services marketing - ch03

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Retail Customers

Chapter 3



Goals for Chapter 3



Goals for Chapter 3 Discuss Five Patterns and Trends the

Retailer must be aware of





Population and Demographics






Geographic and Economic







Lifestyle







Lifestyle

Physical and Natural







Lifestyle


Technological and Informational







Lifestyle



Discuss Factors Influencing Buying

Behavior







Lifestyle



Discuss Factors Influencing Buying

Behavior

Discuss Stages of Buying Process



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.



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.



Demographic Trends



Demographic Trends

PopulationGrowth



Demographic Trends

PopulationGrowth

Age Distribution



Demographic Trends

PopulationGrowth

Age Distribution

Shifting Geographic

Centers



Demographic Trends

PopulationGrowth

Age Distribution

Shifting Geographic

Centers Urban Centers



Demographic Trends

PopulationGrowth

Age Distribution

Shifting Geographic


Mobility



Demographic Trends

PopulationGrowth

Age Distribution

Shifting Geographic


Mobility

Education



Demographic Trends

PopulationGrowth

Age Distribution

Shifting Geographic


Mobility

Education

Marriage and Divorce



Demographic Trends

PopulationGrowth

Age Distribution

Shifting Geographic


Mobility

Education

Marriage and Divorce

Makeup of

Households



Demographic Profiles




Income




Income

Age




Income

Age

Gender

Race




Income

Age

Gender

Race

Religion




Income

Age

Gender

Race

Religion

Family Size




Income

Age

Gender

Race

Religion

Family Size Education

Occupation



DemographicG

roups



DemographicG

roups Baby Boomers -- Born Between 1946 and 1964.

They are now middle aged (37- 55). 75 million

people at their peak earning years



DemographicG




Fifty Plus Mark

et (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



DemographicG




Fifty Plus Mark




Young and Privileged - Offspring of Baby

Boomers and Grandchildren of Fifty plus.



DemographicG




Fifty Plus Mark





Boomers and Grandchildren of Fifty plus. Generation X -- Born between 1965 and 1976

(25 - 36). Smallest Demographic Group



DemographicG




Fifty Plus Mark





Boomers and Grandchildren of Fifty plus. Generation X -- Born between 1965 and 1976

(23 - 34). Smallest Demographic Group

GenerationY - Born after 1976



Growth in Minority Markets




Growth rate in Minorities

(Black, Hispanic, Asian)

is twice as fast as the

general population







general population

Ignoring racial

demographics, particularly

in urban areas, is very

short sighted







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




Patterns and Trends




Patterns and Trends Urban Growth versus Rural

Stagnation -- more true in retailing

than in population. New super stores

are serving as magnets andimprovements in travel make rural

retailing a dying breed









Retailers must keep track of the

overall macro economic cycles of

recession and growth









Retailers must keep track of the

overall macro economic cycles of

recession and growth

Income Gap between the ³haves´

and the ³have nots´ will continue to

grow offering markets for

specialized retailers.



Household Economic Trends



Household Economic Trends Income Growth




Personal Savings




Personal Savings

Women in the Labor

Force




Personal Savings

Women in the Labor

Force

Widespread use of

Credit



Macro Economic Factors



Macro Economic Factors Gross Domestic Product




Interest Rates




Interest Rates

Economic Turbulence

Unemployment




Interest Rates

Economic Turbulence

Unemployment

Underground Economy



Lifestyle (Psychographic) Trends



Lifestyle (Psychographic) Trends Male and Female Role

Flexibility




Flexibility

Deterioration of Institutional Confidence




Flexibility


Management of Time vs.

money (Convenience)




Flexibility


Management of Time vs.

Money (Convenience)

Value and Lifestyle

Fragmentation



Physical and Natural Patterns and

Trends Environmental

Mark eting --marketing

with an eye to

environmental issues is a

growing trend






with an eye to

environmental issues is agrowing trend






with an eye to


New Age and Self Help

products and stores are

growing in popularity




Patterns and Trends




Patterns and Trends

Fastest changing area of retail

environment both in terms of

managing the retail store and

in the products being sold.




