Conceptual Framework

Household Buying Behaviour

UNDERSTANDING
CUSTOMER
BEHAVIOUR

Families and Households

Family Decision Making Process
Conflict in Family Decisions

Business Buying Behaviour

Buyer

User

Payer

INSTITUTION
CUSTOMER
DECISION MAKING

Components of the Business

Buying Process

Household Buying
Behaviour
Households are the basic unit of
buying and consumption in a
society
A household is a consumption unit of one or more
persons identified by a common location with an
address

Families and Households

Family household

A group of persons related by blood and/or marriage.

Four types are most common:

Married couples alone

Married couples with children
A single parent with children
Extended family, which may include parents, childrens
spouses, and/or grandchildren, and occasionally cousins

Nonfamily household

A household that does not contain a family

A single person living alone in a dwelling unit
Roommates
Boarding houses

The Family Decision-Making Process

The same family member may not

have all three roles
A single role may be jointly held by
more than one individual

Steps in Family Buying

Decisions

Initiation of the purchase decision

Gathering and sharing of information
Evaluating and deciding
Shopping and buying
Conflict management

Husband-Wife Decision
Roles

Five patterns of relative influence are

possible:
Autonomous decision by the husband only
Husband-dominated decision
Syncratic decisions
Wife-dominated decision
Autonomous decision by the wife

Decision Plan Nets for

a Husband and Wife
Wifes

Husbands

Price
<$75,000

Insulation
Number of Y
bedrooms
(4)

N
R
N

Price
Y
<$75,000

R
N

Y
A
1
A

Interior
design
Number of
bedrooms
(4)

R Reject

R
N
R

N
3 bedrooms

A
Y

1
Accept

A
2

Factors Influencing Interspousal

Influence

Gender-role orientation
Wifes employment status
Stage in family life cycle
Time pressure
Socioeconomic development of the
population

Childrens Influence on
Family Decision Making

Children influence household buying in

three ways:
Children express individualistic preferences for

products paid for and bought by parents

Children in their teen years begin to have their
own money and become their own payers and
buyers of items of self-use
Children influence their parents choice of
products that are meant for shared consumption

Family Orientation

Childrens influence in the family

decisions depends on whether the family
has a social or a concept orientation
Another way of classifying families is by
how authority is exercised in the family

Childrens Role by Family Type

CHILDRENS ROLE
FOR OWN-USE PRODUCTS
DIRECT CONTROL

FOR FAMILY-USE PRODUCTS

SHARED
INFLUENCE

DIRECT
CONTROL

SHARED
INFLUENCE

FAMILY TYPE
Authoritarian

Low

Low

Low

Low

Neglectful

High

High

Low

Low

Democratic

Moderate

Moderate

Moderate

Moderate

Permissive

High

Moderate

Moderate

Moderate

Learning the Customer

Roles

Primary modes of learning customer

roles
Consumer socialization
Intergenerational influence

Consumer Socialization

Consumer socialization occurs when one

or more of the following are learned or
acquired by children:
Preferences among alternative brands and products
Knowledge about product features and the functioning

of the marketplace
Skills in making smart decisions

Two factors play a role in consumer

socialization of children
Cognitive
Environmental

Learning Mechanisms

Instrumental Conditioning
Children learn those behaviours and the underlying

values that receive rewards from their parents

Modeling

Children look up to their parents as role models and try to

internalize and adopt their values, roles, aptitudes, etc.

Cognitive

Low involvement
There could be undeliberated adoption of product choices
because of familiarity or because these products were used by
ones parents
High involvement
Socialization influence can occur due to communication and
education by parents about various brands or buying
strategies

Intergenerational Influence

The transmission of values, attitudes,

and behaviours from one generation
to the other
Forward IGI
From parents to children

Reverse IGI
From children to parents
Democratic justice

Family Characteristics That

Influence IGI

Family Relationship
Relative Expertise
IGI across households
Expertise
Lifestyle similarity
Resource control

Intergenerational Influences
(IGI)
FAMILY RELATIONSHIP

PERCEIVED
EXPERTISE

Negative

Positive

High

Disaffected
IGI

High
IGI

Low

No
IGI

Discounted
IGI

Conflict in Family Decisions

Distributed Roles
Shared Roles

Types of Conflict
GOALS

Divergent
PERCEPTIONS/
EVALUATIONS
Converge
nt

Convergent

Divergent

Solution Conflict
(Family
vacation)

Compounded
Complex,
Important
Purchases
(Home buying)

No Conflict
(Daily
consumption
items)

Goal Conflict
(What to buy)
(Product level
conflict)

Conflict Resolution
VALUES/GOALS
Convergent

Divergent

Divergent

Problem
solving

Politicking
Bargaining

Convergent

No
Conflict

Persuasion

EVALUATIONS

Framework for Understanding Family Buying Decisions

Buyer/Payer/User Roles

Individual Characteristics
Personality and Lifestyle
Time Pressure
Product Expertise
Education

