Household Life Cycle by Mark Susor

Running head: HOUSEHOLD LIFE CYCLE Household Life Cycle Mark Susor Consumer Behavior MBA 666-D1A4 Benedictine University September 7, 2014 Abstract During the last fifty years the traditional view of the American family has changed significantly. There are many reasons contributing to the changing family dynamics that include larger percentages of women in the workplace, increases in single-parent homes, and younger generations waiting longer to engage in a marital relationship. Today, according to Hawkins and Mothersbaugh (2013), American households follow much more complex and varied cycles….Therefore, researchers have developed several models of household life cycle (HLC). All are based on age and marital status of the adult members of the household and the presence and age of children” (p. 189). Introduction The following analysis will focus on two stages of the household lifecycle; Full Nest I and Empty Nest II. “Full Nest I: Young Married with Children Roughly 6 percent of households are young married couples with children. The addition of the first child to a family creates many changes in lifestyle and consumption. Naturally, new purchases in the areas of baby clothes, furniture, food, and healthcare products occur in this stage…. [Whereas] Empty Nest II: Older Married Couples There are about 11 million households in this segment, and it is expected to grow rapidly over the next 10 years as baby boomers age. Many couples in the over-64 age group are either fully or partially retired” (Hawkins and Mothersbaugh, 2013, pp. 192-196). Too further compare these 2 stages, I will describe how the marketing strategies vary for the following products/services (minivan, razors, Broadway show, and casino); based on what HLC stage is being primarily targeted. Minivan A primary focus of a minivan marketing strategy for Full Nest I would focus on consumer needs of accommodating young children. The promotional messages to this target market would reflect family vacations via the minivan versus a costly airline flight, would speak to the ability to transport children to school and related activities, and would convey the ease of transporting family members as they carry out their day-today lives. Promotional messages would also convey the economics of a minivan to households that are having to make trade-offs when it comes to their purchasing decisions. Hawkins and Mothersbaugh (2013) discuss how “discretionary and adult expenditures are reduced by the need to spend on child-related products such as food, health care, and children’s apparel as well as to offset the decline in income” (p. 193). As far as promotional channels an integrated marketing strategy utilizing both online (display ads, pay-per-click, and search engine optimization) and traditional offline (television, newspapers, and magazines) would be appropriate for the Full Nest I consumer. On the other hand, marketing strategies targeting Empty Nest II should focus on the younger active members of this group. Hawkins and Mothersbaugh (2013) state the following regarding this group’s needs; “The younger members of this group are healthy, active, and financially well-off. They have ample time. They are a big market for RVs, cruises, and second homes. They also spend considerable time and money on grandchildren and occasionally their children on vacations” (p. 196). With this in mind, marketers should focus on the convenience a minivan offers when vacationing with family and functionality it provides when transporting children. The pricing and economics a minivan offers will not be a concern with this group as it is with the Full Nest I group. Promotion to the Empty Nest II group would utilize a more traditional offline approach; the younger part of this group could also be targeted using online channels as more and more of this group become comfortable with the internet and mobile technologies. Razors Companies vary products to attract numerous market segments. Gordon (2004) states; “It all starts with a brand. Let's use Gillette as an example. The brand encompasses a number of product lines, including blades and razors, toiletries, writing instruments and lighters. Individual products exist within each of the product lines. In other words, Gillette's line of blades and razors extends to Lady Gillette, Mach 3, Sensor and others.” Marketing to the Full Nest I market would involve economical razors that provide convenience that a hectic fast-paced life style needs. While the razors marketed to the Empty Nest II group would promote benefits; such as enhanced comfort and smoothness that comes with higher priced razors. As you can see, there is likely to be some crossover with the razor product line with both household groups that would be conducive to a mass marketing effort versus a niche marketing focus. Targeting the Full Nest I group would primarily involve convenience and cost, while the Empty Nest II group would focus more on comfort and enjoyment. Both groups would be interested in a smooth shave. Broadway Show When marketing Broadway shows to the Full Nest I group the marketer would want to focus on the vacation option that New York and other theatre markets can provide with Broadway shows that like: The Lion King, Aladdin, and Wicked. Whereas marketing to the Empty Nest II group, the marketer would again focus on the vacation option, but also include the evening entertainment options; and would promote more mature audience shows like Chicago, Avenue Q, and Kinky Boots. Again, there would be the ability to cross promote with Grandparents looking to take their grandkids to a Broadway show. In terms of pricing, the marketer could promote a more economical matinée performance to the Full Nest II group while providing a higher price ticket to the evening consumer. The marketer could also segregate based on balcony and lower level seating. Casino The marketer for Casino’s in the Las Vegas market would want to promote the vacation alternative and the many family activities Las Vegas can fulfill while allowing the adults to enjoy gambling, shows and nightlife the Casinos have to offer. Marketing to the Empty Nest II group would focus on the more mature activities the Las Vegas strip has to offer. In keeping with the minivan and Broadway show products/services, there would definitely be an opportunity to mass advertise to both groups with Grandparents looking to enjoy activities with their grandchildren. In terms of hotels the market would offer more moderate 3 star level accommodations to the Full Nest I group, while promoting a higher level 4 and 5 star accommodation to the Empty Nest II group. Conclusion In conclusion, it is clear that “the HLC is an important segmentation tool given its relation to differences in the needs, wants, constraints and consumption patterns that are unique to each stage. However, because individuals within each stage may vary on a host of other important factors such as education or income, the HLC becomes more powerful in terms of market segmentation and strategy formulation when it is combined with these factors” (Hawkins & Mothersbaugh, 2013, 197). References Gordon, K. T. (2004, June 7). Pros and cons of expanding your product line. Retrieved from http://www.entrepreneur.com/article/71094 Hawkins, D. I. & Mothersbaugh, D. L. (2013). Consumer Behavior Building Marketing Strategy, (12th. Ed.), New York, NY: McGraw-Hill/Irwin. Household Life Cycle 1