Consumer Behaviour - Chapter 6

1. CHAPTER 06
The American
Society:
Families and
Households
Copyright © 2013 by The McGraw-Hill Companies, Inc. All rights reserved.
McGraw-Hill/Irwin

2. 6-2
PART II: EXTERNAL INFLUENCES

3. L01
L02
L03
L05
L04
Explain the concept of household types and their
influence on consumption
Summarize the household life cycle’s various stages
and marketing implications
Understand the family decision process
Describe the role that households play in child
socialization
Explain the sources of ethical concern associated with
marketing to children
Learning Objectives
6-3

4. Can Kid’s Movies be Big Business?
 Which movie do you think was the highest
grossing film of 2011?
 Rango
 Scream 4
Source: A. Hampp, “Family-film Frenzy Helping Hollywood Fend Off Losses,” Advertising Age, May 2, 2011, p. 14
Consumer Behavior In The News…
6-4

5. Can Kid’s Movies be Big Business?
 Which movie do you think was the highest
grossing film of 2011?
 Rango – if you said Rango you were correct!
 Scream 4
 Animated films dominated in 2011.
 As one source says, “When you have a movie…that
entertains both parents a kids alike, positive word-of-
mouth will spread…”
 Relates to children’s roles as decision influencers
Source: A. Hampp, “Family-film Frenzy Helping Hollywood Fend Off Losses,” Advertising Age, May 2, 2011, p. 14
Consumer Behavior In The News…
6-5

6. The Household Influences Most Consumption Decisions
6-6
The Nature of American Households

7. Types of Households1
Household
Consists of all the people who occupy a housing unit (a house,
apartment, group of rooms, or single room designed to be
occupied as a separate living quarters).
Family Household
One having at least two members related by birth, marriage, or
adoption, one of whom is the householder (householder owns or
rents the residence).
Nonfamily Household
A householder living alone or exclusively with others to whom
he or she is not related.
1 U.S. Census Bureau definition of a household.
6-7
The Nature of American Households

8. 6-8
The Nature of American Households

9. The traditional family refers to a
married opposite-sex couple and
their own or adopted children
living at home.
A step family is a married-
couple family household with at
least one child under the age of
18 who is a stepchild (i.e., a son
or daughter through marriage).
6-9
The Nature of American Households

10. A multigenerational family is a
family household containing
(a) At least two adult
generations, or
(b) A grandparent and at least
one other generation
6-10
Fox News Reports on the Multigenerational Family
YouTube Spotlight
The Nature of American Households

11. 1.
People married
by their early
20s
2.
Couple had
several
children
3.
Their children
grew up and
started their
own families
4.
The original
couple retired
5.
The male
would
eventually die
6.
A few years
later the female
would die
The Traditional view of Family Life Cycle
6-11
The Household Life Cycle

12. American households follow much more complex and
varied cycles today. Therefore, researchers have
developed several models of the household lifecycle
(HLC).
Each HLC stage presents unique needs and wants as
well as financial conditions and experiences.
HLC provides marketers with relatively homogeneous
household segments that share similar needs with
respect to household-related problems and purchases.
6-12
The Household Life Cycle

13. The following Video Clip demonstrates
how Act II fits into today’s households
with its Microwave Popcorn!
6-13
Video Application

14. 6-14
6-14

15. Stages of the Household Life Cycle
6-15
The Household Life Cycle

16. Younger (< 35)
Single I
Young Couples: No Children
Full Nest I
Single Parent I
6-16
The Household Life Cycle

17. Middle Aged (35 – 64)
Middle-Aged Single
Empty Nest I
Delayed Full Nest I
Full Nest II
Single Parent II
6-17
The Household Life Cycle

18. Older (> 64)
Empty Nest II
Older Single
6-18
The Household Life Cycle

19. HLC can be an important segmentation
variable.
The purchase and consumption of many
products are driven by the HLC, with each stage
posing unique problems and opportunities.
6-19
Marketing Strategy Based on the Household
Life Cycle

20. Factors such as income, occupation, and
education 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.
6-20
Marketing Strategy Based on the Household
Life Cycle

