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Chapter 4

Customer Buying Behavior

McGraw-Hill/Irwin PPT 4-1 Levy/Weitz: Retailing Management, 5/e

Copyright Š 2004 by The McGraw-Hill Companies, Inc. All rights reserved.

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 PPT 4-2

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 PPT 4-3

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 PPT 4-4

Stages in the Buying Process

PPT 4-5

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 PPT 4-6

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

PPT 4-7

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

PPT 4-8

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

PPT 4-9

Factors Influencing the Buying Decision Process

PPT 4-10

Methods for Segmenting Retail Markets



Segmenting Markets

Lifestyle Feelings and Behaviors PPT 4-11

Geodemographic Segmentation “Birds of a feather Flock Together� Town and Gown

Latino America

College Town Singles

Hispanic Middle Class

Foreign Films (+)

Boxing (+)

Dogs (-)

Dance Music (+)

Sewing (-)

Barbequing (-)

Coca Cola (+)

Avocados (+)

Fast Food (+)

Cosmopolitan (+)

Friends (+)

Touched By an Angel (+)

Sports Illustrated (+) PPT 4-12

VALS2 American Lifestyles

PPT 4-13

Lifestyle Segmentation VALS Action Oriented


High Resources

Lower resources

Follow Fashions and Fads

Buy American

Spend a lot on socializing, entertainment

Look for bargains

Impulse buyers

Watch TV a lot Read home and garden magazines

Influenced by advertising PPT 4-14

Criteria for Evaluating Segmentation Schemes

Actionability Identifiability Accessibility Stability Size PPT 4-15

Factors Affecting Fashion

Economic Development Social Environment Class structure Role of men and women Structure of the family Personal Issues PPT 4-16

Stages in the Fashion Life Cycle

PPT 4-17

Theories of Fashion Diffusion

Trickle-Down Theory

Mass Market Theory

Subculture Theory PPT 4-18