COPYRIGHT © 2006 Thomson South-Western, a part of The Thomson Corporation. Thomson, the Star logo, and South-Western are trademarks used herein under license.

Roger D. Blackwell Paul W. Miniard James F. Engel Consumer Behavior Requests for permission to make copies of any part of the work should be mailed to the following address: Permissions Department, Thomson Business and Economics 5109 Natorp Boulevard Mason, OH –423–0563

COPYRIGHT © 2006 Thomson South-Western, a part of The Thomson Corporation. Thomson, the Star logo, and South-Western are trademarks used herein under license. Purchase CHAPTER 5

COPYRIGHT © 2006 Thomson South-Western, a part of The Thomson Corporation. Thomson, the Star logo, and South-Western are trademarks used herein under license. To Buy or Not to Buy?

COPYRIGHT © 2006 Thomson South-Western, a part of The Thomson Corporation. Thomson, the Star logo, and South-Western are trademarks used herein under license. The Purchase Process

COPYRIGHT © 2006 Thomson South-Western, a part of The Thomson Corporation. Thomson, the Star logo, and South-Western are trademarks used herein under license. The Purchase Process Consumers decide: Whether to buy When to buy What to buy (product type/brand) Where to buy How to pay

COPYRIGHT © 2006 Thomson South-Western, a part of The Thomson Corporation. Thomson, the Star logo, and South-Western are trademarks used herein under license. The Purchase Process Fully Planned Purchase Partially Planned Purchase Unplanned Purchase

COPYRIGHT © 2006 Thomson South-Western, a part of The Thomson Corporation. Thomson, the Star logo, and South-Western are trademarks used herein under license. The Purchase Process Fully Planned Purchase: both the product and brand are chosen in advance Purchase planning is more likely to occur when product involvement is high with purchase affected by in-store factors and marketing efforts

COPYRIGHT © 2006 Thomson South-Western, a part of The Thomson Corporation. Thomson, the Star logo, and South-Western are trademarks used herein under license. The Purchase Process Partially Planned Purchase: intent to buy the product exists, but brand choice is deferred until shopping When involvement is low, consumers resort to buying a brand they know and like but may also be influenced by price reductions or special displays

COPYRIGHT © 2006 Thomson South-Western, a part of The Thomson Corporation. Thomson, the Star logo, and South-Western are trademarks used herein under license. The Purchase Process Unplanned Purchase: both the product and brand are chosen at point of sale In-store influences can guide product and brand choices made by consumers reminding them of a need and triggering a purchase

COPYRIGHT © 2006 Thomson South-Western, a part of The Thomson Corporation. Thomson, the Star logo, and South-Western are trademarks used herein under license. The Purchase Factor When and if purchase occurs is affected by timing factors such as seasonality Timing also affects the price and the likelihood of a purchase When making a purchase, consumer must also decide how to pay—cash, checks, or plastic

COPYRIGHT © 2006 Thomson South-Western, a part of The Thomson Corporation. Thomson, the Star logo, and South-Western are trademarks used herein under license. Why People Shop While consumers may shop “to acquire something,” there are many other personal and social reasons

COPYRIGHT © 2006 Thomson South-Western, a part of The Thomson Corporation. Thomson, the Star logo, and South-Western are trademarks used herein under license. Why People Shop While consumers may shop “to acquire something,” there are many other personal and social reasons Consumers who dislike shopping embrace the Internet and other forms of direct marketing to make shopping quicker, easier, and less personally involving

COPYRIGHT © 2006 Thomson South-Western, a part of The Thomson Corporation. Thomson, the Star logo, and South-Western are trademarks used herein under license. Why People Shop

COPYRIGHT © 2006 Thomson South-Western, a part of The Thomson Corporation. Thomson, the Star logo, and South-Western are trademarks used herein under license. Why People Shop While consumers may shop “to acquire something,” there are many other personal and social reasons Consumers who dislike shopping embrace the Internet and other forms of direct marketing to make shopping quicker, easier, and less personally involving Marketers should consider how their core customers think of shopping—is it fun or is it a chore for them?

