12-1

12-1

Chapter
Chapter 12
12
Organizational and
Household Decision Making

Organizational
Organizational DecisionDecisionMaking
Making

12-2
12-2

Organizational Buyers are people who

purchase goods and services on behalf of
companies for use in the process of
manufacturing, distribution, or resale.
These individuals buy from Business-toBusiness Marketers,
Marketers who specialize in meeting
the needs of organizations such as
corporations, government agencies, hospitals
and retailers.
Approximately, $2 trillion dollars worth of
products and services change hands among
organizations.

Organizational
Organizational
Purchase
Purchase
Situation
Situation
Expectations
Expectations

12-3
12-3

of
of the
the
Supplier
Supplier

Organizational
Organizational
Climate
Climate of
of the
the
Buyers
Buyers Firm
Firm
Buyers
Buyers
Assessment
Assessment of
of
His/
His/ Her
Her Own
Own
Performance
Performance

Influences
Influences on
on the
the
Organizational
Organizational
Purchase
Purchase Situation
Situation

Organizational
Organizational DecisionDecisionMaking
Making
Vs.
Vs. Consumer
Consumer DecisionDecisionPurchase
Decisions
Frequently
Involve
Many
People
Purchase
Decisions
Frequently
Involve
Many
People
Making
Making

12-4
12-4

Products
ProductsAre
AreOften
OftenBought
BoughtAccording
According to
to Specifications
Specifications
Impulse
ImpulseBuying
Buyingis
isRare
Rare
Decisions
DecisionsAre
AreOften
Often High-Risk
High-Risk
Dollar
Dollar Volume
Volumeof
ofPurchase
Purchaseis
isOften
Often Substantial
Substantial
More
MoreEmphasis
Emphasison
onPersonal
Personal Selling
Selling
Decisions
DecisionsAre
AreGuided
Guidedby
byLong-Term
Long-TermRelationships
Relationships

Influences
Influences on
on the
the
Organizational
Organizational
Buyer
Buyer Behavior
Behavior Process
Process

12-5
12-5

Type
Type of
of Purchase
Purchase

The
TheBuyclass
Buyclass Framework
Framework
Level
Levelof
of
Information
InformationThat
That Seriousness
Seriousnessof
of
Must
Mustbe
beGathered
Gathered Consideration
Considerationof
of
All
AllPossible
Possible
Alternatives
Alternatives

Buyers
Buyers
Familiarity
FamiliarityWith
With
The
ThePurchase
Purchase

Extent of Risk and Effort Involved

Types
Types of
of Organizational
Organizational
Buying
Buying
Situations
Situations
New
New Task
Task
Modified
Modified Rebuy
Rebuy
Straight
Straight Rebuy
Rebuy

12-6
12-6

Organizational
Organizational Decision
Decision
Roles
Roles
Initiator

User

12-7
12-7

Gatekeeper

Decision
Decision
Roles
Roles

Buyer

Influencer

Trends
Trends in
in Organizational
Organizational
Buying
Buying
Behavior
Behavior
Building
Building Strong,
Strong, Lasting
Lasting Bonds
Bonds With
With Suppliers
Suppliers
Consolidating
Consolidating Vendors
Vendors
Emphasis
Emphasis on
on the
the User,
User, Not
Not on
on the
the Buyer
Buyer
Shift
Shift From
From Technology
Technology to
to Marketing
Marketing Orientation
Orientation

12-8
12-8

Defining
Defining the
the Modern
Modern
Family
Family
The Extended Family was once the most
common family unit and consisted of three
generations living together.
The Nuclear Family - a mother, father, and
one or more children - became the modern
family. However, this is no longer a realistic
view of the family.
Today, a Family Household is defined as
containing at least two people who are
related by blood or marriage.

12-9
12-9

Age
Age and
and Size
Size of
of the
the
Family
Family

12-10
12-10

How do the following overall demographics of

the modern family affect marketers?
The under-25 married couple age group declined
by one-third since 1980.
The 65+ group increased by 15% since 1980.
The 35 - 44 year age group grew 40% since 1980,
and will be 50% of the total by the year 2000.
The average marrying age for women is 24 and 26
for men.
The average family size is 2.6 people, and birth
rates are expected to continue to decline.

Family
Family
Households
Households

12-11
12-11

Another factor affecting marketers is that

family households headed by a single person
have grown by over 25% in the last decade.
Over a million couples divorce each year.
The number of unmarried adults is steadily rising.
Single men and women are different markets.
Middle-aged adults have been termed The
Sandwich Generation because they must attend
to those above them and below them in age.
Children that have left home and return to the nest
are called Boomerang Kids.
Kids
Nontraditional family structures continue to rapidly
increase.

