The document provides an overview of consumer behavior in electronic commerce, emphasizing factors such as psychological, social, cultural, and personal influences on purchasing decisions. It details the consumer decision-making process, various distribution channels, and the importance of store environment elements like location, layout, and in-store stimuli. Additionally, it discusses different consumer purchase modes and their implications for retail channel strategy, highlighting the critical roles of store image and store atmosphere in influencing consumer behavior.

1. Chapter 19
Consumer Behavior,
Electronic
Commerce, and
Channel Strategy
Copyright © 2010 by the McGraw-Hill Companies, Inc. All rights reserved.
McGraw-Hill/Irwin

2. 19-2
What is consumer behavior?
Study of individuals, groups, or
organizations and their decision-making
processes for acquiring goods and services.

3. 19-3
Factors Influencing Consumer Behavior:
Psychological Factors: Motivation, perception,
learning, beliefs, and attitudes.
Social Factors: Family, reference groups, social
roles, and status.
Cultural Factors: Culture, subculture, and social
class.
Personal Factors: Age, occupation, lifestyle,
economic situation, and personality.

4. 19-4
Consumer Decision-Making Process:
• Problem recognition
• Information search
• Evaluation of alternatives
• Purchase decision
• Post-purchase behavior

5. 19-5
A distribution channel refers to the path or
route through which goods and services flow
from the producer or manufacturer to the final
consumer.
Introduction

6. 19-6
Types of Distribution Channels:
• Direct: Selling directly to the consumer (e.g.,
through company websites).
• Indirect: Using intermediaries such as retailers or
wholesalers.
• Hybrid: Combining direct and indirect channels.
Introduction

7. 19-7
Direct channel

8. 19-8
Indirect channel

9. 19-9
Store image
Is what consumers think about a particular store.
Includes perceptions and attitudes based on
sensations of store-related stimuli received through
the five senses.
Developing a consistent store image is a common
goal of retailers.
Store-Related Affect and Cognition

10. 19-10
Store Image

11. 19-11
Store atmosphere
Primarily involves affect in the form of in-store
emotional states that consumers may not be fully
conscious of when shopping.
Environmental stimuli affect consumers’ emotional
states, which in turn affect approach or avoidance
behaviors.
The four types of approach or avoidance behaviors
are physical, exploratory, communication, and
performance and satisfaction approach.
Store-Related Affect and Cognition (cont.)

12. 19-12

13. 19-13
Environmental stimuli influence emotional states
(pleasure, arousal), which drive approach or
avoidance behaviors like spending more time or
money.
A Model of Store Atmosphere Effects

14. 19-14
Store Atmosphere (cont.)
Pleasure and arousal were found to influence
consumers’ state:
Enjoyment of shopping in the store.
Time spent browsing and exploring the store’s
offerings.
Willingness to talk to sales personnel.
Tendency to spend more money than originally
planned.
Likelihood of returning to the store.

15. 19-15
Store contact
Involves the consumer locating, traveling to, and
entering a store.
A number of variables are concerned with obtaining
store contacts.
Store location decisions are strongly influenced by heavy
traffic and pedestrian patterns, which facilitate store
contact.
Visibility of the store and its distance from consumers are
used to select locations that can increase store contact.
Store-Related Behavior

16. 19-16
Store Contact

17. 19-17
Store loyalty
Repeat patronage intentions and behavior.
Strongly influenced by the arrangement of the
environment, particularly the reinforcing properties of
the retail store.
Is a major objective of retail channel strategy and has
an important financial impact.
Store-Related Behavior (cont.)

18. 19-18
Store Environment
Three major decision areas in designing effective
store environments:
Store location
Store layout
In-store stimuli

19. 19-19
Store Location
Good locations allow ready access, can attract
large numbers of consumers, and can
significantly alter consumer shopping and
purchasing patterns.
Store location decisions represent long-term
financial commitments, and changing poor
locations can be difficult and costly.
Retail location models are quite sophisticated and
can deal with a variety of criteria.

20. 19-20
Store Location (cont.)
General approaches to selecting store location
Checklist method - A systematic evaluation of
potential sites based on a list of predefined
criteria.
Analog approach - Identifies an existing store
or stores similar to the one planned and uses
their performance data to evaluate potential
sites.

21. 19-21
Store Location (cont.)
Regression models - A statistical approach that uses
historical data to identify factors affecting store
performance and predicts the success of potential
sites. Commonly used to investigate the factors that
affect the profitability of retail outlets at particular
sites.
Location allocation models - Involve the
simultaneous selection of several locations and
estimation of demand at those locations to optimize
some specified criteria.

22. 19-22
Store Layout
Grid layout
The grid layout is more likely to be used in
department and specialty stores to direct customer
traffic down the main aisles.
Free-form layout
This arrangement is particularly useful for
encouraging relaxed shopping and impulse purchases.

