CHANGING PATTERNS OF THE AMERICAN CONSUMER. MARKET
AND THEIR EMMICATIONS FOR THE RESTAURANT INDUSTRY

Thesis fer 2119 has?» of M. S.
MICHIGAN STATE UNIVERSITY
Cami Anne King
1964

 

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CHANGING PATTERNS OF THE AMERICAN
CONSUMER MARKET AND THEIR IMPLICATIONS

FOR THE RESTAURANT INDUSTRY

BY

Carol Anne King

A PROBLEM

Submitted to
the Dean of the College of Home Economics
Michigan State University
in partial fulfillment of the requirements
for the degree of

MASTER OF SCIENCE
Department of Institution Administration

1964

ACKNOWLEDGMENTS

The author wishes to express her appreciation and
thanks to Professor Katherine Hart for her guidance in the
planning, organizing and preparing of this problem, and to
Miss Doris Downs for her encouragement and the guidance of
the writer's graduate program.

A note of thanks is due to Miss Kathryn Bruce and
Miss Lynda Glimm of the National Restaurant Association
for making the results of the General Foods Corporation

study available to the writer.

ii

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TABLE

ACKNOWLEDGMENTS. . . . . .

LIST OF TABLES . . . . . .

LIST OF FIGURES. . . . . .

MARKETING AND THE RESTAURANT

Marketing Concepts. .

OF CONTENTS

Restaurant Marketing Surveys. .
Restaurant Marketing Techniques

THE POPULATION . . . . . .

Birth Rate. . . . . .
Life Expectancy . . .

Teen-age and Old Age Markets. .

Family Formation. . .

THE STANDARD OF LIVING . .

Factors in a Rising Standard of

Multi-Earner Families
Discretionary Income.

CHANGING SOCIAL PATTERNS .

Urbia: Sub-, Inter—,
Social Stratification

and Ex- .

The Growing Credit Economy. . .

iii

INDUSTRY. . . .

Page

ii

vi

WM

12
18
21
24

27
29
34
37
41
41

53
57

o c‘ "hL-fl .-

Increasing Leisure Time

Recreation
Travel
Specialty Foods

Business Entertaining
Implications. . . . .

BIBLIOGRAPHY. . . . . . .

iv

Page

59

67
69

76

LIST OF TABLES

Table

l.

U. S. population and rate of increase:
1900-1960. . . . . . . . . . . . . . . . . . .

Projections of the U. S. population (including
armed forces abroad) in thousands: 1965 and
1970 . . . . . . . . . . . . . . . . . . . . .

Birth rate for the United States: 1900-1959.
In total live births per thousand population .

Life expectancy at birth for United States:
1920-1959. . . . . . . . . . . . . . . . . . .

Death rate from selected causes, in deaths
per 100,000 population: 1920-1960 . . . . . .

The marital status of the population: 1900-
1960. Percent of population married. by sex
(standardized for age) . . . . . . . . . . . .

Changes in distribution of families by size
and mean size: 1930-1953. . . . . . . . . . .

Gross national product and national income
for the U. S. for selected years . . . . . . .

Per capita disposable and discretionary income
in current and constant 1947-1949 dollars:
1939-1956. . . . . . . . . . . . . . . . . . .

Page

10

11

l4

19

20

25

26

29

39

LIST OF FIGURES

Figure

1. Percent change in population age distribution:
1950-1960. . . . . . . . . . . . . . . . . . .

2. Percent change in the population age distribu—
tion: 1940-1950 . . . . . . . . . . . . . . .

3. Percent change in the population age distribu—
tion: 1930—1940 . . . . . . . . . . . . . .

4. Absolute changes in population age distribu-
tion: 1950—1960 . . . . . . . . . . . . . .

5. Absolute changes in population age distribu—
tion: 1940-1950 . . . . . . . . . . . . . . .

6. Absolute changes in population age distribu—
tion: 1930-1940 . . . . . . . . ... . . . . .

7. Cumulative percent distribution of money income
of families in the U. S.: 1944—1959 . . . . .

Vi

Page

15

15

l6

l6

17

17

33

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MARKETING AND THE RESTAURANT INDUSTRY

The restaurant industry is over 2,000 years old but,
during most of its long history, little attempt has been
made to develop a philosophy of management or to make the
restaurant into a productive, efficient business enterprise.

Until recently, the restaurant remained an extension of the ;
family, filling the need for food away from home, and using
production methods found in the home.

Today, our highly mechanized and complex society is
making demands on the restaurant industry for greater.
better, and different kinds of food service, and at a
lower cost. Typically, it is the inability of restaurant
Operators to meet these demands that has made the failure
rate for restaurants one of the highest among all businesses.

With the pressure mounting to produce a profit, the cri-
terion of success in the business world, restaurant opera-
tors are frantically searching for new and better ways to
serve their modern markets. Restaurateurs have tried to

adopt managerial methods, from other industries, and to

develop their own techniques, but they are achieving only
moderate success with this approach to their problems. One
reason for this limited success is that the restaurant in—
dustry is dealing with surface problems which are symptoms
of more basic difficulties.

‘Qng of these basic difficulties is a lack of under-
standing of the changing Consumer market and the concept
of marketing. This paper attempts to describe for the res-
taurant operator some characteristics of the market and
marketing, and how it affects him and his business. Then,
with a better understanding of this basic business function.
the restaurateur is in a better position to fulfill the

needs of his customers.

Marketinq Concepts

What is marketing? Definitions in marketing text-
books are usually similar to dne from Clark and Clark:
”Marketing consists of those efforts which effect transfers
of ownership of goods and services and care for their phy-

sical distribution." The Committee on Definitions of the

 

lFred E. Clark and Carrie Patton Clark, Principles
of Marketing (New York: The Macmillan Co., 1942), p. l.

American Marketing Association2 defined marketing in 1948
as: "the performance of business activities that direct
the flow of goods and services from producer to consumer
or user." A discussion of the marketing process usually
includes mention of the various marketing functions of
buying, selling, transporting, storing, standardizing or
grading, financing, risk—taking, and proViding market in-
formation. 1
More recently, however, the literature of marketing
expands the marketing concept to include the entire business
operation. In 1961, the American Management Association3
stated that marketing is ". . . the total function concerned
with analyzing, creating, developing, packaging, pricing,
distributing, selling, promoting, publicizing, and adver-
tising the goods or services of every enterprise. . . .
Marketing is not only the key to sales success; it is the
central function of a business to which all other functions

are co—ordinate." Philip Gustafson4 elaborated this philosophy:

 

2American Management Association, "Report of the Def—
initions Committee," Journal of Marketing, XIII, No. 2 (Octo-
ber, 1948).

3 . . . .
American Management Assoc1ation, The Marketing Job
(New York: American Management Association, Inc., 1961).

4Philip Gustafson, "Selling Tomorrow's Market," Mar-
ketinq in Transition, ed. Alfred L. Seelye (New York: Harper
& Brothers, 1958).

Basic approaches to selling in the American market
are changing. Business is broadly applying a new
point of view that begins and ends with the custo-
mer . . . .The term commonly used to express the
new concept is 'marketing.’ It focuses company
effort behind one department whose function it is
to understand, motivate, and reach the customers.
In the new way of thinking, marketing permeates
all areas of the business and must be integrated
into each one.

A business organization adhering to this marketing
concept starts by determining the customer's needs and de-
sires, and then engineers its prodUcts according to those
needs. Prices, packaging, and production schedules are
planned on the basis of the market research and, after the
product is sold. the company continues to help the customer

. . 5
get the best use from hlS purchase. Malcolm McNair, Pro—
fessor of Retailing at Harvard University, added that mar-
keting goes beyond selling: "It is the creating and deliv—
ery of a standard of living."

Why this change in emphasis by the marketing men?
Until recently, industry's task was to produce enough to
satisfy the needs of a rapidly growing economy. Now, how-

ever, through advanced technology, we are capable of produ-

cing far more than we can possibly sell. Our ever—rising

 

5Malcolm McNair, "Challenge of the 1960's," Harvard
Business Review (September-October, 1961).

°‘ ' hv—.—‘--,.h-

level of productivity, coupled with the highest standard
of living in the world, permits consumers to choose between
spending and saving, and to decide where to spend their money
and for what goods and services. Besides rising incomes,
consumers have easy credit available for both large and small
purchases. In other words, the consumer has gained indepen-
dence in the market place. He no longer buys a specific pro-
duct because he cannot avoid it; his choice is made on the
basis of the innumerable factors that influence all human
behavior, and recent advances in social science research
methods now permit marketing researchers to study how con-
sumers make decisions to buy.

Philip Gustafson (61) quotes a vice president of
marketing as saying that the customer is king, and the king
will determine what is made, how much, when, and What he

will pay for it.

Restaurant Marketing Surveys

Although manufacturers and distributing organizations
have spent large sums of money to research their markets, the
restaurateur knows practically nothing about what the public

wants in a restaurant. However, General Foods Corporation (56)

published an eating—out index and consumer attitudes survey
in 1960, and Standard Brands, Incorporated (128) reported in
1958 on the findings of a consumer panel on dining-out habits
and attitudes.

The General Foods survey showed that Americans spend
over 1 billion dollars a month for food in restaurants. Of
the meals eaten out Which the survey recorded, 1r% were break-
fasts, 6I% noon meals, and 28% dinner meals. Most morning
and noon meals were eaten out from necessity, evening meals
from choice. Business reasons accounted for 20% of all lun-
cheons and 15% of all dinners eaten out by men. Only 3% of~
the peeple eating out have credit cards for their own per-
sonal use.

