Consumer Behavior, Electronic Commerce, and Channel Strategy

Slides:



Advertisements
Similar presentations
Chapter 28 Promotion and Place Name 12 SAM.
Advertisements

Building Customer Relationships Through Effective Marketing
Retailing and B2C E-Commerce. Retailing Final stop on the distribution path The process by which products are sold to consumers for personal use Retailers.
Chapter 14 Retailers, Wholesalers, and Direct Marketers
By: Megan, Shayla & Angela.  Final element in a retail strategy  Retailer builds a wall around its position in a retail market By building a high thick.
Chapter 13 Product and Distribution Strategies Learning Goals Explain marketing’s definition of a product and list the components of the product strategy.
Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a Consumer Behaviour 4e by Neal, Quester, Hawkins 6–16–1 Chapter 6 Outlet Selection and Purchase.
Alternative Evaluation and Choice
Introduction to Behavior Copyright © 2005 by The McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill/Irwin Chapter 8.
McGraw-Hill/Irwin Copyright © 2008 by The McGraw-Hill Companies, Inc. All rights reserved.
An Introduction to Retailing
Developed by Cool Pictures and MultiMedia Presentations Copyright © 2004 by South-Western, a division of Thomson Learning, Inc. All rights reserved. Developed.
Part Six Distribution Decisions
Chapter 4 Marketing.
CHAPTER 14 Retailers, Wholesalers, and Direct Marketers
McGraw-Hill/Irwin Copyright © 2009 by The McGraw-Hill Companies, Inc. All Rights Reserved.
Marketing Channels and Supply Chain Management
Market Sensing Customer Analysis. What Do We Need to Know About Our Customers?  Everything!! How they make decisions… What influences how they make decisions...
CHAPTER 14 Retailers, Wholesalers, and Direct Marketers
© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Copyright  2007 McGraw-Hill Australia Pty Ltd PPTs t/a Consumer Behaviour 5e by Quester, Neal, Pettigrew, Grimmer, Davis & Hawkins Slides prepared by.
1 Chapter 17 Retail and Business-to-Business Advertising.
UNIT F MANAGEMENT OF DISTRIBUTION, PROMOTION, AND SELLING
An Introduction to Retailing
Dr. Close. Introduction to Channels (1)  Channel: firms handling goods between production and consumption (Wal-Mart)  Importance:  Toughest “P” to.
Chapter 16 Direct Selling & Direct Marketing Channel Systems.
Chapter 16 Direct Selling & Direct Marketing Channel Systems.
Retailing Management 8e© The McGraw-Hill Companies, All rights reserved CHAPTER 2CHAPTER 1 CHAPTER 3 McGraw-Hill/Irwin Copyright © 2012 by The McGraw-Hill.
Multichannel Retailing
Retail Communication Mix
UNDERSTANDING PRINCIPLES OF MARKETING
© 2007 The McGraw-Hill Companies, Inc., All Rights Reserved. McGraw-Hill/Irwin Marketing Management, 8e Chapter Ten Distribution Strategy Key Words /
An Introduction to Retailing
McGraw-Hill/Irwin ©2009 The McGraw-Hill Companies, All Rights Reserved Marketing Intermediaries, Direct Marketing, Indirect Channels, Intensive Distribution,
Market Segmentation and Product Positioning Copyright © 2005 by The McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill/Irwin Chapter 15.
Chapter Thirteen Building Customer Relationships Through Effective Marketing.
Chapter Thirteen Marketing: Helping Buyers Buy Copyright © 2010 by the McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill/Irwin.
Introduction to Business 3e 13 Part V: Marketing Copyright © 2004 South-Western. All rights reserved. Distributing Products.
MARKETING. Standards… BCS-BE-36: The student demonstrates understanding of the concept of marketing and its importance to business ownership. BCS-BE-36:
For use only with Perreault and McCarthy texts. © 2006 McGraw-Hill Companies, Inc. McGraw-Hill/Irwin CHAPTER TWELVE CHAPTER TWELVE.
Chapter Thirteen Building Customer Relationships Through Effective Marketing.
Understanding Principles Of Marketing Pertemuan 09 Matakuliah: J Pengantar Bisnis Tahun: 2009.
Irwin/McGraw-Hill Copyright © 2001 by The McGraw-Hill Companies, Inc. All rights reserved. 1-1.
Chapter Fourteen Assessing and Analyzing Markets McGraw-Hill/Irwin Copyright © 2010 by The McGraw-Hill Companies, Inc. All rights reserved.
Chapter Thirteen Marketing: Helping Buyers Buy Copyright © 2010 by the McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill/Irwin.
Developing a Marketing Plan
Chapter 16 Consumer Behavior and Product Strategy
Understanding The World Of Retailing Chapter 1. What Is Retailing..? Retailing is the set of business activities that adds value to the products and services.
Chapter 8 Introduction to Behavior Copyright © 2010 by the McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill/Irwin.
Ass. Prof. Dr. Özgür KÖKALAN İstanbul Sabahattin Zaim University.
BUSINESS 1 Understanding Marketing Processes and Consumer Behavior.
©2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Chapter 15 Market Segmentation and Product Positioning
MANAGING THE MARKETING MIX: PRODUCT, PRICE, PLACE, AND PROMOTION Bus101.
Chapter 18 Consumer Behavior and Pricing Strategy
Chapter Thirteen Building Customer Relationships Through Effective Marketing.
Chapter 17 Consumer Behavior and Promotion Strategy Copyright © 2010 by the McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill/Irwin.
Consumer Behavior, Electronic Commerce, and Channel Strategy Chapter 19.
Chapter 17:Outlet Seldection and Purchase Perceived risk associated with purchases Social cost Financial cost Time cost Effort cost Physical cost.
Introduction to Consumer Behavior and Marketing Strategy
Consumer Behavior and Product Strategy
Introduction to Consumer Behavior and Marketing Strategy
Copyright © 2007 McGraw-Hill Ryerson Limited
1 Marketing Management SECTION 1 7th Edition Distribution Strategy
Thaksin University Consumer decision making process
Distribution Strategy
Retailing Final stop on the distribution path
Marketing Channels and Supply Chain Management
Marketing Channels and Supply Chain Management
Marketing Channel Strategy and Management
Presentation transcript:

