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As gas prices continue to be on the rise, they are likely to have a large impact on consumer spending but a much smaller impact on the amount of gasoline purchased. People will continue to purchase the same amount of gas that is required for them to make it to work and things of that nature but instead they will reduce their spending on things like shopping, going out to dinner, vacations, and other leisure behaviors. Even though the price of gas continues to raise it is considered an inelastic good so people will not stop driving, but it will make them consider if where they are driving is necessary as well. People calculate for gas in their budget in a category like rent or utilities as something that must be paid for so when that price goes up the naturally look to cut their spending in alternate categories to make up for these higher prices. Some economists estimate that for every one cent increase the price of gas, spending in other areas will decline by one billion dollars. Another way that increasing gas prices effect consumers is that when its prices raise it may also cause prices of other objects as well. The higher gas prices cause other companies to have to charge more due to increase in freight cost and other varies items. This also turns the consumer away from wanting to purchase items, not due to having less money from increase gas prices, but also because the items cost more as well. This also begins to causes strain on our economy because so much of profits are not kept and circulated in the United States, which with consumers in the United States spending less causes the money multiplier to decrease, thus less money circulation. Companies and consumers must find a way to find a balance that appropriate to keep money circulating with these higher gas prices or begin using alternate sources of fuel to keep the economy and consumer behavior a float in the United States.
Here is a video from Fox News on how prices affect consumer spending: impact-of-higher-gas-prices-on-consumer-spending-habits
Online shopping continues to become a more poplar resource for consumers year after year. With the always improving technology and the high amounts of social networking that consumers use daily this is no surprise. Many consumers are swapping in the time of traveling to the store and dealing with the crowds to instead just simply browsing from the comfort of their home and having anything they desire with just a click of a button. When choosing what online sites to shop from it comes down to word of mouth and brand loyalty for many consumers. This is the case do to fact that since consumers are purchasing their product online their is no guarantee that what they see is what they actually will get. So consumers will look to what their peers tell them is good as while as go with a company that they already know and trust. Companies need to take notice to how consumers are starting to make the shift to online shopping and utilize it to their advantage. They need to implement sites that are easy to navigate as well as gaining consumers trust with their sites. With the constant growth of technology the possibilities are endless on what companies can gain and achieve by just taking the time to utilize this important resource to gaining and maintain a constant customer base. Another thing that draws many people to online shopping currently other than the at home convince is that many companies also offer discounts on certain products if you buy them online rather than in the store, this helps to draw customers in since finding the best deal is always key. Companies must remember that the consumer wants to feel safe while shopping on their online site while also feeling that the are receiving something special that a convince to them that they do not normally receive in their store to continue to gain their business and the business of their friends.
Today I will leave you with a video on some ways to make sure your shopping safe while you are online so you can avoid the many frauds that are out there:
Cultural factors have a large impact on customer behavior, culture is perhaps the single most important factor playing a significant role in deciding whether a product sells in a particular area or not. Culture is the basic cause of a person’s wants and behavior. It is learned from family, school, peers, colleagues, and other important peers. It reflects basic values, perceptions, wants, and behaviors. Cultural shifts create opportunities for new products or may otherwise influence consumer behavior as well. Social class distinctions allow companies to position their products to appeal to certain social classes, each culture contains “sub-cultures” which is a group of people who share the same values. Sub-cultures can include religions, racial groups, nationalities, or groups of people sharing the same geographical location. Sometimes a sub-culture will create a substantial and distinctive market segment of its own for companies to try and reach. Culture represents influences that are placed on the consumer by other individuals. It has several important characteristics: Culture is comprehensive, culture is learned rather than being something we are born with, culture is manifested within boundaries of acceptable behavior, and conscious awareness of cultural standards is limited .Culture is a continuous issue for many marketers since it is often difficult to understand. Someone can easily go against the cultural norms of another country without knowing and people from different cultures may feel uncomfortable in each when around each other without knowing why. Language is another important part of culture, you are unable to understand and appropriately communicate with a particular culture how to you expect sell a product to them. Culture provides the meaning of objects and activities and facilitates communication. It is what gives meaning to the advertisements so if a company wants to reach a certain group it is critical to understand their culture to be able to market to them effectively. CULTURE IS KEY!
