the changing consumer in portugal_1995

8/6/2019 The Changing Consumer in Portugal_1995

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ELSEVIER Intern. J. of Research in Marketing 12 (1995) 485-502

The changing consumer in PortugalM i n o o F a r h a n g m e h r ' , P a u l a V e i g a

Universio" of Minho, Campus Gualtar, 4700 Braga, PortugalAccepted March 1995

Abs tra~

The 1980's for Portugal was a period of remarkable changes and a number of events influenced the d ~ c ~significantly. Changes in environmental variables had great impact on the behaviour of P~ttuffaese .oP~mersthe marketing management o f firms. This article reviews the changes along a number of variables which are ret~wamfor decision-making in marketing in Portugal. Economic environment, demographic developmems, curare[ ~-Mattitude changes, variables related to Portuguese consumers and changes in macro marketing-mix wiU [Be assessed.The future trends of these variables will be reviewed and their impfication for marketing management m theremaining years of ehis century will be considered.Keywords: Consumer behaviour: Macro marke*.ing-mix; Marketing management; Portugai

1. IntroductionThe 1980's witnessed remarkable changes inPortugal, espcdally in the econom'c arena. In thefirst half of the eighties, the macroeconomic per-formance was either static or downward in move-ment, The changes in macroeconomlc ve.riablesinfluenced sharply the performance of producersand retai lers of both consumer and dur~.ble goods.

Actually the first five years of the eighties werecharacterised by low or negative increases in realdisposable income. This phenomenon coupledwith a high unemployment rate and unpaidsalaries induced a loss of cor,qdencc ~n house-holds abo.t~;, the furore, wl~ich resulted in them

Corresponding author. T e l . 351 53 604201. Fe,: 351 53676375.

reducing their expenses and increasing their ~av-ings.Conditions began to improve in 1986 and sus-tai,ed growth continued during the remainingyears of the decade. Gradually, with the rcdwz-tion of the unemployment rate and an increase inreal disposable income; consumers regained theirconfidence in the course of the economic recov-ery, and the consumption of goods and servicesstarted to increase. In other words, the revival ofthe economy and its positive impact on producersnod retailers of consumer and durable goods wassatisfactory during the last few years o f 1980"s. Aslowdown of the economy which commenced in1991, however, is now having its negative effectson househoid consumption.

The eighties also witnessed changes in demo-graphic, cuitura! and educational trends w,th theirsubsequent impact on living and consumption0167-8116/95/$09.50 1995Elsevier Science B.V, All rights r,=servedSSDI 0167-8116(95)0C .6-X


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486 M. Farhangmehr, P. Veiga In te rn . Z o f Research in ,~l~rketing 12 (1995) 485 -50 2s t r u c t u r e . E x a m p l e s o f t h e s e t e n d e n c i e s i n c l u d e :t h e " d e g r e e n i n g " a n d " 'g r e y in g " p h e n o m e n a , a ni n c r e a s e i n h e a l t h a n d e n v i r o n m e n t a l c o n c e r n s ,a t t i tu d e t o w a r d s t h e n u m b e r o f c h i ld r e n , e m a n c i -p a t i o n o f w o m e n a n d a s u b s ta n t i a l i n c r e a s e in t h en u m b e r o f f e m a l e s t u d e n t s, s u r p a s s in g t h e i r m a l ec o u n t e r p a r t s i n m a n y f ie l d s.T h i s a r t i c l e w i l l l o o k a t b o t h e n v i r o n m e n t a la n d " m a c r o m a r k e t i n g m i x " va r ia b l es . A t t h ee n v i r o n m e n t a l l e v e l, it w i ll r e v i e w e c o n o m i c , d e -m o g r a p h i c a n d c u l t u r a l c h a n g e s a n d d i s c u s s t h e i rm a r k e t i n g i m p l i c a t i o n s ( S e c t i o n s 2 , 3 , a n d 4 ) .T h e n t h e c h a n g e s , .'n c o n s u m e r b e h a v i o u r w i ll b ed i s c u s se d ( S e c t io n 5 ). M a r k e t i n g m i x v a r i a b le s ,i .e ., p r o d u c t , p r i c e , d i s t ri b u t i o n a n d p r o m o t i o n , a ta g g r e g a t e l e v e l , w i ll a l s o b e c o n s i d e r e d ( S e c t io n6 ) . I n t h e l a s t t w o s e c t i o n s , w e w i l l d i s c u s s f u t u r et r e n d s a n d m a r k e t i n g m a n a g e m e n t f o r th en i n e t i e s .T h i s a r t i c l e i s o n e i n a s e r i e s o f a r t i c l e s r e g a r d -

g " t h e c h a n g i ng c o n s u m e r " i n d if f e re n t E u r o -p e a n c o u n t r i e s. I n t h i s p i e c e o f w o r k t h e d e v e l o p -m e n t e f c o n s u m e r e n v i r o n m e n t i n P o r t u g a l w i l lb e c o n s i d er e d .

2 . T h e e c o n o m i c e n v i r o n m e a tT h e m a ~ o e c o n o m i c p e r f o r m a n c e o f P o r t u g a l

d u r i n g t h e l a s t d e c a d e w e n t t h r o u g h r e m a r k a b l ec h a n g e s . I t i s p o s s i b l e t o d i s t i n g u i s h t h r e e d i s t i n c t

p e r i o d s : a p e r i o d o f e c o n o m i c s ta g n a t i o n a t t h eb e g i n n i n g ( 1 9 8 0 t o 1 9 8 4 ) , a d o w n w a r d t r e n d i nt h e m i d d l e f o l l o w e d b y a n o t e w o r t h y u p w a r dm o v e m e n t n e a r t h e e n d ( 1 9 8 6 t o 1 9 90 ). W i t h t h ee x c e p t i o n o f r a t h e r h i g h i n f la t i on r a t e , t h e r e v iv a lo f th e e c o n o m y a n d t h e c o u n t r y ' s m a c r o e c o n o m i cp e r f o r m a n c e w a s q u i t e s a t i sf a c t o r y d u r i n g t h e l a s tf e w y e a r s o f t h e 1 9 8 0 's . S i n c e t h e n h o w e v e r , t h e r eh a s b e e n a n e c o n o m i c s l o w d o w n w h i c h b e g a n i n1 9 9 1 , a n d b e c a m e m o r e p r o n o u n c e d i n 1 9 9 2 w i t ha c o n t i n u i n g d o w n w a r d t r e n d i n 1 9 9 3 a n d 1 9 9 4 .

P o r t u g a l ' s e n t r y to t h e E U i n 1 98 6 h a s m o s ta f f e c t e d t h e c o u n t r y . T h i s t o g e t h e r w i t h i n c r e a s e dp o l i t i c a l s t a b i l i t y w e r e t h e m a j o r f a c t o r s f o r t h er e v iv a l o f t h e P o r t u g u e s e e c o n o m y .

A s a l r e a d y m e n t i o n e d , e c o n o m i c a c ti v it y w a sp a r t i c u l a r l y d y n a m i c f r o m 1 9 8 6 t o 1 9 9 0 . T h i s p e -r i o d w a s c h a r a c t e r i s e d b y t h e h i g h r e a l g r o w t h i nt h e G D P ( G r o s s D o m e s t i c P r o d u c t ) , a n i n c r e a s ei n e x p o r t s a n d a r e d u c t i o n i n t h e e x t e r n a l a c c o u n ti m b a l a ,: c e . T h e P o r t u g u e s e e c o n o m y s t a r t e d t ob e c o m e m o r e i n t e r n a t i o n a l i s e d a n d m o r e P o r -t u g u e s e p r o d u c t s w e r e a b l e t o p e n e t r a t e i n t oi n t e r n a t i o n a l t r a d e c h a n n e l s . T h e e x p a n s i o n o fe c o n o m i c a c t i v it y i n t h i s p e r i o d h a d i t s e f f e c t o nt h e l a b o u r m a r k e t . T h e u n e m p l o y m e n t r a t ed r o p p e d s ig n i fi c a nt ly , a l o w o f 4 . 7 % a t t h e e n d o ft h e d e c a d e . T h i s f a v o u r a b l e m a c r o e c o n o m i c s i tu -a t i o n c h a n g e d i n 1 9 9 1 . E x p o r t s a n d t h e G D Ps t a r t e d t o f a ll , i m p o r t s i n c r e a s e d w h i l e u n e m p l o y -m e n t c o n t i n u e d i ts d o w n w a r d t r e n d i n 1 99 1, b u t

Table 1L'~'eto~me nts in a numb er of economics variables (billion escudos" )

I980 1983 1986 1988 1990 1991 19921184.0 2167.0 3883.0 5008.0 6962.0 8107.0 9213.03.5 - 3.7 2.2 2.1 6.5 4.8 3.916.7 25.5 11.7 9.6 13.2 11.4 8.97.9 7.8 8.6 5.8 4.7 4.1 4.22359.0 2449.0 2527.0 2838.0 3088.0 3248.0 3370.0483.0 513.0 586.0 647.0 674.0 695.0 705.0972 1105.0 1404.0 1680.0 2084.9 2108.0 2237.01509 1505.0 1705.0 2374.0 2852.0 2993.0 3326.064.4 73.4 82.4.0 70.8.0 73.3 70.4 67.3

D i s ~ m ~ . m eRent disposabXe incomepercemage changeinflation rateUnempk~ynmnt rateConsumption (1)

PrivateC_~-emment

Ex er t of goods and services (1)Impor ts of goods and ser.4ces (1)~/Import ra t io(I ) in constant prices (price k~vel of 1985).Sources: Bank of Portugal Annual Report, OEC D" 195 escudos is equivalen t to one. ECU.

Economic Surveys (OE CD, 1991, 1992, 1994).


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M. Farhangmehr, P. Veiga Intern. J. of Research in Marketing 12 (1995) 485-502 487started to increase from 1992, rising to 5.5% in1993.In this section, a number of economic indica-tors for the period under study will be examined.2.1. Household income

Disposable income of the household increasedduring the 1980's and continued to grow in 1991and 1992. The income received by the householdduring the first five years of the decade showedhigher percentual increase compared to the lastfive years in nominal terms. The annual increasewas over 20% between 1981 and 1984, while itwas under 20% between 1985 and 1990. In realterms however it increased at the beginning ofthe decade, decreased in the mmdle and in-creased again after 1985, peaking in 1987. Al-though in 1988 and 1989 there was a real increasein disposable income, it was less than in 1987.This was due to two factors: measures taken toreduce inflation and the introduction of the newsingle tax system, effective since the beginning ofJanuary 1989. Disposable income continued togrow in nominal terms in 1990, 1991 and 1992. Itachieved its highest increase in 1990 in real terms,and then it started to decrease in the first yearsof the 1990's (Table 1).A phenomenon which considerably influencedthe amount of disposable income and causedmuch pessimism in the Portuguese consumer wasTable 2Firms with delayed salariesYear No. of firms No. of employees1985 668 648161987 212 241861989 94 120131991 70521992 (1) 279 (2) Over 475221993 (1) 290 (2) Over 393791994 (1,3) 279 (2) Over 26073Source: National Institute of Statistics (1990) (data: per De-cember 31).(1) Based on data provided by CGTP. The list provided doesnot include all firms.(2) The data provided does not show the number of unpaidsalaries of all firms.(3) Data: per October 1994.

