Puerto Rican consumers are shifting from impulse buying to more rational consumerism due to the long economic recession. A study found that middle-class Puerto Ricans are cutting back on dining out, clothes and entertainment, and instead spending more on necessities like housing, personal care and cars. Younger consumers are also seeking out deals and bargains. As a result of this more rational approach to spending, companies will need to market products differently by emphasizing attributes like value, price and quality rather than emotional appeals. The changing consumer behavior is expected to influence Puerto Rico's culture to value cost controls more like other Latin American countries.

1. http://caribbeanbusiness.com/cb-archives/
Impulse buying no longer the norm for Puerto Rican consumers
By : LORRAINE BLASOR
Volume: 36 | No: 21
Page : 41
Issued : 05/29/2008
More rational consumerism is newest trend due to bad economy; change is affecting how companies
market their products
Battered by the economy and fearful of the future, Puerto Ricans are discarding traditional
impulse buying in favor of more rational consumerism, a trend certain to influence how
companies market their products, according to recent research examining the effects of the
present economic situation on consumer behavior.
The study, carried out last November by Brand Science, the marketing research division of OMD
Puerto Rico, found middle-class Puerto Ricans are cutting down on eating out, clothes and
entertainment, and spending more on personal care, housing and cars. They also are keeping
budgets to rein in expenses, seeking out bargains and special offers to stretch their dollars, and
taking on more debt. Younger people are going dutch when dating and entertaining at home to
save money. Overtime and working two jobs are more prevalent.
The long-winded recession is transforming Puerto Rican consumers, notorious impulse shoppers,
into more careful buyers, according to the study. Instead of emotion, they are basing a purchase
on “a more rational analysis,” said Rubén Rodríguez, general manager of OMD Puerto Rico,
which together with BBDO Puerto Rico is part of the Omnicom Group, the world’s third-largest
advertising conglomerate. (The study relied on interviews with focus groups and an online
survey of 300 men and women divided into two separate age groups: 18 through 24 years of age
and 25 and up. Professional Market Research conducted the survey.)
For example, three years ago, buyers might have purchased a car solely based on its appeal and
their purchasing power. Today, they are more likely to ask themselves whether they really need a
car and what the car’s fuel efficiency is, said Rodríguez. Or the main criteria in selecting a
refrigerator was that it be made of stainless steel. Now, the consumer carefully considers product
guarantee and energy consumption, he said.
“Nowadays, people seek value for their money,” said Brand Science Marketing Research
Manager Roger P. Dill, who oversaw the project. Thus, while price remains the key factor in
buying, consumers are giving additional weight to other product attributes, which means that as
long as companies can persuade buyers their products meet tougher criteria, they won’t be forced
to sacrifice price, he said.

2. “When consumers switch from emotional to rational buying, it changes the consumption of
media,” said Rodríguez, noting product marketing will need to change in line with the evolving
consumer. A 30-second spot, for example, may no longer do to provide consumers the
information they need to buy a product. As a result, he sees increased use of other media such as
the internet to reach out to consumers.
While other studies in the past two years show consumers in distress, Dill said the Brand Science
research offers the most up-to-date snapshot of the buying habits of the Puerto Rican middle-
class consumer (yearly income between $15,000 and $30,000). “It gives you a snapshot of the
current situation that is pretty faithful,” he said. Psychologist María Isabel Casas also contributed
to the study, which cost $13,500 and was sponsored by General Electric, McDonald’s and
GlaxoSmithKline.
When asked to describe the best and worst of Puerto Rico, respondents singled out beauty,
people, food and festive attitude as the island’s best aspects while government, crime and the
economy rated the worst. They also were asked to specify their concerns over the economy and
to define Puerto Rico. The vast majority of respondents described Puerto Rico as “my country”
or “family.” The survey reflects grave concern for the island economy, the high cost of living
and high indebtedness levels among Puerto Ricans. Casas, who runs her own company,
Consumer’s Truth, finds it especially troubling that young people are becoming indebted to
afford activities such as trips. Respondents also revealed their pessimism about the future, which
they characterized as “uncertain” or “worse.” “Contrary to other historical times, they don’t see a
landscape of hope,” Casas said.
Interestingly, the forces that are reshaping the local consumer are sure to mold the next
generations. Because children are quick to pickup on the financial concerns of their parents,
Rodríguez sees the younger generations developing into consumers “who value things very
differently from the current generation.” Casas predicted Puerto Rico could end up looking more
like other countries in Latin America with a culture attuned to cost controls.
While the study paints a sober picture, Rodríguez emphasized the study’s intention is “not to
bring a negative or pessimistic message, but rather a message to ease consumers.” Casas added,
“It shows how Puerto Ricans are acknowledging and reacting to the reality before them.”