RELATION OF CONSUMERS' BUYING HABITSTO MARKETING METHODS

By MELVIN T. COPELAND

FROM the standpoint of con-sumers' buying habits, merchan-dise sold in retail stores can be

divided roughly into three classes ^:—( i ) convenience goods; (2) shoppinggoods; (3) specialty goods. Usingthis classification, one of the initialsteps in laying out a sales or advertis-ing plan is to determine whether thearticle to be sold will be purchased byconsumers ordinarily with shopping orwithout shopping, at points of immedi-ate convenience or in central tradingdistricts, with insistence on an individ-ual brand, with merely brand prefer-ence, or with indifference to brand.

This preliminary analysis facilitatesthe determination of the kind of storethrough which the market for the spe-cific product should be sought, the den-sity of distribution required, themethods of wholesale distribution to bepreferred, the relations to be estab-lished with dealers, and, in general, thesales burden which the advertising mustcarry.

Convenience Goods

Convenience goods are those cus-tomarily purchased at easily accessible

1 The methods of marketing goods for retail(iistribution are essentially different from themethods of marketing goods for wholesale con-sumption. In the one case it is necessary to se-lect marketing methods whereby the goods canbe parceled out in small lots to individual con-sumers; in the other the sales are made in whole-sale lots for large scale use, as in manufacturingor in construction work.

Mr. C. C. Parlin, manager of the CommercialResearch Division of the Curtis Publishing Com-pany, has divided merchandise for retail distri-

stores; examples are canned soup, to-bacco products, electric light bulbs,safety razor blades, shoe polish, laun-dry soap, crackers, popular magazines,confectionery, and tooth paste. Theconsumer is familiar with these articles;and as soon as he recognizes the want,the demand usually becomes clearly de-fined in his mind. Furthermore, heusually desires the prompt satisfactionof the want The unit price for mostarticles in this class is too small to jus-tify the consumer's going far out of hisway or incurring the expense of astreet-car fare in order to procure aspecial brand. It is for such reasonsas these that a product subject to thistype of demand gains a large sales ad-vantage when it is purveyed in numer-ous stores located at points easilyaccessible to consumers.

The consumer is in the habit of pur-chasing convenience goods at stores lo-cated conveniently near his residence,near his place of employment, at apoint that Can be visited easily on theroad to and from his place of employ-ment, or on a route traveled regularlyfor purposes other than buying trips.

bution into two classes—convenience goods amishopping goods. (Merchandising of Textiles, pp.5-6.) In the case of shopping goods he made adistinction between men's shopping goods andwomen's shopping goods. In the classification ex-plained in this article, convenience goods are de-fined to include practically the same merchandiseas was included by Mr. Parlin in conveniencegoods. The category of merchandise included inshopping goods in this new classification, however,differs from Mr. Parlin's classification, and a newclass—'Specialty goods—is added.

RELATION OF CONSUMERS' BUYING HABITS TO MARKETING 283

In sparsely settled districts, to be sure,the distance a consumer must travel toreach a store carrying conveniencegoods necessarily is greater than indensely populated districts, but funda-mentally the buying habits are the samein all districts. Convenience goods,moreover, are purchased at frequentintervals ljy the average consumer, andthese "repeat" purchases enable thestores handling such wares to secureadequate patronage with reasonablysmall investments in stocks of mer-chandise.

Typical retail establishments carry-ing convenience goods are grocerjrstores, drug stores, and hardwarestores. A majority of these stores areunit stores,* but it is in the trade in con-venience goods that chain store systemshave shown the greatest development.One of the essential characteristics ofchain store systems is the combinationof the advantages of large scale opera-tion with those of small scale selling bylocating branches at points which canbe reached easily by consumers forthe purchase of convenience goods.The few chains of specialty stores,which for reasons to be indicated lateroperate on the principle of one storein a town, constitute an exception.

