MATRICULATION NUMBER:18/law01/037 Consumer Behavior QUESTION In not less than 2000 words explain explicitly how the pandemic (COVID-19) has affected consumer behavior. ANSWER First of all we need to know the meaning of some terms used before we actually hit the nail on the head. What exactly is the Corona virus(COVID-19) about? Coronavirus disease (COVID-19) is an infectious disease caused by a newly discovered coronavirus. Most people infected with the COVID-19 virus will experience mild to moderate respiratory illness and recover without requiring special treatment. Older people, and those with underlying medical problems like cardiovascular disease, diabetes, chronic respiratory disease, and cancer are more likely to develop serious illness. The best way to prevent and slow down transmission is be well informed about the COVID-19 virus, the disease it causes and how it spreads. Protect yourself and others from infection by washing your hands or using an alcohol based rub frequently and not touching your face. The COVID-19 virus spreads primarily through droplets of saliva or discharge from the nose when an infected person coughs or sneezes, so it’s important that you also practice respiratory etiquette (for example, by coughing into a flexed elbow). At this time, there are no specific vaccines or treatments for COVID-19. However, there are many ongoing clinical trials evaluating potential treatments. WHO will continue to provide updated information as soon as clinical findings become available. What is consumer behavior? Consumer behavior is the study of individuals, groups, or organizations and all the activities associated with the purchase, use and disposal of goods and services, including the consumer's emotional, mental and behavioral responses that precede or follow these activities. Consumer behavior emerged in the 1940s and 50s as a distinct sub-discipline in the marketing area. Consumer behavior is the study of individuals’, groups’ and organizations’ decisions with regard to the selection, purchase, use, and disposal of goods, services, ideas, or experiences to satisfy their needs and wants. In simple words: Consumer behavior is the study of how consumers make decisions about what they need, want, and desire and how do they buy, use, and dispose of goods. In the cause of this pandemic, the habit of consumers has changed drastically from the unwariness of these people. A lot of precautionary measures taken and in most cases people have also disregarded all that is happening and are working a lot in ignorance of this virus and it’s about it’s about really. The challenges facing the world right now are shaking up global economies, pushing healthcare systems to their limits, and upheaving people’s daily lives. Currently, more than one-third of the world’s population is under some form of lockdown. To put it simply: there isn’t a business, government, or person that hasn’t felt the effects of coronavirus, even to some degree. One very noticeable impact of the outbreak is its influence on how and what people purchase. This is having a knock-on effect on various industries and key groups. Our latest COVID-19 research, conducted between 16th-20th March among 12,845 internet users across 13 markets, shows how purchase behaviors are changing amid the crisis and what this means for brands. Find full reports and frequent updates on the consumer response to COVID-19 in our hub. If you want to analyze the data in more detail, you can access it for free in our platform. The outbreak of the COVID-19 virus has had a major impact on daily life and consumer behavior in China. When the epidemic peaked in China at the beginning of March, it led to the lockdown of regions and cities with a total population of 500 million people quarantined and a concurrent decline in production. Despite the negative social and economic impact, the outbreak quickly led to an adjustment in people's behavior – from fear to action, to cope with the unexpected situation – and a shift in daily activities from offline to online. Currently, the distribution of COVID-19 in China is beginning to stagnate. Consequently, first lessons can now be drawn from its effects and impacts, serving as a forecast for developments in Europe. Reply is able to provide data-based insights into current market developments in relation to Chinese consumer behavior using the China Beats insight tool. What are consumer packaged goods? Consumer Packaged Goods are items that are used daily by average consumers that require routine replacement or replenishment such as food beverages, clothes, tobacco, household products and so on. The coronavirus disease (COVID-19) outbreak has become a global threat as it has led to shut down of economies around the world. Apart from the health crises caused by this disease, it has also led to lockdowns and travel restriction as one of the measures to contain its spread. This has had a lot of effects on the global economy, consumer demand, businesses, revenue generation, employment and so on. According to the report some major drivers in the COVID-19 pandemic will matter most for Nigeria’s economic growth. These include oil prices, Consumer demand, Trade & Investment, Non-oil exports and Investment & Capital Inflow. Experts believe that COVID-19 will have varied impacts across consumer goods segment. These include; * Food items like staple products (flour, noodles, rice, pasta) and canned/frozen products is likely going to have increase in demand. Foodservice focused businesses are expected to have an 80% decrease in demand. * Beverages will experience limited impact on overall consumption, but there will be short-term increase in selected non-alcoholic beverages like water. * As for consumer health, there will be strong demand for over the counter (OTC) products. * In the household products segment, there will be increased demand in basic and essential products like tissues, toilet paper, soap. Reduction in discretionary spending especially for items with higher value is expected. * There should be limited impact on the demand for tobacco. Emerging reality for CPG companies in Nigeria; expert’s opinion in the McKinsey & Company report, looked at the impact from the different subsets; For local sourcing, businesses with dollar-based input costs are expected to experience pressure on their profits due to increase in Naira value of those goods and shrinking consumer wallets. In countries heavily impacted by COVID-19, consumers are stockpiling food and other essential items, while isolating themselves from crowds. To find out how and when consumers started showing these behavioral changes, Nielsen1 conducted shopper behavior research that started during the beginning of the pandemic in China