Understanding The Decision Making Process Of B2B And B2C Customers Is Crucial For Businesses.

Analyse the impact and influence which the macro environment has on an organisation.

Assess an organisation’s internal environment and capabilities

Analyse the internal environment and capabilities of a given organisation using appropriate frameworks.

The Five Stages of the Decision Making Process

The primary focus of a particular business organization or company is on the customers to whom they can sell their products as well as services. Therefore, customers form an important part of the business organizations or company as the annual sales as well as the annual profit depends primarily on the kind of customer base a company or business has and also the target customer base on which the company or the business organization is focusing on. It is also to be noted that there are several factors which affect the buying pattern as well as the decision making process of these customers. The quality of the services provided by a particular company or business organization along with the brand image of the company or the business organization concerned is one of the primary factors which affect the buying pattern of the customers. However, recent researches suggest that there are five stages in the decision making process related to the buying pattern of the customers.

The above figure lists the five stages of the decision making process of the customers as need recognition, information search, evaluation of alternatives, purchase decision and purchase evaluation. It is to noted that this is not an exhaustive list and there are other factors as well which affect the decision making process of the customers.

B2C is the acronym for “business to customers”, whereas B2B is the acronym for “business to business”. It is to be noted that in the case of the B2C the customers are the individuals are going to purchase the products or the services manufactured by the company or the business organization. However, in the case of B2B, the customers or the intended target customer base are the other companies or business organizations which take the help of the services or the products provided by the company or the business organization concerned. It is to be noted that the primary focus of the B2B is on the relationship process whereas the primary focus of the B2C is on the products as well as the services offered by them.

It is to be noted that the identification of the needs of the customers forms an important aspect of the marketing as well as the operational strategy of various companies as well as business organizations. For the purpose of the identification of the needs of the customers the various companies as well as the business organizations which operate on the basis of the B2C basis conduct regular surveys and various other forms of market researches to understand the needs as well as the requirements of the customers. In case of the companies as well as business organizations related to the B2B industry the various companies or the business organizations can conduct periodical interviews with the representatives of their targeted business organizations and also study their annual reports as well as performance in order to understand their needs and requirements in the best possible manner.

B2C vs. B2B: What's the Difference?

“Product design specification” or more commonly PDS can be defined as “a statement of how a design is made (specify the design), what it is intended to do, and how far it complies with the requirements”. It is to be noted that the customers often purchase a particular product or opt for the services offered by a particular company or business organization looking the product specification details which must be attached in the details of the product or the services offered by the company or the business organization. Therefore, it is often seen that the behavior of the customers is very fickle and they generally opt for the products or the services which apparently offers the best product specification details. In cases of both B2C and B2B related companies as well as business organizations, the product specification forms an important aspect. However, it is seen that for the B2B related companies or business organizations the concept of “product specification” is more important than for the B2C related companies or business organizations.

An evaluation of the suppliers form an important part of the decision making process of the buyers. In case of the B2B related companies or business organizations, an evaluation of the suppliers forms a very part of the entire process of buying. It is often seen that the various business organizations as well as companies insist on having more than one supplier. The brand image of the companies as well as business organizations also matter a lot in this particular process. In the case of B2C related companies as well as business organizations, the customers often compare and contrast the products and the services offered by a particular company or business organization with the products and services offered by others. The online reviews written by the various existing customers also influence the potential customers in a significant manner.

The purchasing decision forms an important part of the entire decision making process. It is to be noted in cases where the business organizations or the companies are the end customers the decision makes process comes after a thorough discussion with the stakeholders, CEO, managers and other important people belonging to the company or the business organization. However, in the cases of individual customers, the decision making propose is a personal one.

The post purchase stage is another important stage in the overall process of the decision making. It is often seen that the businesses are generally considered to be long term clients and therefore they need post sale services for the effective functioning of the products or services which they have procured. However, in case of individual customers the process is a short term one. However, it is often seen that the individual customers as well need effective post sale support. It is here the role of the social media comes in. It is seen that the various major companies and business organizations have social media where the customers can write about their complaints and also get them resolved.

