WHO IS CONCERNED WITH CONSUMER BEHAVIOR - retailers want to know how to most effectively sell their products; many want to control the information intake of their customers - marketers - they want to know the effects of marketing activities on purchase decisions and on understanding how young people develop consumer-related thoughts and actions - psychologists - want to understand the cognitive and affective processes of people through their consumer choices - consumers - want to know how they are being marketed to For research we consulted for this presentation, journals were highly business, marketing and consumerism-driven, with additional resources looking more specifically at the psychology of buying ---EXPLAIN IMAGE ON SLIDE--- consumerism involves both a seller and a buyer, each of whom has a different motive. There is an information exchange between the two, however, as is highlighted in this representation -- RETAILER WANTS TO CONTROL INFORMATION PRESENTED TO USER – see Case 19 (Chapter 2)
Groups of youth and adolescents - perceptual (3-7), analytical (7-11), and reflective (11-16); teens can be split into 2 groups-- tween and teen (tween is more of a state of mind than actual age); - technology has made teens more self-reliant - can access information even more so on their own - they can make online purchases on their own; no longer have to depend on parents for transportation - many, however, will still use money from their parents Cognition about brand recognition, brand loyalty, and other shopping factors are developed throughout adolescence – today’s youth and adolescents have almost unstopping exposure to products through magazines, radio, tv, and the internet - While most teenagers know that they should shop around for the best price on a desired item, most admitted that they would buy in the first store which had the item they wanted. Settling for subobtimal results seems to be quite common across all age brackets when it comes to convenience, especially with the internet - How spending of youth and adolescents has changed in the later part of the 20th century (Hermann) 1. Growing up in a period of almost unbroken prosperity - Greater purchasing power than their ancestors had had in the earlier part of the 20th century - Optimism for future increases to prosperity - Children grow up with more money than their parents did and expect that money to be consistent, which has caused an increase in youth spending over the years; on the flip side, youth concepts about money management have been getting poorer 2. Permissive techniques of child-rearing - This teaching has emphasized greater tolerance for children’s impulses and desires, freer expression of affection and psychological methods of discipline rather than physical - This permissive parenting has led to a shift in influence of peers and family on consumption patterns -- parents have shifted away from stepping in as much on consumer choices 3. A high level of education and heavy exposure to mass media - higher education exposes people to better financial opportunities - media exposure has grown exponentially with the advent of TV and the internet - (1970) - by 3, 1/3 of children TV viewers; by 5, 80% - print media are targeted (and heavily laden with advertising) for teen groups
- what teens spend $ on since the 1990s has not changed - music, clothes, video games, electronics - It is important for teens to remain on top of the latest releases, trends, etc. - one of the target audiences for movies; it is an activity that is primarily done with peers - only 11% of 7-12th graders go with parents, whereas 60% go with peers or siblings - one of teen’s top online purchases is music - much of teen life is surrounded by music; personal players, radio, television (older teens average 2 ½ hours of listening per day, compared to 2-18 years old listening to 1 hr, 27 mins) - teen work affects their purchasing behaviors - 24% work; 40% of these teens earn $100+ per week - About ½ of teens have a bank account - Clothing, music and movies are top items for spending among teens - males are most likely to buy video games and electronics - females clothing, jewelry/accessories and makeup
