Chapter11organizational and Household Decision Making

CHAPTER 12

ORGANIZATIONAL AND HOUSEHOLD DECISION MAKING

Multiple Choice

1. Rick and his decision team purchase office equipment that will be used by the entire organization in the next month. This is an example of which of the following forms of decision making? a. Individual decision making. b. Syncratic decision making. c. Collective decision making. d. Didactic decision making.

Answer: (c) Difficulty: (M) Application Page: 402

2. ________________ are people who purchase goods and services on behalf of companies for use in the process of manufacturing, distribution, or resale. a. Individual buyers b. Consumer buyers c. Global buyers d. Organizational buyers

Answer: (d) Difficulty: (E) Fact Page: 402

3. ____________________ specialize in meeting the needs of organizations, such as corporations, government agencies, hospitals, and retailers. a. Consumer marketers b. Business-to-business marketers c. Filter-down marketers d. Profit marketers

Answer: (b) Difficulty: (E) Fact Page: 402

4. Business-to-business marketing (B2B) is where the action is in terms of volume sales. According to recent reports, the total volume of sales that is exchanged among organizations is about _______________ worth of goods and services. a. $100 million b. $100 billion c. $1 trillion d. $2 trillion

Answer: (d) Difficulty: (M) Fact Page: 402

5. The organizational buyer’s perception of the purchase situation is influenced by a

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number of different factors. Among those factors are the expectations of the supplier and the organizational climate of his or her own company. Which of the following is a third important factor with respect to the organizational buyer’s perception of the purchase situation? a. Government scrutiny of the purchase process. b. Ability to generate profit. c. The organizational climate of competitors. d. An assessment of his or her own performance (the buyer’s performance).

Answer: (d) Difficulty: (H) Fact and Application Page: 402

6. Every time Sue Samuels comes in from a long selling trip, she always makes sure to give reports to all her colleagues on knowledge she has gained and experiences she has had while “on the road.” These reports help her organization to develop a(n) _________________. (Select the most appropriate response.) a. client “hit” list. b. organizational memory. c. consumer memory. d. psychological profile of data sources.

Answer: (b) Difficulty: (H) Application Page: 403

7. Many factors have been identified to distinguish organizational and industrial purchase decisions from individual consumer decisions. All of the following are among those differences EXCEPT: a. the purchase decisions made by companies frequently involve many people. b. organizational and industrial products are often bought according to precise, technical specifications. c. impulse buying in organizational purchasing is a common occurrence because of sales stimulation from direct salespeople. d. decisions are often risky.

Answer: (c) Difficulty: (H) Fact and Application Page: 403-404

8. Business-to-business marketing often involves more of an emphasis on personal selling than on advertising or other forms of promotion. Which of the following is the chief reason for this emphasis? a. Personal selling is more cost efficient than advertising. b. Personal selling is more traditional than advertising. c. Organizational buyers expect personal selling. d. Dealing with organizational buyers typically requires more face-to-face contact than is necessary in the case of end consumers.

Answer: (d) Difficulty: (M) Fact and Application Page: 404

9. Intel’s development of the highly successful “Intel Inside” campaign illustrates how

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important issues like ______________________ can be in industrial contexts. a. personal selling b. containerization c. branding and product image d. public relations

Answer: (c) Difficulty: (H) Fact and Application Page: 404

10. Like end consumers, organizational buyers are influenced by both internal and external stimuli. Which of the following is the BEST illustration of an organizational buyer’s internal stimuli? a. The nature of the organization. b. The buyer’s willingness to take risks. c. The number of people in the purchasing department. d. The organization’s policies on bribery and spiffs.

Answer: (b) Difficulty: (M) Fact Page: 404

11. In many organizations, more complex organizational decisions tend to be made by a(n) ________________ where different individuals play different roles in the decision-making process. a. buying pool b. purchasing network c. information group d. buying center

Answer: (d) Difficulty: (M) Fact Page: 404-405

12. According to the buyclass theory of purchasing, three decision-making dimensions describe the purchasing strategies of an organizational buyer. Which of the following would NOT be among those dimensions? a. The level of information that must be gathered prior to making a decision. b. The seriousness with which all possible alternatives must be considered. c. The degree to which the buyer is familiar with the purchase. d. The degree to which the buyer is a risk avoider.