"unpaid salaries" in the m/d 1980's. This needs tobe explained. During those years some fmms, d~lto genuine difficulties, while others took advan-tage of the situation, would not pay the sa|aricsto their employees. That is, people worked butdid not receive their salary (Table 2). This cre-ated a very pessimistic attitude towards the econ-omy, people became afraid of the future, andconsumption decreased significantly. This prob-lem was dealt with during the late 1980"s andconsequently the number of employees with un-paid salaries decreased considerably. In the firstyears of 1990's this problem was recurring again(Table 2).2.2. Employment

Portuguese authorities did not consider uncm-ploym,~at as a major issue in Portugal until I970.This &es not imply however, that the prob~mdid not exist. The problem was never conskteredof major importance for two reasons: a) the prob-lems of hidden and under-employment werelargely ignored and b) a large segraent of thework force was absorbed for military, purposes.This situation radically changed when the war/nthe African colonies ended in 1974 (therefore lesspeople were needed for military purposes), andwhen the Portuguese residing in these ex-cokmiesreturned en masse from Africa once the colonk,~became independent. These two factors, cout~edwith the oil crisis made unemployment a majorconcern in Portugal.

The unemployment rate decreased cont/nu-ously from 1986 to 1992. For the first time s/acePortugal's entry into European Union, it began toincrease in 1993. The rate of unemployment in1993 was still considered at a good level com-pared with other EU countries. Nevertheless, tiffsfigure does not reveal a number of issues relatedto the job market, i.e., the instability of emph~y-ment, and under-employment i.e. when peeggeare employed only part time or for part of theyear. Other relevant factors include the low levelof education and professional formation of theactive population, the incapacity of the socialsecurity system in responding effectively to theproblems of prolonged unemployment, and the


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488 M. Farhangmehr, P. Veiga~Intern. J. o f Research in M arketing 12 (1995) 485-50 2high unemployment rate of the younger segmentof the population and of women. The unemploy-ment rate for the male population in 1985 was6.4% as compared to 1!.7% for women and 20.1%for youth (between 15 and 24 years). In 1993these rates were 4.7%, 6.5%, and 12.7% respec-tively, showing clearly a higher proportion ofwomen and younger segment of the population~ithout a job (OECD, 1994).

While in 1960 and 1970 the activity rate forfemale population was 12.8% and 18% respec-tkeel.v, this rate later increased to 38.7% in 1985and 42.3% in i99l. Agriculture and services arethe major areas of female employment. In 1987,51.6% of people who worked in agriculture and45.9% of employees in the service sector werewomen. The proportion of women employed inindustD' was less and in 1987 they only consti-tuted 28.6% of the working population in thiss,:%-'tor (Eurostat , 1989, Employment and Unem-pl~_Taent). Women ret~resent a segment o f thejob market which is more vulnerable to job lossesfrom toe modernisation process. This is partlydue to a lower level of education and/or qualifi-cation as compared to men (Cameiro, 1988). Al though child employment is illegal, a studyby. Andrade (1989) indicated that 28% of those inIower age brackets of the population had theirfirst fuI!-tkme paid job before they were 15 yearsold. Ch/ld employment attracts mostly childrenw/th a low level of education, from low incomefamilies. Their parents are dependent on theincome from these children who receive very low~a!afies.

narrow the difference of inflation with other Eu-ropean Union (EU) countries in response to EUconvergence indicators (OEC:~, 1994).

3. Th e demographic development3 . 1 . P o p u l a t i o n s i z e

The demographic change in Portugal has hadan impact on the customer situation.

To analyse the demographic change in Portu-gal two rates need to be considered: "naturalgrowth rate" which is obtained as the net effectof births and deaths rates and "migration rate"which is calculated by subtracting the immigra-tion rate from the emigration rate. The net effectof these two rates define the "total growth rate"for the population.

The increase in population was remarkablebetween 1970 and 1980 mainly due tc the returnof Portuguese frc-a their ex-colonies in Africa. Inthe 1980's, the population tended to increase,though at a much lower rate than in the previousdecade and at an ever-diminishing rate as it cameto a close (Table 3).Z2. A g e d i s t r i b u t i o n

The change in the age distribution of the pop-ulation has also been quite noticeable. As else-where in Europe, in Portugal we also see the twowell-known factors: "degreening" and "greying"(Table 4).

2 . 3 . I n f l a t i o nThe 1980"s started with a high rate of inflation

which continued to increase in the first few years,achie',ing an alarming rate of 29.3% in 1984. Itwent down sharply in 1985 and continued todecrease for the next two years, achieving itsIowest level Ior the decade in 1987. It started torise aga.~n in 1988 and continued until 1990. From1991 til! 1993 the inflation rate had anot herd~vnward trend, achieving 6.5% in 1993 (TableD. Reducing inflation has been one of the mainobjectives of the Governmen~ ~hose goal is to

Table 3Population growth in PortugalYear Total population in millions (i) Annualgrowth rate1973 8.6 0.141975 8.9 1.751980 9.7 1.801985 10.1 0.821991 10.5 0.661996 10.8 0.572001 11.1 0.55Source: Eurostat, Demographic Statistics (Eurostat, 1988 andEuros ta t , 1990).(1) Population on the first of January.


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M. Farhangraehr, P. Veiga Intern. J. o f Research in Ma rketing 12 (1995) 485-5 02 4~DTable 4Age distribution c,f the populationAge Men Women

1976 1985 1995(1) 1976 1985 1995(1)0-14 30.0 25.0 20.5 25.7 22.2 18,915-44 41 .9 43 .8 47.0 41.7 41.6 44.345-64 19.8 21.1 21.0 21.2 22.5 22.065+ 8.3 10.1 11.5 11.4 13.7 14.8Source: Eurostat, Demographic Statistics (Eurostat, 1988,1990).(1) Projection.

A recent study which looked at the demo-graphic change in Portugal for this century(Nazareth, 1988) shows that the variations in av-erage growth rate for all decades since 1900 havebeen more due to migration movements ratherthan the natural change in population.

Due to a high level of hidden and underem-ployment, many Portuguese found emigration theonly solution, and it attracted almost one millionpeople between 1960 and 1970. During the conse-quent two decades the rate of emigration de-creased considerably. Nevertheless, it still attractsmany Portuguese workers who leave the countryin search of a higher income in other countries.The "emigrants", as they are referred to in Por-tugal, constitute a specific segment of the marketwith its own peculiar characteristics. From themarketing point of view the emigrants who visitannually are interested in such commodities asland, houses, furniture, and durable goods.3 .3 . N u m b e r o f ch i ld r e n

As in most other European countries, thenumber of children per family is diminishing. Theaverage number of children per family shows a

decreasing trend, from 3.1 in 1960 to 2.5 in 1~0and 1.8 in 1985 (Nazareth, 1988) which representsa decline of 35,5% during this twenty-five yearperiod.

The fertility rate has always been higher thanthe EU average, but the differem:e has beeneroding gradually to the point of having minima[differences in 1986 and 1987 and a yet towerfertility rate in 1988. As for the causes for such adecrease, a survey conducted in 1980 (Workt Fer-tility Survey) showed that 69% of women whoalready had at least one child did not want tohave more children. Respondents corJsidered fi-nancial difficulties as a major reason for this.This survey also indicated that only 13% of womgmthen had more than four children. The tendem'yfor having four or more children is decreasing.Another study by Figueiredo (1988) showed thatthe percentage of youth who wanted four or morechildren was also decreasing considerably.

3 . 4 . F a m i l y , m a r r i a g e a n d d i v o r c e

A stud'./about youth in general (15 to 24 yearsof age) shows the continuing importance of thefamily in Portugal. 78.6% of the youth hel/evedthe family is a social structure with value, wh~only 8% believed the family to he a pointlesssocial structure (Barros and Bar~o, 1987).

Marriage is considered to be a vital institutionand the idea of not marrying is far from beingacceptable in Portugal. in fact 82% of the youthsaid that they wanted to get married and om'y10.5% preferred cohabitation to marriage. Themajor reason given for this favourab|e attitudetoward marriage was the "potential for human

Table 5Household size and merabers in the household (in units of 1000)Households Number of households Members living n the households

1960 IQ71 1981 1991 (1) 1960 1971 1981 1991 (1)One-family householdTwo familyor more householdTotalAverage household ~ize

2142 2098 2633 2880 8195 7699 86*.391 85 291 49 582 226 9552924 2929 95783.28 3.15 9 2 1 9Source: Eurostat, Census of Population, (Eurostat, 1981-1982).(1) Does not include Azores and Madeira islands.


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4-90 M. Farlumgmehr, P. Veiga Intern- J. of Research in Marketing 12 (1995) 485-502fulfillment of the couple". Comparing their opin-"~n with the older age groups, showed that thelatter group also considered this same factor asthe most hnportant one. This shows that thePortuguese still hold traditional views towardsmarriage. The same study also indicates that di-vorce is more accepted by the younger genera-fion.3.5. Number of househ~ds

One factor which is worth considering is thenumber of people living in a household. Table 5s he ' s household sizes for 1961, 1971, 1981 and1991. There was an increase in the number ofpeople who lived in two-family or more house-hokLs until 1981, but in 1991 it decreased. In thistype of household, young couples live with theirparents or extended families in the same dwelling,as they are unable to afford their own home.Comparing the data with those of other Euro-pean Union countries, the percentage of mem-bers l~.ag ha two-family or more households inPortugal is far higher than the EU average andbigber than that of any other EU country. Thisphenomenon naturally has an impact on the pat-tern of consumption of the families, specially inconnection with durable goods (e.g. one dish-washer per househ~d).

4. Cukw'al values and attitude changes4.L Education

One of the problems which has affected Portu-gal for a h3ng time is ilfiteracy. This problem hasbeen ~H e ~ during the last decades and theilliteracy rate has been progressively diminishingThe number of years for obligatory education hasgradua~y increased from four to six and recentlyto nine years. The decrease in illiteracy, however,has been replaced by what is known as "func-tkmal illiteracy" (Carneh'o, 1988) which is charac -terised by the individual's inability in using hisknowledge in the daily life, Naturally this factorinfluences the global behaviour of the Portuguesepopulation and their behaviour as consumers.

Table 6Level of education of the Portuguese population and itsprojection for the year 2000 (in percentages)Level of education 1981 2000 (1)No education 36.8 20.5Four years of education 3~.9 34.8Six years of education 10.6 15.8Nine y~ars of education 6.4 13.4Secondaryeducation completed 3.5 8,3Higher education and higherprofessional education 1.5 3.0University education 2.1 4.1Source: Carneiro, 1988.(1) Projection.The high level of illiteracy produces consumerswho are less demanding and are less able to usetheir rights as consumers (Table 6).Associated with ~he diminishing rate of illiter-acy is an increasing rate of people with higherand university education. The number of studentsin higher education has been increasing duringthe last decade.4.2. Emancipation of women

More and more the Portuguese agree thatwomen should be working with the same condi-tions as men and for the same period of time. Arecent survey (Figueiredo, 1988) compared theattitude of the younger and older generation to-wards a number of issues. The study shows thatas many as 80.7% of the younger Portuguesegeneration believe that "women should work forthe whole of their lives, as men do", while only37% of the older generation agreed with thestatement. It is interesting to notice that a similarinquiry 20 years earlier produced a 6.4% agree-ment rate for the younger generation of thattime. This shows a real change of values not onlyin the younger generation but also in the samepeople who disagreed 20 years ago but now tendto agree with women working as men do.

