1. 5th Edition

2. Customer Buying Behavior
Chapter 4
Customer Buying Behavior
McGraw-Hill/Irwin
Levy/Weitz: Retailing Management, 5/e
Copyright © 2004 by The McGraw-Hill Companies, Inc. All rights reserved.

3. Illustration
Jennifer Sanchez, at San Francisco State University, is beginning to interview for jobs. For the first interviews on campus, Jennifer had planned to wear the blue suit her parents bought her three years ago. But looking at her suit, she realizes that it’s not very stylish and that the jacket is beginning to show signs of wear. Wanting to make a good first impression during her interview, she decides to buy a new suit.

4. Illustration (Continued)
Jennifer surfs the Internet for tips on dressing for interviews ( and and looks through some catalogs to see the styles being offered. But she decides to go to retail store so she can try it on and have it for her first interview next week. She likes to shop at Abercrombie and Fitch and American Eagle Outfitter, but neither sells business suits. She remembers an ad in the San Francisco Chronicle for women’s suits at Macy’s. She decides to go to Macy’s in the mall close to her apartment and asks her friend Brenda to come along. Jennifer values Brenda’s opinion, because Brenda is a clothes horse and has good taste.

5. Illustration (Continued)
Walking through the store, they see some DKNY suits. Jennifer looks at them briefly and decides they’re too expensive for her budget and too stylish. She wants to interview with banks and thinks she needs a more conservative suit.

6. Illustration (Continued)
Jennifer and Brenda are approached by a salesperson in the career women’s department. After asking Jennifer what type of suit she wants and her size, the salesperson shows her three suits. Jennifer asks Brenda what she thinks about the suits and then selects one to try on. When Jennifer comes out of the dressing room, she feels that the shoulder pads in the suit make her look too heavy, but Brenda and the salesperson think the suit is attractive. Jennifer decides to buy the suit after another customer in the store tells her she looks very professional in the suit.

7. Illustration (Continued)
Jennifer doesn’t have a Macy’s charge card, so she asks if she can pay with a personal check. The salesperson says yes, but the store also takes VISA and MasterCard. Jennifer decides to pay with her VISA card. As the salesperson walks with Jennifer and Brenda to the cash register, they pass a display of scarves. The salesperson stops, picks up a scarf, and shows Jennifer how well the scarf complements the suit. Jennifer decides to buy the scarf also.

8. 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

9. Provide a Lot Information
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

10. 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 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

11. Customer Loyalty Brand Loyalty Store 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

12. 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 Competitor’s Store, Change Behavior
Offer More Convenient Locations, Better Service and Assortments

13. 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

14. Stages in the Buying Process

15. 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

16. Stimulating Need Recognition
Advertising and Direct Mail
Visual Merchandise in Store
Signage
Displays
Suggestions by Sales Associates

17. 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

18. Sources of Information
Internal
Past experiences
Memory
External
Consumer reports
Advertising
Word of mouth

19. How Can Retailers Reduce Information Search?
Extensive merchandise assortment Assistance in locating alternatives Everyday low pricing Credit Information from sales associates

20. Providing Information on Internet

21. Information about Retailers Selling Groceries

22. Belief About Retailers’ Performance Benefits

23. Information Used in Evaluating Retailers

24. Information Used in Purchasing a Suit

25. 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

26. 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

27. Factors Influencing the Buying Decision Process

28. Social Factors Influencing Buying Decisions
Family
Culture
Reference Group

29. Methods for Segmenting Retail Markets
Geographic
Demographic
Segmenting Markets
Lifestyle
Feelings and Behaviors

30. Geodemographic Segmentation “Birds of a feather Flock Together”
Town and Gown
College Town Singles
Foreign Films (+)
Dogs (-)
Sewing (-)
Coca Cola (+)
Fast Food (+)
Friends (+)
Sports Illustrated (+)
Latino America Hispanic Middle Class Boxing (+) Dance Music (+) Barbequing (-) Avocados (+) Cosmopolitan (+) Touched By an Angel (+)

31. Distribution of Grey Collar Aging Couples Near Suburbs

32. VALS2 American Lifestyles

33. Lifestyle Segmentation VALS
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

34. Criteria for Evaluating Segmentation Schemes
Actionability
Identifiability
Accessibility
Stability
Size

35. Example of a Composite Segmentation Scheme

36. Example of a Composite Segmentation Scheme

37. 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.

38. Why Consumers Buy Fashions
Communicate with Others
Manage Appearance
Express Self-Image
Enhance Ego
Impress Others

39. What Creates Fashion?
Economic Factors
Sociological Factors

40. Factors Affecting Fashion
Economic Development
Social Environment
Class structure
Role of men and women
Structure of the family
Personal Issues

41. Stages in the Fashion Life Cycle

42. What Affects the Rate Fashion Spreads?
Advantage
Compatibility
Complexity
Trialability
Observability

43. Theories of Fashion Diffusion
Trickle-Down Theory
Mass Market Theory
Subculture Theory