Irwin/McGraw-Hill

Chapter 17Chapter 17Outlet Selection Outlet Selection

and Purchaseand Purchase

Chapter 17Chapter 17Outlet Selection Outlet Selection

and Purchaseand Purchase

Irwin/McGraw-Hill

Retailing and Outlet SelectionRetailing and Outlet SelectionRetailing and Outlet SelectionRetailing and Outlet Selection

Retailing includes all activities involved with selling to consumers (those purchasing for personal or household consumption). Retail stores In-home shopping Other non-store retailing

Decision Sequence Outlet first, Brand second Brand first, Outlet second Simultaneous

Irwin/McGraw-Hill

Outlet SelectionOutlet SelectionOutlet SelectionOutlet Selection

Outlet imageStore brandsRetail advertising

Spillover salesOutlet location and size

Retail attraction model:market share of a retail store = f (size of the

store, travel time to the store, and attraction factor for the product category)

Irwin/McGraw-Hill

Retail Outlet ImageRetail Outlet Image

Image refers to how a retailer is perceived by consumers and others.

Atmospherics refers to the design of an environment via visual communications, lighting, colors, music, and scent to stimulate customers’ perceptual and emotional responses. Exterior Facilities General Interior Store Layout Interior Displays

Irwin/McGraw-Hill

Dimensions and ComponentsDimensions and Componentsof Store Imageof Store Image

Dimensions and ComponentsDimensions and Componentsof Store Imageof Store Image

Dimension Components(s)

Merchandise Quality, selection, style, and price

Service Layaway plan, sales personnel, easy return, credit, and delivery

Clientele Customers

Physical facilities Cleanliness, store layout, shopping ease, and attractiveness

Convenience Location and parking

Promotion Advertising

Store atmosphere Congeniality, fun, excitement, comfort

Institutional Store reputation

Post-transaction Satisfaction

© The McGraw-Hill Companies, Inc., 1998

Irwin/McGraw-Hill

Expenditures of Individuals Drawn to aExpenditures of Individuals Drawn to aStore by an Advertised ItemStore by an Advertised Item

Expenditures of Individuals Drawn to aExpenditures of Individuals Drawn to aStore by an Advertised ItemStore by an Advertised Item

© The McGraw-Hill Companies, Inc., 1998

0% 10% 20% 30% 40%

Purchased the advertiseditem and one or moreadditional items

Purchased only the advertised item

Did not purchase advertised item but purchased one or more other items

Did not purchase anything

Irwin/McGraw-Hill

Influences on Outlet ChoiceInfluences on Outlet ChoiceInfluences on Outlet ChoiceInfluences on Outlet Choice

Consumer Characteristics: Perceived risk Shopping orientation

In-Store Influences: Point-of-purchase (POPs) displays Price reductions Store layout Stockout situations Sales personnel

Irwin/McGraw-Hill

The Economic and Social Risk of The Economic and Social Risk of Various Types of ProductsVarious Types of Products

The Economic and Social Risk of The Economic and Social Risk of Various Types of ProductsVarious Types of Products

Economic RiskSocialRisk Low High

Low Wine (home use) Personal computerSocks Auto repairKitchen supplies Clothes washerPens/pencils InsuranceGasoline Doctor/lawyer

High Fashion accessories Business suitsHairstyles Living room furnitureGifts (inexpensive) AutomobileWine (entertaining) Snow boardDeodorant Ski suit

© The McGraw-Hill Companies, Inc., 1998

Irwin/McGraw-Hill

Supermarket Decisions: Two-thirds Supermarket Decisions: Two-thirds Are Made In-StoreAre Made In-Store

Supermarket Decisions: Two-thirds Supermarket Decisions: Two-thirds Are Made In-StoreAre Made In-Store

53

3

18

26

60

4

6

30

0 10 20 30 40 50 60 70

Supermarkets

Mass merchandisers

Specifically planned

Generallyplanned

Substitute

Unplanned

Source: The 1995 POPAI Consumer Buying Habits Study, (Englewood, N.J.: Point-of-Purchase Advertising Institute, 1995), p.18.

