Consumer Behavior New Zealand Consumer Behavior This Essay

  • Length: 13 pages
  • Sources: 20
  • Subject: Economics
  • Type: Essay
  • Paper: #93373009

Excerpt from Essay :

Consumer Behavior

New Zealand Consumer Behavior

This research paper has to do with the consumer behavior of the people of New Zealand. The structure of the paper is broken down into how consumer buying behavior is affected by "income status, occupation, Education, geographic, demographics, lifestyles and culture, possessions and level of influence" in their desire to purchase a product such as Hennessey Cognac. Income status means a great deal when looking at whether a person will purchase a high priced specialty item such as cognac, and New Zealanders vary by their ability to purchase the product because of wealth. Occupation is not as great a factor because people in different occupations have differing levels of pay. Education does not seem to matter a great deal either except for the fact that people who are better educated earn more over their lifetimes. This could be more of a factor in other countries, but New Zealand has a higher percentage of people who get secondary educations and nothing more than other OECD members (OECD, 2012). The geographic regions could be a greater deciding factor because the people on the South island are mainly European in origin, which would mean that they would be more likely to purchase the drink, while people on the North island are largely Maori. Demographics play a role in the same way that geography does. Lifestyle, for example rich vs. poor, is probably the biggest factor anywhere. In New Zealand, there is less disparity of wealth, and so this may not be as big a determinant as other factors. Possessions speaks to the wealth factor, as does level of influence. As to the last, a person who wants to be seen as someone who has influence is more likely to drink high-end spirits than someone who does not have that particular issue.

Income Status

A person's income will greatly affect what someone buys, the stores they frequent and how often they buy goods (Booth, 2008). Consumer behavior is linked to many different factors that account for how people buy what they do, but as their income increases, it is invariable that people will purchase more in a free market economy such as New Zealand's. It may seem that the reason for this is simply that as a person has more wealth they are able to purchase more so they do, but it is more complicated than that. According to research conducted by Bauman, Barton and Elliot (2007) regarding how consumers act when they are seeking a banking establishment, people will increase their spending habits up to a point (a point that is different for every individual or couple) and then they will begin saving back the excess. The reason for this could be that people reach a termination point where they have bought everything that they need and want, but this does not explain it all either. It just seems that people have a set threshold in their minds that is predetermined by personality and experience beyond which they will not go when it comes to consumption.

Looking at middle income spending is not that interesting because people basically consume at a level of their income (basically buying what they need and the few luxuries that the income allows them to afford (Booth, 2008)), but lower income individuals may be the most puzzling until the data is examined. Different countries use different thresholds of income when considering someone to have a "low" income, but the term "poor" is often associated with it. This is the family that only makes enough money to supply its basic needs, and does not have any extra to purchase what would be considered luxury goods. This class of earners would generally be thought of as very conservative with their money because they cannot afford enough to be liberal. However, this does not seem to be the case with some of this type of earner. People who earn less, in some cases, spend more than they seem to have money for either because they are more savvy consumers or because they are receiving subsistence cash from their government (Godwin, 2003). Many of the people in this category are in the store more than people at other income levels because they have to search longer for deals that will stretch their income. However, people who are earning part of their income through government assistance programs will often be very irresponsible with their money (Godwin, 2003). The reason for this, according to the research, is that there is less a feeling of ownership. This type of income is seen as "free money," so it is not guarded as closely as it would be if it was earned by the individual. This means that is spent frivolously in many cases because of how it is seen by the person receiving the handout.

New Zealand is not a rich country in terms of average income. The average worker earns $35,304 equivalent in 2012 U.S. currency. This makes it a solidly middle income country. Therefore, based on the research previously reported, New Zealand consumers will buy what they need, and spend what little disposable cash they have on luxuries and savings. The savings rate is actually negative in the country, but it has been making a recovery over the last few years (NZ Treasury, 2011). This means that people are spending more than they earn because of credit expenditures. This consumption is in line with many Western countries (which New Zealand is considered because of its ties to the UK).


Occupations in New Zealand match those in most other countries among the British commonwealths, and most of the people in the country have full employment. Consumer behavior in every nation is affected by the occupations that the people hold because they determine what goods the individual will need to purchase, and this also determines what quality of goods the consumer will be able to purchase. Some occupations dictate that a specific type of tool or resource be used, and the cost is generally high because of the exclusivity of the purchase. But, purchases made specifically for the job are usually either handled by the employer or they are purchases that occur so rarely that they do not make up a large part of the overall spending income of the individual. Occupation matters mainly because it speaks to the money that the person can generate from which they can purchase goods (Olsen, 2005).

The reality is that New Zealand remains the same type of occupational nation that it has been for most of its history. The main industries are no longer agricultural, but a significant portion of the population still derives its income from rural sources. These industries include dairy, sheep, lumber and other occupations that are considered rural. The country has never become a large producer of either electronic or other manufactured goods; many of these products are imported. A large boom has occurred in tourism, especially ecotourism, over the past two decades. This is largely due to the exposure that the country has received over the past couple of years from the movies that have been shot in the country. New Zealand is seen as an unspoiled land that people want to visit to see some of the last first growth forests that exist in the planet (Ecotours New Zealand, 2012). It has also become clear that New Zealand has become a much desired movie location. All of the "Lord of the Rings" films were shot there and the two "Hobbit" epics are shooting there now. This influx of Hollywood money has increased exposure to the country, and it has created a new industry that previously did not exist. Movie companies pay a great deal of money for occupations from location scout to extra, and the people of New Zealand are benefitting from this.

Occupation relates to consumer behavior in the form of confidence (Halstead, Jones & Cox, 2007). When people are satisfied with their present position, they are actually more likely to spend. This seems to be the case because the person is more likely to stay in the job, which means that they will have a long-term, steady income with which to purchase goods and services. In New Zealand, the average length of job tenure is comparable to that in the rest of the industrialized world, so spending habits are also comparable.


The country has become one of the world's leaders in providing education for all of its people. The human development index from the United Nations says that they have a 1.000 education rating (UN, 2010). This means that every person on the islands has the ability to achieve any education that they want to. Primary, secondary and tertiary education is open to all people, and it is highly subsidized by the government. Education is seen as a priority not only by the government, but also by the citizens of the country (Ministry of Education, 2012). Also, the educational attainment of the people…

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