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6-1 CHAPTER CHAPTER 6 6 THE AMERICAN THE AMERICAN SOCIETY: SOCIETY: FAMILIES AND FAMILIES AND HOUSEHOLDS HOUSEHOLDS
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CHAPTERCHAPTER 66THE AMERICANTHE AMERICAN
SOCIETY:SOCIETY:
FAMILIES ANDFAMILIES ANDHOUSEHOLDSHOUSEHOLDS
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The Nature of American HouseholdsThe Nature of American Households
The Household Influences Most Consumption DecisionsThe Household Influences Most Consumption Decisions
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The Nature of the American HouseholdThe Nature of the American Household
Types of Households1
HouseholdHouseholdConsists of all the people who occupy a housing unit (a house,apartment, group of rooms, or single room designed to beoccupied as a separate living quarters).
Family HouseholdFamily HouseholdOne having at least two members related by birth, marriage, oradoption, one of whom is the householder (householder owns orrents the residence).
Nonfamily HouseholdNonfamily HouseholdA householder living alone or exclusively with others to whomhe or she is not related.
1 U.S. Census Bureau definition of a household.
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The Nature of American HouseholdsThe Nature of American Households
Family and Nonfamily Households
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The Household Life CycleThe Household Life Cycle
1.1.People marriedPeople marriedby their earlyby their early
20s20s
2.2.Couple hadCouple had
severalseveralchildrenchildren
3.3.Their childrenTheir childrengrew up andgrew up andstarted theirstarted theirown familiesown families
6.6. A few years A few years
later the femalelater the femalewould diewould die
5.5.The maleThe male
wouldwouldeventually dieeventually die
4.4.The originalThe original
couple retiredcouple retired
The Traditional Family Life Cycle
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The Household Life CycleThe Household Life Cycle
American households follow much more complex andvaried cycles today. Therefore, researchers havedeveloped several models of the household lifecyclehousehold lifecycle(HLC)(HLC).
Each HLC stage presents unique needs and wants aswell as financial conditions and experiences.
HLCHLC provides marketers with relatively homogeneoushousehold segments that share similar needs withrespect to household-related problems and purchases.
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Household Life CycleHousehold Life Cycle
Young (18-34) unmarriedindividuals. In 2003, there wereroughly 66.5 million people in thisage group, with 69% of men and60% of women being single.
Single ISingle I is basically theunmarried members of theyounger Gen X and older Gen Y.
Great market for activities suchas going to to bars, movies, andconcerts.
Single I
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Household Life CycleHousehold Life Cycle
Decision to marry or live togetherbrings about a new HLC stage.
Most in this group have dual incomesand are relatively affluent.
Spend heavily on theater tickets,expensive clothes, luxury vacations,restaurant meals, and alcoholicbeverages.
Can afford nice cars, stylishapartments, and high-quality homeappliances.
Young Couples: No Children
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Household Life CycleHousehold Life Cycle
This stage yields new purchases of baby clothes, furniture,food, and health care products.
Full Nest I: Young Married with Children
Roughly 7% of households are young married couples withchildren. The addition of the first child creates manychanges in lifestyle and consumption.
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Household Life CycleHousehold Life Cycle
Income and expenditure change from childless to young child.Full Nest I: Young Married with Children (cont.)
-50
-40
-30
-20
-10
0
10
20
30
Income Food at
Home
Meals Out Alcoholic
Beaverages
Adult
Apparel
Health Care Pets & Toys Education Personal
Care
Products
Percent Change
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Household Life CycleHousehold Life Cycle
Birth or adoption by singles isincreasingly common. Roughly 1/3of children are born to unmarriedmothers.*
Divorce also continues to be asignificant part of American society.
This type of family situation createsmany unique needs in the areas ofchild care, easy-to-prepare foods,and recreation.
Single Parent I: Young Single Parents
*As many as 40% may actually be born to cohabiting unmarried parents.
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Household Life CycleHousehold Life Cycle
The middle-aged singlemiddle-aged single category (age 35 to 64) include nevermarried and divorced with no child-rearing responsibilities.
This group represented roughly 13.5 million households in 2003which is about 46% of all single-person households!
Middle-Aged Single
The middle-aged singlesmiddle-aged singles havehigher incomes than youngyoungsinglessingles.
Often live in nice condos, frequentexpensive restaurants, own luxurycars, travel often, and are a majormarket for gifts.
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Household Life CycleHousehold Life Cycle
Typically dual income and busy.
Spend on dining out, expensivevacations, second homes, luxurycards, time-saving services.
Prime market for financial servicesand upscale children’s products
About $35 billion/yr. spent ongrandchildren by baby boomers!.
Empty Nest I: Middle-Aged Married with No Children
Includes married couples whose children have left home, coupleswho chose to not have children, and second marriage householdsin which children are not living with the parent.
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Household Life CycleHousehold Life Cycle
Many baby boomersbaby boomers delayed having children until their mid-30s,resulting in a large number in this stage.
Major difference between this segment and the younger newparents is incomeincome.
Delayed Full Nest I:Older Married with Young Children
Spend heavily on child care,mortgage payments, homemaintenance, lawn care, andhousehold furnishings.
Want only the best for their childand willingwilling and ableable to pay for it.
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Household Life CycleHousehold Life Cycle
A major difference between thisgroup and delayed Full Nest IFull Nest I is theage of the children.
Children are generally over age 6 andare becoming more independent,creating new consumption needs.
Families with children age six + arethe primary consumers of lessons ofall types, dental care, soft drinks,presweetened cereals, and a widevariety of snacks.
