Car washing: a monthly task

A Maritz AmeriPoll found that a third of American men wash their cars at least once a week, compared to just 17 percent of women. Women seem to count on rain to do the job, since 42 percent only wash their cars every month or two. Not surprising, men are twice as likely as women to wash their cars more than once a week. As a whole, 72 percent of Americans wash their cars at least once a month.

When it comes to choosing carwashing methods, most Americans get out the bucket and sponge and mm on the hose. A whopping 46 percent prefer to wash their cars by hand at home, with men (51 percent) a little more likely than women (41 percent) to choose this method. Other methods include an automatic card wash at a gas station (23 percent), do-it-yourself at a car wash establishment (16 percent), and a hand-wash and interior cleaning service (15 percent).

Women are nearly twice as likely as men to choose the wash and cleaning service - 19 percent of women, compared to 10 percent of men. The automatic car wash is a favorite among adults 65 and older, preferred by nearly one-third of them. Young adults, on the other hand, go for the do-it-yourself method at the car wash, used by 28 percent of that age group. Maritz AmeriPoll is a national consumer poll conducted regularly by Maritz Marketing Research Inc., St. Louis. Results are based on telephone interviews with American adults. Accuracy
is within +/-3.09 percent.

American teens’ $50 billion grocery bag

The American teenagers’ impact on family grocery purchases exceeds $50 billion annually, an average of $58 per teen household per week, according to a study commissioned by Channel One Network, a provider of news and information-based programming for teenagers.

The "Teen Grocery Shopping" study found that teen households ring up annual grocery store purchases of $100 billion. Nearly $20 billion ($19.6) are purchases directly influenced by teens (made specifically at a teen’s request), while another $32 billion is indirectly influenced by teens (consumed by the teen and other household members).

Not surprisingly, leading teen-influenced categories are snacks, desserts and beverages, which account for 24 cents of each grocery dollar spent in the household, for a total of $25.78 weekly. Purchases most heavily influenced by teens include sports drinks (87 percent of household purchase is teen specified), breakfast bars (85 percent) and salty snacks (75 percent). Other key categories with significant teen influence include cookies (76 percent), carbonated beverages (74percent), cereals (76 percent) and frozen foods (72 percent).

"Teenagers exercise substantial influence over family grocery buying habits and have higher volumes of consumption than their younger siblings," says Tim Nichols, executive vice president of research, Channel One Network. The study was designed by David Michaelson & Associates, a New York research firm. Respondents collected itemized grocery and warehouse store receipts for a seven-day period and identified special requests made by teens (direct purchase influence), standing orders made by a teen (direct influence), items shared with household members (indirect influence) and items used solely by other household members (no influence). Four hundred and thirty-three responses were received from homes with 12-to-17- year-old members.

Business marketers turn to Internet

Five years ago, there were two commercial (.com) Intemet Web sites. Today, there are more than one million of them. Relatively few business and government buyers had Intemet access back in 1993. Today, half (51.0 percent) of all purchase decision-makers in the U.S. use the Intemet in their job, and 85.9 percent expect to use the Intemet for job-related purposes in the next five years, according to a study by Penton Research Services, the research arm of Penton Publishing, a Cleveland-based business information and media company.

"Business marketers have worked hard to get Web sites up and running in recent years, and this is reflected in their print advertising," says Ken Long, director of Penton Research Services. An analysis of advertisements that appeared in 12 Penton business magazines in September 1992 found that none of the ads listed an Intemet address readers could visit to get more information, and practically none (0.2 percent) provided an e-mail address. In September 1997, 60.9 percent of the ads in the same 12 magazines supplied an Intemet Web site address, and 17.7 percent listed an e-mail address.

Seven out of 10 purchase decision-makers surveyed by Penton said that they expect to respond to more ads over the next five years by visiting the company’s Web site (72.2 percent) or by sending e-mail to the company (73.7 percent). Why? "No muss, no fuss, and it can be done at any hour of the day or night," said one executive interviewed. More than half (55.1 percent) of the respondents also expect to use the Intemet to purchase products or services for their organization in the next five years.

