Consumer Behaviour The comparision in consumer behaviour between Millennials and Baby Boomers in the health food sector based on Consumer Decision Making model

ABOUT ME

Welcome to my presentation!

My name is Thi Minh An Nguyen. I am studying MSc Marketing at the University of Lincoln. This presentation is an assignment for the Consumer Behaviour course.

Basically, I am a Millennial. Thanks to this assignment, I have gained more knownlege about not only my generation but also Baby Boomers - a very interested generational cohort.

Consumer Behaviour is a very excited course that helps me to understand the insights of consumer as well as models that demonstrate their consumption process. I am really appreciated that I have memorable experiences in not only this assignment but also the whole module.

Hope everybody enjoy my works. Cheers!

Let's start with my presentation!

INTRODUCTION

Each generation has different values, lifestyles as well as characteristics that influence their perspectives and consumer behaviour (Martin & Prince, 2009; Bucuta, 2015). The consumer behaviour is a phenomenon that can be analysed and understood by taking a generation approach. Millennials and Baby Boomers are two large and powerful generations that not only shape the consumption market but also gain much attention from brands because they are sizeable and have vital purchasing power (Parment, 2013). According to Welsch (2015), “Millennials are from Mars and Baby Boomers are from Venus.” This paper aims at analysing the differences in consumer behaviour between Millennials and Baby Boomers in the area of health foods by applying the consumer decision-making model.

Findings and Discussion

Definition of Baby Boomers

Baby Boomers are the group who were born during 1946 to 1964 (Werner, 2011) and have other names such as the grey market, the third generation, etc (Haynes, 2004). This generational cohort live through highlighted events like the peek economic boom, the rise of television and the creation of the Internet (Lee, 2005; Fona, 2015). Because of their age and their large purchasing power, Baby Boomers are perceived as influential and affluent consumer groups (Rice, 1988; Reisenwitz & Iyer, 2007). They spend approximately $400 billion yearly, which is half of all consumer expenditures in the USA (Palm, 2015). They highlight individualism and self-improvement by achieving personal growth and wealth (Ordun, 2015)

Definition of Millennnials

Although Millennials, who are 18 to 34 years old, are far younger than Baby Boomers, their size is almost equal at approximately 75 million respectively (Clayton, 2016). Millennials are responsible for a fourth of the world population as well as $200 billion in annual purchasing goods (Schawbel, 2015). They are portrayed in both gloomy and bright point of views. Some people state them as “lazy, irresponsible, and impatient” while others demonstrate them as “open-minded, innovative, active and confident” (Ordun, 2015). They have a high educational level, strongly focus on career goals (Schawbel, 2015) and are techoology-savvy (Chiarello-Ebner, 2015).

Differences in attitudes and behaviours between two generational cohorts

The differences between these two generations are the topic that has been discussed in numerous researches (Holbrook and Schindler, 1989, 1994; Schuman and Scott, 1989; Parment, 2011).

Figure 1. Since 2013, Nielsen Global has conducted a survey about the attitudes among 30,000 Millennials and Baby Boomers worldwide. The report was published in 2016 showing many major differences in attitudes and behaviours between these two cohorts (Nielsen, 2016).

Health food sector

The differences in attitudes and behaviours also affect the way Millennials and Baby Boomers purchasing health foods. Health food market is a competitive yet profitable market, which achieved almost £500 million in 2010 and increased gradually from 17% since 2005 (Mintel, 2010). Moreover, Millenials and Baby Boomers are reported as two generations that heavily purchase health foods (Mintel, 2010). Therefore, health food sector is chosen to be an area to be discussed.

Consumer decision making model

Consumer decision-making model will be used as core theoretical framework to analyse the differences in consumer behaviour between Millennials and Baby Boomers. According to Sproles & Kendall (1986), the decision process is “a mental orientation characterising a consumer’s approach to making choices” (p. 276). Since the twentieth century, this concept has been an interesting area for many professionals studying on (Stone. 1954; Darden & Reynolds. 1971; Korgaonkar. 1981; Hafstrom, Chae & Chung, 1992). Humans have to make decisions every day. Some will be small and allow people to make a quick decision based on their experiences. Some will require more efforts and evaluation process, such as purchasing decision.

Figure 2. According to Mothersbaugh & Hawkins (2016), a decision process consists of five stages: Problem Recognition, Information Search, Allternative Evaluation and Selection, Outlet Selection and Purchase, Postpurchase Processess.

For more details, Schiffman & Kanuk (2015) came up with a consumer decision-making model. Different generation will have unique attitudes, perception and learning experiences (internal); be influenced by different sociocultural attributes and exposed to different communication sources (external). Thus, it is undeniable that these differences will affect their decision-making process. However, Millennials and Baby Boomers share some surprise similarities.

