#7 Identifying and Understanding Consumers

What Makes Retail Shoppers Tick

 Demographics
 Lifestyles
 Needs and Desires
 Shopping Attitudes and Behavior
 Retailer Actions
 Environmental Factors

Consumer Demographics

Consumers, both as groups and as individuals, can be identified by such demographics as gender, age, population
growth rate, life expectancy, literacy, language spoken, household size, marital and family status, income, retail sales,
mobility, place of residence, occupation, education, and ethnic/racial background. These factors affect retail
shopping and retailer actions.

Consumer 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.

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.
සංස්කෘතියක් යනු විශ්වාසයන්, සම්මතයන් සහ සිරිත් විරිත් මාලාවක් හරහා ගමන් කරන පුද්ගලයින් සමූහයක් විසින් බෙදා
ගන්නා සුවිබශ්ෂී උරුමයකි.

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, of which there are several types, influence people’s thoughts and behavior. For example, a group
that someone wishes she or he belonged to but does not is called an aspirational group; a group that a person does
belong to is referred to as a membership group; and a dissociative group is one in which a person belongs but wishes
he or she did not. Face-to-face groups, such as families, have the most impact. In reference groups are opinion
leaders whose views are respected and sought.

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.

These psychological factors help in identifying and understanding consumer lifestyles:

A personality is the sum total of an individual’s traits, which make that individual unique. Traits 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 classconscious person values the status of goods,
 services, and retailers. පන්ති විඥානය යනු පුද්ගලබයකු සමාජ තත්වයට ආශා කරන සහ හඹා යන ප්රමාණයයි. එය විමශශන
කණ්ඩායම් භාවිතය සහ කීතශිමත් මිලදී ගැනීම්වල වැදගත්කම තීරණය කිරීමට උපකාරී බේ. පන්ති සවිඥානික පුද්ගලබයක්
භාණ්ඩ, බස්වා සහ සිල්ලර බවබෙන්දන්බේ තත්ත්වය අගය කරයි.

Attitudes (opinions) are the positive, neutral, or negative feelings a person has about different topics. Attitudes are
also feelings consumers have about a given retailer and its activities.

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.

Retailing Implications of Consumer Demographics and Lifestyles

GENDER ROLES The many working women who put in 60 to 70 hours or more each week between their job and home
responsibilities have altered lifestyles.

CONSUMER SOPHISTICATION AND CONFIDENCE Many shoppers are now more knowledgeable and cosmopolitan; more
aware of trends in tastes, styles, and goods and services; and more sophisticated. Nonconforming behavior is accepted
when consumers are self-assured and better appreciate the available choices.

POVERTY OF TIME The increase in working women, the desire for personal fulfillment, the job commute, and the need
for some people to have second jobs has led to many consumers feeling time-pressured.

CMPONENT LIFESTYLES In the past, shoppers were typecast, based on demographics and lifestyles. It is widely recognized
that shopping is less predictable and more individualistic now, and shopper profiling based traditional segmentation
strategies may have low predictive ability for a majority of retailers.

Do different market segments have special needs? If so, what are they?

Let’s address the last question by looking at three particular market segments that attract retailer attention: in-home
shoppers, online/mobile shoppers, and outshoppers.

In-Home Shopping: The in-home shopper is not always a captive audience. Shopping is often discretionary, not
necessary. Convenience in ordering an item, without traveling for it, is important. These shoppers are often active store
shoppers as well as affluent, well educated, self-confident, younger, and venturesome. They like in-store shopping but
have low opinions of local shopping. Catalog shoppers have more flexible time requirements. In households with young
children, in-home shopping is more likely if the woman works part time or not at all than full-time working mothers. In-
home shoppers may be unable to comparison shop; may not be able to touch, feel, handle, or examine products
firsthand; are concerned about service (such as returns); and may not have a salesperson to answer questions.

Online/Mobile Shopping: People who shop online are often well educated and have aboveaverage incomes (as stated in
Chapter 6). As we noted earlier, online shopping encompasses more than just purchasing online. Using the Toys “R” Us
Web site, shoppers can research items, check out prices, and place orders.

