Section 3
BEHAVIOR AND MARKETING STRATEGY
Chapter 8. Introduction to Behavior
Chapter 9. Conditioning and Learning Processes
Chapter 10. Influencing Consumer Behaviors
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Chapter 8
INTRODUCTION TO BEHAVIOR
AUTHORS' OVERVIEW OF THE CHAPTER
Here we offer a model that identifies the main generic behaviors involved in a common purchasing situation—buying
from a retail store.
We begin the chapter by discussing several “traditional” models of the purchase adoption process such as the AIDA
model (see Exhibit 8.1). These models emphasize the cognitive and affective stages involved in deciding to
purchase a new product.
A Behavior Sequence Model of the Purchase Process. This model emphasizes the sequence of overt behaviors that
consumers typically perform in making a purchase from a retail store. We identify seven general categories of
behaviors involved in such a purchase situation—(1) information contact, (2) funds access, (3) store contact, (4)
product contact, (5) transaction, (6) consumption and disposition, and (7) communication behaviors. These
behaviors are discussed along with examples of each (see Exhibit 8.2). Marketers can develop strategies to influence
any one or several of these behaviors in an attempt to increase the probability that consumers will make a purchase.

Information contact behaviors expose the consumer to information about the product or brand.
Information contact is not always due to intentional behaviors; sometimes consumers are
accidentally exposed to product information (driving by a billboard advertisement). When
intentional, information contact behavior is called search. We discuss several factors that
influence the extent of information search.

Funds access refers to the behaviors involved in securing adequate funds to make a purchase.
Funds access can range from simple behaviors such as reaching for one’s wallet or purse, to using
a credit card, to securing a bank loan.

Store contact involves the behaviors necessary for consumers to travel to and enter stores where a
product or brand can be purchased. Convenient locations, maps and direction signs, special hours
(early opening or late closing) and easy or free parking are marketing strategies that can influence
store contact behavior.

Product contact involves behaviors that occur once inside the store, such as finding, handling,
trying the product, and talking to salespeople about the product.

Transaction behaviors involve a set of purchase behaviors, ranging from the simple transaction
behaviors of inserting coins into a vending machine to more complex transaction behaviors such as
negotiating, signing papers, and writing checks when purchasing a car or a house.

Consumption and disposition behaviors also vary from simple to complex depending on each type
of product. Marketers sometimes attempt to modify consumers’ consumption behaviors (teach
them to use the product in a more appropriate way).

Communication behaviors are often of interest to marketers who may want consumers to
communicate information about a product or brand to the manufacturer (fill out and return
questionnaires on warranty cards) or to recommend the product to other consumers.
This behavior sequence model identifies the sequence of generic behaviors that are involved in a typical retail
purchase situation. Of course, different behavior sequences may be relevant in different types of purchase situations.
Consider the differences in behaviors when buying in a store environment versus purchasing the same product from a
mail-order catalog or on the Web. Information contact, product contact, and even funds access behaviors may be
quite different in these three situations.
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Because the environmental, affective, and cognitive factors will change over time, the behavior sequence and the
problem behaviors are likely to change as well. Therefore, marketers need to monitor these factors and the sequence
of behaviors over time to identify problem behaviors that may need to be modified. In sum, the behavior
management model gives marketing managers a general framework for making decisions about what behaviors they
should be concerned with and generally how to change or maintain them.
KEY CONCEPTS AND ISSUES

Traditional (cognitively oriented) models of consumer adoption or purchase process

Behavior sequence model of generic behaviors in purchase process

Information contact behaviors

Funds access behaviors

Store contact behaviors

Product contact behaviors

Transaction behaviors

Consumption and disposition behaviors

Communication behaviors
OUTLINE OF CHAPTER TOPICS
Chapter 8. ANALYZING CONSUMER BEHAVIORS
A. Lands’ End Inlet Store
B. What is Overt Consumer Behavior?
1. The Importance of Overt Consumer Behavior
C. A Model of Overt Consumer Behavior
1. Information contact
2. Funds access
3. Store contact
4. Product contact
5. Transaction
6. Consumption and disposition
7. Communication
a. From consumers to marketers
b. From consumers to consumers
D. Marketing Implications
E. Back to ….. Lands’ End Inlet Store
LEARNING OBJECTIVES
Upon completion of this chapter, the student should be able to:

identify the major types of behaviors involved in various types of purchase situations.

