Targeting Customers and

Gathering Information
 Identifying and
Understanding Consumers
ü Why it is important for a retailer to properly
identify, understand and appeal to its
customers
ü Enumeration and description of consumer
demographics, lifestyle factors, and
needs and desires and to explain how
these concepts can applied to retailing
ü Examining consumer attitude towards
shopping and consumer shopping
behavior, including the consumer
decision process and its stages
ü Retailers actions based on target market
planning
 Why it is Important for a Retailer
to Properly Identify, Understand
and Appeal to its Customers
ü The quality of a retail strategy
depends on how well a firm identifies
and understands its customer and
forms its strategy mix to appeal to
them.
ü This entails identifying consumer
characteristics, needs and attitudes;
recognizing how people makes
decisions, and devising the proper
target market plan.
ü It also means studying the
 Enumeration and Description of
Consumer Demographics, Lifestyle
Factors, and Needs and Desires- and
To Explain How these Concepts can
Applied to Retailing
üConsumer demographics
üConsumer lifestyles
üRetailing implications of consumer
demographics and lifestyles
üConsumer profiles
üConsumer needs and desires
•
•
 Consumer demographics
• Consumer demographics is consumer
data that is objective, quantifiable,
easily identifiable, and measurable.
 Consumer Lifestyles
• Consumer life styles are based on Social
and Psychological factors, as given below:


Social Factors Psychological Factors

Referenc
Cultu Personali Attit
e
re ty udes
Groups

Lif Lif
Social
Class
est Time
Utilizat Perceiv est Class
Consciousne
yle ion ed
Risk yle ss

Househ Family
old Life Purchase
Life Cycle Importance
Cycle
 Retailing implications of
consumer demographics
and lifestyles
• Demographic and lifestyle
factors need to be considered
from several perspectives, as
given below:
– Gender Roles
– Consumer Sophistication and
Confidence
– Poverty of Time
– Component Life Style
 Consumer profiles
• Considerable research has been
aimed at describing consumer
profiles in a way that is useful for
retailers.
– Shoppers at Wal-Mart and Kmart
– Shoppers at Target etc
 Consumer needs and
desires
• Needs are person’s basic shopping
requirements
• Desiresare discretionary shopping
goals that have an impact on
attitudes and behavior.
• There are three particular market
that attract retailer attention
– In-Home Shoppers
– Online Shoppers
– Out shoppers
–
In-Home Shoppers

• Shopping is
discretionary, not
necessary.
• Convenience is
important
• Active, affluent, well-
educated.
• Self-confident,
younger,
adventuresome.
• Time scarcity is not a
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.
Out 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.
 Examining Consumer Attitude
towards Shopping and
Consumer Shopping Behavior,
including the Consumer
Decision Process and its Stages
üAttitudes towards shopping
üWhere people shop
üThe consumer decision process
üTypes of consumer decision making
üImpulse purchase and customer
loyalty
Attitudes towards shopping
• Shopping enjoyment
• Attitudes towards shopping time
• Shifting feelings about retailing
• Why people buy or do not buy on a
shopping trip
• Attitude by a market segment (Thrifties,
Allures, Speedsters, Elites).
• Attitudes towards private brands
üCannot find an appealing style
üCannot find the right size
Top Reasons for üNothing fits
Leaving an Apparel üNo sales help is available
Store Without Buying üCannot get in and out of the store easily
üPrices are too high
üIn-store experience is stressful
üCannot find a good value
 Where people shop
• Cross shopping
– Shopping for a product category at
more than one retail format during
the year.
– Visiting multiple retailers on one
shopping trip.

The consumer decision process
• Consumer decision process
• Factors affecting the process
Types of consumer decision
making

Extended High

Limited RISK & TIME

Routine Low
 Impulse purchase and
customer loyalty
ü Completely unplanned
ü Partially unplanned
ü Unplanned substitution


 Could you pass by this

vending machine without
making a purchase ?
•
 Retailers Actions Based on
Target Market Planning
ü Mass Marketing
Ø Kohl’s Department Stores
ü Concentrated Marketing
Ø Family Dollar
ü Differentiated Marketing
Ø Foot Locker
D e v isin g a Ta rg e t M a rk e tin g S tra te g y
Ø
•
•
 Environmental Factors
Affecting Consumer Shopping
ü State of the economy
ü Rate of inflation
ü Infrastructure where people shop, such as traffic
congestion, the crime rate, and the ease of parking
ü Price wars among retailers
ü Emergence of new retail formats
ü Trends towards more people working at home
ü Government and community regulations regarding
shopping hours, new constructions, consumer
protection and so forth
ü Evolving societal values and norms


