Consumer Spending: Marketing Strategies and Corporate America

Introduction

In a consumer society, marketing is constantly growing, and therefore paying attention to consumer spending habits is vital. Research into this area can give people a clue about shopping habits, purchasing trends, the effects of rewards programs and other incentive schemes, and other salient variables. Especially in the contemporary environment, in which consumers are paying more attention to healthy and organic shopping choices when buying food, it is important to assess the impact of shopping behavior and predilections through surveying consumers.

As Ailloni states regarding the importance of marketing, “In spite of all the intellectual legerdemain involved in repackaging old terms in new age catch phrases, the marketing of consumer packaged goods was, is, and will remain concerned with only one basic objective: the profitable movement of as many cases as possible” (2001 ). Looking at it like this makes its clear that there is no new or old marketing in the face of competitive threats represented by different buying or shopping patterns among different consumer demographics: there is just the bottom line. “From the manufacturer’s point of view, consumers and the trade are the two poles anchoring what should be viewed as a continuing process with product development, advertising, and promotional efforts providing the necessary fuel to keep the process in play” (Ailloni, 1998). These traditions are also based on important financial variables, which, if one considers the economic situation, can potentially mean less dynamic choices are available when an entity is polarizing the definition of marketing into opposites of short-term and long-term agendas for each function of the product, as a statement of profit.

Research Questions

The research questions deal with the shopping habits of people and changes in consumerism. The research focuses on 1) how effective are incentives, promotions and marketing strategies in determining consumer behavior? 2) What factors determine consumer spending patterns and shopping behavior? 3) How does consumer grocery store shopping or organic food shopping determine marketing strategies of supermarkets and how does this have an overall impact on corporate America?

The research deals with findings through the survey.

Methods

A survey can give results about a population, in this case the modern food shopper, whereas qualitative studies could be more of a case-study or subjective perspective from the individual researcher or author. As one text states about the differences between the different designs, “Flexible research designs are much more difficult to pin down than fixed designs. This is in part because it is only in recent years that researchers have given consideration to the design issues, which they raise. Previously there had been a tradition in the disciplines of social anthropology of an apprenticeship model” (Babbie, 1995). A survey is a good way of looking at shopping behavior, because it is something that people are happy to report, and don’t view as something to be hidden. What this survey tried to accomplish was not about people’s choice only but what also what motivates customers to buy certain products from the mentioned suppliers. Moreover, There are also relatively few obstacles of natural bias to overcome when it comes to this subject. “Biases may exist in the selection of sample elements within a given cell even though its proportion of the population is accurately estimated… attempts have been made to combine probability and quota sampling techniques, but the effectiveness of this effort remains to be seen” (Babbie, 1995). It is possible to create something that may include scales of attitudes and belief as well, in terms of a measured survey of food shoppers that takes many different modern variables as a reason. “If the members of a population have unequal probabilities of selection into the sample, it is necessary to assign weights to the different observations made in order to provide a representative picture of the total population” (Babbie, 1995). The measure of quality of the shopping experience and outcomes would need to be based on some way of finding out the thoughts of the population of respondents, by looking at their beliefs and attitudes relative to food shopping.

For the research study conducted here, a survey questionnaire comprising of 14 questions was presented to 50 respondents or consumers. The consumers were given the questionnaire inside shopping centers or other public places and were requested to complete the questionnaire comprising of 14 questions with multiple choice answers. The answers could be on a five point or ten point scale or a simple ‘yes’ or ‘no’, or multiple choice with four or more options. The survey questionnaires were distributed to consumers and later collected. Although 100 were distributed, 50 completed questionnaires were finally used for the analysis. The results of the survey provide insights on consumer behavior and how consumer spending could inform choices for supermarkets like Walmart or corporate America in general. The responses obtained from the questionnaires were tallied and qualitative and quantitative analyses were performed.

Results

The results of the 14 questions were categorized according to the responses and both qualitative and quantitative analysis was done with the obtained data.

