Retail Customers

1
Retail Customers

• Chapter 3

2
Goals for Chapter 3
3
Goals for Chapter 3

• Discuss Five Patterns and Trends the Retailer
  must be aware of

4
Goals for Chapter 3

• Discuss Five Patterns and Trends the Retailer
  must be aware of
• Population and Demographics

5
Goals for Chapter 3

• Discuss Five Patterns and Trends the Retailer
  must be aware of
• Population and Demographics
• Geographic and Economic

6
Goals for Chapter 3

• Discuss Five Patterns and Trends the Retailer
  must be aware of
• Population and Demographics
• Geographic and Economic
• Lifestyle

7
Goals for Chapter 3

• Discuss Five Patterns and Trends the Retailer
  must be aware of
• Population and Demographics
• Geographic and Economic
• Lifestyle
• Physical and Natural

8
Goals for Chapter 3

• Discuss Five Patterns and Trends the Retailer
  must be aware of
• Population and Demographics
• Geographic and Economic
• Lifestyle
• Physical and Natural
• Technological and Informational

9
Goals for Chapter 3

• Discuss Five Patterns and Trends the Retailer
  must be aware of
• Population and Demographics
• Geographic and Economic
• Lifestyle
• Physical and Natural
• Technological and Informational
• Discuss Factors Influencing Buying Behavior

10
Goals for Chapter 3

• Discuss Five Patterns and Trends the Retailer
  must be aware of
• Population and Demographics
• Geographic and Economic
• Lifestyle
• Physical and Natural
• Technological and Informational
• Discuss Factors Influencing Buying Behavior
• Discuss Stages of Buying Process

11
Population and Demographics
12
Population and Demographics

• How many ultimate consumers are there? The answer
  is the Population. Detail by location down to
  county level and city greater than 2,500 can be
  found in Bureau of the Census data.

13
Population and Demographics

• How many ultimate consumers are there? The answer
  is the Population. Detail by location down to
  county level and city greater than 2,500 can be
  found in Bureau of the Census data.
• Who is the ultimate consumer? The answer is found
  through Demographics. Again, detail by location
  down to county level and city greater than 2,500
  can be found in Bureau of the Census data.

14
Demographic Trends
15
Demographic Trends

• Population Growth

16
Demographic Trends

• Population Growth
• Age Distribution

17
Demographic Trends

• Population Growth
• Age Distribution
• Shifting Geographic Centers

18
Demographic Trends

• Population Growth
• Age Distribution
• Shifting Geographic Centers
• Urban Centers

19
Demographic Trends

• Population Growth
• Age Distribution
• Shifting Geographic Centers
• Urban Centers
• Mobility

20
Demographic Trends

• Population Growth
• Age Distribution
• Shifting Geographic Centers
• Urban Centers
• Mobility
• Education

21
Demographic Trends

• Population Growth
• Age Distribution
• Shifting Geographic Centers
• Urban Centers
• Mobility
• Education
• Marriage and Divorce

22
Demographic Trends

• Population Growth
• Age Distribution
• Shifting Geographic Centers
• Urban Centers
• Mobility
• Education
• Marriage and Divorce
• Makeup of Households

23
Demographic Profiles
24
Demographic Profiles

• Income

25
Demographic Profiles

• Income
• Age

26
Demographic Profiles

• Income
• Age
• Gender

27
Demographic Profiles

• Income
• Age
• Gender
• Race

28
Demographic Profiles

• Income
• Age
• Gender
• Race
• Religion

29
Demographic Profiles

• Income
• Age
• Gender
• Race
• Religion
• Family Size

30
Demographic Profiles

• Income
• Age
• Gender
• Race
• Religion
• Family Size
• Education

31
Demographic Profiles

• Income
• Age
• Gender
• Race
• Religion
• Family Size
• Education
• Occupation

32
Demographic Groups
33
Demographic Groups

• Baby Boomers -- Born Between 1946 and 1964. They
  are now middle aged (37- 55). 75 million people
  at their peak earning years

