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Manage Your Energy, Not Your Time by Catherine McCarthy, Tony Schwartz $6.95 Buy it now »
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What Makes a Leader? (HBR Classic) by Daniel Goleman $6.95 Buy it now » Recession-challenged consumers are buying less, looking for deals, or switching to different brands, product categories, or stores. Some are even changing long-held attitudes toward consumption. To many folks, filling the home with more stuff or keeping up with the Joneses is no longer appealing.
positioning. rather than fritter away research resources on potential or peripheral consumers. and chief marketing officers don't expect the situation to turn around soon. Now. but you . Go online with a dash of skepticism. some marketers use research results from Sweden as a proxy for Scandinavia. are shifting research expenditures away from Western Europe and toward emerging markets in Asia and Latin America. the costs of research in emerging economies are less and the payoff from incremental insight can often be greater. nice-to-knows that are not essential will have to wait.. CMOs should tap the knowledge and intuitions of managers and researchers who've lived through previous recessions. there is budget available for increased research on secondary products or customers. including those who are most loyal to the brand and those who are most profitable. In flush times. to conserve cash. such insight can help calibrate the optimal level of price promotion offers. a rising tide of consumption can compensate for less than optimal branding. In the U. Tools like SurveyMonkey allow non-expert users to create custom surveys in minutes. At the same time that marketers must pare down research expenditures. Savvy marketers focus their research on the products. India and Brazil tend to be more fluid. Relative to the developed economies. spending on market research has dipped for four consecutive quarters. Consumer research is therefore critical to aid marketers trying to cement brand preferences early on as these economies develop. such as Unilever. the degree of uncertainty in business and consumer markets has soared. Some large multinational marketers. rather than conducting the same research in all Scandinavian countries. For example. Brand preferences and consumption levels in emerging markets such as China. and markets that are key to their marketing strategy. it's essential to get a clear read on existing core customers. In setting prices. Experience also reveals proxies: in tough times. Value experience and judgment. Enlist trusted partners. As an alternative to offline focus groups. When times are good. or segmentation. Stay focused. Seize opportunities overseas. That is certainly not the case now. Tracking studies may have an edge over one-off projects. and the wave of the future.S. for example. they face added pressure to secure high-quality data and insights. brands. fast. CMOs who trim costs by consolidating their budgets with an integrated research supplier should insist that the supplier aggressively explore synergies across its various component agencies as well as eliminate research redundancies.As a result. combining data sets may reveal new leading indicators of changes in consumer behavior. In a recession. pricing. most firms are reducing spending on the market research that would help manage that uncertainty. Marketers and research suppliers who trust each other and have established long-term relationships can jointly plan how to extract more insights and make better decisions based on fewer expenditures. Most big consumer marketers are seeking to shave 10 to 20% off of research budgets. I recommend that CMOs take the following seven steps to minimize the impact of reduced spending. Taking the do-it-yourself approach rather than outsourcing to a market research firm is attractive in a cost-cutting era. Online research is cheap. custom online panels of consumers can be formed for qualitative research on new product ideas or new ads. Yet.
Are consumers of your brand going to revert to previous consumption patterns when the recession ends? Or are they developing coping mechanisms that will endure. Don't cut across the board. as in the financial services category. how long and what steps will it take to regain them? Eventually. especially if the recession is lengthy? What new products and services will consumers be open to embracing? If.adage. running conjoint studies to check on shifts in price elasticities of demand and price-attribute tradeoffs can usefully improve the profitability of pricing decisions at a time when cash is king. No one has a perfect record of predicting the future. and the recession is making it harder for consumers to envision or articulate their needs. smart marketers devote a portion of their market research to getting a handle on future changes in consumer behavior. and future success depends on being well-positioned. Even so. when it does.com in May 2 . based on sound research. it is doubly important to use rigorous pretesting to select the strongest alternatives. the recession will end. When marketers are creating fewer new ads and introducing fewer new products.risk getting no more than what you pay for. Just as important as knowing where to cut research is knowing where not to cut. This post is based on an opinion column coauthored with Katherine Jocz that first appeared in Advertising Age at www. For key products. In categories where the bases for consumers' value judgments are changing. modest expenditures on copy research can prevent blowing much more money on ineffective messaging. consumer confidence and trust in brands have been seriously eroded. Keep an eye on the new consumer. The opinions of convenience sample of an enthusiastic online brand community may not represent all users. and despite budget pressures. Adding a few questions to standard tracking studies is a low-cost way to shed light on changes in customer attitudes and purchase behavior.
