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Chapter 4
Customer Behavior
Lecturer: Dr. Nguyen Hang Giang Anh
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Learning Objectives
❖ Describe the process that consumers go through
when making retail patronage and buying
decisions.
❖ Identify the different types of buying processes.
❖ Summarize how the economy and social factors
affect consumer purchase decisions.
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Main content
1. The Buying Process
2. Types of Buying Decisions
3. Social Factors influencing the Buying
Process
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1. THE BUYING
PROCESS
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Stages in the Buying Process
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Need Recognition
❖ The buying process is triggered when
consumers recognize they have an
unsatisfied need.
❖ Types of Needs
▪ Utilitarian needs
▪ Hedonic needs
❖ Conflicting Needs
❖ Stimulating Need Recognition
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Types of Needs
CUSTOMER
RETAILER PERSPECTIVES
PERSPECTIVES
Utilitarian • consumers go • Provide adequate information, easy
needs shopping to and effortless shopping experience.
accomplish a o Ex: provide brochures, shop
specific task. assistants, clear instructions
Hedonic • consumers go • Stimulation
needs shopping for o Ex: Background music, visual
pleasure, displays, scents
entertaining,
• Satisfy need for power and status
emotional and
recreational o Some consumers choose retailers
experiences based on the attention and respect
they receive.
• Adventure
o Some consumers enjoy finding
bargains, looking for sales,
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Conflicting Needs
❖ Most consumers have multiple needs but these needs
often conflict.
❖ Customers make trade-offs between their conflicting
needs
❖ Ex: John will have a job interview
▪ He would like to wear a DKNY suit → be fashionable and
enhance her image → hedonic needs.
▪ but satisfying these hedonic needs might conflict with her
utilitarian needs.
▪ utilitarian needs → the need to stay within her budget and the
need to get a job.
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Stimulating Need Recognition
❖ Suggestions by Sales Associates
❖ Advertising and Direct Mail
❖ Visual Merchandise in store
❖ Special Events in the Store
❖ Social media campaigns
❖ Free food sample
❖ Forum, blog website sharing stories
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Information Search
❖ Sources of Information.
o Internal sources: information in a consumer’s
memory such as names, images, past experiences.
o External sources: information provided by a host of
sources such as google, advertising, word of mouth.
❖ Amount of Information Searched.
❖ Consumer Characteristics.
❖ Buying Situation Elements.
❖ Digital Information Search and Price Competition.
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Evaluation of Alternatives
❖ Summarize how consumers use the
collected information to evaluate and select
retailers, channels, and products.
❖ Multiattribute attitude model:
▪ Customers see a retailer, a product, or a channel
as a collection of attributes.
▪ The model is based on
o Performance on relevant attributes
o Importance of those attribute to the customer
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Characteristics of Food Retailers
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Evaluation of Retailers
→ Calculating each store’s overall score then patronizing the retailer with the
highest score.
→ The model does not reflect the consumers’ actual decision process, but it predict
their evaluation of alternatives and their choice based on those evaluations.
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Implications for Retailers
❖ How a retailer use the multiattribute attitude
model to improve the consumer experience and
encourage more frequent purchase.
❖ To develop a program for attracting consumers,
retailers need to collect the information:
▪ Alternative retailers that consumers consider.
▪ Characteristics or benefits that consumers consider
when evaluating and choosing a retailer.
▪ Consumers’ ratings of each retailer’s performance on
the characteristics.
▪ The importance weights that consumers attach to the
characteristics.
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Getting into the Consideration Set (1/2)
❖ Consideration set: the set of alternatives the
customer evaluates when making a choice of a retailer
❖ Retailers develop programs influencing top-of-mind
awareness
▪ Get exposure on search engines like Google
▪ Try to be the top of the page
▪ More stores in the same area (e.g., Starbucks)
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Getting into the Consideration Set (2/2)
❖ After getting into the consideration set, a retailer
can use three methods to increase the chances
that consumers will select it
▪ Increase performance beliefs of your store’s
performance.
▪ Change consumers’ importance weights.
▪ Add a new benefit.
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Purchasing Merchandise (1/2)
❖ Consumers do not always patronize a store or
purchase a brand or item of merchandise with the
highest overall evaluation.
o The product or service offering the greatest benefits
may not be available from the retailer.
o The consumer make purchase choices based on a
single attribute, regardless of how well the offering
performs on other characteristics.
