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?

Household Influences for Marketing Strategy Stage of the Household Life Cycle Structure of Household Unit Household Decision Processes Household Purchase and Consumption Behavior Marketing Strategy

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  Product categories considered  interests  primary decision maker  Free time Changes Over Life-Cycle The family life cycle concept attempts to explain consumer behaviour patterns of individuals as they age, marry, have children and retire

 At each stage members have new needs for goods and services, i.e consumption patterns change  Life cycle stage determines which product categories are bought but not how much is spent on each category  As interests change so too does the ability to reach them.  Purchasing decision process changes  Basic strategy is how to keep customers through the FLC? Why is it of value to understand the family life cycle?

Choose your vacation

 Young singles the most action motivated  greater emphasis on outdoor experiences  Older marrieds the least motivated by action.  did not regard outdoor activities as important  Young single travelers had the most ego motivation  young marrieds with children were highly motivated to escape had most interest in rest and relaxation. Family Life cycle and Travel Travel locations differ significantly across the family life stages

 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 and control; (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) Buy necessities - 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 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 luxuries, home improvements e.g. fitted kitchens etc.;

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: 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 Implications

Traditional Families - one parent works, one parent stays home, children live at home.  eat dinner at-home more frequently than other demographic groups.  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. Marketing Potatoes through the FLC  the mainstay of fresh potato marketing, over time has come to represent less and less of the total population  What sort of potato products?

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?

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 single parent families?

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 but lack 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:

Household Decision Making  Household decision making is also different from individual decision making  Family role structure orientation influences household decision making  Households vary in consumption habits depending on stage where they are in family life cycle  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 Household Decision Making

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

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-dominated  autonomous 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 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. Four Factors Influencing Family Decision Making

Decision Roles Decision Roles Initiator Information Gatherer Gatekeeper Influencer Decision Maker 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 Implications  Marketing communication: advertising message, media used, person targeted, product positioning  Households can be targeted by advertising by lifestyle.  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

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?

Internet, and other technology  since kids are often the more technologically savvy members of the family  Web sites Marketing to the Family When marketing to the family children must be a consideration. How would you reach families with your marketing message? Magazines  children’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.

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, YWCA and other athletic clubs  Direct Mail

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. 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.