INTERGENERATIONAL INFLUENCE IN NEPALESE

GENERATION Y BUYING BEHAVIOUR.

ANMOL BASNET
Exam Roll No: 16570135
Registration No: 2016-2-57-0061

A Graduate Research Project Report Submitted to

Ace Institute of Management
Pokhara University

Submitted for the Degree of

Master’s in Business Administration (MBA)

Kathmandu
August, 2019
Table of Contents
CHAPTER I .............................................................................................................................................................. 1

INTRODUCTION ..................................................................................................................................................... 1

1.1 Background of the Study .....................................................................................................................................1

1.2 Statement of the Problem ....................................................................................................................................3

1.3 Research Objectives ............................................................................................................................................3

1.4 Hypothesis ...........................................................................................................................................................4

1.5 Significance of the Study ...................................................................................................................................4

1.6 Limitations of the Study .....................................................................................................................................4

1.7 Organization of the Study ....................................................................................................................................4

CHAPTER II ............................................................................................................................................................. 6

RELATED LITERATURE AND THEORITICAL FRAMEWORK ........................................................................................ 6

2.1 Conceptual Review ..............................................................................................................................................6

2.2 Intergenerational Influence ...............................................................................................................................10

2.3 Theories on Intergenerational Influence ...........................................................................................................13

2.4 Research Gap ....................................................................................................................................................15

2.5 Theoretical Framework of the Study .................................................................................................................16

CHAPTER III .......................................................................................................................................................... 27

RESEARCH METHODOLOGY ................................................................................................................................. 27

3.1 Research Design................................................................................................................................................27

3.2 Population and Sample .....................................................................................................................................28

3.3 Sources of Data .................................................................................................................................................28

3.4 Data Collection Technique ................................................................................................................................28

3.5 Data Analysis Tool ............................................................................................................................................28

3.6 Analysis and Interpretation: ..............................................................................................................................28

Questionnaire:. .................................................................................................................................................... 30
 CHAPTER I

INTRODUCTION

1.1 Background of the Study

“Listen to your mother, she knows best…” the colloquial saying goes, highlighting
parents’ influence as role models. This influence can be extended to consumer and
purchase behaviour as well. Consumer behaviour can broadly be explained as the
consumer’s attempt to satisfy needs and wants through the purchasing of products or
services (Gunay& Baker, 2011:325). The decision, however, in making the purchase to
satisfy the consumer’s needs and wants is influenced by numerous variables, of which a
prominent variable is the influence of role models (Ruvio et al, 2010:61). Dix et al
(2010:37) agree by stating that young consumers base their behaviour and attitudes on
role models, like those of celebrities and parents – playing an integral part in the
development of product and service choices of young adults.

The term life cycle refers to the progression of the stages through which individuals and
families proceed over time. Life cycle not only has impact on social aspects but now this
concept can be applied to study purchase decision of a consumer and to formulate and
implement marketing strategy as per the implications. The family life cycle is an
idealized construct referring to the fact that the typical family passes through a fixed
sequence of important stages in its life and these stages affect the consumer buying
decisions.

An important issue related to the concept of family life cycle concerns the degree to
which family influence affects children consumer behavior later as adults. The
intergenerational influence is defined as transmission of information, believes, attitudes
and behaviour from one generation to another generation (Moore, Wikie, & Lutz, 2002).
Intergenerational influence has been studied in a variety of ways including political effect
(Niemi&Jennigs, 1991), decision making pattern in the family (Davis, 1976), social
influence (Siddiqui et al., 2012).

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Intergenerational influence is a role player for changing the behaviour of consumer as the
children is likely to be perused in the values that he or she gets from his or her family.
The value and beliefs about any product that a child gets as an intergenerational influence
leads him towards a certain perception about brand positioning of any brand as per the
influence he or she gets from his or her family which ultimately affects the buying
decision of that consumer.

Generation gap today has become a huge matter of concern in every sector.
Many technological advancements, educations opportunities and society up-gradations,
that there is bound to be a difference in thinking and opinions between the two existing
generations. Therefore, generation gap is considered to be an obvious phenomenon in
present context. One of the study indicated that children have a growing ability to
receive information about products and its brands and are able to use this knowledge
to inform the growing influence that they exert in the buying process.

Talking about Nepalese context, Nepalese society is going through a transition phase;
impact of generation gap can very intense. The root of differences between the two
generations lies deep in the foundation of society. Youths have long been expected to
follow their predecessors. But modern education teaches them to have their own view of
life and the world. Many young people are abandoning old morals and values for no
immediate purpose. To them, giving up “old things” is a path to modernity. Thus, this
increasing generation gap in the Nepalese society may also affect the degree of influence
over consumer buying decision.

The subject of purchase decision-making was chosen for this study due to the several
reasons. At first, every person is playing a role of a consumer and makes a lot of purchase
decisions every day. It is important to understand what is influencing personal purchase
decisions. It is necessary to identify if it is a problem/need or a well-thought professional
marketing campaign. Besides that, from a marketer perspective, it is valuable to know
this topic in order to effectively target customers, improve products and services of a
company, and understand how customers view products. Studying these aspects will
result in providing value and customer satisfaction, while creating a competitive
advantage.

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1.2 Statement of the Problem
Generation Y today are not passive users but influential buyers and are socialized in this
role from an early age. Generation Y are segments targeted by marketers as they play an
important role in the buying behaviour of the family (Sharma &Sonwaney, 2016)
Studies have shown that there is a high degree of intergenerational influence over
consumer buying decision. However, due to increasing generational gap in the Nepalese
society, the degree of intergenerational influence over Nepalese consumer buying
decision may have decreased.
Therefore, the research questions are as follows:
i. Is there any significant relationship between the buying behavior of the parent and
the Generation Y?
ii. Does intergenerational influence have impact on the purchase decision making of
the Generation Y?

1.3 Research Objectives

The general objective of the study is to assess the intergenerational influence over
teenagers/adults of Kathmanduvalley purchase decision making. The specific objectives
are as follows:

i. To identify the relationship between the buying behaviour of the parent and
generation Y.
ii. To examine the impact of intergenerational influence on the purchase decision
making ofgeneration Y.
iii. To examine if the family communication pattern influences the purchase decision
making ofgeneration Y.
iv. To examine if the Family decision style influences the purchase decision making
ofgeneration Y.
v. To examine if the socio-economic characteristics influences the purchase decision
making ofgeneration Y.
vi. To examine if the product knowledge and importance influences the purchase
decision making ofgeneration Y.

