Organizational buying behavior also called business buying behavior, refers to the buying behavior of organizations that may buy products for resale further production, or for conducting organization’s operational activities. The major organizations may producer, resellers, government, institution, industries, etc.
Producers: Producers are the organization that purchase products for reproduction or further production.
Reseller: Reseller such as wholesalers, retailers, agents may purchase products for selling products to other.
Government: Government organizations may include ministries, departments, public enterprise, etc. Government is perhaps the largest buyer.
Distinctive characteristics of organizational buying
The distinctive characteristics of organizational buying are listed as follows:
Demand is derived from the need application for the consumer production in which that business product is used.
Demand for business products is inelastic in response to its price.
Demand is widely fluctuating business users take more inventories or less inventories when they expect drastic changes that may take place in prices of the products or in national economy.
Organizational buying is regulatory purchase. In other word organizations buy goods according to the government and organization’s laws, rule and regulations.
Buyers are well informed about what they are buying then are ultimate consumers.
Organizational buying normally aims a long-term relation with seller or suppliers. Organizations do not change their seller or suppliers.
It involves infrequent purchase, organizations do not tend to buy goods frequently as an individual buyer does.
