Podcast
Questions and Answers
When selecting a retail outlet, which step involves the consumer considering various options based on their needs and preferences?
When selecting a retail outlet, which step involves the consumer considering various options based on their needs and preferences?
- Evaluating the relevant alternatives (correct)
- Applying a decision rule to make a selection
- Recognizing a problem that requires outlet selection
- Engaging in internal and possibly external search
A consumer urgently needs a specific brand of medication. In this scenario, which comes first in the consumer's decision-making process?
A consumer urgently needs a specific brand of medication. In this scenario, which comes first in the consumer's decision-making process?
- Brand and outlet simultaneously
- Neither brand nor outlet matters
- Outlet first, brand second
- Brand first, outlet second (correct)
Which marketing strategy is most aligned for a manufacturer when consumers choose an outlet first, then a brand?
Which marketing strategy is most aligned for a manufacturer when consumers choose an outlet first, then a brand?
- Margin training for sales personnel
- Price specials on brands
- Retailer image advertising
- Programs to strengthen existing outlets (correct)
A local grocery store collaborates with a national beverage company, featuring the beverage in its weekly flyer. What kind of marketing strategy is this?
A local grocery store collaborates with a national beverage company, featuring the beverage in its weekly flyer. What kind of marketing strategy is this?
Which describes a key characteristic of online shoppers?
Which describes a key characteristic of online shoppers?
What is a significant barrier preventing some consumers from shopping online?
What is a significant barrier preventing some consumers from shopping online?
An online retailer implements a 'VeriSign' badge on their website. What barrier to online shopping is the retailer trying to overcome?
An online retailer implements a 'VeriSign' badge on their website. What barrier to online shopping is the retailer trying to overcome?
If a consumer researches a product online but then goes to a physical store to make the actual purchase, what are they engaging in?
If a consumer researches a product online but then goes to a physical store to make the actual purchase, what are they engaging in?
What is a key difference between multichannel and omnichannel strategies?
What is a key difference between multichannel and omnichannel strategies?
Which attribute most directly contributes to a store's 'institutional' image?
Which attribute most directly contributes to a store's 'institutional' image?
An online store wants to improve its 'usefulness' to customers. What should they focus on?
An online store wants to improve its 'usefulness' to customers. What should they focus on?
Why have retailers increasingly developed and promoted their own high-quality brands?
Why have retailers increasingly developed and promoted their own high-quality brands?
A customer enters a store to buy milk but ends up also purchasing cookies, triggered by a display near the milk section. This is an example of what?
A customer enters a store to buy milk but ends up also purchasing cookies, triggered by a display near the milk section. This is an example of what?
Consumers generally prefer to shop at the closest store. Which attribute of retail outlet selection does this represent?
Consumers generally prefer to shop at the closest store. Which attribute of retail outlet selection does this represent?
A shopper intends to buy Brand X, but due to promotional in-store displays, purchases Brand Y instead. What kind of purchase is this?
A shopper intends to buy Brand X, but due to promotional in-store displays, purchases Brand Y instead. What kind of purchase is this?
A supermarket uses colorful displays, strategically positioned products, and even background music to make shopping more pleasant. Which tactic are they using?
A supermarket uses colorful displays, strategically positioned products, and even background music to make shopping more pleasant. Which tactic are they using?
Which of the following best defines In-store decisions?
Which of the following best defines In-store decisions?
Which of the following is most likely to result in 'spillover sales'?
Which of the following is most likely to result in 'spillover sales'?
Which of the following is an example of 'partitioned pricing'?
Which of the following is an example of 'partitioned pricing'?
A consumer finds that the store is out of their preferred brand. What is least likely to happen?
A consumer finds that the store is out of their preferred brand. What is least likely to happen?
If 'wanted to compare prices on other sites' was a primary reason for shopping cart abandonment, what can the retailer do?
If 'wanted to compare prices on other sites' was a primary reason for shopping cart abandonment, what can the retailer do?
In the context of consumer behavior, what does 'outlet' refer to?
In the context of consumer behavior, what does 'outlet' refer to?
What is the significance of understanding the consumer decision sequence (outlet first, brand first, or simultaneous) for retailers and manufacturers?
What is the significance of understanding the consumer decision sequence (outlet first, brand first, or simultaneous) for retailers and manufacturers?
Which scenario best exemplifies store-based retailing with enhanced experiential components?
Which scenario best exemplifies store-based retailing with enhanced experiential components?
A consumer finds a brand of tea online, but it's cheaper at a physical store down the street, and makes the purchase there. This is an example of...