describe the factors that influence the extent of consumers’ external search behavior.
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
develop a sequence of consumer behaviors for a given purchase context.

identify potential problem behaviors in a behavior sequence and suggest possible marketing strategies to
influence those behaviors.

describe and use the stages in the consumer behavior management model to develop behavior modification
strategies.
TEACHING IDEAS AND SUGGESTIONS
Overview. The goals of this chapter are (a) to identify generic behaviors that may be critical to the success of the
marketing of a product or service and (b) to present models/tools to help marketers analyze such behaviors and
develop strategies to influence problem behaviors. Too often, marketers and students ignore other behaviors that
precede and follow the purchase transaction. Some of these behaviors may be critical in explaining and
understanding the purchase itself. Many of these other behaviors have marketing implications.
The concepts in this chapter are not difficult, and most students find it relatively easy to grasp the models presented
here. “Hands on experience” seems to be the most pedagogical approach to this material. Class time is well used by
quickly reviewing the models and spending most of the time analyzing and discussing actual examples in class.
Students seem to benefit most from discussing how to think about and analyze actual behaviors.
In-Class Exercise: Sequence of Key Behaviors in a Purchase Situation. Students need practice in identifying the
sequence of key behaviors involved in different purchase situations. They should also be able to identify potential
problem behaviors and design feasible marketing strategies to influence those behaviors. The behavior sequence
model shown in Exhibit 8.2 presents a sequence of generic behaviors involved in a retail purchasing situation.

Ask students to identify the key behaviors involved in a specific purchase situation. Show the generic
behavior sequence model in Exhibit 8.2 as a guide to the class discussion.
For instance, what is the relevant behavior sequence for going to see a movie? How about
purchasing a sweatshirt from a catalog? In contrast, what specific behaviors are relevant for
purchasing gasoline (usually a more automatic, perhaps brand loyal purchase situation)?
Students could play the role of the marketing management of a company such as Hallmark. They
should identify the behaviors that are important in buying greeting cards and various other
Hallmark products such as party favors, wrapping paper, posters, toys, and writing instruments (see
Hallmark case at the end of Chapter 7).
New product information can provide useful concrete examples for identifying behavior sequences
and problem behaviors.
For example, what consumer behaviors should a manufacturer consider when introducing
a new car model such as Infiniti or Lexus (both introduced in 1989)? What behaviors are
relevant for the purchase of a new Lexus? How do these behaviors differ when buying a
used car?

Ask students to contrast these relatively complex sequences of behavior with the behavior sequence of
interest to a company such as Coca-Cola in analyzing soft drink purchases from vending machines. What
behaviors have the greatest influence on this relatively simple purchase?

It is very enlightening to ask students to contrast the sequence of behaviors in making a purchase at a retail
store with the behaviors necessary to make a purchase from a website. For example, funds access presents
unique challenges for customers who prefer to pay with cash or checks. What can the retailer do to
facilitate funds access for these customers?

Challenge students to identify specific behaviors that seem most significant (or the most important, the
biggest problems) in these different purchase situations.
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
In each situation, encourage students to discuss what marketing strategies these companies might develop to
influence those key behaviors.
In-Class Exercise: Information Contact Behaviors. Marketers of most products and services need to understand
consumers’ information contact behaviors. Traditionally, marketing researchers have discussed this as external
search for information. But not all information contact occurs because of intentional, purposive search behaviors.
We saw in Chapter 5 that a great deal of marketing information is encountered unintentionally, as consumers’
behaviors bring them into contact with the information accidentally.
Occasionally, of course, consumers do search for product information to help them make a purchase decision. You
may wish to discuss external search for information in more detail than the text provides.

Ask students to discuss the factors that influence (increase or hinder) the extent of consumers’ search
behaviors.
After some general discussion, show Exhibit 8.3 which lists many potential influences, including
environmental factors and characteristics of consumers (knowledge and involvement).

Ask students to describe marketing strategies that encourage and facilitate consumer search behavior.
For instance, marketers make information available at point-of-purchase, produce informative ads,
train salespeople to give information to customers, and present information on packages.

