6 Family Decision Making PDF PDF

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Lecturer: Dr Katerina Karanika...

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6 Family Decision Making Collective Decision Making • More than one person is involved in purchasing process for products or services that may be used by multiple consumers. Family Roles Initiator • The person who brings up the idea or identifies the need Gatekeeper • The person who conducts the information search and controls the flow of information available to the group. - Eg. Many parents are gatekeepers, who control the information that reaches the family’s children by using the parental control features available on TVs, computers, and other communication devices. Influencer • The person who tries to sway the outcome of the decision. - Eg. Children and teenagers might be influencers in the family’s purchase of a new car, although they are neither the deciders nor buyers of family cars. Decider • The one who makes the decision. Buyer • The one who makes the purchase Preparer • The one who prepares the product for consumption. - Eg. Children from dual-income households are often the deciders, buyers, and preparers of foods, so marketers of cuisine goods must study the roles of children in the consumption of the products offered and consider them in their designs. User • The person who ends up using the product Maintainer • The person responsible to maintain a possession. - Eg. Because children in the role of maintainers often perform housekeeping chores by themselves, makers of, for example, vacuum cleaners should conduct research where they observe how children use their products and make sure they can do so safely. Disposer • The person who decides to dispose the object. Family Trends • Family numbers of marriage. • Smaller families - The higher the education of the parents, the fewer the children. • Growth in non-traditional family types • Increasing number of divorces • Increased incidence of remarriage • Steady increase in the number of unmarried adults and of one person households

• Growing trend towards voluntary childlessness - DINKs - Dual income, no kid couples, have higher discretionary income than couples with children. Sandwich Generation • The adults who must attend to those older and younger than them in age. Position of caring for both children and parents. Boomerang Kids • When adult children return to the nest. Inter-Generational Influences in Consumption • The family is a primary reference group with powerful bonds among its members. • Many product preferences and brand loyalties are transferred from one generation to another. - Eg. In households where grandparents live with their children/grandchildren, grandparents pay an important role in teaching younger members consumption related skills but also participate in major consumption decisions. Family Identity • Family identity is the family’s subjective sense of its continuity over time, its present situation and its character. • It is a mixture of the qualities and attributes that make it a particular family. • A family identity defines a household to household members and outsiders. • Family rituals, narratives and everyday interactions help families maintain their structure, family character and clarify members relationships to one another. Family Identity Framework Each family houses unique bundles of identities: • The family’s collective identity • Smaller groups relational identities - Siblings, couples, parent-child • Individual family members’ identities. - Our intergenerational transfers may be challenged and changed as it interacts with other identity bundles. Communicative Network Approach • Individual identity - Distinguished from others and is unique • Relational identity - Eg. Siblings, couple, parent-child • Collective/group identity - All family members Family Life Cycle Model • Concept that combines trends in income and family composition with the changes in demands placed upon this income. • Based on the notion that as people and families grow older, their preferences and needs for products and services tend to change. • Assumes that families experience predictable stages and that families in the same life stage will have similar consumption patterns. - Starts with bachelorhood and then moves to marriage and the creation of the family unit. - Marriage leads to a growing family with the birth of children and then family contraction as grown children leave the household. - Cycle ends with dissolution of the family unit due to the death of one spouse.

