Personal Recommendations - the Most Important Consideration That Influences B2B Purchases - Literature review Example

High-Involvement B2B: Student Name: Name of institution: Lecture; Date: Introduction The recommendations of friends, relatives and other social contacts are important in the consumer decision making process. In high-involvement products, the consumer may skip the information search and alternative evaluation stage if they are influenced by personal recommendations. In this essay, the consumer buying process is discussed. The discussion focuses on several reasons that make the consumer buying process for high-involvement products longer. The key reason for extending the consumer buying process is that it involves a more extensive information search stage and the consumer spends more time in evaluating alternatives. The final parts involve developing a theory that asserts that personal recommendations are the most important influence in the consumer buying process for high-involvement products. Consumer buying process for High-involvement Purchases The purchase of expensive products or services that carry a significant risk of emotional consequences is termed as a high-involvement purchase. The consumer decision making process for expensive products is a different process than the less-involving process of purchasing low-involvement products (Radder and Huang 2008). Although customers go through the same five-stage decision making process, the process for high-involvement products is siginficantly longer as the information search and alternative evaluation stages are longer. The five-stage decision making process is illustrated below: The consumer buying process is a critical process for marketers to understand. Businesses must influence the customer at every stage of the purchase process to make a sale. However, with high-involvement product, consumers try to avoid marketer’s influence in making their purchase decisions (Radder and Huang2008, In low-involvement purchase process it is usual for customers to skip some of the stages of the consumer decision making process. For example, a hungry student may skip the information search and evaluation steps and go straight to making his purchase of a hamburger. However, high-involvement products call for a more extensive information search and evaluation of alternatives. Expensive products relative to the budget of the purchaser normally involve a high level of involvement as the risk of making a bad decision is higher (Guado 2001). Many high-involvement products also carry a higher personal and social risk. For example, when buying a luxury car, the social status associated with the car is an important consideration. The relevance and importance of high-involvemnt products make their consumer decision making more complex. Houses, cars and insurance policies have high price tags and consequences of failure are high. While not purchased often, these products are important and relevant to the consumer; therefore the consumer decision making process is more complex and differs from the routine process (Guado 2001). The consumer now engages in extended problem solving where he/she compares prices product features and warranties. The information search stage is greatly extended in high involvement purchases. Often, a lot of information is needed to make high involvement purchases. Information about each of the options is gathered and used to evaluate which options are most suitable. More time is spent searching for the information needed for the purchase. Information needed in this phase include consumer opinions, online reviews, consultations with friends and family, interactions with services and sales representatives of selling companies. The effort to minimize potential negative outcomes and maximize reward lead to a longer decision making process for high-involvement products. A well informed decision will maximize professional and personal gains (Karimi, Papamichail and Holland 2015). Some of the gains are long lasting and greatly influence the length of the purchasing decision. A bad decision has many negative implications. Ultimately, buyers want to get the greatest rewards and minimize the potential for negative outcomes in a highly involving purchase (Costello 2015). A successful purchase can lead to maximum personal or professional gains from the use of the product or service, and to long-lasting results. A bad purchase leads to wasted money, negative impressions in social or professional groups, and the need to purchase another solution to better meet your needs. The effect of information on the purchase decision is dependent on the source of the information. Sources of information that are used to make purchase decisions include personal information, commercial information, public information and experimental information. Personal sources of consumer information include friends, family and neighbors. According to Vivek, Beatty and Morgan (2012), personal sources of information are the most influential in the purchase process of high involvement products. Most consumers will skip the information search stage and alternative evaluation to go straight to the purchase stage. It is assumed that consumers who provide the information have evaluated the alternatives and conducted an extensive information search. Influence of Personal recommendation on B2B purchases According to Vivek, Beatty and Morgan (2012), personal information is an important influence in B2B purchases as these types of transactions have become increasingly emotional. According to Vivek, Beatty and Morgan (2012), B2B purchases are most influenced by emotional connection with the brand and not by the logic, testing or facts for the purchase. Personal sources of