COPYRIGHT © 2006 Thomson South-Western, a part of The Thomson Corporation. Thomson, the Star logo, and South-Western are trademarks used herein under license. The Purchase Decision Process

COPYRIGHT © 2006 Thomson South-Western, a part of The Thomson Corporation. Thomson, the Star logo, and South-Western are trademarks used herein under license. The Purchase Decision Process

COPYRIGHT © 2006 Thomson South-Western, a part of The Thomson Corporation. Thomson, the Star logo, and South-Western are trademarks used herein under license. Deciding where and how to purchase - Retail choice is an interactive process where the type of store and specific retailer affect each other - Consumer characteristics are matched to store characteristics and purchase characteristics - Past experience and store image also influence specific store choice The Purchase Decision Process

COPYRIGHT © 2006 Thomson South-Western, a part of The Thomson Corporation. Thomson, the Star logo, and South-Western are trademarks used herein under license. Retail Image Consumers rely on their overall perception of a store (store image) Involves both functional and emotional attributes The perceived level of crowding within the store may also affect shopping behavior, reducing shopping for some consumers while appealing to other segments

COPYRIGHT © 2006 Thomson South-Western, a part of The Thomson Corporation. Thomson, the Star logo, and South-Western are trademarks used herein under license. Retail Image

COPYRIGHT © 2006 Thomson South-Western, a part of The Thomson Corporation. Thomson, the Star logo, and South-Western are trademarks used herein under license. Retail Image

COPYRIGHT © 2006 Thomson South-Western, a part of The Thomson Corporation. Thomson, the Star logo, and South-Western are trademarks used herein under license. Retail Image

COPYRIGHT © 2006 Thomson South-Western, a part of The Thomson Corporation. Thomson, the Star logo, and South-Western are trademarks used herein under license. Determinants of Retailer Success - Location - Nature and quality of assortment - Price - Advertising and promotion - Sales personnel - Service offered - Physical store attributes - Nature of store clientele - Point-of-purchase-displays - Consumer logistics

COPYRIGHT © 2006 Thomson South-Western, a part of The Thomson Corporation. Thomson, the Star logo, and South-Western are trademarks used herein under license. Location Perceived in terms of time and hassle in addition to actual distance Cognitive maps or consumer perceptions of store locations and shopping areas are more important than actual location Consumers generally overestimate both actual distance and time

COPYRIGHT © 2006 Thomson South-Western, a part of The Thomson Corporation. Thomson, the Star logo, and South-Western are trademarks used herein under license. Nature and Quality of Assortment Depth, breadth, and quality of assortment - Specialty stores - Mass merchandisers - Department stores - Value merchants

COPYRIGHT © 2006 Thomson South-Western, a part of The Thomson Corporation. Thomson, the Star logo, and South-Western are trademarks used herein under license. Nature and Quality of Assortment Assortment breadth: how vast or wide the variety of products sold (mass retailers)

COPYRIGHT © 2006 Thomson South-Western, a part of The Thomson Corporation. Thomson, the Star logo, and South-Western are trademarks used herein under license. Nature and Quality of Assortment Assortment breadth: how vast or wide the variety of products sold (mass retailers) Assortment depth: how deep the categories of product sold (specialty store)

COPYRIGHT © 2006 Thomson South-Western, a part of The Thomson Corporation. Thomson, the Star logo, and South-Western are trademarks used herein under license. Nature and Quality of Assortment

COPYRIGHT © 2006 Thomson South-Western, a part of The Thomson Corporation. Thomson, the Star logo, and South-Western are trademarks used herein under license. Nature and Quality of Assortment Assortment breadth: how vast or wide the variety of products sold (mass retailers) Assortment depth: how deep the categories of product sold (specialty store) Category killers: specialize in one category of merchandise and provide a dominant assortment of products (Home Depot, Toys ’R Us)

COPYRIGHT © 2006 Thomson South-Western, a part of The Thomson Corporation. Thomson, the Star logo, and South-Western are trademarks used herein under license. Price Price as a determinant of store patronage varies by type of product Importance of price depends on the nature of the buyer The consumer’s perception of price is usually more important than the actual price Consumers ultimately rely on their overall image of a retailer to filter the effects of price advertising

COPYRIGHT © 2006 Thomson South-Western, a part of The Thomson Corporation. Thomson, the Star logo, and South-Western are trademarks used herein under license. Price Effects of price promotions on: - Building store patronage - Demand for different brands - Short-term buying behavior - Long-term buying behavior