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1.4 Hypothesis
Based on literature review and information this study will analyse the intergenerational
influence over purchase decision making of the generation Y and also the relationship
between purchase decision making of the parent and generation Y on the basis of
following hypothesis:

H1: Family communication pattern has an impact on purchase decision making of the
Generation Y.
H2: Family Decision Style has an impact on purchase decision making of the Generation
Y.
H3: Socio-economic characteristics of the family have an impact on purchase decision
making of the Generation Y.
H4: Product knowledge and importance has an impact on purchase decision making of
the Generation Y.

1.5 Significance of the Study

This study will analyse the intergenerational influence over purchase decision making of
the Generation Y and also the relationship between purchase decision making of the
parent and Generation Y. Today Generation Yis not passive users but influential buyers
and are socialized in this role from an early age. Generation Ys are segments targeted by
marketers as they play an important role in buying decisions of their parents as well.

1.6 Limitations of the Study

The study is very important as much study have not been made in the past in case of
intergenerational influence over purchase decision. However, the study may not cover
entire aspects. The generalizations yielded from the study area may not be equally valid
with all the other the products and services introduced in the market.

1.7 Organization of the Study

The study consists of five chapters. They are as follows:

 The first chapter includes the introduction and consists of the background,
statement of problem, objectives of the study, hypothesis, significance,
limitation and the organization of the study.
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 The second chapter deals with the review of past studies and literatures.
 The third chapter focuses on the research methodology, data collection and
presentation of the research area with the interpretation of the study on the
basis of collected information.
 The fourth chapter deals with the analysis and the results from the data and
information collected.
 The fifth chapter is the last chapter, which draws conclusion derived from the
entire study, and it will present the findings and the implications of the study.

5
 CHAPTER II

RELATED LITERATURE AND THEORITICAL FRAMEWORK

2.1 Conceptual Review

Consumer behaviour is defined as the behaviour that consumer exhibits while he or she
intends to purchase, use, evaluate and then dispose the products. The study on consumer
behaviour focuses on how the consumer make the decision to spend their resources, while
displaying the above mentioned consumer behaviours. The resources that the consumers
basically have are the time, money and effort which they utilize to acquire the desired
products and services. Consumer behaviour answers the questions like what they buy,
why they buy it , when they buy it, where the buy it , how often they buy it ,how often
they use it, how often they evaluate it after the purchase and how and when do they
dispose it (Kakiza, 2015).

The consumer buying behaviour can also be defined as the way the consumers react or
behave when making the purchase of the goods and services they want and are able to
purchase. The consumers tend to show different types of buying behaviour when they are
in the process of purchasing goods and services which is influenced by various aspects
(Sathya&Indirajith, 2018).

Further studies state that consumer behaviour focuses on how individual consumers,
families, or households make decisions to spend their available resources on
consumption-related items (Sapkota,2017).

Consumer behavior is the dynamic interaction of affect and cognition, behavior, and
environmental events by which human beings conduct the exchange aspects of their lives.
Consumer behavior is much more than studying what consumers buy as it attempts to
understand how the decision-making process goes and how it affects consumers’ buying
behavior (Solomon, 2004).
Consumer buying behavior involves a long process where the buyer has to identify the
product, study well its features, the pros and the cons and at last decide on whether to
make a purchase or not. A consumer’s buying behaviour is influenced by various factors

6
which are cultural, social, personal and psychological factors. Consumer behaviour is a
part of human behaviour and by studying previous buying behaviour, marketers can
determine how consumers might make further purchasing decisions (Kotler & Armstrong
2010).
Consumer buying behaviour involves a long process where the buyer has to identify the
product, study well its features, the pros and the cons and lastly deciding on whether to
purchase it or not.

According to Armstrong and Kotler (2003), consumers go through five different

decision-making processes before making the actual purchase. The five stages are:
i. Need Recognition
ii. Information Search
iii. Evaluation of Alternatives
iv. Purchase Decision
v. Post Purchase Behaviour

While going through theses stages, the consumer recognizes the need, gathers
information, evaluates alternatives and makes the purchase decision. Actual purchase is
followed by the post purchase behaviour where the consumer evaluates the products or
services acquired on the basis of the satisfaction gained through the use of the product or
service.

The first stage of the process is the need recognition where the consumer recognizes a
problem or need which is triggered by internal stimuli from one of the person’s normal
needs. A well-known classification of needs was developed many years ago by Abraham
Maslow, which includes physical needs, safety needs, belonging needs, esteem needs,
and self-actualization needs (Peter & Donnelly, 2001). Need recognition means that a
purchaser or a consumer is aware of what he or she wants or desires. A buying process
starts with the need arousal and realization which is activated through internal or external
stimuli. Internal stimulus is when basic needs of a man arise to a particular level and
become a drive and he or she knows from his or her previous experience. External
stimulus is when a need is aroused or realized as the sight of a new product in a shop
while purchasing the usual product (Sathya&Indirajith, 2018).

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The second stage is the search of information regarding the product or the services that
the consumer intends to buy or acquire. Consumers look for the information just to make
sure they are making the right choice regarding their purchase of the products (Armstrong
& Kotler, 2003). In this stage, the consumer enters a stage of active information search to
get more information and awareness regarding the product. Before making the purchase,
the consumer tries to collect more information about the product, its key attributes, and
qualities of various brands and other necessary information (Sathya&Indirajith, 2018).

Peter and Olson (1999) agree that the consumers evaluate the alternatives in terms of
salient beliefs about relevant consequences and combine this knowledge to make a choice
among the available alternatives in the marker. Therefore, the third stage, evaluation of
the alternatives is considered to be one of the most important stages. The evaluation stage
represents the stage of mental trial of the product where the consumer assigns real-time
value-weights to different products and services on the basis of accumulated information
on the product and services and draws conclusions about their relative satisfaction giving
potential value. Then only the consumer develops the intention either to purchase or
reject the product (Sathya&Indirajith, 2018).