information are crucial in creating an emotional connection with the brand. According to Burton, Roberts and Sheather (2015), emotions play a greater role in B2B purchases than most marketers care to admit. Recent research shows that B2B customers are likely to buy products recommended by friends and relatives. It reveals that emotional connection is more important to B2B purchases that even logic or the utility of the product being purchased. Vivek, Beatty and Morgan (2012) argues that marketers need to realize that human have personal goals while making purchases and those should be a great consideration when marketing products on B2B channels. Personal sources of information lead to the creation of emotional connection which is key to clinching B2B sales. According to Vivek, Beatty and Morgan (2012) , brand connection can only be created if the business communicates personal value through friends, relatives and other social connections. Almost every other business communicates business value and thus business value cannot win the battle for B2B customers. According to Vivek, Beatty and Morgan (2012) , communication of personal value impacts on familiarity consideration, purchase, preference and it doubles the advocacy for a product. Vivek, Beatty and Morgan (2012) argues that facts can no longer win the battle for customers in B2B marketing, consumers need to hear the marketing message from their friends, family and other personal contacts. Research by Google on the most important consideration for managers purchasing technology reveal the importance of personal recommendations. Over 93 per cent of the executives interviewed considered vendor honesty a critical factor in making a purchase. On the other hand, when personal recommendations were given, 91 per cent of the managers made a purchase of the recommended product. However, only 73 per cent of the managers were swayed by a strong brand to make the purchase decision. Personal connections create trust and emotional connection with the brand by the purchasing customers. Deciding to purchase expensive equipment for the company is not a snap decision like having lunch at the local McDonalds (Kumar, Cohen and Rajan 2015). Such a purchase decision has to be right as it comes with long-term risks that may impact the future of the organization. Further studies on the impact of word of mouth on B2B purchases reveal it is the most important influence on this type of purchases. Vivek, Beatty and Morgan (2012) assert that 92 per cent of B2B purchases are influenced by word of mouth. Many business executive contact their peers before making B2B purchases. Statistics reveal that almost 60 per cent of executives contact their peer before a major B2B purchase. 80 per cent of managers tasked with making B2B purchases also say that word of mouth recommendation were the most important consideration. Vivek, Beatty and Morgan (2012) dismiss the view that word of mouth is not an important influence in B2B purchases. He argues that it is rare for consumers to make purchases without first asking around about the vendor or the product they are about to purchase (Nica 2015). Forrester research revealed that as many as 84 per cent of respondents listened and were influenced by word of mouth before making business purchases (Roy 2015). Company sources of information are trusted by only a small number of customers. Only about 24 per cent of customers in the Forrester survey said they trusted blogs as sources of purchase information. The importance of personal connection is enhanced by the fact that business people are avid users of social media. Business people are more active on social media than other types of consumers (Khatwani, Anand and Kar and 2014). They use the same considerations in purchasing personal items and those purchased for their organization. Forrester research revealed that business people are 20 per cent more active on social media than other users (Roy 2015). In addition, business people are great advocates of products than consumers. Conclusion This essay concludes that personal recommendations are the most important consideration that influences B2B purchases. While purchase of high-involvement product demand a longer consumer decision making process, personal recommendation can eliminate the information search and alternative evaluation phases. Evidence from several studies indicates that many executives consult their personal contacts before making most of their B2B purchases. Personal contacts help to build trust and a personal connection between the brand and the consumer. Marketers should always know that world of mouth will play a great part in clinching B2B sales and should always seek to influence the prevalent word of mouth about their products. References Burton, S., Roberts, J., &Sheather, S 2015, Getting to Know Them: The Effect of Customer Experience in a Business-to-Business Market. In Global Perspectives in Marketing for the 21st Century (pp. 210-213, Springer International Publishing. Costello, L. M 2015, Elements of Rational and Emotional Appeal in Magazine Advertisements: A Social Cognitive Approach (Doctoral dissertation, Guido, G 2001, The salience of marketing stimuli: An incongruity-salience hypothesis on consumer awareness. Springer Science & Business Media. Karimi, S., Papamichail, K. N., & Holland, C. P 2015, The effect of prior knowledge and decision-making style on the online purchase decision-making process: A typology of consumer shopping behaviour. Decision Support Systems, 77, 137-147. Khatwani, G., Anand, O., &Kar, A. 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M 2012, Customer engagement: Exploring customer relationships beyond purchase.Journal of Marketing Theory and Practice20(2), 122-146. Read More