Consumer and Organisational Behaviour

Definition of Consumer/Organisational behaviour

Consumer/Organisational behaviour is a concept that relates to why people buy one product and not another and why they patronise the activities of some business services and neglect the other. There are some underlying factors that influence consumer behaviour such as culture, socio-economic, personal and psychological.

And also, it is of essence that decision to finally procure a particular product passes through processes which are problem recognition, information, search, evaluation of alternatives, purchase decision and post purchase behaviour.

Kurt Lewin in his work on human behaviour proposed that B = f(P,E), i.e. behaviour (B) is a function (f) of the interactions of personal Influences (P) and pressures exerted by outside environmental forces (E).

In its application to consumer behavior it could be expressed as B=f(I,P) i.e. Consumer behavior(B) is a function (f) of the interactions of interpersonal influences (I) such as culture, friends and relatives and personal factors (P) such as attitudes, learning and perception.

Factors Influencing Consumer Behaviour

The following factors have been identified as those that influence a typical behavior of an average consumer. The factors are:

i. Cultural factors
ii. Social factors
iii. Personal factors
iv. Psychological factors

Others include: group influence, taste and preference economy, opinion leaders, technology and technical expertise, self-image/perception etc,

(i) Cultural Factors:
Culture can be defined as set of values, beliefs, preferences and tastes pass across from one generation to another. Invariably the culture where an individual comes may have a direct/indirect impact and influence on consumption and buying behaviour.

(ii) Social Factors:
This relates to group or societal class. Every consumer belongs to a number of social groups. The word social could be described as relationship, fellowship or interaction between people. For instance, senior secondary school, students are a class of social group whose consuming pattern may be influential on each other.

Every group exhibits certain norms of behavior. Norms are the values, attitudes and behaviours that a group deems appropriate for its members.

(iii) Personal Factors:
These relate to taste, preference and choice that an individual has for a particular product/item. Personal factors do influence consumption pattern of consumer. It can be as a result of religious belief, educational attainment, exposure, taste etc. for Instance, some people could not be influenced to eat a particular kind of meat or food due to personal policy or decision or religious belief.

(iv) Economic:
The nation’s and the consumer economic conditions do also influence consumption pattern and consumer behavior. Inflation (i.e. persistent and consistent rise in price of products) and taxes on personal economic situation is another determinant.

(v) Influence of Opinion Leaders:
These are people whose opinions are sought -on-certain specific products. They most often belong to the same social class as against those they influence. They are knowledgeable, creative, extroverts, friendly, command respect, cosmopolitan, expose to mass media,- opinion moulders, authoritative, influential, etc. . .

(vi) Psychological Factors:
These include attitudes, perception, learning, motivation and personality (self-image) which has direct or indirect influences on consumer buying behaviour.

(a) Attitudes:
This could be seen to be learned reaction towards a product offer in a consistently favourable and unfavourable manner. Although, they are generally not considered as a good component of consumer behaviour.

(b) Perception:
This could be described as mental thought of how someone sees something. This could be selective exposure, selective perception, selective retention may ¡n one way or the other’ influence consumer behaviour.

(vii) Family Life Cycle:
Naturally, people do follow a certain pattern of living known as the family life cycle. This ordinarily means that consumption pattern of people changes at a particular level of growth and development which invariably influences consuming behaviour.

Model of Life Cycles

(i) Bachelor/Spinster: young, not married, no children.
(ii) Newly married couples: young, no children
(iii) Full nest stage one: young married couple with youngest child under 6.
(iv) Full nest stage two: young married couple with youngest child age ten or oven.
(v) Full nest stage three: older married couple with dependant children.
(vi) Empty nest stage one: older married couple with no children living at home, head of household as breadwinner.
(vii) Empty nest stage two: older married couple with no children living at home, head of household retired.
(viii) Solitary survivor stage one: older single person in labour force.
(ix) Solitary survivor stage two: older person, retired.

Consumer Decision Process

Consumer decision process connotes a choice on what to buy, how much to spend, what alternative to acquire and where to purchase it. Consumer decision process passes through the following stages.

(i) Problem recognition/recognition of unsatisfied need:
An unsatisfied need of consumer may create inner tension which may lead to problem recognition. At this stage of decision process, consumer becomes aware of a significant discrepancy between the existing situation and a desired situation. Problem recognition simply connotes a realisation by the consumer that he/she needs to buy-something to get back to the normal state of comfort.

(ii) Information Search:
This refers to information gathering I data collection. Once a need has been recognised by a consumer, he/she begins to search for relevant and reliable information about various alternative ways of solving the problem. Sources of information includes the internet, the mass media (radio, television) and print media (newspaper, magazines) friends and acquaintances, consumer reports or product manual/catalogues, visit to shops, interview etc.

