QUIRINO STATE UNIVERSITY

CABARROGUIS CAMPUS Cabarroguis, 3400 Quirino

GROUP 1 SUMMARY

Submitted by :
Submitted To : Narcisa Benitez
Mrs. Rodazen Mamaril Princess Balancio
Jack Agaloos
Lauren Alay-Ay
Angel Princess Jose
Christine Angel Dumaoal
 QUIRINO STATE UNIVERSITY
CABARROGUIS CAMPUS Cabarroguis, 3400 Quirino

Retail Customers
I. Introduction
The easiest way for retailers to differentiate themselves is to satisfy the customer's needs and wants
better than the competition. Customer satisfaction is determined by whether or not the total shopping
experience has met or exceeded the customer's expectation.

II. How Current Trends Affect the Way the Consumer Behave
The three important types of trends — population, social, and economic — that all retailers must
monitor because they will affect the way customer undertake the shopping process.
1) Population Trends
Retailers often find it useful to group consumers according to population variables, such as
population growth, age distribution, ethnic makeup, and geographic trends.
 Population Growth
Retailers have long viewed an expanding population base as synonymous with growth in retail
markets. Unfortunately, the nation's overall growth rate has declined during each of the past three
decades as families have had fewer children. If current average projections are correct, then the U.S
population will increase about 1 percent per year, from 310 million in 3032 to 341 million in 2020.
However, it is expected to increase by 43 percent over the next 40 years to 439 million by 2050. The
majority of this growth is expected to be the result of immigration.
Implications for Retailers
The demand for products and services will rise with any increase in domestic population, but it won't
rise anywhere near the 80 percent seen over the previous 50 years. But, even a slight increase in the
population will present chances for shops. Successful retailers must concentrate on stealing market
share from rivals, managing gross margin by limiting selling price and cost, and boosting the
productivity of existing stores when population growth slows or, in certain places, diminishes.
 Age Distribution
As people live longer, they also want to retain their youth and one way to do this is through dress.
Today, many baby buster in their late 40s to mid-60s are now spending less on apparel and clothing,
spending more on medicine and recreation, and saving more of their money to pass on their children.
The so-called Generation Y are another interesting age group. This group is emerging as a major
buying and consuming force in the economy.
Implications for Retailers
Understanding the various needs of each age segment, retail must also understand what motivates
consumers to spend money. Younger adults are by their very nature acquisition oriented. As the
population ages, a significant driving force for total economic growth may dry up unless retailers
provide consumers with a reason to shop.

 Ethnic Trends
 QUIRINO STATE UNIVERSITY
CABARROGUIS CAMPUS Cabarroguis, 3400 Quirino

More than 160 years ago, Ralph Waldo Emerson wrote about America as the utopian product of
culturally and racially mixed "melting pot". Emerson explicitly welcomed the racial intermixing of
white s and nonwhites, a highly controversial view during his lifetime. However, it is only in the last
haft-century that the United States has moved from a predominantly white population to a society
rich in racial and ethnic diversity.
Implications for Retailers
Given the growth projections for the U.S population overall, retailers must understand Hispanic
shoppers and what is projected by 2015 to represent $1.5 trillion in purchasing power. One of the
two of the most common mistakes that retailers make when targeting Hispanic is assuming that their
population in the United States is homogeneous. The other common mistake made by retailers is that
all Hispanic behave the same in the marketplace.
 Geographic Trends
The location of consumers in relation to the retailer will oft6 affect how they buy. Retailers should
concern, not only with the number of people, their age, and their ethnicity, but also with where they
reside.

2) Social Trends
In this section, we continue our examination of demographic factors affecting the modern retailers
by looking at several social trends: the increasing level of educational attainment, the state of
marriage and divorce, the makeup of the American households, and the changing nature of work
 Education
The education level of the average American id increasing. Currently, the percentage of men and
women receiving at least four-year college degree are equal at 30 percent each.
Implications for Retailers
Since education levels for the population, in aggregate, are expected to continue to rise, retailers can
expect consumers to become increasingly sophisticated, discriminating, and independent in their
search for consumer products. They will also demand a staff capable of intelligently dealing with
their needs and wants.
 State of Marriage
Married couples are one of the slowest -growing households’ types not only in this country but also
worldwide.
Implications for Retailers
This trend towards single-person households presents many opportunities for the retailer because of
the increased need for a larger number of smaller houses complete with home furnishing. This is
especially true for the young adult market. As a result, retailers may need to adjust their store hours
to accommodate the needs of this market. In addition, with more men living alone, supermarkets will
have to direct promotions toward their needs and habits, particularly since men tend to focus getting
specific items and then getting out of the store as quickly as possible
 QUIRINO STATE UNIVERSITY
CABARROGUIS CAMPUS Cabarroguis, 3400 Quirino

 Divorce
The theory suggests that in the traditional family, working husbands and stay -at- home wives each
performed labor that, when combine, provided the greatest payoff for the time involved. Ad a result,
spouse became less dependent on each other and divorce rates increased. As the economy has started
to recover and people are moving off unemployment can expect a rise divorce, this is generally goof
for retailers.
Implications for Retailers
When a divorce occurs, many retailers purchase is required. Divorce may also impact the easy
people shop once they are settled into their new homes. Retailers must make specific adjustments for
divorced, working women with children by adjusting store hours, providing more consumer
information, and changing the product assortment.
 Makeup of American Households
Because households are the basic consumer unit for most products, household growth and consumer
demand go hand-in- hand. Yet, because of the differing sizes and habits of various generation, the
change in the makeup of households is notoriously hard to predict. This trend, which represents over
one-fourth of all households, is the result of an increased desire for privacy, an increase in young
adults delaying marriage, an increase in never marrieds, and a large increase in the number of people
who live alone after the death of a spouse.
 Changing Nature of Work
Many individuals were starting a small business while holding onto their main job; others were
earning money to purchase something special, saving for future consumption, or saving for
retirement.
Implications for Retailers
Since retailers holding multiple jobs, retailers can tap into this pool of individuals for part time
workers. There are opportunities for retailers to employ part timers in a variety of positions,
including accounting, inventory control, merchandising, buying, and store management.
3) Economic Trend
In this section, we look at the effects of invom6 growth, the declining rate if personal savings, the
increase in the number of working women, and the widespread use of credit on the modern retailer.
 Income Growth
In 2010, the median household income was slightly over $60,000, which is a 70 percent increase
over the median household income in 1990.
Implications for Retailers
Retailers who sell necessities, such as supermarket, like to see incomes rise and taxes decrease.
Retailers who sell luxury goods want to see discretionary income increase.

