Do children influence parents purchasing decisions? Are many decisions made jointly within a family?
Which
person in the family influences different purchases?
How have changes in the modern family affected marketers tactics?
Families worldwide are becoming smaller and less traditional. There are many new types of families; people are joining "intentional families" people living together, sharing common interests- a family choice rather than one born to. There is renewed interest in family
Image Source: Freepik
Key Definitions:
Family:
traditional family structure where several generations live together
Nuclear Family:
traditional living arrangement with married couple and their children
(see 1940s Chevy commercial nuclear family https://www.youtube.com/watch?v=NBenak9wtkE)
Family Household
a housing unit containing at least one family (husband and wife, or partners) married or living common law or a lone parent of any marital status with or without children who have never married and are still living at home
GROWTH, DISTRIBUTION, AGE, SIZE OF FAMILY HOUSEHOLDS
Urban Growth
Shift in where families live-growth of urban areas-80% Canadians were urban dwellers in 2006
Family Make Up
The proportion of people living in a traditional family (married couple +children) declined -45% in 1996. Census data show that married couples declined as a proportion of all census families between 2006 and 2011 but are still the predominant family structure in Canada. (two-thirds of all families). By 2011 the proportion of common-law couples and lone-parent families both increased. Common-law couples outnumbered lone-parent families in 2011. The number of same-sex married couples nearly tripled between 2006 and 2011 Step Families: The 2011 Census of Population counted step families for the first time. They represented about one in eight couple families with children. A higher share of seniors aged 65 and over lived as part of a couple in a private household in 2011 compared with 2001
Young Adults Staying Home Longer or Moving Back
"The number of young adults aged 20 - 29 to living with their parents appears to have levelled off. Of the 4,318,400 young adults in this age group, 42.3% lived in the parental home in 2011, either because they never left it or because they returned home after living elsewhere. This proportion was relatively unchanged from 2006, although it was well above the share of 32.1% in 1991 and 26.9% in 1981.The proportion of young adults living with their parents was higher for those in their early 20s compared with those in their late 20s. Young men were more likely to live at home than young women."( Stats Canada)
According to a PEW study in the US, "In 2014, for the first time in more than 130 years, adults ages 18 to 34 were slightly more likely to be living in their parents’ home than they were to be living with a spouse or partner in their own household." 2016, "More young adults in the U.S. are living with their parents than at any time since around 1940, according to a new Pew Research Center analysis of census data."
Socialization
Stats Canada 2007 reports Canadians are seeing less of their families and friends on workdays, and spending much more time alone. The social networks of Canada’s urban dwellers do include a smaller slice of family and neighbours. However, their networks also include a larger slice of friends and acquaintances. Rural residents, by contrast, have a larger share of neighbours and family members in their close social networks, but the share of friends is smaller.
Religion
Interreligious unions are on the rise in Canada — not a surprise given the country’s increasing cultural diversity and declining religious affiliation. Still, four out of five couples are made up of partners from the same religious group.
Age of Marriage or Living Together
Most Canadians younger than 24 have never been married or in common law relationship; majority of 35-74 year olds are married or living together.People are waiting longer to get married-"Between 1972 and 2008, the average age at first marriage increased from 22.5 to 29.1 for women and from 24.9 to 31.1 for men." (Stats Canada)
Divorce
The divorce rate has declined in Canada "The number of new divorce cases decreased by 8 per cent from 2006 to 2011, dropping steadily each year. " According to Feldstien Family Law Group the divorce rate in Canada is 40%. 2006, One third of marriages end in divorce by 13th year. Canadian divorce rates rise during the first three years after the wedding. However, the likelihood of divorce decreases the longer the couple has been married.