Outshopping: Out-of-hometown shopping, outshopping, is important for both local and surrounding retailers. The former
want to minimize this behavior, whereas the latter want to maximize it. Outshoppers are often young, members of a
large family, and new to the community. Income and education vary by situation. Outshoppers differ in their lifestyles
from those who patronize hometown stores. They enjoy fine foods, like to travel, are active, like to change stores, and
read out-of-town newspapers. They also downplay hometown stores and compliment out-of-town stores. These are vital
data for suburban shopping centers. Outshoppers have the same basic reasons for out-of-town shopping whether they
reside in small or large communities—easy access, liberal credit, store diversity, product assortments, prices, the
presence of large chains, entertainment facilities, customer services, and product quality. Outshopping: පිටස්තර සාප්පු
සවාරි, ප්රබද්ශබේ සහ අවට සිල්ලර බවබෙන්දන් සඳහා වැදගත් බේ. පෙමුවැන්නාට බමම හැසිරීම අවම කිරීමට අවශ්ය වන අතර
බදවැන්නාට එය උපරිම කිරීමට අවශ්ය බේ. පිටත සාප්පු සවාරි යන්නන් බොබහෝ විට තරුණ, විශාල පවුලක සාමාජිකයන් සහ
ප්රජාවට අලුත් ය. ආදායම සහ අධ්යාපනය තත්ත්වය අනුව බවනස් බේ. පිට සාප්පු සවාරි යන්නන් උපන් නගරබේ බවෙඳසැල් වලට
අනුේරහය දක්වන අයබගන් ඔවුන්බේ ජීවන රටාව බවනස් බේ. ඔවුන් බහාඳ ආහාර රසවිඳිති, සංචාරය කිරීමට කැමති, ක්රියාශීලී,
බවෙඳසැල් බවනස් කිරීමට සහ නගරබයන් පිටත පුවත්පත් කියවීමට කැමතියි. ඔවුන් උපන් නගරබේ බවෙඳසැල් අඩු කරන අතර
නගරබයන් පිටත බවෙඳසැල් අගය කරයි. බම්වා තදාසන්න සාප්පු මධ්යස්ථාන සඳහා වැදගත් දත්ත බේ. පිට සාප්පු සවාරි යන්නන්
කුඩා බහෝ විශාල ප්රජාවක වාසය කෙත් නගරබයන් පිටත සාප්පු සවාරි සඳහා එකම මූලික බහ්තු ඇත—පහසු ප්රබේශය, ලිෙරල් ණය,
ගෙඩා විවිධත්වය, නිෂ්පාදන එකතු කිරීම්, මිල ගණන්, විශාල දාම තිබීම, විබනෝදාස්වාද පහසුකම්, පාරිබභෝගික බස්වා සහ නිෂ්පාදන
ගුණාත්මක

The consumer decision process

The consumer decision process has two parts: the process itself and the factors affecting the process. There are six steps
in the process:

A. The Decision Process B. Factors Affecting the Process

 Stimulus 01. Demographics 02.Lifestyle
 Problem awareness
 Information search
 Evaluation of alternatives
 Purchase
 Post-purchase behavior

Key Factors in the Purchase Act

Retailer’s place of purchase • Store • Home • Office/school • World Wide Web

Retailer’s purchase terms • Price • Cash vs. credit acceptance

Retailer’s good/service availability • Stock on hand • Delivery

Place of purchase: This may be a store or a nonstore location. Many more items are bought at stores than through
nonstore retailing, although the latter method is growing quickly. The place of purchase is evaluated in the same way as
the good or the service: alternatives are listed, their traits are defined, and they are ranked.

Purchase terms: These include the price and method of payment. Price is the dollar amount a person must pay to achieve
the ownership or use of a good or service. Method of payment is the way the price may be paid (cash, short-term credit,
long-term credit).

Availability: This relates to stock on hand and delivery. Stock on hand is the amount of an item that a place of purchase
has in stock. Delivery is the time span between placing an order and receiving an item and the ease with which an item is
transported to its place of use.

Post-purchase behavior. After buying a good or service, a consumer may engage in postpurchase behavior, which falls
into either of two categories: further purchases or re-evaluation. Sometimes, buying one item leads to further purchases
and decision making continues until the last purchase. A car purchase leads to insurance; a retailer using scrambled
merchandising may stimulate a shopper to further purchase after the primary good or service is bought. A person may
also re-evaluate a purchase. Is performance as promised? Do actual attributes match the expectations the consumer
had? Has the retailer acted as expected? Satisfaction typically leads to contentment, a repurchase when a good or service
wears out, and positive ratings to friends. Dissatisfaction may lead to unhappiness, brand or store switching, and
unfavorable conversations with friends and negative online postings. The latter situation (dissatisfaction) may result from
cognitive dissonance—doubt that the correct decision has been made.

