Stages SELECTING A RETAILER SELECTING AND CHANNEL MERCHANDISENeed recognition Recognize needs Recognize needs Search for information Search for informationInformation Search about retailers about merchandise Evaluation Evaluate retailers and Evaluate channels merchandise Choice Select a retailer Select and channel merchandise Visit Visit store or internet Purchase site or catalog merchandise Loyalty Repeat patronage Postpurchase of retailer evaluation
Types of NeedsUtilitarian Needs- when consumers go shopping to accomplish a specific task. It is associated with work.Hedonic Needs- when consumers go shopping for pleasure. It is associated with fun.
Some Hedonic NeedsStimulationSocial experienceLearning new trendsStatus and powerSelf-rewardAdventure
Learning New Trends
Status and Power
Factors influencing the amount of information search include 1. The nature and use of the product being purchased 2. Characteristics of the individual customer 3. Aspects of the market and buying situation in which the purchase is made
Marketplace and situational factorsaffecting information search include 1. The number of competing brands and retail outlets 2. The time pressure under which the purchase must be made
Sources of InformationInternal Sources – are information in a customer’s memory such as names, images and past experiences with different stores.External Sources – are information provided by ads and other people.
Purchasing the Merchandise or Service1. Don’t stock out of popular merchandise. Have a complete assortment of sizes and colors for customers to buy. For services retailers, have service providers available when customers are ready to place orders.2. Reduce the risk of purchasing merchandise or services by offering liberal return policies, money-back guarantees, and refunds if the same merchandise is available at a lower price from another retailer.
Cont. 3. Offer Credit. 4. Make it easy to purchase merchandise by having convenient checkout terminals. 5. Reduce the actual and perceived waiting time in lines at checkout terminals.
Types of Buying DecisionsExtended Problem SolvingLimited Problem SolvingHabitual Decision Making
Types of Buying DecisionsExtended Problem Solving = customer devote considerable time and effort to analyzing their alternatives. It involve lot of risk and uncertainty
Types of Buying DecisionsLimited Problem Solving = they have some prior experience with the product or service is moderate. Customers rely more on their personal knowledge than on external information. Impulse buying = buying decision made by customers on the spot.
Types of Buying DecisionsHabitual Decision Making = Is a purchase decision involving little or no conscious effort Brand Loyalty means the customers like and consistently buy a specific brand in a product category. Store Loyalty means that customers like and habitually visit the same store to purchase a type of merchandise.
Social Factors Influencing the Buying ProcessFamily
Social Factors Influencing the Buying ProcessReference Groups
Social Factors Influencing the Buying Process Culture
Criteria for Evaluating Market Segments Actionability Identifiability Accessibility Size
Geographic SegmentationSegmentation Descriptor Example of CategoriesContinents Asia, North America, Europe And South AfricaRegions Southeast Asia, Caribbean, Eastern EuropeClimate Cold, Warm, TropicalCities Florida, London, Manila, Tokyo, Singapore, BangkokPopulation density Rural, Sub-Urban, Urban
Demographic SegmentationSegmentation Descriptor Example of CategoriesAge U6, 6-12, 13-19, 20-29, 30-49, 50-66, over 65Gender Male, FemaleFamily Life Cycle Single, Married with no children, married with youngest child over 6, widowedFamily Income Less than P10,000, P10,000 to P19, 999, P20,000 to P29,999 and 30,000 aboveOccupation Professional, Clerical, sales, retired, studentEducation Elementary graduate, High school graduate, College graduate, VocationalRace Caucasian, African American, AsianNationality American, Japanese, British, German, Italian, Filipino, Italian, Chinese
Geodemographic SegmentationUses both geographic and demographic characteristics to classify consumers.
Buying Situation SegmentationThe buying behavior of customers with the same demographics or lifestyle can differ depending on their buying situation.
Benefit SegmentationAnother approach for defining a target segment is to group customers seeking similar benefits.
Summary The Buying Process Need Recognition Types of Needs Some Hedonic Needs The Types of Buying Decisions Social Factors Influencing the Buying Process Criteria for Evaluating Market Segments Approaches for Segmenting Markets
Cont. To satisfy customer needs, retailers mustthoroughly understand how customers makestore choice and purchase decisions and thefactors they consider when deciding.The importance of the stages depends on thenature of the customer’s decision. Whendecisions are important and risky, the buyingprocess is longer because customers spend moretime and effort on information search andevaluating alternatives. When buying decisionsare less important to customers, they spend littletime in the buying process, and their buyingbehavior may become habitual.
Cont. The buying process of consumers is influencedby their personal beliefs, attitudes, and values andby their social environmental. The primary socialinfluences are provided by the consumers’ families,reference groups, and culture. To develop cost effective retail programs,retailers group customers into segments. Someapproaches for segmenting markets are based ongeography, demographics, geodemographics,lifestyles, usage situations, and benefits sought.Because each approach has its advantages anddisadvantages, retailers typically define their targetsegment by several characteristics.
The End Reported by: Nikki Joy IwanMiriam Ruth San Jose Catherine Briones