HOUSEHOLD PROCESSES How do other people (i.e., family members) influence our behavior?
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Transcript of HOUSEHOLD PROCESSES How do other people (i.e., family members) influence our behavior?
HOUSEHOLD PROCESSES
How do other people (i.e., family members)
influence our behavior?
Consumer Behavior In The News…Consumer Behavior In The News…
Finding new markets for cell phones.Finding new markets for cell phones.
Over 78 % of consumers between age 19 and 64 Over 78 % of consumers between age 19 and 64 own a cell phone.own a cell phone.
Pre-teens seen as a MAJOR new market.Pre-teens seen as a MAJOR new market.
What are the drivers and barriers?What are the drivers and barriers?
Drivers:Drivers:
Barriers:Barriers:
Consumer Behavior In The News…Consumer Behavior In The News…
Finding new markets for cell phones.Finding new markets for cell phones.
Drivers and barriers to pre-teen market?Drivers and barriers to pre-teen market?
Drivers: Drivers: parent’s safety concerns; kid’s desire parent’s safety concerns; kid’s desire for phonefor phone
Barriers: Barriers: parent’s concern over misuse; parent parent’s concern over misuse; parent as final decision makeras final decision maker
Solution?Solution?
Why study household decision making?
Basic purchasing and consuming unit Significant decisions are often made by individuals jointly with other members of his/her householdPrimary mechanism of cultural and social values and behavior patternsAlmost everyone in society is involved with a family
HouseholdsStructureStage in LifecycleRoles & Decision MakingChildren
How have households changed over time?How does a household differ from a family?
Changing Roles• Working women• Children w/more dm power
Changing Family Structure• Divorce: restricted buying power• More single parents• # of cohabitating singles • Remarriage• Blended families: more complex family decision making
Changing Household Structure• Smaller families• Later marriages: Fewer, but higher quality purchases• # of single living alone • # of children age 18 > living @ home
Greater discretionary spending by children
The Changing Family-Household Structure
Other changesSandwich generation?Boomerang generation?Nonhuman family members
Family and Nonfamily Households: 2000-2010Family and Nonfamily Households: 2000-2010Family and Nonfamily Households: 2000-2010Family and Nonfamily Households: 2000-2010
All Households
FamiliesMarried couples
Children under 18 at homeChildren over 18 at homeNo children under 18 at home
Single fathersSingle mothersOther families
NonfamiliesMen living aloneWomen living aloneOther nonfamilies
110,140
77,70560,96924,286
5,31831,365
1,5237,4737,741
32,43410,89816,278
5,258
100.0%
70.655.422.1
4.828.5
1.46.87.0
29.49.9
14.84.8
117,696
80,19361,26623,433
6,88430,950
1,6607,7799,488
37,50312,57718,578
6,347
6.9%
3.20.5
(3.5)29.4(1.3)9.04.1
22.6
18.015.414.120.7
100.0%
68.152.119.9
5.826.3
1.46.68.1
31.910.715.8
5.4
Percent Number Percent Number Percent Change
(000) (000) 2000-2010
2000 2010
Household Life CycleWhat was the “traditional” family life cycle?What might today‘s household life cycle look like?
Consumption Patterns based on Lifecycle
Young bachelors and newlyweds?Early 20s?Single parents/older children?Newlyweds?Older couples/bachelors?Families with young children?
Consumption Patterns based on Lifecycle
Young bachelors and newlyweds: exercise, go to bars/concerts/moviesEarly 20s: apparel, electronics, gasSingle parents/older children: junk foodsNewlyweds: appliancesOlder couples/bachelors: home maintenance servicesFamilies with young children: health foods
What about income and expenditure changes from childless to young child?
Young Married with Children
-50
-40
-30
-20
-10
0
10
20
30
Income Food atHome
Meals Out AlcoholicBeaverages
AdultApparel
Health Care Pets & Toys Education PersonalCare
Products
Percent Change
Marketing Strategy Based on the Marketing Strategy Based on the Household Life CycleHousehold Life Cycle
Factors such as age, income, marital status, presence/absence of children, age of children 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.
Stage of Household
<$10,000
<$25,000 <$30,000 <$50,000 <$100,000 <$500,000 Student
Single I (Under 35, no kids) 1Single-Parent I (Young w/children)
2 11
Single II (35-64, single, no kids) 12 3Single III (Older single) 4Young Married (no kids; both work)
5
Full Nest I (Married w/young kids)
6 7
Full Nest II (Middle- aged w/older kids)
8
Empty Nest I (Middle-aged married w/no kids)
9
Empty Nest II (Older married w/out kids @ home)
10
Household Life Cycle/Social Stratification Matrix
In-Class Exercise
You have just received a $10,000 inheritance from a long-lost relative who you had never met. You are planning to spend the money on two distinct purchases: an evening out at a restaurant and a vacation.You may use all or just a portion of the money on these purchases.Given your position in the HLC/Stratification matrix:
Select a restaurantSelect a vacation destinationDetermine how much $ will be spent on each. If you elect to not spend all your money on these activities, how will you use the balance of the inheritance?
What factors influenced your decision?
Roles
Initiator – first recognizes needInformation gatherer – has expertise and interestInfluencer – evaluates alternativesDecision Maker – makes decisionPurchaser – actual purchaserUser – person who uses the product
Family Decision MakingFamily Decision Making
Husband/Wife Decision Roles for ServicesHusband/Wife Decision Roles for Services
Sex Roles and Decision-making Responsibilities
Who makes key decisions in a family?Autonomic decision: one family member chooses a product
Wives still make decisions on groceries, toys, clothes, and medicines
Syncretic decision: involve both partnersUsed for cars, vacations, homes, appliances, furniture, home electronics, interior design, phone serviceAs education increases, so does syncretic decision making
Heuristics in Joint Decision Making
Synoptic ideal: Husband and wife to take a common view and to act as joint decision makers
Heuristics simplify decision making:Salient, objective dimensionsTask specializationConcessions based on intensity of each spouse’s preferences (choose your battles)