Types of Consumer Decision Making

Extended decision making occurs when a consumer makes full use of the decision process. Much time is spent gathering
information and ranking alternatives—what to buy and where to buy—before a purchase. The potential for cognitive
dissonance is great. In this category are expensive, complex items with which a person has had little or no experience.
Perceived risk of all kinds is high. Items requiring extended decision making include a house, a first car, and life insurance.

limited decision making, a consumer uses all the steps in the purchase process but does not spend a great deal of time
on each of them. It requires less time than extended decision making because a person typically has some experience
with both the brand and retailer choice of the purchase. This category includes items that have been bought before but
not regularly. Risk is moderate, and the consumer spends some time shopping. සීමිත තීරණ ගැනීම, පාරිබභෝගිකබයකු මිලදී
ගැනීබම් ක්රියාවලිබේ සියලුම පියවර භාවිතා කරන නමුත් ඒ සෑම එකක් සඳහාම විශාල කාලයක් වැය බනාකරයි. පුද්ගලබයකුට
සාමාන්යබයන් සන්නාමය සහ මිලදී ගැනීබම් සිල්ලර බවබෙන්දා යන බදකම සම්ෙන්ධබයන් යම් අත්දැකීමක් ඇති ෙැවින් එයට දීර්ශ
තීරණ ගැනීමට වඩා අඩු කාලයක් අවශ්ය බේ. බමම ප්රවගශයට කලින් මිලදී ගත් නමුත් නිතිපතා බනාවන අයිතම ඇතුෙත් බේ.
අවදානම මධ්යස්ථ වන අතර, පාරිබභෝගිකයා සාප්පු සවාරි සඳහා යම් කාලයක් ගත කරයි.

Routine decision making takes place when the consumer buys out of habit and skips steps in the purchase process. He or
she wants to spend little or no time shopping, and the same brands are usually repurchased (often from the same
retailers). This category includes items bought regularly. They have little risk due to consumer experience. The key step is
problem awareness. When the consumer realizes a good or service is needed, a repurchase is often automatic.
පාරිබභෝගිකයා පුරුද්බදන් මිෙදී ගන්නා විට සහ මිලදී ගැනීබම් ක්රියාවලිබේ පියවර මඟහරින විට සාමාන්ය තීරණ ගැනීම සිදුබේ. ඔහුට
බහෝ ඇයට අවශ්ය වන්බන් සාප්පු සවාරි සඳහා සුළු බහෝ කාලය ගත කිරීමට අවශ්ය වන අතර, එම බවෙඳ නාම සාමාන්යබයන් නැවත
මිලදී ගනු ලැබේ (බොබහෝ විට එකම සිල්ලර බවබෙන්දන්බගන්). බමම කාණ්ඩයට නිතිපතා මිලදී ගන්නා අයිතම ඇතුෙත් බේ.
පාරිබභෝගික අත්දැකීම් නිසා ඔවුන්ට කුඩා අවදානමක් ඇත. ප්රධාන පියවර වන්බන් ගැටළු දැනුවත් කිරීමයි. භාණ්ඩයක් බහෝ
බස්වාවක් අවශ්ය ෙව පාරිබභෝගිකයාට වැටබහන විට, නැවත මිලදී ගැනීම බොබහෝ විට ස්වයංක්රීය බේ.

Impulse Purchases and Customer Loyalty

Impulse purchases

arise when consumers buy products and/or brands they had not planned on buying before entering a store, reading a
mail-order catalog, seeing a TV shopping show, turning to the Web, and so forth. බවෙඳසලකට ඇතුළු වීමට බපර, තැපැල්
ඇණවුම් නාමාවලියක් කියවීම, රූපවාහිනී සාප්පු සවාරි දශශනයක් දැකීම, බවේ බවත හැරීම යනාදී බලස පාරිබභෝගිකයන් මිලදී
ගැනීමට සැලසුම් කර බනාතිබූ නිෂ්පාදන සහ/බහෝ බවෙඳ නාම මිලදී ගන්නා විට ආබේගාත්මක මිලදී ගැනීම් පැන නගී.

There are three kinds of impulse shopping:

Completely unplanned. Before coming into contact with a retailer, a consumer has no intention of making a purchase in
a goods or service category

Partially unplanned. Before coming into contact with a retailer, a consumer has decided to make a purchase in a goods or
service category but has not chosen a brand or model.
Unplanned substitution. A consumer intends to buy a specific brand of a good or service but changes his or her mind
about the brand after coming into contact with a retailer.

Customer loyalty

exists, a person regularly patronizes a particular retailer (store or nonstore) that he or she knows, likes, and trusts. This
lets consumers reduce decision making because they do not have to invest time learning about and choosing the retailer
from which to purchase. Loyal customers tend to be time-conscious (e.g., shop locally); do not often engage in
outshopping; and spend more per shopping trip.

Devising a Target Market Strategy

 Determine Target Market Approach

 Select Specific Target Market(s)
 Study Characteristics, Needs, and Attitudes of Target Market(s)
 Examine How Consumers Make Decisions—by Product Category
 Develop and Enact Appropriate Retail Strategy Mix(es) for the Target Market(s) Chosen

ENVIRONMENTAL FACTORS AFFECTING CONSUMERS

 Price wars among retailers

 Emergence of new retail formats
 Emergence of new technologies
 Trend toward more people working at home
 State of the economy
 Consumer confidence about the future
 Country of residence (industrialized versus developing)
 Cost of living in the person’s region or city of residence
 Rate of inflation (how quickly prices are rising)