FAMILIES AND HOUSEHOLDS 6 CHAPTER THE AMERICAN SOCIETY: FAMILIES AND HOUSEHOLDS 6-1

The Nature of Households Family Household Nonfamily Household Consumer socialization Marketing to Children

Consumer Behavior In The News… Today, there are more dual-income households and single-parent households than in the 1960’s. Compared to 1960, do you think that the amount of time parents spend with their kids has: Increased Decreased Stayed the same Source: R. Pear, “Married and Single Parents Spending More Time with Children, Study Finds,” The New York Times, October 17, 2006 6-3

Consumer Behavior In The News… If you said increased you are correct! Many factors seem to be at work: Parents spend less time on housework/ maintenance Parents include children in their leisure time Smaller families mean more time per child Social norms put pressure on parents to spend more time with kids What marketing opportunities exist? Source: R. Pear, “Married and Single Parents Spending More Time with Children, Study Finds,” The New York Times, October 17, 2006 6-4

The Nature of American Households The Household Influences Most Consumption Decisions 6-5

The Nature of the American Household Types of Households1 Household Consists of all the people who occupy a housing unit (a house, apartment, group of rooms, or single room designed to be occupied as a separate living quarters). Family Household One having at least two members related by birth, marriage, or adoption, one of whom is the householder (householder owns or rents the residence). Nonfamily Household A householder living alone or exclusively with others to whom he or she is not related. 1 U.S. Census Bureau definition of a household. 6-6

The Nature of American Households Family and Nonfamily Households 6-7

The Nature of American Households The blended family is a family consisting of a couple, one or both of whom were previously married, their children, and the children from the previous marriage of one or both parents. The traditional family refers to a married couple and their own or adopted children living at home. 6-8

The Household Life Cycle The Traditional Family Life Cycle 6-9

The Household Life Cycle American households follow much more complex and varied cycles today. Therefore, researchers have developed several models of the household lifecycle (HLC). Each HLC stage presents unique needs and wants as well as financial conditions and experiences. HLC provides marketers with relatively homogeneous household segments that share similar needs with respect to household-related problems and purchases. 6-10

Stages of the Household Life Cycle 6-11

The Household Life Cycle Younger (< 35) Single I Young Couples: No Children Full Nest I Single Parent I 6-12

The Household Life Cycle Middle Aged (35 – 64) Middle-Aged Single Empty Nest I Delayed Full Nest I Full Nest II Single Parent II 6-13

The Household Life Cycle Older (> 64) Empty Nest II Older Single 6-14

Marketing Strategy Based on the Household Life Cycle HLC can be an important segmentation variable. The purchase and consumption of many products are driven by the HLC, with each stage posing unique problems and opportunities. The stage in the HLC causes many of the problems or opportunities individuals confront as they mature, but it does not provide solutions. 6-15

Marketing Strategy Based on the Household Life Cycle Factors such as income, occupation, and education heavily influence how an individual meets his/her needs. So, it makes sense to combine stage in the HLC with one of these variables to aid in market segmentation and strategy formulation. 6-16

Marketing Strategy Based on the Household Life Cycle HLC/Occupational Category Matrix 6-17

Family Decision Making Family decision making is the process by which decisions that directly or indirectly involve two or more family members are made. Family purchases are often compared to organizational buying decisions. However, with family purchasing, there is usually less explicit criteria, and most family purchases directly affect the other members of the family. Most important, many family purchases are inherently emotional and affect the relationships between the family members. 6-18

Family Decision Making Family Purchase Roles(6 roles with 4(6) dominant types) Determinants of Family Purchase Roles Conflict Resolution Marketing Strategy and Family Decision Making Consumer Socialization and Marketing to Children 6-19

Family Decision Making The Household Decision-Making Process for Children’s Products 6-20

Family Decision Making Husband/Wife Decision Roles for Services 6-21

Family Decision Making Determinants of Family Purchase Roles How families interact in a purchase decision is largely dependent on the culture and subculture in which the family exists the role specialization of different family members the degree of involvement each has in the product area of concern, and their personal characteristics of the family members 6-22

Family Decision Making Conflict Resolution One study revealed six basic approaches that individuals use to resolve purchase conflicts1. Approach Description Bargaining Trying to reach a compromise. Impressions Management Misrepresenting the facts in order to win. Use of Authority Claiming superior expertise or role appropriateness (the husband/wife should make such decisions). Reasoning Using logical argument to win. Playing on Emotion Using the silent treatment or withdrawing from the discussion. Additional Information Getting additional data or a third-party opinion. 1C. Kim and H. Lee, “A taxonomy of Couples Based on Influence Strategies,” Journal of Business Research, June 1996, pp. 157-68. 6-23

Marketing Strategy and Family Decision Making Family Decision-Making Grid 6-24

Consumer Socialization The family provides the basic framework in which consumer socialization occurs. Consumer socialization is the process by which young people acquire skills, knowledge, and attitudes relevant to their functioning as consumers in the marketplace. Must understand both the content and the process of consumer socialization. Consumer socialization content refers to what children learn with respect to consumption. Consumer socialization process refers to how they learn it. 6-25

Consumer Socialization Piaget’s Stages of Cognitive Development Description Stage 1 The period of sensorimotor intelligence (0-2 yrs.) - behavior is primarily motor - the child does not yet “think” conceptually, though cognitive development is seen Stage 2 The period of preoperational thoughts (3-7 yrs.) - Characterized by the development of language and rapid conceptual development Stage 3 The period of concrete operations (8-11 yrs.) - the child develops the ability to apply logical thought to concrete problems Stage 4 The period of formed operations (12-15 yrs.) - the child’s cognitive structures reach their greatest level of development, and the child becomes able to apply logic to all classes of problems. 6-26

Consumer Socialization The Content of Consumer Socialization Consist of three categories: Consumer skills—are those capabilities necessary for purchases to occur such as understanding money, budgeting, product evaluation, etc. Consumption-related preferences—are the knowledge, attitudes, and values that cause people to attach differential evaluations to products, brands, and retail outlets. Consumption-related attitudes—are cognitive and affective orientations toward marketplace stimuli such as advertisements, salespeople, warranties, etc. 6-27

Consumer Socialization The Process of Consumer Socialization Consumer socialization occurs primarily through family, as well as through a number of avenues including advertising and friends. Parents socialize their children through the following: Instrumental training—occurs when a parent or sibling specifically and directly attempts to bring about certain responses through reasoning or reinforcement. Modeling—occurs when a child learns appropriate, or inappropriate, consumption behaviors by observing others. Mediation—occurs when a parent alters a child’s initial interpretation of, or response to, a marketing or other stimulus. 6-28

Marketing to Children Children are a large and growing market. However, marketing to children is fraught with ethical concerns, including: The limited ability of younger children to process information and to make informed purchase decisions. Marketing activities, particularly advertising, can produce undesirable values in children, resulting in inappropriate diets, and cause unhealthy levels of family conflict. 6-29

Discussion Questions 24) Pick two stages in the household life cycle. Describe how your marketing strategy for the following would differ depending on which group was your primary target market. a) Minivan b) Razors c) Broadway show d) Casino

Discussion Questions 25) Do you think the trend toward nonfamily households will continue? Justify your response. 32) Describe a recent family purchase in which you were involved. Use this as a basis for completing Table 6-3 for a marketer attempting to influence that decision.