Families and households in marketing concepts

It is important to understand the difference between various terms that are frequently encountered when discussing the concept of family. First, we should distinguish between the terms family and household since market statistics may be gathered in either of these bases. A household includes the related family members and all the unrelated persons who occupy a housing unit (whether house, apartments, group of rooms or other). Thus, households may be of two main types: Families and non families. Most Americans live in households. Those who don’t live in group quarters such as military barracks, prisons nursing homes and college dormitories. The term family however is more limited and refers to a group of two or more persons related by blood, marriage, or adoption and residing together as a household. Families comprise approximately seven out of ten households. One way families are classified by the Census Bureau is on the basis of the householder’s (i.e. the person in whose name the housing unit is owned or rented) Marital status. A householder who lives wt his or her spouse is a married couple family (about 56 percent of all households). Families may also be classified on the basis of whether children are present). Although the term would appear to refer only to people under age 18, it actually can refer to children of any age. In fact, over half of all 18 to 24 year olds live with their parents.

Non family households account for about 30 percent of households. The largest segment of these (about 25 percent of all households) is single person households. Households in which two or more people who are unrelated to the householder reside (e.g. unmarried couples and roommates) are labeled other non family households by the Census Bureau. Only about 5 percent of households fall into this category. A basic trend operating in America is that people are spending less of their lives in family households, and families are becoming smaller.

It should be noted that marketers are interested not only in the concept of families but also of households, since both may form the basis or framework of much consumer decision making and buying behavior. The marketer will use the concept that seems most relevant for segmenting markets. For instance, manufacturer of refrigerators dishwashers, ranges, and other kitchen appliances would probably find households to be the most relevant dimension in estimating market size since purchase and replacement of these appliances would depend more on household formation than family formation. On the other hand, sellers of children’s clothing and toys would probably be more interested in data of families.

Family Life Cycle:

The concept of family or household life cycle has proven very valuable for the marketer, especially for segmentation activities.

Traditional Life cycle stages:

The term life cycle refers to the progression of stages through which individuals and families proceed over time. In the United States the following stages are typical of the family lifecycle.

1) The Bachelor Stage: young single people.
2) Newly Married Couples young no children.
3) Full Nest I: young married couples with youngest child under 6
4) Full Nest II: young couples with youngest child 6 or over.
5) Full Nest III: older married couples with dependent children.
6) Empty Nest I: older married couples with no children living with them and household head in labor force.
7) Empty Nest II: older married couples with no children living with them and household head retired.
8) Solitary survivor I: older single people in labor force
9) Solitary Survivor II: older retired single people.

With the life cycle concept the marketer is able to appreciate better how the family’s needs outlooks produce purchases and financial and financial resources vary over time.

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