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Chapter 10Organizational and
Household Decision Making
10-1Copyright © 2013 Pearson Education, Inc. publishing as Prentice Hall
CONSUMER BEHAVIOR, 10eMichael R. Solomon
10-2Copyright © 2013 Pearson Education, Inc. publishing as Prentice Hall
Chapter Objectives
When you finish this chapter, you should understand why:
1. Marketers often need to understand consumers’ behavior rather than a consumer’s behavior.
2. Companies as well as individuals make purchase decisions.
3. Our traditional notions about families are outdated.
10-3Copyright © 2013 Pearson Education, Inc. publishing as Prentice Hall
Chapter Objectives (continued)
4. Many important demographic dimensions of a population relate to family and household structure.
5. Members of a family unit play different roles and have different amounts of influence when the family makes purchase decisions.
6. Children learn over time what and how to consume.
Learning Objective 1
• Marketers often need to understand consumers’ behavior rather than a consumer’s behavior.
10-4Copyright © 2013 Pearson Education, Inc. publishing as Prentice Hall
10-5Copyright © 2013 Pearson Education, Inc. publishing as Prentice Hall
Roles In Collective Decision Making
Initiator
Gatekeeper
Influencer
Buyer
User
10-6Copyright © 2013 Pearson Education, Inc. publishing as Prentice Hall
For Reflection
Assume that you are a sales representative for a large company that markets laptop computers.
• List all the people that may be involved in the decision making.
• Try to match all the people to their possible decision roles as outlined on the previous slide.
Learning Objective 2
• Companies as well as individuals make purchase decisions.
10-7Copyright © 2013 Pearson Education, Inc. publishing as Prentice Hall
10-8Copyright © 2013 Pearson Education, Inc. publishing as Prentice Hall
Organizational Decision Making
• Organizational buyers: purchase goods and services on behalf of companies for use in the process of manufacturing, distribution, or resale.
• Business-to-business (B2B) marketers: specialize in meeting needs of organizations such as corporations, government agencies, hospitals, and retailers.
10-9Copyright © 2013 Pearson Education, Inc. publishing as Prentice Hall
Compared to Consumer Decision Making, Organizational Decision Making…
• Involves many people
• Requires precise, technical specifications
• Is based on past experience and careful weighing of alternatives
• May require risky decisions
• Involves substantial dollar volume
• Places more emphasis on personal selling
10-10Copyright © 2013 Pearson Education, Inc. publishing as Prentice Hall
What Influences Organizational Buyers?
• Internal stimuli
• External stimuli
• Cultural factors
• Type of purchase
10-11Copyright © 2013 Pearson Education, Inc. publishing as Prentice Hall
Table 10.1 Types of Organizational Buying Decisions
• Buyclass theory: organizational buying decisions divided into three types, ranging from most to least complex:
Buying Situation Extent of Effort Risk Buyers Involved
Straight rebuy Habitual decision making
Low Automatic reorder
Modified rebuy Limited problem solving
Low to moderate One or a few
New task Extensive problem solving
High Many
For Reflection
• Summarize the buyclass model of purchasing. How do decisions differ within each class?
10-12Copyright © 2013 Pearson Education, Inc. publishing as Prentice Hall
Learning Objective 3
• Our traditional notions about families are outdated.
10-13Copyright © 2013 Pearson Education, Inc. publishing as Prentice Hall
For Reflection
• How does the changing nature of the family affect marketing mix decisions marketers make to target families and family members?
10-14Copyright © 2013 Pearson Education, Inc. publishing as Prentice Hall
Learning Objective 4
• Many important demographic dimensions of a population relate to family and household structure.
