iPhone: Consumer Behavior
Consumer behavior has changed significantly in
the past years. Given the technology revolution
that has been experienced in the past decades,
consumer behavior has changed drastically.
People have replaced their daily newspapers
with customized online editions of these media
and are increasingly getting information from
online sources. People don’t have to carry
around laptops or desktops to do their routine
work but rather carry smartphones, which prove
to be more efficient, stylish, and convenient. The
iPhone is a perfect example of technology,
making its mark on consumer behavior.
Consumer behavior is defined as the behavior
that individuals exhibit in looking for; buying,
using, evaluating, and disposing of products and
services that they think satisfy their wants.
Consumer behavior centers on how consumers
make decisions to expend their available
resources (time, money, effort) on consumption-
related goods.
This includes what they purchase, why they
purchase it, when they purchase it, where they
purchase it, how frequently they purchase it,
how they assess it after the purchase, the effects
of such assessments on potential purchases and
how they dispose of it off.
Just like in any other organization, consumer
behavior in Apple is rooted in its marketing
concept. Its marketing concept is oriented
through several alternative approaches towards
doing business, and they are referred to as the
production concept, the product concept, and the
selling concept (Solomon, 2004).
Apple’s production concept assumes that its
customers are typically interested in product
availability at low prices, and its inherent
marketing goals are inexpensive and have well-
organized production as well as intensive
distribution.
Apple’s product concept assumes that its
customers will purchase the iPhone since it
offers them quality performance and feature-
filled services. A product orientation leads Apple
to always endeavor to advance the quality of the
iPhone and to add new features that are in
principle viable without first finding out whether
or not customers want these features.
Apple’s former boss, Steve Jobs, argued that
consumers don’t know what they want; just give
them a product and they will realize its worth.
This belief somehow worked for the iPhone
since nobody could foretell of such a product.
The selling concept is a natural development
from both the production concept and the
product concept. Apple’s main objective is
selling the iPhone, and it assumes that its
customers are not likely to purchase an iPhone
unless they are aggressively convinced to do so
– generally through the ‘hard sell’ strategy.
Consumer behavior is grouped into four types,
and these are: routine response, limited decision
making, extensive decision-making, and lastly
impulse buying. Routine purchases are less
costly, and they are made without much decision
making due to the inexpensiveness and
simplicity of the product.
Limited decision-making requires a more
decisive mind and more time for one to purchase
a product. Impulse buying is made randomly
without any prior planning. The extensive
decision-making involves expensive and
unfamiliar products, and this is the perfect
consumer behavior in the case of the iPhone.
The iPhone has revolutionized the way mobile
users think of mobile phones and smartphones.
The iPhone puts together the mobile phone, iPod
music player, camera, text messaging, e-mail
and internet browsing services while offering
inventive features such as multi-touch screen,
visual voicemail, and accelerometers that sense
screen orientation.
Since its first release into the market in June
2007, the iPhone is certainly the most popular
mobile device in the global market. iPhone has
avoided stimulus generalization. It has
distinctive features from other similar phone
models, and this is known as stimulus
discrimination in consumer behavior.
The primary objective of the marketing
strategies is to focus on consumer needs and also
recognize the high degree of diversity amongst
consumers. Everyone has acquired needs which
are shaped by the environment and culture, thus
creating a commonality of needs or interests
which constitute a market segment.
Apple targets its consumers by specifically
designing its iPhone models and promotional
images that satisfy the needs of that segment.
Apple positioned the image of the iPhone so that
the target market segment perceived the iPhone
as more satisfying to its specific needs than other
competitive products. The three features of this
strategic framework are market segmentation,
targeting, and positioning.
Market segmentation involves dividing a market
into subsets of consumers with similar needs or
traits. Market targeting, on the other hand, is
selecting one or more of the segments identified
for the company to pursue. Positioning is
developing a distinctive image for the product or
service in the mind of the consumer. That image
will distinguish the offering from competing
ones and evenly communicate to consumers that
the particular product or service will satisfy their
needs better than other competing brands
(Consumer Purchase Decision Process, nd.).
Roles of Learning and Memory Theories
Learning can be referred to as the knowledge or
skills acquired through experience or by
studying. It is a process in which behavior
capabilities are changed as a result of
experience. Consumers are exposed to new
stimuli every day, and Apple uses the acquired
feedback to modify behavior when seen in
similar situations.
The concept of learning covers a great deal of
ground ranging from a consumer’s simple
association between a stimulus such as a product
logo, for instance, iPhone, and a response, for
instance, the perfect smartphone, to a complex
series of cognitive activities. Understanding the
learning theory benefits Apple since basic
learning principles are at the heart of many
purchase decisions.
Memory
Memory involves a process of acquiring
information and storing the information over
time so that the information will be used when
needed. The three main stages of memory are
encoding storage and retrieval. Many
experiences that people have are encoded in the
brain and stored, and they recall those
experiences when incited by the right cues. This
is a major implication of the cognitive approach
to consumer learning theory.
Apple ensures that its iPhone models are
impressively presented and rely on consumers to
retain the information they learn about the
iPhone trusting the information will be later
applied in situations where consumer1 purchase
decisions will be made.
Conclusively, the paper has looked into the
consumer behavior principles and how they
apply to Apple’s marketing strategies.
Recognizing consumer needs is important in
identifying the marketing strategies to adopt,
and Apple has thus invested a lot of resources in
marketing and marketing research. iPhone has
gained much recognition in the phone industry
due to its uniqueness and functions that are
attractive to the consumers. iPhone has managed
to capture the idea of a smartphone and has gone
ahead to offer exceptional features that are
enviable to its competitors. Apple has been able
to utilize its knowledge of consumer behavior to
its advantage.
Consumer Behavior Towards the Apple’s
iPad 4
The Purpose of the Study
The purpose of this study is to determine
consumer behavior towards the newly
introduced Apple’s iPad 4 in the market. In fact,
given the economic, social, and political
conditions, it is expected that the introduction of
iPad 4 will immediately capture the target
market (Belch & Belch, 2011). Besides, the
reputation of the company and the advanced
features of the newly launched product would
attract a large number of customers both locally
and internationally.
The study is based on the strengths,
opportunities, as well as the internal and external
environmental factors that influence the firm
(Belch & Belch, 2011). The argument is that the
firm would take advantage of its strengths to
influence the buying pattern of the new product.
However, this might not be the case. Further, it
is hypothesized that the new garget would be
attractive to the larger target audience and
enable the firm to maintain its leading position
in terms of market share. However, this study is
aimed at ascertaining these presuppositions.
Specifically, the study intends to provide an
insight into what the target consumers actually
think, know, and believe regarding Apple’s iPad
4.