The Standard Brands survey on habits and attitudes
reported that most frequently the wife suggests eating out;
that, on the average, 56% of all families go out to eat at
least once a month: that the best restaurant patrons are
upper—income-white—collar workers. Of this group, 73% dine
out at least once a month, compared with 39% of the lower-
income blue-collar workers.

Cost was given as the major reason for not eating in

restaurants more frequently. The factors that influence a

preference for a restaurant are cleanliness, good wholesome
foods, good service, and pleasant surroundings and atmosphere.
The survey also showed that people go to different types of
restaurants for different reasons: for convenience, they go
to cafeterias, diners, and drive—ins; for special occasions
or change of routine, they prefer table service or hotel res-
taurants. One-half of all restaurant meals are served on

weekends, with Sunday being the most popular day.

Restaurant Marketing Techniques

Stouffer Foods Corporation of Cleveland, Ohio, is a
prime example of a market—oriented restaurant company. Orig-
inally Operating fast-turnover tea—room-type restaurants,
Stouffer moved with its market to suburban locations, more
luxurious types of service and decor, and to high-quality
precooked frozen foods sold through supermarkets. Stouffer
is also responding to a market for high quality food service
in businesses and institutions with their Management Food
Service division, and to a market for fast food on the new
interstate highway systems with their automats. Most recently
Stouffer is opening motor inns at Columbus and Detroit. In

all its diversified operations, however, Stouffer is aiming

at a particular group, the middle— and upper—income white-
collar worker. Stouffer feels that its present organization
is geared to serving this group, and all expansion is planned
to satisfy its various and changing food needs. This policy
is largely responsible for Stouffer's rapid growth into one
of the country's largest restaurant firms.

Leaders in the restaurant industry tell us that the
ability to adjust to a changing market will be a critical
factor in the future success of any restaurant. Matthew Ber—
natsky (16) of the Cornell School of Hotel Administration
stated that the challenge of the restaurant industry is to
recognize change and modify restaurant operations to meet
new conditions. Failure to accept and meet the challenge
of change can cause some operations to be unprofitable, even
in a period of prosperity.

Markets are people with wants and purchasing power,
and since people's wants are changeable and unpredictable,
they impart this quality to the market. It is the job of
the restaurant operator to determine, first, where his markets
lie and, second, hOW'he may best serve them—~the type of foods,

service, and decor his particular market demands.

THE PO PULAT I ON

Since it is common knowledge that the United States
population is expanding at a rapid rate, some characteris-
tics of this expansion should be of interest to restaurant
men.

The National Planning Association (101) projects a
United States population of 214 million by 1970, a gain of
35 million people within the next eight years, providing
both a stimulant to economic growth and technical progress,
and serious problems in employment, housing, and education.
These projections are in the range of 1.7-1.9% increase per
year, compared with the current rates of growth (1953-1959)
of 1.T% for Japan, 0.9% for France, 0.4% for England, and
1.2% for West Germany. Table 1 shows U. S. population and
growth rates since 1900, and Table 2 shows certain projec-
tions of future population growth.

Philip M. Hauser,6 former acting director of the

United States Bureau of the Census and presently Chairman

 

6Philip M. Hauser, "The Challenge of Tomorrow's
Markets," Journal of Marketing, XXIV, No. 1 (July, 1959).

9

10

of the Department of Sociology, University of Chicago, says:

Tomorrow's market constitutes one of the greatest
challenges and opportunities ever to confront the
American business community. Total national pop-
ulation growth alone constitutes a major challenge.
For it is necessary for the American economy to ex-
pand sufficiently within a period of 25 years to
provide goods and services for an additional 65-95
million Americans consuming at the American level
of living.

TABLE 1.—-U. S. population and rate of increase: 1900-1960

 

 

-======
Year Total Population Percent Increase
Over Previous Census

1900 76,212,168 ....

1910 92,228,496 21.0

1920 106,021,537 15.0

1930 123,202,624 16.2

1940 132,164,569 7.3

1950 151,325,798 14.8

1960 179,323,175 18.5

 

 

 

‘1. '17—.— v—

Source: Population of the United Stategi 1960. U. S.
Summary, Table 2, pp. 1-4.

11

TABLE 2.—-Projects of the U. S. population (including armed

forces abroad) in thousands: 1965 and 1970

 

 

==u===============u=====f :====

1965 1970

Series IIa
All ages 196,217 214,222
Under 5 22,170 25,135
5-9 20,346 22,215
5-17 49,701 54,304

Series III
All ages 194,454 208,931
Under 5 20,408 21,600
5—9 20,346 20,459
5-17 49,701 52,548
18-21 12,090 14,244
14 years and over 138,362 150,450
18 years and over 124,345 134,783
21 years and over 115,043 124,059
65 years and over 18,243 20,035

 

 

 

aSeries II assumes that fertility continues at the
1955-1957 level.

bSeries III assumes that fertility declines from
the 1955-1957 level to the 1949-1951 level by 1965-1970.

Source: U. S. Bureau of the Census, "Current Population
Reports," Series P-25, No. 241.

12

Birth Rate

Of the four factors controlling population growthu—
birth rate, death rate, immigration and emigration—~the birth
rate is presently the only dynamic variable in the U. S. pOp—
ulation growth. In the rural America of the early 1800's,
the birth rate is estimated to have been as high as 55 live
births per 1000 population. It went below 40 in 1880 as the
country was becoming urbanized and industrialized and contin-
ued to drop until it went below 19 in the dark, lean days of
the depression, but rose slightly during the war, leveling
off at about 25 during the past decade (141,144). As in all
countries, the United States' birth rate is related to the so-
cial and economic conditions and the cultural patterns of the
times. The initial high birth rate was due to the Large num—
bers of immigrants, most of whom were in the child-bearing
age and whose social values encouraged having large families.
Then, too, in an agrarian society, large families were needed
to operate the farm. A high infant mortality rate was also
a spur to a high birth rate. Later, the decreased flow of
immigrants, the trend from agriculture to urbanized industry,
and the improvement in medicine Which decreased infant mor—

tality caused a drop in the birth rate. After World War II,

13

the birth rate shot back up again due to an expanding econ-
omy and the return of young men to civilian life.

A number of reasons have been advanced to explain
the current baby boom: an increasing number of infants born
in hospitals resulting in a lower infant mortality rate,
earlier marriages, and a shift in the concept of an ideal
family from two children to four. Additional reasons in-
clude rising incomes and credit buying which allow young
couples to have both children and consumer goods.

Social and economic class no longer seems to be a
factor in the rising birth rates. The high rates cut across
all segments of the population, including the highly educated
and upper social and economic classes as well as the lower
classes. Religion seems to have the most significant effect
on birth rates.

Birth rate statistics tell us about more than the
present crop of babies. A decrease or increase in the birth
rates affects the composition of the population as the crop
of babies move through the age groups to old age and death,
and as their children grow up, marry and have their own fam-
ilies. Fortune (48) has predicted a second baby boom to

start in the late 1960's when the first of the post—war

14

babies begin their families. Table 3 shows the total live
births per thousand of population from 1900 to 1959, and
Figures 1 through 6 show the effect that the low birth rates
of the 1930's and the high rates of the 1950's and 1960's
have had on our population make-up.

TABLE 3.-—Birth rate for the United States: 1900—1959. In
total live births per thousand population

 

 

 

 

 

 

 

Year Rate Year Rate Year Rate
1900 32.2 1938 19.2 1949 24.5
1910 30.1 1939 18.8 1950 24.1
1920 27.7 1940 19.4 1951 24.9
1930 21.3 1941 20.3 1952 25.1
1931 20.2 1942 22.2 1953 25.0
1932 19.5 1943 22.7 1954 25.3
1933 18.4 1944 21.2 1955 25.0
1934 19.0 1945 20.4 1956 25.2
1935 18.7 1946 24.1 1957 25.3*
1936 18.4 1947 26.6 1958 24.6*
1937 18.7 1948 24.9 1959 24.3*
Source: Historical Stgpistigg of_;he United States, Colonial

 

Times to 1957.

*From Stagistica1_Abstract o the Uhited States 1961.

15

Years Figure 1.--Percent change in the
of population age distri-

75;; bution: 1950-1960

65-6
60-
55-5
50-5
45—4
40—
35-3
30-3
25-2
20-2
15-19
10-14
5-
under 5

 
 
 
  
  
  

, W decrease 1950-1960
increase 1950-1960

  

            

1 2 3 4 5 6 7 8 9 10 11 .
Percent of P0pu1ation
Years Figure 2.--Percent change in the
ofage population age distri-

    

75&
70—7
65-6
60-6
55-5

bution: 1940—1950

W1] decrease 1940-1950
- increase 1940-1950

 

35-3
30-3
25~29
20-24
15—19
lO~14

under 5
l 2 3 4 5 6 7 .8 59 10

Percent of Population
Source: U. 5., Bureau of the Census, Census of the Popula-

tion 1960: General Population Characteristics,

PP-

 

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16

Years Figure 3.--Percent change in the
ofage population age distri-
75&ove bution: 1930-1940
70-7
65-69
60-64
55-59
50-54
45-49
40-44
35—39
30~34
25-29
20-24
15-19
10-14
5- 9
underS

 
   
  

 

WWWW decrease 1930-1940
increase 1930-1940

M

 

   

l 2 3 4 5 6 7 8 9 10

Percent of Population

Years Figure 4.--Absolute changes in
ofage population age distri-
75& bution: 1950-1960
70-7
65-69
60-64
55-59
50~54
45-49
40-44
35-39
30434
25-29
20-24
15-19
10-14
5— 9
underS

 
 
   
  

 

 

MWWM

decrease 1950-1960
increase 1950-1960

 

Millions of Population
Source: U. S., Bureau of the Census, Census of the Popula-
' tion 1960: General Population Characteristics,
Table 47, pp. 1-153.

l7

   
   

Years Figure 5.--Absolute changes in

of age population age distri-
75&cnmm bution: 1940-1950

70-74

65569 [mmmw decrease 1940-1950

60—64 - .