and extended to other countries that have also been affected. They monitored consumer trends, as COVID-19 news reached the general public and found out that consumers go through six behavioral stages based on their awareness of the COVID-19 spread in their communities: 1. Proactive health-minded buying: Increased interest in the acquisition of products that maintain well-being or health 2. Reactive health management: Prioritization of products for infection containment (e.g. face masks) 3. Pantry preparation: Higher purchases of shelf-safe products and increased store visits 4. Quarantined living preparation: Increased online shopping, decreased store visits and first signs of strain on the supply chain 5. Restricted living: Possible price gouging due to limited supplies and deterred online fulfillment 6. Living a new normal: Increased health awareness even as people return to their typical daily activities The study also found out that consumers typically moved from one stage to another in a period of two weeks in areas close to the initial outbreak. However, this happened much faster in other countries where the outbreak started later, such as Italy and the US. Currently, the only country where consumers are starting to transition to the sixth stage is China, while the US has begun to move towards restricted living. So, what kind of possible long-lasting consumer behavior shifts can we expect as a result? It’s still too early to tell, but clear trends can be seen, which, if sustained, could lead to significant shifts in how consumers shop in the future. There’s no doubt that the crisis caused by the global Coronavirus (COVID-19) pandemic has created an incredibly difficult business climate. Businesses are being presented with many new challenges as international borders close, bricks-and-mortar businesses shut their doors, and people are told to isolate at home. Many companies face temporary or even permanent closures, with staff facing months of financial uncertainty and worry. Consumer behaviour has been forced to immediately change, and change on a massive scale. Those in isolation or under lockdown can’t perform their usual routines, especially since many local shops have been forced to close their doors for safety reasons. Concerns about the availability of goods have encouraged panic buying of items in bulk. Financial uncertainty and the prospect of a severe and long-term recession make for a stark backdrop which has led to an impact on consumer outlook, perceptions and behaviours. For the businesses that remain active at this time, questions are inevitably being asked about how best to cope with the prevailing trading conditions, and how best their strategies should adapt. This is a difficult question to answer since the Coronavirus pandemic is so new that the circumstances are changing fluidly and on a daily basis. Defining a strategy now is difficult as there is limited evidence or precedent to base assumptions on. Initial indications about what might happen to businesses and the economy could be gauged by looking at the data from the countries which first suffered from the effects of COVID-19. While there’s no guarantee that others will follow the same trajectory, analysis of these countries can reveal useful patterns and insights. Markets could be broken down into three categories based on how far along the outbreak of coronavirus was in the area. Given how quickly the coronavirus pandemic has spread in many markets, these categories may be more informative than the results for individual markets. Markets in the early-stage category had seen relatively few cases, a low number of deaths and few social distancing measures put in place. These markets included the U.S., U.K., Belgium, Germany, Netherlands and South Africa (although clearly some have now advanced beyond this stage). Mid-stage markets, which included Brazil, Canada, Czech Republic, France, Israel, Poland, Saudi Arabia, South Korea and Turkey, were markets in which community transmission was taking place, deaths were increasing and some social distancing measures were taking place. Late-stage markets, which at the time included China and Italy, had seen a significant number of cases and deaths, with full lockdown measures in place to stop the spread of the virus. While consumers were largely concerned about the coronavirus pandemic, personal concern remained relatively low at the time of the study. Overall concern was highest in China, but the country actually scored the lowest for personal concern. In the U.S., both total concern and personal concern were low, with total concern at the lowest among all markets measured. The global COVID-19 pandemic has forever changed our experiences―as customers, employees, citizens, humans―and our attitudes and behaviors are changing as a result. Once the immediate threat of the virus has passed, what will have changed in the way we think and behave, and how will that affect the way we design, communicate, build and run the experiences that people need and want? The answers to these questions will be revealed in the ways people and businesses react and find innovative ways to rise above these challenging times. In consumer goods, this crisis is fundamentally changing how and what consumers buy and is accelerating immense structural changes in the industry, for example. To help accelerate response to Coronavirus-driven changes, we identified five major human implications to expect from people’s behavior now, and next. Each has deep experience implications for all organizations. In concluding all of these, Even before the COVID-19 pandemic struck, companies in the consumer markets sector were experiencing converging pressures, ranging from intense competition to evolving customer preferences. Consumers have made it very clear that digitally enabled convenience matters to them. Now more than ever — in the midst of public-health and economic crises that are rapidly reconfiguring shopping behavior — consumers help define digitally enabled convenience based on the personalized combination of their preferred physical and digital options. In response, consumer-facing companies are considering adjusting their entire value chains to better account for global reverberations — from supply and logistics to e-commerce architecture. And they’re having to do it in near-real time to help keep up with ever-evolving consumer demands. Typical contingency plans help enable operational effectiveness following events like natural disasters, cyber incidents and power outages, among others. They don’t generally take into account the widespread quarantines, extended school closures and added travel restrictions that may occur in the case of a health emergency such as COVID-19.