1. 1
MEMOIRE
Présenté
en
vue
de
l'obtention
du
Master
en
sciences
économiques,
à
finalité
Management
Science
What
are
the
short-‐term
and
long-‐term
impacts
of
the
financial
crisis
on
consumer
behavior
and
how
should
companies
adapt
their
marketing
strategy?
Par
Kevin
Coppens
Directeur:
Professeur
Jean-‐Pierre
Baeyens
Commissaire:
Professeur
Philippe
Mauchard
Année
académique
2013-‐2014
2. 2
Acknowledgments
First
and
foremost,
I
would
like
to
thank
my
director,
the
professor
Jean-‐Pierre
Baeyens
who
supervised
me
throughout
this
thesis
and
for
providing
me
with
an
invaluable
guidance,
assistance
and
support.
I
also
thank
my
assessor,
the
professor
Philippe
Mauchard
for
sharing
his
experience
with
me
and
giving
me
the
opportunity
to
meet
Vincent
Nolf.
Besides,
I
thank
the
Professor
Laurent
Arnone
who
shared
with
me
his
passion
for
consumer
behavior
but
also
for
his
supervision
concerning
the
first
part
of
this
thesis.
Also,
I
want
to
thank
Vincent
Nolf,
Sophie
Thise,
Johan
Velghe
and
Steve
Carlos
Braem
for
answering
my
questions
and
inspiring
me
so
many
new
ideas.
They
brought
a
considerable
value
to
this
thesis.
Moreover,
I
would
like
to
take
the
opportunity
to
thank
my
parents,
Chantal
Dorange
and
Michel
Coppens,
who
allow
me
to
follow
these
studies
and
who
support
me
throughout
my
academic
background.
In
addition,
I
would
also
like
to
thank
my
friend,
Angelique
Leclerc,
for
her
help
in
the
redaction
of
some
sections
of
this
thesis
and
her
support.
Finally,
a
special
thank
goes
to
my
girlfriend,
Sabrina
Vercruysse,
for
supporting,
trusting
and
motivating
me
as
well
as
my
friends
and
my
family
who
contributed
directly
or
indirectly
to
the
elaboration
of
this
thesis
by
their
presence
and
support.
3. 3
Summary
Acknowledgments
....................................................................................................................
2
Summary
...................................................................................................................................
3
Table
of
figures
.........................................................................................................................
7
Executive
summary
...................................................................................................................
9
General
introduction
..............................................................................................................
11
PART 1: The consumer behavior during a downturn
Introduction
............................................................................................................................
15
1.
Chapter
1:
Understanding
consumer
behavior
and
trends
...........................................
16
1.1.
Introduction
..................................................................................................................
16
1.2.
Review
of
consumer
behavior
and
the
process
decision
making
.................................
16
1.3.
Definitions
and
discussion
............................................................................................
18
1.4.
How
trends
start?
.........................................................................................................
20
1.4.1.
Political
initiators
.......................................................................................................
20
1.4.2.
Economic
initiators
....................................................................................................
21
1.4.3.
Socio-‐cultural
initiators
..............................................................................................
21
1.4.4.
Technological
initiators
..............................................................................................
22
1.5.
How
to
identify
a
trend?
...............................................................................................
22
1.5.1.
Who
should
be
observed
or
consulted?
....................................................................
22
1.5.2.
Methodologies
to
identify
a
trend
.............................................................................
23
1.5.2.1.
Practical
identification
............................................................................................
24
1.5.2.2.
Theoretical
identification
.......................................................................................
24
1.5.2.3.
Behavioral
identification
.........................................................................................
24
1.5.2.4.
Attitudinal
identification
........................................................................................
25
1.6.
Conclusion
....................................................................................................................
25
2.
Chapter
2:
Analysis
of
the
structural
trends
at
the
consumer
behavior
level
...............
25
2.1.
Introduction
..................................................................................................................
25
2.2.
The
evolution
of
consumer
behavior
in
“normal
time”.
...............................................
26
2.2.1.
Wise
and
smart
shopping:
Technological
initiator
....................................................
26
2.2.2.
Green
and
ethical
consumption:
Political
and
socio-‐cultural
initiators
.....................
28
4. 4
2.2.3.
Agility
and
lack
of
fidelity:
Political
and
technological
initiators
...............................
29
2.2.4.
Unbridled
consumption:
Economical
initiators
.........................................................
30
2.2.5.
Conclusion
.................................................................................................................
30
3.
Chapter
3:
The
economic
downturn
...............................................................................
31
3.1.
Introduction
..................................................................................................................
31
3.2.
What
is
an
economic
downturn?
..................................................................................
31
3.3.
What
are
the
causes
and
consequences
of
the
current
crisis
......................................
32
4.
Chapter
4:
The
observed
trends
during
an
economic
downturn
...................................
35
4.1.
Introduction
..................................................................................................................
35
4.2.
The
increasing
trends:
..................................................................................................
35
4.2.1.
Discretionary
thrift
....................................................................................................
35
4.2.1.1.
Did
people
really
save
more
money
in
Belgium
during
the
recession?
..................
36
4.2.1.2.
Why
do
people
save
so
much
money
in
time
of
crisis?
..........................................
38
4.2.1.3.
How
people
decided
to
save
money?
.....................................................................
38
4.2.1.4.
Avoiding
buying
useless
goods
and
to
have
a
better
control
on
their
spending.
...
38
4.2.1.5.
Focus
on
brands
of
distributors
..............................................................................
39
4.2.1.6.
Using
special
offers,
but
cautiously.
.......................................................................
40
4.2.1.7.
Selling
and
Buying
used
goods
................................................................................
40
4.2.1.8.
Trying
to
keep
their
good
longer
than
before
........................................................
41
4.2.1.9.
Recycling
more.
......................................................................................................
41
4.2.2.
Mercurial
consumption
.............................................................................................
42
4.2.3.
Demand
for
simplicity
................................................................................................
43
4.2.4.
Compressed
time
preference
....................................................................................
43
4.2.5.
Need
for
security
.......................................................................................................
44
4.2.6.
More
need
for
financing
............................................................................................
44
4.3.
The
decreasing
trends
..................................................................................................
45
4.3.1.
Green
Consumerism
..................................................................................................
45
4.3.2.
Ethical
Consumerism
.................................................................................................
46
4.3.3.
Extreme
seeking
experience
......................................................................................
47
4.3.4.
Decline
of
deference
..................................................................................................
47
4.4.
Conclusion
....................................................................................................................
47
5. 5
PART
2:
How
should
companies
adapt
their
marketing
strategy?
Introduction
............................................................................................................................
51
5.
Chapter
5:
Impacts
of
the
recession
for
companies
.......................................................
52
5.1.
Introduction
..................................................................................................................
52
5.2.
The
relationship
between
supply
and
demand
............................................................
52
5.3.
From
golden
triangle
to
magic
square
..........................................................................
54
5.4.
Analysis
of
new
opportunities
......................................................................................
56
5.5.
Conclusion
....................................................................................................................
58
6.
Chapter
6:
Analysis
of
a
company’s
current
situation
...................................................
59
6.1.
Introduction
..................................................................................................................
59
6.2.
Analysis
of
a
company’s
current
situation
....................................................................
59
6.3.
Conclusion
....................................................................................................................
62
7.
Chapter
7:
How
to
adapt
the
strategy
of
a
company
to
overcome
the
recession?
.......
63
7.1.
Introduction
..................................................................................................................
63
7.2.
Business
strategy
–
Choosing
where
and
how
to
win
...................................................
64
7.3.
Customer
strategy
–
protect
and
grow
customer
loyalty
.............................................
67
7.4.
Organization
strategy
–
Strengthen
the
organization
..................................................
70
7.5.
Manage
complexity
to
drive
performance
improvement
............................................
72
7.6.
Streamline
G&A
............................................................................................................
77
7.7.
Tightly
manage
cash
flows
and
liquidity
.......................................................................
78
7.8.