55_59 increase 1940-1950

50-54
45-49
40—44
35-39
30-34
25-24
20-24
15-19
10-14
5- 9
under5

     

2 4 6 8 10 12 l4 l6

Millions of POpulation

Years Figure 6.--Absolute changes in
of age population age distri-
75&cnmm bution: 1930-1940

    

70-74
65-69
60-64
55-59
50-54
45-49
40-44
35-39
30-34
25-29
20—24
15-19
10—14
5- 9
under5

IIIIIIIIIIIII decrease 1930-1940
- increase 1930-1940

 

12
Millions of Population

Source: U. S., Bureau of the Census, Census of the Popula-
tion 1960: General Population Characteristics,

Table 47, pp. 1-153.

I\.~"— __ _

18

In the 1930-1940 period, the number of children
under 14 years decreased both in total number and in rel—
ative proportion to the rest of the population (Figs. 3
and 6). This decrease was due to the low birth rates
of the 1930's. As these children grew, they caused the
dip in the population to travel upward, until now it is
in the 20-30 age range. At the same time, the baby boom
of the 1940's and 1950's shows both relative and absolute
increases in the groups under 19. This will develop into
a "teenager boom" within the next ten years, increasing
the demand for such items as phonograph records, cosmetics,

used cars, and hamburgers.

Life Expectancy

Another interesting phenomenon is shown in Figures
1 through 6: the increasing numbers of people over 65.
Advances in medical science and living conditions have
pushed the life expectancy at birth to 66.4 years for
men (in 1958) and 72.7 years for women. The rising life

expectancy in the United States is shown in Table 4.

19

TABLE 4.--Life expectancy at birth for United States:

 

 

 

 

 

 

1920-1959
Year Total Male Female
1920 54.1 53.6 54.6
1930 59.7 58.1 61.6
1940 62.9 60.8 65.2
1950 68.2 65.6 71.7
1955 69.5 66.6 72.7
1958 69.4 66.4 72.7
1959 69.7 66.5 73.0
Source: Statistical Abstract of the United States:

 

Table 54.

Much of this increase in the life span is due to
reductions in deaths from diseases that once prevailed
among infants, children and young adults. Some of the
most significant are diphtheria, whooping cough, influ-
enza, and pneumonia, and deaths due to pregnancy and child-
birth (Table 5). Because of the drastic reduction in deaths
from these causes, more and more peOple are living to old
age where degeneratory diseases such as heart disease, can-

cer, and respiratory ailments are prevalent.

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20

 

 

 

 

 

 

 

 

 

 

 

 

 

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21

Another factor in the declining mortality rate is
that cities, where the mortality rate has always been high-
est, are now safeguarding drinking water, milk, and food
supplies. They also enforce sanitation and air polution
ordinances, require quarantine for cases of contagious dis-
ease and mass immunization, and provide a wide range of
medical services. These services are available to large
numbers of people through group medical insurance plans,

charitable organizations, and governmental subsidization.

TeengAge and Old Age Markets

Although the teen-agers of today may baffle their
parents with their likes and dislikes, the market research-
ers refuse to be intimidated. With about one-third of the
teen-age pOpulation employed, and most others receiving
allowances, gifts, and baby-sitting money, teen—agers
represent about a $10 billion market (30,43). Such market
research firms as Eugene Gilbert Youth Research, The Stu-
dent Marketing Institute, The Youth Research Institute,
and National Youth Panel are dedicated to finding out how

teen-agers spend this money . . . and they spend it much

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22

differently than the older generation since they are not
burdened with mortgages, insurance, taxes, and time pay—
ments. Except for school supplies and lunches, teen-age
income is largely "gravy" to be spent on clothes, sports
and sporting equipment, cosmetics and grooming aids, food
and beverages, and automotive needs. The teen-ager's
biggest expenditure is on food--32% (43). According to
one of Eugene Gilbert's surveys (85), the weekly average
income of a boy is $4.16 at 13 years old, $8.26 at 16,
and $16.65 at 18. Girls average two or three dollars
less.

Teen-agers not only spend their money differently
than older people, but they have different attitudes to—
ward the things they buy. They feel free to indulge in
luxury purchases since they have no family responsibility.
They are also quick to try new products and, to a great
extent, influence the spending in their families.

The market surveyors have found that the old age
market is a difficult one to research. With the emphasis
on youth in our modern society, no one wants to admit to
being old: Retailers of women's apparel have found that

the surest way not to sell a garment is to label it as

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23

being for older women. Actually, except for a few health
and comfort needs, older people's needs are about the same
as those of younger people. The only substantial differ-
ence is that they have more free time and, as a rule, less
money. The Social Security Administration (22, 41) reported
that the financial position of older people is slowly im-
proving as more people receive old age, survivors, and
disability insurance benefits and private pensions.
Consideration of income statistics alone may dis—
tort the picture of the older person's financial position.
Many older persons have planned for their retirement, and
by that time they own their own homes and have made all
their major purchases. At this time in their lives they
don't feel the need to save for the future as do younger
persons with growing families, and their pensions are reg-
ular and assured. Most of the older person's income is
spent as it is received, with those in the lower-income
brackets spending on necessities, and those in the middle

bracket having some left over for a few luxuries.

 

..i.'+d(l.s‘ ,. .. 4 .I I I. I v}, Ix .I\II.JII\U.‘ - .04 It} 1 34V -’(J\arflu kl!

24
Eamily Formation

For the purpose of studying markets, the number
of families is more meaningful since the family is the
primary buying unit in many cases. The growth in the
number of families does not necessarily parallel the
growth in the total pOpulation. While the population
grew at an average of 1.8% per year in the past ten years,
the number of families grew at an average of 1.5% (144).
Demographers look for a rapid increase in the rate of
family formation because: peOple are marrying at a
younger age; a larger percentage of peOple are getting
married and more divorced and widowed persons are remar-
rying;a larger percentage of the population is entering
the marriageable bracket. The relative peace and pros—
perity of the times, as well as the military draft, en-
courage early marriage. Table 6 shows the changing mar-
ital status of the population since 1900.

Although the long-term trend of family size has
been downward, several components of this trend are of
interest. The prOportion of large families is dropping

rapidly, and the larger the family, the swifter the drOp.

 

if?» I I ...

I

I ..I\CCJ£~.'

n «o ALI ....L-IIV 0‘ (liken-(Ix:

I!

25

TABLE 6.——The marital status of the population: 1900-1960.
Percent of population married, by sex.
(standardized for age)

 

 

 

j——-—._.
Year Percent of Percent of
Females Married Males Married
1900 58.7%, 59.9%
1910 60.1 60.4
1920 60.4 61.3
1930 61.2 62.1
1940 61.0 62.8
1950 66.1 68.0
1960 67.8 70.0

 

 

 

Source: Statistical Abstract of:the U. §:L_12§1, Table 28,
p. 35.

At the same time, parents of grown children are maintain-
ing their own homes instead of living with their children.
This tends to increase the proportion of two-member fami-
lies and to decrease the size of larger families. On the
other hand, the number of families with one child or none
is also decreasing. The proportion of families with two
or three children under 18 increased during 1940 to 1953,
while the proportions of both smaller and larger families
declined. During the early 1950's the pr0portion of fami-
lies with four or more began a mild rise, due to the pros-

perous times and plenty of available housing. This trend

«HITTIII . , w ,. .. ..,. 1...» (Kilt-Cl I-.- r- .31... .LL-.....FL 31.9\.....r\....

26

toward a growing proportion of moderate-size families,

which seems likely to continue,

is shown in Table 7.

TABLE 7.-—Changes in distribution of families by size

 

 

 

and mean size: 1930-1953
Number of members 1930‘ 1940 1950 1953
All families 100.0% 100.0%. 100.0% 100.0%
2 persons 26.1 29.3 32.8 33.5
5—6 persons 20.9 18.8 16.7 17.1
7 or more persons 11.6 8.7 5.4 4.9
Mean size of family 4.04 3.76 3.54 3.53

 

 

 

 

 

Conrad Taeuber and Irene B. Taeuber, The Changing
Population of the United Stages (New York: Jehn
Wiley & Sons, Inc., 1958), p. 172.

Source:

 

II.I.(.. .\..n-1«- .Hulv: Munro 2. (.H,\.‘rxu.(.\.. r1
$11.9..II .. ., l . .n . . I II .lui..Ia\aH-idl.\fl:
.(‘t . 4 r

THE STANDARD OF LIVING

Probably the most outstanding characteristic of
the American way of life is the high level of living en-
joyed by almost all Americans, not just a select few.
This level of living produces the highest income per
capita ever known and is constantly increasing.

Briefly, standa;g_of living refers to a certain
minimum of necessities or luxuries to which a people may

aspire or desire. Level of living refers to how they ac—

 

tually live, particularly their consumption of goods and
services. It is the luxuries and necessities demanded by
Americans, and the production by industry of the goods
and services to satisfy these demands, that has made the
American standard of living desired by countries around
the world.

The level of living of a country is difficult to
study quantitatively since such factors as political ori-
gins, national wealth, educational levels, characteristics

of the population, and the structure and operation of the

27

 

Airway“! .-. a-

. . 42... 6.113.!

1 2.5. . Uta»...an 2. (€2.11... .

