October 24, 2008

The Herd Effect And The Influence Of Technology On Consumer Behavior In A Crisis

by Reineke Reitsma

with Benjamin Ensor, Laura Wiramihardja

Executive Summary (This is a document excerpt)

There have been tough economic times before, but those were in a different era. In the 1980s, consumers only received information via television and newspapers, which meant a certain delay in getting the news and then being able to react to it. Consumers were aware of issues involving the world economy, but what counted most to the majority was what happened in their own country. But times have changed — information is everywhere, bad news travels fast, and people rely on their peers more than on experts. The credit crisis has painfully exposed banks' vulnerability to the rapid spread of bad news. But banks are not the only firms vulnerable to this effect. Market researchers at companies need insight into their customers' technology uptake, Social Computing behavior, and psychographics to understand how they will behave when the going gets tough.

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