Identifying Customer Needs: Why It's Important

The major difference between the decision making process related to the buying of the products or the services lies in the market researches, which are being conducted by the companies or the business organizations for their B2C and B2B. It is often seen that for the purpose of B2C process, the companies or the business organizations conduct regular surveys, questionnaires, feedback process and other mechanisms to gather information which will enable them to understand the needs as well as the requirements of the customers in the best possible manner. However, in the case of B2B process, the mechanism is a bit complex. For this particular process, the companies or the business organizations need to conduct regular interviews with the representatives of the companies or the business organizations with which they are trying to conduct business. An analysis of the annual reports, annual profits, sustainability reports and others also provide valuable information about the needs as well as the requirements of the companies or the business organizations concerned.

It is to be noted that the personality of the customers play an important role in the decision making process related to the purchase of a particular product. It is generally seen that the individuals like to buy products which add to appeal of their personality as well as character. Therefore, a college student is more likely to buy flashy products in comparison to the individual who is working in the corporate sector. In case of B2B process as well, the brand image of the company or the business organization matter a lot and the various companies try to take the services of the companies or the business organizations which boasts of a positive brand image. It is to be noted that the perception of the customer is normally affected by the “advertising, reviews, public relations, social media, personal experiences and other channels”. It is here that the brand image of the company or the business organization providing the products or the services comes into play. In cases of both B2B and B2C it is seen that the customers tend to take the services of the companies or the business organizations with a more positive brand image. It is generally seen that the companies or the business organizations in order to motivate the customers to buy their products or opt for their services provides various discounted offers, periodical sales, offers products belonging to various diverse brands under one roof and others. However, in case of B2B related companies, the motivation comes from the various economic as well as business considerations which the product or the services is going to bring to the company or the business organization.

The Significance of Product Specification

The behavioral and cognitive approaches to customer learning forms an important part of the decision making process of the customers related to the aspect of buying of the products or taking the help of the services provided by the various companies or business organizations. It is to be noted that the behavioral approaches are related to the specific behavior of the customers like the particular brands as well as the services they prefer over some particular brands or services. The cognitive approach on the other hand, relates to the psychology of the customers. For example, this can relate to the psychology or the mental perception of the customers related to particular products or services. It is to be noted that both these approaches are important for the learning process of the customers. It is to be noted that “earning involves changes in an individual’s behavior arising out of the experience. Most of the human behavior is learned over time, out of the experience”. Therefore, the customers learn about the nature of the products or services provided by the companies or business organizations after repeated use of the services as well as products offered by the companies as well as business organizations. This learning process of the customers through repetition finds relevant support in the “Classical Conditioning theory”. The “Instrumental theory”, on the other hand, insists on the learning process of the customers by means of “trial and error” method.

Culture plays an important role on the buying behavior of the customers. Therefore, the people belonging to a conservative background will opt for the services as well as products which are more conservative in nature. The people belonging to the benevolent culture, on the other hand, are more likely to opt for the products or the services which are more in keeping the values of lessons taught by their culture. There are other factors as well which affect the behavior of the customers like the brands offered by the company, the quality of the services offered by them, the psychology of the person concerned, the religion of the person concerned, the education of the person concerned and various others.

It is seen that in the present times various companies as well as business organizations follow the behavior of the customers to increase the sale of the products and services offered by them. For example, the companies often try to model their products and services on the basis of the services and the products which the customers usually opt for or demand for. A typical example of this is the incorporation of the soft drinks and the various other fizzy drinks in the menu offered by McDonalds. This factor is also taken into consideration while the companies and the business organizations conduct their business in the form of B2B. The business trend followed by the company or business organization and also their operational plan is taken into consideration for the kind of services or products offered by the companies or business organizations.

Evaluation of Suppliers: An Important Aspect of the Buying Process

The present world of technology as well as modern innovations offers diverse methods to the companies and business organizations to understand and also to influence the behavior of the customers. The various companies take the help of the various online polls as well as surveys to understand the needs and the requirements of the customers in an effective manner. The various social media platforms also help the companies to promote the products as well as services offered by them. It is often seen that a positive online image is taken to be the sign of a genuine company. Therefore, the digital platform is often used by the companies as well as business organizations for the effective understanding of the behavior of the customers.

