MARKETING STRATEGIES FOR TARGETED MARKET SEGMENTS

BASED ON SHOPPING MALL IMAGES

Michael Adiwijaya
Lecturer Staff, Petra Christian University Surabaya
Email: michaels@peter.petra.ac.id
ABSTRACT
This research examined the market segmentation based on shopping mall image. The
shopping mall image is derived from the customer perception toward the performances of
shopping mall attributes such as merchandising, accessibility, service, atmosphere,
entertainment, food, and services. There are four results from the market segmentation
processes; they are market or customer segments, customer demographic profile,
customer shopping behavior description, customer perception and customer opinion
toward the shopping mall image. Three market segments are revealed in this research;
namely Demander, Rationale, and Satisfier in which each of market segment had
difference perception toward the shopping mall image but they had the same shopping
behavior except for the amount of money spent per visit variable. Through the analysis of
each market segments profile, then two segments, namely Rationale and Satisfier,
are identified as potential target market. Finally the marketing strategies based on
shopping mall image are developed for potential target market segments.
Keywords:
Shopping Mall Image Studies, Shopping Mall Attributes Performances, Market
Segmentation, Target Market, Marketing Strategies

1.1 BACKGROUNDS
Nowadays one of the global market main challenges for shopping mall industry is
the intense competition between the shopping mall both in the same region and also in
the different region as well. (Soriano, 2003). This competition becomes more intense
because the shopping malls not only compete with the other shopping malls but also with
the other shopping centers format such as strip centers. Beside that, the shopping malls
also have to compete with the indirect competitors both for the stores formats such as
department stores, specialty stores, category specialist etc and for the non store formats
such as online retailers, television home shopping, direct selling, etc as well. (Levy &
Wietz, 2007, p.192)
Another global market main challenge of shopping mall industry is the changing
of consumer market. Spurred by several demographic and life style trend, consumers
have become a heterogeneous market. One composed of numerous micro segments.
These trends include increasing ethnic diversity, an increasing proportion of elderly,
smaller households due to the lower birth rate, higher divorce rate, greater double
income, etc. (Dunne & Lusch, 1999, p.88).
In response to the intense competition and the changing consumer environment,
several industry practitioners and academic experts have expressed the benefits of
targeting specific consumer segments, positioning or repositioning the mall to attract
those segments and differentiating the shopping malls attributes (Alexander &
Muchlebach, 1992, p.75). Shopping malls management realized the efficiency and
effectiveness of targeting a few segment of the market. Before target markets can be

selected, the market must be segmented into meaningful group that can be realistically
with the communication and marketing mix (Kotler, 2004, p.9).
The understanding for the need and characteristic of each customer segment gives
the advantages for management of shopping mall in designing appropriate marketing
strategies in order to attract potential customer segments which result the increasing
visitor traffic and the increasing of tenants revenue within the shopping mall.

2.1 LITERATURE REVIEW

2.1.1 Shopping Mall Images
Nowadays the development of shopping mall is growing very fast especially in
the developed and developing countries that leads to tight competition within shopping
centers, but although there are so many shopping malls even in the same area, however
each of shopping mall has its own image in the customer perception. Shopping mall
attributes created distinctive shopping mall image as the result of the combination of
several attributes performance within the mall (Levy and Weitz, 2007, p.192).
2.1.1.1 Merchandising
Merchandising is an important image attribute because it represents the core
product of shopping center based on Berman and Evans study (as cited on Sit et al. 2003).
The roles of merchandising are also supported by Wakerfield and Baker (1998) that
highlighted the merchandising and tenant variety as stimuli that induce purchasing in a
shopping mall setting and thus influence the consumer image of the mall.

