Ch6 Understanding Consumer Buying Behaviour

Ch6 Understanding Consumer Buying Behaviour 6.1: The Psychological Importance of the Purchase Affects the Decision-Making Process Some purchase decisions are more important, and therefore more psychologically involving, than others. High-involvement purchases involve goods or services that are psychologically important to the buyer because they address social or ego needs and therefore carry social and psychological risks. They may also involve a lot of money and therefore financial risk. The decision process pursued by a given consumer can be classified into one of four categories depending on whether (1) the consumer has a high or low level of product involvement, and (2) he or she engages in an extensive search for information and evaluation of alternative brands or makes the decision routinely. How Do Consumers Make High-Involvement Purchase Decisions? When purchasing high-involvement products or services, consumers go through a problem-solving process involving five mental steps: (1) problem identification, (2) information search, (3) evaluation of alternatives, (4) purchase, and (5) post purchase evaluation. Exhibit 6.2 Types of consumer decision making Extent of involvement Extent of decision making High Low Extended (information search; consideration of brand alternatives) Complex decision making (cars, homes, vacations) Limited decision making, including variety seeking and impulse purchasing (adult cereals and snack foods) Habit/routine (little or no information search; focus on one brand) Brand loyalty (athletics shoes, adult cereals, cologne, deodorant) Inertia (frozen vegetables, paper towels) Exhibit 6.3 Steps in the high-involvement, complex decision-making process Problem Identification Consumers’ purchase-decision processes are triggered by unsatisfied needs or wants. Individuals perceive differences between ideal and actual states on some physical or socio-psychological dimension. This motivates them to seek products or services to help bring their current state more into balance with the ideal. Given that most of us have limited time and financial resources, it is impossible for us to satisfy all our needs at once. Instead, we tend to focus on those that are strongest. The size of the gap between our current and our desired state largely determines the strength of a particular need. A need can become stronger and be brought to our attention by a deterioration of our actual state or an upward revision of our ideal state. A change in a consumer’s actual state can occur for several reasons: For physical needs, a natural deterioration of the actual state occurs all the time. A person’s actual state may change as the result of the depletion of the current solution to a need. In some cases consumers can anticipate a decline in their actual state. A change in a consumer’s desired state may occur for several reasons: The desired state may be revised upward because of new information or the development of an old need. As one need is satisfied, the desired state on other need dimensions increases and becomes more demanding. Information Search Because services are intangible, difficult to standardize, and their production and consumption inseparable, they are more difficult to evaluate than products. Most services are hard to assess until they are being consumed after purchase. How Much Information Will a Consumer Seek Information is valuable to consumers to the extent that it helps make a more satisfying purchase and avoids the negative consequences associated with a poor choice. Consumers are likely to place a higher value on information when the purchase is important. This importance derives from (a) the strength of a person’s need for the product; (b) the person’s ego-involvement with the product; and (c) the severity of the social and financial consequences of making a poor choice. This is why people tend to seek more information about high-priced, socially visible products that reflect their self-image than for lower-priced products that other people seldom notice. The biggest cost for most people is the opportunity cost of the time involved in seeking information. They give up the opportunity to use that time for other, more important or interesting activities, such as working or taking trips. For some people, the opportunity costs of shopping are low because they enjoy wandering through stores or scanning newspaper ads or websites for bargains. Because services, more than products, are associated with greater perceived risk, the individual involved is likely to use more information sources in the attempt to better cope with the risk. This often leads to an extended information-acquisition process, which may include purchase postponement. It also means that consumers are less likely to make a trial purchase than with some products. Sources of Information The three broad categories of information sources are personal, commercial, and public. Personal sources include family members, friends, and members of the consumer’s reference group. Commercial sources refer to various information disseminated by service providers, marketers, and manufacturers and their dealers. They include media advertising, promotional brochures, package and label information, salespersons, and various in-store information, such as price markings and displays. Public sources include