Consumption Patterns among the Young-Old and Old-Old - Assignment Example

Table of Contents Table of Contents 1 Executive Summary 2 2 Introduction 2 2 Definitions 2 2 1 Consumer Perceptions 2 2 2 Personality 3 2 3Elderly 3 2.1.4 Affluent 3 2.2 Scope of the Study 3 3 Context 3 3.1 Industry Facts and Figures 4 3.2 Consumer Characteristics 4 4 Consumer Behaviour Theory 5 4.1 Personality 5 4.2 Consumer Perceptions 8 5 Consumer Market Segmentation 10 5.1 Aged Market 10 5.2 Affluent Market 11 6 Analysis 12 7 Personal Reflection 13 References 15 1 Executive Summary The report examines two consumer behaviour constructs and two segments. Focusing on the cosmetics surgery industry, the study examines the behaviour of the affluent and the elderly within, for the purpose of recommending strategies to marketers. The report concludes with a reflective statement. 2 Introduction The report will examine the consumer behaviour construct through a focus on two of its core concepts and two consumer market segments. The concepts are personality and perception and the segmentations are elderly and affluent markets. This section of the study will clarify the report's key terms, its objectives and scope. 2.1 Definitions As may have been deduced from the preceding, there are four key terms, each of which will now be briefly defined. 2.1.1 Consumer Perceptions This term, central to any understanding of consumer behaviour, refers to how consumers view a product/service, its price and its quality, among others. It focuses on subjective consumer interpretations of a product's attributes versus its price, what its possession and use will contribute to a consumer versus its price. 2.1.2 Personality Within the context of consumer theory, personality has two meanings. The first is consumer personality and the second is brand personality. Ideally, correlation between the two motivates the consumer market to purchase the brand in question and exhibit loyalty towards it. In both instances, personality refers to perceived attributes and characteristics. 2.1.3 Elderly Consumer market segmentation is integral to focused marketing and the identification of potential consumers. The elderly refers to the consumer market segment which is comprised of the aged, generally those at, or above, pension age. This type of segmentation is restricted to age. 2.1.4 Affluent The second type of segmentation is concerned with economic status. It effectively refers to consumer income and, more specifically, to those in the upper income brackets. The affluent are the rich consumers, irrespective of gender and age. 2.2 Scope of the Study This study will focus on the elderly and affluent consumer markets' perceptions and personality vis--vis plastic, or cosmetics surgery. 3 Context The ever-increasing popularity, both national and global, of plastic surgery is amply evidence in the appeal of television shows and serials such as "Extreme Makeover" and "Nip/Tuck." Plastic surgery is now openly discussed and is no longer confined to emergencies or to the female market. In other words, plastic/cosmetic surgery is regularly performed for beautification and anti-ageing purposes and not out of necessity and is now being undertaken by both males and females, not just the latter. 3.1 Industry Facts and Figures The American Society of Plastic Surgeons (cited in Ruiz, 2007) estimates that the number of cosmetics surgeries performed per year has increased by almost 50% from 2000 to 2006. Market researcher, writing on the size of the industry and market, assert the impossibility of gauging the size of the industry/market as statistics are based upon procedures performed in hospitals and not those carried out in private clinics (Davis, 1995). Hazarding a guess, nevertheless, the American Society of Plastic Surgeons (cited in Ruiz, 2007) asserts that it is a multi-billion pound industry. Indeed, tens of billions of pounds are spent on the global plastic surgery industry per annum (Jeffreys, 2005). It is, in other words, an extremely lucrative, constantly growing market. 3.2 Consumer Characteristics Several researchers have studied the cosmetics surgery consumer market. Their data indicates that the market is dominated by the elderly and affluent, with the most popular procedures being anti-ageing ones. Further to that, even though male consumers are represented, 90% of cosmetics surgery consumers are female (Davis, 2005; Jeffreys, 2005). 