Management Consulting/consumer behaviour
sirr,plzz answers this question...
1. You are a member of the purchase committee that has been formed to purchase fifty laptops
for your company. Being a member of purchase committee, what criteria would you suggest
to select the supplier for the same? Explain.
2. ‘Certain products require high degree of pre purchase information search’. Justify the
statement by giving suitable examples. Also give marketing implication of this pre-purchase
search behavior of consumers.
3. Briefly discuss the perception process. Being the marketer of a range of cosmetic products
meant for upper income group people, how would you use the concept of perception while
designing marketing mix for your product?
4. Discuss Nicosia’s model of consumer behavior. Also explain its relevance for a marketer.
5. Which stage in the family life cycle would be the most attractive segment for the following products and services? Give reasons in support of your answer.
(a) Home furniture
(b) Play schools
(c) Health services
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3. You are a member of the purchase committee that has been formed to purchase fifty laptops for your company. Being a member of purchase committee, what criteria would you suggest to select the supplier for the same? Explain.
BUSINESS MARKETS AND BUYING BEHAVIOR
The business market includes firms that buy goods and services in order to produce products and services to sell to others. It also includes retailing and wholesaling firms that buy goods in order toects resell them at a profit. Because asp of business-to-business marketing apply to institutional markets and government markets, we group these together. The business marketer needs to know the following: Who are the major participants? In what decisions do they exercise influence? What is their relative degree of influence? What evaluation criteria does each decision participant use? The business marketer also needs to understand the major environmental, interpersonal, and individual influences on the buying process.
A. What is a Business Market?
The business market comprises all the organizations that buy goods and services for use in the production of other products and services that are sold, rented, or supplied to others. It also includes retailing and wholesaling firms that acquire goods for the purpose of reselling or renting them to others at a profit. In the business buying process business buyers determine which products and services their organizations need to purchase, and then find, evaluate, and choose among alternative suppliers and brands. Companies that sell to other business organizations must do their best to understand business markets and business buyer behavior.
B. Characteristics of Business Markets
In some ways, business markets are similar to consumer markets. Both involve people who assume buying roles and make purchase decisions to satisfy needs. However, business markets differ in many ways from consumer markets. The main differences, are in the market structure and demand, the nature of the buying unit, and the types of decisions and the decision process involved. Business markets also have their own characteristics. In some ways, they are similar to consumer markets, but in other ways they are very different. The main differences include:
1. Market structure and demand.
Business markets typically deal with far fewer but far larger buyers. They are more geographically concentrated. Business markets have derived demand (business demand that ultimately comes from or derives from the demand for consumer goods). Many business markets have inelastic demand; that is, total demand for many business products is not affected much by price changes, especially in the short run.
A drop in the price of leather will not cause shoe manufacturers to buy much more leather unless it results in lower shoe prices that, in turn, will increase consumer demand for shoes. Finally, business markets have more fluctuating demand. The demand for many business goods and services tends to change more—and more quickly—than the demand for consumer goods and services does. A small percentage increase in consumer demand can cause large increases in business demand. Sometimes a rise of only 10 percent in consumer demand can cause as much as a 200 percent rise in business demand during the next period.
2. Nature of the Buying Unit:
Compared with consumer purchases, a business purchase usually involves more decision participants and a more professional purchasing effort. Often, business buying is done by trained purchasing agents who spend their working lives learning how to make better buying decisions. Buying committees made up of technical experts and top management are common in the buying of major goods. Companies are putting their best and brightest people on procurement patrol. Therefore, business marketers must have well-trained salespeople to deal with well-trained buyers.
3. Types of Decisions and the Decision Process
Business buyers usually face more complex buying decisions than do consumer buyers. Purchases often involve large sums of money, complex technical and economic considerations, and interactions among many people at many levels of the buyer's organization. Because the purchases are more complex, business buyers may take longer to make their decisions. The business buying process tends to be more formalized than the consumer buying process. Large business purchases usually call for detailed product specifications, written purchase orders, careful supplier searches, and formal approval.
