Decision making units are the individuals, groups, or other entities who make decisions for an organization. When it comes to business, DMUs can include boards of directors, managers, and shareholders. There are many factors that impact how a DMU influences organizational decision making and what is considered when making impactful decisions! Let's read more about it in this blog post!
"DMU - Decision Making Unit is defined as the group of individuals who are involved in or influence a purchase decision."
A DMU involves several people - anyone could be a member, but usually, there are certain types of members who have more influence than others. The types of members in the Decision Making Unit are split up into 6 categories: users, influencers, buyers, initiators, deciders, and gatekeepers. Each category has unique characteristics that make it different from the others. For example, some people may only be part of the process because they’re affected by the buying decision (thus being categorized as ‘users’).
These types of individuals do not contribute to the making of the buying decisions themselves; rather, they are only a part of the process because they will be using or experiencing the product/service that is being bought.
What is a Decision Making Unit (DMU)?
As mentioned above that DMU involves several people. These types of individuals do not contribute to the making of the buying decisions themselves; rather, they are only a part of the process because they will be using or experiencing the product/service that is being bought.
"Users are involved in or affected by a purchase, but they do not contribute to the buying decision."
Example: The planter John uses every day produces high-quality produce. However, one day his planter stops working and he needs to buy a new one. He doesn’t know how to fix it himself so he takes it into the shop where he bought it from. It is there that he meets Steve who works at the shop and can advise him on how much to spend, what type of machine would suit him best etc.
Although John is part of the purchase process (because he will be using or experiencing whatever product/service was chosen), Steve makes the actual decision for him because John does not have enough knowledge to do so.
"Influencers are not direct users of the product, but they contribute to the buying decision."
Example: John’s wife is also an influencer in his purchasing process because she has a lot of influence over what he decides to buy. However, John still makes the final decision himself because he is the one that will be using or experiencing whatever product/service was bought for him by Steve.
"Buyers are individuals directly involved in and responsible for making a purchase."
The buyer has ultimate power when it comes to deciding which product/service they want within their niche market. Because they are the ones who will be using or experiencing whatever product/service is chosen, it’s only right that they have the power to decide what they want. For example, John is buying a planter from Steve and can choose between two different models because he knows which one would suit him best.
"Initiators are those who first talk of a potential purchase."
Initiators are those people that mention something first. They usually prompt the DMU into thinking about a possible new product/service - whether it’s a service for their company, a toy for their child, etc. However, the DMU does not always go along with what the initiator wants - especially if there isn’t enough information to base a purchase off. For example, John’s wife mentions that she wants to get him a new planter for his birthday but he isn’t too sure because he doesn’t know much about what’s on the market.
"Deciders are those who make the final choice of product or service."
The decider is usually the last person in the DMU to look at all options before making a final decision. This can be due to various reasons, such as time restrictions - if they don’t have enough time or research done on something then they may not want it anymore by the time they do have enough time, etc. For example, it’s John’s birthday and his wife has gotten him a new planter. On the day of his birthday, she tells Steve what they want and he helps them make a final decision on which one to buy. John then makes the actual purchase himself when they go into the store to pick it up.
"Gatekeepers are those who decide whether others are allowed access to the DMU."
Gatekeepers are also known as ‘middlemen’ or ‘intermediaries’ - they can be consultants, etc. Gatekeepers help initiate information by bringing ideas in, knowing how to present things so they will appeal to different people in the DMU, finding out what other people want, etc. Gatekeepers usually work for someone else (such as a company marketing department) and gain access to the DMU through their job. However, they can also be part of the DMU themselves - but that is rare.
Decision Making Unit (DMU) - 3 Types Of Buying Situations
1. Straight rebuy
A straight rebuy is where none of the members of the DMU changes. For example, last year John bought a planter from Steve because it was highly recommended by his neighbor at the time who was using one himself. This year John decides to buy another planter from Steve because he trusts his experience and expertise in selling gardening equipment. the only thing that has changed about John’s situation is that he now wants another planter, but has the same needs and expectations as last year.
Users who are categorized as members of DMU are people who normally consume products or services; they do not contribute to the buying decision itself, but go along with whatever their family and friends decide (if they're involved in it). These types of individuals would include children making purchasing decisions for toys, older adults on fixed incomes making small daily purchases like coffee or candy bars, nursing home patients on restricted diets making food choices, etc.
