ARTICLE: Differentiating Factors of The Individual and Organizational Buyers

There are two types of markets which are industrial markets which are also called institutional markets and the second one is the consumer market. In the industrial markets, the product or service is taken for the business use whereas in the consumer market the products or services are purchased for the individual consumption. The buyers in the industrial markets are terms -d as the organizational buyers who buy the product for running the processes of their company. The buyers in case of consumer markets are known as the individual buyers. There are many factors which differentiate between the organizational and individual buyers, and they will be discussed in this article. Fundamentally there are three types of differentiation between these two type of buyers which are listed below:

  • THE CHARACTERISTICS OF THE BUYER

    The organizational buyer is referred to an organization, and there might be an individual or group of people who may be involved in the decision-making process. The corporate buyers are professionals and highly knowledgeable and analyze the implication and benefits of the product thoroughly. The buying motive of the individual buyer is less rational than the organizational buyer. There are many factors which are associated with the particular buying behaviours, but they all influence the decisions at the personal level and are entirely different from the industrial buying influences.

  • THE BUYING PATTERNS AND THE DECISION PROCESS

    The decision-making process also a distinguishing factor which differentiates the two types of buyers from one another. There are many formalities, for example, sending proposals, quotations, and finalizing the processes of purchasing decision making in the organizational buying whereas it is not there in the individual buying behaviour. In the individual buying, the decision-making process is much more straightforward than the other one. IN the organizational buying the managers have to decide after examining all the related with it such as the financial risks involved in that buying, the technical aspects of the products and its usability in the organization and other factors which influence the decision-making process. Moreover, in the organizational buying, the buyer has to negotiate with the seller extensively. The individual customers do not have to go through the very detailed operation of the negotiation, and therefore it is a much more straightforward process as compared to the industrial buying.

  • THE DEMAND AND MARKET STRUCTURE

    The organizational buyers are far more concentrated geographically than the individual buyers. The number of the organizational buyers is decidedly less than the individual buyers but they buy the products or the services in bulk, and the selling company gains more revenue with these dealings and transactions. The industrial markets operate in either horizontal, or they are vertical context. If they are working in the vertical contact, then they only cater to one or two industries, but if they operate in the horizontal structure, then the consumer base is comprehensive and extensive.

The consumers can have a high involvement in the buying decisions where they will assess every feature of the product or the service very actively and compare them with the other product or service available in the market. This is called as consumer involvement, and to know more about it read “The Concept of Consumer Involvement in Marketing”.