Question

Individual consumers are more likely to buy things impulsively than businesses and institutions because there are less people involved in the decision making process and they are more likely to be influenced when making a purchase. At a business/institutional level there is likely more than one individual involved in the decision making process and whatever is purchased must be justifiable within the budget, overall needs of the company, etc. Businesses and institutions purchase mainly based on their needs, but an individual consumer can be influenced by a variety of factors to purchase something they want but don't actually need. The need to have the most popular brand of clothing or electronics is likely to influence a consumer more than a business, a business/institution will have multiple people collaborating to make a decision providing alternative viewpoints about the positives and negatives of a specific purchase. A consumer only has to justify the purchase with themselves, so although they may not 'need' new boots, they really 'want' them and the boots are popular so they buy them without seeking anyone else's input.

Please respond to post in at least 200 words

Answer 1

Business is a firm where they are running for the sake of earning profits from their business. Business will be having a collective decision making process as there are many involved in it and if the decision is wrong the business will suffer by incurring losses. So business will always want to be cost effective on purchases as they want to reduce their cost to earn profits from revenue. Business will never get influenced by any factor unless it is important to the activity of business. Before purchasing the product business will do analysis with the data they had and see for pros and cons of that purchase.

Consumer is always an individual where he himself can decision on anything. If the decision goes he will have to suffer unlike a business where a group of people working in that business suffers. Consumer will always go by the external factors and even get influenced while making a purchase. Consumer will always get influenced without even knowing to himself. Consumer can even Change his mind at last minute saying he may or may not buy a product where as a business last minute decision can also be costly

So decision making in business is quite complicated when compared to decision of a consumer.