What Is Consumer Behavior and Why is it important? | Assignment

Running head: CONSUMER BEHAVIOUR
Consumer Behaviour
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1
CONSUMER BEHAVIOUR
Article 1: PepsiCo echoes retail woes of consumer shift to experiences, online shopping
By Janet Freund, thestar.com, July 13th, 2017
This article is about the changing behaviour of the customers in the present times.
Most of the customers are opting for the online options in consumers good rather than
visiting the stores for their purchase. The changes in the distribution system in influencing the
buying decisions of the consumers. The business of PepsiCo and some of its competitors are
been effected as the customers showing less interest in the traditional retail business. Other
than that the consumers are leaning more towards the favouring experience than the material
purchase.
The change in customer behaviour has influenced the company and whole industry.
The entry of Amazon Inc. and its distribution strategy has compelled the other companies to
sell their products directly to the customers in online platforms. As the customers are leaning
more into favouring experiences, there could be seen a surge in the industries like restaurant
and leisure. On the other hand, apparel stocks has 25% fall in business and customer staples
industry has fallen by 8% in 2016 (Freund, 2017). Companies that have some share in the
multiple industries are been in a better place as their scopes are varied (Von Leipzig et al.,
2017). But the companies like Coca-Cola or some other like that are facing problems in
changes of strategies. Companies that are in a vulnerable position as they mainly operate
through the brick and mortar stores, sees the need to change their business strategies. Thus,
the customer shifts towards online shopping is influencing the business of PepsiCo or some
other companies at large.
The theories that are implied in this article are focused on motivation-need buying
theory and social aspects of buying theory. Knowing of the buying behaviour of the
customers are the basic necessity of any company. In the said article, there is the case study
of PepsiCo that is facing losing their customer base as they have traditional distribution
designs for their products. This is the era of technology, the trend of online buying is the most
reliable and appreciated one. This fulfils the psychological needs of the buyer as they could
have quality products to them with minimum physical involvement (Reim, Sjödin & Parida,
2018). Again the direct selling is more personal experience for the consumers. This is why,
they are attempting for more online products than stores and vending machines like that of
PepsiCo or Coca-Cola.
The second concept in this article is the fulfilling of social aspects for the customers.
According to this theory, the customers are influenced by the reference group and social
trends. The companies like Amazon Inc. has changed the social preference of the customers
in which they want to deal. Again, the customer behaviour theories says that the company
that is more flexible to change are more likely to survive the changing trends of customer
behaviour. PepsiCo is less vulnerable to the adverse results of changing customer behaviour
for same reason.
The context of favouring experience and distribution strategies should be discussed in
more details in this article. These two aspects are the main game changer in this topic of
business. Therefore, the elevated information in this two topic would increase the validity and
importance of the article.
The article talks about the business models that uses the online medium for their
product distribution and promotions. PepsiCo has a good advertising effect and it has been
able to sustain good reputation in the market for their promotional endeavours. Only the
traditional distribution process is effecting the business numbers of the company. Therefore,
this aspect of business need to be discussed in details for the company’s welfare.
The second thing is the favouring experience. There are several theories and concept
of favouring behaviour of the companies to attract the attention of the customers towards