Topics: Sales, Retailing, Risk Pages: 8 (810 words) Published: October 11, 2013
Customer Buying Behavior

PPT 4-1

Buying Process
• The buying process, the steps consumers go through
when buying a product or service, begins when
customers recognize in unsatisfied need.
• They seek information about how to satisfy the need,
such as what products might be useful and how they
can be bought.
• Customers evaluate the alternative retailers and
channels available for purchasing the merchandise,
such as stores, catalogs, and the Internet, and then
choose a store or Internet site to visit or a catalog to

PPT 4-2

Buying Process
• This encounter with the retailer’s merchandise
offering by weighing both objective and
subjective criteria, customers may make a
purchase or go to another retailer to collect
more information.
• Eventually, customers make a purchase, use
the product, and then decide whether the
product satisfies their needs during the post
purchase evaluation stage of the customer
buying process.
PPT 4-3

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 4-4

What Retailers Need to do for Customers Engaged in

Extended Problem Solving
Provide a Lot Information
-Use Salespeople rather than advertising to
with customers

Reduce the Risks
-Offer Guarantees
-Return Privileges
PPT 4-5

What Retailers Need to do for Customers to

Engage in Habitual Decision Making
It Depends
If the Customer Habitually Comes to You, Reinforce
-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

PPT 4-6

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

PPT 4-7

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
PPT 4-8

Encouraging Impulse Buying
Have Salespeople Suggest Add-ons

Have Complementary Merchandise Displayed Near
Product of Interest
Use Signage or Special Displays
Put Merchandise Where Customers Are Waiting

PPT 4-9

Stages in the Buying Process

PPT 4-10

Types of Needs
• Utilitarian Needs

• Hedonic Needs
• Conflicting needs

---> cross – shopping (buying both premium
and low-priced merchandise; status- oriented
retailers and price-oriented retailers)

PPT 4-11

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
PPT 4-12

Stimulating Need Recognition

Advertising and Direct Mail
Visual Merchandise in Store
Suggestions by Sales Associates

PPT 4-13

Information Search
• Once customers identify a need, they may seek
information about retailers or products to help
them satisfy that need.

PPT 4-14

Factors Affecting Amount of Information Search
• Characteristics of the Product


Characteristics of Customer
Past experience
Perceived risk
Time pressure

Market Characteristics

Number of alternative brands
PPT 4-15

Sources of Information
Past experiences

Consumer reports

Word of mouth
PPT 4-16

How Can Retailers Reduce Information Search?

Extensive merchandise assortment...
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