noncommercial and professional organizations and individuals who provide advice for consumers, such as doctors, lawyers, governmental agencies, consumer-interest groups, and Web journals (blogs). Commercial sources perform an informing function for consumers. Personal and public sources serve an evaluating and legitimizing function. It is highly likely that MacDonald would also seek the opinions of friends in deciding whether to take a cruise and in selecting a particular one. In doing so, he is consistent with the general proposition that consumers choose more personal sources for services than for goods because service consumption is highly personal and must be experienced to be understood. Exhibit 6.4 Factors that are likely to increase repurchase search Product factors Long inter-purchase time (a long-lasting or infrequently used product); frequent changes in product styling; frequent price changes; volume purchasing (large number of units); high price; many alternative brands; much variation in features. Situational factors Experience First-time purchase; no past experience because the product is new; un-satisfactory past experience within the product category. Social acceptability The purchase is for a gift; the product is socially visible. Value-related considerations Purchase is discretionary rather than necessary; all alternatives have both desirable and undesirable consequences; family members disagree on product requirements or evaluation of alternatives; product usage deviates from important reference group; the purchase involves ecological considerations; many sources of conflicting information. Personal factors Demographic characteristics of consumer Well-educated; high income; white collar occupation; under 35 years of age. Personality Low dogmatic (open-minded); low-risk perceiver (broad categorizer); other personal factors, such as high product involvement and enjoyment of shopping and search. Evaluation of Alternatives Consumers find it difficult to make overall comparisons of many alternative brands because each brand might be better in some ways but worse in others. Instead, consumers simplify their evaluation in several ways. First, they seldom consider all possible brands; rather, they focus on their evoked set – a limited number they are familiar with that are likely to satisfy their needs. Second, consumers evaluate each of the brands in the evoked set on a limited number of product dimensions or attributes. They also judge the relative importance of these attributes, or the minimum acceptable performance of each. The set of attributes used by a particular consumer and the relative importance of each represent the consumer’s choice criteria. Third, consumers combine evaluations of each brand across attributes, taking into account the relative importance of those attributes. This multi-attribute assessment of a brand results in an overall attitude toward that brand. The brand toward which consumers have the most favorable attitude is the one they are most likely to buy. Product Attribute and Their Relative Importance When two people use the same set of attributes, they arrive at different decisions because they attach varying degrees of importance to the attributes. A consumer’s personal characteristics and social influence help determine which attributes are considered and their relative importance. Environmental factors and the usage situation can also affect the perceived importance of various product benefits. Exhibit 6.5 Selected attributes consumers use to evaluate alternative products or services Category Specific attributes Cost attributes Purchase price, operating costs, repair costs, cost of extras or options, cost of installation, trade-in allowance, likely resale value. Performance attributes Durability, quality of materials, construction, dependability, functional performance (acceleration, nutrition, taste), efficiency, safety, styling. Social attributes Reputation of brand, status image, popularity with friends, popularity with family members, style, fashion. Availability attributes Carried by local stores, credit terms, quality of service available from local dealer, delivery time. Forming Attitudes toward Alternative Brands Even if two consumers use the same attributes and attach the same relative importance to them when evaluating product offerings, they many not necessarily prefer the same brand. They might rate the various brands differently on specific attributes. Differences in brand perceptions are based on past experience, the information collected, and how that information is perceived and processed. Purchase Choosing a source from which to buy the product involves essentially the same mental processes as does a product-purchase decision. The source is usually a retail store but may also be a mail-order catalogue or a website like RedEnvelope.com. Consumers obtain information about alternative sources from personal experience, advertising, comments of friends, and the like. Then they use this information to evaluate sources on such attributes as lines of merchandise carried, services rendered, price, convenience, personnel, and physical characteristics. Consumers shopping in a retail store on purchasing one brand sometimes end up buying something different. Post Purchase Evaluation Whether a particular consumer feels adequately rewarded following a purchase depends on two things: (1) the person’s aspiration or expectation level – how well the product was expected to perform and (2) the consumer’s evaluation of how well the product actually did perform . Consumers’ expectations about a product’s performance are influenced by several factors. These include the strength and importance of each person’s need and the information collected during the decision-making process. Consistent positive experiences can ultimately lead to brand loyalty – the routine repurchase of the same brand with little consideration of any alternatives. Some experts argue that consumers more often develop loyalty to service providers than to physical products because of the difficulty of evaluating alternatives before actually experiencing the service. Repeated patronage can bring additional benefits, such as discounts, or more customized service as the provider gains more insights into the customer’s preferences. Low-Involvement Purchase Decisions The search for information to evaluate alternative brands is likely to be minimal. As a result, decisions to buy products such as cookies or cereals often are made within the store, either impulsively on the basis of brand familiarity, or as a result of comparisons of the brands on the shelf. The consumers’ involvement and their risks associated with making poor decisions are low for such products. Therefore, consumers are less likely to stay with the same brand over time. Most purchase decisions are low in consumer involvement – the consumer thinks the product or service is insufficiently important to identify with it. Thus, the consumer does not engage in an extensive search for information for such a purchase. Inertia There are two low-involvement buying decisions. When there are few differences between brands and little risk associated with making a poor choice, consumers either buy brands at random or buy the same brand repetitively to avoid making a choice. Marketers must be careful not to confuse such repeat inertial purchasing with brand loyalty because it is relatively easy for competitors to entice such customers to switch brands by offering money-off coupons, special promotions, or in-store displays. Highly brand-loyal customers, on the other hand, resist such efforts on account of their strong brand preference. Impulse Purchasing and Variety Seeking The second low-involvement purchase process is impulse buying, when consumers impulsively decide to buy a different brand from their customary choice or some new variety of a product. The new brand is probably one they are familiar with through passive exposure to advertising or other information, however. Their motivation for switching usually is not dissatisfaction but a desire for change and variety. Understanding the Target Consumer’s Level of Involvement Enables Better Marketing Decisions Consumers employ different decision-making processes and may be influenced by different psychological, social, and situational factors, depending on their level of involvement with the product or service they are buying. Such behavioral differences have a major implication for marketers. A given marketing strategy, or decisions concerning any of the 4 Ps in a marketing plan, will not be equally effective for both high- and low-involvement products. Even though consumers may have differing degrees of psychological involvement with a given product category, the marketer needs to determine whether the majority of potential customers in his or her target segment are likely to be highly involved with the purchase decision or not. The various elements of the strategic marketing plan can then be tailored to the overall level of involvement of people in the target market. Exhibit 6.6 High-involvement versus low-involvement consumer behavior High-involvement consumer behavior Low-involvement consumer behavior • Consumers are information processors. • Consumers learn information at random. • Consumers are information seekers. • Consumers are information gatherers. • Consumers represent an active audience for advertising. • Consumers represent a passive audience for advertising. • Consumers evaluate brands before buying. • Consumers buy first. If they do evaluate brands, it is done after the purchase. • Consumers seek to maximize expected satisfaction. They compare brands to see which provides the most benefits related to their needs and buy on the basis of a multi-attribute comparison of brands. • Consumers seek an acceptable level of satisfaction. They buy the brand least likely to give them problems and buy on the basis of a few attributes. Familiarity is the key. • Personality and lifestyle characteristics are related to consumer behavior because the product is closely tied to the person’s self-identity and belief system. • Personality and lifestyle are not related to consumer behavior because the product is not closely tied to the person’s self-identity and beliefs. • Reference groups influence consumer behavior because of the importance of the product to group norms and values. • Reference groups exert little influence on consumer behavior because products are not strongly related to their norms and values. Exhibit 6.7 Marketing decisions for high-involvement versus low-involvement products or services Marketing mix element Marketing decisions where the consumer exhibits high involvement Marketing decisions where the consumer element exhibits