1. Organizational and Household Decision Making
Chapter 12
Organizational and
Household Decision Making

2. 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-to-Business 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.

3. 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

4. Organizational Decision-Making Vs. Consumer Decision-Making
Purchase Decisions Frequently Involve Many People
Products Are Often Bought According to Specifications
Impulse Buying is Rare
Decisions Are Often High-Risk
Organizational Decision-Making Vs. Consumer Decision-Making
Dollar Volume of Purchase is Often Substantial
More Emphasis on Personal Selling
Decisions Are Guided by Long-Term Relationships

5. Influences on the Organizational Buyer Behavior Process
Type of Purchase
The Buyclass Framework
Influences on the Organizational Buyer Behavior Process
Level of
Information That
Must be Gathered
Seriousness of
Consideration of
All Possible
Alternatives
Buyer’s
Familiarity With
The Purchase

6. Types of Organizational Buying Situations
New Task
Modified Rebuy
Straight Rebuy
Extent of Risk and Effort Involved

7. Organizational Decision Roles
Initiator
Gatekeeper
Decision
Roles
Influencer
User
Buyer

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

9. 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.

10. Age and Size of the Family
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 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.

11. Family Households
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.

12. Effects of Family Structure on Consumption
Age
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:
Marital Status
Presence or Absence of Children
in the Home
Children’s Ages (if any)

13. Family Life Cycle: An Updated View

14. Family Decision Making
Types of Purchase Decisions
Made by Families
Family Decision Making
Accommodative
Group Members Have Different
Preferences and Can’t Agree
on a Purchase That
Will Satisfy Everyone.
Consensual
Group Agrees on the Desired
Purchase, Differing Only in
Terms of How It Will
Be Achieved.

15. Family Decision Conflict
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

16. Sex Roles and Decision-Making Responsibility
Autocratic Decisions
Made by One Spouse or the Other
Syncratic Decisions
Decisions Made Jointly
Factors Influencing Joint or Individual
Family Decisions
Spousal Resources
Experience
Sex-Role Stereotypes
Socioeconomic Status

17. Children as Decision Makers: Consumers in Training
Children are recognized as consumers that deserve attention.
Kids ages 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”.

18. 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.

19. Cognitive Development
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:
Below Age 6, Children Do Not
Employ Storage and Retrieval
Strategies.
Limited
Cued
Between 6 and 12, Children
Employ These Strategies --
When Prompted.
Strategic
12 and Older, Children
Spontaneously Employ These
Strategies.
Tests hypotheses about cause-
and-effect relationships.

20. 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.