At the fourth stage, the consumer would have already evaluated the available alternatives
and is ready to proceed to the actual purchase. At this stage, consumers execute their
purchase intention. Satisfaction or dissatisfaction with the newly bought product may be
the outcomes of the execution of purchase intention. Therefore, purchase decision, the
fourth stage is the decision to buy the most preferred product or services among the
available alternatives. Factors that can affect the consumer’s buying decision are the
attitudes of others or beliefs about the brand created by marketers (Lautiainen, 2015).
This stage is regarded as the terminal stage in the buying decision process that completes
a buying transaction of a product which occurs either as a trial or adoption. If a consumer
is buying something for the first time, from the behavioural view point, it may be
regarded as trial. This trial enables the consumer to accumulate experience about the
product purchased when he or she uses it. If the experience provided by the use of
product is positive in terms of satisfaction derivation then repeat purchases may occur.
However, in the case of durables like refrigerator, air- conditioner and microwave oven,

8
trial purchase is not possible because, once a product is purchased it has to be adopted
and repeatedly used by the consumer (Beatty et al., 1987).

The last stage or the fifth stage is the post purchase behaviour where the consumer will be
satisfied or dissatisfied after purchasing and using the product and will engage in the post
purchase behaviour. Post Purchase behaviour refers to the behaviour of a consumer after
the consumer’s commitment to a product has been made. It originates out of consumer
experience regarding the use of the product and is indicated in terms of satisfaction. This
behaviour is reflected in repeat purchases or not making any further purchase of the
product due to the dissatisfaction (Chaipradermsak, 2007).

This study is entirely based on the fourth stage of consumer buying behaviour which is
the Purchase Decision. This study examines the impact of intergenerational influence on
the purchase decision making of the generation Y.
Hawkins et al. (2001) defines consumer purchase decisions as the decisions made about
purchasing either products orservices from a pet retailer. Generally, the consumer’s
purchase decision will be to buy the most preferred brand among the alternatives
available in the market,but two factors can come between the purchase intention and the
purchase decision. Thefirst factor is the attitudes of others and another is unexpected
situation factors (Kotler&Keller, 2006).
Purchase decision is the thought process of the consumer while making a purchase of a
product that leads a consumer from identifying a need, generating options by collecting
information, and choosing a specific product and brand on the basis of the information
collected and the evaluation of the choice. Some purchase decisions are minor, like
buying toothpaste and other basic things, while other purchases are major, like buying a
house. The more major the purchase decision, the more effort is typically put into the
process. Purchase decisions are made by individuals, households, or by the committees in
business organizations. It can be defined as an act of information processing: the
transformation of knowledge and information into action of finally purchasing the
product (Shamsher, 2012).

Purchase decision has become a huge issue to be understood by the scholars and
researchers in recent years and they have been devoting a considerable amount of effort

9
to the understanding of consumer purchasing decision process. Information acquisition
and information integration were two basic issues on these research areas as it became the
main base for making the final decision of purchasing and using the product by the
consumer (Bettman& Park, 1980).

2.2 Intergenerational Influence

Intergenerational influence (IGI) is the transmission of cognitions, beliefs, perceptions,
attitudes and behaviours from one generation to another. IGI can be defined as the
influence of one generation on another in terms of the transfer of skills, attitudes,
preferences, values, and behaviours. Given this, IGI can involve the within-family
intergenerational transfer of knowledge with regard to a range of consumer behaviours
such as information search, brand, product and store selection, use of evaluative criteria,
and receptivity to marketing mix variables (Kulkarni, 2014).

The transmission of attitudes, values and behaviours from parents to children is generally
termed intergenerational transfer. Although it might be expected that evidence of such
transfer would be strong, past sociological research has demonstrated only a modest
relationship between parent and child attitudes and values (Mc Broom, et al., 1985).
However, this sociological research examines the transmission of general social values
and norms. Almost no research has been conducted which examines such
intergenerational effects in consumer setting. Consumer socialization has seen defined as
the processes by which young people acquire skill, knowledge, and attitudes relevant to
their functioning as consumers in the marketplace (Ward 1974). Agents affecting these
processes include family, peers, media and public institutions (e.g. government, schools)
(Heckler et al.,1989).

Heckler (1989) defines intergenerational influence as the effect of the family in the
socialization of their children which has an impact on their norms, attitudes and values.
This supposedly means that the children learn from and are influenced by their fathers
and forefathers and throughout their generation while learning and developing values and
beliefs. The attitudes are developedtowards various aspects such as sports, leisure,
education, social life. Children then prefer products and services used by their family

10
members, mostly parents and grandparents. This is known as the intergenerational
carryover or intergenerational influence (Childers & Rao, 1992).

Intergenerational Influence has also been defined as the influence of one generation on
another in terms of the transfer of skills, attitudes, preferences, values, and behaviours. In
regards to this definition, intergenerational influence can arise within family
intergenerational transfer of knowledge and information regarding to range of consumer
behaviours such as information search, brand, product and selection of store.
Intergenerational influence has a high impact on the purchase decision including product
preference and loyalty as well (Shah & Mittal, 1992).

Minahan and Huddleston (2013) confirmed that the information and attitude towards
product and services is based on family influences as the behaviour of the consumer is
learned since his or her childhood. Families are not only a primary source of information
of products and brands, but also of the transmission of values and behaviours. Children
learn and understand consumer behaviour by observing their parents’ consumption
practices. Thus, there is a high probability for the children to follow the steps followed by
their parents or family members.

Moore et al (2002) defined the intergenerational influence in a general term as the

transmission of information, believes, attitudes and behaviour from one generation to
another generation. Likewise, in terms of consumer behaviour, Roberti (2014) defined
intergenerational influence as the influence of one family generation on another, in terms
of learning attitudes, brand loyalty, values, and behaviours relevant to one’s functioning
as a consumer.

Intergenerational influence encompasses various types of learning that affect young

people’s acquisition of consumer skills as well as consumption-related knowledge,
preferences, and attitudes from their parents or guardians. Acknowledging the critical
role parents play in children’s consumer socialization, various studies have focused on
how parent–child interaction styles and orientations are linked to parents’ socialization
practices and children’s consumer behaviour, including their consumption/purchase,

11
influence and participation in family purchase processes, use of market information, and
attitudes toward advertising (Roberti, 2014).

