Business Development Chapter 4 The Customer May Have Some Prior Experience

Chapter 04 – Customer Buying Behavior

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ANSWERS TO SELECTED “GET OUT AND DO IT!” QUESTIONS

2. GO SHOPPING Go to a supermarket and watch people selecting products to put in their

shopping carts. How much time do they spend selecting products? Do some people spend

more time than others? Why is this the case? Does consumer behavior vary in the store

perimeter versus in the aisles? Explain your observations.

Students may find a variety of shopping styles from this observational research trip. Some

shoppers will have a list, some will go up and down each aisle, and others will go through

3. INTERNET EXERCISE To better understand the segmentation classification of consumers,

Strategic Business Insights has developed the VALS tool, which uses psychology to segment

people according to their distinct personality traits. Go to the firm’s home page at

http://www.strategicbusinessinsights.com/vals/presurvey.shtml and take the survey to

identify your VALS profile according to your values, attitudes, and lifestyle. According to the

results, what is your VALS profile type? Do you agree with your consumer profile? Why or

why not? How can retailers effectively use the results of this survey when planning and

implementing their business strategies?

“The purpose of the VALS™ survey is to identify the VALS type of the person taking the survey.

That’s it. To find out about a person’s product ownership, media preferences, hobbies,

4. INTERNET EXERCISE Retailers want to segment the market on the basis of the geographic

classification of customers to select the best sites for their businesses. Go to the ESRI

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campus, and read the results. How would a retailer, such as a local restaurant, use the

information in this report when making a decision about whether to open a location in this

zip code?

ESRI uses geography to help governments, industry leaders, academics, and other

organizations make critical and analytical decisions. The Tapestry tool classifies US

5. INTERNET EXERCISE Go to the following Internet sites offering information about the latest

shown by designers. Which of these fashion trends do you think will be popular with college

students? Why?

Students interested in fashion and apparel merchandising will really like this exercise.

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ANSWERS TO DISCUSSION QUESTIONS AND PROBLEMS

1. Does the customer buying process end when a customer buys some merchandise? Explain

your answer.

No, the customer buying process does not end when a customer buys some merchandise.

One of the most important stages of the buying process is the postpurchase evaluation.

2. Describe how service retailers, such as hotels, are using Twitter to provide information

and answer questions about rates, services offered, and other amenities. How is this form

of communication changing their expectations?

The Internet in general, social media, and the increasing applications for mobile devices

.

3. Considering the steps in the consumer buying process (Exhibit 4-1), describe how you (and

your family) used this process to select your college or university. How many schools did

you consider? How much time did you invest in this purchase decision? When you were

deciding on which college to attend, what objective and subjective criteria did you use in

the alternative evaluation portion of the consumer buying process?

To answer this question, students need to consider the following steps in the decision–

making process:

Need recognition—What stimulates the student to first think about going to college? What

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4 In Exhibit 4-6, The Inner City Tenant is described. How should banks, restaurants,

drugstores, and car dealers alter their retail mixes to meet the needs of this segment

compared to the Top Rung segment?

The Inner City Tenant is a younger customer from a diverse background who lives in a city

and is interested in playing sports, music, and fashion. The Top Rung customer, on the

5. Any retailer’s goal is to get customers in its store so that they can find the merchandise

that they are looking for and make a purchase at this location. How could a sporting

goods retailer ensure that the customer buys athletic equipment at its outlet?

A sporting goods retailer can ensure that a customer buys athletic equipment in their store

by helping customers decrease their information search. In general, retailers want to

6. A family-owned used-book store across the street from a major university campus wants

to identify the various segments in its market. What approaches might the store owner

use to segment its market? List two potential target market segments based on this

segmentation approach. Then contrast the retail mix that would be most appropriate for

the two potential target segments.

• Target segment defined on demographics might be:

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Note that the target segment determines the nature of the merchandise offered. For

example, a target segment of students for used books means that the store has to get

information about tastes of the current batch of students at the university, what types of

books they would be looking for used versus new, and their price preferences. Also the

customers can relax to browse the selection.

7. How does the buying decision process differ when consumers are shopping on the

Internet or mobile device compared with shopping in a store in terms of locations or sites

visited, time spent, and brands examined?

When shopping online, customers might spend more time searching for information and

8. Using the multiattribute attitude model, identify the probable choice of a local care dealer

for a young, single woman and for a retired couple with limited income (see the

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accompanying table). What can the national retail chain do to increase the chances of the

retired couple patronizing its dealership?

Importance Weights

Performance Beliefs

Performance

Attributes

Young,

Single

Woman

Retired

couple

Local Gas

Station

National

Service

Chain

Local Car

Dealer

Price

2

10

9

10

3

Reliability

2

9

2

Convenience

8

3

5

9. Think of a recent purchase that you made and describe how economic and social

environmental factors (e.g., reference group, family, and culture) influenced your buying

decision. How are retailers using social media to impact your buying decisions?

Economy- based on the changes in the national and global economy, consumers have

changed their buying habits. Many consumers are now searching for more discounts and

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10. Think about the merchandise sold at Office Depot/OfficeMax and Staples, and list three

to four types of merchandise that fall into extended problem solving, limited problem

solving, and habitual decision making for college students. Explain how the categories of

merchandise would change for each type of buying decision if the customer was the

owner of a medium-sized business.

