Relation of consumers' buying habits to marketing methods

Tags: convenience goods, consumer, shopping goods, merchandise, specialty goods, convenience, sales efforts, manufacturer, consumers, classification, brand, the consumer, HARVARD BUSINESS REVIEW, unit stores, specialty store, the purchase, specialty stores, consumer preference, department store, department stores, consumer recognition, BUYING HABITS, retail stores, marketing methods, manufacturers
Content: RELATION OF CONSUMERS' BUYING HABITS TO marketing methods
By MELVIN T. COPELAND
FROM the standpoint of consumers' buying habits, merchandise sold in retail stores can be divided roughly into three classes ^:-- ( i ) convenience goods; (2) shopping goods; (3) specialty goods. Using this classification, one of the initial steps in laying out a sales or advertising plan is to determine whether the article to be sold will be purchased by consumers ordinarily with shopping or without shopping, at points of immediate convenience or in central trading districts, with insistence on an individual brand, with merely brand preference, or with indifference to brand. This preliminary analysis facilitates the determination of the kind of store through which the market for the specific product should be sought, the density of distribution required, the methods of wholesale distribution to be preferred, the relations to be established with dealers, and, in general, the sales burden which the advertising must carry. Convenience Goods Convenience goods are those customarily purchased at easily accessible
stores; examples are canned soup, tobacco products, electric light bulbs, safety razor blades, shoe polish, laundry soap, crackers, popular magazines, confectionery, and tooth paste. The consumer is familiar with these articles; and as soon as he recognizes the want, the demand usually becomes clearly defined in his mind. Furthermore, he usually desires the prompt satisfaction of the want The unit price for most articles in this class is too small to justify the consumer's going far out of his way or incurring the expense of a street-car fare in order to procure a special brand. It is for such reasons as these that a product subject to this type of demand gains a large sales advantage when it is purveyed in numerous stores located at points easily accessible to consumers. The consumer is in the habit of purchasing convenience goods at stores located conveniently near his residence, near his place of employment, at a point that Can be visited easily on the road to and from his place of employment, or on a route traveled regularly for purposes other than buying trips.
1 The methods of marketing goods for retail (iistribution are essentially different from the methods of marketing goods for wholesale consumption. In the one case it is necessary to select marketing methods whereby the goods can be parceled out in small lots to individual consumers; in the other the sales are made in wholesale lots for large scale use, as in manufacturing or in construction work. Mr. C. C. Parlin, manager of the Commercial Research Division of the Curtis Publishing Company, has divided merchandise for retail distri-
bution into two classes--convenience goods ami shopping goods. (Merchandising of Textiles, pp. 5-6.) In the case of shopping goods he made a distinction between men's shopping goods and women's shopping goods. In the classification explained in this article, convenience goods are defined to include practically the same merchandise as was included by Mr. Parlin in convenience goods. The category of merchandise included in shopping goods in this new classification, however, differs from Mr. Parlin's classification, and a new class--'Specialty goods--is added.
RELATION OF CONSUMERS' BUYING HABITS TO MARKETING 283
In sparsely settled districts, to be sure, for most convenience goods to be
the distance a consumer must travel to sold through wholesalers. Whenever a
reach a store carrying convenience manufacturer of a product in this cate-
goods necessarily is greater than in gory elects to sell directly to unit stores,
densely populated districts, but funda- he must develop a large sales organiza-
mentally the buying habits are the same tion and arrange for his salesmen to
in all districts. Convenience goods, visit the retailers at frequent intervals.
moreover, are purchased at frequent intervals ljy the average consumer, and
Shopping Goods
these "repeat" purchases enable the Shopping goods are those for which
stores handling such wares to secure the consumer desires to compare prices,
adequate patronage with reasonably quality, and style at the time of pur-
small investments in stocks of mer- chase. Usually the consumer wishes to
chandise.
make this comparison in several stores.