2. Modified rebuy
A modified rebuy is where one member of the DMU changes and everything else stays pretty much the same (or at least to the best of their knowledge). For example, last year John bought a planter from Steve because it was highly recommended by his neighbour at the time who was using one himself. This year John decides to buy another planter from Steve because he trusts his experience and expertise in selling gardening equipment - but this time his wife recommends him to get a different model rather than the one they got last year because she thinks it would suit their garden better. So while John wants the same thing as last year, his wife is coming into the process with different information and therefore a new recommendation for him to consider.
3. New buy
A new buy is where one or more members of the DMU change and everything else stays pretty much the same (or at least to the best of their knowledge). For example, last year John bought a planter from Steve because it was highly recommended by his neighbour at the time who was using one himself. This year John decides to buy another planter from Steve but this time he doesn’t know what he needs - so this would be considered a ‘new buy’ situation because they don’t have enough experience with buying these kinds of things to know exactly what they want.
Why are decision-makers important?
1. It allows marketing departments to focus on the people who will be making purchasing decisions and not waste time and resources reaching out to those who won’t ultimately be part of the process.
2. Identifying people in a buying situation can help marketers target their messages more effectively - for example, using language or jargon that is familiar with them so they will take notice and pay attention to things that might be important for this group of people (age, job title, etc.). This will also allow marketers to determine if what they are trying to sell would appeal to this person or group.
3. Sometimes companies would like someone else in the DMU to make the purchase for them - such as when parents want children under the age of 18 to make their own purchasing decisions rather than have the parent do it.
4. People don’t always act alone - some may get input from others in their group on what they should do (e.g.: family members).
5. Some people need to be informed before making purchasing decisions while some just go ahead and make the decision without needing any advice beforehand.
Why are buying situations important?
1. Many products can be used for different purposes, so knowing who is most likely to use them helps marketers develop an effective marketing strategy that targets these people most effectively. For example, a certain type of coffee might be best suited for one group of consumers but not another because their needs are different (e.g.: decaf vs regular) - therefore targeting one group over the other could mean the difference between success and failure for a company.
2. Different buying situations may affect the outcome of a purchasing decision - for example, someone who has never used a particular product before but is trying it with their friends will have a different experience with it compared to someone who uses it daily.
3. Knowing the type of buying situation can help determine which media might be most effective as well as what messages should be included in these marketing materials (i.e.: if they need more information then more detail should be provided, etc.). For example, whether some people would rather read through an instruction manual or just watch some videos on how to use it could change how certain facts and details are communicated and let users know what they need to do so they can get started as quickly as possible.
4. Knowing the type of buying situation can help marketers find where to distribute their information so people can access it at any time, such as websites and social media channels (where many people spend a lot of their time). For example, people looking for a new product online would be very likely to use Google’s search engine and therefore Google ads that appear on the first page of results may be highly effective. Some other examples could be Facebook and Twitter - both of which have billions of users around the world who frequent their pages often.
What are some weaknesses of decision-making units?
1. Not everyone who is involved in a buying situation will be part of the DMU - people may not always follow through with their agreements or may sometimes change their minds about things they promised to do, which can affect what happens to the product/service that’s being sold.
2. Sometimes multiple people will work together as a unit without even realizing it - for example, when someone asks their spouse for advice on something before going ahead and making a purchase decision themselves later on. This would mean that both spouses are considered members of the same DMU, but only one person has made an actual purchase decision.
3. Sometimes it can be difficult to identify who the DMU is for a particular product or service - especially when there are several different groups of people involved in the decision-making process, which can lead to confusion and arguments about what’s best for them.
A DMU is a group of people that are involved in the purchase, or intended purchase, of a product or service. These people are not necessarily involved in the buying process every time - for example, John’s wife may never be involved when he buys something related to their garden but she could always provide feedback later on if she uses it first.
A person can belong to more than one DMU at once depending on what products/services they are buying - for example, John might buy his girlfriend flowers now and then but because this is not something he does very often he doesn’t have enough experience to know where to go or kinds of things exist that might suit his needs.