13. All of the following are part of the categories of the buyclass theory of purchasing EXCEPT: a. a straight rebuy. b. an innovative rebuy. c. a modified rebuy. d. a new task.

Answer: (b) Difficulty: (E) Fact Page: 406, Table 12.1

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14. Which of the following buying decision situations has the highest level of risk and the most buyers involved in the process? a. New task. b. Straight rebuy. c. Modified rebuy. d. Innovative rebuy.

Answer: (a) Difficulty: (M) Application Page: 406, Table 12.1

15. Pam Henry is a purchasing agent for MicroTell. Each Tuesday she places an order for ten (10) boxes of photocopier paper with her supplier. In the above example, Ms. Henry is participating in which of the following buying situations? a. New task. b. Straight rebuy. c. Modified rebuy. d. Innovative rebuy.

Answer: (b) Difficulty: (E) Application Page: 406, Table 12.1

16. Charles Ferguson and his buying team must analyze the purchase of a photocopier for their office. They have had their present model for one (1) year and have been satisfied with its performance, however, several new features for photocopiers have

been developed in the last six (6) months that his team would like for their office. After talking to their existing service rep, Charles and his group decide

to trade in the old model and get a newer model that has all the new features that they have heard about. The new photocopier arrives the next day. Which of the following buying situations best describes the process that Mr. Ferguson and his group have just gone through? a. New task. b. Straight rebuy. c. Modified rebuy. d. Innovative rebuy.

Answer: (c) Difficulty: (M) Application Page: 406, Table 12.1

17. Which of the following buying situations usually involves the most extensive problem solving for a buying group? a. New task. b. Straight rebuy. c. Modified rebuy. d. Innovative rebuy.

Answer: (a) Difficulty: (M) Fact and Application Page: 406, Table 12.1

18. If a buyer in an organization uses an approved vendor list to make daily orders to

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replenish stock that has been depleted during the production cycle, the buyer is most likely using which of the following buying situations to guide his or her actions? a. New task. b. Straight rebuy. c. Modified rebuy. d. Innovative rebuy.

Answer: (b) Difficulty: (M) Application Page: 406

19. A number of specific decision roles are played when a collective decision must be made. Among the roles that might be played is one where the person performs the role of bringing up the idea or need. This person is called a(n): a. Initiator. b. Gatekeeper. c. Influencer. d. Buyer.

Answer: (a) Difficulty: (E) Fact Page: 406

20. Estelle Waters is part of a buying group. She has investigated all the sellers of a new water pump system that is going to be bought by her organization. All the literature on the competitive pump systems comes to her desk and she passes along those items that she feels the others on the group might be interested in. Because of the sheer volume of the literature, she has had to screen many items. Estelle is best described as a(n) _____________ in the above situation. a. initiator b. gatekeeper c. influencer d. user

Answer: (b) Difficulty: (E) Application Page: 406

21. Michelle Roberts has a tough job at PJK Tile. She has to examine information from vendors and decide which of these vendors (and their proposals) should be presented to her company’s purchasing group. No one at PJK Tile sees more information on vendors than Michelle. Which of the following roles does Michelle fulfill for PJK Tile? a. Initiator. b. Gatekeeper. c. Influencer. d. Buyer.

Answer: (b) Difficulty: (E) Application Page: 406

22. In organizations, engineers are often ______________ for product information, whereas purchasing agents play a similar role when the group evaluates the vendors

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that supply these items. a. initiators b. users c. gatekeepers d. influencers


23. Roberto thought of an innovative way to improve performance on his company’s machine lathes. He found a new device that was documented to have aided machine lathe operators improve their performance, found a supplier who sold it, convinced management to purchase the item, and made sure that purchasing ordered the item. When the item came in and was installed, he had a great sense of pride when he observed the lathe operators; using the product actually did improve their performance. Roberto performed ALL of the following buying process decision roles EXCEPT: a. initiator. b. influencer. c. gatekeeper. d. user.

