My overall impression of CONSUMER BEHAVIOR - as a class and a phenomenon

As a Industrial Engineering major, I had only one semester of basic marketing before I took the class BMKT 337 Consumer Behavior at MSU this semester. So, the field of consumer behavior was pretty new to me... I mean as new as it can be after approximately 14years of being a consumer myself.

As you maybe noticed reading or skipping through my blog, I have
quite an interest in the strategy behind store layout and design using the knowledge about human psychology and consumer habits. This knowledge helps retailers, marketers as well as the store designers to develop a consuming environment that lead us through a store and keep us in it as long as possible without us noticing. In my Consumer Behavior class I learned more about psychological, cultural as well as the social factors influencing the human decision making as well as general behavior (e.g. the self; extended self; perception & attitude; motivation, values, norm, and needs; lifestyle & personality; groups, cultures, and subcultures).

Books like Nudge by Richard H. Thaler, & Cass R. Sunstein as well as Predictably Irrational by Dan Ariely had an interesting way to teach me about the utilization of human's psychology and unconscious habits by the retail industry as well as about the marketing research about those phenomena.

This blog even it is was started only because the Consumer Behavior class required it, turned out to be a great opportunity to share the differences between American and German/European consumer behaviors I experienced during my stay in the U.S. as an exchange student. There are so many things one considers normal and expects them to be the same at other places in the world, but they don't. To experience that with even broader awareness, due to this class, became an interesting an fun part of my overall American experiences.

Americans' Love Affair with Drive-Thru Services

Another big difference between the Consumer Behavior of Americans and Germans, I experienced during the last 8 month here in Montana, is the use of the drive-thru services offered by restaurants and other service institutions.

In Germany, the drive-thru of fast food restaurants and coffee shops (only Starbucks) is empty most time and has never a as long line of waiting cars as I have seen in the U.S.. The most places do not even offer a drive through service as far as I remember, especially not in the cities. The only ones I can think of are at rest areas close along the Autobahn, where people grap some food or a snack when they are on a long journey and have no time to stop and eat inside.
The usual German, also eating a lot in fast food - no doubt, parks in front of the restaurant, goes inside, orders and eats within the restaurant area. In case one is in a hurry, the average German would still park outside, rush inside, order and take one's meal into the car to eat is on the way.

Americans are different in terms of the dining culture in general, but even more when it comes to the use of drive-thru services. As we all learned in the documentary Supersize Me: The average American walks about 5.000 steps (approximately 2miles) per day, a European almost twice as much (American College of Sports Medicine, 2010).
Could the Americans' excessive use of drive-thru services be one of the reasons for that?

In America, the drive-thru option is offered not only by fast food restaurants, where you don't even have to leave your car seat to purchase and consume a meal containing 700 to 1.000 calories. Also banks as well as post offices and pharmacies offer drive-thru services in America, an option I had never seen or thought of at these placed in my life before.

Check out what I found online the other day: The 14 strangest Drive Through Services in America ... Crazy Americans!

With the general increase in driving/mobility, also the use of drive-thru services increased in America. McDonald's makes about 65% of its U.S. sales to drive-through customers (www.slate.com). But what are the reasons, that Americans are so obsessed with drive-thru services, but Germans aren't?

The Drive-Through Performance Study, released by Sam Oches in 2013, discovered the following: A few years ago the speed of service has been the number one reason why people used drive-thru services. Drive-tru customers have a higher priority than in-store customers and therefore get there purchase faster. But the average handling time per customers in the most American quick-service restaurants has increased due to more complex menus, more customized options, higher accuracy and a more personalized service by the restaurant's service personnel. Drive through is the place where Americans' top obsessions come together: Mobility and consumption. But it's not only about offering the fastest service anymore. The drive-thru customers want to feel as personally addressed and taken care of as they would inside the store - just in the comfortable place of their car. 