low involvement Product decisions For long-term success, one or more compelling product benefits are necessary, regardless of the level of consumer involvement. For long-term success, one or more compelling product benefits are necessary, regardless of the level of consumer involvement. Pricing decisions Price, unless substantially lower, is likely to be of secondary importance to performance criteria. High price may suggest high quality or status, to the seller’s benefit. Demonstrable consumer benefits are more likely than price to drive consumer choice. Price offers can be effective in gaining trial. A sustained low price, compared to competitors (such as for private-label goods in supermarkets), may provide sufficient inertia for repeat purchase. Promotional decisions Consumers are interested in the information that sellers provide. Promotional vehicles that communicate in greater detail (e.g., print advertising, Internet, infomercials, personal selling) are likely to be effective. Consumers are not interested in the information that sellers provide. Large advertising budgets and a clear focus on a single demonstrable consumer benefit are probably necessary to get the message across. Distribution decisions Consumers will be relatively less concerned with convenience in purchasing. Relatively less extensive distribution is necessary. Consumers will be relatively more concerned with convenience in purchasing. Relatively more extensive distribution is necessary. Product Design and Positioning Decisions Consumers evaluate both high- and low-involvement products on criteria that reflect the benefits they seek. Both types of products and services must offer at least one compelling and valued benefit to continue to win acceptance in the market. Because consumers tend to evaluate high-involvement products and services before purchasing, however, it is particularly important that such offerings be designed to provide at least some benefits that are demonstrably superior to those offered by major competitors, and that marketing communications are effective in making potential customers aware of those benefits. For low-involvement goods and services, on the other hand, much brand evaluation occurs after the purchase is made. Consumers tend to be most positive about – and more likely to repurchase – brands that don’t disappoint them or cause unexpected problems. Consequently, firms that market low-involvement products or services need to pay particular attention to basic use-related attributes, such as consistent product quality, reliability, convenient packaging, and user-friendliness. Pricing Decisions Highly involved consumers generally buy the brand they believe will deliver the greatest value. They are willing to pay a higher price for a brand if they believe it will deliver enough superior benefits relative to cheaper competitors to justify the difference. They may even use high price as an indicator of a brand’s superior quality or prestige, particularly in categories where quality is hard to evaluate objectively before purchase, such as professional services. Many consumers buy low-involvement products largely or solely on the basis of low price. Special sales or coupon offers can be effective in gaining trial of such goods and services. If no problems are experienced during consumption, consumers may continue to buy the brand out of inertia, at least until a competitor offers an attractive price promotion. Advertising and Promotion Decisions Promotional vehicles that communicate in greater detail – such as print advertising, company websites, infomercials, or a salesperson – are more likely to be attended to and be effective in marketing high-involvement goods and services. Because low-involvement customers are usually passive information gatherers, advertising needs to focus on only a few main points and to deliver the message frequently in order to make it easy for consumers to gain familiarity and positive associations with a brand. Television is often the primary medium for low-involvement products because it facilitates passive learning. Distribution Decisions Extensive retail distribution is particularly important for low-involvement products because most consumers are unwilling to search for, or expend extra effort to obtain, a particular brand. The larger the proportion of available retail outlets, including websites, vending machines, and the like, a marketer can induce to carry a brand, the larger that brand’s market share is likely to be. Because consumers are more willing to spend some time and effort to acquire their favorite brand in a high-involvement category, extensive retail coverage is less critical for such products. The marketer may be better off being relatively choosy in selecting retailers to carry a brand, particularly if those retailers will play an important role in promoting the product or servicing it after the sale. The value of some exclusive, prestigious brands is clearly enhanced by the fact they are not available from every mass merchandiser in town. Strategies to Increase Consumer Involvement A firm may try to increase consumers’ involvement with its brand as a way to increase revenues. Increased customer involvement can be attempted in several ways. The product might be linked to some involving issue, as when makers of bran cereals associate their products with a high-fiber diet that