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RETAIL MANAGEMENT-3Prepared by :Dr. Pooja SharmaPresented by :Education & Information Networkhttp://www.InfoFanz.comInfo@I...
UNIT 3      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 integra...
   Consumer understanding or an understanding of the    consumer buying behavior is the starting point of strategy    cre...
Need for studying consumer behavior   The accurate understanding of consumer helps the retailer    create a product that ...
1.   Understanding how the need for a product/service was     determined.2.   Understanding how information was sought by ...
   The retailer also needs to understand its competitors and how    the customers perceive them.   The retailer need to ...
Factors Influencing the retail Shoppers   Shopping is the act of identifying the store and purchasing the    product.   ...
Tr                                      r        av                            u ral ppe            el                    ...
1.   Range of Merchandise:    The range of merchandise is one of the Most important     reason for customers to patronize...
2.   Convenience of shopping at a particular outlet.    This element is fast gaining prominence in the world of     organ...
4.   Socio economic background and culture:    Background of the consume largely determines his /her     lifestyles. And ...
The customer Decision Making Process   At this stage Retailers need to understand the manner in    which a customer makes...
The customer Decision Making process                                                Me                                    ...
Stage 1 Identification of a need for the Product or service. this    arises when the consumer becomes aware of his need fo...
Some other factors influencing consumer behavior,PersonalityLifestylesCultureSocial ClassFamily and Household influences. ...
Shoppers Behavior    Observations of shoppers behavior in the store show that     every purchase involves part or the who...
2.   Magpie Mode: In the magpie mode, the shoppers allows     himself/herself to be distracted and attracted by different ...
Psychographic profile of Indian Shoppers    Segments of Men: profile of Indian men has shown four     broad groups.1.   T...
    Segments of Women: Indian women in following     manner.1.   The contented conservative is a housewife who is happy w...
5.   The affluent sophisticate is an affluent women who is     comfortable with the finer things in life6.   The contempor...
    Youth segments:1.   Homebodies: they are largely traditional , have low individuality     and very few aspirations fo...
4.   Rebels: this is the largest cluster. They may be first generation     educated professionals , experiencing winds of ...
The changing Indian consumer   The media explosion.   Increase in disposable income.   The rise of the great Indian mid...
How consumers Develop Loyalty Towards a Store   The experience during and after the purchase leads to satisfaction    or ...
How consumers Develop Loyalty Towards a Store                    Previous                                      Beliefs and...
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 ...
Conclusion   Retail Strategy is largely information based . The gathering    and analysis of data relevant to the retaile...
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  1. 1. RETAIL MANAGEMENT-3Prepared by :Dr. Pooja SharmaPresented by :Education & Information Networkhttp://www.InfoFanz.comInfo@InfoFanz.com Presented by : www.InfoFanz.com1Prepared by Dr. Pooja S
  2. 2. UNIT 3 Understanding the Retail Consumer:Factors influencing the Retail Shoppers,The Customer Decision Making Process. Presented by : www.InfoFanz.com Prepared by Dr. Pooja Sharma 2
  3. 3. 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 Presented by : www.InfoFanz.com3Prepared by Dr. Pooja S
  4. 4.  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 Presented by : www.InfoFanz.com4Prepared by Dr. Pooja S
  5. 5. 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: Presented by : www.InfoFanz.com5Prepared by Dr. Pooja S
  6. 6. 1. Understanding how the need for a product/service was determined.2. Understanding how information was sought by the customer.3. The process of evaluation of various products and store.4. The payment process.5. The post purchase behavior. Presented by : www.InfoFanz.com6Prepared by Dr. Pooja S
  7. 7.  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 signage’s , shelf position, display space and fixtures, all influences the shopper in his buying decision Presented by : www.InfoFanz.com7Prepared by Dr. Pooja S
  8. 8. 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 Presented by : www.InfoFanz.com8Prepared by Dr. Pooja S
