How The Household or Family Influences Consumer Behaviour

• As discussed earlier, social class is an important influence on the behaviour of consumers within a household

• However, some researchers argue that the household itself is the most important unit of analysis for consumer behaviour because households make many more acquisition, consumption, and disposition decisions than individuals do.

Types of Households

• A family is usually defined as a group of individuals living together who are related by marriage, blood, or adoption

• The most typical unit is the nuclear family, consisting of a father, mother, and children• The extended family consists of cousins• Although the family is important almost everywhere in the world, some countries and cultures exhibit a stronger family orientation than others• In Japan and China, for example, the family is a

focal point, and most people feel a very strong sense of obligation to it

• Family in India is considered a social security blanket and the traditional mindset still follows the age old adage, ‘ the family which lives together, eats together’

• Though conventional family structures are breaking down and joint families are few in the urban towns, yet values, traditions and norms laid down by the family are inherently visible in the family members, even while staying in nuclear households

• The rural heartlands, however, present a contrasting picture of the family, where the cohesiveness and the intention to stay together is more visible

• Contrastingly, in the urban households the family is increasingly under pressure to disintegrate

• Increasing opportunities in urban metropolis and the lure of the amenities in the bigger towns are irrepressible for most households

• A study conducted in 2003, by JWT shortlisted 24 families from all over India- DINKs (Double Income No Kids) in Bangalore, affluent Punjabs in Lajpat Nagar, New Delhi, a middle class family from small town India (Bareilly), middle class family in

Mumbai, an MNC executive family, an extended family in Warangal, and so on• The JWT focused on anthropology issues and

spent seven-days with the family to watch their interplay

• The key issues that came out of the surveyed families were;

(i) The world in your home: The effects of consumerism and western lifestyle is

beginning to take its toll on households (ii) The head of the family: Earlier the father

was the unquestioned head of the family, a role which is now diluting and today the authoritarian approach is being replaced with managing of inter-personal relationships (iii) The importance of self: The aspect of “We”

to “Me” is gradually becoming the norm today in most households

(iv) Uncertainty: Retrenchment, lay-offs or a passing boom can affect confidence of

consumers

• However, joint families are still prevalent and well-suited to modern Indian, life, especially for the 67% of Indians who are farmers or agricultural workers or worn in related activities

• As in most primarily agricultural societies, few individuals can hope to achieve economic security without being a part of a cooperating group of kinsmen• The joint family is also common in cities, where

kinship ties can be crucial to obtaining scarce jobs or financial assistance

• Numerous prominent Indian families, such as the Tatas, Birlas, and Sarabhais, retain joint family arrangements even as they work together to

control some of the country’s largest financial empires

• However, the joint family structures in the urban and the rural areas are very different

• Most urban metropolis may have joint families, under a single roof, but they stay as separate

households, contrast to rural and suburban joint families, where the cohesiveness and a concept of single household still exists• Household is a broader term that includes a single

person living alone or a group of individuals who live together in a common dwelling, regardless of whether they are related

• This term includes cohabiting couples (an unmarried male and female living together), gay couples, and singles who are roommates

• Marketers and researchers are increasingly thinking in terms of households rather than families• Trends such as, later marriages, cohabitation,

divorce, dual careers, boomerang children, longer life, and a lower birth rate have greatly increased the proportion of nontraditional families

• In India, contrastingly, the concept of households is on the rise as joint families are crumbling and more so in bigger cities, where a large population migrates for job opportunities, higher studies,

specialized coaching or for preparation of competitive examinations • Today, there are localities earmarked as a hub

where such kind of households exists

• For instance, Ber Sarai or Katwaria Sarai in South Delhi are small localities nestled behind India’s finest engineering college, Indian Institute of

Technology- Delhi, and young boys from the remotest areas of India prepare for their Civil Services exams• Today as more and more girls are pursuing careers, they need to step out of their homes and at times even move to different cities• Paying Guest accommodations, especially, suited

to the requirements of the working girls or women are being created.

