Family or Household Decision Making

Types of Households/Families

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

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

What is the Family Lifecycle (FLC)

Family Life-cycle bachelor newly married, no kids young couple, kids < 6 young couple, kids >6 older married w/ dep. empty nesters,

working retired widower - working, not

working

financial situation

brands considered

interestsprimary decision

maker

Changes Over Life-Cycle

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)

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

Household Influences for Marketing Strategy

Stage of theHouseholdLife Cycle

Structureof Household

Unit

HouseholdDecision

Processes

HouseholdPurchase andConsumption

Behavior

MarketingStrategy

Choose your vacation

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 escapeolder 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.

Family Life cycle and Travel

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.

number of people (children and adults) in the family,

the ages of the family members

Number of employed adults

What are the Critical Consumption factors?

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: basic kitchen equipment, basic furniture, cars, holidays,

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 andcontrol; (D) Buy: cars, fringes, cookers, life assurance, durable furniture,

holidays,

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 necessities - washers, dryers, baby food and clothes, health

foods vitamins, toys, books etc.;

4) Full nest II. (Youngest child six or over): (a) Financial position better, (b) Some wives return to work, (c) Child dominated household, (d) Buynecessities - foods, cleaning material, clothes, bicycles,

sports gear, music lessons, pianos, junk foods, holidays etc.;

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: new, more tasteful furniture, non-necessary appliances,

boats, holidays, etc.

Empty nest I. (Older married couples, no children living withthem, 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 luxuries, home improvements e.g. fitted kitchens etc.;

7) Empty nest II. (Older married couples, no children living athome, 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:medical appliances or medical care, products which aid

health, sleep and digestion, hobbies and pastimes,

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: hobbies and pastimes,

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: Prepaid funeral

Large bags for larger families

Small bags of specialty potatoes for affluent couples without children. And with small kitchens

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

Marketing Potatoes through the FLC

Two working parents, children presentDinner 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?

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?

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:

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 homeSome in this group are still working, some are retiredalmost 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 elderlyA 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:

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

Consensual Decision Making

Group Agrees on the Desired Purchase

Differing Only in Terms of How It Will Be Achieved.

Types of Purchase Decisions Made by Families

Accommodative

Group Members Have Different Preferences and Can’t Agree on a Purchase That Will Satisfy Everyone

Family Decision ConflictFamily 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 NeedsInterpersonal Needs

Product Involvementand Utility

Product Involvementand Utility

ResponsibilityResponsibility

Person’s Level of Investment in the GroupPerson’s Level of Investment in the Group

Degree to Which the Product in Question Will Be Used or Will Satisfy a Need

Degree to Which the Product in Question Will Be Used or Will Satisfy a Need

For Procurement, Maintenance, Payment, etc.For Procurement, Maintenance, Payment, etc.

PowerPower One Family Member’s Influence Over the Others in Making Decisions

One Family Member’s Influence Over the Others in Making Decisions

Husband-Wife Decision Making

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-dominatedautonomous or unilateral; joint decision

Who makes the Decisions?

The Apparel Manufacturer Haggar Placed Menswear Ads in About a Dozen Women’s Magazines After Its Research Found

That Women Exert Influence Over Men’s Clothing Choices

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 influence3. 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.

Four Factors Influencing Family Decision Making

DecisionRoles

DecisionRoles

Initiator

InformationGatherer

Gatekeeper

Influencer

DecisionMaker

Buyer

Preparer

User

Maintainer

Disposer

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

Marketing Strategy ImplicationsMarketing communication: advertising message,

media used, person targeted, product positioningProduct development: products, e.g. minivans and

cars built specifically for families; vacations; services, e.g. insurance, hotel

Pricing decisions: e.g. discounts for bulk purchasesDistribution: changes in family lifestyle means

changes in distribution, e.g. longer retail hoursPublic policy regulations re marketing to children Households can be targeted by advertising by

lifestyle .

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?

Magazineschildren’s 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

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

Organizationsfamily-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

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.

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.

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.