Consumer Behaviour – A Digital Native is the latest book by Jagdish Sheth of Professor at Emory University, Varsha Jain, Professor at MICA and Don Schultz, Professor at Northwestern University.
Published by Pearson India, Sheth, Jain and Schultz’s book tries to capture the essence of the digital native’s perspective and successfully integrates various components of marketing communication. The book tries to demystify the fast-changing world of consumption and thus is an ambitious endeavour to offer a distinctive perspective integrating brand advertising in digital markets with consumer behaviour.
To explain the concepts in a more clear manner, the authors have included interesting case studies, theoretical insights and real-life practice from some of the world’s foremost experts in marketing. We are reproducing an excerpt from the first chapter of this book with full permission from the publishers.
Chapter One: Understanding The Emergence Of Digital Native’s Behaviour
Learning Objectives: After this chapter, you will be able to —
- 1-1 Explain the emergence of consumer behaviour
- 1-2 Understand the difference between digital natives and physical natives
- 1-3 Clarify the key dimensions of digital natives
- 1-4 Identify with the concepts of the future of consumer behaviour
Nowadays, Indians have started opting for Zomato instead of going out to dine. This is one of the most extensively used apps in India, (though the company has a website as well, offering the same service). Why? They always provide a seamless technology-led dining experience. Zomato also provides a personalized and cloud-based system to figure out the best restaurants. The company has been able to weave technology into the dining experience of the user, cashing on the increasing popularity of Internet usage in India. Additionally, there has been an increasing number of smartphone users who are already using mobile applications (or apps) as these are convenient and can be easily accessed “on-the-go”. These apps provide relevant and personalized experiences based on consumers’ likings, preferences, and geographical locations.
Zomato has developed extremely focused products that enhance the most optimum dining experience. The company also connects consumers with restaurants. Thus, consumers widely use the Zomato app to order food, make reservations, rate restaurant, and gather restaurant information. To sweeten this deal, the entire undertaking is based on a cashless system, that has been supplemented by online ordering and point-of-sale system. Together, they represent cutting-edge technology. In a short period of time, Zomato has become a part of the daily life of the digital natives as they prefer to make their all food and dining-related decisions on this app. Moreover, they also consider the ratings given on this platform to be credible and trustworthy. Additionally, the app is user-friendly; hence, it can be used by any digital native in the country (Bureau, 2015).
One of the most distinctive elements of Zomato is that the company always listens to its consumers. They learn from individuals’ narratives about their pre- and post-dining experiences through Zomato. They engage with the consumer through social media channels as well, and respond promptly to the queries raised by the digital natives. In turn, the consumers provide them with instant feedback.
Thus, it can be seen that technology has created an almost perfectly circular platform. Digital natives engage with Zomato in real time. In turn, the company ensures that consumers’ needs are met. As a result, digital natives like special events arranged by the company such as foodie meet-ups, blogger interactions, and feedback contests. Thus, Zomato has been able to maximize its brand recall and consequently, these consumers have become loyal to the company. To make this a seamless experience, Zomato also uses cloud computing, and it intends to create a virtual environment for the digital natives in future. They will also provide personalized content.
Additionally Zomato connects with its loyal consumers on Omni channels in real time. The end result is that they create a wholesome dining experience on a single platform (Zomato: Catering the Hungry Millennial, 2016).
Such an app experience has made a positive impact on the product quality that the company offers, which adds to its competitive advantage. However, the company still faces the major challenge of bridging the gap between consumers and restaurants thereby developing a seamless experience through the app. The heart of the challenge is to create memorable dining experiences. Digital natives are very demanding, and they have high aspirations and desires. The company, hence, is striving to provide consumers with information about restaurants and dining at their fingertips.
We have now understood the usage of mobile apps in dining experience. In the next stage, we will try to comprehend the current trends in consumer behaviour and also understand how consumers will behave in future (Patidar, 2016).
In order to understand the emergence of consumer behaviour, we need to comprehend the evolution of this stream along with its association with marketing and consumer-oriented concepts. Further, consumer behaviour became dynamic as the usage of technology increased, which led to the emergence of digital natives. This historical background would help us understand how technology has changed consumer behaviour, and digital natives have become important in the marketing domain.
Emergence of Consumer Behavior
Historically, traditional consumers have followed a very different behavior for buying the prod- ucts and services as there were no digital platforms. However, the emergence of technology and high usage of mobile phones has resulted into increased online presence of consumers, and they are using digital platforms for making the purchases. Thus, the core objective of this book is to understand how these digital natives behave in an online setup and make the purchase of products and services. The subsequent sections would provide further details about these areas.
Evolution of Consumer Behavior
Consumer behavior evolved between the 1850s and late 1920s, which is also referred to as the production era. During this time, demand exceeded supply; hence, the aim was to work on manufacturing, increasing the availability of products, and enhancing production capacity and capabilities. Interestingly, the consumers and manufacturers never focused on variations. They just aimed at high numbers in production. Subsequently, from the early 1930s to mid-1950s, the emphasis shifted on sales. This meant that the sale of products was more important than the production of products as there was a surplus of manufactured products. The products were simple and catered to the general requirements of the consumer. However, with the onset of the marketing era in the mid-1950s, satisfaction of specific needs and preferences of consumers, that is, an orientation towards “consumers first” came into vogue. For example, Parle introduced the first cola drink in India, which was known as Gloco Cola with an emphasis on taste and happiness. These two elements were used as the company considered consumers’ preferences and requirements as their prerogative (“The Story of Thums Up, Gold Spot & Limca—Guruprasad’s Portal”, 2017).
