CB/U5 Topic 5 Organizational Consumer Behavior
The buying is done by an individual consumer or his family as well as by various types of formal organisations. In Indian context such organisations are government, semi-government institutions, various departments of government like post offices, railways, public sector undertakings, public and private limited companies in the private sector (whether in manufacturing or service sectors), NGO (mostly organised under Indian Societies Registration Act), cooperative societies and autonomous bodies like electricity boards, development authorities and corporations.
Number of international organizations like World Bank, ILO, WHO, FAO are also operating in India besides there are offices of foreign diplomatic missions. All these and other organisations have to buy both consumable and non-consumable items. Though their share in purchases of various items is not known, they play a dominant role in certain sectors like government, railways, and electricity boards.
These organisations buying behaviour is much different than that of consumers. They go more by price, quality and performance and other factors which influence general consumers play very little role. Therefore, it has certain distinct features and their decisions are more rational. The role of psychology in organizational and industrial buying is very limited.
Hence organizational buying Behaviour is studied separately. The organization buying Behaviour, refers to decision making processes in formal organizations”. In the earlier models the research was confined to study vendor selection. But now the scope has been widened and includes strategic alliances, communication between vendor and buyer, processes of selection of product.
(1) There should be need,
(2) There should be identification of suppliers,
(3) Different suppliers and brands should be evaluated and finally,
(4) A vendor should be selected as per procedure of the organization.