Children's influences on family decision making in Hong Kong

Tai Ming Wut; Ting-Jui Chou. Young Consumers 10. 2 (2009): 146-156.

Abstract (summary)
Purpose - Focus of previous research into family purchasing decisions has centred on the husband and wife. Children's inflInuences on family decision making have increased in recent decades. The purpose of this paper is to investigate children's influences The Chinese Little Emperors: marketing to Chinese young consumers Edited by Cheng Lu Wang Introduction According to [38] Sheth et al. (1999, p. 583), children in the USA accounted for over $60 billion of direct spending and influenced over $380 billion of spending by other members of the family per year. [26] McDonald and Lavelle (2001) estimate that children between ages of two and 12 spending $29 billion their own money independently indirectly influence $320 billion worth of household purchases. [28] McNeal (1992) proposes reasons for children's influence on family decision making ([1] Bakir et al. 2006). The smaller number of children in families means that each child gets more attention from parents. Also, both parents go out to work and children may take more responsibility for family decisions. According to [23] Lackman and Lanasa (1993, p. 85), the trend of increasing child influence is the result of higher consumer socialization of children, increasing independence given to children of dual income families and the higher divorce rate. Children influence family buying decisions in four different ways. First, children influence their parents to buy products for their individual preferences. Second, older children have their own pocket money and buy the products directly. Third, children influence their parents' choice for family products for shared consumption. Lastly, children influence their parents' own preferences ([28] McNeal, 1992, p. 63). Children exert a certain influence on the overall decision process. [16] Filiatrault and Ritchie (1980, p. 139) assess children's influence to be in the range of 2-20 per cent for different decisions, as perceived by their parents. [17] Foxman and Tansuhaj (1988) point out that the cost of the product and the intended user has an impact on adolescents' influence. Adolescent influence decreased for products used primarily for their parents and for expensive family purchases. In the process of family decision-making, there are three stages: initiation, make choice and final decision ([2] Belch et al. , 1985, p. 163). Initiation is the process whereby a family member proposes a suggestion and ideas. Making choice is the second stage. Family members search and compare different alternatives. The final stage is the buying decision process. The child has been regarded as an initiator in family decision-making ([2] Belch et al. , 1985). When a particular product has been chosen as a candidate in the second stage, the product has greater chance to be sold. If a child has considerable influence in final decision-making, the advertisers have to change their promotion strategy. Thus, it is worthwhile to study the impact of children's influences on choice independence and decision stages in family decision making.

Theories of children's influences Theories about family consumption are important because they help us answer questions of group consumer behavior. Resources theory is one theoretical approach used in explaining the role of children in a family decision-making. Resources theory Resources are the main source of power. "A resource is defined as anything that one partner may make available to another, helping the latter satisfy his or her needs or attain his or her goals. The balance of power will be on the side that partner who contributes the greater resources to the marriage". Resources include tangibles such as money and property. Intangible resources include education and occupational training ([3] Blood and Wolfe, 1960, p. 12). Resources are also defined as any property of a person or group that can be made available to other's needs. In society, individuals have to negotiate to secure the resources they want or need. The resources of one person may be exchanged for those of another person ([13] Dallos and Dallos, 1997, p. 14). [41] Tashakkori et al. (1989, p. 91) suggest that resources determine parental power, based on different sources, including education level, age and family interaction. [25] McDonald (1980) proposes that five types of resources serve as bases from which family members may derive power. They are normative, economic, affective, personal and cognitive resources. Normative resources are the family's values and norms. Economic resources refer to the monetary control exerted by the income earner. Affective resources encompass interpersonal relationships and belongingness. Personal resources include physical appearance and role competence. Cognitive resources refer to the intelligence of family members. For example, it is possible for the husband or wife to use normative and economic resources in family decision making ([29] Moschis and Churchill, 1978), whereas the child is using affective and cognitive resources in the family interaction. [37] Sheth and Mittal (2004, p. 325) elaborate that cognitive resources are a basis for a reversal of influence in family. The shift occurs when a child grows up and is exposed to new knowledge. He or she begins to depend less on the parental role model. Thus, when children's preferences differ from those of their parents, they are able to exercise their influence. There are two reasons for reverse influence. First, children may have greater knowledge and expertise than their parents in specific purchasing areas such as new media products. Second, there is a family norm, known as democratic justice in which each family member is given a voice. Many parents may consider giving their children the opportunity to influence their preferences in family decisions. This demonstrates that sons and daughters are citizens of the family and have their own rights. The child may use affective tactics to increase his or her influence on family decisions. [45] Wimalasiri (2004, p. 276) gives a detailed classification of influence tactics used by children to elicit the desired parental purchasing behavior: pressure tactics, upward appeal, exchange tactics, coalition tactics, ingratiating tactics, rational persuasion, inspirational appeals and consultation tactics. Resources theory provides a basis in family decision-making and group decision-making research. Power, which is closely related to the resource, is discussed in the following paragraphs. [33] Rogers (1974) defines power as a capacity or an ability to influence others. Individual power must be viewed

