On the Interface Between Organizational and Consumer Buying Behavior

Yoram Wind, University of Pennsylvania
ABSTRACT - The relevance of organizational buying behavior concepts and methods to the study of consumer behavior is examined. The paper suggests a number of implications for the study of consumer behavior and calls for the legitimization of the study of organizational buying behavior within the boundaries of the consumer behavior discipline.
[ to cite ]:
Yoram Wind (1978) ,"On the Interface Between Organizational and Consumer Buying Behavior", in NA - Advances in Consumer Research Volume 05, eds. Kent Hunt, Ann Abor, MI : Association for Consumer Research, Pages: 657-662.

Advances in Consumer Research Volume 5, 1978      Pages 657-662

ON THE INTERFACE BETWEEN ORGANIZATIONAL AND CONSUMER BUYING BEHAVIOR

Yoram Wind, University of Pennsylvania

ABSTRACT -

The relevance of organizational buying behavior concepts and methods to the study of consumer behavior is examined. The paper suggests a number of implications for the study of consumer behavior and calls for the legitimization of the study of organizational buying behavior within the boundaries of the consumer behavior discipline.

INTRODUCTION

The basic premise of this paper is that our concepts of and approaches to the study of consumer behavior can benefit from a close examination of the organizational buying behavior literature. [The converse (i.e., the contribution of consumer behavior models, concepts, and findings to the study of organizational buying behavior) is also true. Yet, given the orientation of this audience, the paper focuses on the contributions of the organizational buying behavior area to the study of consumer behavior.] Many of the consumer behavior models recognize the social context and multiperson nature of most purchase and consumption behavior. Yet, to date, these models and most of the consumer behavior concepts and studies have focused on the individual as the unit of analysis.

The lopsided emphasis on the individual and the tendency to ignore the multiperson issue can be attributed to three major reasons:

1. Conceptual difficulties involving the development of multiperson variables (as distinct from individual variables) and hypotheses.

2. Methodological difficulties involving the analysis of multiperson data.

3. Operational difficulties involving added time and monetary costs for collection and analysis of multiperson data.

Organizational buying behavior, on the other hand, did not have the luxury of focusing on the individual. Even the early conceptual and empirical organizational buying behavior studies recognized the fact that meaningful studies cannot focus only on the purchasing agent but rather should be concerned also with other organization- al members (e.g., users) involved with the purchase and usage of the given products or services.

In this respect then, the usually neglected area of organizational buying behavior could conceivably provide concepts and methods relevant to the study of multiperson consumer behavior. The objective of this paper is to briefly outline some of these possible contributions and suggest that advances in our understanding of consumer behavior can be gained not only from research on consumer behavior but also indirectly from research on organizational buying behavior.

CONCEPTUAL CONTRIBUTIONS

The conceptual contributions of organizational buying behavior to the study of consumer behavior include the concepts of:

-the buying center

-decision stages and roles in the buying center

-group choice models

-buying situations

-a building block modeling approach

-buying center tasks and objectives

-consumers' organizational climate and structure consumers' organizational technology

-consumers' organizational (vs. individual) variables

The Buying Center

Consumer products and services are purchased not only by individuals, but quite frequently by a number of individuals (not all of whom are members of the same household) or by an individual who buys for the consumption of someone else. Even when a person buys a product or service for his or her own consumption, a number of aspects of the purchase decision are often influenced by some relevant others. In all of these cases a sole focus on the individual could be quite misleading.

Recognizing the multiperson nature of most consumer behavior, greater emphasis has been placed in recent years on the study of the family and, in particular, the husband-wife dyad. Yet, the husband-wife dyad is not always the relevant unit of analysis (consider, for example, purchases involving products for children and the cases in which consumers are not living within the boundaries of the traditional family). It would be much more desirable, therefore, to accept the concept of the buying center, which was developed in the context of organizational buying behavior (Wind, 1967). The concept calls for the identification, in each purchase situation, of the relevant individuals involved in the buying decision process (whether they are members of the same household or not) and using them (the members of the buying center) as the relevant unit of analysis.

Conceptually, the buying center is the appropriate unit of analysis in consumer behavior. Yet, implementing the concept requires the resolution of a number of conceptual and methodological issues (Wind, 1977). A number of these issues are currently studied in the context of organizational buying behavior, and could provide better insight into consumer behavior.

