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RMG 200 (57)
Brent Barr (19)

ch 3 part 1

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Retail Management
RMG 200
Brent Barr

CH 3: CUSTOMER BEHAVIOUR The Buying Process  Buying process: the stages customers go though to purchase merchandise or services 1. Need Recognition Types of Needs a. Utilitarian needs: needs motivating consumers to go shopping to accomplish a specific task b. Hedonic needs: needs motivating consumers to go shopping for pleasure i. Stimulation – background music, visual displays, scents, and demonstrations in stores ii. Social experience – social meeting places, restaurants, movie theatres, bookstores with cafés, online retailers that enable customers to email products to their friends, personal blogs with shopping lists iii. Learning new trends iv. Status and power – place where they can get attention and respect v. Self award vi. Adventure – find bargains, looking for sales and discounts Conflicting Needs  Most customers have multiple needs  Needs cannot be often satisfied in one store or one product, consumers may appear to be inconsistent in their shopping behavior  Cross-shipping: a pattern of buying both premium and low priced merchandise or patronizing expensive, status oriented retailers and price oriented retailers Stimulating Need Recognition  Needs sometimes are stimulated by an event in person’s life  Advertising, internet promotions, direct mail, publicity, special events communicate the availability of merchandise or special process 2. Information Search Amount of Information Searched  Information search: the stage in buying process in which a customer seeks additional information to satisfy a need  Factors influencing the amount of information search include o The nature and use of the product being purchased o Characteristics of the individual customer o Aspects of the market and buying situation in which the purchase is made  Marketplace and situation factors affecting information search include o The number of competing brands and retail outlets o The time pressure under which the purchase must be made Sources of Information A. Internal sources: information in a customer’s memory such as names, images, and past experiences with different stores B. External sources: information provided by the media and other people Reducing Information Search  Retailer’s objective at the information search stage of the buying process is to limit the customer’s search to its store or Web site  Services provided by retailers can also limit search to the retailer’s location  Everyday low pricing is a way retailers increase the chance that customers will buy in their store and not search for a better price elsewhere 3. Evaluation of Alternatives: The Multiattribute Model  Multiattribute attitude model: a model of customer decision making based on the notion that customers see a retailer or a product as a collection of attributes or characteristics the model can also be used for evaluating a retailer or product, or vendor. The model uses a weighted average score based on (1) its performance on relevant attributes and (2) the importance of those attributes to the customer  The model does not reflect customers’ actual decision making process, but it does predict their evaluation of alternatives and their choice Implication for Retailers  The model indicates: o What information customers use to decide which retailer to patronize and which channel to use o Suggests tactics that retailers can undertake to influence customer store choices and merchandise selection  To develop program for attracting customers, the retailer must do market research to collect following information: o Alternative retailers that customer consider o Characteristics or benefits that customers consider when evaluating and choosing retailer o Customer’s ratings of each retailer’s performance on the characteristics o The importance weights that customer attach to the characteristics Getting into the Consideration Set  Consideration set: the set of alternatives the customer evaluates when making a merchandise selection  Eg. Throu
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