Another study (AJmeida and Costa, 1989)compared the attitude of men and women to-wards their roles and responsibilities. It was iden-tified that more women are in favour of womenworking outside the household than men, whichreflects their desire for independence. While al-


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M. Farhangraehr, P. Veiga Intern. J . o f Research in Marketing 12 (1995) 485- 50 2 49Im o s t 7 9 % o f w o m e n b e l i e v e d t h a t " b o ; h w i fe a n dh u s b a n d s h o u l d h a v e a p r o f e s s i o n a l a c ti v it y a n db o t h s h o u l d t a k e c a r e o f t h e c h i l d r e n " , o n l y 5 6 %o f m e n a g r e e d w i t h t h i s s t a t e m e n t . A s f o r m e n ,2 7 % b e l i e v e d th a t " t h e w o m a n s h o u l d h a v e a l es sa b s o r b i n g p r o f e s s i o n i n o r d e r t o h a v e a m o r ea c t iv e r o l e in t h e e d u c a t i o n o f c h i l d r e n a n d i ne s s e n t i a l h o u s e w o r k a f f a i r s " , w h i l e o n l y 6 0 % f e -m a l e r e s p o n d e n t s a g r e e d w i t h t h i s p o s i t io n . I nc o n n e c t i o n w i t h t h e t r a d it i o n a l r o l e o f w o m a n ,1 5 % o f m e n a g r e e d w it h t h e s t a t e m e n t " o n l y m a ns h o u l d w o r k a n d t h e w o m a n c o m p l e t e l y c o n -t r i b u t e h e r t i m e t o t h e c h i l d r e n a n d h o u s e w o r ka f f a i r s ' , w h e r e o n l y 3 % o f w o m e n w e r e i n f a v o u ro f t h i s t r a d i t i o n a l v i ew .

A v e r y in t e r e s ti n g p h e n o m e n o n p r e s e n t ly h a p -p e n i n g i n P o r t u g a l , i s t h e s u b s t a n t i a l i n c r e a s e i nt h e n u m b e r o f f e m a l e u n i ve r s it y g r a d u a t e s a n ds t u d e n ts . O v e r a l l, t h e n u m b e r o f fe m a l e s t u d e n t si n h i g h e r e d u c a t i o n i s n o w h i g h e r t h a n t h e i r m a l ec o u n t e r p a r t s , 6 6 % o f u n i v e r s it y g r a d u a t e s i n 1 9 9 0w e r e f e m a l e a n d 3 4 % m a l e , w h i l e t h i s r a t i o w a s2 6 % a n d 7 4 % r e s p e c t i v e l y i n 1 9 60 . I n a r e a s o fe d u c a t i o n t r a d i t i o n a l l y d o m i n a t e d b y m a l e s t u -d e n t s s u c h a s e n g i n e e r i n g , a s m a n y a s 3 0 % o f t h egradua tes in 1990 were g i r l s (Expresso , 1994) .T h i s d e v e l o p m e n t w il l s o o n c a u s e r e a l c h a n g e s i nth e- f u t u r e e m p l o y m e n t s t r u c t u re a n d i n c o n s u m p -t i o n o f f a m i l i e s.4 .3 . O t he r v a i ue s

R e l i g io u s v a lu e s a r e e r o d i n g a l so . T h e y o u n g e rg e n e r a t i o n c o n s i d e r s i t s e l f a s l e s s r e l i g i o u s t h a nt h e i r p a r e n t s , o r c o m p a r e d t o t h e y o u t h o f 2 0y e a r s a g o ( F i g u e i r e d o , 1 98 8). W h i l e 2 0 y e a r s a g o9 0 % o f t h e y o u t h c o n s i d e r e d t h e m s e l v e s r e l i -g i o u s , o n l y 6 5 % n o w c o n s i d e r t h e m s e l v e s a s s u ch .A l t h o u g h t h e y c o n s i d e r t h e m s e l v e s l e s s r e l i g / o u s ,i t i s in t e r e s t i n g t o n o t e t h a t t h e y b e l ie v e t h a t t h ea c t u a l c r i s i s i n c M l i s a t i o n c a n b e b e t t e r s o l v e d

t h r o u g h s p i r i t u a l v a l u e s a n d m e a s u r e s t h a nt h r o u g h th e d e v e l o p m e n t o f s c ie n c e a n d t e c h ~ bo g y a n d i ts m a t e r ia l s o l ut io n s , a n d t h e r e f ~ e t h e ym a i n t a i n t h a t t h e r e i s a u e e d f o r a r e n e w a l o fs p i r it u a l a n d m o r a l v a l u es .

T h e y o u n g e r g e n e r a t i o n c o n s k l e r s t h e v a l u e sr e l a t e d t o p e r s o n a l a c h i e v e m e n t a n d f c l f i l I m e mm o r e i m p o r t a n t t h a n t h e i r p a r e n t s d k L T i l e p a r -e n ts g e n e ra l ly gi ve m o r e i m ~ , t a n c e t o s o 6 . ~v a l u e s . A c o m f o r t a b l e l i f e i s ~ m s / d e r e d o f ~ 1 i m p o r t a n c e f o r b o t h g e n e r a t i o n s ( 1 2 t h a n d t3 ff~l ev e l o f i m p o r t a n c e f o r t h e o l d e r a n d t h e y o c n g e Tg e n e r a t i o n s r e s p e ct iv e l y, o a t o f a l is t o f 1 9 v a ~ ) .T h e y o u n g e r g e n e ra t i o n d o e s n o t s h o w m u c hi n t e r e s t i n p o l i t i c s o r i n e c o n o m i c s . T h e y s h o wm o r e i n t e r e s t i n sc i e n ce , t e c h n o lo g y , s ~ r t s a n dar t s .T h e e c ol og ic a l a s p ec t a n d c o n c e r n f o r ~ eu n f o r t u n a t e l y is n o t a m a j o r w o r r j o f th e P o r -t u g u e s e , a n d s t ra n g e l y e n o u g h t h e y o u u g e r g e r lc r -a t / o n i s le s s w o r r i e d a b o u t t h e s e i s s u es t lr ~ a t h e i ro f d e r c o u n t e r p a r ts . H o w e v e r t h e c o n c e p t a n d [~-s u e s r e l a t e d t o c o n s e rv a t i o n o f n a t u r e a r e g r a d ~a l ly g a in i n g m o r e f o r c e .

A c c o r d i n g t o l n g l e h a r t ( 1 9 77 ) th e y o u n g e r g e n -e r a t i o n h a v e t h e t e n d e n c y t o p r i z e p o se -m a t e r i a l i s t i c v a l u e s : q u a l i t y o f l i f e , p e r s o r ~ f e bf i l l m e n t , p a r t i c i p a t i o n a n d a u t o n o m y a n ds i d er v a lu e s s u c h a s s e c u ri ty a n d i ~ o m e( m a t e r i a l i s t i c v a l u e s ) o f s e c o m t a r y h ~ a n c e .T h e v a l u e s a s s o c i a t e d w i t h p o s t - m a ~ e r i a | / s m a r eg a i n i n g g r o u n d . A l t h o u g h m o s t o f t h e y o u t h b e -l i e v e i n a m i x t u r e o f m a t e r i a l i s t i c a n d p o s t -m a t e r i a l i s t i c v a l u e s , t h e t e n d e n c y i s t o w a r df a v o u r i n g t h e p o s t - m a t e r i a l i s t i c o n e s A c c o r d / ~ gt o A l m e i d a ( 1 9 9 0 ) t h e t h e o r e t i c a l h y p o t h e s / s o fI n g l e h a r t r e l a t e d t o t h e p o s t - m a t e r i a l L ~ v ~h a v e n o t b e e n c l e a rl y s u p p o r t e d y e t in P ~ u g a LB o t h m a t e r i a li s t ic a n d p o s t - m a t e r i a | i s t ic v a ~ e sa r e o b s e r v e d s i m u l t a n e o u s l y i n t h i s c o u n t r y .

t However it should be mentioned that the sa m ~ wasdrawn from a midd|e class urban population which representsonly 40% of the total population. This implies that the resultswould be less symmetric if the sample for this study wasdrawn from the total population.

5 . C h a n g e s i n c o n s u m e r b e h a v i o u r5 . 1 . Consumpt i on

T h e r e w a s a p o s i t i v e i n c r e a s e i n p r i v a t e c o c t -s u m p t i o n a t t h e b e g i n n i n g o f t h e 1 9 8 0 " s w h i c h


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492 M. F ar~ngm ehr , P . Veiga / Intern. J . of Research in M arketing 12 (1995) 485-502TalMe 7Prgrate consm~ptmn ndicators. Percentage of variation

1983 1986 1988 I990 1991 1992 19931. Imiicator of current consumption - 1.5 9.2 15.2 4.7 6.4 3.6 5.82. Car sales 5.7 17.0 72.0 9.4 7.9 22.1 - 12.33. ~ ~[es 0.0 15.2 10.6 8.5 10.0 13.1 6.0S~zrce: Bank of Portugal, "Sintese mensal da conjuntura", July 1990, March 1993.Bank of ~ g a l , Annual Report, 1990.

was followed by a decrease in 1983 and 1984.Tiffs decrease was mainly due to a num ber ofres ~ct kms hnposed by the International Mone-tary Fund. The/ nfla tio n and interest rates duringtiffs period were high and access to credit wasv e r y I/mired. All these factors affected consump-tion during tiffs Ix~riod.From 1985 consumption increased. This wasdue to a number of factors: political stability, theoptimism which came with Portugal joining theEU and a de ~ea se in both inflation and theimerest rate.

Cons umpt ion growth dimi nished in 1989 dueto credit restfictioos implemented then. (Table7). Th ~ measu re especially influenc ed car sales,which had surged since 1986, the date of Portu-gal 's entry into the Europea n Union.

Another factor which may be considered as acontn'butory factor to the reduction of consump-tion during 1989, is the increment of inflation.Th~ had a double effect: it reduced the dispos-able/ncome of the household in real terms and

also, historically, the increase in inflation hasbeen associated with high concern regarding thefuture income (OECD, 1991).

Consumption growth sharply diminished in1990 but remained near this lower level until1993. Consumer confidence was greatly weak-ened due to an increase in unemployme nt and adecrease in real income. This contributed to areduction in retail and car sales. Consumer de-mand however was not furt her diminishe d due toaccess to consum er credit which substanti ally in-creased from financial liberalisation (OECD ,1994).5 . 2 . C o n s u m p t i o n s t r u c t u r e

"Fable 8 shows the structure of consumption inPortugal in the begin ning and the e nd of the1980's. As Tab les 8 and 9 show, food and clothingare t he i tems that weigh heavily on the familybudget, re pres enti ng over 50% of the family ex-penses in 1980/1981, over 44% in 1989/1990,and almost 53% in 1093.