The Method and Sample
The research study is qualitative and conducted
to establish consumer behavior towards the
newly introduced Apple’s iPad 4, particularly,
among the middle-income earners. The
empirical data are collected from three
participants representing the target market. In
addition, the data were collected within a short
duration, and the telephone interviews were one
of the options for administering the
questionnaire. The interview questions focused
on the qualitative aspects of the product,
particularly the respondents’ perception of the
Apple iPad 4 in terms of quality and cost.
Besides, the interview tended to look at why
customers would not opt for competing
products. Essentially, the study examined the
qualities of the competing products in
comparison to Apple’s iPad 4. Even though the
target clients are numerous, for the purpose of
this study, the numbers of participants were
limited to 3 respondents and were chosen
through simple random sampling procedures. In
other words, the three participants were chosen
through the application of random sampling
procedures (Guion, Diehl & McDonald, 2014).
As indicated, in this particular study, all the
target customers were deemed viable. However,
only 3 participants were randomly selected
depending on their availability for the phone
interviews as well as other personal attributes,
including gender, age, income, and academic
qualifications. Besides, the participants were
chosen from one particular geographical area
though they were carefully chosen to represent
the whole target market.
The Study Findings
As mentioned, the study aimed at determining
consumer behavior towards the newly launched
product. At the end of the study, the qualities of
Apple’s iPad 4 that would enable it to remain
attractive to the target clients were determined.
In fact, the study was conducted using the
participants that were carefully chosen to
represent the diversity of the target market in
terms of demographics and geographical
coverage. In terms of gender, two males and one
female represented the target market. The
implication is that there are more males than
females within the target market (Clow &
Baack, 2012). The findings were in consensus
with the target market demographic statistics,
which indicate that more men are in the middle-
class compared with women.
Besides, the findings indicated varied income
levels among the participants. The income levels
were categorized from high-low-income earners
to high-middle-income earners. In fact, the
majority of the respondents were found among
the middle-income category. In other words, two
out of the three respondents had their income
higher than $15,000, which the majority of the
middle-class earns. The findings confirmed the
target market category of middle-income
earners.
The middle and high-end markets are not only
targeted in high-income countries but also in
developing countries, especially in China and
Africa (Shimp, 2003). Besides, age is a
determining factor. While the majorities who are
enthusiastic about the new garget are within the
age bracket of between 20-25 years, their
incomes do not allow them to buy the gadgets.
The reason explains why those between 27 years
and 35 years are the majority who utilize the
garget. Besides, the age-bracket forms the
majority in the middle-class.
In fact, the statistics indicate that the middle-
class is rapidly growing in developing
economies such as China and sub-Saharan
Africa (Shimp, 2003). As such, the target market
will soon become the largest population in both
developed and developing economies. Apple’s
iPad 4 should be made affordable to this class of
people. Besides the income, the findings
indicated that the majority of the Apple’s iPad 4
users are educated. In fact, the findings indicated
that all the respondents were graduates.
Education plays a critical role in determining
income and a particular social class, which find
it stylish to possess Apple’s iPad 4 (Andrews &
Shimp, 2013). The product can be perceived as
if it belongs to a particular class of individuals
that may be because of its advanced features,
which increase its usability.
The product has been in the test stage in the
market. As such, the majority has used the garget
for a very short period. However, the results
indicated varied reasons for buying the garget.
While one of the respondents pointed out at the
advanced quality, another looked at the price
while the other respondent considered the firm’s
reputation. Considering the internal analysis of
the firm, all these factors have been pointed out
as the major strengths.
In fact, Apple’s emphasis on the provision of
quality product to clients has been its main
competitive advantage (Comstock, Gulati &
Liguori, 2010). Most clients will be buying the
Apple’s products because of its reputation of
producing quality products. The findings in this
category indicated that clients will be looking at
various factors before deciding on whether to
buy the garget.
However, the majority pointed out that they
were attracted by the advanced features of the
Apple’s iPad 4. The improved features of the
garget from other series have increased the
quality of the product. However, as expected, the
female category of the market would always be
attracted by the aesthetic value of the product.
The female respondent pointed the stylish nature
of the garget as the main attracting feature.
Most of the respondents pointed out the
durability as the other benefit Apple’s iPad 4 has
over the competing gargets. In fact, the majority
of esteemed clients would argue that the Apple’s
products have increased quality such as
resilience compared with competitors. However,
other aesthetic values are also combined with
this quality. Indeed, one of the respondents
argued that the products befit the social status.
Some of the clients would be going for the
products simply because of this perceived value.
Price is a critical component in determining the
purchasing decisions. Two respondents pointed
out that the price was taken into consideration.
The indication is that the target market is highly
sensitive to the prices of Apple’s iPad 4. In any
setting, the middle class is always sensitive to
the prices of the products (Comstock et al.,
2010). However, the target group is also ready to
spend a little more for the quality.
As such, while introducing the product into the
market, price sensitivity must be taken into
consideration. However, the findings indicated
that the purchasing decisions are hugely
influenced by prices and the quality of the
product. Generally, the respondents believed
that the apple products have increased quality
compared with other products. Even though
their product prices are high, the higher quality
comes with higher prices.
Conclusion
The study indicated that the purchasing
decisions are influenced by various factors. In
the case of Apple’s iPad 4, the consumer
purchasing decisions would be determined by
price, quality, and the aesthetic value. Like in
most products, the price would still be a
sensitive factor. The consumer behavior
theorists argue that consumers would not always
go for cheaper prices, but take into consideration
the value for their money. A Similar
phenomenon is likely to happen to Apple’s iPad
4. The clients would consider the quality of the
product versus the set prices. The indicated
consumer sensitivity to prices is largely
determined by this equilibrium. Besides the
pricing factor, the firm’s reputation would boost
the sales of iPad 4.
Appendices
The interview questionnaire
Hi, My name is XXX and I am a student at
………. and we are conducting a study on
Apple’s iPad 4. I would appreciate it if you
would answer a few questions. Is that ok?
Demographics
1a: Please specify your gender?
___Male ___Female
1b: Which of the following age categories do
you fall in?
___20 and below ___21-30 ___31-40 ___41-50
___51-60 ___61 and over
1c: Please indicate which of the following
categories describes your educational level at
this point in time.
___High school diploma or equivalent
___Associate’s degree
___Bachelor’s degree
___Master’s degree
___Ph.D or other terminal degree
1d: Which of the following categories includes
your total family income during the last calendar
year from all sources before taxes? Stop me
when I read your category.