Discussion

The questionnaire results indicated that among the 50 respondents from whom the completed questionnaires were collected, 52% were female and 48% male. At least 18 respondents were between 26-40 years with 12 being 40-60 years and 10 were 18-25 years. Thus 36% of the participants were young and between 26 and 40 years and 24% were middle aged. Most participants went to the grocery once a week 35% or 2-3 times a week 32%. Walmart, Costco and Whole foods were the most frequently visited grocery stores with Costco leading at 28% and Walmart at 24%. Location and healthy food were the main consideration and 40% preferred a grocery store located nearby. 24% shopped for quality or health food and another 24% considered price while choosing their grocery store. Monthly average spending in the grocery store is between $100-$500 and 17 participants or 34% spent $300-$500 at the grocery and 30% spent $100-$300 at the grocery store. 20% however spent more than $500 per month on groceries. As far as the importance of organic food is concerned, most agreed that customers should buy organic food and more than half gave high importance to organic food and very few considered organic food as not important. Nearly 58% agreed on the importance of organic food and the fact that customers should switch to more organic. 24% were undecided and the others were not in favor of organic. Knowledge of slaughter house conditions when buying meat seem to affect 36% of the people although many were unaware or unaffected by the conditions.

Consumers showed a preference for grocery stores located nearby. 64% preferred groceries bought from stores located within 10 miles of their home. Thus most customers bought grocery material from stores located nearby and location was an important part of store choice. Locally produced grocery made up for 30%-80% of grocery items for more than 65% of the participants, suggesting that customers made a conscious effort to buy locally produced grocery items. More than 60% either agreed or strongly agreed that rewards programs and promotions given by stores such as Buy one get one free did help in attracting more customers. When asked how grocery stores an supermarkets in general could improve service, customer responded by suggesting better customer management, faster service, more in store help, better organization of products, updated catalogue and inventory, and better quality and wide variety of products.

Considering the research questions once again:

1) how effective are incentives, promotions and marketing strategies in determining consumer behavior?

2) What factors determine consumer spending patterns and shopping behavior?

3) How does consumer grocery store shopping or organic food shopping determine marketing strategies of supermarkets and how does this have an overall impact on corporate America?

The responses provided give use considerable insights on the factors that determine consumer shopping behavior. This relate to location and availability of quality food. The data suggest that incentives, promotions and marketing strategies have a direct impact on consumer behavior as promotions are very effective in attracting and retaining customers. Supermarkets that provide the best money-saving deals and high quality food, and have a wide presence in residential locations are most likely to be successful.

The responses provided here suggest that marketing and promotions as also trends (such as health foods or organic foods) are an important aspect of buyer behavior and all supermarkets should take note of this. Proper marketing strategies, promotions and understanding consumer behavior is an important aspect of customer behavior or shopping patterns analysis and could provide insights on the success of large supermarket chains such as Walmart and Costco.

Conclusions

From the results it could be suggested that most consumer choices depended on ease of shopping such as location and consumers preferred grocery stores in a nearby location within 10 miles of their homes. Some of the major grocery stores such as Walmart and Costco topped the list for choice of grocery shopping. The amount of grocery spending was found to be mainly with $500 although some claimed shopping costs at above $500 per month.

Organic food is in vogue and many consumers preferred to make healthy choices and bought organic food. Whole Foods is catching up on popularity due to the emphasis on organic produce. People also consciously shopped for locally produced items and more than 50% of grocery items bought were locally produced, possibly because of cheap prices. People believed that rewards programs were important in determining consumer choices and shopping behavior. However when asked for improvement of store service delivery, most emphasized on faster service, better quality and a range of products, more in-store help, and better customer management. These responses could be used by supermarkets as leads for their marketing programs and supermarkets should focus on consumer needs, rising trends such as health and organic foods and build more stores near residential areas as location seems an important factor in grocery store choice. These issues could determine how supermarkets work, whether they are successful and profitable and whether corporate America could survive, even in a weak economy.

REFERENCES

Ailloni, D. Marketing by any name is still about sales. Brandweek.

Babbie, E. The Practice of Social Research. New York: Wadsworth.

Kotler, P., Armstrong, G., Brown, L., Chandler, S. A.,Marketing, (4th edn), Prentice Hall, Sydney.