Consumption, in which consumers have a central role, plays a significant role in the wider economic system and for any business organization involved in providing products or services to the public (Gabbott, 2008). In other words, as pointed out by Gabbott (2008), the market will not exist without individuals behaving as consumers. Purchasing behaviour figures reflect the well-being of the economy and also reflect its prevailing trends at any given time. Therefore, the study of consumer purchasing behaviours could demonstrate whether or not an economy is progressing well. In a context of economic recession, which could be seen via the 1930s crisis and especially in the contemporary decline of the economy, the consumer market has been dealing with a big challenge (Hermann, 2009; Nistorescu and Puiu, 2009). Buyers react to any change in the economic situation around them by changing their spending habits. This happens due to a change in the levels of their perception of risk that is influenced directly or indirectly by income changes, high inflation, unemployment and interest rate. There are some different arguments around these issues but few of them raised the question on if policies are effective to solve the issue. Therefore, establishing how much consumers understand the current situation and the policies designed to tackle it are crucial, in order to assess how their behaviour has been affected.
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- To evaluate the extent of the public’s understanding of the effects of the financial crisis.
- To evaluate the extent of the public’s understanding of government policy to influence purchasing and saving behaviour.
- To establish if the public’s purchasing behavior has been affected.
- How much do the Glawegian’s public understand the effect of the recent recession?
- How much do the Glaswegian’s public understand the government policy to influence purchasing and saving behaviour.
- Whether or not the public’s purchasing behavior has been affectedand how much?
Understanding buyer behaviours is of great importance and significance for successful marketing campaigns and business management. Consumer purchasing habits could be various including intricate trends. It is very hard to predict the level of intricacy of the decision-making process of consumers. The study of consumer behaviour is defined as the processes that individuals or groups perform making their buying decision in order to satisfy their needs (Hutchison, 2010; Perner, 2008). The purchasing process can be seen in five stages. Beginning with emergence of a need which is a potential demand (Kotter, 1991), the consumer then start searching for information associated to that need. After evaluating some different alternatives, converting browsers to buyer is made with the most suitable one. The last stage comes after purchasing, when the buyer evaluates the choice made (Hutchison, 2010). It can be identified that the primary determination of buying behaviour is highly influenced by internal and external factors which initially emerge on the need of consumer (Chaudhuri, 2006). This means that beside some basic internal factors such as favourite, appetite, there is also a set of external factors as the environment surrounding the consumer and influencing their purchasing choices, in which economic circumstance is one elemental participant.
The financial crisis, which appeared from 2007, has pushed the world economy into a time of deep downturn. This inevitably leaded to an enormous influence on the economic and social aspects of consumers or spending habits for instance. As stated by Nistorescu and Puiu (2009), during recessions, the spending pattern of people is likely to change. This could be caused by the change in their perception of risk. In addition, in terms of psychological thought, they tend to spend less or almost no money on luxury products, even if they still could afford to do so. Only vital demands and product of cheaper brands could be considered and also the rational point of view on promotion is examined more carefully as comparing products based on price rather than quality (Nistorescu and Puiu, 2009). Based on Flatters’ and Willmott’s (2009, pp 106-108) methodology by comparing response of people during recession with their behaving before that, consumer’s behavioural change could be absorbed as the relationship between how much they are willing to pay and their perception of the value they are receiving. However, the method seems to be not easy to achieve a precise result, as known that their attitude is not only involved an economic aspect but also a social feature.
All increasing unemployment or even falling of wages, rising inflation and interest rates or taxes, which are recognised as the cue of a slowdown of the economy, are facts that affect the consumers in almost all national markets. The economic decline is frequently accompanied by concerns about job security for employees. As noted by Katona (1974), during the recession consumers are motivated to save more because of threats associated to their income. On his view, that saving rates depend on the economic situation and psychological factor. Hence, the more serious impact is on people who directly have been harmed by decreasing wages or cutting jobs. Nonetheless, this concept may not justify accurately the behavioural buying of people who is influenced by uncertain salary. In some cases, consumers in different levels of change in earning behaved the same in their new saving patterns.
Another important sector, which is reflected in climbing of price, is inflation. Higher prices and money depreciation are identified to be the main factors preventing the consumers from sustaining consumer’s usual levels of spending. As explained by Lambin and Jacques (1993), during inflationary time, all cost tend to increase, therefore, raising product price is often necessary for maintaining profit of company at an acceptable level. Again, this causes decline in sale revenue or in other words, consumers reduce their spending. Nevertheless, tax and interest rate, which are the important factors influenced on buyer’s attitude throughout non-observation, are not mentioned even though they could be the big agents of inflation.
Moreover, the psychological outcomes of the recession have extended worldwide as a huge concern. According to Dholakia and Sidney (1987), the overall outcome of depleted economic circumstances influences on consumer feelings of difficulty, lack of confidence and hardship. Building on the pioneering study of George Kantona, Solomon (2009) states that whether the extent of the health of an economy is likely to be optimistic depend on the confidence of consumer about future. However, the perception about this effect of the economy is distinct and can be classified into some cohorts like age, marital status, household size, education, income and so on (Amalia and Ionut, 2009). In contrast, the psychological impact is a very wide aspect and should be studied in particular area.
Some studies seem to be broad when merging a general trend of the impact of the economic recession on purchasing behaviours over the world. This leads to difficulties of giving accurate evaluations. The effect depends on particular society with its own economic system including policies. There are also very few research on reaction of consumer on the reform projects of government in context of the recession such as modifying tax and interest rate. The best way to know whether a new trial policy is developing properly is observing how people are understanding and responding it. Therefore, this research task is to find the answer for the question: what is going on in the consumer’s mind in this context of the economic recession within Glasgow city, based on the Glaswegian’s public attitudes. The mission of policy and its effects are also studied by evaluating consumer’s knowledge on it.
