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December 11th, 2020

MRK7021.1 CONSUMER BEHAVIOR AND ANALYSIS MIDTERM PAPER

In the technology era, it is essential to adapt to new technological trends in terms of

industrial elements, in other words, for companies who are willing to be compatible with the
competitive market. To do this, surely digitalization and new technologies have been playing very
important roles. Organizations that can reach these innovation standards automatically creates
differences with those who cannot. At first stage, adapting these developments used to be
considered as a luxury features; however, it is an obligation for industry since technological
innovations have been normalized nowadays.

By means with digitalization and new technologies, actually, it is intended that some
specific trends and their outstanding aspects. Moreover, the analysis of their impacts on the
customer behaviors since the existing of customers is mandatory in the sense of ongoing industry.
Some of these trends that shape the modern industry era can be classified as Industry 4.0, Artificial
Intelligence, and Machine Learning. In this paper, it is going to be examined these trends and their
impacts on consumers briefly.

Industry 4.0 is a new kind of industry order as understood with its name. After the three big
terms of industry evolution, may be this is the most striking one than ever since it is the most related
one with human-being factor. Because it dramatically affects the usage of human power, Industry
4.0 will be having great impacts on the world order than how predicted. As seen in the Figure 1,
the industry layout has been through such a terms based on mechanics, energy, and beginning of
electronical developments. But now, with the effect of technology era that started in 21th century,
the fourth one creates huge differences compared to other ones.
 Figure 1 [1]

As to the Industry 4.0’s impacts on consumers, it has been changing the habits of customers
in following ways, because the Industry 4.0 initializes mass production that provides more stable
and qualified products with lower costs, customers have been started to have a tendency to consume
their products quickly. It is a natural circumstance since the customers may think in a way that “I
can reach the new one somehow”, so the value of the products has started to decrease according to
customers subconsciously. Furthermore, since Information Technologies provides consumers easy
access opportunity to products and the Industry 4.0 works associatively with the Information
Technologies, consumers’ knowledge level has increased effectively. Now, most of the consumers
have information and data about the products and they started to make their choices accordingly.

The future has come. For more than a decade now, artificial intelligence has become the
talk and eventually we can say that it was initiated in the smart future. Artificial Intelligence will
determine our future and it is going to have a huge effect on many sectors. The mass interactions
among the brands and consumers during shoppers' journeys will bring a great deal of creativity.
Artificial Intelligence is not going to only affect markets, also the consumer preferences and
behaviors. As seen in the Figure 2, how much importance companies give to make investments on
Artificial Intelligence. There are some striking statistics such as 15% of entrepreneur community
uses the Artificial Intelligence and whole again as much is planning to use and almost half of the
digitally matured companies have plans to transition on such new technology etc. For the transition
period to Artificial Intelligence technologies, these numbers give obvious ideas about how effective
these technologies are going to be.
 Figure 2 [7]

When Artificial Intelligence has a more general belief than just about any other sector that
Artificial Intelligence would affect manufacturing companies, recent studies found that Artificial
Intelligence has also a big effect on final customers. Moreover, shopping rate is a major source for
analysis all the time. Today, thanks to Artificial Intelligences, customers' relationships with
products has been enhancing since the Artificial Intelligence establishes an interaction with them.
Artificial Intelligence has much more idea about the potential customers than ever via its
characteristic features. Surely, it is open to discuss how ethical it is in terms of personal privacy;
however now, it is a part of our lives and everyone kind of gets used to this situation. After the
Artificial Intelligence accesses potential customer information, it uses these data to emphasize
more relevant product or service types regarding to customers’ expectations via well designed sales
techniques. Furthermore, Artificial Intelligence aims at attracting again the current customers
rather than the new ones since it is much smoother. This aspect of the Artificial Intelligence
composes sort of an addiction for customers after the initial shoppings. So, it is obvious that
Artificial Intelligence has significant effects on the customer behaviors thanks to developing
involvement levels.

