Family-Household Decision Making (1)

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Chapter

HOUSEHOLD DECISION-MAKING


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Family Life Cycle StagesThe concept of household or family life cycle is important for marketers in

segmenting the market. The following life cycle stages are typical of families:

The bachelor stage: Young, single persons under the age of 35 years. Incomesare generally low since they have started careers, but they may have few

financial burdens and sufficient discretionary income.

Newly married: Young couples, no children. If both spouses are employed, they

will have high levels of discretionary income.

Full nest : Young married couples with youngest child under 6 years of age.

There would be greater squeeze on income because of increased expenses on

childcare. However, if they are members of a joint family, the level of

discretionary income is likely to be high.

Empty nest : Older married couples with no children living with them, parents still

employed. Reduced expenses result in greater savings and highest discretionary

income.


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Examples of non-traditional household life cycle categories:

Sequence I

1. Young married couples with children2. Single parent with older children

3. Older, unmarried

Sequence II

1. Young divorced couple without children

2. Middle-aged married couple without children

3. Older married couple without children.

Sequence III

1. Young married couple with children

2. Middle-aged divorced parent

3. Middle-aged married parent with children and stepchildren.

Sequence IV1. Young unmarried couple without children

2. Middle-aged married couple without children

3. Older married couple without children


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Nature of Household or Family PurchasesMuch depends on income limitations coupled with family responsibilities. These

two factors influence many of the buying decisions of families. As already pointedout, young bachelors as well as newly married young couples (assuming that

both are employed) are quite likely to have significant discretionary income.

Young bachelors are more likely to spend money on clothes and entertainment

etc., while newly married couples will spend more on furnishings, time-saving

home appliances, TV and music system etc. as they are establishing their newhousehold. The family replaces many household items and also buys new

appliances.

In case of non-traditional family lifecycle sequences, single parents are more

likely to be females. In general, divorced women face significant decrease in their

financial resources and this influences their buying patterns. Single parents arecompelled to spend much less time with children and are likely to spend more

money on day-care services for children and toys.


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Nature of Family Decision-Making

When two or more family members are directly or indirectly involved in the

decision-making process, it is called family decision-making. Such familydecisions differ from individual decisions in many ways.

For example, if we consider the purchase of a bicycle for a child, some of the

relevant aspects to think about can be: who recognises the need for bicycle?

How a brand is selected? What role the concerned child plays?

Some family purchases are inherently emotional and affect the relationships

between family members. The decision to buy a new dress, a toy, or a bicycle for

the child is more than simply a routine purchase.


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Family Decision-making for Children


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According to Jagdish N. Sheth, joint decision-making is more likely under fourconditions:

1. A joint decision is likely to be taken under such circumstances to reduce the

uncertainty and the risk. For example, the purchase of a house for the family

will most likely be a joint decision, as it would involve financial, social andpsychological risks.

Initiator Gatekeeper Influencer Decision Buyer User

(Need (Information (Evaluation of maker (Purchase) (Consumption

recognition)1 search) alternatives) (Decision

& evaluation)

to buy)

Joint Decision Roles


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2. When the buying decision is important to the household. Purchase

decisions for low-involvement products are mostly made individually. High-

involvement items such as expensive appliances etc. are generally

purchased in consultation with other family members. Importance of mosthigh-involvement decisions is generally related to some kind of perceived

risk.

3. Certain demographic factors encourage joint decision-making.

i. Joint decisions are less likely among upper and lower socio-economicgroups. However, joint decision-making is quite likely among middle-income

families.

ii. Joint decisions are fairly common among younger families, particularly

during the first few years of marriage.

iii. As long as the family does not have any children, joint decision-making is

more likely. Once children arrive, roles of spouses become more divided

and the need for joint decisions decreases.

iv. If only one parent is employed, there are few time pressures and joint

decision-making is more likely.


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Resolving Conflict

Conflict is likely to arise when two or more people are involved in decision-

making regarding purchase objectives, attitudes of participants towards

alternative brands and the choice of most appropriate alternative.

'Conflict', in case of family decision-making refers to divergence or disagreement,

whether implicit or explicit, between members on the rationale or outcome of a

decision. For example, there may be conflict between the spouses over the issueof family planning, purchase of a car, or house.