28

marketing system all play a part in the consumption levels
of a population. One statistical measure of level of liv-
ing is Gross National Product (GNP), the market value of
the output of goods and services produced by the economy.
Another measure is National Income (NI), the total earnings
of labor and property. These measures are simply different
ways of studying the total economic activity of a country,
and economic activity is the basis of the standard of
.living.

Table 8 shows the increase in GNP and NI since 1900.
Economists predict that GNP and NI will rise even more rap-
idly :u: the next decade, making income and goods available
not just for the increasing population, but for improving
the level of living now enjoyed by our economy. .The dif-

O

. ference between GNP and NI is accounted for by deprecia—
tion allowances, subsidies, business taxes, and business
transfer payments. ,'

Three forces contributing to an improving standard

of living are increasing productivity, advancing technology,

and a large supply of resources, both human and material.

 

. . , u.;:.. . Iv: .I. .x..-...-m “171k LIV 2(”\.r....r\.
hfvbutwh .. . , -.. .. .. I ..o , .kbnaL‘:

29

TABLE 8.—-Gross national product and national income for
' selected years.

 

 

 

 

 

 

 

Year GNP NI

1929 104.4 87.8
1933 56.0 40.2
1939 91.3 72.8
1947 234.3 198.2
1949 258.1 217.7
1950 284.6 241.9
1953 365.4 279.3
1955 397.5 330.2
1956 419.2 350.8
1957 442.8 366.9
1958 444.5 367.4
1959 482.8 399.6
1960 504.4 417.1

 

 

 

Source: National Industrial Conference Board, The Econ-
omic AlmanacI 1962, p. 133.

EEGLQIS in a Rising Standard of Living

Solomon Fabricant (71) defined productivity as a
measure of the efficiency with which resources are conver—
ted into the commodities and services men want. Higher

productivity is a means to better levels of economic

f

,LTYULFHI J... n . A . m If... Venturuu: ..I; r- (1.43;: UNDKIPL. 2(H..._u..(.,...

30

well-being and greater national strength. Thus produc—
tivity is the ratio of output to input. Many different
measures of input and output can be used but as yet none
have been devised that can include all the intangible
factors involved. For this reason economists use "Par-
tial Productivity Measures," the most common of which
are output per man-hour and output per capital investment.
The U. S. output per man-hour has been rising
during the past three generations at about 2.0—2.5% per
year and, since World War II, at 3.0—3.5% per year (71).
The increase itself is more than the Egtgl output per
man-hour in many areas of the world. The increase in
productivity is due, first, to heavy investment in capi-
tal equipment, plants, public improvements, and other
tangible capital goods; second, to increasing education
of workers and on-the—job training; and, third, to intan-
gible capital investments such as research and development.
Increasing emphasis on research and development
has brought about rapid advancement in our technology.
Whole new industries flourish which were not even in ex-
istence 20 years ago. Vbcabularies include such words

as Orlon, stereOphonic, polyethylene, tranquilizer, power

...!
will.

‘37“...- (tlw I.

Linnea:

I..I.!. .II .\.vm‘.hm uklmvhtfilnav. 2.(.pl.\.nn.lf.af

l
t

31

steering, Nike, and electronic computer. Industries are
investing vast amounts in research to improve their prod—
ucts and to develop new ones in addition to improving
production methods. The government is spending billions
of dollars for research in its space program, for arma-
ments, and in the uses of atomic energy.

A third factor contributing to a rising standard
of living is the amount of available resources, both nat-
ural and human. Through research, new ways are being
found to conserve our natural resources and to use them
more efficiently. In many cases, substitutes are being
man-made which are cheaper and more effective than the
natural material. Our rapidly expanding population pro-
vides not only a growing market but also an increasing
source of labor. Furthermore, the educational level of
our labor force is rapidly rising, and advanced educae
tional opportunities are increasingly available for lower
and middle income groups as well as for the wealthy.
People now being trained in colleges and universities
and professional schools will form the core of tomorrow's
labor force which will furnish trained specialists and
technicians needed in the increasingly mechanized work

world.

 

. .....hlnun:

.III.’ .II .L.u.~,.~sl"...~ wklnflv 31'“ 2" nr\sfll.’\s Lt,

\

32

Gains from advanced technology and increased pro-
ductivity can affect an economy four different ways: in-
creased goods and services may be produced to be consumed
by the economy, resulting in a higher standard of living;
the man-hours required to achieve the same level of pro-
duction are reduced, resulting either in a shorter work
week or unemployment or both: profits may be invested in
capital equipment, accelerating economic growth: military
exPenditures may be increased to strengthen national se-
curity. In our economy the gains from technology and pro-
ductivity have been expended all four ways. Increased
consumer goods are produced, and the wide distribution
of income makes them available to all; work hours are
shorter, having fallen from 60 hours a week in 1900 to
35 today in many industries, while unemployment is up,
even in the peaks of the business cycle: capital invest-
ments are high: and the defense budget is a large portion
of the federal budget.

The major effect of these gains on the American
economy has been to increase incomes continually and pro-
vide a rising demand for products. The most rapid strides

have been made by the lowest income groups. Since 1944

 

“-10.:

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I-

.. a; ... :I , .
1% III!“ 2 (. vy\...a. It: U

33

the percent of families having less than $1,000 income
per year has declined from 17% to 5%. The average real
family income has risen since World War II from $4,000
to $5,600, about 40% or about 2-1/2% per year (Figure 7).

Figure 7.--Cumulative percent distribution of money in-
come of families in the U. 8.: 1944-1959.

. _ __ ”...—,— ~fi__--- -... __.. --.—HM..- _..___ __..__-_,._ __, ._ “....

   
   
 

 

 

 

 

 

 

 

 

100. . .nnual income
I?" 80’ and over
4.)
E, 704 - 6000-9999
0
3 60
°‘ 50 - L 5000-5999
0
.3 49 . 4000-4999
4,; 30
.4 ~ 3000-3999
5 20 2000-2999
g \‘ N r-
o 10 _l_ ~lOOO-1999
. under 1000
v 0f «sic qrcw‘cy'v “V
var V» v Vfi v vain 074% 576? g? 53‘b,§
1?,3’,3>£?,3’£?,3’£?.3?fi?.g ~9 ~v'w £?*v

 

Source: Statistical Abstract of the U. S.: 1961, p. 319.

Unionization and social legislation which regulates work
hours, conditions and wages, plus unemployment compensa-
tion and social security have also contributed to the
rising income level of the American worker. Today, blue—

collar and white-collar are often indistinguishable in

. .... U .ulea:

1.4.».1". I... .. ..r .
.u._.- “19.4an 26......“

..f.\ .

h

34

their buying habits. Both are likely to own their own
homes, have a television set, automobile, automatic washer
and dryer, and go on a paid vaction every year. On the
other hand, since the graduated income tax prohibits the
growth of large fortunes, American is fast becoming a
middle—class nation. Figure 7 shows the distribution of

income among U. S. families.

Mylti—Eazner Families

The increasing number of multi—earner families
has contributed to the rising family income. More than
20 million of the country's 45 million families have two
or more members at work and in over half of these fami-
lies the only other earner is the wife. The number of
working wives is rapidly increasing. In 1950 about one—
fifth of all married women were at work, compared with
one-third today (82). Multi—earner families are growing
at an annual rate of about 3%, double the growth rate of
households.

Although earning extra money is of prime consid-
erati on to working wives, their participation in the

labor force is not limited to wives from low-income

... ..m..ulruon.&

*L.”$ ”Wklrfl. PM“ 2.,(.U.v\tfl..’\: ...v,

k

35

families. One-third of the husbands who made $5,000—$7,000
and one-fourth of the husbands earning $7,000-$10,000 in
1959 had wives in the labor force. While wives from lower-
income families work out of necessity, middle—income wives
work for the few extras they might not otherwise have, such
as home furnishings, vacation trips, or college for children.
Upper—income wives work because they want to--to fill their
leisure time after the children are in school, to use their
higher level of education and training, and to seek the
prestige and self—fulfillment of a career. Because upper—
class women are usually better educated, they are able to
earn more money than middle and lower-level women, making

it more worthwhile for them to work.

Working wives are filling an increasing need for
trained specialists, clerical workers and service employees.
In order to make the best use of this labor pool, industry
is offering part-time jobs and working hours designed to
fit into a working wife's family schedule. Zoe Campbell
(15) of the National Industrial Conference Board's Busi—
ness Record estimated that the working wife contributes

around 20—24% of the family income.

...»...

h.l.r,v 1‘ IV I J I

1,1:

02.1...me

.\ nmqtu.’ A ”Jim. ......IP

I .

IV

23.... "...... ..f..- -

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36

Multi—earner families are found predominantly in
the middle and upper—income brackets, probably by virtue
of the extra income. The median income for all families
in 1960 was $5,620; for one—earner families, $5,192; for
two-earner families, $6,438; and for three—earner families,
$8,002 (143). Multi—earner families have contributed to
the establishment of the United States as a middle-class
nation.

The buying habits of the working wife differ from
those of the non—employed wife. Families with a wife work-
ing are more likely to eat out, or to eat food prepared
elsewhere and taken home. These families also spend more
on entertainment. A portion of the wife's salary goes for
the additional expenses stemming from her job, such as
clothes and accessories, personal care, grooming aids,
and for housekeeping and child care. Unless her salary
is needed to satisfy the minimum needs of the family, the
extra income is likely to be spent on consumer goods to

improve the family's standard of living.

hail.) ... . .. . . . - . , ... . s
41.1.»...{4 . .. .... - ., H .....- burst—n: ,I... :51}... whee ..IU. 2.4.1.53? .,

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37

The rapidly increasing income of American workers
prompted economists to develop a new concept to explain
how consumers handle the extra income. The term is dis-
cretionary income-~that part of the income left over after
all necessary spending is done. Discretionary income may
be saved without any reduction in the standard of living,
or it may be spent freely without the pressure of need or
prior commitment. In other words, the consumer has a high
degree of control over this extra money and he uses his
discretion in spending it.