Number of Children
1971 family average was 4 in 1984-3.1; in 2006 average family size 2.5.Marketers watch birth rate to predict demand of products; families are shrinking
Women Working/Head of Household
Increase number of women in workforce. 2007 Canadian women participate in the labour force at a rate nearly equal to men.Family headed by one person grew by over 20% from 86-94, a million were divorced in 1996; number of unmarried adults is rising -22% of population.Men head about 20% of single parent families- 20% of children live in one parent families
Sandwich Generation
Sandwich generation refers to the people "in the middle" who may take care of young family as well as older family. ( their children and their own parents) Caregivers can be in the middle of 3 generations. As people live longer, families can be made up of 4 and 5 generations. The adults in the middle may be young or old, parents or grandparents. (See trailer for Sandwich Generation Movie https://www.youtube.com/watch?v=YhXrHD7qWDk)
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Boomerang Kids
Children who have moved out and then return to the family home are called Boomerang Kids. The parents may welcome them but there can be tension from both sides. Problems can be related to who does what; independence-dependence, previously free now child is under parent's rules; parent previously free now feels responsible. Who is boss? Pay rent? What about overnight guests? Some children bring back their own children. Difficult times due to the economy increase the number off boomerang kids increase. But difficult economy also increase number who don't leave the family home(see clip from Global News Jan 2013 on Boomerang Kids https://www.youtube.com/watch?v=xKfcIKyPyqw)
Kangaroo Generation
The Kangaroo Generation, those 25 to 34 still living with parents. "These "kids" don't leave the pouch, or home, until 100% confident in themselves." (Amy Corr, Media Post)
See the company Zap in Brazil who have created a humourous campaign to get kids to move out
Factors that affect how couple spends: whether there are children and whether woman works
The Family life cycle segments consumers related to changes in income, family consumption and changes in demands upon incomeWith age, preferences change. Life cycle determines which categories are bought but not how much is spent. Marketer can use this cycle to predict demand for categories of products.
Family decision making involves the group and each members role. It can be a collective process, but each member may have different priorities creating the potential for conflict and power struggles.
More Equality in Relationships-Statscan 2007 reports that couples aged 25 to 54 have a more equal partnership in the sharing of financial, child care and household responsibilities. However, gender differences in the division of labour are still evident, if diminishing. Women continue to do significantly more housework than men. In 1986, 54% of men did some housework daily; by 2005, 69% did so. Women’s participation in daily housework remained steady at around 90%. Men’s involvement in child care has also grown. In dual-earner families, men’s participation in housework has grown from 70% in 1992 to 74% in 2005, whereas women’s has dropped from 94% to 90%.
Dual-earner couples feel more time-stressed—particularly the women in these couples. However, despite the pressures of trying to maintain a work–life balance, most dual-earner couples in Canada are satisfied with their life as a whole.
Despite changes in working relationships, wives overall still have more say in groceries, children's toys, clothing, medicines; joint decisions for cars vacations
As couple's education increases more decisions are joint
Consensual Purchase Decision
the group agrees ( consents) on a desired purchase. There may be discussion or small differences on how the purchase takes place
Accommodative Purchase Decision
Here someone may use bargaining, coercion, compromise or may use their power to get agreement among a group- Members may have different preferences or priorities
Factors determining degree of family conflict
Interpersonal Need (a person's level of involvement);product Involvement and Utility (the degree the product will be used or satisfy need; responsibility (who will maintain); Power (the degree to which one member influences others
Decision Roles
Initiator (one who brings up idea; Information Gatherer; Influence; decision maker; preparer (one who processes product or directs service); User; Maintainer; Disposer
Autonomic Decisions
One person decides-purchase decisions made mostly by one or other spouse
Syncratic Decisions
Joint decision making- decisions made jointly by spouses
see Ikea https://www.youtube.com/watch?v=O1kZhFOcf1M
Read a bit from an article about joint decision making and how Ikea built an ad campaign around it, click Shopping: How do couples copeSynoptic Ideal
Partners take a common view and act as joint decision makers to make mutually beneficial decisions (note word "ideal")
Factors determining joint decision making
1. Gender-role stereotypes (traditional tend to make decisions individually on gender-type products
2. Spousace (Individual decisions are more frequent when couple has gained experience as decision making unitl resources (spouse who contributes most has most say
3. Experien
4. Socioeconomic status (joint decisions made more by middle class then by lower or higherFamily Financial Officer - the person in charge of making financial decisions; this person is of interest to marketers
Role of Women
Changing gender roles have changed North America. In 2013 in US 28% of women out earn husbands. Wife is breadwinner in 23% of families; women often better educated; traditional family makeup may be flipped where woman works and man is stay at home nurturer. See more in this article http://www.usatoday.com/story/news/nation/2013/03/24/female-breadwinners/2015559/
Adult Women Market
1. Homemaker who does not plan to work outside home
2. Homemaker who plans to to work at some point
3. Career -oriented woman who values success and achievement
4. Just-a-Job woman who works because she needs moneyTo Read an article concerning marketing to women click Gender Intelligence
Kin-Network system
the rituals intended to maintain ties among family members, both immediate and extended; women still primarily responsible for this area
Parental yielding is when a parent is influenced by a child's desire. Children who live in individualistic cultures like North America have more direct influence
Consumer socialization is the process where people (children) learn the skills to function in the marketplace; for young child influence is family and media. Children learn from parents values and actions (modeling); retailers offer 'play' areas. Media exposes child to idealized images; marketing to child and also adult shows and ads. Children learn gender identity early and also learn gender specific toys; exposure through day care also shows gender roles
Children influenced by different types of parents/ Laisse faire parent is lenient. Authoritarian parent may be hostile, restrictive, could be emotionally uninvolved yet filter media their children are exposed to.