Decision Stages and Roles in the Buying Center

Consumer behavior involves a large number of decisions [A large number of models have been proposed in both the consumer and organizational behavior literature to describe the various buying decisions and their sequence. Since there does not seem to be any consensus as to the "true" sequence of purchase decisions, the readers may select the model of their choice replacing the rows in Exhibit 1 with the decision stages of their own model.] ranging from the identification of a need, through various stages of generation and evaluation of alternatives, to the selection of a product, specific features of a given brand, and time and place of purchase. Since these decisions are typically made by a number of members in the buying center, it is useful to construct a matrix of decision stages by roles as illustrated in Exhibit 1 (which is an adaptation of a matrix developed in an industrial buying study). The specific decision stages and roles would most likely change across buying situations. The same individual could occupy a number of roles (e.g., buyer and user), and a number of individuals could occupy the same role (e.g., there may be a number of users).

EXHIBIT 1

DECISION STAGES BY ROLES

[For alternate formulation of decision stages-by-roles matrix see, for example, Webster and Wind (1972).]

Developing the relevant decision stages-by-roles matrix and establishing common patterns across various buying situations would help our understanding of consumer behavior and place the work on the individual consumer's decision processes in the proper perspective.

Furthermore, in many of these decision stages the person occupying a given role engages in a negotiative process with suppliers and other external personnel. In these cases the unit of analysis can be changed to the group of boundary persons (e.g., buyer and salesman).

Choice Models

The consumer behavior literature has been predominantly occupied with individual choice models. Yet, many consumer behavior situations involve a group choice [The other case of individual choice subject to the influence of relevant others (Wind, 1976) can be viewed as being somewhat between the two extremes of the "pure" individual choice and the group choice situation.] which cannot be explained adequately by individual choice models.

The organizational buying behavior literature and its supporting disciplines (e.g., organizational behavior and political science) have offered a number of group choice models. These models cover both formal "voting" type choice models and informal interaction type models. The formal group choice models vary with respect to the specific decision rules employed (e.g., simple majority), the way these rules are determined, and the weight given each group member. The informal interaction choice models vary with respect to the processes of interaction, influence, persuasion, bargaining, and conflict resolution procedures employed. [For a detailed discussion of a number of these group choice models see, for example, Patanik (1971), Fishburn (1973), and Guetzkow and Collins (1964). A comparison of the predictive ability of a number of these models in the context of both an organizational and family choice setting is being conducted by Buss (1977).]

Buying Situations

One of the early empirical organizational buying behavior studies (Robinson and Faris, 1967) distinguished between three major buying situations--the new task, modified rebuy, and straight rebuy situations. These situations vary with respect to the decision process and information inputs they require as well as with respect to the number of new alternatives considered and uncertainty involved.

Understanding the buying situation is as critical in the study of consumer behavior as it is in the study of organizational buying behavior. Yet, with the notable exception of Howard's (1963 and 1977) classification of consumer behavior into a similar trichotomy of routines, limited and extensive problem solving, and the theoretical and empirical work of him and his colleagues, little explicit attention has been given in the consumer research area to the importance of buying situations in the explanation of consumer research. [Buying situations have also been approached from a different point of view by Belk (1975), who focused on the various dimensions of the consumer situational characteristics; namely, the physical and social surroundings, the temporal perspective, the task definition, and the antecedent states.]

A Building Block Modeling Approach

Whereas most consumer behavior models have attempted to specify the exact network of buying decisions, their interrelationships and determinants (e.g., Howard and Sheth (1969)), the organizational buying behavior model proposed by Webster and Wind (1972) is based on a building block approach, i.e., the model focuses on the identification of the major sets (blocks) of variables that could affect the organizational buying decisions. [For other modeling approaches to organizational buying behavior, see Sheth (1973), Hillier (1975), and Choffray and Lilien (1977).] Recognizing that no deterministic model can explain and predict accurately all organizational buying decisions, the model provides a framework for the identification of variables and specification of hypotheses (reflecting the current state of knowledge) on the relationship among the key variables. As such, it serves only as a guideline for the selection of variables for specific empirical studies on organizational buying behavior with no attempt to specify general cause and effect type relationships.

