The Family and Generational Cohorts Chapter 13 The Family and Generational Cohorts The Family and Generational Cohorts

The family The 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 families Although all families are households, not all households are families Despite changes, the family remains the central institution in providing for the welfare of its members What 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.)

Types of families In Western society, three types of families dominate: Married couples Nuclear families Extended families Single-parent families are increasing in number due to divorce and out-of-wedlock births In other cultures, different types of families dominate Usually before having children or after raising children What 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 families What 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)

Consumer 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 siblings Adolescents and teens more likely to see friends and peers as role models What is it? How do children acquire these skills/norms? What about adolescents and teenagers?

Family consumption roles Individuals in each family are the key decision makers Marketers need to know who in the family makes decisions in order to know whom to target Buying roles have changed significantly in recent times We’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 children Another 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 purchasers E.g., women now responsible for more than half the car buying decisions

Eight roles in the family decision-making process Influencers Gatekeepers Deciders Buyers Preparers Users Maintainers Disposers Described in book, so won’t go over them In your families, who is/are the decider(s) in terms of groceries? Buyers? Preparers? Users? Cars? (influencers, gatekeepers, deciders, buyers, maintainers, disposers)

Roles 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 product Roles vary based on culture as well Marketers need to know which family members make which decisions in order to develop effective marketing strategies E.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.

The family decision process Research identifies four categories of decision patterns: Husband-dominated Wife-dominated Autonomic--each spouse makes an independent decision about half the time Syncratic--decisions are made jointly As 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?

Figure 10.10 Husband-Wife Influence in Financial Tasks and Decisions

The family life cycle (FLC) A steady and predictable (at one time) series of stages that most families progress through FLC analysis enables marketers to segment families in terms of their current stage At each stage there are differences in earning power and unique needs and demands placed on family resources What is it? Why does it matter to marketers? This is significant to marketers because…

Traditional family life cycle Divided into five stages Bachelorhood Honeymooner Parenthood Post-parenthood Dissolution Each pretty much means what it sounds like How 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 services Dissolution (by death or divorce): senior housing or condominiums; single-serving products; convenience items

Nontraditional FLC stages Family households: Childless couples Couples who marry later in life Couples who have children later in life Single 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

Non-family households Unmarried couples (heterosexual or homosexual) Divorced persons (no children) Single persons (most are young) Widowed persons (most are elderly)

Consumption in nontraditional families When households undergo status changes, they often undergo spontaneous changes in consumption-related preferences and thus become attractive targets for many marketers Divorce Boomerang kids Latchkey kids Three 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 income 3. Divorced or other single-parent households create “latchkey kids” (what are they?). Market niches for them include…convenience foods and security systems (cable television?).

Generational marketing As we have seen, age is one method to segment and target a market As consumers age, their preferences and their access to resources change Age-related life transitions create demand for specialized goods and services Examples? Going to college means buying a computer Getting your first job requires buying new clothes

Age cohorts Age also has meaning in terms of common experiences shared with others Groups of people who have grown up during specific time periods and share experiences, memories and symbols that translate into similar preference patterns What 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…

The depression cohort Born 1912-1921 Depression years remain the defining moment Risk averse Frugal Avoid debt Invest only in safest investment vehicles (e.g., government bonds) Different books give different age groupings, but only vary by a few years What happened during the depression? Does this sound like your grandparents?

World war II cohort Born between 1922 and 1927 WWII is the defining moment of this generation Also influenced by the depression Financially conservative Risk averse Housing and health issues are important Very similar to depression cohort

Baby boomers Individuals born between 1946 and 1964 Huge segment: 40% of adult population in the US Highly educated and thus affluent Represent 50% of those in professional and managerial occupations Represent more than 50% of those with a college degree or higher Do 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

Consumer characteristics of “boomers” Tend to be consumption-oriented Willing to borrow to support life style Socially conscious and willing to spend extra for environmentally-friendly products “Yuppies” are a small but highly sought-after segment of this market Well off financially, well educated and in professional fields Often associated with expensive brand names As they age, shifting attention to physical fitness and travel Tell me if this sounds like your parents…

Generation X (“busters” or “slackers”) People born (approximately) between 1965 and 1977 46 million in the US 21% of total population of US Children of divorce, day care and latchkeys Politically conservative with a “what’s in it for me” attitude Many continue to live at home into their 20’s and find good jobs hard to come by Know anybody who falls in this generation (older sibling; cousins)? Does the description fit?

Marketing to Gen-X’ers Newspaper advertising isn’t effective The “MTV generation” MTV Fox television Comedy Central E! Why? Because they don’t read newspapers! Where do they get their information? Agree?

Teens (Generation Y) Substantial segment of the population in the US and abroad Enjoy enormous discretionary purchasing power Increasingly market savvy and involved with consumer culture As rate of single- and working-parent families increases, teens increasingly become primary shoppers for families Regularly go through rapid periods of physical, mental, social and emotional changes, generating rapidly evolving physical, self-expression and self-realization needs Youth population globally is hard to ignore based on its sheer size alone: 31 million teens in the US 1/3 of China’s population is under 20 In Cambodia, over half the population is under 15 In 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 work 88% of teenage girls go to shopping malls Go from board games to computer games, trade dolls for cell phones, clothes and cosmetics become central to their lives

Children (Millenials and Generation Y) Children represent considerable market opportunities for those who can meet their distinct needs and cognitive competencies Greatest expenditures are in: Food and beverages (including sugared cereals) Entertainment (toys, games, movies, music) Clothing Average child sees approximately 20,000 television commercials a year Children as young as three recognize heavily advertised cartoon characters; this recognition produces positive attitudes toward products associated with these characters Children are very brand conscious   We looked at issues related to marketing to children earlier is the semester Why? Again, size does matter… More than 800 million children aged 4-12 in the industrialized world Influence $120 billion in family spending per year E.g., more children age 6 recognized Joe Camel than Mickey Mouse Researching 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 item Ethical issues here about children’s ability to differentiate marketing messages from other messages and their vulnerability to such messages.

Table 10.4 Noteworthy Nontraditional FLC Stages Alternative FLC Stages Definition/Commentary Family Households Childless couples It 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”

Table 10.4 continued Alternative FLC Stages Definition/Commentary Family Households Single parents I High divorce rates (about 50%) contribute to a portion of single-parent households Single parents II Young man or woman who has one or more children out of wedlock. Single parents III A single person who adopts one or more children. Extended family Young 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.

Table 10.4 continued Alternative FLC Stages Definition/Commentary Nonfamily Households Unmarried couples Increased 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.

Number of household by type in 1996 Distribution of Households by type Table 10.5 continued Number of household by type in 1996 Distribution of Households by type ALL HOUSEHOLDS 101,018 100.0% NONFAMILY HOUSEHOLDS 30,777 Living alone 25402 Female householders 14,861 14.7 Male householders 10,442 10.3 25.1 Living with others 5,375 Female householders 2,110 2.1 Male householders 3,266 3.2 5.3 30.5