1 Module 2 | The Retail Environment

2 Module 2 | The Retail Environment

MODULE 2- THE RETAIL ENVIRONMENT

INTRODUCTION
This module examines the effects of the external environment on retailing. Discusses how recent changes
in the population and in social and economic trends affect the way customers behave and the implications of
these changes for retailers. It also includes the behavior of competitors as an important component of the
retail planning and management model.

This module is divided into two lessons, namely:

 Lesson 1 introduces you to retail customers, and
 Lesson 2 introduces you as to how evaluating the competition is done in retailing.

MODULE LEARNING OUTCOMES

In this module, you should be able to:
1. describe the changing economic trends and their effects on retailing;
2. explain the various models of retail competition; and
3. illustrate and explain the retail life cycle.

LESSON 1: RETAIL CUSTOMERS

SPECIFIC LEARNING OUTCOMES

In this lesson, you are expected to:
1. explain the importance of population trends on retail planning;
2. list the social trends that managers should regularly monitor and describe their impact on retailing;
and
3. discuss the consumer shopping and purchasing model, including their key stages.

PRE-ASSESSMENT
Instruction: Choose the letter of the correct answer.

1. What is a retail channel?

I. This is simply the means by which a retailer sells to their customer, examples of retail channels
include stores, website, apps, etc.
II. This is simply the means by which a retailer buys their products, examples of retail channels
primary, secondary, territory, etc.
III. This is simply the means by which a retailer supplies their products, examples of retail channels
include manufacturing, businesses, shops, etc.

a. I b. II c. III
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2. Which is a way to gain customer satisfaction?

a. Confidence in service
b. Not dealing with problems
c. Slow service
d. Long queues

3. Which is not a way to provide consistent and reliable service?

a. Product knowledge
b. Dealing with problems
c. Long waiting time
d. Short waiting time

4. It is important to build a relationship with your customer. In the first few seconds after you notice the
customer’s arrival, you should:
a. Make sure your clothes are neat and you look professional.
b. Find your sales book and get it ready for your next sale.
c. Tidy up the product display before showing it to the customer.
d. Greet the customer and make him feel welcome.

5. To keep the lines of communication open, the best questions to ask:

a. Are direct and to the point.
b. Are ones that can be quickly answered with a "yes" or a "no".
c. Begin with who, what, where, when, how, or why.
d. Are ones that are able to direct the customer to a decision.

6. Good Customer Service helps to:

I. Build Your Brand
II. Create Trust with Your Customers
III. Reduce Customer Complaints & Minimize Problems

a. I
b. II
c. III
d. I, II, III

7. Which statement about customer service is correct?

a. Excellent customer service results in a more positive business reputation.
b. Excellent customer service results in more promises and therefore more lawsuits.
c. Excellent customer service results in fewer loyal customers.
d. Excellent customer service results in lower wages.
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8. A key benefit from offering good customer service is ____________.

a. Lower costs
b. Repeat business
c. Reduced tax
d. less customers

9. What can employees do to help provide good service to customers?

a. change inventory
b. resolve problems
c. plan events
d. change business hours

10. The path a product takes to get from the producer to the consumer.
a. Direct distribution
b. Distribution
c. Channel of Distribution
d. Indirect Distribution

LESSON MAP

Population Social
Trends Trends

Consumer Shopping/
Purchasing Model

Economic
Trends

The map above shows how current trends affect the way consumer behaves
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CORE CONTENTS

ENGAGE: ARTICLE ANALYSIS!

Instruction: Read the article below and answer the question that follows.

Are Retailers Making the Grade When It Comes to Consumers’ Expectations?

Over the last decade, retailers have donea better job at providing a shopping experience that meets
or exceeds customer’s expectations, but the improvement is minimal. Customer satisfaction with overall
retail trade has gone from a score of 74.8 in 2001 to 76.1 at the end of 2011. For those doing math at
home, this corresponds to an increase of approximately 2 percent over a 10-year span. Yet one should not
conclude retailers are doing a poor job at meeting their customers’ expectations by such marginal rating
improvement.
The largest contributing factor for its increase in overall retail trade satisfaction was satisfaction with
gasoline stations. In fact, their score jumped5.7-74 percent during 2011. The driving force behind this
grand improvement was falling gas prices.
In conjunction, retail sales were up approximately 5 percent, and overall retail trade for 2011 rose 8
percent. The good news is that customer satisfaction continues to climb entering 2012, which has a
positive effect on consumer demand and economic growth.

