Evaluation of the Argument on the Middle Aged Consumers’ Behaviors as Compared to Younger Consumers’ Expenditures on Departmental Store Products
It might be true that most middle aged consumers devote an average of 39% of their retail expenditures to departmental store products while the younger consumers only devote an average of 25% on the same. However, the author does not cite demographic data to prove the assertion. Therefore, it cannot be justified whether the actual population of younger consumers exceeded the middle aged consumers by more than 40% (Martins, Yusuf and Swanson, 2012). In such a case revenues derived from the younger consumers would be higher than those generated from middle aged consumers for the same products.
Moreover, the sudden increase in the middle age population does not necessarily mean that a similar trend will remain in the near future. Therefore, it is illogical to argue that since the number of middle aged are expected to increase the departmental stores should produce more products to target the middle aged consumers and reduce manufacture of those which are consumed mostly by the younger consumers. This further implies that the argument would only apply when it has been proven without any reasonable doubt that the real population of the younger aged consumers would be less than that of younger consumers.
Additionally, the author does not include any research that indicates that the real retail expenditure of middle aged and younger aged consumers are 39% and 25% as stated. Martins, Yusuf and Swanson (2012) argue that despite the younger consumers devoting less of their retail expenditure on consumption, the real revenues earned from the younger consumers purchasing departmental store products might be higher than those earned from the middle aged. The argument would further be justified if the author had indicated the steps that he/she followed to reach the conclusion. In this case, the most suitable step would be a calculation on the profits derived from each of the two consumer categories. Hansen (2009) cites that every sales analysis involves the determination of the exact gross sales revenues that a businessman receives minus the costs involved in the sales and production processes. However, if the profits generated from the middle aged consumers are higher than the younger customers, then the conclusion would be applicable. Therefore, since the author does not provide the profit margin that he/she used to reach the decision, the conclusion might not be true.
Moreover, the author overlooked the overall impacts of reducing younger customers’ products on the departmental stores reputation. For example, although the profits which would be derived from the middle aged consumers might be higher, it is unethical to replace products intended for the younger consumers with those for the middle aged consumers. According to Lee and Kottler (2013) all businesses must treat their stakeholders equally. It also probable that if the decision is implemented, it would lead to shortage of products which suit the younger persons’ specific needs. Furthermore, the argument assumes that the rise in middle age customers’ population would lead to an automatic increase in the stores profitability. However, profitability is often determined by several other factors including, but not limited to price, appeal and quality of the products.
Consequently, it is important to consider all the factors affecting consumption behaviors leading to such decisions. As such, the most coherent conclusion would require coming-up with a marketing strategy to enable the businesses to maximize profits from both the two categories. That is, the businesses should produce more products to target the middle aged customers without interfering with the quality and the quantity of those which are consumed mostly by the younger customers. Instead, the business should launch new sales strategy to boost the younger customers’ retail expenditures from 25% to higher percentages.
In conclusion, the argument would only be rational if the author had included the demographic and other statistical data that he/she used to reach the decision. In addition, if the author had correctly evaluated the impacts of the decision on the overall performance and the reputation of the businesses. Specifically, if he would have considered other options that would enable the departmental store owners to meet both the middle aged and younger customers’ needs. Therefore, the argument is weak thereby making the conclusion not only irrational, but also less convincing.
References
Hansen, H. (2009). CAPEX excellence: Optimizing fixed asset investments. Chichester, U.K: John Wiley & Sons.
Lee, N., & Kotler, P. (2013). Corporate social responsibility: Doing the most good for your company and your cause. Hoboken, N.J: Wiley.
Martins, J. M., Yusuf, F., & Swanson, D. A. (2012). Consumer demographics and behavior: Markets are people. Dordrecht: Springer.
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