Typical retail establishments carry- Typical shopping goods are gingham
ing convenience goods are grocerjr cloth, women's gloves, chinaware, and
stores, drug stores, and hardware novelty articles. The typical shopping
stores. A majority of these stores are institution is thE Department store.
unit stores,* but it is in the trade in con- Shopping goods are purchased largely
venience goods that chain store systems by women. Ordinarily a special trip is
have shown the greatest development. made to the shopping center for the
One of the essential characteristics of purpose of buying such merchandise.
chain store systems is the combination As a rule, however, the specific store in
of the advantages of large scale opera- which the purchase is to be made is not
tion with those of small scale selling by determined until after the offerings of
locating branches at points which can at least two or three institutions have
be reached easily by consumers for been inspected. The exact nature of the
the purchase of convenience goods. merchandise wanted may not be clearly
The few chains of specialty stores, defined in advance in the mind of the
which for reasons to be indicated later shopper; this is in contrast to the usual
operate on the principle of one store attitude in purchasing convenience
in a town, constitute an exception.
goods. The purchase of shopping
Because of the desire of consumers to purchase this type of merchandise at easily accessible stores, the manufacturer of a convenience article must aim to secure distribution of his product through a large number of stores in each territory. Many of the retail outlets commonly utilized for this purpose at the present time are small unit stores; consequently, to obtain this widespread distribution it is customary
goods, furthermore, usually can be delayed for a time after the existence of the need has been recognized; the immediate satisfaction of the want is not so essential as in the case of most convenience goods. Because of the variety of merchandise which must be carried to satisfy the shopper and the relative infrequency of purchases of shopping articles by the average consumer, the store catering to the shopping trade must have a central location which attracts
2 A unit store is a store, without an elaborate shoppers from a wide territory. In or-
departmental organization, owned and managed 33 an independent unit for the sale of goods through personal salesmanship.
der to justify the expenses of operation in such a location, the volume of sales
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Harvard Business Review
must be large. Conversely, it follows that the type of store which handles convenience goods ordinarily cannot carry a large enough variety and range of products to offer an attractive opportunity for shopping. A store location suitable for trade in shopping goods usually is not adapted
of the goods to be bought and the store m which the purchase is to be made, provided a satisfactory selection of merchandise can be effected in that store. Whereas convenience goods are purchased at stores that are easily accessible, it ordinarily is necessary for the consumer to put forth special effort
to the convenience goods trade; for the to reach the store selling specialty
rental is high and the delivery interval goods. As in the case of shopping
inconvenient to consumers. It is sel- goods, the actual purchase of a spe-
dom that a department store, for ex- cialty article may be postponed for a
ample, has found it possible to operate time after the specific need has been
a grocery department at a profit. The felt by the consumer. Examples of spe-
factors of location, organization, and cialty goods are men's clothing, men's
consumers' buying habits, which enable shoes, high-grade furniture, vacuum
a department store to cater effectively cleaners, and phonographs. Specialty
to the shopping trade, handicap it in goods are purchased by both men and
developing a business in convenience women, but men's purchases of spe-
goods. When a manufacturer is laying cialty lines are a larger proportion of
out his marketing plans, therefore, he the total sales of such merchandise than
ordinarily finds it inconsistent to at- in the case of shopping goods.
tempt to distribute his product through both Department stores and scattered unit stores or through both department stores and chain stores. The type of store selected depends upon whether it is a shopping line, a convenience line, or a specialty line.
For specialty good^s the manufacturer's brand, the retailer's brand, or the general reputation of the retail store for quality and service stands out prominently in the mind of the consumer. It is because of distinctive characteristics associated with the brand or
The number of stores selling shop- the store that the consumer is prepared
ping goods, furthermore, is much to rely upon the service, quality, and
smaller than the number of convenience prices of merchandise offered by that
stores. The average size of the shop- store as generally being fair and to
ping store is large and its credit gen- accept the merchandise without shop-
erally strong. This facilitates the ping. In numerous lines of specialty
marketing of shopping goods directly goods, such as men's shoes and cloth-
from manufacturer to retailer.
ing, the consumer prefers to deal with
Specialty Goods
a store offering an attractive variety of styles and sizes from which to select.
