Knowing what your customer wants

Academic director of Dublin City University Business School, Dr Melrona Kirrane, at the Londis National Retailer Conference 2012, held at the Malton Hotel, Killarney
Academic director of Dublin City University Business School, Dr Melrona Kirrane, at the Londis National Retailer Conference 2012, held at the Malton Hotel, Killarney

Speaking at the Londis National Retailer Conference 2012, DCU's Dr Melrona Kirrane provided a thought-provoking insight into why certain customers buy particular products

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16 November 2012

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While we are constantly bombarded by media reports of Ireland’s seemingly never-ending recession, it is important to remember that not all consumers have been equally affected by the fiscal events of the past few years. Your customers, according to DCU’s Dr Melrona Kirrane, could subsequently range from ‘slam on the brakes’ consumers, for whom price is the number one priority, and ‘comfortably well-off’ shoppers, who still want to buy their favourite, trusted brands.

Taking a helicopter view of operations

How therefore can a retailer appeal to all these different groups within one store? "There should be a strategy in place from the floor manager," says Dr Kirrane. "I think the store manager needs to take a helicopter view and recognise who the customers are and filter that information downwards. At the same time, the shop floor staff are sometimes closer to the customer and so it is important to empower them to deliver feedback on what the customer wants."

Social media websites such as Facebook and Twitter are another increasingly important advertising tool for those within the grocery trade, according to Dr Kirrane. "I think you would be a fool to decide that your customer would never be influenced by an ad on social media," she says candidly. "I think you need to therefore recognise who’s mostly going to pick up on the ad. So for example, the live for today segment [those consumers who are typically urban and younger, and more likely to spend on experiences rather than material goods, with the exception of consumer electronics] are absolutely going to be influenced by social media, so if your product is something that’s geared towards them, it would be an awful deficit not to deliver your message via social media."

Highlighting a true bargain

A product that represents affordable luxury such as a Magnum ice-cream is an ideal product for an internet advertisement because it "isn’t a huge big costly product, but still is a little indulgence that appeals to nearly every segment." However while marketing products as an affordable alternative to more major expenditures is a smart move according to Dr Kirrane, she warns about the importance of discounting appropriately and managing customers’ expectations in terms of price.

"People can form a habit and an expectation of what a price is for a certain product and if that’s at a promotional price, the retailer will be stung when they try and raise the price back up again," notes Dr Kirrane. "When something is marked at a bargain price forever it’s not actually perceived as a bargain anymore, which is why it’s a good idea to shake promotions up."

Driving profitable growth

Continuing on the subject of prices, in keeping with the ADM Londis group’s progressive technological stance, conference delegates were asked to vote on electronic keypads as to what they believe will be the main driver of profitable growth within their business. Perhaps unsurprisingly, the top answer was value, receiving 54.8% of the vote, followed by range and availability (25.2%), customer service (13%) and innovation and exciting in-store experience (7%).

ShelfLife asked Dr Kirrane if she believed it was still important to focus heavily on the less popular answers. "Yes; different segments of the market view value differently," she replied. "Value is not always about price, it’s about all the other attributes of a product. Consumers are not homogenous, they are multi-faceted and they’re broken down into different segments and so you can’t focus on value to the exclusion of everything else because some of your customers want everything else."

Attributes of an excellent leader

As Dr Kirrane teaches organisational psychology, with a particular interest in personality, leadership and strategic change, we were also keen to hear her views on what makes a leader successful. "I think that given the pace of the world that we live in, it’s an uncertain, unpredictable, very dynamic environment and the winners and leaders of today are the leaders that don’t try to master everything, but roll with the circumstances and are strategically responsive to changes. The most effective leaders in the world are those who relate to followers. So at certain times, followers want to be led and at other times, followers want to hear their own voices. A good leader is empathetic, they are sensitive to what’s happening around them and they are decisive."

Consistently maintaining a quantifiable goal at the forefront of your mind is vital, concludes Dr Kirrane. "It’s most important to have quick winds – achieving a goal may take six months, so you have to be able energise the troops on the journey towards that goal, but there absolutely has to be a goal, otherwise you will never know where your business is heading." 

The psychology of the consumer in 2012
Dr Melrona Kirrane’s presentation for the Londis annual conference revealed several key pieces of research:

  • Product losses are weighed more heavily than gains. For example, a mobile phone may offer many tools and online services, but if it is not easy for a consumer to make a telephone call, they will become disillusioned with that particular product/brand
  • While we will go out of our way to get a €10 discount on a €20 product, we can’t be bothered to shop around for the same discount on a €500 product
  • "Free is the word" in successful advertising and marketing. A study showed that when a Hershey’s Kiss sweet cost 1 cent, and a Lindt Lindor cost 14 cents, the majority of shoppers chose the latter, but when the prices were dropped by just one cent for both sweets, the free Hershey’s Kiss became the much more popular option
  • Familiarity is a major selling point; studies showed children said the same chicken nuggets and chips were tastier when packaged in McDonald’s containers instead of plain wrapping
  • In a supermarket, 75% of shoppers will choose the brand they’re familiar with
  • Consumers can be categorised as belonging to four main segments during a recession – ‘slam on the brakes’, ‘pained but patient’, ‘comfortably well-off’ and ‘live for today’  
 

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