or organisations and the processes they use to select. including: ³The observation of the decision-making. 3 Hawkins. It is also normal to act in such an "irrational way. Motivation Learning Memory Emotions Perceptions Attitudes Personality Lifestyle Culture and 1 2 . purchasing patterns and habits of the general public. and dispose of products and services. This is why it is so challenging for policy-makers to try and understand why consumers behave in different ways and even more so to shape their behaviour. (2002). multi-faceted phenomenon which can be defined in a number of different ways. It becomes even more complex when it becomes apparent that the impact of these influences on decision-making varies from one individual to another. which can be both internal and external.´ 3 Adapted from Hawkins.CONSUMER BEHAVIOUR: THE ROAD TO EFFECTIVE POLICY-MAKING 2 1." yet the thought process involved in order to make that final choice is quite elaborate. D. experiences or ideas to satisfy needs and the impacts that these processes have on the consumer and society. D. The International Dictionary of Marketing: Over 100 professional Terms and Techniques. McGraw-Hill. 3 Figure 1: Internal and external factors influencing the consumer decision-making process1 What is clear from the above model is that influencing or shaping consumer behaviour for policy-makers. groups. use. industry.10th edition. secure. Consumer Behavior: Building Marketing Strategy . or consumer associations alike is never simple. The complexity becomes more apparent when one starts to consider the variety of influences that can affect an individuals' decision-making process (Figure 1). Best and Coney (2001).´2 ³« the study of individuals. A significant amount of academic research is being undertaken in this area and it is important to appreciate the complexity of consumer behaviour without underestimating the difficulties of understanding why people behave in different ways and why it can be so difficult to shape their behaviour. INTRODUCTION: WHAT IS CONSUMER BEHAVIOUR? Have you ever told yourself that you should make an effort to be more physically active? Have you ever been determined to eat healthier or drink fewer fizzy drinks? Have you vowed to buy only organic or fair trade products? Did you ever promise to yourself that next time you'll throw your empty soft-drink can into the recycling bin? And do you think about recycling while on holidays or only during your daily routine? It is often common to say one thing but then act in another way. Yadin. (2007). 'Consumer behaviour' is a complex.
subcultures Demographics Family Opinion leaders Reference groups Social class Marketing campaigns Internal influences External influences Need/ Problem recognition Information search Evaluation of alternatives Decision/ Behaviour/ Purchase (Post-purchase) 4 Despite the fact that individuals behave differently. The purpose of this brochure is to present some of the principles of consumer behaviour and to gain an understanding of the importance of their application in DG SANCO. and how we can influence it. .e. and what has motivated that decision. While DG SANCO does tend to carry out studies to find out about consumers' perceptions and preferences. it is key that DG SANCO finds the best way for consumer-behaviour work to be practically embedded in its policies. it rarely attempts to map consume behaviour per se. The New Economics Foundation. is central to a large part of the work we do and will only continue to gain importance in the coming years. Other people's behaviour matters 2. what exactly the consumer is actually doing or buying. WHY ARE WE EXPLORING CONSUMER BEHAVIOUR? The importance of reaching a better understanding of consumer behaviour in DG SANCO. This was reinforced by the Future Challenges5 exercise .and healthrelated behaviour is essential for policy-making because it allows us to better define the most effective tools for influencing behaviours and implementing the most effective policies. July 2005.an initiative that started in 2006 and by which DG SANCO sought to spot the main challenges it would face during the lifespan of the new Commission. Further to this role. Understanding motivations and the main determinants behind consumer . together with national governments. People are motivated to 'do the right thing' 4. i. People need to feel involved and effective to make a change The European Commission's Directorate General for Health and Consumers (DG SANCO). 5 2. People's self-expectations influence how they behave 5. has an important role to play vis-à-vis policy interventions that aim to shape consumer behaviour. People are bad at computation 7. a number of common features can be observed in one's decision-making processes: Common features of consumer behaviour4 1. 4 For a detailed explanation. please refer to: Behavioural economics: seven principles for policy-makers. consumer groups and other actors. Habits are important 3. People are loss-averse 6.