- Eg. Young bachelors and couples are more likely to go to concerts, cinemas, restaurants, nightclubs and consume more alcohol. Types of Household Decisions Consensual Purchase Decisions • Members agree on the desired purchase and consider alternatives until they find one satisfying the group’s goal Accommodative Purchase Decisions • Members cannot agree on a purchase so bargaining, coercion, compromise and the wielding of power are likely to be used. Decision Conflicts in Families Determined by: • Interpersonal needs • Product involvement and utility • Responsibility for procurement, maintenance, payment etc. • Power = The degree to which one family member exerts influence over the others. Who Makes Key Decisions in the Family? Autonomic Decision • One spouse chooses a product Syncretic Decision • Both partners choose together • Used for cars, vacations, homes, appliances, furniture, home electronics, interior design, phone service. • As education increases, so does syncretic decision making. Factors affecting Decision-Making Patterns Among Couples When couples first marry, they tend to make more joint decisions but over time they begin to specialise in decisions: Sex-Role Stereotypes • Couples who believe in traditional sex-role stereotypes tend to make individual decisions for sex-typed products that are considered feminine or masculine. Spousal Resources • The spouse who contributes the most has the greater influence. Experience • Time constraints and expertise establishes one decision maker Socioeconomic Status • Middle-class families make more joint decisions than do either higher or lower-class families. Heuristics Mental rules of thumb that simplify and speed up decision making based on: - Salient, objective dimensions - Task specialisation - Concessions based on intensity of each spouse’s preference. Children as Consumers • Children have significant spending power.

• They represent a future market for consumer researchers to understand (Geuens, Mast & Pelsmacker, 2002). • The ‘three kids markets’ (McNeal, 1998, p37) of primary purchaser, influencer and that of a future market, represent why marketers should understand the role of children within studies of family consumption. 1. Children buy things on their own (pocket money etc.) 2. Influence the consumptions decisions of others and their family 3. They will group up to become consumers with large disposable income. Primary Market • Children have their own money and buy things that are targeted on them. - Eg. Toys, apparel, movies and games. Influence Market • Children influence their parents spending. • Parents give in to influence from children on many choices. • Parental yielding occurs when a parental decision maker surrounds to a child’s request. • Yielding drives many product selections - Eg. Toys, items for the house like food, holidays. Influence Strategies (Palan & Wilkes, 1997) Bargaining Strategies • The use of reason and negotiation Persuasion Strategies • Persistence, begging, whining, manipulation, nagging and reasoning • The child may try to use logical arguments and factual evidence. Emotional Strategies • Showing anger, pouting, use of sweet talk, guilt trips and ignoring others or trying to intimidate the parent in public or trying to get the parent in a good mood first and then make the request. Request Strategies • Directly ask, express need, express want and demand. Coalition Tactic • Children can recruit other family members to help them get things they want, by encouraging them to approach their parents on their behalf to state their case or asking them to purchase the things their parents may have declined. Exchange Tactic • The child promises something in exchange - Eg. To clean room. Future Market • Kids grow up and become adults but they may stay loyal to the brands they loved when they were young. • Marketers try to lock in brand loyalty at an early age. Consumer Socialisation • The process by which children acquire the skills, knowledge, attitudes and experiences necessary to function as consumers. • Children learn how to act as consumers from the environment around them.

• An ongoing process taking place in adulthood as well. Socialisation Agents Parents • Expose children to marketing stimuli • Parents make direct and explicit attempts to teach their children values in relation to the market place. • Parents indirectly influence their children as they serve as models for children to observe and imitate. • Children learn about consumption through observational learning, by watching parents and imitating. • Parents create opportunities for children to be exposed to external information sources such as television and salespeople. Media, Television, Advertising • Teaching about a culture’s values and myths. Friends • Children talk to their peers about consumer products which increases with age. • Young children perceive their families as more reliable sources of information about consumption than advertising. • However, peers have the most influence on the consumption of teenagers who often like products because their parents do not approve these goods. Reverse Socialisation • When children are educating parents regarding the marketplace. • Regards topics related to internet, technology, celebrity/popular culture, environmental issues. Theory on Parental Styles in Consumer Socialisation Classification of Parental Styles • Identifies parental styles and attitudes toward advertising, consumption and yielding to children’s buying requests. Authoritarian Parents • Restrictive, emotional uninvolved with their children but are actively filtering media to which children are exposed and tend to have negative views about advertising. • Expect unquestioned obedience from their children. Neglecting Parents • More detached from their children and do no exercise much control over what their children do. • They provide their children with little or no nurturing during consumer socialisation. Indulgent Parents • Very nurturing and highly permissive to consumer socialisation. • They communicate about media messages on consumption with their children, are less restrictive and allow children to learn more about the marketplace on their own. • They believe children should be allowed to learn about the marketplace without much interference. Authoritative Parents