Answer: (d) Difficulty: (M) Application Page: 406

24. A good definition of an extended family unit is ______________________ living together. a. one parent and at least one child. b. two parents and at least one child. c. two generations of family plus one renter d. three generations of family


25. Wang Lin has three generations of his family living together in his house. This living arrangement includes not only his parents and siblings, but also his grandparents and one uncle. Wang Lin lives with what is called a(n) __________. a. internal family. b. universal family. c. extended family. d. nuclear family.

Answer: (c) Difficulty: (M) Application Page: 407

26. In the 1950s, TV shows such as Leave It To Beaver showed the family as a mother and father and one or more children. This became known as the ____________. a. internal family. b. universal family.

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c. extended family. d. nuclear family.


27. A family household, as defined by the U.S. Census Bureau, contains: (Choose the strict definition of a family household.) a. single person who maintains at least a semi-permanent residence and pays taxes. b. at least a mother, a father, and at least one child under the age of 18. c. at least two people who are related by blood or marriage. d. at least a mother, a father, one child, and any extended family for which a deduction is taken.

Answer: (c) Difficulty: (H) Fact and Application Page: 407

28. The trend of taking time off from work to raise small children is concentrated among a particular group of women. Which of the following best characterizes this group? a. Blue-collar females under 40-years of age. b. Hispanic-Americans under 40-years of age. c. The best-educated and highest-achieving women in the workforce. d. The least-educated and lower-achieving women in the workforce.

Answer: (c) Difficulty: (M) Fact and Application Page: 408

29. Family size depends on all of the following factors EXCEPT: a. educational level. b. religion. c. the availability of birth control. d. place of residence.


30. Middle-aged people have been termed ______________ because they must attend to those above and below them in age. a. the power generation b. the nursing home generation c. the baby busters d. the sandwich generation


31. Tyler returned home after college to live with his parents. This was to be a temporary arrangement; however, days became months and months became three years. Tyler’s dad wonders if he will ever move out and get his own apartment. Tyler is part of an increasing trend. One-fifth of all 25+ year olds live with their parents. The group that Tyler is in is now called _________________ by demographic researchers.

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a. drop-out kids b. home bodies c. failure “X” d. boomerang kids

Answer: (d) Difficulty: (H) Application Page: 412

32. Two important factors determine how a couple spends time and money. One of these factors is whether the couple has children. What is the other factor? a. whether the woman works. b. whether they have jobs that require extensive travel. c. whether they have extended family members living with them. d. whether they live in an urban or suburban setting.

Answer: (a) Difficulty: (H) Fact and Application Page: 414

33. The ________________ combines trends in income and family composition with the changes in demands placed upon this income. a. product life cycle b. fertility ratio trend c. fecundity life cycle d. family life cycle


34. Four variables are necessary to describe the changes that have occurred in the family life cycle (and accompanying social trends) over the last several years. Which of the following are among those variables? a. Ethnicity and income levels. b. Age and marital status. c. Divorce and religious affiliation. d. Residence region and purchase patterns.

Answer: (b) Difficulty: (H) Fact and Application Page: 416

35. Which of the following family life cycle categories is best described as being the one where there are the most “modern” sex-role attitudes, most likely to engage in exercise, and consume the most alcohol? a. Young bachelors and newlyweds. b. Full-nest families with young children. c. Full-nest families with older children. d. Empty-nest families.

Answer: (a) Difficulty: (E) Fact and Application Page: 417, Figure 12.1

36. Which of the following family life cycle categories is best described as being the one

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where the family is likely to consume junk foods (such as chips)? a. Newlyweds. b. Full-nest families with young children. c. Single parents with older children. d. Empty-nest families.

