Retail Customer

Learning Objectives:To determine the importance of knowledge of consumer behavior for the success of retailing strategies To discuss the factors that influence consumer behavior To outline the stages of consumer decision-making & its impact on retail Strategies To discuss the various levels of consumer decision-making To outline the type of consumer decision-making process To discuss the factors which affect the nature of consumer decision making To discuss the influence of situational variables on shopping behaviour

Introduction Consumer Behavior

Consumer buying behavior refers to the buying behavior of the ultimate consumer. Consumer Behavior is the study of how consumers make decision to use their respective resources such as time, money & effort for buying using & disposing goods & services. In the retailing context marketers are required to understand customers shopping behavior, which includes decision variables regarding, among other things, brand selection, shopping timing, & choice of retail format & store. Consumers shopping behavior can be understood by analyzing the factors that affect behavior, these factors could be demographic, psychological, Environmental, or related to the lifestyle of the customer. In retail context, marketers would specifically be more interested to know about consumers shopping behavior, which involves an understanding of decision variables regarding when, where,& what to shop ( Shopping timing, choice of retail format & store, etc.) Individual consumers consider each element of retail marketing mix in relation to their Culture, Attitude, Previous Learning & Personal Perception.

Why do consumers shop

It has been suggested that consumer shopping activities are influenced by personal & social motives. Consumers motives are important & positively related to their pleasure & satisfaction while shopping in terms of retail choices.

Personal Motives
Role playing- Shopping activities are learned behavior and are expected or accepted as part of ones position or role, such as mother or housewife. Diversion- Shopping can offer a diversion from the routine of daily life & is a form of recreation. Self-gratification- Shopping may be motivated not only by the expected utility of consuming, but the utility of their buying process itself. Thus, emotional states or moods may explain why or when someone goes shopping. Learning about new trends:- Shopping provides consumers with information about trends & movements and product symbols reflecting attitudes & lifestyle. Physical activity- It involves considerable amount of exercise Sensory stimulation- Shopping can provide sensory benefits such as looking at & handling merchandise, listening to the sounds (e.g., noise, msic ) and smelling scents.

Social Motives
Social experience outside home- Shopping can provide opportunities for seeking new acquaintances, encounters with friends, or just people watching. Communication with other similar interests- It provides opportunity for interactions with other customers or sales people. Peer group attraction- Certain stores provide a meeting place where members of the peer group may gather. Status & Authority- Shopping may provide an opportunity to attain status and power by being waited. Pleasure Bargaining- Shopping may offer the enjoyment of gaining a lower price through bargaining comparison shopping or visiting special sales.

Factors Affecting Consumer Decision Making

A consumers purchase decision tends to be affected by the following four factors: Demographic Psychological Environmental Lifestyle

Demographics Factors
Gender Age Occupation Education Family Size Income.

Psychological Factors
Motives Perception Learning Attitude Personality

Environmental Factors
Physical Environment Social Environment-Culture Sub-Culture Social Class

Lifestyle
Activities & Interests Nature of Occupation Availability of Leisure

Stages of the Consumer Decision Process

Stages of the decision-making process Need Recognition

Post-Purchase Dissonance

Information Search

Purchase Decision

Evaluation of Alternatives

Types of consumer Decision-Making

On the basis of the nature of decision making one can classify the purchases into three categories: Routine buy refers to those transactions where the buyer recorders from a regular store without any modifications and on a routine basis. Modified rebuy refers to those transactions where buyers want to modify product specifications, prices terms, or suppliers. It usually involves more time & information New product purchase refers to those transactions where a buyer purchases a product or considers visiting a particular retail outlet for the first time & therefore requires an extensive amount of information to be obtained & evaluated. This largely true for infrequent purchases.

Level of Consumer Decisions

Level of consumer decisions

Extensive decision making

Routine Response

Limited decision making

Impulse Decision

Level of consumer decisions

The four levels of decision making are :Extensive decision-making/Complex high-involvement This kind of decisionmaking usually happens for unfamiliar, expensive and/or frequently bought products. These transactions involve a high degree of economic/performance/psychological risk. Limited decision making It happens when an individual purchases a product occasionally & is required to look for a different brand or retailer for a product one is used to because of non-performance or non-availability. This requires a moderate amount of time for information gathering. Routine response/programmed behavior Is observed in case of lowinvolvement, frequently purchased and generally low cost products. They require very little search & decision efforts and are purchased almost automatically. Impulse buying relates to those purchases that do not involve any conscious planning.

Consumer Decision Rules

Classification of consumer decision making Consumer decision making

Compensatory Decision Rule

Non-compensatory decision rules

Conjunctive decision Rule

Lexicographic decision Rule

Disjunctive Decision Rule

Consumer decision Rule

Compensatory Decision rule :- Is characterized by allowing a positive evaluation of a store or brand on one attribute to compensate or make for a negative evaluation on some other attribute. Non-compensatory Decision rules:- It does not allow consumers to balance positive assessment of store on one dimension against a negative evaluation on other dimensions. Conjunctive Decision Rule:- Here the shopper establishes a specific minimal acceptable level as a cut off point for each dimension. If a particular prospective store falls below the cut off point on any dimension it is dropped from the consideration. Disjunctive Decision Rule:- Under this rule the shopper accepts the store or brand if it meets or exceeds the limit established for any one dimension. Lexicographic Decision Rule:-In this rule a shopper first ranks the dimensions in terms of their perceived salience or importance. The shopper then compares the various brand alternatives in terms of a single attribute that is considered most important.

Influence of Situational Variables on Shopping Behavior

A shopping situation is a particular act of buying behavior occurring at a specific point in space and time. Situational variables refer to all those factors particular to a time & place of observation which do not follow from a knowledge of personal & stimulus attributes. These can be classified in to four distinct dimension of situational influence. Physical setting Social Setting Temporal perspective Task definition

Influence of Situational Variables on Shopping Behavior

Physical Settings:-The physical setting covers geographical location of the retail but might equally be seen in terms of the environment in which the consumer reads a catalogue, or accesses a shopping centre and a particular store. It also subsumes influences on behavior resulting from environmental conditions such as weather or climate, placement of merchandise, access to information in a store and background music or color scheme. Social Setting:- The social setting describes the presence or absence of others, together with their social roles, role attributes & opportunities for interaction. The shoppers who are accompanied by other people are considered to be social shoppers those who are unaccompanied are designated solitary Shoppers Temporal Aspects:- Temporal aspects are very important elements that affect the situational variables time of day & constraints upon time available for shopping are variables with very obvious effects on buyer behavior. Task Definition:- Task definition is more individual specific & encompasses cognitive & motivational indications of the shopping situation, effectively capturing situational influences on the task definition, information search.

Consumers Image of retail stores

A consumers image of a store is the summation of his attitude towards various aspects of that store. Retail marketers have provided considerable importance to consumers attitude & images in store selection & rejection. Every retail store possesses an individuality that differentiates it from its competitors. The measurement of consumers images of the store & measurement of consumers self-images aid retailers in segmenting the consumer population into groups by demographic characteristics or patronage practices based on differences in the image of the retail store or shopping center. Attitude & image formation takes places within & is affected by the physiological, sociological & psychological environments. Within these environments the individuals perceptions, motivation, interpersonal responses, traits & self-concept. The summation of all relevant attitudes is termed as the image of the retail store.

Retail Image Dimension

To measure the image of a retail store or shopping center, it is essential to identify and aggregate the relevant consumer attitudes.