Chapter 10

Household Decision Making

12-2

Decision Roles

In collective decisions, one may play any (or all) of the following roles:

• Initiator: bring up idea or identifies need

• Gatekeeper: conducts information search and “presents” information to other decision-makers

• Influencer: sways outcome of decision

• Buyer: actually makes the purchase

• User: winds up using product

12-3

The Modern Family

• Before 1900s: extended family

• 1950s: nuclear family (mother, father, and children)

• Today:• Married couples constitute less than

50% of households• Majority of adult women live without

spouse• Unmarried opposite sex couples (co-

habitation) is 10-15% of all couples• Same-sex couples• Friends, workers and SM/Web are the

“new family”

12-4

Family Size

• Depends on educational level, availability of birth control, and religious influences

• Marketers keep an eye on fertility and birth rates• Worldwide, women want smaller families (especially

in industrialized countries)• Contraception/abortion are more readily available• Divorce is more common• Older people now pursue “non-grandchildren”

activities (i.e. travel, education, work)• Some countries want people to have more

children (Europe)

12-5

Sandwich Generation

• Sandwich generation: middle-aged adults who care for their parents as well as their own children

• Boomerang kids: adult children who return to live with their parents• Roommates and “failed-

relationship” kids are most likely to boomerang

• Spend less on household items and more on entertainment

12-6

Pets as Family Members

• Pets are treated like family members

• Spending on pets has doubled in the last decade

• Pet Owner Psychology and Characteristics

• Pet-smart marketing strategies:• Name-brand pet products• Designer water for dogs• Lavish kennel clubs, gyms, pet classes/clothiers• Pet accessories in cars• Pet Therapists

12-7

Family Life Cycle

• Factors that determine how couples spend money:• Whether they have children• Age of children; whether at home or

emancipated• Whether the partner works• Family Lifestyles and attitudes towards money• Life Stage of family members

12-8

Life-Cycle Effects on Buying

Life Cycle stages can show marked differences in consumption patterns:

• Young bachelors and newlyweds: exercise, go to bars/concerts/movies

• Early 20s: apparel, electronics, gas expenditures high

• Families with young children: health foods

• Single parents/older children: junk foods

• Newlyweds and New Home Owners: appliances, furniture

• Older couples/bachelors: home maintenance/re-modeling services, travel, “edutainment”, insurance

12-9

Household Decisions

Families make two types of decisions:

• Consensual purchase decisions: members agree on the desired purchase, perhaps differing only in terms of how it will be achieved

• Accommodative purchase decision: members have different preferences or priorities and they cannot agree on a purchase to satisfy the minimum expectations of all involved • Frequently result in multi-laterally unwanted

compromises or no decision at all

12-10

Household Decisions (cont.)

Specific factors that determine how much family decision conflict there will be when making “joint” decisions:

• Interpersonal need

• Product involvement and utility

• Responsibility for ownership and/or payment

• Relationship power

12-11

Sex Roles and Decision-making Responsibilities

Who makes key decisions in a family?

• Autonomic decisions: when one family member makes decisions for the family• Wives still make decisions on groceries, toys,

clothes, and medicines

• Syncretic decisions: when both partners “jointly” make decisions• Typically happens with cars, vacations, homes,

appliances, furniture, home electronics, interior design, phone service

• Increases with education and household income increases

12-12

Identifying the Decision Maker

“Family Financial Officer (FFO)”• Traditional family norm: the man makes the money

and the woman spends it• Modern family norm: either partner can make

money; either partner can spend money

Four factors in joint versus sole decision making:• Adherence to sex-role stereotypes• Comparative spousal resources• Experience with purchase• Socioeconomic status

12-13

LeoShe Mother Types

• June Cleaver: traditional, stay-at-home mom

• Tug of War: work but not happy about it

• Strong Shoulders: lower income but optimistic and strong

• Mother of Invention: enjoy working and being mothers

12-14

Heuristics in Joint Decision Making

• Synoptic Ideal: Husband and wife take a common view and act as joint decision makers

• Heuristics simplify or encourage decision making:• Agree on salient, objective dimensions; different

opinions on less salient/objective dimensions• Task specialization• Concessions based on intensity of each spouse’s

preferences (bargaining process)• Trade away lower value outcomes for higher

value outcomes

12-15

Children as Decision Makers

Children make up three distinct markets:

• Primary market: kids spend their own money

• Influence market: parents buy what their kids tell them to buy (parental yielding)

• Future market: kids “grow up” quickly and purchase items that normally adults purchase (smartphones, laundry detergent)

12-16

Consumer Socialization

• Consumer socialization: process by which young people acquire skills, knowledge, and attitudes relevant to their functioning in the marketplace

• Occurs at different rates in different cultures

• Children’s purchasing behavior is influenced by:• Parents• Television and web (“electronic babysitters”)• Sex roles• Peers• Teachers

12-17

Cognitive Development

• Marketers segment children by their stage of Cognitive Development• ability to comprehend concepts of increasing

complexity

• Three segments often used today:• Limited: Below age 6, children do not use

storage and retrieval strategies• Cued: Between ages 6 and 12, children use these

strategies, but only when prompted• Strategic: Children age 12 and older

spontaneously employ storage and retrieval strategies

Five Stages of Consumer Development

Parental Styles for Socializing Children

Authoritarian

Neglecting

Indulgent

Marketing Research and Children

• Kids tend to:• Be undependable reporters of own behavior• Have poor recall• Be flippant • Be overly influenced by other kids• Not understand abstract questions