1. What is being implied in the article? Are retailers really making the grade when it comes to consumers’
expectations?
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EXPLORE: READING CONCEPTS!

Instruction: Read each concept closely. Spaces are provided for note-taking and reflection.

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 meet or
exceeded the customer’s expectation.
 Customer satisfaction is important because it costs the average retailer five times as much money
to get a new customer into a store as it does to make a sale to someone who has already shopped
there or to retain a current customer who may be unhappy.
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In addition to the merchandise or services offered for sale, another part of customer’s shopping
experience is the services provided by the retailer.

 Customer services are the activities performed by the retailer that influence the following:
o The ease with which potential customer can shop or learn about the store’s offering,
o The ease with which a transaction can be completed once the customer attempts to make a
purchase, and
o The customer’s satisfaction with the product or service after purchase.

Common services provided by retailers include alterations, fitting rooms, delivery, gift registries,
check cashing, credit, extended shopping hours, short checkout lines, gift wrapping, parking, layaway, and
merchandise-return privileges, as well as the availability of in-home shopping options such as television, print
catalogs, and the Internet. It must be remembered that none of these services is actually the merchandise or
service being offered for sale; it merely entices the customers that the retailer is targeting.

Understanding different customer segments and their need for convenience might stipulate the
retailer to offer additional products through its website, thus providing a critical service component to
enhance the customer’s experience.

Market segmentation is another method retailers use to segment, or break down, heterogeneous
consumer populations into smaller, more homogeneous groups based on certain characteristics.
 Helps retailers understand who their customers are, how they think, and what they do.
 It enables retailer to build a meaningful strategy based on the consumer’s needs, desires,
perceptions, and shopping behaviors.

One should study the changing consumer to see how an understanding of population, social, and
economic trends can help a retailer select a market segment to target.

II. POPULATION TRENDS

Retailers often find it useful to group consumers according to population variables, such as
population growth trends, age distributions, ethnic makeup, and geographic trends. This is useful for two
reasons. First, such data is often linked to marketplace needs. Second, the data is readily available and can
be easily applied in analyzing markets.

Population Growth
 Any increase in domestic population growth will mean an increased demand for goods and services.
Even with a minimal growth in the total population will mean opportunities for retailers.
 As population growth slows, successful retailers must focus on taking market share away from
competitors, managing gross margin by controlling selling price and cost and increasing the
productivity of existing stores.
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 Chain store retailers that can operate in hundreds for thousands of different geographic areas also
need to pay attention to areas of a city that may be declining in population.
 Another growth opportunity for retailers is international expansion; however, it is likely that this is a
limited-time opportunity.

Age Distribution
Baby Boomers Gen X Gen Y
Also known as Boomers Baby busters Echo boomers
Millennium generation
Digital generation
Dates of birth 1946-1964 1965-1977 1978-1994
Experienced Birth of rock and roll Growing divorce rate Age of technology
Space exploration Gang violence Multilayered information
Racial divides Pop culture Growth in branding
Sexual revolution Information explosion Recycling
Respond to Authority Creativity Learning
Perspective on Fearful Proficient Indoctrinated
technology
Attitude Realistic Pessimistic Optimistic

