How Information Changes Consumer Behavior And How Consumer Behavior Determines Corporate Strategy
Professor of Operations and Information Management
The Wharton School
University of Pennsylvania
November 6, 2009
Alter Hall 405, 1000am – 1130am
Information availability has increased consumers’ informedness, the degree to which they know what is available in the marketplace, with precisely which attributes and at precisely what price. This informedness has altered the demand side of market behavior: customers now discount more heavily when comparable products are available from competitors and when products do not meet their wants, needs, cravings and longings, but they no longer discount as heavily when purchasing unfamiliar products. Changes in the demand side are producing comparable changes in the supply side: firms earn less than their expectations when competing in traditional mass market fat spots, while earning far more than previously when entering newly created resonance marketing sweet spots. We trace the impact of hyperdifferentiation and resonance marketing on strategy, with a clear progression from a limited number of fat spots, through reliance upon line extensions, and ultimately to fully differentiated market sweet spots.
For a copy of the full paper, click here.