Chapter 1

Chapter 1

Chapter 13 The Family and Generational Cohorts The Family and Generational Cohorts The family The Census Bureau defines family as: Two or more persons, related by blood, marriage, or adoption who reside together In the US today, 70% of the approximately 100 million households are families

Although all families are households, not all households are families Despite changes, the family remains the central institution in providing for the welfare of its members Types of families 1. 2. 3. In Western society, three types of families dominate: Married couples Nuclear families Extended families

Single-parent families are increasing in number due to divorce and out-of-wedlock births In other cultures, different types of families dominate Consumer socialization of children Process by which children acquire the skills, knowledge and attitudes necessary to function as consumers (consumption skills or consumer behavior norms) Preadolescents acquire skills by observing parents and older siblings Adolescents and teens more likely to see friends and peers as role models

Family consumption roles Individuals in each family are the key decision makers Marketers need to know who in the family makes decisions in order to know whom to target Buying roles have changed significantly in recent times Eight roles in the family decision-making process 1. 2. 3.

4. 5. 6. 7. 8. Influencers Gatekeepers Deciders Buyers Preparers Users Maintainers Disposers Number and identity of family members who

fill these roles varies from family to family and from product to product Roles vary based on culture as well Marketers need to know which family members make which decisions in order to develop effective marketing strategies The family decision process 1. 2. 3. 4. Research identifies four categories of decision patterns: Husband-dominated Wife-dominated Autonomic--each spouse makes an

independent decision about half the time Syncratic--decisions are made jointly Figure 10.10 Husband-Wife Influence in Financial Tasks and Decisions Choice of Type of Inv estment Choice of Institution for Cetificate of Deposit Down Payment on a Large Purchase Insurance for Husband Allocation of Funds for Savings Financing of Large Purhcase Insurance for W ife Monthly Expense Budget Gifts to Charities 0 Husband-dominated 10 20

30 Equal partnership 40 50 60 70 Wife-dominated 80 90 100

The family life cycle (FLC) A steady and predictable (at one time) series of stages that most families progress through FLC analysis enables marketers to segment families in terms of their current stage At each stage there are differences in earning power and unique needs and demands placed on family resources Traditional family life cycle 1. 2. 3. 4.

5. Divided into five stages Bachelorhood Honeymooner Parenthood Post-parenthood Dissolution Nontraditional FLC stages Family households: Childless couples Couples who marry later in life Couples who have children later in life Single parents I (divorced) Single parents II (child out of wedlock) Single parents III (adoption) Extended family (adult children return home or elderly parents move in)

Non-family households Unmarried couples (heterosexual or homosexual) Divorced persons (no children) Single persons (most are young) Widowed persons (most are elderly) Consumption in nontraditional families 1. 2. 3. When households undergo status changes, they often undergo spontaneous changes in consumption-related preferences and thus

become attractive targets for many marketers Divorce Boomerang kids Latchkey kids Generational marketing As we have seen, age is one method to segment and target a market As consumers age, their preferences and their access to resources change Age-related life transitions create demand for specialized goods and services Age cohorts

Age also has meaning in terms of common experiences shared with others Groups of people who have grown up during specific time periods and share experiences, memories and symbols that translate into similar preference patterns The depression cohort Born 1912-1921

Depression years remain the defining moment Risk averse Frugal Avoid debt Invest only in safest investment vehicles (e.g., government bonds) World war II cohort Born between 1922 and 1927 WWII is the defining moment of this generation Also influenced by the depression

Financially conservative Risk averse Housing and health issues are important Baby boomers Individuals born between 1946 and 1964 Huge segment: 40% of adult population in the US Highly educated and thus affluent Represent 50% of those in professional and managerial occupations Represent more than 50% of those with a college degree or higher

Consumer characteristics of boomers Tend to be consumption-oriented Willing to borrow to support life style Socially conscious and willing to spend extra for environmentally-friendly products Yuppies are a small but highly sought-after segment of this market Well off financially, well educated and in professional fields

Often associated with expensive brand names As they age, shifting attention to physical fitness and travel Generation X (busters or slackers) People born (approximately) between 1965 and 1977 46 million in the US 21% of total population of US Children of divorce, day care and latchkeys Politically conservative with a whats in it for

me attitude Many continue to live at home into their 20s and find good jobs hard to come by Marketing to Gen-Xers Newspaper advertising isnt effective The MTV generation MTV Fox television Comedy Central E! Teens (Generation Y)

Substantial segment of the population in the US and abroad Enjoy enormous discretionary purchasing power Increasingly market savvy and involved with consumer culture As rate of single- and working-parent families increases, teens increasingly become primary shoppers for families Regularly go through rapid periods of physical, mental, social and emotional changes, generating rapidly evolving physical, self-expression and selfrealization needs Children (Millenials and

Generation Y) Children represent considerable market opportunities for those who can meet their distinct needs and cognitive competencies Greatest expenditures are in: Food and beverages (including sugared cereals) Entertainment (toys, games, movies, music) Clothing Average child sees approximately 20,000 television commercials a year Children as young as three recognize heavily

advertised cartoon characters; this recognition produces positive attitudes toward products associated with these characters Children are very brand conscious Table 10.4 Noteworthy Nontraditional FLC Stages Alternative FLC Stages Family Households Childless couples Definition/Commentary Couples who marry later in life (in their late 30s or later) More career-oriented men and women and greater occurrence of couples living together. Likely to have fewer or even no children.

Couples who have first child later in life (in their late 30s or later) Likely to have fewer children. Stress quality lifestyle: Only the best is good enough It is increasingly acceptable for married couples to elect not to have children. Contributing forces are more career-oriented married women and delayed marriages. Table 10.4 continued Alternative FLC Stages Family Households Single parents I Definition/Commentary Single parents II

Young man or woman who has one or more children out of wedlock. Single parents III A single person who adopts one or more children. Extended family Young single-adult children who return home to avoid the expenses of living alone while establishing their careers. Divorced daughter or son and grandchild(ren) return home to parents. Frail elderly parents who move in with children. Newlyweds living with in-laws. High divorce rates (about 50%) contribute to a portion of single-parent households Table 10.4 continued

Alternative FLC Stages Nonfamily Households Unmarried couples Definition/Commentary Divorced persons (no children) High divorce rate contributes to dissolution of households before children are born. Single persons (most are young) Primarily a result of delaying first marriage; also, men and women who never marry. Increased acceptance of heterosexual and homosexual couples.

Widowed persons (most are Longer life expectancy, especially for women; elderly) means more over-75 single-person households. Table 10.5 continued Number of household by type in 1996 Distribution of Households by type ALL HOUSEHOLDS 101,018 100.0% NONFAMILY HOUSEHOLDS 30,777

Living alone 25402 Female householders 14,861 14.7 Male householders 10,442 10.3 Living with others 5,375 Female householders

2,110 2.1 Male householders 3,266 3.2 25.1 5.3 30.5

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