___$5,000 and below
___$5,001 to $10,000
___$10,001 to $15,000
___$15,001 to $20,000
___$20,001 to $25,000
___$25,001 and over
___Refused or don’t know
Product
2.a: Do you currently own an Apple iPad 4?
A. NO, (thank you the interview is over)
B. YES
2.b: For what duration have you owned the iPad
_____________________
2.c: Which of the following qualities best
describe the features you look at when you
bought this iPad
A. Price
B. Improved features
C. Company reputation
D. Social status
E. Other (specify)
2.d: What was specific about this brand that
made you chose on the Apple iPad 4
Interview
question
Respondent 1
Respondent 2
Respondent 3
1a
Male
Female
Male
1b
21-30
31-40
21-30
1c
Bachelor’s
degree
Bachelor’s degree
Bachelor’s
degree
1d
15,001 to
$20,000
20,001 to $25,000
5,001 to $10,000
2a
YES
YES
YES
2b
6 months
4 months
4 months
2c
Company
reputation
Improved features
price
2.e: What other benefits do Apple iPad 4 has
over competing gargets
2.f: What other factors did you consider while
making the purchasing decision?
Interview Results
References
Andrews, C., & Shimp, T. J. (2013). Advertising
promotion and other aspects of integrated
marketing communications. Boston, MA:
Cengage Learning.
2d
Additional
features
Stylish
Enhanced
quality
2e
Durability
Befits the social
status
durability
2f
Price
Price
Additional
features
Belch, G., & Belch, M. (2011). Advertising and
promotion: an integrated marketing
communications perspective. New York, NY:
McGraw-Hill Education.
Clow, K. E., Baack, D. (2012). Integrated
advertising, promotion, and marketing
communications. Upper Saddle River, NJ:
Pearson Education.
Comstock, B., Gulati, R., & Liguori, S. (2010).
Unleashing the power of marketing. Harvard
Business Review, 88 (10), 90-98.
Guion, L. A., Diehl, D. C., & McDonald, D.
(n.d.). Conducting an in-depth interview. Web.
Shimp, T. A. (2003). Advertising, promotion &
supplemental aspects of integrated marketing
communications. Boston, MA: Thomson South-
Western.
Capilano’s Brand and Consumer Behavior
Consumer behavior remains to be an important
factor in any market and the development of a
brand. Among the existing variety of such
popular food brands like Heinz, Nutella, or
Velveeta, the idea to introduce the Australian
brand Capilano honey seems to be a difficult and
challenging task. The honey industry is not very
popular in all American regions; still, small
honey chains are in demand (Vanhamme,
Hingley, and Lindgreen 338). The choice of this
company can be explained. On the one hand,
Capilano may be considered as a brand in
trouble in the chosen marketplace because of the
cultural, lingual, and poor consumer interest
barriers. On the other hand, Capilano is a
developing brand that has already gained fame
in its native country, Australia, and can achieve
good results in the USA with time. Therefore,
the following consumer behavior based reasons
should be mentioned:
1. Awareness: Consumers should be aware of
the peculiarities of honey and its variety to
meet their needs: honey can be used as a
marinade, sweetener, etc. (Batt and Liu
290). As soon as they have enough
knowledge about this product, they would
be eager to buy it and pay attention to the
quality.
2. Motivation: People can be motivated to
pay more attention to the Capilano’s
production as high-quality honey may be
defined as a need for people to improve
their health and enjoy a natural product
(Onkvisit and Shaw 222).
3. Attitude: Capilano has already gained a
good reputation in Australia. The company
offers its customers a “hive to home”
experience and a number of benefits
associated with quality and trust
(“Capilano Story: Hive to Home, par. 1).
The Americans can consider this
popularity and want to try the products.
4. Attention to personality: This reason
touches upon different aspects of a person
like cultural differences that may inspire a
customer to make a choice or reject a
product, individualism that can be a good
motivating issue, or a human desire to
discover and try something new.
STP Analysis on the Brand
An STP analysis is an opportunity to understand
the essence of segmentation as the process of
dividing the chosen market and brand into
several groups regarding its geographic,
demographic, behavioral, and psychographic
criteria. As for the demographic segment, it is
possible to say that honey industry may be
interesting to all age groups of people from
middle and lower classes because prices on this
product are not too high, and it turns out to be a
good and cheaper in its use replacement for
sugar. It is possible for Capilano to attract more
attention of the rich consumers explaining a high
quality of the offered production and a true
worth of honey as a means to improve health and
choose a healthier lifestyle. The identification of
a lifestyle concept is a part of a psychographic
segment of the analysis. Capilano is the brand
that may be interesting to people, who
appreciate the worth of natural product and
consider the idea of cultural diversity as a
chance to experiment and benefit with some new
practices. Ethnicity remains to be a crucial factor
for people to use honey in the household (Batt
and Liu 291). Finally, such personality trait like
the need for uniqueness can be applied to the
chosen brand. Some people are eager to use
simple things that make them different from the
rest. It is a good chance for Capilano to offer its
American consumers the option of using a
natural product without any chemical or other
constituents.
The analysis of the Capilano’s segments shows
that the following aspects are troublesome for
the company:
1. Not all Americans are aware of the
company’s products and are ready to make
their choice;
2. Capilano does not focus on advertising so
that the consumers are not sure to learn
about the product;
3. Capilano can but does not find it necessary
to explain the worth of natural products for
people and pay more attention to the
quality of the products it offers.
Brand’s Position in the Market
The position of Capilano in the market is of
double nature. The company has already made
an attempt to export its products to about 30
countries (“Our Products: International” par. 1),
still, not many people know a lot about the worth
and quality of Capilano’s production. The
current honeybee colonies in the USA undergo
considerable challenges (Engelsdorp, Caron,
Hayes, and Pettis 116), and it is possible and
desirable for the Americans to use import
products. Though cultural and geographic issues
may become a challenge for the company,
consumers’ needs for quality, taste, and trust can
be used as a means to succeed and develop sales
in different regions. Many people want to try
new and interesting products. The Americans
like to experiment, and the Australians consider
the quality and trust the most. Capilano may
overcome the troubles it faces today in the USA
and continue developing good international
relations.
Works Sited
Batt, Peter, J. and Aijun Liu. “Consumer
Behavior towards Honey Products in Western
Australia.” British Food Journal 114.2 (2012):
285-297.
“Capilano Story: Hive to Home.” Capilano. n.d.
Web.
Engelsdorp, Dennis, Caron, Dewey, Hayes,
Jerry, and Jeffery Pettis. “A National Survey of
Managed Honey Bee 2010-11 Winter Colony
Losses in the USA: Results from the Bee
Informed Partnership.” Journal of Apicultural
Research 51.1 (2012): 115-124.