While the concept itself is fairly simple, it is
a difficult one to translate into dollar statistics.
Spending for such items as boats, vacations, and furs
are relatively easy to catalog, but problems arise in
determining how much of the food purchased is beyond the
”necessary" level. If the barest minimum of food, shelter,
and clothing is taken as necessity, then practically all
expenditures Americans make for these items are discretion-
ary. On the other hand, if the purchases required to main-

tain the present level of living are taken as necessity,

"luvqcllle. 11 ,k ..I . uny. ,. a I.

H‘ ‘ . . ..V 1 I.- ) .1 Iv I
.. . . ; ...-..- -.....U‘aw It.v (.....inwjn- HER-..) $9an 2,1,Hnmu,vrle,q
+1.0...UI t ., s . . ..-.)

L

38

then practically the only discretionary income would be
that which is unspent or saved. To solve this dilemma,
the National Industrial Conference Board (51, 97) has es-
tablished points between the present level of living and
the barest minimum necessities and uses these points as
a basis for determining discretionary income. These
points are slowly raised as the standard of living rises,
making more "luxuries" into “necessities." Thus discre-
tionary income is progressively deflated by a rising stan-
dard of living. Some specific discretionary outlays are
for food, liquor, tobacco, clothing, jewelry and accesso-
ries, personal care, housing, household Operation, personal
business, transportation, recreation, private education,
religious and welfare activities, and foreign travel.

In order to arrive at discretionary income, the
Conference Board has used the following formula:

Disposable income (all income received less per-
sonal income tax).

Less: Imputed income and income received in kind
(not received in money form).

Less: Major fixed commitments.

1. Scheduled repayments of homeowner and
installment debt.

2. Net insurance and pension payments.

3. Homeowner taxes and tenant rent.

\
H’l‘ler.¥q ,v; ,i I n... In: .4

tl-r....r\.:.l I . .. -. .

, -1..- .I. ...}...w‘lq ”Beetle. .1. .( Hx...-.f.....,
Us!“

39

Less: Essential outlays.

1. Food
2. Clothing

3. Household utilities Standards

4. Medical care and defined by the
death expenses Conference

5. Purchased local Board

vvvvvvv

transportation

From this formula the Conference Board arrived at

TABLE 9.--Per capita disposable and discretionary income

in current and constant 1947—1949 dollars:

 

 

 

 

 

1939—1956
Per Capita Per Capita
Disposable Income Discretionary Income
Year Current 1947-1949 Current 1947-1949
Dollars Dollars Dollars Dollars
1939 $ 537 $ 904 $ 173 $ 285
1945 1,075 1,398 517 657
1949 1,261 1,239 441 428
1953 1,567 1,370 546 471
1956 1,709 1,471 589 506

 

 

 

w
...;

 

Source: National Industrial Conference Board, Discretionary
Income (Technical Paper No. 6).

PJ‘J I. ». ...

L..(r-:9Lnl.§ I...

2 n all...

. Milka:

40

Although discretionary income shows a slight long-
term trend upward, the Conference Board feels that it would
have been greater had there not been an exceedingly rapid
increase in fixed commitments, mainly in installment and
homeowner debt which has quadrupled since 1939.

Because a large portion of spending for food away
from home is discretionary, restaurants must compete not
only with each other but with all the other outlets for
discretionary dollars, such as the department store, gro-
cery, travel agent, theater, university, charity and the
bank. The homemaker may decide to eat out tonight and cook
a chuck roast, instead of standing rib, for Sunday dinner,
or she might decide to eat at home tonight because she is
saving for a vacation trip.

Because consumers now can make this choice, they
are becoming far more sophisticated in their buying; They
look for certain features and qualities in what they buy,

and they compare before spending their money.

MI)? I... .. .... i . I: w , a. ..., \«A 4.... II. I -» .\....nw..4...o m. ,lm. My. r ,(.N..\_-: nWLc ...J
-. .-(zr. . . . M, 1.17:; U _ 2
t.l?. 1. r0.

CHANGING SOCIAL PATTERNS

One outstanding social characteristic of the
American people is their mobility. They move from farm
to city, city to suburb, occupation to occupation, home
to vacation area, and social class to social class. Un-
like the European social system, American society does
not confine its members to the occupations, geographical
confines, and social levels of their parents. Americans
are able to move to better housing and to upgrade them-
selves occupationally through public education. With
increasing income and credit financing, they are able
to emulate the living standards of higher social groups.
Americans move about the country on business and pleasure
trips, and large numbers of people move their households

from place to place as their jobs demand.

Urbia: Sub-gi Inter—, and Ex-

Probably the most significant change in the social

patterns of the American culture in the past half-century

41

I , -. I -zldsJI. ---. , L .. Ir. .. .. . .. . .
‘O ..IIZ ... .. I-.. a. w. . .. V II. . I: .....ugvjnm Lkkalro 2¢.5Len.u(\_lv\
a . .II . . ,.. ... . I. 1. ... {firsthand

LII.I\..I I. I .

42

is the shift from a rural to an urban economy and, more
recently, the development of the vast, sprawling metro-
politan areas. Rapid advances in industrialization meant
not only mechanization of farm work, yielding higher pro—
ductivity per acre, but also more jobs in urban areas.
Rapid advances in industrialization meant not only mech-
anization of farm work, yielding higher productivity per
acre, but also more jobs in urban areas. In 1910, 54%
of the population lived in rural areas and 46% in urban
areas. The proportion had changed to 30% rural and 70%
urban by 1960 (144).

To measure urban population, the Bureau of the
Census uses a unit called the Standard Metropolitan Sta-
tistical Area or SMSA. The SMSA includes: incorporated
places of 2,500 or more inhabitants, densely settled ur-
ban fringe around cities of 50,000 or more, and unincor-
porated villages or other compact settlements outside any
urban fringe. The urban population of the U. S. is pre—
sently contained in 168 areas which meet this definition.

In rural areas, the population increased by about
7% from 1950 to 1960; central cities increased by about

1T%. In the suburban and urban fringe areas, however,

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,,. blitz:

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I..- .... (.1532. HwIPruIan 2......

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43

the population increased by almost 49% in the same period.
Within the five SMSA's of three million or more inhabitants
(New York, Los Angeles, Chicago, Philadelphia, and Detroit),
the gain in the central cities from 1950 to 1960 was only
1%, but it was as much as 71% in the surrounding suburbs
(132).

Census experts see the rapid growth in suburban
population simply as a continued peripheral growth, the
central cities having overflowed their boundaries into
the surrounding towns and countryside. Technological
developments such as motor vehicles, hard-surfaced roads,
telephone, radio, the transmission of electric power and
gas, and sewage disposal now permit deconcentration of
the population.

The peripheral growth is composed mainly of upper-
income groups seeking the newer and more desirable avail-
able housing. Generally, they are young adults with
children, wanting safe play areas, good schools, and
attractive neighborhoods.

Suburban growth is selective, and suburbs tend
to be fairly homogeneous in their composition. The Fortune

study (153) of Park Forest, Illinois, and other suburbs

. I I, If.
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n I I v

. m

....JIIA .. .. . -.
.k’fvullVIrI. ,

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m .3. .... --..Jng

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44

showed that suburbanites are mostly professional people
and corporation executives, although some suburbs are
composed of workers and lower—income groups. Large num-
bers of children are common to all suburbs, however.

As a result of selective growth, suburbs are dif—
ferentiated according to the income and social class of
their residents. Executives and professionals who are
rising in income and prestige move from house to house
and suburb to suburb. Also, in making these moves upward,
corporation executives are frequently transferred by their
companies from city to city. All this makes impermanence
and mobility a major characteristic of suburban life. In
order to adjust to new neighborhoods, suburbanites develop
a certain autonomy based on the prevailing standards of
"culture" and "good taste," allowing them to fit into
their new community wherever they move. This set of in-
terchangeable roots takes the place of strong ties of
home, family, and friends which no longer exist for these
people.

Public relations man Robert Smith (126) discussed
the problem of suburban mobility and its effect on the

Old established “home-town" businesses. He found that,

- . 11...)».

y ,. viltana

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-...r I .....152 unhaprum 2,. utitl

.I .Iu .. t.

45

although the native residents of an area knew the various
businesses through their long-established reputations, the
new-comers do not have this image of the local stores and
services. Merchants in this position may find their sales
volume slipping as the native residents leave the area and
competitors move in to cater to the suburbanites. Mr. Smith
felt that local merchants should plan their public relations
program to appeal to the suburbanite's need to establish
roots and to "belong" in the community. This can be done
by playing up the local business's part in the history and
traditions of the area and its contributions to community
life.

Home life in suburbia is centered around the chil-
dren and the family car. Life is informal, with emphasis
on outdoor activity, although for entertaining guests and
celebrating special occasions, suburbanites prefer a more
formal, sophisticated atmosphere. Entertaining is usually
done in the home, but a market exists for fancy, restau-
rant take-home items such as specialty breads and pastries
which lend a distinctive touch to the meal. Because of
the homogeneity of suburban life, suburbanites strive to

conform to the accepted behavior patterns but to be different

‘1 . I x..- . I .. 1% ,, z. . , . .
I . ..I . . .. . . . . .. ..I—D.» . , . _. . .

all: . .. a... ..r. . ls, . .0 I.I II .uuu.%..}mq uknrmlrc 2(H\\..l ....I.

