Life Cycle Revisited: Applications in Consumer Research

Citation:

Subhash C. Jain (1975) ,"Life Cycle Revisited: Applications in Consumer Research", in NA - Advances in Consumer Research Volume 02, eds. Mary Jane Schlinger, Ann Abor, MI : Association for Consumer Research, Pages: 39-50.

Advances in Consumer Research Volume 2, 1975      Pages 39-50

LIFE CYCLE REVISITED: APPLICATIONS IN CONSUMER RESEARCH

Subhash C. Jain, University of Dayton

[Subhash C. Jain is Associate Professor of Business Administration, University of Dayton.]

This article reviews the Status of Life Cycle as an independent factor in consumer research. Although many studies upheld that life cycle discriminated significantly, its usefulness has been found limited. The logic of using life cycle, which is Just one phase of consumer's life style, alone as a predicter over multidimensional approaches, is questioned. A question is also raised over the current practice of constituting life cycle stages, based on age of the head of household, marital status, presence and ages of children.

The concept of family life cycle has been the subject of discussion among marketers for over two decades. A number of studies has found the concept usable in practice for understanding consumer behavior (Carman, 1965; Lansing & Kish, 1957; Lansing & Morgan, 1955; Glick, 1947; Lydall, 1955; Andreasen, 1966). Still other studies have questioned the value of the family life cycle concept in explaining behavior (Rich & Jain, 1968). Lack of any recent, comprehensive, empirical study makes it difficult to arrive at any significant conclusions on the worth of family life cycle in understanding, explaining and influencing consumer behavior. The purpose of this paper is to discuss the conceptual standing of family life cycle, and to critically examine the value of using it as an independent factor in consumer research. The discussion will be substantiated by the findings of two proprietary surveys in which life cycle figured as a predictive variable. The usefulness and acceptance of the concept would also be looked into based on case studies.

DEFINITION OF LIFE CYCLE

The stage in the life cycle is a refinement of a variable used in analyzing purchasing patterns - age of head of the household. The basic assumption underlying this concept is that for marketing studies, an individual's position in the household life cycle is more important than age or income. For example, the decision of a 40 year old man to buy a house is greatly a function of the fact that he has a wife and three children rather than he is 40 years old. The household life cycle begins when a person leaves the home of his parents and moves into another abode. It proceeds from there to the married stage and finally to the stage of solitary survivor. The married stage can be subdivided into stages marked by the birth of children, specific ages of children, and departure of the children to form their own households. Thus family life cycle may be based on a combination of different demographic variables, such as age of the head of household, marital status, presence and ages of children, and age of the housewife.

Rich and Jain (1968) used age of the head of household and presence of children as the differentiating variables between various life cycle stages. The Life study (National Industrial Conference Board, 1965) formed life cycle stages based on presences and ages of children. In the survey of consumer fiances, the Michigan Survey Research Center, in addition to using age of the head of household and presence of children, included the ages of children in its design (Katona, Lininger & Mueller, 1964).

The question -arises which is the most appropriate way to categorize the life cycle. Among the published studies on the subject, no two follow the same classification. This makes comparison difficult. But age of the head of household achieves significance since age as a natural process would make a difference in behavioral patterns irrespective of the family cycle status (Fisk, p.118). For example, a married individual will be a different person in early 20's than when he is over 40, even if no children are involved. Granbois (1963) found that degree of interaction in the process of household decision making between husband and wife declines as the couple becomes older. Webster (1965) discovered the older housewives to be more deal-prone. They bought fewer units and many more brands. Ages of either spouse, however, need not be included in constituting life cycle stages if the ages at which people get married and children are born are significantly consistent among the majority.

Marriage obviously would change one's life perspective. Myers and Reynolds (1966) mentioned the results of a proprietary study that showed how marital status became an intervening variable in the preference for a dressed-up engine with chromed valve covers of an automobile with the married men preferring less glamorous options. Likewise, presence of children would have an effect on a family's life style. One study noted that along with factors such as perceived consumer effectiveness, the presence of children in the family increased the probability of using returnable bottles and nonphosphate laundry detergent (Kinnear, Taylor & Ahmed, 1972) . Another study indicated that married couples with children attached less importance to having a home closer to the family head's place of work than singles and couples without children (The Outlook on Consumer Behavior, 1964) . Katona (1960) mentioned that young couples with children engaged in installment buying more frequently. Montgomery ( 1970), however, discovered that the presence of children had little affect on deadline activity by the family.

Another variable that has found place in forming life cycle groupings is the ages of children. Disagreement prevails among researchers whether the age of the youngest child be considered, or that of the oldest, or those of both (Frank, Massy & Wind, 1972, p. 34). Intuitively, inclusion of age of children in the analysis should make life cycle categories too small to be meaningful from the viewpoint of a practical manager. As a matter of fact, the number of children also may be considered in forming life cycle stages. Many studies have found family size as a viable factor in explaining consumer behavior. For example, Crockett & Friend (1960) found family size to be one of the most highly correlated variables with overall food consumption. A similar conclusion was drawn by Frank, Massy & Boyd (1967). Here again the danger is if along with ages of children, the number of children is used for constituting life cycle stages, each stage may still become smaller.

