Research Topics: Household Lifecycle

Clothing Food and Household Items

Requirement 1 Marks and Spencer (M&S) sells mid-priced clothing, food and household items primarily in UK.  In fact, it is one of the largest UK clothing companies and had sold most of its international stores just to prevent its UK stake for dilution.  Since firms cannot directly control its general environment unlike industry or competitor settings, understanding the effects to firm’s strategies of the turbulent, complex and global scenarios forecasted or actually happening is crucial.  This will provide the firm readiness and flexibility when its environment poses strategic possibilities (opportunities) and strategic constraints (threats) that can enhance/ hinder the attainment of strategic competitiveness.      The advances in technology and its automation capability minimize store personnel difficulties and possible irritability in the old system that can affect its actual responsibility to provide customer service.  They can entertain and communicate optimal number of customers and confronts the system during product download and payment with efficiency.  Customers, in return, receive more attention and fast transactions making the shopping experience time-friendly.  With less time dedicated to complete the store transactions because the new technology can do the processing on its own and silently, store personnel can effectively augment the store outlook, which is intended to attract people, giving the management less worry if wholly managed retail stores are effective medium of marketing.  This idea maximizes the utility of store personnel which can divert marketing investments to promote automation in the store or provide more attractive compensation to store personnel.   Since M&S market presence is superior in European countries, these segments are deemed crucial to the continued success of the firm.  The United Kingdom Government Modernization Agenda to improve older people services supported by Department of Health’s announcement of the new health care system aimed in increasing the quality and decrease variations in health services.  The program will set a framework in which public and private institutions alike will adhere to the health requirements of the growing population of older people.  As a result, this agenda brought a message to industries to provide a platform wherein age structure of their markets are given priority which call for a shift in inefficient and inconsistent delivery and funding of products/ services to a streamline, accurate and reliable one.  With this there is a need to have Gateway that information system of M&S is in line of political agenda.    Both young and old people can have access, in which at least 50% of the country’s households are internet connected, to firm’s product developments and new services.  They will prevent ordering an item at zero stock deepening inconvenience and inferior service quality detrimental to the new policy and customer satisfaction alike.  Older people will feel accepted by the society.  As a result, self-actualization can be relived providing possible market segmentation on the part of the firm to exploit the opportunity of catering the clothing-stylish need of the older age bracket.  The new policy ignited the restructuring of the firm’s resources to better meet the needs of customers.  In effect, marketing programs are not merely advertisement-based rather intensifying product value through excellent customer relationship derives at convenience and ease of transaction.               However, the new policy would also require M&S competitors to upgrade their electronic platforms.  As a result, a clear competition in continuous improvement in the electronic presentation and database will be apparent that can signal shift of firm investment from different media advertisement into technological and service improvement.  Being an official member of working committee building the policy strategies, however, chosen companies have the upper hand and first mover advantage in this area against rivals.  With the necessary knowledge to adapt its gateway in the present needs of customers across age structures and its relative competitive stance from others, marketing decision are made within a direction and objectivity.    Human development Index is high as well as GDP per capita making standard of living and income levels in the same proportion.  Household income is also supported by lack of manpower pushing wage rates in positive direction to attract labor supply.  As a result, purchasing power of individuals can suffice the price of M&S products which is basically marketed for the high-end sector.  Textile industry is both an export and import industry in UK.  In addition, the country is known to be the poets and thinkers providing the basis for the population to be sophisticated and maximize their utility over a range of product and services.  As a result, the stylish and trendy products of the firm blended with the local culture and unique emphasis.  Of course, a sophisticated mind could be argued to express itself in its dress or accessories for acquaintances.  It can denote prestige, status and social order enabling people to communicate through what they wear with less talk.         Requirement 2 Market capitalization is the core indication that a company has a strong footing to continue business under a specific management and ownership.  Low market cap makes companies vulnerable to acquisition while high market cap transform them into formidable acquirers.  High growth in market cap is attained from combination of rapid earnings and increase in returns from book equity.  On the other hand, net asset value is defined as assets minus all liabilities including long-term debt and preferred stock.  In effect, buying stocks below NAVE makes the transaction a bargain because the firm is not getting the maximum face value amount.  As a result, the assumption that high growth in market cap is attained book equity surpluses is confirmed.  However, continued earnings and bottom-line performance can positively affect market impression about the equity issues of the company, thus, a pre-condition to gain returns from book equity.  When NAVE on the book is closer to market value, market cap will not grow.          Market cap is equal to current stock price multiplied by the number of outstanding shares.  In effect, the implication is clearer that market-to-book ratios are related more directly to returns on book equity rather than earnings growth.  As stated earlier, earnings growth can provide the platform to affect market cap but requires more market sentiment.  However, with the presence of high earnings growth and high returns on equity, market cap can propel up in the market charts.  For example, the turnover of M&S continued to be stable from its 2000 performance to the present.  However, its earnings per share (EPS) continued to increase from the same time horizon.  In effect, market cap is expected to be full-blown and benefit the financing capability of the firm despite stability of earnings. The EPS performance can distort the NAVE of M&S.                  From the relationship of market cap and NAVE, four scenarios are available for M&S.  First is vulnerable which is defined as using fairly small amount of capital to generate small amount of returns.  These structures often characterize a firm that is competing in mature industries and domestic markets.  As M&S is mirroring this stance, it must guard its strategy to avoid negative implication of being a vulnerable company.  Second is the complete control company that generates high returns from a large on capital base.  As these companies shape the industry rather than reacts, M&S should be able to expand its capital sources to compete to them.  This is partial control through performance which necessitates high returns from small amount of capital.  There is efficient allocation of resources that result to positive performance which M&S should emulate to prevent pressure from capital sourcing.  Lastly, partial control through size has firms that possess large scale but also provide less return of capital.  This is far from the position of M&A because it has provided substantial EPS through the years.       &nbsp Credit:ivythesis.typepad.com