Turbocharge
Sales
.........................................................................................................
80
7.9.
Price
for
today
and
tomorrow
......................................................................................
83
7.10.
Pursue
game-‐changing
acquisitions
and
partnerships
...............................................
86
7.11.
Conclusion
..................................................................................................................
88
8.
Chapter
8:
How
should
companies
adapt
to
a
recession
in
term
of
marketing?
..........
88
8.1.
Introduction
..................................................................................................................
88
8.2.
Product
.........................................................................................................................
89
8.3.
Price
..............................................................................................................................
90
8.4.
Promotion
.....................................................................................................................
91
8.5.
Place
..............................................................................................................................
93
General
Conclusion
.................................................................................................................
94
7. 7
Table
of
figures
Figure
1.2-‐1:
Consumer
behavior
process
-‐
Adapted
from
Hawkins
M.
(2010)
....................................
16
Figure
1.2-‐2:
Decision
process-‐
Adapted
from
Hawkins
M.
(2010)
......................................................
17
Figure
1.4.2-‐1:
Hierarchy
of
needs,
Maslow
-‐
Retrieved
from
Michael
Solomon,
consumer
behavior
21
Figure
1.5.2-‐1
-‐
Methodologies
to
identify
a
trend
-‐
Adapted
from
William
Higham
(2009)
................
23
Figure
2.2.1-‐1
–
Internet
users
worldwide
-‐
Dr
Fiona
Ellis
Chadwick
....................................................
27
Figure
2.2.1-‐2:
US
E-‐commerce
growth
-‐
Dr
Steven
White
...................................................................
27
Figure
2.2.2-‐1:
Belgian
interest
for
ecological
and
ethical
products
–
CRIOC
.......................................
28
Figure
2.2.2-‐2:
Opinion
leaders
-‐
Yannick
Noah
....................................................................................
28
Figure
3.1-‐1:
"Crisis
count"
–Adapted
from
Economic
Times
(2012)
....................................................
31
Figure
3.2-‐1:
Illustration
of
a
recession
.................................................................................................
31
Figure
3.3-‐1:
Industrial
production
except.
construction
.....................................................................
33
Figure
3.3-‐2:
Real
GDP
growth
..............................................................................................................
33
Figure
3.3-‐3:
Unemployement
rate
-‐
Insee
...........................................................................................
33
Figure
3.3-‐4:
Real
household
disposal
income
-‐
Insee
..........................................................................
33
Figure
3.3-‐5:
Average
growth
in
US
consumer
expenditure
during
recessions
–
McKinsey
.................
34
Figure
3.3-‐6:
Changes
in
expenditure
of
Belgian
households
-‐
CRIOC
..................................................
34
Figure
4.2.1-‐1:
Discretionary
thrift
-‐
Paul
Flatters
(2009)
.....................................................................
35
Figure
4.2.1.1-‐1:
Household
saving
rates
-‐
OCDE
..................................................................................
36
Figure
4.2.1.1-‐2:
Confidence
index
of
Walloon
households
–
IWEP
.....................................................
37
Figure
4.2.1.1-‐3:
Purchase
criterion
of
Belgians
(2008)-‐
CRIO
..............................................................
38
Figure
4.2.1.1-‐4:
Purchase
criterion
of
Belgians
(2014)-‐
CRIO
..............................................................
38
Figure
4.2.1.8-‐1:
Average
monthes
of
vehicle
ownership,
USA
(NY
times,
2011)
.................................
41
Figure
4.2.2-‐1:
Mercurial
consumption
-‐
Paul
Flatters
(2011)
..............................................................
42
Figure
4.2.3-‐1:
Demand
for
simplicity
-‐
Paul
Flatters
(2011)
.................................................................
43
Figure
4.3.1-‐1:
Belgian
interest
for
ecological
and
ethical
products
–
CRIOC
.......................................
45
Figure
4.3.1-‐2:
Green
consumerism
-‐
Paul
Flatters
(2011)
...................................................................
46
Figure
4.3.2-‐1:
Ethical
Consumerism
-‐
Paul
Flatters
(2011)
..................................................................
46
Figure
4.3.3-‐1:
Extreme-‐Experience
seeking
-‐
Paul
Flatters
(2011)
......................................................
47
Figure
5.2-‐1:
Demand
and
supply
relationship
in
"normal"
time
-‐
Hermann
Simon
(2010)
.................
52
Figure
5.2-‐2:
Demand
and
supply
relationship
during
a
downturn
-‐
Hermann
Simon
(2010)
..............
53
8. 8
Figure
5.3-‐1:
The
golden
Triangle
-‐
Erik
Izraelewicz
(2009)
...................................................................
54
Figure
5.3-‐2:
The
magic
Square
-‐
Erik
Izraelewicz
(2009)
......................................................................
55
Figure
5.3-‐3:
Sustainability
opportunities
(adapted
from
Nidumolu
R,
2009)
......................................
56
Figure
6.2-‐1:
Analysis
of
current
situation
according
to
3
dimensions
-‐
(Bain&Company)
...................
60
Figure
7.1-‐1:
Levers
to
survive
a
recession
-‐
Bain&Company
...............................................................
63
Figure
7.2-‐1:
McKinsey
matrix
positioning
-‐
Johnson,
G.
et
al
(2008)
...................................................
65
Figure
7.2-‐2:
McKinsey
matrix
analysis
-‐
Adapted
from
Johnson,
G.
et
al
(2008)
.................................
66
Figure
7.2-‐3:
Marketplace
is
polarizing
-‐
Gagnon,
J.
&
Chu,
J.
(2005)
...................................................
67
Figure
7.3-‐1:
Model
of
Loyalty
-‐
John
Egan
(2011)
................................................................................
68
Figure
7.3-‐2:
The
customer
pyramid
-‐
Wilso,
A.
et
al.
(2012)
................................................................
69
Figure
7.4-‐1:
RAPID
framework
-‐
Bain
&
Company
(2011)
....................................................................
71
Figure
7.5-‐1:
Zero-‐based
approach
1
-‐
Darrell
R.
(2009)
......................................................................
73
Figure
7.5-‐2:
Application
of
Zero-‐Based
approach
................................................................................
74
Figure
7.5-‐3:
Matrix
(organizational)
structure
-‐
Robbins
(2012)
.........................................................
75
Figure
7.6-‐1:
Streamline
G&A
-‐
Easy
of
implementation
-‐
Rogers,
P.,
&
Saenz,
H.
(2007)
....................
77
Figure
7.7-‐1:
Model
and
manage
cash
flow
to
guide
the
business
-‐
Bain
&
Company
(2009)
..............
79
Figure
7.8-‐1:
TOPSales
framework
-‐
Rigby,
D.
(2009)
...........................................................................
80
Figure
7.9-‐1:
Leverage
of
profit
drivers
-‐
Sandra
Rothenberger
...........................................................
84
Figure
7.10-‐1:
Mergers
and
acquisitions
process
-‐
Bain
&
Company
(2009)
.........................................
88
9. 9
Executive
summary
Today,
we
are
living
in
a
society
where
economic
crises
are
part
of
our
history
and
our
daily
life.
Crisis
strongly
impacted
people
but
also
companies
and
governments.
Therefore,
an
interesting
question
would
be
to
ask
how
recessions
impact
on
consumers’
behavior
and
how
enterprises
can
survive
a
downturn.
In
Belgium,
our
researches
showed
that
four
significant
trends
have
affected
the
consumers’
behavior
before
the
financial
crisis
of
2007.
Firstly,
the
wise
and
smart
shopping,
which
underline
the
fact
that
consumers
are
becoming
more
and
more
smart
in
the
way
they
consume,
they
try
to
find
the
best
quality
at
the
lower
price.
For
example,
by
using
discounts.
Secondly,
The
green
and
ethical
consumption
that
is
defined
as
a
willingness
to
consume
on
a
responsible
way.
Thirdly,
the
“mercurial
consumption”
highlights
the
fact
that
people
are
more
and
more
agile
and
less
loyal
to
a
brand.
