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Retail Management. Identifying and Understanding Customer Behavior. The Customer Decision-Making Process. Steps of the Buying Process. There are three models of the buying process AIDA Path to Purchase Consumer Buying Process. Conflicting Needs of Customers. Types of needs:
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Retail Management Identifying and Understanding Customer Behavior
Steps of the Buying Process There are three models of the buying process • AIDA • Path to Purchase • Consumer Buying Process
Conflicting Needs of Customers Types of needs: • Stated or explicit: the “what” • Real: what the stated need actually means • Unstated: what the customer expects implicit with the good or service • Unexpected: needs that are not expected or required but would delight the customer • Secret: needs that the customer does not express, largely because they’re intangible
Information Used in Buying Decisions What influences consumers? • Packaging • Displays • Advertisements • Social media • Spokespeople • Word of mouth
Multiattribute Model 3 Components: • Attributes • Beliefs • Weights Attribute as Differentiator = Beliefs (1-10 Scale) x Weight (1-10 Scale)
Increasing Sales with Extended Problem Solving • Engaging the customer is crucial • Why is the customer buying that item? What benefits will it provide? • Sales people will need to be able to explain specifically how the product will meet the needs and benefits desired by the consumer
Increasing Sales with Limited Problem Solving • Consumers with a limited problem mindset don’t need a high level of engagement • They need to be cued to make a purchase • Advertising, promotion, and in-store merchandising can be especially helpful in influencing the decision
Habitual Decision-Making • Consumers that make purchasing decisions based on habit don’t think about their purchase • They don’t need to dedicate more thought or consideration because their needs are already being met (or exceeded) • This results in customer loyalty!
Target Markets Segmentation: The process of identifying homogeneous groups within a population- groups that share a common trait or characteristic • By identifying segments marketers can decide which segment is most attractive to target and position their product or service to develop them as customers
Meeting the Needs of Specific Groups • Segmentation, targeting, and positioning are critical activities because they help focus marketing and sales resources more efficiently • In this way, the firm can optimize its marketing mix to position its offerings to meet these consumers’ needs • This ensures that consumers’ needs are satisfied and creates a cycle where the firm can continue to innovate, developing products that suits its core customers
Demographic Measurements Common demographic data: • Age • Gender • Race • Religion • Income • Education • Employment/Marital Status
Consumer Lifestyle Factors Psychographic and Lifestyle Data: • Attitudes • Values • Beliefs • Perceptions • Interests
Motivation, Attitude, and Buying Choices Attitudes are described as being composed of three parts: • Affect • Behavior • Cognition Hierarchy of Effects: • Standard-learning hierarchy • Low-involvement hierarchy • Experiential hierarchy of effects
Brand Community • A brand community is a community formed on the basis of attachment to a product or brand, stressing the connection between brand, individual identity, and culture “The people out in the marketplace who embrace the values of the brand, as customers and/or purchase influencers, are the brand’s true “owners””. - Blade Creative Branding
Differentiated, Mass, and Concentrated Marketing Strategies • A firm’s strategy begins with decisions around how it will compete in the marketplace • Which strategy will help to best manage the marketing mix? • Differentiated vs. low cost • Mass vs. niche • How is each aspect of the marketing mix affected depending on what strategy is chosen?
Predicting a Retail Strategy Mix Use the 6 P’s! Product, Place, Price, Promotion, People, Presence • People: People are the face of an organization. High service environments have lots of helpful people • Presence: A retailers participation across multiple channels. This is helpful in managing multi and omni level challenges to meet consumer expectations around accessibility, consistency, and service.
Quick Review • Steps of the Buying Process • AIDA • Path to Purchase • Consumer Buying Process • Needs of customers • How do they make their buying decisions? • What is the best way to identify and select a target market? • Say NO to demographics • What are the last two P’s in the Marketing Mix? • People • Presence