Table 8S~mcture of consumptionexpenditure of families(%)Familyconsumptionexpenditure (%) Evolutionof annual average of consumerexpenditure from 1980./1981-1989/1990

Calcgo~- 1980/1981 1989/1990 Rate of changeF~d, beverages, and tabacco 40.62 34.34 - 5.6Clothing and footwear 10.I3 9.94 + 1.4Housing. heat and light 9.20 12.94 + 47.3Housingexluitmaentand expenditure 8.63 7.67 + 2.3Heahh and medicalser~ices 2.59 3.09 + 38.2Tra~port and .Communication 13.55 13.58 + 18.5Educat~n, Culture and Recreation 3.70 3.58 + 11.5Ot~er ~ and services 8.76 10.54 + 17.4Other expenditures 2.82 2.52 + 10.7Source: National Institute of Statistics, 1990, preliminary dzta. (INE, Estrutura das Despesas de Consumo dos Agregados


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M. Farhangm ehr, P. Veiga~Intern. J. o f Research in Marketing 12 (1995) 485-502 4935 . 3 . C o n s u m e r s a t i s f a c t i o n a n d a w a r e n e s s

C o n s u m e r s a t i s fa c t i o n is n o t a m a j o r c o n c e r no f P o r t u g u e s e o r g a n i s a t i o n s , b o t h p r i v a t e a n dp u b l i c . H e n c e t h e r e i s a g e n e r a l l a c k o f s a t i sf a c -t i o n i n P o r t u g u e s e c o n s u m e r s . A r e c e n t r e s e a r c h( C a s c h o , 1 9 8 9 ) c o n f i r m s t h i s , s h o w i n g t h a t t h eP o r t u g u e s e c o n s u m e r s a r e q u i t e d i s s a t i s f i e d w i t ht h e i r p u r c h a s e o f p r o d u c t s a n d s e rv i c e s. T h e l a c ko f s a t i s f a c t i o n i s e s p e c i a l l y n o t o r i o u s i n s e r v i c e sw h e r e a s m a n y a s 5 1 % o f th e c o n s u m e r s f e l t t h e yw e r e s o m e h o w m i s l e d w h e n b u y i n g . T h e s e r v i c e sw h i c h w e r e c o n s i d e r e d t o p r o d u c e t h e m o s t d i s -s a t is f a c t io n w e r e h e a l t h , e l e c t r ic i t y a n d t r a n s p o r t .T h e m a j o r c o m p l a i n t a b o u t h e a l th s e rv i c es w e r er e l a t e d t o t h e w a i t i n g t im e f o r g e t t i n g a n a p p o i n t -m e n t a n d t h e s m a ll n u m b e r o f d o c to r s. P e r h a p st h is e x p l a in s w h y a h i g h p r o p o r t i o n o f h o u s e h o l di n c o m e i s b e i n g s p e n t o n h e a l t h ( T a b l e s 8 , 9 ).

A l t h o u g h c o n s u m e r s e x p r e s s a h i g h l e v e l o fd i s s a t i s f a c t i o n , t h e y h a v e d o n e v e r y l i t t l e r e a c t i n gt o t h i s s i t u a t i o n . A r e s e a r c h b y C a s c h o (1 9 8 9 )s h o w s t h a t i n 1 98 7, o n l y 4 0 % o f t h e c o n s u m e r sr e a c t e d w h e n t h e y f e l t t h e y w e r e m i s l e d o rc h e a t e d . T h i s n u m b e r i s q u i te l ow w h e n c o m -p a r e d t o t h e E U a v e r a g e , w h e r e e v e n 1 2 y e a r se a r l i e r ( 1 9 7 5 ) a s m a n y a s 6 7 % r e a c t e d i n s i m i l a rs i tua t ions .T h e c o n s u m e r d e f e n c e o r g a n i s a t i o n s a r e l i t t l ek n o w n t o P o r t u g u e s e c o n s u m e r s . T h e s t u d y s h o w sa n a w a r e n e s s o f 3 4 % i n 19 87 a s c o m p a r e d w i t h4 4 % o f E U i n 19 75 a n d 7 2 % i n M a d r i d ( S p a i n ) i n1 9 8 4 . I t s h o u l d b e n o t e d t h a t t h e c o n s u m e r d e -f e n c e m o v e m e n t i n P o r t u g a l i s a v e r y r e c e n t p h e -

Table 9Structure o f consum ption expe nditure of fam ilies 1993Category %Food, beverages,and tobacco 41.14Clothing and footwea r 11.65Housing, heat and light 14.99Furniture, etc. 8.92Hea lth and medica l services 3.72Tran sport and Comm unication 19.45Entertainm ent and cultural 0_! lMiscellaneous good s and services 0.03Source: O EC D (1994); Nielsen (1994).

n o m e n o n w h e n c o m p a r e d t o o t h e r E U c o c m r i e s.A l t h o u g h t h e s e o r g a n i s a t i o n s a r e l i t t l e k n o w n ,t h e c o n s u m e r s f in d t h e m v e r y n e c e s s a r y t o p r o -t e c t t h e i r i n t e r e s t s .

T h e m e d i a h a v e p l a y e d a v e r y si n a i| r o l e i ni n fo r m i n g t h e c o n s u m e r s. B a s e d o n C a s c ~ ( 19 8 9)m o s t c o n s u m e r s b e l i e v e t h a t t h e d i f f e r e n t t y p e so f m e d i a ( r a d i o , t e l e v i s i o n , n e w s p a p e r s a n d m a g -a z i n e s ) p r o v i d e l i t t l e o r n o i n f o r m a t i o n a t a I | .

T h e P o r t u g u e s e c o n s u m e r s b e l i e v e t h a t t h em a r k e t i s f a r f ro m t r a n s p a r e n t a n d m o s t o f t h e mb e l i e v e t h a t t h e y a r e n o t p r o p e r l y i n f o r m e d a b o c tt h e p r o d u c t s o r p r i c e s .

T h e h i g h l e v e l o f d is s a ti s fa c t i o n a n d u n a w ~ e -n e s s s h o w s t h a t t h e P o r t u g u e s e c o m a m e r i s n o ty e t " k i n g " . W i t h t h e a d v e n t o f 1 9 9 2 , h o w e v e r ,a n d e n t ry o f p r o d u c t s a n d c o m p a n i e s f ro m o t h e rE U c o u n t r i e s t h e y m a y st a r t t o a t ta i n t h e i r " k i n g -d o m " a t t h e e x p e n s e o f P o r t u g u e s e f i rm s w h i c ha r e n o t y e t r e a d y t o r e s p o n d s a t is f a c to r i ly t o t h isc h a n g e .5 . 4. G e n e r a l c h a r a c t e r i s t i c s o f P o r t u g u e s e c o n -s u m e r

W h e n b u y i n g a p r o d u c t , P o r t u g u e s e c o n -s u m e r s , g e n e r a l ly s p e a k i n g , p a y m o r e a t t e n t i o n t ot h e m o n e t a r y f a c t o r s ( e . g . p r i c e , b i l l a n d c h a n g e ) ,t h a n w i t h t h e q u a l i t a t i v e e l e m e n t s ( e . g . c o m p a r -i n g t h e a d v a n t a g e s a n d d i s a d v a n t a g e s o f t h e s i m i-l a r p r o d u c t s o r l o o k i n g a t t h e i n f o r m a t i o n g i v e no n t h e p a c k a g e ) . T h i s b e h a v i o u r i n d i c a t e s t h a tt h e c o n s u m e r s a r e s lo w t o a d a p t t h e m s e l v e s t ot h e c o m p e t i n g m a r k e t . E v a l u a ti o n o f th e q u a l i t ~t i r e a s p e c t s o f p r o d u c t s a r e p e r f o r m e d m o s t ly b yc o n s u m e r s l i v i n g i n u r b a n a r e a s , w h o h a v e b o t hh i g h e r i n c o m e a n d e d u c a t i o n l e ve l s. T h i s g r o u po f c o n s u m e r s a l s o p a y s a l o t o f a t t e n t i o n t o t h ep r i c e f a c t o r .P o r t u g u e s e c o n s u m e r s s h o w a h i g h l e v e l o fl o y a lt y t o w a r d s t h e b r a n d ( 7 0 % d o n o t l i ke t oc h a n g e t h e b r a n d t h e y b u y ) a n d t h e s t o r e w h e r et h e y b u y i t (7 1 % a r e v e r y l o ya l to t h e s t o r e w h e r et h e y b u y ) . T h e y t e n d t o p l a n t h e i r p u t c h a ~ e sr a t h e r t h a n b u y o n i m p u l s e ( C a s c fi o , ]9 8 9 ). I n t h es a m e s t u d y , m o s t p e o p l e d e c l a r e d t h a t t h e y d on o t b u y p r o d u c t s t h a t t h e y h a v e n o t a l r e a d yp l a n n e d f o r .


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49 4 ~vz. Fc~rb~a~rnehr,P. Veiga / In ter n . J . o f Research in Market ing 12 (1995) 485-5 02T h i s c o n s u m e r p r o f ' d e , i n p a r t , c a n b e e x -

p l a i n e d b y t h e l o w l e v e l o f d i s p o s a b l e i n c o m ew h i c h l e a v e s l i t tl e r o o m f o r f l ex i b il it y . T h i s f a c t i sc o n f i r m e d b y t h e c o n c e r n s a b o u t t h e f u t u r e w h i ch6 9 % o f t h e r e s p o n d e n t s m a n i f e s te d . T h i s c o n c e r nc o m p e l s t h e m t o s a v e n o w i n o r d e r t o l iv e b e t t e ri n t h e f u t u r e .

C o n s u m e r b e h a v i o u r h o w e v e r d o e s d i f f e r a l o n ga g e g r o u p s. T h e y o u n g e r g e n e r a t i o n i s m o r e o p e nt o n e w p r o d u c t s a n d s h o p s ; th e y h a v e l e s s lo y a l tyt o p r o d u c t s o r s to r e s a n d t e n d t o b u y w i t h o u tp u t t i n g a s m u c h t h o u g h t i n t o t h e i r b u y i n g .

Table l0Market share of private labels for consum er goods in 1993Country PercentageGermany 29.8Belgium 19.8Spain 7.7France 16.5Netherlands 17.1Italy 6.8Portugal 1.7United Kingdom 37.0Sweden 20.0Source : Nie lsen, 1994; Distribui~'~oHo je, 1993.

6 . C h a n g e s i n t h e m a c r o m a r k e t i n g m i xM a r k e t i n g i s n o t p r a c t i s e d m u c h i n P o r t u g a l .

T h e d e v e l o p m e n t o f m a r k e t i n g i n t h is c o u n t r y isv e r y li m i t e d a n d r e c e n t . P u b l i s h e d d a t a a s r e g a r d st o t h e P o ~ u g u e s e m a r k e t i s s c a rc e . T h i s d e c a d eh o w e v e r h a s w i tn e s s ed t h e e m e r g e n c e o f m a r k e t -i n g i n t h e c o u m r y .6 . 1 . P r o d u c t s

T h e i n c r e a s e i n d i s p o s a b l e i n c o m e i n t h e m i de i g h t i e s a n d t h e o p e n i n g o f t h e m a r k e t s a s ac o n s e q u e n c e o f t h e E u r o p e a n p r o je c t , h a s p r o -y o k e d c o n s i d e r a b l e c h a n g e s i n t h e s u p p l y a n dd e m a n c : o f c o n s u m e r a n d d u r a b l e g o o d s . O n e o fM e e l e m e n t s o f t h e m a r k e t i n g m i x m o s t a f f e c t e db y t h e s e c h a n g e s i s t h e p r o d u c t .

