Consumer Behavior Project: Lopez Supermarket [For Dr. Rhi-Perez' Consumer Behavior Course - Fall 2003]

Karla Ordoñez
Jose Luis Quezada

 

 

CONSUMER BEHAVIOR >> FINAL REPORT >> AUDIT >> MARKET SEGMENTATION

MARKET SEGMENTATION

As mentioned by Silvia Rico, the market segment consists of single women with children, ages 25-44, who live in the same geographical area in Brownsville and shop at Lopez Supermarket.

A. External influences

1.       Are there cultures or subcultures whose value system is particularly consistent (or inconsistent) with the consumption of our product?
The value system for the subculture (Mexican-Americans) is for the most part consistent with the consumption of Lopez Supermarket since they all share the traditions and beliefs, Hispanic race, Spanish language, and nationality background. Average family size for this segment is of 3.5, and spends 15 to 20 percent more of disposable income on groceries than the national average. They view their family and friends as an important part of their life, and value their opinions when making decisions such as where to shop for groceries. Customers of Lopez are generally those living close to the store. In general they are low-income Mexican/Hispanics with limited resources, strong values, high ties to family and tradition and the majority practice the Catholic religion.

2.       Is our product appropriate for male or female consumption? Will ongoing gender-role changes affect who consumes our product or how it is consumed?
Lopez Supermarket is appropriate for both male and female consumption. Even though, according to the Census Bureau, 17.4% of households are made up of female householder, and 45.8% without husband presence and with children, products sold at Lopez can be bought by either male or female. The ongoing gender-role (assuming that is from the same culture and subculture) would not change as to who buys at Lopez, but it could affect how it is consumed. Meaning, men, just as women, shop at Lopez, but men would not shop as much or buy the same products as women.  

3.       Do ethnic, social, regional, or religious subcultures have different consumption patterns relevant to our product?
Ethnic and social subculture, for the most part, might have a different consumption patterns. Some might like to go to Lopez to make use of their rebate coupons they offer. Some might shop on a daily basis, while others might shop once a week. It all depends on the amount of income and time they have to make their shopping.

For the most part, Lopez is directed to a Mexican-American region culture.  If Lopez were to locate somewhere where Mexican-American population is very low, Lopez’ current environment might not be as appreciated due a difference in values and believes other segments might have.

4.       Do various demographic or social-strata groups (age, gender, urban/suburban/ru­ral, occupation, income, education) differ in their consumption of our product?
Mexican-American is one of the fastest growing ethnic groups in the U.S. (in Brownsville, they totaled 103.297). Geography is an advantage for Lopez, since stores are located on the border of U.S. and Mexico.

Demographic and social-strata groups (age, gender, urban/suburban/ru­ral, occupation, income, education) might have different motive for shopping at Lopez Supermarket. For example, in an age group, kids might go to buy candy or they could be sent by their mothers to buy immediate products (tortillas, milk, soda) that they might need at home. Meanwhile adults might go to buy groceries in high amounts and items such as beer and cigarettes.

Other segments might not buy their groceries at Lopez, but they might go for the “fresh meat” or “barbacoa” they sell.  Geographically, if Lopez is not close by, consumer might look for alternatives and buy groceries either at a gas station or at another grocery store.

5.       Is our product particularly appropriate for consumers with relatively high (or low) incomes compared to others in their occupational group (ROCI)?
Based on Silvia Rico’s report, class structure for this segment is Lower-Middle who strives to become part of the Upper Class. This segment view food as an abundance of wealth, so they usually give food gifts. They have many status symbols, such as jewelry, new car, home décor, etc.  In their leisure time the go to the beach, and spend time with family. High income might prefer an alternative.

6.       Can our product be particularly appropriate for specific roles, such as students or professional women?
In general, anyone can shop at Lopez, but it is most appropriate for district level, low-middle income consumers whose role are of a household provider.  If customers are playing the role of a professional businessperson, for example, they definitely will not find items they might need (suitcases, high quality pens, etc.), since Lopez is meant for groceries.  A student, might find pen, paper, pencil, and notebooks, but in very small amounts, and a higher price than specialized stores.

7.       Would it be useful to focus on specific adopter categories?
Not necessarily. Focusing on specific adopter categories (The ranking into which adopters of a new product fall according to their willingness and speed to embrace a new product; adopter categories are normally listed as innovators, early adopters, early majority, late majority and laggards) will not help much, since Lopez sells products people are already familiar with.

