Business Buyer Behaviour: Meaning and Types

What is Business Buyer Behaviour?

Business buyer behaviour refers to the intent and attitude shown by companies and employees while making purchases for the organisation. Business buying behaviour is the concept of recognising a company’s requirements and goals and making suitable purchases that help the organisation make profits. Employees are assigned distinct jobs in companies and are accountable for making business purchases. This position is also known as a business buyer. Business buyer behaviour can be understood through the business purchasing process, which assists organisations in obtaining the finest raw materials and items that can be processed to maximise production and returns.

Types of Buying Situations

A buyer may often encounter three different types of buying circumstances. One extreme of this circumstance is a straight rebuy which includes a regular purchase, and the other extreme is a new task, which requires extensive research. Modified rebuy exists at the middle level and takes considerable research. Below is a full description of each buying situation :

1. Straight Rebuy: 

A Straight Rebuy occurs when a buyer purchases the same goods in the same quantities from the same source. In other words, nothing changes. Post-purchase reviews are frequently neglected unless the buyer observes an unanticipated change in the offering, such as a decrease in quality or delivery time. Straight rebuys are preferred by sellers since the buyer does not evaluate other items or look for new suppliers. As a result, the seller receives a consistent and predictable source of money, and doesn’t have to spend as much time on the account and may instead focus on securing new business prospects. Regardless, the seller cannot disregard the account. The seller must still give the buyer with excellent and reliable service; otherwise, the straight-rebuy situation may be jeopardized.

If an account is very large and significant, the seller may go so far as to station personnel at the customer’s place of business to ensure that the client is satisfied and the straight-rebuy condition is maintained. IBM and the management consultancy business Accenture have staff stationed at their customers’ offices and facilities all around the world.

2. Modified Rebuy: 

When a company decides to purchase the same kind of product it has in the past but makes some changes to it, this is known as a Modified Rebuy. Perhaps the buyer wants the goods slightly customised or in different quantities, packaging, or delivery.

For Example, a buyer can opt for a modified rebuy because of the high price of a product or raw material. Suppose, a company wants to reduce its operating cost and wants to achieve this objective by optimising its purchase cost and raw materials. In order to do so, the company can choose to change the vendor who can provide the company with raw materials at a better price.

3. New Task: 

A firm that is purchasing a product or service for the first time has a new task. In these situations, the bigger the cost or risk, the greater the number of decision players and their attempts to gather information. A new-task buying situation arises when a company buys a product for the first time. In general, all of the purchasing processes described in the previous section take place. New tasks take the most time for both the purchasing firm and the firms selling to them. If the product is complex, many suppliers and products will be considered, and several RFPs (Request for Proposal) will be issued.

For example, A school district owns properties. When a new high school is needed, there may not be anyone in the administration who has expertise in developing new schools. That buying circumstance is a new task for everyone concerned.

Participants in Business Buying Process

The different participants in a business buying process include:

1. Users: Users are those employees of the company who utilise the benefits of the good or service. Since they are the product’s first consumers, they initiate the demand for it and help the other participants with queries regarding its specifications.

2. Influencers: Influencers often supply information for assessing alternatives as well as assistance in defining specifications. Influencers in the technical field are especially important.

3. Buyers: The formal authority to place the order and choose the terms and conditions for purchase belongs to the buyer. Selecting and negotiating with suppliers is the buyer’s primary responsibility. When buying an advanced product, the top executives of the organisation are involved.

4. Deciders: The final vendors may be chosen or approved by the decision-maker formally or informally. In routine purchases, buyers frequently make decisions or at the very least approve them.

5. Gatekeepers: Information transfer to other people is regulated by gatekeepers. For example, Buying agents have the power to prevent salespeople from visiting users or decision-makers. Technical staff and even personal secretaries are examples of additional gatekeepers. The buying center is not a permanent and formally designated unit within the buying organisation.

Major Influences on Business Buyers

When making buying decisions, business buyers are influenced by a number of factors. Some marketers believe that the primary factors are economic. They believe that buyers would favour the supplier that offers the lowest price, the best goods, or the best service. They focus on providing substantial economic benefits to buyers. However, business buyers are influenced by both economic and human factors. Business buyers are human and social as well, not cold, calculating, and impersonal. Some of the major influences on business buyers include:

1. Environmental Factors: Current and expected economic environment variables such as the degree of primary demand, the economic forecast, and the cost of money have a considerable influence on business buyers. As economic uncertainty develops, company buyers restrict new investments and work to reduce stock holdings. Key material shortages are a major environmental problem that is growing to be more prevalent. Many businesses are now more willing to buy and store more uncommon commodities in order to ensure adequate supply.

Environmental, technological, political, and competitive developments might have an influence on business buyers. Culture and customs, particularly in an international marketing environment, may significantly impact business buyer reactions to marketer behaviour and approaches.

2. Organisational Factors: Every purchasing organisation has its own set of goals, rules, processes, structure, and systems. The business’s marketer must be as familiar with these organisational factors as possible. Questions like these arise: How many people are engaged in the purchasing process? Who exactly are they? What is their criterion for evaluation? What are the company’s buying policies and limitations?

3. Interpersonal Factors: The buying centre often contains a large number of players who affect each other. It is sometimes difficult for a business marketer to figure out what kind of interpersonal factors and group dynamics to engage in the process of buying. Participants may have influence over their purchasing decisions because they handle the benefits and consequences, are well-considered, have specialised knowledge, or have a particular relationship with other important participants. Interpersonal factors are usually subtle. Business marketers must try to grasp these factors and build tactics that take them into consideration whenever possible.

4. Individual Factors: Each person involved in the business’s buying decision process brings personal reasons, views, and preferences to the table. Personal attributes such as age, income, education, professional identity, personality, and risk attitudes all have an impact on these individual factors. Buyers also have distinct purchasing styles. Some may be technical types who do extensive assessments of competing bids before selecting a supplier. Other buyers may be excellent negotiators at putting sellers against one another to get the best offer.