Goodwill Industries – Marketing to a Variety of Customer Types

Case Study Questions

1. Goodwill customer types. Describe the three customer types mentioned in the video. What is each customer type looking for when they shop at Goodwill? What is most important to each customer type?

There are three types of customer types mentioned in the video -- fashion shoppers, resellers and bargain hunters. Fashion shoppers are looking for stylish fashions at a reasonable price (“Goodwill”). It is most important to these customers to shop in stylish retail outlets which provide them with an experience like that would find in a traditional retail outlet (“Goodwill”). Resellers are looking for quality merchandise, at a deeply discounted price so that they may resell the items (“Goodwill”). The bargain hunters are in search of the ultimate treasure, at a bargain price (“Goodwill”).

2. Value offered. What is Goodwill's value proposition and is it the same for all customer groups?

According to the video, Goodwill’s value proposition is to sell used merchandise at deeply discounted prices. The value proposition would be the same for all customer groups because regardless of what is most important to each customer, there is a common primary goal that motivates each of the three to shop at Goodwill. Each group is looking for the ultimate customer experience -good merchandise at a good price, and the value proposition is just “reframed” for each consumer group (“Goodwill”).

3. Factors affecting Goodwill consumer behavior. How do the four sets of factors affecting consumer behavior affect the buying behavior of Goodwill’s customers? Which of the four sets of factors affecting consumer behavior do you believe most strongly affect consumers’ purchase decisions from Goodwill?

According to the video, there are four sets of factors that affect consumer behavior at Goodwill: cultural, social, personal and psychological. The cultural factor influences a customer’s purchase decision, and this decision is based in large part due to the culture of the neighborhood that the customer lives in (“Goodwill”). As explained in the video, different people view thrift stores different because of their social values, which also affects their purchase decisions. Because of this, Goodwill has implemented a chain of channels, where merchandise moves downward through the chain to account for these consumer behaviors and appeal to the different demographics of each level (“Goodwill”). The personal factor affects consumer behavior by influencing the timing in which they purchase an item (“Goodwill”). Depending on their personal behaviors, a customer can be classified as an “early adopter” (want the latest fashions), a “late adopter” (are less motivated by the latest fashion trends), or “critical mass” (do not really care about fashion at all) (“Goodwill”). The last factor that affects consumer behavior at Goodwill is psychology (“Goodwill”). This influences consumer behavior because it colors how a customer may perceive the value of store merchandise, even when both the high end and low-end items are exactly alike (“Goodwill”).

4. Changes in the marketing environment. What environmental trend(s) does the video discuss that significantly impacts Goodwill’s performance? What two “metrics” (key factors Goodwill tracks determine how well the business is doing) are affected and why does this affect how Goodwill markets its retail goods?

The video discusses that Goodwill’s performance is significantly impacted by (1) the status of debt and the economy and (2) technology and the internet. When the economy is failing, consumers are generally looking for a bargain and shop at Goodwill, increasing sales volume (“Goodwill”). However, when the economy is especially bad, the store is affected exponentially. First, consumers have less money to spend, so store traffic decreases because customers are shopping less, and sales volume decreases (“Goodwill”). Secondly, both the quantity and quality of the merchandise donated to Goodwill are adversely affected (“Goodwill”). With the advance of technology and the internet, customers are selling the items that they may believe may be valuable on eBay or on other auction sites (“Goodwill”). They only donate the lower-quality merchandise that they cannot sell on their own (“Goodwill”). The success or failure of Goodwill stores also affects how the retailer markets its goods. When the store sells less and is less profitable, Goodwill is forced to cut employee hours (“Goodwill”).

5. Impact on Goodwill’s Marketing strategies and tactics. How does Goodwill’s recognition of consumer behavior principles affect its marketing mix?

Goodwill recognizes each of the behavior principals in its marketing mix. The cultural factor is recognized because the culture of a neighborhood influences what kind of merchandise that customers will likely purchase (“Goodwill”). Inventory in conservative neighborhoods is generally traditional (“Goodwill”). The social factor is recognized in Goodwill’s level of stores, even within its own brand. The Goodwill “boutiques” carry the latest fashions, staged in a high-end environment (“Goodwill”). This merchandise is sold at a slightly higher price point than in other Goodwill stores (“Goodwill”). The “regular” Goodwill stores carry general merchandise at regular price points (“Goodwill”). Merchandisers also move inventory laterally between different stores in the same neighborhood to allow customers to see the same goods at the same price point (“Goodwill”). Lastly, merchandise that did not sell in the regular stores is transferred to an “outlet store” (“Goodwill”). The personal factor is recognized in the product mix offered in a particular store (“Goodwill”). Cutting edge stores receive fashions early to accommodate early adopters, while other stores may receive their merchandise towards the end of a trend cycle (“Goodwill”). Psychology is recognized when stores carry particular items and offer then at certain price points (“Goodwill”).

Work Cited

“Goodwill: Understanding Consumer and Business Buyer Behavior Full.” MRKT 310. Pearson Education, Inc., n.d. Web. 6 Nov. 2013. <http://digitalvellum.next.ecollege.com/ postindexmixed.html?courseId=8914284#/menus/2000039111052/items/65315095