COPYRIGHT © 2006 Thomson South-Western, a part of The Thomson Corporation. Thomson, the Star logo, and South-Western are trademarks used herein under license. Advertising and Promotion Image advertising: Visual components and words that help consumers form an expectation about their experience in the store and about what kinds of consumers will be satisfied with the store’s experience

COPYRIGHT © 2006 Thomson South-Western, a part of The Thomson Corporation. Thomson, the Star logo, and South-Western are trademarks used herein under license. Image Advertising

COPYRIGHT © 2006 Thomson South-Western, a part of The Thomson Corporation. Thomson, the Star logo, and South-Western are trademarks used herein under license. Advertising and Promotion Information advertising: Details provided about products, prices, hours of operation, locations, and other attributes that might influence purchase decisions

COPYRIGHT © 2006 Thomson South-Western, a part of The Thomson Corporation. Thomson, the Star logo, and South-Western are trademarks used herein under license. Salespeople are important when choosing a store or shopping center Sales Personnel

COPYRIGHT © 2006 Thomson South-Western, a part of The Thomson Corporation. Thomson, the Star logo, and South-Western are trademarks used herein under license. Salespeople are important when choosing a store or shopping center What makes a salesperson effective? Sales Personnel

COPYRIGHT © 2006 Thomson South-Western, a part of The Thomson Corporation. Thomson, the Star logo, and South-Western are trademarks used herein under license. Salespeople are important when choosing a store or shopping center What makes a salesperson effective? - Perceived knowledge and expertise - Perceived trustworthiness - Customer knowledge - Adaptability Sales Personnel

COPYRIGHT © 2006 Thomson South-Western, a part of The Thomson Corporation. Thomson, the Star logo, and South-Western are trademarks used herein under license. Salespeople are important when choosing a store or shopping center What makes a salesperson effective? - Perceived knowledge and expertise - Perceived trustworthiness - Customer knowledge - Adaptability Sales Personnel Recruiting, training, and motivating effective sales associates benefits retailers

COPYRIGHT © 2006 Thomson South-Western, a part of The Thomson Corporation. Thomson, the Star logo, and South-Western are trademarks used herein under license. Services Offered Varies depending on the type of outlet and consumer expectations Includes such considerations as self-service facilities, ease of merchandise return, delivery, credit, and overall good service

COPYRIGHT © 2006 Thomson South-Western, a part of The Thomson Corporation. Thomson, the Star logo, and South-Western are trademarks used herein under license. Physical Store Attributes The physical properties of the retail environment designed to create an effect on consumer purchases are referred to as store atmospherics Can help shape the direction and duration of consumer attention, express the store’s character, or elicit particular emotional reactions

COPYRIGHT © 2006 Thomson South-Western, a part of The Thomson Corporation. Thomson, the Star logo, and South-Western are trademarks used herein under license. Physical Store Attributes Store atmospherics - Elevators - Lighting - Air conditioning - Convenient and visible washrooms - Layout - Aisle placement and width - Parking facilities - Carpeting - Architecture

COPYRIGHT © 2006 Thomson South-Western, a part of The Thomson Corporation. Thomson, the Star logo, and South-Western are trademarks used herein under license. Store Clientele The type of person who shops in a store affects consumer purchase intention because of the tendency to match one’s self-image with that of the store Some customers may be attracted to or repelled from a store due to their perception of the store and its clientele

COPYRIGHT © 2006 Thomson South-Western, a part of The Thomson Corporation. Thomson, the Star logo, and South-Western are trademarks used herein under license. Point-of-Purchase Materials POP displays and signs can increase the odds of capturing attention and stimulating purchase - E-Theater - Digital POP - Computer Enhanced Merchandising - Digital Self-Service

COPYRIGHT © 2006 Thomson South-Western, a part of The Thomson Corporation. Thomson, the Star logo, and South-Western are trademarks used herein under license. Point-of-Purchase Materials Advantages of POP displays: Inexpensive compared to other forms of promotion They reach people where they buy the products They add atmosphere to retail stores

COPYRIGHT © 2006 Thomson South-Western, a part of The Thomson Corporation. Thomson, the Star logo, and South-Western are trademarks used herein under license. Consumer Logistics The speed and ease with which consumers move through the retail and shopping process - Preparation to shop - Arriving at the store - Entering the store - Movement through the store - Checkout - Travel home and home-warehousing - Inventory stockouts (which prompt repurchase)