Answer: (c) Difficulty: (M) Fact and Application Page: 417, Figure 12.1

37. Families have alternatives in purchasing. In a ________________, the group agrees on the desired purchase, differing only in terms of how it will be achieved. a. accommodative purchase decision b. consensual purchase decision c. contemplative purchase decision d. authoritarian purchase decision

Answer: (b) Difficulty: (H) Fact Page: 418

38. Families have alternatives in purchasing. In a ________________, the group members have different preferences or priorities and cannot agree on a purchase that will satisfy the minimum expectations of all involved. a. accommodative purchase decision b. consensual purchase decision c. contemplative purchase decision d. authoritarian purchase decision

Answer: (a) Difficulty: (H) Fact Page: 418

39. The Smith family is trying to decide on where to take a vacation. Mom wants to go to the big city to shop, Dad wants to go to the beach to relax, and the two teenage kids want to go to Orlando, Florida where the action is. Since no one can agree on where to go, Dad makes the decision (because he is paying for it) and the Smiths go to the beach. This is an illustration of which of the following types of purchase decisions? a. accommodative purchase decision b. consensual purchase decision c. contemplative purchase decision d. authoritarian purchase decision

Answer: (a) Difficulty: (H) Application Page: 418

40. Conflict occurs when there is not enough correspondence in family members’ needs and preferences. Specific factors that determine the degree of family decision conflict include all of the following EXCEPT: a. interpersonal need. b. amount of money present. c. product involvement and utility.

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d. power.

Answer: (b) Difficulty: (H) Fact Page: 418

41. Jennifer and Ted have been married about six months. One of Jennifer’s complaints about Ted’s behavior during their brief marriage is that he seems to make all the decisions when the couple has to purchase high risk or expensive durables (such as furniture or a new car). If Ted makes most of the product decisions, this is characteristic of ______________ decision making. a. autocratic b. syncratic c. bureaucratic d. plutocratic

Answer: (a) Difficulty: (M) Application Page: 419

42. Every one in Cindy Nguyen’s family had a part in deciding where to go on vacation. Her parents wanted to go to Las Vegas and the children wanted to go a variety of theme parks around the country. The Nguyens eventually decided to go to one of the theme hotels in Las Vegas that had something for everyone in the family. The family in the example above seemed to be using ______________ decision making. a. autocratic b. syncratic c. bureaucratic d. plutocratic

Answer: (b) Difficulty: (M) Application Page: 419

43. Various roles are performed within a family unit to keep the family functioning whether it is in purchasing or other responsibilities. The ________________ is the one who keeps track of the family’s bills and decides how any surplus funds will be spent. a. family caretaker (FC) b. wage disperser (WD) c. chief income provider (CIP) d. family financial officer (FFO)

Answer: (d) Difficulty: (E) Fact and Application Page: 419

44. Four factors appear to determine the degree to which decisions will be made jointly or by one or the other spouse. Which of the following factors applies if a husband makes the primary decision to buy a car because “that is what the man should do?” a. Sex-role stereotypes. b. Experience. c. Socio-economic status. d. Spousal resources.

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Answer: (a) Difficulty: (E) Fact and Application Page: 422

45. Meredith works hard to keep her family together in this fast-paced world. She coordinates visits with relatives, calls and writes often to her parents and grandparents, and makes sure her husband remembers all significant birthdays and anniversaries. In the above example, Meredith is primarily responsible for the continuation of the family’s _____________. a. grapevine system. b. gossip net. c. kin-network system. d. buddy system.

Answer: (c) Difficulty: (E) Application Page: 422

46. If a couple follows the synoptic ideal in decision making, the couple: a. acts as independent purchasing agents serving their own needs. b. acts independently but with a common good in place. c. makes joint decisions with a common purpose. d. argues about decisions, but eventually reaches some form of majority view.

Answer: (c) Difficulty: (H) Fact Page: 422

47. Children make up three distinct markets in the United States. What are these three markets? a. The children’s market, the growing market, and the future market. b. The primary market, the bartering market, and the supply market. c. The demand market, the partnering market, and the future market. d. The primary market, the influence market, and the future market.

Answer: (d) Difficulty: (M) Fact Page: 424-425

48. ______________ is the process by which young people acquire skills, knowledge, and attitudes relevant to their functioning in the marketplace. a. Sex-role socialization b. Consumer socialization c. Role differentiation d. Cognitive development

Answer: (b) Difficulty: (M) Fact Page: 426

49. Kids can be segmented by age in terms of their stage of _____________ or ability to comprehend concepts of increasing complexity. a. sex-role socialization b. customer socialization c. role differentiation

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d. cognitive development


50. Children often differ in their information-processing capacity. Which of the following segments that have been identified as using this approach describes a child between the ages of 6 and 12 who is able to employ information-processing strategies (but only when prompted)?

a. Limited. b. Cued. c. Strategic. d. Dynamic.

