Case Study Consumer Behaviour

Transcription

1 Case Study Consumer Behaviour To what extent is the consumer behaviour of Millennials different to that of previous generations (e.g. Generation X and Baby Boomers) in leisure? Author: Natascha McVeigh, Director SSS Date: March

2 Content 1 Introduction Cohort segmentation Generations Millennials in leisure Analysis and comparison of Millennials to Baby Boomers Consumer behaviour theory Discussion Conclusion... 7 Reference List... A Appendix... C 2

3 1 Introduction Millennials and Baby Boomers are different generations, and the concept of generation segmentation is an important tool in consumer behaviour research, however if marketers understand the behaviour and attitudes of consumers, they are able to more easily and clearly identify their future target audience. A segment variable is age in the category of demographics, which means marketers can categorise future target audiences in age groups. The needs and wants of recipients in several age groups are different, and therefore the decision-making process will be contrasting (Solomon, et al., 2006). The aim of this paper is to distinguish between the behaviour of these generations in their leisure time, and explore the differentials and similarities of these attitudes, and concludes the outcome of the question To what extent is the consumer behaviour of Millennials different to that of previous generations (e.g. Generation X and Baby Boomers) in the area of leisure? Alcohol is a component for many people in their leisure time, and this study mainly explores the drinking behaviour of these two generations however, it will give an additional insight of their social behaviour and other leisure activities. Moreover, this paper will link the generation segmentation to the Black Box and S-O-R Model, which are common models of consumer behaviour research. 2 Cohort segmentation According to Solomon, people born in the same period with similar ages will have similar experiences due to historical events and memories. Categorising these age groups, can be defined as cohorts (Solomon, et al., 2013), and some examples of age cohorts are generations such as Baby Boomers, Generation X, and Generation Y (Howell, 2012). A contrasting opinion of researchers is Marketers need to focus more on consumer behaviour rather than segmenting people simply by generation, according to two new studies. (Bacon, 2016). However, the combination of both consumer behaviour and generation segmentation is a powerful instrument to target a specific audience. 3 Generations The definition of cohorts differentiate in terms of names and dates, and are not clearly identified due to several researchers and historians findings. Specific birth years for each generation are disputable, moreover the researchers concur that the common behaviours 3

4 and perspectives of these cohorts are similar (Anon., 2004). According to Solomon, Baby Boomers were born between 1946 and 1964, and Generation Y were born between 1986 and 2002 (Solomon, 2010). 3.1 Millennials in leisure Generation Y, also known as Millennials are categorised in younger and older millennial groups, and was the first generation to grow up with the introduction of computers and mobile phones. The personal and digital connection is important for this generation, and through social media such as Facebook, Millennials enjoy communicating with family and friends (Gözükara & Çolakoğlu, 2016). According to Statista, 76% of Millennials spend their time on Facebook to remain informed, regarding their friends lives (Statista, 2015). Millennials are less likely to search for branded products on Facebook (Gözükara & Çolakoğlu, 2016), however a survey from the wine brand Gallo states, 51 % of Millennials would be prepared to try a new wine if it was recommended on social media (Gallo, 2015), proving that they are still influenced by advertising online. Millennials are well informed regarding the products they purchase, and the companies behind these products, and they expect them to be responsible for ethical fairness. Millennials are less influenced by well-known brands, and are usually not highly involved with big brands (Gözükara & Çolakoğlu, 2016). According to Cone Communications, a Millennial CSR research in 2015 discovered that 70% of Millennials would be willing to pay more money for social and environmentally responsible products (Cone Communications LLC, 2015). This generation is more health conscious, they drink less alcohol and tend to make healthier lifestyle choices, however those who drink alcohol prefer to drink wine, and the wine industry target Millennials as a key segmentation (Siddle, 2017). The Drink Business states, 44% of wine drinkers are under 35 years old (Stone, 2014), and beer as the favourite alcoholic drink is decreasing in popularity from 33% in 2012 to 21.4% in 2015 among the general population and with Millennials (Lutz, 2015). Meeting with friends, drinking wine, and dining out in culinary and exclusive restaurants, as well as sharing their experiences on social media defines the leisure time of Millennials (Hoppe-Spiers, 2017). According to the findings of a survey from 4