This second set video portrays how culture can determine what people place value on this first video shows someone who is viewed to not have money in a store and how they are treated and then the next shows what happens when the table is turned:
A goal of many companies is to gain brand loyalty from their consumers. Brand loyalty is when the company makes an emotional connection to its consumers by gaining their trust as a customer. By doing this many companies learn that brand loyalty is also brand equity. Gaining brand loyalty is what all companies strive to obtain because having loyal customers means having t sales. In a Landmark study at Northwestern University they looked at the results from 802 shoppers to see how important it is for companies to have a brand that is recognized by their consumers. The results showed that shoppers spent less than 12 seconds on average at a product category displayed and 85% of them only picked up the brand that they wanted to purchase. Customers have a variety of reasons to become loyal to a particular brand; it could be the first they ever used, the right price, and the right feel, work the best and so on. The main thing that the customer gains from a brand name is the reputation that it establishes for them. The more positive reinforcement that a brand has to offer either through word of mouth or advertisements the greater influence they gain over their customers. One of the most important things a company can do to gain a customer’s trust is to provide a great initial purchasing experience if they do not succeed with the customer the first time they will like never gain a chance with that customer again. Gaining and maintain your customers trust of your products that you have to offer is the most critical point in gaining brand loyalty. So companies must remember that they key to gaining the loyalty that they desire is to give the customer the best quality and the best service that can be provided every time and in turn the consumer will look to their brand every time as well.
Here is a video of James Averdieck talking about how to build brand loyalty and how they did this with their product:
And again I will leave you with a little comic relief — a video on bikers brand loyalty:
The time is fast approaching for the shopping phenomenon of Black Friday. Black Friday usually consist of long lines of many people waiting for stores to that lure them in by dangling special deals and saving to get them out of bed at a bright and early hour the day following Thanksgiving.
This day has received its name because retailers historically “moved into the black,” or became profitable for the year. Last year The average amount spent per person from Thanksgiving through the end of the weekend was about $365.Retailers traditionally offered extreme discounts as the major attraction for consumers on Black Friday this has been the motivation for many consumers to camp outside stores waiting for the early openings. Store openings are occurring earlier each year with many stores opening at 5 or 6 a.m. This year however a number of stores are opening at midnight and some at 10 p.m. on Thanksgiving Day. Also another trend that is changing for this shopping phenomenon is that instead of the deals being secret and companies going to court to sue over deal leaks, but instead companies are actually putting out ads far ahead of time which has never occurred before. Some people think it is to help lure in more shopper since the economy is not at its peak. Many companies are also trying to boost their online retail numbers for this day as well by offering free shipping on objects ordered on Thanksgiving and Black Friday to try to reach their consumers who do not feel like battling lines and leaving the comfort of their home. Black Friday is in a phase of transformation and it will be interesting to see what these changes bring for this day of mayhem and the years to come.
Video link about Black Friday:http://abclocal.go.com/ktrk/video?id=8427192
With the way time has continued to fly by I have started to have happy thoughts of spring break frequently fly through my head. During my thoughts on frolicking on a beach somewhere nice and warm I remembered the decision that many people must decide…. Where do I go? So I decided to look into where many people tend to spend their vacations and some trends that seem to occur. So I found a survey that was taken last February and found out some very interesting information. The first thing I found interesting from the survey was the gap in differences that travelers tend to spend on their spring breaks. According to the survey 60% of travelers said they would spend $500 to $2000 on their trip with 75% of them staying in the US. Then it continued to inform me that 61% of the women are planning on spending less than $1000, while only 42% of men are. The part that interested me the most was the responses that they got when they asked the question: “Are you planning on taking a Spring Break vacation? “ the interesting part seeing how what region people were in affected their spring break decisions. Below is a picture of how the results turned out:
Westerners tend to stay close to home for Spring Break ,California and Nevada are top destinations in the region, with Hawaii and Mexico being popular among those planning to travel farther. 26% will travel between 50 and 250 miles-the highest of all regions. Their budgets seem to fall about on target with the US as a whole, with over half plan to spend between $500 and $2,000, but surprisingly one-fifth (19%) plan to spend less than $500.
With almost two-thirds of Midwesterners traveling more than 500 miles from home, it seems people in this region travel the farthest for their Spring Breaks. Of those from the Midwest, 75% will stay in the United States and travel to top destinations like Florida, California and Nevada. They’ll also average longer vacations than those in the rest of the country, spending 5.9 days at their destinations longer than most other regions travelers.
Southern travelers are the most likely to stay close to home, only 54% plan on traveling more than 500 miles, while 37% will venture between 100 and 500 miles. Though southerners are the most likely to stay within the U.S, they’re also most likely to travel to the Caribbean. Other popular destinations include Florida, North Carolina, Texas and Tennessee. Finally, the majority of southern travelers (60%) will spend less than $1,000 on their vacations, and their trips will be the shortest of all regions.
