The basics of Family Decision Making

The basics of Family Decision Making Due to its purchasing power, the family is believed as the most important consumers buying unit by many marketers (Dalakas Shoham, 2005). Therefore, a great number of previous studies have been done to understand how a family makes purchasing decisions over the years. As new social trends, the structure of family has changed dramatically in the past three decades in most countries in the world (Brace et al, 2008). The family is convinced as composing by parents and unmarried children in traditional mind. However, in the modern society, the definition of family has moved from only couple and children to family household. According to European Community Household Panel, a family household is a group of people who live together, share the bill and housekeeping arrangement (Askegaard et al, 2006). In view of most marketers, changes in family structures provide marketing opportunities. As the differentiation of the composition, families need and demand is diversified than before. Changes in family structure and modern family Family household types in modern society are diversified, such as single parent families, reconstituted families, unmarried cohabitation families, traditional families, couple with no children families and roommate family households. The reason of diversified family household type is that unmarried cohabitation, delayed marriage and delayed childbirth are trends for young people in the recent years. Furthermore, there have been increases in the proportion of the return of mothers to the workforce and the number of divorces and a decrease in the proportion of intact family unit (two biological parents and their dependent children). It is known that 76 per cent of UK children in 2004 lived in a family unit headed by a couple (UK Office of National Statistics, 2005). But, this official data does not differentiate families by couples who are intact or step parent. Also, it is acknowledged that 83 per cent of children in step parent families or single parent families live with their natur al mother (Brace et al, 2008). Therefore, most of single parent households are headed by females. Although the family types are diversified in the present day and age, intact families, step parent families and single parent families are three major types of composition for modern families. Haskey (1998) indicated there has been an obviously decline in the intact or traditional family household type and step families are more prevalent than single parent households. People are remarrying more often than before, and male is more likely to reconstitute a family than female. For example, step families are the fastest growing type of family in the UK (Mintel, 2005). There are totally 35 per cent British parents live as a non-traditional family unit. Concretely, 19 per cent of British parents are single parents. 16 per cent of British parents have children with ex-wife or ex-husband and now reconstitute families with new partners and the children (Mintel, 2005). Family structures have changed, which influence family decision making. Thus, some researchers argue that family communication has become more open and democratic (Belch and Willis, 2001). Particularly, the role of women has changed in the present society. The changes include education, increasing number of double-income families and the advent of career women. Further to say, these changes have impacted on family buying decisions and the role structure between family members. An increasing number of women are contributing to the incomes of their families and more women are motivated to succeed in their careers. For instance, nearly 60 per cent of women in New Zealand are employed in the workforce (Beatty Lee, 2002). This is much higher proportion than before. Some previous studies indicated that a persons power to make family purchasing decisions depends on his/her ability to satisfy his/her marriage partners needs (Beatty Lee, 2002). Therefore, the more a husband contributes to the resources of the family, the more the wife will accept the husbands buying decisions. In the same way, if the wife contributes significantly to the family income, then the wifes impact on family buying decisions would be greater than in families where the wife does not provide income to the family. It does not mean the person who contributes a dominant income to his/her family must accounts for the completely dominant position in the family buying decision making process. It is more likely that there is more equality in double-income families. Therefore, a wifes occupational status has an obviously effect on the family decision making. The prevalence of women working outside the home is not only because of the necessity to help the family in finance, but also because of the changes in social and cultural trends. Therefore, women obtain more power in some families which both family members will make decisions jointly. This type of family is more likely to be called modern family and it has a more democratic influence structure. In contrast, a traditional family has a more dictatorial husband and the decisions are made more autocratic. Family life cycle There are many factors influence family buying decisions. Despite the family type and womens role in the family, family life cycle (FLC) also significantly affects the family purchasing decisions. The family life cycle describes the changes that occur in family and family structures as they progress over time (Askegaard, 2006). The FLC shows the changes in both the family income and family composition over time. As the time passed, the needs and demands of families tend to change. Therefore, their preferences and behaviours will be changed. Families in similar stages of the life cycle share similar demographic, financial and buying characteristics. In contrast, families at different life cycle stages show different interests, needs and demands and use different communication strategies (Lee Levy, 2004). Childrens roles in family buying decisions Since 1990s, the growing awareness on childrens role is largely because of childrens steadily increasing impact on family buying decisions and increasing spending power (Caruana Vassallo, 2003; Dalakas Shoham, 2005; Fan Li, 2010). Many previous studies pointed out that children have became an extremely vital consumer group which influences family purchases of various products in many ways (Burns et al, 2007; Caruana Vassallo, 2003). Thus, many marketers recognize children as a primary market, an influencing market, and a future market. For example, children in the USA directly spent over $60 billion and influenced over $380 billion of spending by other members of their family per year (Chou Wut, 2009). In Australia, the adolescents market is estimated to be worth about $3.9 million, and in New Zealand the market size is about $800,000 (Wimalasiri, 2004). Therefore children are increasingly attractive targets for marketers. Children as independent consumer In the contemporary world, as primary market, children have increasing spending power in terms of being independent customers. They are seen as different from previous generations. Today, children are more connected, more direct and more informed. They have more personal power, more money, more impact on family decisions and attractive more attention than their parents and ancestors. Most of teenagers receive allowances from their parents or eldership. Also, a great number of adolescents have income from jobs. Past study showed 51.1 per cent of the high school students admitted that they get an allowance from family members in the USA and the median amount was $50 (Dalakas Shoham, 2003). Moreover, Chou Wut (2009) indicated children who between ages of 2 to 12 independently spent $29 billion per year by using their own money and further to say, they indirectly influence $320 billion worth of household purchase. Childrens influence on family buying decisions In addition, children are also major influencers within the family decision making unit. They attempt to and succeed in influencing family purchasing decisions. Several researches have shown that the childrens degree of influence in purchase decisions varies with the type of product (Beatty Lee, 