Onkvisit, Sak and John Shaw. International
Marketing: Strategy and Theory. New York,
NY: Routledge, 2009. Print.
“Our Products: International.” Capilano. n.d.
Web.
Vanhamme, Joelle, Hingley, Martin, K., and
Adam Lindgreen. The Crisis of Food Brands:
Sustaining Safe, Innovative and Competitive
Food Supply. Surrey, England: Gower
Publishing, 2012. Print.
Women’s and Men’s Consumer Behavior
Naturally men and women have different
attributes when it comes to the purchase of
items. There is unquestionable contrast in
attention to details, decision making and
interactions during shopping.
Castaño, Perez and Quintanilla agrees with the
study done in Australia by Gary Mortimer and
Peter Clarke proving women to be social
shoppers (45). It is not unusual to see a group of
three or four women walking around stores
scrutinizing different products or items and even
trying them on whilst comparing prices of the
varieties in stores. Women value opinion of their
friends when purchasing and therefore most of
the time they tag along friends in their shopping
sprees.
A woman is more attentive on the details of
whatever item she is buying. For instance, when
buying a pair of pants a woman will check the
color, the style, fitting, and even the trendiness
of the particular pair. Details are important to
women as this gives a sense of control over the
shopping and purchase of the product.
A female shopper is less decisive than a male. A
woman is likely to spend more time in the mall
lingering along the aisles comparing available
varieties of products. She enjoys the whole
experience, and may spend a significant amount
of time comparing prices of items that she does
not intend to buy right away, this to her is just a
way of gathering information about products for
future reference.
On the other hand, their male counterparts
display the exact opposite of these behaviors
while shopping. Men have been known to be
practical shoppers they shop because they have
to, and they shop as fast and as efficiently as they
can (Castaño, Perez and Quintanilla 47).
Men are lone shoppers. It is very rare to see men
shopping in groups; it is not a social affair unlike
with the female gender. They prefer to shop
quickly and with little or no interaction either
with mall attendants or with friends.
A man’s attention to the details of a product is
insignificant. If for instance, he is to buy a pair
of pants the only thing that matters to him is that
the pants fit. It is unlikely for him to start
deliberating on other aspects of the pants, for
example, if the pants are trendy enough or the
color of the pants. This is seen especially with
old and middle-aged men.
A man’s shopping is goal directed. He goes to a
store or a mall with his mind already set on a
particular item that he wants to buy. The idea of
shopping is not important to most men and
therefore they try to spend as little time as
possible in a store or a mall. A man has this
specific shirt he wants to buy, he walks into a
shop or a mall, picks it and leaves, he will rarely
stand to compare prices or quality of the shirt he
wants with the rest of the shirts on the display
(Castaño, Perez and Quintanilla 49).
From the above discussion, we see the
undeniable variance in the consumer habits of
men and women. Certain aspects of shopping as
portrayed above differ in both genders. Men
shop to get over with the task while women love
every bit from prior researching to the actual
buying.
Toyota Prius Consumer Behavior
Marketing strategies have been changing due to
ever-increasing customer demands. It takes a lot
of effort to change the perception of consumers
towards a particular product or service. The
automobile industry is one of the most
competitive industries across the world and
therefore companies have to come up with
designs that meet the needs and expectations of
potential customers (Anderson, 2010).
Increased global campaigns about
environmental conservation have made many
companies consider environmental issues when
designing their products and services. Many
consumers in the modern world are conscious
about their environment and will always be
careful to consider the effect a particular product
has on the environment (Anderson, 2010).
Marketing strategists have to come up with
marketing messages that are able to convince
consumers that their products and services are
eco-friendly. This paper will highlight some of
the environmental factors that need to be
considered when marketing an automobile
product like the Toyota Prius.
The perception of a customer can only be
influenced to change if the marketing message
highlights serious issues like environmental
conservation. Toyota Prius is a hybrid car model
that is friendly to the environment (Anderson,
2010). The environmental impact of a vehicle is
a major factor in determining whether it will be
rated highly. Toyota Prius is a car model with
high fuel efficiency that makes it consume less
fuel. Fuel efficiency plays a major role in
reducing fossil fuel consumption (Lamb, 2011).
The auto-emissions that are released to the
atmosphere are normally minimal if a car has
high fuel efficiency. The regenerative braking
system in Toyota Prius facilitates the charging of
the car battery through breaking (Lamb, 2011).
This type of feature ensures that there is energy
conservation because the vehicle is able to
generate its own energy (Lamb, 2011). Toyota
Prius has quite a number of other environmental
benefits apart from fuel efficiency.
Customers prefer to live healthy lifestyles and
hence eco-friendly vehicles contribute to this
type of lifestyle. Toyota Prius has a dual gas and
electricity feature that favors environmental
conservation. Environmentally savvy customers
like this type of car because it has good gas
mileage (Lamb, 2011). Toyota Prius guards
against noise and air pollution which is a quality
that promotes its image as being
environmentally friendly. The quality and
reliability of a car determine how long a car lasts
(Anderson, 2010).
Toyota Prius lasts long and, therefore takes long
before being disposed of. Scrap from vehicles is
normally disposed in landfills and, therefore the
longer the car lasts the lesser amount of trash
disposed of in landfills (Lamb, 2011).
Automobile companies use a lot of money to
develop environmentally-friendly vehicles that
can easily penetrate the modern mobile.
In conclusion, environmental factors have a
great influence on the type of car that consumers
purchase. The perception of consumers can only
be changed if the marketing message sent out by
companies depicts the environmental benefits of
a particular product. Toyota Prius is an
environmentally friendly car model produced by
the Toyota Company to meet the current market
demands. Potential buyers of Toyota Prius are
between 30 and 50 years and conscious about
their environment (Anderson, 2010). This
segment of consumers needs to be sure about the
environmental benefits of each type of car for
them to consider buying. Fuel efficiency,
longevity, and less carbon emission are some of
the selling points that the Toyota Company uses
to sell its Toyota Prius model.
Consumer Behavior and Purchasing Trends
in Marketing
A shift towards online purchasing has become
rampant currently. Most businesses have
invested heavily in e-commerce because
consumers are exploring and enjoying shopping
online.
Self service; most stores check-in kiosks in
metro stations and airports, check out hotel
services have moved to a self-service type of
business. By implementing self-service,
businesses save money by hiring fewer
employees. Self-service has been implemented
by most businesses recently. Other than costing
businesses money, customer service is one of the
most difficult strategies to implement.
Business sectors have become blurry with a
realized gradual extinction of brands.
Businesses have shifted focus from a specific
product branding to product diversity.