Family Life Cycle Stages

• The concept of household or family life cycle is important for marketers in segmenting the market

• In 1966, William Wells and George Gubar proposed eight stages to describe the family life cycle (“Life Cycle Concept in Marketing Research,” Journal of marketing Research, November 1966) • The following life cycle stages are typical of families:

1. The bachelor stage: Young, single persons under the age of 35 years. Incomes are generally low since they have started careers, but they may have few financial burdens and sufficient discretionary income

2. Newly married: Young couples, no children. If both spouses are employed, they will have high levels of discretionary income.

3. Full nest I: Young married couples with youngest child under 6 years of age. There would be greater squeeze on income because of increased expenses on

childcare. However, if they are members of a joint family, the level of discretionary income

is likely to be high

4. Full nest II: Young married couples with children from 6 years to 12 years of age. Better financial position because income of both parents is rising. Children spend more hours outside their parents’ influence

5. Full nest III: Older married couples with dependent teenage children living at home. Financial position of the family continues to improve. There are increasing costs of college education for children

6. Empty nest I: Older married couples with no children living with them, parents will still employed. Reduced expenses result in greater savings and highest discretionary income

7. Empty nest II: Older married couples with no children living with them and parents retired. Drop in income and couple relies on savings and fixed income from retirement benefits

8. Solitary survivor I: Older single persons with low income and increasing medical needs (widow or widower)

• Due to changes occurring in demography after 1980, researchers have suggested more

modernized family life cycle categories

• In the Indian context, these changes are visible among urban educated families

• Some types of households, such as unmarried couples living together are generally regarded with social disapproval, or married couples who

decided not having children are just a negligible percentage.

Example of non-traditional household life cycle categories:

Sequence I

• Young married couples with children

• Young divorced parent

• Single parent with older children

• Older, unmarried.

Sequence II

• Young divorced couple without children

• Middle-aged married couple without children

• Older married couple without children

Sequence III

• Young married couple with children

• Middle-aged divorced parent

• Middle-aged divorced parent with children and stepchildren

Sequence IV

• Young unmarried couple without children

• Middle-aged married couple without children

• Older married couple without children

• Widow• In sequence I, a young married couple with children gets divorced and one of the spouse never marries

• In sequence III, a couple gets divorced in middle age and one of the spouses remarries and

establishes a family with children and stepchildren• It is certain that there would be difference in buying

patterns if a divorced person is having children or not having children

• Similarly, there would be differences in buying patterns in case a person remarries or decides to stay single• Since the cases of divorce are on the increase, the

life cycle sequences proposed by Wells and Gubar are probably more important than the modernized family life cycle categories

• Research has revealed many differences in consumption patterns across family life cycle stages

• The concept of family life cycle can be usefully used to segment the market

• It is significantly related to food and beverage consumption, purchase of major and minor appliances and monetary value of family purchases of furniture, autos and entertainment electronics• Research indicates that household expenditures

are systematically related to the stage of life cycle• It is believed that family influence significantly affects the children’s consumer behaviour later as adults and children also have the opportunity to influence their parents’ consumption decisions, particularly the ageing parents

• The family is the primary socialization agent for each new generation and passes on attitudes, values and behaviour to children

• This is often referred to as ‘intergenerational transfer’• In the process of socialization, the new generation

acquires not only general social values and norms but also skills and knowledge that help them in becoming successful consumers in an increasingly complex market place

• Family influence helps us learn attitudes and preferences towards products and brands, choice of stores, meaning of marketing communications and price-quality-value judgments

• What is relevant to marketers is the extent to which this family influence passes over into consumers’ behaviour as adults• Such influences are likely to continue being exerted between parents and children as each generation ages, particularly among joint families.