Full Nest II:Middle-Aged Married with Children at Home
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Household Life CycleHousehold Life Cycle
This group often faces serious financial pressures. The singleparent often lacks some or all of the financial, emotional, andtime support that the presence of a spouse generally provides.
Single Parent II:Middle-Aged Single with Children at Home
This group is inclined to usetime-saving alternatives suchas ready-to-eat food, and eatat fast-food restaurants.
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Household Life CycleHousehold Life Cycle
There are about 10 million households inthis segment, and it is expected to growrapidly over the next 10 years as the BabyBoomers age.
Most couples in the over-64 age group areeither fully or partially retired.
The younger members are healthy, active,and often financially well-off.
They have ample time and are a big marketfor RVs, cruises, and second homes. Theyalso spend a lot of money on grandchildren.
Empty Nest II: Older Married Couples
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Household Life CycleHousehold Life Cycle
There are more than 15 millionolder singlesolder singles in the U.S., andthis group is growing rapidly.
Roughly 3/4 of all older singlesolder singlesare female and roughly 2/3 of allolder singlesolder singles live alone.
Being older, single, and generallyretired, this group has uniqueneeds for housing, socialization,travel and recreation.
Older Single
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Marketing Strategy Based on theMarketing Strategy Based on theHousehold Life CycleHousehold Life Cycle
HLCHLC can be an important segmentationsegmentation variable.
The purchase and consumption of many products aredriven by the HLC, with each stage posing uniqueproblems and opportunities.
The stage in the HLC causes many of the problems oropportunities individuals confront as they mature, but itdoes not provide solutions.
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Marketing Strategy Based on theMarketing Strategy Based on theHousehold Life CycleHousehold Life Cycle
Factors such as income, occupation, and educationheavily influence how an individual meets his/her needs.
So, it makes sense to combine stage in the HLC withone of these variables to aid in market segmentationand strategy formulation.
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Family Decision MakingFamily Decision Making
Family decision makingFamily decision making is the process by which decisionsthat directly or indirectly involve two or more family membersare made.
Family purchases are often compared to organizational buyingorganizational buyingdecisions. However, with family purchasing, there is usuallyless explicit criteria, and most family purchases directly affectthe other members of the family.
Most important, many family purchasesare inherently emotional and affect therelationships between the familymembers.
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Family Decision MakingFamily Decision Making
The Household Decision-Making Process for ChildrenThe Household Decision-Making Process for Children’’s Productss Products
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Family Decision MakingFamily Decision Making
Determinants of Family Purchase Roles
How families interact in a purchase decision is largelydependent on the
cultureculture and subculturesubculture in which the family exists
the role specializationrole specialization of different family members
the degree of involvementinvolvement each has in the product area ofconcern, and
their personal characteristicspersonal characteristics of the family members
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Family Decision MakingFamily Decision Making
Conclusions on Family Decision Making
Different family members are often involved atdifferent stages of the decision process.
Different family members often evaluate differentattributes of a product or brand.
The direct involvement of family members in eachstage of the decision process represents only a smallpart of the picture.
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Family Decision MakingFamily Decision Making
Conclusions on Family Decision Making (cont.)
Participants at each stage of the decision process andthe method by which conflicts are resolved areprimarily a function of the product category andsecondarily a function of the characteristics of theindividual family members and the family as a whole.
Overt conflicts in decision making are less commonthan agreement.
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Consumer SocializationConsumer Socialization
The family provides the basic framework in whichconsumer socialization occurs.
Consumer socializationConsumer socialization is the process by which youngpeople acquire skills, knowledge, and attitudes relevantto their functioning as consumers in the marketplace.
Must understand both the content and the process ofconsumer socializationconsumer socialization.
Consumer socializationConsumer socialization content refers to what children learnwith respect to consumption.
Consumer socializationConsumer socialization process refers to how they learn it.
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Consumer SocializationConsumer Socialization
Consist of three categories:
1.1. ConsumerConsumer skillsskills—are those capabilities necessary forpurchases to occur such as understanding money,budgeting, product evaluation, etc.
2.2. Consumption-related preferencesConsumption-related preferences—are the knowledge,attitudes, and values that cause people to attach differentialevaluations to products, brands, and retail outlets.
3.3. Consumption-relatedConsumption-related attitudesattitudes—are cognitive andaffective orientations toward marketplace stimuli such asadvertisements, salespeople, warranties, etc.
The Content of Consumer Socialization
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Consumer SocializationConsumer Socialization
Consumer socializationConsumer socialization occurs primarily through family, as wellas through a number of avenues including advertising and friends.Parents socialize their children through the following:
The Process of Consumer Socialization
1.1. Instrumental trainingInstrumental training—occurs when a parent or siblingspecifically and directly attempts to bring about certainresponses through reasoning or reinforcement.
2.2. ModelingModeling—occurs when a child learns appropriate, orinappropriate, consumption behaviors by observing others.
3.3. MediationMediation—occurs when a parent alters a child’s initialinterpretation of, or response to, a marketing or other stimulus.
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Marketing to ChildrenMarketing to Children
Children are a very large market. Spending by children aged5 – 14 is estimated at $35 billion, and they influence about$220 billion of their parents’ purchases!
However, marketing to children is fraught with ethicalconcerns, including:
The limited ability of younger children to processinformation and to make informed purchase decisions.
Marketing activities, particularly advertising, can produceundesirable values in children, resulting in inappropriatediets, and cause unhealthy levels of family conflict.
