Customerq Buying

Behavior
 Learning Objectives
q
1 Describe the process that consumers go through
when making retail patronage and buying decisions.

2 Identify the different types of buying processes.

3 Summarize how the economy and social factors

affect customer purchase decision.

4 Determine why and how retailers group customers into

market segments.
Consumer buying behavior

➢ refers to the buying behavior of final

consumers—individuals and households
who buy goods and services for personal
consumption.
Stages in Buying Process
 THE BUYING DECISION PROCESS

Process Stages • Needs can be triggered by:

• Problem/Need recognition
• Information search
• Evaluation of alternatives
• Purchase decision
• Postpurchase behavior
• Internal stimuli
• Normal needs become
strong enough to drive
behavior
• External stimuli
• Advertisements
• Friends of friends
 Types of Need

Utilitarian need Hedonic needs

When consumers go shopping When consumers go shopping
to accomplish a specific task for pleasure
• Stimulation
• Status and power
• Adventure
 THE BUYING DECISION PROCESS

Process Stages • Consumers exhibit heightened

attention or actively search for
• Problem/Need recognition information.
• Information search • Sources of information:
• Evaluation of alternatives • Personal
• Purchase decision • Commercial
• Postpurchase behavior • Public
• Experiential
• Word-of-mouth
 THE BUYING DECISION PROCESS

Process Stages Multiattribute attitude model

based on the notion that customers
• Problem/Need recognition see a retailer, a product, or a
• Information search channel as a collection of attributes
or characteristics
• Evaluation of alternatives
• Purchase decision
• Postpurchase behavior
 THE BUYING DECISION PROCESS
Characteristics of Food Retailers
Process Stages
• Problem/Need recognition
• Information search
• Evaluation of alternatives
• Purchase decision
• Postpurchase behavior
 THE BUYING DECISION PROCESS

Process Stages Evaluation of Retailers

• Problem/Need recognition
• Information search
• Evaluation of alternatives
• Purchase decision
• Postpurchase behavior
 THE BUYING DECISION PROCESS
Process Stages
• Problem/Need recognition
• Information search
• Evaluation of alternatives
• Purchase decision
• Postpurchase behavior
Multiattribute attitude model use
for retailers:
• This indicates what information
customers use to decide which
retailer to patronize or which
channel to use
• it suggests tactics that retailers
can undertake to influence
customers’ store, channel, and
merchandise choices.
 THE BUYING DECISION PROCESS
Process Stages
• Problem/Need recognition
• Information search
• Evaluation of alternatives
• Purchase decision
• Postpurchase behavior
Consideration set- the set of
alternatives the customer evaluates
when making a choice of a retailer
to patronize
• Increase beliefs about the store’s
performance.
• Change customers’ importance
weights.
• Add a new benefit.
 THE BUYING DECISION PROCESS
Process Stages
• Problem/Need recognition
• Information search
• Evaluation of alternatives
• Purchase decision
• Postpurchase behavior
Various tactics use by retailers:
• attempt to make it easy to
purchase merchandise.
• turn a positive purchase
intention into a sale
• increase the chances of making
a sale by reducing the risk
• create a sense of urgency or
scarcity to encourage
customers to make a purchase
decision
 THE BUYING DECISION PROCESS

Process Stages • Satisfaction is important:

• Delighted consumers engage in
• Problem/Need recognition positive word-of-mouth.
• Information search • Unhappy customers tell on average
• Evaluation of alternatives 11 other people.
• It costs more to attract a new
• Purchase decision customer than it does to retain an
• Postpurchase behavior existing customer.
• Cognitive dissonance is common
 TYPES OF BUYING DECISION
Extended problem
solving
purchase decision process in
which customers devote
considerable time and effort
to analyze their alternatives
• Financial risk
• Physical risk
• Social risk
Limited problem
solving
purchase decision process
involving a moderate amount
of effort and time
Impulse buying
Habitual decision
making
purchase decision process
involving little or no conscious
effort. Today’s customers have
many demands on their time
• Brand loyalty
• Retailer loyalty
SOCIAL FACTORS INFLUENCING THE BUYING
PROCESS
 MARKET SEGMENTATION

➢ A retail market segment is a group of

customers who are attracted to the same
retail mix because they have similar needs
Criteria for Evaluating Market Segments

➢ Actionable
➢ Identifiable
➢ Substantial
➢ Reachable
 Approaches for Segmenting Markets

Geographic Demographic Geodemographic Lifestyle

Buying Situation Benefit
segmentation segmentation segmentation segmentation
segmentation segmentation
groups customers groups consumers on Uses both refers to how
The buying behavior group customers
according to where the basis of easily geographic and people live, how
of customers with seeking similar
they live. measured, objective demographic they spend their
the same benefits
characteristics such as characteristics to time and
demographics or
age, gender, classify consumers. money, what
lifestyle can differ
income,and education. activities they
depending on their
pursue, and their
buying situation
attitudes and
opinions about the
world in which they
live.
Geodemographic segmentation: Examples of
Tapestry
Lifestyle Segmentation: VALS American
Lifestyle
 Composite Segmentation Approaches

➢ uses multiple variables to identify customers in the

target segment according to their benefits sought,
lifestyles, and demographics.

CCaroline
V
Vanessa
S
Sophie
18-24 years old 35-54 years old 55 and up
Generally accepted lifecycle stages in the
Philippines
Stages Description
Bachelor Young, single, and independent
New Married Couples Young, no children, also known as DINKs (Double
income, no kids)
Full Nest I Families with children, youngest child below six
years
Full Nest II Families with children, youngest child six years or
older
Full Nest III Families with dependent children
Empty Nest I Older married couples, no children living with them
Empty nest II Older married couples, retired, and no children
living with them
Solitary Survivor I Older, no family, and supporting self
Solitary Survivor II Older, no family and retired
 References

Levy, M., Weitz, B. A., & Beitelspacher, L. S. (2012). Retailng Management. New
York: McGraw Hill Irwin.

Levy, M., Weitz, B. A., & Grewal, D. (2014). Retailing Management. New York:
McGraw Hill Education.
Customerq Buying
Behavior