Family Decision Making


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?

THE FAMILY

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 choose rather than one born to. There is renewed interest in family

Types of family

Image Source:  Freepik

Key Definitions:

Extended Family

Granny

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 http://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


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 http://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

Effects Of Family Structure on Consumption

family lifeFamily Life Cycle

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

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 http://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 cope

Factors determining joint decision making

1. Gender-role stereotypes (traditional tend to make decisions individually on gender-type products
2. Spousal resources (spouse who contributes most has most say
3. Experience (Individual decisions are more frequent when couple has gained experience as decision making unit
4. Socioeconomic status (joint decisions made more by middle class then by lower or higher

Family 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 money

To 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

Synoptic Ideal

Partners take a common view and act as joint decision makers to make mutually beneficial decisions (note word "ideal")

CHILDREN AS DECISION MAKERS

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/)



CONSUMERS AND SUBCULTURES

INCOME AND SOCIAL CLASS


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?

 

CONSUMER SPENDING AND ECONOMIC BEHAVIOUR

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.)"

I See current

Canada Consumer Confidence

below here http://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

SOCIAL CLASS

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 http://www.youtube.com/watch?v=nU5MtVM_zFs and the full documentary playlist here http://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 http://www.youtube.com/watch?v=F0Oqeov0Gcw See video about income inequity in US by Paul Krugman http://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 http://www.youtube.com/watch?v=mHACox2UamQ


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.


Royalty

Paris Hilton

Kardashians

 

Social Mobility

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.

HOW SOCIAL CLASS AFFECTS PURCHASE DECISIONS

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 new

Affluent 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



Parody display is avoidance of widely used status symbols. The person may do the opposite of what's expected. Example can be-buying ripped jeans, or wearing something that might be worn by a worker.

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)

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.

 

Reference as noted above and: Solomon, Michael R., Zaichkowsky, Judith and Rosemary Polegato. Consumer Behaviour: Buying, Having, Being. Fifth Canadian Edition. Toronto: Pearson Education Canada


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