• Warm and support the child’s views. • Nurturing and very restrictive to consumer socialisation. Segmenting Kids • Marketers segment kids by age in terms of their stage of cognitive development or ability to comprehend concepts of increasing complexity Cognitive Development Stages 1. Limited - Less than 6 years old - Children do not employ storage and retrieval strategies. 2. Cued - Between 6-11 years old - Children employ storage and retrieval strategies when prompted 3. Strategic - 11 years old and older - Spontaneously employ these storage and retrieval strategies and begin to show a more adult pattern in how they combine elements in the world into meaning. Ethical Considerations • No misleading claims about the product’s performance or benefits • Must not exploit children’s imagination • Cannot create unrealistic expectations • Products must be shown in a safe situation • No encouragement of inappropriate behaviour • Avoid ads that: - Encourage children to pressure their parents to buy the products advertised - Lead children to feel that ownership of a given product will make them more accepted by peers Age Cohorts • Consists of people of similar ages • We are more likely to have things in common and to have similar experiences with people close to our age. • As we grow older, our needs and preferences change in unison with others who are close to our own age. Silent Generation • Those who were born between two World Wars. War Baby Generation • Born during World War II. Baby Boom Generation • Born between 1946-65 and continue to be the most powerful age segment economically. • Often active and physically fit and in peak earning years. - They buy food, apparel, retirement programs as well as ‘midlife crisis’ products. Generation X • Born between 1966-76. • Desire stable families, save portion of income, view home as expression of individuality. • A difficult group for marketers to ‘get a clear picture of’. • Income of this age cohort is below expectations.

Generation Y (Echo Boomers, Millennials, Gen Years) • Born between 1986-2002 • First to grow up with computers in their homes. • Respond well to personally relevant promotions and use interactive marketing platforms. • Students on campus is an attractive segment to many companies because these novice consumers are away from home for the first time so have yet to form brand loyalty in some product categories such as cleaning supplies Generation Z • Born 2003 or later. • Most diverse generation and digital native. Tweens • Aged 8-13. • Spend $14bn a year on ‘feel good’ products. • Have characteristics of both children and adolescents. • Families are important to tweens in terms of social lives and they tend to be brand loyal. Youth/Teen Market • Aged 13-17. • Have more independent behaviour compared to tweens. • More brand skeptical. • The transition that teenagers go through create a lot of uncertainty about one’s self and the need to belong and find one’s unique identity as a person becomes pressing. • Teens search for cues from their peers and from advertising. • Product usage is a significant medium that lets them satisfy needs for belonging, independence, experimentation, responsibility and approval from others. • Teenagers in every culture experience developmental issues when they transition from childhood to adult. • Young people cope with insecurity, parental authority and peer pressure. Common Themes to Teens Autonomy vs Belonging • Teens want independence but also need support. • They want to acquire independence so they try to break away from their families but they want to attach themselves to a support structure such as peers to avoid being alone. - Therefore, they are susceptible to peer pressure. Idealism vs Pragmatism • Tend to view adults as hypocrites whereas they see themselves as sincere. • They have to struggle to reconcile their view of how the world should be with the realities they perceive around them. Narcissism vs Intimacy • Tend to obsess about their appearance and needs. • Feel the desire to connect with each other in deeper and more meaningful ways and in sincere relationships Rebellion vs Conformity • Teens rebel against social norms and social standards of appearance and behaviour but they need to fit in and be accepted by others. The Grey Market • Marketers traditionally ignored the elderly because of the stereotype that they are inactive and spend too little.

• Most of the elderly are healthy and interested in new products and experiences. • Marketers may need to emphasise product benefits rather than age-appropriateness in marketing campaigns because the older we get, the younger we feel relative to our actual age. Perceived Age: How old a person feels or looks as opposed to their chronological age. Common Values 1. Autonomy - Want to be self sufficient 2. Connectedness - Value bonds with friends and family 3. Altruism - Want to give something back to the world...