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Consumers Rule


Buyer's perception of purchase situation is affected by expectations of supplier, ... Neopets Inc. NEOPETS INC. 12-17. The Family Life Cycle ... – PowerPoint PPT presentation

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Title: Consumers Rule

Organizational and Household Decision
Making Chapter 12
Organizational Decision Making
  • Collective decision making
  • Organizational buyers buy from B2B marketers
  • Decisions become very important due to great
    responsibility for others
  • Buyers perception of purchase situation is
    affected by expectations of supplier,
    organizational climate of own company, and
    buyers assessment of own performance
  • Organizations members share information and
    develop organizational memory

Organizational vs. Consumer Decision Making
  • Organizational buying is different
  • Involves many people
  • Precise, technical specifications (require a lot
    of product knowledge)
  • Past experience and careful weighing of
    alternatives (impulse buying is rare)
  • Decisions are often risky (to ones career)
  • Substantial dollar volume
  • More emphasis on personal selling

Organizational vs. Consumer Decision Making
  • Similarities
  • Emotions do guide decisions
  • Brand loyalty
  • Long-term relationships
  • Aesthetic concerns
  • Branding and product image
  • Intel Inside

How Do Organizational Buyers Operate?
  • Organizational buyers are influenced by
  • Internal stimuli
  • Buyers psychological characteristics
  • External stimuli
  • Nature of buyers organization
  • Overall economic/technological environment of
  • Cultural factors
  • Different norms for doing business in different

Type of Purchase
  • The more complex, novel, or risky the decision,
    the more effort the buyer will devote to
    information search/evaluating alternatives
  • Fixed set of suppliers for routine purchases
    reduces information search in evaluating

The Buyclass Framework
  • Buyclass theory of purchasing dimensions
  • Level of information gathered prior to decision
  • Seriousness of evaluation of alternatives
  • Buyer familiarity with purchase

Table 12.1 Corporate Buying Strategies
Decision Roles
  • In collective decisions, one may play any (or
    all) of the following roles
  • Initiator
  • Gatekeeper
  • Influencer
  • Buyer
  • User

B2B E-Commerce
  • Internet interactions between two or more
  • Exchanges of information, products, services, or
  • Internet provides online catalog of products and
  • Roughly half of B2B e-commerce consists of
    auctions, bids, and exchanges among numerous

The Family
  • As traditional family living arrangements have
    waned, siblings, close friends, other relatives,
    and intentional families continue to provide
  • Consuming homemade food is symbolic of family
    structure and expressing affection
  • Discussion Is the family unit dead?

Defining the Modern Family
  • Extended family and nuclear family
  • Just what is a household?
  • Family household contains at least two people
    related by blood/marriage
  • Divorces and separations are accepted in our
    culturemarital breakups are ever-present theme
    in books, music, and movies
  • Adult females are staying home with
    family/children more (especially among
    best-educated/highest achieving women)

Family Size
  • Depends on educational level, availability of
    birth control, and religion
  • Marketers keep an eye on fertility rate and birth
  • Worldwide, women want smaller families
    (especially in industrialized countries)
  • Contraception/abortion are more readily available
  • Divorce is common
  • Older people now pursue non-grandchildren
  • Some countries want people to have more children

Nontraditional Family Structures
  • Any occupied housing unit is a household
  • Same-sex households are increasingly common
    marketers target them as unit
  • POSSLQ living arrangement
  • Rise of single-person households
  • Singles spend more on rent, alcohol, reading
    materials, health care, and tobacco/smoking

Nontraditional Family Structures (Contd)
  • Voluntarily childless women and childless couples
    are attractive market segments
  • Discuss the pros and cons of the voluntarily
    childless movement. Are followers of this
    philosophy selfish?
  • Two-income couples without children are better
    educated and have more professional/managerial

Whos Living at Home?
  • Traditional extended family is alive and well
  • Sandwich generation
  • Many adults are caring for parents as well as
  • Boomerang kids
  • Living with parents longer or are moving back in
  • Spend less on housing/staples and more on

Nonhuman Family Members
  • We often treat companion animals as family
  • 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
  • Perma-pets
  • Neopets Inc.

