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Unit 7: Consumer Analysis
Notes
Figure 7.1: External Environmental Forces Confronting Retail Firms
Competition
Technology
Channel Partners
Retail Firm
Socio-economic
Factors Consumer Behaviour
Legal and Ethical
Factors
Source: Excel book, Retail at crossroads by Raju Rathod
7.2.2 Factors Influencing Consumer Behaviour
There are three main categories of factors that affect the consumers’ behavior. The first broad
category is a demographic factor that comprises occupation of customers, education level of
customers, income level of customers, socio-economic class of customers and life style and
value orientation of customers. These demographic factors largely influence customer’s behavior
towards retail stores. The other factors are personal and social factors.
Many retailers successfully prepare very strong database of customers and do customized retail
marketing. Data mining tools can help retailer to target the specific group of customers with
customized offers.
Notes Demographic factors like size and composition of population influence the way
people in a country shop. India with large population of youngsters is hot destination for
various life style brands. Many of these brands like Nike and Reebok have opened their
exclusive stores in India. The US based clothing giant Levi Strauss and Co. sees India as
one of the fastest growing markets for Levi’s. Personal factors like age, gender and life
cycle stage also affects the choice of retail store. People in family with kids are likely to
visit a multibrand store or hypermarkets to accommodate family shopping needs while
those in young age groups might have specific choice in terms of brand they need and
might go to an exclusive brand outlet personal factors like occupation, education and
economic situation of the consumer greatly affects the way consumers evaluate, purchase
and use products. If we try profiling the Retail consumers we can find differences in terms
of selection of a particular retail stores by consumers of different occupation, education
and income levels. Several studies have revealed that consumers’ selection of a retail store
involves prestige seeking buying behavior and the choice is driven by their social and
organizational status. A company president and top managers are likely to visit high-end
stores like lifestyle and stores of designer brands. People from middle and lower income
group are more likely to frequent value for money stores like Big Bazaar, etc. Lifestyle
Contd...
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