4 Consumer Behaviour Theory 4.1 Personality Dweck, Chiu and Hong (1995) define personality as assumes all important psychic regularities, and refers to an inferred entity, rather than a directly observable phenomenon. It is a construct that takes into account the regularities of in an individual's behavior as they respond to diverse stimuli. It is referred to as important and relatively stable aspects of a person's behavior that account for consistent patterns of behavior which may be observable or unobservable and conscious or unconscious. Personality is one's acquired, relatively enduring, yet, dynamic, unique, systems of predispositions to psychological and social behavior. These definitions describe the inherent consistency of one's actions. While cultural traits may be shared by cultures, groups of people, or entire populations, the specific pattern and combination of traits is unique to that individual personality. Carl Jung argues that the ego (the personality) is shaped largely through social forces and society as a whole (Lachmann, 2004). It is through stages of life development that one forms their sense of self, their identity. Carl Jung's theory of human behaviour stemmed from the notion that people are complex individuals who are driven mostly from unconscious inherited experiences from human nature attempting to live in a world of opposing forces. Jung's theory is based on the notion that individuals behave as a result of both conscious and unconscious forces. The unconscious, according to Jung's theory stems from all of past human development (Lachmann, 2004). Jung believed that personality is the human innate tendency to act in a certain way. Jung's notion of visible persona and unconscious drive relates to consumer behaviour. In many situations, consumer psychologists would agree that some purchase decisions involve unconscious decisions or influences from aspects that many are not conscious about. While it appears that Jung's notion of unconscious is a more influential driving factor, individuals are driven by forces that they cannot readily explain. Some items are so insignificant that most individuals purchase based on habit. Routine response behaviour is exercised when the consumer purchases low-price items or items that are frequently purchase, such as toothpaste, shampoo, soap, or pencils (Hudson, 1978). These routine purchases require little to no involvement by the consumer in the purchase decision and are usually based on the need for the commodity. Either the product is not very important, or the alternatives are considered equal so the consumer does not go through a decision making process each time the item is purchased. Many other purchases, on the other hand, involve the consumer at fundamentally deep personal connections. Strong consumer connections are built from consumers' identification with those companies in which the product assists the consumer to satisfy one or more self definitional, self-referential, or self-defining needs. Consumers identify with the personification of products and brands through the companies' or brands' association to traits such as values, characteristics, attitudes, and ideals. It is a challenge to measure these deep rooted personality sentiments and preferences. Researchers have indicated that consumers do not think in words. There is much more subconsciously occurring in a purchase behaviour. They have also argued that within the existing purchase behaviour, mind, body, brain, and society are connected in the process (Ruth, Brunel and Otnes, 2002; Jewell and Rao, 2004). There is a connection to thoughts, feelings, memories, and culture that exists in the consumer behaviour realm, all connected and influencing the other. A traditional model of consumer behaviour, as influenced by consumer personality, includes the following elements: stimulus situation, perception (and awareness), cognition and memory (belief and remembering), learning (association), emotion (feeling), motivation (desire), an intention (Ruth, Brunel and Otnes, 2002; Jewell and Rao, 2004). Bhattacharya and Sen (2003) argue that through social need theories and identification theories, strong consumer company relationships are built from consumers' identification with companies, at least where the company or product assists the consumer to satisfy one or more self definitional needs. These needs could be either self-referential or self-defining. They argue that companies and products can assist consumers in satisfying a sense of social well-bring and belonging depending on the company and the products (Bhattacharya & Sen, 2003). They also point out that consumers supersede their personal identities and develop social identities when they associate with a particular company or product (Bhattacharya & Sen, 2003). Particular companies' and their products can assist satisfying the social needs of an individual through the personality of the company or product, and the traits and needs that consumers gain through association. Consumers identify with companies and the personification of products and brands through the companies' or brands' traits such as values, characteristics, attitudes, and ideals. In other words, consumption is a method of establishing one's sense of identification demonstrating one's personality. Behavioural-Marketing researchers have long attempted to address why consumers behave the way they do in the marketplace. Traditional economic demand theory is based on the notion that all customers have all the information they need to judge a commodity. Thus, they are expert buyers. However, consumers are not usually expert buyers and often lack the information needed to judge the quality of a commodity. Indeed, consumers tend to rely on their subjective perceptions of a commodity or service when making the purchase decision and, indeed the re-purchase or recommendation ones (Chapman and Wahlers, 1999). The implication here is that consumer perceptions of a commodity/service influence the market performance of that commodity of service. Given the importance of the consumer perception construct, it needs to be further explained. 