Children learn consumption-related information; child goes through stages of development and does not use information the same way as adults; they are vulnerable to persuasive messages and can not always distinguish reality. Ethical issues surround ads to children as they don't know the difference between a program and commercial. The line is blurred. Little data available on children's preferences or influences on spending. But more is coming from online activities. Children are valuable in product testing; foods toys
see Consuming Kids: The Commercialization of Childhood
Ten minute movie preview
>
Full Movie
To read more on ethics, click http://www.apa.org/monitor/sep00/advertising.html
Virgin Mobile tried to help kids intimidate their parents into buying them a cell phone by posting powerpoint presentations to show to parents (formerly at http://www.enlightenmentkit.com/)
How
do people who occupy different positions in society spend their money?
Are the rich really different?
Are all rich people alike in their spending?
What effect does a person's status in society have on her/his spending?
Standard of living for Canadian families continues to rise. Income shifts are linked to women's role and educational attainment
Consumer demand depends on both "ability to buy" and "willingness to buy" Demand for necessities stable, other expenditures can be postponed or eliminated
Discretionary Income is money available over and above what is needed to be comfortable.
In one Canadian survey 70% reported that if income doubled they would be happier. Anxiety about money is more a state of mind than how much one has
Often money is equated with security, comfort, freedom and pleasure.Psychological meanings for money equate it with success/failure, social acceptability
What Canadians value is freedom money allows
CONSUMER CONFIDENCE
Consumer Confidence is the state of mind of consumers in relation to economy- for example, their optimism or pessimism about economic conditions; when economy good people spend more on discretionary purchases; when economy not good they may fear spending.
Feb 2017 Information:
"The Conference Board of Canada’s Index of Consumer Confidence soared in February 2017, rising 9 points to 110.6 (2014 = 100). It was the largest monthly increase since March 2015, and the national index now sits at its highest level in more than seven years. The balance of opinion rose on all four survey questions. Although regional developments drove some of the increases, February’s gains suggest the recent string of solid job creation and economic growth at the national level, as well as the improved economic outlook for 2017, have consumers feeling more upbeat.)"
"Consumer Confidence in Canada decreased to 55.25 Index Points in October from 55.77 Index Points in September of 2018. Consumer Confidence in Canada averaged 53.41 Index Points from 2010 until 2018, reaching an all time high of 56.43 Index Points in April of 2018 and a record low of 46.80 Index Points in February of 2016."
I See current
below here https://www.tradingeconomics.com/canada/consumer-confidence
source: tradingeconomics.com
Key Terms:
Consumer Confidence
the state of mind of consumers in relation to economy-their optimism or pessimism about economic conditions; when economy good people spend more on discretionary purchases; when economy not good they may fear spending.
