Consumer Frugality Essay Example | Topics and Well Written Essays - 1000 words

Consumer Frugality - Essay Example According to a survey study conducted by Booz & Company on 2,000 consumers in the U.S., there is an emergence of frugal consumers. This is mainly because of the recent recession that has shaped their consumption behavior. It is expected that such consumption behavior will persist in the future even as there are reports that the U.S. is recovering from the recession (Zavestoski, 2002). Therefore, marketers have identified a market segment consisting of frugal consumers and are making efforts to attract such customers. The frugal consumer has unique characteristics including a strong consciousness on a value which determines the level of trade -off in price and convenience. Research studies on consumption patterns among U.S. consumers indicate that almost 67 percent of customers are purchasing low priced products in order to reduce spending while improving on saving (Craig-Lees & Hill, 2002). This is evident from the decrease in the Per capita consumption expenditure across almost all demographic groups. Additionally, customers have maintained a weak sentiment which has influenced their low expenditure on consumption. The target market segment of frugal consumers can be described using a number of demographic factors that define their unique features. The demographic factors include household income and age. First, the target market segment consisting of frugal consumers is made up of middle-income households. They have an annual income between $20,000 and $50,000 and are very mindful when it comes to spending their income. They are very selective and often plan in advance before going for shopping at discount stores rather than high-end stores. Second, the target market consists of individuals aged between 35 and 40 years. This is the age gap within which people have families, are in employment, and are working hard to save for their retirement. They are very keen with their spending habits and they always ensure that they are buying goods at low prices so that they can save a significant part of their income (Zavestoski, 2002). Third, the target market consists of home owners who have a high demand for household products to use in their homes. However, they are also very frugal and have a habit of shopping from discount stores. The multiple demographics of frugal consumers make it very difficult to market products. Discount retail shops including target, Costco, and Sam's Club have developed a number of marketing mixes in attracting frugal consumers. Let us recall that frugal consumers buy less and price conscious. Therefore it is evident that any marketing mix targeting frugal consumers should heavily rely on price. However, the other 3 P’s are equally important because they complement price. It is an obvious fact that consumers are becoming very frugal these days and that businesses need to differentiate their products in order to remain competitive (Craig-Lees & Hill, 2002). The frugal consumer is looking for products that will deliver the best value for their dollar. This implies that businesses need to provide the best value to its client in order to attract a significant number of frugal consumers. The most common marketing mix among companies targeting frugal customers is that there is always a price discount. This is mainly because such consumers a re very sensitive to changes in prices. A significant decrease in