4.2 Consumer Perceptions Researchers define consumer perceptions as the ways in which they process information about a product and a commodity and the ways in which they subsequently subjectively react to that product or commodity. Within the context of the stated, consumer perceptions tend to focus on product/commodity price, value and quality, with the assumption being that correlation between price and value lead to consumer satisfaction. Consumer perception of value has received increased attention as companies attempt to differentiate their product or service and build customer loyalty in an increasingly crowded marketplace. The consumer's expectations about the value contained in the service or commodity have also been found to be related to overall perceptions of quality (Hartline and Jones, 1996). It is thus that marketing theorists maintain that any company's position in the marketplace can be improved more by enhancing the perceived quality of product/service, rather than by discounting price. The market performance of a product or service is, hence, immediately related to the consumer market's perceptions of the product/service's quality. While researchers have argued value to be more important than price, they have also conceded to the imperatives of correlating between value and price. This means that while the consumer market would prefer to buy quality products than cheap, low quality ones, they insist that value must be equal to price or, preferably, that value exceeds price. This means that not only does consumer satisfaction partially hinge on the product's being perceived of as worth the price paid for it but on perceptions of value exceeding price. Proceeding from the above stated, it is further important to note that in their studies on consumer perceptions and satisfaction, researchers have further examined the link between perceived quality and perceived value (Dobbs, Monroe and Grewall, 1991; Chapman and Wahlers, 1999). They found that perceived quality had a significant effect on the consumer's perception of value. For example, a study by Hartline and Jones (1996) found a statistically significant relationship between the independent variables perceived value, service quality and the performance of a hotel's housekeeping staff with the dependent variable, the intention to recommend the hotel to others. It is, therefore, apparent that perceived value is an antecedent to a customer's willingness-to-buy and as an outcome of perceived product quality and perceived sacrifice. Closely related to the consumer's perceptions of quality is the concept of customer satisfaction. A review of the marketing literature reveals that perceived product and service quality and customer satisfaction play a critical role in the purchase intentions of consumers (Zeithamal, Berry, and Parasuraman, 1996). For example, research by Cronin and Taylor (1992) found evidence of a link between the consumer's perceptions of service quality and their satisfaction levels. They also found that customer satisfaction impacts the consumer's purchase intentions. Furthermore, the quality of service received and the quality of a product purchased is a potential antecedent of satisfaction. The implication of the foregoing is clear: consumer perceptions, as determined by their subjective assessment of product price, product value and product quality, influence the market position of the company in question, not to mention the market performance of the product/service. The primary problem with the aforementioned, and herein lies the challenge to marketers, is that perceptions are subjective. While they are partly formed and influenced by information which is available to the consumer on the product or company, they are ultimately dependant upon the ways in which consumers subjectively process that information and, as based upon their personality, react to it. It is, thus, that the concept of consumer perceptions may be described as problematic and extremely challenging. 5 Consumer Market Segmentation 5.1 Aged Market The elderly consumer market has been subdivided into three sub markets by researchers. These are the young-old market, aged 55-64, the mature old market, aged 65 to 74 and the old, elderly market, aged over 75 (Levy and Weitz, 2001). As may be assumed from the foregoing subdivision, this market is a highly heterogeneous one in terms, not only of age, but of interests, income and educational level (Levy and Weitz, 2001). The implication here is that it is erroneous to forward any generalisations regarding consumer behaviour within the context of this particular segment. While conceding to the fact that generalisations regarding the elderly market would be misleading and most probably founded upon erroneous assumptions. Abdel-Ghany and Sharpe (1997), nevertheless, insist that some conclusions may be drawn on the basis of the expenditure patterns of this group. As they argue, a review and critical analysis of expenditure patterns evidences three stable characteristics. The first is that this group displays a tendency towards scepticism regarding marketing claims and, hence, tend to be very discerning. The second is that this group tends to exhibit high level of brand loyalty. The third is that the elderly market is a decisive one. Its members may engage in comparative shopping but once they find a product which they perceive to possess the requisite attributes, the strongly come out in its favour and their decision to purchase, and remain loyal to that brand, is firm (Abdel-Ghany and Sharpe, 1997). 