Chapter 3 - Shopper Behavior Flashcards
Consumer motives for shopping - personal motives and social motives
Personal motives:
Relaxing
Role playing
Seeking variety
Seeking sensory stimulation form the retail environment
Social motives:
Social interaction away from home
Fulfilling status needs
Being with peer groups
Different types of shopper
Multichannel enthusiast
Positive attitudes towards multiple channels for searching and buying
Highly innovative people
Enjoy shopping
Show LOW loyalty
Different types of shopper
Uninvolved shopper
Not positive toward any channel of shopping
Do not enjoy shopping
Show LOW loyalty
Low price consciousness
Different types of shopper
Store focused shoppers
Favour brick and mortar stores
Negative attitudes towards any other channel except stores
They are loyal shoppers
Show little innovativeness
Different online shopper types
Credibility first purchasers - strong preference for high reputation stores
Risk averse purchasers - take a long time to decide to buy a high price item by comparing info on items in different stores
Economical purchasers - favour purchasing low price items and take a long time to decide to buy an item, they do not like to communicate with others
Active star purchasers- fond of communicating with others of their shopping experience, lots of word to mouth interaction make them most influential group
Direct purchasers - similar to economical shopper but are task orientated and do not take long to make a buying decision
High loyalty purchasers - clear preferences and add items to favourite lists, share their online experience word to mouth and they are very informed with the products and services - making them loyal customers
Retail outlet customer base consists of
Core customers: use the outlet because it is their first choice, small percentage of outlets shopper but represent most of its sales.
Secondary shoppers: use the outlet to compare price and merchandise, not necessarily the first choice outlet
Tertiary shoppers: browse the outlet occasionally but seldom make a purchase
Four product classes
Convenient products
Convenience products
- inexpensive and purchased regularly
- little to no comparison shopping is done
- minimum time and effort spent on buying these
3 groups
Staples - bread
Impulse goods - magazines or sweets @ checkout
Emergency goods - suntan lotion
Four Product classes
Shopping Products
- Cause consumers to engage in comparison process before buying
- these cost more and bought less frequently than convenience goods
Examples - clothes, furniture
Four product classes
Speciality products
These have unique characteristics for which the consumer will not accept substitutes.
- these consumers are well informed and make special efforts to acquire the products they want
Examples - photographic and electronic equipment and designer clothes
Four product classes
Unsought products
These are products that are either known or not known by the consumer and which they usually don’t consider buying .
Examples
New products of which the consumer was not previously aware and products like insurance which the consumer does not want immediately
Perceived risk and its implication for retailing
Perceived risk: the level of risk a consumer believes exists in respect for purchasing a specific product or service from a specific retailer.
Perceived means that is not always based on facts
Innovative outlets such as television shopping are viewed as higher risk
Traditional outlets have an advantage with high perceived risk items because their reputation and well trained sales persons are reassuring to the customer.
Financial risks can be reduced by offering guarantees and trial periods
Social risks can be reduced though a skilled sales force and established brands
Physical and functional risk can be addressed by using respected organisations as endorsers for the quality and functioning of the product.
Eight types of perceived risk
Functional risk : risk that products will not perform as expected like breaking down soon etc
Physical risk : risk to self and other that the product poses like possibility of health hazard
Financial risk : risk that product will not be worth it’s cost either in time or in money. Any possible further immediate costs to make it work properly
Social risk: risk that shopping at a specific retailer will cause embarrassment and may not meet with peer approval
Psychological risk: risk that poor product choice will risk consumers ego, where the purchase might be incompatible with consumers self image
Time loss risk: risk of spending too much or to little time on the purchasing, inconvenience or delays when product needs to be repaired or replaced
Future opportunity cost: risk that an improved or lower cost product may be available in the future
- rapid rate of new technology
Source risk: risk of trusting the retailer or organisation involved in the transaction
- relevant for online retailers
Factors affecting perceived risk
Familiarity with the product
Amount of information available
Number of alternatives available
Social visibility
Guarantees offered
Urgency of the need
Time available to shop
Risk relievers for consumer s
Seeking information from friends and family
Having brand loyalty
Obtaining expert advice
Product testing through private of gov organisations
Buying most expensive model
Seeking reassurance
Requiring guarantees
Retail outlet selection process for consumers
Same as choosing a brand
Recognises a problem Select an outlet Engages in external and internal search Evaluates alternatives Then makes a decision
Retail outlet criteria
Outlet Image
Market communication of retailer s
Outlet location and size
Retail outlet criteria - Outlet image
This refers to the consumers perceptions based on all the features associated with a retail outlet
Different groups of people want different things therefore a retailer must be in control of most dimensions which project a well focused image.
