UNIT- V

Identification and Understanding Consumers

 CONTENTS

Consumer demographics and Lifestyles, Consumer Needs and

Desires, Shopping Attitudes and Behaviour, Retailer Actions,
Environmental Factors Affecting Consumers
 Demographics & Lifestyles
 Demographics  Lifestyles
– Consumer data – Ways in which
that is objective, consumers and
quantifiable, families live and
easily spend time and
identifiable, spend money
measurable
Demographic
Divide overall market by:-
• Age
• Gender
• Family size
• Family life cycle
• Income
• Occupation
• Education
• Nationality
• Race
• Religion
Lifestyles
Consumer lifestyles are based on social and psychological
factors and are influenced by demographics.
As with demographics, a retailer should first have some
knowledge of consumer lifestyle concepts and then
determine the lifestyle attributes of its own target market.
Lifestyle is the expression of the individual’s situation, life
experiences, values, attitudes and expectations
It is defined simply as how the individual lives
‘Lifestyle’ has been used interchangeably with the term
‘psychographics’
Social Factors that identifying and understanding consumer lifestyles

Culture

Time Social
utilization class

The family Reference

life cycle groups
These Social Factors are useful in identifying and understanding consumer lifestyles
 A culture is a distinctive heritage shared by a group of people that passes on a series of
beliefs,norms,and customs.

 Social class involves an informal ranking of people based on income, occupation, education, and
other factors. People often have similar values in each social class.

 Reference groups It includes individuals or groups that influence our opinions, beliefs, attitudes
and behaviors. They often serve as our role models and inspiration. Marketers view reference
groups as important because they influence how consumers interpret information and make
purchasing decisions.
 The family life cycle describes how a traditional family moves from bachelorhood to children to
solitary retirement. At each stage, attitudes, needs, purchases, and income change. Retailers
must also be alert to the many adults who never marry, divorced adults, single-parent families,
and childless couples. The household life cycle incorporates life stages for both family and
nonfamily households.

 Time utilization refers to the activities in which a person is involved and the amount of time
allocated to them. The broad categories are work, transportation, eating, recreation,
entertainment, parenting, sleeping, and (retailers hope) shopping. Today, many consumers
allocate less time to shopping.
Psychological Factors helps in identifying and understanding
consumer lifestyles

Personality

Class consciousness

Attitudes (opinions)

Perceived risk
These Psychological Factors are useful in identifying and understanding
consumer lifestyles
• A Personality is the sum total of an individual’s traits, which make that individual
unique. They include a person’s level of self-confidence, innovativeness, autonomy,
sociability, emotional stability, and assertiveness.
• Class consciousness is the extent to which a person desires and pursues social
status. It helps determine the use of reference groups and the importance of prestige
purchases. A class-conscious person values the status of goods, services, and
retailers.
• Attitudes (opinions) are the positive, neutral, or negative feelings a person has about
different topics. They are also feelings consumers have about a given retailer and its
activities. Does the consumer feel a retailer is desirable, unique, and fairly priced?
• Perceived risk is the level of risk a consumer believes exists regarding the purchase
of a specific good or service from a given retailer, whether or not the belief is correct.
- There are Six types: Functional (Will a good or service perform well?),
Physical (Can a good or service hurt me?), Financial (Can I afford it?), Social
(What will peers think of my shopping here?), Psychological (Am I doing the
right thing?),and Time (How much shopping effort is needed?). Perceived
risk is high if a retailer or its brands are new, a person is on a budget or has
little experience, there are many choices, and an item is socially visible or
complex.
 Consumer
Needs
&
Desires
From a retailing perspective, Needs are a person’s basic shopping requirements
consistent with his or her present demographics and lifestyle.
Desires are unrestricted shopping goals that have an impact on attitudes and
behavior.
- A person may need a new car to get to and from work, and he or she may seek a
dealer with Saturday service hours.
- The person may desire a Porsche and a free loaner car when the vehicle is serviced
but be satisfied with a Toyota that can be serviced on the weekend and fits within the
budget.
When a retail strategy aims to satisfy consumer needs and desires, it
appeals to consumer motives, the reasons for their behavior. These
are just a few of the questions to resolve:

 How far will customers travel to get to the retailer?

