Consumer Behaviour

1. Family &Family Life cycle SocialClass

2. What is a Family? Family is defined as a group of two or more people (one of whom is a householder) related by birth, marriage or adoption and residing together Household: Is a family and any unrelated person residing in the same house and consuming food from a common kitchen at least once a day Two types of household: Family Household Institutional Household e.g. Hostel All families are households but all households are not families

3. Types of Family Family of Orientation Consist of one’s parents and elders Provides orientation towards Social: Religion, Politics, Economics Emotional: Self Worth, Ambition, Love and Care Family of Procreation Consist of one’s spouse and children Most important buying unit in a market The influence of Family of Orientation decreases with Age

4. Types of Family Traditional Family Types: Married Couple: Simplest type of family consisting of husband and wife Nuclear Family: Consist of Husband Wife and at least one child Extended Family: Consist of a nuclear family with at least one grand parent Joint Family: Blood relatives and their spouses with kids staying together New Modes of Family Blended Family: A family in which either or both partner were previously married Single Parent Family: A family in which only one of the parent is present Unmarried Family: Parents, unmarried, but living together Communal Family: A group of families living together and sharing responsibility

6. Fashion

7. Fads

8. “In/Out”

10. Interpersonal skills

11. Dress/grooming standards

12. Manners and speech

13. Educational motivation

14. Occupational career goals

15. Consumer behavior normsPreadolescent Adolescent Teens Older

16. Functions of a Family Provides Economic Well Being Provides Emotional Support Provides Suitable Life Style Provides Social Relationships Provides Morals and Ethical Values Provides Religious Values Provides Interpersonal Skills

17. Family Life Cycle (1/2) Stage 1 :Bachelorhood Few Financial Burdens Fashion and Recreation Oriented Stage 2: Newly Married Couple Financially better off Highest purchase rate of consumables and durables Romantically inclined Stage 3 : Parenthood Elementary school stage Youngest child < 6 years of age Low Liquid Assets High purchase of baby food & baby oriented products High school stage Youngest child >= 6 years of age Financially better off College Phase All children still financially dependent High family influence on purchases Major expense on higher education

18. Family Life Cycle (2/2) Stage 4: Post Parent Hood Head of the family in labour force No Dependent Children Expenditure in self development Stage 5 :Dissolution : Solitary Survivor – II Single Surviving head of family in labor force Supported by family and friends Have high expendable income Spent on loneliness reducing products and services Solitary Survivor – II: Single Surviving wife Low levels of income and savings Expenditure on medical products, security, affection

19. Table 10.6 Eight Roles in the Family Decision-Making Process ROLE DESCRIPTION Influencers Family member(s) who provide information to other members about a product or service Gatekeepers Family member(s) who control the flow of information about a product or service into the family Deciders Family member(s) with the power to determine unilaterally or jointly whether to shop for, purchase, use, consume, or dispose of a specific product or service Buyers Family member(s) who make the actual purchase of a particular product or service Preparers Family member(s) who transform the product into a form suitable for consumption by other family members Users Family member(s) who use or consume a particular product or service Maintainers Family member(s) who service or repair the product so that it will provide continued satisfaction. Disposers Family member(s) who initiate or carry out the disposal or discontinuation of a particular product or service

20. Household Decision Making Process Influencer (Children) Communication targeted at Children Initiator (Parents, Children) Decision Maker (Parents, Children) Purchaser (Parents) Communication targeted at Parents User (Parents, Children) Information Gathering

21. Types of Family Decisions Husband Dominated Decisions Husband takes the purchase decisions Traditionally in products like Automobiles, Alcohol, Insurance Wife Dominated Decisions Wife takes the purchase decisions Traditionally in products like household maintenance items, food and kitchen appliances Joint Decision Making Both husband and wife make the decision Traditionally in School choice, living room furniture, vacations Child Dominated Decision Making Child makes the “final product” decision Traditionally on children related items Unilateral Decision Making Taken by any member of the family Traditionally on Personal Care items, low priced goods These Traditional Roles are Changing

22. Conflict Resolution Family Decisions are bound to create conflict Conflicts are resolved by: Bargaining: Reaching a compromise on which product to buy Impression Management: Misrepresentation of facts in order to create favorable impressions Use of Authority: Claiming superior authority to resolve the conflict Reasoning: Using logical arguments to resolve the conflict Playing on Emotions: Using emotions to resolve the conflict Additional Information: Getting additional Data or Third Party Information

23. Consumer Socialization

24. Consumer Socialization Consumer Socialization is the process by which people acquire skills, knowledge and attitudes relevant to their functioning as consumers in the marketplace Contents of Consumer Socialization: Consumer Skills: Skills necessary for purchase and understand money, budgeting, product evaluation Consumption Preferences: Are knowledge, attitudes and values that cause people to attach differential evaluation to products, brands and retail outlets Consumption Attitudes: Are cognitive orientation towards market place stimulus such as advertising, sales persons, warranties etc.

