1.4 Consumer Behavior History from 1920–2020

1920s Salespeople and Market Research

Businesses in the Roaring Twenties wanted consumers to buy products and goods on lines of credit and shop in a new department store landscape. But how could they accomplish that when their previous business strategies were more focused on producing goods than on selling them?2 Business owners turned their focus to newly formed marketing departments that would act as catalysts for sales and research. Businesses realized that consumers wanted to save time by getting mass-produced goods for instant gratification instead of learning a lot about a company’s products.3 Salespeople capitalized on this with a flurry of slogans and colorful ads to sway consumers’ minds. Companies coupled their slogans with commercial research. In this decade, we see businesses hiring psychologists for the first time: enter Daniel Starch and Charles Coolidge Parlin.4 While Starch conducted door-to-door interviews asking homeowners about their memories of magazine advertisements, Parlin spearheaded the first commercial research firm with the Saturday Evening Post to study consumers and advertisements.

Let’s reflect on this 1927 Pillsbury’s Pancake Flour magazine advertisement. How does this advertising copy try to persuade instead of educate the consumer? How do the words in the ad emphasize the 1920s consumer’s new focus on convenience? How does Pillsbury’s compare its product to what the consumers could bake at home?

1940s Homo economicus

While the 1920s focused on consumers’ wants, the Depression and World War II in the 1940s swung the pendulum in the opposite direction. Businesses viewed consumers through the lens of the Homo economicus model as making purchasing decisions rationally.5 This model influences our present-day perception of B2Bs, in which logical spending delivers the most utility. Businesses in the 1940s expected consumers to know of all the available products in the marketplace and to be compelled to purchase a product objectively when a company lowered product prices. These were unrealistic expectations because consumers could not compare all available products to make an educated decision. The Homo economicus model also deemphasizes consumer uniqueness and preferences.6 One major component of the Homo economicus model is bolstering product value by demonstrating high sales in advertisements. A major flaw with the theory of this model is that it discounts the desirability of purchasing high-priced luxury items such as perfume.

Let’s examine this 1940s Chrysler Fargo truck advertisement. What elements of the ad reflect the Homo economicus model of using rationalism? Consider this remark from a retail analyst of the era:

1950s Irrational Consumer

With World War II finally over, businesses went back to their Roaring Twenties roots to focus on slick advertising targeted to a consumer no longer deemed rational. This new, irrational consumer was impulsive and susceptible to advertising influences. The fifties welcomed two consumer theories and models into marketing: Pavlovian learning and Freudian psychoanalytic theory.8 Pavlovian learning’s four key components of drive, cue, response, and reinforcement created a wave of repetitious ads featuring purchasing motives of hunger (fast food), sex (beauty products), and fear (car safety).9 Meanwhile, the Freudian model of guilt and shame over repressed sexual urges translated instead into the socially approved purchasing of cars, which represent gratification. Since these repressed consumer feelings could not be observed externally by marketers, psychologists like Ernest Dichter launched new motivational research focusing on in-depth interviews to reveal consumers’ true desires.10

In this 1951 Cadbury's ad, we see several strategies to cue the consumer toward hunger. What other influences does the ad use to appeal to the irrational consumer?

1960s–1970s Problem Solver

Where the 1940s deprived the consumer of information to make educated choices in the marketplace, the 1960s and 1970s saw a powerful movement of governmental consumer activism through President John F. Kennedy’s leadership. His Consumer Bill of Rights protected consumers from previous decades’ misleading advertising. The Consumer Bill of Rights contained four major elements: the right to safety, the right to be informed, the right to choose, and the right to be heard.11

As consumer access to information increased, consumer choice did as well. And these choices were products manufactured with the consumer in mind, not the company. This pivot was largely due to shedding the 1950s irrational consumer perception and instead crowning the consumer as a “cognitive person” or “problem solver.” 13 Despite consumers having both information and choices, consumer research scientists observed that the average consumer found it challenging to remember many different product attributes due to the lack of organized marketplace information.

A 1967 Lego ad used the following text: “Lego, the toy they won’t be tired of by Dec. 26th. Lego . . . the thoughtful toy.” How does this messaging reflect the child as a “problem solver” and “cognitive person”? How does this ad’s messaging differ from the 1950s irrational consumer?

1980s Cognitive Miser

The 1980s consumer adapted to the continuing influx of product choices and longer working hours by going in the exact opposite direction of the 1970s problem solver. Instead of engaging in extensive decision-making, due to lack of ability or time, consumers opted for satisfactory decisions, which included buying cheap or using name brands. 14 Lack of time and more women returning to work also sparked consumers to buy convenience products and participate in direct mail and at-home shopping. President Ronald Reagan ushered in an age of business, conservatism, and affluence that reversed some of Kennedy’s consumer regulations and encouraged more luxury spending on credit. In 1980, Apple used a Ben Franklin Apple ad with a photo of a surprised Ben Franklin using an Apple computer to research a kite and the text “What kind of man owns his own computer?” The text below this question answers that a wise man owns his own computer and gives information about where to buy an Apple computer. How does this ad represent the 1980s’ cognitive miser?

1990s Collective Buyer

The 1990s pulled us closer to who we are as consumers today. Consumers no longer make isolated purchasing decisions as in previous decades; now, they collaborate with multigenerational members living in their same household. Consumers from the 1940s, the economic consumers, are aging and have very different purchasing needs. Where we saw mothers returning to the workforce in the 1980s, the 1990s represents consumers working multiple jobs and living with others in order to survive economically. This decade also serves as the start of adult children living longer at home with their parents. All of these factors play a major role in consumers behaving more collectively in their buying journey.