Demographic determinants are among the most essential objective deter-minants of consumer behavior. They comprise age, gender, household size, stage of family life cycle, profession, education, race, and nationality, among others. Despite the growing influence of social, cultural, and psychological determinants on consumer behavior within the last decades, demographic determinants still remain essential variables characterizing the consumer.
First of all, they differentiate needs, stimulate or inhibit definite consumer behavior, and determine the conditions of the occurrence of behavior. Addi-tionally, they are easy to identify and constitute one of the fundamental crite-ria of market segmentation and typology.
Demographic factors allow divisions based on generations, including the Si-lent Generation (year 1909–1945), the Baby Boomers (1946–1964), Genera-tion X (1965–1980) and GeneraGenera-tion Y (1981–1995) (Graham, 2010). People of the Silent Generation (today accounting for 26% of the population of Europe) grew up in the difficult and turbulent times of world wars, which resulted in predictability and rationality in their decisions. Unlike the Silent Generation, Baby Boomers (30% of the population) are people who, since their birth, have been setting trends: they contributed to the dynamic development of the toy industry in their childhood; their adolescence marked the time of the expan-sion of fast food chain restaurants; and during their adult life, they shaped the real estate market. Currently – on account of their age – they make demands concerning their health, physical, and mental fitness. Generation X (about 17%
of the European population) is a generation of discouraged people, frightened by the perspective of a crisis; or they reject the hunt for money, and traditional values. While growing up, they began to set up their own businesses and es-tablish families (Solomon, Bamossy, Askegaard & Hogg, 2010).
ACTIVITY
Think how you might use age differences to market a new da-ting service in different countries in Europe.
Age is of considerable importance among the variables of consumer behav-ior. It is particularly vital during the initial and final stages of human life. With age, changes occur in people's needs and consumption volume, market deci-sions, and roles in the buying processes (Harcar, Spillan & Kucukemiroglu, 2005). Age also marks boundaries of buying possibilities: children, for exam-ple, have a limited ability to take legal actions, whereas more senior peoexam-ple, due to their heath condition, are limited in their abilities to compare goods and to make purchases.
Adulthood is the period of the greatest market activity, which is mainly due to the fact that the age of 35–55 is the time of achieving the highest income level during the whole lifetime. Consumers aged 35–44 spend most on house-hold maintenance, cars, and entertainment. People aged 45–54 spend 30%
more on foodstuffs and clothing and 57% more on savings within pension schemes than those in other age categories (Solomon, Bamossy, Askegaard &
Hogg, 2010). The increased expenses in maturity are a factor differentiating consumer behavior at various stages of adulthood because uniformity of life-styles in different age groups leads to standardization of consumption within each group. However, ‘attributing’ definite products or brands to a definite age group is no longer valid. On the contrary, seeing that more mature consumers are interested in offers targeted at younger people, producers may decide to expand their offer with products addressed to older people, without tarnish-ing the image of a youth brand.
EXAMPLE
Children as buyers on the Lithuanian market
At present, children and young people are an important group of buyers of market products. In Lithuania, the population of children and young people is in decline, yet every fifth person is under the age of 19. The role of children in buying decisions is growing proportionately to their age. In the early years, their influence concerns the purchase of sweets, favorite snacks, or toys. Teenagers, in turn, press for purchases of clothes and holi-days, as well as act as initiators of purchases of consumer dura-bles, particularly electronic equipment. According to research results, children have the greatest impact on the purchase of products to be used by them. Their influence is rather moderate
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with respect to activities undertaken by the whole family (vaca-tion, restaurants), and the lowest when it comes to the purchase of consumer durables and expensive goods. In the case of con-sumer durables, though, children's role is most prominent in the initial stages of the decision-making process (problem recogni-tion, information search) and less important in the phase of a product purchase. Children can also decide about certain as-pects of a purchase, leaving other asas-pects to parents. Conse-quently, they make a decision about a cell phone model, yet the choice of the operator or the place of purchase, as well as the type of contract remains in the parental power.
Source: DG SANCO (2007)
Elderly people constitute a very special group of consumers (Lambkin, Foxall, van Raaij & Heilbrunn, 2001). In the monthly budgets of seniors, sav-ings reaches a slightly lower level than that of working people. Elderly people make their purchases in a more planned and organized way. Several times a week, they buy food in small local stores close to their home. They form their opinions of market offers mainly on the basis of their knowledge and experi-ence. Average expenses of senior households are higher compared to working households, as well as to expenses of all households. The expenses mainly concern basic goods: according to observations, the expenses connected to satisfaction of nutrition, accommodation, and health needs account for the largest share of all expenses. Households of senior people have a higher level of consumption of food (by about 20-30%), but a lower level of purchasing durable products. Additionally, the equipment used by senior households is not new (Harris, 2010).