In the optimization era, the Machine Learning is one of the most essential and inevitable
part of modern industry especially for the companies that have technological contemporary
mindsets. The main necessity for the Machine Learning is to initialize the operations that user
wants the Machine Learning to implement. To do this, deep software knowledge are supposed to
be know but after the initialization process, the operations go on so rapidly and without any human
based mistakes. Since what Machine Learning provides for its users so conventional, its usage rate
has been greatly enhancing. Moreover, these types of companies give highly priority to reach
Machine Learning technologies since they have concerns about missing the potential consumers
by their rivals. As seen via the second recommended video, some companies like Amazon uses
some strategical techniques of Machine Learning to encourage potential consumers to spend money
thanks to the Machine Learning Technology. In addition, companies may take advantage of the
Machine Learning technology in different area as seen in the Figure 3, for instance Netflix saved
on approximately 1 billion dollars, Amazon’s ship time has decreased dramatically through 15
minutes, and 87% of companies based on Artificial Intelligence usage have utilized such a
technology on forecasting of sales and email marketing by using Machine Learning technologies.

Figure 3 [6]

How Machine Learning has an impact on consumers’ behaviors is so interesting topic since
this technology presents us a part from the science fiction movies. What I mean is that the Machine
Learning has capability on reading our brains and shaping our consumers regarding with what we
think about a product. [8] The Machine Learning use some algorithms to evaluate brain responses
on product or services, then classify brain regions behavior that have characterized success, the
future strategies or new goods are now available to measure the degree to which the corresponding
brain responses conform to the expected samples. This significant advance in signaling processes
will transform the implementation in the marketing field of such image on brain techniques by
providing a better predictability in the adoption of future brands, products and promotions by
customers at a pace that enables them to be accessed as standard pre-tested instruments which show
a strong returning on the investment. [8]

Recommended video links:

[1] https://smartboost.com/blog/how-to-predict-consumer-behavior-using-ai-marketing/

[2]
https://www.youtube.com/watch?v=GSAz0vVfVmo&feature=emb_title&ab_channel=BigThink

[3]

https://www.youtube.com/watch?v=-RwllZP2IvU&feature=emb_title&ab_channel=Strategy%26

[4] Also I highly recommend you to watch “Upgrade” movie which is related to Artificial
Intelligence.

References:
[1] M. Di Nardo, D. Forino & T. Murino (2020) The evolution of man–machine
interaction: the role of human in Industry 4.0 paradigm, Production & Manufacturing Research,
8:1,
20-34, DOI: 10.1080/21693277.2020.1737592
[2] Averina, M. (2019, September 15). How Artificial Intelligence Can Impact Your Consumer
Habits. Retrieved from https://society30.com/how-artificial-intelligence-can-impact-your-
consumer-habits/
[3] V. Sima, Sustainability 2020, 12(10), 4035; https://doi.org/10.3390/su12104035
Received: 31 March 2020. Retrieved from https://www.mdpi.com/2071-1050/12/10/4035/htm

[4] G. A. Calvert and M. J. Brammer, "Predicting Consumer Behavior: Using Novel Mind-Reading
Approaches," in IEEE Pulse, vol. 3, no. 3, pp. 38-41, May 2012, doi:
10.1109/MPUL.2012.2189167.

[5] C. J. Turner, C. Emmanouilidis, T. Tomiyama, A. Tiwari & R. Roy (2019): Intelligent decision
support for maintenance: an overview and future trends, International Journal of Computer
Integrated Manufacturing, DOI: 10.1080/0951192X.2019.1667033
[6] Anthony J. (2020). 55 Notable Machine Learning Statistics: 2020 Market Share & Data
Analysis. Retrieved from https://financesonline.com/machine-learning-statistics/
[7] Blaisdell R. (July 17, 2018). Fascinating Statistics about Artificial Intelligence. Retrieved from
https://rickscloud.com/fascinating-statistics-about-artificial-intelligence/

[8] G. A. Calvert and M. J. Brammer, "Predicting Consumer Behavior: Using Novel Mind-Reading
Approaches," in IEEE Pulse, vol. 3, no. 3, pp. 38-41, May 2012, doi:
10.1109/MPUL.2012.2189167.