Accounting paper on: Businesses purchase and complete business transactions

Give an overview of the basic differences between how consumers purchase and complete business transactions, and how businesses purchase and complete business transactions?Ans1. The core function of marketing is to understand the needs of the consumers & manufacture products which satisfy their needs, wants and desires. It shall be taken into consideration that, if the needs and wants of the customers are not understood it might act as a disaster of highest order. It has been seen that, there is a difference between how consumers purchase & how businesses purchase. The consumers purchase decision follows a set pattern i.e. recognition of the problem, search for relevant information, evaluate the alternatives & take up a decision. The businesses purchase decision follows an entirely different pattern i.e. firstly, identify the need for purchase, secondly; prepare a specification list, thirdly; a detailed proposal would be provided from the suppliers, fourthly; evaluation based upon the different parameters such as price, quality, quantity, value for money & lastly; the buyer will make up their mind to purchase a particular product from a supplier after negotiating over the price, delivery days, payment terms, etc.

The basis upon which the consumer purchase decision & business purchase decision can be distinguished has been discussed as under. They are as follows:

Þ    Features

The first basis upon which the consumer purchase & business purchase can be distinguished refers to the features of products attached to it. The two main features of a business purchase decision transaction refer to decision making & elasticity of demand. Whereas on the other hand, the characteristics of the consumer purchase decision transactions solely depends upon the needs of the same (Anderson, 2012).

The demand for the consumer products is highly elastic in nature. It shall be kept in mind that, people tend to buy more products when it is cheap. But, in case of business enterprises the demand of the products are inelastic in nature. This means that, the business organizations would be required to purchase the products irrespective of the price attached to it.

Þ    Types

The second basis upon which consumer purchase & business purchase can be distinguished refers to the type of product. The consumer purchase business transactions can be divided upon household items. There are three types of products under the business purchase transactions which shall be taken into consideration i.e. resellers, producers who would buy goods & services and government, non-profit organizations.

Þ    Size

The consumer purchase transaction would be referred to as a larger place wherein exchange of goods & services will be taken into consideration. The business purchase transactions consist of a limited target audience or customers which would order the products or services in bulk quantities (Anderson, 2012).

Þ    Time Frame

It shall be seen that, the consumers’ business transactions are bought at a higher pace. Whereas on the other hand, business houses will buy or purchase industrial commodities which requires high levels of evaluation from the alternatives. It has been seen that, business houses & organizations requires high levels of time to select the products (MRS Evidence Matters, 2005).

Þ    Considerations

The major consideration while buying a consumer related brand or a product would be to buy the product from one brand or a brand towards which the consumer is loyal towards too. Whereas on the other hand, business purchase transactions take into consideration three main aspects such as reliability in terms of quality, quantity, specialized products and goal congruence. Price is a major consideration for both consumer as well as business houses (Anderson, 2012).

The various factors which influences the business decision making process have been discussed as follows. They are:

Þ    Social responsibility: Social responsibility refers to the fore most factors which influence the decision making process of the businesses. Corporate social responsibility (CSR) refers to a concept which shall be followed by the business houses for good.

Þ    Competition: Competition refers to a factor which influences the decision making process of the businesses. These days the organizations operate in a competitive environment therefore, organizations pay attention towards their rivals.

Þ    Economic environment: Economic Environment also plays one of the major roles in the business decision making process          . Economic environment provides the enterprises a way out through the financial problems.

The factors which influences the consumer decision making process have been discussed in this section of the write up. They are as under:

Þ    Culture: Culture refers to one of the aspects which are taken into consideration by the consumers while taking a particular decision. Culture refers to the values, attitudes, ideals which helps the individuals to communicate with one another & influence the decision making process.

Þ    Socio-economic: Socio – economic factor has high levels of influence over the consumer decision making process. It has been seen that, the marketing managers have tried to correlate the socio economic factors which would directly appeal the marketing mix.

Þ    Reference group: Reference Group refers to the factor which helps to influence the consumer’s purchase decisions. Consumers use the reference groups to compare their feeling as well as the thoughts of others.

