Retail management-3-retail consumer

RETAIL MANAGEMENT-3
Prepared by :
Dr. Pooja Sharma

Presented by :
Education & Information Network
http://www.InfoFanz.com
Info@InfoFanz.com

Presented by : www.InfoFanz.com1Prepared by Dr. Pooja S

UNIT 3

Understanding the Retail Consumer:

Factors influencing the Retail Shoppers,
The Customer Decision Making Process.

Presented by : www.InfoFanz.com Prepared by Dr. Pooja Sharma 2

Introduction

 Peter Drucker quoted “Business Exists to satisfy
Customers”.

 The existence o the customer is integral to the existence of
the Retailer.

 The Integral Part of understanding customers is identifying
the customer for the product or service, i.e. The target
segment, and the demographics of this segment, their need
and buying behavior


 Consumer understanding or an understanding of the
consumer buying behavior is the starting point of strategy
creation.

 It is not important to understand consumers know about a
product, but also what they do not know.

 Shopping is an activity that everybody perform with high level
of regularity ad involvement.

 It has been found that shoppers behave differently depending
on the type of shopping situation. They tend to change their
information search process depending on the type of store
and product


Need for studying consumer behavior

 The accurate understanding of consumer helps the retailer
create a product that is likely to be successful in the market.

 Retailers need to know the various influences that lead up to a
purchase and they consider the external and internal
influences.

 Some important and external and internal influences are as:


1. Understanding how the need for a product/service was
determined.

2. Understanding how information was sought by the
customer.

3. The process of evaluation of various products and store.

4. The payment process.

5. The post purchase behavior.


 The retailer also needs to understand its competitors and how
the customers perceive them.

 The retailer need to understand why customer choose the
competition over its products. This analysis may reveal some
startling facts and provide a direction for future
differentiation.

 as quoted “some various aspects like signage’s , shelf position,
display space and fixtures, all influences the shopper in his
buying decision


Factors Influencing the retail Shoppers

 Shopping is the act of identifying the store and purchasing the
product.

 Shopping is a function of the nature of the product, the
degree of perceived risk inherent in the product class, and the
level of knowledge or amount of information about
alternatives.

 In India retailers and retail formats are still evolving. Local
bania and other option available in the ,market.

 Therefore understanding the reasons behind consumers
choosing or selected a store is important for retailer

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Range of merchandise


1. Range of Merchandise:

 The range of merchandise is one of the Most important
reason for customers to patronize a particular outlet.
 Initial curiosity about the store draw a consumer to retail
store
 But convert the customer into buyer and retain them over a
period of time is dependent on the quality and the range of
merchandise offered by the store.
 Range of merchandise includes categories like Books &
Music, apparel and other lifestyles products

Presented by : www.InfoFanz.com10
Prepared by Dr. Pooja S

2. Convenience of shopping at a particular outlet.
 This element is fast gaining prominence in the world of
organized retail.
 Example patient prefer medicine shops , fresh juice and
fruits shops near clinic or hospitals.

3. Time of Travel:
 Time requires to reach a particular location is again become
critical.
 big cities where traveling takes too much time like Delhi,
Mumbai because of this we can see many local areas
developing in terms of shopping to facilitate buying


4. Socio economic background and culture:
 Background of the consume largely determines his /her
lifestyles. And this influences the kind of store that he may be
comfortable shopping in.
 Consumer buying behavior varies largely market to market
influence by culture and environment.

5. The stage of the family life cycles.
 The stage of the family life cycle the customer belongs to also
influences their needs.

 Example Need for young bachelors differ from the
requirements of the old age or senior citizen.


The customer Decision Making Process

 At this stage Retailers need to understand the manner in
which a customer makes a decision. And this requires an
understanding of consumer behavior.

 The need for product or a service starts at the time when the
need for that particular product or services recognized.

 A need can be Psychological or Functional.

 The process that a customer goes through while making
purchase decision is as follows


The customer Decision Making process

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Need
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Store Evaluation Purchase
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Stage 1 Identification of a need for the Product or service. this
arises when the consumer becomes aware of his need for a
particular product or services.

Stage 2 Search For Information: the second steps where
consumer seeks information from the various sources
available.

Stage 3 Evaluating Alternatives: these evaluating criteria are used
by consumers use to consider different options. This would
vary from person to person and may be influenced by the
situation.