Ask students to discuss when marketers might want to encourage (or discourage) search behaviors.
For instance, it could be useful to encourage search behavior if your brand stands up well to close
scrutiny, compares strongly with competitive products, or if there are many satisfied customers
who will give good recommendations, since consumers are likely to receive positive information.
In the opposite circumstances, it might be better to discourage search. Search is not very desirable
for the brand with a large market share as this is likely to identify other brands in which the
consumer might become interested.
In-Class Exercise: Funds Access Behaviors. The behaviors involved in how consumers get access to their funds
are quite interesting. Many marketing strategies are directed at influencing these behaviors.

Ask students to identify the specific behaviors involved in accessing their funds.
Few consumers carry substantial amounts of funds with them (cash in the pocket). Other devices
used to access funds include credit cards, debit cards, checks, loans, bank cards, and automatic
teller machines. Some consumers might borrow money from other consumers.

Ask students to discuss how marketing strategies influence consumers’ funds access behaviors.
Several examples are given in the text. Company’s credit and payment policies have a major
influence on funds access behaviors.
In-Class Exercise: Store Contact Behaviors. For retailers (manufacturers who sell through retail channels),
consumers’ store contact behaviors are extremely important. From both perspectives, consumers must come into
contact with the store.

Ask students to identify the specific behaviors involved in store contact.
Students should mention traveling to the store (alternatives include private car versus public
transportation, bicycling versus walking). Other important behaviors include parking one’s car,
looking for the store, and entering the store. These may not be problem behaviors, but they can be
(it might be difficult to locate the door for a small shop in the second floor of a building).
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
Ask students to discuss marketing strategies designed to affect consumers’ store contact behaviors.
The text discusses several examples. Other possibilities include rewarding store contact by
awarding prizes to consumers who come in—a car dealership might offer consumers free
doughnuts and coffee on Saturday mornings.
Sometimes these store contact strategies can “backfire.” A “98-cent store” in California
(most items cost 98 cents) had a promotion for the first 98 people to come into their new
store to get a small-screen, black-and-white TV for 98 cents. So many people showed up
that police had to be called in to control the near-riot situation.
In-Class Exercise: Product Contact Behaviors. Once consumers are in the store, manufacturers are quite
interested in making sure they come into contact with their products. These product contact behaviors are critical,
for if they do not occur, purchase cannot occur.

Ask students to discuss the specific behaviors involved in product contact in different retail stores—a
clothing boutique vs. a large department store vs. a grocery store.
Students should mention walking around in the store, asking for directions, reading signs, looking
for displays, entering an aisle or part of the store where the product might be, looking in the
direction of the product, and picking up the product from the rack or shelf.

Ask students to discuss marketing strategies designed to affect consumers’ product contact behaviors.
The text covers several examples. Students might mention factors such as in-store displays (large
stacks of product packages at the end of a supermarket aisle), layout of a store’s aisles, lighting
that highlights a product, signs to draw attention to a product, and colorful packages to catch
consumers’ attention. In addition, sales personnel can influence product contact.
Product contact behaviors are a major problem for the so-called hypermarts, giant stores covering
up to 250,000 square feet. One man spent 30 minutes trying to find the Canada Dry Ginger Ale
and finally gave up. Problems with product contact are one reason why such huge stores are not
being built in the U.S. with the enthusiasm they once enjoyed.
In-Class Exercise: Transaction Behaviors. Transaction behaviors concern all behaviors associated with the
purchase transaction. Measuring and understanding consumers’ transaction behaviors is not as easy as it might seem.

Ask students to consider how a marketer like Proctor & Gamble could know about consumers’ transaction
behaviors.
Observation of transaction behaviors at the check-out counter or asking consumers to fill out
detailed diaries has been tried. Although useful, these techniques have obvious disadvantages,
especially when done on a large scale.

Then describe the behavior measurement technologies based on scanner equipment such as IRI’s
BehaviorScan, or the Nielsen services. These technologies have the potential to tell marketers a great deal
about purchase-related behaviors (amount purchased, price paid, use of coupons and deals, influence of
advertising and sales promotions).
Theoretically, scanner data is capable of revealing who goes into a store during the week of a big
promotion, who buys the promoted brand and non-promoted brands, how many units they buy,
whether they switched from a regular brand to the one on deal, how they paid for the purchase,
what time of day or week they made the purchase, among other things. However, it is not a trivial
matter to get this level of information out of the raw data.