relative to specific social systems and the positions a person occupies within a given social system. It should be noted that power is linked to the family and the individual's specific role in the family. Power broadly refers to all kinds of influence between family members. [18] Galvin et al. (2004, p. 209) agree with the argument that influence occurs when family members use their power to try to change or modify others' behaviors or beliefs. [12] Corfman and Lehmann's (1987) ideas are an extension of those originally developed by [33] Rogers (1974). Power is also defined as the ability of one person to change another person's attitudes, beliefs or behavior in an intended direction. They add that relative influence in the family can be related to power-related resources and power use-related goals. Power-related resources correspond to passive influence and influence attempt. Power use-related goals are the costs and benefits of exercising power and are either personal goals or task goals. When someone associates a higher income with greater power, the partner earning the higher wage is more likely to be the decision-maker. Wages should be positively related to the frequency of decision-making ([15] Elder and Rudolph, 2003, p. 296). To test their resources hypothesis on couples only, [3] Blood and Wolfe (1960) interviewed about 900 wives in Detroit and asked who made the final decision in family decisions. They drew the conclusion that most families had a joint (equalitarian) decision structure. However, there were families in which the husband made the most decisions (25 per cent) and a few wives dominated families (3 per cent). Thus, in the early literature on family decision-making, resources theory is supported for couples with no children. Does resources theory apply to families where children are involved? It is expected that the child, having has less economic resources, is thus less influential in family consumption decisions. Unitary model According to [14] Dobbelsteen and Kooreman (1997), family members with lower income have lower opportunity cost in the family decision making process. Optimal decision-making involves allocation of time by each partner to income earning activities, household decision-making and leisure. For example, a child who is not employed has a lower opportunity cost and should therefore be more involved in household decision making. The concept is related to involvement. The more highly involved the family member is in the purchase decision, the more the family member expresses interest in the household product. Thus, the more influence that particular family member will have in the final decision outcome ([32] Qualls, 1987). There are some empirical family decision-making studies involving children. [2] Belch et al. (1985, p. 167) investigate family members' influence as a function of product category and stages of the decision making process by questioning husbands, wives and children. The products selected for the study are: car, television, household appliances, furniture, family vacation and breakfast cereal. Wives' scores are always above the mid-range for all products and three stages of the decision making process. Husbands have the least influence at all stages of the decision process where purchase of breakfast cereal is concerned and the highest influence at the decision stage for car purchase. The influence of the child varies by product class and by decision stage. The child shows the greatest influence for decisions regarding cereal and less for other products. The child has greatest influence in the initial stage and less on the final stage of decision-making. Regarding specific decision areas, the husband has more influence on the amount of money spent, which indicates the husband is the main income source of the family. Husbands have least influence in specific product selection such as colour, style and brand of products, decision-making areas that are dominated by