The Family Life Cycle
  • Factors that determine how a couple spends
  • Whether they have children
  • Whether the woman works
  • Using FLC concept to segment households
  • As we age, our preferences/needs for products and
    activities tend to change
  • Pivotal events alter role relationships and
    trigger new stages of life that alter our

FLC Models
  • Useful models take into account the following
    variables in describing longitudinal changes in
    priorities and demand for product categories
  • Age
  • (Relaxed) marital status
  • Presence/absence of children in home
  • Ages of children
  • Such factors allow use to identify categories of
    family-situation types (e.g., Full Nest I vs.
    Delayed Full Nest)

Life-Cycle Effects on Buying
  • FLC model categories show marked differences in
    consumption patterns
  • Young bachelors and newlyweds are most likely to
    exercise, go to bars/concerts/movies
  • Those in early 20s apparel, electronics, gas
  • Families with young children health foods
  • Single parents/older children junk foods
  • Newlyweds appliances (e.g., toaster ovens)
  • Older couples/bachelors home maintenance services

Household Decisions
  • In every living situation, group members seem to
    take on different roles similar to those within a
  • Consensus purchase decision vs. accommodative
    purchase decision
  • Factors determining family decision conflict
  • Interpersonal need
  • Product involvement and utility
  • Responsibility
  • Power

Sex Roles and Decision-making Responsibilities
  • Autonomic decision vs. syncratic decisions
  • Wives tend to have most say buying groceries,
    toys, clothes, and medicines
  • Both make decisions for cars, vacations, homes,
    appliances, furniture, home electronics, interior
    design, and long distance phone services
  • As education increases, so does syncretic
    decision making
  • Even after death, spouses seem to still consider
    the one who has died when making household

Identifying the Decision Maker
  • Family financial officer (FFO)
  • In traditional families, the man makes the money
    and the woman spends it
  • If spouses adhere to more modern sex-role norms,
    there is shared participation in family
    maintenance activities
  • Women seem to be gaining ground in almost all
    areas of decision making
  • Women often struggle with the juggling lifestyle

LeoShe Mother Types
Figure 12.2
Identifying the Decision Maker (Contd)
  • Cultural background plays a big role in
    determining whether husbands or wives are
    dominant in the family unit
  • Coca-Colas campaign to Latin American women
    (Mom knows everything)
  • Butterfly contraception program in India
  • Four factors in joint vs. sole decision making
  • Sex-role stereotypes
  • Spousal resources
  • Experience
  • Socioeconomic status

Identifying the Decision Maker (Contd)
  • As women work outside the home, men are
    participating more in housekeeping activities
  • Women are still primarily responsible for the
    continuation of the familys kin-network system

Heuristics in Joint Decision Making
  • Synoptic ideal vs. muddling through
  • Heuristics
  • Salient, objective dimensions
  • Task specialization
  • Concessions based on intensity of each spouses

Children as Decision Makers
  • Boom in Helsinki phone market among little kids
  • Mobile parenting
  • Children make up three distinct markets
  • Primary market
  • Influence market
  • Parental yielding
  • Future market

Consumer Socialization
  • The process by which young people acquire skills,
    knowledge, and attitudes relevant to their
    functioning in the marketplace
  • Sources of knowledge include friends, teachers,
    family, and the media

Influence of Parents
  • Direct and indirect parental influences
  • Deliberate attempt to instill own consumption
  • Determine exposure to informational sources (TV,
    salespeople, peers)
  • Cultural expectations regarding involvement of
    children in purchase decisions
  • Grown-ups as models for observational learning
  • Passing down of brand loyalty
  • Steps involved in turning kids into consumers
    (see Figure 12.3)
  • Parental styles that affect socialization
    authoritarian, neglecting, and indulgent

Television The Electric Babysitter
  • Advertisings influence begins at early age
  • Many marketers start to push their products on
    kids to encourage them to build a habit at an
    early age
  • Kids are also exposed to idealized images of what
    it is like to be an adult
  • Discussion Are marketers robbing kids of their

Sex-Role Socialization
  • Children pick up on gender identity at an early
  • Toy companies perpetuate gender stereotypes
  • Children rehearse adulthood roles via toys as
  • Toys R Us Girls World Boys World
  • Male and female play patterns
  • Smartees line of dolls and Working Woman Barbie

Marketing Research and Children
  • Relatively little real data on childrens
    preferences/influences on spending patterns is
  • Kids tend to
  • Be undependable reporters of own behavior
  • Have poor recall
  • Not understand abstract questions
  • Product testing
  • Message comprehension
  • Children may not understand persuasive intent of
  • FTC action to protect children (1990 Childrens
    Television Act)
  • Discussion Do you think market research should
    be performed with children? Why or why not?
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