The Family and Its Social Class Standing

Types of families

Nuclear

Extended

Single-parent

Changes in household spending patterns

Consumer Socialization - the Process by Which Children Acquire the Skills, Knowledge, Attitudes, and Experiences Necessary to Function as Consumers

Socialization Process

Other Functions of the Family

Economic well-being

Emotional support

Suitable family lifestyles

Family Decision Making

Dynamics of Husband-Wife Decision Making

Husband-Dominated

Wife-Dominated

Expanding Role of Children In Family Decision Making

Choosing restaurants and items in supermarkets

Teen Internet mavens

Pester power

Framework of 10-year-old Influencer

The Family Life Cycle

Stage I: Bachelorhood

Stage II: Honeymooners

Stage III: Parenthood

Stage IV: Postparenthood

Stage V: Dissolution

Modifications - the Nontraditional FLC

Bachelorhood The Target Consumer Is Not Yet Married

Nontraditional FLC Family Stages

Alternative FLC Stage

Definition/Commentary

Childless couples

Increasingly acceptable with more career-oriented married women and delayed marriages

Couples who marry later in life

Likely to have fewer or no children

Couples with first child in late 30s or later

Likely to have fewer children. Want the best and live quality lifestyle

Single parents I

High divorce rate - about 50% lead to this

Single parents II

Child out of wedlock

Single parents III

Single person who adopts

Extended family

Adult children return home. Divorced adult returns home. Elderly move in with children. Newlyweds live with in-laws.

Dual Spouse Work Involvement (DSWI)

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.

Social Class Measure and Distribution

Social Class Measurement

Subjective Measures

individuals are asked to estimate their own social-class positions

Objective Measures

individuals answer specific socioeconomic questions and then are categorized according to answers

Objective Measures

Social Class Mobility

Upward mobility

Downward mobility

Rags to riches?

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.

The Affluent Consumer

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.

What Is the Middle Class?

The middle 50 percent of household incomes - households earning between $25,000 and $85,000

The emerging Chinese middle class

Moving up to more near luxuries

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.

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

Consumer Behavior and Social Class

Clothing, Fashion, and Shopping

The Pursuit of Leisure

Saving, Spending, and Credit

Social Class and Communication

Influence of Culture on Consumer Behavior

Culture: The sum total of learned beliefs, values, and customs that serve to regulate the consumer behavior of members of a particular society.

This theoretical model of cultures influence on behavior gives us a sense of how culture combines with personality traits to build our beliefs and values. This forms our attitudes, which combine with social norms to determine how we intend to behave, and consequently do behave, in given situations.

Researchers have developed this matrix for (Global youth) ages 14-24. The segments are as follows:

1. The in-crowd is all about privilege and reinforcement

2. Pop mavericks spread word of mouth rapidly and like individuality

3. Networked intelligentsia are the hub of online social networks and are creative

4. Thrill renegades are all about infamy, adrenaline, and anarchy

Culture Satisfies Needs

Food and Clothing

Needs vs. Luxury

What kinds of needs does culture help satisfy? It helps us decide where to eat, when to eat, and what to eat. It helps us know which products we simply must have, like a cell phone, and what products are a luxury, like a private plane.

Culture Is Learned

We learn about our own culture from the time we are small children. Through both informal and formal learning, we learn how to behave and the difference between right and wrong. The learning of our own culture usually happens slowly over time. Quite often, when someone moves, they must learn a new culture. This process of acculturation can be very difficult and will differ based on age, interest in the culture, and desire to become part of the new society.

There is a strong symbolic nature to human language. We use symbols to communicate with each other and marketers will use symbols to communicate to their customers.

You can probably think of many rituals in which you have been involved birthday parties, weddings, graduations, or religious rites of passage. Many of these rituals involved artifacts, objects that are important to the day. Some rituals might even be informal, like poker night. Are there certain artifacts that students absolutely must have? Food, perhaps, music or objects.

