Transcript household decision making

Family or Household
Decision Making
Families and Households
What’s the difference between a Family and
Household?
 families are related by blood or marriage
 households are people living together, but not
necessarily related
Types of
Households/Families
Why is it Important for Marketers to know about
Families and Households?
Families/households impart lifestyle and consumption
values to their members
The family/household is one of the most influential in
consumption decisions
Households/families make several joint purchase
decisions
As a unit, the family/household is a prime target
market for goods and services
What is the Family Lifecycle (FLC)
Family Life-cycle
 bachelor
 newly married, no kids
 young couple, kids < 6
 young couple, kids >6
 older married w/ dep.
 empty nesters, working
 retired
 widower - working, not
working
Changes Over Life-Cycle
 financial situation
 brands considered
 interests
 primary decision
maker
Why is it of value to understand the family life cycle?
 At each stage members have new and constant needs for goods
and services I.e consumption patterns change
 How do we keep customers through the FLC? (Automobile)
What are the Critical Consumption factors?
 number of people (children and adults) in the family,
 the ages of the family members
 Number of employed adults
Stages of the family life cycle
1) Bachelor Stage. (Young single people not living at home):
(a) Few financial burdens,
(b) Fashion/opinion leader led,
(c) Recreation orientated,
(d) Experiment with personal financial management
(e) men and women differ in consumer behaviour
- women more housing-related items and furniture,
-men more on restaurants and cars
(f) buy: basic kitchen equipment,
basic furniture, cars, holidays,
2) Newly married couples (Young, no children) (DINKS)
(a) Better off financially than they will be in the near future,
(b) High levels of purchase of homes and consumer durable goods,
(c) Establish patterns of personal financial management and
control;
(D) Buy: cars, fringes, cookers, life assurance, durable furniture,
holidays,
3) Full nest I. (Youngest child under six):
(a) Home purchasing at peak,
(b) Liquid assets/saving low,
(c) Dissatisfied with financial position and amount of money saved,
(d) Reliance on credit finance, credit cards, overdrafts etc.,
(e) Child dominated household,
(f) Buy necessities - washers, dryers, baby food and clothes, health
foods vitamins, toys, books etc.;
4) Full nest II.
(Youngest child six or over):
(a) Financial position better,
(b) Some wives return to work,
(c) Child dominated household,
(d) Buynecessities - foods, cleaning material, clothes, bicycles,
sports gear, music lessons, pianos, junk foods, holidays
etc.;
5) Full nest III. (Older married couples with dependent children.:
(a) Financial position still better,
(b) More wives work,
(c) School and examination dominated household,
(d) Some children get first jobs; other in further/higher education,
(e) Expenditure to support children's further/higher education,
(f) Buy: new, more tasteful furniture, non-necessary appliances,
boats, holidays, etc.
) Empty nest I. (Older married couples, no children living with
them, head of family still in labor force):
(a) Home ownership at peak,
(b) More satisfied with financial position and money saved,
(c) Interested in travel, recreation, self-education,
(d) Make financial gifts and contributions,
(e) Children gain qualifications and move to Stage 1.
(f) Buy luxuries, home improvements e.g. fitted kitchens etc.;
7) Empty nest II. (Older married couples, no children living at
home, head of family retired):
(a) Significant cut in income,
(b) Keep home,
(d) Concern with level of savings and pension,
(e) Assist children
(f) Buy:medical appliances or medical care, products which aid
health, sleep and digestion, hobbies and pastimes,
8) Solitary survivor I. (In labour force):
(a) Income still adequate but likely to sell family home and purchase
smaller accommodation,
(b) Worries about security and dependence;
(c) Concern with level of savings and pension,
(d) Buy: hobbies and pastimes,
9) Solitary survivor II. (Retired):
(a) Significant cut in income,
(b) Additional medical requirements,
(c) Special need for attention, affection and security,
(d) May Seek sheltered accommodation,
(e) Possible dependence on 'others for personal financial,
management and control.
Buy: Prepaid funeral
How do the following overall demographics of the modern family
affect marketers?
The under-25 married couple age group declined by one-third
since 1980.
The 65+ group increased by 15% since 1980.
The 35 - 44 year age group grew 40% since 1980, and was 50% of
the total in 2000.
The average marrying age for women is 24 and 26 for men.
number of unmarried adults is rising steadily
The average family size is 2.6 people, and birth rates are
expected to continue to decline. I.e. family size is shrinking
only 10% have 3 or more kids
family households headed by a single person have grown by
over 25% in the last decade
Over a million couples divorce each year in USA.
Household Decision Making
 Households vary in consumption habits depending on
stage where they are in family life cycle
 Household decision making is also different from
individual decision making
 Family role structure orientation influences household
decision making
 Nature of good or service to be purchased and consumed
influences household decision making
Family Decision Making
Types of Purchase Decisions
Made by Families
Consensual
Accommodative
Group Agrees on the Desired
Purchase, Differing Only in
Terms of How It Will
Be Achieved.