W i t h t h e o p e n i n g o f th e m a r k e t s , t h e r e h a sb e e n a p r o l i f e r a t io n o f f o r e ig n b r a n d s i n t h ec o u n t r y . T h e c o n s u m e r s a r e n o w o f f e r e d a m u c hw i d e r r a n g e o f p r o d u c t s w i t h c o m p e t i t i v e p r i c e s .T i f fs m e a n s a c h a l l e n g e t o P o r t u g u e s e p r o d u c e r sw h o h a v e n o t b e e n u s e d t o c o m p e t i t i o n . P o r -t u g u e s e p r o d u c e r s a r e n o w r e a l i s i n g t h a t t h e yn e e d t o p a y m o r e a t t e n ti o n t o c o n s u m e r s a ti sf a c-t io n a n d t o d e v e l o p b e t t e r a n d m o r e c o m p e t i ti v ep r o d u c t s . S e g m e n t a t i o n s t r a t e g i e s h a v e b e e na d o p t e d b y m a n y f ir m s .

P r i v a t e l a b e l s w e r e f i rs t i n t r o d u c e d i n P o r t u g a li n 1 9 84 b y a s u p e r m a r k e t a n d d i s c o u n t c h a i ns t o r e a n d t h e y w e r e r e f e r r e d t o a s " w h i t e p r od ..u c t s " w i t h v e r y s i m p l e p a c k a g i n g ( g e n e r i c p r o d -

u c t s) . D u e t o t h e f e w n e s s o f s t o re s c a r r y i n g th e s ek i n d s o f p r o d u c t s , t h e i r s h a r e o f t h e m a r k e t w a sa l w a y s u n d e r 1 % . T h e i r r e l a t iv e i m p o r t a n c e d i -m i n i s h e d g r a d u a l l y , a n d t h e y b e c a m e p r a c t i c a l l yn o n - e x i s t e n t b y t h e e n d o f t h e 1 9 80 's . T h e y s t a r t e dt o r e s u r g e a s a r e s u l t o f t h e g r o w i n g n u m b e r a n di m p o r t a n c e o f h y p e r m a r k e t s a n d t h e e v o l u t io n o fm a i n r e t a i l o r g a n i s a t i o n s ( N i e l s e n , 1 9 9 3 ) . H o w -e v e r , p r i v a t e l a b e l s a r e s ti ll v e r y r a r e i n P o r t u g a l ,e s p ec i a ll y w h e n c o m p a r e d t o o t h e r E u r o p e a nU n i o n c o u n t r i e s ( T a b l e 1 0) . S a l e s o f p r i v a t e ! a -b e l s i n P o r t u g a l a r e l e s s t h a n i n t h e s m a l l e s tc o u n t r i e s i n t h e u n i o n , w h i ch m a y s u g g e s t t h a tt h is p h e n o m e n o n i s n o t r e l a t e d t o t h e s i ze o f t h eP o r t u g u e s e m a r k e t ( D i s t r i b u i ~ o H o j e , 19 93 ).

D a t a o n t h e m a r k e t s h a r e o f h ea l t h p r o d u c t s isn o t a v a i la b l e . T h i s s h a r e , h o w e v e r , a p p e a r s t o b ei n c r e a s i n g . I n f a c t , a r e c e n t s t u d y a n a l y s i n g t h ec o n s u m e r b e h a v i o u r r e l a t e d t o s u p e r m a r k e t s i n1 99 2 in d i c a t e s t h a t 7 6 % o f t h e P o r t u g u e s e c o n -s u m e r s a r e e i t h e r c o n c e r n e d o r v e r y c o n c e r n e da b o u t t h e n u t r i ti o n a l c o n t e n t o f f o o d . T h i s c o n -c e r n i s e s p e c i al l y h i g h a m o n g m e n ( 8 5 % ) , h o u s e -h o l d s w i t h c h i l d r e n ( 8 0 % ) a n d y o u n g a d u l t s b e -t w e e n 2 5 a n d 3 9 (8 8 % ) ( D i s t r i b u i ~ o H o j e , 1 9 93 ).

T h e e c o l o g ic a l c o n c e r n s o f c o n s u m e r s a r e a l s oi n c r e a s i n g . T h e a b o v e s t u d y a l s o i n d i c a t e s t h a t8 6 % o f P o r tu g u e s e c o n s u m e r s a r e m o d e r a t e l y o rv e r y c o n c e r n e d a b o u t t h e r e c y cl in g o f p r o d u c t s .T h i s c o n c e r n , a l o n g w i t h n e w g o v e r n m e n t r e g u l a -t i o n s h a s c o n t r i b u t e d t o a n i n c r e a s e o f p r o d u c t sa n d p a c k a g i n g w h i c h a r e m o r e e n v i r o n m e n t a l l yf r i end ly .


11/18

M. Farhangmehr, ~ Veiga~Intern. Z of Research in Marketing 12 (1995) 485-.~2 4956.Z Price

T h e t h e o r y s u g ge s t s t h a t , w h e n b u y i n g a p r o d -u c t, t h e w e i g h t o f t h e p r i c e e l e m e n t v a r i e s a c c o r d -i n g t o e c o n o m i c c o n d i t i o n s o f t h e c o u n t r y a n dc o n s u m e r e x p e c t a t i o n r e g a r d i n g th e f u t u r e i n -c o m e . H i s t o r ic a l l y i n P o r t u g a l t h e i n c r e a s e o fi n f la t i o n h a s p r o d u c e d u n c e r t a i n t y r e g a r d i n g f u -t u r e i n c o m e a n d t h u s, h a s h a d g r e a t i n f lu e n c e i nh o u s e h o l d e x p e n d i t u r e ( O E C D , 1 99 1) .

A s t u d y o n c o n s u m e r b u y i n g a t t i t u d e s (D i s t r ib -u i ~ o H o j e , 19 9 4a ; D i s t r i b u i ~ o H o j e , 1 9 94 b )s h o w s t h a t t h e p r i c e e l e m e n t i s o n e o f th e m o s ti m p o r t a n t f a c t o r s w h e n d e c i d i n g t o b u y f o o dp r o d u c t s ( 3 4 % ) . T h e p r i c e e l e m e n t i s o n l y o fl e s s e r i m p o r t a n c e t h a n t h e q u a l i t y fa c t o r (3 6 % ) .I n f a c t t h e d i f f e r e n c e b e t w e e n t h e p r i c e a n dq u a l i t y is m i n i m a l . T h i s i s n o t t h e g e n e r a l c a s e ,h o w e v e r , fo r E u r o p e , w h e r e a s i m i l a r s t u d y i n d i-c a t e s t h a t q u a li t y i s t h e m o s t i m p o r t a n t e l e m e n tf o r 4 6 % o f E u r o p e a n s a s c o m p a r e d t o p r i c e w h i c hi s o n l y t h e m o s t i m p o r t a n t e l e m e n t f o r 1 7 % . T h i sm a k e s P o r t u g u e s e f i r m s p l a c e h ig h c o n s i d e r a t i o no n t h e p r i c e e l e m e n t o f t h e i r p r o d u c t s a n d w o r r ya b o u t t h e p r i c e e l e m e n t o f th e c o m p e t i t io n .

T w o n e w d e v e l o p m e n t s h a v e h a d a n i m p a c t o np r i c e s o f fa s t -m o v i n g c o n s u m e r g o o d s : th e e n t r yi n t h e P o r t u g u e s e m a r k e t o f i n t e r n a t i o n a l m a n u -

f a c tu r e s, w h i ch i n c r e a s e d c o m g ~ i t ~ a a m o n gd u c e r s , a n d s t r o n g c o m p e t R k m a m o n g t h e l a r g es u r f a c e s t o r e s . A s a r e su R ~ t h e i n c r e a s e i np r i c e o f s o m e o f t h e s e p r o d u c t s h a s b e e n l o w e rt h a n t h e a v e r a g e i n f la t i o n r a t e i n t h e c o u m r y( N i e l s e n , 1 9 9 4 ) .

I t i s i m p o r t a n t t o m e n t i o n t h a t t h e r e a r e n op r i c e c o n t r o l s ; h o w e v e r , i t i s i ll e g a l t o s e | | b e k ~ vc o s t .6.3. Distribution

U n t i l t h e l a t e 1 9 7 0' s t h e r e w a s a p r o t f f e r ~ i o no f s m a l l r e t a i l s h o p s , w h i l e d u r i n g t h e 1 9 8 ff s t h ec o u n t r y w i t n e s s e d t h e d e v e l o p m e n t o f l a r g e s e l bi n g o u t l e t s a n d a re d u c t i o n i n t h e n m n ~ r o fs m a l l e r o u t le t s . T h i s c h a n g e h a s e n a b l e d f i rm s t or e d u c e t h e i r d i s t r ib u t i o n c o s t a n d t o t r a n s f e r i t t om e r c h a n d i s i n g r e l a t e d a c t iv i ti e s . T h e r a p i d a n ds i g n if i c an t c o n c e n t r a t i o n o f s a l e s h a s a l s o c o n -t r i b u t e d t o a n i n c r e a s e o f t h e p o w e r o f la r g ~d i s t r ib u t i o n c o m p a n i e s .

T h e k e y d e v e l o p m e n t s th a t h a ve o c c u r r e d / nt h e a r e a o f r e ta i l o u t l e ts a r e : a n i n c r e a s e i n t h e n u m b e r o f h y p e r m a r k e t s a n d

s u p e r m a r k e t s . a d e c r e a s e i n t h e n u m b e r o f s m a l l s h o p s , a n d

s p e c i a l i s t f o o d s h o p s .Table 11Num ber o f outlets selling food and sales volume for food (in pe rcentage)

Number of Outle ts as percentage Sales of volume of of tota l outle tsof tota l as percentage1987 1990 1993 1987 1990 1993

Hyp er ma rkets (1) 0.01 0.00 0.10 5.40 21.10 36.20Su perm ark ets(2 ) 0.80 1.00 1.40 20.40 19.10 ~22.50Fr ee service(3 ) 5.20 6.30 6.90 19.90 15.60 I0.10La rge sho ps(4 ) 13.90 21.40 23.60 13.40 14.40 10.80Sm all shops(4 ) 72.60 65.90 62.20 28.90 24.20 16.20Spe ciality food shops 7.50 5.30 5.80 12.00 5.60 4.30To tal numb er of outlets 42639 39358 37001Change in % from 87 to 93 13.2%Sales volume (billions of escudos) 446 770 1109Change in % from 87 to 1993 149%(1) Se~!i~.garea equal or over 2500 m2.(2) Setl ing area equal or over 4 ~ m2 and u nder 2500 m2.(3) Selling area betw een 50 m2 and 400 m 2.',4) Large shops a re distinguished from sm all shof ~. ~hen they have a cashier or hav e more than two employees.Source: Nielsen Fo od Index (1990, !994).


