Recession Effects on Consumer Purchasing in the UK Computer Industry - Research Proposal Example

Marketing Research Proposal MARKETING RESEARCH PROPOSAL Effects of the recession on consumer purchasing patterns in the UK computer industry Introduction The economic recession of 2008/2009 originated from the mortgage markets after financial institutions offered mortgages to those who had no ability to afford them. Therefore, there was a collapse of the property market, which quickly spread to other financial systems and economic markets, resulting in a global recession that still affects the UK markets today (Verma, 2013: p20). The turmoil in the banking sector has had long standing repercussions for other industries. One such industry was the electronics industry that suffered from banks becoming more vigilant concerning lending of loans. Thus, while consumers may have desired to buy new electronics, especially high-tech equipment, most could not do so because they had limited ways of generating capital that they could use to allow the purchases (Hartman, 2010: p38). This can be seen in the losses suffered by such electronics companies as Motorola Mobility and Blackberry, which emphasized the profound effects of economic recession. The research will seek to evaluate the effects of the recession on behaviour of the consumer in the UK electronics industry, particularly with regards to the smartphone industry. Understanding the response of consumers to the economic downturn with regards to their buying behaviour is imperative for companies seeking to ensure future success (Chakrabarti, 2011: p56). While signs show that the UK economy is stabilizing, leading to questions about this research’s relevance, the changes to consumer behaviour by recessions tend to last for a long time. Therefore, even as economists signal the end of the recession and beginning of recovery, this is unlikely to be reflected immediately by consumers in their buying behaviour. Rationale for the Study The UK economy’s current state has heavily burdened many companies across the country. The declining spending and tendency to save among consumers led to profit losses for many organizations, which have been predicted by experts to have long lasting effects (Ver Eecke, 2013: p82). Today, consumers are more aware of the pitfalls bedevilling spending above one’s means with improved financial education. This trend will portend challenges for marketers because the consumers now tend to do need evaluation, while also showing more selective behaviour in buying decisions. Thus, companies will be required to conduct a re-evaluation of marketing strategies with the aim of identifying effective was of product marketing, focusing on delivering value and meeting needs of the consumer (Chaston, 2009: p40). If the marketing staff attempt to comprehend the decision-making and behaviour patterns in purchasing decisions, they will have more effective strategies compared to simply advertising their services and goods. Understanding consumers is one of the most important marketing strategies, especially concerning the motivations and desires of the consumer (Trewsdale, 2013: p111). It is predicted that consumers will be more likely to spend most of their time thinking about purchases, particularly for costly products. The consumers will actively attempt to alter their purchasing behaviour and cut back on products that are considered non-essential like luxuries. The primary motivators present in the purchasing behaviour of consumers still remain the same, which means that the consumer will buy what they deem valuable without regards of price (Cynamon et al, 2013: p90). Finally, it is also predicted that buying behaviour will vary dependent on socio-economic status, gender, age, or level of income. Companies that are successful are normally those that have sustainable and valuable competitive advantage, which cannot be imitated easily by their competitors. In general, companies will focus on operations, customer service, and product innovation (Rossi, 2011: p310). Normally, if companies attempt to specialize on these three areas, they will end up lacking consistency and focus. The firms that are most successful will elect to focus on one area, while also delivering secondarily in the remaining categories. It is, therefore, imperative to understand the importance of coming up with a sustainable advantage over their competition, as well as the importance of effective communication to the consumer (DataMonitor, 2010: p32). In this context, it is significant to study the influence of the economic recession on the buying behaviour of consumers in the electronics industry. This study is crucial to future research because of the usefulness of the electronics industry to the UK and global economy, coupled to the fact that the effects of the economic recession’s effect will be felt for a long period by the consumer. It will also set the stage for investigations into consumer motivations for buying electronics, as well as specific factors crucial to purchasing decisions. Additionally, it will also lead to further research into understanding consumers and the future of the electronics industry from an operational standpoint, as well as from the consumer’s standpoint. Research Methods for Business & Management MOD001105 Name: Qualification Title: Title: Effects of the recession on consumer purchasing patterns in the UK computer industry Context of the Study The National Bureau of Economic Research argues that, economies are considered to be in recession if they go through a decline in GDP for more than one successive quarter (Pemberton, 2012: p76). The economic downturn witnessed in the UK in the latter part of the last decade affected the country profoundly. It has, in fact, been described, as the most debilitating recession to affect the UK since the end of WWII. The period saw a decline of close to 4% for GDP in the year 2009, while levels of unemployment rose to the highest point for the last twenty years (De Nardi et al, 2011: p29). The economic downturn portends subsequent impact on consumer behaviour and trends. Because a significant number of