- Who affects youth - parents - peers - advertising ~ who influences and how much shifts over time as cognition develops How are they socialized to be consumers? - Modeling - imitating (consciously or unconsciously) parents, then later peers and what they see in advertising - Reinforcement - this can be positive or negative from parents or peers based on consumer choices - Social interaction - both one way and two-way (talks BY the parent v talks WITH parent about consumer decisions) ********WHOSE THEORY IS THIS******PUT ON SLIDE ~ Piaget’s theory of intellectual development (1960) assumes that all socialization occurs by age of 15, but this can vary depending on the child and his or her interactions with outside influences (AGE) ~ It is also assumed that in middle- and upper-class families, parents more closely supervise the spending of their children than in lower-class families, but a study by Churchill and Moschis found this to be untrue (SOCIOECONOMIC) ~ birth order - first child seems to rely more heavily on parent input; later children depend more on peers ~ SEX ~ females stronger orientation to peers than males, but there is no research that gender impacts influence of parents on buying decisions ~ FAMILY AND PEER COMMUNICATION are strongest, tying most of the influences together in one way or another ((just reference the picture))
- Tweens alone wield more than $43 billion in spending power annually; College age students have more the $200 billion This has been happening for a while -- 1989-1998, an increase of 300% in youth and adolescent spending In 1998, the average teen spent $56 of his or her own $ and $28 of parents per week Tweens are eager for independence and to be regarded as individuals. Teens develop their own styles, which becomes a mixture of fitting in and standing out. The are motivated by this desire for independence and trying to mature as both a consumer and an individual. Tweens and teens look at purchasing certain products or brands as a means to help them find out who they are without their parents’ involvement. - still, effects of peer pressure are evident in their consumer choices - 51% of teens aged 12-17 cite their friends as the biggest influence on how they spend their money, 71% cite friends on type of music they listen to, and movies they see in the theater 53% Brand loyalty, as Brigid will mention, is very strong in many consumer purchases, and it really takes root during the adolescent years. Nostalgia for brands and popular items from one’s younger years is especially apparent as a person ages Even as younger buyers, products are often consumed because they fit with the consumer’s image of himself or herself. It also helps consumers deal with the difference between their actual selves and their ideal selves.
1. YOUTH AND TEEN INFLUENCE (WHY it is IMPTT TO LOOK AT THEM) “ The best way to a young girl’s purse is through her parents ” - Children, tweens and teens are influenced by their parents but also maintain a great deal of influence over them - There is a shift throughout the adolescent years away from nearly primary influence of parents on decisions to a significant influence from peers - Among products youth and teens influence parents on cell phones, vacations, automobiles - “ Retailers advertise to parents, but manufacturers advertise to kids to try to get them to make consumer decisions.” - There are also efforts to “target both moms and children at the same time in different ways.” - Teens are considered a “future market” because companies can create lifelong loyal customers --- many user preferences for products are set in adolescence and early adulthood, lasting throughout the rest of one’s life, ??as Julianne will mention later?? 2. Teen’s attitudes differ from their parents’ in many ways: *****SEE IMAGE of COMPARISON CHART***** 3. Paco Underhill and other researchers have looked at how retailers even look at physical product placement in stores - parents might say yes to products, but probably would not pick them up themselves - Sweets at children’s eye level - Barney books at bottom shelf; more classic stories (Grimm’s Fairy Tales) at parents’ level marketers take advantage of children’s “age aspirations,” especially for teens and tweens, who admire their siblings and other slightly older people they might admire Marketers use creative measures to attract teens - giveaways, sweepstakes, other things at concerts, coffee shops, arcades, and other hangout locations. College students are prime targets for advertisers because of their market’s size, their role as trendsetters, their building brand loyalties, and their aspirations for higher living situations upon attaining their degree.
Now I’d like to talk to y’all about mature consumers, or senior citizens. (Read the stats). As you can see seniors are a worthwhile focus of study and research. Since one day we’ll all be seniors, it’s important to understand how and why seniors buy.