An alternative would be to subgroup the current marketing segment even further (such those women who work and those who don’t) in order to target them better, since this subgroups share similar purchasing behaviors. This group of single young women with children can be subdivided based on the people that live with them (alone with own children, and with extended family), their number of working hours (part-time, and full-time), and based on their children’s age (under 6 yrs., and from 6 to 17 yrs.).

Targeting per segment

Women living alone with their own children:
This sub-segment is influenced greatly by their children, they may go to shop at Lopez because their children had great experiences from the store. Children are a strong influence that guides these women to shop there, but also they also have influence in the products they buy. This segment may spend great part of their income in shopping products their children like, depending on their age. Small children may influence them to buy candies, and products that contain attractive animations. Older children may influence their overall product selection based on their tastes and preferences. These children may also influence their mothers to buy high quality, and name branded products.

Women living with extended family:
These women are more likely to be influenced by their relatives living with them, specially the older ones that are thought to be the wisest ones. This segment tries to comply with society, and with their own family. They want to be approved by others, and make their purchases according to the way others expected them to act. They choose Lopez as their store for their food supplies, because it is the family tradition store. They are high self-monitoring, since these women tend to evaluate products consumed in public in terms of the impressions they make on others. They may also cash their checks, and pay some bills at Lopez, because that is the family tradition way to do this activity. Another reason for them to cash their checks is because they are low-Income and usually they do not have a bank account, because they tend to save the money that is left (if any) in their houses. They learned these activities from their parents or relatives living with them.

Women living with extended family and not working:
This segment relies on the extended family (or federal aid such as food stamps) for financial support.
They might be the ones purchasing immediate items for their children (such as cereal, milk, cookies) but leave the large purchase decisions to a secondary person. This segment has more time to shop and look around, and does not go to Lopez alone. They usually go at least twice a week (if not more) with their kids, and the extended family member with the purchase decision in the household. They rely on their family and friends for their immediate purchase decision, and try to save as money as much as possible since they don’t have sufficient income.

Women working full-time:
This sub-segment is very busy, they value their time, and buy at Lopez because of the store location, the relative small store size (comparing it with HEB, and El Globo), and because they are very familiar with the store, and they cash their checks at Lopez when they go shopping in order to save time.  These women know where are products located within the store, they know products prices, people working there, and people shopping there.  Women within this segment, go to Lopez once a week, or once every two weeks, depending on the way they get paid. They will usually go to the store on weekends, especially on Friday because is when they may cash their wage checks. On weekends they can buy groceries for all the week, since buying food supplies is a priority for them, and whatever money is left, they will spend it in clothes or save it. This segment usually goes to shop alone, and make their purchases according their own opinion, and neither relatives nor children influence their consumer behavior. These women are very important for Lopez because these women buy high-volume when they go to Lopez. They buy huge quantities because they do not have time to go other day in the week. Their purchases may not be well planned, they may buy their necessary products, and other products with discounts. Products strategic point-of-display is very important to influence this segment to buy.

Women working part-time:
This women have more time to analyze and plan their shopping, they may look more detailed the products they will buy. They may go to Lopez at an average rate of three times per week. Since they earn less money than full-timers, they will buy products at discount, and are well informed of the products that are going to be on sale any specific day. These women are very familiar with the store, and usually they have great relationships with store employees, and seek for their advice when making their purchases. This segment go to shop with their children, or other relatives, so their purchases are influenced by the people that go with them. They shop at Lopez because it is the store for groceries they know best, and because their relatives advice them to. They are more likely to be influenced by advertising (specially coupons), than full-timers, since they have more time to read adds, look for coupons, cut and use them.

Women with children under 6 years old:
This group of women with children under 6 years old, represents 8.6% of the female householder with no husband present, according to the U.S. Census Bureau (Census 2000) of Cameron County. This segment in heavily influenced by their children preferences. They will look for products that will be accepted and that will cause a positive attitude in their children. Children are a strong influence that guides their consumer behavior; thus influencing the type of products they buy. This segment may spend great part of their income in children-related products, such as candies, chocolates, cereals with cartoon animations, products that include small toys and others that are attractive to children. Mothers will usually go to Lopez accompanied by their children, because children make pressure to go with them. Children under 6 years old like to be with their mothers, and enjoy going to shop with them. These children influence mothers to buy seasonal products, especially adornments to their houses, and also food that include seasonal animation in its package. This segment may end up buying unexpected items, and spending more money than planned because of their children influence.

