Chapter 6: Families and Households A family household is defined as a household consisting of a family and any unrelated people residing in the same housing unit.

The Household Life Cycle

The Household Life Cycle The traditional view of the American household life cycle was quite simple. People married by their early 20s (in 1960, the median age was 20.3 for women and 22.8 for men); they had several children; these children grew up and started their own families; the original couple retired; and the male would eventually die, followed after a view years by the female.

Family Decision Making Family decision making is the process by which decisions that directly or indirectly involve two or more family members are made.

The Nature of Family Purchase Roles The six roles that frequently occur in family decision making, using a cereal purchase as an example. It is important to not that individuals will play various roles for different decisions. Initiator Information gatherer Influencer Decision maker Purchaser User

The Nature of Family Purchase Roles Family decision making has been categorized as husband-dominant, wife-dominant, or individualized. Until recently, most studies have ignored the influence of children. Yet children, particularly teenagers, often exert a substantial influence on family purchase decisions. Thus, we need to recognize that child-dominant, and various combinations of husband, wife, and childe joint decisions are also common.

The Nature of Family Purchase Roles Conclusions on family decision making: Different family members are often involved at different stages of the decision process. Different family members often evaluate different attributes of a product or brand. The direct involvement of family members in each stage of the decision process represents only a small part of the picture. The product category is important because it is closely related to who uses the product. Over conflicts in decision making are less common than agreement.

Consumer Socialization Consumer socialization is the process by which young people acquire skills, knowledge, and attitudes relevant to their functioning as consumers in the marketplace. The content of consumer learning can be broken down into three categories: consumer skills, consumption-related preference, and consumption-related attitudes. The process of consumer socialization Instrumental training, modeling, mediation

Consumer Socialization The supermarket as a classroom Observing Making requests Making selections Making assisted purchases Making independent purchases

Chapter 7: Group Influences on Consumer Behavior A reference group is a group whose presumed perspectives or values are being used by an individual as the basis for his or her current behavior. Strength of social tie Primary group and secondary group Type of contact Direct and indirect

Reference Groups Change as the Situation Changes

Reference Group Influences on the Consumption Process The nature of reference group influence Information influence; Normative influence; Identification influence Degree of reference group influence Group influence is strongest when the use of product or brand is visible to the group. Group influence is higher the less of a necessity an item is. In general, the more commitment an individual feels to a group, the more the individual will conform to the group norms. The more relevant a particular activity is to the group’s functioning, the stronger he pressure to conform to the group norms concerning that activity. The final factor that effects the degree of reference group influence is the individual’s confidence in the purchase situation.

Reference Group Influences on the Consumption Process

Reference Group Influences on the Consumption Process

Reference Group Influences on the Consumption Process

Asch Phenomenon Eight subjects are shown four straight lines on a board-three unequal lines are grouped close together, and another appears some distance from them. Seven of the subjects are working for the experimenter, and they announce incorrect matches. The order of announcement is arranged so that the native subject responds last. The Native subject almost always agrees with the incorrect judgment of the others. This is known as the Asch phenomenon.

Asch Phenomenon

Reference Groups Change as the Situation Changes

Reference Groups Change as the Situation Changes

Reference Group Influences on the Consumption Process

Word-of-mouth (WOM) Communications Word-of-mouth communication, individuals sharing information with other individuals, are critical influence on consumer decisions and business success. Wal-Mart has become America’s largest retailer. However, it spends just 0.5 percent of its sales on advertising, compared to 2.5 percent for Kmart. Clearly, positive word-of-mouth communications are worth a great deal to a firm.

Word-of-mouth (WOM) Communications

Likelihood of Seeking an Opinion Leader

Opinion Leader Characteristics The most salient characteristic is greater long-term involvement with the product category than the non-opinion leaders in the group. This is referred to as enduring involvement, and it leads to enhanced knowledge about and experience with the product category or activity. Thus, an individual tends to be an opinion leader only for specific product or activity clusters.

Opinion Leader Characteristics Advertising Advertising attempts to both stimulate and simulate opinion leadership. Stimulation involves themes designed to encourage current owners to talk about the product/brand or prospective owners to ask current owners for their impressions.

Opinion Leader Characteristics Product sampling Sampling-sending a sample of a product to a group of potential consumers-is an effective meads of generating interpersonal communications concerning the product.

Opinion Leader Characteristics Creating Buzz Buzz can be defined as the exponential expansion of WOM. It happens when “word spreads like wildfire” with no or limited mass media advertising supporting it. In fact, creating buzz is a key aspect of guerrilla marketing.

Diffusion of Innovations An innovation is an idea, practice, or product perceived to be new by the relevant individual or group. Categories of innovations Continuous innovation Dynamically continuous innovation Discontinuous innovation

Diffusion of Innovations Continuous innovation Adoption of this type of innovation requires relatively minor changes in behavior or changes in behavior that are unimportant to the consumer.

Diffusion of Innovations Dynamically continuous innovation Adoption of this type of innovation requires a moderate change in an important behavior or a major change in a behavior of low or moderate importance to the individual.

Diffusion of Innovations Discontinuous innovation Adoption of this type of innovation required major changes in behavior of significant importance to the individual or group.

Adoption Process and Extended Decision Making

Diffusion Process The diffusion process is the manner in which innovations spread throughout a market. The term spread refers to purchase behavior in which the product is purchased with some degree of regularity.

Factors Affecting the Spread of Innovations Type of group Type of decision Marketing effort Fulfillment of felt need Compatibility Relative advantage Complexity Observability Trialability Perceived risk

Factors Affecting the Spread of Innovations Perceived risk is a function of three dimensions The probability that the innovation will not perform as desired The consequence of its not performing as desired The ability to reverse, and the cost of reversing, any negative consequences.

Diffusion Rate for Popular Consumer Electronics

Adoptions of an Innovation Over Time Next figure reemphasize the fact that a few individuals adopt an innovation very quickly, another limited group is reluctant to adopt the innovation, and the majority of the group adopts at some time in between the two extremes. Innovators 2.5% Early adopters 13.5% Early majority 34% Late majority 34% Laggards 16%

Adoptions of an Innovation Over Time

Adoptions of an Innovation Over Time

Treasure Impossible I’m possible