Selected Rituals and Associated Artifacts

SELECTED RITUALS

TYPICAL ARTIFACTS

Wedding

White gown (something old, something new, something borrowed, something blue)

Birth of child

U.S. Savings Bond, silver baby spoon

Birthday

Card, present, cake with candles

50th Wedding anniversary

Catered party, card and gift, display of photos of the couples life together

Graduation

Pen, U.S. Savings Bond, card, wristwatch

Valentines Day

Candy, card, flowers

New Years Eve

Champagne, party, fancy dress

A culture cannot just exist within one person. There must be a large group which is involved, a significant portion of society.

Facial Beauty Ritual of a Young TV Advertising Sales Representative

Culture is Dynamic

Evolves because it fills needs

Certain factors change culture

Technology

Population shifts

Resource shortages

Wars

Changing values

Customs from other countries

It is important for marketers to realize that culture is changing. The products that fulfill needs, what is cool and in style, are constantly changing. Large cultural shifts may occur due to events that affect society. Certain cultures would like to change. For example, this is a link to changing the drinking culture at colleges.

The Measurement of Culture

Content Analysis

Consumer Fieldwork

Value Measurement Instruments

Content Analysis : A method for systematically analyzing the content of verbal and/or pictorial communication. The method is frequently used to determine prevailing social values of a society.

Consumer Fieldwork

Field Observation

Natural setting

Subject unaware

Focus on observation of behavior

Participant Observation

With consumer fieldwork, researchers observe behavior. This can be done in the field or by actively involving participants to observe their own behavior and beliefs.

American Core Values Criteria for Value Selection

The value must be pervasive.

The value must be enduring.

The value must be consumer-related.

When looking at American culture, what are the core values that reflect society? To be included on the list on the following page, the core values have to meet these three criteria. They have to be pervasive, where a significant portion of the population accepts this value. They have to be enduring, lasting for a significant period of time, and they must be consumer related, in that they help us understand consumption.

Scale to Measure Attitude Toward Helping Others

Consumer Decision Making and Beyond

Levels of Consumer Decision Making

1. Extensive Problem Solving

A lot of information needed

Must establish a set of criteria for evaluation

2. Limited Problem Solving

Criteria for evaluation established

Fine tuning with additional information

3. Routinized Response Behavior

Usually review what they already know

Not all consumer decision-making situations are the same and marketers generally put them into these three groups. At one extreme is extensive problem solving which usually involves a lot of information, whereas routinized response behavior usually requires little or no information. Limited problem solving lies in the middle of these two extremes where new information is often added and a criterion for evaluation is formed. Consumers tend to have little experience with the product category when engaging in extensive problem solving as opposed to being very familiar with a routinized purchase.

Models of Consumers: Four Views of Consumer Decision Making

An Economic View

A Passive View

A Cognitive View

An Emotional View

There are four types of models which explain why consumers act the way they do. In an economic view, there is perfect competition and the consumer makes rational decisions. They are aware of all choices, can rank their benefits, and can choose the best alternative. Unfortunately for many, the perfect consumer does not exist. On the other extreme is the passive view, in which the consumer is passive to the marketer in making their decisions. Here the consumer plays no role as they would in a cognitive view where the consumer is a thinking problem solver. We have discussed emotions and they are at the center of the emotional model of consumer decision making.

Models of Consumers: An Economic View

The economic view portrays consumers as making rational decisions.

Clearly, this model is not characteristic of most consumption situations because consumers are rarely aware and knowledgeable of all the product alternatives in any given situation, and of all the features and benefits of the product offerings they can choose from.

Thus, they are often unable to make rational decisions.

Models of Consumers: A Passive View

The passive view depicts the consumer as basically submissive to the self-serving interests and promotional efforts of marketers.

Consumers are perceived as impulsive and irrational purchasers, ready to yield to the arms and aims of marketers.

Models of Consumers: A Cognitive View

The cognitive view depicts consumers as problem solvers where they cognitively process information, seek out products and services that fulfill their needs, form preferences, make choices, and engage in post purchase evaluations of their selections.

Such decision making is characteristic of consumption situations where consumers are highly involved with purchases and experience high levels of perceived risk.

Models of Consumers: An Emotional View

The emotional view states that consumers often have deep emotions or feelings regarding many purchases.

