Understanding Customer Buying Behavior in Merchandising

Posted on Sep 9, 2024 in Economy

The Importance of Customer Knowledge

Consumers are increasingly demanding and heterogeneous.

  • Distributors provide sales outlets in the encounter between manufacturers and customers.
  • Consumers are increasingly choosing between different outlets.
  • The provider must investigate and learn in depth about its customers.
  • Knowing the customer is not easy, over time their buying and consumption habits, lifestyle, cultural values, and tastes change.
  • The expert merchandiser must identify the changes in consumer behavior and update the point of sale, offering what customers are looking for.

The Customer Buying Behavior

The merchandiser’s primary mission is to attract buyers to the point of sale, encourage them to enter, guide their purchasing, and achieve their fidelity to re-buy. The merchandiser’s task will be to understand:

  • How to influence the cultural, social, personal, and psychological factors in customer buying behavior.
  • How to develop the process of purchase decision.
  • What merchandising stimuli are best suited to provide satisfaction to customers and motivate the act of purchase.

Factors Influencing Buyer Behavior

Cultural Factors

People are born and educated in a society where they learn and share a culture, a set of rules and values that act as a general guide for behavior. This will decisively influence the goods and services they purchase and consume. The merchandiser has to organize the point of sale with adequate incentives to meet these needs.

Social Factors

There are social groups to which the client belongs or aspires to belong, which also influence their attitudes and buying behavior: these are the reference groups. We can identify three types of groups:

  • Group aspiration
  • Group membership
  • Group dissonance

Personal Factors

A client’s personal characteristics such as age, sex, marital status, and occupation will also influence their purchasing decisions.

  • Lifestyle
  • Personality
    • Purchase is identified
    • Shopping is manifest

Psychological Factors

  • Motivation: Maslow’s Hierarchy of Needs
  • Perception: The same object can be perceived differently by two people due to the following factors:
    1. Perception is selective.
    2. People see what they want and do not see what they do not want to see.
    3. People tend to retain the stimuli that confirm their ideas.
  • Learning: A change in a person’s conduct due to experience. If an outlet provides customer satisfaction, their experience will be positive and result in the desire to buy back in the same place.
  • Beliefs and Attitudes: Beliefs are the ideas or thoughts that a person has about something or someone. Attitudes are predispositions of behavior towards a person, object, or idea based on deep-rooted beliefs and feelings. The attitude is composed of three elements:
    • Cognitive element
    • Affective element
    • Behavioral element

The Purchase Decision Process

We can distinguish five stages in the purchase decision process and five roles that can be performed by several people:

  • Initiator: The person who first suggested the idea of buying.
  • Influencer: Will influence the purchase.
  • Decider: Decides on any or all aspects of the purchase.
  • Buyer: Makes the purchase.
  • User or Consumer: Uses or consumes the product.

Stage 1: Recognition of a Need

This begins when the buyer feels a need, the lack of something they want to cover. It can be triggered by internal stimuli (hunger, thirst, cold, etc.) or by external stimuli. The merchandiser should encourage the client by making them feel the lack of something.

Stage 2: Finding Information

The buyer seeks the information necessary to meet their need (family, friends, neighbors, acquaintances, information points, points of sale, etc.). The merchandiser can provide adequate classification, distribution, and signaling within the point of sale.

Stage 3: Evaluation of Alternatives

The purchaser will examine the qualities of each brand and identify the benefits and satisfactions that they provide.

Stage 4: Purchase Decision

The buyer makes the purchase.

Stage 5: Post-purchase Behavior

Consumers will experience some satisfaction or dissatisfaction. If positive, people speak well of the brand and point of sale. If negative, they will not buy the product and may even change locations.

Types of Buying Behavior

  • Irrational Buying Behavior: Responds to the influence of stimuli emitted by the point of sale that act as temptations, prompting the desire to buy products that are not needed. Shopping facilities are key, allowing the application of a suitable price mix.
  • Rational Behavior: Buying only what is on the shopping list, what is necessary, and being satisfied until the next purchase. These sales normally attract customers to the point of sale. One aspect of the role of the point of sale for the buyer is the use of linear and selection strategies to resolve indecision.

Merchandising Controls

As merchandising is an activity that occurs at the point of sale, it is clear that commercial incentives should be known. The merchandiser has the information to identify appropriate commercial incentives and influence the buying behavior of customers. The following considerations should be taken into account when establishing commercial incentives present at the point of sale:

  • Commercial incentives should fill the point of sale. It is not enough to provide incentives; one must know how to issue them.
  • Commercial stimuli must be easily understood by customers. The same stimulus does not cause the same customer response.

The Merchandising Mix

The merchandiser’s task is to determine the combination of commercial incentives, at a reasonable cost for the facility, capable of providing the highest possible satisfaction demanded by their customers. This combination of commercial incentives is called the merchandising mix. As point-of-sale stimuli have a cost for the facility, the merchandiser shall decide which bids should be taken into account:

  • To provide maximum satisfaction at minimum cost.
  • Making the satisfactions provided differentiate the establishment from the competition.
  • Incentives regarding products and services offered.
  • Incentives for communication: Low investment in the corporate image, environment, furniture, decoration, and advertising.
  • Incentives for the physical distribution of goods: Investing in stocks, presentation, and products on the shelf.