And
finally,
the
general
desire
for
unbridled
consumption.
During
the
financial
crisis,
these
trends
have
evolved
differently
according
to
their
nature.
Smart
and
wise
shopping
have
been
accentuated,
we
grouped
these
trends
in
a
new
category
called
“Discretionary
thrift”,
which
represents
all
the
techniques
used
by
consumers
to
save
money.
The
trend
for
mercurial
consumption
has
also
increased
considerably
while
we
notice
a
decrease
in
green
and
ethical
consumption
as
well
as
the
trend
for
unbridled
consumption.
In
addition
to
these
trends,
which
already
existed
in
Belgium
before
the
recession,
three
other
trends
emerged;
the
demand
for
simplicity,
the
compressed
time
preference,
the
need
for
security
and
the
need
for
more
financing.
Therefore,
we
can
notice
that
the
crisis
has
brought
the
consumers
to
buy
products
in
a
smarter
way
in
order
to
save
money
and
to
be
able
to
face
uncertainty.
Regarding
companies,
we
also
observe
they
had
difficulties
to
adapt
to
the
recession
that
impacted
negatively
their
sales
and
more
generally
to
new
consumers.
However,
a
crisis
is
also
an
extraordinary
opportunity
for
improving
the
organization
and
the
performance
of
a
company.
10. 10
Besides,
many
companies
won’t
survive
to
the
recession,
which
is
a
fantastic
opportunity
for
strong
and
smart
companies
to
go
out
of
the
crisis
by
being
strengthened.
We
also
exposed
that
every
company
is
different
and
is
not
necessarily
able
to
seize
these
opportunities.
Concretely,
it
will
depend
on
the
initial
situation
of
a
company,
which
is
defined
according
to
three
dimensions:
how
the
crisis
has
affected
the
industry
of
the
company?
What
the
strategic
position
of
the
company
is
within
the
industry?
And
what
the
financial
position
of
the
company
is?
In
case
the
enterprise
is
not
well
positioned
in
terms
of
these
three
dimensions,
the
company
will
first
have
to
undertake
different
strategic
actions
in
order
to
improve
its
situation
to
survive
to
the
recession.
Then,
it
will
be
able
to
seize
more
opportunities
offered
by
the
recession
and
to
invest
in
marketing
tactics
in
order
to
boost
its
sales.
To
do
that,
a
company
can
work
on
the
product,
price,
promotion
or
place.
In
regard
to
the
product,
companies
should
propose
an
added
value,
accorded
to
customer’s
expectations
(need
for
finance,
security
and
simplicity)
with
the
higher
quality/price
as
possible.
In
terms
of
pricing,
it
is
advised
to
propose
discounts
in
kind
as
well
as
non-‐linear
pricing
strategy
rather
than
acting
directly
on
price
(need
for
finance,
discretionary
shift,
mercurial
consumption).
Concerning
the
promotion,
we
advice
to
focus
on
the
Internet
or
to
use
tactics
of
guerilla
marketing
(mercurial
consumption).
Finally,
as
for
place,
we
didn’t
observe
many
changes,
however,
it
seems
more
and
more
interesting
for
companies
to
have
at
least
a
virtual
presence
on
the
Internet
and
if
possible,
to
propose
an
e-‐commerce
website
(need
for
simplicity,
mercurial
consumption).
To
conclude,
this
thesis
aims
to
expose
how
recessions
have
impacted
consumers’
behavior
and
how
companies
can
survive
to
a
downturn.
It
also
highlights
that
there
is
no
magical
solution
to
beat
a
crisis
and
that
companies
have
to
take
their
initial
situation
into
account
and
to
be
creative.
Innovation
is
a
key
to
come
out
victorious
from
a
recession.
11. 11
General
introduction
The
recent
financial
and
economic
crisis
has
hit
both
consumers
and
companies
worldwide,
but
also
governments
and
financial
institutions.
Because
of
the
gears
between
these
economic
players,
the
effects
of
the
crisis
spread
quickly
at
every
level
and
all
around
the
world,
creating
a
new
environment
wherein
the
economic
agents
have
now
to
evolve.
This
is
a
cyclic
and
old
phenomenon,
which
requires
adaptation
from
each
impacted
agents.
Moreover,
consumers’
behavior
is
becoming
more
and
more
important
for
strategic
and
operational
choices
of
companies.
Indeed,
studying
consumers’
behavior
enables
to
understand
their
needs
and
expectations,
and
by
this
way,
companies
are
able
to
propose
an
adapted
product
or
service.
Regarding
the
recent
recession,
we
decided
to
ask
ourselves
“What
are
the
short-‐term
and
long-‐term
impacts
of
the
financial
crisis
on
consumers’
behavior,
and
how
should
companies
adapt
their
marketing
strategy?”.
In
other
words,
we
decided
to
study
how
consumers
react
to
the
recent
crisis,
and
how
companies
should
adapt
to
theses
changes.
The
relevance
of
this
subject
is
mainly
the
fact
that
we
want
to
deal
with
a
current
issue
and
by
proposing
concrete
solutions
for
companies
to
help
them
to
survive
and
beat
the
crisis.
Moreover,
this
topic
has
not
been
deeply
treated,
so
it
was
very
challenging
to
explore
this
subject,
which
could
offer
interesting
insights
to
companies.
In
order
to
build
our
reasoning
and
to
propose
a
reliable
analysis,
we
based
our
research
on
a
specific
methodology.
We
set
up
an
academic
approach,
through
theoretical
concepts,
so
as
to
build
our
work
on
a
strong
and
framed
basis
by
the
means
of
scientific
papers,
books,
newspapers
and
economic
magazines.
Furthermore,
it
seemed
important
to
complete
this
approach
with
a
practical
study,
benefiting
from
the
experience
and
the
skills
of
some
experts.
To
achieve
this
study,
we
intend
to
articulate
this
report
in
two
complementary
parts.
First
of
all,
it
seemed
relevant
to
cover
the
field
of
consumers’
behavior
in
time
of
economic
downturn.
Indeed,
for
a
long
time,
we
were
attracted
by
the
complexity
of
consumers’
behavior.
Why
are
people
buying
this
product
and
not
another
one?
Why
not
the
cheaper?
Why
not
the
best
in
terms
of
quality?
Even
12. 12
during
a
period
of
prosperity,
consumers’
behavior
is
hard
to
understand
and
many
companies
fail
to
identify
the
needs
of
their
customers.
The
main
reason
why
consumers’
behavior
is
so
hard
is
that
there
are
a
multitude
of
variables
that
can
influence
people
and
the
way
they
behave.
But
we
could
go
further
by
wondering
what
happened
regarding
the
recent
economic
downturn?
Did
they
continue
to
buy
the
same
product?
Did
we
witness
a
change
in
behavior?
How
did
consumers
react
to
uncertain
times?
Most
of
these
questions
have
not
been
treated
in
depth
and
will
help
us
to
answer
the
question
“What
are
the
short-‐term
and
long-‐term
impacts
of
the
financial
crisis
on
consumer
behavior?”.
To
do
so,
we
will
first
expose
an
overview
of
the
last
crisis
and
its
incredible
magnitude.
Secondly,
we
will
highlight
the
changes
that
appear
in
consumers’
behaviors,
which
are
mainly
driven
by
general
trends.
Then,
we
will
answer
the
question
“How
should
companies
adapt
their
marketing
strategy?”
in
the
second
part
of
this
thesis.
Many
companies
were
completely
lost
during
the
last
recession.
They
were
witnessing
about
their
sales
drop
and
many
managers
who
never
experienced
a
downturn
before
took
wrong
decisions.
To
deal
with
this
topic,
we
will
examine
the
new
opportunities
that
the
recession
created
for
companies.
Thus,
we
will
expose
the
strategies
that
work
during
a
recession
to
help
companies
to
adapt
to
new
customers’
needs.
