Determinant attributes in supermarket choices

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Determinant attributes in supermarket choices

  1. 1. Determinants of supermarket choices in Pietermaritzburg<br />
  2. 2. Contents<br />Introduction<br />Related literature<br />The supermarket industry in South Africa<br />Methodology<br />Findings <br />Recommendations<br />Conclusion<br />Limitations <br />
  3. 3. Introduction <br />2002 to 2007, supermarket industry growth 105%<br />Expected to grow 93% by 2012<br />Increased number of stores  increased competition<br />Increased buying power for consumers<br />Is there a gap between customer needs and retailer offerings?<br />Aim: investigate attributes that determine supermarket choices <br />
  4. 4. Related literature<br />Store image: a perception held in the shopper’s mind, determined partly by the functional qualities of the store and partly by the aura of psychological attributes (Ghosh, 1990)<br />A store image is also what influences consumers’ choices<br />
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  10. 10. Supermarket industry in SA<br />High concentration and competition<br />Price discounting and high distribution costs<br />Dominated by domestic retailers<br />Supermarkets are replacing traditional spazas<br />Black middle-class  openings in townships<br />Choice and convenience for middle class<br />Price discounting for low income group<br />Value-added in-store offerings<br />
  11. 11. Methodology <br />Price, location convenience, store layout, store merchandise, store promotions, store personnel, store atmosphere, store services andreputation<br />Likert scale questionnaire <br />1 = not at all important<br />5 = extremely important<br />Non-probability sampling<br />Survey at 3 malls (224) and UKZN PMB campus (50)<br />Cronbach’s Alpha: 0.744 <br />High face validity and content validity <br />
  12. 12. Results <br />
  13. 13. Store Services <br />Lusch et al (1993: 96): credit, delivery, return policy, and guarantees<br />Terblanche (1998: 63): lay-bye plan, returns, credit, delivery, packaging, and complaints handling<br />Lindquist (1974: 31): salesclerk service, presence of self-service, ease of merchandise return, delivery service and credit policies<br />Arnold et al (1983: 157), Severin et al (2001: 192), and Mesquista and Lara (2008: 46)<br />
  14. 14. Location and Price <br />Majority of authors support these findings<br />Further reinforced by BMI<br />Convenience over price, especially among high income earners <br />
  15. 15. Reputation <br />Terblanche (1998: 63) and Lindquist (1974: 31-32): institutional dimension of a retail outlet image<br />Doyle and Fenwick (1974: 46)<br />
  16. 16. Store Merchandise<br />Lusch et al (1993: 96): quality, style and fashion, assortment, and national versus private labels<br />Terblanche (1998: 63): quality, depth, width, style, price, and innovativeness<br />Lindquist (1974: 31): quality, assortment or selection, fashion or styling, guarantees, and pricing<br />Different perspectives<br />Greater variety and assortment<br />Quality<br />Depth and selection<br />Organised merchandise <br />
  17. 17. Less important attributes<br />Store layout<br />Supermarkets frequented by shoppers<br />Store atmosphere<br />Low involvement shopping<br />Store personnel<br />Little personal interaction<br />Store promotions<br />Short term<br />
  18. 18. Recommendations<br />Price <br />Negotiation with suppliers<br />Providing incentives to suppliers such as shelf space, in-store promotions<br />Bigger operation formats<br />Location <br />Choose a high traffic location<br />Free shuttle<br />Anchoring a shopping centre <br />
  19. 19. Recommendations<br />Store Merchandise<br />Increasing stock variety <br />Superior conditions of products<br />Product presentation<br />More private labeled products<br />Services<br />Flexible return policy <br />Variety of payment options<br />Training for staff<br />Reputation <br />CSR programmes<br />Marketing the programmes<br />
  20. 20. Conclusion <br />Attributes chosen from rich literature research<br />Price, Location, Services, Reputation, and Merchandise<br />Coincides with past research<br />Provides insight for all stakeholders<br />Needs further follow-up research<br />
  21. 21. Limitations <br />Disproportionate number of respondents from each mall<br />Difficulty in completing the questionnaire<br />Unrepresentative racial proportions of respondents<br />

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