Clothing Food and Household Items

Requirement 1 Marks and Spencer (M&S) sells mid-priced clothing, food and household items primarily in UK. In fact, it is one of the...

HOUSEHOLD LIFE CYCLE

HOUSEHOLD LIFE CYCLE             INTRODUCTION                 The family has always been regarded as the basic social institution.  It is the first venue for children to learn attitudes, values and behaviors that would help shape his or her future personality.  The critical function of the family gives emphasis on marriage.  The marital union of a man and a woman is the legal basis for starting a family.  One of the most common motivations of couples to engage in marriage is the idea of starting and raising their own family.  The traditional family structure composed of the married couple and the children has always been the ideal.                         Recent studies however, suggest the opposite.  According to  (1999) the face of the American family had changed as evidenced by the drop of the percentage of America households made up of married couples with children from 45% in the early 1970s to just 26% in 1998 (p. 1).  The decrease is attributed to many factors including postponement of marriage and child-bearing, high incidence of divorce, and the old generation who are contributing to childlessness and single-person households.  Many people today are engrossed with the past-paced modern lifestyle that marriage and family are seen as hindrance to living substantially and successfully.  Also, many Americans are seen as becoming more tolerant of divorce partly because many of them who are starting their own families may be products of divorce themselves                        ( 1999, p. 1).   The overall result is one and the same: the decline in the traditional family structure.     DRIVERS OF THE HOUSEHOLD LIFE CYCLE     Age               The average age of the household, and its relationship to the age of the individual, is shown to have some interesting and consistent properties which provide greater insight into the structure of households, particularly as an individual grows older.  When the average person is born, they join a household whose average age is about twenty.  Over the next twenty years of their life, their household grows by an average of ten years in age as younger members join the household and older members leave.  Over the next fifteen years, from age twenty to thirty five, the average person experiences a decrease in the average age of their household as they leave their familial home to create new households and then start adding new children to this household ( 2005, ).  The median age at home leaving according to  (2004) was youngest for the group of persons born in 1951-1956, at an average of 21.5 years for men and 19.9 years for women.  In 2001, 41.1 percent of persons aged 20-29 were living with their parents, compared to 27.5 percent in 1981.  Home leaving indicates other successful transitions to adult life, but living at home can also help young people to complete education, experiment with relationships and obtain employment. A critical event occurs at about age twenty eight, when people start to live in a household that is younger than themselves ( 2005, ).  By age 25-29, the majority of women and about two thirds of men are living in conjugal unions ( 2004).  From about age thirty five onwards, the average household age increases at slightly more than proportional rate as children grow up, leaving their parents by themselves.  Above the age of seventy the relationship begins to scatter as many different household structure emerge (the elderly, the widow or widower living alone, and the extended family where the parents move back in with their children).  It has also been found out that more females of all ages tend to live in single parent families, and that major differences between the genders appear in the later years of life.  Older males tend to remain in two-person household, while older females tend to be lone person households and single parent households ( 2005, ).                         Marriage and Children                  (n.d.) argued that families follow five stages over a lifetime: young singles, young married, parenthood (full nest), post-parenthood (empty nest), and dissolution.  The first stage is premised on the principle of accepting financial and emotional responsibility for oneself through differentiation of self in relation to family of origin, development of intimate peer relationships, and establishment of self in relation to work and financial independence.  Marriage, on the other hand, is the commitment to a new system where realignment of relationships with extended families and friends to include the spouse takes place ( 1999,  cited in  2006).  In most functional marriages, partners combine their beliefs and behaviors in a synergetic way.  Synergy in the family life cycle is the ability to take two different points of view and create an option that neither person had considered.  Some of the issues in this stage include the transition into the new family system, including the spouse in personal relationships established in singlehood, commitment to making the marriage work, and putting the needs of the partner ahead of own needs ( 2005a).                         The entry of children in the system entails the married couple to provide some space for them and to support each other in child rearing, and financial and household tasks ( 1999,  cited in  2006).  The decision to have children affects the individual development of the man and the woman, the identity of the family and the entire marital relationship.  This stage tests the ability of the couple to communicate well in order to resolve issues and maintain a healthy relationship ( 2005b). There is also realignment of relationships with extended family to accommodate parenting and grandparenting roles.  Furthermore, when children grow up, the family is expected to increase flexibility in its boundaries to include children’s independence and grandparents’ frailties.  The couple needs to shift their focus to the mid-life marital and career issues facing them as well as to leniency to the children to explore outside the family system.  