Consumer Behaviour

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It highlights behaviour of Gen X, Gen Y and Elderly and buying behaviour

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Consumer Behaviour

  1. 1. Consumer Behaviour Gen X, Gen Y, and The Elderly: Impact on Retail
  2. 2. <ul><li>General: Idealist </li></ul><ul><li>Born between 1945 and 1964: most of today’s world leaders and executives. </li></ul><ul><li>The fastest growing segment of the population. </li></ul><ul><li>They perceive themselves as younger than their years – (cognitive age versus chronological age). </li></ul><ul><li>  </li></ul><ul><li>Consumer Behaviour </li></ul><ul><li>Households are small and their need for new purchases is limited. </li></ul><ul><li>Enjoy convenience in the marketplace and appreciate their leisure time. </li></ul><ul><li>Although brand loyal, they only tend to try new products or brands if given good reasons to do so. </li></ul><ul><li>Enjoy buying for themselves, for their homes, and for others. </li></ul>Elderly
  3. 3. <ul><li>General: Reactive </li></ul><ul><li>Those born between 1965 and 1977 (40 million people). </li></ul><ul><li>First too be deeply affected by divorce, saw their families encounter several periods of economic turbulence. </li></ul><ul><li>Are now young adults who are driving the new hi-tech economy, forming families, and becoming an increasingly positive economic force. </li></ul><ul><li>Look for a balance between work and leisure. </li></ul><ul><li>Consumer Behaviour </li></ul><ul><li>Distrustful to marketing. </li></ul><ul><li>Not drawn to traditional forms of advertising (i.e. hyping up products). </li></ul><ul><li>Express their need to stay in control by purchasing. communications equipment such as fax machines, e-mail, and mobile phones. </li></ul><ul><li>Do not like labels, are cynical and do not want to be singled out and marketed to. </li></ul>Generation X
  4. 4. <ul><li>General: Civic </li></ul><ul><li>Primarily the offspring of the Baby Boomers. </li></ul><ul><li>Pragmatic and hard working, with emphasis on independence and individuality. </li></ul><ul><li>Economically more optimistic than previous generations, holding a positive outlook as a result of growing up in a time of prosperity. </li></ul><ul><li>Consumer Behaviour </li></ul><ul><li>Remarkably sophisticated consumers with a high level of brand awareness. </li></ul><ul><li>And they are healthy spenders. </li></ul><ul><li>Their parents make all the important decisions. </li></ul><ul><li>Tend to think of their image before purchase any product. </li></ul><ul><li>Disloyal to brands but highly loyal to relationships. </li></ul><ul><li>Most influenced by friends and peers. </li></ul><ul><li>Short attention span. </li></ul>Generation Y
  5. 5. One Example To Sum It Up
  6. 6. Differences Relevant to a Retailer
  7. 7. PARAMETER GEN X GEN Y ELDERLY Consumer Type Sincerity appeals Smart (aware) consumer Motivated Consumer Role in family Decision makers and Information Gatherers Strong Influencers Decision Maker Media Habits TV strongest medium TV, Internet Newspapers a widespread medium Purchase Behaviour Materialistic/cynical Savvy ,Pragmatic Narcissist, Consumption Oriented Technology Use technology Assume technology Have technology Price – Quality Price Oriented Value oriented Conspicuous Consumption Attitude towards Brand Rebel against hype Rebel against hype Respond to image building type Loyalty Not really: Attitude of getting the best deal As long as convenient Brand Loyal Diversity Accept Celebrate As a cause Shopping Behaviour Self reliant / individualistic Self-inventive / individualistic Mass movement Appealing themes/ Products Beverages, snacks, footwear and music Entertainment / Clothes and accessories, health Groceries, household necessities
  8. 8. <ul><li>Gen-X </li></ul><ul><li>Amazon.com - No nonsense retailer which appeals to the generations use of different media and value </li></ul><ul><li>Gen-Y </li></ul><ul><li>Apple - Most admired brand by Gen-Y, So clean and simple and easy to use, No excess </li></ul><ul><li>Elderly </li></ul><ul><li>Harley Davidson - The ultimate luxury, also a statement of freedom and lost youthfulness </li></ul>Case Studies in Retail
