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Study: Four Types Of Consumers Emerging From Recession

Economic upheaval redraws American consumer map

By James Limbach
ConsumerAffairs.com

November 5, 2009

A new study -- "Marketing to the Post-Recession Consumers" -- by the marketing strategy and research firm Decitica, looks into the differences in how consumers have responded to the recession.

Decitica has identified four distinct consumer segments emerging from the recession:

• Steadfast Frugalists

• Involuntary Penny-Pinchers

• Pragmatic Spenders and

• Apathetic Materialists

These categories were derived by analyzing the frequency, satisfaction and the self-efficacy associated with a variety of spending, purchase and consumption behaviors.

Steadfast Frugalists

Steadfast Frugalists are committed to self-restraint, engaging in prudence with unequivocal enthusiasm. They make up about one-fifth of the American consumers, representing all income and age groups.

"Marketers will find this group to be the most challenging, as they are the least brand loyal and most likely to discount marketing messages," notes Dr. Srinivas.

Eighty-percent of Steadfast Frugalists say the new behaviors they have adopted will likely stay with them for a long time. This is in contrast to twenty-four percent of Apathetic Materialists who feel this way.

Involuntary Penny-Pinchers

Involuntary Penny-Pinchers, about twenty-nine percent of the population, have been severely affected by the recession. They are mainly made up of households with less than $50,000 in income, with more women than men.

This segment has been forced to embrace thrift like never before. Presently, their actual behaviors do not differ widely from those of Steadfast Frugalists. Where they drastically diverge is in their aversion to expending effort in money-saving strategies. Only 17 percent find buying store or generic labels to be satisfying, compared with 59 percent of Steadfast Frugalists.

Also, the recession has had a heavy emotional impact on Involuntary Penny-Pinchers; they admit to being more scared (77 percent), stressed (81 percent) and worried (87 percent) about the future than other groups.

Pragmatic Spenders

"Pragmatic Spenders are the most attractive group for marketers because of their higher spending power," says Dr. Srinivas. "While it is true that they have also curbed their spending, they are the most capable, both psychologically and financially, to willfully resurrect their past spending patterns," he added. This group comprises 29 percent of consumers.

Income has blunted the effects of the recession on this segment. Only 28 percent of Pragmatic Spenders feel the recession has changed what and how they will buy in the future, versus 55 percent of Steadfast Frugalists.

Apathetic Materialists

Apathetic Materialists seem least changed by the recession. They have not embraced the new frugality to the same extent as others and get minimal satisfaction from such behaviors. Only about six percent in this group find price comparison to be satisfying, in contrast to 85 percent in the Steadfast Frugalists camp.

The Apathetic Materialists segment has more men (55 percent) and younger consumers (72 percent are below the age of 40). They are the least driven by price: only eight percent admit to being very focused on value compared with 30 percent of Pragmatic Spenders and 52 percent of Involuntary Penny-Pinchers.

Marketers want fresh view

"This research by Decitica decisively shows that marketers need a fresh lens through which to view consumers in the post-recession world," said Dr. Val Srinivas, principal at Decitica. "Marketing strategies that ignore the diversity of consumers' recession experiences won't have the desired potency."

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