Talking about this topic with some friends and class mates here in the U.S., the issue of saving time and multitasking seem to be an issue when it come to the choice of use drive-thru services. You don't have to leave your car, can listen to music or talk on the phone while waiting for your food, and you can eat (fill your stomach) on your way to another location. Sounds quite reasonable, besides I think especially in America using the drive-thru service does not make a big difference from in-store ordering, time-wise. The most restaurants are giant anyway and have several check-outs in the restaurant. Furthermore the idea of eating as a secondary activity while focusing on doing something else also does not correspond very well with my understanding of dining in general. That might also be one of the reasons why I am not a fan of fast food restaurants after all and have used a drive-thru service only a few times in my life so far.

And once again, I can only say: The differences between American and German/European consumer behavior are unlimited! 

Look at these guys reaction ... too funny:

 

Further information about the history and culture od drive-through services:
The Drive Thru Performance Study
'We're Thru' by Tom Vanderbilt 

German Traditions / Rituals

Rituals are a set of multiple, symbolic behaviors that occur in a fixed sequence and are repeated periodically (Solomon, p 588). We take the rituals we know for granted and think everybody does it like us. But there are differences from country to country, from family to family.

After reading the article We gather together by Melanie Wallendorf and Eric J. Arnold for my consumer behavior class, I thought I share some typical religious as well as non-religious German rituals with you. Let me start in a chronological order at the beginning of a year of German rituals...

Fasching / Carnival
On November 11th at 11:11am starts the six weeklong carnival season ending on Ash Wednesday before Easter. Especially in cities in the western part of Germany, people celebrate carnival pretty excessively. Whole streets are closed, everybody is dressed up in a costume and carnival organizations arrange massive carnival parades. Even all of the German political parties have a carneval event where they have speeches about the other parties in a satire and ironical way. And on Rose Monday, the most people in Germany eat a jelly filled dounut called Pfannkuchen, Krapfen or Berliner depending on in which part of Germany you are.

Fastenzeit / Fasting
Based on western religion a 40 day-long fasting period developed to prepare and clear ones body and mind for the great feast of eastern. Back in the day, religious people denied themself treats then consume during the rest of the year. Nowadays people desacrilized this religious rituals and use it to loose some weight after the winter. The usual treats which will be abandoned for these 40 days are meat, sweets, alcohol and cigarettes. People want to discipline themself and conciously give up some bad habits for at least a certain period of time, after which they eat as much Easter candy and chocolate as they can.


Ostern / Easter
Another ritual originated in the Christian religion are Easter rituals in Germany. In the Easter traditions or rituals of the most German families, there is not much left from the religious background. My family kept a little bit of it: On Good Friday my family eats fish for dinner, like all religious people do. On Easter sunday, it is not about about Jesus' surrection anymore either: It is all about Easter bunnies and Easter eggs. In an average German family, the adults hide little presents either in the garden or the apartment and the children (mostly
                             the younger ones) have to find them.

Oktoberfest
More a ritual invented for the adults then for the children is the worldwide know Oktoberfest. The 16-day beer festival from mid September till October takes place in Munich at the Theresienwiese. This ritual started October 12 in 1810, at the wedding of Bavaria's Crown Prince Ludwig to Princess Therese of Saxony-Hildburghausen. Since then more than six million people visit this public festival every year. But not every brewer can sell ones beer. Only breweries with a production location in Munich are allowed to serve beer during Oktoberfest. In about 14 tents (some of them fit 10thousand people in them) people dressed in either Dirndl or Lederhosen drink 6.7million Mass (1l/33.8oz of beer) during these 16 days. This traditional but very international event of amusement is not realy cheep: A Mass costs about 10€ ($12.50), half a chicken about the same and a huge pretzel 5€ ($6.25). But Oktoberfest is not the place to think about money... It's all about fun and especially beer. Since a few years, Munich is not even the only place hosting an Oktoberfest anymore, many other cities in Germany as well as all over the world are copying this ritual.