A consumer finds a brand of tea online, but it's cheaper at a physical store down the street, and makes the purchase there. This is an example of...
If a brand seeks to promote consistent messaging, no matter on what channel the user engages them, what kind of marketing strategy should they employ?
If a brand seeks to promote consistent messaging, no matter on what channel the user engages them, what kind of marketing strategy should they employ?
Which factor is LEAST likely to be considered part of a 'bricks-and-mortar' retailer's outlet image?
Which factor is LEAST likely to be considered part of a 'bricks-and-mortar' retailer's outlet image?
Which factor is LEAST likely to be considered part of an online retailer's outlet image?
Which factor is LEAST likely to be considered part of an online retailer's outlet image?
A retailer that has high-quality store brands that are known for their affordability is most benefiting what factor?
A retailer that has high-quality store brands that are known for their affordability is most benefiting what factor?
A store places candy near the checkout counters in order to spur unplanned purchases. This is an example of...
A store places candy near the checkout counters in order to spur unplanned purchases. This is an example of...
A customer specifically intends to buy a specific item for dinner. When at the store, however, they realize that this item is too expensive, and buy another to save money. What describes this purchase?
A customer specifically intends to buy a specific item for dinner. When at the store, however, they realize that this item is too expensive, and buy another to save money. What describes this purchase?
A shopper buys multiple products in a single shopping trip. Which of the following is not a way that these purchases might have been compelled?
A shopper buys multiple products in a single shopping trip. Which of the following is not a way that these purchases might have been compelled?
A brand is experiencing decreased sales. Which of the following likely contributed to them?
A brand is experiencing decreased sales. Which of the following likely contributed to them?
Consumers are complaining that it is too hard to buy your product from their cart and on your site. What are they complaining about?
Consumers are complaining that it is too hard to buy your product from their cart and on your site. What are they complaining about?
A large variety of products are available at an online retailer's site. This fact is considered...
A large variety of products are available at an online retailer's site. This fact is considered...
What is the effect of a coupon normally?
What is the effect of a coupon normally?
What is atmospherics?
What is atmospherics?
What's an example of atmospherics?
What's an example of atmospherics?
Suppose that a website has incredible graphics and colors. What makes it difficult to get a purchase?
Suppose that a website has incredible graphics and colors. What makes it difficult to get a purchase?
Flashcards
Problem Recognition
Problem Recognition
The process where a consumer recognizes a need or desire that can be satisfied by acquiring a product.
Outlet First Choice
Outlet First Choice
A consumer behavior pattern where the choice of retail outlet precedes the selection of a specific brand or product.
Brand First Choice
Brand First Choice
A consumer behavior pattern where the selection of a specific brand or product precedes the choice of retail outlet.
Co-op ads
Co-op ads
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Online Shopper Characteristics
Online Shopper Characteristics
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Barriers to Internet Shopping
Barriers to Internet Shopping
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Omnichannel Strategy
Omnichannel Strategy
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Multi-Channel Strategy
Multi-Channel Strategy
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Retail Outlet Image
Retail Outlet Image
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Retailer Brands
Retailer Brands
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Spillover Sales
Spillover Sales
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Outlet Location and Size
Outlet Location and Size
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Unplanned Purchases
Unplanned Purchases
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In-store decisions
In-store decisions
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Generally planned
Generally planned
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Point-of-Purchase Materials
Point-of-Purchase Materials
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Stockouts
Stockouts
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Price Reductions and Promotional Deals
Price Reductions and Promotional Deals
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Atmospherics
Atmospherics
