AN INVESTIGATION OF SHOPPING CENTRES AS SITUATIONAL INFLUENCES ON CONSUMER BEHAVIOUR IN THE GREATER DURBAN AREA By: SULEMAN HOOSEN DOCRAT 2QG^C?? l^^ Submitted in accordance with the requirements for The degree of Master of Commerce /Uj)^oVCX~ • In the Department of Management Sciences In the FACULTY OF COMMERCE At the UNIVERSITY OF KWA- ZULU NATAL SUPERVISOR: PROF. K. POOVALINGAM 2007 i DECLARATION I, Suleman Hoosen Docrat, Registration Number 200302463, hereby declare that this dissertation is my own original work, that all assistance and sources of information have been acknowledged, and that it has not been submitted in part or full for any other degree to any other University. S. H. DOCRAT ii Acknowledgements Firstly, I would like to thank Almighty God for giving me the strength and will power to complete my studies. This study has been an interesting and a learning curve in my life, hours of hard work and dedication to achieve this success. I would like to extend my thanks and gratitude to my supervisor, Prof. Kasthuri Poovalingam for her encouragement, continuous valued guidance and time spent reviewing the manuscript on the research topic. Sincere thanks also go to the following: • Dr. H. L. Garbharran for proofreading and editing the dissertation; • Colleagues at the Durban University of Technology; • The research assistants who personally administered the questionnaires and the respondents who participated in the survey; • Management staffs of the various shopping centres for permission to conduct interviews; and • Individuals whose names are not mentioned but assisted with the studies. Last, but not least, very special thanks to my loving and supportive wife Fatima, my daughter Farzana. and my son Muhammed for their moral support, help, inspiration and motivation during this study. m ABSTRACT The purpose of this study was to investigate the factors that influence the consumers' decision-making process in the selection of shopping centres. The South African society is undergoing a rapid transformation in its consumption patterns. The development and expansion of shopping centres means that consumers, in most cases, have an increasing choice of shopping destinations that meet their needs for goods, services and entertainment. The development and rapid expansion of planned shopping centres, often called Shopping Malls, has been one of the greatest retail revolutions in South Africa in the last twenty years. The competitive retail environment poses serious threats and opportunities for growth and profitability of shopping centres. The empirical research, which was conducted amongst shoppers at the various centres in the greater Durban area, confirms the significance of the various situational influences, which are the physical surroundings, the social surroundings, time, task definition and antecedent states as they impact on the shopping centres. The findings of this study reveal that stakeholders of shopping centres should go beyond the tactical aspects of shopping centre operations and adopt a strategic approach to business, in which customers' needs and competitors' actions are monitored in their quest to obtain preference vis a vis their competitors. The need to create and maintain a sustainable competitive advantage over other centres is at the heart of ensuring the continued viability of individual shopping centres. Against the urgent need to adopt a strategic approach to shopping centre development and management, recommendations are provided for developers and managers to acknowledge the impact of the dynamic aspect of the factors that influence the consumers' decision-making process and their implications for shopping centre development and promotion. This study is aimed at providing valuable information to a variety of stakeholders such as the tenants, property developers, investors, shopping centre managers, retailers and consumers at shopping centres as well as academics interested in consumer behaviour and the impact of shopping centres in South Africa. CONTENTS PAGE Chapter One: Overview of the Study 1.1 Introduction 1 1.2 Motivation for the study 2 1.3 Problem Statement 3 1.4 Sub Problem 3 1.5 Research Objectives 3 1.6 Key Questions of this research 4 1.7 Research Methodology 4 1.8 Limitations of the Study 5 1.9 Summary and division of chapters 6 Chapter Two: The Shopping Centre Industry and its Dynamics 2.1 Introduction 7 2.2 Definition of Shopping Centres 8 2.3 Development of Shopping Centre in South Africa 9 2.4 Situational Influences and the Marketing Mix on Shopping Centre 14 2.5 Shopping Centre