Consumer behavior: yesterday, today, and tomorrow

Business Horizons, May-June, 1991 by Judith Lynne Zaichkowsky

THE PROBLEM SOLVER

In the 1960s John Kennedy became president of the United States and gave the consumer elevated status. In his message to Congress on March 15, 1962, he put forth the Consumer Bill of Rights (1963) as a social contract between business and society. Government was tile ultimate guarantor of these rights, which included the right to safety, the right to be informed, the right to choose, and the right to be heard (redress). The government took Kennedy seriously and began an activist role.

The marketplace was becoming more diversified. The concept of market segmentation became even more important. Goods that the consumer ted were now being produced, rather than just the goods the manufacturer wanted to make. Choice prevailed for the consumer, and the consumer was recognized by the highest official in the country. Consumers had the right to he informed and protected.

The government poured millions of dollars into departments whose goal was to make sure the consumer had access to information. The Federal Trade Commission flourished. Labels were put on products listing all ingredients. Advertising was regulated and measured; if it was misleading, then corrective advertising was necessary. Information was in great supply to the consumer. Ralph Nader, with his book Unsafe At Any Speed, emerged as the hero of the 1970s, taking on corporate giants in the name of the little man. Consumerism was everywhere.

As a result of this environment, consumer behavior researchers started to see the consumer as a "cognitive man." The irrational psychotic purchaser of the 1950s and early 1960s was left behind. The consumer was now a problem solver. He or she was receptive to products or services that consciously met his or her needs. Consumers were thought to actively search for information about the products and services they bought. Consumer Reports was born. Consumers were seen as striving to make the best decisions possible given their limitations.

However, consumer researchers told us that even though consumers are given information, they often fail to use it to make decisions. In an initial experiment (Jacoby, Speller, and Kohn 1974) and a follow-up (Scammon 1975), consumers were given objective product information concerning several brands available in the marketplace. The results of the first study showed that consumers felt better about their brand selections with more information, but actually made poorer choices. The study by Scammon corrected for weaknesses in the original study but still found that recall of product attributes decreased with increasing information. Consumers were still limited by the extent of their knowledge about the marketplace and their capacity to store information about the marketplace in short-term memory. Miller's (1956) rule of seven plus or minus two) pieces of information as cognitive capacity held for the consumer.

The information in the marketplace was not organized for the ease of the consumer. Unit pricing was fine, but comparing prices across brands and sizes for products was quite a challenge. Only when unit prices were posted on one sheet in a simple linear manner by decreasing prices across all sizes and brands did the consumers shift in their decision making toward lower-priced brands. You can imagine the national brand manufacturer's enthusiasm toward presentation of this information at point of purchase.