Consumer Behavior: Point Of Purchase

Point of Purchase as the name suggests is the time at which the purchase decision is to be made. It is one of the most important marketing opportunity manufacturers and retailers have available to influence buying behavior. Our study will aim to delve into customer behavior at POP – what they shop, what they look for while shopping, what attracts their eye, what pulls them, what pushes them etc. It is easy to obtain a true understanding of the customer/consumer at the POP. POP advertising is a relatively new field which has gained significant attention. We want to compare and contrast efficacy of POP advertising with respect to price cuts in our study. For this we need to know how customers feel about brands, packaging, products or promotion initiatives.

To this purpose we have gone through some studies, a literature review of which is presented below.

Principle Study

Sales Effects of In-Store Advertising

Arch G. Woodside and Gerald L. Waddle

The authors have propounded 3 hypotheses which they propose to study with primary research data.

Hypothesis1. Point of Purchase advertising is more effective than a price reduction to push sales.

Hypothesis2. Irrespective of presence or absence of POP advertising, a product with price reduction will sell more than a product without any reduction.

Hypothesis3. Customers will buy a product at non-reduced price with POP advertising than without the POP advertising.

The study was conducted in a period of 4 weeks in 4 super marts

A price reduction of approximately 20% was chosen for this experiment.

We propose to incorporate these hypotheses as our primary ones.

Auxiliary Studies

Point-of-sales promotions and buying stimulation in retail stores

Rajagopal

This study deals with repurchase behavior and how POP advertising can influence it. Modern Retail – Large Stores and Super-Marts are potential outlets where customers see promotion innovations, which mobilise their buying decisions. Along with promotional offers, price reductions, samples, bonus packs and store displays are components of product trial.

The favourable outcome of a trial leads to repurchase behavior. Repeat-buying behaviour of customers can be thought to be determined by the values acquired on the product – awareness, attributes, trial, availability and repeat, which the author calls AATAR factors. The AATAR factors influence the customers towards making re-purchase decisions.

Among growing competition in retailing consumer products, innovative point-of-sales promotions offered by super markets are aimed at boosting sales and improving the brand of the store. The 2 main findings from the study are –

• Acceleration in Purchase and Product trial are found to be the two most influential variables of retail point-of-sales promotions. Compulsive buying and promotional approaches – coupons, price discounts, samples and buy-one-get-one-free are significantly related.
• Time of the year and sales offers (discounts) influence leisure shopping mainly. This includes variables like work hours, public holidays, paid leaves POP promotions and customer interactions. These several factors induce compulsive buying characteristics in customers.

Does In-Store Marketing Work? Effects of the Number and Position of Shelf Facings on Brand Attention and Evaluation at POP

Pierre Chandon, J.Wesley Hutchinson, Eric T. Bradlow, & Scott H.Young

This research was conducted regarding shelf store management with the following objectives –

1. Does Brand get recognised in In-Store Marketing?
2. Does In-Store Marketing influence brand consideration and choice apart from the contribution of out-of-store factors?
3. How much can POP affect Brand Evaluation?

The methodology followed was manipulation of the number of shelf facings and the orientation of facing (vertical/horizontal) of 12 brands of bar soap and analgesics. Total shelf space was constant. Consumers’ past usage, shopping traits, and demographics were measured and compared.

Point of Purchase – 2 seconds to Retail Impact

Tracy Sherwood

This article talks of POP displays and their effectiveness through innovation. POP displays are according to Tracy, “vibrant communicators of a brand’s story and values to consumers”. Further it provides a clear point of difference to the other shelf products.

According to the Point-of-Purchase Advertising Institute, 67% of purchase decisions are made in store, thus making it essential that retailers provide customers with as much product info as possible on the rack. Hence product information becomes paramount in POP displays.

Her estimate of a 2 second impact window is driving home the point that innovation will catch the eye and not lengthy textual expositions extolling the virtues of the brand. The paper also looks at holiday seasons are a battle of sales margins.

“It’s hard to agree that such early positioning will have any lasting effects when the majority of the general public starts to shop two weeks before the holiday,” said Mr. Bob Duerr of Blue Water Communications, Inc., marketing and advertising agency in New Jersey. Thus, the latest efforts in POP marketing attempt to dually engage and educate customers as they enter the retail environ to encourage repurchases.

Store Environment and Consumer Purchase Behaviour: Mediating Role of Consumer Emotions

Elaine Sherman, Anil Mathur and Ruth Belk Smith

This article has a cross-sectional field study of the effect of store environs on consumer emotions and as a result, their influence on aspects of consumer behavior. It is in a stimulus-organism-response framework and the results suggest that a consumer’s emotions can be a telling factor in the purchasing process.

This study identifies and explores how store environment and emotional states may influence various dimensions of purchase behavior. Research confirms that although cognitive factors may largely account for choice of store and for most planned purchases within the store, the environment in the store and the emotions of customers are vital determinants that dictate purchase patterns.