Ward (1974) identified that family directly influencesthe general cognitive skills,
indirectly impacts the development of consumer skills and motivates children to apply
general cognitive abilities in areas of ConsumerBehaviour. The idea of buying some
product or services does not come suddenly but carry long process of thinking, analyzing
options, and taking other factors in account to reach the conclusion. These days
marketing decision makers spend more money than ever to understand who their
customers are, who buys and why do they buy those things and also where do they buy
(Kotler & Armstrong, 2011).

The concept of intergenerational influence is a well-studied topic in marketing. A lot of

past researchers have looked at how consumers learn from their parents. This has mainly
been studied from the perspective of consumer socialization and the influence parents
have a socializing their children as the family unit is seen as the largest influence on a
child. The reasoning for looking at intergenerational influence from a consumer
socialization viewpoint is often based around Ward’s (1974) research and definition that
consumer socialization is how children acquire the skills, beliefs and knowledge to
function in society and a consumer driven marketplace. Intergenerational influence is
seen to include the transmission of information, attitudes, resources, beliefs, values and
behaviours from parent to child and is therefore very similar to the skills acquired in
consumer socialization. Culture is the belief and values of members of a society and is
therefore linked to intergenerational influence as culture forms the basis of the values and
beliefs that are transferred from parent to child. Both these concepts are important in
consumer behaviour research, because brands and products used in childhood within a
family unit often are still used in adulthood (Morris, 2014).
A familybrings its own values, codes and rituals and represents a special reference group
with family members frequently exchanging feedback on consumed products and/or
future planned purchases. This interaction is a fundamental building block in influencing
purchase behaviour within a family.

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2.3 Theories on Intergenerational Influence
The past studies and the literatures show that the concept of intergenerational influence
basically emerges and is based on two important theories which are, the Socialization
Theory and the Emotional Contagion Theory.

2.3.1 The Socialization Theory

Many studies and researches made in the past on intergenerational influence are based on
the socialization theory. Child (1969), defined socialization as a process through which
people make the way of social behaviour. It is also defined as the process, through which
the people living in the society learn the rule and regulation to live in the society in an
effective manner (Brim, 1968).
Over the years, the concept of family socialization has been changing. The change
reflects the changing society and the changing market condition. The traditional approach
towards socialization is based on the concept that the families are the primary
socialization agents of children, who teach them what they require to know in order to
function in the society they live in. Thus, socialization has long term effects on the
functioning of an individual as it is the transmission of the values, beliefs and attitudes
from one generation to another (Putney &Bengston, 2002).
In regards to the consumer behaviour, socialization is defined as the cultural process
where an individual take possession or acquire the skills, knowledge and attitudes they
require to meet the roles as consumers and their functioning as a consumer in the market
(Ward, 1974). Family plays an important primary agency in the consumer socialization
processes that are capable of transmitting values and consumption models to their
children. The parents represent as the main consumer skills teachers for their offspring
(Roberti, 2014). According to Keller and Ruus (2014) parents represent as the main
consumer skills teachers for their offspring for transmitting the consumption habits and
lifestyles to them in both intentional and unintentional way. Thus, socialization process
makes a way for the creation of the intergenerational influence.

It is believed that the socialization process is a never ending process because an

individual acquires new information with the changing environment. The first and
primary reference group children use to shape their behaviour is the family. Regardless of

13
age, it is common for people to remember shopping with their parents and forming
expectations for appropriate shopping behaviour (Rath et al, 2008). Physical preservation,
transmission of knowledge, ideologies, and values are vital in well-functioning families
and the children learn and understand consumer behaviour by observing their parents’
consumption practices in the family environment (Kestler, 2010).

Family is considered as one of the agent of socialization, who has a significant influence
on the buying decision of their children. Past researches and studies have shown that
children learn basic aspects of purchasing and consumption from their parents (Moschis
and Churschill, 1978). It has been found out that the parent-child communication about
consumption predicts fairly well the children’s knowledge of selected products. Past
research and studies on consumer socialization theory and intergenerational influence
lead the belief that parents’ positive affect relates significantly to the child’s positive
affect and that parents transmit consumption related values, purchasing habits, and brand
preferences to their children (Gilal et. al., 2018).

The socialization theory suggests that parents’ behaviour relates significantly to the
child’s behaviour and that parents transmit consumption related values, purchasing
habits, and brand preferences to their children. Young consumers base their behaviour
and attitudes on role models, like those of parents who play an integral part in the
development of product and service choices of children (Gilal et al., 2018).
Thus, this study examines the impact of intergenerational influence on the purchase
decision making of the consumer by using consumer socialization theory.

2.3.2 The Emotional Contagion Theory

Another theory that is being widely applied in the study of consumer behaviour is the
Emotional Contagion Theory. Emotional Contagion Theoryis the transmission of
individual’s emotions, attitudes, beliefs, and behaviour to others. It is considered as one
of the leading theory of psychology that suggests that people often mimic or catch the
positive emotions of others during their social interactions which is also known as the
trickle-down effect in which one’s behaviours can provoke similar responses in receivers
(Gilal et al., 2018). Hartfield (1993) defines emotional contagion as the tendency to
automatically mimic and synchronize expressions, vocalizations, postures, and

14
movements with those of another person’s and, consequently to converge emotionally.
Emotion transmission occurs when events or emotions in one family member’s
immediate daily experience show a consistent predictive relationship to the emotions or
behaviours in another family member usually their children (Rulon, 2013).

Theory on emotional contagion attempts to explain how emotions are transmitted among
people in social interactions and how understanding and catching another person’s
emotions affects the dynamics of the social interaction and affects their decision making
process.

2.4 Research Gap

Intergenerational influence is the main actor for changing the behaviour of consumer as
the children are likely to be influenced by the values that he or she gets from his or her
family. The value and beliefs about any product that a child gets as an intergenerational
influence leads him or her towards a certain perception about the product which
ultimately affects the buying decision of that consumer.

Nepalese society is going through a transition phase and generation gap today has
become a huge matter of concern in Nepal. Many technological advancements,
educations opportunities and society up-gradations, that there is bound to be a difference
in thinking and opinions between the two existing generations. Therefore, generation gap
is considered to be an obvious phenomenon in present context. Likewise, the generation
gap will have an impact in the purchase decision-making among the generation Y as well
as the parents. This area of consumer behaviour is necessary to be studied on because it is
important to understand what is influencing personal purchase decisions and then
effectively target customers, improve products and services of a company, and
understand how customers view products.