COPYRIGHT © 2006 Thomson South-Western, a part of The Thomson Corporation. Thomson, the Star logo, and South-Western are trademarks used herein under license. Consumer Logistics The purchase process is facilitated, positively or negatively, by consumer logistics What consumers expect and demand from a purchase situation changes depending on what type of store they are visiting

COPYRIGHT © 2006 Thomson South-Western, a part of The Thomson Corporation. Thomson, the Star logo, and South-Western are trademarks used herein under license. The Changing Retail Landscape

COPYRIGHT © 2006 Thomson South-Western, a part of The Thomson Corporation. Thomson, the Star logo, and South-Western are trademarks used herein under license. The Changing Retail Landscape Consumers want to purchase goods and services from a variety of retailing formats Marketers have implemented multichannel retailing to reach diverse segments through a variety of formats based on their lifestyles and shopping preferences

COPYRIGHT © 2006 Thomson South-Western, a part of The Thomson Corporation. Thomson, the Star logo, and South-Western are trademarks used herein under license. The Changing Retail Landscape Location-Based Retailing Retailers that have a physical location for consumers to visit Can be free-standing or housed in a mall, strip center, central market, or central business district

COPYRIGHT © 2006 Thomson South-Western, a part of The Thomson Corporation. Thomson, the Star logo, and South-Western are trademarks used herein under license. The Changing Retail Landscape Location-Based Retailing Value-oriented retailers - offer consumers lower prices than other retailing forms because of the large economies of scale generated by high sales volume - convenience of buying many different types of products in one store or have a large selection of items

COPYRIGHT © 2006 Thomson South-Western, a part of The Thomson Corporation. Thomson, the Star logo, and South-Western are trademarks used herein under license. The Changing Retail Landscape Location-Based Retailing The Shopping Mall - People visit malls less often and spend less time than they used to - Malls are becoming lifestyle centers and emphasizing the entertainment value of shopping - Shift toward making malls become “a place to be,” not just “a place to shop”

COPYRIGHT © 2006 Thomson South-Western, a part of The Thomson Corporation. Thomson, the Star logo, and South-Western are trademarks used herein under license. The Changing Retail Landscape Direct Marketing refers to strategies used to reach consumers somewhere other than a store

COPYRIGHT © 2006 Thomson South-Western, a part of The Thomson Corporation. Thomson, the Star logo, and South-Western are trademarks used herein under license. The Changing Retail Landscape Direct Marketing More consumer shopping and buying activities are occurring in someplace other than the store Most in-home shoppers are active retail shoppers who shop at home for reasons other than deliberate avoidance of the store or shopping mall

COPYRIGHT © 2006 Thomson South-Western, a part of The Thomson Corporation. Thomson, the Star logo, and South-Western are trademarks used herein under license. The Changing Retail Landscape Direct Marketing Direct selling: any form of face- to-face contact between a salesperson and a customer away from a fixed retail location - door-to-door selling - in-home parties

COPYRIGHT © 2006 Thomson South-Western, a part of The Thomson Corporation. Thomson, the Star logo, and South-Western are trademarks used herein under license. The Changing Retail Landscape Direct Marketing Direct selling: any form of face- to-face contact between a salesperson and a customer away from a fixed retail location - door-to-door selling - in-home parties Direct mail ads

COPYRIGHT © 2006 Thomson South-Western, a part of The Thomson Corporation. Thomson, the Star logo, and South-Western are trademarks used herein under license. The Changing Retail Landscape Direct Marketing Direct selling: any form of face- to-face contact between a salesperson and a customer away from a fixed retail location -door-to-door selling -in-home parties Direct mail ads Direct mail catalogs

COPYRIGHT © 2006 Thomson South-Western, a part of The Thomson Corporation. Thomson, the Star logo, and South-Western are trademarks used herein under license. The Changing Retail Landscape Direct Marketing Telemarketing - outbound telemarketing - inbound telemarketing: use a toll free number to place orders directly

COPYRIGHT © 2006 Thomson South-Western, a part of The Thomson Corporation. Thomson, the Star logo, and South-Western are trademarks used herein under license. The Changing Retail Landscape Direct Marketing Telemarketing - outbound telemarketing - inbound telemarketing: use a toll free number to place orders directly Direct response ads: ads that require a direct response from consumers