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Study Notes
- Consumer Behavior Lecture 5 covers Chapter 17 on Outlet Selection and Purchase
- Discusses both the outlet choice and product choice
Learning Objectives
- Analyze how consumers decide between retail outlets versus specific products
- Discover and explain the different marketing strategies that are based on the consumer decision sequence
- Considerations for the evolving retail scene
- Describe attributes that affect retail outlet selection
- List the in-store and online factors that influence brand choices
Outlet Selection and Choice
- Selecting a retail outlet follows a similar thought process to selecting a brand
- Consumer must first acknowledge a need that can be satisfied by visiting a particular outlet
- Search internally and externally for information
- Evaluate the alternatives available
- Apply a decision rule
Outlet vs Product Choice
- Decisions about choosing an outlet and a product can occur in three ways:
- Outlet first, then brand second
- Brand first, then outlet second
- Brand and outlet are chosen simultaneously
Marketing Strategies and the Consumer Decision Sequence
-
There are Retail and Manufacturer levels to consider when constructing a marketing strategy
-
Outlet First, Brand Second:
- Retailers may use retailer image advertising, margin management on shelf space, location analysis and appropriate pricing
- Manufacturers may use distribution in key outlets, point-of-purchase displays, and programs to strengthen existing outlets
-
Brand First, Outlet Second:
- Retailers may offer multiple brand and/or key bands, co-op ads, price specials and retailer-sponsored search-engine links
- Manufacturers may offer more exclusive distribution, brand availability advertising and brand image management
-
Simultaneous Approach:
- Retailers may use margin training for sales personnel and provide a high-service or low-price structure
- Manufacturers create programs targeted at retail sales personne, use distribution in key outlets and co-op advertising
The Retail Scene
- Focus on the internet and stores as models for retailing
- Internet retailing
- Access, youth, high income, and high education characterize online shoppers
- However, there are barriers to overcome such as lack of trust, ease of returns and delivery costs
- Store-based Retailing
- Still the dominant form of retail despite the impact of the internet
- Internet as Part of a Multi-Channel Strategy & Omnichannel Strategy
- Both are used to meet the needs of target markets
The Evolving Retail Scene
- Internet retailing continues to grow as a strong retail channel
| 2010 | 2015 | |
|---|---|---|
| U.S. Internet users (millions) | 254 | 288 |
| Total online retail expenditures (billions) | $176 | $279 |
| Online spending (% of all retail spending) | 8% | 11% |
| Total web-influenced in-store sales (billions) | $1,021 | $1,543 |
-
The COVID-19 pandemic increased growth of E-Commerce, demonstrated by changes to store operations:
- Microsoft to permanently close all physical stores as sales shift online
- Prada opens online store on Alibaba's Tmall
- Bose is shutting down all of its US stores
- Gap sales moved online
- Online sales grew 40%
- Bath and Body Works closes all stores in US and Canada
- Online sales grew 85%
- Zara's owner says it will close as 1,200 stores
- Online sales grew 95%
-
Online Sales of popular products and services:
- Travel represents the highest value of online retail sales
- Home products, apparel, computer hardware/software and automotive/parts, follow
- Services and readily available merchandise are other important categories
-
Barriers to Internet Shopping:
- Shoppers may not want to give personal information or require a personal touch
- A recent study states these are the reasons why people who are online have never made a purchase
| Reason | 2005 | 2010 |
|---|---|---|
| Lack of "touch" | 55% | 36% |
| Don't want to give personal financial information | 62 | 32 |
| Delivery costs too high | 22 | 29 |
| Returns will be a hassle | - | 26 |
| Prefer to research online, buy offline | 24 | 24 |
| Feel no need to buy online | - | 23 |
| Can't speak to sales assistant online | - | 14 |
- Guidelines for online retailers to help convert Website visitors to buyers:
- The site needs an appropriate landing page
- Deal with the consumer's privacy and security concerns
- Direct control through "opt-in" features
- Use privacy statements (VeriSign)
- Signal the firm's investment in their website
- Deal with "lack of touch" through visual search and custom displays
Store-based Retailing
- Salespeople are poorly informed
- Waiting in long lines
- It takes too long to shop
Multi-Channel Retailing
- Most retailers utilize multiple retail channels, such as physical stores, Internet, catalogs, etc
- This approach can take many forms and can be successful for a number of reasons, such as a regional in-store retail utilizing online to become national/international in scope.