Given the disappointing results (in terms of predictive efficacy) of most of the detailed consumer behavior models, it might be useful to lower our level of expectations from these models and reformulate them as building block models of consumer behavior. Alternatively, one can even take the organizational buying behavior block model presented in Exhibit 2 (Webster and Wind, 1972) and use it in some modified form as a guideline for consumer behavior studies.

EXHIBIT 2

AN ORGANIZATIONAL BUYING BEHAVIOR BLOCK MODEL

Buying Center Tasks and Objectives

The consumer behavior literature has given considerable attention to consumers' objectives as defined by their needs or benefits sought. Yet, little attention has been given to the identification of consumers' purchase related tasks, their relationship to the consumers' hierarchy of objectives, the ways consumers attempt to resolve conflicting objectives, and the evaluation of the purchase tasks (and functions).

It is in this context that the organizational buying behavior and procurement literature can be of help since one of their major concerns is with these issues (e.g., value analysis, economic order quantity procedures, etc.) and their impact on the buying process.

Consumers' Organizational Climate and Structure

[The term consumers' organization is used to denote the group of people comprising the organization within which the consumers' purchase and consumption activities take place. The family, for example, can be considered such an organization.]

The "organizational climate" literature distinguishes nine dimensions of organizational climate (Litwin and Stringer, 1968) which could also be used to describe the relevant consumer climate. These dimensions are: structure, responsibility, reward, risk, warmth, support, standards, conflict, and identity. The identification of these dimensions in the context of consumer behavior can add a rich new perspective to the more conventional consumer psychographic inventories.

Some of these dimensions are also related to the structural characteristics which have been ignored by the more conventional approaches to the study of consumer behavior. Among the more relevant structural characteristics are:

The reward system. In the organizational buying context the behavior of individual buying center members was explained by their perceptions of the criteria used to distribute rewards (Wind, 1971). It seems, therefore, that in multiperson consumer buying centers the consumers' perceived rewards should be examined as one possible explanation (and predictor) of purchase behavior.

Division of responsibilities. The division of responsibilities within the consumer organization (the actual matrix of decisions by roles) and its stability (over time and situations) is one of the major factors which effect organizational buying behavior. It might be useful, therefore, to consider this variable (and its related concepts--the degree of decentralization and profit responsibilities of the buying function) in consumer studies as well.

Roles, role expectation, and role conflict. Organizational buying behavior and the sociological literature have suggested the importance of perceived roles, role expectations, and role conflicts in explaining the behavior of organizational members. The same concepts seem to be appropriate for the explanation of consumer purchase (and usage) behavior.

Authority structure. The buying authority and the extent of lateral vs. vertical involvement in the purchase process have long been recognized in organizational buying (for example, Strauss (1962)). These concepts have largely been ignored in consumer behavior despite the similarity between the authoritarian-democratic structure of the family and that of an organization. Similarly, the purchase involvement of two parents (lateral relationship in egalitarian type family) differs from that of a parent and a child (vertical relationship).

Consumers' Organization Technology

It is well recognized in the organizational buying literature that technology has its impact both on the determination of which item to buy and on the nature of the buying process itself. It is reasonable to assume that technology is also a major factor in consumer behavior. Yet, it has been largely ignored in the study of consumer behavior.

In the consumer context, technology includes the house and equipment owned and used by the consumer, as well as the programs and procedures used to "manage" the household affairs in general and the buying function in particular.

The consumer's technology defines the technological constraints within which purchase and usage decisions and behavior take place. It is important to remember that the current house and equipment, as well as the technological orientation of the consumer, places significant constraints on the buying actions that can be considered. It might be useful, therefore, to examine consumer behavior conditional on the consumers' technological constraints. [This (technological) conditional analysis is similar in spirit to the one in which purchase and usage behavior is explained conditional on the consumers' existing inventory (assortment) or products (Wind, 1977c).] This is especially crucial for new products which either have to fit the consumers' current state of technology or change it (most likely at a higher psychological and monetary cost).

Telephone and mail buying are examples of buying technology. Other technological developments should also be given attention. In particular, two-way cable TV and the recently introduced home computers which, at a price equivalent to a color TV set, have the potential of changing consumer buying technology, and affecting the buying decision process and outcomes.