Answer: (b) Difficulty: (M) Fact and Application Page: 428-429

True/False

51. Collective decision making occurs when more than one person is involved in the purchasing process for products or services that may be used by multiple consumers.

Answer: (True) Difficulty: (E) Fact Page: 402

52. The organizational buyer is a person who purchases goods and services on behalf of companies involved in making consumer goods.


53. The consumer market has annual sales of about $2 trillion worth of products and services; these sales exceed purchases by organizations and businesses.

Answer: (False) Difficulty: (M) Fact Page: 402

54. Organizational buyers often engage in a learning process in which members of the firm share information with one another and develop an “organizational wish list.”


55. Purchase decisions made by companies frequently involve only one person because of the nature of organizational buying.


56. Impulse buying in organizations is common because of the daily opportunities for change that confront an organizational buyer.

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57. Business-to-business marketing often involves more of an emphasis on personal selling than on advertising.

Answer: (True) Difficulty: (M) Fact Page: 404

58. One of the strategies employed by organizational buyers to reduce information search and effort in evaluating competing alternatives for routine purchases is to use a fixed set of suppliers.

Answer: (True) Difficulty: (E) Fact Page: 404 59. The people who make up the buying unit within an organization are called the buying center.


60. Habitual decision making is often found in the straight rebuy.

Answer: (True) Difficulty: (M) Fact Page: 406, Table 12.1

61. The greatest number of buyers involved in an organization purchase process occurs when there is a modified rebuy.

Answer: (False) Difficulty: (M) Fact Page: 406, Table 12.1

62. Limited problem solving occurs in the modified rebuy.

Answer: (True) Difficulty: (M) Fact Page: 406, Table 12.1

63. The influencer is the person who brings up the idea or need.


64. Rufus opens all the mail that comes into the office and decides how to prioritize the correspondence for each of the vice presidents. In this example, Rufus is considered a gatekeeper.

Answer: (True) Difficulty: (M) Application Page: 406

65. Today people are joining intentional families—groups of unrelated people who meet regularly for meals and who spend holidays together.

Answer: (True) Difficulty: (H) Fact Page: 407

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66. The extended family is still the most common family unit.

Answer: (False) Difficulty: (E) Fact Page: 407

67. Aunts, uncles, and cousins are part of your extended family.


68. A family household must have at least two people who are related by blood or marriage according to the U.S. Census Bureau.


69. The fertility rate is determined by the number of births per year per 1000 women of child-bearing age.


70. A child that has matured, left home, and then returns home to live with the family again is called a baby buster.

Answer: (False) Difficulty: (E) Fact Page: 412

71. One of the variables used to describe the family life cycle is the ratio of same-sex marriages or relationships.


72. In a consensual purchase decision, the group agrees on the desired purchase.


73. Parental yielding occurs when a parental decision maker is influenced by a child’s request and “surrenders.”


74. Consensual socialization is the process by which young people acquire skills, knowledge, and attitudes relevant to their functioning in the marketplace.


75. Despite children’s buying power, relatively little real data on their preferences or influences on spending patterns is available.

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Essay Questions

76. The organizational buyer’s perception of the purchase situation is influenced by a number of factors. According to the text, what are these factors?

Answer:The factors include: (a) the organizational buyer’s expectations of the supplier, (b) the organizational climate of his own company, and the buyer’s assessment of his own performance.

Difficulty: (E) Fact Page: 402

77. What are some of the key differences between organizational/industrial purchase decision making and the consumer decision-making process?

Answer:Although there are more similarities between organizational buying and consumer buying than most believe, there are important differences. Key among them:

Purchase decisions made by companies frequently involve many people. Some of them do the actual buying, some directly or indirectly influence the

decision, and employees actually use the products or services.Organizational and industrial products are often bought according to precise,

technical specifications that require rational criteria and knowledge about the product category.

Impulse buying of industrial/business products is rare. Those decisions are based upon past experience with the products and a careful weighing of alternatives.