Specialty goods are those which have Purchases are made by each individual
some particular attraction for the con- customer at infrequent intervals. Con-
sumer, other than price, which induces sequently, a specialty store generally is
him to put forth special effort to visit located at a point to which customers
the store in which they are sold and to can be drawn from a wide area.
make the purchase without shopping. In purchasing specialty goods, the consumer determines in advance the nature
From the manufacturer's standpoint, a specialty line calls for selected distribution, in contrast to the general dis-
RELATION OF CONSUMERS' BUYING HABITS TO MARKETING 285
tribution essential for convenience that they carry. Because of the limited
goods. The dealers who are to handle market for such specialties and the vol-
the specialty line must be carefully ume of business necessary to justify
selected on the basis of their ability to carrying such a stock, ordinarily only
attract the class of customers to whom one or perhaps two or three stores in
the product will appeal. Retailers must a city can obtain enough business on
be chosen who can be relied upon to these goods to warrant taking on a line
use aggressive selling methods in at- of fancy groceries; in the same city,
tracting customers to their stores. Fre- anywhere from one hundred to several
quently, exclusive agencies are granted hundred grocery stores are carrying
to retailers for the distribution of spe- convenience goods.
cialty goods. An exclusive agency is In the shoe trade, medium- and high-
seldom, if ever, justified for any line priced shoes for both men and women
which is not a specialty line. It is only are specialty goods. Women's shoes
in the marketing of specialty goods, which feature style novelties border on
furthermore, that manufacturers have the shopping classification. The com-
found it practical to operate retail mon grades of work shoes, on the
branches.
other hand, border on the classification
Because of the part which each indi- of convenience goods. The manufac-
vidual retail store handling the mer- turer of women's novelty shoes, for
chandise plays in the sale of the spe- example, cannot advisedly leave the
cialty goods, the care with which these shopping institutions out of considera-
stores must be selected, and the meth- tion in planning his sales program. The
ods of cooperation which are essential manufacturer of cheap work shoes,
between the manufacturer and the however, ordinarily must place his
dealer, specialty goods are especially product in a larger number of stores
suited to distribution by direct sale than would be required were he selling
from manufacturer to retailers. The medium-grade dress shoes for men.
manufacturer of specialty goods who Although women's ready-to-wear
works out his plan of distribution sys- suits generally are shopping goods, a
tematically on this basis also often finds few manufacturers recently have been
it advisable, through his national or developing standard trade-marked
local advertising, to assume part of the . lines, which tend to fall into the class
burden of focusing the demand on indi- of specialties. Several Retail stores
vidual stores.
also have developed specialty reputa-
In case of several commodities, the tions for women's ready-to-wear. In
articles tend to fall into more than one view of the conditions in the women's
of these three categories. Staple gro- ready-to-wear field and also in several
ceries, for example, are clearly con- other fields, the average department
venience goods; fancy groceries, on the store now seems to be faced definitely
other hand, are specialty goods. In with the question of whether its mer-
each city there usually are from one to chandising should be primarily on a
three stores which have a high reputa- shopping basis or whether at least some
tion for specialties in groceries. Al- of its departments should be developed
though these stores also sell staple gro- on a specialty basis. The piece goods
ceries, their patronage is secured pri- departments are likely to remain shop-
marily on the basis of the specialties ping departments. Shoes, men's cloth-
286
HARVARD BUSINESS REVIEW
ing, women's ready-to-wear, furniture, sold in bulk, for example, the demand silverware, and numerous other depart- depended upon the amount consumers ments are being developed in several wished to purchase or were induced to department stores as specialty depart- purchase by retailers who featured the ments, but generally without a con- article; sales were not directly stimuscious, well-coordinated policy for a lated by the sugar refiner. For an unstore as a whole. In these specialty de- branded product, the individual manupartments the emphasis is shifted from facturer seldom can afford to assume comparative prices and comparative the burden of stimulating demand which
styles to the special qualities and char- cannot be specifically directed to the
acteristics of the merchandise carried. product of his own factory. For such
In other department stores the mer- an unbranded product the manufac-
chandising is still almost entirely on a turer must rely chiefly upon his ability
shopping basis, with the featuring of to produce cheaply, in order to be able
prices and bargains that are supposed to offer low prices, and he. must pursue
to appeal to the shopper. In so far as merely passive selling methods or, at
department stores develop specialty de- most, direct his sales efforts chiefly
partments, they will afford attractive toward wholesale and retail merchants.