Examples include department stores which saw the role of being “all things for all people”
Their image became too scattered to appeal to customers.
These include rational and emotional components
Rational components include price, parking
Emotional include decor and atmospherics
Retail outlet criteria - market communication of retailer
This refers to means such as advertising that retailers can use to communicate their image to customers.
Price promotions are used to draw customers to a shop. The impact varies on product category, brand and retail outlet
Outlet location and size
Location of an outlet effects the consumers choice of shop. They prefer closer shops.
The size of an outlet affects this too, larger outlets are preferred unless a consumer wants fact or convenient service.
Retail gravitation model calculates shop attraction based in shop size and travel distance.
The shop size refers in square meters refers to the breadth and width of merchandise.
Travel time to a shop refers to the physical and psychological effort to visit a given retail outlet.
Product class refers to the varying travel time associated with different products
Large attraction coefficient means consumers are unwilling to travel very far for products such as convenience products
Factors influencing in-shop behaviour
In shop information Shop layout Shop atmosphere Sales personnel Point of purchase displays Product displays Pricing strategies and promotions Out of stock situations
In shop information - providing information to consumers may prove a big advantage if they were unaware of this info before.
They serve as an competitive technique for consumers as well.
Point of purchase displays - these attract consumer attention and impact sales positively. The use of shelf displays are strongly substantiated because the net combined display and shelf sales are well above average.
Shop layout and traffic : factors such as visibility increase the chance that a product will be purchased. Retailers study traffic patterns to determine good and bad sales areas to design optimum layout patterns for placing and spacing of products.
Factors influencing in-shop behaviour
Product displays
- factors that influence sales here are the height of the products as well as the facing (number of rows) of the products. Eye level shelf position is optimum spot because customers purchase time and amount is limited.
Pricing strategies -
retailer want to project a low price image it uses loss leaders- where products are sold at cost or slightly above cost to generate consumer traffic.
Sales increase in response to price promotions an be due to the following:
- Stockpiling: customers buy ahead of anticipated needs
- Switching brands: repeat buyers
- draws new customers to buy the brand
Shop atmospherics - influence the shoppers mood and willingness to visit and browse. Attributes such as lighting, layout, sounds etc
Factors influencing in-shop behaviour
Sales personell
- often the fist point of contact with the retailer.
- they can exercise their influence to generate consumer purchases
- retailers consider them a priority but the high cost and turnover of sales force make retailer use self service as much as possible
Out of stock situations
When a retailer does not have stock of a certain brand they have four options:
- Buy same brand but at another shop
- Switch brands
- Delay purchase
- Cancel purchase
Consumer behaviour under certain economic conditions:
Inflation
Stagflation
Recession
Shortages
Inflation:
the constant and considerable rise in prices of products and services in general, measured by the CPI.
Consumers are forced to reconsider their consumption priorities because of price increases from inflation.
Functionalism
The consumer tries to find greater value for thief reducing purchasing power.
For durable products such as furniture, consumers will pay a higher price if they perceive it to give them better service and a longer life span.
With high inflation rates use techniques such as comparative shopping to find the best value for the lowest price point.
The outcome of this is the postponement of discretionary purchases with the net result of a decrease in sales of durable products.
Consumers try and beat inflation and this behaviour might result in a further increase in inflationary demand.
Recession
The aspects of a recession that affect a retailer are the decrease in the growth of employment opportunities and the growth of the unemployed.
The result of the combined influence of continuos inflation and increase number of recessions is a decline in the real income of the consumer, high unemployment rates and little consumer confidence.
This causes consumers values to change, as their purchasing behaviours
Stagflation
This is the word given to the combined effects of a stagnation in production and employment as well as the increasing price inflation
Shortages
Shortages of raw materials, affect the supply of products, contribute to inflation and drastic price increases, this requiring a reorientation in marketing to customers.
Does one advertise a product when availability is unknown?
Impact of certain economic conditions on consumer behaviour
Consumer can do two things in periods of inflation and recession
Either increase income or modify consumption behaviour with current income.
What do consumers do?
Try to become more self sufficient
Rely more on family and friends
A shift to functionalism and value of products
Simplifying lifestyles
4 Impulse buying forms
Pure impulse
- novelty purchase which breaks normal buying pattern
Reminder impulse
- a shopper sees an item and is reminded to purchase because stock at home is low or advertisement
Suggestion impulse
- shopper sees an item for the first time and visualises a need for it
Planned impulse
- shopper enters a shop with expectation and invention of making some purchases on the basis of price specials.
Characteristics of impulse buying products
Typically
Low in price
Short product lifespan
Small and weigh little