Companies also try to anticipate the customers¶ future needs and wants. they often only increase knowledge or raise awareness. distribution and selling.Behaviour Gap Evaluation Necessary But not sufficient Fiscal measures Regulations Society norms Incentives 5 Future Challenges Paper: 2009-2014.In terms of policy-making. PRACTICAL APPLICATIONS OF CONSUMER BEHAVIOUR The need to influence consumer behaviour is nothing new and there are numerous examples that illustrate attempts to do so ± these come from both the commercial and public policy areas.eu/dgs/health_consumer/future_challenges/future_challenges_paper. The key challenge to effective health and consumer policies lies in bridging the gap between change in attitudes and actual changes in beh aviour ± what is often referred to as the 'Attitude-Intention-Behaviour Gap' (please refer to Figure 2). smokers are generally aware of the harm that smoking can cause and may even acknowledge that they need to stop. whether they are happy with what they buy and what is making them buy or not buy. One final point worth mentioning here is that the Internet and the rise of the digital world have further complicated consumer behaviour for governments and industry alike by giving the consumer more power to choose. Companies devote significant resources to find out which customers are buying their products and services. Marketing for many companies is an integral part of their business model.europa.pdf 6 Developed by the Geary Institute at the University College Dublin 6 If the ultimate goal is to shape behaviour. "The consumer is king" has become a reality as consumers have access to a wealth of information to help them with the purchase of goods Awareness vs. but this does not always lead them to actually quit smoking. However. then we need to explore how to bridge this gap between changing attitudes and intentions. The commercial sector recognised long ago the importance of understanding and influencing behaviour. Commercial marketing is something that most citizens come into contact with on a daily basis and. behaviour change: the case of smoking For example. Figure 2: The Changing Behaviour Pyramid 6 Increase Awareness Raise level of knowledge Change Attitudes UCD Geary Institute Change Behaviour Evaluation Attitude-Intention. http://ec. . The fact that many companies put so much emphasis on marketing highlights how important they believe the issue to be. 3. for most organisations. there are many initiatives or behavioural interventions claiming to be able to shape consumer behaviour. is an ongoing process that includes advertising.
Can the tools and techniques of the commercial world be used to change other. for example to smoke less. and develop quantitative research designs.uk/what-is-social-marketing. Social marketing is also concerned with achieving tangible and measurable behavioural goals Social marketing principles can be used to develop effective behavioural interventions on numerous issues ranging from alcohol reduction to decreasing prevalence of obesity to promoting sustainable behaviour (i. There is a huge potential for policy-makers to fully understand how consumers are spending their time online. or can afford.nsmcentre. and instead tries to understand why people act as they do. a company is unlikely to produce and promote a new product without first doing the research to understand whether it is something consumers need. Social marketing is not a panacea. 2002. promotion) to influence a target audience to voluntarily accept." 8 Social marketing is a consumer-focused approach aiming to understand what really influences behaviour so that the development of behaviour change interventions.org. nonpurchasing behaviours? Rather than selling a product. which can be defined in many ways. For example. or abandon a behaviour for the benefit of individuals. and in the appropriate context. especially as it seems that Internet users are increasingly using the medium as a way to improve their lifestyles. campaigns or programmes are based on sound knowledge of consumer behaviour.http://www. It is about empowering citizens and not persuading them to change by preaching to them. but there is growing evidence that when applied effectively. Blair-Stevens (2006) . or society as a whole."7 ³social marketing is the systematic application of marketing concepts and techniques to achieve specific behaviour goals. WHAT ARE THE TOOLS FOR SHAPING CONSUMER BEHAVIOUR? It is important to differentiate between identifying the drivers of behaviour and finding the tools to change the behaviour in question. for a social or public good. reject. modify. which one should I order? I'm hungry« 7 8 8 4. price.html Darn! So many treat choices. They can help define the problem.e. can marketing be used to influence behaviours in relation to social issues such as healthy living or caring for the environment? The above questions have led to the development of the concept of Social Marketing. identify determinants.7 and services. recycling). Qualitative methods are used to explore specific aspects of consumer behaviour and for probing below the surface for effective drivers and subconscious motivations. The skill comes with being able to choose the right theory for the right situation and then finding the most effective tool that will actually lead to the required behavioural change. They are a starting point for explaining consumer behaviour. French. place. it can be a powerful tool for achieving a tangible and measurable impact on behaviours. Kotler et al. Social marketing goes beyond simply giving people information and urging them to act in a certain way. like. including: ³«the use of marketing principles and techniques (4 Ps ± product. generate hypotheses/ideas. groups. Due to the .