Nature of Household or Family Purchases

• Much depends on income limitations coupled with family responsibilities

• These two factors influence many of the buying decisions of families

• A already pointed out, young bachelors as well as newly married young couples (assuming that both are employed) are quite likely to have significant discretionary income

• Young bachelors are more likely to spend money on clothes and entertainment etc., while newly married couples will spend more on furnishings, time-saving home appliances, TV and music systems etc. as

they are establishing their new household

• The pattern of purchases will change when they are blessed with children, wife may leave her job and their level of discretionary income will fall

• During the next two stages (Full Nest II and Full Nest III), the household financial position improves because husband draws a higher salary and wife returns to work, the children and teens are in

school and consumption patterns are heavily influenced by the requirements of children• The family replace many household items and also

buys new appliances• During the stage of Empty Nest, the discretionary

income of parents increases and they can afford to spend money on themselves such as luxury items and travel etc.

• In the later stages of Empty Nest and Solitary Survivor, parents are retired resulting in decreased income and increasing expenditures on medical bills• In case of non-traditional family lifecycle sequences, single parents are more likely to be females• In general, divorced women face significant decrease in their financial resources and this influences their buying patterns• Single parents are compelled to spend much less

time with children and sure likely to spend more money on day-care services for children and toys.

Marketing Implications

• Marketers are recognizing the importance of nontraditional households and developing offerings that cater to their unique needs• Products and services that offer convenience can be marketed specifically to dual-career and divorced households• Because more husbands from dual-career families and single or divorced men shop for groceries and other items, retailers are increasingly targeting men• Wives in dual-career households have more clout in expensive decisions, so marketers of costly products and services must appeal to both husband and wife

• Non-traditional families are also being targeted: Hallmark has developed greeting cards that deal with stepfamily and cohabitation relationships

• Single men and women, in particular, are an attractive target for many marketers• In Germany, Wal-Mart has had great success with

“Single Shopping” nights• Unmarried men and women wheel their shopping

carts down the aisles (alone or with their children) to meet other singles while passing displays of convenience products such as frozen dinners and displays of items that foster romance, such as wine and candles

• Wal-Mart reports that sales are up by 25% on singles nights.

Nature of Family Decision Making

• When two or more family members are directly of indirectly involved in the decision making process, it is called family decision making

• Such family decisions differ from individual decisions in many ways• For example, if we consider the purchase of a bicycle ? • How a brand is selected?• What role the concerned child plays?• Some family purchases are inherently emotional

and affect the relationships between family members

• The decision to buy a new dress, a toy, or a bicycle for the child is more than simply a routine purchase• It often might be an expression of love and commitment to the child• The decision to buy a new stereo system or television set has emotional meaning to others in the family • The root cause of many marital discords is often

related to spending the money• Joint decisions are more likely to operate in the

early stages of family life cycle when both spouses are relatively less experienced

• After gaining experience, they usually delegate responsibilities concerning buying decisions to each other

• When children enter the family scene, both husband and wife assume specific roles• The husband tends to be more influential in the

early stages of the life cycle, however, the wife is likely to become increasingly influential after a period of time, more so if she is employed and having some financial leverage over family buying decisions

• The influence of children on family decisions is more when they side with one of the parents

• We have already seen the different purchase roles: the initiator, the gatekeeper or information gatherer, the influencer, the decider, the buyer and the user (s)

• In many situations of family buying decisions, the primary product user is neither the decision maker nor the buyer

• For instance, in many families wives purchase most of the fragrances for their husbands

• Thus, marketers must be aware of different roles played by family members that influence the family buying decision process

• Fisher-Price puts its ads in Reader’s Digest to influence parents for toys that they buy for their children

• The first ad shows different sets of toys meant for children up to 1 Year plus age

• Parents make the buying decision and the actual users are very young children

• The second ad of Fisher-Price shows an older child who can influence the parents’ decision and may actually be present when the actual purchase is made

• As mentioned earlier, some family purchases, such as the toys for children are something more than the normal routine purchases and will most likely be laden with emotional overtones

