Presentation on theme: "The Family and Generational Cohorts"— Presentation transcript:
1The Family and Generational Cohorts Chapter 13The Family andGenerational CohortsThe Family and Generational Cohorts
2The familyThe Census Bureau defines family as: “Two or more persons, related by blood, marriage, or adoption who reside together”In the US today, 70% of the approximately 100 million households are familiesAlthough all families are households, not all households are familiesDespite changes, the family remains the central institution in providing for the welfare of its membersWhat is a “family”?Is this an accurate description of what a modern “family” looks like? What’s missing? Gays and lesbians, for one (or two)According to American Demographics…What is a household?Includes individuals who are not related by blood, marriage or adoption, such as unmarried couples, friends, roommates or boarders(you and your roommates, e.g.)
3Types of familiesIn Western society, three types of families dominate:Married couplesNuclear familiesExtended familiesSingle-parent families are increasing in number due to divorce and out-of-wedlock birthsIn other cultures, different types of families dominateUsually before having children or after raising childrenWhat is it?H and W and one or more children (on the decline)3. What is it?A nuclear family with at least one grandparent living in the household;also on decline due to geographic mobility that splits familiesWhat fourth type of family would you guess is the most rapidly growing?Example?In Asian countries, extended families are much more common(several generations living in a household—elders are revered)
4Consumer socialization of children Process by which children acquire the skills, knowledge and attitudes necessary to function as consumers (consumption skills or consumer behavior norms)Preadolescents acquire skills by observing parents and older siblingsAdolescents and teens more likely to see friends and peers as role modelsWhat is it?How do children acquire these skills/norms?What about adolescents and teenagers?
5Family consumption roles Individuals in each family are the key decision makersMarketers need to know who in the family makes decisions in order to know whom to targetBuying roles have changed significantly in recent timesWe’re talking about families, but who actually buys the products?What does this mean for marketers?Example in book is that mothers, not children, purchase crayons, so mothers should be targeted, not childrenAnother example: the majority of men’s underwear is purchased by women (wives and mothers) (sad commentary on men!) so marketers have to understand both the users and the purchasersE.g., women now responsible for more than half the car buying decisions
6Eight roles in the family decision-making process InfluencersGatekeepersDecidersBuyersPreparersUsersMaintainersDisposersDescribed in book, so won’t go over themIn your families, who is/are the decider(s) in terms of groceries?Buyers?Preparers?Users?Cars? (influencers, gatekeepers, deciders, buyers, maintainers, disposers)
7Roles vary based on culture as well Number and identity of family members who fill these roles varies from family to family and from product to productRoles vary based on culture as wellMarketers need to know which family members make which decisions in order to develop effective marketing strategiesE.g., in the US, decision about what car to purchase were traditionally husband-dominant. That is becoming less the case in the US.In many societies that remains the norm.
8The family decision process Research identifies four categories of decision patterns:Husband-dominatedWife-dominatedAutonomic--each spouse makes an independent decision about half the timeSyncratic--decisions are made jointlyAs we’ve seen, who makes the decisions in a household varies from family to family and product to product..Examples of the kinds of purchases that would fall into each of the four categories?
9Figure 10.10 Husband-Wife Influence in Financial Tasks and Decisions
10The family life cycle (FLC) A steady and predictable (at one time) series of stages that most families progress throughFLC analysis enables marketers to segment families in terms of their current stageAt each stage there are differences in earning power and unique needs and demands placed on family resourcesWhat is it?Why does it matter to marketers?This is significant to marketers because…
11Traditional family life cycle Divided into five stagesBachelorhoodHoneymoonerParenthoodPost-parenthoodDissolutionEach pretty much means what it sounds likeHow is each group likely to spend its money?Bachelors: basic home furnishings, cars, clothing and accessories, health clubs, dating services, t&e (group has sufficient disposable income to indulge themselves)Honeymooners: major and minor appliances, nicer furniture, carpeting, dishes, travel (this group has an income 30% higher than the average household so substantial disposable income)Parenthood: can actually be further divided into preschool/elementary/high/college stages; needs include day care and children’s clothes and toys and progresses to second and third cars, computers, cell phones, etc.Postparenthood: travel; second homes; investments; health-related goods and servicesDissolution (by death or divorce): senior housing or condominiums; single-serving products; convenience items
12Nontraditional FLC stages Family households:Childless couplesCouples who marry later in lifeCouples who have children later in lifeSingle parents I (divorced)Single parents II (child out of wedlock)Single parents III (adoption)Extended family (adult children return home or elderly parents move in)Changes in society in the last 25 years make the traditional model outdated(E.g., 30% of all households today are non-family households, which outnumber the nuclear family, which was once the stereotypical family—The Wonder Years, etc.)See Kanuk p. 291 chart 10-4
13Non-family households Unmarried couples (heterosexual or homosexual)Divorced persons (no children)Single persons (most are young)Widowed persons (most are elderly)
14Consumption in nontraditional families When households undergo status changes, they often undergo spontaneous changes in consumption-related preferences and thus become attractive targets for many marketersDivorceBoomerang kidsLatchkey kidsThree such changes include..Examples of consumption patterns in such cases?1. Divorce means buying/renting new residence, new furniture, telephones, etc.2. What is it? When an adult child (book calls them “boomerang kids”) moves home, there may be additional contributions to household costs and thus more expendable income3. Divorced or other single-parent households create “latchkey kids” (what are they?).Market niches for them include…convenience foods and security systems (cable television?).
