Family or Household
Decision Making
Types of
Households/Families
Why is it Important for Marketers to know about
Families and Households?
1. impart lifestyle and consumption values to their
members
2. influential in consumption decisions
3. make several joint purchase decisions
4. prime target market for goods and services
Household Influences for
Marketing Strategy
Structure
of Household
Unit
Stage of the
Household Household
Life Cycle Purchase and
Marketing
Consumption Strategy
Behavior
Household
Decision
Processes
What is the Family Lifecycle (FLC)
The family life cycle concept attempts to explain consumer
behaviour patterns of individuals as they age, marry, have
children and retire
Family Life-cycle Changes Over Life-
bachelor Cycle
financial situation
newly married, no kids
Product categories
young couple, kids 6
interests
older married w/ dep.
primary decision
empty nesters,
working maker
retired Free time
widower - working,
not working
Why is it of value to understand the family
life cycle?
At each stage members have new needs for goods and
services, i.e consumption patterns change
Life cycle stage determines which product categories are
bought but not how much is spent on each category
As interests change so too does the ability to reach them.
Purchasing decision process changes
Basic strategy is how to keep customers through
the FLC?
Choose your
vacation
Family Life cycle and Travel
Travel locations differ significantly across the family life stages
Young singles the most action motivated
greater emphasis on outdoor experiences
Older marrieds the least motivated by action.
did not regard outdoor activities as
important
Young single travelers had the most ego
motivation
young marrieds with children were highly
motivated to escape had most interest in rest
and relaxation.
Older unmarrieds, young marrieds, and
young singles thought cultural attractions were
important.
For the older married and older unmarried
segments, weather was very important in
vacation destination selection.
attractions such as theme parks were
important for divorced travelers with children
and young married travelers with children.
What are the Critical
Consumption factors?
number of people (children and adults) in
the family
the ages of the family members
Number of employed adults
Stages of the family life cycle
1) Bachelor Stage. (Young single people not living at home):
(a) Few financial burdens,
(b) Fashion/opinion leader led,
(c) Recreation orientated,
(d) Experiment with personal financial management
(e) men and women differ in consumer behaviour
- women more housing-related items and furniture,
-men more on restaurants and cars
(f) buy: basic kitchen equipment,
basic furniture, cars, holidays,
2) Newly married couples (Young, no children) (DINKS)
(a) Better off financially than they will be in the near future,
(b) High levels of purchase of homes and consumer durable goods,
(c) Establish patterns of personal financial management and
control;
(D) Buy: cars, fringes, cookers, life assurance, durable furniture,
holidays,
3) Full nest I. (Youngest child under six):
(a) Home purchasing at peak,
(b) Liquid assets/saving low,
(c) Dissatisfied with financial position and amount of money saved,
(d) Reliance on credit finance, credit cards, overdrafts etc.,
(e) Child dominated household,
(f) Buy necessities - washers, dryers, baby food and clothes, health
foods vitamins, toys, books etc.;
4) Full nest II.
(Youngest child six or over):
(a) Financial position better,
(b) Some wives return to work,
(c) Child dominated household,
(d) Buynecessities - foods, cleaning material, clothes, bicycles,
sports gear, music lessons, pianos, junk foods, holidays
etc.;
5) Full nest III. (Older married couples with dependent children.:
(a) Financial position still better,
(b) More wives work,
(c) School and examination dominated household,
(d) Some children get first jobs; other in further/higher education,
(e) Expenditure to support children's further/higher education,
(f) Buy: new, more tasteful furniture, non-necessary appliances,
boats, holidays, etc.
Empty nest I. (Older married couples, no children living with
them, head of family still in labor force):
(a) Home ownership at peak,
(b) More satisfied with financial position and money saved,
(c) Interested in travel, recreation, self-education,
(d) Make financial gifts and contributions,
(e) Children gain qualifications and move to Stage 1.
(f) Buy luxuries, home improvements e.g. fitted kitchens etc.;
7) Empty nest II. (Older married couples, no children living at
home, head of family retired):
(a) Significant cut in income,
(b) Keep home,
(d) Concern with level of savings and pension,
(e) Assist children
(f) Buy:medical appliances or medical care, products which aid
health, sleep and digestion, hobbies and pastimes,
8) Solitary survivor I. (In labour force):
(a) Income still adequate but likely to sell family home and purchase
smaller accommodation,
(b) Worries about security and dependence;
(c) Concern with level of savings and pension,
(d) Buy: hobbies and pastimes,
9) Solitary survivor II. (Retired):
(a) Significant cut in income,
(b) Additional medical requirements,
(c) Special need for attention, affection and security,
(d) May Seek sheltered accommodation,
(e) Possible dependence on 'others for personal financial,
management and control.
Buy: Prepaid funeral
Implications
Small bags of specialty
Large bags for larger potatoes for affluent
families couples without children.
And with small kitchens
Marketing Potatoes through the FLC
Traditional Families - one parent works, one parent stays home,
children live at home.
eat dinner at-home more frequently than other demographic
groups.
consume more potatoes per person than those in families without
children.
affluent groups tend to eat fewer potatoes than low- to moderate-
income groups with the same demographics.
the mainstay of fresh potato
marketing, over time has come to
represent less and less of the total
population
What sort of potato products?
Two working parents, children present
Dinner is a hectic time.
Parents and children arrive home about the same time.
Kids are excited (and hungry); parents are tired (and
hungry).
Convenience concerns often override other factors in
deciding what's for dinner.
