OrganizationalandHouseholdDecisionMaking.pptx

12-1 Copyright 1999 Prentice HallChapter 12Organizational andHousehold Decision MakingCONSUMER BEHAVIORFourth EditionMichael R.Solomon12-2 Copyright 1999 Prentice HallOrganizational Decision-MakingOrganizational Buyers 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-to-Business-to-Business MarketersBusiness 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.12-3 Copyright 1999 Prentice HallOrganizational Purchase SituationExpectations of the SupplierOrganizational Climate of the Buyers FirmBuyers Assessment of His/Her Own PerformanceInfluences on the OrganizationalPurchase Situation12-4 Copyright 1999 Prentice HallOrganizational Decision-MakingVs.Consumer Decision-MakingPurchase Decisions Frequently Involve Many PeopleProducts Are Often Bought According to SpecificationsImpulse Buying is RareDecisions Are Often High-RiskDollar Volume of Purchase is Often SubstantialMore Emphasis on Personal Selling Decisions Are Guided by Long-Term Relationships12-5 Copyright 1999 Prentice HallThe Buyclass FrameworkLevel of Information ThatMust be GatheredSeriousness of Consideration of All Possible AlternativesBuyersFamiliarity WithThe PurchaseType of PurchaseInfluences on the Organizational Buyer Behavior Process12-6 Copyright 1999 Prentice HallTypes of Organizational BuyingSituationsNew TaskModified RebuyStraight RebuyExtent of Risk and Effort Involved 12-7 Copyright 1999 Prentice HallOrganizational Decision RolesGatekeeperDecisionRolesInitiatorUserInfluencerBuyer12-8 Copyright 1999 Prentice HallTrends in Organizational BuyingBehaviorBuilding Strong,Lasting Bonds With SuppliersConsolidating VendorsShift From Technology to Marketing OrientationEmphasis on the User,Not on the Buyer12-9 Copyright 1999 Prentice HallDefining the Modern FamilyThe Extended Family Extended Family was once the most common family unit and consisted of three generations living together.The Nuclear Family 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 Family Household is defined as containing at least two people who are related by blood or marriage.12-10 Copyright 1999 Prentice HallAge and Size of the FamilyHow do the following overall demographics of How do the following overall demographics of the modern family affect marketers?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.12-11 Copyright 1999 Prentice HallFamily HouseholdsAnother factor affecting marketers is that Another factor affecting marketers is that family households headed by a single person family households headed by a single person have grown by over 25%in the last decade.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“The Sandwich Generation”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 KidsBoomerang Kids.Nontraditional family structures continue to rapidly increase.12-12 Copyright 1999 Prentice HallEffects of Family Structure onConsumptionThe Family Life Cycle(FLC)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:AgeChildrens Ages(if any)Marital StatusPresence or Absence of Children in the Home12-13 Copyright 1999 Prentice HallFamily Life Cycle:An UpdatedView Age of Head of Household Under 35 35-64 Over 641 Adult in Household Bachelor I Bachelor II Bachelor III2 Adults in Household Young Childless Older Couple Couple Couple2 Adults+Children in Full Nest I Delayed Full Nest Household Full Nest II Full Nest III12-14 Copyright 1999 Prentice HallA Ac cc co ommmmo od da at ti iv ve eGroup Members Have Different Preferences and Cant Agree on a Purchase That Will Satisfy Everyone.Types of Purchase Decisions Made by FamiliesC Co on ns se en ns su ua al lGroup Agrees on the DesiredPurchase,Differing Only in Terms of How It Will Be Achieved.Family Decision Making12-15 Copyright 1999 Prentice HallFamily Decision ConflictConflictConflict 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 NeedsProduct Involvementand UtilityResponsibilityPersons Level of Investment in the GroupDegree to Which the Product in Question Will Be Used or Will Satisfy a NeedFor Procurement,Maintenance,Payment,etc.PowerOne Family Members Influence Over the Others in Making Decisions12-16 Copyright 1999 Prentice HallSex Roles and Decision-MakingResponsibilityFactors Influencing Joint or Individual Family DecisionsSpousal ResourcesExperienceSex-Role StereotypesSocioeconomic StatusAutocratic DecisionsMade by One Spouse or the OtherSyncratic DecisionsDecisions Made Jointly12-17 Copyright 1999 Prentice HallChildren as Decision Makers:Consumers in TrainingChildren 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 snacksFrozen noveltiesKids beauty aids and fragrancesToys Parental Yielding Parental Yielding occurs when a parental decision maker is influenced by a childs request and“surrenders”.12-18 Copyright 1999 Prentice HallConsumer SocializationConsumer 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 Authoritarian parents-restrictive with a negative view about advertising.Neglecting parents Neglecting parents-detached from kids and exercise little control over what their children do.Indulgent parents Indulgent parents-less restrictive and want children to learn about buying.Influence of Television:The“Electronic Babysitter”“Electronic Babysitter”that teaches children about a cultures values,myths,and idealized images.12-19 Copyright 1999 Prentice HallCognitive DevelopmentKids Can Be Segmented By Age in Terms of Their Stage of Cognitive DevelopmentStage of Cognitive Development,or Ability to Comprehend Concepts of Increasing Complexity.Children Differ in Abilities to Store and Retrieve Information From Memory:LimitedCuedStrategic12 and Older,Children Spontaneously Employ These Strategies.Tests hypotheses about cause-and-effect relationships.Below Age 6,Children Do Not Employ Storage and Retrieval Strategies.Between 6 and 12,Children Employ These Strategies-When Prompted.12-20 Copyright 1999 Prentice HallMarket Research and ChildrenDespite 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 TestingProduct 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.