Gender is another determinant of consumer behavior. Gender differences affect consumer expectations of market goods and services, consumer ways of buying goods, and roles in the decision-making process. The comparison of male and female shares in decision making has revealed that women are more frequent decision makers with respect to shopping and big purchase planning, whereas men make decisions about ways of gaining the means of need satis-faction. With regard to definite goods, it turns out that male decisions chiefly concern all technical parameters of a purchased product, and whether the
product will be bought or not. Women, in turn, take the lead in decisions con-cerning the appearance of the product (Schiffman & Kanuk, 2010).
Household size also belongs to the group of demographic determinants, which, together with income, determines the way a given household is fur-nished with consumer durables – the higher the number of family members, the better the standard of household furnishing with consumer durables. The average monthly consumption of food per capita decreases with an increase in the number of family members. It turns out that the average food consump-tion per capita of a one-member household is 20 to 85% higher than that of a multi-member household (Hawkins & Best, 2004).
Finally, the stage of family life cycle appears as an especially significant de-terminant of decision-making processes. Generally, the older the family, the more autonomic are the decisions are made by its members. Households run by 20-year-olds have a lower level of average spending than other families, as income in this age group is lower. In the course of maturing, consumers achieve higher income levels (until retirement); and therefore, in time, they can afford to increase their expenses on luxuries, higher-quality home furnish-ings, better services, and food. These changes, however, entail other types of decisions and different ways of making them. The analysis of the family life cycle assumes the existence of breakthrough moments that change consum-ers' previous priorities into new ones. These moments include the establish-ment of a family, the birth of a child, leaving home by the last child, the death of a spouse, retirement, or even divorce. These types of experiences provoke substantial changes in the level and structure of consumption expenses (Sol-omon, Bamossy, Askegaard & Hogg, 2010), as well as in the ways and models of decision making.
EXAMPLE
Way of spending free time by Finish consumers Research carried out in the Finish market reveals that numer-ous families prefer to spend their leisure in an active way – by participating in sports or tourism. Two-member families (child-less) also prefer to spend their free time outside the home, but by meeting friends or going to the theater or museum. Addition-ally, they like tourism or meetings. Three-member families most
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EXAMPLE
frequently choose entertainment that does not require leaving home – watching TV or taking care of the house, animals, and garden. The interest in computer games grows proportionately to the number of family members, but declines with respect to the cinema and social activities.
Source: DG SANCO (2009)
Education is considered to be another key factor that has a determining in-fluence on consumer market behavior. Accordingly, people with basic educa-tion prefer to watch TV, tend to their house or garden, or look after their ani-mals – generally activities that do not require leaving home or making a physi-cal or intellectual effort. They like to relax together at home (Blackwell, Miniard & Engel, 2001). Quite an opposite approach is seen in people with tertiary and secondary education -- they go in for sports and tourism more often than people of other educational levels. People with a bachelor’s degree spend their free time visiting friends; shopping; and going to concert halls, theaters, and museums. The higher the level of education is, the greater the people's interest in the cinema, tourism, and social activities outside the home.
The degree of attractiveness of watching TV and tending to one’s own home declines with the level of education. A higher level of education causes a rise in independent decision making by males and females and a fall in mutual deci-sion making or decideci-sions made by children (Evans, Foxall & Jamal, 2009).
Race and nationality are the most potent determinants with respect to con-sumer eating customs and habits, and slightly less important for consumption of consumer durables and services. As a result of migrations, many countries have seen minority groups foster the development of ethnic markets, stores, and service points (Raymond, 2003). Consequently, they affect the local socie-ty, leading to the mixing of cultures. Nevertheless, some groups live in isola-tion, trying to preserve their native character. Affiliation with a consumer eth-nic group affects degree of vulnerability to a media message, type of message, food preferences, political views, type of leisure, and readiness to try out new products.
Recommended literature
1. Doole, I., Lancaster, P. & Lowe, R., 2005. Understanding and managing customers.
New York: Financial Times Press.
2. Evans, M., Moutinho, L. & van Raaij, W. F., 1996. Applied consumer behavior, Har-low: Addison-Wesley Publi. Co.
3. Graham, J., 2010. Critical Thinking in Consumer Behavior: Cases and Experiential Exercises. New Jersey: Prentice Hall.
4. Lambkin, M., Foxall, G., van Raaij, F. & Heilbrunn, B., 2001. European perspective on consumer behavior. London: Prentice Hall Europe.
5. Raymond, M., 2003. Tomorrow people: future consumers and how to read them.
London: Financial Times Press.