The definition of life cycle as discussed above attaches little significance to income or any other economic variable. Thus it is assumed that married families with younger children would behave alike, even if they are located on different steps on the status ladder. This assumption hardly appears reasonable. Engel, Kollat & Blackwell (1968) indicated that the influence of social class on consumer behavior varied in different stages of the life cycle. Accepting their hypothesis, to make life cycle stages meaningful, each stage may further be split into status categories. Once again we may be faced with the problem that a status-life cycle category may become too narrow to be of value. As has been said: "If a category is too narrow, it will include such a small proportion of the sample that it will be all but unpopulated except in large surveys " (Wells & Gubar, 1966, p. 360).

In the final analysis, the bases used to break down family life cycle will have to depend on two factors: nature of the product, and prerequisites of a good segmentation criterion. In the case of products such as baby foods, school supplies, vacation, entertainment, toys, and large appliances, perhaps inclusion of ages of children as a criterion for forming life cycle stages would be desirable. For segmenting the market for products such as housing, furniture and furnishings, insurance, small appliances, and cars, the variables marital status, age of the head of household, and presence of children may suffice. Of course, different criteria may have to be used for individual products within the same broad group. To segment the market for appliances, as an example, generally speaking ages of children would be important. But ages of children may be more meaningful for discriminating buying of refrigerator, vacuum cleaner and washing machine than air conditioner, electric floor waxer, and compactor, since purchase of these items may depend more on the level of discretionary income than the ages of children. As far as the criteria for good market segmentation are concerned, the following conditions should be met:

(a) Each segment should show varied demand elasticities in response to price and promotional variables (Engel, Fiorillo & Cayley, 1972; Frank, 1968).

(b) Each segment should differ in the average purchase rate of the product being considered.

(c) Within a segment the heterogeneities should be minimal.

(d) Each segment should be large enough to justify a separate marketing program (Bieda & KassarJian, 1969; Engel, Kollat & Blackwell, 1969).

(e) Each segment should be within the reach of the firm's promotional Program.

APPLICATIONS

Many consumer researches have been reported in literature in which life cycle figured as an independent variable. A comprehensive summary of these studies has been prepared by Wells & Gubar (1966). However, a brief review would be desirable here. Applying the concept of family life cycle to consumer finances, Lansing & Morgan (1955) discovered that people differed in their behavior patterns in different stages of family life cycle with respect to income, expenditures on durables, assets and debts, and subjective feelings about financial position. For example, the income of a typical family increased until the head of the household reached late forties, and declined thereafter, with the exception of the young, married, and children under six stage, since during this stage the wife stopped working .

Social Research, Inc. (1964) in a study undertaken for the Kroehler Manufacturing Company, noted that interest in furniture buying was highest among newly married couples and among families with grown-up children. The young family, however, placed relatively greater emphasis on sensibility and practicality in furniture buying, while the families in the later stages attached more importance to attractiveness and reflection of good taste. Barton (1955) found that life cycle discriminated in behavior better than age in the case of nondurable goods. For example, young housewives tended to buy prominently advertised products, products in smaller sizes and packages and new products. Older housewives, however, bought larger sizes and multiple packages, were less likely to be influenced by advertising and showed less interest in new products. A more recent evidence of the link between a family's stage in the life cycle and consumer traits was found in the National Industrial Conference Board (NICB) study (1965), sponsored by Life, on the Expenditure Patterns of the American Family. This study provides a most comprehensive treatise on life cycle, covering expenditures on services, and nondurable and durable goods. The NIBC Study showed that expenditures varied by age and life cycle to about the same degree for about 50 percent of products and services. But for 177 products and services life cycle was found to be more discriminating than age which excelled in 54 cases.

One study has taken an exception to the findings of the studies reported above. Rich & Jain (1968) in their study of shopping behavior questioned the applicability of life cycle as a predictor of shopping behavior. The authors, based on the data of an extensive empirical study of women's shopping behavior, suggested that life cycle distinctions were obscured by the leveling effects of socioeconomic changes. Similar comments were made by a baking company executive on the usefulness of life cycle:

Basically, from a marketing standpoint, bread is considered a staple it's on the housewife's list, and the question is, which type of bread and brand she will select. Snack cakes are primarily an impulse item, and the decision to buy is made in the store more often than not.

As far as bread is concerned, it is generally agreed that children and young people prefer soft white bread. As people grow older, they tend to prefer a firmer bread. However, there appear to be geographic differences. In the South and Midwest, soft bread is asked for. On the eastern seaboard and the Far West, more of the firmer bread is sold. Also, the East and Far West consume more variety breads - rye, whole wheat, French, Italian and so on, than in other sections.

