Chap. 4. consumer behavior. quiwa

Chapter 4Chapter 4

CONSUMER BUYING

BEHAVIOR

The Buying The Buying ProcessProcess

Recognize needs

Search for information about

retailers

Evaluate retailers and channels

Select a retailer and

channel

Visit store or internet site or

catalog

Repeat patronage of

retailer

Recognize needs

Search for information about

merchandise

Evaluate merchandise

Select merchandise

Purchase merchandise

Postpurchase evaluation

Stages SELECTING A RETAILER AND CHANNEL

SELECTING MERCHANDISE

Need recognition

Information Search

Evaluation

Choice

Visit

Loyalty

Need Need RecognitionRecognition

Types of Types of NeedsNeeds

Utilitarian Needs- when consumers go shopping to accomplish a specific task. It is associated with work.

Hedonic Needs- when consumers go shopping for pleasure. It is associated with fun.

Some Hedonic Some Hedonic NeedsNeeds

StimulationSocial experienceLearning new trendsStatus and powerSelf-rewardAdventure

StimulationStimulation

Social ExperienceSocial Experience

Learning New TrendsLearning New Trends

Status and Status and PowerPower

Self-Self-rewardreward

AdventurAdventuree

Information Information SearchSearch

Factors influencing the Factors influencing the amount of information amount of information

search includesearch include1. The nature and use of the product being purchased

2. Characteristics of the individual customer

3. Aspects of the market and buying situation in which the purchase is made

Marketplace and situational Marketplace and situational factors affecting information factors affecting information search includesearch include

1. The number of competing brands and retail outlets

2. The time pressure under which the purchase must be made

Sources of InformationSources of InformationInternal Sources – are

information in a customer’s memory such as names, images and past experiences with different stores.

External Sources – are information provided by ads and other people.

Purchasing the Merchandise or Purchasing the Merchandise or ServiceService

1. Don’t stock out of popular merchandise. Have a complete assortment of sizes and colors for customers to buy. For services retailers, have service providers available when customers are ready to place orders.

2. Reduce the risk of purchasing merchandise or services by offering liberal return policies, money-back guarantees, and refunds if the same merchandise is available at a lower price from another retailer.

Cont.Cont.3. Offer Credit.4. Make it easy to purchase

merchandise by having convenient checkout terminals.

5. Reduce the actual and perceived waiting time in lines at checkout terminals.

Types of Buying Types of Buying DecisionsDecisions

Extended Problem Solving

Limited Problem SolvingHabitual Decision Making

Extended Problem Solving = customer devote considerable time and effort to analyzing their alternatives. It involve lot of risk and uncertainty

Types of Buying Types of Buying DecisionsDecisions

Limited Problem Solving = they have some prior experience with the product or service is moderate. Customers rely more on their personal knowledge than on external information.Impulse buying = buying decision madeby customers on the spot.

Types of Buying Types of Buying DecisionsDecisions

Habitual Decision Making = Is a purchase decision involving little or no conscious effortBrand Loyalty means the customers like and consistently buy a specific brand in a product category.Store Loyalty means that customers like and habitually visit the same store to purchase a type of merchandise.

Types of Buying Types of Buying DecisionsDecisions

Social Factors Social Factors Influencing the Buying Influencing the Buying

ProcessProcessFamily

Reference Groups

Social Factors Social Factors Influencing the Buying Influencing the Buying

ProcessProcess

Culture

Social Factors Influencing Social Factors Influencing the Buying Processthe Buying Process

Criteria for Evaluating Criteria for Evaluating Market SegmentsMarket Segments

ActionabilityIdentifiabilityAccessibilitySize

AppApproaches for roaches for Segmenting MarketsSegmenting Markets

Geographic SegmentationDemographic SegmentationGeodemographic Segmentation

Lifestyle SegmentationBuying Situation Segmentation

Benefit Segmentation

Geographic Segmentation

Segmentation Descriptor

Example of Categories

Continents Asia, North America, Europe And South Africa

Regions Southeast Asia, Caribbean, Eastern Europe

Climate Cold, Warm, TropicalCities Florida, London, Manila, Tokyo,

Singapore, BangkokPopulation density Rural, Sub-Urban, Urban

Geographic Segmentation

Demographic Segmentation

Segmentation Descriptor

Example of Categories

Age U6, 6-12, 13-19, 20-29, 30-49, 50-66, over 65

Gender Male, Female

Family Life Cycle Single, Married with no children, married with youngest child over 6, widowed

Family Income Less than P10,000, P10,000 to P19, 999, P20,000 to P29,999 and 30,000 above

Occupation Professional, Clerical, sales, retired, student

Education Elementary graduate, High school graduate, College graduate, Vocational

Race Caucasian, African American, Asian

Nationality American, Japanese, British, German, Italian, Filipino, Italian, Chinese

Demographic Segmentation

Geodemographic Segmentation

Uses both geographic and demographic characteristics to classify consumers.

Lifestyle Segmentation

Activities hobbies, vacation, shopping, sports

Interests fashion, recreation, food, media

Opinions social/political issues, products

Lifestyles urban mobile, cosmopolitan, couch potato

Buying Situation Segmentation

The buying behavior of customers with the same demographics or lifestyle can differ depending on their buying situation.

Benefit Segmentation

Another approach for defining a target segment is to group customers seeking similar benefits.

SummarySummary The Buying Process Need Recognition Types of Needs Some Hedonic Needs The Types of Buying Decisions Social Factors Influencing the

Buying Process Criteria for Evaluating Market

Segments Approaches for Segmenting Markets

Cont.Cont. To satisfy customer needs, retailers must thoroughly understand how customers make store choice and purchase decisions and the factors they consider when deciding. The importance of the stages depends on the nature of the customer’s decision. When decisions are important and risky, the buying process is longer because customers spend more time and effort on information search and evaluating alternatives. When buying decisions are less important to customers, they spend little time in the buying process, and their buying behavior may become habitual.

Cont.Cont.The buying process of consumers is influenced by their personal beliefs, attitudes, and values and by their social environmental. The primary social influences are provided by the consumers’ families, reference groups, and culture.To develop cost effective retail programs, retailers group customers into segments. Some approaches for segmenting markets are based on geography, demographics, geodemographics, lifestyles, usage situations, and benefits sought. Because each approach has its advantages and disadvantages, retailers typically define their target segment by several characteristics.

The EndReported by:Nikki Joy Iwan

Miriam Ruth San JoseCatherine Briones