- Multi-channel shoppers are consumers who browse and/or purchase in more than one channel
- Consumers may use multiple channels for research and make a purchase in a specific channel
- Internet, catalogs and stores create a decision ecosystem in which stores and the internet are the primary sales channels while catalogs are researched
Multichannel vs Omnichannel
| Multichannel | Omnichannel | |
|---|---|---|
| Definition | All channels available to the consumer, but not themselves integrated | All channels available to the consumer and are connected |
| Quantity vs. Quality | Reach a user through the maximum number of channels | Give users a seamless experience across every channel |
| What User Gets | Brand is on every channel, but each channel may have different messaging | No matter which channel is used, the message is consistent |
| Stats | 95% of marketers say multichannel is important for targeting | Companies with an omnichannel strategy retain 89% of customers |
| Weaknesses | Doesn't use the advantages of using multiple channels in tandem | Must be used with analytics to individualize experience to each user's needs |
| Result | Fragmented, inconsistent experience | Seamless, delightful experience |
Attributes Affecting Retail Outlet Selection
- Consumers compare alternative outlets based on evaluative criteria
- Outlet image
- Retailer brands
- Retail advertising
- Outlet location and size
Outlet Image: Bricks-and-Mortar
- Consumers evaluate a store based on a number of dimensions:
| Dimension | Components |
|---|---|
| Merchandise | Quality, selection, style, and price |
| Service | Layaway plan, sales personnel, easy return, credit, and delivery |
| Clientele | Customers |
| Physical facilites | Cleanliness, store layout, shopping ease, and attractiveness |
| Convenience | Location and parking |
| Promotion | Advertising |
| Store Atmosphere | Congeniality, fun, excitement, comfort |
| Institutional | Store reputation |
| Posttransaction | Satisfaction |
Outlet Image: Online
- Consumers evaluate an online store based on a number of dimensions:
| Dimension | Components |
|---|---|
| Usefulness | Great product offers and info, value, aligns with interests |
| Enjoyment | Fun, attractive, pleasant to browse |
| Ease of use | Easy to use and navigate, flexible site |
| Trustworthiness | Reputation, information safety and security |
| Style | Helpful, friendly, knowledgeable, calm |
| Familiarity | Advertising both online and offline, general familiarity |
| Settlement | Fast and flexible delivery and transactions |
Retailer Brands
- Store image is related to the store brand
- Manufacturers brands were traditionally offered by retailers
- Retailers such as Walmart and Target are now developing high-quality brands with the store’s name
Retail Advertising
- Retailers use advertising to communicate their attributes, particularly sale prices, to consumers
- Spillover sales are additional items customers purchase when they visit a location to purchase an advertised item
Outlet Location and Size
- Affects store selection
- Consumers generally select the closest store
- Consumers generally prefer larger outlets over smaller ones
In-Store and Online Influences on Brand Choices
- Shoppers leave a retail outlet with a different brand or additional items than intended
- Influences within the retail outlet affects shopping patterns
- Unplanned purchases are made in a retail outlet that are different from what a consumer planned
- Types of purchases that can be made:
- Specifically planned - A specific brand or item decided on; purchased as planned
- Generally planned - Decide to purchase a product category before, but not the specific item
- Substitute - A change from a specifically or generally planned item to a functional substitute
- Unplanned - Was not in mind upon store entry
- In-store decisions - The amount of generally planned, substitute, and unplanned purchases
Strategies to influence in-store and online decisions:
- Point-of-Purchase Materials
- Price Reductions and Promotional Deals
- Outlet Atmosphere
- Stockouts
- Website Functioning and Requirements
- Sales Personnel
Point-Of-Purchase Materials
- POP materials include coupon dispensers, retail price promo signs, shelf talkers, danglers, product display materials, and more
- POP materials increase sales:
- Coupon dispenser lift - 6%
- Retail price promo sign lift - 11%
- Shelf talker/dangler lift - 17%
- Inflatable/mobile lift - 17%
Price Reductions and Promotional Deals
- Comes in the form of coupons, multiple-item discounts and gifts
- Follow the creation of point-of-purchase materials
- Internet retailer priced, $24.95 plus $5 shipping or $29 included shipping are examples of partitioned prices
- Sales increases in response to price reductions come from four sources:
- Current brand users may buy ahead of their anticipated needs (stockpiling)
- Users of competing brands may switch to the reduced price brand
- Nonproduct category buyers may buy the brand because it is now a superior value to the substitute product or to “doing without”.
- Consumers who do not normally shop at the store may come to the store to buy the brand
Outlet Atmosphere
- Managers perform atmospherics and manipulate the physical retail environment to create specific mood responses in shoppers
- Considerations the manager will make:
| Ambient Conditions |
| Physical conditions |
| Social Conditions |
| Symbols |
- Internet retailers also have online atmospheres that are determined by
- Graphics
- Colors
- Layout
- Content
- Entertainment features
Stockouts
- Stockouts affect a consumer's purchase decision or result in the consumer buying the same brand at another store
- May switch brands
- May delay the purchase
- May forgo the purchase altogether
Web-Site Functioning and Requirements
- Consumers often research online then buy in traditional stores, and only 5% that visit online outlet make a purchase
- A DoubleClick study lists reasons for shopping cart abandonment
- Shipping and handling costs too high - 44%
- Not ready to make the purchase - 41%
- Wanted to compare prices on other sites - 27%
- Product price higher than willing to pay - 25%
- Wanted to save products in cart for later consideration - 24%
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