 Ans2.

Decision Making Unit (DMU) refers to the team or collection of people who will be involved within the buyer decision process. DMU majorly takes into consideration the decision making for the enterprise rather than the decision making of the consumers. There are various people involved within the entire process. They are the gate keepers, initiators, buyers, deciders, users & the influencers.Decision making Units in Business – to – Business (B2B) as compared to Business – to – Consumers (B2C) has been referred to as a complex process. This is due to the fact that, many people are involved within the same. Initiators refer to the people who recognize the problem & feel the need to satisfy the same. Gatekeeper refers to the individuals who either give the entire process a start button or a stop button. They are the ones who provide recommendations for the decision makers. Deciders refer to the people who are responsible for making the final decision i.e. whether to buy a particular commodity or not. Lastly, influencer refers to the people who influence the overall decision making process of the buyers.

Business to Business marketing refers to the type of marketing which is practiced between two or more business enterprises. Business to business marketing refers to the type of marketing which would meet the needs of the business houses. The products exchanged within the B2B marketing will help to drive the consumers to buy the products. Some of the reasons or benefits which would make the business to business (B2B) markets special as compared to the consumer market have been described as follows.

Ans3.

It shall be taken into consideration, some of the elements such as culture, personal expectations, aspirations; etc shall be kept in mind while recognizing the problems.Awareness: The business decision making process begins when the organization identifies the need for purchase. The main reason for the organization to buy a particular product would be either to replace the existing items or buy a new product or finish off the stocks.Information search: Once problem has been recognized by the consumer, the second step within the decision making process is to search for the relevant information. Recalling information, experiences, personal feelings attached to it shall be kept in mind (Handlin, 2010). Two types of search shall be taken into consideration i.e. Internal & External. These two means shall be used in order to gather information regarding a particular commodity.Specification: It shall be kept in mind that, if the buyers have agreed to buy a particular product a detailed specification list would be prepared. Specifications can be on the following basis such as quantities, performance of the product & technical requirements of the same.Alternative evaluation: Once the information search is done, various alternatives shall be taken into consideration (Handlin, 2010). A descriptive evaluation criteria shall be formulated which would help to evaluate the various alternatives.Proposals: Once the buyer makes a decision to a buy a particular product with given specifications a detailed proposal would be provided from the suppliers.  A formal document would be prepared which would highlight the requirements as well as ask for price quotations.Decision: Based upon the evaluation done in the above step, an alternative shall be selected. The alternative selected shall be such which would help to meet the needs of the customers (MRS Evidence Matters, 2005).Evaluation: The buyers will evaluate the various alternatives based upon the  different parameters such as price, quality, quantity, value for money, etc.Post decision evaluation: The last step which shall be taken into consideration by the consumer refers to the post decision evaluation. This means, whether the customer is satisfied or dissatisfied with the use of a particular product. This refers to the process where in the consumers will reevaluate the product or the alternative selected (Valerie, 1984).Order: Once the buyers will make up their mind to buy a particular product from a supplier they will negotiate upon the price, payment terms, delivery dates, place & other contractual terms. When the order is complete & delivered, the last step would be to review the performance of the product.

Task 4 – 20 Marks

In progressing and developing business sales, you have identified the importance of “Buying Centre” to ‘Window World’. How might a better understanding of the terms; New Buy, Modified re-buy and Straight re-buy, assist ‘Window World’?

Ans4. In order to develop business sales, “Window World” shall take into consideration the following terms such as new buy, modified re buy & straight re buy. New buy refers to a situation where in the customer will buy an entirely new product. The main reason for an entirely new buy could be due to dissatisfaction from the previous good or service. It shall be kept in mind by Window World that, the customer might not be willing to buy a new product as he is not satisfied with the product offered. Hence, he will tend to buy an entirely new product (MRS Evidence Matters, 2005).

