Family or Household Decision Making. Types of Households/Families.
Family & Household
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Transcript of Family & Household
Family & HouseholdDr. Rohit Vishal Kumar
Reader, Department of MarketingXavier Institute of Social Service
Video for the Class
What is a Family? Family
is defined as a group of two or more people (one of whom is a householder) related by birth, marriage or adoption and residing together
Household: Is a family and any unrelated person residing in the same house
and consuming food from a common kitchen at least once a day Two types of household:
Family Household Institutional Household e.g. Hostel
All families are households but all households are not families
Types of Family Family of Orientation
Consist of one’s parents and elders Provides orientation towards
Social: Religion, Politics, Economics Emotional: Self Worth, Ambition, Love and Care
Family of Procreation Consist of one’s spouse and children Most important buying unit in a market
The influence of Family of Orientation decreases with Age
Types of Family Traditional Family Types:
Married Couple: Simplest type of family consisting of husband and wife
Nuclear Family: Consist of Husband Wife and at least one child
Extended Family: Consist of a nuclear family with at least one grand parent
Joint Family: Blood relatives and their spouses with kids staying together
New Modes of Family Blended Family:
A family in which either or both partner were previously married Single Parent Family:
A family in which only one of the parent is present Unmarried Family:
Parents, unmarried, but living together Communal Family:
A group of families living together and sharing responsibility
Functions of a Family Provides Economic Well Being Provides Emotional Support Provides Suitable Life Style Provides Social Relationships Provides Morals and Ethical Values Provides Religious Values Provides Interpersonal Skills
Family Life Cycle (1/2) Bachelorhood
Few Financial Burdens Fashion and Recreation Oriented
Newly Married Couple Financially better off Highest purchase rate of consumables and durables Romantically inclined
Full Nest – I Youngest child < 6 years of age Low Liquid Assets High purchase of baby food & baby oriented products
Full Nest – II Youngest child >= 6 years of age Financially better off
Full Nest – III All children still financially dependent High family influence on purchases Major expense on higher education
Family Life Cycle (2/2) Empty Nest – I:
Head of the family in labour force No Dependent Children Expenditure in self development
Empty Nest – II: Head of the family retired from the labor force Drastic Fall in Income Readjustment of lifestyle Increasing medical expenses
Solitary Survivor – I: Single Surviving head of family in labor force No dependent children Have high expendable income Spent on loneliness reducing products and services
Solitary Survivor – II: Single Surviving head of family retired from labor force Low levels of income and savings Expenditure on medical products, security, affection
An Illustration Percentage Change in expenditure in Full Nest I stage Based on study by US Bureau of Labor
Income - 9.30Food at Home 11.80Eating Out - 34.70Alcohol - 43.40Adult Clothing - 28.40Health Care 7.90Toys & Pets 23.00Self Enjoyment - 48.10Personal Care Products - 8.50
Still Want to Have Children?
Family Purchase Roles Initiator:
The family member who first recognizes a need to start the purchase process
Influencer: The person who influences the alternatives evaluated
Decider: The person in the family who makes the final decision
Purchaser: The family member who actually purchases the product
User: The ultimate consumer of the product
“Information Gathering” continues throughout the process
Household Decision Making Process
Communication targeted at
Children
Communication targeted at
Parents
Influencer(Children)
Initiator(Parents, Children)
InformationGathering
DecisionMaker
(Parents, Children)
Purchaser(Parents)
User(Parents,Children)
Types of Family Decisions Husband Dominated Decisions
Husband takes the purchase decisions Traditionally in products like Automobiles, Alcohol, Insurance
Wife Dominated Decisions Wife takes the purchase decisions Traditionally in products like household maintenance items, food
and kitchen appliances Joint Decision Making
Both husband and wife make the decision Traditionally in School choice, living room furniture, vacations
Child Dominated Decision Making Child makes the “final product” decision Traditionally on children related items
Unilateral Decision Making Taken by any member of the family Traditionally on Personal Care items, low priced goods
These Traditional Roles are Changing
Conflict Resolution Family Decisions are bound to create conflict Conflicts are resolved by:
Bargaining: Reaching a compromise on which product to buy
Impression Management: Misrepresentation of facts in order to create favorable impressions
Use of Authority: Claiming superior authority to resolve the conflict
Reasoning: Using logical arguments to resolve the conflict
Playing on Emotions: Using emotions to resolve the conflict
Additional Information: Getting additional Data or Third Party Information
Consumer Socialization
Consumer Socialization Consumer Socialization is the process by which people acquire
skills, knowledge and attitudes relevant to their functioning as consumers in the marketplace
Contents of Consumer Socialization: Consumer Skills:
Skills necessary for purchase and understand money, budgeting, product evaluation
Consumption Preferences: Are knowledge, attitudes and values that cause people to attach
differential evaluation to products, brands and retail outlets Consumption Attitudes:
Are cognitive orientation towards market place stimulus such as advertising, sales persons, warranties etc.
Process of Consumer Socialization Family is the primary source of consumer socialization Family causes consumer socialization through:
Instrumental Training: Occurs when family members specifically and directly attempt to bring
certain responses through reasoning and / or reinforcement EG: “Chocolates are bad for your teeth”
Modeling: Occurs when a child learns appropriate or inappropriate behavior by
observing other members of the family EG: Using Lipstick because mother uses lipstick
Mediation: Occurs when a family member alters a child’s initial interpretation of a
marketing stimulus through use of authority EG: “You are too young to use a ball-pen. Use a pencil”
Piaget’s Stages of Cognition Stage I : Sensorimotor Intelligence
Age between 0-2 years Child learns by observing
Stage II : Preoperational Thoughts: Age between 3 -7 years Child learns language and rapid conceptual development
Stage III : Concrete Operation: Age between 8 – 11 years Starts to apply logic to solve the problem
Stage IV : Formal Operations: Age between 12 to 15 years Logical in nature, Grasps abstract concepts with ease
James McNeal’s 5 Stage Model (1/2) Developed by observing behavior in Super Markets
Stage I : Observation: Median age 2–6 months Child can process sounds and colors Environment creates stimulus and brings rewards
Stage II : Making Request: Median Age 2 years Child understands various objects and products Makes request by pointing and gesturing Request only when physical object present Mental Image of product yet difficult to carry
Stage III : Making Selection Median Age 4 years Simple request processing Ability to carry mental image develops Ability to pick up things from the shelves independently Concept of money becomes clearer
James McNeal’s 5 Stage Model (2/2)
Stage IV : Assisted Purchase: Median age 6 years Children learn by modeling Start learning Value of Money Learning to become primary consumers
Stage V : Making Independent Purchase: Median Age 8 years Making Independent purchase Ability to visit store sections independently
Major Findings
Children Learn to Shop By Going Shopping with their ParentsLearning in stages
Utilization in Marketing
Children Clubs being started for various productsMost Retailers in USA have introduced child shopping cart
Children Given Preferential treatment in shops
Importance of Children Market Findings from the USA
Unassisted spending by children of 4-15 is $ 35 Billion Influence indirectly $ 200 billion worth of parental purchase Brand Loyalty is extremely strong Ethical issues are ever present
Exercise Groups to Present E and F Have a Power-Point presentation ready (4-5 pages) The group would be called to present in the class Evaluation will be out of 15 marks
Exercise E
Interview 3-4 students (class 5 – 12) and determine and describe the household decision purchase of his or her (a) clothes (b) Toiletries and (c) Hobby related items
Exercise F
Interview (a) family which has no dependent children and (b) family in Full Nest 1 stage and determine the differences in purchase of products and service