Consumer Organizational (vs. Individual) Variables

The dependent variable in many consumer behavior studies bas measured a response of the consumer organization (e.g., household purchase) and not of the individual decision maker. In contrast, the explanatory variables used in consumer behavior studies tend to be, with few exceptions (e.g., family income), individual in nature (e.g., education, sex, personality, attitudes, etc.).

Viewing the consumer as an organization suggests the addition of a new class of variables--namely, "organizational'' type variables which measure the characteristics of the relevant consumer organization (apart from the characteristics of the individuals involved). The development of a set of consumer "organizational" measures requires a theoretical framework which encompasses the relevant dimensions of consumers' organizational behavior. In the absence of such a framework (which also does not exist for organizational buying situations) one may consider a number of variables [For a detailed discussion of organizational measures, see Price (1972).] (and their possible consumer behavior descriptors) such as:

Domain consensus. (Levine and White, 1961)--the degree to which members of the consumer organization (e.g., household) agree on the goals, reference orientation, and tasks.

Stability. (Caplow, 1964)--the length of time the consumer organization has been in its current structure (e.g., length of stay in a family life cycle stage, etc.).

Resource distribution. (Evan, 1966)--the amount and type of resources held by each member of the buying center compared with their needs.

Formalization. (Hage and Aiken, 1970)--the degree to which a consumer organization has rules and established guidelines for its purchase and consumption behavior.

Satisfaction. (Smith, Kendall, and Hulin, 1969)--the consumer's satisfaction with other members of the buying center (those occupying parallel roles to "co-workers" and "supervisors").

Efficiency. (Etzioni, 1964)--the amount of resources used by the consumer organization to achieve its intended purchase and consumption goals.

Intimacy. (Hemphill and Westie, 1950)--the degree to which members of the buying center are familiar with the preferences of the other members and know their probable reaction under widely different circumstances.

Participation. (Hemphill and Westie, 1950)--the degree to which members of the buying center apply time and effort to the purchase and consumption activities of the buying center.

In addition to the "new" consumer organizational type independent variables that the study of organizational buying behavior suggests for inclusion in consumer behavior models, there are a number of concepts suggested by the organizational buying behavior literature which should receive greater attention by consumer researchers. These concepts include:

The make, buy, or lease decision. Most consumer behavior studies focus on the buy decision ignoring the other two alternatives facing the consumer--leasing or making the product (or performing the service) by themselves.

The dyadic relationship between buyer and seller. Whereas most consumer studies focus on the consumer, a number of organizational buying studies have attempted to examine the nature of interactions between the buyer-seller, their negotiations, and bargaining processes. Given that in many consumer situations (e.g., in the retail environment) the consumer interacts directly with a seller, it might be useful to borrow from this area of the organizational buying behavior literature.

Multiple sourcing. Most organizations have policies against single source and attempt to maintain at any given time a number of alternative sources of supply. The consumer behavior literature has ignored this phenomenon and focused in many studies on the selection of a single brand or source. There is, however, some evidence to suggest that consumers do buy multiple brands from multiple sources. This was especially evident during the energy crisis when consumers tried to maintain "good customer relations" with more than a single gas station.

METHODOLOGICAL CONTRIBUTIONS

Comparing the level of sophistication and innovativeness of consumer and organizational buying research suggests a clear dominance of consumer research. [For a discussion of some of the limitations of consumer research, see Jacoby (1976) and Wind (1977b).] Yet, despite the more advanced state of research on consumer behavior, there are a number of methodological contributions the organizational buying behavior literature can make to the advancement of consumer research. These contributions encompass areas which received considerably more attention in the study of organizational buying behavior and which could be applied to the study of consumer behavior. In particular these include:

-greater emphasis on the analysis of purchase documents

-reliance on protocol analysis

-time and motion studies

-input-output analysis

-reliance on smaller samples

Greater emphasis on the Analysis of Purchase Documents

Examination of organizational buying research, and especially as conducted by industrial firms, suggests a much greater emphasis on secondary data analysis. Of particular interest is the utilization of purchase documents as the data for the analysis of various aspects of organizational buying behavior, such as source loyalty (Wind, 1970). Consumer researchers have relied heavily on panel purchase data (such as MRCA purchase diaries), with little attention, however, to the utilization of household purchase records, e.g., the analysis of bills paid, etc.