This is typical of consumption situations where consumers place more emphasis on their current moods and feelings and less emphasis on prepurchase information.

In such cases, a product is bought on an impulse on a whimor because the buyer is emotionally driven.

Emotional advertising appeals include stressing nostalgia, fantasy, and being seduced by the product.

Consumer Decision Making

An overview of consumer decision making shows three main sections. The first includes all the external influences on a consumer. This includes socio-cultural factors as discussed in previous chapters, as well as the marketers efforts. The second section includes the individuals consumer decision making, which occurs in the three stages of need recognition, pre-purchase search, and evaluation of alternatives. This process is guided by psychological factors and the consumers experiences. The third major section includes the actual purchase and how the consumer feels and what they think after they purchase the product.

Process - Need Recognition

Usually occurs when consumer has a problem

Need recognition styles

Actual state

Desired state

A consumer usually realizes they have a need when they have a problem. Maybe they are hungry or are having friends over for dinner on Saturday night so they seek out choices in food.

Prepurchase Search

Begins with internal search and then moves to external search

The impact of the Internet

There are many factors that increase search:

Product factor

Situational factors

Social acceptability

Consumer factors

Once the consumer has decided they have a need, they search through their mind for information on the product or service. After this, they may use the Internet, contact friends, or go to retail locations to learn more about a product. Some consumers will search for information for a long time, whereas others will make the search as short as possible. The time of the search can be related to the complexity and price of the product, the situation, experience with the product, or the social acceptability tied to the product.

Evaluation of Alternatives

Evoked set

Criteria used for evaluating brands

Consumer decision rules

Decisions by functionally illiterate population

Going online for decision-making assistance

Lifestyles as a consumer decision strategy

Incomplete information

Applying decision rules

Series of decisions

Decision rules and marketing strategy

The Evoked Set

When looking at the choices available and how they rate, the consumers will blend the list of brands they have acquired with the list of criteria that they have decided is important. The specific brands that the consumer considers is called the evoked or consideration set. A diagram of this set is shown on the following slide.

The evoked set is the group of acceptable brands that the consumer has found through internal and external search. Unknown brands cannot be in this set since they are unknown.

Decision making is very hard for intangible services. This web link helps consumers who are trying to find a doctor a difficult service to evaluate.

Criteria used for evaluating brands

Consumer decision rules and their application

Consumers will establish criteria which are important to evaluate brands. These are usually product attributes such as auto focus, flash, image stabilization, lens type, size and weight for a new digital camera.

Consumer Decision Rules

Compensatory

evaluates each brand in terms of each relevant attribute and then selects the brand with the highest weighted score.

Noncompensatory

positive evaluation of a brand attribute does not compensate for a negative evaluation of the same brand on some other attribute

Conjunctive, disjunctive, or lexicographic

These rules are also referred to as heuristics, decision strategies, and information-processing strategies. They are the procedures that a consumer uses to make their brand choices. If they are compensatory, the consumer will evaluate each attribute and add them up for the brand. The belief is that the consumer will choose the brand with the highest rating.

In a noncompensatory decision, the consumer does not balance positive attributes against negative, but every attribute must reach a minimum level or it will be disqualified.

In a conjunctive rule, the consumer will establish a minimally acceptable cutoff point for each attribute evaluated. Brands that fall below the cutoff point on any one attribute are eliminated from further consideration. In a disjunctive rule, the consumer will establish a minimally acceptable cutoff point for each relevant product attribute. In a lexicographic rule, a consumer will first rank product attributes in terms of importance, then compare brands in terms of the attribute considered most important.

Hypothetical Use of Decision Rules

Decision Rule

Mental Statement

Compensatory rule

I selected the netbook that came out best when I balanced the good ratings against the bad ratings

Conjunctive rule

I selected the netbook that had no bad features

Disjunctive rule

I picked the netbook that excelled in at least one attribute

Lexicographic rule

I looked at the feature that was most important to me and chose the netbook that ranked highest on that attribute

Affect referral rule

I bought the brand with the highest overall rating

Decisions by functionally illiterate population

It may be shocking to hear that 20 percent of Americans do not possess the language and math skills required from a typical retail environment. In fact, illiterate consumers make decisions in different ways as seen on the figure on the following slide. They tend to base their decisions on less information and use more basic processing tactics.