 The most significant implication of an aging population for retailers, particularly those targeting
boomers, is that their customers’ big spending years are generally behind them. However, retailers
must resist the temptation to overlook these segments.
 Retailers who ignore boomers – thinking they’re past their spending time prime – are limiting their
success. After all, boomers will continue to buy cars, travel, and indulge in expensive “toys” for
themselves as well as presents for their kids and grandkids.
 Besides understanding the various needs of each age segment, retailers must also understand what
motivates consumers to spend money.
 Gen X is the fastest growing group of consumers that spend full price for luxury items.
 Younger adults are by their very nature acquisition oriented. These first-time renters and home buyers
need to acquire material objects and usually judge their progress by such possessions; older adults
tend to conserve what they have.
 Therefore, as the population ages, a significant driving force for total economic growth may dry up
unless retailers provide consumers with a reason to shop.
 Retailers must be able to speak the older consumers’ language, avoid talking down to or patronizing
them, shun “phony friendliness,” and understand that, as they age, older consumers need to easy-to-
navigate store layouts and clearly labeled merchandise.
 Today’s successful retailers will be those who come up with new and indigenous ways to not just
attract audience but also compel them to walk in the door.
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 The shopping behavior of Gen Y is based on different criteria than previous generations. They are
concerned with how the product makes them appear and less concerned about the shopping process.
 Gen Y also seems to be turned off by promotions that don’t take them seriously. These anti-fashion
and anti-establishment consumers still want entertainment or events when they shop; however, the
promotions used must be relevant to them, funny, and say, “We understand.”
 The recent recession has also introduced another trend for these under-20 shoppers; buying
secondhand. These retailers not only allow the consumer to save money but also appeal to a
growing ecofriendly sentiment among teenagers.

Ethic Trends
 Hispanic Americans are more likely to shop as a family; the average amount per shopping trip can
be very attractive. Also, many Hispanics are moving into the higher income ranks. Two common
mistakes that retailers make when targeting Hispanics:
o Assuming that their population is homogeneous even if they’re not.
o Assuming that Hispanics behave the same in the marketplace. Actually second-generation
Hispanic Americans, who have immersed in American culture, are very different in their
shopping behavior than foreign-born Hispanics. First generation Hispanics usually view
themselves as completely Hispanic and have minimal contact with or interest in mainstream
U.S. culture.
o Recent consumer data suggests that even as Hispanics become more mainstream, they may
maintain shopping tendencies that are unique relative to all shoppers in general.

 African Americans. Retailers need to recognize the shopping habits of African Americans. For
instance, when shopping for groceries, half of African Americans use a shopping list, almost half use
coupons, and 61 percent use a frequent shopping card.
 Asian Americans. Asian teens and college students are frequent purchasers of fashionable apparel
and designer labels.

Geographic Trends
 The location of consumers in relation to the retailer will often affect how they buy.
 Retailers should be concerned, not only with the number of people, their ages, and their ethnicity,
but also with where they reside.
 All consumers want convenience and will therefore tend to patronize local retail outlets. In fact,
your proximity to retail store is a strong determinant of whether you shop on the Internet for
certain merchandise.
 For instance, if you live a block or two from an office supply store or consumer electronics store,
you are less likely to buy office supplies and consume electronics on the Internet.
 A common mistake made by retailers is to assume that all consumers in a certain geographic
area have the same purchasing habits.
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 As a result, many of the leading retailers have developed micromarketing merchandising

strategies.
 Micromarketing involves tailoring merchandise in each store to match the preferences of its
neighborhood.

Urban Centers
 Metropolitan statistical areas (MRAs) are freestanding urban areas with populations in excess
of 50,000. However, the urban or metropolitan population varies considerably by state.
 Every shift in consumer population patterns has major implications for retailers, especially when it
comes to expenditures made for household products.
 There are also opportunities for retailers in smaller markets. Historically, most chain retailers have
ignored these markets.
 In addition to their rapid growth, secondary markets are attractive because of the low level of retail
competition, lower building costs, cheaper labor, and fewer building and zoning regulations.
 As MSAs have begun to stabilize, secondary markets have become more attractive.
 A large urban city is often composed of many smaller markets and neighborhoods such as the
China town neighborhood in Binondo, Manila.
 Retailers operating in these neighborhoods nee to adjust their merchandise and services to serve
the local markets.

Mobility
 In many countries, people are born, raised, married, widowed, and die in the same city or
immediate geographic vicinity.
 Two major factors for this heightened mobility is the country’s divorce rate/separation rate and
state or regional economic slowdown and hence loss of jobs that varies across the country.
 If the population moves, the retailer may find that its target market no longer resides in its
immediate area. Likewise, retailers in areas undergoing rapid population growth will want to be
prepared to serve these new consumers quickly as many retail-oriented decisions must be made
on the spot.
 After a move, consumers must locate new sources for food, clothing, household goods, and
recreation.

