1. Customer Buying Behavior
Chapter 4
Customer Buying Behavior

2. Illustration of Buying Process
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.
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3. 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 interested in fashion.

4. 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.
John A. Rizzo/Getty Images

5. 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.

6. 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.

7. Stages in the Buying Process

8. Types of Needs
Utilitarian Needs –satisfied when purchases accomplish a specific task. Shopping needs to be easy and effortless like Sam’s or a grocery store.
Hedonic needs – satisfied when purchases accomplish a need for entertainment, emotional and recreational experience as in department stores or specialty stores.

9. Satisfied Hedonic Needs
Stimulation
Social experience
Learn new trends and fashions
Satisfy need for power and status
Self-rewards
Adventure
(c) image100/PunchStock

10. Stimulating Need Recognition
Suggestions by Sales Associates
Advertising and Direct Mail
Visual Merchandise in store
Special Events in the Store
Signage
Displays
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11. Factors Affecting Amount of Information Search
Nature of the Product
Complexity
Cost
Characteristics of Customer
Past experience
Perceived risk
Time pressure
Aspects of the Market
Number of alternative brands

12. Sources of Information
Internal
Past experiences
Memory
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External
Consumer reports
Advertising
Word of mouth
The McGraw-Hill Companies, Inc./John Flournoy, photographer

13. How Can Retailers Limit the Information Search?
Information from sales associates
Provide an assortment of services
Provide good assortments
Everyday low pricing
Credit
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14. Providing Information on Internet Buying a Car On-line
(c) image100/PunchStock

15. Characteristics About Food Retailers

16. Evaluation of Retailers

17. Info Sanchez Used in Buying Suit

18. Information Needed to Use Multi-Attribute Model
Alternative retailers consumers can consider
Characteristic/Benefits Sought in Making Store and Merchandise Choices
Ratings of Alternative Performance on Criteria
Importance weights that consumers attach to the merchandise

19. Getting into the Consideration Set
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

20. Purchasing Merchandise or Services
Customers do not always purchase a brand with the highest overall evaluation.
The high-rated item may not be available in the store.
How can a retailer increase the chances that customers will convert their merchandise evaluations into purchases?
The McGraw-Hill Companies, Inc./Jill Braaten, photographer

21. Converting Merchandise or Services Evaluations into Purchases
Don’t stock out of popular merchandise
Offer liberal return policies, money back guarantees, and refunds if same merchandise is available at lower prices from another retailer
Offer credit
Make purchases easy by having convenient checkout
Reduce waiting times at checkout
The McGraw-Hill Companies, Inc./Andrew Resek, photographer

22. 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
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Janis Christie/Getty Images
Greg Kuchik/Getty Images

23. Extended Problem Solving
Consumers devote time and effort analyzing alternatives
Financial risks – purchasing expensive products or services
Physical risks – purchases that will affect consumer’s health and safety
Social risks – consumers will believe product will affect how others view them

24. 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
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25. Limited Problem Solving
Purchase decisions process involving moderate amount of effort and time
Customers engage in this when they have had prior experience with products or services
Customers rely more on personal knowledge
Majority of customer decisions involve limited problem solving
(c) Brand X Pictures/PunchStock

26. What do Retailers Need to do for Customers Engaged in Limited Problem Solving?
It 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

27. 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
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28. Habitual Problem Solving
Purchase decision process involving little or no conscious effort
For purchases that aren’t important to the consumer
For merchandise consumers have purchased in the past
For consumers loyal to brands or a store
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29. 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

30. What Retailers Need to do for Customers to Engage in Habitual Decision Making
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

31. Factors Influencing the Buying Decision Process

32. Family Influences Buying Decisions
Purchases are for entire family to use
Whole family participates in decision making process
Retailers work to satisfy needs of all family members
© Digital Vision

33. Culture
Culture is the meaning, beliefs, morals and values shared by most members of a society
Western culture: individualism
Eastern culture: collectivism
Subcultures are distinctive groups of people within a culture
Mark Andersen/Getty Images

34. Reference Groups
A reference group is one or more people whom a person uses as a basis of comparison for beliefs, feelings and behaviors.
Reference groups affect buying decisions by:
Offering information
Providing rewards for specific purchasing behaviors
Enhancing a consumer’s self-image
(c) image100/PunchStock

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

36. Methods for Segmenting Retail Markets

37. VALS2 American Lifestyle Segments

38. 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.
The McGraw-Hill Companies, Inc./Lars A. Niki, photographer
Digital Vision / Getty Images
(c) Digital Vision/PunchStock

39. Why Consumers Buy Fashions
Communicate with Others
Manage Appearance
Express Self-Image
Enhance Ego
Impress Others
McGraw-Hill Companies, Inc./Gary He, photographer

40. Stages in the Fashion Life Cycle

41. Theories of Fashion Diffusion
Trickle Down Theory:
Fashion leaders are consumers with the highest social status – wealthy, well-educated consumers.
After they adopt a fashion, the fashion trickles down to consumers of lower classes

42. Theories of Fashion Diffusion
Mass Market Theory: This theory suggests that fashions spread across social classes and that each social class has its own fashion leaders who play a key role in their own social networks
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43. Theories of Fashion Diffusion
Subculture Theory: This theory is based on the development of recent fashions. These fashions start with people from lower-income groups and “trickled up” to mainstream consumer classes.
© Digital Vision

44. Saturation to Decline
When fashion reaches saturation, it becomes less appealing to consumers. It no longer provides an opportunity for people to express their individuality.
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