Advent & Weihnachten / Advent & Christmas
The advent period takes place during the four weeks before Christmas. Most important are the four Sundays before Christmas, the four Advents. German families have either an Advent wreath or an Advent arrangement with four candles on top of it. Every following Sunday one more candle gets light until all four are burning the Sunday before Christmas eve. For children in Germany, Advent means opening and Advent calendar starting at December 1st. Every day until Christmas eve on the 24th, almost every child in Germany opens a little paper door on ones Advents calendar hiding a little treat behind it. December 6th is another important day during this pre-Christmas period - St. Nicholas day. On the evening of December 5th, the children have to clean and polish their shoes and place them in front of the door. When the child behaved well during the previous year, St. Nicholas will fill one's shoes with nuts, fruit and treats. Bad children gets coals and will be punished by St. Nicholas' birch. I have never met a child, which had experienced that.
Christmas eve on December 24th is the most important day of the whole Christmas period. Usually, the whole family comes together, a giant meal will be served and the children get way more presents than they need. In the afternoon, some Germans go to church (that is the only day of the year my family goes). Later after this, the candles on the Christmas tree will be light and everybody is amazed by all the presents lying underneath the tree. After everybody received their gifts and has started to drink, the preparation of the Christmas dinner begins. Some families have saved a piece of this also so desacralized religious feast: They serve fish for dinner on Christmas eve. The two following days are the Christmas holidays, days of more giant meals and tones of presents for the children.

Silvester / New Years
After this so glorious period of Advent and Christmas, the German year ends with Silvester. People dress up, drink a lot of Sekt (sparkling wine) and at midnight of December 31th everybody lights a firework and midage children / teenagers through firecracker down the streets. Some people celebrate the ritual of lead-pouring reading the personal fortune for coming year from the shape made by molten lead dropped into cold water.

If you wonna get more background information regarding all these German rituals, take a look at the following websites...
http://www.germany.info; http://www.germany.travel;

Americans love Walmart... Germans don't

America's largest retailer - Walmart - tries to expand internationally since years. In some countries that effort is a success, but in Germany it wasn't. After experiencing the incredible popularity of Walmart in every city I visited during my time here in the US, I thought about the reasons why this American success strategy failed so badly in Germany.

We do have some stores with quite similar strategy like Walmart, but those are more like a mix of Walmart and Costco, I would say: You can buy everything from vegetables to camping gear and groceries come in a bigger size than in usual grocery stores. Those stores usually require a membership card, which allows only the cardholder to purchase in the store and in some of them only business owners can become members.

I simply think the business strategy of Walmart just disn't work in the environment of German consumerism and the German retail market. But I wanted to find some facts about Walmart's failure in Germany...

In 1998, Walmart took over the stores of Wertkauf and Interspar and entered the German market with 85 locations. After 8.5 years of trying, Walmart sold all 85 location to METRO,  one of Germany's biggest retail companies.

Labor Management: Walmart's tried to apply the company's US success strategy in an unmodified manner to the German market, which especially wasn't appreciated by the German employees. Morning exercises might work in America to boost the employees' morale and inspire their loyalty, but Germans become rather annoyed than motivated. The management of Walmart threatened to close certain stores if their staff didn't agree to work longer hours than stated in their contracts and did not permit video surveillance of their work. But, spying as well as reporting of employees' misbehavior is illegal in German. Besides the trouble with the German standards in labor management and law, Walmart struggled with the high labor cost in the country.

Misreading the Market: Walmart lacked in knowledge about the market they were entering. That the company tried to sell the same (American) products in Germany. For examples pillow sheets or paper block have a different sizing in Germany than in America. Walmart ended up with huge amounts of both products they couln't sell to the German customers. David Wild, CEO of Wal-Mart Germany, stated: "It does not good to force a business model onto another country's market just because it works well somewhere else."