25. Copyright 2007 by Prentice Hall Chapter 11 Social Class and Consumer Behavior

26. Copyright 2007 by Prentice Hall Chapter Outline What is Social Class? The Measurement of Social Class Geodemographic Clustering The Affluent Consumer The Middle Class Consumer The Working Class Selected Consumer Behavior Applications of Social Class

27. Copyright 2007 by Prentice Hall Social Class The division of members of a society into a hierarchy of distinct status classes, so that members of each class have either higher or lower status than members of other classes.

28. Copyright 2007 by Prentice Hall Social Class Is Hierarchal Status is frequently thought of as the relative rankings of members of each social class

29. Copyright 2007 by Prentice Hall Table 11.2 Percent Distribution of Five-Category Social-Class Measure SOCIAL CLASSES PERCENTAGE Upper 4.3 Upper-middle 13.8 Middle 32.8 Working 32.3 Lower 16.8 Total percentage 100.0

30. Copyright 2007 by Prentice Hall Social Class Measurement Subjective Measures individuals are asked to estimate their own social-class positions Reputational Measures informants make judgments concerning the social-class membership of others within the community Objective Measures individuals answer specific socioeconomic questions and then are categorized according to answers

31. Copyright 2007 by Prentice Hall Objective Measures Single-variable indexes Occupation Education Income Other Variables Composite-variable indexes Index of Status Characteristics Socioeconomic Status Score

32. Geo demographic clustering “Birds of a feather flock together” Families of similar socioeconomic backgrounds tend to reside in the same neighborhoods or communities. “They cluster together” Dispersed communities with similar geographic profiles Located by PINCODES

33. Copyright 2007 by Prentice Hall Index of Status Characteristics (ISC) A composite measure of social class that combines occupation, source of income (not amount), house type/dwelling area into a single weighted index of social class standing.

34. Copyright 2007 by Prentice Hall Socioeconomic Status Score (SES) A multivariable social class measure used by the United States Bureau of the Census that combines occupational status, family income, and educational attainment into a single measure of social class standing.

35. Copyright 2007 by Prentice Hall Geodemographic Clusters A composite segmentation strategy that uses both geographic variables (zip codes, neighborhoods) and demographic variables (e.g., income, occupation) to identify target markets.

36. Copyright 2007 by Prentice Hall PRIZM (Potential Rating Index by Zip Market) A composite index of geographic and socioeconomic factors expressed in residential zip code neighborhoods from which geodemographic consumer segments are formed.

37. Copyright 2007 by Prentice Hall The Affluent Consumer Especially attractive target to marketers Growing number of households can be classified as “mass affluent” with incomes of at least $75,000 Some researchers are defining affluent to include lifestyle and psychographic factors in addition to income Have different medial habits than the general population

38. Copyright 2007 by Prentice Hall What Is the Middle Class? The “middle” 50 percent of household incomes - households earning between $22,500 and $80,000 Households made up of college-educated adults who use computers, and are involved in children’s education Lower-middle to middle-middle based on income, education, and occupation (this view does NOT include upper-middle, which is considered affluent)

39. Copyright 2007 by Prentice Hall The Middle Class There is evidence that the middle class is slowly disappearing in the U.S. Growth of middle class in some Asian and Eastern European countries Many companies offering luxury to the masses with near-luxury models and goods

40. Copyright 2007 by Prentice Hall The Working Class? Households earning $40,000 or less control more than 30 percent of the total income in the U.S. These consumers tend to be more brand loyal than wealthier consumers.

41. Copyright 2007 by Prentice Hall Discussion Question What types of products are targeted to the working class? What issues must marketers consider when targeting their ads to the working class?

42. Copyright 2007 by Prentice Hall The Techno Class Having competency with technology Those without are referred to as “technologically underclassed” Parents are seeking computer exposure for their children Geeks now viewed as friendly and fun

43. Copyright 2007 by Prentice Hall Consumer Behavior and Social Class Clothing, Fashion, and Shopping The Pursuit of Leisure Saving, Spending, and Credit Social Class and Communication

44. Copyright 2007 by Prentice Hall Class Situations, Self-Perceptions, and Financial OrientationsFigure 11-9