5th Edition PPT 4-1

Chapter 4 Customer Buying Behavior

McGraw-Hill/Irwin PPT 4-2 Retailing Management, 5/e Levy/Weitz:

Copyright 2004 by The McGraw-Hill Companies, Inc. All rights reserved.

 Copyright 2006

Copyright 2006, Ignacio J. Vzquez 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.

PPT 4-3

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
PPT 4-4

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

PPT 4-5

What Retailers Need to do for Customers to

Engage in Habitual Decision Making

It Depends
If 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 Competitors Store, Break the Habit

-Offer Special Promotions

PPT 4-6

Customer Loyalty
Brand Loyalty
Committed to a Specific Brand Reluctant to Switch to a Different Brand May Switch Retailers to Buy Brand

Store Loyalty
Committed to a Specific Retailer

Reluctant to Switch Retailers

PPT 4-7

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 Loyalty
Make Sure Customer is Satisfied

Provide Good Service, Assortments, value

Offer Rewards to Convert to Loyal Customer

If the Customer Goes to Your Competitors Store, Change Behavior

Offer More Convenient Locations, Better Service and Assortments
PPT 4-8

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

PPT 4-9

Stages in the Buying Process

PPT 4-10

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
PPT 4-11

Stimulating Need Recognition

Advertising and Direct Mail

Visual Merchandise in Store Signage Displays Suggestions by Sales Associates

PPT 4-12

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
PPT 4-13

Sources of Information
Internal
Past experiences
Memory

External
Consumer reports Advertising Word of mouth
PPT 4-14

How Can Retailers Reduce Information Search?

Extensive merchandise assortment

Assistance in locating alternatives Everyday low pricing Credit Information from sales associates

PPT 4-15

Providing Information on Internet

PPT 4-16

Information about Retailers Selling Groceries

PPT 4-17

Belief About Retailers Performance Benefits

PPT 4-18

Information Used in Evaluating Retailers

PPT 4-19

Information Used in Purchasing a Suit

PPT 4-20

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

PPT 4-21

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

PPT 4-22

Factors Influencing the Buying Decision Process

PPT 4-23

Social Factors Influencing Buying Decisions

Family
Culture Reference Group

PPT 4-24

Methods for Segmenting Retail Markets

Geographic

Demographic

Segmenting Markets

Lifestyle Feelings and Behaviors

PPT 4-25

Geodemographic Segmentation Birds of a feather Flock Together

Town and Gown Latino America

College Town Singles

Foreign Films (+) Dogs (-)

Hispanic Middle Class

Boxing (+) Dance Music (+)

Sewing (-)
Coca Cola (+) Fast Food (+) Friends (+) Sports Illustrated (+)
PPT 4-26

Barbequing (-)
Avocados (+) Cosmopolitan (+) Touched By an Angel (+)

Distribution of Grey Collar Aging Couples Near Suburbs

PPT 4-27

VALS2 American Lifestyles

PPT 4-28

Lifestyle Segmentation VALS

Action Oriented High Resources Follow Fashions and Fads Believers Lower resources Buy American

Spend a lot on socializing, entertainment

Impulse buyers Influenced by advertising
PPT 4-29

Look for bargains

Watch TV a lot Read home and garden magazines

Lifestyle Segmentation VALS

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PPT 4-30

Criteria for Evaluating Segmentation Schemes

Actionability
Identifiability

Accessibility
Stability Size
PPT 4-31

Example of a Composite Segmentation Scheme

PPT 4-32

Example of a Composite Segmentation Scheme

PPT 4-33

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.

PPT 4-34

Why Consumers Buy Fashions

Communicate with Others Manage Appearance Express Self-Image Enhance Ego Impress Others

PPT 4-35

What Creates Fashion?

Economic Factors Sociological Factors

PPT 4-36

Factors Affecting Fashion

Economic Development
Social Environment Class structure Role of men and women Structure of the family Personal Issues
PPT 4-37

Stages in the Fashion Life Cycle

PPT 4-38

What Affects the Rate Fashion Spreads?

Advantage
Compatibility

Complexity
Trialability

Observability
PPT 4-39

Theories of Fashion Diffusion

Trickle-Down Theory

Mass Market Theory

Subculture Theory
PPT 4-40