5.2 Affluent Market The affluent market is far less complex than the elderly one. While it is quite diverse in terms of age, gender and personality, it is quite homogenous as regards to taste and shopping preferences (Levy and Weitz, 2001). While refraining from any absolute generalisations, Levy and Weitz (2001) observe that this group is discerning, likes to ensure that the money they spend is money well-spent and insist upon quality service/goods. Further to that, the affluent tend to spend significant amounts of money on luxury goods and services and, indeed, have a weakness for self-pampering (Levy and Weitz, 2001). 6 Analysis Proceeding from the above stated, several observations can be made. These pertain, first, to consumer behaviour and second, to the behaviour of the affluent and the elderly within the cosmetics surgery market. As based upon an understanding of the affluent and the elderly as discerning consumers who, despite significant levels of expenditure on luxury goods and services, are concerned with quality and, importantly, a correlation between price and quality, it is possible to conclude that this consumer segment will be susceptible to the services of the cosmetics surgery industry. Being susceptible to, however, does not imply that they will be vulnerable to marketers' messages as studies indicate that they show high levels of scepticism regarding the aforementioned (Abdel-Ghany and Sharpe, 1997; Levy and Weitz, 2001). Therefore, when appealing to the affluent and the elderly, it is strongly recommended that marketers base their claims on information and convey information through their campaign. In other words, they need to spell out the benefits of this type of surgery and precisely what consumers may expect should they decide to undergo it. Added to the above stated recommendation, it is strongly advised that marketers emphasise differentiation. In brief, the market is an intensely competitive one, with the question being why consumers should opt for one clinic, hospital or surgeon versus another. It is important to note that marketers are not advertising the industry itself but the services of specific entities and individuals within. Hence, the provision of information regarding the individual/entity's track record, possibly the nature of its clientele and the areas of its/his/her specialisation, need to be communicated. Specifically addressing the elderly and affluent market, anti-ageing procedures should be highlighted, as should risk and safety statistics. The implication here is that solid and tangible information must be communicated when targeting this group, especially when influencing their decision, not just to undergo the procedure but to purchase the services of a specific clinic/practitioner, as opposed to the numerous other alternatives. As may have been deduced from the foregoing, the affluent and elderly represent a highly attractive market for cosmetic surgeons. It is, indeed, a market with incredible opportunities for growth. The realisation of the said growth, however, is ultimately contingent, not upon attractive advertising and eye-catching campaigns but on campaigns which provide information to a sceptical and discerning consumer segment. 7 Personal Reflection From a personal, experiential perspective, I can safely assert that information is vital to the decision to purchase. Even though the literature cited in the foregoing has identified the elderly and the affluent as the more discerning and sceptical of the consumer market segments, I believe that most have become sceptical and discerning. The reason, quite probably, is that we are bombarded by ads most every minute of our waking hours and are constantly being told that Product X is better than Product Y, only to end up disappointed. Disappointment, coupled with exaggerated and often baseless marketing claims have taught us to undertake our own research when making a major purchase decision. Cosmetics surgery falls into that category. At the same time, advertisements which are seemingly based upon objective information, lower our defences, somewhat. For these reasons, I believe that the report findings are valid and accurate - information-based marketing is the optimal approach within the context of the said industry and vis--vis References Abdel-Ghany, M. and Sharpe, D. L. (1997). 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