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496 M. F ~ h r , P. Veiga Intern. J. of Research in Marketing 12 0995) 485-502T~e 12Number e~ c~e~ and sags volume for cafes and restaurants

N u m b e r o f o u t l e ts a s p e r c e n t a g e S a l e s o f v o l u m e o f o u t le t s a so f t o t a l p e r c e n t a g e o f t o t a l1987 1990 1993 1987 1990

Res~m-,mts 23.0 27.3 27.3 46.2 52.1Cages 43.5 53.5 54.5 35.0 36.8T~eras and others 33.5 19.1 18.2 18.8 11.1Toh~ nu~er of ou~ets 35246 44090 49183~ g e hl % fi'om87 to 93 39.5"Sales volumeLbRl/onsof escudos) 289 639Ch~ge in % from f7 m 1993

199346.842.610.6954230

Source: NieBen Food Index, Lisbon, Sept. 1990, and August 1994.* a considerable increase in the market share ofh.~Tpermarkets.- a signkficant decrease in the market share ofsmall shops.- wh~le there has been a considerable increase inthe number of outlets and the sales volume ofrestaurants and c-,des, the traditional taverns in

Portugal have suffered a substantial reduction,both in terms of the number of outlets andtheir sales volume.Table 11 shows the changes in the number andstructure of outlets, as well as the related sales

volume. The table clearly shows how the smallindependent stores are decreasing and how thehypermarkets are gaining ground. Table 12 showsthe striking increase of the number and salesvolume of cafes and restaurants. This, in part, isexplained by an increase in disposable incomeand also the increase in the number of workingwomen, which contn'butes to the substitution forhome cooking by eating in cafes and restaurants.

Another development which occurred in thetare 1980's was the rapid growth of franchising inPortugal. In 1991, there were 76 foreign and 12Portuguese francl'dsers (Anufirio Franchise, 1991).A recent study (Duarte, 1992) indicates that morethan 96% of the foreign franchisers and all Por-tuguese franchisers in her sample (37 franchisers)were hnplemented in Portugal after 1985.6. 4. Direct market ing

Direct marketing began to develop signifi-cantly in Portugal in the mid 1980's. I t is believed

that it is one of the areas of marketing in highdevelopment (Marketing e Publicidade, 1992). In1993 there were around 20 direct marketing firmsin Portugal. They are small firms employing 2 to23 full-time employees. The development andsuccess of sales by direct marketing firms hasattracted new firms into this area.

Table 13 shows the development of the salesvolume in direct marketing according to Euro-pean Direct Marketing Association (EDMA), un-til 1990. The development has cont inued in therecent years. The sales volume of the ten largestdirect marketing firms had an over 40% increasefrom 1991 to 1992. The amount of investment inthis area, however, compared to other Europeancount ries is still very small. In 1990, the amountof investment per habitant was 8 ECU in Portu-gal, compared to 116 in Germany and 76 in EUcountries (Marketing e Publicidade, 1992). "

The most highly developed area of this activityis direct mail, or sales through correspondence.The expenditure in direct mail, based on a reportby the Portuguese post office, had a greater in-crease than other information channels, e.g. press,Table 13Sales volume in direct marketing (thousands of ECU)Year Sales volume1986 7 0001987 8 0001988 10 0001989 12 0001990 16000Sourc.e: Marketing e Publicidade (1992).


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M. F arhangmehr, P. Veiga~Intern. Z of Research in Ma rketing 12 (1995) 485 -502Table 14Advertising market in Portugal 1983-1993

497

Year Percentagef total Total millions esc % Inc.T.V. Radio Press Outdoor

% of ODP

1983 55 16 29 n.a 5652.2 231986 58 14 28 n.a 13449.5 421988 50 12 32 6 34647.0 571990 44 8 37 11 59241.5 321991 43 8 38 11 75848.0 281992 45 9 36 10 96078.3 271993 52 7 31 10 !04172.4 8

0.250.300.580.700.770.84n/aSource: Sabatina (1991); OECD, 1994.

radio and television. While publicity throughmailings is increasing, sales through mail are notproportionally incrementing. The report con-cludes that this increase in mailing may not bemaintained in future, which might consequentlyaffect the volume of sales through mail (Market-ing e Publicidade, 1992).6 .5 . A d v e r t i s i n g

The communication and public relations mar-ket has been another area of exceptional develop-ment. While until mid 1985, there were only afew advertising agencies in this market, from thenon the number of agencies has increased consid-erably. The major reasons for absence of suchdevelopment until 1985 were the public adminis-tration of many firms, a traditional approach to-wards the market and a lack of competition.However, with the advent of privatisation and therenewed access of private initiative in many sec-tors, such as banks, along with the economicgrowth between the mid eighties and 1992, com-petition became fiercer and thus the use of adver-tising increased very significantly.The advertising market is highly concentratedboth in the users and providers of this service.The firms that use advertising the most are theproducers of consumer good products, cars, andbanks. The ten largest advertising firms in Portu-gal, which are mostly foreign, have 47.5% of themarket share (MOCI, 1994).

Advertising expenditure has increased consid-erably since 1982, the date after which data is

available. Its increase in nominal terms is quRehigh. It has increased from 0.26% of GNP in I982to 0.9% of GNP in 1992 (Table 14). The pre-ferred media for advertising by far are the print edmedia and television which have the largest shareof the total advertising expenditure. In 1993 tele-vision's share of advertising was 52% wh/le theprinted media's was 31%. Television has a~a~absorbed the highest share of the advertisingmarket. This share had the greatest increase after1992, a time when private television channehwere launched in Portugal. The printed med/aadvertising had also a very high growth s/nee1982, increasing 22 times in nonfinal terms. Th.ehighest proportion of the print media marketbelongs to daily newspapers (Table 15).Radio advertising had a high growth rate i~the early 1980's. This was due to libera|isation ofthe radio waves, which increased the number oflocal and regional radio stations. As a result,regional advertising, uncommon until then,started to expand Later, radio advertising had areduct ion of sales b ~, 10% and capt ured only 7%of the advertising market in 1933.Table 15Breakdown of advertising expenditure in Print Media for t993(in percentage)Daily newspapers 40.3Weekly newspapers 21.6Women's magazine 8.5Economic and management mafazines 6.9Others 22.7Source: MOCL 1994.


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498 M. Fadumgnwhr, P. Veiga Intern. 1. of Research in Marketing 12 (1995) 485-502C o m p a r a t i v e a d v e r t is i n g a n d t o b a c c o a d v e r t is -

i n g a r e p r o h i b i t e d i n P o r t u g a l . A d v e r t i s i n g o fa l c o h o l i c b e v e r a g e s , a n d e t h i c a l p r o d u c t s a r e a l s ot o g o v e r n m e n t r e s t ri c ti o n s .

6-6. Sa /es p ~T h e i n c r e a s e o f s a l e s p r o m o t i o n a c t i v i t i e s i nP o r t u g a l i s a n e w t r e n d a n d h a s b e e n d e v e l o p e d

o m ' y i n r e c e n t y e a r s . A c c o r d i n g t o N i e l s e n ( I 9 9 4 )" t h e d e v e l o p m e n t o f t h i s t y p e o f a c t iv i ty is m a i n l yd u e t o t h e f o ll o w in g :- M o d e r n J s a t io n o f t h e r e ta i l m a r k e t ( g r o w t h i nt h e n u m b e r o f la r g e s to r e s ).- E n t r y i n t h e P o r t u g u e s e m a r k e t o f s e v e r a l i n -t e r n a t i o n a l m a n u f a c t u r e r s , w h i c h i n c r e a s e d

c o m p e t i t i o n b e t w e e n p r o d u c e r s .- S o l i d g r o w t h i n t h e n u m b e r o f r e f e r e n c e s i nn m s t m a r k e t s . M a n u f a c t u r e r ' s n e e d t o d i sp l a y t h e i r p r o d u c t si n l a r g e s u r f a c e s t o r e s .- S t r o n g c o m p e t i t i o n b e t w e e n t h e l a r g e s u r f a c e

s t o r e s . "T h e d e v e l o p m e n t o f t h i s a c t i v i t y , w h i c h w a sn o n - e ~ d s t e n t i n t h e p a s t , h a s c a u s e d a c h a n g e i nc o n s u m e r b e h a v i o u r . S a l e s p r o m o t i o n a c t i v i t i e s

h a v e e n ~ . ' . ~ a g e d a b u y i n g b e h a v i o u r w h i c h i sm o r e i n d u c e d b y im p u l s e a n d a r e d u c e d l o y a lt y t ob r a n d s . W h i l e a s t u d y i n 1 9 8 7 ( C a s c i o ) i n d i c a t e da h i g h b r a n d l o y a lt y , P o r t e r ( 1 9 9 4 ) m o r e r e c e n t l ys h o w s l o w e r l e v e ls o f b r a n d l o y a lt y . N i e l s e n ( 1 9 9 4 )a l s o i n d ic a t e s t h a t t h e c o n s u m e r l o ya lt y , b o t h t ob r a n d s a n d l o c a ti o n , h a v e d im i n i s h ed .

Z Market researchM m - k et r e s e a r c h f n -n lS a r e b o t h f e w i n n u m b e ra n d n e w l y f o u n d e d . A l t h o u g h t h e f ir s t m a r k e t

r e s e a r c h f i r m s b e g a n t h e i r a c t i v it ie s in t h e 1 9 6 0 's ,a n d f o r tw o d e c a d e s m a i n t a i n e d a n a l m o s t v ir t u a lm o n o p o l y i n t h e m a r k e t , s ig n if ie a w , d e v e l o p m e n ta n d p r o l i fe r a t i o n h a s o n l y o c c u r r e d i n r e c e n ty e a r s a g a i n e s p e c i a l l y a f t e r P o r t u g u e s e i n t e g r a -t i o n i n t o t h e E l 3 . B y . t h e e n d o f 1 98 0's , t h e r ewere e igh t f i rms in th i s i ndus t ry . I n 1991 , t he rew e r e ~ f i n n s , b o t h n a t i o n a l a n d f o r e i g n , e m p l o y -i n g 5 0 0 e m p l o y e e s w i th a v o l u m e o f b u s in e s s o fo v e r t h r e e b i l l i o n e s c u d o s , w h i c h w a s 0 . 0 3 % o f

G D P ( Q u e i r o z , 1 9 9 1 ) . B y 1 9 9 4 , t h e r e w e r e m o r et h a n 1 0 0 m a r k e t i n g r e s e a r c h f i r m s i n P o r t u g a l .S o m e o f t h e m a r k e t i n g r e s e a r c h f i rm s a r e b u i lta r o u n d t h e i n d u s t r i a l a n d b u s i n e s s a s s o c i a t i o n sa n d a r e i n v o l v e d i n t h e a p p l i c a t i o n o f f u n d s o r i g i -n a ti n g fr o m t h e E u r o p e a n U n i o n .

T h e r e a l g r o w t h o f m a r k e t in g r e s e a r c h a n d i ns p i t e o f e c o n o m i c r e c e s s i o n , o c c u r r e d a f t e r 1 9 9 2 .T h i s s u gg e s ts t h a t m a r k e t r e s e a r c h h a s b e e n c h o -s e n a s a n i n s t r u m e n t t o r e s p o n d t o t h e r e c e s s io n .T h e s a l e s v o l u m e f o r t h e e n t i r e i n d u s t r y i s n o t~ v a i l a b l e ; h o w e v e r , t h e s a l e s v o l u m e o f 1 4 m a j o r, i rms in 1993 was over 5 .7 b i l l i on e~cudos . Th i si n d i c a t e s a h i g h g r o w t h f o r t h i s m a r k e t . T h i sg r o w t h h a s b e e n a c c o m p a n i e d b y t h e : ; f fe r in g o fm o r e s p e c i a i i s e d a n d d i v e r s i f i e d s e r v i c e s b y t h er e s e a r c h f ir m s .

