Back to Homepage Income Measures Income: Saving and Investment Methods of Buying That Save Money The Choice of Goods Methods of Buying That Reduce Mistakes In Selection Methods of Securing Information Concerning Goods Plans and Motives of Consumers Consuming the Product Who Is the Consumer? The Consumer in the Market Priorities and Preferences in Consuming Decisions The Consumer as User of Wealth The Consumer as a Buyer Consumers as Self-Conscious Agents Criteria of a Good Market Information Versus Persuasion of the Buyer The Rate of Interest Interest Rates and Economic Activity Saving, Investment, and Income Saving Motives Saving Plans and their Realization Total Spending Is the Key to Prosperity The More We Spend, The More We Have Spending by Private Enterprise

Criteria of a Good Market It has been said that what the consumer wants when she buys is the best article available for her purpose for a minimum expenditure of time, energy and money. Market agencies and devices may therefore be rated by the degree to which they facilitate the achievement of this end. More specifically, what the consumer-buyer desires in the market may be summarized thus: (1) a wide range of choice among many varieties of goods and services together with the particular variety which in size, specific qualities and general character meets her desires, (2) a market structure and market agencies that save her time and energy, (3) devices and arrangements that reduce mistakes in selection, and (4) fair prices. How does the present market meet the requirement of furnishing the buyer with a wide range of choice? Upon the whole its efficiency in this respect is amazing and is steadily increasing. The market as such is not of course responsible for the wide range of goods and services produced under modern technological methods, for the fact that the products of every climatic zone are exchanged with those of every other zone, for the fact that fewer and fewer fruits and vegetables are now out of season, for the fact that new goods and new variants of old goods are constantly being turned out. But it is through market agencies that this potential availability becomes actual availability for every consumer who desires to exchange money for goods. The essential service rendered to the consumer by marketing agencies is "assembling," that is, getting in touch with sources of supply, scouting for new and varied types of goods and bringing them together in the proper quantity for each market. Thus the actual availability of goods to the consumer is largely a function of the types of retail agencies with which she is in touch and the stock of goods they carry. In the cities breadth of choice is at its maximum. There are the great entrepôts of merchandise. There hundreds of specialized shops offer carefully selected stocks adapted to the special requirements and tastes of multitudinous purchasers. Those living in cities can rarely complain that even the rarest, most exotic, or most individual good is not obtainable. The range of choice in the smaller towns and villages can not of course be as great as in the larger cities. The number of accessible retail shops will be smaller and their stocks not so large or so specialized. But the rate at which the range of choice of rural people has been expanding is amazing. Improved roads and new means of transportation have shortened the distance to central trading points and made the metropolis the customary shopping center for many types of goods. The telephone, the mail order, the parcel post as well as the old-time peddler and huckster all play their part in extending the range of choice of the rural consumer. Two factors of course limit the availability of goods. One is their producibility. Travel by air had to await the invention of the aeroplane. Much as one may desire another painting by Rembrandt or novel by Dickens neither will be forthcoming; watermelon in January and similar marvels are now possible but there are still limits upon choice set by the growing season. The second factor determining the availability of goods is the relative profit in their production. The farmer will not grow, the manufacturer will not make and the retailer will not stock articles which will not yield a profit, or which will not yield as large a profit as will alternative uses of labor and capital. Profits are a resultant of the relationship between costs of production and gross receipts. Receipts in turn depend upon demand or the amount that will be purchased at a particular price. Here lies the reason why the consumer-buyer may not find an article of a particular kind, size, or quality in the market. In that market she is a member of an unprofitable minority. Those with needs or tastes similar to hers are too few in number to induce production or, if numerous, are unable or unwilling to pay the price that would bring the article on the market. It follows therefore that a given consumer may not find what she wants in a particular market due not to the fact that the article is non-producible or that the market agency is inefficient but to the fact that she is unique in her desire, or is one of a relatively small or relatively unprofitable group. The smaller the market or the more alien the community the more likely is this to be the case. In a large city there are more likely to be others who wear shoes of a special size and kind, who desire foods of unusual flavor, or furniture, books and plays that vary from the tastes of the majority. It is true that retailers, manufacturers, or other producers may not always foresee or estimate correctly their chances of profit and a demand therefore goes unsatisfied. The availability of goods is dependent upon the ease with which buyers can make their preferences known, the alertness of producers to chances of profit, and upon their power to make actual demand from the potential demand of a scattered minority group. Not only does the modern market rate high in the range of choice it offers but also in the degree to which it is organized to save the buyer's time and energy. One of the outstanding time and energy savers of the modern market is the wide distribution of retail stores handling "convenience" goods. Almost every country crossroad has its store, and a drug-store and a grocery are "just around the corner" from almost every family in towns and cities. To save the buyer's time stores handling "shopping goods," are gathered together in one district. In the larger cities secondary shopping streets are also found at intervals throughout the residential districts. Within the shopping district, moreover, the lay-out is usually such as to bring department stores, furniture stores, those handling women's wear and so on in contiguous locations. The department store may also be considered a time-saver in that it brings all types of goods under one roof with the types usually purchased at the same time located adjacent to one another. Certain services offered by retail establishments are primarily time and energy savers. The telephone service makes it unnecessary to go to the store at all as does mail-order selling. Mail-order selling not only saves the time and energy spent in going and returning but it enables the buyer to make a selection at her leisure and at the time most convenient. There is no pressure to buy; no embarrassment due to the spoken or implied criticism of the salesperson; no hasty selection in order not to waste her time. Lists may be made out and revised again and again; prices compared and decisions made, not in the hurried atmosphere of the rush hour of a busy store in time taken from other duties, but in one's own home when other tasks are done. It was noted in the preceding chapter that the credit system saved the buyer's time. So also do frequent deliveries and early opening and late closing hours. The latter, as mail-order buying, permits the buyer to choose her most convenient time for purchasing. Advertising also must be listed as a time saver. The buyer finds out what is available and the current prices without leaving her home. She may reduce her shopping time and make tentative selections at her leisure prior to visiting the shops. A large selling staff also saves the buyer's time; she need not wait to be served. These time-saving features of the current market are by no means costless. A wide distribution of retail stores, order-taking, frequent deliveries, a staff to meet the peak of the load and long hours, increase selling expenses. But they expedite and lighten the process of marketselection.   Home