5 the beer brand Heineken who produced a global research of drinking attitudes of millennial consumers, 75% say that they are limiting their alcohol consumption on a night out, and 36% had suffered from social shaming caused by drunken pictures on social media (Heineken, 2016). 3.2 Analysis and comparison of Millennials to Baby Boomers Baby Boomers were born after World War II, and are heavily influenced by brands, and todays well-known brands were created from the Baby Boomer Generation (Siddle, 2017). The Gallo wine research states, Millennials are four times more likely than Baby Boomers to select a bottle of wine based on its label (Gallo, 2015), this in contradiction with the findings of the researchers Gözükara & Çolakoğlu, who state Millennials are less influenced by wellknown brands. Moreover, other similarities between Baby Boomers and Millennials standout such as the high involvement regarding the internet and social media, the use of Facebook, and in their social behaviour with friends and family (Siddle, 2017), and according to Statista, 72% of Baby Boomers used Facebook in April 2016 (Statista, 2016). As well as Millennials, Baby Boomers are health conscious and choose healthier products (Siddle, 2017). They are also socially conscious and according to the Fair trade consumption study, 76.8 % of US Baby Boomers expressed a willingness to pay more for fair trade products (Benson & Hiller Connell, 2014). In contrast to Millennials who are not known as natural drinkers, Baby Boomers are drinking alcohol regularly, and moreover spend most of their income on alcohol (Siddle, 2017). According to the Wine Market Council report, 30% of Baby Boomers drank wine in 2015 which is the second highest statistical impact after Millennials with 42% (Chew, 2016), and moreover the Drink Business states in their study of 27,991 people, who were aged over 65 that one in five people drink to unsafe levels (Eads, 2015). 4 Consumer behaviour theory There are several models in consumer behaviour theory to help understand the behaviour of consumers, such as the Black Box Model which is in common use. This model is simple in its structure and the black box represents the mind (psyche) of the consumer, however there is 5

6 no conclusion regarding the consumers thought process (Kotler & Armstrong, 2010). To link up to cohort segmentation, the aim is to understand the mind, and behaviours of consumers within similar age groups and this model establishes its limitation, as here the decisionmaking process of a purchase would not be more clarified. The Stimulus-Organism-Response Model of buyer behaviour is an extended model of the Black Box Model, and includes the characteristics of the consumer, such as their cultural, social, and personal background. This model is more compatible with the cohort segmentation, as the influences of the consumers environment are considered. Therefore marketers can paint a clearer picture of their target audience, and can understand the cognitive and emotional processes in combination with the behaviour, rather than just analyse the behavioural response (Michon & Chebat, 2008). 5 Discussion Millennials differ to Baby Boomers, however they are also very similar in their behaviour, this paper explored that both in their free time use the internet and social media regularly to stay in contact with friends and family. Millennials with 76% spend most of their time on Facebook followed by Baby Boomers with 72%. Wine as an alcoholic drink for use in leisure time is the most important drink for Millennials who made up to 44% of wine drinkers, followed by Baby Boomers with 30%, and beer as the favourite alcoholic drink is decreasing in popularity from 33% in 2012 to 21.4% in 2015, throughout the general population, and with Millennials. In contradiction there were findings from researchers who state that Millennials are less influenced by well-known brands, however the statistics discovered that Millennials are four times more likely than Baby Boomers to select a bottle of wine based on its label. Statistically one in five Baby Boomers are drinking to unsafe levels, which all research findings concur. The findings of analysing consumer behaviour models, concluded that the S-O-R Model would be more beneficial than the Black Box Model, as it includes cognitive and emotional processes rather than only the behavioural responses of cohorts, which is a huge advantage in understanding the attitudes of consumers. 6

