12-1
Chapter 12
Organizational and
Household Decision Making
Organizational Decision-Making
• 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, 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.
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Organizational Purchase
Situation
Expectations
of the
Supplier
Organizational
Climate of the
Buyer’s Firm
Buyer’s
Assessment of
His/ Her Own
Performance
Influences on the
Organizational
Purchase Situation
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Organizational Decision-Making
Vs. Consumer Decision-Making
12-4
Purchase Decisions Frequently Involve Many People
Products Are Often Bought According to Specifications
Impulse Buying is Rare
Decisions Are Often High-Risk
Dollar Volume of Purchase is Often Substantial
More Emphasis on Personal Selling
Decisions Are Guided by Long-Term Relationships
Influences on the Organizational
Buyer Behavior Process
Type of Purchase
The Buyclass Framework
Level of
Information That Seriousness of
Must be Gathered Consideration of
All Possible
Alternatives
Buyer’s
Familiarity With
The Purchase
12-5
Extent of Risk and Effort Involved
Types of Organizational Buying
Situations
New Task
Modified Rebuy
Straight Rebuy
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Organizational Decision Roles
Initiator
User
12-7
Gatekeeper
Decision
Roles
Buyer
Influencer
Trends in Organizational Buying
Behavior
Building Strong, Lasting Bonds With Suppliers
Consolidating Vendors
Emphasis on the User, Not on the Buyer
Shift From Technology to Marketing Orientation
12-8
Defining the Modern 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.
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Age and Size of the Family
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• 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 Households
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• 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.
– Nontraditional family structures continue to
rapidly increase.
Effects of Family Structure on
Consumption
12-12
The Family Life Cycle (FLC) Combines Trends in
Income and Family Composition With the Changes in
Demands Placed Upon This Income.
Four Variables are Necessary to Describe These
Changes:
Age
Marital Status
Presence or Absence of Children
in the Home
Children’s Ages (if any)
Family Life Cycle: An Updated
View
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Family Decision Making
12-14
Types of Purchase Decisions
Made by Families
Consensual
Accommodative
Group Agrees on the Desired
Purchase, Differing Only in
Terms of How It Will
Be Achieved.
Group Members Have Different
Preferences and Can’t Agree
on a Purchase That
Will Satisfy Everyone.
Family Decision Conflict
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Conflict Occurs When There is Not Complete
Correspondence in Family Members’ Needs and
Preferences.
Some Specific Factors Determining the Degree of
Family Decision Conflict Include the Following:
Interpersonal Needs
Person’s Level of Investment in the Group
Product Involvement
and Utility
Degree to Which the Product in Question Will
Be Used or Will Satisfy a Need
Responsibility
For Procurement, Maintenance, Payment, etc.
Power
One Family Member’s Influence Over the
Others in Making Decisions
Sex Roles and Decision-Making
Responsibility
Autocratic
Decisions
Syncratic
Decisions
Made by One
Spouse or the
Other
Decisions
Made
Jointly
Factors Influencing Joint or Individual
Family Decisions
Sex-Role Stereotypes
Spousal Resources
Socioeconomic Status
Experience
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Children as Decision Makers:
Consumers in Training
12-17
• Children are recognized as consumers that
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 child’s request and
“surrenders”.
Consumer Socialization
• 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 culture’s values, myths, and idealized images.
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Cognitive Development
12-19
Kids Can Be Segmented By Age in Terms of Their
Stage of Cognitive Development, or Ability to
Comprehend Concepts of Increasing Complexity.
Children Differ in Abilities to Store and Retrieve
Information From Memory:
Limited
Cued
Strategic
Below Age 6, Children Do Not
Employ Storage and Retrieval
Strategies.
Between 6 and 12, Children
Employ These Strategies -When Prompted.
12 and Older, Children
Spontaneously Employ These
Strategies.
Market Research and Children
• Despite children’s 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.
– 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.
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