15Generational marketing As we have seen, age is one method to segment and target a marketAs consumers age, their preferences and their access to resources changeAge-related life transitions create demand for specialized goods and servicesExamples?Going to college means buying a computerGetting your first job requires buying new clothes
16Age cohortsAge also has meaning in terms of common experiences shared with othersGroups of people who have grown up during specific time periods and share experiences, memories and symbols that translate into similar preference patternsWhat are age cohorts?Examples of “preference patterns”?How about types of music? What kind of music do your grandparents like? (swing and big band)How about your parents? (rock ‘n roll?)Do you think your parents will start to listen to swing when they get older?Will you listen to rock ‘n roll?Each “age cohort” shares certain things in common, like music, that continue as they age.Let’s look at age cohorts today, from oldest to youngest…
17The depression cohort Born 1912-1921 Depression years remain the defining momentRisk averseFrugalAvoid debtInvest only in safest investment vehicles (e.g., government bonds)Different books give different age groupings, but only vary by a few yearsWhat happened during the depression?Does this sound like your grandparents?
18World war II cohort Born between 1922 and 1927 WWII is the defining moment of this generationAlso influenced by the depressionFinancially conservativeRisk averseHousing and health issues are importantVery similar to depression cohort
19Baby boomers Individuals born between 1946 and 1964 Huge segment: 40% of adult population in the USHighly educated and thus affluentRepresent 50% of those in professional and managerial occupationsRepresent more than 50% of those with a college degree or higherDo you suppose this cohort is attractive to marketers?You bet!Why?Size alone would be enough, but also income.What do you suppose were the defining moments of this generation?Kennedy assassination and Vietnam War
20Consumer characteristics of “boomers” Tend to be consumption-orientedWilling to borrow to support life styleSocially conscious and willing to spend extra for environmentally-friendly products“Yuppies” are a small but highly sought-after segment of this marketWell off financially, well educated and in professional fieldsOften associated with expensive brand namesAs they age, shifting attention to physical fitness and travelTell me if this sounds like your parents…
21Generation X (“busters” or “slackers”) People born (approximately) between 1965 and 197746 million in the US21% of total population of USChildren of divorce, day care and latchkeysPolitically conservative with a “what’s in it for me” attitudeMany continue to live at home into their 20’s and find good jobs hard to come byKnow anybody who falls in this generation (older sibling; cousins)?Does the description fit?
22Marketing to Gen-X’ers Newspaper advertising isn’t effectiveThe “MTV generation”MTVFox televisionComedy CentralE!Why?Because they don’t read newspapers!Where do they get their information?Agree?
23Teens (Generation Y)Substantial segment of the population in the US and abroadEnjoy enormous discretionary purchasing powerIncreasingly market savvy and involved with consumer cultureAs rate of single- and working-parent families increases, teens increasingly become primary shoppers for familiesRegularly go through rapid periods of physical, mental, social and emotional changes, generating rapidly evolving physical, self-expression and self-realization needsYouth population globally is hard to ignore based on its sheer size alone:31 million teens in the US1/3 of China’s population is under 20In Cambodia, over half the population is under 15In Hong Kong, South Korea, Thailand and Singapore, consumers below 30 represent 50-70% of the population.US teenagers receive an average allowance of $50/week and many work88% of teenage girls go to shopping mallsGo from board games to computer games, trade dolls for cell phones, clothes and cosmetics become central to their lives
24Children (Millenials and Generation Y) Children represent considerable market opportunities for those who can meet their distinct needs and cognitive competenciesGreatest expenditures are in: Food and beverages (including sugared cereals) Entertainment (toys, games, movies, music) ClothingAverage child sees approximately 20,000 television commercials a yearChildren as young as three recognize heavily advertised cartoon characters; this recognition produces positive attitudes toward products associated with these charactersChildren are very brand conscious We looked at issues related to marketing to children earlier is the semesterWhy?Again, size does matter…More than 800 million children aged 4-12 in the industrialized worldInfluence $120 billion in family spending per yearE.g., more children age 6 recognized Joe Camel than Mickey MouseResearching children’s letters to Santa Claus is very instructional on this:50% of requests are for specific branded items;85% mention at least one brand name itemEthical issues here about children’s ability to differentiate marketing messages from other messages and their vulnerability to such messages.
25Table 10.4 Noteworthy Nontraditional FLC Stages Alternative FLC StagesDefinition/CommentaryFamily HouseholdsChildless couplesIt is increasingly acceptable for married couples to elect not to have children. Contributing forces are more career-oriented married women and delayed marriages.Couples who marry later in life (in their late 30s or later)More career-oriented men and women and greater occurrence of couples living together. Likely to have fewer or even no children.Couples who have first child later in life (in their late 30s or later)Likely to have fewer children. Stress quality lifestyle: “Only the best is good enough”
26Table 10.4 continued Alternative FLC Stages Definition/Commentary Family HouseholdsSingle parents IHigh divorce rates (about 50%) contribute to a portion of single-parent householdsSingle parents IIYoung man or woman who has one or more children out of wedlock.Single parents IIIA single person who adopts one or more children.Extended familyYoung single-adult children who return home to avoid the expenses of living alone while establishing their careers. Divorced daughter or son and grandchild(ren) return home to parents. Frail elderly parents who move in with children. Newlyweds living with in-laws.
27Table 10.4 continued Alternative FLC Stages Definition/Commentary Nonfamily HouseholdsUnmarried couplesIncreased acceptance of heterosexual and homosexual couples.Divorced persons (no children)High divorce rate contributes to dissolution of households before children are born.Single persons (most are young)Primarily a result of delaying first marriage; also, men and women who never marry.Widowed persons (most are elderly)Longer life expectancy, especially for women; means more over-75 single-person households.
28Number of household by type in 1996 Distribution of Households by type Table continuedNumber of household by type in 1996Distribution of Households by typeALL HOUSEHOLDS101,018100.0%NONFAMILY HOUSEHOLDS30,777Living alone25402Female householders14,86114.7Male householders10,442Living with others5,375Female householders2,1102.1Male householders3,266