3 IllustrationJennifer Sanchez, at San Francisco State University, is beginning to interview for jobs. For the first interviews on campus, Jennifer had planned to wear the blue suit her parents bought her three years ago. But looking at her suit, she realizes that it’s not very stylish and that the jacket is beginning to show signs of wear. Wanting to make a good first impression during her interview, she decides to buy a new suit.
4 Illustration (Continued) Jennifer surfs the Internet for tips on dressing for interviews ( and and looks through some catalogs to see the styles being offered. But she decides to go to retail store so she can try it on and have it for her first interview next week. She likes to shop at Abercrombie and Fitch and American Eagle Outfitter, but neither sells business suits. She remembers an ad in the San Francisco Chronicle for women’s suits at Macy’s. She decides to go to Macy’s in the mall close to her apartment and asks her friend Brenda to come along. Jennifer values Brenda’s opinion, because Brenda is a clothes horse and has good taste.
5 Illustration (Continued) Walking through the store, they see some DKNY suits. Jennifer looks at them briefly and decides they’re too expensive for her budget and too stylish. She wants to interview with banks and thinks she needs a more conservative suit.
6 Illustration (Continued) Jennifer and Brenda are approached by a salesperson in the career women’s department. After asking Jennifer what type of suit she wants and her size, the salesperson shows her three suits. Jennifer asks Brenda what she thinks about the suits and then selects one to try on. When Jennifer comes out of the dressing room, she feels that the shoulder pads in the suit make her look too heavy, but Brenda and the salesperson think the suit is attractive. Jennifer decides to buy the suit after another customer in the store tells her she looks very professional in the suit.
7 Illustration (Continued) Jennifer doesn’t have a Macy’s charge card, so she asks if she can pay with a personal check. The salesperson says yes, but the store also takes VISA and MasterCard. Jennifer decides to pay with her VISA card. As the salesperson walks with Jennifer and Brenda to the cash register, they pass a display of scarves. The salesperson stops, picks up a scarf, and shows Jennifer how well the scarf complements the suit. Jennifer decides to buy the scarf also.
8 Types of Purchase Decisions Extended Problem Solving-High financial or Social RiskLimited Problem Solving-Some Prior Buying ExperienceHabitual Decision Making-Store Brand, Loyalty
9 Provide a Lot Information What Retailers Need to do for Customers Engaged in Extended Problem SolvingProvide a Lot Information-Use Salespeople rather than advertising to communication with customersReduce the Risks-Offer Guarantees-Return Privileges
10 What Retailers Need to do for Customers to Engage in Habitual Decision Making It DependsIf the Customer Habitually Comes to You, Reinforce Behavior-Make Sure Merchandise in Stock-Provide Good Service-Offer Rewards to Loyal CustomerIf the Customer Goes to Your Competitor’s Store, Break the Habit-Offer Special Promotions
11 Customer Loyalty Brand Loyalty Store Loyalty Committed to a Specific BrandReluctant to Switch to a Different BrandMay Switch Retailers to Buy BrandStore LoyaltyCommitted to a Specific RetailerReluctant to Switch Retailers
12 What Do Retailers Need To Do for Customers Engaged in Limited Problem Solving It Also Depends…If the Customer Is Coming to You, Provide a Positive Experience and Create LoyaltyMake Sure Customer is SatisfiedProvide Good Service, Assortments, valueOffer Rewards to Convert to Loyal CustomerIf the Customer Goes to Your Competitor’s Store, Change BehaviorOffer More Convenient Locations, Better Service and Assortments
13 Encouraging Impulse Buying Have Salespeople Suggest Add-onsHave Complementary Merchandise Displayed Near Product of InterestUse Signage in Aisle or Special DisplaysPut Merchandise Where Customers Are Waiting
15 Why People Go Shopping Purchase merchandise or services Take a break from daily routineSocial experienceLearn new trends and fashionsSatisfy need for power and statusSelf-rewards
16 Stimulating Need Recognition Advertising and Direct MailVisual Merchandise in StoreSignageDisplaysSuggestions by Sales Associates
17 Factors Affecting Amount of Information Search Characteristics of the ProductComplexityCostCharacteristics of CustomerPast experiencePerceived riskTime pressureMarket CharacteristicsNumber of alternative brands
18 Sources of Information InternalPast experiencesMemoryExternalConsumer reportsAdvertisingWord of mouth
19 How Can Retailers Reduce Information Search? Extensive merchandise assortment Assistance in locating alternatives Everyday low pricing Credit Information from sales associates
25 Information Needed to Use Multi-Attribute Model Alternative Consumer ConsideringCharacteristic/Benefits Sought in Making Store and Merchandise ChoicesRatings of Alternative Performance on CriteriaImportance of Criteria to Consumer
26 Methods for Increasing Consumer Evaluation Increase Performance Beliefs of Your StoreDecrease Performance Beliefs About CompetitorIncrease Importance Weight of Attributes on which You Have an AdvantageAdd a New Benefit on which You Excel
27 Factors Influencing the Buying Decision Process
28 Social Factors Influencing Buying Decisions FamilyCultureReference Group
29 Methods for Segmenting Retail Markets GeographicDemographicSegmenting MarketsLifestyleFeelings and Behaviors
30 Geodemographic Segmentation “Birds of a feather Flock Together” Town and GownCollege Town SinglesForeign Films (+)Dogs (-)Sewing (-)Coca Cola (+)Fast Food (+)Friends (+)Sports Illustrated (+)Latino America Hispanic Middle Class Boxing (+) Dance Music (+) Barbequing (-) Avocados (+) Cosmopolitan (+) Touched By an Angel (+)
31 Distribution of Grey Collar Aging Couples Near Suburbs
33 Lifestyle Segmentation VALS Action OrientedHigh ResourcesFollow Fashions and FadsSpend a lot on socializing, entertainmentImpulse buyersInfluenced by advertisingBelieversLower resourcesBuy AmericanLook for bargainsWatch TV a lotRead home and garden magazines
34 Criteria for Evaluating Segmentation Schemes ActionabilityIdentifiabilityAccessibilityStabilitySize