Separation vs.
Convergence of Roles

Nature of Purchase

Importance
Perceived Risk
Urgency
Shared Vs. Individual Use
Sources of Information

Marketer
Mass Media
Word-of-Mouth

Decision Process
Autonomous
Joint
Conflict Occurrence
Conflict Resolution
Problem Solving
Persuasion
Bargaining
Politicking

CHOICE

Family Characteristics
Family life cycle
Socio-economic status
Dual career

Role specialization
Sex role orientation

Family communication & interaction patterns

Democratic vs. authoritarian
Harmony vs. discord
Time consumption-joint vs. separate

22

Business Buying
Behaviour
A business is a licensed entity
engaged in the activity of making,
buying, or selling products for profit
or nonprofit objectives
2008 by Nelson, a division of Thomson Canada Limited

23

Comparison of Household and

Business Buying
CHARACTERISTIC

HOUSEHOLD BUYING

BUSINESS BUYING

Specialization of customer roles

Combined or slightly specialized

Moderately to very specialized

Formalization of the buying

process

Informal

Slightly formal (small businesses)

to formal (large businesses)

Accountability for decisions

Usually not formally measured

Strict measures

Internal capabilities

Weak

Weak (small businesses) to

very strong (large businesses)

Complexity of requirement

Little complexity

Operational and strategic

complexity

Components of the
Business Buying Process

Procurement system
Nature of the purchase
Organizational characteristics
Buying centre
Rules and procedures
A decision process

Buying Behaviour Associated with

Buyclasses
Buyclass

Description of Need

Buying Centre Size

Information Search

Straight rebuy

Item is frequently needed

and has been satisfactorily
bought before

Very small; ordering may

even be automated

Brief or nonexistent; new

suppliers rarely considered;
technical expertise rarely
sought

Modified rebuy

Need is broadly similar to

one that has been fulfilled
before but requires some
change in specifications

Moderate

Some information is
gathered; new suppliers may
be considered; technical
experts may have input into
decision

New task

Need is completely new to

the organization

Large

Extensive; new suppliers

often considered experts
usually have major input
into decision

Perceived Risk

Perceived risk refers to the expected

probability that the purchase may not
produce a satisfactory outcome
It is a product of two factors:
The degree of uncertainty that a choice may

be wrong
The amount at stake should a wrong choice
occur

Importance

The importance of purchase is a

combination of the amount at stake
and the extent to which the product
plays a strategic role in the
organization
The higher the amount at stake, and the

more strategic the products role, the more

important the purchase

Complexity

Complexity refers to the

extensiveness of effort it takes to
comprehend and manage the product
during its acquisition
Complexity has two dimensions:
The number of performance dimensions
The technical and specialist knowledge

required to understand those dimensions

Time Pressure

Time pressure refers to how urgently

the item is needed
When the item is needed urgently the
purchase decision will:
Short-circuit the usual process
Make the process less deliberative
Give more direct role to the

user/requisitioner

Organizational Characteristics

Four organizational characteristics of

the customer firm affect buying
behaviour:
Size
Structure
Purchase resources
Purchase orientation

The Buying Centre

User
Buyer
Analyzer
Influencer
Gatekeepers
Decider

Decision Process

Business buying decisions comprise

the following stages:

Need assessment
Developing choice criteria
Request for proposals (RFPs)
Supplier evaluation
Supplier selection
Fulfillment and monitoring

Components of a Business
Customers Total Costs
Acquisition Costs

Possession Costs

Usage Costs

Price

Interest cost

Field defects

Paperwork cost

Storage cost

Training cost

Shopping time

Quality control

User labour
cost

Expediting cost

Taxes and insurance

Product
longevity

Cost of mistakes in order

Shrinkage and
obsolescence

Replacement
costs

Prepurchase product
evaluation costs

General internal
handling costs

Disposal costs

Psychology of Decision Makers

The decision-making process is

primarily driven by two psychological
processes occurring in the decision
makers:
Their expectations
Their perceptual distortions

Conflict and Its Resolution

Problem solving
Persuasion
Bargaining
Politicking

A Comprehensive Model of Organizational Customer

Behaviour
Organization Characteristics
Size

Centralization

Purchase Orientation

Rules and Procedures

Decision Process

Nature of Purchase
Buying Task
Straight Rebuy
Modified Rebuy
New task
Perceived risk
Importance
Complexity
Time pressure

Need Identification
Vendor Search
Evaluation
Criteria
Vendor Evaluation

Information Sources
Salespersons
Advertisements
Product literature
Syndicated research
reports

Trade/professional
journals
Trade associations
Word-of-mouth
Vendor referrals

Conflict
Resolution
Problem
solving
Persuasion
Bargaining
Politicking

Decision
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