More
generally,
the
goal
of
this
dissertation
is
to
give
a
global
view
of
the
impact
of
the
last
economic
downturn
on
the
consumer
and
company
level.
14. 14
« We are witnessing a seismic change in consumer behavior.
That change is being brought about by technology
and the access people have to information. »
- Howard Schultz
15. 15
Introduction
The
first
part
of
this
thesis
aims
to
provide
to
the
reader
a
general
overview
of
the
changes
in
term
of
consumer
behavior.
In
order
to
do
that,
we
decided
to
begin
this
thesis
by
presenting
some
famous
theories
as
well
as
some
definitions
about
the
terminology
we
use.
We
also
present
the
existing
mythologies
that
can
be
employed
to
identify
a
trend.
Once
these
important
aspects
developed,
we
will
expose
the
structural
trends
we
identified,
in
other
words,
the
trends
that
exist
for
10
years
or
more.
It
is
particularly
interesting
to
understand
how
consumer
behavior
has
changer
this
last
10
years
because
it
will
enable
us
to
isolate
the
trends
that
are
specifically
the
results
of
a
recession.
Finally,
we
will
end
this
first
part
by
exposing
how
the
identified
trends
have
been
affected
by
a
recession;
some
of
them
have
disappeared
while
others
have
strengthened.
Moreover,
we
also
witness
the
emergence
of
new
trends.
16. 16
1. Chapter
1:
Understanding
consumer
behavior
and
trends
1.1. Introduction
The
first
part
of
this
thesis
aims
to
meet
two
objectives.
The
first
one
is
to
present
briefly
the
most
important
theories
concerning
consumer
behavior
and
the
decision-‐making
process.
These
theories
will
enable
the
reader
to
understand
why
some
trends
emerged
or
strengthened
during
the
recession.
Secondly,
it
will
expose
the
terminology,
how
a
trend
starts
and
the
methodologies
generally
used
to
identify
a
trend.
1.2. Review
of
consumer
behavior
and
the
process
decision
making
According
to
Michael
Solomon
et
al.(2005),
the
field
of
consumer
behavior
covers
a
lot
of
ground:
“it
is
the
study
of
the
processes
involved
when
individuals
or
groups
select,
purchase,
use
or
dispose
of
products,
services,
ideas
or
experiences
to
satisfy
needs
and
desires.
»
The
consumer
behavior
is
influenced
by
several
variables
that
can
be
either
internal
or
external.
The
internal
variables
are
unique
to
each
consumer
while
the
external
variables
are
influenced
by
the
environment.
These
variables
are
exposed
on
the
following
figure
3.2-‐1.
Figure
1.2-‐1:
Consumer
behavior
process
-‐
Adapted
from
Hawkins
M.
(2010)
External Influences
Culture
Subculture
Demographics
Social Status
Reference Groups
Family
Marketing Activities
Internal Influences
Perception
Learning
Memory
Motives
Personality
Emotions
Attitudes
Self – Concept and
Lifestyle
=
Consumer Behavior
17. 17
As
we
may
see
on
figure
1,
the
consumer
behavior
can
be
influenced
by
a
total
of
fourteen
variables
that
are
equally
distributed
between
the
external
and
internal
variables.
Depending
on
the
way
consumers
conceptualize
their
lifestyle,
they
will
have
different
needs
and
desires
to
satisfy.
The
decision
process
(cf.
Figure
3.2-‐2)
is
the
next
step
of
the
figure
1.
In
times
of
crisis,
some
of
these
variables
tend
to
change,
which
could
lead
to
the
emergence
of
general
trends.
The
process
is
very
simple,
an
external
variable
will
change
(for
example,
the
average
income
per
person
will
decrease),
and
then,
it
will
influence
the
internal
variables
(for
example,
the
perception).
Finally,
the
consumer
behavior
will
change
and
the
needs
and
desires
of
the
consumers
will
be
different.
According
to
Hawkins
M.
2010,
the
buying
process
consists
of
five
stages.
It
starts
from
problem
recognition,
which
states
that
a
need
or
a
desire
has
to
be
satisfied.
Then,
the
consumer
tries
to
find
information
about
the
products.
After
that,
he
evaluates
the
different
possible
alternatives.
Finally,
he
makes
a
purchase.
The
last
stage
of
this
process
consists
in
evaluating
the
choice
he
has
made.
Figure
1.2-‐2:
Decision
process-‐
Adapted
from
Hawkins
M.
(2010)
In
the
frame
of
this
work,
we
will
not
develop
in
detail
the
variables
that
influence
the
consumer
behavior
nor
the
decision
process.
However,
for
more
information,
we
strongly
recommend
reading
the
book
of
Michael
Solomon,
which
is
called
Consumer
Behavior,
and
the
book
of
Hawkins
Motherbaugh
called
“Consumer
Behavior:
Building
Marketing
Strategy”.
Needs,
Desires
Decision process
Situations
Problem Recognition
Information Search
Alternative Evaluation
and Selection
Outlet Selection and
Purchase
Post purchase
processes
18. 18
1.3. Definitions
and
discussion
The
term
“trend”
can
be
confusing
because
the
meaning
is
often
different
in
function
of
the
people
or
the
context
in
which
it
is
used.
We
regrouped
different
definitions
we
found
in
the
Merriam-‐
Webster
dictionary
(2014)
where
a
trend
is
defined
as
“A
line
of
general
direction
or
movement…a
prevailing
tendency
or
inclination…a
line
of
development…
the
general
movement
over
time
of
a
statistically
detectable
change…
or
a
current
style
or
preference”.
Obviously,
in
the
frame
of
this
work,
we
need
a
more
restricted
definition.
Therefore,
we
will
use
the
term
“trend”
to
refer
to
“consumer
trend”
which
is
defined
by
William
Higham
(2009)
as
“a
change
in
consumer
attitudes
and
behaviors
that
offers
marketing
opportunities”.
In
his
book,
the
next
big
thing,
William
Higham
identified
different
types
of
trends.
He
has
opposed
behavioral
and
attitudinal
trends,
micro
and
macro
trends
and
finally,
international
and
national
trends.
Firstly,
the
behavioral
trends
are
defined
as
changes
in
the
way
consumers
behave.
William
Higham
observed
that
consumers
can
change
either
their
attitude
towards
something
or
change
their
physical
behavior.
Behavioral
trends
are
particularly
important
for
marketers
because
they
have
a
direct
impact
on
sales.
Therefore,
it
is
essential
to
predict
them
correctly
in
order
to
adapt
the
strategy
of
the
company.
(Higham,
W.,
2009)
Secondly,
the
attitudinal
trends;
these
trends
are
a
little
less
important
than
behavioral
trends.
It
represents
the
feeling
consumers
have
concerning
something.
William
Higham
(2009)
highlights
that
consumers
could
change
their
attitude
without
changing
their
behavior.
However,
attitudinal
trends
often
prefigure
behavioral
trends.
In
other
words,
consumers
usually
change
their
attitude
before
changing
their
behavior.
Thirdly,
William
Higham
described
micro
trends
as
“trends
that
affect
a
relatively
small
number
of
consumers”.
However,
even
if
micro
trends
affect
a
small
part
of
the
population,
it
can
be
useful
to
consider
them
in
order
to
adapt
the
short-‐term
marketing
tactics.
Moreover,
micro
trends
can
also
be
an
early
manifestation
of
a
large
trend.
(Higham,
W.,
2009)
19. 19
Fourthly,
macro
trends,
the
most
powerful
type
of
trend,
are
described
as
influencing
a
wide
range
of
sectors,
markets
and
demographics.
These
trends
reflect
the
key
consumer
needs
and
attitudes.
(Higham,
W.,
2009)
Fifthly,
international
trends
are
trends
that
can
transcend
national
borders.
These
trends
spread
in
countries
that
have
a
similar
socio-‐economic
situation.
Moreover,
they
are
based
on
strong
behavioral
drivers
such
as
safety
or
status
enhancement.
(Higham,
W.,
2009)
Finally
the
national
trends
are
more
specific
to
a
particular
culture
or
business
context.