Decisions are often high risk, especially in the sense that a buyer's career may be riding on his or her demonstration of good judgment.

Companies are usually part of a narrow customer base and the dollar volume of purchases is often substantial. The buyer often has a fairly high degree of

influence over the supplier.Business-to-business marketing often involves more of an emphasis on personal

selling than on advertising or other forms of promotion.

Difficulty: (H) Fact Page: 403-404

78. Describe what a buyclass framework is and the three decision-making dimensions that describe the purchasing strategies of an organizational buyer.

Answer:Organizational buying decisions can be divided into three types, which range from the most to the least complex. This classification scheme is called the buyclass theory of

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purchasing (framework), and it uses three decision-making dimensions to describe the purchasing strategies of an organizational buyer: (a) the level of information that must be gathered prior to making a decision, (b) the seriousness with which all possible alternatives must be considered, and (c) the degree to which the buyer is familiar with the purchase.

Difficulty: (M) Fact Page: 405

79. Characterize the straight rebuy, the modified rebuy, and the new task decision in organizational purchasing. Provide an example of each.

Answer:(a) A straight rebuy is like a habitual decision. This entails an automatic decision as when an inventory level reaches a pre-established reorder point. Most organizations maintain an approved vendor list. As long as experience with the vendor is satisfactory, there is little to no ongoing information search or evaluation.(b) A modified rebuy situation involves limited decision making. It occurs when an organization wants to repurchase a product or service, but with some minor modifications. This decision might involve a limited search for information, most likely by speaking to a few vendors. The decision will probably be made by one or a few people.(c) A new task involves extensive problem solving. Because the decision has not been made before, there is often a serious risk that the product won’t perform as it should or that it will be too costly. The organization designates a buying center with assorted specialists to evaluate the purchase, and they typically gather a lot of information before coming to a decision.

Difficulty: (M) Fact and Application Page: 406, Table 12.1

80. What specific roles are played within the buying center of an organization or a household when a collective purchase decision must be made? Explain and describe each of these roles.

Answer:Decision roles include:

Initiator - the person who brings up the idea or purchase need.Gatekeeper - the person who conducts the information search and controls the

flow of information available to the group; in organizational contexts, the gatekeeper identifies possible vendors and products for the rest of the group to

consider.Influencer - the person who tries to sway the outcome of the group's decision;

some people may be more motivated to get involved. Participants also differ in terms of the amount of power they have to convince others of their

choice. For example, engineers often act as influencers for product

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information while purchasing agents play a similar role when the group evaluates the vendors that supply these items.

Buyer - the person who actually makes the purchase; the buyer may or may not actually use the product. This person may pay for the item, procure it, or both.

User - the person who winds up using the product or service.

Difficulty: (M) Fact Page: 406

81. What is the difference between the extended and nuclear family?

Answer:The extended family consists of three generations living together and often includes grandparents, aunts, uncles, and cousins. The nuclear family is a mother and a father and one or more children. The nuclear family became the model family unit over time, replacing the extended family as the most common.

Difficulty: (E) Fact Page: 407

82. Explain and characterize the family life cycle concept.

Answer:The family life cycle combines trends in income and family composition with the changes in demands placed upon this income. As we age, our preferences and need for products and services tend to change. The family life cycle uses age, marital status, the presence of children in the home, and how old the children are if present to detail trends of family members.

Figure 12.1 lists the groups found within the family life cycle. Students should be able to describe each of these groups briefly based on the table and information found in the chapter. However, if more details are required, be sure to give accurate and detailed exam instructions to avoid confusion and misunderstanding of the required task.

Difficulty: (M) Fact and Application Page: 414-417, Figure 12.1

83. What types of purchase decisions are made by families? Indicate the common practice within families with respect to these decisions and give an example of each form.

Answer:Two basic types of purchase decisions are made by families:

Consensual purchase decisions - These are characterized by group agreement on the desired purchase; with differences exist only in terms of how it will be achieved. In such cases, the family will consider alternatives until it finds

the means for satisfying the group's goal.

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Accommodative purchase decisions - These are characterized by groups that have different preferences or priorities and cannot reach agreement on a purchase that will satisfy the minimum expectations of all members. It is here

that bargaining, coercion, compromise, and the wielding of power are all likely to be used to achieve the primary goal of agreement on the

purchase.

