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Understanding Consumer Behavior for Retail Success

Explore the importance of identifying, understanding, and appealing to customers by examining segmentation factors, consumer attitudes, decision-making process, and target market planning. Also, consider how environmental factors affect consumers.

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Understanding Consumer Behavior for Retail Success

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  1. Identifying and Understanding Consumers Chapter 7

  2. Chapter Objectives • To Examine the Importance of Identifying, Understanding, and Appealing to Customers • To Enumerate & Describe Segmentation Factors and their Application • To Examine Consumer Attitudes and the Decision Making Process • To Examine Target Market Planning • To Note Environmental Factors that Affect Consumers

  3. 2. Life-Styles 3. Needs and Desires 1. Demographics 4. Shopping Attitudes and Behavior 6. Environmental Factors 5. Retailer Actions What Makes Retail Shoppers Tick Retail Shoppers

  4. Demographics • Market Size • Gender • Age • Household Size • Marital and Family Status • Income • Retail Sales • Birth Rates • What Else?

  5. Consumer Life-Styles Bases • Culture • Social Class • Reference Groups • Family Life Cycle • Time Utilization

  6. Psychological Factors • Personality • Class Consciousness • Attitudes & Opinions • Perceived Risk • Importance of Purchase

  7. Outcome • Purchase New Product • Stick with Old Brand • Talk to Friends • Seek More Information • Nonpurchase Consumer • Factors Affecting Perceived Risk • Product/Retailer Newness • Consumer’s Budget • Level of Consumer Experience • Number of Alternatives • Social Visibility • Amount of Information Available • Time Available to Shop • Urgency of Need • Price of Product • Etc. Impact of Perceived Risk on Consumers • Types of Perceived Risk • Functional • Physical • Financial • Social • Psychological • Time

  8. Demographic and Life-Style Considerations • Gender Roles • Consumer Sophistication and Confidence • Poverty of Time • Component of Life-Style

  9. Consumer Needs and Desires • In-Home Shopping • Online Shopping • Outshopping

  10. Attitudes Toward Shopping • Shopping Enjoyment • Attitudes Toward Shopping Time • Shifting Feelings about Retailing • Why People Buy or Do Not Buy • Attitudes by Market Segment • Shopping Avoiders • Time-Starved Shoppers • Responsible Shoppers • Traditional Shoppers • Attitudes Toward Private Brands

  11. Cross-Shopping • More than One Retail Format • More than One Retailer

  12. Consumer Decision Perspectives • What to Buy • Where to Buy

  13. Purchase Problem Awareness Information Search Evaluation of Alternatives Post- purchase Behavior (b) Demographics Life-Style (a) Consumer Decision Process The Decision Process Stimulus (a) Impact of Life-Style on Demographics (b) Impact of Purchases on Life-Style

  14. Retailer’s • Purchase Terms • Price • Cash vs. Credit • Acceptance • Retailer’s • Place of Purchase • Store • Home • Office/school • World Wide Web • Retailer’s • Good/Service • Availability • Stock on Hand • Delivery Purchase Act Influences Consumer’s Purchase or Nonpurchase

  15. Types of Decisions • Extended Decision Making • Limited Decision Making • Routine Decision Making

  16. Other Aspects • Impulse Purchases • Completely Unplanned • Partially Unplanned • Unplanned Substitution • Customer Loyalty

  17. Select Specific Target Market(s) Study Characteristics, Needs, and Attitudes of Target Market(s) Examine How Consumers Make Decisions--by Product Category Develop and Enact-- Appropriate Retail Strategy Mix(es) for the Target Market(s) Chosen Consumer Decision Process Determine Target Market Approach

  18. Environmental Factors • State of Economy • Rate of Inflation • Price Wars • New Retail Formats • Government Regulations • What else?

  19. Retailer Actions • Mass Marketing • Concentrated Marketing • Differentiated Marketing

  20. What You Should Know • Importance of Identifying, Understanding, and Appealing to Customers • Demographic and Life-style Factors and their Application to Retailing • Consumer Decision Making Process • Target Market Planning • Environmental Factors that Affect Consumer Shopping

  21. Questions? Questions?

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