The buying firm might even prepare policy manuals that detail the purchase process. Finally, in the business buying process, buyer and seller are often much more dependent on each other. Consumer marketers are often at a distance from their customers. In contrast, business marketers may roll up their sleeves and work closely with their customers during all stages of the buying process—from helping customers define problems, to finding solutions, to supporting after-sale operation. They often customize their offerings to individual customer needs. In the short run, sales go to suppliers who meet buyers' immediate product and service needs.
C. Business Buyer Behavior
The model in Figure suggests four questions about business buyer behavior: What buying decisions do business buyers make? Who participates in the buying process? What are the major influences on buyers? How do business buyers make their buying decisions?
a. A Model of Business Buyer Behavior
At the most basic level, marketers want to know how business buyers will respond to various marketing stimuli. Figure shows a model of business buyer behavior. In this model, marketing and other stimuli affect the buying organization and produce certain buyer responses. As with consumer buying, the marketing stimuli for business buying consist of the four Ps: product, price, place, and promotion. Other stimuli include major forces in the environment: economic, technological, political, cultural, and competitive.
These stimuli enter the organization and are turned into buyer responses: product or service choice; supplier choice; order quantities; and delivery, service, and payment terms. In order to design good marketing mix strategies, the marketer must understand what happens within the organization to turn stimuli into purchase responses. Within the organization, buying activity consists of two major parts: the buying center, made up of all the people involved in the buying decision, and the buying decision process. The model shows that the buying center and the buying decision process are influenced by internal organizational, interpersonal, and individual factors as well as by external environmental factors.
b. Major Types of Buying Situations
There are three major types of buying situations. At one extreme is the straight rebuy, which is a fairly routine decision. At the other extreme is the new task, which may call for thorough research. In the middle is the modified rebuy, which requires some research. In a straight rebuy the buyer reorders something without any modifications. It is usually handled on a routine basis by the purchasing department. Based on past buying satisfaction, the buyer simply chooses from the various suppliers on its list. "In" suppliers try to maintain product and service quality. In a modified rebuy, the buyer wants to modify product specifications, prices, terms, or suppliers. The modified rebuy usually involves more decision participants than the straight rebuy. The in suppliers may become nervous and feel pressured to put their best foot forward to protect an account. Out suppliers may see the modified rebuy situation as an opportunity to make a better offer and gain new business. A company buying a product or service for the first time faces a new-task situation.
In such cases, the greater the cost or risk, the larger the number of decision participants and the greater their efforts to collect information will be. The new-task situation is the marketer's greatest opportunity and challenge. The marketer not only tries to reach as many key buying influences as possible but also provides help and information. The buyer makes the fewest decisions in the straight rebuy and the most in the new-task decision. In the new-task situation, the buyer must decide on product specifications, suppliers, price limits, payment terms, order quantities, delivery times, and service terms. The order of these decisions varies with each situation, and different decision participants influence each choice.
c. Participants in the Business Buying Process
The decision-making unit of a buying organization is called its buying center: all the individuals and units that participate in the business decision-making process. The buying center includes all members of the organization who play any of five roles in the purchase decision process.
• Users are members of the organization who will use the product or service. In many cases, users initiate the buying proposal and help define product specifications.
• Influencers often help define specifications and also provide information for evaluating alternatives. Technical personnel are particularly important influencers.
• Buyers have formal authority to select the supplier and arrange terms of purchase. Buyers may help shape product specifications, but their major role is in selecting vendors and negotiating. In more complex purchases, buyers might include high-level officers participating in the negotiations.
• Deciders have formal or informal power to select or approve the final suppliers. In routine buying, the buyers are often the deciders, or at least the approvers.
• Gatekeepers control the flow of information to others. For example, purchasing agents often have authority to prevent salespersons from seeing users or deciders. Other gatekeepers include technical personnel and even personal secretaries. The buying center is not a fixed and formally identified unit within the buying organization.
It is a set of buying roles assumed by different people for different purchases. Within the organization, the size and makeup of the buying center will vary for different products and for different buying situations. Business marketers working in global markets may face even greater levels of buying center influence. The buying center concept presents a major marketing challenge. The business marketer must learn who participates in the decision, each participant's relative influence, and what evaluation criteria each decision participant uses. The buying center usually includes some obvious participants who are involved formally in the buying decision.
d. Major Influences on Business Buyers
Business buyers are subject to many influences when they make their buying decisions. Some marketers assume that the major influences are economic. They think buyers will favor the supplier who offers the lowest price or the best product or the most service. They concentrate on offering strong economic benefits to buyers. However, business buyers actually respond to both economic and personal factors. Far from being cold, calculating, and impersonal, business buyers are human and social as well.