Going online for decision-making assistance

Lifestyles as a consumer decision strategy

Incomplete information

Many consumers will no longer make a decision without going online. In addition, many consumers will purchase products to maintain a lifestyle they have chosen. For many, purchase decisions are related to healthy lifestyles, luxury living, or simplifying their lives.

Coping with Missing Information

Delay decision until missing information is obtained

Ignore missing information and use available information

Change the decision strategy to one that better accommodates for the missing information

Infer the missing information

Applying Decision Rules

Series of decisions

Decision rules and marketing strategy

Consumers can apply their decision rules to similar or dissimilar alternatives. They may decide between a vacation and a new car. They will use decision rules focused on these alternatives and may include attributes such as fun, excited, necessary. In either case, this is just the first decision in a series of decisions. If they pick the vacation, they would have decisions on where to visit, who to bring, where to stay, and what airline to fly. Marketers must be aware of these decision rules so they can send the right messages through the correct channels at the best time to reach the consumer.

Output of Consumer Decision Making

Purchase behavior

Trial purchases

Repeat purchases

Long-term commitment

Postpurchase evaluation

There are three types of purchases consumers make trial, repeat, and long-term commitment. Trial includes the first time a consumer buys a product when there is potential for repeat purchases. This is their attempt to evaluate the product to see if they really like it. If so, there will be repeat purchases over time. Products which are rarely purchased and kept for a long time are different than those trial-and-repeat purchases. These long-term commitment products include cars, appliances, and housing.

In either situation, the consumer will always have postpurchase evaluation, which is further explained on the following slide.

Postpurchase Evaluation

Actual Performance Matches Expectations

Neutral Feeling

Actual Performance Exceeds Expectations

Positive Disconfirmation of Expectations

Performance Is Below Expectations

Negative Disconfirmation of Expectations

Marketing strategies to reduce postpurchase dissonance

ads which reassure buyers that they made the right choice;

reassuring messages and text within the instruction manuals;

extensive warranties, guarantees, and service;

a mechanism to obtain further information about the product;

postpurchase contacts with buyers by mail or phone

Gifting Behavior: Gifting is an act of symbolic communication, with explicit and implicit meanings ranging from congratulations and love, to regret, obligation, and dominance.

Reported Circumstances and Motivations for Self-Gift Behavior

Gifting Relationships

GIFTING RELATIONSHIP

DEFINITION

EXAMPLE

Intergroup

A group giving a gift to another group

A Christmas gift from one family to another family

Intercategory

An individual giving a gift to a group or a group giving a gift to an individual

A group of friends chips in to buy a new mother a baby gift

Intragroup

A group giving a gift to itself or its members

A family buys a VCR for itself as a Christmas gift

Interpersonal

An individual giving a gift to another individual

Valentines Day chocolates presented from a boyfriend to a girlfriend

Intrapersonal

Self-gift

A woman buys herself jewelry to cheer herself up

Consuming and Possessing

Consumers find pleasure in possessing, collecting, or consuming

Products have special meanings and memories

Relationship Marketing : Marketing aimed at creating strong, lasting relationships with a core group of customers by making them feel good about the company and by giving them some kind of personal connection with the business.

Relationship marketing is important to all firms. Trust between the firm and its consumers will lead to strong and long-lasting relationships. It is usually much more economical for a company to retain an existing customer than to recruit a new customer.

SOCIAL CLASSES and PERCENTAGE

Upper 4.3%

Upper-middle 13.8%

Middle 32.8%

Working 32.3%

Lower 16.8%

Single-variable indexes

Occupation

Education

Income

Composite-variable indexes

Index of Status Characteristics

Socioeconomic Status Score

Attitude toward helping others (AHO)

People should be willing to help others who are less fortunate

Helping troubled people with their problems is very important to me

People should be more charitable toward others in society

People in need should receive support from others

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