Effects
Effects of
of Family
Family
Structure
Structure on
on
Consumption
The Family Life Cycle (FLC) Combines Trends in
Consumption

12-12
12-12

Income and Family Composition With the Changes in

Demands Placed Upon This Income.
Four Variables are Necessary to Describe These
Changes:
Age
Age
Marital
Marital Status
Status
Presence
Presence or
orAbsence
Absenceof
of Children
Children
in
in the
the Home
Home
Childrens
ChildrensAges
Ages (if
(if any)
any)

Family
Family Life
Life Cycle:
Cycle: An
An
Updated
Updated
View
View

12-13
12-13

Family
Family Decision
Decision
Making
MakingTypes of Purchase Decisions

12-14
12-14

Types of Purchase Decisions

Made
Made by
by Families
Families

Consensual
Consensual

Group
GroupAgrees
Agreeson
onthe
theDesired
Desired
Purchase,
Purchase,Differing
DifferingOnly
Onlyin
in
Terms
Termsof
ofHow
HowItItWill
Will
Be
BeAchieved.
Achieved.

Accommodative
Accommodative

Group
GroupMembers
MembersHave
HaveDifferent
Different
Preferences
Preferencesand
andCant
CantAgree
Agree
on
onaaPurchase
PurchaseThat
That
Will
WillSatisfy
SatisfyEveryone.
Everyone.

Family
Family Decision
Decision
Conflict
Conflict
Conflict Occurs When There is Not Complete

12-15
12-15

Conflict
Correspondence in Family Members Needs and
Preferences.

Some Specific Factors Determining the Degree of

Family Decision Conflict Include the Following:
Interpersonal
InterpersonalNeeds
Needs

Persons
PersonsLevel
Levelof
ofInvestment
Investmentin
inthe
theGroup
Group

Product
ProductInvolvement
Involvement
and
andUtility
Utility

Degree
Degreeto
toWhich
Whichthe
theProduct
Productin
inQuestion
QuestionWill
Will
Be
BeUsed
Usedor
orWill
WillSatisfy
SatisfyaaNeed
Need

Responsibility
Responsibility

For
ForProcurement,
Procurement,Maintenance,
Maintenance,Payment,
Payment,etc.
etc.

Power
Power

One
OneFamily
FamilyMembers
MembersInfluence
InfluenceOver
Overthe
the
Others
in
Making
Decisions
Others in Making Decisions

Sex
Sex Roles
Roles and
and DecisionDecisionMaking
Making
Responsibility
Responsibility

12-16
12-16

Autocratic
Decisions

Syncratic
Decisions

Made by One
Spouse or the
Other

Decisions
Made
Jointly

Factors
Factors Influencing
Influencing Joint
Joint or
or Individual
Individual
Family
Family Decisions
Decisions
Sex-Role
Sex-RoleStereotypes
Stereotypes
Spousal
SpousalResources
Resources

Socioeconomic
SocioeconomicStatus
Status
Experience
Experience

Children
Children as
as Decision
Decision
Makers:
Makers:
Consumers
in
Training
Consumers
in
Training
Children are recognized as consumers that

12-17
12-17

deserve attention.

Kids ages 4 - 12 spend or influence their parents to

spend about $140 billion a year.
Children are particularly influential in purchasing the
following products:

Fruit snacks
Frozen novelties
Kids beauty aids and fragrances
Toys

Parental Yielding occurs when a parental decision

maker is influenced by a childs request and
surrenders.

Consumer
Consumer
Socialization
Socialization

12-18
12-18

Consumer Socialization is defined as the

process by which young people acquire skills,
knowledge, and attitudes relevant to their
functioning in the marketplace.

Influence of Parents:
Authoritarian parents - restrictive with a negative view about
advertising.
Neglecting parents - detached from kids and exercise little
control over what their children do.
Indulgent parents - less restrictive and want children to
learn about buying.

Influence of Television:
The Electronic Babysitter that teaches children about a
cultures values, myths, and idealized images.

Cognitive
Cognitive
Development
Development
Kids Can Be Segmented By Age in Terms of Their

12-19
12-19

Stage of Cognitive Development,

Development or Ability to
Comprehend Concepts of Increasing Complexity.
Children Differ in Abilities to Store and Retrieve
Information From Memory:
Limited
Limited

Below
BelowAge
Age6,
6,Children
ChildrenDo
DoNot
Not
Employ
EmployStorage
Storageand
andRetrieval
Retrieval
Strategies.
Strategies.

Cued
Cued

Between
Between66and
and12,
12,Children
Children
Employ
EmployThese
TheseStrategies
Strategies---When
WhenPrompted.
Prompted.

Strategic
Strategic

12
12and
andOlder,
Older,Children
Children
Spontaneously
SpontaneouslyEmploy
EmployThese
These
Strategies.
Strategies.

Market
Market Research
Research and
and
Children
Children
Despite childrens buying power, relatively
little data on their preferences or influences
on spending patterns is available.
Children are difficult subjects to research.
A particularly helpful types of research with
children is Product Testing.
Testing
Many serious ethical issues are raised when
advertisers try to appeal directly to children.
Kids cognitive defenses are not yet developed
enough to filter out commercial appeals.

12-20
12-20