wives. The child's influence also increases for the colour style and brand of products and the child has the least influence on how much money to spend. [40] Swinyard and Sim (1987) obtained a similar result. A review of some of empirical literature indicates that children are most likely to have influence when they are the primary user of a product or in the initial buying stages and when they are involved in sub-decisions such as make, colour and brand choices ([2] Belch et al. , 1985; [40] Swinyard and Sim, 1987). On the other hand, [24] Lee and Beatty (2002, p. 34) find that adolescents exert less influence during the configuration and negotiation stages but gain power in the outcome stage. [19] Holdert and Antonides (1997) also report that children's influence is higher in the choice and final purchase of the decision process for four purchases (holidays, adult and children's clothing and sandwich fillings). The results contradict previous research findings ([2] Belch et al. , 1985; [30] Moschis and Mitchell, 1986; [40] Swinyard and Sim, 1987) where children's influence is strong during problem recognition and information search but declines during the decision stage. Then the research hypotheses are proposed as follows: H1. Child has more influence than his or her parents in the making choice stage of family purchase. H2. Parents have more influence than their children in the decision stage in family purchase. Methodology In June 2006, the number of domestic households in Hong Kong was recorded as 2.3 million ([7] Census and Statistics Department, 2006a, p. 12). Achieving simple random sampling on all Hong Kong families is, therefore, neither practical nor desirable, where time, manpower and financial resources are restricted. Quota sampling, one type of purposive sampling, is adopted, which ensures that certain groups are adequately represented in the study through the assignment of a quota. The quota is fixed for each subgroup, based on the total numbers of each group in the population. This form of sampling involves collecting information from members of the population who are conveniently available to provide it. It is perhaps the best way of collecting information quickly and efficiently. In the study, a specified number of families in different areas of Hong Kong were chosen for the sampling purpose. Although this is the least expensive way of selecting a sample it may bias the sample as most individuals available to participate may have unique characteristics that cause them to be less representative of the total sampling population ([22] Kumar, 1999, p. 178). The data collection method for the large-scale survey is by means of distributed structured questionnaires. The researcher contacts people attending a pre-organized function in a venue such as restaurant or shopping centre. This ensures a higher response rate and personal contact with respondents. The researcher explains the purpose of the study and rights of respondents. Any questions can be clarified. It is expected that all family members attend the function. If one spouse or one family member alone is approached, he or she might oblige the researcher by arranging for the rest of the questionnaires to be completed by other family members. This may pose problems because the other family members may be reluctant to comply. In the study, follow-up telephone calls were made to families that had not completed all their questionnaires, to encourage compliance. The data collection period lasted four months, until the quotas were almost filled. This appears to have been the most efficient method of data collection, given the limited amount of time allocated to the project.

Although a convenience sample was used, specific demographic quotas were established to ensure adequate representation of families in Hong Kong. Only those families in which husband, wife and at least one child were living together during the data-gathering period would be included in the target sample. The child had to be at least seven years old. More than half of the families were living in the New Territories, around a quarter of families were living on Hong Kong Island and the rest were living on Kowloon side. The distribution is similar to the population distribution in Hong Kong (see Table I [Figure omitted. See Article Image.]). Samples were vetted to exclude any families that had personal or business relationships with the researcher and excluded, in order to guarantee the integrity of the survey. Before questionnaires were sent out, the researcher checked the suitability of each family to fill in the set of questionnaires. Suitability criteria for participation in the survey are as follows: - The family unit comprises at least three members (father, mother and one or more children). If there were more than one child in the family, usually the eldest one would be chosen to fill in the questionnaire. If the eldest child is unavailable or his or her age exceeds 29 years old, the second eldest will be the substitute. This procedure will continue until there is one suitable candidate to fill in the questionnaire. If no suitable candidate can be found the whole set of questionnaires is forfeit. - All family members are living together in one place. In order to satisfy this requirement, all members must have resided overnight at least once per week under the same roof in the previous 12 months. - The child must be at least seven years old in order to understand the content of the questionnaire. - The upper limit of the child or young person is set at 29 years old. In comparison with some other locations, the age of fully independent adulthood in Hong Kong is delayed, as many young people pursue tertiary education, remaining dependant on their parents up to and after they enter society as paid employees. Parenting does not end when a child reaches 25 or older. Unemployment and underemployment, along with the low level of affordable housing in Hong Kong, mean that adult children must remain in the family home long after reaching maturity. According to data from the Hong Kong Census and Statistics department, women have the highest labour participation rate in the 25-29 age group, and men in the 30-39 age group ([8] Census and Statistics Department, 2006b). The age of fully independent living (i.e. moving out of the family home and setting up a new one) generally coincides with the age of marriage, after which, most young people want to start their own independent family life. The median age of first marriage for a woman was 28 and for a man, 31 in 2004 ([10] Census and Statistics Department, 2005, p. 54). It is therefore reasonable to set 29 years old as upper limit for the category for young people. The target children respondents may have difficulties understanding questions. In this case, the interviewer or parents can help the child to finish the survey. According to [31] Piaget (1966) and [34] Roedder (1999), children under age of seven have limited cognitive abilities ([5] Caruana and Vassallo, 2003, p. 58). They are in the perceptual stage and their consumer knowledge is often based on a single dimension or attribute of a product. This changes considerably when they move into the analytical stage, between the ages of seven and 11. Under this analytical stage children may understand concepts such as product categories or prices. According to [34] Roedder (1999), children have the ability to analyze multiple dimensions or attributes of a product. After the analytical stage, children pass through the reflective stage (ages 11 to 16). As they grow, children develop more