COPYRIGHT © 2006 Thomson South-Western, a part of The Thomson Corporation. Thomson, the Star logo, and South-Western are trademarks used herein under license. The Changing Retail Landscape Purchase Behavior and E-Commerce

COPYRIGHT © 2006 Thomson South-Western, a part of The Thomson Corporation. Thomson, the Star logo, and South-Western are trademarks used herein under license. The Changing Retail Landscape Purchase Behavior and E-Commerce The technology of websites determines what can be offered to consumers, but only consumers determine which technologies are accepted Today, more people use the Internet for search and pre- purchase evaluation than purchase

COPYRIGHT © 2006 Thomson South-Western, a part of The Thomson Corporation. Thomson, the Star logo, and South-Western are trademarks used herein under license. Consumer Resources: What People Spend When They Purchase Money Time Attention

COPYRIGHT © 2006 Thomson South-Western, a part of The Thomson Corporation. Thomson, the Star logo, and South-Western are trademarks used herein under license. Concept of Time Budgets People have “unlimited” money budgets: have potential to earn as much money as they want People have limited time budgets: maximum of 24 hours per day How consumers allocate their time depends on their timestyles

COPYRIGHT © 2006 Thomson South-Western, a part of The Thomson Corporation. Thomson, the Star logo, and South-Western are trademarks used herein under license. Concept of Time Budgets

COPYRIGHT © 2006 Thomson South-Western, a part of The Thomson Corporation. Thomson, the Star logo, and South-Western are trademarks used herein under license. Time and Money Budgets Timestyles: determines how consumers allocate their time As people work and make more money, leisure time decreases— leading to an increased value of time

COPYRIGHT © 2006 Thomson South-Western, a part of The Thomson Corporation. Thomson, the Star logo, and South-Western are trademarks used herein under license. Discretionary time: leisure time when individuals feel no sense of economic, legal, moral, social or physical compulsion or obligation Nondiscretionary time: Includes physical obligations, social obligations and moral obligations Time and Money Budgets

COPYRIGHT © 2006 Thomson South-Western, a part of The Thomson Corporation. Thomson, the Star logo, and South-Western are trademarks used herein under license. Time and Money Budgets Time-Using Goods

COPYRIGHT © 2006 Thomson South-Western, a part of The Thomson Corporation. Thomson, the Star logo, and South-Western are trademarks used herein under license. Time and Money Budgets Time-Using Goods Goods that require time to use, such as television, skiing, fishing, golfing, and playing tennis As consumer have less leisure time, they are often willing to spend more money on the precious time they do have (travel, extreme sports, and eating out)

COPYRIGHT © 2006 Thomson South-Western, a part of The Thomson Corporation. Thomson, the Star logo, and South-Western are trademarks used herein under license. Time and Money Budgets Time-Saving Goods

COPYRIGHT © 2006 Thomson South-Western, a part of The Thomson Corporation. Thomson, the Star logo, and South-Western are trademarks used herein under license. Time and Money Budgets Time-Saving Goods Goods and services that gain leisure time by decreasing nondiscretionary time expenditures Housecleaning services or dishwashers and microwave ovens free up time to spend on leisure or other activities Some firms position products with time-saving benefits

COPYRIGHT © 2006 Thomson South-Western, a part of The Thomson Corporation. Thomson, the Star logo, and South-Western are trademarks used herein under license. Polychronic Time Use Polychronic time involves combining activities simultaneously

COPYRIGHT © 2006 Thomson South-Western, a part of The Thomson Corporation. Thomson, the Star logo, and South-Western are trademarks used herein under license. Polychronic Time Use Polychronic time involves combining activities simultaneously Trend has given rise to products: cellular phones (talk and walk or drive) online radio services (listen to music while working on computers) beepers for dental patients (wait for appointments and shop) prepared meals (shop for groceries and buy completed dinner at same store)

COPYRIGHT © 2006 Thomson South-Western, a part of The Thomson Corporation. Thomson, the Star logo, and South-Western are trademarks used herein under license. Time and Money Budgets Time Prices

