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The Modeling of Family Life Cycle of China Urban Families and Empirical Research of Its Relation with the Product Consumption

Author: LiuYanBin
Tutor: YuHongYan
School: Jilin University
Course: Business management
Keywords: Family Life Cycle Market segmentation variables Household consumption behavior
CLC: F713.50
Type: PhD thesis
Year: 2008
Downloads: 864
Quote: 2
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Abstract


The Sociologists, consumer researchers and marketing researchers have been taking“family life cycle”as one way to understand the family, for them, the family life cycle is a very important concept(Lansing and Kish 1957;Rich and Jain 1968;Spanier, Lewis, and Cole 1975;Murphy and Staples1979). Engel,Kolat and Blackwell(1978) said that“because the family life cycle combines the income with demand, it has been considered as the most powerful method to classify and segment the individuals and families”. Therefore, the marketing and consumer behavior textbooks believe that the family life cycle is an important demographic variable in explaining the consumer and segmenting the market, its validity have been confirmed in many countries and markets, either in the product or service consumption areas, or in the family consumption allocating areas and other business areas(Bellon et al.,2001). Nevertheless, on this concept and its role in consumer analysis, it still has some problems on the concept and empirical research.Based on the analysis of previous literatures, we will develop a family life cycle model fit to the Chinese urban families, and then examine the validity of this model as a market segment variable. Therefore, our paper presents a two-stage modeling method. That is, first, we will use the modern family life cycle flow chart to build the initial model, and then use the quality research method to compare the family consumption situation in two adjacent stages, analyze the impact of family events upon family to further simplify the initial model, and finally develop a family life cycle model fit to the urban families in the northeast of China.Based on the literature combing and Chinese family demographic environment analyzing, we use the flow chart to determine the 15 stages in the initial model, that is youth single, middle-aged single, elderly single, cohabiting couples, young couples, middle-aged couples, elderly couples, children rely onⅠ,Ⅱ,Ⅲ,Ⅳ, the three-generation familyⅠ,Ⅱ,ⅢandⅣ. Next, we use the quality research method to determine the impact of family events on the family consumption, such as getting married (Distinguish between the cohabiting couples and young couples), children getting into the primary school (distinguish the three-generation familyⅠandⅡ), children getting into the middle school(distinguish between the children rely onⅠandⅡ, distinguish the three-generation family II and III), children’s graduation from the middle school (distinguish between the children rely on III and IV; distinguish between the three-generation family III and IV ). The result shows that all the events have a tremendous influence on the family, except the children graduate from the middle school,the family could be divided into two different stages. Finally, our family life cycle model includes 14 stages, that is youth single, middle-aged single, elderly single, cohabiting couples, young couples, middle-aged couples, elderly couples, children rely onⅠ,Ⅱ,Ⅲ,Ⅳ, the three-generation familyⅠ,Ⅱ, andⅢ. This model has big difference from the models that have been widely applied, such as Wells and Guber’s model (1966), Murphy and Staples’s model (1979), Gilly and Enis’s model(1982). The most obvious difference lies in two points: firstly, taking into consideration massive existence of the cohabiting couples and its special consumption characteristics, our model took cohabiting couples as an independent stage, which conforms to the characteristic of the modern family evolution; secondly, considering the universal existence of the backbone families, we add the backbone families type into our model, and based on the family consumption characteristics we divide it into three stages, which conforms to the Chinese families’characteristics.Through the analysis of 2006 China’s population statistic data, we find the new family life cycle model can adapt to the China urban demographic environment very well, and make the explicit classification for more than 96% china urban families. However, the research value is not restricted in this, but lies in whether it can be used in the business as a market segmentation variable. Therefore, we did an empirical research of this model. In this paper, we take the urban family in the northeast of China as an example, using the questionnaire survey method, and send 2000 questionnaires in Shenyang, Harbin, Changchun and Jilin, of which there are 902 validity questionnaires. The analysis methods are regression analysis, AOV analysis, etc. We use the SPSS15.0 as the analysis instrument. The main conclusions are as follows:Firstly, the new urban family life cycle model has a significant explanation power in the family consumption expenditure and product consumption. We control the family month income, the age of the head of a household and the family scale, etc. And then