Modified re buy refers to buying the previous product with some modifications. The changes can be either from the producer’s side or the supplier’s side or due to some other element. In this particular situation the buyer would be required to modify the product either on either of the following basis i.e. price, suppliers, terms, etc (Harrison, Hague & Hague, 2012).

Straight re buy refers to a situation where the consumer will buy a good which is identical to the previous purchase. The purchase made would be practiced in an identical amount with identical terms from an identical supplier. It shall be seen that, when the consumers opt for straight re buy it means that the products have an attractive target group taking into consideration the marketing efforts within the production process (Harrison, Hague & Hague, 2012).

Task 5 – 15 Marks

‘Window World’ had a very good reputation with customers for its products and services within its consumer market-place and had ensured that attention was also paid to contacting and communicating with the customer after the completion of the sale. Why is this post purchase customer engagement still important when dealing with business customers?

Ans5. Once the product is being purchased, there would be dissonance in the minds of the consumers. This might lead to disquieting amongst the features as well as various types of information which would support his/her decision to buy a particular brand. Hence, marketing communications shall be referred to as a strategic tool which would provide beliefs as well as high levels of evaluations regarding a particular brand (Handlin, 2010). A positive marketing communication will lead to reinforcement of the choice of the consumers & they will feel good about the product bought. Therefore, the job of the marketer does not end with the sale of the product. The marketer shall also take into consideration the post purchase satisfaction, post purchase actions & post purchase uses of the product (MRS Evidence Matters, 2005).

Dissonance refers to a term which describes the feeling of uneasiness while dealing with conflicts. It shall be taken into consideration that people sometimes feel surprised, dreadful & embarrassed. A motivational drive shall be taken into consideration by the individuals who would help to reduce the levels of dissonance. Some of the ways with which level of dissonance shall be reduced have been discussed in this section of the report. They are as under:Þ    Selective exposure: It shall be taken into consideration that, people tend to avoid all those things which leads to high levels of dissonance. People avoid reading information via television, magazines, and programs. Hence, people choose to be with people who think like them as well as like them. Most of the people “stick with their kind of people” & maintain relative comfort levels within the same.

Þ    Need for reassurance: It has been seen that, close call decisions leads to high levels of internal tensions once the decisions have been made. Hence, three instances leads to post decisions dissonance such as :

°         Amount of time taken by the buyer to choose a particular product

°         Importance of issue

°         The amount of difficulty associated with reversing the decisions that has been made

The elements which shall be kept in mind with respect to the post purchase behavior have been discussed in this section of the report. They are as follows:

Þ    Post Purchase Satisfaction: Post purchase satisfaction refers to the first element which shall be kept in mind by the marketers once the product is bought. Satisfaction refers to the bridge between what is expected & what is perceived out of the product. When the perceived expectation is not up to the mark, the consumer would be disappointed, whereas if the expectation is over and above what is expected, then the consumer is delighted. It is this feeling which incites the consumer to buy the product again or not, recommend others to buy a particular product or not (Duff, 2012). Consumer forms a level of expectation from the various means which educate about the product. The various means of communication would be message flown by the seller, other source of information, friends, media, etc. If there is large gap between the levels of expectation than the perceived levels of expectations, it leads to greater dissatisfaction. The main importance of post purchase satisfaction is to check that, whether the customer is satisfied with the quality of the product or not. Whether the information provided by the seller truthfully represents the performance of the product or not. There are sellers who understate the levels of performance which provides the customer with high levels of consumer (CiteMan, 2006).

Þ    Post Purchase Actions: Satisfaction as well as dissatisfaction of the product leads to high levels of influence over the behavior of the product. If the customer would be satisfied with the purchase of the product, there is a probability that he/she will purchase the product again. It shall be seen that, a satisfied customer will tend to speak positive things about the brand. Whereas, on the other hand a dissatisfied consumer will either return the product or dump the same. There would be certain decisions which shall be taken into consideration in order to satisfy the customer. Certain private actions which can be taken by the dissatisfied customer would be to either stop buying the product, warn family and friends i.e. not to buy the product, etc (Anderson, 2012).

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