outlets for manufacturers whose distri- If the product is branded, on the other
bution otherwise would be through spe- hand, the manufacturer can undertake
cialty stores.
not only to direct the active demand to
his particular product, but also to Relation of Brands to Buying Habits arouse latent demand by stimulating a
Convenience, shopping, and specialty goods are sold both branded and un-
larger number of consumers to want his product or by making previous con-
branded. Because of the differences in the buying habits of consumers in pur-
sumers desire to use more of his product at a specific price. When the Amer-
chasing these classes of goods, brands do not play the same part in the merchandising plans for all three classes,
ican Sugar Refining Company, in 1912, for example, began to put out sugar in packages bearing the company's trade-
and the advertising problems of manufacturers are quite dissimilar for shop-
mark, the company not only was in a position where it could inform the con-
ping, convenience, and specialty merchandise. A brand is a means of identifying the product of an individual manufacturer or the merchandise purveyed by an in-
sumer regarding the merits of that particular brand, but it also could practically undertake to induce consumers to use more sugar, as, for instance, in canning fruit.
dividual wholesaler or retailer. The real demand for any commodity is the quantity which consumers will buy at a specific price. If a product is unbranded, the volume of the demand ordinarily depends upon the quantity that consumers elect to buy, either entirely upon their own initiative or as a result of the sales efforts of the retailers by whom it is sold. When sugar was
With the development of the package trade, the tendency during recent years has been for an increasing proportion of convenience goods to be branded. The increase in the sale of crackers in packages, for example, in contrast to the former bulk sales, has given greater significance to brands of crackers and has facilitated the use of aggressive sales methods by cracker
RELATION OF CONSUMERS' BUYING HABITS TO MARKETING 287
manufacturers. Among shopping goods there has been some increase in the number of brands, but large quantities of merchandise in this class still are sold unbranded. Specialty goods are all branded, except in a few cases where retail stores have reputations which practically render it unnecessary for them to have brands placed on the merchandise which they sell. When a manufacturer undertakes to focus the potential demand upon his product with brand identification, he must consider the attitude in which the consumer ordinarily approaches the purchase of such an article. The attitude of the consumer may be that of: ( i ) recognition, (2) preference, or {3) insistence. Consumer Recognition When a brand has any significance at all, it serves primarily as a cause for recognition. If the consumer's previous acquaintance with the brand has been favorable, or if the manufacturer's or dealer's advertising has made a favorable impression, other things being equal, the recognized brand will be selected from among other unrecognized brands or from among unbranded merchandise. For some products--such as silk goods, ginghanis, and women's suits --pattern, style, and price are considered by the consumer, before brand. When the selection narrows down to a choice between articles of this sort approximately equal in pattern, style, and price, the recognition of a known brand sways the choice. The manufacturer of such goods, however, cannot hope ordinarily to secure many sales merely because of brand, if his product is higher in price or less popular in pattern and style than directly competing goods shown in other stores.