15
2.5 Theoretical Framework of the Study
Figure 2.1. Framework Diagram

Independent variables Dependent variable

 Family communication pattern

 Family decision style
 Socio-economic characteristics  Purchase
Decision
 Product Knowledge and
Making
importance

Moderating variables

 Type of product
 Family structure (extended or nuclear)
 Gender

2.5.1 Operational Definition of Variables

Dependent Variables
The dependent variable for the study is the purchase decision making of the consumer.
Purchase decision is the fourth stage is the decision to buy the most preferred product or
services among the available alternatives. Purchase decision is the thought process of the
consumer while making a purchase of a product that leads a consumer from identifying a
need, generating options by collecting information, and choosing a specific product and
brand on the basis of the information collected and the evaluation of the choice. Purchase
decisions are made by individuals, households, or by the committees in business
organizations. It can be defined as an act of information processing: the transformation of
knowledge and information into action of finally purchasing the product. The purchase

16
decision is determined by either purchasing or not purchasing the product (Smasher,
2012).

Independent Variables

The main factors that influence the Intergenerational Influences depend on several
factors. Some of the major factors are discussed below which are the independent
variable for the study that determine intergenerational influence which includes:

i. Family Communication Pattern

According to Mandrik et al. (2005), communication within the family members directly
influences a child’s acquisition of consumption-related information, beliefs, and values.
Family communication pattern is considered as one of the most important factor that has
a high intergenerational influence over the children to make their purchase decision.
Moschis (1985) has outlined that the role of family communication in the transference of
information and the learning of consumption related values and skills varies based on
whether a family utilizes a concept-oriented or socio-oriented communication structure.
Social-orientation is defined as a measure of the degree to which children are taught to
avoid social conflict, defer to their elders, utilize parental standards, and foster control
and deference to authority’ whereas concept-orientation measures the degree to which
parents encourage their children to express their opinions, independently evaluate all
sides of an argument, develop new ideas, and communicate openly without obedience to
authority (Hsieh et al., 2006).
Family communication pattern refers to the frequency, type, and quality of
communication among family members. Family communication is an integral part of
study of consumer behaviors therefore, various dimensions have been introduced which
explains the interaction between parents and children. The first dimension is the socio-
orientation which explains the frequency of communication that is designed to produce
deference, and to foster harmony and pleasant social relationships among the parents and
the children. The second dimension deals with the positive constraints to stimulate the
child to develop his or her own views about the world which fostered the independent

17
development of consumer skills and experience among the children (Spacil and
Teichmannova, 2016).
The family communication structures influence the decision making ability of the
children. Families that have frequent communication have a higher chances of displaying
intergenerational transfer and influence which is long lasting and is demonstrated in
different aspects of life including the purchase decision making of the children (Hecklers
et al., 1989).
Family communication is related to parental monitoring and control of children’s
consumption behaviour, parental attitudes toward advertising and children’s consumer
skills, and interpretation of product information and knowledge (Moschis and Moore
1979). Children’s learning and acquisition of effective consumption behaviour is also
influenced by the amount and quality of communication within the family (Palan 1998).
Therefore, further understanding the influence of family communication patterns on
family decision making could contribute to effective marketing and product positioning.
Moschis (1985) conceptualised the family communication process and confirmed that
family communication plays an important role in consumption behaviour of the children.
Further studies on the effect of family communication on consumer behaviour and
purchase decision of the children have shown that children from nuclear families seem to
be the most competent consumers and those from extended appear to be the least
competent (Moschis et al., 1986). Also, parents with higher education level and families
with a higher household income engaged more frequently in family communication and
influenced their children when making a purchase decision or guide their consumption
behaviour. Further, children from open minded families will have highest level of
perceived influence of children and children from protective family will have least level
of influence of children on purchase decision making.
Other aspects of the family communication pattern are the concept-oriented
communication and social oriented communication pattern. Concept oriented
communication practices encourages children to develop independent views of the world
and self-expression and thereby fosters development of children’s consumer skills,
competences, and independent decision-making ability. On the other hand, socio-oriented
communication practices stress child conformity to parents’ authority where parents

18
control and monitor their children’s consumption behaviour as well as their purchase
decision (Roberti, 2014). Socio-oriented consumer communication is aimed at obedience
and conformity, and stresses control over and restrictions of children’s consumption
(Jaakkola, 2007).
Therefore, family communication pattern has been considered as the independent and
important variable in this study as the amount and quality of communication between
children and the parents have great impact on children’s development as well as parents'
adjustment toward children.

ii. Family Decision Style

Various type of Family decision style exists in the society. Past studies show that the
family is changing its structural influence in the society, with in the past holding the
traditional role of a providing security is now replaced by a more nuclear family model
containing unmarried couples, one-person households or lone-parent families. A child in
a single-parent family has more influence on purchase decisions than a child in a two-
parent family.
When compared to the past decision styles of the families, family members are becoming
more dependent to the children and include the views and opinions of their children to
take major decisions of the family. Studies have found that usually family members give
a power to an individual like wife or husband to purchase any item and after that is there
is any objection on purchasing decision or on quality of the product or on quantity family
shift the power of purchasing to other one (Lukina, 2016).
Studies have been made regarding the family interaction styles among male and female
adolescents. Male children communicated disagreements and suggestions more directly
to their fathers, with fathers generally encouraging assertiveness and directness in their
sons. Female children, on the other hand, shared their suggestions indirectly with their
fathers. A higher degree of conflict was also observed between sons and their mothers
than between sons and their fathers (Spacil and Teichmannova, 2016).
Family decision making is determined by the way family communicate with each other
which has two dimensions, socio-oriented communication style and concept oriented
communication style. Social oriented communication encourages and inspires the

