Consumer Power

Consumer Power

Introduction

"Customer is a King" this phrase is commonly known for many centuries in business world. However, deeper inside this phrase, the power to control almost everything in the market is still belong to the sellers. Sellers control the product price, quality as well as quantity in the market; and customers have to follow sellers' rule. However, in the past who would think that customers would have much more power to negotiate or bargain with the sellers? But according to the advance in technology especially internet, which have created the different market, the power have began to shift from sellers to customers. Today, the market is driven by consumer. The way companies measure their performance in the industry is not only look at the product quality or service performance, but look at the customer satisfaction as well. Therefore, company business strategies have to focus on consumers much more than before and be able to adapt the strategy to reach changeable consumer satisfaction. However, this article will not focus on the business strategy for company but will focus on the consumer behavior, rapidly change due to the technology advance.

Power to choose product and bargain the price

The emergence of the internet is the key part that shifts the power form sellers to buyers. Internet has built the innovation way of trading in the market. It allows buyers to view and compare product from tremendous sellers any where around the world. The web makes the things easy for people to discover what they want to know and who offers the best deal. Think about the past, in my opinion, one thing that made the power belong to the seller hand was mainly about the location issue. Electronic stores, for instance, could set the TV price as high as they could if they were the only store in that location and there were no other stores nearby. Customers in that area had 2 choices; either bought this expensive TV or drove the long way to buy from different store in other locations. Internet has eliminated this location issue. According to the Goldman Sachs survey, online shoppers in America during the 2004 holiday season--the busiest time for retailers, from November 1st to December 26th--spent $23 billion online, 25% more than in the same period in 2003. Spending patterns on the internet are increasingly coming to resemble those in the high street. Clothing was the most popular item bought online in America, accounting for 16% of online sales, followed by toys and video games with 11% and consumer electronics with 10%. Jewelry was the fastest-growing category, with the value of sales doubling to $1.9 billion. This statistic proves that the consumers behavior have changed shapely. In the internet world, there is no boundary throughout the world. Customer can buy the cheapest product from any locations around the world, which mean sellers do not compete with other stores in particular location anymore. They have to compete with countless competitors in the rimless world. According to the article "crowed at last" from the Economist print edition, "as competition increased and became more global, there were more products to choose from and they increasingly resembled each other." This circumstance makes the great advantage to customers. Customers have the power to bargain the price with sellers in order to reach their satisfied product price.

eBay.com, for example, is the e-market that truly gives the power to customer in order to bargain the price on the market over sellers. eBay.com is the b-web that creates the agora and aggregate both sellers and buyers into the same place. In eBay, all product prices are controlled by the demand in the market. I considered eBay.com as a b-web that bargaining price product is easily found especially antique product that has not been produced anymore. Whenever I view eBay.com I feel like I have the power to bargain the product that I want with my budget that I have because it is an auction. In this situation, if the price has exceeded my budget, this circumstance does not because of seller negotiate the price with me but because the price is bargain by other customers who offer the better price. Therefore, the power to control the price is still belong to the consumer hand.

Nonetheless, the group of people whom should be watched closely is the people who age 18-34 years old. For this age group, internet is almost every thing in their daily live. They prefer to be connected wherever they go. Their purpose of using the internet is not only considered the internet as a main source of information or entertainment, but also deemed the internet as a great shopping center. According to my experience, whenever I want to buy something, the first place I went to is the market on the internet. Internet has provided many advantages to the consumers. First, Internet has allowed user to shop and compare product price from many stores during the same time. Twenty years ago, consumers might find a hard time compare product price between 2 stores, especially these 2 stores located at the opposite way. They have to drive to the first store, check product price and then drive to another store in order to compare to another store price. This circumstance truly wasted their time. Besides that, customer could buy product in their nearest store without knowing if there was any cheaper price in other stores. In this circumstance, stores have much power over consumers in the market. Internet makes the situation completely change. Today, consumers can check product price form several stores at the same time by on-line. Moreover, the store location issues have become the less important topic since these on-line store do delivery services to customer. Today, therefore, the power has been given to consumer hands instead of seller as before. Consumers, therefore, have power to bargain the price over sellers since they have many options on the on-line market.

In the article "crowed at last" from the Economist print edition, "Over 80% of Ford's customers in America have already researched their prospective purchase on the internet before they arrive at a showroom, and most of them come with a specification sheet showing the precise car they want from the dealer's stock, together with the price they are prepared to pay. Similarly, more than three-quarters of mobile-phone buyers in America do their research on the web, even though only 5% buy online, says John Frelinghuysen of Booz Allen Hamilton, a firm of business consultants. They still want to go to a shop to hand over their money and get their phone, but first they want to see exactly what the service package covers, and to read what other users say about their proposed purchase."