According to Harry L. Davis, to avoid conflict, households usually engage in

problem solving through discussion and compromise to reach a consensus, or

there may be consensus and the household may opt for an individual decisioninstead of a joint decision. For example, there may be consensus that the father

or the mother will make the purchase decision.


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William J. Qualls has suggested six influence strategies to resolve conflict:

1. Expert: A spouse might attempt to influence the other by using her/his

superior expertise about decision alternatives.

2. Legitimate: A spouse might attempt to influence the other on the basis ofher/his position in the household.

3. Bargaining: A spouse might attempt to influence the other now and

reciprocate the influence at some future date.

4. Reward: A spouse might attempt to influence the other by offering a reward

so that the other concede.

5. Emotional: A spouse might attempt to influence the other by showing an

emotional reaction.

6. Impression management:

i. Use of punishments, threats, authority and negative emotions: Such

strategies focused on refusing to do chores, behaving angrily, threatening

punishment and making it clear that the spouse had no right to disagree.

Cont.


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ii. Use of positive emotion and subtle manipulation: These strategies included

putting the spouse in a more receptive frame of mind, appealing to mutuallove and affection and promising something attractive in exchange for

agreeing.

iii. Use withdrawal and egocentrism: The spouse withdraws affection, exhibits

coldness in relationship and looks hurt.

iv. Use of persuasion and reason: This strategy refers to use of reasoning, or

persistence to convince the other to change the viewpoint.


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Husband-wife Influences

Nature of Product

Traditionally, among different societies throughout the world, husbands are

regarded as providers of material support and leadership authority within the

family and wife is more likely to provide affection and moral support. Husbands

are viewed as dominant decision-makers for products such as financial services

and automobiles etc., while wives are regarded as decision makers for foods,

toiletries and small appliances etc. However, these roles have merged as an

increasing number of wives have started going into employment and changes in

family norms, particularly in urban areas.


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Harry L. Davis and Benny P. Rigaux undertook a detailed study of husband/wife

influences by product category and classified products into four categories:

1. Products for which the influence of husband tends to dominate the decision-making. Such products include hardware, sports equipment, financial

services and men's shaving products etc.

2. Products for which the influence of wife tends to dominate the decision-

making. Examples of such products are women's clothing, toiletries,

groceries, kitchenware and child clothing etc.

3. Products for which decisions are made by either the husband or the wife

(autonomous decisions). These products may include women's jewelry, toys

and games, cameras and men's casual clothing etc.

4. Products for which husband and wife make joint decisions. Examples of

such products are refrigerators, furniture, TV sets, carpets, financial

planning and family car etc.


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Nature of Purchase Influence

The differentiation of roles is believed to result from small group interaction.

Leaders that emerge take up either instrumental roles or expressive roles.

Leaders taking up instrumental roles are concerned with tasks that help the

group take decisions about its basic purpose or goal (also called functional ortask leaders). For example, decisions on budgets, timing and product

specifications would be task-oriented. Leaders with expressive roles facilitate

expression of group norms and provide the group with social and emotional

support in order to maintain intra-group cohesion such as design, colour and

style, reflect group norms.


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Family Characteristics

The third reason for variation in relative influence of husband/wife relates to

family characteristics. Though husband and wife tend to dominate decisions for

certain product categories, the degree of their dominance may vary within

different families.

Research shows that the influence of the husband will generally be more in

making purchase decisions than wife when:

1. Husband's level of education is higher than his wife.

2. Husband's income and occupational status are higher than wife's.

3. His wife is not employed.

4. The couple is young and at an earlier stage of family life cycle.

5. If the couple has a greater than average number of children.


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(a) Targeting wives for instrumental roles (b) Targeting husbands for non-traditional roles


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Parent-child Influences

Children are playing an increasingly important part in family decision-making. No

sooner do they posses the basic communication skills needed to interact with

parents and other family members, they start their "I want" this campaign. In the

context of consumer behaviour, parent-child relationship is viewed as a situation

of influence and yield. Children strive to influence parents to buy something and

parents yield to their demand.

Older children with greater media exposure are more likely to directly influence

decisions concerning purchase of food items, personal care and beauty

products, TV, stereo and computer etc. Dual-income households foster greater

self-reliance among children. As a result of this, they are likely to influence

decisions for products that the whole family consumes.


