Household and social class

Household Influence on Consumer Behavior

• Definition of Household and Family

  • Household: One or more individuals living in the same housing unit.

  • Family: A group related by marriage, birth, or adoption, potentially including same-sex couples.

• Types of Families

  • Nuclear Family: Consists of a couple and their children.

  • Extended Family: Includes additional relatives like grandparents, aunts, uncles, and cousins.

  • Increase in Nontraditional Households: Although average household sizes are decreasing, nontraditional households are rising.

• Family Life Cycle Stages

  • Progression from no children to small families, large families, and back to smaller families (empty nest).

  • Demonstrates how household structure and dynamics change over time.

• Importance for Marketers

  • Understanding spending patterns: Single versus multiple household expenditures differ.

  • Buying patterns evolve with family life stages, necessitating targeted marketing strategies.

• Factors Influencing Household Structure

  • Marriage and Cohabitation: Forms of family arrangements.

  • Careers and Number of Careers: Dual-income households impact purchasing power.

  • Smaller Families and Same-Sex Couples: Diversity in family structures influences product needs.

• Targeting Households for Marketing

  • Products focused on convenience appeal to working households.

  • Nontraditional households require tailored marketing approaches recognizing their unique needs.

  • Importance of inclusivity, especially for the LGBT community, focusing on more than just superficial support.

Decision-Making in Households

• Roles and Tasks of Household Members

  • Different roles played by family members in the decision-making process influence outcomes from problem recognition to post-consumption.

  • Creating a chart to show the dynamics of which family members influence decisions aids in targeting marketing strategies.

• Decision-Making Patterns

  • Autonomous Decision: Made by one member without consultation.

  • Partner-Dominated Decisions: One spouse heavily influences the choice.

  • Child-Dominated Decisions: Preference of children leads to product selection.

  • Syncretic Decisions: Collaborative decisions involving all family members.

• Conflict in Decision Making

  • Common occurrences, particularly when parents disagree on purchases, can be resolved through problem-solving techniques like persuasion and bargaining.

• Influence of Social Class and Status

  • Higher-income partners typically exert more psychological influence in decisions due to their economic power; education level also plays a role.

  • Recognizing that decision-making happens informally; for instance, parents may consult children when making decisions on child-related products.

• Socialization through Consumption

  • Children learn purchasing habits from parents while also expressing their preferences, affecting family decision-making.

  • The influence varies with the type of household and child development stages.

• Regulation for Marketing

  • Marketers targeting children must comply with federal regulations like the Children’s Online Privacy Protection Act (COPPA).

Social Class Influence on Consumer Behavior

• Definition of Social Class

  • A group identified according to status, determining economic positioning from high to low.

• Social Class Distribution in the U.S.

  • Capitalist Class: 1% of the population with incomes over $2 million.

  • Upper Middle Class: 14%, approximately $150,000 income.

  • Middle Class: around $70,000 income.

  • Working Class and Working Poor: Financial variability.

• Global Variations in Class Structure

  • Different structures in economies/cultures like Japan and India.

• Consumption Types

  • Trickle-Down Consumption: Upper-class goods adopted by lower classes.

  • Regular Consumption: Lower-class goods adopted by upper classes.

  • Trickle-Across Consumption: Products consumed across all classes.

• Indicators for Social Class Classification

  • Income, Occupation, and Education: Key factors in determining status.

  • Additional indicators: Location, possessions, family background, social interactions.

• Status Concepts

  • Inherited vs. Earned Status: Status can be inherited through family or achieved through personal success.

  • Status Threat: Perceived degradation in social standing can foster insecurity among consumers.

  • Status Crystallization: Consistency across socio-economic indicators (e.g., education, income).

  • Upward Mobility and Downward Mobility: Movement between social classes affecting consumer behavior.

• Social Class Fragmentation

  • Technology and inclusivity blur lines between social classes; higher classes often participate in conspicuous consumption to signal status.

  • Voluntary Simplicity: A lifestyle choice moving away from compulsive consumption.

• Consumption Patterns Across Classes

  • Upper class often focuses on investment and self-expression, while the middle class seeks guidance from upper class practices.

  • Working class tends to prioritize immediate needs, relying heavily on family support.

  • Underprivileged face financial constraints impacting cognitive resources and general wellbeing.

• Marketing Applications

  • Identification of target group for product/service development based on social class.

  • Messaging and media strategy should align with class characteristics and consumer perceptions of money and happiness.

Conclusion

• Summary of Key Learnings

  • Understanding household dynamics and influences contributes significantly to effective marketing strategies.

  • Social class influences consumption patterns and product perceptions, informing how marketers approach different consumer segments.

• Future Engagement

  • Reminder: Quiz on lecture content due by November 15; encourages student engagement with the material.