 How important is convenience?
 What hours are desired? Are evening and weekend hours required?
 What level of customer services is preferred?
 How extensive a goods/service assortment is desired?
 What level of goods/service quality is preferred?
 How important is price?
 What retailer actions are necessary to reduce perceived risk?
 Do different market segments have special needs? If so, what are they?
Shopping Attitudes & Behaviour

Attitudes Toward Shopping

Considerable research has been done on people’s attitudes

toward shopping. Such attitudes have a big impact on the

ways in which people act in a retail setting. Some of the

research findings are

• Shopping Enjoyment: In general, people do not enjoy shopping
as much as in the past. So, what does stimulate a pleasurable
shopping experience—a challenge that retailers must address?
“Customers derive enjoyment in their shopping from an
assessment of accessibility, atmosphere, environment, and
personnel.
• If a shopping center facilitates fast, efficient shopping, this would
appeal to men, who would enjoy shopping in that region, and
may therefore be more likely to return to the location in the
future.
• At the same time, since women comprise a higher proportion of
the shopping population, there is a need to promote aspects of
the shopping center as a relaxing and fun leisure activity to
increase female enjoyment of the shopping location, to retain
these customers and increase the likelihood of repatronage.”
Attitudes Toward Shopping Time
• Retail shopping is often viewed as a chore. “This observation
suggests that retailers should not lose sight of the
importance of time-related factors in catering to customers.
• No matter how much effort the retailer invests in order to
improve store ambience, the effects of those efforts can be
tempered by the consumer’s level of chronic time pressure.
• Therefore, retailers should not only invest more in store
atmospherics (e.g., music, color, lighting, smell, and visual
merchandising) but pay equal attention to the efficiency of
store location, parking, and sales personnel assistance that
may deactivate shoppers 'chronic time pressure.”
Shifting Feelings About Retailing

• There has been a major change in attitudes toward spending,

value, and shopping with established retailers:
• “The same shopper who buys commodity goods at Target
may also buy expensive apparel at Nordstrom. This shift does
not appear to be transitory, but rather seems to define a
more enduring pattern of behavior.”
• In addition, the “rapid expansion of specialty chains,
combined with heightened competition from mass
merchandisers and department stores, has led to price wars
and homogenization in several sub segments.
• Specialty retailers must therefore constantly try to find ways
to distinguish themselves from competitors in consumers
'eyes.
Why People Buy or Do Not Buy
on a Shopping Trip
Why People Buy or Do Not Buy on a Shopping Trip
• It is critical for retailers to determine why shoppers leave without making a purchase. Is it
prices? A rude salesperson? Not accepting the consumer’s credit card? Not having an item in
stock? Or some other factor?
According to one retail consulting company, here are the top 10 reasons shoppers leave an
apparel store without buying:
• 1. Cannot find an appealing style.
• 2. Cannot find the right size or the item is out of stock.
• 3. Nothing fits.
• 4. No sales help is available.
• 5. Cannot get in and out of the store easily.
• 6. Prices are too high.
• 7. In-store experience is stressful.
• 8. Cannot find a good value.
• 9. Store is not merchandised conveniently.
• 10. Seasonality is off.
• Attitudes by Market Segment: Research has shown that shoppers
may be classified into several types based on their outlook to shopping. For example,
according to one classification, shoppers can be broken into Four Types.
• “Thrifties” are most interested in price and convenience.
• “Allures” want a “fun, social shopping experience.”
• “Speedsters” want to shop quickly. They shop disproportionately.
• “Elites” want quality merchandise, an unhurried shopping experience, and the
ability to be educated about products.

• Attitudes Toward Private Brands: Many consumers believe private

(retailer) brands are as good as or better than manufacturer brands: “For American
consumers, private brands are brands like any other brands. In a new nationwide study by
Ipsos-MORI, seven out of ten shoppers believe that the private-label products they buy are
as good, if not better, than their national-brand counterparts.
• Four in ten now identify themselves as ‘frequent’ store-brand shoppers, and nearly one-half
of all consumers say that their typical market basket contains 25 percent or more of private-
brand products.”
Private Label
 Retailer Actions
• In deciding on a target market approach, a retailer considers its
goods/service category and goals, competitors’ actions, the size of various
segments, the efficiency of each target market alternative for the
particular firm, the resources required, and other factors. For Example-
• In Mass Marketing, a firm such as a supermarket or a drugstore sells to a
broad spectrum of consumers; it does not really focus efforts on any one
kind of customer.
• In Concentrated Marketing, a retailer tailors its strategy to the needs of
one distinct consumer group, such as young working women; it does not
attempt to satisfy people outside that segment.
• With Differentiated Marketing, a retailer aims at two or more distinct
consumer groups, such as men and boys, with a different strategy mix for
each; it can do this by operating more than one kind of outlet (such as
separate men’s and boys 'clothing stores) or by having distinct
departments grouped by market segment in a single store (as a
department store might do).
 Environmental Factors Affecting
Consumers
Several environmental factors influence shopping attitudes
and behavior, including:
 State of the economy.
 Rate of inflation (how quickly prices are rising).
 Infrastructure where people shop, such as traffic congestion,
the crime rate, and the ease of parking.
 Price wars among retailers.
 Emergence of new retail formats.
 Trend toward more people working at home.
 Government and community regulations regarding shopping
hours, new construction, consumer protection, and so forth.
THANK YOU