  9. 9. Tr r av u ral ppe el ti m cult f sho ea c io- d o nd So oun dis r tan kg ce b ac Loc Factor’s influencing e of nsumer fe ation customer’s decision ily li making al famStag of co conv en cycle ienc e Range of merchandise Presented by : www.InfoFanz.com Prepared by Dr. Pooja Sharma 9
  10. 10. 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 Presented by : www.InfoFanz.com10 Prepared by Dr. Pooja S
  11. 11. 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 Presented by : www.InfoFanz.com11 Prepared by Dr. Pooja S
  12. 12. 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. Presented by : www.InfoFanz.com12 Prepared by Dr. Pooja S
  13. 13. 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 Presented by : www.InfoFanz.com13 Prepared by Dr. Pooja S
  14. 14. The customer Decision Making process Me Pri dia– nt I AV & tn re n te Search Need for Store Store Evaluation Purchaserecogniz Informati visits visits of options decision ed on Fam ily Fri & end s t o S ser Presented by : www.InfoFanz.com14 Prepared by Dr. Pooja S
  15. 15. 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.Stage 4 The Purchase Decision: at this stage is made about first , whether to buy or not. Presented by : www.InfoFanz.com15 Prepared by Dr. Pooja S
  16. 16. Some other factors influencing consumer behavior,PersonalityLifestylesCultureSocial ClassFamily and Household influences. Presented by : www.InfoFanz.com16 Prepared by Dr. Pooja S
  17. 17. 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 categories1. 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 Presented by : www.InfoFanz.com17 Prepared by Dr. Pooja S
  18. 18. 2. Magpie Mode: In the magpie mode, the shoppers allows himself/herself to be distracted and attracted by different brands on display.3. 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 Presented by : www.InfoFanz.com18 Prepared by Dr. Pooja S
  19. 19. 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. Presented by : www.InfoFanz.com19 Prepared by Dr. Pooja S
  20. 20.  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.3. The troubled homebody is housewife who is not sure that she is doing the right thing by sitting at home.4. The tight-fisted traditionalist is traditional women who believes in saving for tomorrow Presented by : www.InfoFanz.com20 Prepared by Dr. Pooja S
  21. 21. 5. The affluent sophisticate is an affluent women who is comfortable with the finer things in life6. The contemporary housewife is a housewife who plays active role in the household and sees herself as equal to her husband.7. The Gracious hedonist is a working women who believes in looking after herself well Presented by : www.InfoFanz.com21 Prepared by Dr. Pooja S
  22. 22.  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 .2. Two faced youths : they are inwardly traditional and outwardly modern.3. 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. Presented by : www.InfoFanz.com22 Prepared by Dr. Pooja S
  23. 23. 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.5. 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. Presented by : www.InfoFanz.com23 Prepared by Dr. Pooja S
  24. 24. 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 Presented by : www.InfoFanz.com24 Prepared by Dr. Pooja S
  25. 25. 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. Presented by : www.InfoFanz.com25 Prepared by Dr. Pooja S
  26. 26. How consumers Develop Loyalty Towards a Store Previous Beliefs and shopping attitudes experienceRecognize desire Evaluate options & Store Store Decision Outcome to shop select store5 visit(s) visit(s) Information on product, store, location from different sources Presented by : www.InfoFanz.com Prepared by Dr. Pooja Sharma 26
  27. 27. Research prior to setting up a retail store Demographic Data. Population GDP Customer Data. Presented by : www.InfoFanz.com27 Prepared by Dr. Pooja S
  28. 28. Research after setting up a retail store Merchandise and service offered. New product development. Acceptability of products. Acceptability of pricing. Understanding consumer profiles. Presented by : www.InfoFanz.com28 Prepared by Dr. Pooja S
  29. 29. Conclusion Retail Strategy is largely information based . The gathering and analysis of data relevant to the retailer is done by market research . From the retailer ’s perspective, market research needs to be done prior to the setting up of a retail store and after setting up the retail store. The information needed at both the stages varies significantly. In the world of increasing competition, research can aid the retailer in satisfying the customer and hereby building loyalty Presented by : www.InfoFanz.com29 Prepared by Dr. Pooja S
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