These and other research fmdings are outlined in the new study, "Industry Inquiry Trends." The report presents the results of a survey of 676 managers, executives, engineers, and purchasing agents in the United States, who are involved in buying decisions for their organization. The overall margin of error for the survey is +/-4 percent at the 95 percent confidence level.

Credit cards: it’s a buyer’s market

Americans love to say "charge it." Even though more than half of Americans agree at least somewhat that "nothing is worth owning if you can’t pay for it in cash," three out of four own and use credit cards, according to a Wirthlin Worldwide national telephone survey.

Among those who .carry credit cards, the average person carries about four-cards and charges around $200 during a typical month. Two-thirds spend $300 or less per month using credit cards.

Those who do not own credit cards are likely to be young, single, low income and less educated, groups which tend to have less experience or more credit risk.

To credit card issuers, the most important question is not always how many cards the customer owns or even how much they spend, rather how they pay. Of course companies need customers who pay their bills, but they would prefer people who take a longer time to pay off those bills, since most of their profits are derived from interest charged on outstanding balances.

Fortunately for them, almost three out of five credit card users admit to being "revolvers," who carry - at least some balances from month to month. One in four (25 percent) of those surveyed are full revolvers who almost always carry balances. Eighteen percent say they usually try to pay off their bills, but may carry balances at times when emergencies arise that exceed their current cash flow, such as medical expenses or car repairs. Seventeen percent do their best to juggle their credit card bills, paying off higher interest rate cards first and carrying balances on others with more lenient payment terms.

More than a third (37 percent) of credit card users are what the industry calls "transactors," who pay off their full balances each month. Interestingly, transactors have the highest median monthly credit card spending of the four goups. These consumers take advantage of the convenience and the cash float offered by credit cards, while paying very little for the service.

The credit card industry is furiously competitive. When AT&T ventured into the business in 1990 with its no annual-fee cards, issuers of Visa and MasterCards followed suit, forever changing the face of credit card marketing. It has become a buyers’ market where consumers have their pick of the pre-approved, low introductory rate offers that swell their mailboxes monthly. One result has been more of a tendency to view credit cards as a commodity item. Three in four Americans surveyed (74 percent) agee with the statement, "All credit cards are pretty much alike, so I try to find the ones with the lowest interest rates and annual fees." Accustomed to getting something for nothing, almost half (48 percent) of credit card users surveyed say they "refuse to pay annual fees, no matter what benefits the card offers," and an additional 20 percent say this describes them somewhat.

Another outcome of free and easy credit cards is that customer loyalty has weakened considerably. Customers are routinely tempted to transfer balances from a card they currently own to a new one to take advantage of a low introductory rate. More than one-fourth of cardholders (27 percent) have played the "rate surfing" game. It’s no surprise to industry observers that all this has come back to haunt the industry. While the number of accounts has soared over the past decade, profits have sunk just as dramatically, drained by the cost of offering inducements. Meanwhile, consumer debt and payment delinquency have climbed.

But the pendulum is beginning to swing the other way. The industry is going through some consolidation in hopes of returning to more profitable times. Ironically, AT&T announced (after eight years in the business and a Baldrige award) that it is selling off its credit card business to Citicorp.

Consumers are doing some consolidating of their own by cutting up some of those cards they acquired in the frenzy of the early ’90s. Over a third (36 percent) of credit card users say they have cancelled One or more cards in the past 12 months. When asked why, 36 percent cite convenience, saying they want fewer cards to carry and fewer monthly bills to deal with. Others are winnowing down their cards and keeping those that offer the best financial terms (33 percent) or the most attractive rewards progams (4 percent). And about one in five have cancelled cards as part of a conscious effort to spend less on credit.

In a related question, 46 percent say they now use credit cards less than they did two or three years ago, while 31 percent say more. Some of these presumably have switched to debit cards, which provide the same spending convenience but deduct money directly from a checking account.

As the industry becomes increasingly competitive, credit card companies are turning to creative incentives and sophisticated target marketing in order to shore up the loyalty of current cardholders and win new ones. Reward progams, perks, value-added features and co-branding are some of the tactics used to appeal to consumers and distinguish one particular card from the crowd.

