Term Paper on "Business Buying Decision Process"

Term Paper 4 pages (1643 words) Sources: 4 Style: APA

[EXCERPT] . . . .

Business Buying Decision Process

The business buying decision can be an extremely important one in the ultimate buying process, and this process involves several steps. It must be remembered that the business market as such is made up of organizations that, in some way or another, may be involved in the manufacture, distribution, or offering support services for the product or the services that have been sold to the customer. It is also important to note that the amount of purchasing that would be undertaken by the business market as a whole would be able to dwarf easily the total amount of spending done by customers, in the customer buying process. For marketers, it is vital to understand the principle behind why businesses make purchase decisions, as this can be critical to their marketing endeavors. However, for many a marketer, understanding the business market may not be as complicated and difficult as trying to understand a consumer market, and it is for this reason that the marketer must choose to use different tools for each market. ("Principles of marketing, business buying behavior," n. d.)

There can be three noted steps in the business purchase decision process: the need recognition process, the search process, and the evaluating options process. Purchase and the after evaluation processes occur at a later stage. Now, one must understand the need recognition at the outset, before proceeding to the next steps. This step involves the stage when within a business environment; the need arises to make a purchase. According to the buying center concept, initiators would be one of the first individuals to recognize a need, and then to act upon it. In most situations, the initiator may also be the user or the buyer, and it must be noted that while users are generally motivated to identify the need for new solutions, buyers would be more likely to identify their need to re-purchase products. However, whereas in the past, most companies would use human interventions in the customer re-purchase decision, today most companies seem to prefer automation for the purpose, and this has made it more challenging for competitors to replace currently purchased products. Marketers today must understand this important change. ("Principles of marketing, business buying behavior," n. d.)

In the second, that is the search stage, the search for alternatives to consider as 'potential solutions to recognized needs' is assumed to be one of the most noteworthy dissimilarities between consumer and business purchasing. It must be remembered that most of these decisions are based on the organization's need to reduce costs. As far as a supplier is concerned, it is at this particular step of the purchase process when he would have to ensure that he is also included within the search activities of the buyer or others in the buying center. It is when the search option has yielded results that the members of the so called buying center may begin to evaluate all the options that are now available to them, and perhaps use a checklist of the benefits and the advantages and the disadvantages of the purchase they are about to make. Each benefit is assigned a particular weight that would correspond directly to the level of importance it enjoys within the purchase decision being made. ("Principles of marketing, business buying behavior," n. d.)

The next important stage in the business buying decision process is the actual purchase of the product or the service. This stage may require the filling in of various forms and the completion of formalities, and these may entail a long wait. For a very large purchase, the business buyer would have to consider and evaluate financing options before he can make the actual purchase. The fifth and final stage in the business purchase process, the after purchase evaluation can be extremely important. After the order has been received, the purchasing company may try to spend some time reviewing the results that have been garnered because of the purchase that has been made. The buyer may try to discuss product performance issues with the users of the product. If the product is well received it may end up moving to a straight re-purchase status, and this would be able to effectively eliminate much of the evaluation process from any future purchases. ("Principles of marketing, business buying behavior," n. d.)

The buying process leads to a decision to buy, and the trick, according to experts, is to construct the entire sales process in such a way that it remains in tune with what people do wish to buy, and also so that people end up buying whatever the company may have on offer. In other words, it must be stated that the buying decision is the eventual culmination of a buying process, and it may either stretch over a period of time, or it may be made overnight, but it is not an event, but a process. ("The buying process leads to a decision to buy," n. d.) Although buying processes may be similar, it must be noted that the marketing communication for a consumer market may vary from that of the business to business communication market. This would mean that the marketing manager would have to analyze deeply both buyer and consumer behavior, and be able to identify consumer behavior when he is making a purchase, as well as study the business buyer's behavior when he is making a significant purchase, and thereafter, arrive at a decision. (Varey, 2002) the business buying process is undoubtedly more complex than the simple consumer buying process, and the reason is that almost all the time, business buying takes place within a formal organization, where aspects like budget, costs, and profits must all be evaluated and considered before making the final decision. (Kurtz; Boone, 2005)

Buying behavior as such may be similar in both the cases, because it involves the buying decision that has to be made when people are buying and using a product or a service. Consumer behavior refers to the buying behavior of the ultimate customer of the product being sold: his reaction to the marketing strategy, why he is buying what he is buying, and why at this time, and so on. The consumer buying process too involves several stages: the problem recognition, or the recognition of the awareness of need, for example. This can mean contemplation of the desired state and the actual condition the consumer is in at the present time. The next stage is that of the search for information regarding the purchase, this may be both internal, that is, within one's own memory, as well as external, that is, asking friends and others for information. The evaluation of the alternatives available to him is the next stage, and this signifies his need to establish certain criterion and the evaluation of the advantages and the disadvantages of the product he is about to acquire. This is much the same as the business buyer's decision making process, and the stage when he evaluates alternatives and weighs them against his own needs so that he would be able to make a final purchase based on them. ("Chapter 6, class notes," n. d.)

The actual purchase decision is made in the next stage, much like the business buyer. The purchase is next, and this may depend upon the availability of the product and the time taken for the order to be filled. The last stage, like the busyness buying process, is when the consumer enters into the post purchase stage. The outcome of the purchase would be revealed at this stage, as this is when the customer is either satisfied or dissatisfied with the purchase that he has made. This is also the time when he thinks about whether he has made the right decision or not… READ MORE

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