may reduce the incidence of colon cancer. Of course, the involving issue might be social rather than personal. Thus, cause-related marketing is the practice of designating a portion of a brand’s profits to a nonprofit cause – such as the Special Olympics or breast cancer research – and aggressively publicizing it As cause-related marketing has become more popular, its effectiveness as a tool for increasing consumer involvement and brand preference may be declining, as discussed in Exhibit 6.8. Or the product can be tied to a personally involving situation, such as advertising a sleeping aid late in the evening when insomniacs are interested in finding something to help them sleep. Finally, an important new feature might be added to an unimportant product as when Revlon introduced its ColorStay Lipcolor. 6.2: Why People Buy Different Things: Part1- The Marketing Implications of Psychological and Personal Influences Even when two consumers have equal involvement with a product, they often purchase different brands for varying reasons. The information they collect, the way they process and interpret it, and their evaluation of alternative brands are all influenced by psychological and personal characteristics. Some of the important psychological, or thought, variables that affect a consumer’s decision-making process include perception, memory, needs and attitudes. The consumer’s personal characteristics, such as demographic and lifestyle variables, influence these psychological factors. Perception and Memory Perception is the process by which a person selects, organizes, and interprets information. Exposure to a piece of information, such as a new product, an ad, or a friend’s recommendation, leads to attention, then to comprehension, and finally to retention in memory. Once consumers have fully perceived the information, they use it to evaluate alternative brands and to decide which to purchase. The perception process is different for low-involvement products. Here, consumers have information in their memories without going through the sequence of attention and comprehension. Exposure may cause consumers to retain enough information so that they are familiar with a brand when they see it in a store. Two basic factors – selectivity and organization – guide consumers’ perceptual processes and help explain why different consumers perceive product information differently. Selectivity means that even though the environment is full of product information, consumers pick and choose only selected pieces of information and ignore the rest. For high-involvement purchases, consumers pay particular attention to information related to the needs they want to satisfy and the particular brands they are considering for purchase. This perceptual vigilance helps guarantee that consumers have the information needed to make a good choice. For low-involvement products, consumers tend to selectively screen out much information to avoid wasting mental effort. The average consumer is exposed to over 1000 ads every day plus information from other sources such as catalogues, websites, and friends. Consumers must be selective in perceiving this information to cope with the clutter of messages. Consumers also tend to avoid information that contradicts their current beliefs and attitudes. This perceptual defense helps them avoid the psychological discomfort of reassessing or changing attitudes, beliefs, or behaviors central to their self-images. Memory Limitations There are different theories of how the human memory operates, but most agree that it works in two stages. Information from the environment is first processed by the short-term memory, which forgets most of it within 30 seconds or less because of inattention or displacement of new incoming information. Some information, however, is transferred to long-term memory, from which it can be retrieved later. Long-term memory has a nearly infinite storage capacity, but the amount of product information actually stored there is quite limited. For information to be transferred to long-term memory for later recall, it must be actively rehearsed and internalized. It takes from 5 to 10 seconds of rehearsal to place a chunk of information in long-term memory. This is why print media and interactive electronic media, such as websites, are good for communicating complex or technical information about high-involvement products. This explains why television advertising for low-involvement products should focus on a few simple pieces of information, such as brand name, symbol, or key product attributes, and be repeated frequently. Perceptual Organization Another mental factor determining how much product information consumers remember and use is the way they organize the information. They organize information through the processes of categorization and integration. Categorization helps consumers process known information quickly and efficiently. Integration: means that consumers perceive separate pieces of related information as an organized whole. Effects of Stimulus Characteristics on Perception Consumers’ personal characteristics influence the information they pay attention to, comprehend and remember. Needs and Attitudes An attitude is a positive or negative feeling about an object (say, a brand) that predisposes a person to behave in a particular way toward that object. Fishbein Model Martin Fishbein