Each
country
has
its
own
specificities
that
impact
on
consumer
attitudes
and
behaviors.
(Higham,
W.,
2009)
We
also
decided
to
distinguish
two
different
trends:
Firstly,
the
structural
trends
that
we
define
as
trends
that
appear
with
the
normal
evolution
of
our
society.
That
can
include
technologic
changes
or
simply
a
general
change
in
mentality.
And
secondly,
the
conjectural
trends,
which
result
from
a
specific
economic
situation.
Moreover,
it
is
also
important
to
take
into
consideration
that
trends
have
a
more
limited
impact
on
marketing
mix
in
period
of
behavioral
and
attitudinal
stability
than
in
a
recession.
(Higham,
W.,
2009).
Today
we
are
living
in
a
world
that
is
far
from
being
stabilized’’.
Another
interesting
observation
is
that
trends
are
becoming
more
and
more
global.
This
is
mainly
the
consequence
of
technological
advances
in
communication.
We
are
living
in
a
world
in
which
we
can
have
friends
around
the
world.
Finally,
some
authors
also
refer
to
Mega
trends,
which
are
defined
by
Frost
and
Sullivan
as
“global,
sustained
and
macroeconomic
forces
of
development
that
impact
business,
economy,
society,
cultures
and
personal
lives,
thereby
defining
our
future
world
and
its
increasing
pace
of
change”.
The
main
difference
between
trends
and
megatrends
is
a
question
of
duration.
While
a
trend
should
influence
consumer
behavior
during
the
next
five
years,
megatrends
could
last
for
next
ten
to
fifteen
years.
(Paludan,
J.P.,
2006)
20. 20
Sometimes,
it
can
also
appear
that
two
opposing
trends
exist
in
the
same
time.
Generally,
it
affects
different
type
of
consumers.
In
this
particular
case,
we
will
talk
about
“Conflicting
trends”.
1.4. How
trends
start?
Most
of
the
time,
trends
emerge
from
an
environmental
or
individual
change.
In
other
words,
they
tend
to
appear
when
an
environmental
shift
disrupts
consumer’s
attitudes
and
behaviors.
The
process
is
relatively
easy
to
understand.
By
experiencing
a
change
in
their
environment,
customers
will
react
in
a
specific
way.
Therefore,
a
trend
will
be
created
by
the
reaction
to
something
a
consumer
experiences.
(Higham,
W.,
2009)
William
Higham
(2009)
also
exposed
the
concept
of
trend
initiator,
which
he
defined
as
the
environment
changes
that
could
lead
to
a
consumer
reaction.
In
order
to
distinguished
trends
initiators,
it
can
be
useful
to
use
tools
such
as
the
PEST(EL)
framework.
Concretely,
there
are
four
initiators;
political,
economic,
socio-‐cultural
and
technological
initiators.
The
PEST
analysis
will
provide
data
that
enable
to
identify
key
drivers
of
change.
(Johnson
G.
et
al,
2008)
1.4.1. Political
initiators
Political
indicators
are
composed
of
government
actions
or
changes
in
political
climate
at
home
or
abroad.
More
specifically,
a
new
law
or
a
different
majority
could
lead
to
the
apparition
of
a
trend.
(Higham,
W.,
2009)
In
Belgium,
some
political
laws
were
especially
important
in
the
initiation
of
new
trends.
For
example,
in
2007,
the
Belgian
government
subsidized
the
installation
of
solar
panels
and
offered
to
buy
the
green
certificates
of
citizens
at
an
interesting
price.
The
results
were
that
many
Belgians
have
taken
the
plunge
and
set
up
solar
panels
on
the
roof.
(Collard,
F,
2013)
Therefore,
the
measures
taken
by
the
government
certainly
contributed
to
the
increasing
concerns
from
the
citizens
for
the
environment.
In
parallel,
it
also
impacted
and
spread
the
existing
and
increasing
trend
of
green
consumerism.
21. 21
1.4.2. Economic
initiators
The
relative
wealth
and
revenue
of
consumers
will
also
affect
how
they
think
and
behave.
(Higham,
W.,
2009)
According
to
William
Higham,
the
concept
of
hierarchy
of
need,
introduced
by
Maslow
in
1943
can
be
very
useful
to
understand
how
economic
initiators
work.
Maslow
defined
five
levels
of
needs,
which
are
physiological,
safety,
belongingness,
ego-‐needs
and
self-‐
actualization.
(Cf.
figure
3.4.2-‐1)
(Michael
Solomon,
2009)
Figure
1.4.2-‐1:
Hierarchy
of
needs,
Maslow
-‐
Retrieved
from
Michael
Solomon,
consumer
behavior
Each
time
a
level
is
reached,
people
will
try
to
reach
the
next
level.
In
function
of
the
economical
situation
of
a
country,
the
needs
of
the
population
will
be
different.
An
improvement
in
the
economical
situation
of
consumers
could
lead
to
new
needs
and
it
could
initiate
a
new
trend.
Conversely,
a
deterioration
of
the
economical
situation
could
motivate
people
to
be
more
focused
on
basic
needs.
(Higham,
W.,
2009)
1.4.3. Socio-‐cultural
initiators
According
to
William
Higham
(2009),
social
initiators
are
related
to
“human
society
and
its
modes
of
organization”.
That
includes
employment,
population,
education
rates,
lifestyle
choices,
media
and
so
on.
William
Higham
observed
that
trends
are
sometimes
the
reaction
of
a
contemporary
social
behavior.
Moreover,
location
can
also
affect
behavior.
For
example,
if
someone
moves
into
a
new
area,
he
could
have
new
needs.
Finally,
the
media
is
also
very
powerful.
For
example,
social
and
environmental
drivers
have
initiated
the
trends
for
well-‐being
and
conscious
consumption,
but
social
media
greatly
contributed
to
spread
them.
(Higham,
W.,
2009)
22. 22
1.4.4. Technological
initiators
A
technological
innovation
can
also
initiate
a
trend.
Indeed,
new
technologies
can
lead
to
new
products,
services
or
even
knowledge
that
are
desirable
and
that
can
change
consumer
behavior.
However,
it
is
important
to
specify
that
there
is
distinction
between
product
availability
and
consumer
adoption
trends.
Sometimes,
a
new
technology
is
developed
but
is
not
adopted.
1.5. How
to
identify
a
trend?
Trends
are
not
always
easy
to
detect
or
to
observe;
actually,
most
of
the
time,
we
don’t
have
all
the
necessary
data
to
capture
a
change.
According
to
William
Higham,
to
identify
a
new
trend,
it
is
essential
to
look
for
any
signs
of
change
among
consumers
considering
that
these
changes
can
be
either
behavioral
or
attitudinal
(defined
in
the
section
1.3).
Therefore,
the
identification
of
trend
can
be
done
either
on
a
“one
off”
or
on
an
“ongoing
basis”.
(Higham,
W.,
2009)
Before
reviewing
the
methodology
allowing
the
identification
a
trend,
it
seems
essential
to
understand
who
should
be
observed
or
consulted
in
order
to
facilitate
this
identification.
1.5.1. Who
should
be
observed
or
consulted?
William
Higham
proposes
to
focus
on
different
people
in
order
to
identify
a
trend.
In
one
hand,
there
is
a
group
named
“Consumers”
which
includes
innovators,
influential
and
early
adopters.
Innovators
are
defined
as
“individuals
who
first
express
a
new
idea
or
mood”.
(Higham,
W.,
2009)
They
are
particularly
interesting
to
observe
because
they
have
the
ability
to
initiate
a
trend,
they
will
be
particularly
useful
to
predict
a
new
trend.
Most
of
the
time,
they
are
researchers,
artists,
writers,
filmmakers,
musicians,
designers
and
so
on.
“What
creative
people
are
doing
today
gives
an
indication
of
what
less
creative
people
may
be
doing
tomorrow”.
(Higham,
W.,
2009)
Influential
people
are
the
one
who
will
spread
ideas
or
moods
to
others.