Different Culture & Customers: Germans don’t like employees handling their groceries at the check-out, they prefer to bag their own groceries into reusable bags. Especially male customers were put off by the clerks, who were instructed to smile, and thought they would be flirting. Germans are rather used to brusque service. Like many Europeans, German consumers prefer to shop daily at local markets instead of weekly shopping in a hypermarket. At the same time, they are one of the most parsimonious and price-conscious consumers in Europe with an in average increasing income in their households.

Competition: Germany is the home of discounters. The profit margins in German retailing are the lowest in Europe. Two German discounters, Aldi and Lidl, dominate the grocery market, with smaller shops that feature cut-rate food with a still pretty high quality. Aldi also heavily promotes one-week sales, featuring deeply discounted merchandise, ranging from wine to garden hoses, which draw customers back. A limited critical mass, insufficient square meter productivity and a too aggressive pricing policy made Walmart loose this competition.

Walmart never got traction in Europe's biggest market characterized by an incredible price competition, well-established discounters and the cultural resistance of German shoppers to hypermarkets, which sell fresh vegetables a few feet away from camping gear.

Other countries in which Walmart also failedto succeed are India, South Korea and Russia.

Ressources:
www.kwintessential.co.uk, www.nytimes.com, www.businessinsider.com, www.dw.de

European vs. American Coffee Culture

Drinking a cup of coffee seems to be normal part of everyone's day everywhere in the world... But there are differences - smaller as well as bigger ones.

The European coffee culture started somewhen in the 14th century in Turkey and stread out all over the continent via Italy. Starbucks invented the idea of coffeehouses and coffee culture - the home away from home - first in the 1970s, but it never became the same like in Europe.

When you order a coffee in Europe you usually get it served by a waiter or a waitress and it comes in a nice ceramic cup or glass with a saucer. Next to the cup lies a teaspoon, a package of sugar and most of the time a little chocolate or a biscuit. Depending on the country you get served a glass of water beside your coffee and either find a little pot of milk on each individual table, or get a little cup of half and half beside your coffee. In America your ordered coffee will come most of the time in a to-go paper cup with a plastic lid on it. Only in a few American coffee shops you have a choice to get your coffee in a ceramic cup.

A latte does not even exist in Europe. In case you order one anyways, you would ether get a glass of milk or a Latte Macchiato in a glass 2/3 milk, 1 shot of espresso and 1/3 milk foam in it. A large Mocha with two added shots of espresso ordered in Europe will probably cause you a heart attack. Coffee in Europe is not necessarily like coffee in America.

Another difference is the size you can choose for your coffee. In Europe you often only have the choice between small/cup or big/mug, but this is only for drip coffee and cafe au lait. All the others like Cappuccino or Latte Machiato mostly just come in one size. In America, you sometimes also can only choose between small and large, which is usually for drip coffee, but between 8oz, 12oz, 16oz, and 20oz or small, medium, large or many more.

Next point is the check out. In Europe you usually order your coffee, the waiter or waitress takes a not of your order and when you're about to leave the café you order the check or pay at the bar. In America you pay your coffee right after the order and even before you get the coffee. In case you want another cup, you go to the counter and order as well as pay again.

Cafés in Europe

Once the coffee is prepared by the Barista, the usual coffee consumer acts different depending on ones continent of origin. The European coffee consumer mostly visits a café in company and spends quite a while chatting, reading or simply enjoying the taste of a well prepared cup of coffee. Drinking coffee is a social activity. European cafés are cozy and nicely furnished places, often with an inside as well as outside area, which invites the customers to sit down and relax. Europeans enjoy and kind of celebrate drinking coffee other than the usual American (there are always exceptions, of course). The American coffee consumer orders, pays, takes the in a paper or plastic cup served coffee (depends if hot or iced coffee) and leaves. If one decides to sit down in the coffeehouse, it is usually to get work done on the laptop, to study or even to meet someone for a business purpose. Way less relaxing and enjoyment of the coffee taste. Americans often even add one up to several flavors to the coffee so they don't have to taste the flavor but this get the energy kick of the caffeine.