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

fl i



Factors Influencing Consumer

Buying Behavior (1 of 4)

fl i C





Psychological Factors



F I fl i C






Motivation -- Maslov¶s Hierarchy of Needs

Physiological

F I fl i C







Physiological Safety

F I fl i C








Social

F t I fl i C








Social

Esteem

F t I fl i C








Social

Esteem

Self Actualization

F t I fl i C








Social

Esteem

Self Actualization Perception (Covey example)

F t I fl i C








Social

Esteem


Learning

F t I fl i C








Social

Esteem


Learning

Attitudes (What does FORD stand for?)



F t I fl i C




Buying Behavior (2 of 4) Personal Factors

F t I fl i C





Physical Characteristics - Age, Gender,

Race, Size, etc.







Race, Size, etc.

Personality - Means of coping with the

world around an individual







Race, Size, etc.



Self -Concept - The image we have of

ourselves combined with our image

within a social context







Race, Size, etc.



Self -Concept - The image we have of

ourselves combined with our image

within a social context

Lifestyle

-Consists of

Activities,

Interests, Opinions and Demographics






Physical Characteristics - Age, Gender,Race, Size, etc.


world around an individual Self -Concept - The image we have of

ourselves combined with our imagewithin a social context

Lifestyle - Consists of Activities,

Interests, Opinions and Demographics Life Cycle - From Family Economics.

Different stages of consumer spendingas we mature and age






Social Factors





Social Factors

The Family - Most important Social

influence

ReferenceGroups - Peers,

colleagues, coworkers, clubs, gangs

etc. Often serves as surrogate

family in today¶s dysfunctional

society.






Social Factors


influence

ReferenceGroups - Peers,

colleagues, coworkers, clubs, gangs



society. Social Class - Combination of

income, occupation, education,

place of residence





Buying Behavior (3 of 4) Social Factors


influence

Reference

Groups

-Peers,colleagues, coworkers, clubs, gangs



society.

Social Class - Combination of income, occupation, education,

place of residence

Culture - Ethnic, geographic,

religious background




c o s ue c g Co su e


Product Characteristics




g



Product Tangibility -- How does the

product look, f eel, smell, sound or taste.

Product tangibility must match consumer

wants, desires, needs and expectations.




g







Product Durability -- How long will the

product last. Durable goods is

classification of long-lived goods.

Nondurables are products not expected to

last long.




g







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.

Consumer Behavior Model




(Stages of Buying Process)





(Stages of Buying Process) Passive InformationGathering -

Receiving and processing of

information regarding existence,

quality, services, stores, convenience,

pricing, advertising that consumer might consider in making a purchase





(Stages of Buying Process) Passive InformationGathering -

Receiving and processing of

information regarding existence,

quality, services, stores, convenience,

pricing, advertising that consumer might consider in making a purchase

Need R ecognition - Consumer

recognizes a need or desire for the

product or service. When the need ishigh relative to barriers to resolving

need there is a shop trigger event






Active Information

Gathering - Comparison

of different products,

brands, colors,capabilities, etc.






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.






Transaction - Final

negotiation as to Price,

Store, Credit or Cash, etc.

An opportunity for retailers to market

³extras´.

Post Purchase

Evaluation

-Did the product and retail

experience meet the

consumer¶s expectations



Summary

Selling the ³better mousetrap´ is not enough

S



Summary


In order to succeed, a retailer must be aware of the

patterns and trends effecting the retail environment.

S



Summary




Failure to keep up with trends will cause retailers tolocate in the wrong locations, sell the wrong product

and fail to meet their customers needs

S



Summary






Many factors influence the consumer¶s purchase

decision including psychological, personal and socialfactors

S



Summary






Many factors influence the consumer¶s purchase

decision including psychological, personal and socialfactors

The high rate of retail business failure is indicative of

services marketing - ch03

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