5th Edition

PPT 4-1

Chapter 4
Customer
Buying Behavior

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

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

 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

Segmenting Markets

Demographic

Lifestyle
Feelings and Behaviors
PPT 4-25

Geodemographic Segmentation
Birds of a feather Flock Together
Town
Townand
andGown
Gown

Latino
LatinoAmerica
America

College
CollegeTown
TownSingles
Singles

Hispanic
HispanicMiddle
MiddleClass
Class

Foreign
ForeignFilms
Films(+)
(+)

Boxing
Boxing(+)
(+)

Dogs
Dogs(-)
(-)

Dance
Dance Music
Music(+)
(+)

Sewing
Sewing(-)
(-)

Barbequing
Barbequing(-)
(-)

Coca
CocaCola
Cola(+)
(+)

Avocados
Avocados (+)
(+)

Fast
Fast Food
Food(+)
(+)

Cosmopolitan
Cosmopolitan (+)
(+)

Friends
Friends(+)
(+)

Touched
TouchedBy
Byan
anAngel
Angel(+)
(+)

Sports
SportsIllustrated
Illustrated(+)
(+)
PPT 4-26

Distribution of Grey Collar Aging Couples Near

Suburbs

PPT 4-27

VALS2 American Lifestyles

PPT 4-28

Lifestyle Segmentation
VALS
Action Oriented

Believers

High Resources

Lower resources

Follow Fashions and Fads

Buy American

Spend a lot on socializing,

entertainment

Look for bargains

Impulse buyers
Influenced by advertising
PPT 4-29

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