Transcript Chapter13

Chapter 13
The Family and
Generational Cohorts
The Family and
Generational Cohorts
The family
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The Census Bureau defines family as:
“Two or more persons, related by blood,
marriage, or adoption who reside together”
In the US today, 70% of the approximately
100 million households are families
Although all families are households, not all
households are families
Despite changes, the family remains the
central institution in providing for the welfare
of its members
Types of families
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In Western society, three types of families
dominate:
Married couples
Nuclear families
Extended families
Single-parent families are increasing in number
due to divorce and out-of-wedlock births
In other cultures, different types of families
dominate
Consumer socialization of children
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Process by which children acquire the skills,
knowledge and attitudes necessary to
function as consumers (consumption skills or
consumer behavior norms)
Preadolescents acquire skills by observing
parents and older siblings
Adolescents and teens more likely to see
friends and peers as role models
Family consumption roles
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Individuals in each family are the key
decision makers
Marketers need to know who in the family
makes decisions in order to know whom to
target
Buying roles have changed significantly in
recent times
Eight roles in the family decision-making
process
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Influencers
Gatekeepers
Deciders
Buyers
Preparers
Users
Maintainers
Disposers
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Number and identity of family members who
fill these roles varies from family to family and
from product to product
Roles vary based on culture as well
Marketers need to know which family
members make which decisions in order to
develop effective marketing strategies
The family decision process
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Research identifies four categories of
decision patterns:
Husband-dominated
Wife-dominated
Autonomic--each spouse makes an
independent decision about half the time
Syncratic--decisions are made jointly
Figure 10.10 Husband-Wife Influence in
Financial Tasks and Decisions
Choice of Type of Investment
Choice of Institution for Cetificate of Deposit
Down Payment on a Large Purchase
Insurance for Husband
Allocation of Funds for Savings
Financing of Large Purhcase
Insurance for Wife
Monthly Expense Budget
Gifts to Charities
0
Husband-dominated
10
20
30
Equal partnership
40
50
60
70
Wife-dominated
80
90
100
The family life cycle (FLC)
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A steady and predictable (at one time) series
of stages that most families progress through
FLC analysis enables marketers to segment
families in terms of their current stage
At each stage there are differences in earning
power and unique needs and demands
placed on family resources
Traditional family life cycle
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Divided into five stages
Bachelorhood
Honeymooner
Parenthood
Post-parenthood
Dissolution
Nontraditional FLC stages
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Family households:
 Childless couples
 Couples who marry later in life
 Couples who have children later in life
 Single parents I (divorced)
 Single parents II (child out of wedlock)
 Single parents III (adoption)
 Extended family (adult children return home
or elderly parents move in)
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Non-family households
 Unmarried couples (heterosexual or
homosexual)
 Divorced persons (no children)
 Single persons (most are young)
 Widowed persons (most are elderly)
Consumption in nontraditional families
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2.
3.
When households undergo status changes,
they often undergo spontaneous changes in
consumption-related preferences and thus
become attractive targets for many
marketers
Divorce
Boomerang kids
Latchkey kids
Generational marketing
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As we have seen, age is one method to
segment and target a market
As consumers age, their preferences and
their access to resources change
Age-related life transitions create demand for
specialized goods and services
Age cohorts
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Age also has meaning in terms of common
experiences shared with others
Groups of people who have grown up during
specific time periods and share experiences,
memories and symbols that translate into
similar preference patterns
The depression cohort
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Born 1912-1921
Depression years remain the defining
moment
Risk averse
Frugal
Avoid debt
Invest only in safest investment vehicles
(e.g., government bonds)
World war II cohort
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Born between 1922 and 1927
WWII is the defining moment of this
generation
Also influenced by the depression
Financially conservative
Risk averse
Housing and health issues are important
Baby boomers
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Individuals born between 1946 and 1964
Huge segment: 40% of adult population in the
US
Highly educated and thus affluent
Represent 50% of those in professional and
managerial occupations
Represent more than 50% of those with a
college degree or higher
Consumer characteristics of “boomers”
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Tend to be consumption-oriented
Willing to borrow to support life style
Socially conscious and willing to spend extra for
environmentally-friendly products
“Yuppies” are a small but highly sought-after
segment of this market
Well off financially, well educated and in professional
fields
Often associated with expensive brand names
As they age, shifting attention to physical fitness and
travel
Generation X (“busters” or “slackers”)
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People born (approximately) between 1965
and 1977
46 million in the US
21% of total population of US
Children of divorce, day care and latchkeys
Politically conservative with a “what’s in it for
me” attitude
Many continue to live at home into their 20’s
and find good jobs hard to come by
Marketing to Gen-X’ers
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Newspaper advertising isn’t effective
The “MTV generation”
MTV
Fox television
Comedy Central
E!
Teens (Generation Y)
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Substantial segment of the population in the US and
abroad
Enjoy enormous discretionary purchasing power
Increasingly market savvy and involved with
consumer culture
As rate of single- and working-parent families
increases, teens increasingly become primary
shoppers for families
Regularly go through rapid periods of physical,
mental, social and emotional changes, generating
rapidly evolving physical, self-expression and selfrealization needs
Children (Millenials and Generation Y)
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Children represent considerable market
opportunities for those who can meet their distinct
needs and cognitive competencies
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Greatest expenditures are in:
Food and beverages (including sugared cereals)
Entertainment (toys, games, movies, music)
Clothing
Average child sees approximately 20,000 television
commercials a year
Children as young as three recognize heavily
advertised cartoon characters; this recognition
produces positive attitudes toward products
associated with these characters
Children are very brand conscious
Table 10.4 Noteworthy Nontraditional
FLC Stages
Alternative FLC Stages
Family Households
Childless couples
Definition/Commentary
Couples who marry later in
life (in their late 30s or
later)
More career-oriented men and women and greater
occurrence of couples living together. Likely to have
fewer or even no children.
Couples who have first
child later in life (in their
late 30s or later)
Likely to have fewer children. Stress quality
lifestyle: “Only the best is good enough”
It is increasingly acceptable for married couples to
elect not to have children. Contributing forces are
more career-oriented married women and delayed
marriages.
Table 10.4 continued
Alternative FLC Stages
Family Households
Single parents I
Definition/Commentary
Single parents II
Young man or woman who has one or more children
out of wedlock.
Single parents III
A single person who adopts one or more children.
Extended family
Young single-adult children who return home to
avoid the expenses of living alone while establishing
their careers. Divorced daughter or son and
grandchild(ren) return home to parents. Frail elderly
parents who move in with children. Newlyweds
living with in-laws.
High divorce rates (about 50%) contribute to a
portion of single-parent households
Table 10.4 continued
Alternative FLC Stages
Nonfamily Households
Unmarried couples
Definition/Commentary
Divorced persons (no
children)
High divorce rate contributes to dissolution of
households before children are born.
Single persons (most are
young)
Primarily a result of delaying first marriage; also,
men and women who never marry.
Widowed persons (most are
elderly)
Longer life expectancy, especially for women;
means more over-75 single-person households.
Increased acceptance of heterosexual and
homosexual couples.
Table 10.5 continued
Number of household by
type in 1996
Distribution of
Households by type
ALL HOUSEHOLDS
101,018
100.0%
NONFAMILY HOUSEHOLDS
30,777
Living alone
25402
Female householders
14,861
14.7
Male householders
10,442
10.3
Living with others
5,375
Female householders
2,110
2.1
Male householders
3,266
3.2
25.1
5.3
30.5