Chapter

HOUSEHOLD DECISION-MAKING

Family Life Cycle Stages

The concept of household or family life cycle is important for marketers in segmenting the market. The following life cycle stages are typical of families: 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. Newly married: Young couples, no children. If both spouses are employed, they will have high levels of discretionary income. Full nest : 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. Empty nest : Older married couples with no children living with them, parents still employed. Reduced expenses result in greater savings and highest discretionary income.

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Examples of non-traditional household life cycle categories: Sequence I 1. Young married couples with children 2. Single parent with older children 3. Older, unmarried Sequence II 1. Young divorced couple without children 2. Middle-aged married couple without children 3. Older married couple without children. Sequence III 1. Young married couple with children 2. Middle-aged divorced parent 3. Middle-aged married parent with children and stepchildren. Sequence IV 1. Young unmarried couple without children 2. Middle-aged married couple without children 3. Older married couple without children

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. As 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 system etc. as they are establishing their new household. The family replaces many household items and also buys new appliances. 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 are likely to spend more money on day-care services for children and toys.

Nature of Family Decision-Making

When two or more family members are directly or 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 for a child, some of the relevant aspects to think about can be: who recognises the need for 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.

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Family Decision-making for Children

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According to Jagdish N. Sheth, joint decision-making is more likely under four conditions: 1. 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 risks.
Joint Decision Roles
Initiator (Need recognition)1 & evaluation) Gatekeeper (Information search) Influencer (Evaluation of alternatives) to buy) Decision maker Buyer (Purchase) (Decision User (Consumption

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2. When the buying decision is important to the household. Purchase decisions for low-involvement products are mostly made individually. Highinvolvement 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. 3. i. Certain demographic factors encourage joint 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.
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ii. iii.

iv.

Resolving Conflict Conflict is likely to arise when two or more people are involved in decisionmaking regarding purchase objectives, attitudes of participants towards alternative brands and the choice of most appropriate alternative. 'Conflict', in case of family decision-making refers to divergence or disagreement, whether implicit or explicit, between members on the rationale or outcome of a decision. For example, there may be conflict between the spouses over the issue of family planning, purchase of a car, or house. According to Harry L. Davis, to avoid conflict, households usually engage in problem solving through discussion and compromise to reach a consensus, or there may be consensus and the household may opt for an individual decision instead of a joint decision. For example, there may be consensus that the father or the mother will make the purchase decision.
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William J. Qualls has suggested six influence strategies to resolve conflict: 1. 2. Expert: A spouse might attempt to influence the other by using her/his superior expertise about decision alternatives. Legitimate: A spouse might attempt to influence the other on the basis of her/his position in the household.

3. Bargaining: A spouse might attempt to influence the other now and reciprocate the influence at some future date. 4. 5. 6. Reward: A spouse might attempt to influence the other by offering a reward so that the other concede. Emotional: A spouse might attempt to influence the other by showing an emotional reaction. Impression management:

i. Use of punishments, threats, authority and negative emotions: Such strategies focused on refusing to do chores, behaving angrily, threatening punishment and making it clear that the spouse had no right to disagree.

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ii.

Use of positive emotion and subtle manipulation: These strategies included mutual for

putting the spouse in a more receptive frame of mind, appealing to love and affection and promising something attractive in exchange agreeing. iii.

Use withdrawal and egocentrism: The spouse withdraws affection, exhibits

coldness in relationship and looks hurt. iv. Use of persuasion and reason: This strategy refers to use of reasoning, or persistence to convince the other to change the viewpoint.

Husband-wife Influences
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., while wives are regarded as decision makers for foods, toiletries and small appliances 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.

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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 decisionmaking. Such products include hardware, sports equipment, financial services and men's shaving products etc. Products for which the influence of wife tends to dominate the decisionmaking. Examples of such products are women's clothing, toiletries, groceries, kitchenware and child clothing etc. Products for which decisions are made by either the husband or the wife (autonomous decisions). These products may include women's jewelry, toys and games, cameras and men's casual clothing etc. 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.

2.

3.

4.

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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.