Consumer Behavior, Electronic Commerce, and Channel Strategy Chapter 19 Consumer Behavior, Electronic Commerce, and Channel Strategy McGraw-Hill/Irwin Copyright © 2010 by the McGraw-Hill Companies, Inc. All rights reserved.

Introduction From an economic perspective, channels of distribution are thought of as providing: Form utility Time utility Place utility Possession utility

Store-Related Affect and Cognition Store image Is what consumers think about a particular store. Includes perceptions and attitudes based on sensations of store-related stimuli received through the five senses. Developing a consistent store image is a common goal of retailers.

Store-Related Affect and Cognition (cont.) Store atmosphere Primarily involves affect in the form of in-store emotional states that consumers may not be fully conscious of when shopping. Environmental stimuli affect consumers’ emotional states, which in turn affect approach or avoidance behaviors. The four types of approach or avoidance behaviors are physical, exploratory, communication, and performance and satisfaction approach.

Exhibit 19.2 - A Model of Store Atmosphere Effects

Store Atmosphere (cont.) Pleasure and arousal were found to influence consumers’ stated: Enjoyment of shopping in the store. Time spent browsing and exploring the store’s offerings. Willingness to talk to sales personnel. Tendency to spend more money than originally planned. Likelihood of returning to the store.

Store-Related Behavior Store contact Involves the consumer locating, traveling to, and entering a store. A number of variables are concerned with obtaining store contacts. Store location decisions are strongly influenced by heavy traffic and pedestrian patterns, which facilitate store contact. Visibility of the store and its distance from consumers are used to select locations that can increase store contact.

Store-Related Behavior (cont.) Store loyalty Repeat patronage intentions and behavior. Strongly influenced by the arrangement of the environment, particularly the reinforcing properties of the retail store. Is a major objective of retail channel strategy and has an important financial impact.

Store Environment Three major decision areas in designing effective store environments: Store location Store layout In-store stimuli

Store Location Good locations allow ready access, can attract large numbers of consumers, and can significantly alter consumer shopping and purchasing patterns. Store location decisions represent long-term financial commitments, and changing poor locations can be difficult and costly. Retail location models are quite sophisticated and can deal with a variety of criteria.

Store Location (cont.) General approaches to store location Checklist method - Attempts to systematically evaluate the relative value of a site compared to other potential sites in the area. Analog approach - Identifies an existing store or stores similar to the one to be located.

Store Location (cont.) Regression models - Commonly used to investigate the factors that affect the profitability of retail outlets at particular sites. Location allocation models - Involve the simultaneous selection of several locations and estimation of demand at those locations to optimize some specified criteria.

Store Layout Grid layout Free-form layout The grid layout is more likely to be used in department and specialty stores to direct customer traffic down the main aisles. Free-form layout This arrangement is particularly useful for encouraging relaxed shopping and impulse purchases.

Exhibit 19.3 - Examples of Grid and Free-Form Store Layouts

Exhibit 19.4 - Advantages and Disadvantages of Grid and Free-Form Layouts

In-Store Stimuli Signs and price information Color Benefit sign Price-only sign Color Warm colors Cool colors Shelf space and displays Normal display, expanded display, and special display

In-Store Stimuli (cont.) Music The tempo of background music influences consumer behavior Scent Scents vary in terms of how pleasant they are perceived to be, how likely they are to evoke physiological responses, and how strong they are. Ambient scent can influence feelings about stores and their products. Neutral and pleasant scent categories can be diffused in a store to influence consumers.