III. SOCIAL TRENDS

We continue our examination of demographic factors affecting the modern retailer by looking at
several social trends: the increasing level of educational attainment, the state of marriage, and the changing
nature of work.

Education
 Educational attainment, which is very closely linked to parent’s education, is the single most
reliable indicator of a person’s income potential, attitudes, and spending habits.
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 College-educated consumers differ in their buying behavior from other workers of the same age
and income levels. They are more alert to price, quality, and advertised claims.
 When retailers use education to segment the marketplace, they often overlook a certain
percentage of the market over ages 25 that have some college experience but failed to earn a
degree.
 Since education levels for 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.

State of Marriage
 This trend toward single-person households presents many opportunities for the retailer because
of the increased need for a larger number of smaller houses complete with home furnishings.
 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 on getting specific items and then getting
out of the store as quickly as possible.

Changing Nature of Work

 In other industrialized economies, work has become less central to one’s life. In the past, work
has often the way people identified themselves and obtained meaning in their lives.
 People’s hobbies are becoming more work oriented. Many are gardening, investing time and
money in learning to cooking, developing photography skills, and doing projects around the
house.
 The explosive growth of the Internet and cloud computing have allowed many people to set up
home-based business especially when this pandemic strike.
 Since many individuals are holding multiple jobs, retailers can tap into this pool of individuals for
part-time workers. Retailers have done this in the past, primarily at the clerk level.
 Today, there are opportunities for retailers to employ part-timers in a variety of positions, including
accounting, inventory control, merchandising, buying, and store management.

IV. ECONOMIC TRENDS

We will now look at the effects of income growth, the declining rate of personal savings, the increase
in the number of working women, and the widespread use of credit on the modern retailer.

Income Growth
 The imbalance in income growth across households has created an increased demand for value-
oriented retailers.
 Retailers of luxury automobiles, lavish foreign vacations, and executive-style houses in gated
communities had also done well.
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 Economists tend to view income from two different perspectives: disposable income and
discretionary. Disposable income is simply all personal income minus personal taxes. For most
consumers, disposable income is their take-home pay. Discretionary income is disposable
income minus the money needed for necessities to sustain life, such as minimal housing,
transportation, for and clothing.
 Retailers who sell necessities to sustain life, such as supermarkets, like to see incomes rise and
taxes decrease. These retailers know that, while consumers won’t spend all their increased
disposable income on the retailer’s merchandise, they will nevertheless increase spending.
 Retailers who sell luxury goods want to see discretionary income increase. However, the recent
economic slowdown due to pandemic had a negative effect on both types of incomes as the value
of the houses and stock market portfolios declined during this slowdown.
 In addition, many workers lost jobs, and others were forced to take pay cuts. As a result of these
factors, the net worth of the consumers declined.

Personal Savings
 It must be pointed out that the government’s numbers regarding the savings rates fail to address
the treatment of capital gains or losses. When the government measures disposable income, it
counts wages, interest earned, and dividends; however, it overlooks realized or unrealized capital
gains or losses.
 The government’s data tends to undervalue savings because it fails to consider the wealth effect.
The wealth effect claims that for example, for every P100.00 of additional wealth generated in an
individual’s stock market holdings, that individual will spend P4.00.
 Such spending lowers the nation’s savings rate because, as the stock market rises, spending
increases without an increase in wages and salaries. Savings will also decrease in this example
because the government will subtract taxes on the stock market gains from disposable income.
 Retailers have enjoyed continued sales growth over the past decade; however, this growth is not
due to significant increases in household income. Instead, retailers have benefited from the
spending rather than saving mindset of the consumer.
 Some economists fear that in another decade, retired baby boomers will begin to remove much of
their money from the stock market. If this occurs in great numbers, then the economy will see
another declining market that would likely result in reverse wealth effect.