Reliance on Protocol Analysis

Protocol analysis--the analysis of transcripts of the verbalized thoughts and actions of a subject when the subject has been instructed to think or solve a problem aloud--has been employed in a number of problem solving situations. The early application of protocol analysis has been in the organizational buying behavior area with work of Clarkson (1963) on trust investment behavior and Wind (1968) on the decision process of purchasing agents. In both cases the protocol approach resulted in considerable insights into the subject's decision process. Consumer researchers should consider the use of this research approach in the study of consumer behavior.

Time and Motion Studies

Time and motion studies have been utilized (although infrequently) to study the work flow of the organizational purchasing function. This approach, whether conducted in the real world (by following consumers around on a shopping trip or during product consumption) or in a laboratory, could be applied to the study of consumer behavior and, in particular, to the study of product (and service) purchase and usage patterns.

Input-Output Analysis

The application of input-output analysis to the organizational buying function offers an interesting way of modeling the purchase function as a provider of inputs for the various users at various stages of the productive process (Watson and Smith, 1966). To date, to the best of this author's knowledge, this approach has not been applied in the study of consumer behavior. It does suggest, however, an approach which could provide intriguing insights into the role of consumer purchases in the maintenance of consumers' activities and standard of life.

Reliance on Smaller Samples

The relatively small number of organizational buyers (which characterize many industries), coupled with the high cost of conducting personal interviews with organizational buyers, have led to frequent reliance on relatively small samples. To achieve effective samples given these constraints, many organizational buying studies rely on careful telephone screening, followed by personal interviews with relatively small samples. Recent difficulties in obtaining consumers' cooperation and the increased cost of consumer interviewing suggest the desirability of following the example of organizational buying behavior studies. Certain advances in segmentation research--componential segmentation--are especially suited for such cases requiring relatively small samples. This approach was developed and first implemented in a number of organizational buying behavior studies (Green, Douglas, and Carmone, 1977). Yet, it is obviously appropriate for consumer segmentation efforts.

CONCLUDING REMARKS

The preceding discussion has highlighted some of the potential contributions the organizational buying behavior area can make to the study of consumer behavior. These and other contributions (which time and space constraints prevent me from discussing here) have a number of major implications to the study and teaching of consumer behavior. More specifically, they would suggest that:

1. Consumer researchers could benefit from a careful examination of the organizational buying behavior literature from which they can generate new variables, hypotheses, and even some methodological ideas.

2. The teaching of consumer behavior should not exclude the topic of organizational buying behavior. On the contrary, it seems that the study of organizational buying behavior should be viewed as an integral part of consumer behavior courses.

3. Innovative research on organizational buying behavior is a legitimate area of study for consumer researchers and hence should not be excluded (because of the subject matter) from either the Journal of Consumer Research or the sessions of the Association for Consumer Research.

Accepting my premise and conclusions we are still faced with the question of "how to best proceed toward improving our understanding of which aspects of organizational buying behavior can (and should) be applied to the study of consumer behavior?" Obviously, no prescriptions can, or even should, be given to researchers with respect to style, direction, and approach of their research. Yet, one possible route toward answering this question might be to list the "traditional" differences between organizational and consumer buying behavior and examine the extent to which each of these items can be utilized in the explanation of consumer behavior.

To illustrate this approach, let's consider the dimension of derived demand. The derived demand nature of organizational buying has often been presented as one of the major differences between organizational and consumer buying behavior. Yet, if one accepts the concepts of Decker (1965) and Lancaster (1966) consumer demand for goods can also be seen as a derived demand since goods are in this approach the inputs to the production of "commodities." Recreation, for example, can be considered a commodity which leads to a derived demand for sport equipment and time. Similarly, the demand for health can be viewed as a commodity with a derived demand for medical care (Grossman, 1972).

These and other approaches should be further explored and experiments designed to test their suggestions concerning the application of organizational buying concepts to the study of consumer behavior. This transfer of organizational buying concepts and methods to the study of consumer behavior is, in my opinion, both feasible and valuable. It offers an exciting new challenge and a legitimate new area of study for consumer researchers.

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