34
Demographic Groups

• Baby Boomers -- Born Between 1946 and 1964. They
  are now middle aged (35- 53). 75 million people
  at their peak earning years
• Fifty Plus Market (aged and aging). Control over
  75 of nations wealth. Are no longer sick and
  dying but are alive and active. Their spending
  patterns differ significantly from under fifties

35
Demographic Groups

• Baby Boomers -- Born Between 1946 and 1964. They
  are now middle aged (35- 53). 75 million people
  at their peak earning years
• Fifty Plus Market (aged and aging). Control over
  75 of nations wealth. Are no longer sick and
  dying but are alive and active. Their spending
  patterns differ significantly from under fifties
• Young and Privileged - Offspring of Baby Boomers
  and Grandchildren of Fifty plus.

36
Demographic Groups

• Baby Boomers -- Born Between 1946 and 1964. They
  are now middle aged (35- 53). 75 million people
  at their peak earning years
• Fifty Plus Market (aged and aging). Control over
  75 of nations wealth. Are no longer sick and
  dying but are alive and active. Their spending
  patterns differ significantly from under fifties
• Young and Privileged - Offspring of Baby Boomers
  and Grandchildren of Fifty plus.
• Generation X -- Born between 1965 and 1976 (25 -
  36). Smallest Demographic Group

37
Demographic Groups

• Baby Boomers -- Born Between 1946 and 1964. They
  are now middle aged (35- 53). 75 million people
  at their peak earning years
• Fifty Plus Market (aged and aging). Control over
  75 of nations wealth. Are no longer sick and
  dying but are alive and active. Their spending
  patterns differ significantly from under fifties
• Young and Privileged - Offspring of Baby Boomers
  and Grandchildren of Fifty plus.
• Generation X -- Born between 1965 and 1976 (23 -
  34). Smallest Demographic Group
• Generation Y - Born after 1976

38
Growth in Minority Markets
39
Growth in Minority Markets

• Growth rate in Minorities (Black, Hispanic,
  Asian) is twice as fast as the general population

40
Growth in Minority Markets

• Growth rate in Minorities (Black, Hispanic,
  Asian) is twice as fast as the general population
  
• Ignoring racial demographics, particularly in
  urban areas, is very short sighted

41
Growth in Minority Markets

• Growth rate in Minorities (Black, Hispanic,
  Asian) is twice as fast as the general population
  
• Ignoring racial demographics, particularly in
  urban areas is very short sighted
• Dual Career families are growing. Retailers must
  target the needs and wants of this growing market

42
Geographic and Economic Patterns and Trends
43
Geographic and Economic Patterns and Trends

• Urban Growth versus Rural Stagnation -- more true
  in retailing than in population. New super stores
  are serving as magnets and improvements in travel
  make rural retailing a dying breed

44
Geographic and Economic Patterns and Trends

• Urban Growth versus Rural Stagnation -- more true
  in retailing than in population. New super stores
  are serving as magnets and improvements in travel
  make rural retailing a dying breed
• Retailers must keep track of the overall macro
  economic cycles of recession and growth

45
Geographic and Economic Patterns and Trends

• Urban Growth versus Rural Stagnation -- more true
  in retailing than in population. New super stores
  are serving as magnets and improvements in travel
  make rural retailing a dying breed
• Retailers must keep track of the overall macro
  economic cycles of recession and growth
• Income Gap between the haves and the have
  nots will continue to grow offering markets for
  specialized retailers.