On a usual summer day in Europe, you would see the streets full with people sitting outside of coffee shops (cafés) talking and enjoying the moment. Contrast walking through the streets in an American city, you would pass a lot of people with a coffee cup in their hand seemingly inhaling the coffee while they're walking.

In the end, the consumption of coffee is a lifestyle in Europe and a routine in America. Americans consume coffee to be awake and speed up. Europeans ironically use coffee as an opportunity to slow down and enjoy life a little.

So the next time you are travelling in Europe, take some time to sit down in one of the several café and enjoy a nice cup of coffee with your travelling companion, and don’t you even think about taking that coffee with you.  

 

American Starbucks

Welcome to Starbucks' Evenings

The coffee giant Starbucks intends to integrate its newest invention 'Starbucks Evening' at more locations all over the US. Starbucks Evenings is the company's latest concept to serve alcoholic beverages such as bottled beer and wine after 4pm in certain locations all over the country.

"The concept is a natural progression for Starbucks as we seek to create a new occasion for customers to gather, relax and connect with each other in the evenings," Ms. Passé (Starbucks' Spokeswomen) stated. (http://www.usatoday.com)

The first store offering this service in October 2010 is located in Seattle. Since then, the concept has evolved into 26 locations in Seattle, Chicago, Atlanta, Los Angeles, Portland and Washington, D.C. until 2012 and will be offered in 40 locations by the end of this year. Once again, Starbucks proves its leadership in the market of American coffee houses. Besides underlining its first mover position, Starbucks of course intends to increase its revenue during the time after 4pm, when the coffee business usually slows down.

In cafés in Germany and other European countries, it is a regular part of the menu to offer a variety of beers, wines and other alcoholic aperitifs. When I heard about the new concept at Starbucks I was at first surprised but then realized, that I of course have never seen or purchased any alcoholic beverages at a Starbucks store or in a place of its competitors. The whole idea, concept and atmosphere is a total different one of an American coffeehouse than in a German or European café.

I now declare this April to month I discover more differences between the German and American culture of coffee consumption!

... don't be surprised when you soon get carded at a Starbucks ordering a beverage after 4pm! Happy Starbucks Evenings!

'The place you love during the day now has more reasons to love it at night.' (starbucks.com)

Coffee does not immediately taste like coffee...

I cannot really remember when I started consuming coffee, but I guess I was about 14 years old. Since then I like my coffee always the same way: only with milk, no sugar and especially not with any of the 1000 flavors the Americans like to add to their coffee. All members of family drink their coffee pretty much like that (the one prefers half-and-half over milk and the other does not add anything).

The most people I know back home (in Germany) drink their coffee unsweetened. Americans on the other hand seem to prefer any kind of flavor, there must exist 1000s, over the actual taste of the coffee. I study this behavior since 8 month now every day at the coffee place in the university's library. Pretty interesting what the people (Americans) add to their coffee to get the caffeine in their body, but not to taste the actual coffee flavor anymore...

The weirdest flavor I discovered the other day... BACON.

Who wants a task of smoked, fried, fatty bacon in one's coffee?
I haven't met or seen a single person ordering a bacon-latte yet, but I had to get to know more about it...

On the website of baconaddicts.com I found the following description about the Torani Bancon Flavoring Syrup:

"Bacon Addicts will this appreciate this salty, sweet syrup packed with bacon's authentic smoky, savory flavor! ...
Torani suggests you use their bacon syrup in Coffee, Espresso, Lattes, Manhattans, Milkshakes, Old-Fashioned and Bloody Marys. But, we think you can get more creative with Bacon Lemonade, Bacon Soda, or Bacon Beer! Or put it on ice cream, in an apple pie, on pancakes or in cake frosting - anywhere you want to add the sweet, smoky taste of BACON!"

Isn't that gross? Taste is allway a subjective ... but bacon-flavored coffee and coctails do not appeal to me!

What do you think about this new flavor? Has anyone tried it yet? I would love to know...