PONDICHERRY UNIVERSITY (A Central University) DIRECTORATE OF DISTANCE EDUCATION Retail Shoppers' Behaviour Paper Code : MBRM 4001 MBA - RETAIL MANAGEMENT IV - Semester Author Prof.K.Venugopal Rao, MBA Department, S.K.University, Anantapur. All Rights Reserved For Private Circulation Only ISBN 978-93-81932-19-3 TABLE OF CONTENTS UNIT LESSON TITLE PAGE NO. 1.1 Retailing Shoppers 3 1.2 Retail Shopper Behaviour 13 I 1.3 Concepts and Techniques for Understanding 27 Retail Shopper Behaviour 1.4 Customer Buying Behaviour Process 37 2.1 Model of Retail Consumer Behaviour 53 2.2 Personal influence on the Shopper 64 II 2.3 Social and Cultural influence on the Customer 72 2.4 Understanding Customer Needs and Motives 79 3.1 Relevant Theories of Personality 101 3.2 Perception 124 III 3.3 Motivation 132 3.4 Customer Buying Roles 146 4.1 Stages in Retail Buying Decision Process 153 4.2 Information Search and Alternative Evaluation 160 IV 4.3 Brand Choice and Post Purchase Dissonance 169 4.4 Brand Loyalty 178 5.1 Market Research 199 5.2 Retail Market Consumer 213 V 5.3 Research Before Setting up a Retail Store 220 5.4 Research After Setting up a Retail Store 239 MBA (Retail Mgmt) - IV Semester Paper Code: MBRM 4001 Paper - XIV Retail Shoppers' Behaviour Objectives ➢ To understand shoppers Behaviour ➢ To familiarize with Models & Theories of Consumer Behaviour, and ➢ To acquainted with Marketing Research Procedure. Unit - I Shopper Behaviour: Introduction, Concepts & Techniques for Understanding the retail dynamics of customer buying behaviour process. Unit - II Model of retail consumer behaviour, personal, social and cultural influences on the customer and understanding customer needs and motives. Unit - III Relevant theories of personality, perception and motivation, customer buying roles. Unit - IV Stages in retail buying decision process such as information search, alternative evaluation, brand choice, post purchase dissonance, brand loyalty and motivation. Unit - V Market research – A tool for understanding retails markets consumers, research prior to setting up a retail store & research after setting up a Retail Store. 1 References 1. Bajaj, Tuli & Srivastava, RETAIL MANAGEMENT, Oxford University Press, New Delhi 2. Dunne, RETAIL MANAGEMENT, Cengage Learning Pvt. Ltd, New Delhi 3. P.Robins, Organizational Behaviour – 11th Edition 4. Swapna Pradhan, Retailing Management, Tata Mc Graw Hill. 2 UNIT - I Unit Structure Lesson 1.1 - Retailing Shoppers Lesson 1.2 - Retail Shopper Behaviour Lesson 1.3 - Concepts and Techniques for Understanding Retail Shopper Behaviour Lesson 1.4 - Customer Buying Behaviour Process Lesson 1.1 - Retailing Shoppers Learning Objectives ➢ Distinguish between consumer and buyer. ➢ Know the retailing shopper characteristics. ➢ Examine the factors influencing for growth of retail industry in India. ➢ Know the factors influencing the Retail shopper. ➢ Identify the driving forces for the growth of the retail sector. Introduction One of the most important constants among all of us, despite our differences, is that above all we are consumers. We consume or use products/services on regular basis. As consumers, we play vital role in the health of the economy-local, national or international. Today, the era of digital revolution, which has introduced several drastic changes in to business environment. This digital revolution of the market place and its impact on consumer behavior present many challenges for today’s market place. This focuses on how individuals make decision to spend their available resources, time, money and efforts on consumption re- lated items. 3 Consumer behavior signifies the totality of consumers’ decisions with respect to the acquisition, consumption and disposition of goods, services, time and ideas by human decision making units. Clearly, consumer behavior frequently involves decisions within retailing contexts or with retail phenomena serving as boundary or framing conditions. Nevertheless, to say the importance of understanding consumer behavior has been more important to retailers than ever. In particular, effective retail strategy satisfies consumer needs better than competitors’ strategies and understanding consumer needs and buying behavior is critical, for effective retail decision-making as well as the subsequent development and implementation of retail strategy. To woo the consumers, the retail industry must understand the behavior of the consumers. But understanding consumer behavior is complex, as it is related to psychology of consumers and also depends on various factors which have a direct bearing on consumer behavior. Consumer and Buyer “A consumer is an individual who buys products or services for personal use and not for resale. A consumer is someone who can make the decision whether or not to purchase an item at the store, and someone who can be influenced by marketing and advertisements. Any time someone goes to a store and purchases a