Most consumers have a primary credit card, one they use most often. The goal for the card issuer is to do whatever it takes to make sure their card is the consumer’s primary card. So Wirthlin asked respondents who say they have a primary card what makes that card their favorite. Despite the question cited earlier, interest rates (32 percent) and annual fees (6 percent) drive preference for fewer than four in 10 consumers. For the majority of those "responding, the coveted primary card status goes to the card that has something special to offer. Nearly one-fourth (23 percent) reach for a specific card so they can rack up rewards like airline miles, cash rebates, merchandise discounts, or points toward the purchase of an automobile. (There are even cards nowwhich donate a fraction of a percent of purchases, to your alma mater or favorite charity.) Other reasons to prefer a certain card are because it has a good reputation, because of an affinity branding, extra features, good customer service, or wide acceptance and prestige.

Buoyed by the success of these new kinds of incentives, the industry is making a turnaround. Credit card companies are signing up new vendors in record numbers, making it possible to charge everything from groceries to fast food. But they are not about to forget the lessons of the past decade. As they rebuild customer loyalty, consumers can expect card issuers to pass the costs along this time. The trend is toward new fees, shorter grace periods, higher rates, and stricter financial penalties. Some issuers are even considering tying rewards to revolving balances instead of total card charges.

As credit card issuers have adapted to a changing marketplace, they have become smarter about consumers and how they view and use credit. Some Americans view credit cards as a way to stretch their income. More than a third of those interviewed (35 percent) agree that credit cards help them "maintain a higher standard of living" than they could otherwise enjoy. About the same percentage (36 percent) say they sometimes use cards to buy what they want even when they know they don’t have enough money to pay the bill in full. A third (33 percent) say they "rarely have a zero balance on their credit cards" and 23 percent say this describes them somewhat. No doubt this group includes many of the 17 pement who "don’t trust [themselves] to manage [their] credit card debt."

At the other end of the spectrum, many claim they only put purchases on credit cards if they cain pay the bill in full (43 percent say this describes them very well, 29 pement somewhat). Older cardholders are the most likely to feel this way. Some consumers use credit cards to spread out their payments on major pumhases, such as furniture, appliances, even college tuition, while others keep credit cards to use only in case of an emergency.

As we move toward a cashless society, the stakes in the credit card business are huge. Understanding consumers will be the key to determining who becomes king of the credit card hill. Companies who succeed in becoming their customers’ primary card will be those who:

  • target carefully, focusing on ideal prospects with cards designed to meet their particular needs,
  • monitor usage closely, so they can offer appropriate rewards to encourageincreased usage,
  • appeal to up-and-coming younger market segments,
  • show how annual fees are offset by rewards and other incentives which pay back the cardholder,
  • encourage more "casual use" of credit cards for small, everyday purchases, by emphasizing the benefits of security, convenience, and less hassle, and,
  • persuade consumers that credit is not a vice, but an investment in a future gain, a tool that makes possible a better lifestyle.

This report contains selected results from Wirthlin Wofldwide’s National Quorum survey conducted January 9-13, 1998. Interviews were conducted by telephone with a representative random sample consisting of 1,000 adults (age 18+) residing within the continental U.S. Most of this report is based on a subsample of 729 respondents who own one or more credit cards. The margin of sampling error at a 95 percent confidence level is +/-3 percentage points for the full sample and +/-3.6 percentage
points for the subsample of cardholders.

Most homes own exercise equipment

Adults in half of all American households own at least one piece of exercise equipment, and it is being used regularly in almost two out of three of those households, according to a national survey by the Fitness Products Council (FPC), North Palm Beach, Fla. FPC is a group of about 185 companies that manufacture and distribute exercise equipment for institutions and consumers in North America.

The survey is believed to be the first comprehensive study of adult (age 18 and older) ownership, use and attitudes toward home exercise equipment, sales of which have boomed in the past decade.

"The stereotype is that most home exercise equipment just ends up gathering dust, but now there is solid evidence that millions of people are using the equipment to good results," says Gregg Hartley, executive director of the Fitness Products Council, which sponsored the study.

The survey found that exercise equipment is owned in 49.8 million households (50.1 percent of the U.S. total 99.3 million) and used regaalarly in 32.3 million (32.5 percent of all households and 64.7 percent of owning households.)

