Family or Household Decision Making

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• Family or Household Decision Making

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

• impart lifestyle and consumption values to their
  members
• influential in consumption decisions
• make several joint purchase decisions
• prime target market for goods and services

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What is the Family Lifecycle (FLC)

• Changes Over Life-Cycle

• 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
• brands considered
• interests
• primary decision maker

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Why is it of value to understand the family life
cycle?
The family life cycle concept attempts to explain
consumer behavior patterns of individuals as they
age, marry, have children, retire, and their
discretionary income vary over their life span

• At each stage members have new and constant needs
  for goods and services I.e consumption patterns
  change
• Life cycle determines which product categories
  are bought but not how much is spent on each
  category
• Basic strategy is how to keep customers through
  the FLC? (e.g. Automobile)

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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
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Choose your vacation
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Family Life cycle and Travel

• Travel locations, arrangements etc. differ
  significantly across the family life stages
• Young singles the most action motivated,
• older marrieds the least motivated by action.
• young marrieds with children were highly
  motivated to escape
• older marrieds were not.
• Young marrieds with children had most interest in
  rest and relaxation.
• Young single travelers had the most ego
  motivation where
• middle-aged singles were least motivated by ego.

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• Young singles placed much greater emphasis on
  outdoor experiences
• older marrieds did not regard outdoor activities
  as important.
• 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.

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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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Marketing Potatoes through the FLC

• Traditional Families - one parent works, one
  parent stays home, children live at home.
• eat dinner at-home more frequently than other
  demographic groups.
• also 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, but over
  time it has come to represent less and less of
  the total population

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• 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?

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• 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 families with children?

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• Households without children
• Half the U.S. population lives in a one- or two-
  person household.
• Every demographic in this group has lower potato
  consumption than households with children and
  represents a significant (and currently missed)
  opportunity.
• Singles
• Singles have the lowest at-home potato
  consumption, with affluent singles showing 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.
• Potato product ideas

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• Double income, no kids
• young married couples just establishing their
  households. Many can afford to eat out often and
  don't have 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

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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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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.
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Accommodative
Group Members Have Different Preferences and
Cant Agree on a Purchase That Will Satisfy
Everyone
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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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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
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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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• 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?

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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.