Destination 15 2.6 Types of Shopping Centres 16 2.6.1 Super Regional Shopping Centres 18 2.6.2 Regional Shopping Centres 19 2.6.3 Community Shopping Centres 21 2.6.4 Neighbourhood Shopping Centre 21 2.6.5 Speciality Shopping Centres 22 2.6.6 Convenience (Strip) Shopping Centres 22 2.6.7 Outlet of Off- Price Shopping Centres 22 2.6.8 Power Centres 22 2.7 The Shopping Centre Marketing Mix 23 2.7.1 Introduction 22 2.7.2 Marketing Mix 22 2.7.2.1 Product/Services 25 2.7.2.2 Place 27 2.7.2.3 Promotion 31 2.7.2.4 Price 34 2.7.2.5 People 37 2.7.2.6 Physical Evidence 38 2.7.2.7 Processes 39 2.8 Conclusion 41 Chapter Three: Shopping Centres as Situational Influences on Consumer Behaviour 3.1 Introduction 42 3.2 Consumer Behaviour 42 3.3 The New Consumer 43 3.4 Consumer Behaviour Research 43 3.5 Market Segmentation, Targeting and Positioning with regard to Shopping Centre 46 3.6 A Framework for Consumer Analysis 51 3.7 The Nature of Consumer Behaviour 54 3.8 Consumer Decision- Making Process 57 3.9 High- involvement and Low- involvement decision- making 62 3.10 Situational Influences 64 3.10.1 Types of Situations 67 3.10.2 Situational Influences on Consumer Behaviour 70 3.10.3 Situational Classification and Characteristics 71 3.10.4 Situational Influences on Consumer Behaviour in the Shopping Centre Industry 74 3.11 A model of The Decision Making Process of Shopping Centre Selection 77 3.12 Retailing within Shopping Centres 83 3.12.1 Introduction 83 vii 3.12.2 Definition of Retailing 3.12.3 General Description of Retailing 3.12.4 The Dynamic Nature of Retailing in South Africa 3.12.5 Retailing with Special Reference to Shopping Centres 3.12.6 The Retailing Concept 3.13 The Dynamic Nature of Retailing 3.13.1 The Wheel of Retailing 3.13.2 The Dialectic Process 3.13.3 The Retail Life Cycle 3.13.4 the Retail Accordion 3.14 Classification of South African Retailing 3.14.1 Store Retailing 3.14.2 Types of Ownership of Retail Stores or Stores 3.14.3 Types of Merchandise or Product Assortment sold 3.14.4 Location of the Store 3.14.5 Size of the Market Area 3.14.6 Types of Services Rendered 3.14.7 Non-store retailing 3.15 Retail Market Strategy 3.15.1 Introduction 3.15.2 Definition of Retail Market Strategy 3.15.3 Target Market and Retail Formats 3.15.4 Building a sustainable competitive advantage 3.16 Conclusion Chapter Four: Research Methodology 4.1 Introduction 4.2 Development of the Appropriate Research Design 4.3 The study area and population 4.4 Sampling Method 4.5 Sampling Size 109 4.6 Sampling Units 110 4.7 Sampling elements: Shopping centre shoppers 110 4.8 Sampling Selection and Procedure 110 4.9 Data Collection 111 4.10 Data Analysis 116 4.11 Conclusion 121 Chapter Five: Analysis of Data 5.1 Introduction 123 5.2 Coronach Alpha Test 124 5.3 Comparative Descriptive Statistics- Shopping Centres 124 5. 4 Shopping Centre Factors 130 5.5 Family visits to shopping centre 142 5.6 Demographic Profile of Respondents 143 5.7 Central Tendency Statistics 145 5.8 Correlation 146 5.8.1 Definition of correlations 146 5.8.2 Any correlation can reveal the following conclusions or results 146 5.8.3 Interpretation of Questions 10.1- 10.12 146 5.8.4 Interpretation of Questions 10.13- 10.23 147 5.8.5 Interpretation of Question 14 150 5.9 T-test 158 5.9.1 T- test on Gender and Question 10.1- 10.8 158 5.9.2 T- test on Gender and Questions 10.9- 10.16 160 5.9.3 T- test on Gender and Question 10.17- 10.23 162 5.9.4 T- test on Gender and Question Three 164 5.9.5 T- test on Gender and Questions 14.1- 14.6 165 5.9.6 T- test on Gender and Questions 14.7-14.11 166 5.10 Chi-Square Test 167 iv 5.11 Conclusion 167 Chapter Six: Summary, Recommendations and Conclusions 6.1 Introduction 169 6.2 Summary of the Theoretical Underpinnings of the Study 169 6.3 Discussion on Critical Questions and Key Findings based on the study 171 6.4 Recommendations 175 6.5 Conclusions 176 Bibliography 177 Annexure-A 189 Annexure-B 195 Annexure- C 196 List of Figures Figure 2.1. Shopping Centre Industry Marketing Channels 28 Figure 2.2. The World's Largest Shopping Malls 34 Figure 3.1. The Wheel of Consumer Analysis 51 Figure 3.2. Consumer Behaviour Model 54 Figure 3.3. Depicts the consumer decision-making process, as well 58 as the four main forces that influence consumers as they go through the process. Figure 3.4. Decision-Making Process 60 Figure 3.5. Distinction between high and low- involvement decision-making 62 Figure 3.6. The Situation Interacts with the Marketing Activity and the Individual to Determine Behaviour 66 Figure 3.7. An Overview of the Buying Process 75 Figure 3.8.