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Chapter 10 Organizational and Household Decision Making 10-1 Copyright © 2013 Pearson Education, Inc. publishing as Prentice Hall CONSUMER BEHAVIOR, 10e.

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Presentation on theme: "Chapter 10 Organizational and Household Decision Making 10-1 Copyright © 2013 Pearson Education, Inc. publishing as Prentice Hall CONSUMER BEHAVIOR, 10e."— Presentation transcript:

1 Chapter 10 Organizational and Household Decision Making 10-1 Copyright © 2013 Pearson Education, Inc. publishing as Prentice Hall CONSUMER BEHAVIOR, 10e Michael R. Solomon

2 10-2 Copyright © 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 Our traditional notions about families are outdated.

3 10-3 Copyright © 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.

4 Learning Objective 1 Marketers often need to understand consumers’ behavior rather than a consumer’s behavior Copyright © 2013 Pearson Education, Inc. publishing as Prentice Hall

5 10-5 Copyright © 2013 Pearson Education, Inc. publishing as Prentice Hall Roles In Collective Decision Making Initiator Gatekeeper Influencer Buyer User

6 10-6 Copyright © 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.

7 Learning Objective 2 Companies as well as individuals make purchase decisions Copyright © 2013 Pearson Education, Inc. publishing as Prentice Hall

8 10-8 Copyright © 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.

9 10-9 Copyright © 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 10-10 Copyright © 2013 Pearson Education, Inc. publishing as Prentice Hall What Influences Organizational Buyers? Internal stimuli External stimuli Cultural factors Type of purchase

11 10-11 Copyright © 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 SituationExtent of EffortRiskBuyers Involved Straight rebuyHabitual decision making LowAutomatic reorder Modified rebuyLimited problem solving Low to moderateOne or a few New taskExtensive problem solving HighMany

12 For Reflection Summarize the buyclass model of purchasing. How do decisions differ within each class? Copyright © 2013 Pearson Education, Inc. publishing as Prentice Hall

13 Learning Objective 3 Our traditional notions about families are outdated Copyright © 2013 Pearson Education, Inc. publishing as Prentice Hall

14 For Reflection How does the changing nature of the family affect marketing mix decisions marketers make to target families and family members? Copyright © 2013 Pearson Education, Inc. publishing as Prentice Hall

15 Learning Objective 4 Many important demographic dimensions of a population relate to family and household structure Copyright © 2013 Pearson Education, Inc. publishing as Prentice Hall

16 10-16 Copyright © 2013 Pearson Education, Inc. publishing as Prentice Hall The Modern Family Changes in family structure Changes in concept of household (any occupied housing unit)

17 10-17 Copyright © 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

18 10-18 Copyright © 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

19 10-19 Copyright © 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

20 10-20 Copyright © 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

21 10-21 Copyright © 2013 Pearson Education, Inc. publishing as Prentice Hall Variables Affecting FLC Age Marital Status Children in the Home Ages of Children in the Home

22 10-22 Copyright © 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

23 Learning Objective 5 Members of a family unit play different roles and have different amounts of influence when the family makes purchase decisions Copyright © 2013 Pearson Education, Inc. publishing as Prentice Hall

24 10-24 Copyright © 2013 Pearson Education, Inc. publishing as Prentice Hall Household Decisions Consensual Purchase Decisions Accommodative Purchase Decisions

25 10-25 Copyright © 2013 Pearson Education, Inc. publishing as Prentice Hall Resolving Decision Conflicts in Families Interpersonal need Product involvement and utility Responsibility Power

26 10-26 Copyright © 2013 Pearson Education, Inc. publishing as Prentice Hall 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

27 10-27 Copyright © 2013 Pearson Education, Inc. publishing as Prentice Hall Factors Affecting Decision-Making Patterns Among Couples Sex-role stereotypes Spousal Resources Experience Socioeconomic Status

28 10-28 Copyright © 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

29 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 Copyright © 2013 Pearson Education, Inc. publishing as Prentice Hall

30 Learning Objective 6 Children learn over time what and how to consume Copyright © 2013 Pearson Education, Inc. publishing as Prentice Hall

31 10-31 Copyright © 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)

32 10-32 Copyright © 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

33 10-33 Copyright © 2013 Pearson Education, Inc. publishing as Prentice Hall Figure 10.2 Five Stages of Consumer Development

34 10-34 Copyright © 2013 Pearson Education, Inc. publishing as Prentice Hall Parental Styles for Socializing Children Authoritarian Neglecting Indulgent

35 10-35 Copyright © 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

36 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? Copyright © 2013 Pearson Education, Inc. publishing as Prentice Hall

37 10-37 Copyright © 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.


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