21. HLC/Occupational Category Matrix
6-21
Marketing Strategy Based on the Household
Life Cycle

22. Family decision making is the process by which decisions
that directly or indirectly involve two or more family members
are made.
Family purchases are often compared to organizational buying
decisions. However, with family purchasing, there is usually
less explicit criteria, and most family purchases directly affect
the other members of the family.
Most important, many family purchases
are inherently emotional and affect the
relationships between the family
members.
6-22
Family Decision Making

23. Family Purchase Roles
Determinants of Family Purchase Roles
Conflict Resolution
Marketing Strategy and Family Decision Making
Consumer Socialization and Marketing to Children
6-23
Family Decision Making

24. The American Home
Shield ad provides a
good example of how
family decisions
directly or indirectly
involve two or more
family members.
Courtesy AHS
6-24
Applications in Consumer Behavior

25. The Household Decision-Making Process for Children’s Products
6-25
Family Decision Making

26. Determinants of Family Purchase Roles
How families interact in a purchase decision is largely
dependent on the
culture and subculture in which the family exists
the role specialization of different family members
the degree of involvement each has in the product area of
concern, and
the personal characteristics of the family members
6-26
Family Decision Making

27. Decision-Making Influence and Relative Income
6-27
Husband Earns More Wife Earns More
Family Decision Making

28. Conflict Resolution
One study revealed six basic approaches that individuals use to
resolve purchase conflicts1.
Approach Description
Bargaining Trying to reach a compromise.
Impression
Management
Misrepresenting the facts in order to win.
Use of Authority Claiming superior expertise or role appropriateness (the
husband/wife should make such decisions).
Reasoning Using logical argument to win.
Playing on
Emotion
Using the silent treatment or withdrawing from the
discussion.
Additional
Information
Getting additional data or a third-party opinion.
1C. Kim and H. Lee, “A taxonomy of Couples Based on Influence Strategies,” Journal of Business Research, June 1996, pp. 157-68.
6-28
Family Decision Making

29. 6-29
Marketing Strategy and Family Decision Making

30. The family provides the basic framework in which
consumer socialization occurs.
Consumer socialization is the process by which
young people acquire skills, knowledge, and attitudes
relevant to their functioning as consumers in the
marketplace.
Understanding the content and the process of
consumer socialization.
Consumer socialization content refers to what children
learn with respect to consumption.
Consumer socialization process refers to how they learn it.
6-30
Consumer Socialization

31. Piaget’s Stages of Cognitive Development
Stage Description
Stage 1 The period of sensorimotor intelligence (0-2 yrs.)
- behavior is primarily motor
- the child does not yet “think” conceptually, though
cognitive development is seen
Stage 2 The period of preoperational thoughts (3-7 yrs.)
- Characterized by the development of language and
rapid conceptual development
Stage 3 The period of concrete operations (8-11 yrs.)
- the child develops the ability to apply logical
thought to concrete problems
Stage 4 The period of formed operations (12-15 yrs.)
- the child’s cognitive structures reach their greatest
level of development, and the child becomes able
to apply logic to all classes of problems.
6-31
Consumer Socialization

32. Consist of three categories:
1. Consumer skills—are those capabilities necessary for
purchases to occur such as understanding money,
budgeting, product evaluation, etc.
2. Consumption-related preferences—are the knowledge,
attitudes, and values that cause people to attach differential
evaluations to products, brands, and retail outlets.
3. Consumption-related attitudes—are cognitive and
affective orientations toward marketplace stimuli such as
advertisements, salespeople, warranties, etc.
The Content of Consumer Socialization
6-32
Consumer Socialization

33. Consumer socialization occurs primarily through family, as well
as through a number of avenues including advertising and friends.
Parents socialize their children through the following:
The Process of Consumer Socialization
1. Instrumental training—occurs when a parent or sibling
specifically and directly attempts to bring about certain
responses through reasoning or reinforcement.
2. Modeling—occurs when a child learns appropriate, or
inappropriate, consumption behaviors by observing others.
3. Mediation—occurs when a parent alters a child’s initial
interpretation of, or response to, a marketing or other stimulus.
6-33
Consumer Socialization

34. Children are a large and growing market.
However, marketing to children is fraught with ethical
concerns, including:
The limited ability of younger children to process
information and to make informed purchase decisions.
Marketing activities, particularly advertising, can
produce undesirable values in children, resulting in
inappropriate diets, and cause unhealthy levels of family
conflict.
6-34
Marketing to Children