Lecture 04. The consumer decision process

Transcription

1 Lecture 04 Outlet selection and product purchase Post-purchase processes The consumer decision process Source: Quester et al., (2014), Consumer Behaviour: implications for marketing strategy 7th ed, McGraw-Hill Education, page

2 Learning objectives How the traditional retailing environment is changing Trend towards internet retailing Factors that affect retail outlet selection Why consumer characteristics can also affect outlet selection In-store influences that can affect brand choice How marketers can capitalise on these influences Consumer outlet selection and product purchase Where will consumers shop? How do they choose a retail outlet? Consumer characteristics Store characteristics In-store decision alterations The purchase process Alternative to store selection Implications for strategy 2

3 Outlet choice vs product choice Retail outlet first, brand second Brand (or item) first, retail outlet second Brand and retail outlet simultaneously Marketing strategy based on the consumer decision sequence 3

4 Retailers use quality brands to promote the store The retail scene In retail stores Other outlets, non-store outlets Internet sales Markets, direct sales, etc. 4

5 Online shopping Increasing number of consumers preferring to shop online 5% in 1999 to 31% in Females now using the internet Males 64%, females 62% Image of the outlet influenced by: Webpage design Convenience Security Pricing Online shopping by age groups 5

6 Reasons for not purchasing on the internet Retail format Attributes affecting retail outlet selection Reflect different types of shopping behaviours Outlet image A consumer s or a target market s perception of all the attributes associated with a retail outlet 6

7 Dimensions and components of store image Dimension Merchandise Service Clientele Physical features Convenience Promotion Store atmosphere Institutional Post-transaction Component(s) Quality, selection, price, style Sales assist., return, credit Other customers Clean, layout, etc. Location, parking Advertising Fun, excitement, comfort Store reputation Satisfaction Attributes affecting retail outlet selection Store brands Retail advertising Price advertising size of discount reference/comparison may be used words accompanying the price information Outlet location and size 7

8 Expenditure of individuals drawn to a store by an advertised item Outlet location and size Retail attraction model: MSi = n S i= 1 Si / Ti l Si / Ti l MSi = market share of store i Si = size of store i (or mall) Ti = travel time to store i l = attraction factor for a particular product category 8

9 Consumer characteristics and outlet choice Shopping orientation Perceived risk Financial risk Social risk Financial and social risks for various types of products 9

10 In-store influences that can affect evaluation of alternatives and purchase In-store influences that alter brand choices The nature of unplanned purchases Reminder purchases Impulse purchases 10

11 In-store influences that alter brand choices (cont.) The nature of unplanned purchases The specifically planned decision The generally planned decision The substitute decision The unplanned decision The in-store decisions Encouraging unplanned purchases - gift-time and suggesting products 11

12 In-store buying habits Point-of-purchase (POP) displays A device used by marketers and retailers at the point of sale to inform consumers or encourage them to buy; may comprise posters, cards, shelf wobblers, etc. 12

13 Point-of-purchase (POP) displays Shopper behaviour in response to frequent stockouts 13

14 Impact of stockout situation Store atmosphere and shopper behaviour 14

15 Purchase Once the brand and store have been selected Complete transaction: Payment Online/security risk Learning objectives Be aware of the post-purchase activities Understand post-purchase dissonance Know why product use is important to marketers Know why product disposal is important to consumers Understand the concept of customer satisfaction Understand the concept of consumer loyalty 30 15

16 Post-purchase consumer behaviour Source: Quester et al., (2014), Consumer Behaviour: implications for marketing strategy 7th ed, McGraw-Hill Education, page Post-purchase processes Post-purchase dissonance Product use and non-use Disposal Purchase evaluation Customer satisfaction repeat purchase behaviour and consumer loyalty 32 16

17 Post-purchase dissonance Some purchases are followed by postpurchase dissonance Probability of post-purchase dissonance and the magnitude of dissonance is a function of: degree of commitment and/or whether the decision can be revoked importance of the decision to the consumer difficulty of choosing among the alternatives individual s tendency to experience anxiety 33 Product use and non-use Product use use innovativeness regional variations multiple vs single use Packaging Defective products product recalls 34 17

18 Product disposal and marketing strategy Recycling product package Trade-ins to motivate replacement Second-hand markets E.g. textbooks, clothes/ Cash converters 36 Purchase evaluation and customer satisfaction The evaluation process Demension of performance Dissatisfaction responses Marketing strategy and dissatisfied consumer 37 18

19 Purchase evaluation and customer satisfaction Evaluation of a purchase is influenced by: Expectations Perceived performance Dimensions of performance: Instrumental: physical/functional Symbolic: image Affective: emotional 38 Purchase evaluation and customer satisfaction The evaluation process Dimensions of performance Customers switch away from service providers rather than to providers: Core service failure (44%) Service encounter failures (34%) Pricing (30%) Inconvenience (21%) Response to service failures (17%) Attraction to competitors (10%) Ethical problems (7%) Involuntary switching (6%) 39 19

20 Measuring customer satisfaction Qualitative measurement techniques Focus groups Surveys 40 Purchase evaluation and customer satisfaction Dissatisfaction responses Possible outcomes of a negative purchase evaluation: Taking no action Switching brands, products or stores Warning friends and colleagues 41 20

21 Actions taken by consumers in response to product dissatisfaction Source: Quester et al., (2014), Consumer Behaviour: implications for marketing strategy 7th ed, McGraw-Hill Education, page Purchase evaluation and customer satisfaction Marketing strategy and dissatisfied consumer: Marketers need to satisfy consumer expectations by: creating reasonable expectations through promotional efforts maintaining consistent quality so that these reasonable expectations are fulfilled 43 21

22 Repeat purchase behaviour Repeat purchase behaviour Simply involves the frequent repurchase of the brand Brand loyalty Implies a psychological commitment to the brand 45 Brand loyalty Biased A behavioural response Expressed over time A consumer selects a brand over alternative brands A function of psychological processes 46 22

23 Value of customer loyalty Increased purchases of the existing product Cross-purchases of your other products Price premium due to their appreciation of your added-value services Reduced operating cost because of familiarity with your service system Positive word-of-mouth that refers other customers to your firm 47 Repeat purchase behaviour and marketing strategy Once objectives are defined for each group it becomes possible to develop and implement marketing strategies and evaluate the results 48 23

24 Relationship marketing Developing a core product/service on which to build Customising the relationship to the individual customer Augmenting the core product/service with extra benefits Pricing in a manner that encourages loyalty Marketing to employees so that they perform well for customers 49 Summary The post-purchase process The post-purchase dissonance Why product use is important to marketers Why product disposal is important to consumers Concept of customer satisfaction Concept of consumer loyalty 50 24

25 Next lecture Lecture 05: Perception, Learning and Memory Case study: Spotlight on Hong Kong: Can-Do Hong Kong Spirit (p. 256) Beware the rhino Just don t tell em (p. 291) 51 25