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Retailing MKTG 3346 Consumer Shopping Overview 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

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Retailing

MKTG 3346

Consumer Shopping Overview

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,

High price,

High risk,

Infrequent

  • 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


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

      • Actors

      • Reviews

  • Location

    • Multiplexes

      • Many screens

      • Different start times

Are movies cross-shopped with other forms of 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


Shopping Behavior Depends on Retail Format

Outlet% ShoppingNumber of Weekly

Weekly TripsSpending

Supermarkets1002.4 $ 72.82

General merchandise 681.3 32.53discount stores

Fast-food restaurants 651.9 16.32

Drug stores 391.2 18.70

Convenience stores 372.4 19.72

Wholesale clubs 271.7 75.12

Specialty food stores 91.0 23.70

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


Consumer Shopping Process


How Retailers Affect Need Recognition STIMULATING TRAFFIC AND SALES

  • Out-of-Store

    • Advertising

    • Direct mail

  • In-Store

    • Visual merchandising

      • Signage

      • Displays

    • Suggestions by sales associates

In-store merchandising and selling can generate unplanned, 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

  • Product

    • Extensive merchandise assortment

    • Ease in locating alternatives (cross merchandising)

    • Useful information from sales associates

  • Price

    • Everyday low pricing; price matching

    • Loyalty 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 suit

Source: Levy and Weitz


Between Purchase Intent and the Purchase

  • Purchase Intention

  • Desire to buy the most preferred brand/product

In-store Merchandising

Social Factors

  • Product Choice

  • Choice of the store/brand/product

Intention to buy does not always result in purchase


Buyer’s Decision ProcessPOST-PURCHASE BEHAVIOR

  • Consumer’s Expectations of Value

  • Perceived Value

Satisfied

Customer!

Dissatisfied Customer!

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

Adapted from Prentice Hall


Example of Marketing to Customer Segments


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