(Higham,
W.,
2009)
The
innovators
are
often
the
first
who
express
a
new
idea
or
mood;
however,
they
are
not
the
ones
who
will
spread
an
idea.
Influential
people
can
be
film
stars,
singers,
sport
people
as
well
any
other
23. 23
personalities.
Therefore,
it
can
be
very
useful
to
analyze
what
Influential
people
are
thinking
and
how
they
behave.
Finally,
early
adopters
are
“the
first
consumers
to
adopt
a
new
trend”.
(Higham,
W.,
2009)
Often,
they
are
then
followed
by
a
large
part
of
the
population.
In
the
other
hand,
there
is
another
group
called
“Observers”,
this
latter
includes
journalists,
professors,
researchers
and
entrepreneurs.
Compare
to
direct
consumer’s
observation;
a
significant
advantage
of
finding
information
from
observers
is
that
it
can
enable
to
save
time
by
preserving
a
same
level
of
reliability.
It
consists
in
interviewing
some
experts
such
as
journalists,
academics,
researchers
and
entrepreneurs
who
have
specific
and
extended
knowledge
about
the
subject.
1.5.2. Methodologies
to
identify
a
trend
William
Higham
(2009)
highlights
four
different
ways
to
identify
and
study
a
trend:
Figure
1.5.2-‐1
-‐
Methodologies
to
identify
a
trend
-‐
Adapted
from
William
Higham
(2009)
We
will
review
each
of
them
separately
in
the
following
sub-‐sections.
Pracrcal
Theorercal
Behavioral
Astudinal
24. 24
1.5.2.1. Practical
identification
In
his
book,
William
Higham
(2009)
defines
practical
identification
as
“the
study
of
consumer
activity,
statistical
data
and
media
sources
to
obtain
physical
evidence
of
change”.
In
other
words,
this
methodology
consists
in
researching
evidences
and
facts
that
have
impacted
consumer
behavior.
The
analysis
of
data
display
by
government
or
specialized
organizations
can
produce
very
reliable
results.
However,
the
drawback
of
this
method
is
that
the
analysis
of
statistical
data
or
media
sources
can
be
very
time
consuming.
In
the
frame
of
this
work,
we
considerably
used
this
method.
1.5.2.2. Theoretical
identification
Theoretical
identification
does
not
allow
bringing
a
sufficient
level
of
reliability.
It
is
important
to
use
other
methods
in
parallel.
Concretely,
it
consists
in
reviewing
the
existing
theories
about
consumer
behavior
in
other
to
predict
or
understand
a
change.
Alongside,
it
will
be
essential
to
search
evidence
to
confirm
these
theories.
A
good
example
could
be
to
use
the
theory
of
Maslow
(reviewed
in
the
section
1.4.2)
in
order
to
understand
what
will
be
the
next
need
of
the
customers.
An
application
of
theoretical
identification
can
easily
be
done.
Currently,
China
is
confronted
to
more
and
more
pollution,
which
is
becoming
a
key
challenge
for
China’s
leaders.
(Reuteurs,
2014)
If
we
put
that
fact
into
perspective
on
the
Maslow
pyramid,
we
can
see
that
it
affects
directly
the
second
step
(safety).
Therefore
we
could
expect
an
increasing
population’s
concern
about
pollution,
ecology
and
environment.
This
increasing
concern
for
ecology
will
certainly
lead
to
ecological
movement
in
China.
In
addition
to
practical
identification,
we
used
a
lot
this
method
to
observe
trends.
1.5.2.3. Behavioral
identification
Behavioral
identification
consists
in
observing
people
and
to
evaluate
how
they
behave
and
what
have
changed
compared
to
past.
Then,
the
results
can
easily
be
extrapolated
A
good
example
could
be
to
observe
which
part
of
the
population
made
shopping
on
the
Internet
this
year
compared
to
previous
years.
By
extrapolating
the
results,
we
could
forecast
next
trends.
(Higham,
W.,
2009)
25. 25
1.5.2.4. Attitudinal
identification
Attitudinal
identification
is
mostly
related
to
what
and
how
people
consume.
In
fact,
the
way
people
behave
and
the
kind
of
products
they
buy
can
provide
much
information
about
what
they
feel
and
how
they
perceive
themselves.
Therefore,
it
is
possible
to
detect
a
trend
by
observing
the
level
of
popularity
of
a
product
or
a
kind
of
product.
(Higham,
W.,2009)
William
Higham
(2009)
provides
an
interesting
example
in
his
book;
if
we
observe
an
increased
consumption
of
luxurious
products
that
display
prominent
logo
of
the
brand,
we
can
understand
that
the
purchaser
has
materialist
values
such
as
social
status.
In
the
case
the
consumption
for
this
kind
of
product
increases,
we
will
be
able
to
identify
a
new
trend
of
consumption
related
to
materialist
values.
1.6. Conclusion
This
first
chapter
enables
us
to
improve
our
understanding
of
consumer
behavior
but
also
to
define
a
trend
and
to
explain
how
they
can
start.
Also,
one
of
the
objectives
was
to
familiarize
the
reader
with
the
terminology.
Finally,
we
examined
how
it
is
possible
to
identify
a
trend,
which
is
very
interesting
from
a
methodological
point
of
view.
Thanks
to
this
chapter,
we
are
now
able
to
analyze
the
trends
that
appear
the
last
ten
years
as
well
as
the
conjectural
trends
that
emerge
during
the
recession.
2. Chapter
2:
Analysis
of
the
structural
trends
at
the
consumer
behavior
level
2.1. Introduction
The
main
purpose
of
this
section
is
to
observe
how
consumer
behavior
changes
in
“normal”
time.
In
the
following
section,
we
will
be
able
to
isolate
which
changes
are
the
results
of
the
last
crisis.
This
section
is
mainly
based
on
literature
reviews,
newspapers,
data
provided
by
the
CRIOC
(“Centre
de
recherche
et
d'information
des
organisations
de
consommateurs“)
as
well
as
reports
and
interviews
with
experts
in
consumption.
26. 26
2.2. The
evolution
of
consumer
behavior
in
“normal
time”.
Consumer
behavior
has
changed
a
lot
over
the
last
15
years.
During
these
last
fifteen
years,
consumers
were
facing
to
a
fast
changing
world
drove
by
new
technologies.
These
changes
have
resulted
in
new
ways
of
consumption.
Our
objective
is
therefore
to
understand
what
were
the
initiators
of
these
changes
and
how
they
affected
consumer
behavior.
During
the
2000s,
some
changes
have
been
observed
in
occidental
economies.
Firstly,
Consumers
became
continuously
more
and
more
tech-‐savvy
and
empowered.
Secondly,
even
if
we
were
in
a
phase
of
debrided
consumption,
the
concern
for
green
and
ethical
products
increased
and
became
more
important
for
consumers
each
year.
Finally,
except
for
some
products,
the
loyalty
of
consumers
towards
brands
or
distributors
tended
to
decrease.
We
will
now
review
these
changes
in
details
in
the
following
sub-‐
sections.
2.2.1. Wise
and
smart
shopping:
Technological
initiator
The
creation
of
the
first
computer,
followed
by
the
development
of
Internet
and
first
smartphone
has
completely
changed
the
world
by
giving
new
possibilities
to
consumers.
Everything
is
now
changing
faster
and
consumers
are
empowered.
The
Wise
Shopping
is
defined
as
a
way
to
control
expenses
thanks
to
different
techniques
that
enable
the
consumer
to
limit
his
purchases
and
to
decrease
the
costs
of
purchased
products.
(Djelassi,
S.,
2009)
In
parallel,
the
“smart
shopping”
consists
in
optimizing
the
purchase
power
by
looking
constantly
for
good
deals.
(Djelassi,
S.,
2009)
The
development
of
Internet
and
the
easy
access
to
information
has
contributed
to
change
the
way
people
are
consuming.
