The change in paradigms
Globalization, the rise of the Internet, generation X and generation Y, all of these issues have transformed purchasing behavior, or what is the same, consumption.
The key in these turbulent times is not only to understand the characteristics of the consumer but rather to understand the evolution of demand. In other words: How much have consumption paradigms changed? The diversity of real needs, values and lifestyles of a demastered society are an example of this change. And therefore, the impact of change on the essence of consumption is decisive in the strategy of a company.
Introduction
Due to the numerous changes experienced in recent decades, the consumer is no stranger to this change in the set of ideas and values, methods and solutions that help explain the way the world is shaped, and what are the valid answers to problems. according to this interpretation.
Today's society is said to be consumerist and allows itself to be trapped by the hypercommunication of brands, allowing itself to be convinced of the urgency of satisfying imposed needs, which do not arise from its own scale of satisfaction.
We are losing sight of the differences that arise among consumers even at the regional level, not only because of their income, but also because of their behavior pattern, their group of belonging and, especially, the group to which they would like to belong. The reasons for buying do not go through satisfying a need, but rather by very diverse factors, such as: the characteristics of the company they are buying from, the place that this company occupies as an economic agent and the prospective approach that an individual makes of himself himself and his place in society.
Shoppers became compulsive, hyperrational and comfortable, very comfortable. Also less "markers" and more aware than ever of their power. New Argentine consumers are unlike anything marketers have seen so far. The same person shows different faces as a consumer, and as in the great world markets, in Argentina people of the middle and upper-middle class also shop in cheap places where second brands abound.
Change patterns and emerging consumer trends
- The digital age
The age of the Internet has changed the parameters with which we handled ourselves, and the decreasing costs in communications and access to the network have reinforced this trend.
Internet changes the logic of marketing, because times change and access to information, among other reasons. Product development and consolidation times were dramatically reduced. Customers around the world access information about the company and its competitors at launch.
Buyers have power in their hands through the mouse, and they become impatient and intolerant, jumping from place to place at the speed of a click. The client is ready to leave a site at any time, and expects a high quality service and transfers that expectation to the traditional market. In our country, there are many "voyeurs", potential consumers who do not complete the purchase, but use the network to search, compare features and prices, and make purchasing decisions.
- The client claims the services obtained on the web from the retail trade: greater variety, search capacity (browsers) and home delivery in all areas. There is less and less tolerance to waiting times or product changes due to lack of stock The purchase decision is made in privacy, and the customer comes to the store with even more information than the seller.
- Globality
Traditional barriers disappear, or lose their relative value in the world economy. Gradually the flow of exchange of goods and services increases, and with it transculturization increases. Culture flows come not only from some dominant center, but also from peripheral groups. The spread of music through MP3 and the rise of ethnic food are examples of this trend.
- Cosmopolitan consumers with more refined tastes. Greater demand for ethnic products (music, restaurants, alternative medicine, tourism). Clients more difficult to surprise, who expect innovative products and services… but always at a lower price.
- Population aging
The life expectancy of the population has risen due to advances in medicine, improvements in living conditions and more information about lifestyle habits, hygiene and healthy eating. We live longer and better, actively participating in society until older ages.
The family group model has also changed. The median age for marriage is closer to 30 than 20, and birth control is usual. The consolidation of women in the labor field motivates many times to postpone motherhood in pursuit of her career. The combined decrease in birth and death rates generates this aging population.
- The new third age is consolidated as a target segment, with an individualistic consumption profile (empty nest syndrome). Increasing demand for solution-products: hearing aids, glasses, easily open jars, foods with fibers, low fat, etc. Older consumers with an active mind, free time and the desire to feel younger, who demand tourism, recreation and sports.
- Access to information
We have access to a huge number of books, magazines and papers from all over the world. The consumer searches more before making a decision, and with a few clicks, he finds all the information he needs, the price compared between different companies, how to get discounts by grouping together with other users, delivery times and characteristics of the competitors.
Studies show how consumers hate choosing between quality and price or beauty and durability. The incorporation of lines 0-800 and customer satisfaction surveys is due to the fact that the idea of power in the hands of consumers is consolidated.
For example, in the children's market, the range of options involves a dramatic change in the way they learn and develop their purchasing behaviors. In our country, cable television has reached 60% of homes, with high penetration in the interior, and children are becoming more adept with electronic media than their parents.
On the other hand, the appearance of virtual classrooms is changing learning processes and changing the relationship between students and teachers in the real world. New ways of reflection and interactivity are sought and a transformation in the role of teachers.
- Greater power to consumers, who have greater demands based on the information available to them. Increasing demand for services to search and send specialized information, which increase knowledge and reduce the time invested. Greater demand for advanced models of online education.
- Change in the role of women
The woman has consolidated her professional presence. This situation is potentiated by the increase in jobs related to the intellect before force, the strengthening of telework, the growth of 24-hour businesses and the development of support services as a solution to the family-work dilemma.
The change in cultural values and styles of consumption that this transformation involves is great.
According to a study carried out in 1999, Argentines think that women will work more, spend more time outside their home and be more independent. Women think that there will be an increase in the burden for women, who today assume various roles. Everyone agrees that there will be fewer marriages, more divorces and more single mothers.
- Strong demand for business 24 x 7 or with extended hours (dry cleaners, supermarkets, gyms) and growth of multi-service premises that support the teleworker at home (photocopiers, scanners, call shops, sale of office supplies). Demand for skilled people in a variety of things, or with the inventiveness to solve them in terms of housekeeping and assisting household members. Increase in the sale of frozen meals and “meal solutions” (ready-made, ready-to-heat products and eat).