There are certain pre-set stereotypes about senior citizens, and as with all stereotypes, not all are true. Can anyone think of a stereotype that might be related to senior shoppers? Why yes, they are stereotyped as being set in their ways, and there is a degree of truth to this when discussing them as consumers. How many of you have ever shopped with a grandparent, or an elderly aunt or uncle? What did you notice about the experience as compared to shopping with one of your peers or your parents? (Hopefully someone will say something insightful and presentation-helping). According to a study done at 3 universities in Australia, seniors tend to be less price-sensitive than other age groups. So while it may take a while to, say, food shop with a senior, they usually don’t have much variety in the products they purchase. In my personal experience, shopping with my grandmother was far easier than shopping with my mom ever was, because my mom would have coupons and would try new products, and my grandmother only occasionally used coupons and purchased products from a selected repertoire of what she has used for years. I think it’s safe to say that at some point you’ve all heard the phrase uttered by a senior citizen “the good old days” or “when I was your age”. Marketing companies have paid attention to this, and done research to support that nostalgia is a main draw for senior shoppers. Nostalgia is defined as “an emotional state in which an individual yearns for an idealized or sanitized version of an earlier time”. Particularly when seniors are browsing the internet, nostalgia a very significant factor. Brand & Store loyalty= research has found that seniors have greater levels of brand and store loyalty. Does anyone have an idea about why that might be?= Often mature consumers have shopped at stores over a period of years, established a relationship with the retailer. Either from habit when there were fewer brands available, or from preference, older consumers spend years buying and shopping at one particular place, and to invoke a stereotype, can be ‘set in their ways’. After 30 years of buying dove, there is no reason to buy a new brand. Convenience= In product design, accessibility, convenience, simplicity, matter to seniors. They are attracted to ease of use. Risk reduction- The elderly want to minimize the degree of risk involved in purchasing, so they tend to employ risk-reducing methods like talking to friends and family, doing research, etc. I will go into more detail about this later. In the matter of form over function, the elderly choose function over form. My dad is a perfect example of this, as he is always emphasizing the practicality of something over what it looks like. If given a choice of something that looks pretty over something that works better, research shows that seniors will choose what works better.
1999-2000= .6%, 2009, 3.6%.
RECOMMENDATION AGENT - allows consumer to more efficiently screen the potentially very large set of alternatives that are available in an online shopping environment while providing a personalized list of recommended alternatives based on a customer’s previous purchases (or search paths) - 3 parameters - attribute importance weight - minimum acceptable attribute levels - quota cut-off to limit number of products to be included
COMPARISON MATRIX The Comparison Matrix is designed to help customers make in-depth comparisons of selected alternatives. The matrix clearly outlines information about a select number of products. - Use of a CM should result in a shift in emphasis from memory-based to stimulus-based purchase decisions, as important characteristics are directly lined up In tests run to study the effectiveness of RAs and CMs, users were more likely to switch their product choice when they did not having the option of using an RA than if they were to use one. The use of a CM, on the other hand, leads to a decrease in the number of objects viewed but an increase in quality of the items that were considered, and it was tied to good objective decision quality. The use of either or both of these tools is very useful for consumers in online shopping environments, as there there is no limit on display space and consumers’ limited cognitive resources may be overloaded with the vast amount of information available. The RA is good for the initial search, the CM is better for later, in-depth searching. It helps limit searches, view price ranges (and what products are overpriced) and make decisions that will best, or at least quite satisfactorily match user preferences.
Authors say that main components of their online consumer behavior theory are intention, adoption, and continuance. What affects the intention of the consumer? Trust and perceived risk, for one thing. Products like CDs, books, and canned food don’t require the consumer to check them for defects before buying, making them a low-risk item to buy online. Brand and service quality also play a role in intention of the consumer. Adoption is a way of saying “purchasing”. So what will make someone take the leap from intending to purchase to making the purchase? Results varied widely, but consumers looked for ease of navigation and interface, security, accessibility, social presence, online shoppng aid, and brand/reputation. Continuance is another way of saying buying again from the same site or e-retailer. The study of continuance is new and not much data is available, but what has been found to be important to consumers when deciding whether to purchase from an online retailer again is navigation, security, search attribute, shopping aid availability, and service quality.
----------------------- TIME ---- if anyone has anything to add to this, please feel free! - “Time is money.” - - when people look to sources for information or where to purchase an item, time is a key item. Perceptions about what sources to use, in what order, and how valuable each is depends on prior searches and what information a consumer has about a product prior to beginning the search. - brand information - vendor experience - convenience of receiving item or service When time is limited, certain aspects become of increasing importance. Sources with negative information about a product are important because they can help a user quickly eliminate a product or vendor from consideration. Various studies have found that less increase in information is found as more and more sources are consulted *** INSERT SOME QUOTES FROM SURVEY*** For booking an emergency flight: Many responses stressed not spending much time (1 hour or less MAX, in most cases): &quot;[I would book] online...I would spend as little time as possible.&quot; / &quot;I'd spend about 20 minutes online so that I could find the soonest flight that I could afford (and catch!)&quot; BUT one person said: &quot;Book through Airline directly and I would spend as much time as it takes &quot; Responses for booking a vacation were much more varied; more people were willing to spend more time, but some were willing to devote a few week's time and look at more sources, while others still wanted to view select resources and spend less time; few said they would consult a travel agent; predominant information seeking was via the internet.