sophisticated information processing and social skills and during adolescence they become more focused on social meaning. This implies that peer influence is important in this stage. In addition, [27] McNeal (1969, p. 261) agrees that independent purchasing becomes significant near age seven. This is a time when the child begins seeking independence from his or her parents. Therefore, the minimum age of children to be included in the study is seven. Since target respondents are Chinese, back translation is used to ensure the meaning of original questions is fully converted. Back translation is the process of translating a questionnaire that has previously been translated from English into Chinese back to English by an independent translator to guarantee correct translation. Minor corrections have been done on the wording of questionnaire. Correlation coefficients among almost all questions in test-retest are significant at p less than 0.5. This suggests a good reliability of instrument design. Choice independence (child) is a scale original to [4] Carlson and Grossbart (1988). They report an alpha of 0.63. It is a five-item, four point, Likert-like summated rating scale measuring the degree to which a parent reports a child exercises autonomy in the purchase of several products that the child will consume. The scale mentioned previously was adapted to use as choice independence using a seven point Likert scale instead of a four-point scale. Respondents were given the opportunity to choose the middle point between two specific descriptions if they felt both situations might occur. For the husbands' and wives' sets of questionnaires, the wordings are modified accordingly (see Table II [Figure omitted. See Article Image.]). Scale for decision role is original to the study by [21] Kim and Lee (1997), who developed measures of children's relative influence based on multiple-informant, multiple-item responses. The scale here adapted in the current study aims to capture the relative role played by a child in decisions to purchase products that are used in the family. Higher scores on the scale suggested that children made the family purchase decision almost entirely by themselves. That means the scale is similar but reversed compared with choice independence. The seven-point Likert scale in hedonic and utilitarian dimensions is used instead of three different product categories. The wordings are adapted to suit all three members of the family. Alpha is reported at ranges from 0.78 to 0.86 (see Table III [Figure omitted. See Article Image.]). Data analysis and discussion A total of 202 sets of questionnaires were sent out and 134 were completed (a response rate of 66.33 per cent). Of the 134 completed sets, 122 were suitable for further analysis. 12 were invalid as one or more (husband, wife or child) sets were missing or some of questions were incomplete within the separate sets. Therefore, the final response rate was 60.40 per cent, which corresponds to the response rate in similar studies. After discarding 36 incomplete questionnaires, there were 366 questionnaires from a total of 122 families available for further analysis. In terms of total number of siblings, the average for respondent families was 2.03, which corresponds to the population in Hong Kong. Since our methodology preferentially selected the eldest child in the family, the age of children and the ranking cannot be compared with the population in Hong Kong. The gender distribution of children also approximates that of the whole population. Table IV [Figure omitted. See Article Image.] shows demographics of child respondents in families.

Children's ratings are less than parents' ratings in the "making choice" stage and children's ratings are higher than parents' ratings in the "decision role" stage. Parents' perceptions differ significantly from the perceptions of their children (see Table V [Figure omitted. See Article Image.]). The child has more say in choice independence, which are less than 4. Parents have more say in the decision stage, which are also less than 4. Reversed scale has been used in the decision stage scale. H1 and H2 are supported (see Table VI [Figure omitted. See Article Image.]). There are a significant proportion of adult children (children aged 19-29) in the sample (see Table IV [Figure omitted. See Article Image.]). As previously explained, due to high housing prices in Hong Kong and the Chinese tradition, many unmarried, adult children live with parents. It is expected those adult children could contribute to the high choice independence. This is verified in Table VI [Figure omitted. See Article Image.], where it can be seen that the rating of choice independence of younger children is smaller and the difference in rating between adult children and parents is statistically not significant. This is consistent with [2] Belch et al. 's (1985) finding. [2] Belch et al. (1985, p. 167) point out that the child has the most influence in the initiation stage and that the child's influence subsequently diminishes in the evaluation stage and decision stage in almost all the products they tested. These are televisions, vacations, household appliances, household furniture, breakfast cereal and automobiles. The only exception is the automobile. The findings with Israeli families are similar. Children's influence is consistently the highest in the initiation phase and the lowest in the search or evaluation stage. Also the mean influence of Israeli teenagers tends to be higher than the influence of teenagers in the USA ([39] Shoham and Dalakas, 2003). Conclusion and theoretical implications In summary, parents have the final say on family decision making and the child has his or her own influence in the stage of making choice. H1 that child has more influence than his or her parents in the stage of making choice and H2, that parents have more influences on final family decision are supported. The family is a resource exchange system. However, resource theory assumes that family members are rational. This may not always be the case. Family members may act altruistically without expecting any reward, as is often the case in parent/child as well as couple relationships. [35] Roloff (1981) suggests contributions, needs and equality are also considerations in the exchange process. Thus, family decision-making cannot be explained fully by economic resources. Affective and cognitive resources should be taken into account. [43] White and Klein (2002) suggest that family theory development occurs in two distinct stages: formative and refinement stage. Formative stage is the development period where basic concepts and understandings develop. Refinement stage is where theory is tested, applied, criticized and refined. Canonical concepts are then established accordingly. Resources theory was developed in the midtwentieth century, borrowing theoretical concepts from other fields. It is now moving into the "refinement" stage in this century ([11] Chibucos and Leite, 2005, pp. 359-60). Family consumption is one of the "refinements" in the field. In view of the above findings, resource theory is supported for Chinese parents and children in Hong Kong.