Dinnertime solutions need to be quick and easy.
What sort of potato products
would they be interested in?
Single parent families- single working parent, children
present.
Dinner is just another thing on the "to do" list along with
soccer practice, homework, etc.
needs easy, quick meal solutions.
What sort of potato products should be marketed to single
parent families?
Households without children
Half the U.S. population lives in a one- or two- person household.
Every demographic in this group has lower potato consumption
than households with children and represents a significant (and
currently missed) opportunity.
Singles
Singles have the lowest at-home potato consumption, with affluent
singles showing even lower consumption than low- to moderate-
income singles.
They eat out often, and represent a significant portion of fry
consumption in restaurants. Many in this group will be moving into
the marriage, parenthood segment.
Potato product ideas:
Double income, no kids
young married couples just establishing their households.
Many can afford to eat out often but lack cooking skills.
Empty Nesters, children grown and out of home
Some in this group are still working, some are retired
almost all want a break from the years of dinner
preparation.
They can afford to eat out or take home upscale meals.
Often health and fitness conscious, this important group has
positive attitudes about potatoes.
Potato Product ideas:
Married and Single active elderly
A small percentage of the population at present,
this demographic, along with empty nesters, is expected to
grow dramatically in the next 20 years.
Potato product ideas:
Household Decision Making
Households vary in consumption habits depending on
stage where they are in family life cycle
Household decision making is
also different from individual
decision making
Family role structure
orientation influences
household decision making
Nature of good or service to be
purchased and consumed
influences household decision
making
Household Decision Making
Types of Purchase Decisions Made by Families
Consensual Decision Making
Group Agrees on the
Desired Purchase
Differing Only in
Terms of How It Will
Be Achieved.
Accommodative
Group Members Have
Different Preferences
and Can’t Agree
on a Purchase That
Will Satisfy Everyone
Husband-Wife Decision Making
Who makes the Decisions?
Influence may depend on the good or service to
be purchased, role structure orientation, stage of
the decision making process
four categories:
husband-dominated;
wife-dominated
autonomous or unilateral;
joint decision
The Apparel Manufacturer Haggar Placed Menswear Ads in
About a Dozen Women’s Magazines After Its Research Found
That Women Exert Influence Over Men’s Clothing Choices
Four Factors Influencing Family Decision Making
1. Sex-role stereotypes - separation of decision-making
for sex-typed products.
2 Spousal Resources - spouse contributing the greater
resources (usually, but not always, money) has the
greater influence
3. Experience - individual decisions are made more
frequently when the couple has gained experience as a
decision-making unit
4. Socio-Economic Status - middle class families make
more joint decisions than either upper or lower class
families.
Information
Gatherer
Initiator Gatekeeper
Disposer Buyer
Decision
Roles
Maintainer Influencer
User Decision
Maker
Preparer
Consumption-related Roles
Initiators: initiate consumption behaviour
Information Gatherers: research alternatives
Gatekeepers: control flow of information to other
members
Influencer(s): provide information about a good or
service to other members
Deciders: have power to make final buying decision
Buyers: member(s) who actually make purchase
Preparers: transform product into useable form
Users: family members who use the good or service
Maintainers: responsible for maintenance of good
Disposers: responsible for disposal of good/service
Marketing Strategy Implications
Marketing communication: advertising message,
media used, person targeted, product positioning
Households can be targeted by advertising by
lifestyle .
Product development: products, e.g. minivans and
cars built specifically for families; vacations; services,
e.g. insurance, hotel
Pricing decisions: e.g. discounts for bulk purchases
Distribution: changes in family lifestyle means
changes in distribution, e.g. longer retail hours
Public policy regulations re marketing to children
If a car is being purchased by a family for a teenager
to drive to school, how will this influence:
The type of product
Method of financing
Price
Appropriate promotion message
The media
As opposed to the family purchasing a car that the
adult head of the household will use to commute to
work?
Marketing to the Family
When marketing to the family children must be a consideration.
How would you reach families with your marketing message?
Magazines
children’s magazines are good avenues for
reaching the youth and mom markets.
also family-oriented magazines aimed more at
parents. Eg. Family Circle, Sesame Street Parents
(5.4 million readers) Family Fun, Child, Parents,
or Parenting magazine.
Internet, e-mail and other technology
since kids are often the more technologically
savvy members of the family
Web sites
Organizations
family-friendly organizations are good
places in which to focus marketing efforts
aimed at the family eg.
Religious institutions
Schools: primary, secondary, public and
private;
their affiliated clubs and organizations,
Kids’ groups - Scouts, 4-H, etc.
YMCA, YWCA and other athletic clubs
Direct Mail
For many households, a car purchase is a family event. It can
be a pleasant one or a story that is retold with embarrassment
and horror. If you were the owner of a car dealership how
would you make the purchase of a car a pleasant family event.
Provide a good play area. Construction play, a table for drawing,
good books, creative activities like train sets, Lego tables, mazes
and puzzles. Stay away from videos. Children who sit too long just
build up their energy and compensate with over-active play.
Welcome families with broad smiles, make eye contact with the
youngsters.
Take a few minutes to make the children comfortable by leading
them to the play area or explaining where the toys are. Do not put
parents into the position of apologizing for their children's
behavior.
Make sure that the vending machine has packaged, healthy
treats available, including fruit juice or water in bottles.
The bathroom should have a change table.
stop periodically to make sure the kids are engaged and happy.
Include them if old enough, in some of the discussions.