it is relatively easy to identify aspects of DG SANCO¶s work where behaviour ± or more specifically shaping behaviour ± is key to achieving policy aims. Figure 3: The application of consumer behaviour within DG SANCO DG DG SANCO Food & feed safety Consumer affairs Public health Increasing application of consumer behaviour Perception of Excessive Drinking Among Irish College Students A study carried out by a team of researchers at the UCD Geary Institute into µPerceptions of excessive drinking among Irish college students¶ provides a good example of how quantitative and qualitative data can be combined into a mixed -methods analysis. these exploratory methods cannot usually be used to gather representative findings. 9 5. and rarely initiates campaigns. The quantitative part of the study used the Alcohol Use Disorders Identification Test (AUDIT)1 as a benchmark: participants were asked to (a) provide information about their drinking habits. the Commission principally provides information.low number of respondents involved. They are: Cross-sectional surveys Longitudinal surveys Opinion polls Experimentation and behavioural economics research Data mining There is no one-size-fits-all approach to designing consumer behaviour studies ± frequently a combination of qualitative and quantitative methods is needed to obtain conclusive results. (b) to rate it on a scale between ³mild´ and ³excessive´. and (c) to rate the . yet there is still uncertainty about the most appropriate tools to be used. Indeed. In these cases. but the Member States who are directly involved in seeking to change behaviour. FOR WHICH DG SANCO AREAS IS CONSUMER BEHAVIOUR APPLICABLE? As highlighted earlier there are many areas of DG SANCO¶s work where consumer behaviour is relevant. The qualitative methods are: In-depth interviews Semi-structured interviews Focus groups Case studies Projective techniques Quantitative tools are based on data that can be obtained through large-scale surveys and other quantitative methods used to obtain a wide range of specific information from participants. This is made all the more difficult when we consider who actually has the responsibility to act. DG SANCO recognises the need to make consumer behaviour an integral part of its policy deliberations. in many instances it is not DG SANCO.
These nine µanchoring vignettes¶ were used to account for subjective and objective measures in participants¶ responses. See also full article here: http://ideas. DG SANCO also referred to a number of secondary sources to attempt to ascertain the impact of product information on consumers. what type of toy to buy? How do consumers react to a campaign on product safety? What kind of information on financial services should be disclosed to consumers and how should it be presented? What is the best way to inform consumers on consumer products and services in order to achieve change? When and why do consumers not make the optimal (rational) choice in economic terms? In this area of DG SANCO.repec. interviews with a variety of stakeholders and the use of a Eurobarometer. cross-checking whether data actually corresponds with what consumer behaviour is really about. HEALTH PRODUCTS AND SERVICES The relevance of consumer behaviour to the work of DG SANCO in the area of public health can be captured in the following questions: 11 Why do people drink so much? Why do they eat what they eat? On what information do consumers base their purchasing decisions? How do they . FOOD SAFETY Some of the key questions in relation to consumer behaviour that DG SANCO work in the area of food and feed safety attempts to address are: What type of information is important to the consumer? Do consumers understand the labelling information they are given? Does nutrition or animal welfare labelling have an impact on consumer behaviour? What is the best way to present nutrition or animal welfare information? Through a series of public consultations. An increasing attempt is also being made within this area to integrate behavioural economics elements into their work. third countries and data provided by supermarkets.html 10 Some examples of the relevance of consumer behaviour to three DG SANCO areas are given below. work has been carried out on product labelling whereby DG SANCO has looked into consumer food labelling requirements/preferences.e. i.drinking behaviour of a hypothetical peer in nine 'vignettes' (illustrations/stories/examples). CONSUMER PRODUCTS AND SERVICES Some of the questions pertaining to consumer behaviour which are relevant to this area of DG SANCO¶s work include: How do people choose which bank account to open. there is an interest in an individual¶s values and preferences in terms of the type and presentation of information.org/p/ucd/wpaper/200712. surveys of Member States. The qualitative data for the study was obtained through focus groups with student drinkers from the same university. to put their own consumption in perspective to their conceptions of excessiveness. Taken together. including studies carried out by Member States. the analysis of the data showed that a large number of students who drink excessively by objective measures may not realise that they have a drinking problem. This latter part of DG SANCO tends to look at consumer satisfaction and complaints to ascertain where the problem areas lie. but also a concern for whether or not the consumer is being misled by other agents.