Stage 4 The Purchase Decision: at this stage is made about first ,
whether to buy or not.


Some other factors influencing consumer behavior,

Personality
Lifestyles
Culture
Social Class
Family and Household influences.


Shoppers Behavior

 Observations of shoppers behavior in the store show that
every purchase involves part or the whole of a process that
follows a consistent patterns of See- Touch- Sense- Select.

 Different shopping behavior have been classified into three
categories

1. Blinkered Mode: in this Mode, shopping is very automatic.
It is characterized by shoppers confidently and efficiently
zooming in on familiar brands with no time or interested in
logical label reading or studying product attributes


2. Magpie Mode: In the magpie mode, the shoppers allows
himself/herself to be distracted and attracted by different
brands on display.

3. Browser Mode: The ‘browser’ mode finds the shopper
behaving more rationally , reading the back of pack copy and
invariably comparing prices, ingredients and seeking more
information about product attributes, making price value
comparisons across various brands


Psychographic profile of Indian Shoppers

 Segments of Men: profile of Indian men has shown four
broad groups.
1. The traditional Men is conservative, driven by values, cherishes
by family and avoids ostentation.
2. The Pleasure seeker is a self oriented person driven by status
and status symbols. He is risk taker and pleasure seeker.
3. The social chameleon is a hypocrite of sorts who wants to
project the right image. Tech savvy and individualistic.
4. The intrinsic progressive man is futuristic person. He believes in
family values and equality of sexes.


 Segments of Women: Indian women in following
manner.
1. The contented conservative is a housewife who is happy with her
state of her life /society.

2. The anxious rebel is a working women who is happy with the
existing state of affairs.

3. The troubled homebody is housewife who is not sure that she is
doing the right thing by sitting at home.

4. The tight-fisted traditionalist is traditional women who believes
in saving for tomorrow

5. The affluent sophisticate is an affluent women who is
comfortable with the finer things in life

6. The contemporary housewife is a housewife who plays active role
in the household and sees herself as equal to her husband.

7. The Gracious hedonist is a working women who believes in
looking after herself well


 Youth segments:

1. Homebodies: they are largely traditional , have low individuality
and very few aspirations for self and keep duty and morality
at the core of their value .

2. Two faced youths : they are inwardly traditional and outwardly
modern.

3. Wannabes: this is large cluster. They are materialistic show
offs they are extremely competitive. they are desperately to
be a part a crowd , and trend followers, aggressive seek out
lifestyles.


4. Rebels: this is the largest cluster. They may be first generation
educated professionals , experiencing winds of change in the
form of education as the means to a career, wealth ,change in
lifestyles and independence.

5. Cool guys: they are the influences . Others want to be like
them. They fall in the “work hard play harder”. They are
confident and have a strong sense of individuality.


The changing Indian consumer

 The media explosion.

 Increase in disposable income.

 The rise of the great Indian middle class

 Increase in the number of earning young people

 Change in expenditure patterns

 Increase in the number of working women

How consumers Develop Loyalty Towards a Store

 The experience during and after the purchase leads to satisfaction
or dissatisfaction with that particular store.

 The consumer incorporates the experience that he/she had while
shopping and his/her post purchase satisfaction or
dissatisfaction.

 The consumer also influences by the opinions and the experience
that friends and family have had with the store.

 Retailers need to understand this process and tap into the buying
process, so that they can develop loyalty over a period of time.

How consumers Develop Loyalty Towards a Store

Previous
Beliefs and
shopping
attitudes
experience

Recognize desire Evaluate options & Store
Store Decision Outcome
to shop select store5 visit(s)
visit(s)

Information on product, store,
location from different sources


Research prior to setting up a retail store

 Demographic Data.

 Population

 GDP

 Customer Data.


Research after setting up a retail store

 Merchandise and service offered.

 New product development.

 Acceptability of products.

 Acceptability of pricing.

 Understanding consumer profiles.


Conclusion

 Retail Strategy is largely information based . The gathering
and analysis of data relevant to the retailer is done by market
research .
 From the retailer ’s perspective, market research needs to be
done prior to the setting up of a retail store and after setting
up the retail store. The information needed at both the stages
varies significantly.
 In the world of increasing competition, research can aid the
retailer in satisfying the customer and hereby building loyalty


Retail management-3-retail consumer

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