BROWSING - WHAT IS BROWSING? - takes different forms, is for different purposes - window shopping - lack of need - lack of finances - more of a female thing (stereotypically) - researching for knowledge - lack of need, but curiosity - serendipity - not searching for anything in particular, but willing to find something by chance - Magazine perusal
- BROWSING VERSUS SHOPPING - prepurchase search: information seeking and processing activities which one engages in to facilitate decision making regarding some goal object in the marketplace. - ongoing search: search activities that are independent of specific purchase needs or decisions. In other words, ongoing search does not occur in order to solve a recognized and immediate purchase problem. ((LOOK MORE AT BLOCH 1986)) - Goals and motives of prepurchase search versus browsing((BLOCH 1986)) - what are end results of browsing?
People’s default thinking today seems to be that the Internet can be a one-stop shop for information In some ways, libraries expect this now and have changed their resources from predominantly in-print to predominantly online (Kelley Blue Book, for example)
Consumer & Browser Behavior <ul><li>Human Information Behavior </li></ul><ul><li>17:610:510:03 </li></ul><ul><li>October 14, 2009 </li></ul><ul><li>Brigid Abraham </li></ul><ul><li>Julianne Kurtz </li></ul><ul><li>Mary Grace Whealan </li></ul>
Who is today’s consumer? http://likeiknowit.wordpress.com/2008/05/19/micro-interactions/
Who is Concerned with Consumer Behavior? <ul><li>Retailers </li></ul><ul><li>Marketers </li></ul><ul><li>Psychologists </li></ul><ul><li>Consumers </li></ul><ul><li>Process : Information transmitted from producers to consumers; information transfer, then knowledge and evaluation of user leads to product choice </li></ul>http://www.industrialsearchenginemarketing.com/blog/2007/12/31/consumer-behavior-overview-101-aligning-online-with-offline-marketing-campaigns/
What Influences Consumer Behavior? <ul><li>http://www.ac.wwu.edu/~market/courses/380/consbehv.html </li></ul>
What consumer behaviors is Mr. Bean exhibiting? <ul><li>Behavior impacted by shopping environment </li></ul><ul><ul><li>In this case, negatively </li></ul></ul>
Youth Consumers <ul><li>Groups of youth </li></ul><ul><li>Technology as influencing youth consumer behavior </li></ul><ul><li>Changes in youth spending </li></ul><ul><ul><li>Significant growth in money expended by minors </li></ul></ul>
Experian Simmons survey <ul><li>What youth and teens are buying </li></ul><ul><li>How much they are spending </li></ul>Gen. Y (born 1977-1994, numbering 76 million) have tremendous spending power – about $600 billion per year, not including influence on parents.
What consumer behaviors is Mr. Bean exhibiting? <ul><li>Impacting Peers, Colleagues, Family…even strangers </li></ul><ul><ul><li>In this case, a fellow shopper </li></ul></ul>
Adolescent Consumer Behavior <ul><li>Piaget’s theory of intellectual development (1960) assumes that all socialization occurs by age of 15 </li></ul><ul><li>Consumer tendencies for life built around late adolescent/early adulthood </li></ul><ul><li>Churchill and Moschis’ 1979 study evaluated the interactions of: </li></ul><ul><ul><li>Age </li></ul></ul><ul><ul><li>Socioeconomic status (* found not to be a factor) </li></ul></ul><ul><ul><li>Birth Order </li></ul></ul><ul><ul><li>Sex </li></ul></ul><ul><ul><li>Amount of TV/media </li></ul></ul><ul><ul><li>Family Communication about Consumption </li></ul></ul><ul><ul><li>Peer Communication about Consumption </li></ul></ul><ul><ul><li>Materialism </li></ul></ul><ul><ul><li>Social Motivations for Consumption </li></ul></ul><ul><ul><li>Economic Motivations for Consumption </li></ul></ul>Churchill and Moschis, 1979
Purchasing Motivations of Generation Y Consumers (Noble, Haytko, and Phillips. 2009) <ul><li>Changing attitudes and influences as cognition develops </li></ul><ul><li>Brand loyalty – lifelong; starts here </li></ul>Socialization Theory – Processes by which young people acquire skills, knowledge, and attitudes relevant to their functioning as consumers in the marketplace.
