Chapter 12
Organizational and Household Decision Making
By Michael R. Solomon
Opening Vignette: Amanda
•
Why is Amanda nervous?
•
What difficulties has Amanda had
since moving in with Orlando?
•
Why does Orlando’s occupation
convince Amanda that he is capable
of more?
•
What did Amanda do to help Orlando
Organizational Decision Making
• Collective Decision Making
– A process in which more than one person is involved in the purchasing process for products or services to be used by multiple consumers
• Organizational Buyer
– A person who purchases goods and services on behalf of companies for use in the process of manufacturing, distribution, or resale
• Business-to-Business Marketers:
– Specialize in meeting the needs of organizations such as corporations, government agencies, hospitals, and retailers
• The organizational buyer’s perceptions of the purchase situation is influenced by:
– Expectations of the supplier
– Organizational climate of his own company
Organizational Decision Makers
Advertising to Organizational Buyers
• Advertisements targeting
organizational buyers such as this CDW ad for technology equipment often try to assuage the concerns of the risk
associated with purchase.
• This ad states, “At CDW, we
know that every day, you’re asked to do the impossible. From personal account
managers to custom
Organizational Decision Making
Versus Consumer Decision Making
•
Factors which distinguish organizational and
industrial purchase decisions from individual
consumer decisions:
– Purchase decisions frequently involve many people
– Products are often bought according to precise technical specifications that require a lot of product category
knowledge
– Impulse buying is rare – Decisions are often risky
How do Organizational Buyers Operate?
•
Type of Purchase:
–
The type of item to be purchased influences the
organizational buyer’s decision-making process
–
Buying Center:
• A group of people who make the more complex
organizational decisions
•
The Buyclass Framework:
–
Straight rebuy:
A habitual decision
How Organizational Buyers Operate
•
Decision Roles:
– Initiator: The person who brings up the idea or need.
– Gatekeeper: The person who conducts the information
search and controls the flow of information available to a group.
– Influencer: The person who tries to sway the outcome of
the decision.
– Buyer: The person who actually makes the purchase.
– User: The person who winds up using the product or
service.
•
B2B E-Commerce
The Family
•
Defining the Modern Family
– Extended Family: Consists of three generations living
together and often includes grandparents, aunts, uncles, and cousins.
– Nuclear Family: A mother and a father and one or more children
•
Just What Is A Household?
– Family Household: Contains at least two people who are related by blood or marriage.
•
Family Size
Family Structures
Meeting Family Size Needs
•
Folger’s Coffee
addresses an
important need by
allowing single people
to brew one cup of
The “Sandwich Generation”
VIDEO: DDB Worldwide
•
DDB Worldwide, as
the advertising
agency in charge of
revamping J.C.
Penney’s image, had
to address the special
challenge of reaching
working moms.
Nontraditional Family Structures
•
POSSLQ
– Persons of Opposite Sex Sharing Living Quarters
•
Voluntarily Childless:
– Women of childbearing age who choose to have no children
•
Who’s Living at Home?
– Boomerang Kids: Children between the ages of 18 and 34 that return home to live with their parents.
•
Animals Are People Too! Nonhuman Family
Dog Condoms?
•
This Spanish public
service ad promotes
pet sterilization via a
fake ad for dog
The Family Life Cycle
•
Family Life Cycle (FLC)
– Concept that combines trends in income and family
composition with the changes in demands placed upon this income to segment households.
•
FLC Models
– Focuses on longitudinal changes in priorities which is valuable in predicting demand for specific product categories over time.
– Four variables are necessary:
• (1) Age
• (2) Marital Status
• (3) Absence or Presence of Children
Ethan Allen
•
This ad by a furniture
manufacturer
specifically refers to
The Intimate Corporation:
Family Decision Making
•
Household Decisions
–
Consensual Purchase Decision:
Members agree on
desired purchase
–
Accommodative Purchase Decision:
Members
have different preferences or priorities and cannot
agree on a purchase
–
Factors determining the degree of family decision
conflict:
• Interpersonal need
• Product involvement and utility
• Responsibility
•
This Kudos
advertisement tries to
explain that the
product will satisfy two
members of the
household for different
reasons.
•
What type of family
decision have the
mother and son
made?
Sex Roles and Decision-Making
Responsibilities
•
Autonomic Decision
–
When one family member chooses a product
•
Syncratic Decision
–
When the family jointly makes a decision
•
There is a shift in decision making
toward more compromise and
turn-taking.
•
Spouses typically exert significant
Identifying the Decision Maker
•
Family Financial Officer (FFO):
–
The individual who keeps track of the family’s
bills and decides how much surplus funds will be
spent.
•
Four Mother Types (LeoShe):
–
June Cleaver, the Sequel
–
Tug of War
–
Strong Shoulders
Who Buys the Pants?
Identifying the Decision Maker
•
Four Factors Determine the Degree to
Which Decisions will be Made Jointly
by One or the Other Spouse
–
Sex-role stereotypes
–
Spousal resources
–
Experience
–
Socioeconomic Status
•
Kin-Network System:
–
Ties among family members, both immediate and
Women Manage Many Tasks
•
Women often
manage many tasks
within the family that
pull them in many
Heuristics in Joint Decision Making
•
Synoptic Ideal:
–
Calls for the husband and wife to take a common view
and act as joint decision makers
•
Frequently observed decision-making
pattern:
–
(1) Areas of common preference based on salient,
objective dimensions rather than subtler,
hard-to-define cues.
–
(2) Couple agrees on a system of
task specialization
.
–
(3) Concessions are based on the intensity of each
Children As Decision Makers:
Consumers-In-Training
•
Primary Market:
–
Kids spending their own allowance on their
own wants and needs.
•
Influence Market:
–
Parental Yielding:
Occurs when a parental
decision maker is influenced by a child’s
request and “surrenders.”
•
Future Market:
Consumer Socialization
•
Consumer Socialization
–
The process “by which young people acquire skills,
knowledge, and attitudes relevant to their
functioning in the marketplace.”
•
Influence of Parents:
–
Parents’ influences in consumer socialization are
both direct and indirect.
•
Television: “The Electric Babysitter”:
–
The more children are exposed to television, the
Consumer Socialization (cont.)
•
Sex Role Socialization:
– Children pick up on the concept of gender identity as early as age one or two.
•
Cognitive Development
– Stage of Cognitive Development: The ability to comprehend concepts of increasing complexity
– Preoperational Stage of Development: A stage of cognitive development
•
Alternative three-segment approach:
Marketing Research and Children
•
Product Testing:
–
A particularly helpful type of research with children.
–
Involves watching kids play with toys or involving
them in focus groups
•
Message Comprehension:
–
Children differ in their ability to process
product-related information
–
Ethical issues must be considered when directing
• Ads that directly target children must deal with a number of ethical issues. This ad solicits children to directly contact the
organization.
• The girl in the picture is captioned as saying, “My name is Nina, I am 4 years old and I have three close friends and live in a house with 6 rooms.”
• How does this ad target the weaknesses of the cognitive capabilities of children in this