The research purpose
In terms of expectations for converting the research objectives to new knowledge, this project expects to establish the level of change in consumer’s mind, such as the extent of consumer’s understanding of the impacts of the recent economic decline and understanding the impacts of reform policies of government and also how its effects on their purchasing habits by comparing different perceptions from different factors and different classes of society in Glasgow. On the other hand, in order to build up new knowledge based on foundations of previous researches, a literature review is vital to help understanding the basic background and the emerged issue (Saunders et al, 2009, p 61). This secondary information was critically reviewed some researches on changes of consumer behaviours in situations of the economic crisis to recognise the issues, such as lack of study on consumer’s understanding the effect of the situation and the effect of the policies, which need to fulfill in the primary research phase.
To come up with the study of people’s attitudes on the effect of the recent recession, a survey strategy seems to be appropriate by its advantages in colleting a large amount of data with a quick timeline (Saunders et al, 2008, pp144-145). In addition, the data collected will be easy to compare between attitudes from different groups by statistical calculations. In deed, aim to discover the general attitudes of participant, questionnaire system will be operated as a quantitative approach. These data could be assembled according to the majority rule. However, the data collected from questionnaire is unlikely to be much wide-ranging because the numbers of question could be limited and sometimes it cannot cover all aspects expected. Thus, there may be also involved non-standardised interviews in order to collect in-depth information (Kumar, 2005). The qualitative answers could be variable and should be criticised consistent with quantitative evidences, in order to establish if the public’s purchasing habit has been affected.
It is impossible to ask every individual in Glasgow for collecting data. Therefore, only a limit amount of population will be selected to conduct an outcome of entire citizen. As stated by Saunders et al (2008,p212), studying on the populations, in which an appropriate amount of people is chosen to sample, could stand for a whole. It will be involved a variable number of Glaswegian’s publics. This means that the major, the location, the age and the sex of participants will be expected to come from different areas. A probability of sampling will be used to include 100 participants, which seem to be enough to have an effective result. It means that each individual will be selected random or they have an equal opportunity of being involved or not. This aims to gain an equal outcome when data is averaged. The process will be started around city centre of Glasgow and then expand to some greater places or probably countryside as well.
In order to undertake a general attitude of respondents about the effect of the recent economic recession, a questionnaire system, which is a data collection technique in which each participant responds to the same list of questions (Saunders et al, 2008, p360), seems to be an effective choice. This series of questions is designed following categories: the level of understanding of impact of the downturn, the level of understanding the purpose of the government policy, the level of the change their habits. Within each these patterns, possible questions will be listed in detail. It is expected to include 30 questions, which are brief and quality. Then, some interviews, in which revealing the answers of the “why” questions is a big advantage (Saunders, 2008, p323), could be made with some additional questions if they are necessary. These interviews could be on discovering other factors, which are not mentioned on questionnaire, are influencing people’s buying habits during this hard time. The numbers of interviewee may be 10 people chosen from different cohorts.
With a limit of time for undertaking this research, a systematic timeline is truly essential. Since the proposal was completed, it should be taken few days for updating literature and starting some writing drafts. Two weeks then should be spent on preparing some materials for interviews and designing questionnaire including sampling plan. The collection data process could take quite long time by looking for participants and travelling. A suggestion for this is 2 weeks. Data collected will be converted to database on computer and will be turned to calculation of statistics. This whole process is expected to spend about 1 week and a haft. The important step is a comparison of results gained with literatures. This step is estimated to cost around 2 weeks. Two or three weeks later should be spent on writing project and fixing any error, which could emerge. This whole project is planed for around 10 or 11 weeks.
Ethics of the research
Ethics, as defined by Cooper and Schindler (2008:34, cited in Saunders et al, 2009, p.184), is the “norms or standards of behaviour that guide moral choices about our behaviour and our relationships with others”. Thus, a research conducted must methodologically and morally guarantee to every individual who are both directly and indirectly related (Saunders et al, 2009). In addition, this should be sustained during the whole research stages and after its outcome released as well. Based on this principle, this proposal is following the ethics below:
The data of participants will be treated confidentially and anonymously as ensuring that theirs privacy is stored securely and safely (Bell, 2005, pp.48-49). They are also informed clearly the goal and process of research in which they are to be engaging and inclusively their role.
A consent form, which contains detail of legal rights, privacy, use of participant’s data, recording of interview and so on, will be made carefully. They will be aware of their rights in which they are able to withdraw partly or totally from research at anytime with no reason (Bera, 2004). This mean that they could reject any question they do not want to respond.
This research will be undertaken by getting involvement of attitudes of the public in Glasgow. Any sensitive issue and also any effect, which is seemed to be immoral and harmful to any one, will be avoided fully from its design to its achievement.
- Amalia, P., and Ionut, P. (2009). Consumers’ reaction and organizational response in crisis context, The Journal of the Faculty of Economics. University of Oradea. 1(5) pp. 779-782.
Bell. (2005) chapter 3: Ethics and Integrity in Research.
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- Saunders, M., Lewis, P., and Thornhill, A. (2009) Research methods for business students. England: Pearson Education Limited.
- Solomon, M. (2009) Consumer behaviour, buying, having & being. USA: Pearson Education Inc.
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Glasgow’s Public Parks and the Community. (2019, Apr 11). Retrieved from https://phdessay.com/glaswegian-publics-perception-of-the-impact-of-the-economic-recession-and-how-it-has-affected-consumer-behavior/