Such a marketing orientation helped companies provide satisfaction to consumers, gain maximum profits, and work with a competitive edge. Hence, firms started exploring what the consumers would like well in advance so that the products and services could be offered at the right time. For example, Rexona claimed that using their soap would help women have lovely skin. This brand message created a significant impact as it demonstrated the company’s concern towards women.
With a comprehensive understanding of the consumers’ specific needs and requirements, companies now started targeting particular groups or segments of consumers so that their specific needs and requirements were met by the products and services more appropriately. Thus, relevant marketing communications emerged based on consumers’ needs and requirements. This concept of targeting worked for 50 years. Gradually, societal marketing was developed implying that consumers’ immediate needs and wants were understood and addressed by companies. However, this entailed not much of a connection between the company and the long-term influencers of consumers, which included consumers’ family, friends, neighbors, and communities (Bhaskar, 2017).
Emergence of Connections Between Consumer Behavior and Marketing
Based on the above findings, it was felt that there was also the need for understanding the unsatisfied requirements. This was possible to gauge through market research. Consequently, research revealed that consumers have complex behavior, and this complexity existed because their psychological and social needs were synchronized with their functional needs. It was also found that there are specific needs and requirement for certain groups or segments of consumers. Thus, one product or service cannot satisfy all the needs and requirements of consumers as they are exclusive and distinctive. Thus, it was observed that products or services needed to be personalized to suit different consumer segments. To do so, studies were conducted in detail on consumer purchase and consumption. These studies led to the emergence of consumer research. This research helped in understanding consumers more comprehensively as companies had the tools and technique to carry out this process. This with a thorough understanding of consumers led to the emergence of marketing strategy (Rogoll, 2017).
This strategy orientation understood consumers’ trends. It helped visualize future possibilities. Eventually, consumer research also found heterogeneity and similarities among consumers across different countries. For example, while the basic needs of the consumers remained the same, as every individual needs food, water, and shelter, such basic needs increased and became more complex due to the expanding cultural environment of consumers. This was further supplemented by the education and experience of individuals. There might even be a possibility that consumers develop similar needs. These similarities help develop promotions for products and services, leading to strategic orientation of products through segmentation, targeting, and positioning. While making these segments, key dimensions such as age, gender, family, social class, income, race, and ethnicity, geographical location, and lifestyles are considered by companies (“Predominant Components of Brand Equity …”, n.d.). For example, Parle Glucose has developed biscuits especially for children to give them strength and energy. Children like these biscuits as they are sweet. The parents are happy as they provide the right amount of glucose for the growth of their children. Similarly, a criteria like gender also affects consumer behavior. Generally, women like pink; men prefer white and blue. Thus, segments can be made in line with this generalization. For example, Lux soap used pink color to illustrate that this soap is for women. They even emphasized that the complexion of women grows with the use of this soap. Another key dimension, family structure, determines the marital status and spending capacity of consumers. Hence, these two factors also determine their behavior. For example, an unmarried person is likely to eat out more as compared to a married person. Social class and income also determine the behavior and consumption patterns of consumers especially in terms of their music, clothing, leisure, activities, hobbies, and art. Individuals always tend to socialize within the same social class. For example, the elite class likes to play golf at the premium clubs and socialize with the similar class of individuals. Race and ethnicity are other determining factors of consumer behavior. For example, Ponds use skin whitening for the women because in India, “beauty means white”, especially in the context women. Geographical location of consumers also determines segmentation. For example, Indian consumers from the northern part of the country are different from those from the south. Finally, lifestyle, as defined by activities carried out by the person in his spare time, is another deciding factor (Patel, 2017).
Companies develop an image of products & services through segmentation and position them accordingly. This image is then created in the minds of the consumers.
These segments help companies save their resources as they can satisfy a bigger group of consumers with the same products and services. For example, consumers want white and clean clothes, Tide, the detergent brand promoted this idea and satisfied these individuals effectively. Similarly, Colgate Gel targeted children and parents with the promise of white and clean teeth. Companies thereby develop an image of products and services through such segmentation and position them accordingly. This image is created in the minds of the consumers. The benefits of the products associated with their features are demonstrated. Thus, companies are able to develop a unique selling proposition (USP) that helps consumers differentiate the products of particular company from competing brands. This process results in the extension of new sizes, flavors, colors, and so on. Consumers are provided with options of a vast range of products from various firms. They are also able to understand the “me too” products, especially in the luxury segment, as they do not have any unique characteristics. For example, Louis Vuitton has many “me too” products in the Indian market as a majority of the consumers cannot afford to buy this brand (Kaushik, 2017).
These processes have further led to marketing mix methods. These include all the four Ps—product, price, place, and promotion. Product offering to consumers includes ingredients, colors, sizes, shapes, features, characteristics, and so on. Price refers to the monetary payment that is to be paid by consumers, and it includes returns, discounts, allowance, and modes of payment; place denotes the store or non-store where products are sold; and promotion relates to advertising, public relation, and personal selling that develop awareness about products amongst consumers. Rasna, for example, is a well-known product in India. It is a drink with multiple flavors, reasonably priced, and easily available at different prominent stores in the country. It was promoted by a sweet young girl whose statement “I love you Rasna” had gained instant popularity (Harish, 2017).