Buying Process and Consumers Psychological Factors - Literature review Example

Buying Process Name Institution Course Professor Date Introduction Success of managerial effectiveness in an organization is determined by the ability of the organization to influence decision outcomes (Farrell, & Schroder, 1999). Howard & Doyle (2006) argue that a “buying center” act as the unit of an organization, which is involved with making of various decisions of an organization as it regards to buying process. Buying process is one of the activities, which management team of an organization has to focus on ensuring that it is effective in order to create effective relationships with customers. Buying process is crucial in an organization. This is because it influences the performance of an organization in terms of attaining its desired performance level, in terms of sales. As such, the management team has to focus on streamlining the buying process. Unfortunately, buying process is characterized of several challenges, which are based on decision-making. This involves management team decisions and consumer decision-making, which is highly influenced by the behavior of consumers. The strategy, which an organization uses, is one of the key challenges for the buying process (Farrell, & Schroder, 1999). This is because an organization may adopt a strategy, which will lead it towards improving its performance in buying process, or influencing the buying process in a negative manner. As such, the ability of an organization to adopt an effective strategy leads towards attainment of success. Actually, buying process strategy is affected by two factors. One of the factors is the characteristic of the source of the strategy. Source dictates the power of the strategy, which would contribute towards influencing others and attaining the desired objectives of the strategy. The other factor is the relationship, which exists between the source and target (Daulatram, 1989). This indicates that a strategy can only attain success when it is perceived to be meaningful to the target. Therefore, the source and target must have a relationship, which enable the strategy to attain success. However, organizations have not being able to adopt effective strategies for the buying process. This occurs since the power base for such strategies do not create effective relationships with the target. Consequently, the strategy does not have the capability of attaining its desired success. To counter this, organizations have to focus on reinforcement of their power bases for buying process strategy in order to ensure that success is attained (Kholi, 1989). As Soderlund et al. (1999) claims, consumers’ decisions influence significantly the buying process. This indicates that social, psychological, and personal factors, which determine consumers’ decisions, induce a significant challenge in the buying process. Considering social factors, it is evident that consumers will base their decision on their wants, culture, social class, reference groups, and opinion leaders among others. This is great challenge for an organization since it becomes difficult for the organization management team to focus on satisfying these needs of consumers. Moreover, consumers express diversity in terms of their wants. This presents another challenge for the buying process since as one strategy seeks to satisfy the needs of one group of consumers it may never satisfy the needs of another group of consumers. Culture determines attitudes, ideas and values, which are adopted by a group of individuals in terms of believes (Soderlund et al., 1999). This indicates that a group of individuals may advocate for a particular product or advert. Consequently, an organization buying process may face challenges when a large group of individuals rejects its products or adverts. Consumers tend to base buying decisions on social class. This occurs as consumers want to satisfy their needs by their means. With reference to this, an organization buying process has to incur challenges as it tries to determine what should be supplied where and at what price. Such situations occur since social class is sensitive to the price of products. Opinion leaders are usually attracted by marketers. However, attracting the most influential opinion leader for an organization is complex. Consumers’ psychological factors are the most devastating in buying process (Venkatesh et al., 1995). This is because these factors are individual based and not group based. Consequently, it becomes complex for the management team of an organization to address individual psychological factors. These factors include motives, perception, ability and knowledge, attitudes, personality, and lifestyles. A motive is regarded as a self-energizing activity, which drives an individual towards attaining desired goals. Buying process in an organization has to take into consideration of the various needs of consumers, which motivate their purchases. This is a complex activity, which the buying process of an organization has to undertake because consumer-motivating factors keep on changing with time. Organization buying process would never like to mess with consumer perception (Venkatesh et al., 1995). This is because this factor attracts a consumer to a product in terms of “what a consumer can see”. Since consumer perceptions are constantly changing, it becomes difficult for an organization to determine how the products will be perceived in the market. Moreover, ability, knowledge, attitudes, lifestyles, and personality determine consumers’ preference for the products. These factors are challenging to the buying