Final Exam Study GuideChapter 10: Organizational and Household Decision MakingDecision RolesThe Modern FamilyFamily Life CycleFLC ModelsLife-Cycle Effects on BuyingSex Roles and Decision-making ResponsibilitiesChildren as Decision MakersConsumer SocializationMembership versus Aspirational Reference Groups:Positive versus Negative Reference Groups:Large group vs. Small group:Conformity:Word-of-Mouth Communication:Guerrilla Marketing:Viral MarketingOpinion LeadershipReasons to Seek Advice from Opinion LeadersThe Surrogate ConsumerMKTG 3051st Edition Final Exam Study GuideChapter 10: Organizational and Household Decision MakingDecision Roles- In collective decisions, one may play any (or all) of the following roles:- Initiator: brings up idea or identifies need- Gatekeeper: conducts information search- Influencer: sways outcome of decision- Buyer: actually makes the purchase- User: winds up using productThe Modern Family- Before 1900s: extended family- 1950s: nuclear family (mother, father, and children)- Today, many households:- Married couples less than 50% of households- Majority of adult women live without spouse- Unmarried opposite sex couples- Same-sex couples- Pets are treated like family membersFamily 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- As we age, our preferences/needs for products and activities tend to changeFLC Models- Useful models take into account the following variables in describing longitudinal changes in priorities and demand for product categories:- Age- Marital status- Presence/absence of children in home- Ages of children- Such factors allow us to identify categories of family-situation typesLife-Cycle Effects on Buying- FLC model categories show marked differences in consumption patterns- Young bachelors and newlyweds: exercise, go to bars/concerts/movies- Early 20s: apparel, electronics, gas- Families with young children: health foods- Single parents/older children: junk foods- Newlyweds: appliances- Older couples/bachelors: home maintenance services- http://www.npr.org/blogs/money/2014/04/01/297289442/more-house-less-booze-how-spending-changes-from-age-25-75?utm_medium=facebook&utm_source=npr&utm_campaign=nprnews&utm_content=04012014Sex Roles and Decision-making Responsibilities- Who makes key decisions in a family?- Autonomic decision: one family member chooses a product- Wives still make decisions on groceries, toys, clothes, and medicines- 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 makingChildren as Decision Makers- Children make up three distinct markets:- Primary market: kids spend their own money (e.g., choose their brands of toothpaste, shampoo, etc.)- Influence market: parents buy what their kids tell them to buy (parental yielding; “I saw this in a TV show”)- Future market: kids “grow up” quickly and purchase items that normally adults purchase(e.g., Kodak encourages kids to become photographers; cell phones)Consumer Socialization- process by which young people acquire skills, knowledge, and attitudes relevant to their functioning in the marketplace- Children’s purchasing behavior is influenced by:- Family (e.g., Parents)- Television and the WebMembership versus Aspirational Reference Groups:Membership reference groups: people the consumer actually knowsAdvertisers use “ordinary people”Aspirational reference groups: people the consumer doesn’t know but admiresAdvertisers use celebrity spokespeoplePositive versus Negative Reference Groups:Reference groups may exert either a positive or negative influence on consumption behaviorsAvoidance groups: motivation to distance oneself from other people/groupsAnti-brand communities: coalesce around a celebrity, store, or brand—but in this case they’re united by their disdain for itLarge group vs. Small group:Social loafing:Less likely to devote in a larger group effortDiffusion of responsibility:http://www.youtube.com/watch?v=FOCpOZ4txvshttp://www.youtube.com/watch?v=OSsPfbup0ac&feature=relatedhttp://www.cnn.com/video/data/2.0/video/crime/2013/10/11/newday-pkg-sambolin-philly-beating.cnn.htmlShopping situations:Going alone vs. going alongConformity:Most people tend to follow society’s expectations regarding how to look/actFactors influencing conformity:Cultural pressuresFear of devianceCommitment to group membershipGroup unanimity, size, expertiseSusceptibility to interpersonal influenceWord-of-Mouth Communication:WOM: product information transmitted by individuals to individuals (e.g., referral)More reliable form of marketingSocial pressure to conformInfluences two-thirds of all salesPowerful when we are unfamiliar with product categoryWe weigh negative WOM more heavily than we do positive comments!Negative WOM is easy to spread, especially onlineGuerrilla Marketing:Guerilla marketing:Promotional strategies that use unconventional locations and intensive WOM to push productsRecruits legions of real consumers to draw attention to products or serviceshttp://www.youtube.com/watch?v=qMOuF8oskRUhttp://www.youtube.com/watch?v=L5M4n2qX4yoViral MarketingViral marketing: getting online visitors to forward information to their friends (for product awareness)https://www.facebook.com/video.php?v=10152195912647751&fref=nfhttps://www.youtube.com/watch?v=t9qxT8wI-0IThink about a free email servicee.g., Hotmail inserts a small ad on every message sent, making each user a salesperson.Opinion LeadershipOpinion leaders: influencing others’ attitudes and behaviorsThey are good information sources because they:- May be experts- Provide unbiased evaluation- Are socially active- Are similar to the consumer- Are among the first to buyReasons to Seek Advice from Opinion Leaders- Expertise- Unbiased knowledge power- Highly interconnected in communities (social standing)- Referent power/homophily- Hands-on product experience (absorb risk)The Surrogate ConsumerSurrogate consumer: a marketing intermediary hired to provide input into purchase decisionsInterior decorators, stockbrokers, professional shoppers, college consultantsConsumer relinquishes control over decision-making