10-15Copyright © 2013 Pearson Education, Inc. publishing as Prentice Hall
10-16Copyright © 2013 Pearson Education, Inc. publishing as Prentice Hall
The Modern Family
• Changes in family structure
• Changes in concept of household (any occupied housing unit)
10-17Copyright © 2013 Pearson Education, Inc. publishing as Prentice Hall
Family Size
• Depends on educational level, availability of birth control, and religion
• Women want smaller families
• The rate of voluntary childlessness is rising, making DINKs a valuable market segment
10-18Copyright © 2013 Pearson Education, Inc. publishing as Prentice Hall
Sandwich Generation
• Sandwich generation: adults who care for their parents as well as their own children
• Boomerang kids: adult children who return to live with their parents• Spend less on household
items and more on entertainment
10-19Copyright © 2013 Pearson Education, Inc. publishing as Prentice Hall
Nonhuman Family Members
• Pets are treated like family members• Pet-smart marketing strategies:
• Name-brand pet products• Lavish kennel clubs• Pet accessories
10-20Copyright © 2013 Pearson Education, Inc. publishing as Prentice Hall
Family Life Cycle
• Factors that determine how couples spend money:• Whether they have children• Whether both spouses work
• Family life cycle (FLC) concept combines trends in income and family composition with change in demands placed on income
10-21Copyright © 2013 Pearson Education, Inc. publishing as Prentice Hall
Variables Affecting FLC
Age
Marital Status
Children in the Home
Ages of Children in the Home
10-22Copyright © 2013 Pearson Education, Inc. publishing as Prentice Hall
For Reflection
• For the following products, discuss how having children or not might affect the choices a couple makes. What do such variations mean for marketers?• Groceries• Cars• Vacations
Learning Objective 5
• Members of a family unit play different roles and have different amounts of influence when the family makes purchase decisions.
10-23Copyright © 2013 Pearson Education, Inc. publishing as Prentice Hall
10-24Copyright © 2013 Pearson Education, Inc. publishing as Prentice Hall
Household Decisions
Consensual Purchase Decisions
Accommodative Purchase Decisions
10-25Copyright © 2013 Pearson Education, Inc. publishing as Prentice Hall
Resolving Decision Conflicts in Families
• Interpersonal need
• Product involvement and utility
• Responsibility
• Power
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Who Makes Key Decisions in the Family?
• Autonomic decision: one family member chooses a product
• Syncretic decision: involve both partners• Used for cars, vacations, homes, appliances,
furniture, home electronics, interior design, phone service
• As education increases, so does syncretic decision making
10-27Copyright © 2013 Pearson Education, Inc. publishing as Prentice Hall
Factors Affecting Decision-Making Patterns Among Couples
Sex-role stereotypes
Spousal Resources
Experience
Socioeconomic Status
10-28Copyright © 2013 Pearson Education, Inc. publishing as Prentice Hall
Heuristics in Joint Decision Making
• Synoptic ideal: the couple takes a common view and act as joint decision makers
• Heuristics simplify decision making:• Salient, objective dimensions• Task specialization• Concessions based on intensity of each
spouse’s preferences
For Reflection
• What exposure have you had to family decisions made in your own family? Can you see the patterns discussed in the chapter in those decisions? Give an example.
10-29Copyright © 2013 Pearson Education, Inc. publishing as Prentice Hall
Learning Objective 6
• Children learn over time what and how to consume.
10-30Copyright © 2013 Pearson Education, Inc. publishing as Prentice Hall
10-31Copyright © 2013 Pearson Education, Inc. publishing as Prentice Hall
Children as Decision Makers
• Primary market: kids spend their own money• Influence market: parents buy what their kids tell
them to buy (parental yielding)• Future market: kids “grow up” quickly and
purchase items that normally adults purchase (e.g., photographic equipment, cell phones)
10-32Copyright © 2013 Pearson Education, Inc. publishing as Prentice Hall
Consumer Socialization
• Consumer socialization is the process by which young people acquire skills, knowledge, and attitudes relevant to their functioning in the marketplace
• Children’s purchasing behavior is influenced by• Parents, family, and teachers• Television and toys• Culture
10-33Copyright © 2013 Pearson Education, Inc. publishing as Prentice Hall
Figure 10.2 Five Stages of Consumer Development
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Parental Styles for Socializing Children
Authoritarian
Neglecting
Indulgent
10-35Copyright © 2013 Pearson Education, Inc. publishing as Prentice Hall
Cognitive Development
• Limited: Below age 6, children do not use storage and retrieval strategies
• Cued: Between ages 6 and 10, children use these strategies, but only when prompted
• Strategic: Children ages 10 and older spontaneously employ storage and retrieval strategies
For Reflection
• How do the stages of cognitive development relate to a child’s ability to comprehend marketing messages?
• How can marketing messages be adapted to meet the appropriate stage of cognitive development?
10-36Copyright © 2013 Pearson Education, Inc. publishing as Prentice Hall
10-37Copyright © 2013 Pearson Education, Inc. publishing as Prentice Hall
Chapter Summary
• The purchase decisions made by many may differ from those made by individuals.
• Buying for one’s self is different than buying for one’s company.
• Our traditional notions of family are outdated.
• Family members play different roles and varying levels of influence.
• Children learn over time how to consume.