Youth and Teen Influences <ul><li>Influenced by parents …but also influence parents </li></ul><ul><li>Youth/teen opinions differ from parents’ </li></ul><ul><li>Teens as targets of advertisers </li></ul><ul><ul><ul><li>Strategically placed store items </li></ul></ul></ul>
Adults <ul><li>Responsibilities: </li></ul><ul><ul><li>Taking care of children </li></ul></ul><ul><ul><li>Taking care of parents </li></ul></ul><ul><ul><li>Demanding careers </li></ul></ul><ul><ul><li>Social lives </li></ul></ul><ul><ul><li>Balancing a family budget </li></ul></ul>
Adults Prefer Online Shopping <ul><li>No “grocery store” arguments </li></ul><ul><li>Increased comfort level </li></ul><ul><li>Convenience </li></ul><ul><li>Less stressful environment </li></ul><ul><li>When asked how much time an ADULT aged 35-54 would spend on a plane ticket to see a loved one or to go on a vacation, the adult gave the same terse response: “Southwest Airlines, Travelocity. Less than an hour.” </li></ul>
Challenges of Adults <ul><li>Struggle to fight own impulses and appease children's impulses </li></ul><ul><li>Less available time than other age groups </li></ul><ul><li>Raising children in a technological world </li></ul>
Mature Consumers <ul><li>By 2020, there will be 1,000,000,000 people over the age of 60 living worldwide </li></ul><ul><li>The 85+ age bracket is the fastest growing segment of the worldwide population </li></ul><ul><li>Seniors have 70% of the USA’s purchasing power </li></ul><ul><li>Highest percentage of discretionary income of any 10-year age bracket </li></ul><ul><li>Seniors 65+ had $200 billion in purchasing power yearly (est. in 2000) </li></ul>
Important Factors to Mature Consumers <ul><li>Nostalgia </li></ul><ul><li>Brand/Store Loyalty </li></ul><ul><li>Convenience </li></ul><ul><li>Simplicity </li></ul><ul><li>Risk reduction </li></ul><ul><li>Functionality </li></ul><ul><li>Reisenwitz, T., Iyer, R., Kuhlmeier, D, & Eastman, J.. (2007). The elderly’s internet usage: an updated look. Journal of Consumer Marketing , 24(7), 406-418. </li></ul>
Brand Loyalty and Trust <ul><li>Perceived service quality </li></ul><ul><li>Overall purchasing experience </li></ul><ul><li>Associate positive conventional shopping experience with positive online service </li></ul>
Consumer Choice All have been impacted by the Internet Consumer Browse Pre-purchase Search Impulse Buying
What consumer behaviors is Mr. Bean exhibiting? <ul><li>Impulse Buying Behavior </li></ul><ul><ul><li>Browsing with the intent to buy, but nothing specific in mind </li></ul></ul>Video care of YouTube.com
Impulse Buying <ul><li>Immediacy of purchase </li></ul><ul><li>Accompanied by emotions </li></ul><ul><li>Proximity to stimulus </li></ul>
How has technology shaped our consumer behaviors? <ul><li>Constant need for timely information (i.e. flights) </li></ul><ul><li>Auction sites such as ebay make selling collectible items easier </li></ul><ul><li>More inclined to research the value and prices of a purchase </li></ul><ul><li>Must consider risks when making purchases </li></ul>
E-Commerce <ul><li>According to the U.S. Census Department of Commerce, in the first quarter of 2009, $32.4 billion was spent in e-commerce </li></ul><ul><li>E-commerce has grown from less than a percent of total quarterly retail sales 10 years ago to 3.6% of total quarterly retail sales </li></ul>U.S. Dept. Of Commerce. (2009). [Graph representing quarterly progression of e-commerce percentage sales]. Quarterly Retail E-commerce Sales . Retrieved from http://www.census.gov/retail/mrts/www/data/pdf/09Q2.pdf