Women in the Labor Force

The rise in the number of working women has many retails impact.
 Over the past five decades, women have become a dominant factor in the labor force. However,
as time goes by, women in the organization are increasing.
 This growing trend of women in the labor force is true to all age groups; even women aged 25-34,
who might be expected to be raising families.
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 This significant rise in the number of working women has protected many households from
inflation and recession. In fact, many economists suggest that the working woman has been the
nation’s secret weapon against economic hardships.
 In addition to the working wife, another reason for the huge increase in household income for dual
wage-earner families that is, where once a professional man would marry a secretary, nurse, or
school teacher, today many professional men are marrying professional women.
 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.
 Working men and women are often unable to shop between the hours of 8:00-5:00pm. Thus,
these individuals prefer that retailers hold sales and special events in the evenings or on
weekends.

Widespread Use of Credit

 Retailers, especially department stores and those selling big-ticket items, have long offered their
own credit cards to customers. However, today the trend is away from the retailer’s store-branded
cards and toward third-party cards (Visa, MasterCard, etc.).
 Credit card firms are seeking for the trend to continue. They offer promotional incentives such as
free airline miles, rebates on new auto purchases, and rebates on future purchases. For the
retailer, credit card use has increased sales and profits.
 Retailers benefit from credit cards. Research shows that customers spend more when they use a
credit card than when they must pay in cash. However, since the growth in credit has been
outstripping the growth in personal income, it is evident that households will face a liquidity crisis
as income growth slows or becomes negative.

V. CONSUMER BEHAVIOR MODEL

Now that we have examined the population, social, and economic trends of today, we can develop a
model that describes and, to some degree, predicts how these factors come together to affect consumer
buying patterns. We call this the consumer shopping and purchasing model.
 Consumers are typically confronted with fundamental decisions when it comes to meeting their needs
and want: what products or brands can potentially fulfill their needs, and where should they purchase
these products or brand.
 This model suggests that consumer behavior is process with a series of steps. The six stages in the
model are stimulus, problem recognition, search, evaluation of alternative purchase, and post-
purchase evaluation.
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Figure 1. Consumer Shopping and Purchasing Model

Stimulus
A stimulus involves a cue (external to the individual) or drive (internal to the individual) A cue is any
object or phenomenon in the environment that is capable that is capable of eliciting a response.
Common examples of retail marketing stimuli are classified into two: controlled by the seller or retailer
and retailer cannot control.
Cues controlled by the seller or Cues that the retailer does not
retailer control
Advertisements Word-of-mouth
Point-of-purchase displays
Coupons
Salespeople
Free samples

A second type of stimulus is internal to the individual and is referred to as a drive. A drive is a
motivating force that directs behavior. Drives can be physiologically based (hunger and the need to
stay warm in the cold) or learned (the desire to spend spring break in Cancun).

 As consumers move through their daily routine in an information economy, they are constantly
exposed to hundreds of messages regarding product, service, and where to purchase them.
 As a result, one of the scarcest resources is human attention. All retailers are competing with
virtually all other organization and individuals for the consumer’s attention.
 Consequently, the individual is always involved in passive information gathering, which is the task
of receiving and processing information regarding the existence and quality of merchandise,
services, stores, shipping convenience parking, advertising and any other factor that a consumer
might consider in making a decision of where to shop and what to purchase.

Problem Recognition
 Stimuli can often lead to problem recognition.
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 Problem recognition occurs when the consumer’s desired state of affair departs sufficiently from the
consumer’s actual state of affairs.
 When this happens, the consumer is in a state of unrest until he or she finds a way to resolve this
difference.
 Not all problems will stimulate the same level of problem-solving activity. The level of one’s desire to
resolve a particular problem depends on two factors: the magnitude of the gap between the
consumer’s desired and actual states, and the importance of the problem.

Problem Solving
The next two stages in the consumer shopping and purchasing model---active information
gathering (or search) and evaluation of alternatives--- will determine the degree of problem solving
that occurs.
 Individuals solve problems by searching for information and then evaluating their options or
alternatives.
 If consumers do not select the best product, they can incur:
o Financial loss/financial risk,
o Personal harm/safety risk, or
o The decline of respect from family and friends / social risk
 Shoppers are finding the Internet and smartphone apps an efficient and effective way to help
them solve their purchasing problems. They use the Internet to search for peer ratings on brands,
to get advice from friends and the blog sphere, and to find the best price at stores nearby or from
e-tailers.
 The amount of problem-solving activity consumers engage in varies considerably, depending on
their prior experience and the need to reduce financial, personal, and social risk.
 Consumer learn quickly, and when they locate the product, brands, and retailers that are good at
satisfying their needs at a low or acceptable level of risk, then the degree of problem decreases.