A s u r v e y o f 1 5 0 f i r m s sh o w s t h a t t h e P o r -t u g u e s e c o m p a n i e s w h i c h u s e t h e s e rv i c es o f m a r -k e t i n g r e s e a r c h f i r m s a r e a n e l i t e . T h e m a j o r i t y( 7 6 % ) o f t h e c l i e n t f i r m s w e r e s a t i s f i e d w i t h t h es e r v i c e s p r o v i d e d b y m a r k e t i n g r e s e a r c h f i r m s .P o r t u g u e s e c o m p a n i e s d o n o t u s e r e s e a r c h f i r m so n a r e g u l a r b a s i s (5 8 % ) . T h e a d - h o c s tu d i e sm o r e i n d e m a n d a r e r e l a t e d t o t h e c o n s u m e r ,o p i n i o n a n d i m a g e s t u d i e s . T h e m o s t c o m m o nt y p e o f s y n d i c a t e d r e s e a r c h i s a u d i e n c e s t u d i e s( 7 0 % ) . T h e c o s t o f t e l e p h o n e c a ! I s a n d t h e l i m -i t e d c o v e r a g e o f t e l e p h o n e l in e s h a s r e s t r i c t e d t h eu s e a n d d e v e l o p m e n t o f d a t a c o l l ec t io n t h r o u g ht e l e p h o n e i n te r v i e w i n g ( M a r k e t i n g e P u b l i c i d a d e ,1 9 9 4 ) .

A l t h o u g h m a r k e t r e s e a r c h h a s d e v e l o p e d i nr e c e n t y e a r s , t h e i n v e s t m e n t s i n t h i s a r e a c o m -p a r e d t o o t h e r E u r o p e a n c o u n t r i e s , f o r m a v e r ys m a ll p e r c e n t a g e o f G D P . I t is e x p e c t e d th a t t h em a r k e t f o r t h i s s e c t o r w i l l i n c r e a s e s u b s t a n t i a l l yi n t h e f u t u r e .

T h e i m p l e m e n t a t i o n o f m a r k e t i n g p ~ . .- c ip l es isc u r r e n t l y e x p a n d i n g ; h o w e v e r , i t i s s t il l b e i n g c a r -r i e d o b t o n a s m a l l s c al e e s p e c ia l l y w h e n c o m -p a r e d t o t h e m a j o ri ty o f E U c o u n t r ie s .7 . F u t u r e t r e n d s7.1. Economic trends

U n e m p l o y m e n t i s e x p e c t e d t o w o r s e n i n t h ec o m i n g y e a r s d u e t o t e c h n o l o g i c a l d e v e l o p m e n t


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M. Farhangmehr, P. Vdg a ~Intern. J. of Research n Marke ting 12 (/995 ) 48 5-502which will not be accompanied with parallel de-velopment of services and a higher level of educa-tion (Carneiro, 1988). Unemployment is expectedto increase to 153% in the beginning of the nextcentury (year 2005) which is an increase of over6% as compared to 1983. The sector most likelyto be affected is agriculture, while the servicesector will be respons~le for the creation of themost new jobs. The projected rate of change inunemployment, for the period 1983-2005, is + 9%in the agricultural sector and -10% in the ser-vice sector.7 . 2 . D e m o g r a p h i c t r e r d s

The increase in population will tend to main-tain its pattern of moderate grmvth which wasobserved during the 1980's, until the end of thiscentury. The natural growth rate will increasemoderately during this decade (Table 3). It ismore difficult however to judge the migrationrate due to uncertainties in predicting the effectof EL/ policy as regards the free movement oflabour after 1992. Also unpredictable is how muchthe end of the civil wars in Angola and Mozam-bique will encourage some ex-residents of thesecountries to return, or how future developmentsin the South African situation will affect thereturn of Portuguese emigrants there. The pre-sent expectations are an increase in the net effectof migration: there will be more Portuguese com-ing back to Portugal than those leaving the coun-try. This tendency will positively affect the popu-lation growth rate. The estimated population forthe beginning of the next century is 11.1 million,which is an increase of 5.8% in relation to thepresent population, and represents an averageincrease of 0.6% per year.Another tendency which is expected to con-tinue through the rest of the 1990's is a decreasein the propo~ion of younger age brackets of thepopulation (between 0 and 14 years) and an in-crease in the proportion of those over 65 years ofage.7 . 3 . C u l t u r a l t r en 4 s

Although the environmental aspect is not amajor worry of the Portuguese, the concept and

4 9 9

iSSUeS related to it are gradually ga/v/ag force.Environmental and health concerns, currea~lower than in many Other EU coumries, a~ e'/~pected to grow in importance. The ~ oforganisations and individuals working for t l~tection of the environment will increase. Twoother developing tcndcl~S are related toemployment of women and chi1~ren. Ia spR ofexisting laws defending t.he women's righls in thework place, female workers cont/nu to ~e Iessprotected and badly paid. The futurewill be a stricter enforcement of regulatio~,s ~le-fending female workers and the ~ oflabour.

As indicated before, the tmmber of womeastudying in both secondary and higher e d a c a ~is increasing. This tendency will continue in thefuture and more women viii soon behigher positions and working in higher pald~jobs.The materialistic and p~; rimterialist.ic values,which have been obset~e6 simultaneously in Por-tugal, will both continue to he held in fu~ere.Higher development is expected however ofvalues of thf: post-materialistic category.7.4. Conmmptkm

Consumer confidence and expectatiom for therest of the ninetics is expected to decline dee toan increase in unemployment and lower covd~dence in the Portuguese economy. On the otherhand, based on OECD (1994) projections,int er~ t rates and the increase in consumer cred~will lend support for an increase in p~ate con.sumption.In connection with consumption sh,~act-tne,Casc~o (1989) identified a strong teRdency to-wards the maintenance of expenses for food andclothing which are essential items, espec/a~among the higher income population. For thosewith lower incomes, a tendency for a decrease insuch expenditures is expected. The study alsoshowed intentions for reduced purchasing ofnon-essential items, such as durable goods, furP2~-ture, leisure and holidays, the last two being moresensitive to reduction.Countering this tendency however are theyounger group of consumers and those wRh higher


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50D M. Fariumgmehr, P. Veiga Intern. Z of Research in Marketing 12 (1995) 485-502w h e r e a s l i g h t i n c r e a s e i n d e m a n d o f

d m a b . ~ g o o d s i s e x p e c t e d . A s f o r l e is u r e , t h e r ea r e a l s o i n t e n ti o n s f o r i n c r e as e d e x p e n d i t u r e s f o rt w o g r o u p s : p e o p l e w i t h m o r e f o r m a l e d u c a t i o n ,a n d m e n . W o m e n a n d c o n s u m e r s w it h lo w e r in -c o m e s s n o w a n i n t e n t i e n f o r a r e d u c t i o n o f ex -p e n s e s i n l e i s u r e .

T h e n u m b e r o f s t u d en t s i n h i g h er e d u c a t io nh a s b e e n L , , ~ ' r e a s i n g d u r i n g t h e l a s t d e c a d e a n dt h e _ m ~ j e c ~ o n i s f o r a f u r t h e r i n c r e a s e . T o g e t h e rw i* .h t h e g r a d u a l r e d u c t i o n o f i l l it e ra c y , t h e i n -c r e a s e i n t h e n u m b e r o f y e a r s f o r o b l i g a t o ry e d u -c a ti o n a n d a n i n cr e a se i n t h e n u m b e r o f p e o p l ew i t h h i g h s c h o o l , h i g h e r a n d u n i v e r s i t y e d u c a t i o n~ ' p r o d u c e c o n s u m e r s w h o a r e m o r e a w a r e a n dd e m a n d i n g , a n d w h o a r e m o r e o p e n t o i n n o v a -l i on . A re c e n t s t udy (S i l va , 1994) shov , , s t ha t c on-s u m e r s w i th k i g h e r le v e l o f e d u c a t i o n t e n d t o b em o r e d e m a n d i n g a n d m a k e m o r e c o m p l ai n ts w h e nt h e y a r e d i s s a t i s f i e d w i t h a p r o d u c t .

_~. M a r k e t i n g m a n a g e m e n t i n t h e n i n e ti e sI n t h i s s e c t i o n , w e w i l l d i s o J s s a n u m b e r o f

i s s u e s r e l a t e d t o m a r k e t i n g m a n a g e m e n t , b a s e don the previous a , - . a lys i s .8.L Product

A s o f 1 9 92 a n d t h e o p e n i n g o f th e P o r t u g u e s em a r k e t s , t h e i n f lu x o f p r o d u c t s f r o m t h e c o u n t r i e so f E u r o p e a n U n i o n h a s i n c r e as e d . T h e i lf fl ow o fE u r o p e a n b r a n d s h a s b e e n p a r t i c u l a r l y n o t i c e a b l ef o r s o m e c a t e g o r i e s o f p r o d u c t s , s u c h a s b r e a k f a s tc e r e a l s , c h o c o l a t e s , s o f t d r i n k s , c a t a n d d o g f o o d s .T h i s s i t u a t i o n w i l l c o n t i n u e i n t h e f u t u r e , p l a c i n gm o r e c o m p e t i t i v e p r e s s u r e o n F o r t u g n e s e p r o -d u c e r s .

A s in d i c a t e d i n th e r e p o r t p r o d u c e d b y M o n i -t o r C o m p a n y ( P o ~ e r , 1 99 4), P o r t u g u e s e m a n u f a c -t u r e r s h a v e s e r i o u s p r o b l e m s i n t h e i r m a r k e t i n ga c t i v i t i e s . T h e l a c k o f m a r k e t i n g c a p a c i t y i s p a r -t k " a la r l y e v i d e n t i n e x p o r t e d p r o d u c t s . T h i s s a m er e p o r t i n d i c a t e s t h a t u p t i l l n o w t h e P o r t u g u e s eha v e n o t l:e ,~ .o , a b l e t o c re a t e a d i s t i nc t b r a n dn a m e f o r a n y o f t h e i r p r o d u c t s ( w i t h t h e e x c e p -t i o n o f P o r t w i n e ) i n t h e i n t e r n a t io n a l m a r k e t s .T h i s ~ R u a t i o n h a s o b l i g e d f i r m s t o c o m p e t e b y

o f f e r in g p r i c e r e d u c t io n s . T h e c o m p e t i t i v e p r e s -s u r e , a n d l a c k o f i n t e r n a t io n a l r e c o g n i ti o n o f P o r -t u g u e s e p r o d u c t s i n i n t e r n a t i o n a l m a r k e t s i s r e -q u i r i n g f i r m s t o b e c o m e m o r e m a r k e t - o r i e n t e da n d t o m o r e s u b s t an t ia l ly d e v e l o p t h e i r m a r k e t i n gpra c t i c e s .

A n o t h e r t e n d e n c y d u r i n g t h e c o m i n g y e a r s isr e l a t e d t o p r i v a t e l a b e l s . I t s t a r t e d t o r e s u r g e i n1 9 9 2 a n d i t i s e x p e c t e d t h a t f o r t h e r e m a i n i n gy ea ,~ s o f t h e 1 9 9 0 's t h e i r i m p o r t a n c e w i l l g r o w .W h i l e i n t h e b e g i n n i n g o n l y s u p e r m a r k e t s a n dd i s c o u n t s t o r e s w e r e s e l l i n g p r i v a t e l a b e l s , m o r eo r g a n i s a t io n s a n d n e w m a r k e t s w il l t e n d t o a d o p tt h e m . T h e r e f o r e t h e p r e s e n t f o r e c a s t i s f o r a ni n c r e a s e i n t h e i r s h a r e o f r e v e n u e .

