Consumer Shopping Overview

Consumer Shopping Overview

RetailingMKTG 3346

Professor Edward Fox

Cox School of Business/SMU

Factors Driving Consumer Shopping Behavior

Needs Social group Family size Occupation

Price Sensitivity Disposable income Opportunity cost of time

Location and Retail Density

Shopping Behavior Depends on the Product

High-Involvement, Detailed Process Buying a Durable – Car, Computer, Home High Risk, Uncertainty

Moderate Problem Solving Some Prior Buying Experience Relatively Infrequent Purchase May Be Impulse Purchase

Habitual Decision Making Frequent Shopping Store, Brand Loyalty Drives Purchase

Low involvement,Low price,Low risk,High frequency

High involvement,High price,High risk,Infrequent

Shopping Behavior ExamplesAPPAREL

Moderate Price High involvement for some; low for others

Shopping Product Consumers likely to shop around Evaluate both quality and price Image?

Experience Good – Touch it; try it on Less likely to buy online or by catalog Interaction with salesperson may affect

Browsers or goal (i.e., purchase) oriented shoppers? Mall locations facilitate browsing and search

Shopping Behavior ExamplesMOVIE

Low Price Low involvement?

Experience good Prerelease advertising Quality assessment

ActorsReviews

Location Multiplexes

Many screensDifferent start times

Are movies cross-shopped with other forms of Are movies cross-shopped with other forms of entertainment?entertainment?

Shopping Behavior ExamplesINSURANCE

High Price High involvement?

Unsought Product Consumers may avoid the subject Don’t want to think about it, so don’t give it much attention

Credence Product Inertia Hard to get customers to switch Primary interaction with provider may be billing

Triggered by events (bad stuff happened) Regret

Outlet % Shopping Number of Weekly

Weekly Trips Spending

Supermarkets 100 2.4 $ 72.82

General merchandise 68 1.3 32.53discount stores

Fast-food restaurants 65 1.9 16.32

Drug stores 39 1.2 18.70

Convenience stores 37 2.4 19.72

Wholesale clubs 27 1.7 75.12

Specialty food stores 9 1.0 23.70

Source: “Consumers Are Skeptical Again,” “63rd Annual Report of the Grocery Industry,” Progressive Grocer, April 1996, p.42.

Shopping Behavior Depends on Retail Format

Consumer Shopping Process

How Retailers Affect Need Recognition STIMULATING TRAFFIC AND SALES

Out-of-StoreAdvertisingDirect mail

In-StoreVisual merchandising

SignageDisplays

Suggestions by sales associates

In-store merchandising and selling can generate In-store merchandising and selling can generate unplanned, or impulse, purchasesunplanned, or impulse, purchases

Adapted from Levy and Weitz

Factors Affecting Information Search

Customer Characteristics Experience with the product/category Perceived risk Time pressure

Product Characteristics Complexity Cost Risk

Category Characteristics Number of alternatives Meaningful differences between products

Adapted from Levy and Weitz

How Retailers Reduce Information Search KEEPING CUSTOMERS IN THE STORE

ProductExtensive merchandise assortment Ease in locating alternatives (cross merchandising)Useful information from sales associates

PriceEveryday low pricing; price matchingLoyalty incentives; volume discounts; card programs

Adapted from Levy and Weitz

Evaluating Retailers

Source: Levy and Weitz

Evaluating a Product for Purchase

Information used in buying a men’s suitInformation used in buying a men’s suit

Source: Levy and Weitz

Between Purchase Intent and the Purchase

Purchase IntentionDesire to buy the most preferred brand/product

Purchase IntentionDesire to buy the most preferred brand/product

Product ChoiceChoice of the store/brand/product

Product ChoiceChoice of the store/brand/product

In-store Merchandising

Social Factors

Intention to buy does not always result in purchaseIntention to buy does not always result in purchase

Buyer’s Decision ProcessPOST-PURCHASE BEHAVIOR

Consumer’s Expectations of Value

Dissatisfied Customer!

Dissatisfied Customer!

Satisfied Customer!

Satisfied Customer!

Perceived Value

Adapted from Prentice Hall

Retailers must deliver on the promise of value, Retailers must deliver on the promise of value, or lose repeat business – customer loyalty!or lose repeat business – customer loyalty!

Example of Marketing to Customer Segments