RETAIL MANAGEMENT, 2/E

Chetan Bajaj,
Bajaj Director,
Sona School of Management, Salem, Tamil Nadu
Rajnish Tuli,
Tuli Director,
Millward Brown, South East Asia, Singapore
Nidhi Varma Srivastava,
Srivastava Director,
Millward Brown, India

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 Chapter - 4
RETAIL CUSTOMER

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Importance of consumer behaviour
Consumer behaviour : study of how consumers make decisions to
use their respective resources such as time, money, and effort for
buying, using, and disposing goods and services
‘Understanding the pulse of the consumer’: demography,
psychology, environment, and life style of the customer need to be
studied
Involves identifying the various stages in the consumer
decision-making process and keeping track of the major
influences at each stage
Choice of a hair shampoo
- consumer need could be (normal to dry, normal to oily,anti-
dandruff)
- reason to buy (silky texture, free from dandruff, wavy touch)
- brand preference (local, international)
- place of purchase (supermarket, phrmacy, kirana store)
- frequency of purchase (weekly, fortnightly,monthly)
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Motives for shopping
Motives influence a consumer’s shopping activities
Personal Motives
role playing: where a daughter is influenced by her
mother’s choices while shopping and plays a role of
demonstrating ‘learned behaviour
- diversion: diversion from daily life to shopping
- self-gratification: expected utility of the buying process
- learning about new trends: to gain information about new
trends
- physical activity: exercise involved
- sensory stimulation: gain sensory benefits like listening to
music

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 Contd…
Social Motives
- chance to socialize: can meet up with friends or seek
acquaintances
- peer group attraction: a meeting place for peers
- status and authority: attain status and power by being
waited upon
- pleasure bargaining: enjoyment in gaining a lower price

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Consumer decision-making process

Factors affecting the consumer decision making process

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Contd…

Demographic factors
- objective, quantifiable, and easily identifiable such as
gender, income, family size, age, marital status, etc.
- identifies the ultimate consumer
- Shopper’s Stop is segmented for the high income group
while Saravanna stores is segmented for the daily wage
earners

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Contd…
Psychological factors
- intrinsic or inner aspects of the individual
Each consumer reacts differently based on their:
- Motives: internal energizing force that orients a
person’s activities towards satisfying a need or
achieving a goal
- Perception: process of selecting, organizing, and
interpreting information inputs to produce meaning
- Example: the salesmen’s service in Shoppers’ Stop will
be perceived positively ,while in few cases it shall be
considered as interference
- Learning: permanent change in behaviour results from
the consequences of past behaviour
- consumer learning theories are classical conditioning,
operant conditioning, vicarious learning, and mere
exposure
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Contd…
Attitude:
- consumers’ predisposition to respond favourably
or unfavourably
- for e.g.: Indian consumers have a positive
attitude towards burgers
Personality:
- internal traits and behaviours that makes a
person unique
- for e.g.: he is an extrovert by nature

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Contd…

Environmental factors
- physical and social characteristics of a consumer’s external
world
- physical objects (goods and outlets), spatial relationships
(location of the shopping centre and merchandise in stores),
and the social factors (opinion leaders, the person’s family, co-
customers, reference groups, social class, and culture)
Two levels of environment
- macro environment includes large-scale, general environmental
factors (e.g.: easy installments in purchasing Maruti 800)
- micro environment refers to the more tangible physical and
social aspects of an individual’s immediate surroundings

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Social class
Social class: classification of members of a society into a
hierarchy of distinct status classes, so that members of each
class have a relatively similar status and members of all
other classes either have more or less status
Middle class consumers prefer shopping in local kirana
stores while consumer falling in the upper class or elite class
prefer strolling in malls
Customers are classified as:
- upper elite class
- lower upper class
- upper middle class
- middle class
- working class
- lower middle class
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Culture and sub-culture
Set of values, ideas, and attitudes accepted by a homogeneous
group of people and transmitted to the next generation
Major influencing factor in retail marketing and
communications
India is a collectivistic society hence the culture differs
entirely from individualistic societies (e.g. United States)
Global companies entering into India need to revise their
promotional strategies
McDonalds, Pizza Hut have localized their service in order to
suit the culture of India by adding Tandoori Pizza and
vegetable burgers

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Stages of consumer decision-making

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Consumer decision rules

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Situational influences

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Indian shoppers
Indian shoppers tend to visit the market in the seond half of
the day rather than in the first half, especially during
summers
Cineplexes in the major cities carried out a drive to
introduce effective air conditioning systems in their
theatres to attract the crowds during morning or noon
hours in north India
Inconvenience of carrying too many purchases over a
longer distance using two-wheelers, bicycle, scooters etc
Prefer to purchase products, other than food or beverages
in the company of their relatives or friends

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Sample of customer profile and
analysis
When do customers like to shop?
How do customers like to pay?
What quality of merchandise do customers usually prefer?
What type of store has the maximum appeal for my
customers?
How do customers handle servicing of the mechanical
products purchased by them?
Who does most of the buying in the homes of my
customers?
What is the income level of my average customer?
What is the age profile of my average customer?
What is the general attitude of my customer towards his
community?
How does my customer react to new and different
merchandise or promotional activities?
What major changes has my customer made in the last two
years?
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