They react to both reason and emotion. Today, most business-to-business marketers recognize that emotion plays an important role in business buying decisions. When suppliers' offers are very similar, business buyers have little basis for strictly rational choice. Because they can meet organizational goals with any supplier, buyers can allow personal factors to play a larger role in their decisions. However, when competing products differ greatly, business buyers are more accountable for their choice and tend to pay more attention to economic factors. Figure lists various groups of influences on business buyers— environmental, organizational, interpersonal, and individual.
Major Influences on Business Buyers
• Environmental Factors
Business buyers are influenced heavily by factors in the current and expected economic environment, such as the level of primary demand, the economic outlook, and the cost of money. As economic uncertainty rises, business buyers cut back on new investments and attempt to reduce their inventories. An increasingly important environmental factor is shortages in key materials. Many companies now are more willing to buy and hold larger inventories of scarce materials to ensure adequate supply.
Business buyers also are affected by technological, political, and competitive developments in the environment. Culture and customs can strongly influence business buyer reactions to the marketer's behavior and strategies, especially in the international marketing environment. The business marketer must watch these factors, determine how they will affect the buyer, and try to turn these challenges into opportunities.
• Organizational Factors
Each buying organization has its own objectives, policies, procedures, structure, and systems. The business marketer must know these organizational factors as thoroughly as possible. Questions such as these arise: How many people are involved in the buying decision? Who are they? What are their evaluative criteria? What are the company's policies and limits on its buyers?
The buying center usually includes many participants who influence each other. The business marketer often finds it difficult to determine what kinds of interpersonal factors and group dynamics enter into the buying process. Participants may have influence in the buying decision because they control rewards and punishments, are well liked, have special expertise, or have a special relationship with other important participants. Interpersonal factors are often very subtle. Whenever possible, business marketers must try to understand these factors and design strategies that take them into account.
Each participant in the business buying decision process brings in personal motives, perceptions, and preferences. These individual factors are affected by personal characteristics such as age, income, education, professional identification, personality, and attitudes toward risk. Also, buyers have different buying styles. Some may be technical types who make in-depth analyses of competitive proposals before choosing a supplier. Other buyers may be intuitive negotiators who are adept at pitting the sellers against one another for the best deal.
D. The Business Buying Process
There are eight stages of the business buying process. Buyers who face a new-task buying situation usually go through all stages of the buying process. Buyers making modified or straight rebuys may skip some of the stages. We will examine these steps for the typical new-task buying situation.
a. Problem Recognition
The buying process begins when someone in the company recognizes a problem or need that can be met by acquiring a specific product or service. Problem recognition can result from internal or external stimuli. Internally, the company may decide to launch a new product that requires new production equipment and materials. Or a machine may break down and need new parts. Perhaps a purchasing manager is unhappy with a current supplier's product quality, service, or prices. Externally, the buyer may get some new ideas at a trade show, see an ad, or receive a call from a salesperson who offers a better product or a lower price. In fact, in their advertising, business marketers often alert customers to potential problems and then show how their products provide solutions.
b. General Need Description
Having recognized a need, the buyer next prepares a general need description that describes the characteristics and quantity of the needed item. For standard items, this process presents few problems. For complex items, however, the buyer may have to work with others—engineers, users, consultants—to define the item. The team may want to rank the importance of reliability, durability, price, and other attributes desired in the item. In this phase, the alert business marketer can help the buyers define their needs and provide information about the value of different product characteristics.
c. Product Specification
The buying organization next develops the item's technical product specifications, often with the help of a value analysis engineering team. Value analysis is an approach to cost reduction in which components are studied carefully to determine if they can be redesigned, standardized, or made by less costly methods of production. The team decides on the best product characteristics and specifies them accordingly. Sellers, too, can use value analysis as a tool to help secure a new account. By showing buyers a better way to make an object, outside sellers can turn straight rebuy situations into new-task situations that give them a chance to obtain new business.
