1. CHAPTER 7: IDENTIFYING AND UNDERSTANDING
CONSUMERS 1

2. 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, needs and desires – and to explain how these concepts can be applied to retailing

3. Chapter Objectives (cont.)
To examine consumer attitudes toward shopping and consumer shopping behavior, including the consumer decision process and its stages
To look at retailer actions based on target market planning
To note some of the environmental factors that affect consumer shopping

4. Figure 7-1: What Makes Retail Shoppers Tick
7-4

5. Demographics and Lifestyles
consumer data that is objective, quantifiable, easily identifiable, and measurable
Lifestyles
ways in which consumers and families live and spend time/money

6. Helpful Facts for Understanding U.S. Demographics
Typical household has an annual income of $50,000
Top 1/5 of households earn $100,000 or more
Lowest 1/5 of households earn $20,000 or less
High incomes lead to high discretionary income

7. Helpful Facts for Understanding U.S. Demographics (cont.)
There are 5 million more females than males
Three-fifths of adult females are in the labor force
Most U.S. employment is in services
30 % of all U.S. adults have at least a four-year college degree

8. Current Economic Issues
Real 17 percent unemployment rate (10 percent unemployment and 7 percent underemployed, stopped linking, accepted early retirement offer)
Low levels of consumer confidence
High foreclosure rate (particularly Nevada, Texas, California, Florida) plus high underwater loans (nationwide)
Many fixes are temporary—”cash for clunkers” auto rebates, first time homebuyer incentives, mortgage renegotiations

9. Understanding Consumer Lifestyles: Social Factors
Culture
Reference
Groups
Lifestyle
Social
Class
Time
Utilization
Household
Life
Cycle
Family
Life
Cycle

10. Understanding Consumer Lifestyles: Psychological Factors
Personality
Attitudes
Lifestyle
Perceived
Risk
Class
Consciousness
Purchase
Importance

11. Figure 7-2: Perceived Risk and Consumers

12. Retailer Strategies to Reduce Perceived Risk by Shoppers
Functional– product usage testing by retailer; especially private labels. Double check returned “B” goods. Simulate wear for new goods.
Physical- safety testing, reduce salt and fat in food products
Financial- money back guarantee and exchange privileges

13. Retailer Strategies to Reduce Perceived Risk by Shoppers (cont)
Social— co-branding of private label products with major high-quality national brands (Kirkland by Starbucks)
Psychological– showing empathy for consumer
Time- double money back guarantee; Saturn dealers picking and returning recalled cars

14. Illustrations of Life Styles
Gender Roles
Consumer Sophistication and Confidence
Poverty of Time
Component Lifestyles

15. Figure 7-4: Blurring Gender Roles

16. Three Special Market Segments
In-Home Shoppers
Online Shoppers
Outshoppers

17. Online 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

18. Attitudes Towards Shopping
Level of 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

19. 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

20. Table 7-3 Global Shopping Attitudes and Behavior
Why Consumers in 51 Countries
Shop at a Specific Retailer (% saying highly influential):
Good value for the money
Lowest prices
Convenient location
Great sales and promotions 55
Desired products in stock
Organized store layout (ease of shopping) 42
Friendly, knowledgeable employees 40
Fast checkout
Customer loyalty program

21. Visiting multiple retailers on one shopping trip
Cross-Shopping
Shopping for a product category at more than one retail format during the year
Visiting multiple retailers on one shopping trip 21

22. Figure 7-5: The Consumer Decision Process

23. Figure 7-6: Key Factors in the Purchase Act

24. Types of Consumer Decisions
Extended
Limited
Routine
High
RISK & TIME
Low

25. Types of Impulse Shopping
Completely unplanned
Partially unplanned
Unplanned substitution

26. Figure 7-8: Impulse Shopping

27. Figure 7-10: Devising a Target Marketing Strategy

28. Possible Retailer Approaches
Mass Marketing
Kohl’s Department Stores
Concentrated Marketing
Foot Locker
Differentiated Marketing
Family Dollar

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