• Families are quite likely to vary in their buying decision making depending on their stage in the life cycle• Consider this example of family decision making• Ramesh is a university teacher in a North Indian

state capital

• His wife expired two-years ago • The son Kunal is 16 and the daughter Sonam is 14• Ramesh is planning a fifteen-day holiday during

summer vacations • He could make the decision on his own, but wants

to involve his children in the decision making for three reasons

1. The decision is important to all of them

2. They have to consider the expenses and the importance of being together and having good time and finally

3. There is ample time because it is March and they would go in the month of May

• Ramesh informed the kids about the holiday• Both Kunal and Sonam were excited and started

collecting information• In the process they became aware about various

options such as Shimla, Mussorie, Goa, or Ooty• The real influences are children who specified the

alternatives • The decision maker will be the father because he

is head of the family and will make travel and hotel arrangements and controls the finances

• Ramesh contacts a friend who is a travel agent and easily makes the travel arrangements and hotel bookings

• There was a conflict between Kunal and Sonam

• Kunal wanted to go to Goa and Sonam was keen on Ooty

• Ramesh settled the conflict that they would go to Goa this year and Ooty the next year.

Family Decision Making for Children’s Products

Gatekeepers (Parents)

Initiators (Parents, Children)

Influencer(Children)

Communications

Communicationstargeting children

Decision Makers

(Parents)

Buyers (Parents)

Users(Children)

Joint Decision Roles

Initiator

(Need recognition)

Gatekeeper

(InformationSearch)

Influencer

(Evaluation of

alternatives

Decision Maker

(Decision to

Buy)

Buyer

(Purchase)

User

(Consump-tion&

Evaluation

Roles That Household Members Play

• In a multi-person household, members may perform a variety of tasks or roles in acquiring and consuming a product or service:

• Gatekeeper: Household members who collect and control information important to the decision

• Influencer: Household members who try to express their opinions and influence the decision

• Decider: The person or persons who actually determine which product or service will be chosen

• Buyer: The household member who physically acquires the product or service

• User: The household members who consume the product.

According to Jagdish N Seth, joint decision making is more likely under four conditions:

1. • When the level of perceived risk in buying is high

• This is likely when a wrong decision will affect the whole family

• A joint decision is likely to be taken under such circumstances to reduce the uncertainty and the risk

• For example, the purchase of a house for the family will most likely be a joint decision, as it would involve financial, social and psychological risk

• It is believed that joint decision making encourages the group to handle riskier decisions as every member of the group can share the blame if the decision made happens to be wrong

• This suggests that when husband and wife discuss the purchase issue of a house, they probably would buy a more expensive house than if either of them were to make the decision alone

• Arch G Woodside has reported that wives were more inclined to make riskier decisions for various products after joint discussion.

2. • When the buying decision is important to the household

• Purchase decision for low-involvement products are mostly made individually

• High-involvement items such as expensive appliances etc. are generally purchased in consultation with other family members

• Importance of most high-involvement decisions is generally related to some kind of perceived risk

• However, some decisions may be important without there being a risk worth consideration, such as whether to go on a 15-day vacation to Goa and enjoy the beaches for the third time in a row

• There is a possibility that children would like to go somewhere else for a change and may have ideas for some other vacation resort

• Consideration of this aspect is important for the parents but there is hardly any risk involved

3. • When there are few or no time pressures

• If there are time constraints, as is often the case in dual-income families, individual family members are inclined to make purchase decisions alone

• For example, since both spouses are employed they often experience time pressures and

frequently purchase products that otherwise might be purchased on a joint decision basis.

4. • Certain demographic factors encourage decision making

• Joint decisions are less likely among upper and lower socio-economic groups

• However, joint decision making is quite likely among middle income families

• Joint decisions are fairly common among younger families, particularly during the

first few years of marriage

• As long as the family does not have any children, joint decision making is more

likely

• Once children arrive, roles of spouses become more divided and the need for

joint decisions decreases

• If only one parent is employed, there are few time pressures and joint decision-making is more likely.

The Roles of Spouses

• Husbands and wives play different roles in making decisions, and the nature of their influence

depends on the offering and the couple’s relationship • In examining husband-wife influence, a landmark

study conducted in Belgium (and replicated in the United States) identified four major decision

categories:

1. A Husband-dominant decision: is made primarily by the male head-of-household (e.g., the purchase of lawn mowers and hardware)

2. A wife-dominant decision: is made primarily by the female head-of-household (e.g., children’s clothing, women’s clothing, groceries, and toiletries)

3. An autonomic decision: is equally likely to be made by the husband or the wife but not by both (e.g., men’s clothing, luggage, toys and games, sporting equipment, and cameras)

4. A syncretic decision: is made jointly by the husband and wife (e.g., vacations, refrigerators, TVs, living room furniture, financial planning services, and the family car.