Habitual Problem Solving

 The consumer relies on past experience and learning to convert the problem into a situation
requiring less thought.
 Occurs when the consumer relies on past experience and learns to convert the problem into a
situation requiring less thought.
 The consumer has a strong preference for 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.
 The consumer may not have a store choice in mind but may have a strong preference for the
brand to purchase.
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 In this instance, since the brand has already been determined, the consumer has, in a sense,
restricted the problem-solving process to deciding which retailer to patronize among those that
carry the brand.
 Occurs when the consumer has a strong preference for either the brand or the store, but not both.

Extended Problem Solving

 Occurs when the consumer recognizes that a problem exists yet does not have a strong
preference for either the brand or the store.
 Occurs when the consumers recognized a problem but has decided on neither the brand nor the
store.
 Typically involves infrequently purchased expensive products of high risk. Here, the consumer
desires a lot of new information, which implies a need for extensive problem solving.

Problem-Solving Stages
Once consumers recognized that a problem exists and believe a potential a potential product solution
exists within the marketplace, they will engage in problem solving. The first is active information gathering,
which is when consumers proactively gather information. Occurs when consumers proactivity gathers
information. Set of attributes refers to the characteristics of the store and its products and services.

The evaluation of alternatives typically involves three stages:

1. In the first stage, consumer develops a set of attributes on which the purchase decision will be
based. The set of attributes refers to the characteristics of the store and its products and services.
These can include such things as price, product quality, store hours, convenient parking, and so on.
These attributes are often based on general information sources such as pre-existing knowledge,
advertising, discussions with friends and relatives, and magazines.
2. In the second stage, consumers narrow their consideration set to a more manageable number of
attributes. Although consumers want to think that they have considered a wide range of option so as
not miss a golden opportunity.
3. In the final stage, consumers directly compare the key attributes of the alternatives remaining on
their “short list”. Consumers are very active in their search for specific information and often begin
ascertaining actual prices through store visits, browsing the store’s website, or preliminary negotiating
when appropriate.

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.
 This stage may include final negotiation, application for credit if necessary, and determination of
the terms of purchase (cash, credit card, etc.).
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 The Purchase stage is often seen by retailers as an opportunity to use suggestion selling to sell
add-on or related purchases such as extended service warranties, batteries for toys, and impulse
merchandise. Both online and bricks-and mortar retailers use this technique.

Post-purchase
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. 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 consumer ises the product or
service. During this critical time, consumers form lasting impressions regarding the soundness of their
purchase decision.
 If post-purchase resentment is not identified and rectified quickly by the retailer; it can have a
long-term negative effect on the retailer’s bottom line. This is because a satisfied customer may
tell a few friends, but a dissatisfied customer usually will tell a dozen or more.
 However, in case where an online chat room or internet complaint site is used it may be millions.
Just Google any retailer’s name followed by the word sucks and you will see the true feeling of
many dissatisfied consumers.
 If the retailer is proactive in its customer-satisfaction program and responds quickly to budding
resentment, it can be overcome. The problem is that many unhappy consumers do not report their
dissatisfaction, so retailers must be diligent in their monitoring.
 Many retailers have started customer follow-up programs, such as customer-satisfaction reply
cards.
 Electronic cash registers have aided in this process by efficiently gathering the names, addresses,
and telephone numbers of customers, recording the merchandise purchased, and automatically
mailing the customer satisfaction surveys.

EXPLAIN: DELVING THE RETAIL WORLD

Instruction: Answer the following questions below.

1. Differentiate customers vs. consumers.

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2. What are the population variables? Briefly discuss each variable.

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3. In your opinion, what do you think is the importance of population trends on retail planning?
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4. Between 2010 and 2050, what type of retailers will be most affected by the changes in the ethnic makeup
of the population? Will these same retailers be affected by the changing age distribution?
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EXTEND: RETAILER’S POV!

