Chapter 13 Household S tructure and Consumption B ehaviour

1. Chapter 13 Household Structure and Consumption Behaviour • Nature of Australian households • Stages in the household life cycle • Households also undertake purchase-related decision making • The link between household and consumer socialisation • Trends relating to household consumption Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a Consumer Behaviour 4e by Neal, Quester, Hawkins

2. Types of Households • Household designates a variety of distinct social groups • Family household • two or more related persons, who live and eat in private residential accommodation • Non-family household • householders who either live alone or with others to whom they are not related Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a Consumer Behaviour 4e by Neal, Quester, Hawkins

3. Influence of Household Consumption on Marketing Strategy

4. Changes in Household Structure(the average size of household and family units)

5. Young (under 35) Single I young married full nest I single parent I Middle-aged (35–64) Single II delayed full nest II full nest II single parent II empty nest I Older (over 64) single III empty nest II Household Life Cycle Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a Consumer Behaviour 4e by Neal, Quester, Hawkins

6. Stages in the Household Life Cycle

7. Young Single Stage • Two subgroups • Living at home • Independent Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a Consumer Behaviour 4e by Neal, Quester, Hawkins

8. Young Married: No Children Stage • High level of disposable income • Often DINKs Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a Consumer Behaviour 4e by Neal, Quester, Hawkins

9. Full Nest I: Young Married with Children Stage • One partner stops working • About 61% keep dual income Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a Consumer Behaviour 4e by Neal, Quester, Hawkins

10. Single Parent I: Young Solo Parent Stage • One in four marriages end in divorce • A high proportion of divorced males remarry • (64.2% of males in 1988 compared to 26.1% of females) • Latest figures: http://www.abs.gov.au/Ausstats/abs%40.nsf/94713ad445ff1425ca25682000192af2/c500a32ee2774a8cca25699f0005d61b!OpenDocument Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a Consumer Behaviour 4e by Neal, Quester, Hawkins

11. Middle-Aged Single II Stage • Small group of the population • High disposable income • Travel often Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a Consumer Behaviour 4e by Neal, Quester, Hawkins

12. Delayed Full Nest I: Older Married with Young Children Stage • Many have delayed having children until their thirties • They have a high income and have acquired more capital and possessions • They outspend all groups on childcare, mortgage repayments, home and garden maintenance, and household furnishings • High non-child spending e.g. food, alcohol, entertainment and savings Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a Consumer Behaviour 4e by Neal, Quester, Hawkins

13. Full Nest II: Middle-Aged Married, with Children at Home Stage • Older children • Heavy consumer of lessons and clothing • Need larger homes Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a Consumer Behaviour 4e by Neal, Quester, Hawkins

14. Single Parent II: Middle-Aged Single with Children at Home Stage • Financially burdened group • Older children take on significant household responsibilities • Typically female • (5 times male number) Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a Consumer Behaviour 4e by Neal, Quester, Hawkins

15. Empty Nest I: Middle-Aged Married with No Children Stage • Typically dual income • Time poor, cash rich • Spend on dining out, holidays, services Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a Consumer Behaviour 4e by Neal, Quester, Hawkins

16. Empty Nest II: Older Married Couple Stage • Either still working or fully retired • Financial situation in decline Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a Consumer Behaviour 4e by Neal, Quester, Hawkins

17. Older Single III Stage • Typically female • Growing segment as baby boomers age Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a Consumer Behaviour 4e by Neal, Quester, Hawkins

18. A Product Targeted at the Older Single Market

19. Household Life Cycle and Social Class • A useful segmentation is household life cycle and social class • People from different social classes have similar problems but seek varying solutions Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a Consumer Behaviour 4e by Neal, Quester, Hawkins

20. Household Life Cycle/Social Stratification Matrix

21. Targeting Communications at ‘Influencers’ and ‘Information Gatherers’

22. Household Decision Making Five distinct roles: • Information gatherer • Influencer • Decision maker • Purchaser • User Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a Consumer Behaviour 4e by Neal, Quester, Hawkins

23. Determinants of Household Purchases • Different members at different stages • Different attributes are considered by each member • Involvement is often removed • e.g. Clothes for children, BBQ for Dad • Who is doing the ‘purchasing’ • Product category • Likely conflicts • Resolution etc. Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a Consumer Behaviour 4e by Neal, Quester, Hawkins

24. Household Decision Making (cont.) • Individual’s role within the household • Information gatherer • Influencer • Decision maker • Purchaser • User • Cultural and social changes Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a Consumer Behaviour 4e by Neal, Quester, Hawkins

25. Family-Member Influence at Various Stages of the Decision-Making Process

26. Conflict Resolution Approaches used to resolve purchase conflicts: • Bargaining • Impression management • Use of authority • Reasoning • Playing on emotions • Additional information Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a Consumer Behaviour 4e by Neal, Quester, Hawkins

27. Consumer Socialisation • Young people acquiring skills, knowledge and attitudes relevant to their functioning as consumers in the marketplace • Consumer socialisation and advertising • advertising standards • Role of the household in socialisation Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a Consumer Behaviour 4e by Neal, Quester, Hawkins

28. Managerial Framework for Evaluating the Household Decision-Making Process

29. Household Trends Over the Next 25 Years • Single households to double • Average household size down* • 2.6 (1996) • 2.2 (2021) • Families without children more than ‘with children’ by 2016 • One-parent families up by 30% to 66% Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a Consumer Behaviour 4e by Neal, Quester, Hawkins

30. The Importance of the Family Pet: Ownership in 1998

31. Computers and Video Games in Households • Large number of household have Internet access • Opinion of being ‘online’ and video games is now more favourably accepted by experts Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a Consumer Behaviour 4e by Neal, Quester, Hawkins

32. Households and the Purchase of Services • High use of services • Food • eating-out more frequent • fast food frequently purchased Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a Consumer Behaviour 4e by Neal, Quester, Hawkins

33. Implications… • As marketers you will need to consider… • will these trends continue? • what will be the ramifications for the product/service market under your management? • When is the ‘household’ the decision-maker … as opposed to ‘individuals’ Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a Consumer Behaviour 4e by Neal, Quester, Hawkins

34. Summary • Household is the basic consuming unit • Family households pass on cultural and social-class values and behaviour patterns • Family household—2 or more related persons living together • Non-family households—2 or more unrelated persons • HLC is classified into stages—relatively predictable • HLC variables—age, marital status (household head) presence of children • Household decision making—who buys,who decides, and who uses products purchased and used by and for the household Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a Consumer Behaviour 4e by Neal, Quester, Hawkins

35. Summary (cont.) • Marketing managers must take into account each household decision process for each product category • Role specialisation • Trends—services, role of pets, etc. • Consumer socialisation—how children become socialised, learn how to be consumers • Purchasing skills, e.g. shopping, budgeting • Indirect skills, e.g. symbols of quality, prestige • Families assist by teaching, providing role models, etc. Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a Consumer Behaviour 4e by Neal, Quester, Hawkins

36. Next Lecture… Chapter 14: Group Influence and Communication Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a Consumer Behaviour 4e by Neal, Quester, Hawkins