Group Members Have Different
Preferences and Can’t Agree
on a Purchase That
Will Satisfy Everyone.
Consensual Decision Making
Accommodative
Family Decision Conflict
Conflict Occurs When There is Not Complete
Correspondence in Family Members’ Needs and
Preferences.
Some Specific Factors Determining the Degree of
Family Decision Conflict Include the Following:
Interpersonal Needs
Person’s Level of Investment in the Group
Product Involvement
and Utility
Degree to Which the Product in Question Will
Be Used or Will Satisfy a Need
Responsibility
For Procurement, Maintenance, Payment, etc.
Power
One Family Member’s Influence Over the
Others in Making Decisions
Husband-Wife Decision Making
Who makes the Decisions?
 Influence may depend on the good or service to
be purchased, role structure orientation, stage of
the decision making process
 four categories:
husband-dominated;
wife-dominated
autonomous or unilateral;
joint decision
Sex Roles and Decision-Making Responsibility
Autocratic
Decisions
Syncratic
Decisions
Made by One
Spouse or the
Other
Decisions
Made
Jointly
Four Factors Influencing Family Decision Making
1.
Sex-role stereotypes - separation of decision-making
for sex-typed products.
2 Spousal Resources - spouse contributing the
greater resources (usually, but not always,
money) has the greater influence
3. Experience - individual decisions are made
more frequently when the couple has gained
experience as a decision-making unit
4. Socio-Economic Status - middle class families
make more joint decisions than either upper or
lower class families.
Information
Gatherer
Initiator
Gatekeeper
Disposer
Buyer
Decision
Roles
Maintainer
Influencer
Decision
Maker
User
Preparer
Consumption-related Roles
 Initiators: initiate consumption behaviour
 Information Gatherers: research alternatives
 Gatekeepers: control flow of information to other
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members
Influencer(s): provide information about a good or
service to other members
Deciders: have power to make final buying decision
Buyers: member(s) who actually make purchase
Preparers: transform product into useable form
Users: family members who use the good or service
Maintainers: responsible for maintenance of good
Disposers: responsible for disposal of good/service
Marketing Strategy Implications
Marketing communication: advertising message,
media used, person targeted, product positioning
Product development: products, e.g. minivans and
cars built specifically for families; vacations; services,
e.g. insurance, hotel
Pricing decisions: e.g. discounts for bulk purchases
Distribution: changes in family lifestyle means
changes in distribution, e.g. longer retail hours
Public policy regulations re marketing to children
 Households can be targeted by advertising by
lifestyle .
Marketing to the Family
When marketing to the family children must be a consideration.
How would you reach families with your marketing message?
Magazines
children’s magazines are good avenues for reaching the youth
and mom markets.
also family-oriented magazines aimed more at parents. Eg.
Family Circle, Sesame Street Parents (5.4 million readers)
Family Fun, Child, Parents, or Parenting magazine.
Internet, e-mail and other technology
since kids are often the more technologically savvy members of
the family
 Web sites
Organizations
family-friendly organizations are good places in which to focus
marketing efforts aimed at the family eg.
 Religious institutions
 Schools: primary, secondary, public and private;
 their affiliated clubs and organizations,
 Kids’ groups - Scouts, 4-H, etc.
 YMCA or YWCA and other athletic clubs
Direct Mail
marketing to families employs strategies and practices that
strongly appeal to parent customers and their children for the
ultimate purpose of increasing sales. It involves looking at your
sales and marketing processes from the viewpoint of a consumer
who has money to buy, children beside them and is stretched for
time.
Family marketing has three components:
products
customer service
and environment.
For many households, a car purchase is a family event. It can
be a pleasant one or a story that is retold with embarrassment
and horror. Which do you think will lead to a repeat sale or
referral? If you were the owner of a car dealership how would
you make the purchase of a car a pleasant family event.
Provide a good play area. Construction play, a table for drawing,
good books, creative activities like train sets, Lego tables, mazes
and puzzles. Stay away from videos. Children who sit too long just
build up their energy and compensate with over-active play.
Welcome families with broad smiles, make eye contact with the
youngsters.
Take a few minutes to make the children comfortable by leading
them to the play area or explaining where the toys are. Do not put
parents into the position of apologizing for their children's
behavior.
Make sure that the vending machine has packaged, healthy
treats available, including fruit juice or water in bottles.
The bathroom should have a change table.
stop periodically to make sure the kids are engaged and happy.
Include them if old enough, in some of the discussions.
Since 1976, the real income (in constant dollars
corrected for inflation) of Canadian families has
remained relatively constant. How is this situation
affecting the purchasing behaviour of Canadian
Families?
How should a firm use this information to develop
a marketing strategy for
Shoes
Microwave ovens
Travel packages
For what kinds of products would the
family-life cycle concept be most useful in
estimating demand?
Give some examples of the effects of the
changing role of women on marketing
practices (product, promotion, price, place)