3. Stages SELECTING A RETAILER SELECTING
AND CHANNEL MERCHANDISE
Need recognition Recognize needs Recognize needs
Search for information Search for information
Information Search about retailers about merchandise
Evaluation Evaluate retailers and Evaluate
channels merchandise
Choice Select a retailer Select
and channel merchandise
Visit Visit store or internet Purchase
site or catalog merchandise
Loyalty Repeat patronage Postpurchase
of retailer evaluation
5. Types of Needs
Utilitarian Needs- when consumers
go shopping to accomplish a specific task.
It is associated with work.
Hedonic Needs- when consumers go
shopping for pleasure. It is associated
with fun.
14. Factors influencing the amount
of information search include
1. The nature and use of the product
being purchased
2. Characteristics of the individual
customer
3. Aspects of the market and buying
situation in which the purchase is
made
15. Marketplace and situational factors
affecting information search include
1. The number of competing brands and
retail outlets
2. The time pressure under which the
purchase must be made
16. Sources of Information
Internal Sources – are information
in a customer’s memory such as
names, images and past experiences
with different stores.
External Sources – are information
provided by ads and other people.
17. Purchasing the Merchandise or
Service
1. Don’t stock out of popular merchandise. Have a
complete assortment of sizes and colors for
customers to buy. For services retailers, have
service providers available when customers are
ready to place orders.
2. Reduce the risk of purchasing merchandise or
services by offering liberal return policies,
money-back guarantees, and refunds if the
same merchandise is available at a lower price
from another retailer.
18. Cont.
3. Offer Credit.
4. Make it easy to purchase
merchandise by having
convenient checkout terminals.
5. Reduce the actual and perceived
waiting time in lines at checkout
terminals.
19. Types of Buying Decisions
Extended Problem Solving
Limited Problem Solving
Habitual Decision Making
20. Types of Buying Decisions
Extended Problem Solving = customer
devote considerable time and effort to
analyzing their alternatives. It involve
lot of risk and uncertainty
21. Types of Buying Decisions
Limited Problem Solving = they have some
prior experience with the product or service is
moderate. Customers rely more on their
personal knowledge than on external
information.
Impulse buying
= buying decision made
by customers on the spot.
22. Types of Buying Decisions
Habitual Decision Making = Is
a purchase decision involving little or no
conscious effort
Brand Loyalty means the customers
like and consistently buy a specific brand
in a product category.
Store Loyalty means that customers
like and habitually visit the same store to
purchase a type of merchandise.
29. Geographic Segmentation
Segmentation Descriptor Example of Categories
Continents Asia, North America, Europe And South
Africa
Regions Southeast Asia, Caribbean, Eastern Europe
Climate Cold, Warm, Tropical
Cities Florida, London, Manila, Tokyo, Singapore,
Bangkok
Population density Rural, Sub-Urban, Urban
31. Demographic Segmentation
Segmentation Descriptor Example of Categories
Age U6, 6-12, 13-19, 20-29, 30-49, 50-66, over 65
Gender Male, Female
Family Life Cycle Single, Married with no children, married with
youngest child over 6, widowed
Family Income Less than P10,000, P10,000 to P19, 999, P20,000 to
P29,999 and 30,000 above
Occupation Professional, Clerical, sales, retired, student
Education Elementary graduate, High school graduate, College
graduate, Vocational
Race Caucasian, African American, Asian
Nationality American, Japanese, British, German, Italian, Filipino,
Italian, Chinese
34. Buying Situation Segmentation
The buying behavior of customers
with the same demographics or
lifestyle can differ depending on their
buying situation.
35. Benefit Segmentation
Another approach for defining a
target segment is to group
customers seeking similar benefits.
36. Summary
The Buying Process
Need Recognition
Types of Needs
Some Hedonic Needs
The Types of Buying Decisions
Social Factors Influencing the Buying
Process
Criteria for Evaluating Market Segments
Approaches for Segmenting Markets
37. Cont.
To satisfy customer needs, retailers must
thoroughly understand how customers make
store choice and purchase decisions and the
factors they consider when deciding.
The importance of the stages depends on the
nature of the customer’s decision. When
decisions are important and risky, the buying
process is longer because customers spend more
time and effort on information search and
evaluating alternatives. When buying decisions
are less important to customers, they spend little
time in the buying process, and their buying
behavior may become habitual.
38. Cont.
The buying process of consumers is influenced
by their personal beliefs, attitudes, and values and
by their social environmental. The primary social
influences are provided by the consumers’ families,
reference groups, and culture.
To develop cost effective retail programs,
retailers group customers into segments. Some
approaches for segmenting markets are based on
geography, demographics, geodemographics,
lifestyles, usage situations, and benefits sought.
Because each approach has its advantages and
disadvantages, retailers typically define their target
segment by several characteristics.
39. The End
Reported by:
Nikki Joy Iwan
Miriam Ruth San Jose
Catherine Briones