As marketers we examine the level of involvement and amount of time a consumer spends

in the buying process. Depending on the significance of the purchase, consumers will be

more or less involved in the purchase process with varying amounts of time and research.

Extended Problem Solving – considerable time, complex, unfamiliar, and significant, less

frequently purchased, considerable risk, and uncertainty. Customers will spend more time

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Appendix 4A

I. Customer Buying Behavior and Fashion

• To sell fashion merchandise profitably, retailers need to (1)

understand how fashions develop and diffuse throughout

Ask students to discuss the latest

trends they see other students

II. Customer Needs Satisfied by Fashion

• People use fashions to both develop their own identity and

gain acceptance from others; however, these can be

opposing forces. To satisfy these conflicting needs,

Fast Fashion has been a

tremendous success in supplying

consumers with “fresh trend-right

III. How Do Fashions Develop and Spread?

• Fashions are not universal. A fashion might be accepted in

one geographic region, country, or age group and not in

another.

Ask students from different

backgrounds to discuss the

current “fashions” in their own

cultures. What are some

A. Creation

• New fashions arise from several sources including fashion

designers, creative consumers, celebrities, and even

retailers.

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B. Adoption by Fashion Leaders

• Initial adopters of a new fashion are called fashion leaders,

innovators, or trendsetters, and they are the first people

to display the new fashion in their social group or write

about them in social media.

Discuss with students the impact

of fashion that comes from

celebrities in film, sports, and

social media. What impact do

influencers and bloggers have on

C. Spread to Large Consumer Groups

• The fashion becomes increasingly visible, receives greater

publicity and media attention, and is readily available in

retail stores.

• Compatibility is the degree to which the fashion is

consistent with existing norms, values, and behaviors.

Ask students what fashions they

would most likely find in a luxury

store, discount store, and off-price

retailer. Compare fashions in

Neiman Marcus and Macy’s.

Compare fashions in Urban

D. Saturation

• All consumers in the target market are aware of the fashion

and have decided to either accept or reject it, which makes

the fashion become old and boring to many people.

E. Decline in Acceptance and Obsolescence

• When fashions reach saturation, they have become less

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ANCILLARY LECTURES AND EXERCISES

Lecture # 4-1 THE MULTIATTRIBUTE MODEL

Instructors’ Note: This lecture can be used to demonstrate a model designed to predict a

Introduction

• The multiattribute model is based on the notion that customers see a retailer or a product

as a collection of attributes or characteristics.

Beliefs about performances

• A customer considering shopping at three retailers mentally processes the “objective”

information about each of the retailers and forms an impression of the benefits the retailer

provides.

• His or her beliefs about these benefits may be a combination of several objective

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Importance weights

• A customer may develop an overall evaluation of each retailer based on the importance

he/she places on each of the benefits provided by the retailers. For example, the

Choice of Alternatives

• For the young woman, the Internet grocer has the highest score, and thus the most

favorable evaluation. However, the Supercenter has the highest score for the parent, who

would probably buy the family’s weekly groceries there.

Implications for retailers

• First, the model indicates what information customers use to make their decision about

which retailer to patronize. Thus, to develop a program for attracting customers, the

retailer needs to do market research to collect the information listed below.

1. Getting into the consideration set

The retailer must make sure that it is included in the customer’s consideration set. The

consideration set is the set of alternatives the customer evaluates when making a

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2. Changing performance beliefs

The first approach involves altering customer’s beliefs about the performance of the

retailer—increasing the retailer’s performance rating on a characteristic. For example,

the supermarket would want to increase its overall rating evaluation by improving its

3. Changing importance weights

Altering customers’ importance weights is another approach to influencing retailer choice. A

4. Adding a new benefit

The retailer might try to add a new benefit to the set of benefits that customers

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ANCILLARY EXERCISE # 4-1: USING THE MULTIATTRIBUTE MODEL FOR CHOOSING A STORE

————–——–——–——————-

Instructor’s Note: This exercise is intended to give students the opportunity to use the

multiattribute model found in the text. Instructors might want to use this lecture as a stimulus

to a class discussion on the topic.

————–——–——–——————-

Instructions

• Pick a student who has recently made a store choice decision — such as choosing a retailer

to buy jeans, get a haircut, buy groceries, or eat a meal.

• Typical factors are convenience (location), price of merchandise, availability of specific

items, offering credit, service, etc.

• List these benefits offered on the row in the left-hand column.

• Ask the student which characteristics or benefit is the most important to him/her and give

that benefit a 10 in the importance weight column.

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ANCILLARY EXERCISE # 4-2

Using the multiattribute attitude model and the following information, identify the probable

choice of a retail store for a young single businesswoman and for a retired couple with limited

income buying a TV set.

IMPORTANCE WEIGHTS

PERFORMANCE BELIEFS

CHARACTERISTIC

YOUNG

SINGLE

RETIRED

COUPLE

DISCOUNT

STORE

DEPART-

MENT

STORE