19
children to follow the path of their parents. It encourages harmonious parent–child
relationships as well as conformity on the part of the child to parental control. Parents
also expect that their children take decision on wants and family values while not having
any questions regarding the decisions taken by the parents (Clark et. al, 2008). On the
other hand, concept-oriented communication is centralised in the idea of encouraging
children to share their views about purchase decisions and take the decisions on their own
and encourages for an open exchange of ideas and feelings in parent–child relationships
(Shin, 2010).
Under family decision style, parental style and power to children’s influence in family
consumption decisions is widely discussed as parental style as well as parental power
actually provides marketers a new segmentation variable.
According to Draley et al. (1978), parental style is defined as, ‘‘a constellation of
attitudes toward the child that are communicated to the child and create an emotional
climate in which the parents’ behaviours are expressed’’ whereas parental practices are
‘‘specific, goal-directed behaviours through which parents perform their parental duties’’
Parents engage in parental practices with the purpose of attaining specific socialization
goals, and in this sense, parental practices tend to have immediate impact on a child’s life
even influencing the consumption behaviour and purchase decision of the child (Bandura,
1989).
Children who perceive parents to possess high power tend to have greater relative
influence than do those who perceive parents to have low power. This indicates that
parents with certain parental style are actually more receptive to children's influence than
those with other parental style. Research and study in this area could help the marketers
to sell their products more efficiently through targeting at parents with a certain parental
style or a certain level of parental power (Gilal et al., 2018).
Parental style influencing the consumption decision of the children can be of various
types, and have different expectations about children’s development of consumption-
related skills, knowledge, and values along with the rewards and the punishments.
Therefore, children under different parental styles possess different level of consumption
knowledge and skills, and further different extent of influence in family consumption
decisions (Carlson and Grossbart, 1988).

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iii. Socio-Economic Characteristics
Various forms of influence are transmitted from parents to their children, including
religious, cultural social values. Socio-economic characteristics are for example income,
social class and education of the family. In a study, it was found out that adolescents from
higher socio economic status were found to socialize faster and these children socialize
faster, their knowledge about market increases and thus, these children tend to take their
own decisions in regards to the availability of the financial resources and the market
information (Kulkarni, 2014).
Many studies have shown that social and economic conditions, parental social status and
networks are particularly important during early childhood that the parental
characteristics influencing product choice matter (Webster and Wright, 1999). Family
background still plays an important role in the inheritance of social class, education and
income (Bravo et al., 2007).In addition to economic and material resources, children are
influenced by the human or cultural aspects, social status and networks, as well as aspects
of the genetic background influencing cognitive skills, non-cognitive traits and physical
characteristics while making a purchase decision.
Moschis (1985) stated that the family’s social class has an impact on the intergenerational
transfer of the consumer skills, knowledge as well as the negotiation skills. Furthermore,
on the basis of their study, they found out that children from lower class families do not
get much opportunity to participate in taking consumption and purchase decisions
because of less communication among the parents and the children.
Moschis, et al. (1983) suggested that high level of consumer knowledge and purchase
knowledge is transferred among the children in the middle class families rather than other
socio-economic class
According to Nappi (1973), the main source for children to develop consumer behaviour
and influence their purchase decision is that of their parents. They mainly make
observation when their parents go for shopping. Shopping with a child or providing
consumer education to a child on how to make a good purchase decision are specific
examples of parental practice aimed at developing a child’s consumer competence which
directly influences the purchase decision of the children. According to Bandura (1989),

21
parental style has an indirect impact on child outcomes by acting as a moderator of the
link between parental practices and child outcomes. They also enjoy a major influence in
family purchase decisions (Lukina, 2016)

iv. Product Knowledge and Importance

Cultural knowledge in the children is created when families teach their children the
information, codes, skills, attitudes, conceptions, beliefs, systems and values. Certain
product categories and brands have become firmly woven into our family histories and
the tapestry of everyday life. . Some parental activities that has impact on children’s
cultural knowledge are telling stories and reading books to children, playing cards and
board games with them, doing jigsaw puzzles, visiting zoos, libraries and museums (Lee
and Lee, 2011).
The concept of consumer knowledge is defined as the extent of experiences and
familiarity that the consumer has with a product. The knowledge of the consumer is the
information that is available with the consumer for making decisions without external
searching (Alba, 1987). Many research studies have found that product knowledge plays
an important role in consumer decision making (Bettman and Park, 1980). Product
knowledge can be defined as the product-related information that is stored in the
customers’ memory, such as information on brands, products, attributes, evaluations,
decision heuristics and usage situations. In fact, product knowledge does not depend only
on consumer’s product awareness but also on the confidence about their knowledge and
understanding (Yazdanparast and Spears, 2012). Studies on the role of consumer product
knowledge in information processing suggest that consumers with different levels of
product knowledge exhibit different processing patterns and outcomes (Lee and Lee,
2011).

There two types of product knowledge which is objective knowledge and subjective
knowledge. Objective knowledge is typically defined as the content and organization of
knowledge that consumers hold in their memory which includes knowledge about
products related to terminology, product attributes, uses for the products (Chaudhuri,
2000).

22
Subjective knowledge is consumers' own assessment of their product knowledge level
and can influence decision makers' perception of their ability to process product
information which is one of the process of purchase decision making.
It has been suggested by Alba and Hutchinson (1987) that the new consumers rely more
on external information than experts and they search for more information as they are not
confident about the ability to make the right product choices than the experts (Bansal and
Voyer, 2000). Consumers with high level of product knowledge are also less likely to
form extreme beliefs and attitudes towards a company or its products (Sohn and
Leckenby, 2005). Due to lack of shopping experience among the children, they lack both
objective and subjective knowledge regarding the product. Therefore, the children tend to
rely on their parents while making a purchase decision.
Study conducted by Lukina (2016) shows that there is a strong relationship between
product importance and adolescent influence on family purchase decision.
Getting extra information about the products or services enhanced the individual
knowledge, that which increases the influence among the purchase decision making of
the consumer.
Reinforcement is considered as one of the process of learning about the products and
gaining more information and knowledge regrading the products and services.
Reinforcement, involves either reward (i.e. positive reinforcement of desired skills,
knowledge and attitudes) or punishment (i.e., negative reinforcement of undesired skills,
knowledge and attitudes) mechanisms used by the parents (Moschis and Churchill, 1978).
When children make a purchase decision, their parents may show satisfaction or
dissatisfaction towards their purchase decision. This process is important to guide the
purchase behaviour of the children.
The consumer’s knowledge of the product significantly affects their purchase behaviour
processes as well as many other consumer behaviours. The level of knowledge and
information changes the perception of the consumers towards why the product purchased,
when it is consumed, and how it is experienced. The consumer looks out for more
information on the product they are likely to but which ultimately influences their
purchasing behaviour. They get influenced by the knowledge and information regarding

23
the product and its attributes, the meaning of attributes and how these attributes help the
consumer influence their purchase decision (Gilal et. al., 2018).
The knowledge and information regarding the product the consumer intends to buy is
important in every stage of the purchase decision-making process which are when the
individual recognises the need, through to defining the problem, searching for
information, evaluating alternatives, making a purchase, and then consuming the product
or service and entering the post-purchase phase
The knowledge and information that consumer gets regarding the product they intend to
purchase is regarded very crucial from a marketing perspective. The consumer
knowledge and information guides all aspects of the marketing strategy of that particular
product or service (Ellis, 2015).