Ask students to discuss how marketers could use these technologies to develop behavior modification
strategies.
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The text discusses how these techniques can help identify problem behaviors.
In-Class Exercise: Consumption and Disposition Behaviors. Consumption behaviors concern all behaviors
involved in using (consuming) a product or service, and disposition deals with the disposing of products. Certain
businesses also provide the environment in which consumption takes place—for instance, restaurants, pubs and bars,
theme parks, and the like. These businesses must be especially careful to understand consumers’ consumption
behaviors.

Ask students to identify the specific behaviors involved in their consumption of two different products—e.g.
dental floss and fast-food restaurants.
For certain products like dental floss, consumption behavior is important because consumers learn
a great deal about the product attributes and their consequences through consumption behaviors.
These cognitions/beliefs can have a major influence on subsequent purchase behaviors.
Certain businesses also provide the environment in which consumption takes place—for instance,
restaurants, pubs and bars, theme parks, and airlines. These businesses must be especially careful
to understand and influence consumers’ consumption behaviors because those behaviors have a
major impact on their satisfaction with the product/service.

Ask students to discuss marketing strategies designed to affect consumers’ consumption behaviors.
Marketers may have different behavioral goals. Marketers who want consumers to use more of the
product may have to encourage them to use the product in a different way or in different contexts.
The strategies to do so may involve both behavior modification techniques as well as changes in
affect and cognitions.
In-Class Exercise: Communication Behaviors. Many marketers are interested in consumers’ communication
behaviors. As the text describes, marketers may want to know how consumers communicate with the company or
with each other.

Ask students to identify specific communication behaviors involved in different marketing situations.

And, ask students to develop some marketing strategies designed to affect these communication behaviors.
For instance, manufacturers of small appliances (Black & Decker) or electronic equipment (Sony) often
have short questionnaires concerning consumers’ behaviors—where one bought a product, where they heard
about it, what store they patronized, etc. These companies want consumers to return the questionnaires.
A strategy to get consumers to return purchase questionnaires is to attach the warranty registration
to this questionnaire. This increases the likelihood that consumers will fill out the questionnaire
and return it along with the warranty registration.
A company might want its customers to be sure to tell them if they are not satisfied with any aspect of the
product or shopping experience.
The company could draw one communication per day (or per week) and give a prize to that
consumer (positive reinforcement of communication behavior).
It could be even more effective if companies would actually do something about complaints and
suggestions. Stew Leonard’s Dairy, a very successful grocery store in Connecticut, has a
suggestion box that is filled each day, largely because Stew actually follows through on the good
suggestions and the legitimate complaints. Customers can see the store improving.
Other companies might want their consumers to spread positive word-of-mouth about the products.
Favorable word-of-mouth communications can be encouraged by rewarding consumers who do so.
A mail order company selling sailboards and related equipment wants its customers to refer their
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friends to the company. So, for every person who buys a sailboard and rig, the company gives the
referring person $50 off any purchase over $200. The discount is a positive reinforcer for the
desired word-of-mouth communication behavior.
In-Class Exercise: Behaviors in Different Purchase Situations. It is useful for students to be aware of how the
relevant behavior sequence varies across different purchase situations.