Instruction: Put yourself in the shoes of a retailer then answer the following:

1. Which recent trend- parent returning to live with their children or children returning to live with their
parents- is going to have the most significant impact on retailers? What can you do as a retailer to take
advantage of these trends?
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2. What if you are now a retailer, how will the changes in economic trends affect you?
______________________________________________________________________________________
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3. Illustrate the consumer behaviour model, including the key stages in the buying process. Explain each
stage briefly in your OWN words.

Discussion. Must be of your OWN words.

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EVALUATE: RETAIL CUSTOMERS TODAY

Instruction: Answer the following questions.

1. Why should a retailer care about a customer after a sale has been made?
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2. What strategies should retailers develop given the higher level of educational attainment today? Explain
your reasoning.
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3. Search and read an article that talk about an incident of customer dissatisfaction.
a. Write the link of the article.
b. Identify what caused customer’s dissatisfaction.
c. If you are the retailer, how are you going to address the incident of dissatisfaction?
Link Cause Solution

TOPIC SUMMARY
In this lesson, you have learned that …
 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 these changes but also can profit from the opportunities.
 Retailer often find it useful to group consumers according to population variables, such as population
growth trends, age distributions, ethnic makeup, and geographic trends.
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 This is useful for two reasons, First, such data is often linked to marketplace needs, Second, the data
is readily available and can easily applied in analyzing markets.
 Five major special trends and their implications. These five trends include the increasing educational
levels of consumers, their changing state of marriage (including the expansion of the never married
population), the effect of higher divorce rates, and the changing makeup of the American household,
and the changes in the nature and importance of an individual’s work.
 The imbalance of income growth among various consumer segments, this country’s low level of
personal savings, the impact of women in the labor force in averting economic crisis, and the impact
of the widespread use of credit on retailing.

POST-ASSESSMENT
Instruction: Choose the letter of the correct answer.

1. What is a retail channel?

IV. This is simply the means by which a retailer sells to their customer, examples of retail channels
include stores, website, apps, etc.
V. This is simply the means by which a retailer buys their products, examples of retail channels
primary, secondary, territory, etc.
VI. This is simply the means by which a retailer supplies their products, examples of retail channels
include manufacturing, businesses, shops, etc.

a. I b. II c. III

2. Which is a way to gain customer satisfaction?

a. Confidence in service
b. Not dealing with problems
c. Slow service
d. Long queues

3. Which is not a way to provide consistent and reliable service?

a. Product knowledge
b. Dealing with problems
c. Long waiting time
d. Short waiting time

4. It is important to build a relationship with your customer. In the first few seconds after you notice the
customer’s arrival, you should:
a. Make sure your clothes are neat and you look professional.
b. Find your sales book and get it ready for your next sale.
c. Tidy up the product display before showing it to the customer.
d. Greet the customer and make him feel welcome.
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5. To keep the lines of communication open, the best questions to ask:

a. Are direct and to the point.
b. Are ones that can be quickly answered with a "yes" or a "no".
c. Begin with who, what, where, when, how, or why.
d. Are ones that are able to direct the customer to a decision.

6. Good Customer Service helps to:

IV. Build Your Brand
V. Create Trust with Your Customers
VI. Reduce Customer Complaints & Minimize Problems

a. I
b. II
c. III
d. I, II, III

7. Which statement about customer service is correct?

a. Excellent customer service results in a more positive business reputation.
b. Excellent customer service results in more promises and therefore more lawsuits.
c. Excellent customer service results in fewer loyal customers.
d. Excellent customer service results in lower wages.

8. A key benefit from offering good customer service is ____________.

a. Lower costs
b. Repeat business
c. Reduced tax
d. less customers

9. What can employees do to help provide good service to customers?

a. change inventory
b. resolve problems
c. plan events
d. change business hours

10. The path a product takes to get from the producer to the consumer.
a. Direct distribution
b. Distribution
c. Channel of Distribution
d. Indirect Distribution
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REFERENCES
 Lusch, Robert F. et.al. Retailing an Introduction 8th Edition. Cengage Learning., 2015.
 Author: Will Kenton., Retrieved from: https://www.investopedia.com/terms/b/btoc.asp Retrieved on
March 21, 2021.