Bookshops are selling tea and coffee while
supermarkets and departmental stores are giving
out loans. Consumers are getting used to acquire
more services at one shop or store (Top Trends
in Retail, shopping & leisure, 2012).
How the trends influence consumer behavior
For self-service purchasing trends, consumers
acquire the feeling of being in charge by serving
themselves. They develop a feeling of trust, and
this comes along with satisfaction.
Consumers are bored with the constant tradition
of finding goods at the same place in
supermarkets and some stores all year round.
They would rather buy goods at the comfort of
their homes via the internet. They have
developed satisfaction in saving time rather than
waste it by walking the long corridors of
supermarkets.
Emerging purchasing trends
As income rises, consumers shift from diets
based on grain to high-value dominated food
such fruits, dairy products, meat, and vegetables.
There is a gradual reduction of the middle class
in most economies of developed countries. This
has seen the disappearance of mid-price
retailers. There is some noted polarization of
cheap versus luxury in the consumer market.
The middle class is predicted to be extinct by
2015.
Once consumers get used to eating food that is
high-value dominated, they will cease eating
junk food, which research has proved to be
unhealthy anyway. With the projected increase
in income, buying, and cooking food at homes
will be a new consumer behavior. Consumers
will appreciate eating healthy as opposed to
compromising their health.
Consumers are slowly appreciating buying only
cheap and expensive goods. For example, it is
becoming a common practice to buy a $ 20 T-
shirt and a $ 400 wrist watch. Consumers may
find comfort and satisfaction in blending cool
looking cheap stuff with expensive and classy
ones. They may no longer opt to buy middle
priced items (Top Trends in Retail, shopping &
leisure, 2012).
Consumer Behavior in Insurance Positioning
Role of Consumer Behavior in Insurance
Positioning
Consumer behavior is a broad concept that
critically analyzes consumer purchases with the
aim of predicting future purchases. It explains
why a consumer settles on a certain product or
service as opposed to another. Positioning refers
to the view and opinion a customer places on a
product in relation to competition.
A positioning strategy should take into
consideration a number of factors. One such
factor is the effect of consumer behavior. The
role of a positioning strategy is to prepare the
mind of a consumer. The basis should be
differentiating a company’s product from
competitors. In a market where the insurance
service is the same, this is tricky. However, the
service provider should strive to meet the basic
requirements of a service before engaging in
secondary requirements.
In United States, it is a legal requirement for any
individual who owns or drives a vehicle to buy
Auto Insurance. This provides a vast target
market encompassing virtually all segments.
Since this is not an essential product, a number
of factors influence a customer’s decision to buy
insurance from a particular provider.
Most customers might look for comfort, value
addition and innovativeness since prices are
almost the same. Hence, it is imperative for
Nationwide Auto Insurance to employ a strategy
that puts it in that position (Usunier 2000).
Creating long-term bonds requires creating new
ways that meet the sophistication and
unpredictability of customers. Nationwide
Insurance does not compete on prices. Rather, it
employs a value addition policy that ensures
brand loyalty.
Consumers perceive non-basic items as
unnecessary costs. They do not enjoy purchasing
auto insurance. This means that Nationwide
should use creative ways to make this a good
experience. From the above, it is important to
note that Nationwide can combine a service
whose requirements are bound to possession of
yet another product. For example, Nationwide
can package Car Insurance and Life Insurance
together.
Unlike luxury products, which customers may
quit using once they fulfill their urges, this
service (insurance) is a requirement. Hence, the
principle of diminishing returns does not apply.
Income and budget constraints on consumers
inform their every day purchases. However, in
the case of Auto Insurance, this may not affect
their decision, as it is mandatory. Hence,
customers base purchase decisions on reliability,
reputation, similar services and innovativeness.
Nationwide should strive to compete from these
angles (Usunier 2000).
Impact of Purchasing Trends on Consumer
Behavior
Technology
Technology is closely associated to
globalization. Nationwide insurance uses
technology at various levels of its operations.
For example, it allows online payments of
premiums and uses customized customer service
solutions such as face book and Twitter to handle
enquiries (Suri et al 2003).
Technological improvements have introduced
advances in software and hardware, which have
created a shift in information power from
marketers to consumers. The insurance industry
has registered tremendous gains from the recent
information technology waves in terms of
automation. Consumers in this environment
have continued to expect more from insurance
providers. For example, a mobile application
that reminds them to pay premiums when they
fall due may be pleasant (Castells 2011).
Globalization
Consumer behavior is not a static concept. Apart
from the fact that majority of customers tend to
act in different ways and react differently to the
various strategies, global purchasing trends
equally affect their behavior. First, globalization
has exposed customers to volumes of easily
available information from which they can make
decisions. In the context of insurance industry,
customers can easily compare different
providers, gauge other consumers’ reactions and
make a reliable decision.
It is, therefore, incumbent upon Nationwide to
maintain an impeccable reputation (Nationwide
2012). This is especially true in a world where
consumers discuss brands at readily available
forums such as blogs and social networking
sites. An adverse move may easily sway a
prospective customer’s opinion and may even
dislodge a customer from a company (Suri et al
2003).
Hence, companies need to be globally alert on
the hot issues that consumers are discussing
concerning their operations and make
instantaneous corrections and clarifications to
avoid negative opinions, which have the
capability of spiraling to dangerous levels
(Castells 2011).
Cultural Changes
Nationwide communicates it corporate culture
well to suppliers, customers and prospective
clients. The company engages in social
responsibility activities to enhance its culture. It
touts diversity and inclusion, respect, integrity
and honesty as its main pillars. It is paramount
to project a clear organizational structure in an
industry whose business threatens a company’s
morality and integrity.
Additionally, consumers are quite alert and
dynamic making articulate profiling a challenge.
Customers critically look into organizational
ethics before making purchases. Hence,
Nationwide should strive to align strategies with
values and competencies to attract this
unpredictable market.
Product, Pricing, Promotional and Place
Distribution Strategies Recommendations
Product Strategy
Nationwide offers a variety of products spread
across its five main areas of operation (property
and casualty, life insurance and retirement
savings, health, mortgage and banking and asset
management). It should use the already existing
multi-policy offers to drive sales of Auto
Insurance. Nationwide can also personalize its
‘vanishing deductible and I am on your side
programs’ through use of podcasts to enhance
lower premiums on Auto Insurance.
Nationwide can also reposition by offering
specialized car maintenance solutions through
use of past accident data simulations.
Nationwide can redefine policies to cut premium
payments for selected groups, such as students,
who willingly and proportionately adhere to
programs such as ‘smart ride’. Lastly,
nationwide can reposition the claims process by
having mobile units that only respond to an
accident scene if the customer does not have a
mobile application that processes the claims
instantaneously.