For instance, ask students to compare the relevant behaviors for an in-store purchase situation versus a nonstore purchase such as a catalog purchase. Also, two different types of retail environments might be
compared (buying a suit or dress at a large self-service, off-price store versus a small, boutique shop).
Students should be able to identify the key behaviors that consumers must perform to buy products
in these different types of environments. Product contact and transaction behaviors may be quite
different. Consider how information contact behaviors differ in the two situations. Funds access
behavior will also differ.
This task has real-world validity, since several mail-order companies also own and operate retail
stores—Sharper Image (expensive gadgets) or Williams-Sonoma (gourmet kitchen equipment), or
Banana Republic (casual sportswear). They must consider the different types of behaviors
consumers must perform.
PROJECT
A project can be assigned from many of the exercises described above. Also, questions 3 and 6 below could make
useful projects to be done outside of class. Students should bring the project to class for general discussion.
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NOTES AND ANSWERS TO REVIEW AND DISCUSSION QUESTIONS
1.
Describe the differences between traditional models of the adoption process (for example, awareness, interest,
evaluation, trial, adoption) and the behavior sequence presented in Exhibit 8.2.
This straightforward review question asks students to compare the traditional “behavior” model illustrated
in Exhibit 8.1 with the generic behavior in Exhibit 8.2.
An obvious difference is that the traditional models tend to focus on the cognitive and affective states that
precede a single purchase behavior, whereas the behavior sequence model focuses on the behaviors that
precede a purchase. The traditional models ignore the various behaviors involved in a purchase, whereas
the behavior sequence model ignores the internal psychological factors that precede and influence purchase.
In addition to the obvious internal (psychological) vs. external (environmental) focus of the two models,
students should note the different types of behaviors recognized in the behavior sequence model. The
behavior sequence model provides a much more complex and complete view of behavior than the
traditional models, which only include purchase behavior.
Finally, the behavior sequence model includes important behaviors that occur after purchase, while the
traditional models tend to end at purchase, reflecting marketer’s narrow focus on brand purchase.
Perhaps a clever student will notice that the behavior sequence model is more consistent with (and more
easily integrated with) the Wheel of Consumer Analysis.
The reciprocal influences between behavior, environment, and affect/cognition in the Wheel of Consumer
Analysis also “fit” with the behavior sequence model. For instance, the different behaviors in the behavior
sequence model take place in different environments and involve different affective and cognitive states.
2.
What advantages do you see in the use of the behavior sequence model for marketing researchers and for
marketing managers?
This is a more difficult application question; graduate students may offer more detailed answers to this
question than undergraduates.
In general, the behavior sequence model helps researchers and managers focus on consumers’ overt
behaviors and develop more effective strategies to influence these marketplace responses.
The model focuses managers’ attention on other important factors besides the commonly considered
cognitive factors. The model clearly recognizes that most purchases can be described as a series or
sequence of behaviors. It emphasized that managers are ultimately concerned with changing or maintaining
consumers’ behaviors.
The behavior sequence model clarifies the progression or sequence of behavior actions that occur over time
before and after a purchase. It also emphasizes that there are many entities besides the manufacturer who
have an interest in behaviors in the sequence.
For instance, media companies are concerned about information contact behaviors, and credit card
companies and banks are interested in funds access behaviors.
Focusing attention on particular behaviors helps marketers develop effective strategies to influence those
behaviors.
Finally, the model can be used to suggest ways of better controlling and evaluating marketing strategies. If
a marketer knows what particular behavior a strategy is designed to influence, then the criterion for success
is obvious. Did the behavior change, or not?
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3. Use the behavior sequence model to describe a recent purchase of a product and of a service.
This application question forces students to apply the behavior sequence model to a personal situation and
thereby understand it better.

Ask a few students to present their purchase to the class.

Show the behavior sequence model in Exhibit 8.2 to guide the discussion.
Students’ answers will necessarily be idiosyncratic. However, everyone should be able to identify
actual behaviors in each category of the behavior sequence model, including information contact,
funds access, contact with a store or provider agency, product contact or service experience, a
transaction, consumption, and communication.
Discussion of these answers will indicate the broad range of overt behaviors that can occur in
consumer purchasing situations.