W i t h t h e g r o w in g n u m b e r o f w o r k i ng w o m e n ,a n u m b e r o f o p p o r tu n i t ie s a r e o p e n i n g f o r t h ep r o d u c e r s o f g o o d s a n d s e rv i ce s . T h e r e i s a n e e df o r p r o d u c t s t h a t r e s p o n d t o t h e n e e d s a n d t h en e w r o l e o f t h e f e m a l e s e g m e n t o f t h e m a r k e t .A l l p r o d u c t s t h a t c a n " i n c r e a s e t h e t i m e a v a i l -a b l e " ( D o u g l a s a n d I s h e r w o o d , 1 9 7 9 ) f o r a c t i v ew o m e n o f t h e 1 9 9 0 's a r e in t h is c a te g o r y .

" G r e y i n g " a n d " d e g r e e n i n g " f a c to r s a ls o i nd i-c a t e n e w a v e n u e z f o r t h e d e v e l o p m e n t o f p r o d -u c t s. W h i l e t h e g r e y i n g p h e n o m e n o n , i n v i te s t h ed e v e l o p m e n t o f p r o d u c t s t h a t c a t e r ~ 'o t h e n e e d so f t h i s s e g m e n t , t h e d e g r e e n i n g f a c t o r i n d i c a t e st h a t m a n u f a c t u r e r s w i l l h a v e t o m a k e t h e i r p r o d -u c t s a t t r a c t i v e t o i n d i v i d u a l s o f o t h e r a g e g r o u p s .

T h e e c o lo g i c al t r e n d a n d e n f o r c e d r e g u l a t i o n sw ill h a v e a n i m p a c t o n t h e p a c k a g i n g o f p r o d u c t sw h i c h w i l l o b l i g e f i r m s t o d e v e l o p r c c y d a b l e o rr e u s a b l e p a c k a g i n g .8.2. Price

A s d i s c u s s e d e a r l i e r i n t h i s p a p e r , t h e P o r -t u g u e s e a r e v e r y s e n s i t i v e t o p r i c e a n d t h i s i s o n eo f t h e m a j o r f a c t o r s i n t h e i r b u y i n g d e c i s i o n s .T h i s a t t i t u d e c a n i n p a r t e x p l a i n t h e s u c c e s s o fl a r g e s e l l i n g o u t l e t s r e c e n t l y e s t a b l i s h e d i n t h ec o u n t r y w h i c h a r e c a p a b l e o f s e l l i n g t h e i r m e r -c h a n d i s e , i n c l u d i n g t h e i r o w n b r a n d s a t p r i c e sl o w e r t h a n o t h e r o u t lo t s.

A n o t h e r r e l a t e d t e n d e n c y o b s e r v e d i n r e c e n ty e a r s h a s b e e n a p o l a r i s a t i o n o f p r i c i n g . W h i l et h e m a r k e t f o r h i g h q u a l it y a n d h i g h - p r i c e d p r o d -u c t s h a s b e e n d e v e l o p i n g a t o n e e x t r e m e , t h e r e


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M. Farhangmehr, P. Veiga I n t e r n .J. of Research in Marketing 12 (i995) 485-5W2 501h a s b e e n g r e a t d e v e l o p m e n t a t th e l o w e r e n d o ft h e m a r k e t w i t h a p r o l i f e r a t io n o f c h a i n s t o r e sse l l ing f ixed , l ow-pr i ced i t ems , such as 300 o r 500e s c u d o s p r o d u c t s . T h e h i g h c o n c e r n i n r e l a t io n t op r i c e n e e d s t o b e c o n s i d e r e d i n m a r k e t i n g d e c i -s i o n m a k i n g . D u e t o t h i s p o l a r i s a t i o n , t h e r e i s a ni n c r e a s e d t e n d e n c y o f s e g m e n t a t i o n b a s e d o np r i c e .

I n g e n e r a l t e r m s , d u e t o i n c r e a s e d c o m p e t i t io na s a r e s u l t o f t h e E u r o p e a n m a r k e t , t h e r e w i l l h ea g e n e r a l d e c l i n e i n t h e p r i c e o f f a s t m o v i n gc o n s u m e r g o o d s a s c o m p a r e d t o i n f la t io n .8.3. Promotion mix

I t is a l so e x p e c t e d t h a t t h e a r e a o f c o m m u n i c a -t i o n a n d p u b l i c re l a t i o n s w i ll h a v e a t r e m e n d o u sincrease in the 1990 ' s . Un t i l 1992 there was on lyo n e p u b l ic t e l e v is i on c o m p a n y w i t h t w o c h a n n e l s .R e c e n t l y tw o p r i v a te c h a n n e l s h a v e b e g u n b r o a d -c a s t i n g i n P o r t u g a l . T h e e x p a n s i o n o f t e l e v i s i o nc h a n n e l s a n d r a d i o s t a t i o n s w i ll d e f i n i te l y c o n -t r i b u t e t o a c o n c o m i t a n t e x p a n s i o n o f t h e a d v e r -t i s e m e n t m a r k e t i n P o r tu g a l . T h e r e c e n t t r e n d i nt h e d e v e l o p m e n t o f s p e c i a l i s e d m e d i a ( w o m e n ,p a r e n t s , b u s i n e s s , m a r k e t i n g , d i s t r i b u t i o n , e t c . )t e n d s t o c o n t i n u e i n t h e 1 99 0's .

W i t h t h e e x p e c t e d in c r e a s e in t h e n u m b e r o fe d u c a t e d w o m e n a n d t h e t e n d e n c y t o w a r d t h e irf u r t h e r e m a n c i p a t i o n , t h e r o l e d i f fe r e n c e b e -t w e e n m a l e a n d f e m a l e i s e r o d i n g . W o m e n a ~ ea l s o s t a r t i n g t o p a r t i c i p a t e m o r e i n b u y i n g d e c i -s i o n s , e s p e c i a l l y f o r h i g h i n v o l v e m e n t p r o d u c t sa n d p r o d u c t s w h e r e t h e d e c i s i o n - m a k i n g t r a d i -t io n a l ly b e l o n g e d t o m e n . T h e a d v e r ti s in g m e s -s a g es , t h e r e f o r e w il l t e n d t o a d d r e s s b o t h m e na n d w o m e n e q u a ll y .

T h e y o u n g e r g e n e r a ti o n a r e a ls o b e c o m i n gm o r e i n d e p e n d e n t c o n s u m e r s a n d , d u e t o a m o r el i b e r a l e d u c a t i o n , a r e b e c o m i n g m o r e i n v o l v e d i nf a m i l y b u y i n g d e c i s io n s . T h i s t e n d e n c y i s e n c o u r -a g i n g m o r e a d v e r t i s e m e n t s s p e c i f i c a l l y d i r e c t e dt o w a r d s y o u t h w i th m e s s a g e s t h a t e m p h a s i s e t h ep o s t - m a t e r i a l is t i c v a l u e s .8. 4. Distribution

I n t h e a r e a o f d is t ri b u ti o n , t h e p a t t e r n f o r t h ef u t u r e i s t h e c o n t i n u a t i o n o f t h e r e c e n t t r e n d s ,

i . e . , f u r t h e r c o n c e n t r a t i o n o f r e t a i l s a l e s a n dd e v e l o p m e n t o f la r g e ~ l l i n g a r e a s w h i c h w il lt o a n i n c r e a s e o f p o w e r t o h ~ r g ec o m p a n i e s . T h e 1 99 0"s , w i t h t h e d y n a m i c s b r o a g ~a b o u t f r o m t h e E u r o p e a n U n i o n M a r k e t, w iRp r o v o k e a n i n cr ea s in g i n t e r n a t ~ o f l ac g ed i s t r i b u t io n c o m p a n i e s . T h i s s i t u a t i o n ~ t h a tt h e p r o d u c e r s n e e d t o r e s p o n d t o t h e c h a t i e n g et h r o u g h t h e d e v e l o p m e n t o f E u r o p e a n

T h e d i r e c t m a r k e t i n g w il l t e n d t o h a v ed e v e l o p m e n t i n t h e f u t u r e . H o w e v e r , r e s t r i c t / o o n d a t a b a s e s w a y b e a t h r e a t to i ts d e v e ~T h e r e c e n t l e g i s l a t i o n ( 1 9 9 1 ) o n w o t e c t / o a o fp e r s o n a l d a t a i n c o m p u t e r i s e d d a t a b a s e s i s v e ~r ig o ro u s . T hi s t o ge th e r w ith th e n o n ~ o fd a t a b a s e s w i t h g r e a t c a p a c i ty f o r m a r k e t s e g m e wt a t i o n m a y a f f e c t t h e a d v a n c e m e n t o f t h e d i~ re ctm a r k e t i n g i n d u st ry . B y c o n s i d e r i n g t h e a d d r e s s e sa n d p r o f e s s i o n s o f c i ti z e n s a s c o n f i d e n t i a l d a m , i ti s b e l i e v e d t h a t t h i s l e g i s l a t i o n m a y a f f e c t R i md e v e l o p m e n t o f t h e s e c t o r .

F r a n c h i s in g i s e x p e c t e d t o h a v e f u r t h e r d e v e l -o p m e n t s i n t h e l C ~0 's , b o t h i n t e r m s o f t h e t r a m -h e r o f e s t a b l i s h m e n t s o f e x / s t i n g f r a n c h L s e r st h e e n t r y o f t h e n e w o n e s . T h e s e d e v e t o g n n e n ~w i ll b e m o r e r e l a t e d t o t h e e n tr y, o f f r a n c h h e r s o ff o r e i g n o r i g i n r a t h e r t h a n P o r t u g u e s e o n e s .D u a r t e ( 1 9 9 1 ) i n h e r s t u d y i d e n t i f ' t e d t h a t t h e r ew i l l b e l i t t l e d e v e l o p m e n t o f f r a n c h i s i n g o f P o r -t u g u e s e o r i g in i n t h e n e a r f u t u r e .

9 . F o r f e r 0 m , r e a d i n gF o r f u r t h e r r e a d i n g , s e e : B a n k o f P o r t u g a l1 98 0; E t u d e s E c o n o m i q u e s d e I ' O C D E , 1 99 0;

Guf f r e , 1994 ; INE , 1991 ; Nie l sen Index , 199~ ,N i e l s e n , 1 99 4; Q u e i r o z , 1 9 92 ; T o r r e s , 1 98 7; V i l a ~e t a l . , 1994 ; Wo r ld F er t i l i t y Surve y , 1980 .

A e k a e w l e d g e m e a t sW d e e p l y a p p r e c i a t e t h e s u g g e s ti o n s a n d

v a l u a b le c o n t r i b u ti o n s o f W . F r e d v a n R a a i j a n dP e t e r L e e f l a n g . W e w o u l d a l s o l ik e t o t h a n k M r .B r uc e . B i r d f o r t h e i m p r o v e m e n t o f t h e E n g l is h ,a n d S a b a t i n a a n d C G T P f o r p r o v id i n g u s w i th t h e


18/18

5 02 M . F ~ , P . V eig a I n te r n . J . o f R es ea rc h in M a rk et in g 1 2 0 9 9 5 ) 4 85 -5 02data . Spec~a] apprec ia t ion goes to A.C. Nie l sen ,Por tugal for the i r va luable coopera t ion .

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