COPYRIGHT © 2006 Thomson South-Western, a part of The Thomson Corporation. Thomson, the Star logo, and South-Western are trademarks used herein under license. Time and Money Budgets Time Prices Products have economic prices as well as time prices How much time it takes to shop for, install, or use a product Firms sometimes use time prices in their ads (only takes 2 hours to install or 10 seconds for quick-dry paint)

COPYRIGHT © 2006 Thomson South-Western, a part of The Thomson Corporation. Thomson, the Star logo, and South-Western are trademarks used herein under license. Cognitive Resources Cognitive resources: mental capacity available for undertaking various information-processing activities

COPYRIGHT © 2006 Thomson South-Western, a part of The Thomson Corporation. Thomson, the Star logo, and South-Western are trademarks used herein under license. Cognitive Resources Cognitive resources: mental capacity available for undertaking various information-processing activities Capacity: cognitive resources that an individual has available at any given time for processing information

COPYRIGHT © 2006 Thomson South-Western, a part of The Thomson Corporation. Thomson, the Star logo, and South-Western are trademarks used herein under license. Cognitive Resources Cognitive resources: mental capacity available for undertaking various information-processing activities Capacity: cognitive resources that an individual has available at any given time for processing information How much of this resource do consumers spend when shopping or making a purchase?

COPYRIGHT © 2006 Thomson South-Western, a part of The Thomson Corporation. Thomson, the Star logo, and South-Western are trademarks used herein under license. Cognitive Resources Attention: allocation of cognitive resources

COPYRIGHT © 2006 Thomson South-Western, a part of The Thomson Corporation. Thomson, the Star logo, and South-Western are trademarks used herein under license. Cognitive Resources Attention: allocation of cognitive resources Attention consists of two dimensions:

COPYRIGHT © 2006 Thomson South-Western, a part of The Thomson Corporation. Thomson, the Star logo, and South-Western are trademarks used herein under license. Cognitive Resources Attention: allocation of cognitive resources Attention consists of two dimensions: Direction: focus of attention Intensity: the amount of capacity focused in a particular direction

COPYRIGHT © 2006 Thomson South-Western, a part of The Thomson Corporation. Thomson, the Star logo, and South-Western are trademarks used herein under license. Cognitive Resources Attention: allocation of cognitive resources Attention consists of two dimensions: Direction: focus of attention Intensity: the amount of capacity focused in a particular direction Gaining attention represents one of the most formidable challengers a marketer may face

COPYRIGHT © 2006 Thomson South-Western, a part of The Thomson Corporation. Thomson, the Star logo, and South-Western are trademarks used herein under license. Cognitive Resources Shallow Attention Many products are not important enough to warrant consumers investing a large amount of cognitive resources Consumers attempt to find acceptable rather than optimal solutions for their consumption needs

COPYRIGHT © 2006 Thomson South-Western, a part of The Thomson Corporation. Thomson, the Star logo, and South-Western are trademarks used herein under license. Cognitive Resources Exceeding Cognitive Capacity Because capacity is limited, it is possible to provide too much information and exceed capacity (information overload) Consumers can become confused and make poor choices or they may stop processing information before they are overloaded

COPYRIGHT © 2006 Thomson South-Western, a part of The Thomson Corporation. Thomson, the Star logo, and South-Western are trademarks used herein under license. Cognitive Resources Exceeding Cognitive Capacity The amount of attention given to a product or specific purchase choice depends on factors such as involvement, situation, personality, and other variables

COPYRIGHT © 2006 Thomson South-Western, a part of The Thomson Corporation. Thomson, the Star logo, and South-Western are trademarks used herein under license. Communicating with Consumers: Integrated Marketing Communications

COPYRIGHT © 2006 Thomson South-Western, a part of The Thomson Corporation. Thomson, the Star logo, and South-Western are trademarks used herein under license. Integrated Marketing Communications (IMC) A systematic, cross-organizational marketing communication process that is customer-centric, data- driven, technically anchored, and branding effective

COPYRIGHT © 2006 Thomson South-Western, a part of The Thomson Corporation. Thomson, the Star logo, and South-Western are trademarks used herein under license. Integrated Marketing Communications (IMC) IMC programs are comprehensive IMC programs are unified IMC programs are targeted IMC programs have coordinated execution of all the communications components of the organization IMC programs emphasize productivity in reaching targets when selecting communication channels and allocating resources to media