Study finds slowdown in purchase of electronic items
A recent survey on household electronics by the Barna Research Group, Glendale, CA, found that the growth of home technology has slowed to a crawl. Ownership of equipment such as VCRs and personal computers has changed little over the past 18 months. While VCR ownership has risen to more than three-quarters of all households (78%), this is a minimal increase above the 76% penetration figure recorded in late 1989. VCR
ownership had been increasing by 20-30% per year until 1989, when ownership reached the 76% level. Sales of personal computers reflect a similar slowing trend. While the 1989 study revealed that 24% of all households owned a home computer, that figure has risen only slightly, to just 26% today. Recent breakthroughs in technology and even the downward movement of prices appear to have done little to move people into the home computer market.
The most rapid growth over the past two years was seen in ownership of compact disc players. The survey shows that ownership rose from 24% of all households in 1989 to 30% today. Even this rate of growth, while eclipsing that of PCs and home computers, is far below the expectations of industry experts.
The huge growth of compact disc sales has created the appearance of greater pen¬etration than is the case. Many CD owners are simply replacing their vinyl album collections with CDs, thus making the CD market appear to be growing much more rapidly than it is.
Ownership of other electronic equipment - cellular telephones, satellite dishes for television reception, and home fax - all remain minimal. Less than one out of ten households owns any of those items.
In commenting on these findings, George Barna, president of Barna Research Group, says that technology for home use has reached a critical point in its development. "The early adopters have all rushed out and purchased the latest and greatest innovation. Most adults, who have access to these machines on the job, have yet to determine how their personal lives will be enhanced by owning such technology. If the manufacturers of these pieces of equipment are seeking broader penetration over the next few years, the key will be developing and promoting new and attractive applications. The next few years will be a time when people are less dazzled by the existence of technology and more concerned about the utility and life-enhancement properties of those technologies."
Barna also notes that the highest penetration levels for household electronic equipment were recorded among homes in which there were at least two income-earners; homes in which the adults were under age 55; and urban and suburban locations. Adults from households earning over $60,000 per year were four times as likely as the typical household to own a cellular car phone; three times as likely to own a fax machine; and twice as likely to own a home computer.
The depressed economy has also pushed people to reconsider the necessity of some of these items. According to Barna, the studies indicate that many people are redefining the difference between a necessity and a luxury. "When PCs and CD players first emerged, many adults looked upon those items as something they had to have. Today, though, with tighter money, rising unemployment and other lifestyle pressures playing a larger role in people's lives, fewer individuals regard these technologies as a 'must-have.' Leisure is extremely important to people, as is the protection of their time. Yet these machines are not always viewed as necessary means to enhancing their leisure time or their overall satisfaction with life."
Many firms creating new names
Two out of every three companies created a new name during the last two years, according to an annual survey of marketing executives at 600 U.S. firms. Many methods were used to generate these new names for products, services, or the businesses themselves. But only one-third of companies tests new names before unveiling them.
The survey was conducted by Rivkin & Associates, a communications consulting firm based in Midland Park, NJ. Among the findings:
- 69% of the companies surveyed introduced a new name during the past two years (compared with 55% in the 1990 survey).
- Internal task forces, the most commonly used method, were considered most effective by half the respondents.
- Ranked below that in effectiveness were advertising agencies, naming consultants, employee contests, the extensions of existing names, and other methods such as public relations firms and computer naming software.
- The typical company used several different methods to develop new names.
- Only 37% of companies use research to test new names.
- Name generation projects are viewed as substantially more important and more difficult than five years ago.
Doctors influence consumer OTC purchases
When buying non-prescription medications, a doctor's recommendation is the single most important factor influencing consumer decision, according to a new national survey. An overwhelming majority (69%) of the population say they listen first to a doctor's opinion regarding over-the-counter (OTC) products, while only seven percent consider price to be the most influential factor.
"This study illustrates just how much American consumers rely on their physicians for advice, even when selecting an over-the-counter medication," says Susan S. Smirnoff, senior vice president of Ruder Finn, Inc., the New York-based
firm that commissioned the survey. "The finding is significant given the consumer trend of self-medication as a way to reduce escalating health care costs."
Respondents were also asked to weight by varying level of importance five factors which affect their buying decisions. Topping the list of what is considered "very important" is advice from a doctor (79%) and a pharmacist (51%). Twenty-eight percent say price is "very important" to their purchase decision, followed by a friend or relative's recommendation (18%) and advertisements (8%).
Older Americans appear more likely to be influenced by their doctor's recommendation. Seventy-four percent of adults 45 years of age and older cite aphysician's opinion as the most important factor in determining which medicine to buy, compared to 63% of those under the same age.
The survey also reports encouraging news for the media and advertisers, as more than one-third (38%) of those questioned feel advertisements are at least "somewhat important" in terms of their OTC decision-making process.