Figure 3. Consumer decision-making model (Schiffman & Kanuk, 2015)

Similarities

Firstly, both two generations have same Need Recognition when they are looking for health foods. British adults aged 19-64 are reported to consume an unhealthy diet which is too high in salt and saturated fat and limited in fibre and green (Houses of Parliament, 2016). However, Millennials and Baby Boomers recogise the problem and look for a more healthy eating lifestyles. Since 2000, health consciousness has become a global phenomenon and consumers at all ages are more aware of the important of health and eating lifestyles (SRI International 2010; Hartman Group, 2012: Marjanen et al., 2016). According to Cimigo (2015), both Millennials and Baby Boomers rated health as the most concerned in lives. Millennials care more about health because they perceive health is an important attribute to achieve personal goals and provide productive works (Dossin, 2016). As previously stated, Millennials are highly educated, thus, they have much knowledge on the importance of health. Meanwhile, Baby Boomers spend most of their money on health sectors (Fona, 2015) because they desire youthful spirits and manage health issues (Lee, 2016; Nutraceuticals, 2010). Baby Boomers are elderly generation and facing numerous health conditions related to ageing, thus, it is extremely crucial for them to have high demands on health products, especially foods. Therefore, many foods and beverages brands focus on products that meet healthy needs of consumers. These ideas mirror the ideology of Dorsey-Kockler (2010) and Glikes-Smith (2014) academic who also studied the need recognition of consumers in health product sector.

Millennials and Baby Boomers are both health-conscious

Secondly, findings show that both generation highlight Promotion as the most influenced factors in the Marketing mix when they come up with a decision on buying health foods. They share a love for coupons and sales promotion (Synchrony Financial, 2015). Both groups prefer promotion that highly engages with consumers and provides useful information about specific health benefits (Chiarello-Ebner, 2015). It leads to understanding for marketers to attract both generations purchasing their health food products.

They love coupons!
Sales promoton

Differences

Sociocultural Influences are an important factor that affects the decision process. Millennials highly value opinions of friends and family and more likely to be inspired by online reviews (Chiarello-Ebner, 2015; Dossin, 2016; Fromm, 2015). They live in the technological world, thus, it is easy for them to seek for product reviews online. More than 80% of Millennials favour word of mouth from friends, family and social media while there are only 50% of Baby Boomers value that (Bucuta, 2015). Baby Boomers get the most influences from face-to-face retailers and salespeople (Synchrony Financial, 2015).

The second difference is Communication Sources. Millennials perceive traditional channels (e.g: television, print) are out-of-date and unattractive (Bucuta, 2015). Millennials are more clever and aware of marketing tactics employed by traditional media. Thus, it is less likely for them to receive communication messages from marketers through traditional media. Conversely, a 2013 Radius Global Market Research study showed that almost 40% of Baby Boomers value print media for product searching and advertising (Palm, 2015). Moreover, they live in TV era, thus, TV commercial has a large and reliable impact on their consumer behaviour (Palm, 2015). On the other hand, Millennials are technology-savvy and more likely to influenced by social media, especially contents that are written by authentic peers (Schawbel, 2015). Brands that highly engage with them on social media platforms and have positive online feedback are favoured by Millennials.

Communication contents that attract Millennials (McReynolds, 2015)
Baby Boomers are attracted to traditional media such as TV.

When two generations do Pre-purchase Information Search, more than 30% of Millennials find healthy food information on blogs while there is only 8% of Baby Boomers trust bloggers (Clayton, 2016) although 88% of them access to the Internet (Tennant et al., 2015). Millennials search information mostly online (Fromm, 2015). However, it leads to a problem that online information are too crowded for Millennials to make a final decision. Meanwhile, Baby Boomers do not research many sources before purchasing and decide quickly (Lee, 2016).

The major difference is Evaluation of Purchase Alternatives. Millennials and Baby Boomers seek for different product attributes when they decide to purchase healthy foods. 40% of Millennials rank ingredients sourced sustainability is the selling point in their purchase decision (Nielsen, 2015) while Baby Boomers are more concerned about nutritional factors such as sugar-free and low-fat (Fona, 2015; Mintel, 2016). Almost half of Baby Boomers are more interested than Millennials in foods that satisfy health benefits such as anti-aging, bone-maintaining and weight management (Clayton, 2016). They are less likely to seek for mental and muscle health benefits in foods than Millennials (Clayton, 2016). Moreover, Millennials highlight organic food trends (Tweed, 2016; Hoffman, 2012). 45% of Millennials actively purchase organic foods compared to only 30% of Baby Boomers to do so (Tuttle, 2015). Therefore, Baby Boomers tend to buy health food that high in fibre and vitamins while Millennials seek for organic products providing protein and energy. Price is another criteria to be assessed. Baby Boomers are less influenced by price than Millennials when purchasing goods (Synchrony Financial, 2015). However, Millennials are more likely to pay extra for health products, especially sustainable sourced ingredients foods (41% compared with 21%) (Nielsen, 2015).

In terms of Loyalty in the output of consumer decision making, Millennials is the most difficult group for brands to create brand loyalty (Ordun, 2015; Lazarevic, 2012). They would like to experience new products while 44% of Baby Boomers purchase the same brands consistently (Chiarello-Ebner, 2015). Baby Boomers are extremely loyal in compared with Millennials (Homburg & Giering, 2001; Beauchamp & Barnesm, 2015). Therefore, it is important to retain Baby Boomers and attract more Millennials in health food marketing strategy.

Figure 4. Comparision between Millennials and Baby Boomers toward consumer decision making (Parment, 2013)

Conclusion

Millennials and Baby Boomers has difference consumer behaviour when decide to purchase health foods because they are influenced by different external sources and seek for unique health food attributes. However, they share the same concern about health and need foods improving their mental and physical health. It is crucial for marketers to understand their similarities and differences in order to provide marketing tactics that suit for each segment.

Let's watch a funny clip about Millennials vs. Baby Boomers!

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