2.1.1.2 Accessibility
The definition of accessibility is the ease of getting in and out of a shopping
center (Levy and Weitz, 2007, p.594). Accessibility can be further divided into macro
accessibility and micro accessibility. Macro accessibility concerns access road condition
to the center and the proximity of the center from the customers work place or residence.
Meanwhile according to Sit et al. (2003), the micro accessibility refers to parking
facilities within the center and the ease of navigation within the shopping center. The
definition of accessibility is close related with the site selection process and layout
planning within the mall as one part of retail mix.
2.1.1.3 Service
Shopping center services are confined to behavior of retail employees such as
courtesy, knowledge, and friendliness. Thus these services can be classified as personal
service. By Lovelock et al (as cited in Sit et al, 2003). However, according to Berman &
Evans (as cited in Sit et al, 2003) besides personal service, shopping mall also provides
communal services in terms of ambulance such as escalators, lifts, and sign boards and
amenities such as restrooms. Sit et al. (2003) stated that both personal and communal
services are central to the shopping mall image because they represent the augmented
product that support the core product (merchandising) and also add value to the total
shopping experiences of the customers.
2.1.1.4 Atmospherics
Atmospherics refer to the design of an environment via visual communicators,
lighting, colors, music, and scent to stimulate customers perceptual and emotional
response and ultimately to affect their purchase behavior (Levy & Weitz, 2007, p.510).

According to Smith and Burns (as cited on Sit et al, 2003), the atmospherics are critical
because they act as environmental cues that consumers use to imply the quality of a
shopping center. Further, atmospherics have been reported to stimulate consumer
purchase at a shopping mall (Wakefield & Baker, 1998).
2.1.1.5 Entertainment
Entertainment is pivotal for shopping center because it induce an exciting or fun
shopping experience, which in turn can entice consumer patronage. Entertainment in the
shopping center can be categorized into special event entertainment and specialty
entertainment. The key distinction between these two types of entertainment is the length
of duration or span of operation. Special entertainment is offered on an occasional or
seasonal basis for a short period of time. Conversely, specialty entertainment is generally
incorporated into a shopping centers property for longer duration (Haynes & Talpade,
1996).
2.1.1.6 Food
Food is pivotal to shoppers because they: first, create an entertaining ambience
within a shopping centre conducive to a pleasant or exciting shopping experience. And
second, provide a needed break from hours of shopping and or as a conclusion to an
extended shopping excursion (Haynes & Talpade, 1996).
2.1.1.7 Security
Besides attracting consumers, shopping centers also appeal to the criminals. The
consumer behavior literature by Schiffman & Kanuk has revealed that many consumers
are risk averse and thus they may be reluctant to visit a shopping center that is perceived
to be dangerous (as cited in Sit et al. 2003). Despite its significance, Sit et al. (2003)

elucidate that limited studies have examined the contribution of security to shopping
center image. There are three security variables; they are quality of the center, safe place
to be, and the personal security.
2.1.2 Customer Perception
Perception is defined as the process by which an individual selects, organizes, and
interprets stimuli into a meaningful and coherent picture of the world (Schiffman and
Kanuk, 2004, p.158). Meanwhile customer perception according to Cutlipp (1999, p.120)
is the interpreted of scene of actions, included people, places, actions, and entire range of
phenomena, which is give perceptions of that scene to the customer and respond based on
the perception.
Two individuals may be exposed to the same stimuli under the same apparent
conditions, but how each person recognizes, selects, organizes, and interprets this stimuli
is highly individual process based on each persons own need, values, and expectation.
(Schiffman and Kanuk, 2004, p.158)
2.1.3 Market Segmentation and Targeting
Market segmentation can be defined as the process of dividing a market into
distinct subsets of consumers with common needs or characteristics and selecting one or
more segments to target with a distinct marketing mix (Schiffman and Kanuk, 2004,
p.50). Based on Kotler, there are two kind bases for market segmentation. They are
descriptive base and causal base (as cited in Lee Hew & Fairhurst, 2000). The descriptive
segmentation base uses demographic, socio-economic, geographic, personality, lifestyle,
product usage and brand loyalty as the characteristic of customer in the market.
Demographic and socioeconomic bases, which include age, gender, education, marital

status, and life cycle stage, have been utilized most frequently. There has been empirical
support for the validity of using the descriptive segmentation bases (Plummer, 1974).
The causal segmentation bases include self concept, attitude or preference or
perceptions, benefits and usage situation. These bases typically are preferred over
descriptive ones, by academicians and practitioners, because of their link to the actual
behavior of the consumer. There has been empirical support for the validity of using the
causal segmentation bases (Finn and Louviere, 1996).

