Chapter 11

Organizational and Household

Decision Making

CONSUMER
BEHAVIOR
Global Edition 9e
Michael R. Solomon

Copyright 2011 Pearson Education

11-1

Chapter Objectives
When you finish this chapter, you should
understand why:

Marketers often need to understand

consumers behavior rather than consumer
behavior, since in many cases more than one
person decides what to buy.

Companies as well as individuals make

purchase decisions.

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Chapter Objectives (continued)

Our traditional notions about families are

outdated.

Many important demographic dimensions of a

population relate to family and household
structure.

Members of a family unit play different roles

and have different amounts of influence when
the family makes purchase decisions.

Children learn over time what and how to

consume.
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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.

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Roles In Collective Decision Making

Initiator
Gatekeeper
Influencer
Buyer
User
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Discussion
Assume that you are a sales representative for a large
company that markets gauze bandages for use in
hospitals.

List all the people (by position, such as doctors or

nurses) 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.

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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

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What Influences Organizational Buyers?

Internal stimuli
External stimuli
Cultural factors
Type of purchase

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Table 11.1 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

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Crowd Power in Organizations

Prediction market: groups of people with knowledge
about an industry are jointly better predictors of the
future than are any individuals

Two ways to approach predictions:

Employees collectively select factors for product
success
Knowledgeable outsiders (industry experts,
consumers) predict success

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The Modern Family

Changes in family structure

Changes in concept of household (any
occupied housing unit)

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Discussion
In identifying and targeting newly divorced couples,
do you think marketers are exploiting these couples
situations?

Are there instances in which you think marketers

may actually be helpful to them?

Support your answers with examples.

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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

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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

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Nonhuman Family Members

Pets are treated like family members

Spending on pets has doubled in the last
decade

Pet-smart marketing strategies:

Name-brand pet products
Designer water for dogs
Lavish kennel clubs, pet classes/clothiers
Pet accessories in cars

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Family Life Cycle

Factors that determine how couples spend

money:
Whether they have children
Whether the woman works

Family life cycle (FLC) concept combines

trends in income and family composition
with change in demands placed on income

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Variables Affecting FLC

Age
Marital Status
Children in the Home
Ages of Children in the Home

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Household Decisions
Families make two types of decisions:

Consensual purchase decision: members agree on

the desired purchase, differing only in terms of how it
will be achieved

Accommodative purchase decision: members have

different preferences or priorities and they cannot
agree on a purchase to satisfy the minimum
expectations of all involved

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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

Who plays the role of family financial officer?

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Factors Affecting Decision-Making

Patterns Among Couples
Sex-role stereotypes
Spousal Resources
Experience
Socioeconomic Status
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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 spouses
preferences

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Children as Decision Makers

Children make up three distinct markets:

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)

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Consumer Socialization
Consumer socialization: process by which young
people acquire skills, knowledge, and attitudes
relevant to their functioning in the marketplace

Childrens purchasing behavior is influenced by

Parents, family, and teachers
Television and toys
Culture

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Figure 11.2
Five Stages of Consumer Development

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Parental Styles for Socializing Children

Authoritarian

Neglecting

Indulgent

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Cognitive Development

Limited: Below age 6, children do not use

storage and retrieval strategies

Cued: Between ages 6 and 11, children use

these strategies, but only when prompted

Strategic: Children ages 11 and older

spontaneously employ storage and retrieval
strategies

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Marketing Research and Children

Difficulty assessing childrens

preferences/influences on spending patterns
because kids tend to
Be undependable reporters of own behavior
Have poor recall
Not understand abstract questions

Researchers do study kids for

Product testing
Advertising message comprehension
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Discussion

Do you think market research should be

performed with children? Why or why not?

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Figure 11.3 Sketches Used to Measure

Childrens Perception of Commercials

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Chapter Summary

The purchase decisions made by many may

differ from those made by individuals.

Buying for ones self is different than buying

for ones 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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