Place Distribution Strategies
Nationwide employs the services of exclusive
agents, individual brokers and banks as part of
an intricate distribution strategy. Lately,
Nationwide has widely used the internet to
bolster this strategy. Through its ‘I am on Your
Side’ customer experience slogan, the company
seeks to leverage social media exhaustively.
Though Insurance is mostly a face-to-face
service, Nationwide should revolutionize this by
selling Auto insurance online as part of a
repositioning strategy. The company will spend
less on agent commissions and save customer’s
insurance ‘shopping’ costs.
Promotional Strategy
Auto insurance industry’s promotional spending
has recorded an upward trend since 2006. Major
competitors, however, constantly outspend
Nationwide. In 2009, Nationwide changed its
slogan from ‘Life Comes at You Fast’ to ‘I am
on your Side’. Since then its promotional
strategy centers on this slogan.
The company uses broadcast television, print,
web and radio to reach out to its market. It also
uses public relations and sponsorship programs.
However, Nationwide should use personalized
strategies more often as part of ‘I am on Your
Side’ slogan. This will initiate direct buzz
marketing, which is an effective tool in the
internet. Additionally, Nationwide should
leverage social media avenues (e.g. You Tube,
Face book and Twitter) as part of a repositioning
strategy.
These are increasingly becoming powerful
brand discussion forums and Nationwide can
use this valuable information to improve its
Auto Insurance service. This would be a smart
move to counter the disadvantage where
competition outspends it in mainstream
advertising. Additionally, Nationwide can
reposition through continued roll out of its
‘smart ride program’ in every state. Currently,
Nationwide runs tests in only one state and its
success may drastically reduce premium
payments on Auto Insurance and save customer
costs.
Pricing Strategy
Nationwide does not compete on price. Instead,
it places emphasis on value and creating
innovative and fresh ideas. For example, in 2009
Nationwide created an iPhone application that
allows customers to initiate a claims process
when an accident occurs. This application is
open source and it was new in the insurance
industry. The customer can take photos of the
accident scene, inform the authorities and fill
claims forms online, which saves time.
To reposition, Nationwide can insist further on
value addition. Nationwide can refrain from
spending too much on advertising compared to
competitors (e.g. Progressive, Allstate and
GEICO) to attract customers, which has been the
trend since 2006. Additionally, since customers
can easily obtain price comparisons, it would be
prudent to continue offering excellent customer
services (e.g. claims handling).
Nationwide should also continue using the ‘I am
on Your Side’ slogan to influence customer
purchases through hands-on community
engagements. Lastly, it should continue with its
policy where it differentiates its Auto Insurance
service on value addition as opposed to price.
Consumer Behavior: the Purchase of
Salmons
The human behavior has significant impacts on
the economy because decisions such as
consumption, production, savings and
investment depend on people’s beliefs, attitudes
and preferences. The variation in the degree of
risk in purchase decisions forces consumers to
evaluate the worth of goods in order to derive
maximum utility from the goods.
The degree of risk associated with various
products determines the consumer’s likelihood
to choose a product. Consumers in the real world
lack full knowledge of the vuaculture has
introduced concerns regarding the sustainability
of the environment. The individual attitudes and
perceptions regarding the environment have
significant impacts on consumer behavior. The
essay f salmons from fish farms in Scotland.
The case study of Scottish aquaculture salmon
aquaculture uses indicators relating to socio-
economic benefits and environmental damage to
establish whether the people’s purchase decision
relate to their views on the impacts of fish
farming on the environment. An analysis of the
frequency of salmon purchases illustrates a
relationship between the demand for farmed fish
and the concerns on the environmental impacts
of the products (Whitmarsh and Palmieri 142).
Consumers concerned about the environmental
impacts of fish farming are less likely to
purchase farmed salmons. The case study
demonstrates that consumer uncertainty
regarding the environmental effects of fish
farming in Scotland influences purchasing
behavior. Salmon consumers ensure to reduce
their uncertainty about the environmental
impacts of fish farming by minimizing the
purchase of farmed salons. The case study
demonstrates a relationship between the
availability of information relating to a purchase
decision and the degree of consumer uncertainty.
Limited knowledge or incorrect information on
aquaculture is likely to influence reduced
consumption of farmed salmons. The case study
presents a challenge to the aquaculture industry
to adopt measures focused on increasing the
public awareness on fish farming practices.
Adequate knowledge on fish farming would
considerably reduce the uncertainty regarding
farmed salmons and persuade potential
consumers to change their purchase decisions in
the context of environmental concerns.
The evidence regarding the influence of
environmental preferences on consumption
demonstrates that consumers who are sensitive
about sustainable environmental practices will
exhibit behaviors and preferences, which
allocate a high degree of engagement to product
providers engaged in activities that minimize
their uncertainty on the environmental impacts
of the product. The influence of uncertainty on
consumers prevails due to the absence of data,
which introduces challenges regarding judging
the brand preference based on its factual
attributes (Pindyck and Rubinfeld 213).
Decision making by individual consumers
occurs mainly without the participation of
experts, which predisposes consumers to a high
degree of uncertainty. The dependence of
purchasing decisions of consumers on the
degree of uncertainty varies depending on the
context and attributes variables relating to a
product. Consumers who are sensitive to
environmental sustainability consider the failure
to purchase farmed salmon to have a high
aggregate utility in terms of minimizing the risks
of environmental damage. The uncertainty on
the fish farming practices influences the decline
in the relative advantage of purchasing a farmed
salmon.
Consumer Behavior and Cultural Values
Background
This research discusses the relationship between
cultural values and consumer behavior.
Consumers are the backbone of the firm,
implying that they are the most significant
element of the firm. The ability of a firm to grow
depends on its ability to influence consumers
positively. The process of influencing
consumers depends on a number of factors.
Various scholars have conducted research to
come up with reasons that would help in
explaining consumer behavior. They have tried
to determine how firms could influence the
behavior of consumers. This article seeks to
review the works of various scholars in order to
determine their views concerning consumer
behavior. The paper also seeks to determine how
consumer behavior is influenced by the cultural
values of various groups. Consumer behavior is
heavily influenced by the cultural values of an
individual. This is the main objective of this
paper. A review of the literature would help in
exploring the effects of culture on marketing. A
literature review is also important because it
guides the research.
Procedure
In order to conduct a critical review of the
literature, the researcher intends to gather twenty
different articles. The researcher would use the
abstracts of the articles to obtain relevant
information regarding consumer behavior.
Although it is appropriate to conduct detailed
research by looking at the entire work, it would
be prudent in this case to use the abstracts of the
articles because of the magnitude and time limits
of this research. The time available for the
research demands a brief investigation of the
articles. Therefore, the abstracts would be
extremely crucial to the researcher.