Moderating Variables
The moderating variables for this study are type of product, gender and family structure.

i. Type of Products
Product is considered as one of the important elements of marketing mix which consists
of both good and service. Type of product in this study consist of the category of the
product on the basis of its feature, usage, physical attributes, benefits etc that consumer
finds on a product.
Various studies indicated that the type of the product is the major factors of the
intergenerational influence. The intergenerational influence was found less regarding less
expensive products of which the children are the prime-users (e.g., breakfast cereals,
snack foods, toys, clothing, and etc). Whereas, intergenerational influence was found
moderate family activities (e.g., restaurant outing, family entertainment, family vacations
etc). And for more expensive products such as family-related miscellaneous products,
(e.g., laundry detergent, kitchenware and other family-related decisions, intergenerational
influence was found to be very high (Dikcius et al., 2014).
For understanding purchase decision-making behaviour of the consumer, importance of
the product involvement should not be ignored. Product involvement is commonly

24
defined as a consumer’s enduring perceptions of the importance of the product category
based on the consumer’s inherent needs, values, and interests (De Wulf et al., 2001).
Past studies have suggested that the product can be classified into high involvement and
low involvement category depending on the nature of importance to the customers which
is influenced by various aspects ((Zaichkowsky, 1985). In the purchase decision making
process, consumers spend a lot of their time, effort, and energy for more expensive and
personal products such as laptops, automobiles etc which are the durable goods and are
considered high involvement products. In regards to the high involvement products, the
consumer’s purchase decision processes are thought to proceed through extended
decision-making, a series of sequential stages involving information search and
evaluation of criteria which results to lengthy decision making process (Celebi, 2009). On
the other hand, consumers spend less time, effort, and energy for inexpensive and less
exciting products which are the consumable products and are called low involvement
products (Chung and Zhao, 2003). Therefore, this study has also studied and analysed the
two types of products which are durable goods and consumable goods in relation to the
intergenerational influence and purchase decision making.

 Durable Products

Durable goods are a category of consumer products that do not need to be purchased
frequently because they are made to last for a long time and are not easily destroyed.
Durables goods have an extended product life and are not typically worn out or consumed
quickly when the consumer uses them. Since they're made to last, durable goods are often
times more expensive than non-durable goods and are not purchased repeatedly over a
short period of time. Studies show that durable goods are used up all at once or have a
lifespan of fewer than three years.

Consumers are ready to buy a durable good today but can always wait and purchase it
tomorrow giving them plenty of time to come up with the purchase decision. Durable
products can last for a longer period and can be repeatedly used by one or more persons.
Some of the examples of durable goods are, television, laptops, refrigerator, automobiles,
etc. Consumers consider wisely in regards to the brand, image, price, quality and many
other aspects while buying durable products and do not buy these products randomly and

25
irrationally. The durable products that have been covered in this study are watch, laptop,
camera and two wheelers.

 Consumable Products

The non-durable products or the consumable products have short life and must be
consumed within short time after they are manufactured. Consumable products are those
products which fulfill the basic needs of the consumers and are frequently purchased
products and can be easily bought from nearby outlets. Freshness, packing, purity, and
price are important criteria to purchase these products.

Consumable products which are also known as low-involvement products, is consumed

in one or a few usage occasions. Consumers, generally, do not make much effort or spend
much money and time in making a selection while purchasing these types of products.
This results to parents being flexible in allowing their children to contribute to the
purchase decision-making process for these non-durable products (Spacil and
Teichmannova, 2016).

ii. Gender
Another issue of interest in the area of intergenerational influence and purchase decision
is the effect of gender in the intergenerational influence to guide the buying behaviour of
the children. It has been found that fathers will act as a main influencer for the sons,
whereas mothers will do so for daughter (Roberti, 2014).
Research has found that adolescents report a higher degree of communication with their
mothers than with their fathers on issues such as relationships, social issues, interests, and
problems in general. These findings are consistent with the idea that females are more
relationship oriented and communal than males (Spacil and Teichmannova, 2016).
Mothers or the females of the household are generally considered to be more nurturing,
dependent, submissive, indecisive, caring and expressive, while fathers or the males of
the family are considered to be more dominant, active, strong, stubborn, competent,
instrumental, and independent. The same theory applies to the children as well, girls and
boys respectively. This also guides the influential behaviour of the parents over their
children.

26
The gender of the children has an impact on the degree of parental influence on the
purchase decision of the children. It was found that the females especially teenagers,
exhibit an earlier and relatively higher need for conformity to peer group norms, they are
more likely to make decisions relevant to personal appearance independently of their
family. As a result, less intergenerational influence is demonstrated for such products.
This earlier pattern of consumer independence may also influence female decision
strategies as they reach adulthood. Because they began making consumption decisions at
an earlier age, intergenerational influences may be weaker generally for females than for
males (Heckler et. al., 2016).
Thus, gender of the consumer has affects the strength of the relationship between the
intergenerational influence and the purchase decision of the consumer.

iii. Family Structure

Family structures refer to the type of a family i.e. extended with many members in it or
nuclear with few members in the family which changes the consumer buying decision.
Family structure also has an effect in the relation between parent child interactions in
purchase decision making. It has been found that small and simpler family structure have
more children involvement in the purchase decision while in extended and complicated
family structure children have less involvement (Lukina, 2016)
Siddiqui et al. (2012) also found that children in smaller families get more parental
influence during purchase decisions than do children in families with more children.

CHAPTER III

RESEARCH METHODOLOGY

3.1 Research Design

The study is descriptive and explanatory in nature. In this research, the quantitative
method helps to describe the intergenerational influences on purchase decision making
and further helps to understand how intergenerational transfer and family values, beliefs,
attitudes and behaviours on generation Y buying decision in Nepal.