 Personal Saving
 QUIRINO STATE UNIVERSITY
CABARROGUIS CAMPUS Cabarroguis, 3400 Quirino

A major criticism of the U.S economic system is that it does not reward personal saving. Expressed
as a percentage of disposable income, saving had dwindled from a post- World War II high of 8.8
percent in 1981 to 6.5 percent in 1990. While it appears that the recession of 2008-2009 had altered
the saving habits of many American.
Implications for Retailers
Retailers have enjoyed continued sales growth over the past decades; however, this growth is not
fueling your significant increases in household income. Instead, retailers have benefited from
spending rather than saving mindset of the consumer.
 Women in the Labor Force
Another reason for the huge increase in household income for dual wage-earner families is that,
where once a professional man would marry a secretary, a nurse or teacher. as a result, the household
income for these couple us increasing faster than the norm.
Implications for Retailers
As the number of dual wage-earner families increases, many of these families have less time for
Shopping and are more prone to looking for convenience and additional services from retailers.
 Widespread Use of Credit
Credit card firm are seeking for the trend to continue. They offer promotional incentives such as free
airlines miles, rebates on new auto purchases, and rebates on future purchases.
Implications for Retailers
Retailers benefits from credit cards. Research shows that customers spend more when they use a
credit card than when they must pay in cash.

III. CONSUMER SHOPPING AND PURCHASING MODEL

1) Stimulus
 QUIRINO STATE UNIVERSITY
CABARROGUIS CAMPUS Cabarroguis, 3400 Quirino

Refers to a cue that is external to the individual or a drive that is internal to the individual. A cue
refers to any object or phenomenon in the environment that is capable of eliciting a response.
A common example of retail marketing stimuli are advertisement, coupons, salespeople, and free
example.
A second type of stimulus is internal to the individual and is referred to as a drive. A drive refers to a
motivating force that is directs behavior.
2) Problem Recognition
Problem Recognition occurs when the consumers desired state of affairs departs sufficiently from the
consumer's actual state of unrest.
3) Problem Solving
The next two stage in the consumer shopping and purchasing model— active information gathering
(ir search) and evaluation of alternative will determine the degree of problem solving that occurs.
Individual solve problem by searching for information and then evaluating their options or
alternative.
The amount of problem-solving activity consumes engage in varies considerably depending on their
prior experience and the need to reduce financial, personal, and social risk.

Exhibit 3.7 illustrates the three level of problem solving.

 Habitual Problem Solving

Occurs when the consumer relies on past experiences and learns to convert the problem into a
situation requiring less thought. The consumer has a strong preference for the brand to buy
and the retailer from which to purchase it.
 Limited Problem Solving
Occurs when the consumer has a strong preference for either the brand or the store but not
both
 QUIRINO STATE UNIVERSITY
CABARROGUIS CAMPUS Cabarroguis, 3400 Quirino

 Extended Problem Solving

Occurs when the consumer recognizes a problem but had decided on neither the brand nor the
store.
 Problem-solving Stage
Once consumer recognize that a problem exists and believe a potential product solution exists
within the marketplace, they will engage in problem solving. The first step is active
information gathering, occurs when consumer proactively gather information.
 Evaluation Alternative
Stage 1: consumer develop a set of attributes on which the purchase decision will be based.
Set of Attributes refers to the characteristics of the store and its products and services.
Stage 2: consumers narrow their consideration set to more manageable number of attributes.
Stage 3: consumer directly compare the key attributes of the alternatives remaining on their
"short list"
One of the most important variables of problem solving is the source of information used by
consumers.
4) Purchase
Based on information gathered and evaluated in the problem-solving stage, the consumer
decides whether to purchase and which product and retailer to choose.
5) Post- Purchase Evaluation
The consumer shopping and purchase process does not end with the purchase. Ultimately,
consumers are buying solutions to their perceived needs, and successful retailers take an
active interest in ensuring that their customers feel satisfied over the long term and that their
needs have been resolved.
 Post Purchase Resentment
One of the most important moments in the use and evaluation stage occurs immediately after the
transaction, in the first hours and days in which the consumer uses the product or service. During
this critical time, consumers form lasting impressions regarding the soundness of their purchase
decision. These impressions will likely influence all future purchase decision. In the event of a
problem, a consumer dissatisfaction can lead to post-purchase resentment, where the consumer's
dissatisfaction results in resentment toward the retailer.
 QUIRINO STATE UNIVERSITY
CABARROGUIS CAMPUS Cabarroguis, 3400 Quirino

SUMMARY
This chapter focus on why retailers must continuously monitor to the changes in the
environment that affect consumer demand. By now it should be clear that the rapid changes
occurring in our society require both sensitive management and good retail information
systems. Retailers need resourceful managers who not only can provide leadership in
handling the challenges of the changes but also can profit from the opportunities they present.