7 6 Conclusion There are huge advantages for marketers to segment in cohorts, which is part of demographics as it provides marketers with the possibility to target a larger group of people with the same interests, and address them through specific media channels. The findings of this paper discovered that there is an inconsistency in the existing data, and during this study it was hard to source reliable data. Leisure behaviour of both generations were similar, however they differ slightly in the explored areas, such as in their alcohol, and social media habits. Stereotyping each generation as being likeminded is unhelpful in targeting the required groups, as all generations have individuals, some very similar and others very different, this requires marketers to combine segmentation with consumer behaviour to filter out complementary attitude elements, to help discover the suitable target audience for the appropriate products or services. The consumer behaviour theory has a wide range of models which can be used to paint a clearer picture of potential future customers, a more suitable method is the S-O-R Model as it includes the personal background of consumers. When marketers understand that consumer behaviour is a complex process, then they can target more specifically in the future, and can consider consumers wants and needs. 7

8 Reference List Anon., Demographics of Age: Generational and Cohort Confusion. Journal of Current Issues & Research in Advertising (CTC Press), 26(2), pp Bacon, J., Behaviour versus demographics: Why the term millennial is useless. [Online] Available at: [Accessed 23 March 2017]. Benson, E. & Hiller Connell, K. Y., Fair trade consumption from the perspective of US Baby Boomers. Social Responsibility Journal, 2(10), pp Chew, J., Millennials Are Drinking More Wine Than Boomers. [Online] Available at: [Accessed 28 March 2017]. Cone Communications LLC, Cone Communications Millennial CSR Study. [Online] Available at: [Accessed 20 March 2017]. Cutler, N. E., Millennials and Finance: The Amazon Generation. Journal of Financial Service Professionals, 6(69), pp Eads, L., One in five baby boomers drink to unsafe levels. [Online] Available at: [Accessed 25 March 2017]. Gallo, TOP 10 TRENDS OF THE AMERICAN WINE CONSUMER. [Online] Available at: [Accessed 23 March 2017]. Gözükara, İ. & Çolakoğlu, N., A Research on Generation Y Students: Brand Innovation, Brand Trust and Brand Loyalty. International Journal of Business Management and Economic Research, 2(7), pp Heineken, Moderate alcohol consumption becoming the new cool among millennial consumers. [Online] Available at: [Accessed 25 March 2017]. Hoppe-Spiers, J., Food: The New Luxury.. Food & Drink, Issue 1, pp Howell, R., Market Segmentation: the Importance of Age Cohorts. Neumann Business Review. Kotler, P. & Armstrong, G., Principles of Marketing. 13 ed. New Jersey, USA: Pearson Education Limited. Lutz, A., Millennials are drinking wine instead of beer. [Online] Available at: [Accessed 25 March 2017]. A

9 Michon, R. & Chebat, J.-C., Breaking Open the Consumer Behavior Black Box: Sem and Retail Atmospheric Manipulations.. Journal of Marketing Theory and Practice, 4(16), pp Siddle, R., Battle of the Generations.. Aroq - Just-Drinks, pp Solomon, M. R., Consumer Behavior: Buying, Having, and Being. 9 ed. New Jersey, USA: Prentice Hall. Solomon, M. R., Bamossy, G., Askegaard, S. & Hogg, M. K., Consumer Behaviour: A European Perspective. 3 ed. Essex, England: Pearson Eduation Limited. Solomon, M. R., Bamossy, G., Askegaard, S. & Hogg, M. K., Consumer Behaviour. 5 ed. Essex, England: Pearson Education Limited. Statista, Most common reasons for Millennials in the United States to use Facebook and Twitter as of February [Online] Available at: [Accessed 18 March 2017]. Statista, Percentage of U.S. Baby Boomer internet users who use selected social networks as of April [Online] Available at: [Accessed 28 March 2017]. Stone, G., Generation Y prepared to pay more. [Online] Available at: [Accessed 23 March 2017]. B

10 Appendix Appendix A: Graph Facebook use Millennials Appendix B: Graph Facebook use Baby Boomers C

11 Appendix C: Statistics wine brand Gallo Appendix D: Graph Wine Market Council D

12 Appeendix E: Graph Beer consume General Population and Millennials E