Changes in consumer habits after the Argentine devaluation
In our case in particular, the change in the economic-social scenario was so dramatic from the beginning of 2002, that demand projections could never give a result or be roughly approximate to reality.
Burdened by the weight of the crisis, the Argentine consumer shows disconcerting reactions.
They must be investigated by companies if they are to overcome the context successfully. (Figure 1)
How do we buy today?
Consumers today are much more rational in our purchases, that is to say that impulse or compulsory purchases are relegated in favor of a much more "meditated" cost / benefit ratio.
Preferences turn to brands with higher performance or lower prices, especially the so-called “b brands”, and to the supermarket's own brands.
- 76% of consumers switched to cheaper brands. The brand / consumer relationship is redefined. All links are questioned. The relationships between the three major consumer profiles, the "brand", the "rational", and the "Economists". The logic of value is modified, now we are looking for the "best" within the possible. We have a much greater awareness of purchase, we demand price, and quality at the same time. We are looking for formats or presentations that imply a lower outlay of money for each purchase. There is a high sensitivity to offers and / or promotions, 65% of shoppers in the supermarket look for promotional posters before brands. 43% of consumers go to non-regular supermarkets to buy offers.50% of those consumers buy that offer and leave. The volume purchased at a time is less,and thus there is a greater frequency of visits to the supermarket.Finally, those who suffered the least variations compared to last year were independent self-services, and neighborhood businesses, where although there were changes in their demand levels, they were not so drastic. (Graphs 2,3,4,5,6 and Table 3)
Brand Valuation
It is clear that consumers want to continue acquiring brands in their preferences.
This change in situation installed what we could call "the era of NON-brands", which made consumers go the reverse way in the evolutionary stages of Marketing, giving more importance to the product than to the brands.
The fact of not being able to acquire brands makes them feel like a loss of identity.
The internal process of the consumer is very complex and, in this case, there is a longing and nostalgia for the brands, which generates feelings of "anger" and anger and the emergence of a demanding attitude towards companies.
The forced passage from the 1st marks to the 2nd (even to 3rd in some cases) is presented as difficult, but the really traumatic thing is the change to the NO marks.
This makes that, in a process of justification in the consumer's mind, the 2nd brands start to behave like 1st, and this is seen in the modification of the market shares.
Marketing resources to overcome the crisis.
Actions and reactions.
Among the list of behaviors that consumers take, the following stand out:
- Reduce spending, "stretch" the duration of the product. Buy less (global purchase). Buy a single product per item (eg: family deodorant instead of individual). No "stocking". No replacement..Smaller purchases (smaller packages).Packaging changes (from modern to rustic) The consumption made in this period produced a "risky" learning for companies. Who learned to live without those brands could become difficult to return..
Other attitudes that have been detected, and which should not be downplayed, are:
- Orientation to family consumption with loss of hedonism. Optimize and recycle (use without wasting). Buy 1st brands and replace with 2nd known brands. Move to 2nd brands from the same company. Buy own brands from Supermarkets "imagining" that there are a great brand behind.
(Tables 1, 2 and 4)
From where to speak to the consumer.
It is KEY at the moment to deepen the relationship with the client; recognize them, be close, show that they are understood and understood.
They need to see that the company also loses (lower profit, lower prices).
They expect to see "do" rather than "say."
It is in this context that there are better positioned brands and others are more affected to meet these demands of the "new Argentine consumer".
The prevailing susceptibility means that some principles must be followed:
- Re-appropriate the concept of quality. Appeal to national origin. Avoid everything that denigrates the consumer or evokes misery ("we offer you this discount, because you are very bad financially !!!")
Success factors in the crisis.
- Avoid confinement and / or denial behaviors. Do not abandon consumers (from looking at brands to looking at customers). Maintain product performance (do not lower quality). Help maintain identity. Defend penetration with packaging more boys. That the client open the pantry and see the product. Use of Social Marketing honestly and responsibly (with interesting results). Reformulation of the product with "hypercompetitive" technology that does not affect profitability as much.
The steps to successful marketing
- Understand the needs of the consumer, doing research to discover what products and services people want. Understand what is going to lead to success: deciding what market share the company should have, how much money it should earn and control costs. Emphasis on constant feedback and on measuring success, how the company is doing compared to the competition. Leaving traditional thinking aside. Defining markets and identifying long-term opportunities in them. Understanding that a good value does not mean a cheap product. Value doesn't just mean what you pay; It means what you receive for what you pay. Recognize the competitive framework. Who is the competition? What is the best competitive advantage? Competition can copy tangible things,but it cannot copy an operating philosophy or commitment to excellence. Recognize the global environment. Emphasize efforts and prioritize resources toward those efforts. A good strategy needs a precise allocation of money and people who can get the most with the least. Understand that you can't do everything simultaneously. Success depends on knowing how to focus only on a few things and commit to always doing them in an optimal way.Success depends on knowing how to focus only on a few things and commit to always doing them in an optimal way.Success depends on knowing how to focus only on a few things and commit to always doing them in an optimal way.
Conclusions
- As stated at the beginning, the fundamental thing must be to try to understand the evolution of demand and not so much the characteristics of the consumer. Knowing how the consumption paradigms fluctuate, we can get a more or less approximate idea of what type of strategy they have What to have the company and then what kind of marketing tactics should be implemented. There will be no possible success for those who have the “this is how we have always done it” mentality, nor for those who choose to believe that today is like yesterday, ignoring the implications of the forceful revolution that is affecting every aspect of the current company. Past success does not necessarily serve to predict future success, because the simple fact that things always went a certain way does not necessarily guarantee that they will be forever.
