Retail Management: A Strategic

Approach
Thirteenth Edition

Chapter 7
Identifying And
Understanding
Consumers

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Learning Objectives (1 of 2)
7.1 To discuss why it is important for a retailer to properly
identify, understand, and appeal to its customers
7.2 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

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Learning Objectives (2 of 2)
7.3 To examine consumer attitudes toward shopping and
consumer shopping behavior, including the consumer
decision process and its stages
7.4 To look at retailer actions based on target market
planning
7.5 To note some of the environmental factors that affect
consumer shopping

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Figure 7.2 What Makes Retail
Shoppers Tick

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Consumer Demographics and
Lifestyles

Consumer Demographics Consumer Lifestyles

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Helpful Facts for Understanding U.S.
Demographics (1 of 2)
• Typical household has an annual income of $54,000
• Top 1/5 of households earn approximately $100,000 or
more
• Lowest 1/5 of households earn $20,000 or less
• High incomes lead to high discretionary income

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Helpful Facts for Understanding U.S.
Demographics (2 of 2)
• There are about 6.5 million more females than males
• 57 percent of adult females are in the labor force
• Most U.S. employment is in services
• Approximately 32 percent of all U.S. adults age 25 and
older have at least a four-year college degree
• African Americans, Hispanic Americans, and Asian
Americans account for one-third of U.S. residents. their
total annual buying power is more than $3.4 trillion.

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

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Understanding Consumer Lifestyles:
Psychological Factors
• Lifestyle
– Personality
– Attitudes
– Perceived Risk
– Class Consciousness
– Purchase Importance

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Figure 7.3 Perceived Risk and
Consumers

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Retailer Strategies to Reduce
Perceived Risk by Shoppers (1 of 2)
• 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

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Retailer Strategies to Reduce
Perceived Risk by Shoppers (2 of 2)
• 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; auto dealers picking
and returning recalled cars

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

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Figure 7.4 Blurring Gender Roles

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Gender Segmentation and Retail
Prices
Please click URL to view:
https://youtu.be/aXS17KQQdUc

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Three Special Market Segments
• In-Home Shoppers
• Online/mobile Shoppers
• Out shoppers

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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

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Attitudes Towards Shopping
• Level of shopping enjoyment
• Shopping time
• Cautious Optimism and Disparity in Wealth Effect

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Shopper Segmentation
• Shifting feelings about retailing
• Attitudes by market segment
‒ Involved
‒ Spontaneous
‒ Apathetic
• Attitudes toward private brands

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Top Reasons for Leaving an Apparel
Store Without Buying
• Change in shopping goals
• Deficiencies in merchandise assortment (cannot find an
appealing style, right size, fit)
• Lack of salesperson support and unsatisfactory in-store
experience
• Cannot find a good value

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Table 7.3 Global Shopping Attitudes
and Behavior
Why Consumers in 51 Countries Shop at a Specific (% saying highly
Retailer influential):
Good value for the money 61
Lowest prices 58
Convenient location 57
Great sales and promotions 55
Desired products in stock 54
Organized store layout (ease of shopping) 42
Friendly, knowledgeable employees 40
Fast checkout 38
Customer loyalty program 28

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

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Figure 7.6 The Consumer Decision
Process

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Figure 7.7 Key Factors in the
Purchase Act

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Types of Consumer Decisions

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Types of Impulse Shopping
• Completely unplanned
• Partially unplanned
• Unplanned substitution
• Retail atmospherics
• Enhanced service mix – related + unrelated to core

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Figure 7.10 Devising a Target
Marketing Strategy

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

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