Consumer behaviour & retail operations

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  • Discretionary income – amount left after paying for basic necessities and taxes. Hollinger ( 1998 ) – mail order market in UK has historically served the lower income groups owing to the attraction of financial credit which may have been difficult to obtain elsewhere.
  • Consumer behaviour & retail operations

    1. 1. Consumer behaviour & retail operations
    2. 2. Needs, wants & demand functions for the purchase of clothes <ul><li>Needs – Basic human requirements that pre exist for warmth, covering, social status. </li></ul><ul><li>Wants – Potential purchase occurs as the individual feels a drive to satisfy those needs. </li></ul><ul><li>Demands – Those wants for which the customer is able to pay. </li></ul>
    3. 3. Time taken to shop <ul><li>Functional ( time efficient ) – focused, predetermined routine habitual action. </li></ul><ul><li>Complex ( time required ) – Pre-planned/ researched, higher risk. </li></ul><ul><li>Leisure ( time rich activity ) – Emphasis on browsing and serendipity. </li></ul>
    4. 4. Adoption processes of fashion <ul><li>Trickle –down theory – is based upon the premise that new innovative fashions originate in the wealthier classes owing to ability to purchase designer clothing and are passed down the middle classes and to lower socio-economic groups. </li></ul><ul><li>Trickle-up theory – as a hypothesis, style creation by the lower socio economic groups which is followed by upper classes to being adopted by the middle classes. </li></ul><ul><li>Trickle across theory – is based upon the theory that fashion and style can originate in any one of the social classes. Opinion leaders play a key role. ( eg – fashion product created in large numbers to bring down unit price thus trickle down, at other times product such as mobile phone etc are accepted at the height of their pricing ) </li></ul>
    5. 5. Retail buying role <ul><li>Initiator – first individual </li></ul><ul><li>Influencer- provides views and advice </li></ul><ul><li>Decider – individual who will take decision </li></ul><ul><li>Buyer – actually makes the purchase </li></ul><ul><li>User – who consumes or uses the product. </li></ul>
    6. 6. Decision over store choice <ul><li>Kelly & Stephenson ( 1967 ) </li></ul><ul><li>General store characteristics – reputation etc </li></ul><ul><li>Physical characteristics of store – décor, cleanliness, checkout services etc. </li></ul><ul><li>Convenience of reaching the store </li></ul><ul><li>Products offered – variety, dependability, quality </li></ul><ul><li>Prices charged by the store – value, special sales </li></ul><ul><li>Store personnel </li></ul><ul><li>Advertising by the store </li></ul><ul><li>Friend’s perception of the store. </li></ul>
    7. 7. Theories of Consumer behaviour <ul><li>Engel-Kollat-Blackwell ( EKB ) model ( 1968 ) undergone three major changes </li></ul><ul><li>High involvement </li></ul><ul><li>Element of risk is higher ( consumer unsure about he outcome of purchase decision ) </li></ul><ul><li>The central process can be seen in five stages :- </li></ul><ul><li>1 – problem recognition/ arousal </li></ul><ul><li>2 – internal search </li></ul><ul><li>3 – external search </li></ul><ul><li>4 – choice/purchase </li></ul><ul><li>5 – outcome of satisfaction. </li></ul>
    8. 8. <ul><li>Sheth’s family model of behaviour – decision process is investigated in terms of individual </li></ul>
    9. 9. Eight stage model – retail buying process <ul><li>Need arousal </li></ul><ul><li>Recognition of the need </li></ul><ul><li>Level of involvement </li></ul><ul><li>Search for information or identification of alternatives </li></ul><ul><li>Evaluation of alternatives </li></ul><ul><li>Decision </li></ul><ul><li>Purchase action </li></ul><ul><li>Post-purchase feeling </li></ul>
    10. 10. Product category & level of purchase involvement <ul><li>Convenience – frequent purchase, low involvement. </li></ul><ul><li>Shopping – comparisons are made. Medium involvement </li></ul><ul><li>Speciality – High involvement </li></ul><ul><li>Fashion – susceptible to peer and reference group influence. High involvement. </li></ul>
    11. 11. Different aspects pf perceived risk <ul><li>Economic risk </li></ul><ul><li>Physical risk </li></ul><ul><li>Psychological risk – status can be lost through patronizing the wrong store. </li></ul><ul><li>Performance risk </li></ul>
    12. 12. Energizers or motivational factors <ul><li>Role playing – learned or expected behaviour </li></ul><ul><li>Diversion – escape from daily routine </li></ul><ul><li>Self gratification </li></ul><ul><li>Learning about new trends </li></ul><ul><li>Physical activity – mall walk etc </li></ul><ul><li>Sensory stimulation – sound, light, colors etc. </li></ul>
    13. 13. Social motives of shopping <ul><li>Social experiences outside the home </li></ul><ul><li>Communication with others having similar interest </li></ul><ul><li>Peer group attraction </li></ul><ul><li>Status and authority </li></ul><ul><li>Pleasure of bargaining </li></ul>
    14. 14. Motives for patronage of retail outlet <ul><li>Convenience </li></ul><ul><li>Reputation </li></ul><ul><li>Service encounter </li></ul><ul><li>Expectations of merchandise </li></ul><ul><li>Expectations of value </li></ul>
    15. 15. Understanding motivation – Maslow’s hierarchy model ( 1968 ) <ul><li>High – 5 self actualization </li></ul><ul><li>4 esteem – ego needs, success, status, recognition etc </li></ul><ul><li>3 belongingness – acceptance, affection, giving and receiving love </li></ul><ul><li>2 safety – security, shelter, freedom from fear and anxiety </li></ul><ul><li>Low - 1 Physiological – hunger, thirst, sleep etc. </li></ul>
    16. 16. Demographic factors <ul><li>Slowing birth rate </li></ul><ul><li>Average life expectancy </li></ul><ul><li>Social structure – rich becoming richer, poor becoming poorer </li></ul><ul><li>Delay of Marriage </li></ul><ul><li>Value of education – high education, loans to pay off hence white collar jobs and formal wear. </li></ul><ul><li>Working women </li></ul><ul><li>Population mobility </li></ul><ul><li>Ethnic groups </li></ul>
    17. 17. <ul><li>Psychographics </li></ul><ul><li>Role of children in consumer behaviour process. </li></ul>

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