“Wife/LL? .u h" ... .. . 0., I. u, LLJLug .. ..x

.\

in

46

from their neighbors in little ways. Their efforts at
individuality are usually centered in home decoration.
"Good taste" is the criterion of whether or not an effort
at individuality is acceptable behavior in suburbia.

The biggest development in suburban marketing
has been the shopping center. Such a center consists
of a large number of stores selected to provide the prop—
er balance and selection of goods and services. The
buildings are integrated architecturally and parking
space is plentiful and convenient. The shopping center
concept is presently being expanded to provide for social,
cultural, and civic activities by inclusion of meeting
rooms, office buildings, and recreational facilities.

Night and Sunday shopping is another recent devel—
opment in suburban marketing. With large numbers of women
working, and many others confined to their homes by small
children or lack of transportation, night and weekend
shopping has rapidly increased in popularity. In many
other families, these shopping hours allow the men to
participate in the purchasing for the family. For these

families, "going to the store" is a family activity.

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47

Recently, business and industry have also been
moving to the suburbs in order to take advantage of lower
taxes, more space, lower property costs, quick access to
freeways, and prOximity to residential areas. This has
created a market for hotel and restaurant services for
traveling business men, and for meeting rooms and enter—
taining facilities. Businessmen often prefer to hold
meetings in airport motels to avoid the long trip into
town.

The suburban population explosion may be an interim
phase in the development of a megalopolis or "inter-urbia."
Inter-urbias are found where the suburbs of one city meet
those of another, or where the intervening areas between
towns and cities are not farming lands and are relatively
densely populated. Freeways and limited-access highways
provide rapid transportation throughout inter-urbia. Pres-
ently, inter-urbias exist along the Connecticut-New York-
New Jersey coast, between Milwaukee-Chicago-Gary, and be-
tween Toledo-Cleveland-Erie, and in other industrial centers.

Freeways to and through the city, common ownership
of automobiles, the search for more space, privacy and

pleasant surroundings, and availability of telephone,

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48

radio, electricity, and fuels have all contributed to the
growth of inter—urbia. With this growth has come the mar—
ket for consumer goods and services. One implication of
inter—urban marketing is that the large suburban shopping
centers draw business not only from their own immediate
areas, but from towns and cities as far as 40 or 50 miles
away via freeway. For this reason, advertising to the
inter-urban market requires a somewhat different approach
than does the local market. The advertising media selected
must cover the entire market area, not just the local area.
The warehousing and delivery of merchandise to outlying
stores and homes also creates problems for the retailer
in inter—urbia.

Chambers of commerce and merchants' associations
in many inter-urban areas have found that the lure of shop—
ping centers in more distant cities has drawn away much of
their local business. Full-scale campaigns to promote
local downtown and suburban shopping areas are being used
to keep the shoppers at home.

The mass exodus of the middle and upper-income
groups to the suburbs has created a number of problems

for the central cities. The population remaining, largely

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49

the lower—income groups, must support schools, roads,

police and fire protection, sanitation, parks and rec-
reational programs, and all the other services a city

provides for its residents. In addition, roads, park—
ing facilities and public transportation are taxed by

heavy use of commuters.

A counter-movement to this exodus to the suburbs
is the trend toward down—town apartment living. Authori-
ties feel that many suburbanites who are tired of commut-
ing and maintaining a house will prefer to move back into
town when their children are grown. Also, at this point
in their lives, the suburbanites' incomes have risen suf-
ficiently so that they can afford the high rents of a
modern town apartment.

To capitalize on this theory and to bolster their
sagging down—town areas, many large cities are planning
urban renewal and redevelopment plans with the help of
federal aid. By replacing the slums and declining areas
anmnrithe city center with apartments, offices, stores,
and convention centers, city planners hOpe to draw people
back into town from the suburbs. To provide transporta-

tion, they are planning parking garages both above and

50

under the ground, a vast network of freeways linking with
the interstate and other highway systems, and fast, effi-
cient public transportation systems such as subways, rapid
transits and monorails.

There are four different approaches to the problem
of urban renewal (94): 1) Get the people in and out quickly
through improvement of traffic and transportation facilities,
2) Give the city back to the people by separating pedestrians
and vehicles through the use of shopping malls. This approach
also includes improving the aesthetic qualities of the city,
3) Proper use of the land, such as removal of residences
from the industrial areas, and 4) Rebuilding or replacing
the slums that constrict the center of town. Housing pro-
jects are built for low—income families.

Whatever approach is used, however, planning is
emphasized. Victor Gruen (115) believes that there should
be no conflict between the "downtowners" and the "decentral-
izers.” The two areas should be seen as complementary
units of the whole urban community, and.both must be planned
as such. Downtown serves as a market for shopping goods
(large purchases compared before buying) since it can main-

tain a wide selection of merchandise. It is also a center

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51

of entertainment and cultural activity, and a center of
concentrated business activity. Downtown is the hub of
administration and warehousing for businesses in the sur-
rounding area. It may also be the location of local,
county, state, and federal government activities. Sub-
urban shogping centers provide ”convenience" items, such
as food, drugs, housewares, and automotive needs. Very
little shopping around is done for this type of goods.
Thus, downtown and suburban shopping areas serve differ-
ent markets or, rather, different needs of the same market.
Whether a restaurant is located in downtown, sub—
urbia, or interurbia, its management must be aware of the
market it serves. Downtown restaurant business is mainly
luncheon trade from office workers, business and trades
people and shoppers. Dinner business in downtown areas
is dwindling in most large cities, except in theater dis—
tricts, convention centers and areas catering to tourists.
In the suburbs, dinner is usually the bigger meal in terms
of volume, although some restaurants in shopping areas may
do a large business serving shoppers and special parties
or teas. Since suburbanites depend on their cars for
transportation, adequate parking facilities are a neces-

sity for the suburban restaurant.

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52

Suburban dependence on the automobile has brought
about the development of a new marketing concept, the
drive—in. Movies, banks, laundries, and stores, as well
as restaurants, have capitalized on the popularity of
"drive-in." Some retailers foresee completely automatic
drive—in retailing for all kinds of consumer goods in
the not—too-distant future. The drive-in restaurant has
been successful because it fulfills many of the needs of
the suburban restaurant patron. The suburbanite can take
his family to the drive—in without concern for his chil-
dren's public manners; he doesn't have to dress up; and
the meal is relatively inexpensive. Financial_World (36)
reported that about 50% of the drive—in business comes
from local families, 20% from transient trade, and 30%
from teen-agers who spend one-third of their allowance
on hamburgers, French fries, milk shakes, and soft drinks.
It is significant that these are the people who will make
up the core of the future restaurant market. According
to Eiggncial World, drive-ins do about one-third of the
nation's restaurant business and are the fastest growing

segment of the industry.

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53

Social Stratification

Social class is primarily a way of describing one
of the status systems operating in a society. It is a
way of ranking other people according to whether they are
superior, inferior, or on the same level as oneself. W.
Lloyd Warner (148) first reported this social class sys—
tem in the 1930's. In his research he found six levels
of social class in America:

1. Upper—upper class, comprising about 1% of the
total population. They are the "old family"
elite with inherited wealth and established
lineage.

2. Lower-upper class, also about 1% of the popu-
lation. These people may be wealthier than
the upper-uppers, but their wealth is newer,
and their manners and tastes not quite so
polished. Their sense of lineage is less
pronounced.

3. Upper-middle class, about 10%. This group
is made up of moderately successful business—
men and professionals. They have less wealth
than the lower-uppers. Some education and
polish is required for membership in this
group but lineage is unimportant.

4. Lower-middle class, about 30% of the popula-
tion. These are the small businessmen, school
teachers, foremen in industry. The emphasis
in this group is on respectability. They are
the church-goers, lodge members, and "flag-
wavers."

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54

5. Upper-lower class, about 32%. The solid, respect—
able laboring people who keep their houses clean
and stay out of trouble.

6. The lower-lower class, about 26%. These are the
disrespectable people who wait for public relief.
They are often slovenly, living from day to day.

Since Warner's research in this area was published, many
other social scientists have found variations of the six-
level society existing throughout the country.

In talking about this system of social stratifica-
tion, Sociologist Burleigh Gardner7 said,

These social strata tend to define the social world

in which a person largely participates. It defines

his kind of people and within it are the circles

‘from which he draws his major satisfactions of inter-

personal contacts. Since most of his social contacts

and participation and most of his friendships lie
within his own class level, this becomes the source
of many of his standards of conduct, his way of life,
and his value systems.

Within the system of social status is the idea of
social mobility which permits movement both up and down
the scale. This is the American dream that everyone should
have the opportunity to better himself, translated into

rising in the social system. In order to rise in the sys-

tem, however, one must have more than rising income and

 

7Burleigh B. Gardner, "Status and Consumer Behavior,"
Consumer Behavior, V01. II of The Life Cycle and Consumer
Behavior, ed. Lincoln H. Clark (New York: New York Univer-
sity Press, 1955).

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55

the prOper occupation; the beliefs and values of the higher
status level must be internalized, and the person must be
accepted by the group.

The values of social class are of extreme impor-
tance in marketing. A lower-class person will not buy a

\
product if he feels that it is not appropriate for a per—
son of his level, but a middle—class member may feel that
the same product will give him prestige among his peers.
Thus, in addition to their utilitarian functions, goods
are expressions of status factors, and give identity to
a particular social class.

One such good is food. Food preferences and din-
ing habits vary greatly among social classes, and know—
ledge of dietary habits is one key to social mobility.