Because of the desire of consumersto purchase this type of merchandiseat easily accessible stores, the manufac-turer of a convenience article must aimto secure distribution of his productthrough a large number of stores ineach territory. Many of the retail out-lets commonly utilized for this purposeat the present time are small unitstores; consequently, to obtain thiswidespread distribution it is customary

2 A unit store is a store, without an elaboratedepartmental organization, owned and managed 33an independent unit for the sale of goods throughpersonal salesmanship.

for most convenience goods to besold through wholesalers. Whenever amanufacturer of a product in this cate-gory elects to sell directly to unit stores,he must develop a large sales organiza-tion and arrange for his salesmen tovisit the retailers at frequent intervals.

Shopping Goods

Shopping goods are those for whichthe consumer desires to compare prices,quality, and style at the time of pur-chase. Usually the consumer wishes tomake this comparison in several stores.Typical shopping goods are ginghamcloth, women's gloves, chinaware, andnovelty articles. The typical shoppinginstitution is the department store.Shopping goods are purchased largelyby women. Ordinarily a special trip ismade to the shopping center for thepurpose of buying such merchandise.As a rule, however, the specific store inwhich the purchase is to be made is notdetermined until after the offerings ofat least two or three institutions havebeen inspected. The exact nature of themerchandise wanted may not be clearlydefined in advance in the mind of theshopper; this is in contrast to the usualattitude in purchasing conveniencegoods. The purchase of shoppinggoods, furthermore, usually can be de-layed for a time after the existence ofthe need has been recognized; the im-mediate satisfaction of the want is notso essential as in the case of most con-venience goods. Because of the varietyof merchandise which must be carried tosatisfy the shopper and the relative in-frequency of purchases of shopping ar-ticles by the average consumer, the storecatering to the shopping trade musthave a central location which attractsshoppers from a wide territory. In or-der to justify the expenses of operationin such a location, the volume of sales

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must be large. Conversely, it followsthat the type of store which handlesconvenience goods ordinarily cannotcarry a large enough variety and rangeof products to offer an attractive oppor-tunity for shopping.

A store location suitable for trade inshopping goods usually is not adaptedto the convenience goods trade; for therental is high and the delivery intervalinconvenient to consumers. It is sel-dom that a department store, for ex-ample, has found it possible to operatea grocery department at a profit. Thefactors of location, organization, andconsumers' buying habits, which enablea department store to cater effectivelyto the shopping trade, handicap it indeveloping a business in conveniencegoods. When a manufacturer is layingout his marketing plans, therefore, heordinarily finds it inconsistent to at-tempt to distribute his product throughboth department stores and scatteredunit stores or through both departmentstores and chain stores. The type ofstore selected depends upon whether itis a shopping line, a convenience line,or a specialty line.

The number of stores selling shop-ping goods, furthermore, is muchsmaller than the number of conveniencestores. The average size of the shop-ping store is large and its credit gen-erally strong. This facilitates themarketing of shopping goods directlyfrom manufacturer to retailer.

Specialty Goods

Specialty goods are those which havesome particular attraction for the con-sumer, other than price, which induceshim to put forth special effort to visitthe store in which they are sold and tomake the purchase without shopping.In purchasing specialty goods, the con-sumer determines in advance the nature

of the goods to be bought and the storem which the purchase is to be made,provided a satisfactory selection ofmerchandise can be effected in thatstore. Whereas convenience goods arepurchased at stores that are easily ac-cessible, it ordinarily is necessary forthe consumer to put forth special effortto reach the store selling specialtygoods. As in the case of shoppinggoods, the actual purchase of a spe-cialty article may be postponed for atime after the specific need has beenfelt by the consumer. Examples of spe-cialty goods are men's clothing, men'sshoes, high-grade furniture, vacuumcleaners, and phonographs. Specialtygoods are purchased by both men andwomen, but men's purchases of spe-cialty lines are a larger proportion ofthe total sales of such merchandise thanin the case of shopping goods.

For specialty good̂ s the manufac-turer's brand, the retailer's brand, orthe general reputation of the retailstore for quality and service stands outprominently in the mind of the con-sumer. It is because of distinctive char-acteristics associated with the brand orthe store that the consumer is preparedto rely upon the service, quality, andprices of merchandise offered by thatstore as generally being fair and toaccept the merchandise without shop-ping. In numerous lines of specialtygoods, such as men's shoes and cloth-ing, the consumer prefers to deal witha store offering an attractive variety ofstyles and sizes from which to select.Purchases are made by each individualcustomer at infrequent intervals. Con-sequently, a specialty store generally islocated at a point to which customerscan be drawn from a wide area.