Conclusion

Therefore, from the above discussion it becomes clear that the customer decision making process forms an aspect of the overall business program of any company or business organization. Therefore, the various companies or business organizations need to take this particular aspect of their business in a serious manner. There are various factors which affect the decision making process of the customers like the cultural factors, motivational factors and others. Theorists often use the behavioral as well as the cognitive approaches to understand the needs as well as the requirements of the customers in a more effective manner. Many companies even take the help of the digital platform to understand the needs as well as the requirements of the customers.

References

Aguirre-Rodriguez A, M BosnjakM Sirgy, 'Moderators Of The Self-Congruity Effect On Consumer Decision-Making: A Meta-Analysis' (2018)

Consumer Behavior: Buying, Having, And Being' (S3.amazonaws.com, 2018) <https://s3.amazonaws.com/academia.edu.documents/38962867/Consumer-Behavior.pdf?AWSAccessKeyId=AKIAIWOWYYGZ2Y53UL3A&Expires=1521109857&Signature=BKOhimbyRWtV7btVzoNm9SECBWk%3D&response-content-disposition=inline%3B%20filename%3DConsumer-Behavior.pdf> accessed 15 March 2018

Consumer Decision Making Styles In Retailing: Evolution Of Mindsets And Psychological Impacts' (2018) <https://www.emeraldinsight.com/doi/abs/10.1108/07363761311290858> accessed 15 March 2018

Gao J and others, 'Understanding Online Purchase Decision Making: The Effects Of Unconscious Thought, Information Quality, And Information Quantity' (2018)

Godey B and others, 'Brand And Country-Of-Origin Effect On Consumers' Decision To Purchase Luxury Products' (2018)

Health Behavior' (Google Books, 2018) <https://books.google.co.in/books?hl=en&lr=&id=9BQWCgAAQBAJ&oi=fnd&pg=PA95&dq=behavioral+and+cognitive+learning+theories&ots=edJ32luOc1&sig=2WwRmtxwEPYkd899GDS8tSDGRoA#v=onepage&q=behavioral%20and%20cognitive%20learning%20theories&f=false> accessed 15 March 2018

Hung KJ Petrick, 'Testing The Effects Of Congruity, Travel Constraints, And Self-Efficacy On Travel Intentions: An Alternative Decision-Making Model' (2018)

'Multiple Objective Decision Making — Methods And Applications' (Google Books, 2018) <https://books.google.co.in/books?hl=en&lr=&id=M0noCAAAQBAJ&oi=fnd&pg=PA12&dq=customer+decision+making+process&ots=0YStRI5PFs&sig=Wk1HQTAagCG7TrEtJIonEPnhVbo> accessed 15 March 2018

Popovi? A and others, 'Towards Business Intelligence Systems Success: Effects Of Maturity And Culture On Analytical Decision Making' (2018)

Psycnet' (Psycnet.apa.org, 2018) <https://psycnet.apa.org/fulltext/2014-30721-003.html> accessed 15 March 2018

Quality Management For Organizational Excellence' (M5zn.com, 2018) <https://www.m5zn.com/newuploads/2015/03/06/pdf/5de5a3408f57150.pdf> accessed 15 March 2018

Serra Cantallops AF Salvi, 'New Consumer Behavior: A Review Of Research On Ewom And Hotels' (2018)

'Strategic Management: Theory: An Integrated Approach' (Google Books, 2018) <https://books.google.co.in/books?hl=en&lr=&id=Qy8aCgAAQBAJ&oi=fnd&pg=PP1&dq=management+theory&ots=o9lERnKUsq&sig=tUtsv9c92gOKv9Tc2GMDq4fd1Gg> accessed 15 March 2018

Theoretical Foundations Of Learning Environments' (Google Books, 2018) <https://books.google.co.in/books?hl=en&lr=&id=3oOpAgAAQBAJ&oi=fnd&pg=PR1&dq=behavioral+and+cognitive+learning+theories&ots=9n6q5izAe5&sig=-kEPkMbJc6pZ8KaVzBMhlYz1QjA> accessed 15 March 2018