Family or Household Decision Making

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• Family or Household Decision Making

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Families and Households
Whats the difference between a Family and
Household?

• families are related by blood or marriage
• households are people living together, but not
  necessarily related

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Types of Households/Families
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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

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What is the Family Lifecycle (FLC)

• Family Life-cycle
• bachelor
• newly married, no kids
• young couple, kids lt 6
• young couple, kids gt6
• older married w/ dep.
• empty nesters, working
• retired
• widower - working, not working

• Changes Over Life-Cycle
• financial situation
• brands considered
• interests
• primary decision maker

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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

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• 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

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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
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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
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4) Full nest II. (Youngest child six or over)
(a) Financial position better, (b) Some wives
return to work, (c) Child dominated household,
(d) Buy
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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
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) 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
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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
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• 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

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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
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• 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.

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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

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Family Decision Making
Types of Purchase Decisions Made by Families
Accommodative Group Members Have Different
Preferences and Cant Agree on a Purchase That
Will Satisfy Everyone.
Consensual Group Agrees on the Desired Purchase,
Differing Only in Terms of How It Will Be
Achieved.
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Consensual Decision Making
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Accommodative
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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
Persons 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 Members Influence Over the Others in
Making Decisions
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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

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Sex Roles and Decision-Making Responsibility
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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.
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Decision Roles
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Consumption-related Roles

• Initiators initiate consumption behaviour
• Information Gatherers research alternatives
• Gatekeepers control flow of information to other
  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

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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 .

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Marketing to the Family
When marketing to the family children must be a
consideration. How would you reach families with
your marketing message?

• Magazines
• childrens 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

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• 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

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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.
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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.
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• 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.

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• 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

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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)