Behavioural Economics
the study of the behavioural determinants of economic decisions; also called economic psychology, the "human" side of economic decisions; how motives and expectations of future affect current spending; when pessimistic about future people cut back
Savings Rate
the amount of money saved to use later- influenced by person's pessimism or optimism about personal circumstances
Animal and human species have a "pecking order', a relative standing in the society. Social class is the overall rank of people in a society; people who are grouped within the same class are approximately equal in terms of social standing, occupations and lifestyles. Place one occupies in social structure (your social class) helps determine how much money and how it is spent. Society is hierarchical where access to products/services is determined by resources and social standing Artificial divisions are created where resources are distributed unequally. Some members in a group get more than their share, others not lucky
See tease from movie People Like Us https://www.youtube.com/watch?v=nU5MtVM_zFs and the full documentary playlist here https://www.youtube.com/watch?v=nU5MtVM_zFs&list=PLC6D871A2A8C3C8EF
Unlike some countries, Canada does not have a strictly defined class system.
OLD MONEY/NEW MONEY
Those with "old money' have no need to show it; whereas, those with new money may feel a need to show it off. People generally try to rise up in the; advertisers appeal to this group with words to show they "have arrived". Social class is as much a state of being as having; what one does with money defines them
See a video Sociology professor William Doherty examines differences in U.S. family structure across economic classes. ----- The Changing American Family https://www.youtube.com/watch?v=F0Oqeov0Gcw See video about income inequity in US by Paul Krugman https://www.youtube.com/watch?v=5kwA-CwFK5A In Canada we still have 30% in unions while in US only 11% in unions because of political change. See 1957 take on social class in America https://www.youtube.com/watch?v=mHACox2UamQ
Achieved Status
Example: Sam Walton, self-made man and an American legend Walmart
The secret of Sam's success
Walmart was founded about 50 years ago by Sam Walton. Walton was a self-made man who set up his first Walmart discount-store in Rogers, Arkansas with low priced goods. The location served the small-town market. Although there was slow growth ,by 1970 the
company offered its shares on the stock market (j18 stores with sales of $44m.)
In 10 years it had grew to 276 stores and sales of $1.2 billion.
Ascribed Status
Examples,
Based on "who" you are.
Royalty, Kardashians, Paris Hilton
Social mobility refers to movement of individuals from one social class to another
Individuals are often defined by what they do; occupational prestige evaluates worth
Income is not a very good indicator of social class
PROBLEMS WITH SOCIAL CLASS SEGMENTATION
Marketers have ignored status inconsistency; mobility between generations, subjective social class, aspirations to change class and the status of working wives.
Consumers see different stores and products as appropriate for different social classes
Poverty- Lowest Income
14% of Canadian families live below poverty line; this group has been largely ignored by marketers
Unemployed and "working poor" feel alienated in consumer society
Ethical issues are raised when marketers target poor with ads for "sin" products such as alcohol and tobacco
Working class tends to evaluate product in utilitarian, practical ways: sturdy, comfort;
they are less likely to experiment with newAffluent concerned with appearance, body image
Marketers readily target affluent consumers; affluent can be categorized as "old money' or "nouveaux riches". Paradox is that when people have enough money social distinctions no longer revolve around it.To be in upper social class money is not enough; need history of family public service and philanthropy. Many big profile billionaires can be considered "working wealthy"
Nouveaux Riches - Newly Rich
Status anxiety is a worry of the nouveaux riches (newly rich); they have money but they worry about how they are seen as part of social class. They wonder- Am I doing the right thing, being in the right place, wearing the right clothes, using the right products? Advertisers can play to this group's insecurities.
Conspicuous consumption is the buying and displaying luxury goods to publicly display one's ability to afford them; to show superior socioeconomic status
Parody display
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General conclusions on relative value of indicators of social class
Social class appears to predict purchases with symbolic aspects but low to moderate prices
Income is better predictor of major expenditures without status or symbolic aspects (major appliances)
Social class and income data are needed to predict purchases of expensive symbolic products (cars, homes)
Measuring social class is problematic; most work revolves around "nuclear family"; our society is becoming more anonymous; interviewer bias; subjective terms used
Marketers are now creating what they call "addressable ads" and delivering TV ads that change message and creative elements to suit different viewers- all through database marketing techniques delivered on cable. More and more information is available from social networks, location aware applications and database tracking.
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