From the manufacturer's standpoint,a specialty line calls for selected distri-bution, in contrast to the general dis-

RELATION OF CONSUMERS' BUYING HABITS TO MARKETING 285

tribution essential for conveniencegoods. The dealers who are to handlethe specialty line must be carefullyselected on the basis of their ability toattract the class of customers to whomthe product will appeal. Retailers mustbe chosen who can be relied upon touse aggressive selling methods in at-tracting customers to their stores. Fre-quently, exclusive agencies are grantedto retailers for the distribution of spe-cialty goods. An exclusive agency isseldom, if ever, justified for any linewhich is not a specialty line. It is onlyin the marketing of specialty goods,furthermore, that manufacturers havefound it practical to operate retailbranches.

Because of the part which each indi-vidual retail store handling the mer-chandise plays in the sale of the spe-cialty goods, the care with which thesestores must be selected, and the meth-ods of cooperation which are essentialbetween the manufacturer and thedealer, specialty goods are especiallysuited to distribution by direct salefrom manufacturer to retailers. Themanufacturer of specialty goods whoworks out his plan of distribution sys-tematically on this basis also often findsit advisable, through his national orlocal advertising, to assume part of theburden of focusing the demand on indi-vidual stores.

In case of several commodities, thearticles tend to fall into more than oneof these three categories. Staple gro-ceries, for example, are clearly con-venience goods; fancy groceries, on theother hand, are specialty goods. Ineach city there usually are from one tothree stores which have a high reputa-tion for specialties in groceries. Al-though these stores also sell staple gro-ceries, their patronage is secured pri-marily on the basis of the specialties

that they carry. Because of the limitedmarket for such specialties and the vol-ume of business necessary to justifycarrying such a stock, ordinarily onlyone or perhaps two or three stores ina city can obtain enough business onthese goods to warrant taking on a lineof fancy groceries; in the same city,anywhere from one hundred to severalhundred grocery stores are carryingconvenience goods.

In the shoe trade, medium- and high-priced shoes for both men and womenare specialty goods. Women's shoeswhich feature style novelties border onthe shopping classification. The com-mon grades of work shoes, on theother hand, border on the classificationof convenience goods. The manufac-turer of women's novelty shoes, forexample, cannot advisedly leave theshopping institutions out of considera-tion in planning his sales program. Themanufacturer of cheap work shoes,however, ordinarily must place hisproduct in a larger number of storesthan would be required were he sellingmedium-grade dress shoes for men.

Although women's ready-to-wearsuits generally are shopping goods, afew manufacturers recently have beendeveloping standard trade-marked

. lines, which tend to fall into the classof specialties. Several retail storesalso have developed specialty reputa-tions for women's ready-to-wear. Inview of the conditions in the women'sready-to-wear field and also in severalother fields, the average departmentstore now seems to be faced definitelywith the question of whether its mer-chandising should be primarily on ashopping basis or whether at least someof its departments should be developedon a specialty basis. The piece goodsdepartments are likely to remain shop-ping departments. Shoes, men's cloth-

286 HARVARD BUSINESS REVIEW

ing, women's ready-to-wear, furniture,silverware, and numerous other depart-ments are being developed in severaldepartment stores as specialty depart-ments, but generally without a con-scious, well-coordinated policy for astore as a whole. In these specialty de-partments the emphasis is shifted fromcomparative prices and comparativestyles to the special qualities and char-acteristics of the merchandise carried.In other department stores the mer-chandising is still almost entirely on ashopping basis, with the featuring ofprices and bargains that are supposedto appeal to the shopper. In so far asdepartment stores develop specialty de-partments, they will afford attractiveoutlets for manufacturers whose distri-bution otherwise would be through spe-cialty stores.

