4.CUSTOMER BUYING BEHAVIOR

STAGES IN BUYING PROCESS

A. Utilitarian Needs (Specific Shopping )

Men Women Child

B. Hedonic Needs (Shopping for Pleasure )

1. Stimulation Child Child ---

2. Social Experience Women

3. Learning New trends Women

4. Self reward

5. Adventure

RESEARCH TECHNIQUES

STAGES IN BUYING PROCESS

1. Need Recognition

A. Types of Needs – 1 Utilitarian Needs (Specific Shopping )

2 Hedonic Needs (Shopping for Pleasure )

•Stimulation

•Social Experience

•Learning New trends

•Status & Power

•Self reward

•Adventure

B. Conflicting Needs

• Cross Shopping – Pattern of buying both premium & low priced

merch

C. Stimulating Need Recognition – Tie with a blazer

STAGES IN BUYING PROCESS CONTI….

2. Information Search

Amount of Info searched

- Influencing factors : a) nature & use of product being purchasedb) characteristics of individual customerc) aspects of market & buying situation

Source of information –Internal /External

Reducing the information search - EDLP

STAGES IN BUYING PROCESS CONTI….

3. Evaluation of Alternatives : The Multi-attribute model

I. Beliefs about Performance A. Information about stores selling groceries

Store Characteristic Super Center Supermarket Internet Grocer

Grocery Prices 20% below Avg Avg 10% above Avg

Delivery cost 0 0 10

Total travel time 30 15 0

Typical check out time (Minutes )

10 5 2

No. Of Products ,Brands, & Sizes

40000 25000 20000

Fresh Produce Yes Yes Yes

Fresh Fish Yes Yes No

Ease of Finding Products Difficult Easy Easy

Ease of collecting nutritional information about products

Difficult Difficult Easy

STAGES IN BUYING PROCESS CONTI….

3. Evaluation of Alternatives : The Multi-attribute model

I. Beliefs about Performance

B. Beliefs about Stores Performance Benefits

Performance Benefit

Supercenter Supermarket Internet grocer

Economy 10 8 6

Convenience 3 5 10

Assortment 9 7 5

Availability of product information 4 4 8

* 10 = excellent; 1 = poor

STAGES IN BUYING PROCESS CONTI….

3. Evaluation of Alternatives : The Multi-attribute model contd…

II. Importance Weights

CHARACTERISTIC

PARENT WITH FOUR CHILDREN

SUPER CENTER

SUPERMARKET

INTERNET GROCER

ECONOMY 4 10 10 8 6

CONVENIENCE 10 4 3 5 10

ASSORTMENT 5 8 9 7 5

AVAILABILITY OF PRODUCT INFORMATION 9 2 4 4 8OVERALL EVALUATION Young Single Woman 151 153 221

Parent with four children 192 164 156

PERFORMANCE BELIEF YOUNG SINGLE

WOMAN

IMPORTANCE WEIGHT

* 10 = very important; 1 = very unimportant

STAGES IN BUYING PROCESS CONTI….

3. Evaluation of Alternatives : The Multi-attribute model contd…

III. Evaluating stores

IV. Implications for retailers-

Getting into the consideration set

Changing performance beliefs

Changing importance weights

Adding a new benefit

STAGES IN BUYING PROCESS CONTI….

4. Purchasing the Merchandise or Service - Retailers preventive measures

a) No stock outs

b) Appropriate return / exchange policies

c) Credit terms

d) Convenient check outs

e) Minimal waiting time at checkout

5. Post purchase Evaluation

TYPE OF BUYING DECISIONS

Extended Problem Solving -

Extended time & effort is invested

Limited Problem Solving -

Moderate time investment. Impulse Buying

Habitual Decision Making -

Little / No effort. Brand Loyalty /Store Loyalty

SOCIAL FACTORS INFLUENCING THE BUYING PROCESS

Family

Reference Group – used as a basis of comparison

for beliefs, feelings & behaviors

Culture – beliefs, moral, values shared by most

members within a society

MARKET SEGMENTATION

Group of customers whose needs are satisfied by a similar retail mix because they have similar needs

Criteria for evaluating Market segments

Actionability - Should clearly indicate what action should be taken to satisfy its needs

Identifiability - Segment size, Target audience to communicate

Accessibility - Ability to communicate to the segment

Size - Target segment should be large enough

MARKET SEGMENTATION CONTI…

Approaches for segmenting Markets

Geographic

Demographic

Geo-demographic

Lifestyle

Buying situation

Benefit segmentation

Composite segmentation approaches

E