Findings that support the thesis
Consumer behavior is directly influenced by the
cultural values of an individual. The values of
society would have an impact on the personality
of a person. A person’s personality is shaped by
the cultural beliefs of the society. This
personality would dictate the way an individual
behaves. According to Vinson, Scott, and
Lamont (1977), personal values play a critical
role in establishing the behavior of customers in
the market. These scholars concluded that
personal values have a strong impact on the
behavior of an individual. An individual is
influenced to behave in a certain manner,
depending on societal expectations and
demands. The individual would then absorb
these values and make them part of his or her
personality. Because of this, culture plays a big
role in determining what to buy and when to buy
each item in the market. Furthermore, the
attitude of a person towards a certain product in
the market determines whether the person would
buy the product or not. The surrounding
environment affects the attitude of an individual
in a number of ways. The people that individual
associates with would also have an impact on his
or her attitude.
There is a close relationship between cultural
values and the behavior of an individual. The
behavior of an individual is heavily influenced
by the cultural values of a particular society. A
person who cherishes healthy foods would stay
away from foods considered unhealthy, such as
those with high contents of calories. In this case,
his or her behavior would have been affected by
cultural values. Personal values would also
determine the extent to which an individual
consumes a given product. The values of
individuals determine the extent to which they
embrace new technologies, such as the mass
media. Moreover, personal values would
influence consumers when it comes to
consuming class products. Some consumers
might not use products that are associated with
low classes (Kaže, 2010). When a consumer
cherishes a given brand, he or she is likely to
purchase the product more often, especially if
the brand is associated with a given value, which
is cherished by the customer. The consumer
would consider being loyal to a certain brand
because of the perceived value of the product.
Kropp (2003) focused on cross-cultural
consumer values. He noted that the world is
becoming a global village at a very fast rate. A
person in China can stay in South Korea and
access goods from other parts of the world. Such
a consumer might be carrying some of his or her
entrenched values. While in the new society,
such an individual would acquire new values.
The individual’s behavior would be affected by
the original values, as well as the newly acquired
values. However, some individuals might not
change their tastes and preferences, even after
changing their physical environments. This
means that they are not influenced by new
cultures. In other cases, people are forced to
embrace new cultures. This would happen when
an individual is exposed to information that
promotes foreign culture. This would be through
promotion in televisions and social media.
McGregor (2000) argued that it is possible to use
social values to determine the general behavior
of the market.
Financial Crisis of 2008 and Consumer
Behavior
Introduction
Although the main cause of the global financial
crisis that began in 2007 was the bursting of the
housing bubble, economists largely agree that
the ensuing recession was the outcome of a
combination of several factors. Prime amongst
these was the adoption of liberal financial
policies and weak regulatory controls on
financial institutions. In addition, financial
institutions took major risks in not providing for
appropriate safeguards for the loans they gave to
borrowers.
They did not take appropriate precautions in
verifying their credentials and creditworthiness.
According to Dudovskiy (2013), a major cause
of the recession was the inability of financial
regulators to tighten regulatory controls and to
check the dishonest practices of financial
institutions. Such laxities on the part of
regulatory bodies motivated financial
institutions to provide home loans at extremely
low rates of interests, which resulted in
excessive borrowing and created a situation in
which the loan money was either misused for
other purposes or the borrowers were unable to
repay the hefty mortgage installments. Because
of the heavy demand for funding, banks were
unable to provide loans to all applicants
(Rampell, 2009).
This situation led financial institutions to devise
the system of subprime mortgage loans, which
entailed offerings of mortgage bonds to
investors with the objective of generating the
maximum capital. Credit ratings and credibility
of borrowers were not checked properly and it
was obvious that such practices would increase
the number of default cases (McKay, 2011, p.1).
It is in this context that economists hold the
Federal Reserve responsible for the recession of
2008 because it failed in effectively regulating
and checking the risk taking behaviors of banks
and financial institutions. The recession of 2008
not only proved to be a disaster for national
economies and businesses, but also impacted the
lives of people.
The recession had led to the increase in prices of
most commodities in addition to impacting
exports adversely and creating trade barriers. In
combination, all these factors played role in
reducing the buying power of the consumer
drastically. People had to compromise on their
shopping because their real incomes declined
and they had to buy lesser quantity of goods and
services (Crotty, 2009). This paper makes a
detailed analysis of the background and causes
of the economic recession of 2008 and examines
how it changed the shopping behaviors of
consumers.
Background
According to the National Bureau of National
Research (2014), “a recession is a significant
decline in economic activity spread across the
economy, lasting more than a few months,
normally visible in real GDP, real income,
employment, industrial production, and
wholesale-retail sales” (p.1). In effect, economic
recession is understood as a difficult period,
during which economic growth is very low on
account of lean performances of sectors such as
manufacturing, imports and exports. Such a
situation is also characterized by a high rate of
unemployment (Leamor, 2008).
It is thus clear from the definition of recession
that it is characterized by a severe financial
crisis, when individuals, businesses, and
governments face immense hardships in finding
solutions towards reviving the economy. The
financial crisis began in the US but soon spread
across the entire world taking businesses and
entire economies in its grip (Ravallion, 2009).
Very soon, the destructive elements and adverse
impacts of the American economy had spread
much further than the housing sector. In
particular, the banking sector was the hardest hit,
which is apparent from the fact that in 2009
alone, 176 banks had to close down in America.
Consequently, most businesses were unable to
get the required funding and could not maintain
their inventories. In addition, they were unable
to pay their creditors and workers. Even though
interest rates had declined to almost 0%, credit
markets showed no signs of revival. Major auto
industries such as Chrysler and General Motors
were unable to cope with the financial pressures
and had to approach the government for help.
They were fortunate in getting government
assistance by way of bailout. However, the
recession was in full bloom in 2009 and stock
prices tumbled to record lows (Havermann,
2014).
In the US, the casualties of the recession were
the banking sector, insurance companies and big
and small companies involved in mortgage
lending. Foreign economies also got caught in
the crisis and many major economies such as
those of China, Japan, Germany and the UK had
no option but to adopt the same lines of action
as adopted by the US Federal Reserve and major
American corporations (Leamer, 2008). An
immediate outcome in Europe was that its real
estate sector crashed, while China and Japan had
to suffer tremendously on account of a steep
decline in their manufacturing and export
sectors as the demand from America and Europe
was almost entirely wiped out (Stiglitz, 2008;
Garnaut, 2009).
Similarly, less developed nations also lost a
great deal on account of reduced demand for
their exports. At the same time, massive
investments made in the past by foreign
companies had become a trickle after 2008, thus
putting a stop to the developmental activities
that had begun in creating employment and
infrastructural development in different sectors.