2.2 CONCEPTUAL FRAMEWORK

This research is started with the main challenges that the shopping malls
management faced nowadays. Those main challenges replace the mass marketing strategy
into the segmented marketing strategy for shopping mall management. Moreover this
research did causal market segmentation based on shopping mall image. The next phase
is the market targeting process that was conducted by measuring each market segment
based on their perception toward the performances of shopping mall attributes and based
on their shopping behavior in order to identify and to select the potential market segment
to be served and treated specially.
After finding the potential market segments together with their perception
information and their shopping behavior; then the development of marketing strategy can
be established. The summary of the theoretical framework can be seen as flow chart on
figure 1.1

Figure 1.1 Conceptual Framework Chart

The Global Shopping Mall

Challenges

The movement from mass

marketing strategy to the
segmented marketing strategy
The Causal Market
Segmentation based on
Shopping Mall Image
Customer Shopping
Behavior

Market
Segments

Shopping Mall
Attributes

Target Market

Marketing
Strategies

3.1 ISSUES FOR INVESTIGATION

3.1.1 Purpose of Research
1. To make the customer segmentation based on the customers perception toward the
performances of shopping mall attributes or based on shopping mall image.
2. To collect information regarding the demographic profile of customer, the customer
shopping behavior, customer perception towards shopping mall image and the
customers opinion toward Tunjungan Plaza Surabaya as the places (object) of the
research.
3. To identify the potential market segments as target markets.

4. To develop marketing strategy based on shopping mall image for target markets.
3.1.2 Problem Statement
How to formulate the marketing strategies for shopping mall based on shopping mall
image in order to attract the targeted potential market segments to visit and to shop at the
mall?
3.1.3 Hypotheses
Hypothesis 1:
H0: There are no differences of customer perception toward shopping mall image for each
market segment
H1: There are differences of customer perception toward shopping mall image for each
market segments.
Hypothesis 2:
H0: Each customer segment does not perform different shopping behavior
H1: Each customer segment performs different shopping behavior.

4.1 RESEARCH METHODOLOGY

4.1.1 Place of Research
The place for this research will be done at Tunjungan Plaza (TP) which is located
in Surabaya, East Java Province Indonesia. The considerations in choosing TP as the
place of research are as follow; firstly TP is the largest shopping center in Indonesia,
secondly TP is strategically located in the heart of Surabaya's central business district

4.1.2 Instrument Research Design

There were four sections of questions on the questionnaire design; they are the
demographic questions, the customer shopping behavior questions, the customer
perception questions and the customer opinion question. The first section of the
questionnaire is containing some questions related with the demographic information of
the customers such as gender, age, marital status, education background, occupation, and
monthly income. At the mean time, the second section of the questionnaire is containing
some questions related with the customer shopping behavior information. There are six
shopping behavior that will be investigated; they are shopping preference, frequency of
visit per month, amount of money spent per visit, desire to stay, amount of variable
purchased per visit, and re-patronage intention.
The third section of the questionnaire is containing some questions related with
the customer perceptions toward the importance of shopping mall attributes
performances. Finally, the last part is the open questions which are consisting of two
questions connected to the customer opinion regarding the shopping preferences and the
uniqueness of the shopping mall
4.1.3 Research Population
The population for this research is the entire customers of TP who were doing
shopping activities within the mall, at the time that the field study was conducted.
Therefore the customers who were not doing the shopping activities at that moment were
not covered as the population for this research

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4.1.4 Sampling Type and Method

This research used the non-probability sampling as the type of sampling design
and convenience samples as the sampling method.
4.1.5 Sample Size
Since standard value of ordinal data is similar to nominal data then the maximum
value of the variance (quadratic standard deviation) is 0.25. It is gathered by multiply the
p (probability of success) by q (probability of fail) which will reach maximum at p=0.5
and q=0.5. (Maholtra, 1996, p.413)
The number of observation n for unknown size of population will be count by:
n

/2 2

pq

= stand for alpha (significant level)

D = stand for error (precession level)
Z = standard normal
In this research, the significant level or alpha score is determined 10% and the
standard for error is also determined 10%. Then by using the formulation, the total
respondents required is around 270 respondents.
4.1.6 Statistical Analysis
4.1.6.1 Cluster Analysis
Cluster Analysis is used to identify and to classify the customers at TP into several
groups or segments based on their perception toward the performances of shopping mall
attributes.

