Theoretical Modeling of Influence of Children on Family Purchase Decision Making

Abstract

Children traditionally were not considered important consumer segment. However, with changing economic, social and demographic scenario, the situation has undergone a change. Substantial research has found that children have influence in family purchase decisions. McNeal (1987) categorized children as three markets in one: they are current market that spends money on their desires, they are a future market for most goods and services and they are markets of influential that cause billions of dollars of purchase among their parents. A study by Nickelodeon (2013) states that power of kids influence over purchasing decisions has increased significantly over the years and decision making among families is collaborative. McNeal (1998) reported that children's indirect purchase through influencing parents decisions soared from USD 5 billion in 1960s to USD 188 billion in 1997. Today children are not passive users but influential buyers and are socialized in this role from an early age. The topic gains special relevance from Indian context due to various reasons. The influence of children in decision making is still an unexplored topic in India. The study specially gains relevance as India has witnessed huge cultural, social and economic changes in the past decade. With compounded annual growth rate of 5.36% predicted for average household disposable income between 2005-2025 (McKinsey Global Institute, 2007) the financial position of families is much stronger. As per Census 2010 of India, demographically India is a young nation with 30% of the population below the age group of 15 years. According to consumer socialization theory family, peers, media are important socialization agents. Also according to research, child's influence is effected by product category, age of child, family communication pattern (Ahuja and Stinson, 1993, Caruana and Vassallo, 2003, Haynes et al., 1993; Ozgen, 2003). The model integrates these two different areas of research to develop a conceptual model to explore the relation of influence of children with respect to different factors. The model introduces the concept of “parent's re-socialization”.