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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. Research shows that the influence of the husband will generally be more in making purchase decisions than wife when: 1. 2. 3. 4. 5. Husband's level of education is higher than his wife. Husband's income and occupational status are higher than wife's. His wife is not employed. The couple is young and at an earlier stage of family life cycle. If the couple has a greater than average number of children.
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(a) Targeting wives for instrumental roles

(b) Targeting husbands for non-traditional roles

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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.
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Consumer Socialisation of Children The family provides the basic framework in which consumer socialisation takes place. Television may also be instrumental in exerting persuasive influence on what children see and how they react to certain brands. Scott Ward has defined consumer socialisation as the process by which young people acquire skills, knowledge and attitudes relevant to their functioning as consumers in the marketplace. Learning is a lifelong process and includes acquisition of consumption-related knowledge as well. The quantity and nature of what children learn before they are about 18 years of age is important. Consumer learning can be usefully categorised as directly relevant and indirectly relevant. Directly relevant learning refers to those aspects that lead to actual purchase and use. For example, a child has to learn certain skills such as how to shop, compare brands and budget the available money etc. Examples of directly relevant consumer learning content are: knowledge and attitude about shops or stores, products, brands, advertising, salespeople and various sales promotions Cont. etc.

Methods of Socialisation Stage I. Observing (average age - 6 months): Parents begin taking children with them to stores. In this stage children make sensory contact with the market place and construct mental images of marketplace objects and symbols. Stage II. Making requests (average age - 2 years): Children have learned quite a few things, TV commercials also serve as meaningful stimulus and they begin to make requests for desired things that they see in store. They use pointing and gesturing or some even may make statements to indicate that they want some item. Stage III. Making selections (average age - 3 years): Children begin developing memory for retail store locations for certain products and are able to locate and pick satisfying products by themselves. Stage IV. Making assisted purchases (average age - 5 years): Most children learn by observing that money needs to be given to stores people to get things. This helps them learn to value money given to them as a means to acquire things from a store.
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Stage

V.

Making

independent

Children 7 - 11 year old are able to handle money

purchases (average age - 8 years): Most children remain in stage IV a long time before their parents allow them to move to stage V when they start buying things on their own without parental assistance. They gain a better understanding of money and convince parents that they are capable of making correct purchases without their assistance.
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The Swiss psychologist, Jean Piaget, has mentioned four stages of cognitive development in children: Age 0-2 years: During this period, children primarily display muscular movement and do not yet "think" conceptually. Age 3-7 years: This is a preoperational stage in which cognitive structure is poorly organised and the child is developing language skills. Parents may allow some limited purchases with their assistance, such as ice cream, toffees, or cold drinks etc. Age 8-11 years: Children of this age group are in concrete operational stage and in the process of developing more complex abilities, such as some application of logical thought to real problems. Age 12-15 years: In this stage, the ability of children to think in abstract terms and associate concepts and ideas is more developed. They are capable of making more thoughtful and balanced decisions about a wide range of products.
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Parents' Role in Consumer Socialisation Les Carlson and Sanford Grossbart have identified four types of parents in their study of parents' role in children's socialisation. 1. Authoritarian Parents: Such parents tend to exercise a high degree of control over their children and expect total obedience from them. They attempt to protect children from outside influences. 2. Neglecting Parents: Parents of this type do not show much concern for their children and neglect them. They show little concern in controlling the children or encouraging their capabilities. 3. Democratic Parents: Parents with this approach encourage a balance between their own and children's rights and encourage children's selfexpression. They are warm and supportive; expect mature behaviour from children and value autonomy. 4. Permissive Parents: Such parents believe in as much freedom as possible for children without putting their safety in jeopardy. Their thinking is that children have rights equal to adults, but unlike adults, have no responsibilities.
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Influence of Children in Purchasing Process As a result of increasing numbers of working parents, much responsibility for shopping has been shifted to teenagers. Teenage girls not only help in shopping but also spend time in preparing meals at home for the family. Teenagers also have a say in family decisions for cars, TV sets, computers and family vacations. Sharon E. Beatty and Salil Talpade have reported that teenagers exert most influence when: 1. They have more perceived knowledge of the product: It is not unusual for teenagers to possess more knowledge than parents about certain types of products such as cellular phones, and computers etc. They consider the product to be important: If teenagers view a product as more important to them, they are more likely to exert influence on family purchasing decision. They have more purchasing power: In case the teenager's purchasing power is greater, parents are more likely to respect her/his opinion about purchasing a product.

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Discussions