Consumer recognition--an acquaintance with the general standing of the brand--^probably is the only attitude toward that brand which the manufacturer of a typical shopping line ordinarily can establish in the mind of the average purchaser by means of advertising and sales efforts. If the product has some special feature, as, for example, cotton fabrics dyed in fast colors or fast-colored silk goods loaded with a minimum of tetra-chloride of tin, it occasionally is possible to arouse the interest of the consumer to a point of preference. A family brand, by which is meant a brand or trade-mark that is applied commonly to a group of different products turned out by a single manufacturer, serves primarily to establish consumer recognition for All Products in the group as soon as the consumer becomes acquainted with one article bearing the common brand. The experience of retail dealers indicates that for shopping and convenience goods the common brand aids in promoting consumer recognition. If it is a specialty line, the experience of the consumer with one article bearing the brand is likely to establish in the minds of consumers at least an attitude of preference for other articles bearing the same brand. It is unsafe, however, for the manufacturer to count upon the family brand to develop more than consumer recognition without the presentation of sales arguments for each article bearing the brand. Consumer Preference Consumer recognition soon shades into consumer preference. When several brands oi merchandise, which are similar in general quah'ties and in external appearance, are offered to the consumer by a retail salesman, the one
288
HARVARD BUSINESS REVIEW
for which previous experience, advertising, or perhaps the retailer's recommendation has created a preference, is chosen. The strength of the brand depends upon the degree of preference in the mind of the consumer. In purchasing convenience goods, for example, the consumer often approaches the retailer with the question, "Have you the X brand?" If the retailer does not have that brand in stock, another brand ordinarily is accepted by the consumer, or, if the retailer specifically urges another brand in the place of the one called for, a substitute may be taken by the consumer. This practise of asking for brands is common for many consumers in the purchase of convenience articles. The brand comes first in the consumer's mind and signifies to him the quality, style, or pattern of article, or the type of container that he wishes to obtain. In such cases the consumer has a preference for the brand asked for, but ordinarily it is not strong enough in this class of merchandise to make him insist on that brand to the point of visiting a less convenient store to make the purchase. It is because the consumer generally has merely the attitude of brand preference in purchasing convenience goods that it is essential for the manufacturer of such a product to place his wares on sale in a large number of stores in each territory. Consumer Insistence The third stage in which the demand for branded articles manifests itself is consumer insistence. When the consumer approaches the purchase of an article in this attitude of mind, he accepts no substitute unless it is an emergency. This attitude of consumer insistence holds commonly in the purchase of specialty goods. To warrant undertaking to develop this attitude, the product
must be so individualized in quality, in its special features, or in the service rendered by the manufacturer or retailer as to differentiate it distinctly from competing articles and to induce consumers to put forth special effort to secure that brand. The manufacturer of an electrical washing machine, for example, undertakes to present his sales arguments in such a way as to lead the consumer to insist upon the purchase of his particular make. Through advertising, the manufacturer of such a machine seeks to convince the consumer that his is the machine which should be purchased and that a store carrying thi.s brand should be sought out. The difference between no standing at all in the mind of the consumer, consumer recognition, consumer preference, and consumer insistence is one of the degrees to which the selling process has been carried with the consumer before he visits a retail store to make his purchase. If the consumer has no familiarity whatsoever with the brand of product to be purchased, the entire sales burden rests on the salesman in the store visited. If the consumer recognizes the brand, the manufacturer of that brand has taken the initial step in consummating the sale to the consumer. If the manufacturer has established consumer preference, the sale has proceeded one step further. If the consumer has the attitude of insistence, it remains merely for the retail salesman to close the sale. Marketing costs generally are high. One of the first steps to be taken by a manufacturer, who is seeking to effect economies in selling his product, is to make an elementary analysis of the habits of consumers in buying articles of the sort he is producing. The formulation of an effective marketing plan
RELATION OF CONSUMERS' BUYING HABITS TO MARKETING 289
must start with a consideration of the consumer; the Next Step is to adjust the plans of retail and wholesale distribution and the advertising program in accordance with the analysis of the buy-
ing habits of consumers among whom the market for the product is to be developed. This approach assures the maximum results from the sales efforts that are put forth.

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