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4.1.6.2 Factor Analysis

This analysis eased the researcher in making general interpretation toward the
differences of perception of each customer segments by reducing some variables in the
same dimension into one factor that represent the others.
4.1.6.3 ANOVA
This analysis is used to support the cluster analysis to determine the ideal number
of cluster by observing the trade off between the average F score and the standard
deviation. Ideal cluster has maximum average F score and minimum standard deviation.
4.1.6.4 MANOVA
This analysis is used to test the hypothesis 1. The determination whether to reject
or to receive null hypothesis can be used by observing the significance level on the
general linear model.
4.1.6.5 Chi Square Analysis
The result from this analysis is the identification of the relationship between
segments perception toward mall attributes performances with their shopping behavior.
4.1.6.6 Descriptive Analysis
This analysis is used to describe the profile regarding the demographic profile, the
shopping behavior description, the customer perception, and the customer opinion for
each market segment. Then next phase is to identify the potential customer segments.
Finally, to develop marketing strategy based on potential market segments perception
toward the performances of shopping mall attributes.

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5.1 DATA ANALYSIS

5.1.1 Market Segmentation
Table 1.1: ANOVA Cluster 2, 3, 4, 5
Cluster 2
Average St

Cluster 3
Average St

Cluster 4
Average St

Cluster 5
Average St

F Score
55.964

F Score
38.095

F Score
30.439

F Score
24.709

Deviation
30.787

Deviation
16.406

Deviation
15.695

Deviation
12.751

As can be seen on table 1.1, the cluster which has maximum average F score and
minimum standard deviation is cluster 3. It means that the ideal numbers of clusters for
market segmentation in this research are three clusters or three market segments.
5.1.2 Market Segment Analysis
5.1.2.1 Demographic Profile for Each Market Segment
The description of demographic profile for segment 1 is as follow: This segment
is dominated by female teenager with average age on 13-19 years old. Their marital
statuses are single with education background at senior high school and some of them at
bachelor level. They are student with monthly income below Rp 1 million ( US$ 100)
and only small number of them has income between Rp 1 3 million ( US$ 100 300)
per month. Meanwhile the description of demographic profile for segment 2 is as follow:
This segment is dominated by young female with average age on 20-25 years old. Their
marital statuses are single with education background at senior high school and small
number of them at bachelor level. Most of them work as an employee with monthly
income below Rp 1 million ( US$ 100) but also many of them have income between Rp
1 3 million ( US$ 100 300) per month. Finally for segment 3, the description of its
demographic profile is as follow: This segment is dominated by male with average age on

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20-25 years old. Their marital statuses are single and some of them are married with more
than one child. Most of them have education background at senior high school but also
many of them have bachelor level. They work as an employee with monthly income
below Rp 1 million ( US$ 100) but also some of them have income between Rp 1 3
million ( US$ 100 300) per month.
5.1.2.2 Shopping Behavior Description for Each Market Segment
The description of shopping behavior for segment 1 is as follow: most of them
visited mall 1-2 times per month but many of them also visited mall 3-4 times a month.
Their spending per visit below Rp 250.000,- ( US$ 25) but some of them also spent
between Rp 250.001 Rp 500.000,- ( US$ 25 50) per visit. The desire to stay is 3-4
hours per visit but many of them also spent time less than 3 hours per visit. The majority
purchased 2-4 items per visit and many of them also purchased 5-6 items per visit. Most
of them are sure to come back again and doing shopping, but some of them are doubt
whether to come again next month for shopping.
The description of shopping behavior for segment 2 is as follow: most of them
visited mall 1-2 times per month and some of them also visited mall 3-4 times a month.
Their spending per visit below Rp 250.000,- ( US$ 25) but many of them also spent
between Rp 250.001 Rp 500.000,- ( US$ 25 50) per visit. The desire to stay is 3-4
hours per visit and only small number of them who stayed less than 3 hours per visit. The
majority purchased 2 4 items per visit and some of them purchased only 1 item per
visit. Most of them are doubt whether to come again next month for shopping but some
of them are sure to come back again and doing shopping.