In the upper classes, social prestige is derived from
knowledge and consumption of rare or expensive foods, or
of dishes which are expensive to prepare. Sociologist
Harriet Moore (106) stated that as a person strives to
gain entree into a more sophisticated social group, he
will almost invariably be alert and receptive to the food
preferences and dietary habits of its members, because

failure to do so may mean failure to get "in."

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56

Stores and services, too, have overtones of social
class. An upper-class woman "wouldn't be caught dead" in
a store catering to lower—class trade, While a middle or
lower-class shopper thinks that the clerks in a high-fashion
salon are “snooty." In the same way, restaurants are
evaluated by the class of patrons to which they cater.

A lower-class patron may be psychologically threatened

by a head waiter, while an upper-class patron finds social
prestige in being recognized by the staff of a particular
establishment. In this way, some restaurants become places
to see and be seen, while others concentrate on the sale

of food and de-emphasize such social functions as decor
and fancy service.

Thus, social class is one characteristic of the
market which directly influences the goods and services
which that market will or will not buy. A restaurant
operator must determine the social class of his patrons
and have some understanding of the habits and preferences
of that social class in order to successfully serve his

market.

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57

The Growing Credit Economy

Credit buying in the U. S, has had spectacular
growth for a number of reasons: 1) There has been a basic
change in the social and moral acceptability of debt. It
is no longer considered sinful to owe money, or virtuous
to be thrifty. 2) Inflationary tendencies of the economy
encourage buying on credit and repaying with "cheaper"
dollars. 3) With the growth of Social Security, pension
plans and hospitalization insurance, saving for future con-
tingencies has become less necessary. 4) Early marriages
mean that new families are created while their earning
power is relatively low but their needs for household
goods are high. Credit buying allows these young people
to pay for their home furnishings as they use them. 5)
With the rising standard of living, more and more luxuries
are becoming the necessities of daily living. The pros-
perity of the times makes younger peOple Optimistu: con-
cerning future prOSperity. They think that, since the
economy will continue to expand, times will be good and
there is no need for self—denial. These people are too
young to remember the depression years. 6) The use of

servants or domestics is declining but the view that the

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58

wife is more than a housekeeper is rising. The only answer
has been to provide the wife with all sorts of labor-saving
devices in order to eliminate the drudgery of housework.

Available consumer credit has been a great spur to
consumer spending. A full 25% of all retail sales are made
on credit. Edwin B. George (57) said that credit is the
lubricant that facilitates the increased flow of goods in
our economy.

The credit card is an off—shoot of this trend to-
ward credit buying. Credit cards were originated by the
oil companies as a service to motorists and today the ma-
jority of cards in circulation are those of the oil com—
panies. In addition, 5—1/2 million other cards are in
circulation, issued by hotels, air lines, stores, credit
card companies, restaurants, and banks. Businessmen were
the first to recognize the advantages of paying their
travel and entertainment eXpenses with the credit card.
The executive doesn't have to carry large sums of money
with him, and the charge slips provide an accurate record
of his expenses. About one-half of the credit cards are
held by company officials and representatives. With this
wide acceptance by business executives, the credit card

has become a symbol of status and prestige.

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59

Fine stores, restaurants, and hotels have found
that they can no longer refuse to accept credit cards.
Customers feel that this service is inherent in a fine-
quality, reputable business. In order to provide this
service, restaurants may subscribe to one of the national
credit card companies, maintain their own systems, or be—
long to a local group plan. Although some restaurant
operators have devoted considerable effort to fighting
the credit card, many others have come to the conclusion

that credit is becoming a necessary part of doing business.

Increasing Leisure Time

Increased leisure time, one of the benefits of
increased productivity and technological growth, is a
many-sided facet of the American society. But, although
leisure has implications for sociologists, educators,
political leaders, and religious leaders, it is the mar-
keting aspect which has the most significance for the
restaurant industry. Gracious dining has been considered
in itself a form of leisure—time activity (74), and eat-
ing out is considered a natural addition to many other

recreational activities.

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60

Recreation

Some writers (74) foresaw increased leisure as
a threat to society, that the tendency to be spectators
would "reduce the mass media audience to an imbecility
of nonparticipation (48)." Others prophesied an increase
of alcoholism, delinquency, and other social evils. What
actually happened, however, is just the opposite. While
some workers are taking second jobs to augment their in-
comes, others are spending more and more free time in
participation activities. Hunting, golfing, boating,
bowling, and fishing are all increasing in popularity.
As for alcoholism and nonparticipation, the national
liquor bill actually dropped in the 1947-1952 period,
and since then has remained about the same: TV viewing
has also declined slightly, and stronger declines have
been felt by spectator sports and movies. Taking their
place as leisure time activities are cultural pursuits
such as painting and sculpting, music and theater, rec-
reational travel, and reading. The swift rise in the
sales of paperback books, particularly in better quality
editions of the classics, political and business books

and other good literature, was totally unpredicted.

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61

Institutions Magazine (135) predicted a rise of
"pleasure domes" in the Sixties. These recreation centers
house swimming pools, gymnasiums, ice rinks, meeting and
class rooms, motel, restaurants from French service to
snack bar or whatever facilities the management wishes
to install. Institutions felt that there would be a def-
inite place in the next few years for family recreation
facilities coupled with food service and motel rooms, but
warned that public tastes are fickle and that ”There is
always a possibility that patterns of leisure activity
will change under the shifting sands of status, or mobil-
ity, or pressure from varying promoters.”8

For this reason, the operator should not base his
pleasure dome on one type of recreation facility but should
be ready to change with the market.

The changing patterns of leisure time activity
have significance for restaurants. Restaurant operators

who draw business from movie patrons and sports spectators

have found their sales volume decreasing, while those who

 

8 . .
"A SpeCial Report on the New Leisured Masses and
Your Stake in Their Discretionary Pleasure Dollars," Insti—
tutions Magazine (June, 1961), pp. 6-14, 23-30.

L 1

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62

cater to bowlers, swimmers, skaters, and boating enthusi-

asts see increasing opportunities ahead.

m

With increasing discretionary income and increas-
ing leisure time through a shorter work week and paid va-
cations, domestic travel is becoming one of the fastest
growing industries in the United States. Foreign travel
abroad, thousands of upper-income people, the restaurant's
best customers, are being exposed to new tastes in foods
and are becoming more sophisticated in their food pref—
erences.

Domestic travel has a more direct effect on Amer—
ican restaurants, however. Turnpike and airport feeding
are million-dollar businesses. Airlines consider their
food served in~f1ight as a competitive factor in drawing
passengers. Some restaurants are built directly on a
tourist trade, such as those at Disneyland and Freedom—
land in New York. Roadside restaurants, resorts, and
down—town restaurants cater to tourists as well as the

local trade.

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63

Travel for business reasons has also increased,
due to increased business activity and the trend toward
big, far—flung corporations. The convention is becoming
almost a habit in business. The "executive vaction” is
an accepted fact: the executive takes his family along
on a business trip, and then takes a few days off for a
little tour on the way home.

Estimates of the amount of money Americans spend
on travel run as high as $25 billion, with about one-fourth
of this for business travel. In 1957, the Bureau of the
Census made a survey of travel (145) and found that during
that year the civilian population of the country made 231
million trips totaling 1.6 billion trip-days away from
home.9 Visits to relatives accounted for 546 million
trip—days; vacation and pleasure, 61 million trip—days;
and business accounted for 44 million trip—days. Between
85—90% of all travel is done by car, and the majority of
trips are taken by families in the middle and upper-income

range. Curtis Publishing Company found in their series of

 

9A trip—day is one person going at least 100 miles
and returning the same day, or going out of town and staying
overnight. An overnight is counted as two trip-days.

 

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64

travel surveys (28) that 70% of the traveling was done
by families having $5,000 or more income.

The National System of Interstate and Defense
Highways has had a great impact on the traveling Ameri-
can public. Planned to handle the traffic of 1975, these
roads will form a 41,000 mile network covering the entire
country. Total cost of the program is $41 billion with
the states paying $2.5 billion and the federal government
providing a $25 billion subsidy. The balance, mainly for
tunnels and bridges, is financed through tolls. The sys-
tem is presently about one-third completed, one—third
under construction, and one—third still on paper.

The Interstate system is affecting the economy
in various ways. First, automobile travel is even more
enticing and the motorist can travel further, faster,
safer, and stay longer than he did before. Second, while
the Interstate system routes traffic around metropolitan
areas, feeder—freeways into the downtown areas are expected
to bring increasing local traffic into the downtown sections,
rejuvenating these areas. Third, with access to downtown
via expressways and freeways, the urban population is no

longer confined to city and suburbs but can move out to

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65

locations near the highway and, in so doing, move the
consumer market with them. Business enterprises are
also finding it advantageous to relocate near the ex—
pressways. Fourth, this relocation of business and
people helps to support the industries which serve the
travel market. Mr. G. Carroll Weaver of Harris Kerr
Forster says,

The preponderance of data in our firm's files

show that a restaurant with a highway location

must generate business from the surrounding

local communities if it is to be financially

successful. Transient highway traffic alone

seldom can support the average restaurant

operator.lO
Fifth, many commercial enterprises catering to the motor
traveler, including restaurants, gas stations, and motels
have found their business routed away from them when the
expressways opened. Land around the access roads rose
in value, putting it beyond the reach of many small res-
taurant owners, but big chains such as Holiday Inn and

Howard Johnson are building multi—million dollar units

to capitalize on the expressway traffic.

 

lO .
G. Carroll Weaver, "The Interstate Highway System:

Its Effect on the Food Service Industry," Transcript (Nbvem-
ber, 1959), pp. 1, 6, 7.

