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Family Decision Making

Notes Prepared by: Joel Peter Lobo, (MBA SJEC, 2008-10)


The expanding role of children in family decision making

Over the past several decades, there has been a trend toward children playing a more active role in what the family buys, as well as in the family decision making process. This shift in influence has occurred as a result of families having fewer children, more dual income couples who can afford to permit their children to make greater number of the choices. Also the single parent households often push their children toward household participation and self reliance. For example kids in supermarkets with a parent make an average of 15 requests, of which about half are typically granted. The table shows some of the tactics employed by children to influence their parents.
Tactics used by children to influence their parents
Pressure tactics               
The child makes demand  uses threats, or intimidation to persuade you to comply with his /her request
Upward appeal
The child seeks to persuade you, saying that the request was approved or supported by an older member of the family, a teacher, or a family friend
Exchange tactics
The child makes an explicit or implicit promise to give you some sort of service such as washing the car in return for the favour
Coalition tactics
The child seeks the aid of others to persuade you to comply with his /her request or uses the support of others as an argument for you to agree with him/her
Ingratiating tactics
The child seeks to get you in a good mood or think favourably of him or her before asking you to comply with a request.
Rational persuasion
The child uses logical arguments and factual evidence to persuade you to agree with his/her request
Inspirational appeals
The child makes an emotional appeal or proposal that arouses enthusiasm by appealing to your values and ideas
Consultation tactics
The chid seeks your involvement in making a decision
There is also research evidence supporting the notion that the extent to which children influence a family’s purchases is related to family communication patterns. Teenagers  who spend considerable time on the internet and know how to search for and find information and respond to requests from others to provide information. It has been shown that teen internet mavens contribute significantly to the family’s decision making.

The family life cycle
Sociologists and consumer researchers have long been attracted to the concept of the family life cycle (FLC) as a means of depicting what was once a rather steady and predictable series of stages through which most families progressed. However, with the advent of many diverse family and lifestyle arrangements, what was the rule has been on the decline. This decline in the percentage of families that progress through a traditional FLC seems to be caused by a host of societal factors, including a increasing divorce rate, the explosive number of out of wedlock births, and the 35 year decline in the number of extended families that transpired as many young families moved to advance their job and career opportunities.
FLC analysis enables marketers to segment families in terms of a series of stages spanning the life course of a family unit. The FLC is a composite variable created by systematically combining such commonly used demographic variables as marital status, size of family, age of family members and employment status of the head of household. The ages of the parents and the relative amount of disposable income usually are inferred from the stage in the family life cycle.
FLC concept is divided into two sections. The first section considers the traditional FLC schema. This model is increasingly being challenged because it fails to account for various important family living arrangements. To rectify these limitations, the second section focuses on alternative FLC stages, including increasingly important non-traditional family structures.
Traditional Family Lifecycle
The traditional family life cycle is a progression of stages through which many families pass, starting with bachelorhood, moving on to marriage, then to family growth, to family contraction, and ending with the dissolution of the basic unit. The traditional FLC models proposed over the years can be synthesized into just five basic stages, as follows.
Stage I: Bachelorhood – young singles adult living apart from parents
Stage II: Honeymooners – young married couple
Stage III: Parenthood – married couple with at least one child living at home
Stage IV: Post parenthood- an older married couple with no children living at home
Stage V:  Dissolution – one surviving spouse
Stage I: bachelorhood
The first FLC stage consists of young single men and women who have established households apart from their parents. Although most members of this FLC stage are employed, many are college or graduate students who have left their parents’ home. Young single adults are apt to spend their incomes on rent, basic home furnishings, the purchase and maintenance of automobiles etc. They have sufficient disposable income. Marketers target singles for a wide variety of products and services. In cities there are travel agents, housing development, health clubs sport clubs, and other service and product marketers that find this FLC stage lucrative target niche.
Stage II: honeymooners
The honeymoon stage starts immediately after the marriage vows are taken and generally continues until the arrival of the couple’s first child. This FLC stage serves as a period of adjustment to married life. Because many young husbands and wives both work , these couples have available a combined income that often permits a lifestyle that provides them with the opportunities of more indulgent purchasing of possessions or allows them to save or invest heir extra income. Honeymooners have considerable start up expenses in establishing a new home.
Stage III: parenthood
When a couple has it first child, the honeymoon is considered over. The parenthood stage usually extends over more than a 20 year period. Because of its long duration, this stage can be divided into shorter phases the preschool phase, the elementary school phase, the high school phase and the college phase. Throughout these parenthood phases, the interrelationships of family members and the structure of the family gradually change. Furthermore, the financial resource of the family change significantly, as one parents progress in a career and as child rearing and educational responsibilities gradually increase and finally decreases as children become self supporting.
Stage IV: post parenthood
Because parenthood extends over many years it is only natural to find that post parenthood when all the children have left home, is traumatic for some parents and liberating for others. This so called empty nest stage signifies for many parents almost a rebirth, a time for doing all the things they could not do while the children were at home and they had to worry about soaring educational expenses.
It is during this stage that married couples tend to be most comfortable financially. Today’s empty nester has more leisure time. They travel more frequently, take extended vacations, and are likely to purchase a second home in a warmer climate. They have higher disposable incomes because of savings and investments and they have fewer expenses.
Stage V: dissolution
Dissolution of the family unit occurs with the death of one spouse. When the surviving spouse is in good health, is working or has adequate savings, and has supportive family and friends, the adjustment is easier. The surviving spouse often tends to follow a more economical lifestyle. Many surviving spouses seek each other out for companionship; others enter into second marriages.
Marketing and the traditional FLC
Traditional family life cycle concept indicated the types of products and services that a household or family might be most interested in at each stage; it is also possible to trace how the FLC concept impacts a single product or service over time.
Modifications –the non-traditional FLC
The traditional FLC model has lost its ability to fully represent the progression of stages through which current family and lifestyle arrangements move. To compensate for these limitations, consumer researchers have been attempting to search out expanded FLC models that better reflect diversity of family and lifestyle arrangements. Figure presents an FLC model that depicts along the main horizontal row the stages of the traditional FLC and above and below the main horizontal row are selected alternative FLC stages that account for some important non-traditional family households that marketers are increasingly targeting. The underlying socio demographic forces that drive this expanded FLC model include divorce and later marriages, with and without the presence of children. Greater reality is provided by this modified FLC model, it only recognizes families that started in marriage, ignoring such single-parent households as unwed mothers and families formed because a single person or single persons adopt a child.