d. Supplier Search
The buyer now conducts a supplier search to find the best vendors. The buyer can compile a small list of qualified suppliers by reviewing trade directories, doing a computer search, or phoning other companies for recommendations. Today, more and more companies are turning to the Internet to find suppliers. For marketers, this has leveled the playing field—smaller suppliers have the same advantages as larger ones and can be listed in the same online catalogs for a nominal fee: The newer the buying task, and the more complex and costly the item, the greater the amount of time the buyer will spend searching for suppliers. The supplier's task is to get listed in major directories and build a good reputation in the marketplace. Salespeople should watch for companies in the process of searching for suppliers and make certain that their firm is considered.
e. Proposal Solicitation
In the proposal solicitation stage of the business buying process, the buyer invites qualified suppliers to submit proposals. In response, some suppliers will send only a catalog or a salesperson. However, when the item is complex or expensive, the buyer will usually require detailed written proposals or formal presentations from each potential supplier. Business marketers must be skilled in researching, writing, and presenting proposals in response to buyer proposal solicitations. Proposals should be marketing documents, not just technical documents. Presentations should inspire confidence and should make the marketer's company stand out from the competition.
f. Supplier Selection
The members of the buying center now review the proposals and select a supplier or suppliers. During supplier selection, the buying center often will draw up a list of the desired supplier attributes and their relative importance. In one survey, purchasing executives listed the following attributes as most important in influencing the relationship between supplier and customer: quality products and services, on-time delivery, ethical corporate behavior, honest communication, and competitive prices. Other important factors include repair and servicing capabilities, technical aid and advice, geographic location, performance history, and reputation. The members of the buying center will rate suppliers against these attributes and identify the best suppliers. As part of the buyer selection process, buying centers must decide how many suppliers to use. In the past, many companies preferred a large supplier base to ensure adequate supplies and to obtain price concessions. These companies would insist on annual negotiations for contract renewal and would often shift the amount of business they gave to each supplier from year to year. Increasingly, however, companies are reducing the number of suppliers.
There is even a trend toward single sourcing, using one supplier. With single sourcing there is only one supplier to handle and it is easier to control newsprint inventories. Using one source not only can translate into more consistent product performance, but it also allows press rooms to configure themselves for one particular kind of newsprint rather than changing presses for papers with different attributes. Many companies, however, are still reluctant to use single sourcing. They fear that they may become too dependent on the single supplier or that the single-source supplier may become too comfortable in the relationship and lose its competitive edge. Some marketers have developed programs that address these concerns.
g. Order-Routine Specification
The buyer now prepares an order-routine specification. It includes the final order with the chosen supplier or suppliers and lists items such as technical specifications, quantity needed, expected time of delivery, return policies, and warranties. In the case of maintenance, repair, and operating items.
h. Performance Review
In this stage, the buyer reviews supplier performance. The buyer may contact users and ask them to rate their satisfaction. The performance review may lead the buyer to continue, modify, or drop the arrangement. The seller's job is to monitor the same factors used by the buyer to make sure that the seller is giving the expected satisfaction. We have described the stages that typically would occur in a new-task buying situation. The eightstage model provides a simple view of the business buying decision process. The actual process is usually much more complex.
In the modified rebuy or straight rebuy situation, some of these stages would be compressed or bypassed. Each organization buys in its own way, and each buying situation has unique requirements. Different buying center participants may be involved at different stages of the process. Although certain buying process steps usually do occur, buyers do not always follow them in the same order, and they may add other steps. Often, buyers will repeat certain stages of the process.