This is also the time for realignment of relationships to include in-laws and grandchildren, and dealing with disabilities and death of grandparents.  The last stage is characterized by the age of physiological decline, exploration of new familial and social role options, making room for the older generation, and preparation for own death.  This stage is the period of life review and integration ( 1999,  cited in  2006).     REGIONAL VARIATIONS AND TRENDS IN HOUSEHOLD LIFE CYCLE AND THEIR MARKETING IMPLICATIONS                    (2003) reported that immigration and family building of Generation Xers are both significant in the presence of traditional families.  Utah, Texas, California, New Jersey, Idaho and New Hampshire which all have growing immigrant populations registered a high percentage of the traditional married-with-children households.  Regions that registered the largest rates of growth in married-with-children households in the 1990s can be found in much of the West; California; the Southwest’s Texas; and the Southeastern states of Florida, Georgia and North Carolina. Metropolitan areas with the most growth in traditional families are located primarily in these same regions, led by Las Vegas, where married-with-children households increased by 75 percent during the 1990s.  Twenty one states on the other hand, registered declines in married-with-children households. They are largely located in the central part of the United States, including the Midwest and the Great Plains, as well as in some demographically stagnant parts of the South and New England ().  According to the Brookings Institution Center on Urban and Metropolitan Policy population growth rate is fastest in Western cities at 19 percent followed by Southern cities; and those cities with greater human capital and moderately high levels of immigrants had strong growth rates (cited in  2006).                        (n.d.) reported that household or family life cycle models are useful for marketing segmentation because they mark stages or transitions associated with distinctive trends in expenditure for goods and services.   The concept of family/household life cycle encompasses lifestyle, income and expenditure pattern differences brought about by family role traditions.   (1996) added that the household’s pattern of production, consumption, resource allocation and decision making are also determinants of economic behavior.  The six stages of family life cycle based on demographic data are: (1) young single people; (2) young couples with no children; (3) young couples with youngest child under six years; (4) couples with dependent children; (5) older couples with no children at home; and (6) older single people.  Each stage has its characteristic purchasing patterns and financial circumstances (p. 1).               The approach to studying consumption patterns in many developed western countries is divided into two aspects.  First, consumers are classified into four life cycles groups namely: dependent adults or single adults; pre-family or married adults without children; family with one or more children; and adults whose children have left home.  These four groups are then broken down further by a combination of occupation and/or income to produce twelve major SAGACITY groupings which is a powerful discriminator between consumer groups for a wide range of products and services ( n.d.).  Family life, as it progresses from the time of marriage to having children, to letting children marry and have a family of their own, to being grandparents, entails several financial issues and planning.  Each stage brings with it new needs, new responsibilities and new trends in the market.  The early earning stage or the post-college years as stated by  (2006) are spent mostly on paying off college loans while learning how to handle cash flow issues and budgeting.  Those who have children are inclined to invest in college funds as well as retirement savings.  The established earning stage (35 to 55 years old) is characterized by emphasis on college education of the children and most financial issues are centered on it.  The pre-retirement phase is the appropriate time for discerning on legacy planning and positioning assets more conservatively.  Lastly, the retirement phase places high importance on life insurance and philanthropic spending to leave a legacy.                (2000) cited that families in the later stages of the family life cycle manifested greater similarities between the preferences of husbands and wives.  Young people consumed less energy (except for gasoline), middle aged families with children consumed the most energy, and gasoline usage had inverse relation with the presence of children.  “Second families” represent different consumption processes as having a young child increases the probability of greater material wealth to provide sufficient conditions for raising the child ().   and  (1990) further narrated that the consumer factor reveals that people in older life cycle stages read more than people in younger life cycle stages, who are more brand conscious.  Younger adults and single parents make decisions on their own and younger families consult their spouses in decision making.  Reasons for purchases show that single parents do not own the product, older families are replacing, and retirees want new product characteristics.                The Brookings Institution Center on Urban and Metropolitan Policy concluded that considering the regional variations in household life cycle and the unique consumerism in each life cycle stage, the future of cities and suburbs depends on their being desirable places for consumers to live and there is a need to figure out what people are looking for and provide appropriate choices and opportunities (cited in  2006)                                           REFERENCES     Credit:ivythesis.typepad.com

HOUSEHOLD LIFE CYCLE

HOUSEHOLD LIFE CYCLE INTRODUCTION The family has always been regarded as the basic social institution. ...

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