23. 19-23
Examples of Grid and Free-Form Store
Layouts

24. 19-24
Advantages and Disadvantages of Grid and
Free-Form Layouts

25. 19-25
In-Store Stimuli
Signs and price information
Benefit sign
Price-only sign
Color
Warm colors
Cool colors
Shelf space and displays
Normal display, expanded display, and special display

26. 19-26
In-Store Stimuli (cont.)
Music
The tempo of background music influences consumer
behavior
Scent
Scents vary in terms of how pleasant they are
perceived to be, how likely they are to evoke
physiological responses, and how strong they are.
Ambient scent can influence feelings about stores and
their products.
Neutral and pleasant scent categories can be diffused
in a store to influence consumers.

27. 19-27
Nonstore Consumer Behavior
Consumer purchase mode refers to the method
a consumer uses to shop and purchase from store
or nonstore alternatives.
Choices made among the various consumer
purchase modes are influenced by many factors.

28. 19-28
Catalog and Direct Mail Purchases
Have grown dramatically with the increase in
dual-income families and the general need for
consumers to save time.
Catalogs have some disadvantages for
consumers.
Catalog prices are higher and consumers have to pay
shipping charges.
Do not allow the consumer to experience the feel, fit,
or other sensory stimuli of a product directly.

29. 19-29
Catalog and Direct Mail Purchases (cont.)
Waiting time to receive merchandise.
Unsatisfactory product returned at consumer’s own
expense.

30. 19-30
Vending Machine Purchases
Provide merchandise in convenient locations and
are often available for purchases twenty-four
hours a day.
Product prices are typically higher.
Recovery of money may not be possible when
vending machines fail to deliver the merchandise.

31. 19-31
Television Home Shopping
Allows consumers to purchase conveniently from
their homes by telephone and can offer and
demonstrate products.
It also allows better visual display than catalogs.
Limitations:
Consumers must watch the channel when the
merchandise is offered.
Consumers must pay shipping charges
Less informative than experiencing products directly
in stores.

32. 19-32
Direct Sales Purchases
Salespeople can provide in-depth product usage
information.
Merchandise is often priced higher than similar
merchandise in stores.
Consumers’ must spend time watching the
demonstration and discussing products.
Pressure by overzealous salespeople to purchase
unneeded products.

33. 19-33
Electronic Exchanges
Involve consumers in collecting information,
shopping, and purchasing from Web sites.
Is the fastest growing purchase mode.

34. 19-34
A Comparison of Six Consumer Purchase
Modes

35. 19-35
Summary
Channels of distribution have a very important
impact on consumer affect, cognition, and
behavior.
The two most critical store-related affect and
cognitions for channel strategy are store image
and store atmosphere.
The store-related behaviors, store contact and
store loyalty, are primary objectives of retail
channel strategy.

36. 19-36
Summary (cont.)
Store environment entails store location, store
layout, and in-store stimuli.
The six consumer purchase modes include stores,
catalogs/direct mail, vending machines, direct
sales, TV home shopping, and electronic
exchange.
It is the consumer and their relationships with
other criteria that determine appropriate channel
strategy.

37. 19-37
QUIZ: TRUE OR FALSE
1. Store image is determined by the consumer's perception
of store-related stimuli received through the five senses.
2. Free-form store layouts discourage impulse purchases
and promote quick shopping.
3. Catalog shopping usually has lower prices and no
shipping charges compared to in-store shopping.
4. Regression models are used to predict the success of
store locations based on historical data.
5. Music tempo in stores does not influence consumer
behavior.

38. 19-38
QUIZ: TRUE OR FALSE
6. In-store stimuli, such as expanded displays, can encourage
consumers to spend more time and money in the store.
7. Vending machine purchases are always cost-effective for
consumers.
8. Store loyalty is a key objective of retail channel strategy
because it has a financial impact.
9. Electronic exchanges are declining in popularity as a
consumer purchase mode.
10. Checklist methods and regression models are two common
approaches to store location decisions.

39. 19-39
QUIZ: IDENTIFICATION
11. The study of individuals, groups, or organizations and their
decision-making processes for acquiring goods and services.
12. A distribution channel where goods are sold directly to the
consumer, such as through company websites.
13. The layout used in department stores to direct customer
traffic efficiently.
14. The systematic evaluation of potential store locations based
on predefined criteria.
15. The purchase mode that allows consumers to shop using
catalogs and direct mail.

40. 19-40
QUIZ: IDENTIFICATION
16. The term for consumers returning to a store repeatedly
due to positive experiences.
17. The consumer behavior influenced by environmental
stimuli like scent, music, and lighting.
18. The purchase mode that enables consumers to buy
products from vending machines available 24/7.
19. The emotional states influenced by store atmosphere,
driving approach or avoidance behaviors.
20. The channel that combines both direct and indirect
distribution methods.