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The description of shopping mall behavior for segment 3 is as follow: most of

them visited mall 1-2 times and small number of them visited 3-4 times a month. Their
spending per visit below Rp 250.000,- ( US$ 25) and small number of them spent
between Rp 250.000 Rp 500.000,- ( US$ 25 50) per visit. The desire to stay is 3-4
hours per visit but many of them also spent time less than 3 hours per visit. The majority
purchased 2-4 items per visit and some of them also purchased 5-6 items per visit. Most
of them are sure to come again next month for shopping and the rest are doubt about it.
5.1.2.3 Perception Description for Each Market Segment
For Segment 1, most of the performances of shopping mall attributes are
perceived important.. Therefore this segment 1 can be identified or named as
Demander because as the customer, this segment demand the entire attributes to
perform well in satisfying them.
In the meantime for Segment 2, some of the performances of shopping mall
attributes are perceived important and some are not. Therefore this segment 2 can be
identified or named as Rationale because it is the nature of customer to demand well
performances from shopping mall attribute in satisfying them but they didnt demand the
entire variables and only for selected variables which they perceived important.
The last is for segment 3, some of the performances of shopping mall attributes
are perceived important and some are not. Therefore this segment 3 can be identified or
named as Satisfier because as the customer, this segment only need short number of
variables to be satisfied (easy to be satisfied). Meanwhile for others variables, they
perceived them as neutral.

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5.1.2.4 Opinion Description for Each Market Segment

Segment 1 or Demander segment refers TP as the convenience place where
they can do the shopping activities on many stores that offer many type of products with
good services and also can enjoy the atmosphere within the mall. In retail perspective,
this segment perceived that the quality performances of TP can be seen on
merchandising, service, and atmosphere dimension or attribute.
Meanwhile, segment 2 or Rationale segment refers TP as the strategic mall
because of its location in the center of Surabaya which ease the customer to access the
mall from many directions all around the city; also because of its history as the first mall
in Surabaya and because of many occasional entertainments such as celebrities visit,
exhibition, etc. In retail perspective, this segment perceived that the quality performances
of TP can be seen on accessibility and entertainment dimension or attribute.
Finally, segment 3 or Satisfier segment have the combination of opinion from
segment 1 and segment 2. Therefore in retail perspective, this segment perceived that the
quality performances of TP can be seen on merchandising, service, atmosphere,
accessibility, and entertainment dimension or attribute.

6.1 HYPOTHESES TEST

6.1.1 Hypothesis 1
Table 1.2: Multivariate Test
Multivariate Tests(c)
Effect
CLUSTER

Value
Pillai's Trace
Wilks' Lambda

0.851
0.265

Hypothesis

Error

df

df

F
27.432
34.778(a)

Sig.
14
14

518
516

0.000
0.000

16

Hotelling's Trace

2.339

42.929

14

514

0.000

2.133

78.909(b)

259

0.000

Roy's Largest Root

From table 1.2 Multivariate Test, on the cluster part showed that most of the significance
level for several test is below 0.1 (alpha 10%). This means that null hypothesis is rejected
or in another word that there are differences on perception toward the performances of
shopping mall attributes for each segment.
Table 1.3: Test of Between Subject Effects
Tests of Between-Subjects Effects
Dependent
Type III Sum of
d
Mean
Source
Variable
Merchandise

CLUSTER

Sig.

Squares
11.683

f
2

Square
5.841

5.67

0.004

34.21
39.335
48.581
29.686
21.206
29.068

2
2
2
2
2
2

17.105
19.668
24.29
14.843
10.603
14.534

46.779
40.318
39.051
39.619
38.608
75.292

0.000
0.000
0.000
0.000
0.000
0.000

Access
Services
Atmosphere
Entertainment
Food
Safety

In addition, based on table 1.3 Test of between Subject Effects confirmed that the
significance level of the entire attributes is below 0.1 (alpha 10%). This evidence also
supported to reject null hypothesis or in another word that there are differences on
perception toward the performances of shopping mall attributes for each segment even
the perception for the performance of each attributes.
6.1.2 Hypothesis 2
Table 1.4: Chi Square Test
Shopping Behavior Variables

Chi-Square

df

Sig.