Women with children from 6 to 17 years old:
These children have strong influence in product brand selection. This group represents 35.3% of the female householder with no husband present, according to the U.S. Census Bureau (Census 2000) of Cameron County. They may influence their mothers to buy the brands that are most common, and are preferred by their friends. These children may not go to shop with their mothers, since they are at an age where they like to be seen as independent individuals. They do not participate actively in the purchase itself; they just influence their mothers to buy what they said. Mothers seek the approval of their children, so their purchases may be strongly influenced by their children. This segment wants to create a positive attitude towards the products they buy. These women are willing to buy more expensive items to satisfy their children’s preferences. They are willing to buy more products at a higher price, and sacrifice other goods, as possible to comply with children’s desires. For this segment, their children are seen as young adults with valuable opinion about products. Since many of this children go to school, and are the most knowledgeable and educated in the family, their judgment about certain products are taken as valid, and may cause changes in the products bought. 

8.       Do groups in different stages of the household life cycle have different consump­tion patterns for our product? Who in the household is involved in the purchase process?
In this case, single women might just buy the basic items (milk, cereal, eggs). If they live with their parents, their parents might be the ones doing the groceries. Younger kids might also play a role, meaning they might be the ones asking what type of products to buy at Lopez (specific brand of cereal or soft drink).

B.  Internal influences

1.       Can our product satisfy different needs or motives in different people? What needs are involved? What characterizes individuals with differing motives?
Yes. Customers might go to buy groceries, and at the same time take advantage of paying their bills, cashing a check, or sending mail.  Those who go on a daily basis might also want to know what kinds of savings they might find. Kids might want to go to buy candy. Others might need to buy food for a birthday party, or to get ready for Friday’s barbeque.

2.       Is our product uniquely suited for particular personality types? Self-concepts?
Lopez is focused more for the lower-middle income people. This means that people who have relatives and shop at Lopez might do so as well just to not feel left out, as mentioned by Silvia. High-income people might not shop there simply because they might want to be compared or identified with the low-middle income people (of course there are exceptions but this goes for the majority of the high-income class.)  For the most part, Lopez is directed toward a Mexican-American environment and to the other segments that accept this.

3.       What emotions, if any, are affected by the purchase and/or consumption of this product?
Realizing that they are known and treated on a friendly matter influence them to go to Lopez. Also having family, neighbors, or friends who might work or go there, might affect this as well.

4.       Is our product appropriate for one or more distinct lifestyles?
For the most part, is for those who prefer to go to Lopez for convenience and to save money. Young single Mexican-American mothers might go there because their concern is their family and their heritage traditions. Other with a different lifestyle (those who might like to spend a lot of money, for example) might not consider Lopez as an option.

As Silvia Rico mentioned, self-monitoring is also affected here because their choices are influenced by their estimates of how Lopez is perceived by their family and friends. If a person was told that shopping at Lopez is only for the poor, then that person might be embarrassed to go or be seen there.
A birth of a child or departure of an older one, may affect the lifestyle of the consumer and they way they buy. For the birth of a child, they might need to buy baby products, while for the departure of a child, they might consume less.

5.       Do different groups have different attitudes about an ideal version of our product?
Yes. Some might prefer a “nice looking and cleaner” store.  Others might compare Lopez to H.E.B. and might perceive Lopez as a small, local store compared to H.E.B.  Others might not want to shop at Lopez because of the smell (meat) it emits. There are also those who believe that Lopez is fine the way it is.

C.  Situational influences

1.       Can our product be appropriate for specific types of situations instead of (or in addition to) specific types of people?
Yes. In case of an emergency (a hurricane, for example), people might go to Lopez to buy items such as candles, flashlights, can food, batteries, or anything else they might need.  A family birthday party or special celebration might require buying the meat and even decorations such as balloons.  Barbeque on Friday, as Silvia pointed out, is another example.

D.  Decision-process influences

1.       Do different individuals use different evaluative criteria in selecting the product?
Yes. Family could influence some individuals (worrying about what their family might think of them if they were to shop at another store).

Others might select distance or convenience as a way to measure going to Lopez (how far it takes to go to Lopez compared to going to a gas station).

2.       Do potential customers differ in their loyalty to existing products/brands?
Some of the products sold at Lopez might not be sold at other stores and vice-versa. (Hill Country products are only sold at H.E.B.).  Some products are well known to them since they are the products their parents and grandparents used. Others might not be as loyal to the brands as they are to the store itself.

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