North-easterners travel the come in a short second for the furthest trips, with 60% of travelers from the region planning trips of more than 500 miles. Florida is the destination of choice as 42% of Northeastern travelers.. Northeastern travelers also seem to have the biggest budget of all regions. Almost half will spend between $1,000 and $5,
Product placement have become such common occurrences in many consumers have become so used to it that at times it can even go unnoticed. Product placement is a form of advertising, where a brand places their good or service in the context of movies television shows, news programs, and ect. This form of advertising has been around for many years but started to gain more popularity in the early 1990’s This video below shows some of the many ways companies use product placement form the very first to ever do so to more current ways used today. The reason for this shift in advertising to this strategy was it was easier for a company to reach a certain target market and to reach a significantly larger number of them at one time. You will find product placement in most any television show or movie that you will see on television or in the theater. Companies see this not only as advertising but an investment for their brands in helping them reach their target markets. Also investors feel it is a great way for them to gain brand awareness of their particular brand. One movie that is a great example on how companies use product placement is flims is the movie newest Transformers, in this movie there is product placement very often that offen goes unnoticed until you actually try to look for it. Product placement has been around for many years and it is something that goes unnoticed but sometimes can be obvious and maybe a little over done. So I thought I would leave you today with this link to a video clip from the Colbert Report and maybe even a laugh.
Subliminal messages have always been a well known phenomenon and often subject to scientific and public debate due to the variety of matter that they can contain. A subliminal message is a signal in the form of a picture or sound that is designed to pass the normal limits of perception,that means that people perceive it with their subconscious while not perceiving it consciously. Subliminal messaging can be found almost anywhere your eyes can look. It can be found in song, advertising, movies, and television shows. Some messages are very obvious with what they are doing while others can be very discreet with the message they are trying to get across. The messages that are found in all these can have a variety of messages they are trying to get across from religious to sexual “hidden” images and message. Advertising is where I believe subliminal messaging is the most apparent. In every commercial or billboard add you can find an underlying message trying to reach a certain person to convince them that they want to buy the product they have on display. You can also find many subliminal messages in shows and movies that are watched every day. The one fact about these two areas to me is how much of the subliminal messages in the children’s versions of movies and television that can be found. Songs have always delivered a message with their lyrics but they also have a variety of ways they display subliminal messages that might not be noticed immediately. The most obvious way being by using phrases with alternate meanings. The second way that many people have discovered is by having messages when you play them backwards like the video below. Subliminal messaging can be found almost everywhere you look and the more you become aware of “tricks” that are often used you soon begin to wonder when is there not a subliminal message?
Iphone have changed the way that many consumers choose their products. They have made it so a person can research a product anywhere to even purchase something right from their phones. The Iphone is a great example of the large impact that our continuous technological improvements have on consumer behavior. Consumers having Iphone leads overall to consumers being more informed with the purchases they make every day. They can easily access the internet to read a review for a product or seein if it is offered at another location for a lower price just by making a few clicks on their phone. Also the social media aspect of the Iphone is a big impact onto consumer behavior. Anywhere people go now they can see what restaurant their friend might be at or what new thing everyone is buying and be motivated to do so themselves.
As the video says business need to use this new techonolgy that is becoming popular to interact and communicate with their customer. With the Iphone and its technology companies can reach their customers on a variety of levels. First they need to be very active in media sites that are offered on the Iphone. Business should create active Facebook pages and twitter so they will be able to interact with their customers on a variety of levels and keep their customers informed of things that are going on or that you might be doing in the future. When having these pages though business need to not use them only just to boost themselves if a customer is to write a negative experience on your page it should never be deleted. A customer does not want to look at your page and find that after they felt something was unsatisfactory for you just to delete it. Leave all comments online god or bad and if bad show them that you car and are trying to fix the problem to draw them back and show other customers that you care. The area that I feel many companies need to look into with IPhones to gain a competitive advantage is by creating apps for the IPhone.
By creating an app you would allow your customer to not only be able to see new items, sales, or learn about the product you also give them the access to purchase an item anywhere from their phone. I see this becoming a very competitive market for many companies in the future because it does not only increase sales but it also increases your brand recognition. The more you make your product available the more likely your consumers are to purchase it. Consumers are becoming more technologically advanced so companies must go with the change or forever be left in its dust.