LAPTOP BUYING BY ORGANIZATION
1.Purchases are planned and needs are anticipated
2.Systematic, cost benefit analysis
4.Regional or national
5.Proposals and bids formally solicited
6.Extensive ~comparislon and ranking of suppliers
7.Time and place of delivery and frequency of order specified as part of the contract
8.Active file maintained on supplier and product performance
A BASIC MODEL OF
ORGANIZATIONAL BUYING DECISION
Product buying centre
Criteria to evaluate products
Criteria to evaluate suppliers >>>>>>Evaluation
Expectations >>>>>>alternative products >>purchase
>>>>>>alternative suppliers>> decision
About alternative products
About alternative suppliers
Trade newspapers / Word of mouth
This model can add value to the customer buying by
-creating product awareness
-making product availability
-providing after sales service
-providing effective customer service
-special pricing terms
-special inventory terms
-special delivery terms
-controlled order cycle time
-special credit terms
4. ‘Certain products require high degree of pre purchase information search’. Justify the statement by giving suitable examples. Also give marketing implication of this pre-purchase search behavior of consumers.
Pre-Purchase Processes: Need Recognition, Search, and Evaluation
The Consumer Decision Process (CDP) is a road map of consumer's minds that marketers and managers can use to help guide product mix, communication and sales strategies :
Need recognition refers to the buyer's acceptance that the category (a product or service) is necessary to remove or satisfy a perceived discrepancy between the current motivational state and the desired motivational state.
Search for information:
• Internal: retrieving knowledge from memory or genetic tendencies.
• External: collecting information from peers, family and the marketplace.
Sources of information:
• Marketer dominated: anything the supplier does to inform and persuade
• Non-marketed dominated: friends, family, opinion leaders, media, WOM.
• Exposure * Attention * Comprehension * Acceptance * Retention
Pre-purchase alternative evaluation:
• Evaluative criteria: standards used to compare different products & brands.
• Salient attributes: the most important.
• Determinant attributes: details that determine which brand or store consumers choose .
Purchase to decide whether to purchase:
• Choose one retailer (catalogues, aids on TV…)
• In-store choices (salespersons, product displays at POP…)
Consumption: the point at which consumers use the product - satisfied?
Post-consumption evaluation: possible results:
• Satisfaction: consumers' expectations are matched by perceived performance.
• Dissatisfaction: experiences and performance fall short of expectations
• Post-purchase regret: have I made a good decision? Did I consider all the alternatives? The highest the price, the highest this factor.
Variables that shape the decision process:
VARIABLES THAT SHAPE THE DECISION PROCESS
• demographics, psychographics, values, personality, lifestyle
• consumer resources (time, money attention * information reception and processing capabilities)
• knowledge (information stored in memory)
• attitudes (overall evaluation of an alternative)
• social class
• family (the primary decision-making unit)
• personal influences
• information processing
• learning (process whereby experience leads to changes in behaviour)
• attitude and behaviour change
• NEED RECOGNITION
Need recognition refers to the buyer's acceptance that the category (a product or service) is necessary to remove or satisfy a perceived discrepancy between the current motivational state and the desired motivational state. If the need is not activated, there is no business!.
Options to activate it:
• Product innovations.
• Undermine consumers' perceptions about their actual state.
• Advertising (reminding the need).
Types of need recognition that can be activated:
• Generic need (primary demand): demand for the product or service category as a whole, but it applies to all brands in the category .
• Selective need (selective demand): occurs when the need for a specific brand within a product category is stimulated.
Purchase motives that can be activated:
NEGATIVE PURCHASE MOTIVES POSITIVE PURCHASE MOTIVES
Problem removal Sensory gratification
Problem avoidance Intellectual stimulation
Incomplete satisfaction Social approval
Mixed-approach avoidance --
Normal depletion --
Once the need recognition has been activated, the consumer will proceed through the decision process depending on the importance of the need at the time it is activated .
Aspects companies must bear in mind in building up competitive maps of consumer research:
Degree: how many…?
Sequence: in what order…?
• PRE-PURCHASE EVALUATION
The alternatives considered during decision making compose the consideration or evoked set (eg: BLs only have that brand in their consideration set). Companies are very interested in gain entry into the consideration set and sometimes it is beneficial for a company that the buyer also considers competitive brands (“attraction effect”): the attractiveness of a given alternative and its odds of being chosen are enhanced when a clearly inferior alternative is also considered.
There are 2 options to evaluate the different choice alternatives:
• Rely on pre-existing evaluations: prior consumption of the product leads to the formation of evaluation that is stored in memory. If the relevant evaluations are retrieved during internal search, then each can be compared to determine which considered alternative is most liked (eg: Coke or Pepsi, Mcdonald's or Burger King…?).