Although all of these elements may not necessarily have

an impact on
any particular shopper, they do influence the retailers

overall target

Information Gathering and
Processing in Retailing
üHow information flows in a retail
distribution channel
üWhy retailers should avoid strategies
based on inadequate information
üRetail information system, its
components, and the recent
advances in such systems
üDescription of Marketing research
process
How Information Flows in a
Retail Distribution Channel
üInformation flows among
ØSupplier
ØRetailer and
ØConsumer

Informati Informati
on Information on
and the and the and the
Supplier Retailer Consumer
 Suppliers Need To Know

From the Retailer

 From the Customer


v Estimates of v Attitudes toward

category sales styles and
v Inventory models
turnover rates v Extent of brand
v Feedback on loyalty
competitors v Willingness to
v Level of pay a premium
customer for superior
returns quality
•
 Retailers Need To Know

From the Supplier


From the Customer


v Advance notice v Why people shop

of new models there
and model v What they like and
changes dislike
v Training v Where else people
materials shop
v Sales forecasts
v Justifications for
price changes
 Consumers Need To Know

From the Supplier

 From the Retailer


v Assembly and v Where specific

operating merchandise is
instructions stocked in the
v Extent of store
warranty v Methods of
coverage payment
v Where to send a acceptable
complaint v Rain check and
other policies
Why Retailers Should Avoid
Strategies Based on
Inadequate Information
• Using intuition
• Continuing what was done before
• Copying a successful competitors
strategy
• Devising a strategy after speaking to a
few individuals about their
perceptions
• Automatically assuming that a
successful business can easily expand
• Not having a good read on consumer
 Retail Information
System(RIS), its Components,
and the Recent Advances in
RIS
• Building and using a RIS
• Data base management
• Data warehousing
• Data mining and micromarketing
• Gathering information through the
UPC and EDI
 Retail Information
System (RIS)
vAnticipates the information
needs of retail managers
vCollects, organizes, and
stores relevant data on a
continuous basis
vDirects the flow of
information to the proper
decision makers
A Retail Information
System
 Data-Base Management
v A major element in an RIS
v System gathers, integrates, applies, and
stores information in related subject
areas
v Used for
– Frequent shopper programs
– Customer analysis
– Promotion evaluation
– Inventory planning
– Trading area analysis
 Five Steps to Approaching
Data-Base Management
v Plan the particular data base and its
components and determine
information needs
v Acquire the necessary information
v Retain the information in a usable and
accessible format
v Update the data base regularly to reflect
changing demographics, recent
purchases, etc.
v Analyze the data base to determine
strengths and weaknesses
Retail Data-Base Management
in Action
Data Warehousing
 Components of a Data
Warehouse
vPhysical storage location for data –
the warehouse
vSoftware to copy original databases
and transfer them to warehouse
vInteractive software to allow
processing of inquiries
vA directory for the categories of
information kept in the
warehouse
 Data Mining and
Micromarketing
vData mining is the in-depth
analysis of information to gain
specific insights about
customers, product
categories, vendors, and so
forth
vMicromarketing is an
application of data mining,
whereby retailers use
differentiated marketing and
develop focused retail
 Description of Marketing
Research Process
üMarketing research in retailing
üMarketing research process
üIssue/Problem definition to be
researched
üExamining secondary data, gathering
primary data, analyzing the data,
making recommendations, and
implementing findings.
The Marketing Research
Process
 Marketing Research
in Retailing
 The collection and analysis of
information relating to specific
issues or problems facing a
retailer
 Secondary Data

Advantages

Disadvantages


v Inexpensive v May not suit current

v Fast study
v Several sources v May be incomplete
and v May be dated
perspectives v May not be accurate
v Generally or credible
credible v May suffer from
v Provides poor collection
background techniques
information •
Secondary Data Sources

Internal

External


v Sales reports v Data bases

v Billing – ABI/Inform,
reports etc.
v Government
v Inventory
– U.S. Census of
records Retail Trade
v Performance – Statistical
reports Abstract of
the U.S.
– Public records
 Primary Data

Advantages

Disadvantages


v Collected for v May be more

specific expensive
purpose v Tends to be more
v Current time consuming
v Relevant v Information may
v Known and not be acquirable
controlled v Limited
source perspectives
Primary Data Decisions

• In-house or
outsource?
• Sampling method?
– Probability
– Nonprobability
• Data collection
method?
– Survey
– Observation
– Experiment
– Simulation
 Survey Methods

v In-person v Disguised
v Over the v Nondisguised
telephone
v By mail
v Online
 Mystery Shoppers

vRetailers hire people to

pose as customers and
observe operations
from sales
presentations to how
well displays are
maintained to service
calls