5th Edition
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.
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.
Illustration (Continued)
Jennifer surfs the Internet for tips on dressing for
interviews (www.collegegrad.com and
www.careercity.com) 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.
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.
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.
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.
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
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
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
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
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
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
Stages in the Buying Process
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
Stimulating Need Recognition
Advertising and Direct Mail
Visual Merchandise in Store
Signage
Displays
Suggestions by Sales Associates
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
Sources of Information
Internal
Past experiences
Memory
External
Consumer reports
Advertising
Word of mouth
How Can Retailers Reduce Information Search?
Extensive merchandise assortment
Assistance in locating alternatives
Everyday low pricing
Credit
Information from sales associates
Providing Information on Internet
Information about Retailers Selling Groceries
Belief About Retailers’ Performance Benefits
Information Used in Evaluating Retailers
Information Used in Purchasing a Suit
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
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
Factors Influencing the Buying Decision Process
Social Factors Influencing Buying Decisions
Family
Culture
Reference Group
Methods for Segmenting Retail Markets
Geographic
Demographic
Segmenting Markets
Lifestyle
Feelings and Behaviors
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 (+)
Distribution of Grey Collar Aging Couples Near
Suburbs
VALS2 American Lifestyles
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
Watch TV a lot
Read home and garden
magazines
Criteria for Evaluating Segmentation Schemes
Actionability
Identifiability
Accessibility
Stability
Size
Example of a Composite Segmentation Scheme
Example of a Composite Segmentation Scheme
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.
Why Consumers Buy Fashions
Communicate with Others
Manage Appearance
Express Self-Image
Enhance Ego
Impress Others
What Creates Fashion?
Economic Factors
Sociological Factors
Factors Affecting Fashion
Economic Development
Social Environment
Class structure
Role of men and women
Structure of the family
Personal Issues
Stages in the Fashion Life Cycle
What Affects the Rate Fashion Spreads?
Advantage
Compatibility
Complexity
Trialability
Observability
Theories of Fashion Diffusion
Trickle-Down Theory
Mass Market Theory
Subculture Theory