Chapter 1: Why do People Buy Things They Don t Need?


Chapter 1: Why do People Buy Things They Don't Need?

OVERVIEW

Because they do need!

That is the simple answer to a profoundly challenging question. Consumers buy things to satisfy a concrete, distinctly felt need. Many consumer marketers go little further than this: uncover the need, target it in advertising, and, voila, products get sold. But in today's diverse, networked, information-crowded marketplace, it is hard to rise above the background noise of commerce with practical, needs-based advertising.

What do any of us really need? More fundamentally, how do you reach a mass-consumer market where my need is so different from your need and your need is so different from that of each of your neighbors? What about where the need cannot be defined in conscious, rationally based criteria, but is ephemeral, based on emotions and feelings? Any psychologist will tell you that each of our individual needs extends so much deeper than the simple physical subsistence level. In today's consumer-driven society, satisfying consumer needs has less to do with the practical meeting of physical needs and everything to do with gratifying desires based upon emotions. The act of consuming, rather than the item being consumed, satisfies the need. This is the subject of this book.



WHAT DO CONTEMPORARY AMERICANS NEED?

Economists and social scientists who study the realm of consumer spending can tell us much about what consumers buy, where they buy it, when they buy, and how much they spend. They chart it, graph it, and measure it. However, the flood of numbers emanating from this research cannot reveal the why that ultimately drives consumer behavior. Yet, by understanding the why, practicing marketers can communicate with potential consumers to entice them to buy products using the emotionally based, right-brain-inspired language.

The overall message of so many books that explore modern American consumerism is to shake their fingers at our wasteful consumer behavior and call on consumers to stop their unnecessary, throwaway spending. Think if Americans directed their economic might toward the public good and infrastructure, rather than the extravagant weekly, even daily, shopping trips to the malls, armed with credit cards and insatiable consumer appetites. For example, Juliet Schor, of Harvard University, writes:

The intensification of competitive spending has affected more than family finances. There is also a boomerang effect on the public purse and collective consumption. As the pressures on private spending have escalated, support for public goods and for paying taxes has eroded. Education, social services, public safety, recreation, and culture are being squeezed. The deterioration of public goods then adds even more pressure to spend privately. People respond to inadequate public services by enrolling their children in private schools, buying security systems, and spending time at Discovery Zone rather than the local playground.

Yet, in light of the tragic events of September 11, 2001, and the worsening economic crisis, this point of view seems strangely un-American. The simple fact remains that our whole economic system, even our way of life, depends upon the continued, sustained practice of "excessive," as some see it, American consumerism.



ONCE A CONSUMER NATION, ALWAYS A CONSUMER NATION

As long as the U.S. Department of Commerce, under the Bureau of Economic Analysis, has tracked the nation's gross domestic product (GDP), consumer spending has been the very underpinning of the economy. Consumers' insatiable appetite to buy has contributed between 60 and 70 percent of the GDP since 1929, with only a slight downturn to about 50 percent during the war years of the 1940s. In 1929, 1930, and 1940, personal consumption as a percentage of GDP topped 70 percent, demonstrating the long-standing foundational role consumer spending has played in the American economy, as displayed in Figure 1.1.

YEAR

GDP

PERSONAL CONSUMPTION

PERCENT OF TOTAL ECONOMY

1929

$ 103.7

$ 77.5

74.7%

1930

91.3

70.2

76.9

1940

101.3

71.2

70.3

1950

294.3

192.7

65.5

1960

527.4

332.3

63.0

1970

1039.7

648.9

62.4

1980

2795.6

1762.9

63.1

1990

5803.2

3831.5

66.0

1995

7397.7

4975.8

67.3

1996

7816.9

5256.8

67.2

1997

8304.3

5547.4

66.8

1998

8747.0

5879.5

67.2

1999

9268.4

6282.5

67.8

2000

9817.0

6739.4

68.7

2001

10100.8

7045.4

69.8

2002

10480.8

7358.3

70.5

Source: U.S. Bureau of Economic Analysis


Figure 1.1: Personal Consumption Expenditures as a Percentage of GDP (in billions)