Managerial implications Parents' decision usually prevails in the final decision stage in family decision-making. This may be due to economic realities, where parents contribute and hold family financial resources. Children have influence in the stage of making choice, which is consistent with previous research findings ([2] Belch et al. , 1985; [30] Moschis and Mitchell, 1986; [40] Swinyard and Sim, 1987). [6] Chan and McNeal (2003) also report that Chinese parents adapt relatively strict control over the products that children can or cannot buy but allow them more freedom in choosing brands of permissible products. It has been known for marketers to target both children and parents in family consumption products advertising, with increasing children's influences in family decisions ([20] Kaur and Singh, 2006). The results of this study show that parents and their children usually work together in family decision making. It is clear that the marketer must address the needs of both parties and work to help to resolve any conflict that may arise. As the final decisions are made by parents, conservative pricing strategy may be used for family products, as parents are mostly rational. Therefore, bulk packs with lower prices may be suitable for family products. Since the final decisions are all made by parents, the outlets for family products should be similar to those available in the adult market. In Hong Kong, family convenience products could be situated in residential shopping centres as well as trendy commercial areas. This would allow both working parents to perform their purchase activities during lunchtime and after office hours. Since almost all Hong Kong children and teenagers have regular internet access, new products and product information could be made available online so that these two groups might act as initiators and influencers. Direct marketing has advantages on family household products. It has roots in direct mail and catalogue marketing. Today, it includes television direct-response marketing and electronic shopping, because many household decisions are jointly made and it is difficult for all family members to physically shop together to search and purchase a particular product, even in a densely populated city like Hong Kong. Thus, a discussion and conflict resolution "space" is offered for direct marketing methods. Family members can share their opinions after viewing promotional materials, such as the IKEA home wares catalogue and the Dell's on-line computer promotion electronic mails. Limitations and future research areas Product categories, age and gender of child are potential candidates affecting family decision making, which are not measured in the study. Different members of the same family may perceive different meanings for the same question in the questionnaire, which may be due to the difference in educational level and social experience between couples and their children. Also income, occupation and employment status of family members could contribute the influence of each individual family member. The study does not trace the changes of a particular family or any individual member in the family. Families gradually change as they move through the life cycle and many researchers have attempted to investigate how family decision-making varies with progress through this cycle ([42] Wells and Gubar, 1966; [36] Schaninger and Danko, 1993; [44] Wilkes, 1995). A snapshot of the family at various stages of their relationship was captured but the researcher was unable to trace through the

whole process. In addition, it is difficult to capture the complete causal picture through the nonlongitudinal approach. Since Hong Kong is a highly advanced and westernized city in comparison with other Chinese cities, the results from this study may not be generalizable to other Chinese families in Mainland China. However, it can provide some insights for marketers on major cities such as Shanghai and Beijing, where young consumers are closer to Hong Kong's young consumers in attitude and experience than those young consumers from other parts of the Chinese Mainland. Taking into account the above limitations and the results obtained, future research should include a broad range of factors that determine family decision making, including the effect of income, education level, employment status, siblings, peer groups, teachers, celebrities and other public figures. Also, a longitudinal design would enable a deeper understanding of the complex relationships among family members. Moreover, besides the nuclear family, which is the targeted sample in the study, there are other types of family: homosexual family, extended family, blended family, single-parent family and cohabiting family. It can be anticipated that family communication would be different in those families. Thus, similar studies could be performed in those families for comparison. This study excludes singleparent households and extended family households, which form a significant proportion of family types. Research on the purchase decision in those families shows variation in family decisionmaking. Received March 2008. Revised December 2008. Accepted January 2009.