Family purchases are often characterized by accommodative rather than consensual decisions.

Difficulty: (M) Fact and Application Page: 418

84. What specific factors determine the degree of conflict in family decision making? Give examples.

Answer:Conflict occurs when there is not complete correspondence in family members' needs and preferences. Some specific sources of conflict:

Interpersonal need - This refers to a person's level of investment in the group. For example, a child may care more about what the family will buy for the

house than a brother who will be away, rooming at college.Product involvement and utility - This refers to the degree to which the product in

question will be used or will satisfy a need. For example, a coffee drinker in the family would care more about the replacement of a coffee maker than spending the same amount of money on something else for the family.

Responsibility - This refers to the long-term commitment for procurement, maintenance, or payment if the item is purchased. For example, who will be responsible for walking the dog and feeding it, if one is added to the household?Power - This refers to the amount of influence one family member exerts over the

others in making decisions. For example, husbands traditionally have more power than wives, wives have more power than children, older children have more power than younger children. Those who are thwarted in their

preferences may throw temper tantrums or refuse to do their chores.

Difficulty: (H) Fact and Application Page: 418

85. Define autonomic and syncratic buying decisions. Identify and discuss the four factors that appear to determine the degree to which decisions will be made jointly or by one or the other spouse. Provide examples of how a married couple might handle the purchasing decision for each factor.

Answer:Autonomic buying decisions - traditionally were made by one spouse or the other. Men had sole responsibility for buying cars; women picked out the draperies.

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Syncratic buying decisions - decisions made jointly by both spouses, for example, vacation destinations.

Four factors which determine who will make purchase decisions:

Sex-role stereotypes - Separation of decision making for sex-typed products, for example, those considered to be "masculine" or "feminine."

Spousal resources - The spouse contributing the greater resources (usually, but not always, money) has the greater influence. For example, the career wife

who got a big promotion and a raise gets to select the vacation spot for celebrating.Decision-making experience - Individual decisions are made more frequently when the

couple has gained experience as a decision-making unit. For example, the couple who have been married 10 years are more likely to let one spouse

shop for both.Socio-economic status - Middle-class couples make more joint decisions than either

upper- or lower- class couples. For example, planning a budget (maybe even having a budget) is more likely done together in a middle-class household,

especially specifying who has the final authority (i.e., the husband is less likely to object unilaterally to the wife's suggestions in a middle-class household).

Difficulty: (H) Fact and Application Page: 419-422, Table 12.2

86. Define consumer socialization and discuss sources of influence on children.

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

The major sources of consumer socialization influence are the family and the media for younger children; older children are also influenced by friends and teachers.

Family influence - Parental influence is both direct (explicit attempts to teach values) and indirect (by serving as models for children to observe and imitate and

by creating opportunities for children to be exposed to external information sources, such as television, salespeople, and peers).

Shopping - As infants accompany parents to stores, they begin to be exposed to marketing stimuli. Bit by bit, they begin to make requests for desired objects,

soon making their own selections at the stores. Assisted purchases are possible by age five, and by eight, most children are making independent purchases and are full-fledged consumers.Parental-style influence - Three dimensions combine to form different "segments" of

parental styles. The dimensions seem to be the parent's emotional relations

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with the child, parental control over media and communication about consumption values, and parental views about advertising. Three parental styles:

Authoritarian parents are hostile, restrictive, and emotionally uninvolved with their children, lack warm relationships with their children, but are actively filtering media to which children are exposed,

and tend to have negative views about advertising.

Neglecting parents are more detached from their children, they do not exercise much control over what their children do.

Indulgent parents communicate about media messages on consumption with their children, are less restrictive, and allow children to learn more about the marketplace on their own.

Television - The media teach people about a culture's values and myths. Kids watch a lot of television and kids over six do one-fourth of their viewing during

prime time hours so they are affected by programs targeted to adults.

Difficulty: (H) Fact and Application Page: 426-427

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Chapter11organizational and Household Decision Making

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Transcript of Chapter11organizational and Household Decision Making