• Constructing new evaluations: in many circumstances consumers may be unable or unwilling to rely on their pre-existing evaluations for making a choice (eg: NCUs). There are 2 basic processes by which consumers can construct evaluations:
• Categorisation process: evaluation of a choice alternative depends on the particular category to which is assigned (general product category: motorised forms of transportation; specific product category: Harley Davidson motorcycles). The phenomenon of “brand extensions” occurs when a well-known and respected brand from one product category is extended into other product categories.
• Piecemeal process: an evaluation is derived from consideration of the alternative's advantages and disadvantages along important product dimensions . In choosing the evaluative criteria, consumers use:
• “Cut-offs” (restrictions for acceptable performance)
• Signals (product attributes that are used to infer other product attributes * eg: higher prices are often indicators of higher quality).
Once the consumer has selected the different choice alternatives, he/she has to apply a decision rule, or evaluation strategies:
• Non-compensatory evaluation strategies: a product weakness on one attribute cannot be offset by its strong performance on another attribute (eg: if you reduce the oil and salt in chips to make them healthier, consumers won't buy them):
* Lexicographic strategy: brands are compared initially on the most important attribute. The brand perceived as superior is bought.
* Elimination by aspects strategy: the consumer imposes cut-offs (eg: must be under £2) and if only one brand passes it will be chosen, if more than one pass then the prior strategy will be applied.
* Conjunctive strategy: the consumer establishes a set of cut-offs and the brand that meets all the cut-offs will be chosen.
• Compensatory evaluation strategies: a perceived weakness of one attribute may be offset by the perceived strength of another attribute:
* Simple additive: the consumer simply counts or adds the number of times each alternative is judged favourably in terms of the set of salient evaluative criteria
* Weighted additive: the consumer now engages in more refined judgements about the alternative's performance than simply whether it is favourable or unfavourable. These judgements are then weighted by the importance attached to the attributes.
A) TYPES OF PURCHASE DECISIONS:
In the purchase stage, consumers decide whether, when, what, where to buy and how to pay. The decision to buy can lead to 3 different purchasing methods:
• FULLY-PLANNED PURCHASE: Both the product and brand are chosen in advance. It is more likely to occur with high involvement. Marketing tactics (sampling of products, price reductions, coupons, POP displays, other promotional activities…) put efforts on loyalty.
• PARTIALLY PLANNED PURCHASE: Intent to buy the product exists but brand choice is deferred until shopping, when price reductions or special displays and packaging affect.
• UNPLANNED PURCHASE: Both the product and brand are chosen at point of sale (“in-store marketing strategies”) (eg: TPS).
Sometimes, timing factors such as seasonality affect the purchase and the marketing mix:
* Products: need to be available when customers need them
* Promotions must run at the right time.
* Price: time also affects price (eg: flights, 7-Eleven…)
B) STORE IMAGE (RETAIL FACTORS) AND CHARACTERISTICS:
To make choices, consumers rely on their overall perception of a store when making choices. The way in which a store is defined in the shopper's mind (functional qualities + psychological attributes) is called “store image”, and affects the decision of purchase. Determinants of retailer success or failure:
• Location: it represents the distance consumers perceive the have to travel to reach and shop at the store and it is influenced by ease of parking, ease of driving, access…
• Nature and quality of assortment (surtido).
• Price: price promotion is not always the best strategy as it only shifts demand from one time period to another for a store (no loyalty).
• Advertising and promotion for positioning of the retail brand:
• Image advertising: uses visual components and words that help consumers form an expectation about their experience in the store and what kinds of consumers will be satisfied with the store's experience.
• Information advertising: provides detail about products, prices, hours of store operation, locations and other attributes that might influence purchase decisions.
• Sales personnel: skill levels and motivation are the main factors that make a salesperson effective. The persuasion strategies (used in the transaction relationship are important in the sales success) are: perceived knowledge & expertise; perceived trustworthiness; customer knowledge and adaptability.
• Services offered: depending on the type of outlet and consumer expectations, delivery, credit, overall good service.