46
Household Economic Trends
47
Household Economic Trends

• Income Growth

48
Household Economic Trends

• Income Growth
• Personal Savings

49
Household Economic Trends

• Income Growth
• Personal Savings
• Women in the Labor Force

50
Household Economic Trends

• Income Growth
• Personal Savings
• Women in the Labor Force
• Widespread use of Credit

51
Macro Economic Factors
52
Macro Economic Factors

• Gross Domestic Product

53
Macro Economic Factors

• Gross Domestic Product
• Interest Rates

54
Macro Economic Factors

• Gross Domestic Product
• Interest Rates
• Economic Turbulence

55
Macro Economic Factors

• Gross Domestic Product
• Interest Rates
• Economic Turbulence
• Unemployment

56
Macro Economic Factors

• Gross Domestic Product
• Interest Rates
• Economic Turbulence
• Unemployment
• Underground Economy

57
Lifestyle (Psychographic) Trends
58
Lifestyle (Psychographic) Trends

• Male and Female Role Flexibility

59
Lifestyle (Psychographic) Trends

• Male and Female Role Flexibility
• Deterioration of Institutional Confidence

60
Lifestyle (Psychographic) Trends

• Male and Female Role Flexibility
• Deterioration of Institutional Confidence
• Management of Time vs. money (Convenience)

61
Lifestyle (Psychographic) Trends

• Male and Female Role Flexibility
• Deterioration of Institutional Confidence
• Management of Time vs. Money (Convenience)
• Value and Lifestyle Fragmentation

62
Lifestyle (Psychographic) Trends

• Male and Female Role Flexibility
• Deterioration of Institutional Confidence
• Management of Time vs. money (Convenience)
• Value and Lifestyle Fragmentation
• Baby Busters

63
Physical and Natural Patterns and Trends
64
Physical and Natural Patterns and Trends

• Environmental Marketing --marketing with an eye
  to environmental issues is a growing trend

65
Physical and Natural Patterns and Trends

• Environmental Marketing --marketing with an eye
  to environmental issues is a growing trend

66
Physical and Natural Patterns and Trends

• Environmental Marketing --marketing with an eye
  to environmental issues is a growing trend
• New Age and Self Help products and stores are
  growing in popularity

67
Physical and Natural Patterns and Trends

• Environmental Marketing --marketing with an eye
  to environmental issues is a growing trend
• New Age and Self Help products and stores are
  growing in popularity

68
Technological and Informational Patterns and
Trends
69
Technological and Informational Patterns and
Trends

• Fastest changing area of retail environment both
  in terms of managing the retail store and in the
  products being sold.

70
Technological and Informational Patterns and
Trends

• Fastest changing area of retail environment both
  in terms of managing the retail store and in the
  products being sold.
• Well educated, high income baby boomers are
  receptive to electronic high technology products

71
Technological and Informational Patterns and
Trends

• Fastest changing area of retail environment both
  in terms of managing the retail store and in the
  products being sold.
• Well educated, high income baby boomers are
  receptive to electronic high technology products
• Fastest growing segment of retailing is the high
  end computer, telephone and other technological
  gadgets

72
Factors Influencing Consumer Buying Behavior (1
of 4)
73
Factors Influencing Consumer Buying Behavior (1
of 4)

• Psychological Factors

74
Factors Influencing Consumer Buying Behavior (1
of 4)

• Psychological Factors
• Motivation -- Maslovs Hierarchy of Needs

75
Factors Influencing Consumer Buying Behavior (1
of 4)

• Psychological Factors
• Motivation -- Maslovs Hierarchy of Needs
• Physiological

76
Factors Influencing Consumer Buying Behavior (1
of 4)

• Psychological Factors
• Motivation -- Maslovs Hierarchy of Needs
• Physiological
• Safety

77
Factors Influencing Consumer Buying Behavior (1
of 4)

• Psychological Factors
• Motivation -- Maslovs Hierarchy of Needs
• Physiological
• Safety
• Social

78
Factors Influencing Consumer Buying Behavior (1
of 4)

• Psychological Factors
• Motivation -- Maslovs Hierarchy of Needs
• Physiological
• Safety
• Social
• Esteem

79
Factors Influencing Consumer Buying Behavior (1
of 4)

• Psychological Factors
• Motivation -- Maslovs Hierarchy of Needs
• Physiological
• Safety
• Social
• Esteem
• Self Actualization