 

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66

Specialty Foods
Another outlet for discretionary time and income
is gourmet or specialty foods. Through television, movies,
newspapers, home service magazines, and travel, middle-
income groups have been exposed to such items as smoked
oysters, imported cheeses, and foreign breads, and the
whole gamut of domestic and imported wines and liqueurs.
The market for these items is presently small, but rapidly
growing as these foods take on increasing social signifi-
cance. Social prestige is attached to knowledge of rare,
expensive, or hard-to-prepare foods. In The Status Seekers,
Vance Packard (106) stated that knowledge of dietary habits
of various social classes is one of the keys to social
mobility.
Because of this quality of social prestige, in-

creasing emphasis is being placed on the preparation of
food as entertainment. Nelson N. Foote, Professor of So-
ciology and Director of the Family Study Center at the
University of Chicago, has commented that

. . . the social rituals of cooking are becoming

elaborated into an art of boundless proportions;

not only is cooking becoming more and more effi-

cient, it is becoming an end in itself. It con—
sumes increasing time, attention, and ingenuity;

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67

attracts a more and more critical and appreciative

audience; requires improved techniques for achiev—

ing aesthetic ends.l

Katherine Hamill of Fortune felt that snobbism

is an important factor in the growth of the specialty
food market, particularly in suburbia, where there is
emphasis on entertaining, and suburbanites are looking
for something new that the neighbors haven't served.
Miss Hamill concluded that

Many Americans now buying fancy foods for their

own use may be doing so out of curiosity or snob-

bism . . . . However shallow the original impulse

to buy, the lasting result may be a greater so-
phistication of the American taste.l

Business Entertaining

Business entertaining is an accepted custom in
business, as old as buying and selling, but its recent
portrayal in popular novels and movies about the business

community has been greatly exaggerated. Most businessmen

 

llNelson N. Foote, "The Autonomy of the Consumer,"

Consumer Behavior, Vol. I of The Dynamics of Consumer Reac-
tion, ed. Lincoln H. Clark (New York: New York University
Press, 1954).

12Katherine Hamill, "Caviar in the Supermarket,"
Fortune (January, 1959), pp. lOl-lO3ff.

...». I

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68

feel that some good will entertaining helps to establish
a climate of confidence with their clients. Personal
contact is more effective in a social atmosphere than
in an office. Extravagant entertainment with liquor and
night clubs is of questionable value, though, since most
company buyers do their purchasing on the basis of pro-
duct value, not how they were entertained.

In addition to good will entertaining of clients,
Seymour Freedgood (53) lists eight types of business ban-
quets: to honor or introduce an individual; for a "cause"
or fund-raising; to give awards for civic, cultural, or
professional achievement; to instruct or entertain; to
promote; as idea sessions for top executives; functions
sponsored by trade associations, professional groups and
foundations; and political events. Protocol also requires
government officials to entertain. The State Department
has a budget of $2 million a year for entertaining.

Because of the exaggerated picture of business
entertaining in books and movies, and some misuses of
expense account deductions from tax returns, the govern—
ment is presently pushing for stringent restrictions on

such deductions. President Kennedy recommended a $30 a

is ...de 1.33;”! ml:

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. . JO”... 1.... a ......22 Whartmv. Tarutrlpfi
l. \CJLaC‘ , i .

L. I l. ) In.

69

a day limitation for business travel expense, and complete
elimination of business entertainment deductions. The
National Restaurant Association, in lobbying against these
restrictions, estimated that a $2 billion restaurant mar-
ket is involved, about 20%lof the total industry volume.
Convention and banquet business would be almost completely
eliminated. Although the N.R.A. does not condone income

tax abuse, it feels that the present laws with proper en-

 

forcement would be sufficient, and that the elimination
of business entertainment would prove a great detriment

to business relations and to the restaurant and related

industries.

I 1' I'

Among industries, the restaurant industry is a
paradox, being both ancient in origin and tradition, and
newly emerging in management concepts. The idea of pre—
paring meals for sale dates back to pre-Roman times,
While the idea of a restaurant as an efficient, profit-
able business enterprise is only now developing. Res-

taurants are still sometimes thought of as houses of the

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as}. i a ..VA- ...J.|d. ~ A’fK-.. ¥.-..¢.-.xu. . , .....w .I , ... _. ..

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70

disappearing art of haute cuisine, or an extension of a
certain family's hospitality.

In the modern, highly mechanized and interdepen-
dent society, however, restaurateurs who do not see their
Operation as a business and who do not apply known, tested
business principles in its operation are doomed to failure.
One of the most basic of these business principles is the
knowledge of the consumer market and the ability to meet
that market.

In summarizing the changing patterns in the Ameri-
can consumer market, we can say that: first, the popula-
tion is increasing very rapidly, particularly in the num-
bers of children and people over 65. Second, consumer
income is growing even faster than the pOpulation, with
the greatest rise in the income of the middle class. Some
of this increased income is due to greater numbers of work—
ing wives in the labor force. With a rising level of living,
consumers are working shorter hours and have more dollars
available for discretionary spending. Third, changes in
American social patterns have radically affected the con-
sumer market: a growth in suburban living, coupled with

dependence and emphasis on motor transportation; greater

‘wi . “
yaw-.Ii: .lmai, . , . ”v.4. all-.53.. . nifty. .. > . .... w}- uJ...ao rt”! . HI...

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71

informality and increased demand for fun and recreation.
including pleasure travel; rising interest in education
and cultural activities and a growing credit economy.
Large corporations have deve10ped which employ greater
numbers of white collar workers, transferring them around
the country, giving the American community the quality

of both physical and social mobility.

With all these forces bearing upon it, the res—
taurant industry is forced to change its approach to the
consumer market. The industry has probably changed more
in the past 50 years than it did during all the previous
history. Types of food services are emerging which were
inconceivable a few years ago.

Automatic vending machines, for example, incor—
porate heating and refrigeration devices, changemakers.
and electronic reheating units. These machines are gain-
ing usage in areas where cost would make a manned Opera—
tion uneconomical.

The rapid growth of business and personal travel
has brought about rapid changes in restaurants which serve
travelers. The original restaurants catering to travelers

in colonial America were the country inns and post houses.

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9\.‘n.¢.UII\...r
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72

Fred Harvey advanced the field in this country with his
railroad terminal restaurants and dining cars. Increased
dependence on automobile travel brought the development
of tourist courts and motels, which have progressed from
their rather tawdry beginnings to large, beautiful plants.
Their food services are aimed at attracting not only“trav-
elers, ibut also conventions, local meetings, and dinner
trade. Toll-road restaurants, airport restaurants, and
airline catering are the newest versions of food services
catering to travelers.

The shift from an agricultural economy to a manu-
facturing economy took workers away from home for long
periods of time, including meal periods. Employers found
that it was to their advantage to feed their workers on
the premises and turned the job over to industrial caterers.
Labor unions supported the idea, considering subsidized
lunch rooms a fringe benefit.

Drive-ins are the most rapidly growing segment of
the restaurant industry (36), prObably because they cater
to the most rapidly growing segment of the pOpulation,
suburban automobile—oriented families with children and

limited incomes.

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73

Specialty houses such as steak houses or Polyne-
sian restaurants cater to the more sophisticated tastes
of today's restaurant patrons. A different type of spe-
cialty house limits itself to the 15¢ hamburger or the
$1.09 steak, or a wide variety of pancakes. Through
lower overhead due to specialization, these restaurants
are able to charge lower prices.

Large multi-division companies have grown in the
past few years, catering to different sectors of the
changing restaurant market, as restaurants are becoming
more and more large corporate enterprises.

A small but rapidly growing segment of the res—
taurant industry is the food and liquor services in rec—
reational clubs. Historically, some of the finest res—
taurants have been in private clubs. Today the recrea-
tion clubs are available to almost everyone, and their
food services are inoreasing in number and sales volume.
Bowling alleys, swimming pools, golf clubs, skating rinks,
and gambling casinos all offer some sort of food and/or
liquor frequently with more than one type of service.
Experts (127) foresee the growth of large recreational

complexes with many types of recreational facilities and

1!,- )fi’) .13)— Ujrmlz -,.. ..l:

I -
5.13).: . .. ..Jm. .3..- x...» .... - . - -
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74

a variety of food services, catering to a public with
increasing leisure time.

These are some of the responses the restaurant
industry has made to the demands of a highly mechanized
and complex society. These responses are the result of
knowledge of the needs of the market and the develOpment
of products and services which fulfill these needs. It
is precisely the restaurant operators who have assessed
their markets and geared their operations to serve them
who have been able to maintain and expand their profit-
able businesses in an industry with one of the highest
failure rates in the country.

G. Carroll Weaver of Harris Kerr Forster summed
up the picture of restaurant marketing when he wrote:

. . . the problems and difficulties of the
operator in many cases were directly linked
with changing markets and a lack of under-
standing as to the significance of the change
and how to cope with it.

I suggest that the answers and solutions
to meeting changes in the market and customer
attitudes can come only from an intelligent
study, analysis and appraisal of the facts of
the market, the present demand, and the devel-
oping potentials. Establish the needs, and
then produce the products and services to meet
these needs. . . .

The success of these operators who were
definitely confronted with adverse trends

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I} 1...?! s . ... ”I. ”2.1m. . 5).-S-“ .bm..-. ., ...... , . . a J,
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75

steadily undermining and depleting their
business, was due to their ability to seek
out and face facts and adapt products and
policies to the determined market pattern.

In today's market, you are in the mi-
nority if you can stand still and maintain
a profitable business.

 

w"

l“3W’eaver, Transcript, pp. 1, 6, 7.

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- L.-

lO.

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