Recession and Consumer Behavior

One of my friends went for a job interview and the topic for group discussion was "Effects of recession on Consumer Behavior". My friend is in Finance stream, and so he couldn't speak much on it, but this led me into deep thinking.

Recession has badly hit the world and almost all businesses are striving to atleast survive. How do marketers measure Consumer Behavior (CB) in a recession-hit scenario?

The process of Consumption Behavior is a congregation of four consecutive psychological domains, all backed by a common domain of Personality. These four psychological factors are Motivation, Perception, Learning and Attitude. 

The essence of CB is that consumers of a segment depict more or less uniform behavior and that is what is capitaised on by marketers. Now, as there is recession, the behavior of consumers have changed drastically. For eg: A consumer may have a favorable attitude towards say, Gucci watch, but his attitude towards purchase behavior may be unfavorable. He may like Gucci as a brand, but may not have resources to buy it. As such, marketers can't conclude anything about consumer attitude, if they aren't buying a particular product.

So, how to tackle this situation? Well, in current situation, not only economies, but consumers too are in deep liquidity crunch. As such, consumer attitude is dictated by pricing. Consumers want value for money. So, marketers must give them cost-effective or efficiency pricing, and that's how marketers can mould the attitude of consumers towards their offerings.

Let's just wait and watch the actions of marketers and then draw a conclusion in this context.

Whats So Peculiar ?

Consumer behavior is a highly analytical subject, with great scope of research. There is a scope of research in every aspect of behavior shown by consumers.

Well, consumers do behave in a peculiar fashion quite a number of times. In my last assignment on consumer behavior (CB), we had to take up an irrational behavior depicted by consumers, and then work backwards to relate the behavior to theories of CB. I took up the behavior of obsessed investors as my topic of research.

The interesting part is the speculation of my classmate on the pecularity of the respective behavior. He wasn't convinced with the behavior we took up as being peculiar. Then we came up with discussion on the parameters on which we call a behavior as strange and erratic. One criteria was that a peculiar behavior is uncommon in terms of frequency and number of people doing it.

Other argument was that a behavior though shown by majority, may be called peculiar. For eg: people are fussy about paying ten extra bucks to a cab-driver, while same majority may give money as tips in restaurants. This behavior though depicted by a lot of people, yet is peculiar.

So, the criteria of peculiar behavior can be:

1. A behavior that is shown by few people, that is, a behavior that is uncommon

2. A behavior that shows two converse and contrasting reactions in different situations, or that shows lack of uniformity in different situations.

This is a great area of research. There are no right and wrong here, but there can be multiple answers.  

Attitude vs Perception

Can you differentiate between attitude and perception? The two terms seem to mean quite the same thing, but there's a great difference in thier implication.

I will enunciate on the topic as per the principle of consumer behaviour. Perception refers to an opinion formed about a product or brand on reception of a stimulus. Every stimulus (selectively percieved stimulus) leads to formation of perception. Now once perception is formed about a product, consumers tend to learn more about the product or brand. Once learning comes up to the desired level, consumers form attitude.

Now, the difference between these two psychological domains lies in the fact that every single stimuli forms a perception, while attitude is a consequence of learning about a product/brand, which in turn is the outcome of perception(s). Consumers may have different needs for cognition. As such, consumer learning comes from multiple stimuli leading to multiple perceptionm.

In a nutshell, consumers first percieve, learn from perception/s (on account of single or multiple stimuli depending on their need for cognition) and then forn attitudes, which dictate their purchase decisions.