4.
Encourage students to discuss how the relevant behaviors differ across situations, and to consider how
marketing strategies might be developed for these situations.
This is a fairly complex application question that requires students to think carefully about the specific
behaviors involved in searching for information about these brands.
Marketers of a leading brand probably want to maintain the existing purchase behaviors of their customers.
In general, they probably want to discourage these customers from searching for new information since that
might turn up new choice alternatives (other brands).
In general, marketers trying to introduce a new brand, especially against strong competitors, should
encourage search behavior, since this is one way for consumers to learn about the new brand.
Marketers who are promoting an existing low share brand also need to increase information search
activities, and also carefully target selected consumers to receive product information. Encouraging wordof-mouth by existing customers is one way to provide product information.
5. Give some examples of marketing strategies aimed at addressing the funds access problem of college seniors.
This application question asks students to identify strategies that influence probability of purchase by
enhancing funds access behaviors. It will help students appreciate that all marketing strategies, at their
base, are concerned with influencing consumers’ behaviors.
Lack of direct access to funds can block a sale. Layaway plans, delayed payment plans, new credit cards,
and special loan terms are examples of strategies directed toward this behavior. The local student
newspaper will have numerous examples of strategies to enhance funds access. Some universities issue
magnetic cards for student to use to purchase food in the dorms and cafeterias on campus, thus facilitating
funds access.
6.
Visit several local supermarkets and note evidences you are able to observe of push and pull strategies used to
increase product contact for grocery items. Share these observations with other members of your class.
This complex application question could be assigned as an out-of-class project.
For clarity, briefly review the difference between push and pull strategies before beginning the class
discussion.
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Push strategies are intended to get the product on the retail shelf and/or increase how much
marketing effort retailers exert. Examples of push strategies include store displays and spiffs
(payments of store salespeople for selling the product). Push strategies are so named because they
seem to “push” the product through the distribution channel. Push strategies also include price
discounts on case lots or other financial incentives to the retailer. If these trade deals are passed on
to consumers as price reductions, they should increase the probability of consumers’ purchase
behaviors.
Pull strategies such as coupons and rebates are incentives directly targeted at consumers. They are
intended to increase the probability of purchase. Pull strategies seem to “pull” the product through
the distribution channel because they increase demand for the product.
Students should be able to identify several push and pull strategies for grocery products. They should also
describe how these strategies influence consumers’ product contact behavior. For many price reductions in
the grocery store (20 cents off), however, the differences between push and pull strategies may not be
obvious to consumers in the supermarket.
Effective push efforts might involve placement of specially designed product displays, signs,
Special in-store promotions (tasting booths), and price discounts of various types to the retailer (10
percent off the normal case price, if you buy 30 cases).
Pull strategies are most commonly illustrated by coupons that consumers are redeeming. Rebates
are another example. Contests that require a proof of purchase or prizes in the package are also
pull strategies.
7.
List at least three examples of situations in which marketing efforts have been instrumental in changing your
consumption or disposal behavior for products you have purchased.
This general review/application question forces students to think about how marketing strategies affect
consumption (and disposal) behaviors.
This question should generate a good discussion. Because of increased interest in the environmental impact
of products, students are likely to focus on disposal issues.
Many marketers are attempting to influence how consumers dispose of their products by promoting
their products as recyclable or biodegradable.
Of course, disposal behaviors are also of interest to governmental and social agencies who are
attempting to change consumers’ consumption and disposal behaviors.
A noted marketing strategy is the “Don’t Mess with Texas” campaign, which is credited
with reducing road-side litter in Texas.
Classroom discussion will also turn up a lot of examples of signs, labeling, dumpster placement,
deposit laws, etc., and also some disagreement on which efforts are/were effective.
8. Assume the role of a marketing manager for each of the purchases you described in response to Question 3.
Which behaviors would you want to change?
This is a somewhat difficult application question.
Students should identify the key problem behavior in each behavior sequence/situation.
Then, they should develop marketing strategies, either from a behavior or a cognitive perspective,
or both, to modify the behavior.
You might suggest that students use each other’s examples to help them be more objective and
analytic.
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Point out that in complex situations, marketing managers must be realistic about the probabilities
of behavior change they can expect. Marketers sometimes need multiple interventions at various
stages in the behavior process.
9. Suggest strategies for decreasing the frequency of post holiday merchandise returns to a department store.
This rather difficult application question forces students to use the behavior management model for
developing marketing strategies to modify this post transaction communication behavior. Students will
have to think deeply about their answer. The analysis of the contingencies regarding this behavior can be
complex, and will probably include cognitive and affective issues as well as the behavior modification
techniques of Section 3.
Students should recognize that returning merchandise for refund or exchange is a post-purchase
communication behavior. In making returns, consumers are communicating with the retailer (and only
indirectly with the manufacturer).
Such behaviors can cause “problems” for retailers especially after a big gift-giving holiday such as the
Christmas season. Perhaps the most obvious way to reduce an unwanted behavior is to punish it each time
it occurs. However, it is unlikely that many stores would intentionally punish return behaviors (by charging
a fee to return items, making returns more difficult, or giving consumers a “hard time”).

