Consumer Behaviour

*CHAPTER 3 Trends in Determinants of Customer BehaviorCUSTOMER BEHAVIOR: A MANAGERIAL PERSPECTIVEPART 1:

Copyright 1999 by Thomas Southwestern. All rights reserved.

CHAPTER 3PART 1Customer Behavior: A Managerial Perspective

Copyright 1999 by Thomas Southwestern. All rights reserved.*Factors that Influence Customer BehaviorThree factors that are expected to cause the most significant change in customer behavior are:Changes in demographicsAdvances in technologyChanges in public policy



Copyright 1999 by Thomas Southwestern. All rights reserved.*Conceptual Framework



Copyright 1999 by Thomas Southwestern. All rights reserved.*Benefits of Anticipating Trendsin Customer BehaviorAnticipating trends can give companies a key strategic advantageBy sighting a trend, the industry can create a market by channeling a latent needAnticipating trends creates positive public opinion for the company and the industry, portraying them as responsive



Copyright 1999 by Thomas Southwestern. All rights reserved.*Demographic TrendsAging of the populationRise in number of working womenIncrease in single-person householdsDecline of the middle classIncrease in ethnic diversityGeographic redistribution



Copyright 1999 by Thomas Southwestern. All rights reserved.*Aging of the PopulationPopulations age for two key reasonsBirth rate is declining Life expectancy is risingThe aging population has concerns:WellnessFinancial well-beingSafety and securityRecreational needs



Copyright 1999 by Thomas Southwestern. All rights reserved.*Women in the WorkforceEffects of the working women trend:A significant change in the resources of a householdTime shortage: lack of free timeTime shift: the time when nonwork-related activities may be pursuedA shift in the lifestyle of familiesWith both spouses working, households have turned into roommate families



Copyright 1999 by Thomas Southwestern. All rights reserved.*Single-person HouseholdImplications of the living alone trend include:LonelinessSelf-respect and autonomyCocooningImpulse buying



Copyright 1999 by Thomas Southwestern. All rights reserved.*The Declining Middle ClassFour key implications:An increasing range in prices of productsMore customer militancyAffordabilityThe neo rich



Copyright 1999 by Thomas Southwestern. All rights reserved.*Ethnic DiversityTwo distinct implications:Segmented marketsCultural diversity



Copyright 1999 by Thomas Southwestern. All rights reserved.*Geographic RedistributionGeographical redistribution separates different generations in different space and time zonesIncreases gaps both within and between generationsPeople living in different areas of the country reflect different values, lifestyles, and attitudesRegional marketing responds to and feeds the differences by exposing newly arrived residents to regional tastes



Copyright 1999 by Thomas Southwestern. All rights reserved.*Technological TrendsTechnology is shaping future customer valuesAdvances in technology have already given customersIncreased access to informationNewer generations of productsAutomation of transaction processes to provide customers with greater flexibility and controlAccess to some customized products



Copyright 1999 by Thomas Southwestern. All rights reserved.*Customer Responses toNew TechnologyTechnological developments will stimulate changes in customer behaviorCustomers will:Take on the role of coproducersEngage in disintermediationEngage in outsourcingEngage in automation of consumption



Copyright 1999 by Thomas Southwestern. All rights reserved.*Trends in Public PolicyEconomic pragmatism is prevailing over ideologyMany governments are concerned with protection of passive consumersGovernments on an international level are pursuing regional economic integration



Copyright 1999 by Thomas Southwestern. All rights reserved.*The Governments Role in the National EconomyHistorically, three ideologies have shaped the governments role in national economic affairsPoliticalReligiousCentral planning



Copyright 1999 by Thomas Southwestern. All rights reserved.*Implications of Ideology vs. Economic Pragmatism



Copyright 1999 by Thomas Southwestern. All rights reserved.*Implications for Customer BehaviorGreater competitionCustomer orientation is a mustAll three customer roles will benefitThe payer by lower pricesThe user by better productsThe buyer by ease of doing businessMore standardization



Copyright 1999 by Thomas Southwestern. All rights reserved.*Implications of the Trends for the Three Customer RolesThe foregoing trends in demographics, technology, and public policy will influence all three customer rolesUserPayerBuyer



Copyright 1999 by Thomas Southwestern. All rights reserved.*Influence of Major Trends in Demographics on the Three Customer Roles

UserPayerBuyerDEMOGRAPHICSAging populationIncreased health and security and recreational needs.Cost containment for health-care needs a high concern.Home delivery and convenience in buying important.Working womenTime-saving appliances; cooking, cleaning, child care outsourced.Affordability somewhat improved.Male-female role specialization in buying further diluted.Single-person householdsSocial and emotional values in products acquire prominence.Better affordability.More impulse and experiential buying.Declining middle classDemand for extreme upscale and downscale merchandise.Financing progressively more important.More diligent buying effort among the expanded downscale customer groups.Increasing ethnic diversityGreater ethnic diversity in customer tastes.Cross-ethnic differences in affordability.Expected customer service levels differ across ethnic groups.Geographic redistributionGreater regional diversity in customer tastes.



Copyright 1999 by Thomas Southwestern. All rights reserved.*Influence of Major Trends in Technology on the Three Customer Roles

UserPayerBuyerTECHNOLOGYAccess to informationMore customized products.Better information on competitor prices.Product search on the Internet. Product information on demand.Smart productsSmart products with memory for users preferences.New methods of identity verification ensure security against frauds.Automated purchaseBuying direct from the factory.Liberated customer behaviorBuyers will need to be technology-savvy.Mass customized lifestyles



Copyright 1999 by Thomas Southwestern. All rights reserved.*Influence of Major Trends in Public Policy on the Three Customer Roles

UserPayerBuyerPUBLIC POLICYEconomic pragmatismBetter products due to open-market economy.Better prices due to competitive economy.Easier access to global products.Easier to do business with companies.Rights of passive consumersConsumers assured protection against passive consumption.Financial penalties for offensive consumption.Access to societally harmful product/services made more difficult.Regional economic integrationSeasonal products available for year round consumption.Exposure to diverse consumption cultures.More economically produced and more economically priced products and services.Easier to acquire products and services from diverse consumption culturesLocal availability of global products.



Copyright 1999 by Thomas Southwestern. All rights reserved.*Overall Implications for MarketersThe economy will become more service-oriented requiring companies to make significant changes:Measure customer value of products and services in terms of time and moneyMake safety and quality, and courteous efficiency an integral part of the service offeredAdopt mass customizationOffer instant marketing


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Consumer Behaviour

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