Chapter 77

Identifying and Understanding

Consumers

Chapter Objectives

To discuss why it is important for a retailer to properly identify, understand, and appeal to its customers

To enumerate and describe a number of consumer demographics, lifestyle factors, and needs and desires – and to explain how these concepts can be applied to retailing

To examine consumer attitudes toward shopping and consumer shopping behavior, including the consumer decision process and its stages

Figure 7-1: What Makes Retail Shoppers Tick

Demographics and Lifestyles Demographics

– consumer data that is objective, quantifiable, easily identifiable, measurable

Lifestyles– ways in which

consumers and families live and spend time and spend money

Typical household has an annual income of $45,000 Top 1/5 of households earn $85,000 or more Lowest 1/5 of households earn under $18,000 High incomes lead to high discretionary income There are 5 million more females than males Three-fifths of females age 20 and older are in the labor force Most U.S. employment is in services More than 25% of all U.S. adults age 25 and older have at

least graduated from a four-year college

Understanding Consumer Lifestyles: Social Factors

Lifestyle

CultureReference

Groups

Social Class

FamilyLife Cycle

Time Utilization

HouseholdLife Cycle

Understanding Consumer Lifestyles: Psychological Factors

Lifestyle

Personality Attitudes

PerceivedRisk

PurchaseImportance

ClassConsciousness

Illustrations Gender Roles

Consumer Sophistication

and Confidence

Poverty of Time

Component Lifestyles

Gender Differences?

consumer-knowledge.com

Curated ConsumptioniBood

e.g., Woot

Three Special Market Segments

• Shopping is discretionary, not necessary

• Convenience is important

• Active, affluent, well-educated

• Self-confident, younger, adventuresome

• Time scarcity is not a motivator

In-Home Shoppers

• Use of Web for decision- making process as well as buying process

• Convenience is important

• Above average incomes, well-educated

• Time scarcity is a motivator

Online Shoppers

• Out-of-hometown shopping• Young, members of a large

family, and new to the community

• Income and education vary• They like to travel, enjoy

fine food, are active, and read out-of-town newspapers

Outshoppers

Environmental Factors and Consumers

State of the Economy Rate of Inflation Infrastructure for Shopping Price Wars Emergence of New Retail Formats People Working at Home Regulations on Shopping Changing Social Values and Norms

Figure 7-6: Key Factors in the Purchase Act

Figure 7-5: The Consumer Decision Process

Problem AwarenessProblem Recognition

A. DefinitionB. Cues

1. Internal2. External

C. Types*1. Merchandise2. Social

a. Social Experiences Outside the Homeb. Communication with others having the same

interestsc. Peer group attractiond. Status and Authoritye. Pleasure of Bargaining

3. Personala. Role Playingb. Diversionc. Self-Gratificationd. Learning About New Trendse. Physical Activityf. Sensory Stimulation

Information SearchII. Shopping Alternatives

A. Internal SearchB. External Search

Influenced by:-Perceived Risk-Shopping Orientations-Attitudes towards Shopping-Situational Factors, etc.

Shopping Orientations:1. Economic Shopper2. Personalized

Shopper3. Ethical Shopper4. Apathetic Shopper

Figure 7-2: Perceived Risk and Consumers

Department Store Shopping MotivesShopper Typologies Metastudy

Hedonic Shopping Motivations (Arnold and Reynolds, 2003):-Adventure Shopping-Social Shopping-Gratificaiton Shopping-Idea Shopping-Role Shopping-Value Shopping

Attitudes Towards Shopping

Shopping enjoyment Shopping time Shifting feelings about

retailing Why people buy or not on a

shopping trip Attitudes by market segment Attitudes toward private

brands

Evaluation of Alternatives

• Screening AlternativesA. Attitude Formation

Purchase

IV. Decision

A. Choice RulesB. Other Factors

Post-Purchase Evaluation

V. Outcome

A. Satisfaction/DissatisfactionB. Dissonance Reduction

Top Reasons for Leaving an Apparel Store Without Buying

Cannot find an appealing style Cannot find the right size Nothing fits No sales help is available Cannot get in and out of the store easily Prices are too high In-store experience is stressful Cannot find a good value

Table 7-3: Where America ShopsType of Retailer % Shopping At

• Supermarkets 72

• Discount department stores/supercenters 66• Drugstores 61• Convenience stores 59

• Apparel stores 36

• Home improvement centers 31

• Membership clubs 29

• Book/music stores 22• Consumer electronics stores 21

Chapter Seven Discussion Questions: 4, 8