Relation of Brands to Buying Habits

Convenience, shopping, and specialtygoods are sold both branded and un-branded. Because of the differences inthe buying habits of consumers in pur-chasing these classes of goods, brandsdo not play the same part in the mer-chandising plans for all three classes,and the advertising problems of manu-facturers are quite dissimilar for shop-ping, convenience, and specialty mer-chandise.

A brand is a means of identifying theproduct of an individual manufactureror the merchandise purveyed by an in-dividual wholesaler or retailer. Thereal demand for any commodity is thequantity which consumers will buy at aspecific price. If a product is un-branded, the volume of the demandordinarily depends upon the quantitythat consumers elect to buy, eitherentirely upon their own initiative or as aresult of the sales efforts of the retailersby whom it is sold. When sugar was

sold in bulk, for example, the demanddepended upon the amount consumerswished to purchase or were induced topurchase by retailers who featured thearticle; sales were not directly stimu-lated by the sugar refiner. For an un-branded product, the individual manu-facturer seldom can afford to assumethe burden of stimulating demand whichcannot be specifically directed to theproduct of his own factory. For suchan unbranded product the manufac-turer must rely chiefly upon his abilityto produce cheaply, in order to be ableto offer low prices, and he. must pursuemerely passive selling methods or, atmost, direct his sales efforts chieflytoward wholesale and retail merchants.If the product is branded, on the otherhand, the manufacturer can undertakenot only to direct the active demand tohis particular product, but also toarouse latent demand by stimulating alarger number of consumers to want hisproduct or by making previous con-sumers desire to use more of his prod-uct at a specific price. When the Amer-ican Sugar Refining Company, in 1912,for example, began to put out sugar inpackages bearing the company's trade-mark, the company not only was in aposition where it could inform the con-sumer regarding the merits of that par-ticular brand, but it also could prac-tically undertake to induce consumersto use more sugar, as, for instance, incanning fruit.

With the development of the pack-age trade, the tendency during recentyears has been for an increasing propor-tion of convenience goods to bebranded. The increase in the sale ofcrackers in packages, for example, incontrast to the former bulk sales, hasgiven greater significance to brands ofcrackers and has facilitated the use ofaggressive sales methods by cracker

RELATION OF CONSUMERS' BUYING HABITS TO MARKETING 287

manufacturers. Among shopping goodsthere has been some increase in thenumber of brands, but large quantitiesof merchandise in this class still aresold unbranded. Specialty goods areall branded, except in a few cases whereretail stores have reputations whichpractically render it unnecessary forthem to have brands placed on the mer-chandise which they sell.

When a manufacturer undertakes tofocus the potential demand upon hisproduct with brand identification, hemust consider the attitude in which theconsumer ordinarily approaches thepurchase of such an article. The atti-tude of the consumer may be that of:( i ) recognition, (2) preference, or{3) insistence.

Consumer Recognition

When a brand has any significanceat all, it serves primarily as a cause forrecognition. If the consumer's previousacquaintance with the brand has beenfavorable, or if the manufacturer's ordealer's advertising has made a favor-able impression, other things beingequal, the recognized brand will be se-lected from among other unrecognizedbrands or from among unbranded mer-chandise. For some products—such assilk goods, ginghanis, and women's suits—pattern, style, and price are consid-ered by the consumer, before brand.When the selection narrows down to achoice between articles of this sort ap-proximately equal in pattern, style, andprice, the recognition of a known brandsways the choice. The manufacturerof such goods, however, cannot hopeordinarily to secure many sales merelybecause of brand, if his product ishigher in price or less popular in pat-tern and style than directly competinggoods shown in other stores.

Consumer recognition—an acquain-tance with the general standing of thebrand—^probably is the only attitude to-ward that brand which the manufac-turer of a typical shopping line ordina-rily can establish in the mind of theaverage purchaser by means of adver-tising and sales efforts. If the producthas some special feature, as, for ex-ample, cotton fabrics dyed in fast colorsor fast-colored silk goods loaded witha minimum of tetra-chloride of tin, itoccasionally is possible to arouse theinterest of the consumer to a point ofpreference.

