Which type of consumer are you?
A study shows that four different types have emerged from the Great Recession.
One fact often ignored in the current debate on the lasting effects of the recession is the wide variation in the way American consumers are dealing with the downturn.
A new study -- "Marketing to the Post-Recession Consumers" -- by the marketing strategy and research firm Decitica has identified four distinct consumer segments emerging from the recession:
- Steadfast Frugalists
- Involuntary Penny Pinchers
- Pragmatic Spenders
- Apathetic Materialists
Steadfast Frugalists. Steadfast Frugalists are committed to self-restraint, engaging in prudence with unequivocal enthusiasm. They make up about one-fifth of American consumers, representing all income and age groups.
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Eighty percent of Steadfast Frugalists say the new behaviors they have adopted will likely stay with them for a long time. Only 24% of Apathetic Materialists feel this way.
"Marketers will find this group to be the most challenging, as they are the least brand loyal and most likely to discount marketing messages," said Val Srinivas of Decitica.
Involuntary Penny Pinchers. Involuntary Penny Pinchers, about 29% 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. 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% find buying store or generic labels to be satisfying, compared with 59% of Steadfast Frugalists.
Also, the recession has had a heavy emotional impact on Involuntary Penny Pinchers. They admit to being more scared (77%), stressed (81%) and worried (87%) about the future than other groups.
Pragmatic spenders. Income has blunted the effects of the recession on this group, which is 29% of consumers. Only 28% of Pragmatic Spenders feel the recession has changed what and how they will buy in the future, versus 55% of Steadfast Frugalists.
"Pragmatic Spenders are the most attractive group for marketers because of their higher spending power," Srinivas said. "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."
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 6% in this group find price comparison to be satisfying, in contrast with 85% in the Steadfast Frugalists camp.
The Apathetic Materialists segment has more men (55%) and younger consumers (72% are below the age of 40). They are the least driven by price: Only 8% admit to being very focused on value compared with 30% of Pragmatic Spenders and 52% of Involuntary Penny-Pinchers.
Related reading at ConsumerAffairs.com:
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