People
are
now
able
to
easily
compare
the
quality
of
the
products
and
the
prices
of
the
shops
they
consider.
Therefore,
it
is
easier
to
make
a
good
deal.
On
the
figure
4.2.1-‐2,
we
may
observe
the
impressive
growing
rates
of
e-‐commerce.
We
can
notice
that
more
and
more
people
are
making
their
purchase
on
the
Internet.
These
impacts
can
be
meaningful,
not
only
for
retailers
but
also
for
producers
that
have
to
reorganize
their
entire
distribution
system.
In
her
scientific
paper,
Malobi
Kar
(2010)
described
consumers
of
the
early
2000s
as
“empowered”
and
“tech-‐savvy”.
Actually,
the
Internet
has
sustainably
changed
the
consumer
behavior.
From
1998,
27. 27
more
and
more
people
got
an
access
to
Internet
(Cf.
Figure
4.2.1-‐1
and
the
annual
growth
of
online
retail
sales
was
comprised
between
20%
and
41%.
(Internet
Retailing,
2009)
Figure
2.2.1-‐1
–
Internet
users
worldwide
-‐
Dr
Fiona
Ellis
Chadwick
Figure
2.2.1-‐2:
US
E-‐commerce
growth
-‐
Dr
Steven
White
These
technological
changes
obviously
had
a
major
impact
on
the
way
people
consume
by
ensuring
there
is
an
easy
comparison
of
products.
Moreover,
Malobi
Kar
(2010)
observed
that
even
people
who
did
not
have
a
lot
of
time
as
well
as
thrifty
consumers
were
now
looking
for
more
information
about
product
prices
and
quality
before
taking
a
purchase
decision.
Therefore,
it
confirms
that
consumers
completely
change
the
way
they
consumed.
The
conclusion
is
that,
even
before
the
crisis,
consumers
were
becoming
more
and
more
powerful
and
smarter
in
the
way
he
select
a
product
or
a
service.
What
about
Belgian
Consumers?
According
to
Jan
Velghe,
Steve
Carlos
Braens
and
Sophie
Thise,
all
expert
in
trends
and
consumption
at
the
Crioc,
technological
innovations
really
had
a
strong
impact
on
the
way
Belgians
were
consuming.
They
observed
that
Belgians
became
more
and
more
agile
before
the
recession.
Therefore,
the
loyalty
of
Belgians
towards
distributors
or
brands
has
also
decreased.
For
them,
it
also
means
that
consumers
became
smarter
in
the
way
they
made
their
purchases.
Nevertheless,
they
specified
that
consumers
stay
relatively
loyal
in
some
specific
sectors
that
are
especially
important
for
them.
For
example,
if
consumers
consider
that
a
specific
brand
can
bring
them
more
value,
they
28. 28
will
continue
to
buy
products
of
this
brand.
The
experts
of
the
CRIOC
noticed
this
phenomenon
for
the
cosmetics
sector.
2.2.2. Green
and
ethical
consumption:
Political
and
socio-‐cultural
initiators
For
several
years,
the
global
concern
for
ethical
and
ecological
responsibility
is
becoming
more
and
more
important
for
consumers.
(Flatters,
P,
2009)
The
Cambridge
dictionary
defined
green
consumerism
as
“the
situation
in
which
consumers
want
to
buy
things
that
have
been
produced
in
a
way
that
protects
the
natural
environment”.
Figure
2.2.2-‐1:
Belgian
interest
for
ecological
and
ethical
products
–
Adapted
from
CRIOC
(2012)
This
trend,
which
is
generally
described
as
a
“Mega
trend”
(Sanwant
Singh),
has
also
be
observed
in
Belgium.
As
we
may
see
on
figure
3,
concern
of
Belgians
for
Environment
and
ethical
products
have
significantly
increased
in
2003
before
knowing
a
softer
growth
until
the
financial
crisis.
During
our
interviews
with
experts
of
Belgian
Consumption,
we
also
had
a
confirmation
of
this
phenomenon.
Indeed,
according
to
the
Crioc,
before
the
recession,
Belgians
were
more
and
more
trying
to
buy
ecological
products.
If
we
wonder
why
there
was
this
change
of
mentality
and
that
we
look
into
the
past,
we
can
easily
understand
that
the
main
initiators
of
these
trends
were
political
but
also
socio-‐cultural.
By
going
back
in
history,
we
found
a
lot
of
information
about
Scientists
that
warned
people
about
climate
change.
Soon
after
this
warning,
the
Kyoto
protocol
was
signed
(in
1997)
and
the
global
concern
of
people
for
environment
was
becoming
more
and
more
important.
(Unfccc,
2014)
This
latter
was
also
strengthened
and
spread
by
some
artists
or
singers
such
as
Yannick
Noah
and
his
song
“Aux
arbres
citoyens”.
(Cf.
Figure
4.2.2-‐2).
Figure
2.2.2-‐2:
Opinion
leaders
-‐
Yannick
Noah
2002
2004
2005
2006
2007
Ecological
Ethical
29. 29
Today,
this
change
in
mentality
of
people
has
also
affected
many
companies
and
this
is
not
unusual
to
see
advertisings
that
emphasize
the
ecological
or
ethical
side
of
a
product
or
service.
To
conclude,
we
can
reasonably
believe
that
these
various
events
and
therefore,
researchers,
famous
people
and
politicians
had
a
decisive
role
as
initiators
and
spreaders
of
these
trends,
in
other
words,
they
contributed
a
lot
to
the
increasing
concern
about
ecology
and
responsible
products.
Currently,
consuming
ecologically
and/or
ethically
is
becoming
a
habit.
2.2.3. Agility
and
lack
of
fidelity:
Political
and
technological
initiators
Several
experts
in
consumption
noticed
that
people
were
becoming
less
and
less
loyal
toward
a
brand
or
a
distributor.
Paul
Flatters
calls
this
phenomenon
the
“Mercurial
consumption”
and
defines
it
as
the
fact
that
shoppers
are
becoming
more
and
more
agile.
The
experts
of
the
Crioc
have
confirmed
that
this
trend
also
existed
in
Belgium
and
specified
us
that
the
main
causes
were
political
and
technological.
It
seems
that
some
political
measures
have
affected
the
loyalty
and
fidelity
of
consumers
for
brands.
A
good
example
of
political
initiators
could
be
the
liberalization
of
energy
in
Belgium,
which
gave
the
possibility
and
encouraged
consumers
to
choose
the
best
supplier
of
energy
from
a
price/quality
point
of
view.
Moreover,
as
briefly
discussed
in
the
section
2.2.1,
the
apparition
of
some
tools
or
easy
comparators
on
the
Internet
has
also
amplified
this
trend.
For
example,
if
someone
want
to
book
a
fly,
he
can
easily
compare
the
prices
and
services
of
every
company
through
only
one
website
(http://www.liligo.fr).
Today,
we
are
seeing
more
frequently
the
emergence
of
these
types
of
website
for
different
sectors
such
as
banking,
hotel,
catering
and
so
on.
Therefore,
even
before
the
crisis,
consumers
were
becoming
more
and
more
agile
and
very
price
sensitive.
30. 30
2.2.4. Unbridled
consumption:
Economical
initiators
Jan
Velghe,
expert
in
consumption
at
the
CRIOC,
defined
unbridled
consumption
as
the
desire
to
have
always
the
latest
and
the
best
technology/product.
Before
the
crisis,
a
significant
number
of
people
changed
of
phone
as
soon
a
new
model
existed.
Concerning
computers
and
cars,
it
was
approximately
the
same
phenomenon,
people
wanted
to
change
regularly
and
didn’t
really
keep
their
products
a
long
time
compare
to
their
initial
lifetime.
Before
the
recession,
the
experts
in
consumption
of
the
Crioc
observed
that
people
tended
to
consume
more
than
needed.
Moreover,
they
explained
that
many
purchases
were
impulsive
and
not
necessarily
planned.
This
behavior
leads
to
overconsumption.
These
observations
were
confirmed
at
a
global
level
by
the
NY
times
(2011).
