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Transcript of Chapter 4
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PPT 4-1
5th Edition
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PPT 4-2McGraw-Hill/IrwinLevy/Weitz: Retailing Management, 5/e Copyright © 2004 by The McGraw-Hill Companies, Inc. All rights reserved.
Customer Customer Buying BehaviorBuying Behavior
Chapter 4Chapter 4
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PPT 4-3
© Copyright 2006, Ignacio J. Vázquez All rights reserved. No part of this book may be reproduced, stored in a retrieval system, or transmitted by any means, electronic, mechanical, photocopying, recording, or otherwise, without written permission from the author.
© Copyright 2006
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PPT 4-4
Types of Purchase Decisions
Extended Problem Solving-High financial or Social Risk
Limited Problem Solving-Some Prior Buying Experience
Habitual Decision Making-Store Brand, Loyalty
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PPT 4-5
What Retailers Need to do for Customers Engaged in Extended Problem Solving
Provide a Lot Information -Use Salespeople rather than advertising to communication with customers
Reduce the Risks -Offer Guarantees
-Return Privileges
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PPT 4-6
What Retailers Need to do for Customers to Engage in Habitual Decision Making
It DependsIf the Customer Habitually Comes to You, Reinforce
Behavior-Make Sure Merchandise is in Stock
-Provide Good Service
-Offer Rewards to Loyal Customer
If the Customer Goes to Your Competitor’s Store, Break the Habit-Offer Special Promotions
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PPT 4-7
Customer Loyalty
Brand Loyalty Committed to a Specific Brand
Reluctant to Switch to a Different Brand
May Switch Retailers to Buy Brand
Store LoyaltyCommitted to a Specific Retailer
Reluctant to Switch Retailers
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PPT 4-8
What Do Retailers Need To Do for Customers Engaged in
Limited Problem Solving
It Also Depends…If the Customer Is Coming to You, Provide a Positive
Experience and Create LoyaltyMake Sure Customer is Satisfied
Provide Good Service, Assortments, value
Offer Rewards to Convert to Loyal Customer
If the Customer Goes to Your Competitor’s Store, Change BehaviorOffer More Convenient Locations, Better Service and
Assortments
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PPT 4-9
Encouraging Impulse Buying
Have Salespeople Suggest Add-ons
Have Complementary Merchandise Displayed Near Product of Interest
Use Signage in Aisle or Special Displays
Put Merchandise Where Customers Are Waiting
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PPT 4-10
Stages in the Buying Process
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PPT 4-11
Why People Go Shopping
Purchase merchandise or services
Take a break from daily routine
Social experience
Learn new trends and fashions
Satisfy need for power and status
Self-rewards
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PPT 4-12
Stimulating Need Recognition
Advertising and Direct Mail
Visual Merchandise in Store
Signage
Displays
Suggestions by Sales Associates
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PPT 4-13
Factors Affecting Amount of Information Search
• Characteristics of the Product
Complexity
Cost
• Characteristics of Customer
Past experience
Perceived risk
Time pressure
• Market Characteristics
Number of alternative brands
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PPT 4-14
Sources of Information
ExternalConsumer reports
Advertising
Word of mouth
Internal Past experiences
Memory
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PPT 4-15
How Can Retailers Reduce Information Search?
Extensive merchandise assortment
Assistance in locating alternatives
Everyday low pricing
Credit
Information from sales associates
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PPT 4-16
Providing Information on Internet
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PPT 4-17
Information about Retailers Selling Groceries
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PPT 4-18
Belief About Retailers’ Performance Benefits
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PPT 4-19
Information Used in Evaluating Retailers
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PPT 4-20
Information Used in Purchasing a Suit
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PPT 4-21
Information Needed to Use Multi-Attribute Model
• Alternative Consumer Considering
• Characteristic/Benefits Sought in Making Store and Merchandise Choices
• Ratings of Alternative Performance on Criteria
• Importance of Criteria to Consumer
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PPT 4-22
Methods for Increasing Consumer Evaluation
• Increase Performance Beliefs of Your Store
• Decrease Performance Beliefs About Competitor
• Increase Importance Weight of Attributes on which You Have an Advantage
• Add a New Benefit on which You Excel
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PPT 4-23
Factors Influencing the Buying Decision Process
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PPT 4-24
Social Factors Influencing Buying Decisions
Family
Reference Group
Culture
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PPT 4-25
Methods for Segmenting Retail Markets
GeographicDemographic
Feelings and BehaviorsLifestyle
Segmenting Markets
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PPT 4-26
Geodemographic Segmentation“Birds of a feather Flock Together”
Latino America
Hispanic Middle Class
Boxing (+)
Dance Music (+)
Barbequing (-)
Avocados (+)
Cosmopolitan (+)
Touched By an Angel (+)
Town and Gown
College Town Singles
Foreign Films (+)
Dogs (-)
Sewing (-)
Coca Cola (+)
Fast Food (+)
Friends (+)
Sports Illustrated (+)
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PPT 4-27
Distribution of Grey Collar Aging Couples Near Suburbs
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PPT 4-28
VALS2 American Lifestyles
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PPT 4-29
Lifestyle SegmentationVALS
Action Oriented
High Resources
Follow Fashions and Fads
Spend a lot on socializing, entertainment
Impulse buyers
Influenced by advertising
Believers
Lower resources
Buy American
Look for bargains
Watch TV a lot
Read home and garden magazines
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PPT 4-30
Lifestyle SegmentationVALS
• http://www.sric-bi.com/vals/presurvey.shtml
This online version of the VALS™ questionnaire has been optimized for Netscape Navigator 4.x and Internet Explorer 5.01 or higher. You need to have Java, Javascript, and cookies active to take the questionnaire. Please check your browser preferences to ensure that Java, Javascript, and cookies are active. Company and personal firewalls may also interfere with the surve
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PPT 4-31
Criteria for Evaluating Segmentation Schemes
Actionability
Identifiability
Accessibility
Stability
Size
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PPT 4-32
Example of a Composite Segmentation Scheme
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PPT 4-33
Example of a Composite Segmentation Scheme
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PPT 4-34
What is Fashion?
A type of product or way of behaving that is temporarily adopted by a large number of consumers because it is viewed as socially acceptable.
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PPT 4-35
Why Consumers Buy Fashions
Communicate with Others
Manage Appearance
Express Self-Image
Enhance Ego
Impress Others
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PPT 4-36
What Creates Fashion?
Economic Factors
Sociological Factors
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PPT 4-37
Factors Affecting Fashion
Economic Development
Social Environment
Class structure
Role of men and women
Structure of the family
Personal Issues
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PPT 4-38
Stages in the Fashion Life Cycle
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PPT 4-39
What Affects the Rate Fashion Spreads?
Advantage
Compatibility
Complexity
Trialability
Observability
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PPT 4-40
Theories of Fashion Diffusion
Trickle-Down Theory
Mass Market Theory
Subculture Theory