80
Factors Influencing Consumer Buying Behavior (1
of 4)

• Psychological Factors
• Motivation -- Maslovs Hierarchy of Needs
• Physiological
• Safety
• Social
• Esteem
• Self Actualization
• Perception (Covey example)

81
Factors Influencing Consumer Buying Behavior (1
of 4)

• Psychological Factors
• Motivation -- Maslovs Hierarchy of Needs
• Physiological
• Safety
• Social
• Esteem
• Self Actualization
• Perception (Covey example)
• Learning

82
Factors Influencing Consumer Buying Behavior (1
of 4)

• Psychological Factors
• Motivation -- Maslovs Hierarchy of Needs
• Physiological
• Safety
• Social
• Esteem
• Self Actualization
• Perception (Covey example)
• Learning
• Attitudes (What does FORD stand for?)

83
Factors Influencing Consumer Buying Behavior (2
of 4)
84
Factors Influencing Consumer Buying Behavior (2
of 4)

• Personal Factors

85
Factors Influencing Consumer Buying Behavior (2
of 4)

• Personal Factors
• Physical Characteristics - Age, Gender, Race,
  Size, etc.

86
Factors Influencing Consumer Buying Behavior (2
of 4)

• Personal Factors
• Physical Characteristics - Age, Gender, Race,
  Size, etc.
• Personality - Means of coping with the world
  around an individual

87
Factors Influencing Consumer Buying Behavior (2
of 4)

• Personal Factors
• Physical Characteristics - Age, Gender, Race,
  Size, etc.
• Personality - Means of coping with the world
  around an individual
• Self-Concept - The image we have of ourselves
  combined with our image within a social context

88
Factors Influencing Consumer Buying Behavior (2
of 4)

• Personal Factors
• Physical Characteristics - Age, Gender, Race,
  Size, etc.
• Personality - Means of coping with the world
  around an individual
• Self-Concept - The image we have of ourselves
  combined with our image within a social context
• Lifestyle - Consists of Activities, Interests,
  Opinions and Demographics

89
Factors Influencing Consumer Buying Behavior (2
of 4)

• Personal Factors
• Physical Characteristics - Age, Gender, Race,
  Size, etc.
• Personality - Means of coping with the world
  around an individual
• Self-Concept - The image we have of ourselves
  combined with our image within a social context
• Lifestyle - Consists of Activities, Interests,
  Opinions and Demographics
• Life Cycle - From Family Economics. Different
  stages of consumer spending as we mature and age

90
Factors Influencing Consumer Buying Behavior (3
of 4)
91
Factors Influencing Consumer Buying Behavior (3
of 4)

• Social Factors

92
Factors Influencing Consumer Buying Behavior (3
of 4)

• Social Factors
• The Family - Most important Social influence

93
Factors Influencing Consumer Buying Behavior (3
of 4)

• Social Factors
• The Family - Most important Social influence
• Reference Groups - Peers, colleagues, coworkers,
  clubs, gangs etc. Often serves as surrogate
  family in todays dysfunctional society.

94
Factors Influencing Consumer Buying Behavior (3
of 4)

• Social Factors
• The Family - Most important Social influence
• Reference Groups - Peers, colleagues, coworkers,
  clubs, gangs etc. Often serves as surrogate
  family in todays dysfunctional society.
• Social Class - Combination of income, occupation,
  education, place of residence

95
Factors Influencing Consumer Buying Behavior (3
of 4)

• Social Factors
• The Family - Most important Social influence
• Reference Groups - Peers, colleagues, coworkers,
  clubs, gangs etc. Often serves as surrogate
  family in todays dysfunctional society.
• Social Class - Combination of income, occupation,
  education, place of residence
• Culture - Ethnic, geographic, religious
  background

96
Factors Influencing Consumer Buying Behavior (4
of 4)
97
Factors Influencing Consumer Buying Behavior (4
of 4)

• Product Characteristics

98
Factors Influencing Consumer Buying Behavior (4
of 4)

• Product Characteristics
• Product Tangibility -- How does the product look,
  feel, smell, sound or taste. Product tangibility
  must match consumer wants, desires, needs and
  expectations.

