Illustration Jennifer 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 its 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.
Illustration (Continued) Jennifer surfs the Internet for tips on dressing for interviews (www.collegegrad.com 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 womens suits at Macys. She decides to go to Macys in the mall close to her apartment and asks her friend Brenda to come along. Jennifer values Brendas opinion, because Brenda is a clothes horse and has good taste.
Illustration (Continued) Walking through the store, they see some DKNY suits. Jennifer looks at them briefly and decides theyre too expensive for her budget and too stylish. She wants to interview with banks and thinks she needs a more conservative suit.
Illustration (Continued) Jennifer and Brenda are approached by a salesperson in the career womens 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.
Illustration (Continued) Jennifer doesnt have a Macys 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.
Types of Purchase Decisions Extended Problem Solving -High financial or Social Risk Limited Problem Solving -Some Prior Buying Experience Habitual Decision Making -Store Brand, Loyalty
What Retailers Need to do for Customers Engaged in Extended Problem Solving Provide a Lot Information -Use Salespeople rather than advertising to communication with customers Reduce the Risks -Offer Guarantees -Return Privileges
What Retailers Need to do for Customers to Engage in Habitual Decision Making It Depends If the Customer Habitually Comes to You, Reinforce Behavior -Make Sure Merchandise in Stock -Provide Good Service -Offer Rewards to Loyal Customer If the Customer Goes to Your Competitors Store, Break the Habit -Offer Special Promotions
Customer Loyalty Brand Loyalty Committed to a Specific Brand Reluctant to Switch to a Different Brand May Switch Retailers to Buy Brand Store Loyalty Committed to a Specific Retailer Reluctant to Switch Retailers
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 Loyalty Make Sure Customer is Satisfied Provide Good Service, Assortments, value Offer Rewards to Convert to Loyal Customer If the Customer Goes to Your Competitors Store, Change Behavior Offer More Convenient Locations, Better Service and Assortments
Encouraging Impulse Buying Have Salespeople Suggest Add-ons Have Complementary Merchandise Displayed Near Product of Interest Use Signage in Aisle or Special Displays Put Merchandise Where Customers Are Waiting
Stages in the Buying Process
Why People Go Shopping Purchase merchandise or services Take a break from daily routine Social experience Learn new trends and fashions Satisfy need for power and status Self-rewards
Stimulating Need Recognition Advertising and Direct Mail Visual Merchandise in Store Signage Displays Suggestions by Sales Associates
Factors Affecting Amount of Information Search Characteristics of the Product Complexity Cost Characteristics of Customer Past experience Perceived risk Time pressure Market Characteristics Number of alternative brands
Sources of Information External Consumer reports Advertising Word of mouth Internal Past experiences Memory
How Can Retailers Reduce Information Search? Extensive merchandise assortment Assistance in locating alternatives Everyday low pricing Credit Information from sales associates
Providing Information on Internet
Information about Retailers Selling Groceries
Belief About Retailers Performance Benefits
Information Used in Evaluating Retailers
Information Used in Purchasing a Suit
Information Needed to Use Multi-Attribute Model Alternative Consumer Considering Characteristic/Benefits Sought in Making Store and Merchandise Choices Ratings of Alternative Performance on Criteria Importance of Criteria to Consumer
Methods for Increasing Consumer Evaluation Increase Performance Beliefs of Your Store Decrease Performance Beliefs About Competitor Increase Importance Weight of Attributes on which You Have an Advantage Add a New Benefit on which You Excel
Factors Influencing the Buying Decision Process
Social Factors Influencing Buying Decisions Family Reference Group Culture
Methods for Segmenting Retail Markets Geographic Demographic Feelings and Behaviors Lifestyle Segmenting Markets
Geodemographic Segmentation Birds of a feather Flock Together Town and Gown College Town Singles Foreign Films (+) Dogs (-) Sewing (-) Coca Cola (+) Fast Food (+) Friends (+) Sports Illustrated (+) Town and Gown College Town Singles Foreign Films (+) Dogs (-) Sewing (-) Coca Cola (+) Fast Food (+) Friends (+) Sports Illustrated (+)
Distribution of Grey Collar Aging Couples Near Suburbs
VALS2 American Lifestyles
Lifestyle Segmentation VALS Action Oriented High Resources Follow Fashions and Fads Spend a lot on socializing, entertainment Impulse buyers Influenced by advertising Believers Lower resources Buy American Look for bargains Watch TV a lot Read home and garden magazines