Consumer behavior and demographics in major home appliance purchases

Customer Analysis/Consumer behavior on Major Home Appliances (Maytag)

Customer description at industry level

The typical major home appliance customer is part of a couple, a homeowner, and is buying his or her first or second washing machine, refrigerator, or stove and desires a quality product, rather than a product that will simply 'do the job' for a short period of time. Demographically this consumer demand segment is more likely to be composed of homeowners than renters. Geographically these buyers are likely to be somewhat dispersed, as no single segment of the country but more likely to be concentrated in suburban than urban areas. Psycho graphically they value home life. Their lifestyles include children, and Compared to purchasers of non-qualified products, appliance purchasers also tend to be slightly older, and slightly more educated. Purchasers of Energy efficient products tended to be even older -- while the average home appliance customer is between 40-49 years old, the energy efficient conscious consumer was 50-59 in his or her average age range. (D&R International, 1999, p.1) Behavioral characteristics in terms of how they use the product would define them as somewhat heavy uses (cookers rather than consumers of fast food), individuals who desire a quality product because they frequently use the product. The median income of such buyers is $60,000 to $74,999, with the distribution of incomes fairly consistent between purchasers of energy saving models and those who did not buy a compliant model.. (D&R International, 1999, p.4)

Explain why those variables are the relevant ones

This decision-making process affects how the product is price and how the product is positioned in the market. The fact that this is a need-driven rather than a purely want-driven product, and requires planning rather than impulse buying means that demand will be less elastic in terms of price, and more dependant on other factors such as changes in life circumstances, such as home buying, marriage, or relocation from one area to the country.

Segments are defined

Men, women, singles and couples, older and younger people, second and first time appliance buyers, couples that do a great deal or very little laundry/cooking/cleaning, the number of children in the home, and also to a lesser extent, the desire for a particular aesthetic appearance in the machines being purchased would be the most common segments of the buyers.

Needs and wants are identified

Needs include capacity, size, and presence of a dryer for washing machines. For oven ranges, electric vs. gas. For microwaves, wattage. Wants include top or front loading, color, the size of the appliance, and its ability to fit in with the desired room. Also, energy efficiency vs. capacity -- older couples might desire more energy efficient appliances to save money, while younger couples desire capacity for washing large loads of children's clothing.

Is decision high or low involvement?

Almost all appliances are high involvement decision, given that most couples will only buy a few washing machines or oven ranges in their entire lives, yet do not wish to be burdened by costly repairs or energy costs.

Describe decision process

The Maytag Homepage depicts a white, upper to middle-class couple marveling how the Maytag has a large capacity, which saves time (for the woman) and energy (for the man) as well as keeps clothes like new. If the decision process is gender divided thus Maytag covers all potential 'bases.' Thus decisions involve need, functionality, reliability, pricing and only then form. Maytag's perceived quality of customer care (Peterson, 2005) that extends to summoning user's opinions via a corporate weblog encourages customers to feel involved in the process.

If joint decision, describes roles consumers play in the decision

The partnership may be equal, and even in traditional couples, a woman may have more say because washing machines, ovens, etc. are seen as 'women's products.' Men may have more concern and impact upon buying the good for price-conscious or efficiency reasons, while women will have more concern for product use.

Demand forecast

The demand forecast is mixed. Increased demand for durable goods are likely to coincide with the continuing spiral upwards in the real estate market, as new homeowners must buy new appliances. Concerns about the economy might cause an upswing in energy-efficient appliances. But for Maytag's smaller line of microwaves, vacuum cleaners, and non-necessary goods, the still shaky economy might cause these market bases to contract. Also improved technology will likely require fewer repairs, and the possibility of increased interest rates would cause the ability to borrow these goods to contract, for consumers who do not have 'ready cash' to purchase large appliances of quality.