Given that no developed economy was
prospering, it was apparent that there was no
engine to pull out the global economy from the
severe recession that had already engulfed the
entire world. Dolphin & Chappell (2010) have
held that under the circumstances, economists as
well as governments were convinced that a
recovery would be very painful and time
consuming.
The Effects of the Economic Recession
The recession led to negative impacts on
individuals, businesses and national economies.
For instance, industrial productivity and the
Gross Domestic Product declined in most
economies of the world. In fact, the US economy
was the worst hit because it experienced a
negative growth rate in its GDP. In this context,
Barrell and Hurst (2008) have written about
severe issues such as high levels of consumer
borrowing and the ultimate end of consumer
spending, which combined in creating disastrous
consequences for people and the entire
economy.
It has been argued by Yuill (2009) that the
financial crises had created challenges for
shopping centers, and they were forced to make
difficult choices in closing down their
establishments in view of lack of business
viability. It has been claimed by several
economists that the overall economic
environment was such that most economies of
the world had been impacted negatively (Fox,
2009). Most private businesses did not have
orders for their products and hence there was no
basis for them to continue with their productive
activities. It was obvious that in such
circumstances individual businesses as well as
big corporations were sailing in the same boat
(Tropeano, 2010).
However, it can be said that in addition to
adversely impacting the performance of the
private and public sectors, the economic
recession gave a major blow to the satisfaction
levels that individual consumers derived from
their spending. Their purchasing power was now
reduced considerably and they had to make
compromise by way of lesser purchases of goods
and services. Another option was to buy low
quality products at lower prices.
Change in Shopping Behaviors
Research by Engemann and Wall (2010) has
indicated that the shopping behavior of people
can be defined as the manner, in which they act
while making purchases for the goods and
services needed by them. According to Bell and
Lattin (1998), shopping behavior of consumers
is best determined by collecting data on
shopping patterns of consumers and then
arriving at information about the average
quantity of goods and services that are
purchased by them during each visit to the store.
The data allows shopping establishments to
recognize the needs of consumers and to frame
marketing and sales strategies in countering the
strategies of their competitors; ultimate
objective being to get larger numbers of
consumers to their store. It is known that prior to
the recession consumers purchased goods and
services in keeping with their normal
consumption patterns. Such patterns also
permitted distributors of goods and services to
continue with their normal distribution
strategies and to find ways of innovative
distribution systems in order to improve
efficiency in a highly competitive environment.
Prior to the recession, consumers had
demonstrated behavioral patterns whereby they
visited shopping centers as a part of their regular
routine to buy goods for daily needs. As per
research carried out by McKenzie and
Schargrodsky (2005), many people visit
shopping centers on a regular basis in order to
fulfill their social needs of meeting people and
discussing social issues with them. Many
consumers find it very convenient to do their
shopping and to meet their friends at the same
place. However, after the recession, the purchase
patterns of consumers changed dramatically in
view of reduced purchasing power. In the
process, the social interactions of these people
were also cut drastically. In addition, consumers
had to change their preferences and opt for
cheaper goods as they could no longer afford the
high prices of their previously preferred high
end luxury brands (Verick & Islam, 2010).
A clear impact that emerged from the recession
in terms of consumption patterns was the
preference of consumers for cheaper goods and
services. In addition, the impact of the recession
was also reflected in terms of a steep decline in
sales volumes for many companies that sold
consumer goods.
Chappell (2009) has shown that during the
period 2007 to 2009 there was a considerable
decline in sales and marketing activities. Such
outcomes occurred because in order to keep up
with their expenses on food consumers had to
compromise by reducing expenses on non-food
items. It can be said that during the recession,
the proportion of consumers’ incomes spent on
food was increasing at a constant pace. At the
same time, change was also apparent in the
context of the quality of goods purchased by
consumers. A distinct characteristic of
consumption patterns during this period was the
frequency with which consumers visited
economy centers such as dollar and dime stores
where they could buy inexpensive products.
How the Financial Crisis Changed People’s
Shopping Behaviors
It is quite apparent that the recession led to
reduced income for the public at large. Under
such circumstances, they were bound to alter
their shopping behaviors. Nevertheless, it is now
recognized that the impact of the recession on
the shopping behaviors of people was more
indirect than direct. Anon (2009) has argued in
this regard that the recession created a direct
impact on the hiring and recruitment patterns of
companies.
Given that the recession had reduced the
profitability of must companies, they were
bound to hire less and to lay off workers in larger
numbers. Lesser employment opportunities
entail lesser purchasing power for consumers,
which mean lesser expenditure on purchase of
goods and services (International Monetary
Fund, 2010). Such patterns also implied that the
economic recession led to a steep decline in the
wealth holdings of people because in the
absence of regular flow of incomes they had no
option other than digging into their savings. At
the same time, in view of enhanced competition
amongst retail outlets, more attention was paid
by store owners to impact the behavioral
patterns of shoppers. It is obvious that in order
to attract more customers, store owners would
try to find ways of reducing prices to the
maximum.
Lichtenstein (1993) has held in this regard that
the most significant marketplace cue in catching
the attention of customers is the price, which is
the most important amongst all factors in
determining if the consumer visits the shopping
center. It is thus correct to say that a change in
any product’s price will definitely lead to a
change in consumers’ shopping behaviors
(Bivens, 2009).
Conclusion
The economic crisis of 2008 was the direct
outcome of the bursting of the real estate bubble.
The sub-prime crisis led to a severe debt crisis,
which in turn caused several financial
institutions to go bankrupt. Consequently, it
became very difficult for businesses to get credit
to continue with their production activities,
while many could not afford to maintain
inventories. The government did save a few
banks from going bankrupt but with a larger
number of large corporations seeking
government bailout, the Federal Reserve
expressed its helplessness in providing relief to
such companies from the taxpayer’s collections,
particularly during a time when financial
resources were shrinking rapidly and markets
were disintegrating at the slightest indication of
financial hardships.
There was an overall decline in production as the
recession created a chain impact on all business
activities across the world. There was a decline
in the demand for most products, which led to
the decline in productivity, the decline in
disposable income and the overall decline in the
demand for goods and services. This was a
vicious circle that took all activities within its
grip and caused all people and nations to suffer.
In view of the reduced disposable incomes in the
hands of the public at large, there was bound to
be reduced spending on goods and services.
Behavioral patterns of people changed in regard
to visiting shopping centers. In addition, it
became evident that consumers preferred to buy
cheaper products as they could not afford to buy
the heavily priced goods. Therefore, a clear link
is established between the economic recession
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