  9. 9. Step Elderly Generation X Generation Y Problem Recognition Only resort to necessary purchases, less exotic or luxury items, simpler lifestyles Self-aware, will try to upgrade lifestyles, but still conservative More self-aware and more interested in maintenance and recent trends Information Search Extensive in case of high-involvement or high-risk products Rely on traditional ATL advertising (TV ads) plus the Internet, occasionally seek peer groups Extensive across categories, seek information on Internet, from peer groups Alternative Evaluation and Selection No interest in fashion, high-end items must represent value for money Less interested in trends and more stinted in overall spending Spend more freely and show more interest in fashion and style Outlet Selection and Purchase Prefer locations that give good buys and encourage touch-and-feel i.e. where they can get a better first-hand experience Trade off between time spent shopping and desire to make a good buy. A mix of multi-brand outlets and convenience stores. Prefer exclusive outlets for up –market items such as durables due to their exclusivity, but otherwise prioritize convenience and reduced shopping time Post-Purchase Processes Likely to grudge purchases that are not necessary or value for money Moderate dissonance, even on reasonable purchases Less likely to experience dissonance due to self-confidence and extensive information search
  10. 10. Step in Decision Model Key Trait or Constraint for Retailer Problem Recognition Consumer self-awareness, interest level in style and fads Information Search Right level of information for a given category, increasing use of Internet and non-traditional media Alternative Evaluation and Selection Price, value for money, interest in style Outlet Selection and Purchase Convenience, number of brands available, exclusivity Post-purchase Processes After-sales service, service experience Implications for Retailers
  11. 11. The Ideal Retail Mix
  12. 12. Place Product Value People Communication <ul><li>They travel the most for the goods/brands they like. </li></ul><ul><li>Store Ambience not a strong driving factor. </li></ul><ul><li>Most brand loyal – Most of the marketing spend today is on them </li></ul><ul><li>Conspicuous consumption </li></ul><ul><li>Luxury for retired lives </li></ul><ul><li>Do not spend on goods they don’t need. </li></ul><ul><li>Highly Social and Demand Service </li></ul><ul><li>Value Personal Recommendations and expert opinion </li></ul><ul><li>Traditional mass media advertising and word-of-mouth. </li></ul><ul><li>Not very open to internet, social media. </li></ul>
  13. 13. Place Product Value People Communication <ul><li>Clean Ambience – Tidy, AC etc. </li></ul><ul><li>Trade off between distance travelled and quality of goods available. </li></ul><ul><li>High Quality Product with longer Life – but affordable price tags </li></ul><ul><li>Experiment with brands – Least Brand Loyal </li></ul><ul><li>Offer Value and “Live Up to” Claims - Like Products that Deliver </li></ul><ul><li>Better to use Market Penetration Than Price Skimming </li></ul><ul><li>Listen more to the sales-person than Ads </li></ul><ul><li>Like Personalized attention </li></ul><ul><li>Direct Mailers – Receptive to Uniqueness </li></ul><ul><li>Highly Individualistic Campaigns </li></ul><ul><li>Interactive Advertising Using New Media </li></ul><ul><li>Dislike The use of Role Models </li></ul>
  14. 14. Place Product Value People Communication <ul><li>Prefer Convenience except for up-market goods. </li></ul><ul><li>Prefer larger stores – one stop shopping </li></ul><ul><li>Store design contains areas for young people to hang out. </li></ul><ul><li>Collection/Variety of Products at lower costs – Value for money </li></ul><ul><li>More than a product – Value added benefits and Exclusivity </li></ul><ul><li>“ don't like a hard sell “ but “brand and fashion-conscious “ </li></ul><ul><li>Value for money, information seekers for up market categories </li></ul><ul><li>Low decision making for non-necessary products </li></ul><ul><li>Born into technology – low social interaction, high virtual interaction </li></ul><ul><li>Creative Advertising – Impulse Buyers (Unplanned Buying) </li></ul><ul><li>Ads focus on high energy, with fast-moving visuals, splashy graphics, brilliant colours </li></ul><ul><li>Fickle consumer – 360 degrees campaign </li></ul>
  15. 15. <ul><li>Stephanie M Noble & Charles H Noble – Getting to know Y: The Consumption Behaviors of new cohort, American Marketing Association Conference </li></ul><ul><li>Canadians Plastic Sector Council – GenX /GenY Behavioural Research and Messaging Strategy , March 2008 </li></ul><ul><li>Enterprisingmuseum.com </li></ul><ul><li>Deloitte Consulting LLP — Who are the Millennials, a.k.a. Generation Y, 2005 </li></ul><ul><li>Retail buying criteria of X Generation consumers </li></ul>Sources

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