To try to break consumption down into the categories you mention would be most difficult. Obviously, the larger the family, the greater the consumption. But it might be a mistake to assume that per person consumption for your group 2 is markedly different from that of, say, group 4, since both parties in the newly married couple will tend to eat away from home more often, and their restaurant or sandwich shop consumption includes bread which otherwise would be purchased for the home. Another difficulty is that national eating habits are changing. We are snacking more and eating fewer full meals. Also, far more meals are eaten away from home than ever before - not only in restaurants and coffee shops, but in schools, day care centers, industrial feeding establishments, homes for the elderly, hospitals, and so on. As for snack cake, consumption probably rises rapidly from kindergarten, levels off in the midteens, declines in the late teens and twenties, though it by no means disappears.

The studies referred above have been based on information gathered in 1950's and 1960's. In the absence of any recent empirical work, verification of earlier studies on their standing today must be made on indirect evidence.

Table 1 shows the results of a survey on shopping behavior, where both life cycle and age were used as independent variables. In most cases, it would be noted, the chi-square values for age are considerably larger than those for life cycle. In quite a few cases, age chi-square values were far in excess of those for life cycle, for example, persons with whom shopping discussion was found helpful. The life cycle was favored for nature and extent of discount shopping, services expected from a department store, extent of shopping done by mail and fashion consciousness. On balance, it might be reasonable to conclude that neither age or life cycle is able to predict shopping behavior to any large extent. Further use of age in segmentation may be as useful as life cycle.

A similar conclusion would be drawn from the findings presented in Table 2. Usage of 22 of the 36 financial services tested was found to vary among respondents when categorized by sex, age, educational level, income level, and family life cycle. Of these, usage varied by stage of family life cycle alone for 14 services. This was followed by age (13 services) and by educational level and income level (both with 10 services).

CONCLUSION

Life cycle, it should be recognized, is but one of the many variables that affect consumer behavior. The entire spectrum of behavior cannot be explained by a single variable. It is the total life style that would determine how a group of people may behave in the market place. According to Plummer; 1974), activities, interests, opinions, and demographics are the four major life cycle dimensions, with 9 variables under each dimension, making a total of 36 variables. Life cycle falls under demographics along with 8 others. Clearly, life cycle alone cannot be expected to discriminate in behavior, assuming all other life style variables to be constant. There may be situations where life cycle, as also incomes social class, or age, may reveal significant differences in consumer behavior. But such differences may lack reliability.

Further, it would be easy to make a case for life cycle through discovering broad distinctions among consumers in different stages of family life cycle. But how far such distinctions are usable at the micro level is difficult to say. Consider Table 3, as an example. Based on information collected from six hospitals, the health care needs in different stages in family life cycle have been compiled. Obvious differences are noticeable in various life cycle stages. Health care requirements are minimum in the bachelor stage. In the later stages, the families tend to require more intensive medical care with the exception of older couples, with grown up dependent children. It is questionable, however, if this type of information might help a drug company in formulating its marketing strategy, or a hospital in programming its service offerings.

As an hypothesis,-it appears that the concept of family life cycle, as has been conceived and used so far, may be outdated. The concept, however, may be made more viable through using a combined life cycle socio-economic index, built on life cycle, income, social class, family size, etc. Also attempts might be made for inclusion of households in the analysis which past studies on life cycle have ignored. These are middle aged single people, either never married or divorced or widowed; and older married couples who never had children. Possibly one way of improving the present categorization of family life cycle would be to use three different life cycles: the bachelor (bachelorette) life cycle; the divorced/widowed life cycle; and the married life cycle. Within each stage, there will be a group of situations that would affect consumer behavior. Thus each cycle may be broken into various stages based on a relevant "situations vector."

TABLE 1

CHI-SQUARE VALUES FOR LIFE CYCLE AND AGE GROUPS

TABLE 2

LIFE CYCLE, COMPARED TO OTHER SCOIO-ECONOMIC VARIABLES, AS A CRITERION FOR MARKET SEGMENTATION: USE OF BANKING SERVICES

TABLE 3

FAMILY LIFE CYCLE AND HEALTH CARE SERVICES NEEDS/PUREHASING HABITS

The literature search shows that linking of market behavior to family-age and child-rearing, i.e., family life cycle, was useful in the realm of housing purchases, finances, and the purchase of certain packaged consumer goods (Hisrich & Peters, 1974) . Other evidence suggests, however, that life cycle may have lost significance as a predictive variable. A variable significant in one market/product context may not be significant in another. Possibly a predictive variable needs to be tested in each individual market/product context to ascertain its usefulness.

Years ago Gary Steiner (1966, p. 211) mentioned a few propositions on consumer behavior. These propositions are equally true today. We may, therefore, conclude our discussion on life cycle with these propositions: (1)"Some do, some don't," (2) "The differences are not very large," and (3) "It is not as simple as that.

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