99
Factors Influencing Consumer Buying Behavior (4
of 4)

• Product Characteristics
• Product Tangibility -- How does the product look,
  feel, smell, sound or taste. Product tangibility
  must match consumer wants, desires, needs and
  expectations.
• Product Durability -- How long will the product
  last. Durable goods is classification of
  long-lived goods. Nondurables are products not
  expected to last long.

100
Factors Influencing Consumer Buying Behavior (4
of 4)

• Product Characteristics
• Product Tangibility -- How does the product look,
  feel, smell, sound or taste. Product tangibility
  must match consumer wants, desires, needs and
  expectations.
• Product Durability -- How long will the product
  last. Durable goods is classification of
  long-lived goods. Nondurables are products not
  expected to last long.
• Product Availability -- Relates not to whether a
  good can be found but to the amount of effort a
  consumer is willing to spend on a product.

101
Consumer Behavior Model (Stages of Buying
Process)
102
Consumer Behavior Model (Stages of Buying
Process)

• Passive Information Gathering - Receiving and
  processing of information regarding existence,
  quality, services, stores, convenience, pricing,
  advertising that consumer might consider in
  making a purchase

103
Consumer Behavior Model (Stages of Buying
Process)

• Passive Information Gathering - Receiving and
  processing of information regarding existence,
  quality, services, stores, convenience, pricing,
  advertising that consumer might consider in
  making a purchase
• Need Recognition - Consumer recognizes a need or
  desire for the product or service. When the need
  is high relative to barriers to resolving need
  there is a shop trigger event

104
Consumer Behavior Model (Stages of Buying
Process)
105
Consumer Behavior Model (Stages of Buying
Process)

• Active Information Gathering - Comparison of
  different products, brands, colors, capabilities,
  etc.

106
Consumer Behavior Model (Stages of Buying
Process)

• Active Information Gathering - Comparison of
  different products, brands, colors, capabilities,
  etc.
• Purchase Decision - Two decisions. First is buy
  or no-buy. If decision is to buy then timing of
  purchase is second decision.

107
Consumer Behavior Model (Stages of Buying
Process)
108
Consumer Behavior Model (Stages of Buying
Process)

• Transaction - Final negotiation as to Price,
  Store, Credit or Cash, etc. An opportunity for
  retailers to market extras.

109
Consumer Behavior Model (Stages of Buying
Process)

• Transaction - Final negotiation as to Price,
  Store, Credit or Cash, etc. An opportunity for
  retailers to market extras.
• Post Purchase Evaluation - Did the product and
  retail experience meet the consumers expectations

110
Summary
111
Summary

• Selling the better mousetrap is not enough

112
Summary

• Selling the better mousetrap is not enough
• In order to succeed, a retailer must be aware of
  the patterns and trends effecting the retail
  environment.

113
Summary

• Selling the better mousetrap is not enough
• In order to succeed, a retailer must be aware of
  the patterns and trends effecting the retail
  environment.
• Failure to keep up with trends will cause
  retailers to locate in the wrong locations, sell
  the wrong product and fail to meet their
  customers needs

114
Summary

• Selling the better mousetrap is not enough
• In order to succeed, a retailer must be aware of
  the patterns and trends effecting the retail
  environment.
• Failure to keep up with trends will cause
  retailers to locate in the wrong locations, sell
  the wrong product and fail to meet their
  customers needs
• Many factors influence the consumers purchase
  decision including psychological, personal and
  social factors

115
Summary

• Selling the better mousetrap is not enough
• In order to succeed, a retailer must be aware of
  the patterns and trends effecting the retail
  environment.
• Failure to keep up with trends will cause
  retailers to locate in the wrong locations, sell
  the wrong product and fail to meet their
  customers needs
• Many factors influence the consumers purchase
  decision including psychological, personal and
  social factors
• The high rate of retail business failure is
  indicative of the difficulties in the retail
  industry.