Nonstore Consumer Behavior Consumer purchase mode refers to the method a consumer uses to shop and purchase from store or nonstore alternatives. Choices made among the various consumer purchase modes are influenced by many factors.

Catalog and Direct Mail Purchases Have grown dramatically with the increase in dual-income families and the general need for consumers to save time. Catalogs have some disadvantages for consumers. Catalog prices are higher and consumers have to pay shipping charges. Do not allow the consumer to experience the feel, fit, or other sensory stimuli of a product directly.

Catalog and Direct Mail Purchases (cont.) Waiting time to receive merchandise. Unsatisfactory product returned at consumer’s own expense.

Vending Machine Purchases Provide merchandise in convenient locations and are often available for purchases twenty-four hours a day. Product prices are typically higher. Recovery of money may not be possible when vending machines fail to deliver the merchandise.

Television Home Shopping Allows consumers to purchase conveniently from their homes by telephone and can offer and demonstrate products. It also allows better visual display than catalogs. Limitations: Consumers must watch the channel when the merchandise is offered. Consumers must pay shipping charges Less informative than experiencing products directly in stores.

Direct Sales Purchases Salespeople can provide in-depth product usage information. Merchandise is often priced higher than similar merchandise in stores. Consumers’ must spend time watching the demonstration and discussing products. Pressure by overzealous salespeople to purchase unneeded products.

Electronic Exchanges Involve consumers in collecting information, shopping, and purchasing from Web sites. Is the fastest growing purchase mode.

Exhibit 19.5 - A Comparison of Six Consumer Purchase Modes

Electronic Commerce The process by which buyers and sellers conduct exchanges of information, money, and merchandise by electronic means, primarily on the Internet. Electronic commerce often requires consumers to seek out marketers by going to particular Web sites.

Consumer Strategies for Electronic and Store Exchanges Consumers can both shop and purchase electronically, making a pure electronic exchange. They can use the store-aided electronic exchange. Consumers can collect information online and then go to a brick-and-mortar store or dealer to make a purchase. They can shop and purchase in stores without using the Internet at all.

Exhibit 19.6 - Point-and-Click and Brick-and-Mortar Consumer Strategies

Consumer Electronic Exchanges and Multichannel Marketing The use of the Internet for collecting information about products and brands and purchasing has grown rapidly in recent years. Many retailers now use a multichannel distribution strategy which allows consumers to purchase in stores, online, from catalogs and in other ways.

Channel Strategy Different members of a distribution channel may be primarily concerned with influencing different consumer behaviors. The starting point for designing effective channels is an analysis of consumer-product relationships.

Exhibit 19.8 - Channel Design Criteria

Commodity The nature of the product or service offered to the consumer. Key consumer-related questions in considering the nature of the product or service are: What consequences or values the product or service provides the target market? How much time and effort target-market consumers are willing to expend to shop for, locate, and purchase the product? How often target-market consumers purchase the product?

Conditions The current state of and expected changes in the economic, social, political, and legal environments in which the firm operates. This information is critical in channel design because channels typically involve long-term commitments by the firm that may be difficult to change.

Competition The size, financial and marketing strengths, and market share of a firm’s competitors are major concerns in designing effective marketing strategies. For channel decisions, a key issue is how major competitors distribute products and how their distribution system influences consumers.

Costs Costs can be viewed as a constraint on the firm’s ability to distribute products and services and to serve and influence consumers. Firms seek distribution systems that minimize total distribution costs at a particular level of customer service.

Coverage Seldom can every member of a selected target market receive sufficient marketing coverage to bring about an exchange. Coverage refers to the number of outlets in a particular geographic area in which the product or service will be sold.

Competence Frequently overlooked criterion in designing channels: Firm’s competence to administer the channels. Perform channel tasks at all levels to ensure effective distribution to the consumer.

Control In general, there is greater control in direct channels because no intermediaries are involved. Franchised channels also involve greater control than indirect channels because the franchiser places strong contractual constraints on the franchisee’s operations.

Characteristics of Intermediaries In addition to such factors as the size, financial strength, and marketing skills of intermediaries, consumer perceptions of intermediaries can be crucial in channel strategy. If no acceptable intermediaries are available, the firm must market directly, encourage the development of intermediaries, or forgo entering a particular market.

Summary Channels of distribution have a very important impact on consumer affect, cognition, and behavior. The two most critical store-related affect and cognitions for channel strategy are store image and store atmosphere. The store-related behaviors, store contact and store loyalty, are primary objectives of retail channel strategy.

Summary (cont.) Store environment entails store location, store layout, and in-store stimuli. The six consumer purchase modes include stores, catalogs/direct mail, vending machines, direct sales, TV home shopping, and electronic exchange. It is the consumer and their relationships with other criteria that determine appropriate channel strategy.