According
to
Matt
Ritchel,
before
this
last
recession,
Americans
wanted
to
change
their
products/models
quickly
and
regularly.
This
behavior
can
be
initiated
by
the
fact
that
people
were
living
in
a
country
with
a
relatively
good
economical
situation
and
therefore,
they
were
able
to
spend
a
large
part
of
their
wages
to
buy
the
latest
technology
even
if
it
was
not
necessary.
2.2.5. Conclusion
As
detailed
before,
before
the
recession,
it
was
possible
to
identify
four
major
trends
that
also
existed
in
Belgium;
wise
and
smart
shopping,
green
and
ethical
consumption,
agile
consumers
and
a
desire
for
“unbridled
consumption”.
These
trends
were
the
results
of
different
initiators
we
examined
in
the
previous
section.
In
the
following
part
of
this
thesis,
we
will
focus
on
the
evolution
of
the
consumer
behavior
during
and
after
the
recession.
Therefore,
it
will
be
possible
to
examine
how
the
trends
that
led
the
behavior
of
the
consumer
before
2007
have
evolved
but
also
how
new
trends
have
emerged.
31. 31
3. Chapter
3:
The
economic
downturn
3.1. Introduction
We
are
living
in
a
new
world,
a
world
in
which
crises
are
occurring
more
and
more
frequently.
The
“economic
times”
has
counted
no
less
than
399
financial
crises
in
the
world
between
1973
and
2007.
Fortunately,
even
if
this
number
may
seem
enormous,
only
a
small
part
of
them
really
impacted
people.
(Figure
5.1-‐1)
From
a
general
point
of
view,
despite
this
important
number
of
occasional
crisis,
people
knew
approximately
15
years
of
prosperity
and
growth.
In
the
frame
of
this
work,
we
will
focus
on
the
subprime
crisis
of
2007
and
its
impacts
in
Europe
on
people,
but
also
on
companies,
which
had
to
adapt
to
new
consumers.
The
intensity
of
this
crisis
makes
it
very
interesting
to
study.
Indeed,
the
impacts
were
so
significant
that
we
can
easily
observe
them
and
therefore,
we
can
isolate
the
trends
that
emerged
during
this
latest
crisis
Figure
3.1-‐1:
"Crisis
count"
–Adapted
from
Economic
Times
(2012)
3.2. What
is
an
economic
downturn?
According
to
Stijn
Claessens
and
M.
Ayhan
Kose,
there
is
no
official
definition
of
a
recession.
However,
in
practice,
most
analysts
used
to
consider
that
a
recession
appears
when
there
are
two
consecutive
quarters
of
decline
in
a
country
real
gross
domestic
product.
Figure
3.2-‐1:
Illustration
of
a
recession
A
broader
definition
is
used
by
The
National
Bureau
of
Economic
Research
(NBER),
which
defines
a
recession
as
“a
significant
decline
in
economic
activity
spread
across
the
economy,
lasting
more
than
58
51
17 399
1875 - 1913
1919 - 1939
1945 - 1971
1973 - 2007
Crisis Count
32. 32
a
few
months,
normally
visible
in
production,
employment,
real
income,
and
other
indicators.
A
recession
begins
when
the
economy
reaches
a
peak
of
activity
and
ends
when
the
economy
reaches
its
trough.”
In
the
frame
of
this
work,
we
are
going
to
use
the
broader
definition.
Therefore,
we
will
use
different
indicators
to
emphasize
the
importance
of
the
last
financial
crisis.
3.3. What
are
the
causes
and
consequences
of
the
current
crisis
The
current
European
crisis
is
a
direct
consequence
of
the
US
recession.
In
order
to
help
people
to
buy
a
house,
US
politicians
decided
to
decrease
the
interest
rates.
Consequently,
US
banks
granted
more
and
more
loans,
which
was
very
profitable.
Moreover,
US
banks
decided
to
share
the
risk
by
creating
CDO
(collateralized
debt
obligation)
that
they
sell
to
investors.
(CNBC)
The
risk
was
really
low
because
if
people
stopped
to
reimburse
their
loans,
the
bank
would
become
the
owner
of
the
house
and
will
have
to
sell
it.
This
low
risk
encourages
banks
to
grant
loans
to
people
that
could
be
unable
to
reimburse.
What
happened
next
is
very
well
known,
banks
were
faced
with
many
people
who
were
unable
to
reimburse
and
had
to
sell
many
of
those
homes
at
the
time.
Prices
of
houses
decreased
but
nobody
wanted
to
buy
it.
Finally,
banks
and
investors
were
bankrupt.
The
bankruptcy
of
the
famous
bank
Lehman
Brothers
was
a
one
of
the
consequence
of
this
practice.
(Insee,
2009)
Jacques
Gravereau
(2010)
observed
that
every
crisis
has
a
certain
number
of
similarities.
In
the
case
of
the
subprime
crisis,
he
identified
four
similarities:
First,
there
was
an
extreme
increase
of
liquidity,
amplified
by
the
important
offer
of
loans
and
low
interest
rates.
Secondly,
there
was
a
wild
speculation
that
attracts
everybody.
Thirdly,
new
financial
techniques
were
created
(Swap
in
1637,
Investment
trusts
and
leverage
in
1920
and
so
on).
Those
techniques
were
generally
abstract
and
very
complicated.
Most
people
did
not
understand
them
and
were
unable
to
evaluate
the
real
risk.
Lastly,
there
was
a
general
euphoria
that
was
based
on
the
feeling
that
people
will
be
much
richer.
Besides,
the
current
crisis
(which
has
started
in
2007)
is
a
sales
crisis
and
not
a
cost
crisis.
Indeed,
the
main
characteristic
of
this
crisis
is
that
people
simply
avoid
buying.
(Herman
Simon,
2010)
There
are
many
reasons
that
motive
people
to
save
their
money;
however,
the
most
important
is
certainly
the
33. 33
fear
of
the
future.
(Herman
Simon,
2010)
That
is
why
this
recession
is
also
called
a
crisis
of
confidence.
(Laura
Kodres,
2008)
Another
reason
is
people
need
to
have
liquidity
to
face
potential
future
losses
in
their
investment
portfolio.
(Herman
Simon,
2010)
This
behavior
leads
to
a
vicious
circle,
the
sales
of
companies
continued
to
decrease.
Therefore,
they
had
to
lay
off
numerous
employees.
Those
individuals
lost
their
purchasing
power
and
had
to
reduce
their
consumption,
which
amplified
the
crisis.
The
following
figures
show
the
severity
of
this
crisis:
Figure
3.3-‐1:
Industrial
production
except.
construction
(seasonally
adjusted
for
Euro
17)
–
Eurostat
Figure
3.3-‐2:
Real
GDP
growth
-‐
Eurostat
Figure
3.3-‐3:
Unemployement
rate
-‐
Insee
Figure
3.3-‐4:
Real
household
disposal
income
-‐
Insee
34. 34
We
will
end
this
chapter
with
a
comparison
between
the
study
of
McKinsey
in
US
and
a
research
made
by
the
CRIOC,
both
of
them
can
help
us
to
illustrate
how
the
different
industries
were
impacted
during
a
recession.
Concerning
the
study
of
McKinsey
(Cf.
Figure
5.3-‐5),
we
can
observe
an
increase
in
education,
reading,
protection,
and
health
care
while
all
the
other
industries
are
decreasing.
Figure
3.3-‐5:
Average
growth
in
US
consumer
expenditure
during
recessions
–
McKinsey
The
figure
5.3-‐5
is
particularly
important
to
illustrate
the
change
in
customer
behavior
in
time
of
crisis,
and,
therefore,
to
understand
which
industries
were
the
most
affected
by
a
recession.
Concerning
the
study
of
the
Crioc,
we
can
observe
that
the
expenses
decreased
in
each
item
of
expenditure.
Figure
3.3-‐6:
Changes
in
expenditure
of
Belgian
households
-‐
CRIOC