pioneered a model that specified how consumers combine evaluations of a brand across multiple attributes to arrive at a single overall attitude toward that brand. His model is expressed as follows: where: = Consumer’s overall attitude toward Brand A. = Consumer’s belief concerning the extent to which attribute is associated with Brand A. = The importance of attribute to the consumer when choosing a brand to buy. = The total attributes considered by the consumer when evaluating alternative brands in the product category. = Any specific product attribute. Exhibit 6.8 A compensatory multi-attribute model of attitudes towards alternative cruises Our hypothetical consumer, Paul MacDonald, is interested in taking a Caribbean cruise lasting not more than seven days some time during the months of January or February at a reasonable price. As the table indicates, he uses five attributes (choice criteria) to make a comparison between three alternative cruises. On the basis of information gathered from advertising, travel agents, promotional materials received from a number of cruise lines, and friends, he rates the three different cruises on each of the five attributes as follows: Ratings Service attribute Importance weight (0–10) A B C Demographics – other passengers 10 8 8 8 Entertainment 10 8 10 9 Ports of call 8 8 9 9 Low fares 7 9 8 8 Size/steadiness of ship 6 9 8 8 Using the formula in the text, MacDonald calculates that an overall attitude score for Cruise A equals . His overall attitude scores for the other two cruises: Cruise B = 356 and Cruise C = 346. Consequently, MacDonald prefers and will be predisposed to buy Cruise B, the cruise towards which he has the most positive attitude. Although the demographics of other passengers was one of the most important attributes, it played no significant role in determining which cruise he would buy because there were no significant differences between the three cruises on that attribute. Instead the determinant attribute – that which had the biggest impact on which cruise MacDonald would prefer – was entertainment. Non-compensatory Attitude Models Consumers may adopt a simpler approach and evaluate alternative brands on only one attribute at a time. Such an approach is noncompensatory because a poor evaluation of a brand on one attribute cannot be offset by a strong evaluation on another. The lexicographic model, suggests that consumers evaluate brands on the most important attribute first. If one brand appears clearly superior on that dimension, the consumer selects it as the best possible choice. If no brand stands out on the most important attribute, the consumer evaluates the alternative brands on the second most important attribute, and so forth. Marketing Implications of Attitude Models The models suggest that to design appealing product offerings and structure effective marketing programmes, marketers must have information about (1) the attributes or decision criteria consumers use to evaluate a particular product category; (2) the relative importance of those attributes to different consumers; and (3) how consumers rate their brand relative to competitors’ offerings on important attributes Multi-attribute models are especially helpful in formulating marketing strategies. They do so by showing the consumer’s ideal combination of product/service attributes, each of which is weighted as to its relative importance. Attitude Change The multi-attribute attitude models of consumer choice suggest various ways marketers might change consumer attitudes favorably for their brands versus competing brands. These are discussed briefly below: Changing attitudes toward the product class or type to increase the total market Changing the importance consumers attach to one or more attributes. Adding a salient attribute to the existing set. Improving consumers’ ratings of the brand on one or more salient attributes via more extensive or effective advertising and promotion. Lowering the ratings of the salient product characteristics of competing brands. Demographics and Lifestyle Demographics Demographics influence (1) the nature of consumers’ needs and wants, (2) their ability to buy products or services to satisfy those needs, (3) the perceived importance of various attributes or choice criteria used to evaluate alternative brands, and (4) consumers’ attitudes toward and preferences for different products and brands. Lifestyle Two people of similar age, income, education, and even occupations do not necessarily live their lives in the same way. They may have different opinions, interests, and activities. As a result, they are likely to exhibit different patterns of behavior – including buying different products and brands and using them in different ways and for different purposes. These broad patterns of activities, interests, and opinions are referred to as lifestyles. To obtain lifestyle data, consumers are asked to indicate the extent to which they agree/disagree with a series of statements having to do with such things as price consciousness, family activities, spectator sports, traditional values, adverturesomeness, and fashion. Exhibit 6.9 Global scan’s lifestyle psychographic segments and the proportion of people in each segment across three countries Strivers: Young people (median age 31) who live hectic, time-pressured lives. They strive hard for success. They are materialistic, seek pleasure, and demand instant gratification. Achievers: They have achieved some of the success that strivers aim for. They are affluent, assertive, and upward bound. They are very status conscious and buy for quality and are slightly older than strivers. Pressured: This group cuts across age groups and is composed mainly of women who face constant financial and family pressure. They do not enjoy life as much as they could and feel generally downtrodden. Adapters: These are older people who maintain time-honored values but keep an open mind. They live comfortably in a changing world. Traditionals: They hold onto the oldest values of their countries and cultures. They resist change and prefer routines and familiar products. 