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Consumer Socialisation of Children

The family provides the basic framework in which consumer socialisation takesplace. Television may also be instrumental in exerting persuasive influence on

what children see and how they react to certain brands. Scott Ward has defined

consumer socialisation as the process by which young people acquire skills,

knowledge and attitudes relevant to their functioning as consumers in the

marketplace. Learning is a lifelong process and includes acquisition of

consumption-related knowledge as well. The quantity and nature of what children

learn before they are about 18 years of age is important.

Consumer learning can be usefully categorised as directly relevant and indirectly

relevant. Directly relevant learning refers to those aspects that lead to actualpurchase and use. For example, a child has to learn certain skills such as how to

shop, compare brands and budget the available money etc. Examples of directly

relevant consumer learning content are: knowledge and attitude about shops or

stores, products, brands, advertising, salespeople and various sales promotions

etc.


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Methods of Socialisation

Stage I. Observing(average age - 6 months): Parents begin taking children with

them to stores. In this stage children make sensory contact with the market place

and construct mental images of marketplace objects and symbols.

Stage II. Making requests (average age - 2 years): Children have learned quite a

few things, TV commercials also serve as meaningful stimulus and they begin to

make requests for desired things that they see in store. They use pointing and

gesturing or some even may make statements to indicate that they want some

item.

Stage III. Making selections (average age - 3 years): Children begin developing

memory for retail store locations for certain products and are able to locate and

pick satisfying products by themselves.

Stage IV. Making assisted purchases (average age - 5 years): Most children

learn by observing that money needs to be given to stores people to get things.

This helps them learn to value money given to them as a means to acquire

things from a store.


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Stage V. Making independentpurchases (average age - 8 years):

Most children remain in stage IV a

long time before their parents allow

them to move to stage V when they

start buying things on their own

without parental assistance. They gain

a better understanding of money and

convince parents that they are capable

of making correct purchases without

their assistance.

Children 7 - 11 year old are able to handle money


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The Swiss psychologist, Jean Piaget, has mentioned four stages of cognitive

development in children:Age 0-2 years: During this period, children primarily display muscular movement

and do not yet "think" conceptually.

Age 3-7 years: This is a preoperational stage in which cognitive structure is

poorly organised and the child is developing language skills. Parents may allow

some limited purchases with their assistance, such as ice cream, toffees, or colddrinks etc.

Age 8-11 years: Children of this age group are in concrete operational stage and

in the process of developing more complex abilities, such as some application of

logical thought to real problems.

Age 12-15 years: In this stage, the ability of children to think in abstract terms

and associate concepts and ideas is more developed. They are capable of

making more thoughtful and balanced decisions about a wide range of products.


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Parents' Role in Consumer Socialisation

Les Carlson and Sanford Grossbart have identified four types of parents in their

study of parents' role in children's socialisation.

1. Authoritarian Parents: Such parents tend to exercise a high degree of

control over their children and expect total obedience from them. They

attempt to protect children from outside influences.

2. Neglecting Parents: Parents of this type do not show much concern for

their children and neglect them. They show little concern in controlling the

children or encouraging their capabilities.3. Democratic Parents: Parents with this approach encourage a balance

between their own and children's rights and encourage children's self-

expression. They are warm and supportive; expect mature behaviour from

children and value autonomy.

4. Permissive Parents: Such parents believe in as much freedom as possiblefor children without putting their safety in jeopardy. Their thinking is that

children have rights equal to adults, but unlike adults, have no

responsibilities.


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Influence of Children in Purchasing Process

As a result of increasing numbers of working parents, much responsibility for

shopping has been shifted to teenagers. Teenage girls not only help in shoppingbut also spend time in preparing meals at home for the family. Teenagers also

have a say in family decisions for cars, TV sets, computers and family vacations.

Sharon E. Beatty and Salil Talpade have reported that teenagers exert most

influence when:

1. They have more perceived knowledge of the product: It is not unusualfor teenagers to possess more knowledge than parents about certain types

of products such as cellular phones, and computers etc.

2. They consider the product to be important: If teenagers view a product

as more important to them, they are more likely to exert influence on family

purchasing decision.3. They have more purchasing power: In case the teenager's purchasing

power is greater, parents are more likely to respect her/his opinion about

purchasing a product.


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Family-Household Decision Making (1)

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