This research has many practical and interesting applications, because pleasure was associated with the money spent and affinity for that particular store, while arousal was associated with money spent, time spent and the total number of items purchased in that store.

Mood States and Consumer Behaviour: A Critical Review

Meryl Paula Gardners

The author presents a conceptual framework about the nature and limitations of the direct and indirect effects of mood states on consumer behavior, brand evaluation, and brand recall.

The paper examines the possible implications of these findings for consumer behavior with respect to service encounters, POP stimuli, and communications. In each of these areas 2 questions are answered.

1. What inferences can be drawn for CB from our knowledge of the effects of mood states on consumer behavior, brand evaluation, and brand recall?
2. Can marketers take advantage of opportunities presented by the effects of mood on CB? (Or do logistics prohibit application of mood-focused marketing)

A Two State Model of Purchase Incidence and Brand Choice

Randolph E Bucklin and James M Lattin

The model states that there are two ways of shopping .Customers whose purchases are pre-planned and those who decide on the spot – planned and opportunistic. The model tests the impact of POP promotion on shoppers with the planned decision state. The hypotheses are

1. A shopper is more likely to be influenced by POP advertising if his decision state is opportunistic than planned.
2. POP is complementary to external promotional activity whereas it is inconsequential to planned buyers.

The product taken in the model is saltine crackers and it has a sample of 15023 shopping trips. Hypotheses hold out as validated by goodness of fit and significance of the coefficients.

Sales Response of Elderly Customers to POP advertising

Alan J Greco and Linda E Swayne

POP advertising can be a reliable source of pre-purchase information for an elderly consumer. In a previous study by Lumpkin and Festervand (1987 of elderly apparel shoppers, it was found that of 8 product information sources, POP information was rated 3rd most useful while media advertising was ranked 7th in importance. POP information was found to be moderately useful among all 3 sub-segments of elderly information seekers ranging from “non-searchers” to “moderates” to “evaluators.”

The authors propose that displays are more productive than media advertising expenditures as they offer narrow focus, precise target marketing, and easy evaluation of sales response. In their study, coffee was selected as the product. In the study 3021 observations were recorded. 32.1 % of the shoppers were judged to be elderly. Sample was skewed towards females (75 %) and Caucasian (94 %).

How to Win or Lose Sales at the Point of Purchase

Robert N. McMurry

Manufacturers of big ticket consumer durables like automobile and home appliances give a lot of importance to market research to get consumer insights. But even after that consumers refuse to buy their products, where all scientific findings are in favour of consumer buying. Often their role is limited to getting consumers to the retail store; they ignore the process of buying by the consumer inside the store and what happens with the consumer decisions at the POP.

Firms have to understand buying is a complex process. Costly items are not bought instantaneously. Consumers’ decisions are influenced by various personal, social and interpersonal variables.

The author studied the buying behavior of 250 housewives. The purpose of this survey was to answer questions like:

• What is the appeal to the housewife of a fifth burner, a built-in griddle, etc.?
• What motivates women to buy a particular type of kitchen range?

This study would be quite helpful in deciding the various consumer considerations at POP.

It Just Feels Good: Customers’ Affective Response to Touch and Its

Influence on Persuasion

Joann Peck & Jennifer Wiggins

This research paper investigates the role of touch in consumer influence in the absence of product information. The author finds that the consumers who are prone to touch are more susceptible to persuasion. The consumers who are not motivated by the touch phenomenon can be influenced by communication that incorporates touch given that there is a perceptible link between the touch and the communication.

The author tests various hypothesis based on the research data:

Hypothesis1: A message that incorporates a touch element will influence the people who are high in NFT (need for touch) and will not influence the low NFT people.

Hypothesis2: A message that contains touch element with positive feedback will persuade more for people who have high NFT compared to message with neutral or negative feedback.

In our study we have incorporated the NFT differences between males and females.

The complex behavioural characteristics that dictate buying patterns can be studied with the help of certain hypothesis and analysed with primary data. We hope that our study will be instrumental in deriving some conclusive inferences using SPSS.

• Hypothesis1. Point of Purchase advertising is more effective than a price reduction to push sales.
• Hypothesis2. Customers will buy a product at non-reduced price with POP advertising than without the POP advertising.
• Hypothesis3. Elderly people (>60 yrs) do not value media advertising as much as POP and this translates to sales at POP.
• Hypothesis4. POP influences often results in guilt of purchasing unreasonable items.
• Hypothesis5. A shopper is more likely to be influenced by POP promotion if his decision state is opportunistic rather than unplanned.
• Hypotheis6. Effects of Mood States on Consumer Behavior are complementary to POP promotion.
• Hypothesis7. Touch and Feel of Product is more important for females than males who shop.
• Hypothesis8. Touch of a product aids sales irrespective of product information gained from it.
• Hypothesis9. Shelf Placing as regards to height of vision is paramount in influencing consumer purchasing behavior.
• Hypothesis10. Innovative POP and ambient environment act as positive re-inforcers to consumer buying patterns.