You could ask students to consider the reasons why consumers return gifts for exchanges or refunds.
Perhaps these factors can be changed to make returning less likely.
One way to do so is to identify the sequence of behaviors involved in gift giving and look for
behaviors that seem to lead to returning gifts
For instance, some return behaviors might be due to ineffective repurchase behaviors on
the part of the gift giver. There could be a problem in information contact (not getting
good information about what is available in stores or what the gift recipient really wants).
Product contact might be ineffective, with gift givers never finding the “best” gift.
Therefore, one marketing strategy to reduce returns is help consumers make more
appropriate gift choices, so fewer returns will be necessary. Salespersons might be
trained to “interview” their customers to identify a more appropriate gift.
A different marketing strategy is to promote gift certificates from the store, instead of buying a
present that might not be appreciated and would need to be returned.
Although the question focuses on the need to decrease product return behaviors, some students
may suggest that a more reasonable strategy, in some circumstances, would be to facilitate return
behaviors. This could involve streamlining the return process by setting up special counters for
returns and training personnel to make it a pleasant, non-threatening experience.
Competitive issues will be an important part of the discussion. A store will want to pay attention to what
competitive department stores are doing. An especially effective return strategy might give a store an
advantage over its competition.
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NOTES TO DISCUSSION QUESTIONS FOR MARKETING STRATEGY IN ACTION—
Peapod Online Grocery - 2003
Overview. This case discusses the tumultuous online grocery business in the U.S. The case is designed to
give students the opportunity to evaluate the behaviors involved in online shopping versus shopping in a
conventional manner. However, in order to actually shop on-line, students would have to be members so
other tasks are listed to give them an idea of what Peapod is all about and what shopping online from this
service would be like.
Suggestions for Discussion Questions.
1.
What behaviors are involved in online grocery shopping? How does online grocery shopping
compare with traditional shopping in terms of behavioral effort?
As noted, in order to actually shop through the Peapod service, students would have to be
members. However, reviewing the peapod site should make it clear that shopping involves merely
pointing and clicking on various icons. After logging on and reaching the Peapod site, shoppers
have to click on the Peapod logo. A review of Exhibit 1 taken from the Peapod web-page attached
shows the features of the peapod system. If desired, instructors can ask students to get specific
information from the site. The examples in the About Peapod section of the website offer the
prices of some cereal brands and nutritional information. The instructor could ask students to find
the price of General Mills Cheerios, 20 ounce box and how many calories are in an average
serving. This information was available in January 2003; the price was $5.29 and the calories
listed were 150.
Compared to a conventional grocery shopping trip, the behaviors involved are less effortful and
perhaps quicker. The sequence of behaviors for shopping at Peapod is not much different than a
traditional grocery shopping trip, although they are performed in-home and without actually
contacting the products directly. Shopping either way may or may not involve starting with a
shopping list. Basically, once a consumer is a member of Peapod, shopping involves store contact,
product contact, funds access, and transaction, all done with points and clicks rather than actual
physical shopping behaviors. The consumer then has to be home to receive the merchandise.
Consumption, disposition, and communication may be no different although shoppers may
communicate more about this service since it is novel.
2.
What types of consumers are likely to value on-line grocery shopping from Peapod?
As stated in the case, dual income households are a prime market because their time-compressed
lives make the service more valuable to them. Also, disabled and elderly people who have trouble
shopping in stores could value this service because it saves them behavioral effort. Of course,
members likely have relatively high incomes to cover the additional costs for the service.
It should also be noted that in order to use the service, consumers have to have access to a
computer and have sufficient computer knowledge to use the service efficiently. Students could be
asked whether consumers who are likely to benefit from this service are also likely to be computer
users. Finally, consumers have to live in the trading areas for which this service is available.
3.
Overall, what do you think about the idea of on-line grocery shopping? How does it compare with
simply eating in restaurants and avoiding grocery shopping and cooking altogether?
Students likely have a variety of opinions about on-line grocery shopping and most probably think
it is a good idea. Although not stated in the case, studies have shown that many consumers find
grocery shopping in stores to be a hassle that they want to avoid. This may be one reason why
many households frequently eat at restaurants rather than cooking at home. Students could be
asked about the relative advantages of online grocery shopping and cooking at home versus simply
eating in restaurants or getting take-out prepared meals. With the additional costs on on-line
grocery shopping and the behavioral time and effort to prepare meals, restaurant meal prices likely
become more attractive for many consumers.
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