• As spouses come closer to a final decision, the process tends to move toward syncratic decision making and away from the other three types,

particularly for more important decisions• These role structures are only generalities, however; the actual influence exerted depends on many factors• First, a spouse will have greater influence when

he or she brings higher financial resources to the family and he or she has a high level of

involvement in the decision• Second, demographic factors, such as total family

income, occupation, and education, are also related to the degree of husband-wife influence

• Combined, these factors provide a spouse with a perception of power in the decision-making

situation• The higher the degree of perceived power, the

more likely the spouse will exert influence• When the family has strong traditional sex-role

orientation, certain tasks are stereotypically considered either masculine or feminine, and more decisions tend to be husband dominated then in less traditional families• For example, Mexican American families tend to

have a strong traditional orientation and are characterized by more husband-wife decisions• Yet, sex-role changes, as noted earlier, are influencing husband-wife decisions

• In Thailand, for instance, nearly half of the husbands surveyed said they decided what foods their households would eat and that they did the family food shopping, traditionally considered the wife’s role• In the United States, joint decision making is most

common Anglo families; husband dominance is more likely in Japanese American families; and wife dominance is more prevalent in African

American families• Researchers have found support for the four major

patterns of spousal decision roles in a number of countries, although the United States, France, and the Netherlands exhibited a higher level of joint decision making than Venezuela and Gabon,

where autonomous decisions were more prevalent

• Other aspects of spousal decision making have also been studied• For example, Through the processes of bargaining (which involves a fair exchange) or concession (in which a spouse gives in on some points to get what he or she wants in other areas), couples tend to make equitable decisions that result from compromises• Couples do not typically follow a formal, systematic process for making decisions; instead, they use an informal process in which they have limited awareness of each other’s knowledge and decision strategy• Husbands and wives are generally not good at estimating their spouse’s influence and preferences, although each learns from the

outcome of previous decisions over time and tends to adjust decision behaviours accordingly

• Alternatively, the man’s role of being a patriarch in the family who was considered the supreme

guardian is now increasingly under pressure• As the woman of the house steps out to work, he

is stepping in to help in household chores• Looking after the children, cooking, household

shopping are some of the chores that the man in mats, the man’s status was god like and he was therefore, referred to as “Pati Parmeshwar”

• Today, his role is more defined as a pati and not parmeshwar, which means he is a more humane character that the family can relate to.

Husband-wife Influences

• Gender role preferences reflect culturally determined attitudes toward the role of

husband/wife and father/mother in the household • The relative influence of husband/wife or father/mother is likely to vary according to

1. The Nature Of Product

2. Nature Of Purchase Influence And

3. Family Characteristics

1. Nature of Product

• Traditionally, among different societies throughout the world, husbands are regarded as providers of material support and leadership authority within the family and wife is more likely to provide affection and moral support

• Husbands are viewed as dominant decision-makers for products such as financial services and automobiles etc.

• However, these roles have merged as an increasing number of wives have started going into employment and changes in family norms, particularly in urban areas

• Harry L Davis and Benny P Rigaux undertook a detailed study of husband/wife influences by

product category and classified products into four categories:

1. Products for which the influence of husband tends to dominate the decision making.

Such products include hardware, sports equipment, financial services and men’s shaving products etc.

2. Products for which the influence of wife tends to dominate the decision making.

Examples of such products are women’s clothing, toiletries, groceries, kitchenware and child clothing etc.

3. Products for which decisions are made by either the husband or the wife (autonomous decisions). These products may include women’s jewellery, toys and games, cameras and men’s casual clothing etc.

