Family or Household Decision Making

1

• Family or Household Decision Making

2
Types of Households/Families
3
Why is it Important for Marketers to know about
Families and Households?

1. impart lifestyle and consumption values to their
   members
2. influential in consumption decisions
3. make several joint purchase decisions
4. prime target market for goods and services

4
Household Influences for Marketing Strategy
Structure of Household Unit
Stage of the Household Life Cycle
Marketing Strategy
Household Purchase and Consumption Behavior
Household Decision Processes
5
What is the Family Lifecycle (FLC)
The family life cycle concept attempts to explain
consumer behaviour patterns of individuals as
they age, marry, have children and retire

• 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

• financial situation
• Product categories considered
• interests
• primary decision maker
• Free time

• Changes Over Life-Cycle

6
Why is it of value to understand the family life
cycle?

• At each stage members have new needs for goods
  and services, i.e consumption patterns change
• Life cycle stage determines which product
  categories are bought but not how much is spent
  on each category
• As interests change so too does the ability to
  reach them.
• Purchasing decision process changes
• Basic strategy is how to keep customers through
  the FLC

7
Choose your vacation
8
Family Life cycle and Travel
Travel locations differ significantly across the
family life stages

• Young singles the most action motivated
• greater emphasis on outdoor experiences
• Older marrieds the least motivated by action.
• did not regard outdoor activities as important
• Young single travelers had the most ego
  motivation
• young marrieds with children were highly
  motivated to escape had most interest in rest and
  relaxation.

9

• Older unmarrieds, young marrieds, and young
  singles thought cultural attractions were
  important.
• For the older married and older unmarried
  segments, weather was very important in vacation
  destination selection.
• attractions such as theme parks were important
  for divorced travelers with children and young
  married travelers with children.

10
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

11

• 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

12
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
13
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
14
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
15
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
16
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
17
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
18

• 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

19
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
20
Implications
Small bags of specialty potatoes for affluent
couples without children. And with small kitchens
Large bags for larger families
21
Marketing Potatoes through the FLC

• Singles
• have the lowest at-home potato consumption,
  affluent singles have even lower consumption than
  low- to moderate-income singles.
• They eat out often, and represent a significant
  portion of fry consumption in restaurants. Many
  in this group will be moving into the marriage,
  parenthood segment.
• Households without children
• Half the N. Am population lives in a
  one-two-person household.
• Every demographic in this group has lower potato
  consumption than households with children and
  represents a significant opportunity.
• Potato product ideas

22

• Two working parents, children present
• Dinner is a hectic time.
• Parents and children arrive home about the same
  time.
• Kids are excited (and hungry) parents are tired
  (and hungry).
• Convenience concerns often override other factors
  in deciding what's for dinner.
• Dinnertime solutions need to be quick and easy.

What sort of potato products would they be
interested in?
23

• Traditional Families - one parent works, one
  parent stays home, children live at home.
• eat dinner at-home more frequently than other
  demographic groups.
• consume more potatoes per person than those in
  families without children.
• affluent groups tend to eat fewer potatoes than
  low- to moderate-income groups with the same
  demographics.

• the mainstay of fresh potato marketing, over time
  has come to represent less and less of the total
  population
• What sort of potato products?

24

• Single parent families- single working parent,
  children present.
• Dinner is just another thing on the "to do" list
  along with soccer practice, homework, etc.
• needs easy, quick meal solutions.
• What sort of potato products should be marketed
  to single parent families?

25

• Double income, no kids
• young married couples just establishing their
  households. Many can afford to eat out often but
  lack cooking skills.
• Empty Nesters, children grown and out of home
• Some in this group are still working, some are
  retired
• almost all want a break from the years of dinner
  preparation.
• They can afford to eat out or take home upscale
  meals.
• Often health and fitness conscious, this
  important group has positive attitudes about
  potatoes.
• Potato Product ideas
• Married and Single active elderly
• A small percentage of the population at present,
• this demographic, along with empty nesters, is
  expected to grow dramatically in the next 20
  years.
• Potato product ideas

26
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

27
Household Decision Making
Types of Purchase Decisions Made by Families
Consensual Decision Making
Group Agrees on the Desired Purchase Differing
Only in Terms of How It Will Be Achieved.
28
Accommodative
Group Members Have Different Preferences and
Cant Agree on a Purchase That Will Satisfy
Everyone
29
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

30
The Apparel Manufacturer Haggar Placed Menswear
Ads in About a Dozen Womens Magazines After Its
Research Found That Women Exert Influence Over
Mens Clothing Choices
31
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.
32
Decision Roles
33
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

34
Marketing Strategy Implications

• Marketing communication advertising message,
  media used, person targeted, product positioning
• Households can be targeted by advertising by
  lifestyle .
• 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

35

• If a car is being purchased by a family for a
  teenager to drive to school, how will this
  influence
• The type of product
• Method of financing
• Price
• Appropriate promotion message
• The media
• As opposed to the family purchasing a car that
  the adult head of the household will use to
  commute to work?

36
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

37

• 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, YWCA and other athletic clubs

• Direct Mail

38
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. If you
were the owner of a car dealership how would you
make the purchase of a car a pleasant family
event.
39

• 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.
• make eye contact with the youngsters.
• Lead kids to play area or explain where the toys
  are so parents dont have to apologize 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.