2002). They have the most influence on buying decisions when they are the primary users of the products, for example, toys, games, and school supplies. They are also influential in purchase decisions about products which for all family members, for example, vacations, furniture, movies, and eating out. However, they have less impact on these products than in the products which they are the primary consumers. According to Dalakas Shoham (2003) reported, 34 per cent of nine to 14-year-olds acknowledged they influenced their parents purchasing decisions on videogame systems, 19 per cent affected decisions on vacation choice, 18 per cent have impact on stereo equipment, and 14 per cent particip ated the family decisions making process on computer equipment, VCRs, and televisions. Moreover, adolescents influence has been affected by the cost of the products on purchasing decisions. Their influence decreased for expensive family purchases. Furthermore, they have most influence as regards product type, colour and brand. One of the areas where children have the major impact is food purchasing decision. Food plays a vital role in family life and it is the main expenditure for most families. Children have most influence on the food and the meals which are easy to prepare. US studies have shown that in the major categories of food and drinks, playthings and clothing and TV programmes, children have an obviously influence (Chou Wut, 2009). In the UK, 84 per cent of parents said that their children decided what food to buy. 29 per cent parents admitted that their children impact on the choice of furniture. Even 20 per cent of parents said they like to listen to their childrens suggests about their own clothes when purchasing (Dalakas, Shoham, 2005). Also, through a survey, cable television networks in the USA found that children affected average of 43 per cent of total purchases which are made the decisions by parents. Further to say, mothers who shop with their kids normally spend 30 per cent more than they originally plan and fathers spend 70 per cent more (Caruana Vassallo, 2003). The ways and factors for children to affect family decisions Generally speaking, there are four different ways for children to influence family buying decisions. First, they hugely involve in affecting their parents to purchase products which they are the finally users. Second, older children buy the products which they want directly by using their own money. This money is received as allowances or salary. Third, children participated and affected their parents in family buying decisions making process for family products. Lastly, parents consult their childrens opinion for some of their own purchase. Therefore, children exert a certain influence on the overall family decisions. Children have more influence during the problem recognition and information search stage, but their influence decreases at the finally decision making stage. Their influence can be direct or indirect. Young children more tend to impact family purchases by directly asking. However, older adolescents may use various strategies to impact their parents decision making. Except the direct requests, they also take other actions like bargaining, persuasion, or using emotional strategies. A childs age is an important related factor of the childs influence on family decision making. Older children have fewer requests than younger children and their parents more tend to satisfy their request. The parents believe the older children have more experience with shopping and products, so they easily yield than before. Also, parents are convinced that their older children possess more understanding of economic concepts and have higher skills on shopping than younger children. Furthermore, childrens influence on family decisions is affected significantly by family type. Children in single parent families or one child families have more influence than others and the adolescents in modern families affect their families more obviously than adolescents in traditional families. The reasons for children influencing family decisions In the current era, family communication has become more open and democratic. Parents pay more attention to their children and spend more time to listen to their childrens opinions. These changes in family communication caused children can exert influence on family purchasing decisions making process. Furthermore, the influence of each child has increased because of the trends of smaller number of children in families. Because of the returns of women to workforce, most families economic status is in good condition. It not only means parents can afford enough money to satisfy their children request, but also pushes the children to take more responsibility for family decisions. This is because working couples have little time to make decisions and have to give their children more power. The analysis of implication for marketing There are many factors influence the children when they making purchasing decisions and shape their habits at the present. The top three influence factors are family, friends and media. All of them have outstanding impact on childrens shopping skills and behavior. In details, the family has been believed as it has the most influence on children in the purchasing process of food products, health care products and furniture. On the other hand, friends and the media play an extremely important role in affecting the discretionary purchase of the children. In fact, most of marketers consider the media as the most powerful affecting factor to impel the children to make purchasing decisions. They are convinced the television advertising is the greatest influence marketing communication tool. Moreover, previous marketing researches also suggested the companies to access the children seriously with child friendly amenities, colourful and playful displays and even credit cards (Caruana Vassal lo, 2003). In addition, it is known that most of children have low brand loyalty for most products. Because of their strong curiosity, they are easily to be attracted by original and distinct products. However, once they build the brand loyalty for one particular brand, they will be lifetime consumers for the brand. Furthermore, for the ethic thinking, the marketers ought to avoid displaying violent or pornographic pictures to children in their advertising. This is because children are not mature enough and cannot understand the meaning of this kind of advertising. Further to say, children very like to imitate what they saw. Thus, it is dangerous for children to access violent or pornographic advertising. For example, there was lots of news regarding that children did violent events after playing violent games, such as GTA, Counterstrike, or watching violent movie. An analysis of the situation of children in China Children in China have become the most significant target consumers for many marketers. This is not only because China has the largest population of children in the world, but also due to the fact that Chinese children have more economic power and influence in their families than children in other countries. Fan Li (2010) mentioned that there are 1,321.29 million people in China at the end of 2007. Among others, 19.4 per cent (about 256.60) are under the age of 14. This made China become the largest potential market. In the present China, children have more discretionary income compared with before and also exert a greater impact on family buying decision than other countries children. One couple one child has been a basic state policy in China for a long time since the early 1970s. Therefore, as the only child in the family, both parents and grandparents give most of their love and attention to the child. Even it caused a seriously problem raised in China, the Chinese children have been considered as being like Little emperors/empresses. A part of parents would like to satisfy their childrens each request as possible as they can. Due to the importance of Chinese children, marketers did many researches to seek the most relative information sources for Chinese children. Finally, they found that TV, parents, store visits and friends were ranked as the most significant sources to receive information for Chinese children (Fan Li, 2010).