amongst many more. many challenges evolve that we need to keep up with in order to truly understand our citizens. economic and environmental issues when considering new initiatives. However. Best practice could be learned as to how success can be built around a brand and the amount of time and effort that companies put into promoting and defending their brands. can only be assessed on a case-by-case basis. Influencing consumer behaviour is in fact about targeting the right people with the right message. The vulnerable consumer. who does not always have access to the same number of choices as the average consumer. 6. 9 Speech by President Barroso. but have little time to assess what is the right type of information and what will actually get people to change their behaviour. also needs to be taken into account. health and consumer policies. The Internet has become the first medium in history to allow for complex interaction between networks of people via Facebook and YouTube. follow-up projects undertaken within DG SANCO identified indicators and looked at how to monitor reproductive health. A point worth considering is whether DG SANCO can learn lessons and best practice from those organisations for which influencing behaviour is a vital part of their day-to-day work: essentially this refers to major commercial companies. In summary. Indeed. especially with the move towards the Commission¶s 'SMART' Regulation agenda 9 and the need to assess social. 18 September 2009: ³«and we continue to attach a high political priority to reducing administrative burdens and driving forward smart regulation. where consumer behaviour is most important. Figure 4: Actors interested in consumer behaviour Marketing organizations Marketing strategies . CONCLUSIONS Consumer behaviour is complex and very often not considered rational. it is likely that there may be many more policies where consumer behaviour work might be relevant. We live in a digital age and thus need to keep up with new trends in the social media. and where new norms are created over time.select what they buy? What information could or should be provided to consumers when making decisions about health? How should this information be presented? Why do people alter their behaviour when it comes to health issues? What type of information could or should be provided to actually change people¶s behaviour and improve people¶s health overall? One of the key challenges officials face in this area is the large quantity of information on health that is available publicly and that needs to be filtered.´ 12 Figure 4 below provides an overview of the actors who have a general interest in consumer behaviour and who have a role (to a greater or a lesser extent) in influencing a specific behaviour and/or the ongoing processes. In a constantly changing society where citizens are more proactive and have better access to information. Officials tend to spend a lot of time trying to collate the information. For example. On the other hand. Understanding these differences across the EU-27 and how they will impact on a policy intervention is key to our success. there is often the problem of not being able to find any information at all. I will make smart regulation a 'Leitmotif'. A further challenge is that consumer personalities differ across borders and also between and within regions. but it proved difficult to find a lot of the data in Member States.
but it can enable and support the conditions to do so in a collective way.e. We have to communicate effectively with Europe's citizens. if citizens are really to be at the heart of DG SANCO¶s policies. e. Improve collaboration with other Commission services. Set-up procedures to integrate consumer behaviour concerns into our policymaking process from the early Impact Assessment stage. then we have to better understand their motivations and needs. Olson & Grunert (1999) Social Marketing Consumer research Behavioural economics Affect Cognition Behaviour Environment DG SANCO cannot change behaviour alone. .embed social marketing principles in our policy-making by developing consumer-focused approaches based on social marketing principles and practice. Consult stakeholders early on in the decision-making process. and see how these can be applied to policy.g. and will continue to be. Act as ambassadors of a DG SANCO brand and communicate more effectively. for example new social media. continuous "consumer insight"). Improve academic-policy links. Better integration of scientific knowledge into policy-making. Adequate and effective communication with citizens is an important factor to build confidence and trust in order to shape behaviour in a positive way. Societies are evolving and consumers are changing. using as wide a variety of tools as possible. The media is also a key actor. On a final note. Figure 4 also shows where some of the academic disciplines fit within the wider picture. 13 FUTURE ACTION FOR DG SANCO Follow consumer trends on a regular basis (i. Figure 4 shows that partnerships across the public sector and with the private and not-for-profit sectors and other relevant stakeholders could be built in order to identify priorities together. Our objective is to improve the daily lives of EU citizens and it is. therefore. Cooperate with the private sector which tends to continually evaluate consumer behaviour and the impact of changes in their commercial strategies on the consumer. key actors with whom DG SANCO needs to work as they will help to build the evidence base on which policy initiatives to influence behaviour are based. DG Research. Effective and consistent data collection and appropriate formal evaluation structures should be planned already in policy-development stage.Public policy Government and subpolitics Consumer activities Coonnssuumeerrss Based on: Peter. Put the consumer at the centre of all policies . Keep abreast of new trends in conventional and social marketing. essential to think ahead as to how the context in which we operate will change. Those working in this discipline are.
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