households are faced with unemployment, consumer spending has declined. Areas that suffered the most significant cutbacks include indulgences like coffee, personal durables like clothes, and, especially, household durables like electronics (Parker, 2013: p44). Thus, it is important to study the alterations in purchasing behaviour and consumer preferences in coming up with marketing strategies to regain competitive advantage. Aims and Objectives of the Study This research study will seek to evaluate the buying behaviour of consumers, as well as the process of decision-making in the electronics industry in the UK during the recession. Specifically, the research study will seek to satisfy several objectives. These are: To assess whether processes of decision making for buying behaviour change when the economy is in a recession for the electronics industry. To assess the main factors influencing purchasing behaviour for consumer electronics during a recession To assess the most important factors influencing electronics consumers. To assess the underlying needs that drive electronics consumers. To assess how the consumers choose between different electronics brands. To assess the characteristics of electronics products that keep consumers loyal to those electronics companies that have been successful during the recession, such as Apple. Rationale for this Study What is the research issue? The economic recession that affected the UK economy in the last decade continues to affect profoundly consumer buying behaviour, burdening many companies across the country. The declining spending and tendency to save among consumers has led to profit losses for many organizations, which will have long lasting effects (Ver Eecke, 2013: p82). Today, consumers are less willing to spend above their means with improved financial education. This trend will portend challenges for marketers because the consumers now conduct need evaluation, while also showing more selective behaviour in buying decisions. Thus, companies will be required to conduct a re-evaluation of marketing strategies with the aim of identifying effective was of product marketing, focusing on delivering value and meeting needs of the consumer (Chaston, 2009: p40). Why is it an issue? Understanding consumers is one of the most essential marketing strategies, especially concerning the motivations and desires of the consumer (Trewsdale, 2013: p111). It is predicted that consumers will more likely spend more time thinking about purchases, particularly for costly products. The consumers will actively attempt to alter their purchasing behaviour and cut back on products that are considered non-essential like luxuries. The primary motivators present in the purchasing behaviour of consumers still remain the same, which means that the consumer will buy what they deem valuable without regards of price (Cynamon et al, 2013: p90). Finally, it is also predicted that the buying behaviour will vary dependent on socio-economic status, gender, age, or level of income. Why is it an issue now? Today, despite the improvement of the UK economy, the effects of the recent recession still continues to impact on the consumer buying behaviour. In general, companies today focus on operations, customer service, and product innovation (Rossi, 2011: p310). Normally, if companies attempt to specialize on these three areas, they will end up lacking consistency and focus. The firms that are most successful will elect to focus on one area, while also delivering secondarily in the remaining categories. It is, therefore, important to understand the importance of coming up with a sustainable advantage over their competition, as well as the importance of effective communication to the consumer (DataMonitor, 2010: p32). In this context, it is important to study the effect of the economic recession on the buying behaviour of consumers in the electronics industry. How this research can benefit future developments This study is crucial to future research because of the importance of the electronics industry to the UK and global economy, coupled to the fact that the effects of the economic recession’s effect will be felt for a long period by the consumer. It will also set the stage for investigations into consumer motivations for buying electronics, as well as specific factors crucial to purchasing decisions. Additionally, it will also lead to further research into understanding consumers and the future of the electronics industry from an operational standpoint, as well as from the consumer’s standpoint. References Chakrabarti, R. (2011). Household debt and saving during the 2007 recession. Cambridge, Mass, National Bureau of Economic Research. Chaston, I. (2009). Boomer marketing selling to a recession resistant market. London, New York. Cynamon, B. Z., Fazzari, S. M., & Setterfield, M. (2013). After the great recession: the struggle for economic recovery and growth. Cambridge: Cambridge University Press DataMonitor. (2010). Jameson case study targeting the "recession resistant" consumer. London, Datamonitor. De Nardi, M., French, E., & Benson, D. (2011). Consumption and the Great Recession. Cambridge, Mass, National Bureau of Economic Research. Hartman, J. (2010). Options and opportunities for consumer businesses: advertising during a recession. San Francisco, Calif, the Center for Research & Development. Parker, S. (2013). The squeezed middle the pressure on ordinary workers in America and Britain. Bristol, Policy Press. Pemberton, J. (2012). The costs of recession: a comment. University of Reading, Department of Economics. Rossi, V. (2011). Is the global economy on the brink of recession? Intereconomics. 46(6), 300-326. Trewsdale, J. M. (2013). The aftermath of recession: changing patterns in female employment and unemployment in Northern Ireland. Belfast, Equal Opportunities Commission for Northern Ireland. Ver Eecke, W. (2013). Ethical reflections on the financial crisis 2007/2008 making use of Smith, Musgrave and Rajan. Heidelberg, Springer. Verma, N. M. P. (2013). Recession and its aftermath adjustments in the United States, Australia, and the emerging Asia. India, Springer. Read More