we use the regression analysis to examine the model’s the explanation power in 8 family consumption expenditures and 14 product consumption. The result shows that the new model has a significant explanation power in 8 family consumption expenditures and 14 product consumption, that is, family food expenditures, the family clothing expenditures, the family education expenditures, the family rest and recreation expenditures, the family transportation expenditures, the family communication expenditures, the family healthcare expenditures and the family equipment thing expenditures; The consumptions of the kitchen furniture, living room urniture, bedroom furniture, television, refrigerator, washer, beer, white liquor, fruit punch, carbonic acid drink, the quick-freeze stuffed dumpling, the bread/biscuit/cake, and the expense in the Chinese restaurant and the fast-food restaurant.Secondly, the new urban family life cycle model is an effective variable for market segmentation. Take the family life cycle model as an independent variable, the 8 kinds of family consumption expenditures and 14 kinds of product consumptions as the dependent variables, the AOV analysis result show that: the new model can make the explicit classification for the 8 kinds family consumption expenditures and 14 kinds product consumptions. This conclusion is consistent with the Bellon et al. (2001), and it means that the new family life cycle model is a valuable segmentation variable for family consumption expenditure and product consumption.Therefore, the findings indicate that the new family life cycle model can be considered as a explanation variable to interpret and segment the family consumption expenditure and product consumption in the marketing domain. The research contributions mainly lie in three parts: expanding the family life cycle concept, innovating the modeling method and the empirical research in the Chinese environment.Firstly, expand the family life cycle concept, and build the family life cycle model fit to the Chinese environment. We expanded the family life cycle concept to the three-generation family, therefore it conforms to the Chinese context better. It not only promotes the application of this concept in the Chinese context, but also provides a reference for the countries with similar cultural environment. Furthermore, we expanded the family life cycle concept to the cohabiting couples, and it conforms to the characteristics of the modern family.Secondly, enrich and improve the modeling method. Based on the review of previous researches, our paper presents a two-stage modeling method. That is, first we will use the modern family life cycle flow chart to build the initial model, and then use the quality research method to compare the family consumption situation in two adjacent stages, analyze the impact of family events on family to further simplify the initial model, and finally develop a family life cycle model fit to the urban families in the northeast of China. This method not only takes into consideration the specific family’s demographic characteristic, but also takes the distinguish ability to family consumption into account. This method is more specific, precise and scientific, and it provides an important reference to the similar researches.Finally, this research will promote the family life cycle model theory in the empirical study, and provide the basis for its application in the marketing practice. It’s the first time to examine the relationship between the new model and the product consumption (controlling lots of social economic and demographic variables), and it’s the first time to use the Chinese urban research data, examine the validity of taking the family life cycle model as an market segment variable in lots of product and service consumption areas, supply a foundation for the family life cycle in the marketing domain.Although this research has certain advantages, any research has its limitation. Our research also has certain limitations, in the same time, the limitations supply the future research direction for us.Firstly, our research conclusions are only suitable to the urban family in the northern part of China. Because of the cultural differences between the south and north, the urban and rural, the research results are not applicable to the family in south and rural. Therefore, the later research must expand the research scope, including the family in the south of china and the rural areas.Secondly, the information we use in our research is static, including the family consumption expenditure and demographic situation in different stages. But we have not got the information about the impact of the marriage, child’s birth, the matriculation as well as the change of family composition form on the family consumption. To solve this problem, we need a group of informants, get data continuously and evaluate them in the long term. Rex and Wagner‘s (2006) research shows it is necessary to do so. But for us, it is hard to get this kind of information and data, so we hope we can do it in the future research.

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CLC: > Economic > Trade and Economic > Domestic Trade and Economic > The circulation of commodities and the market > Market > Marketing
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