Type of store decision (percent)

Irwin/McGraw-Hill

In-Store Shopper Purchase BehaviorIn-Store Shopper Purchase BehaviorIn-Store Shopper Purchase BehaviorIn-Store Shopper Purchase Behavior

© The McGraw-Hill Companies, Inc., 1998

Specifically Generally In-storeProduct Planned Planned +Substituted+Unplanned = DecisionsTotal study average* 30 % 6% 4% 60 % 70%Hair care* 23 4 5 68 77Magazines/newspapers* 11 3 1 84 89Oral hygiene products* 30 5 5 61 71Automobile oil* 21 — — 79 79Tobacco products* 32 6 — 61 68Coffee 42 5 6 47 58First aid products 7 10 — 83 93Cereal* 33 9 6 52 67Soft drinks* 40 3 5 51 60Alcoholic beverage mixers*23 6 4 68 77Fresh fruits, vegetables* 67 7 1 25 33Cold remedies** 28 35 19 18 72Toothpaste/toothbrushes** 38 31 16 15 62Antacids/laxatives** 39 37 12 12 61Facial cosmetics** 40 34 11 15 60Sources: *1995 POPAI Consumer Buying Habits Study (Englewood, N.J.: Point-of-Purchase Advertising Institute, 1995); **1992 POPAI/Horner Canadian Drug Store Study (Englewood, N.J.: Point-of-Purchase Advertising Institute, 1992)

Irwin/McGraw-Hill

The Sales Impact of Point-of-Purchase DisplaysThe Sales Impact of Point-of-Purchase DisplaysThe Sales Impact of Point-of-Purchase DisplaysThe Sales Impact of Point-of-Purchase Displays

610

38

96

28

534

70

0

100

200

300

400

500

600

Papertowels

Shampoo Toothpaste Deodorant Coffee Fabricsoftener

Percent Increase700%

Source: POPAI/KMart/Procter & Gamble Study of P-O-P Effectiveness in Mass Merchandising Stores, (Englewood, N.J.: Point-of-Purchase Advertising Institute, 1993).

Irwin/McGraw-Hill

0.9

1.8

2.5

6.0

0.60.9

0.6 0.7

0

1

2

3

4

5

6

7

8

9

10

No ad—no display No ad—display Ad—no display Ad and display

Juice

Cereal

Impact of Advertising and Point-of-Purchase Displays on Impact of Advertising and Point-of-Purchase Displays on Sales of Juice and Cereal (percent sales gain)Sales of Juice and Cereal (percent sales gain)

Impact of Advertising and Point-of-Purchase Displays on Impact of Advertising and Point-of-Purchase Displays on Sales of Juice and Cereal (percent sales gain)Sales of Juice and Cereal (percent sales gain)

Source: 1987 POPAI Consumer Buying Habits Study (Englewood, N.J.: Point-of-Purchase advertising Institute, 1987).

Pu

rch

ases

per

100

sh

op

pe

rs

Irwin/McGraw-Hill

Store Atmosphere and Shopper BehaviorStore Atmosphere and Shopper BehaviorStore Atmosphere and Shopper BehaviorStore Atmosphere and Shopper Behavior

Ambient ConditionsTemperature • Air quality •

Noise • Music • Odor

Physical ConditionsLayout • Equipment • Colors •

Furnishings • Space

Social ConditionsCustomer characteristics •

Number of customers • Sales force characteristics

SymbolsSigns • P-O-P displays •

Decor style

Sales PersonnelCareer objectives • Training • Personal

situation • Social class • Stage in HLC

ConsumersLifestyle • Shopping orientation • Stage in

HLC • Situation

ConsumersEnjoyment • Time in store •

Items examined • Information acquired •

Purchases • Satisfaction

Sales PersonnelMood • Effort •

Commitment • Attitude • Knowledge • Skill

Source: Adapted from M. J. Bitner, “Servicescapes,” Journal of Marketing, April 1, 1992, pp. 57-71.

Store Atmosphere Individual Characteristics Response

Irwin/McGraw-Hill

Impact of a Stockout SituationImpact of a Stockout SituationImpact of a Stockout SituationImpact of a Stockout Situation

I. Purchase behaviorA. Purchase a substitute brand or product at the original store. The substitute

brand/product may or may not replace the regular brand in future purchases.B. Delay the purchase until the brand is available at the original store.C. Forego the purchase entirely.D. Purchase the desired brand at a second store. All of the items initially desired

may be purchased at the second store or only the stockout items. The second store may or may not replace the original store on future shopping trips.

II. Verbal behaviorA. The consumer may make negative comments to peers about the original store.B. The consumer may make positive comments to peers about the substitute store.C. The consumer may make positive comments to peers about the substitute

brand/product.III. Attitude shifts

A. The consumer may develop a less favorable attitude toward the original store.B. The consumer may develop a more favorable attitude toward the substitute store.C. The consumer may develop a more favorable attitude toward the substitute

brand/product.

© The McGraw-Hill Companies, Inc., 1998

Irwin/McGraw-Hill

Terri recently went to Kroger to pick up a few items. Once in the store, however, she found that Kroger had changed the location of many items, and she was unable to find what she was looking for. Terri’s dissatisfaction with Kroger was due to: point of purchase displays price of merchandise store layout a stockout situation sales personnel