Other factors that affect information search are: the time and money cost, the information the consumer already has from past experiences and other sources; the amount of the perceived risk if a wrong selection is made.

(iii) Evaluation of Alternatives:
Immediately consumer identified reasonable alternatives, the consumer must evaluate each one in preparation to making a purchasing decision. Past experience, attitude towards various brands of products, opinion of family members and groups are used as components of evaluation guide which consumers used to evaluate alternatives.

Moreover, there are two categories of choice models, these are; compensatory and non-compensatory models.

(a) Compensatory Model: This is when consumer arrives at a choice by considering all of the attributes for a product and mentally trading off the alternatives perceived weakness on one or more attributes for its perceived strength on other attributes.

(b) Non-Compensatory Model: This is more or less the opportunity of the compensatory model. This is when an alternative fails to meet the cut-off mark of consumer, even on one attribute, ¡t is then dropped.

(iv) Purchase Decision:
Once the consumer has evaluated the alternatives, then, he/she must make purchase decision. If the decision is to buy, he or she must so make decisions on the brand, price, store, colour, etc. Marketers can influence decision making process of consumers even at this level as most consumers find it very hard and difficult to make decision. Some consumers choose the convenience in-home shopping via telephone or mail order rather than travelling to complete transaction in retail stores.

(v) Post Purchase Decision:

It must be noted that the consumers decision process does not end with the purchase decision. However, the experience of buying and using the product provides information that the consumer will use in future decision-making.
After a consumer makes an important choice decision, he/she may be reasoning out-the wisdom or what led to the purchase decision. Therefore a marketer must know that post purchase behavior can influence repeat sales and affect (positive/negative) what the consumer tells others about the product or services of a particular organisation or firm.

Model of Consumer Buying Behaviour

Problem recognition → information search → Evaluation of alternatives → Purchase decision → Post purchase → decision.

Organisational Buying Behaviour

Organisational buying behavior also known as business buying process takes place within a formal organisation with its budget, cost and profit expectations. It is of essence to note that institutional, industrial, commercial and organizational buying behavior decisions primarily involve several people with bureaucratic procedures.

To comprehend organisational buying behavior, business; operations involve knowledge of influences on the purchase decision process, the stages in the organisational buying model, types of business buying situations and technique, skills and strategies for purchase decision analysis.

Factors That Influence Organisational Buying Behaviour

The following among other factors influence organisational or business to business buying behavior:

i. environmental factor:
ii. organisational factor;
iii individual factor;
iv. Interpersonal factors

(i) Environmental factors:
This influence may be due to a foreseeable change in business condition, a new technological invention or development, law or policies formulated by government supervising agents. Types of environmental forces which determine organisational buying behaviour are economic, political, legal and technological influences

(ii) Organisational factors:
This is determined on the strategic priorities of the firm, and the role that purchasing occupies in the executive hierarchy along with the competitions that a business organisation is facing.

(iii) Individual factor:
This is determined by the procurement or purchasing officer. Each member of staff in an organisation has a peculiar personality, identity, a specialise set of learned experiences a specific organisational function and a mental knowledge or perception of how best to achieve both personal and organisational goals. Members of an organisation can be influenced by rational and emotional quality and price. Emotional criteria comprise human factors which include the desire for ego and status within an organization.

(iv) Interpersonal factors:
This relates to person to person relationship or influences as a result of interaction that exist among member of organisation or a business to business market. Members staff of different organizations, live, socialise and relate with each other such as social club, professional bodies, religious circles, philanthropic organizations etc and as such can influence each other for patronage.

Model of Organisational Buying Behaviour

Problem Recognition → General Description of Need → Detailed Description of Product Specification → Supply Search → Acquisition and Analysis of Proposals → Supply Selection → Selection of an Order Routine → Performance Review

Description of Organisational Buying Process

(i) Problem recognition:
At this stage, a staff in an organisation discovers a problem that can be solved or an opportunity that can be tapped by acquiring a specific product.

(ii) General description of need:
This is when member of organisation determine ¡n a specific manner how the identified problem can be solved.

(iii) Product specification:
This involves a detailed and precise technical expertise and intervention and description of the needed item(s).

(iv) Supply search:
This is the search for the suppliers of the needed item after it has been identified and known.

(v) Acquisition and Analysis of Proposals:
This is when shortlisted supply format prices and products catalogues are examined, scrutinized and assessed.

(vi) Supply selection:
This relates to analysis of alternative proposals.

(vii) Selection of an order routine:
This is when the order for the supply of the successful shortlisted firm is placed.

(viii) Performance review:
This involves evaluation or past purchase review exercise as the functionality of the procured item.

Evaluation
1. Distinguish between organisational behavior and consumer behaviour.
2. Explain the influence of environmental and individual factors on organisational buying behavior.