A family brand, by which is meanta brand or trade-mark that is appliedcommonly to a group of different prod-ucts turned out by a single manufac-turer, serves primarily to establish con-sumer recognition for all products inthe group as soon as the consumer be-comes acquainted with one article bear-ing the common brand. The experienceof retail dealers indicates that for shop-ping and convenience goods the com-mon brand aids in promoting consumerrecognition. If it is a specialty line,the experience of the consumer withone article bearing the brand is likelyto establish in the minds of consumersat least an attitude of preference forother articles bearing the same brand.It is unsafe, however, for the manufac-turer to count upon the family brand todevelop more than consumer recogni-tion without the presentation of salesarguments for each article bearing thebrand.

Consumer Preference

Consumer recognition soon shadesinto consumer preference. When sev-eral brands oi merchandise, which aresimilar in general quah'ties and in ex-ternal appearance, are offered to theconsumer by a retail salesman, the one

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for which previous experience, adver-tising, or perhaps the retailer's recom-mendation has created a preference, ischosen. The strength of the brand de-pends upon the degree of preference inthe mind of the consumer. In purchas-ing convenience goods, for example, theconsumer often approaches the retailerwith the question, "Have you the Xbrand?" If the retailer does not havethat brand in stock, another brand or-dinarily is accepted by the consumer, or,if the retailer specifically urges anotherbrand in the place of the one called for,a substitute may be taken by the con-sumer. This practise of asking forbrands is common for many consumersin the purchase of convenience articles.The brand comes first in the consumer'smind and signifies to him the quality,style, or pattern of article, or the typeof container that he wishes to obtain.In such cases the consumer has a pref-erence for the brand asked for, butordinarily it is not strong enough in thisclass of merchandise to make him in-sist on that brand to the point of visit-ing a less convenient store to make thepurchase. It is because the consumergenerally has merely the attitude ofbrand preference in purchasing con-venience goods that it is essential forthe manufacturer of such a product toplace his wares on sale in a large num-ber of stores in each territory.

Consumer Insistence

The third stage in which the demandfor branded articles manifests itself isconsumer insistence. When the con-sumer approaches the purchase of an ar-ticle in this attitude of mind, he acceptsno substitute unless it is an emergency.This attitude of consumer insistenceholds commonly in the purchase of spe-cialty goods. To warrant undertakingto develop this attitude, the product

must be so individualized in quality, inits special features, or in the servicerendered by the manufacturer or re-tailer as to differentiate it distinctlyfrom competing articles and to induceconsumers to put forth special effort tosecure that brand. The manufacturerof an electrical washing machine, forexample, undertakes to present his salesarguments in such a way as to lead theconsumer to insist upon the purchase ofhis particular make. Through adver-tising, the manufacturer of such a ma-chine seeks to convince the consumerthat his is the machine which should bepurchased and that a store carrying thi.sbrand should be sought out.

The difference between no standingat all in the mind of the consumer,consumer recognition, consumer prefer-ence, and consumer insistence is one ofthe degrees to which the selling processhas been carried with the consumer be-fore he visits a retail store to make hispurchase. If the consumer has nofamiliarity whatsoever with the brandof product to be purchased, the entiresales burden rests on the salesman inthe store visited. If the consumer rec-ognizes the brand, the manufacturer ofthat brand has taken the initial step inconsummating the sale to the consumer.If the manufacturer has establishedconsumer preference, the sale has pro-ceeded one step further. If the con-sumer has the attitude of insistence, itremains merely for the retail salesmanto close the sale.

Marketing costs generally are high.One of the first steps to be taken by amanufacturer, who is seeking to effecteconomies in selling his product, is tomake an elementary analysis of thehabits of consumers in buying articlesof the sort he is producing. The for-mulation of an effective marketing plan

RELATION OF CONSUMERS' BUYING HABITS TO MARKETING 289

must start with a consideration of the ing habits of consumers among whomconsumer; the next step is to adjust the the market for the product is to be de-plans of retail and wholesale distribu- veloped. This approach assures thetion and the advertising program in maximum results from the sales effortsaccordance with the analysis of the buy- that are put forth.

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