$$ What We Buy $$ <ul><li>What are people buying? </li></ul><ul><li>Why are they buying online? </li></ul><ul><li>Why aren’t they? </li></ul>
Recommendation Agents <ul><li>3 parameters </li></ul><ul><ul><li>attribute importance weight </li></ul></ul><ul><ul><li>minimum acceptable attribute levels </li></ul></ul><ul><ul><li>quota cut-off to limit number of products to be included </li></ul></ul>Netflix.com Bestbuy.com
Comparison Matrix <ul><li>in-depth comparisons of selected alternatives </li></ul><ul><li>matrix clearly outlines information about a select number of products. </li></ul>
Methodology Framework of Online Consumer Behavior
What consumer behaviors is Mr. Bean exhibiting? <ul><li>Impulse Buying Behavior </li></ul><ul><ul><li>Browsing with the intent to buy, but nothing specific in mind </li></ul></ul><ul><ul><li>Physical product trial </li></ul></ul>
Is there ANYTHING You Can’t Buy Online? <ul><li>Peapod/ Fresh Direct: People like the ritual of picking out food </li></ul><ul><li>Cars: usually involves a payment plan and test drive </li></ul><ul><li>Use sites as informational: not to buy directly </li></ul>
RISK Risk Reducing Methods: Word of Mouth Recommendation Product Warranties Endorsements Advertisements Samples Return Policies Free Samples Money-Back Guarantees Trial Sizes Price Reductions <ul><li>LEVELS of RISK </li></ul><ul><li>High </li></ul><ul><ul><li>Car </li></ul></ul><ul><li>Medium </li></ul><ul><ul><li>Laptop Computer </li></ul></ul><ul><li>Low </li></ul><ul><ul><li>Clothing or supermarket items </li></ul></ul>
Time for Consumer Search and Decision <ul><li>Factors considered </li></ul><ul><ul><li>Brand Information </li></ul></ul><ul><ul><li>Experience with Vendor </li></ul></ul><ul><ul><li>Convenience </li></ul></ul><ul><li>When time is short, factors change level of importance </li></ul>“ Time is money.” Time for search determines search type, depth, and sources consulted “ If I had more time , I would probably use more sources— a more extensive internet search, calling up people who might know about [SUBJECT X], etc.” – Survey Participant Hauser, Urban, and Weinberg , 1993
What consumer behaviors is Mr. Bean exhibiting? <ul><li>Browsing </li></ul><ul><li>/ Window </li></ul><ul><li>Shopping </li></ul>Video care of YouTube.com
Why Browse? <ul><li>What is browsing? </li></ul><ul><li>How is it different from shopping? </li></ul><ul><ul><li>Impulse buying blurs this line </li></ul></ul><ul><li>How do we browse? </li></ul>Research conducted by Bloch, Sherrell, and Ridgway (1986, 1989)
Why Browse? <ul><li>Browsing versus searching </li></ul><ul><ul><li>Determinants </li></ul></ul><ul><ul><li>Motives </li></ul></ul><ul><ul><li>Outcomes </li></ul></ul><ul><li>Recreation </li></ul><ul><li>Banking knowledge for later shopping use </li></ul>Research conducted by Bloch, Sherrell, and Ridgway (1986, 1989)
What makes some stores so successful? <ul><li>Consistency of usability design </li></ul><ul><li>Responsive to customer needs </li></ul><ul><li>Timeliness of information </li></ul>
What does all of this mean for libraries and librarians?
Survey Findings <ul><li>- 100% of respondents chose the internet in their top 3 - 92% had friends/family in the top 3 - 49% had car dealerships in top 3 - 33% had library in top 3; </li></ul><ul><li>46%, however, would consult a library 4th, and 8% would not consult a library at all - just 23% indicated they would consider speaking to librarian about finding car information </li></ul>