4. Products for which husband and wife make joint decisions. Examples of such products are refrigerators, furniture, TV sets, carpets, financial planning and family car etc. Earlier, the decisions about these products were viewed as relatively more husband dominated; however, joint decision making now reflects a greater influence of working wives

• These findings have several important implications for marketers

• If a product is husband or wife-dominant, or falls in a category where joint decision making is more likely, or the product is in autonomous category, then the ad messages and media selection have to be tailored accordingly

• The differences may require separate ad campaigns to appeals to both spouses may not prove to be as effective.

2. Nature of Purchase Influence

• The differentiation of roles is believed to result from small group interaction

• Leaders that emerge take up either instrumental roles or expressive roles

• Leaders taking up instrumental roles are concerned with tasks that help the group take decisions about its basic purpose or goal (also called functional or task leaders)

• For example, decisions on budgets, timing and product specifications would be task-oriented

• Leaders with expressive roles facilitate expression of group norms and provide the group with social and

emotional support in order to maintain intra-group cohesion such as design, colour and style, reflect group norms

• Historically, the instrumental role within family has typically been associated with husband and

expressive role with wife • Thus, men tend to be task-oriented leaders while

women lead in social-emotional behaviour• Husbands tend to be more concerned with functional product attributes and are inclined to exert more influence on the purchase decision• The wife is more concerned with the aesthetic

aspects of products and suggesting the purchase• These historical roles are undergoing some degree

of change and instrumental as well as expressive roles are becoming increasingly intermingled

between husband and wife as more wives are taking up employment• Working wives tend to be less inclined to accept

traditional homemaking tasks associated with expressive roles• Robert Ferber and Lucy Chao Lee (“Husband-Wife

Influence in family Purchasing behavour,” Journal of Consumer Research 1, June 1974) have

suggested that wife may be just as likely as the husband to fulfill certain instrumental roles such as payment of bills and keeping track of other family expenditures• This is an instrumental rather than expressive role

as it concerns budgetary aspects

Family Characteristics

• The third reason for variation in relative influence of husband/wife relates to family characteristics

• Though husband and wife tend to dominate decisions for certain product categories, the degree of their dominance may vary within different families• In case of patriarchal families (father is considered

the dominant member), husband dominates decisions irrespective of the product category under purchase consideration• In matriarchal families (mother is the dominant

member), wife plays the dominant role and tends to make most of the decisions

• Research shows that the influence of husband will generally be more in making purchase decisions than wife when:

1. Husband’s level of education is higher than his wife

2. Husband’s income and occupation status are higher than wife’s

3. His wife is not employed

4. The couple is young and at an earlier stage of family life cycle

5. If the couple has a greater than average number of children• In case of these conditions favour the wife, that is, she is more educated, is employed with higher income and status etc., then the opposite would be true

• The husband-dominant family profile indicates a typical conservative family with traditional values and attitudes toward the roles of father and mother

• In families where women are less educated and unemployed and husband has higher income

giving him financial power, generally the family would be conservative and more traditional values prevail• Increasing levels of education among women,

emphasis on equal opportunities and entry of more and more women in jobs is having an impact on shifts in husband/wife roles

• Products and services, which were mostly considered the exclusive domain of male family heads are now being advertised for house ladies

• Marketers are increasingly targeting wives for their instrumental roles in family decision making

• The current trends strongly indicate that shift in husband/wife roles in family decision making will become widespread in times to come.

Parent-child Influences

• Children are playing an increasingly important part in family decision making• No sooner do they posses the basic communication

skills needed to interact with parents and other family members, they start their “I want this campaign”

• In the context of consumer behaviour, parent-child relationship is viewed as a situation of influence and yield• Children strive to influence parents to buy something and parents yield to their demand• Older children with greater media exposure are more

likely to directly influence decisions concerning purchase of food items, personal care and beauty products, TV, stereo and computer etc.

• Dual-income households foster greater self-reliance among children• As a result of this, they are likely to influence decisions for products that the whole family consumes• It is generally believed that children rely more on

parents for norms and values as long as they are younger and, subsequently, on their peer group as they grow older.