27
3.2 Population and Sample
This study is comprised of potential adults from Nepla. Also, in order to collect sample
purposive sampling method have been used to obtain maximum variety of people with
various socio-economic backgrounds like education, age , gender and type of family for
this the sample is collected from adults from different backgrounds. The sample in this
study is selected based on characteristics of a population and the objective of the study.
A total of one hundred and fifty samples have been used for the study of research.

3.3 Sources of Data

The data is collected from both primary and secondary sources and is quantitative in
nature. The researcher has collected the primary data by using the structured
questionnaire through Google forum. The secondary data is collected from relevant
literature, library study and research reports.

3.4 Data Collection Technique

The primary data for this study is collected through distribution of structured
questionnaires through Google forum. For the references various articles are used for the
further information regarding past practices and trend of conducting research in regards
of intergenerational influence.

3.5 Data Analysis Tool

Both dependent and independent variables is measured on a five point Likert scale
ranging from strongly agree = SA, agree = A, neutral = N, disagree = DA to strongly
disagree = SD. Data is analysed using descriptive and inferential statistics. Charts and
figures are used to present and analyse the data. The SPSS software is used to analyse the
collected data for the study. Multipleregression is used to measure the significance and
association.

3.6 Analysis and Interpretation:

The data generated from the google forum has been summarized accordingly and the
relationships among variables have been obtained by using frequency distributions,
different statistical tests and tools. Tabular presentation has been used for quantitative
data. The data have been interpreted analytically in language and the table and graphs
have been used to explain the relationship between the variables. Information extracted

28
from the secondary sources is summarized and concluded to meet the research objectives
analytically. Following tests were carried out for the purpose of the study:

 Percentage table
 Descriptive statistics
 Cross-tabulation frequency
 Multiple regression

3.6.1 Software Used

The data collected during the study has been analysed by simple descriptive analysis
using Statistical Package for Social Scientists (SPSS) and EXCEL software. This
software was chosen because it is the most appropriate software for research project and
has the required functions.

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Questionnaire: Following questionnaire are asked to 150 people who fall under
generation Y (born in-between 1981-1996) about intergenerational influence on their
buying behaviors.

Q.1. Gender:

a. Male b.Female

Q.2. Age:

a. 22-26 years b. 27-31 years c. 32-37 years

Q.3. Types of family:

a. Nuclear b. Joint

Dependent Variable: Purchase Decision Making

Q.4. Permission of the Parents to make a Purchase Decision

a. Yes b. No

Q.5. Parents Recommendation to make a Purchase Decision

a. Yes b. No

Q.6. Rank the factors that Influence the Most when Making a Purchase Decision (5=Most
Influential, 1 least influential)

Ranking of the Factors 1 2 3 4 5

The factor that influence the most while making a

purchase decision is the brand

The factor that influence the most while making a

purchase decision is the design/style

The factor that influence the most while making a

purchase decision is the advertisement

The factor that influence the most while making a

purchase decision is the price

30
Q.7. Rank the Individuals that Influence the Most when Making a Purchase Decision (5
being most influential and 1 being least)

Ranking of the Influencers 1 2 3 4 5

The parents influence the most when making a purchase

The celebrities influence the most when making a purchase

The friends influence the most when making a purchase

Social Media influences the most when making a purchase

Teachers influence the most when making a purchase

Q.8. Influence of the Parents on the Purchase Decision of the Respondents:

a. Yes b. No

Independent Variable: Family Communication Pattern

Q.9. Level of Agreement or Disagreement in Regards to the Family Communication
Pattern Influence in the Purchasing Decision

Family Communication Pattern Strongly Agree Neutral Disagree Strongly

Agree disagree

My family allows me to take decisions

on purchasing the products while
expressing the opinions independently
and evaluating the product

My family doesn’t encourage me to take

sole decision on purchasing the products
while meeting the parental standard

31
I share my views on the products with
my family to receive their feedback
before I make a purchase.

I don’t share my views on the products

with my family to receive their feedback
before I make a purchase.

Independent Variable: Family Decision Style

Q.10. Level of Agreement or Disagreement in Regards to the Family Decision Style

Making Influence in the Purchasing Decision

Family Decision style Strongly Agree Neutral Disagree Strongly

Agree disagree

The head of the family takes the sole

decision on purchase making

Family discussion is made among the

family members before purchase making.

I react variously to my parents negative

response related to purchase decision

I agree to my parents even with their

negative response related to purchase
decision due to my financial dependency
upon them.

Independent Variable: Socio-Economic Characteristics

Q.11. Level of Agreement or Disagreement in Regards to the Influence of the Socio-
Economic Characteristics in the Purchasing Decision

Socio-Economic Characteristics Strongly Agree Neutral Disagree Strongly

Agree disagree
I always take my parents or family
members with me for shopping

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I feel comfortable in taking my parents or
family members for shopping

Parents are good decision makers for

purchase decision
Parents always interrupt and influence in
purchase decisions

Independent Variable: Product Knowledge and Importance

Q.12. Level of Agreement or Disagreement in Regards to the Influence of the Product

Knowledge and Importance in the Purchasing Decision

Product Knowledge and Importance Strongly Agree Neutral Disagree Strongly

Agree disagree

I am loyal to the brands that have been

used by my parents

My parents force me to buy their related

choice of product

If I buy a product without the consultation

of my parents, they tend to become
unsatisfied

If I buy a product with the consultation of

my parents, they tend to become satisfied

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Moderate Variable: Type of Product- Durable Products

Q.13. Level of Agreement or Disagreement in Regards to the Parents Influence while

Making a Purchase Decision on Various Range of Durable Products

Parents Influence on Purchase Decision Strongly Agree Neutral Disagree Strongly

of Durable Products Agree disagree
I am influenced by my parents when
making a purchase decision on a watch

I am influenced by my parents when

making a purchase decision on a laptop

I am influenced by my parents when

making a purchase decision on a camera.

I am influenced by my parents when

making a purchase decision on two
wheelers.

Moderate Variable: Type of Product- Consumable Products

Q.14. Level of Agreement or Disagreement in Regards to the Parents Influence while

Making a Purchase Decision on Various Range of Consumable Products

Parents Influence on Purchase Decision Strongly Agree Neutral Disagree Strongly

of Consumable Products Agree disagree
I am influenced by my parents when
making a purchase decision on a hair care
products.
I am influenced by my parents when
making a purchase decision on a shampoo.

I am influenced by my parents when

making a purchase decision on soap

34