process of an organization since their analysis at an individual level is difficult. Personal factors also play a significant role in inducing challenges to an organization buying process. These factors include age, race, and sex among others. Based on these, buying behavior of consumers varies on various products (Kholi, 1989). This becomes complex for an organization buying process to determine what should be done to ensure even buying behavior. Nevertheless, organization-buying process may overcome these challenges by conducting an effective market research, which is based on consumer targets in order to comprehend what should be satisfied to consumers (Moon, & Tikoo, 2000). In addition, an organization may classify its consumers based on their needs in order to ensure that it satisfies their needs. However, it may not be an effective solution since consumer population is constantly changing. Moon & Tikoo (2000) claim that buying activities include identification and search for information, which related to external and internal business environment that is essential in making buying decisions, using analysis techniques, proactive focusing, and procedure control. Irrespective of there being an outlined set of activities, decision makers of buying process face challenges as they express differences based on the use of analysis techniques and information search. These differences in decision-making process lead to attainment of different strategies and emergence of conflict in the buying process. Such differences could be regulated by ensuring that decisions are evaluated for quality such that the decision-maker feels accountable (Ham, & Spurgeon, 1993). This is an effective means of ensuring that buying decisions are focused towards attainment of success. This accountability should be based on outcomes, as well as procedure of the buying process. The significance of decision-making in buying process is based on the uncertainty of consumer behavior, buyer power, and importance of purchase. Consumer behavior determines the level of decisions, which consumers make towards products. Positive consumer behavior leads to attainment of success of the buying process while negative consumer behavior leads to attainment of negative results from the buying process (Cannon, & Perreault, 1999). Organizational buying process has to determine the buying approach adopted by consumers in order to ensure that it is able to attain its desired success level. This is essential since consumer-buying approach significantly influences the buying process. The structure and composition of the buying center of an organization determines the strength of an organization to make amicable decisions on buying process (Howard, & Doyle, 2006). Further, the power and influence of the organization-buying center determines the ability of an organization to attain its desired success level in the buying process. This indicates that internal conflict, lack of power and lack of influence of the buying center of an organization is highly associated with complexities of the buying process of an organization (Wilson, 2000). According to Leonidou (2005), challenges of buying process may be overcome by ensuring that sellers have the capacity of analyzing various strategies and influences of consumers’ decisions. This includes identifying consumers’ needs and conducting effective market research in order to ensure that adequate data and information is collected. This provides room for the organization to formulate and adopt strategies, which will contribute towards attaining its desired goals and objectives (Tanner, 1999). Moreover, since developing and maintaining a healthy consumer relationship demands knowledge and skills, organizations have to hire experts and professionals to provide valuable information on how this can be done effectively. This would result in attainment of success of industrial buyers and business relationships. Conclusion An organization-buying center determines the success level and performance of the buying process. As such, it is essential to ensure that this unit has adequate influence and power in the buying process, so that the decisions, which are made, will contribute towards attainment of organization success. The key challenge of the buying process of the organization is the decision-making process. This challenge is experienced from both the buying center and consumers. This indicates that decision-making making should be addressed effectively in order to ensure that the buying process of an organization is able to attain the desired success level. Further, consumer buying behavior, which influenced by personal, social and psychological factors induce, a significant challenge to the buying process of an organization. Therefore, there is a need of ensuring that this addressed effectively in order to attain the desired success level. Reference List Cannon, J, & Perreault, W. (1999). “Buyer-Seller Relationships in Business Markets”, Journal of Marketing Research, 36 (3). Daulatram, L.B. (1989). “Retail scanner checkout system: how buying committees functioned”, Industrial Marketing Management, Vol. 18, pp. 179-85. Farrell, M, & Schroder, B. (1999). “Power and Influence in the Buying Centre”. European Journal of Marketing, Vol, 33 No. 11/12. Ham, C. and P. Spurgeon. (1993). “The Development of the Purchasing Function” in P. Spurgeon (ed.). The New Face of the NHS, London; Longman. Howard, P, & Doyle, D. 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(2000). “Why divide consumer and organisational buyer behaviour”, European Journal of Marketing, Vol. 34 No. 7, pp. 780-96. Read More