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Purchasing Merchandise (2/2)
❖ Retailers use four tactics to increase the chances
that consumers will convert their positive evaluations
into purchases.
o making it readily available on mobile devices or
reducing waiting times at checkout in store.
o providing sufficient information that reinforces the
consumer’s positive evaluation.
o reducing the risk of making a purchase mistake.
o creating a sense of urgency or scarcity to encourage
consumers to make a purchase decision
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Post-purchase Evaluation
❖ After making a purchase, the consumer uses the
product and then evaluates the experience to
determine whether it was satisfactory or
unsatisfactory.
❖ Satisfaction:
▪ a post-consumption evaluation of how well a store
or product meets or exceeds customer expectations
▪ Becomes part of the customer’s internal
information that affects future store and product
decisions
❖ High level of Satisfaction builds store and brand
loyalty
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2. TYPES OF BUYING
DECISIONS
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Three types of consumer decision-making processes
Extended Problem Solving
Limited Problem Solving
Habitual Decision Making
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Extended Problem Solving (1/2)
Consumers devote time and effort analyzing
alternatives
▪ Performance risk – a poorly
performing products or services
▪ Financial risks – purchasing
expensive products or services
▪ Social risks – product will affect
how others view them
▪ Physical risks – affect
consumer’s health and safety
▪ psychological risks – how
consumers will feel if product
doesnot work well 22
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Extended Problem Solving (2/2)
Retailers stimulate Customers Engaged in
Extended Problem Solving
❖ Provide necessary information available and easy
to understood
• Use Salespeople rather than advertising to
communicate with customers
❖ Reduce the Risks
• Offer money-back guarantees
© Royalty-Free/CORBIS
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Limited Problem Solving (1/2)
Purchase decisions process involving moderate
amount of effort and time
❖ Customers engage in this when
they have had prior experience
with products or services
❖ Customers rely more upon
personal knowledge
❖ Majority of customer decisions
(c) Brand X Pictures/PunchStock
involve limited problem solving
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Limited Problem Solving (2/2)
❖ One common type of limited problem solving is
impulse buying, or unplanned purchasing
▪ a buying decision made by consumers on the spot
after seeing the merchandise.
❖ Retailers encourage impulse-buying behavior by using
point-of-purchase (POP) or point-of-sale (POS)
displays to attract consumers’ attention.
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Habitual Problem Solving (1/2)
Purchase decision process involving little
or no conscious effort
❖ For purchases that aren’t very
important to the consumers
❖ For familiar merchandise consumers
purchased in the past
❖ For consumers loyal to a brand or a
store
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Customer Loyalty
❖ Brand Loyalty
▪ Committed to a Specific
Brand in a product category
▪ Reluctant to Switch to a
Different Brand
▪ May Switch Retailers to Buy
Brand
❖ Retailer Loyalty
▪ Committed to a Specific
Retailer for a type of
merchandise
▪ Reluctant to Switch Retailers
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Habitual Problem Solving (2/2)
Retailers stimulate Customers Engaged in
Habitual Problem Solving
❖ If the customer habitually comes to you,
reinforce behavior
o Select a convenient location
o Make sure merchandise in stock
o Provide good customer service
o Offer rewards to loyal customer
❖ If the customer goes to your competitor, break
the habit
o Offer special promotions
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3. SOCIAL FACTORS
INFLUENCING THE
BUYING PROCESS
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Social Factors Affecting Buying Decisions
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The Economy
❖ National and Global economy
▪ When economies undergo recessions →
consumers reduce their purchases or seeking
more affordable options.
▪ When the economy is flourishing → consumers are
willing to spend more on luxury or hedonic
products.
❖ International economy
▪ National economies ebb and flow in their strength
relative to one another.
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Family
❖ Purchases are for entire
family to use.
❖ Whole family participates in
decision making process.
❖ Retailers work to satisfy needs
of all family members.
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Reference Groups (1/2)
❖ A reference group
▪ one or more people whom a person uses as a basis of
comparison for beliefs, feelings and behaviors.
❖ A consumer might have different reference groups
▪ such as family, friends, celebrities, and opinion leaders.
❖ Reference groups affect buying decisions by:
▪ Offering information
▪ Providing rewards for specific purchasing behaviors
▪ Enhancing a consumer’s self-image
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Reference Groups (2/2)
❖ Celebrities
▪ Tennis player Serena Williams: guide the
selection of athletic apparel.
▪ Katy Perry: casual fashion advice.
❖ Store advocates
▪ Customers that like a store so much that they
actively share their positive experiences with
friends and family.
▪ Victoria Secret.
▪ The faceshop.
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Culture
❖ Culture is the meaning, beliefs, morals and values
shared by most members of a society.
▪ Western culture: individualism
▪ Eastern culture: collectivism
Subcultures are
distinctive groups
of people within a
culture
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