Frequency of Visit

3.089

0.798

Money Spent

8.148

0.086

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Desire to Stay

8.636

0.195

Amount of Purchase

3.531

0.473

Re-patronage Intention

1.742

0.419

Based on table 1.4 can be seen for frequency of visit, desire to stay, amount of purchase,
and re-patronage intention variables had the significant level above the alpha 10% which
means for those variables; null hypothesis is accepted which means that each customer
segment does not perform different shopping behavior. But for money spent variable, it
had the significant level below the alpha 10% which means for that variable; null
hypothesis is rejected which means that each customer segment performs different
shopping behavior.

7.1 CONCLUSION
Hypothesis 1 has significant level below alpha score 10% which does not support
the hypothesis or in another word, each market segment has its own perception toward
the performances of shopping mal image. This hypothesis test result shows the significant
evidence for management of shopping mall to do market segmentation based on shopping
mall image for its market (customer) because customer perception toward shopping mall
image can not be generalized into one same perception.
Meanwhile, hypothesis 2 has significant level above alpha score 10% which
supports the hypothesis or in another word, each market segment performs the same
shopping behavior. This hypothesis test result shows the significant evidence for
management of shopping mall not to use the customer shopping behavior as the
consideration in identifying potential market segment.

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8.1 MARKETING STRATEGIES RECOMENDATIONS

Based on the research analysis result; there are three market segment revealed,
namely Demander, Rationale, and Satisfier. Market segment Demander refers
to customers who demand the entire shopping mall attributes to perform well in reaching
their expectation and satisfaction. Meanwhile market segment Rationale refers to
customers who are rationale that can balance between which attributes performances are
perceived important and which are not. Finally, market segment Satisfier refers to
customers who have less demand on the performances of shopping mall attributes.
Moreover, based on the observation and analysis the profile of each market
segment especially on the perception of each market segment toward the performance of
shopping mall attributes, then two potential market segments are identified; they are
Rationale and Satisfier.
The recommendations for marketing strategies in serving the target markets are
explained as follow: For merchandising attribute; the brand options variable is perceived
important which means the mall management should manage the stores or tenants within
mall to offer many brand options. Meanwhile for accessibility attribute; the road access to
the mall is perceived important which means the mall management should coordinate
with the local government in providing good road access condition into the mall.
For service attribute; the personal service and amenities service should be
managed and be maintained well. Courtesy, prompt service and knowledge of the staff at
information desk are the important variables to be noticed on personal service. Therefore
mall management should schedule the training program for staffs at information desk in
order to prepare them to be courtesy to customer, having appropriate mall knowledge,

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and help the customer promptly. While the restrooms which are clean, easy to be found,
and strategically located are the important variables to be noticed on amenities service.
Therefore mall management should monitor the cleaning service department and the
traffic into the restrooms location.
At the mean time, for atmosphere attributes; comfort situation within mall is
perceived as the important variable Therefore mall management should manage the
customer traffic to flow smoothly within each part of location within mall. For
entertainment attribute; both permanent and occasional entertainment are perceived
important. Therefore mall management should manage the contract with stores that
supporting the permanent entertainment such as cinema, game zone, toys stores, etc. In
addition, mall management can arrange many occasional entertainments such as live
music, performances by celebrity, conducting exhibition, etc to provide occasional
entertainment at the mall.
Finally for food attribute and service attribute; the entire variables are perceived
important. Therefore food court center, types of food offered, food price, and the quality
of food should be managed well by monitoring the performances of food department at
the mall. Meanwhile the safety of the mall facilities such as escalator and lift, safety in all
mall areas such as restroom, parking space, and inside mall, safety of vehicle, and the
security guard on duty should be developed or at least maintained at the good level by
mall management through the monitoring of security department at the mall in
partnership with local police department and also through the coordination with its
customer via security campaign within mall.

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