6.3: Why People Buy Different Things: Part 2- The Marketing Implications of Social Influences Social influences are particularly apparent when consumers purchase high-involvement, socially visible goods or services. The social influences affecting consumers’ purchase decisions include culture, subculture, social class, reference groups, and family. These five categories represent a hierarchy of social influences, ranging from broad, general effects on consumption behavior to more specific influences that directly affect a consumer’s choice of a particular product or brand. For a simplified view of this hierarchy of social influences. Exhibit 6.11 Simplified hierarchy of social forces affecting consumer behavior Culture Culture is the set of beliefs, attitudes, and behavior patterns shared by members of a society and transmitted from one generation to the next through socialization. Cultural differences across countries create both problems and opportunities for international marketers. Subculture Share common geographic, ethnic, racial, or religious backgrounds. They continue to hold some values, attitudes, and behavior patterns that are uniquely their own. Such groups are referred to as subcultures. Social Class Every society has its status groupings largely based on similarities in income, education and occupation. Because researchers have long documented the values of the various classes (typically thought of as five – upper, upper-middle, middle, working, and lower. Reference Groups These include a variety of groups that affect consumer behavior through normative compliance, value-expressed influence, and informational influence. The first is most effective when there are strong normative pressures (for instance, from a college fraternity or exclusive club); when social acceptance is important (serving of certain foods to guests); and when the use of a product is conspicuous (women’s fashion clothing). Informational influence involves the use of influential people to help assess the merits of a given product/service. The opinions of such individuals often legitimize the purchase of a certain product or service. Word of mouth is also important with respect to restaurants, entertainment, banking, and personal services. And young adults are more willing to seek referrals than are older people. The Family The family is a reference group, but because of its importance, we discuss it separately. First, it serves as the primary socialization agent, helping members acquire the skills, knowledge, and attitudes to function as consumers in the marketplace. Family members tend to specialize in the purchase of certain products either because of their interest or expertise or the role structure of the family. Wives, in most marriages, have the most say in the purchases of food and household products, children’s clothes and toys, and over-the-counter drugs. The influence of various family members varies substantially across countries. Generally, the more traditional the society, the more men hold the power. In the more egalitarian countries, such as the Scandinavian nations, decisions are more likely to be made jointly. As women become better educated and more influential as wage earners in developing nations, more joint decision making will happen. Family Life Cycle When people leave home and start their own households, they progress through distinct phases of a family life cycle. The traditional cycle in the most industrialized nations includes young singles, young marrieds without children, young marrieds with children, middle-aged marrieds with children, middle-aged marrieds without dependent children, older marrieds, and older unmarried. Each phase of the life cycle brings changes in family circumstances and purchasing behavior. For example, young singles’ purchases tend to concentrate on nondurable items, including food away from home, clothing, and entertainment. Young marrieds without children are typically more affluent because both spouses usually work away from home. They are a major market for such durables as automobiles, furniture, and appliances. Young marrieds with children probably have the least disposable income, but they are the major market for single family dwellings, infant products and clothing, and child care services. Middle-aged couples without children usually have the most discretionary income. They are a major market for many luxury goods and services, such as expensive cars and international travel. Finally, the older marrieds and unmarried typically have less disposable income but are nevertheless an important market for medical products and services as well as hobby and craft items.