Non traditional FLC stages
The table presents an extensive categorization of non-traditional FLC stages that are derived from the dynamic socio demographic forces operating during the past 30 years or so. These non traditional stages include not only family households but also nonfamily households: those consisting of a single individual and those consisting of two or more unrelated individuals. At one time, nonfamily households were so uncommon that it was not really important whether they considered or not.
Noteworthy Non traditional FLC stage
Alternative family stages and definition
Childless couples
It is increasingly acceptable for married couples to elect not to have children. Contributing forces are more career oriented married women and delayed marriages
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 non 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’.
Single parent I
High divorce rates (about 50 percent ) contribute to a portion of single parent households
Single parent II
Young man or woman who has one or more children out of wedlock
Single parent 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 return home to parents. Frail elderly parents who move in with children. Newlyweds living with in-laws.
Non Family Households
Unmarried couples
Increased acceptance  heterosexual and homosexual couples
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.
Widowed persons (most are elderly)
Longer life expectancy, especially for women, means more over 75 single person households.

Consumption in non traditional families
When households undergo status changes (divorce, temporary retirement, a new person moving into the households, or the death of a spouse), they often undergo spontaneous changes in consumption related preference s and thus become attractive targets for many marketers. For example, divorce often requires that one (or both) former spouses find a new residence, get new telephones, buy new furniture, and perhaps find a job.
In another sphere, the substantial increase in dual income households has also tended to muddy the lifestyle assumptions implicit in the traditional FLC. Most dual income families have children. The most affluent dual income segment is not surprisingly, the crowded nesters. This dual income couple with an adult child living at home has the advantage of an additional potential source of income to contribute to the general well being of the household.


Bibliography
1)      Consumer  Behaviour
Leon Schiffman
Lesslie Lazar Kanuk
Pearson/PHI,8e
2)      Consumer Behaviour
Satish k Batra
S H H Kazmi,
Excel Books  




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