Understanding the Retail Consumer:

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

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. Understanding how information was sought by the customer. The process of evaluation of various products and store. The payment process. The post purchase behavior.

2.

3. 4. 5.

 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 signages , 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

Factors influencing customers decision making

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

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

Need recogniz ed

Search for Informati on

Store visits

Evaluation of options

Purchase decision

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. whether to buy or not.

Stage 4 The Purchase Decision: at this stage is made about first ,

Need recognition
Environmental Influences - Culture - Social class - Personal influence - Family - Situation Individual differences - Consumer resources - Motivation - Knowledge - Attitudes - Personality, values and lifestyle

M E M O R Y

Need recognition

Consumer decision process model

Need recognition Internal search Exposure Stimuli Attention Search Environmental influences

Comprehension Acceptance Retention

M E M O R Y

Individual differences

Consumer decision process model

Need recognition Internal search Exposure Stimuli Attention Search Pre-purchase evaluation of alternatives Purchase Consumption Post-consumption evaluation Satisfaction Environmental influences

Comprehension Acceptance Retention

M E M O R Y

Individual differences

External search

Dissatisfaction

Search for information

Internal search: retrieving knowledge from memory or genetic tendencies External search: collecting information from peers, family, and the marketplace

Search may be passive as consumers become more receptive to information around them, or active if they engage in search behaviour Search refers to a receptivity of information that solves problems or needs rather than a search for specific products

Search: Sources of information

Marketer dominated - Advertising
- Salespeople - Infomercials - Websites - Point-of-sales materials

Non-marketer dominated stimuli

- Friends

- Family
- Opinion leaders - Media

Variables shaping the decision process

Individual differences:
Demographics, psychographics, values, and personality Consumer resources Motivation Knowledge Attitudes

Environmental differences:
Culture Social class Family Personal influence Situation behaviours

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. 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

3.

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. The troubled homebody is housewife who is not sure that she is doing the right thing by sitting at home. The tight-fisted traditionalist is traditional women who believes in saving for tomorrow

3.

4.

5.

The affluent sophisticate is an affluent women who is comfortable with the finer things in life The contemporary housewife is a housewife who plays active role in the household and sees herself as equal to her husband. The Gracious hedonist is a working women who believes in looking after herself well

6.

7.

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

2.

3.

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. 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.

5.

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 shopping experience

Beliefs and attitudes

Recognize desire to shop

Evaluate options & select store5

Store visit(s)

Decision

Outcome

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.