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Lecture 04
Outlet selection and product
purchase – Post-purchase
processes
The consumer decision process
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Source: Quester et al., (2014), Consumer Behaviour: implications for marketing strategy 7th ed, McGraw-Hill Education, page 20
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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
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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
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Outlet choice vs product choice
• Retail outlet first, brand second
• Brand (or item) first, retail outlet second
• Brand and retail outlet simultaneously
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Marketing strategy based on the
consumer decision sequence
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Retailers use quality brands to promote
the store
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The retail scene
• In retail stores
• Other outlets, non-store outlets
– Internet sales
– Markets, direct sales, etc.
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Online shopping
• Increasing number of consumers preferring to shop online – 5% in 1999 to 31% in 2004-5
• Females now using the internet – Males 64%, females 62%
• Image of the outlet influenced by: – Webpage design
– Convenience
– Security
– Pricing
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Online shopping by age groups
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Reasons for not purchasing on the
internet
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Attributes affecting retail
outlet selection
• Retail format
– 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
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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
Dimensions and components of store
image
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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
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Expenditure of individuals drawn
to a store by an advertised item
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= MSi Si / Til
n S
i= 1 Si / Til
Outlet location and size
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• Retail attraction model:
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
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Consumer characteristics and outlet
choice
• Shopping orientation
• Perceived risk
– Financial risk
– Social risk
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Financial and social risks for
various types of products
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In-store influences that can affect
evaluation of alternatives and purchase
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In-store influences that alter brand
choices
• The nature of unplanned purchases
– Reminder purchases
– Impulse purchases
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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
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Encouraging unplanned purchases -
‘gift-time’ and suggesting products
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In-store buying habits
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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.
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Point-of-purchase (POP) displays
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Shopper behaviour in response
to frequent stockouts
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Impact of stockout situation
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Store atmosphere and shopper behaviour
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Purchase
• Once the brand and store have been selected
• Complete transaction:
– Payment
– Online/security risk
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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
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Post-purchase consumer behaviour
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Source: Quester et al., (2014), Consumer Behaviour: implications for marketing strategy 7th ed, McGraw-Hill Education, page 184
704003 – Product purchase and
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Post-purchase processes
• Post-purchase dissonance
• Product use and non-use
• Disposal
• Purchase evaluation
• Customer satisfaction
– repeat purchase behaviour and
– consumer loyalty
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Post-purchase dissonance
• Some purchases are followed by post-
purchase 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
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Product use and non-use
• Product use
– use innovativeness
– regional variations
– multiple vs single use
• Packaging
• Defective products
– product recalls
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Product disposal and
marketing strategy
• Recycling
– product
– package
• Trade-ins
– to motivate replacement
• Second-hand markets
– E.g. textbooks, clothes/ ‘Cash converters’
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Purchase evaluation
and customer satisfaction
• The evaluation process
– Demension of performance
• Dissatisfaction responses
• Marketing strategy and dissatisfied
consumer
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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
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Purchase evaluation
and customer satisfaction
• The evaluation process
– Dimensions of performance
• Customers switch ‘away’ from service providers
rather than ‘to’ providers:
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• 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%)
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Measuring customer satisfaction
• Qualitative measurement techniques
• Focus groups
• Surveys
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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
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Actions taken by consumers in response to
product dissatisfaction
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Source: Quester et al., (2014), Consumer Behaviour: implications for marketing strategy 7th ed, McGraw-Hill Education, page 195 704003 – Product purchase and
Postpurchase processes
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
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Repeat purchase behaviour
• Repeat purchase behaviour
– Simply involves the frequent repurchase of
the brand
• Brand loyalty
– Implies a psychological commitment to the
brand
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Brand loyalty
• Biased
• A behavioural response
• Expressed over time
• A consumer selects a brand over alternative
brands
• A function of psychological processes
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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
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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
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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
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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
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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)
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