1. Customer Buying Behavior Buying Process :- begins when customers recognize an unsatisfied need. 3 types of customer decision-making processes 1.Extended Problem solving 2.Limited Problem Solving 3.Habitual Decision Making

2. Extended Problem Solving Is a purchase decision process in which customers devote considerable time & effort to analyzing alternatives. Mainly when purchase decision involves a lot of risk & uncertainty. Types of risks - Financial risks - Physical risks - Social risks

3. Limited Problem Solving Purchase decision process involving a moderate amount of effort & time. Mainly when purchase decision involves some prior experience with the product or service & risk is moderate. Type 1. Impulse buying :- decision made on the spot after seeing the merchandise. Ex:- “BEST BUY”

4. Habitual Decision Making Purchase decision process involving little or no conscious effort. Examples :- 1. Brand Loyalty :- therefore retailers need to keep high loyalty brands. 2. Store Loyalty approaches for increasing store loyalty approaches for increasing store loyalty - convenient location - convenient location - Offering complete assortments - Offering complete assortments - Rewarding for frequent purchases - Rewarding for frequent purchases - Providing good customer service - Providing good customer service - Reducing no. of stock outs - Reducing no. of stock outs

5. The Buying Process Retailers attempt to influence consumers as they go through the buying process to encourage them to buy the retailers merchandise & service STAGES SELECTING A RETAILER SELECTING MERCHANDISE Need recognition Need Recognition Information Search Search for Information About retailers Search for Information About merchandise Evaluation Evaluate Retailers Evaluate Merchandise Choice Select a Retailer Select a Merchandise Visit Visit Store or Internet site Or look through catalog Purchase Merchandise Loyalty Repeat Store Patronage Post purchase evaluation

6. Need Recognition Types of Needs 1. Psychological needs :- emotional needs 2. Conflicting Needs :- multiple needs 3. Stimulating Need Recognition :- advertisement, store ambience, visual merchandise, direct mail, publicity, special prices,

7. Psychological needs :- emotional needs Functional needs – rational StimulationStimulation Social ExperienceSocial Experience Learning new trendsLearning new trends Status & PowerStatus & Power Self-rewardSelf-reward Conflicting Needs :- Multiple needs. Pattern of buying :- both premium & low-priced is called CROSS –SHOPPING Example :- An executive may own an Mercedes-Benz & buy petrol from a discount service station. Note :- Because need often cannot be satisfied in one store or by one product Consumers may appear to be inconsistent in their shopping behavior.

8. Information Search Seek information about retailers or products to help them satisfy the need. AMOUNT OF INFORMATION SEARCHED :- Depends upon gains vs cost of searching. Internet reduces cost of searching FACTORS INFLUENCING AMOUNT OF INF SEACRH :- 1. Nature & Use of Product being purchased 2. Characteristic of individual customer 3. Aspects of market & buying situation 4. Marketplace & situational factors - no. of competing brands & retail outlets - no. of competing brands & retail outlets - Time pressure under which purchase has to be made - Time pressure under which purchase has to be made

9. Sources of information (a) Internal Sources - information in customers memory - information in customers memory - names, images, past experiences - names, images, past experiences (b) External Sources - Information provided by ads & other people. - Information provided by ads & other people. Reducing the Information Search – Retailers Objective 1. Provide good selection of merchandise 2. Broad assortment – colors,brands,sizes 3. Services - availability of credit - availability of credit - delivery for durables like furniture,appliance etc - delivery for durables like furniture,appliance etc - Information - Information - Everyday Low Prices - Everyday Low Prices - Money back guarantee etc - Money back guarantee etc

10. Evaluation of Alternatives - Multiattribute Attitude Model Is based on the notion that customers see a retailer or a product as a collection of attributes or characteristics. Customer's evaluation of a product or retailer on:- - Its performance on relevant attributes - Importance of those attributes to customers Multiattribute Model offers a framework for developing a retailing strategy to evaluate merchandise & vendors

11. Implications for Retailers Encourage customers to shop at its store more frequently Market research to collect the following information :- 1. Alternative stores that customers consider 2. Characteristics or benefits that customers consider when evaluating & choosing a retailer. 3. Customer’s ratings of each store’s performance on the characteristics 4. The importance weights that customers attach to the characteristics (out of 10)

12. Getting into the Consideration Set Consideration Set:- is the set of alternatives the customer evaluates when making a selection. The retailers must make sure that it is included in the customer’s consideration set. 4 methods 1. Increase the belief about the store’s performance 2. Decrease the performance belief for competing stores in the consideration set. 3. Increase customer’s importance weights 4. Add a new benefit.

13. Purchasing the Merchandise Steps that retailers take to increase the chances that customers can easily convert their positive merchandise evaluations into purchase are :- 1. Don’t stock out of popular merchandise.Have a complete assortment of sizes & colors for customer to buy. 2. Offering liberal return policies & refunds 3. Offer Credit 4. Having convenient checkout terminals 5. Reduce the actual & perceived waiting time in lines at checkout terminals.

14. Postpurchase Evaluation Post purchase evaluation becomes a part of the customers internal information that affects future store & product decisions. Satisfaction :- Is a post consumption evaluation of how well a store or product meets or exceeds customer expectations.