• Store atmospherics (physical store attributes): the physical properties of the retail environment designed to create an effect on consumer purchases. To the marketer, a store atmospherics can help shape both the direction and duration of consumers' attention and increase the odds that a consumer will purchase products that otherwise might go unnoticed: music, elevators, air conditioning…
• POP displays: POP displays increase the odds of capturing consumers' attention and therefore stimulate purchase and increase sales. This is true especially if we are analysing low-involvement and impulse products because it is a fundamental aspect whether or not consumers are aware of a product's existence, so displays and shelf-position become foremost vehicles to induce purchasing in the store (ENGEL et al refer to it as “in-store stimuli”). It is important at the “exposure” step in the “psychological process”,
• Store layout: It is referred to the location of items within the store, related with the size of the outlet and the maximisation of the traffic flow through the store (eg: placing the tills where consumers have to walk as many aisles as possible).
• Store atmosphere (environment): aspects that affect the shopper's mood and willingness to visit and linger: lighting, presentation of merchandise, colours, music… it can affect either quick or slow purchases
• Store clientele: a customer matches one-self image with the rest of buyers in the store, and it can make it to avoid one store or to choose it.
• Consumer logistics: it is the speed and ease with which consumers move through the retail and shopping process. It contains 7 primary consumer stages:
• Preparation to shop.
• Arriving at.
• Entering the shop / store.
• Movement through the store.
• Check-out (pasar x caja)
• Travel home and home warehousing
• Inventory stock-outs
In general, stores are adding technology, personnel and training to increase service and decrease the time consumers spend waiting in the store and at check-out (eg: checkers throughout the store for customers to check prices).
Spyware is software that’s downloaded onto a computer without the permission of the owner and that collects personal information such as the user’s online activities, financial records, and passwords. Generic need recognition occurs when the need for an entire product category is stimulated. Selective need recognition occurs when the need for a specific brand within a product category (selective demand) is stimulated.
Search, the second stage of the decision-making process, represents the motivated activation of knowledge stored in memory or acquisition of information from the environment about potential need satisfiers. Internal search involves scanning and retrieving decision-relevant knowledge stored in memory. External search consists of collecting information from the marketplace. External search motivated by an upcoming purchase decision is known as pre-purchase search. This type of external search differs from ongoing search, in which information acquisition takes place on a relatively regular basis regardless of sporadic purchase needs. External search set: those choice alternatives that consumers gather information about during pre-purchase search. Haptic information represents information acquired by touch. Opinion leaders or influential’s are other consumers who are respected for their expertise in a particular product category. “Funnel” search strategy: when people begin their internet search with generic terms but eventually refine their search with terms focusing on specific products. According to a cost versus benefit perspective, people search for decision-relevant information when the perceived benefits of the new information are greater than the perceive costs of acquiring this information. Perceived risk represents consumers’ uncertainty about the potential positive and negative consequences of the purchase decision.
The manner in which choice alternatives are evaluated is the focus of our third stage of the consumer decision-making process, pre-purchase evaluation. Those alternatives considered during decision making compose what is known as the consideration set (also known as the evoked set).
Retrieval set: the recall of choice alternatives from memory. According to a categorization process, evaluation of a choice alternative depends on the particular category to which it is assigned. In contrast, under a piecemeal process, an evaluation is derived from consideration of the alternative’s advantages and disadvantages along important product dimensions. Brand extensions, in which a well-known and respected brand name from one product category is extended into other product categories, is one way companies employ categorization to their advantage. A cutoff is simply a restriction or requirement for acceptable performance. Signals are stimuli used to make inferences about the product.
• Lexicographic strategy (noncompensatory evaluation strategy): an evaluation strategy in which brands are compared initially on their most important attribute.
• Elimination by aspects strategy (noncompensatory evaluation strategy): an evaluation strategy resembling the lexicographic strategy but in which the consumer imposes cutoffs.
• Conjunctive strategy (noncompensatory evaluation strategy): an evaluation strategy employing a comparison of each brand to cutoffs that are established for each salient attribute of the brand.
• Simple additive (compensatory evaluation strategy): an evaluation strategy by which the consumer counts or adds the number of times each alternative is judged favorably in terms of the set of salient evaluative criteria.