toy, shirt, beverage, or anything else, they are making that decision as a consumer”. “A consumer is a person who uses a product or service, and is often called an “end user” because he is the last stop and does not usually transfer or sell the item to another party. A buyer can be a consumer, as in the example of a teenager buying and using a video game. At the same time, a consumer is not necessarily the buyer - for instance, if a mother purchases cereal for herself and her family, each family member is a consumer of the product”. Consumer Consumer is a broad label for any individuals or households that use goods generated within the economy. The concept of a consumer occurs in different contexts, so that the usage and significance of the term may vary. The “consumer” is the one who consumes the goods and services produced. As such, consumers play a vital role in the economic system of a nation because in the absence of the effective demand that emanates from them, the economy virtually collapses. 4 Buyer Any person who buys a product/service, may not be necessarily user or consumer. On the other hand, “a buyer is a customer—he is an individual or business that makes a purchase from a seller. Regardless of the scenario, the buyer is the party that gives or transfers money to the seller to secure a product. A teenager getting a video game from a store at the mall is a buyer as is a distribution company that purchases raw materials from a manufacturer on credit”. Consumer and Customer In common usage, we do not differentiate them. The customer is someone who regularly purchases from a particular store or a product of a particular company. Consumer A consumer is anyone who typically engages in any one or all of the activities in evaluating, acquiring, using or disposing of goods and services. This is a broad term for individuals that use products and services that are generated in the economy. They are the ones who consume the products or services they have bought or were bought for them. They use these products based on what they have heard or seen and apply all the information where deciding whether they need the product or not. Customer Came from the term, “custom,” meaning habit or tradition. These are people or organizations who frequently visit your store, they purchase from you preferably. The owner or store keeper also makes sure that his/her customers are satisfied. In this way, owner and customer maintain their relationship, which means expected buys in the future. Today, this relationship is popularly called as Customers Relationship Management. With this term, another slogan for customers was revealed “the customer is always right.” Difference between Consumer and Customer Consumers either buy or don’t buy the products that they necessarily use while customers are people who buy some goods and services but may not use the merchandise themselves. Consumers have goals and purpose while buying items while customers buy these products and may not use them personally, they either buy them to resell or buy for 5 those who want them. Consumers pertain mostly to an individual or family while customers can be an individual, organization or another seller. Consumers play a role in the demand of products in the economy while customers can simply decide if this will go or not. Retail Shopper Characteristics Since in dependence, Retail in India has evolved to support the unique needs of this country with many sizes and complexity. Organized retailing is not in existence in India till the 1990s, but the roots are traced in 1800s with the entry of the ‘Spencer’s’ departmental store in South India in 1897. Today it has different sub divisions and hypermarkets and large retail stores. India’s retail sector, contributing in country’s GDP for about 9-10%, and 8% of the total employment but still it is noticed that it remains one of the least developed sectors in India. The estimated annual retail sales accounts for about $ 6 billion and is expected to reach $ 17 billion dollar mark by the year 2010, according to a study done by the Associated Chambers of Commerce & Industry (ASSOCHAM). According to the report, “Retail in India: Getting Organized to Drive Growth,” by global consultant A.T. Kearney ranked India as 5th in Global Retail Development Index and 3rd in Confidence Index in retail business. And the CII, India’s retail industry is growing with a 5% compounded annual growth rate (CAGR) and has $ 320 billion in annual revenue. It is noticed that, Wal-Mart’s $ 315.6 billion in global sales last year is about the same size of the whole Indian retail industry. Organized retail in India stands at around 3% out of the total retail market. It is showing signs of bigger and better growth of around 30% CAGR. The Indian consumer is turning into a convenience shopper and so retail formats are being driven to all-in-one format, which includes shopping, eateries and even entertainment like movies.