The Fitness Products Council estimates that in 1996 consumers spent roughly $4.8 billion for home exercise equipment. "Just a few years ago, home exercise equipment meant a pile of weights in a boy’s bedroom," Hartley says, "but today consumers are spending hundreds and even thousands of dollars for treadmills, stationary bikes, home gyms and other equipment. We think the trend will continue for many years."

Here are some additional findings from the survey, which was administered by Target Management, Inc., Wilton, Conn., and involved telephone interviews with 1,607 individuals. Exercise equipment was defined as "items such as free weights, home gyms, stationary bikes, ski machines, rowing machines, treadmills, stairclimbers or spot toners such as thigh exercisers or abdominal trainers."

  • About 49:6 million Americans aged 18 and older say they own and use home exercise equipment at least once a week. Another 4.9 million say they own it and use it less often than once a week, but "regularly." These two groups - totaling 54.5 million adults - are described as "owner-users" in the material that follows. They represent about 28 percent of the total adult population (191.9 million) and 57 percent of those adults who own exercise equipment (96.1 million). In addition, one or more adults use equipment in 18 percent of those households where the original owner does not use it.
  • Owner-users - those who own equipment and use it regularly - are evenly divided by sex and age. Males constitute 51.9 percent. By age groups, they are: 18-24:13 percent; 25-34:24 percent; 35-44:23 percent; 45-54:18 percent; 55+: 22 percent.
  • Most owner-users are involved in other sports and fitness activities. Only 20 percent say they pursue no other activity at least once a week.
  • The main reasons non-users gave for not using the equipment or for stopping were boredom (42 percent) and lack of time (41 percent).Answers related to dissatisfaction with the equipment included: "Don’t enjoy using it" (32 percent); "Didn’t see results" (18 percent) and "Wrong type of equipment" (15 percent). Only 5 percent says the equipment malfunctioned or broke.
  • Among those who have owned and used their equipment for six months or more, however, 93 percent say they were achieving beneficial results; only 7 percent say they did not achieve any benefit. Better muscle tone was reported by 47 percent of this group and loss of weight or inches reported by 20 percent.
  • The most-owned equipment was free weights, owned by 36 percent of owner-users, or 19.4 million adults. Second was treadmills, owned by 25 percent (13.6 million), then stationary bikes, owned by 23 percent (12.3 million). Among owner-users, 19 percent (10.3 million) own more than one type of equipment and 7 percent (3.8 million) own three or more.
  • The leading sources of equipment are "stores like Sears or JC Penney’s." Owner-users reported buying 25 percent of their equipment there. About 20 percent came from sporting goods stores. The third-most popular source, with 12.3 percent was secondhand, followed closely by "self service stores like Wal-Mart and Target," with 11.8 percent.
  • The average amount spent for any single piece of new equipment (not including secondhand purchases) by owner-users was $392. Treadmills fetched the highest average price, $699. Home gyms were next at $402, followed by cross-country ski machines, $394. The average spent for all new equipment by owner-users’ was $473.
  • The decision to purchase home exercise equipment is highly personal. Asked, "Which one event or situation motivated you to purchase your equipment?" owner-users said 39 percent of their purchases grew out of a personal decision to improve health. The desire to lose weight was second, mentioned by 12 percent. Asked, "Which one person had the most influence on the purchase decision?" 38 percent said "myself." A family member was cited in 33 percent of the purchase decisions and a friend in 14 percent.
  • Infomercials are powerful. "Saw it on TV" was the second-most cited Outside influence, credited for helping to stimulate 17 percent of purchases by owner-users. The most important reason was previous use of similar equipment (cited by owner-users in 26 percent of purchases).  "Recommended by friend or family member" was mentioned by 16 percent. Newspaper or magazine advertisements or articles were cited by 11 percent.
  • About 7 percent of all respondents - representing 14 million adults - said they plan to purchase home exercise equipment in the future. Those most positive were current ownerusers, with 11 percent planning to make another purchase. Among nonusers or former owners, 9 percent said they intended to buy, compared to only 4 percent of those who have never owned equipment. Computer-assisted telephone interviews were completed with 1,607 adults to develop adequate samples of those who don’t own home exercise equipment, those who own but don’t use and those who own and use. The latter group consisted of 491 individuals. The survey has a confidence level of 95 percent with a margin of error of +/-3 percent.