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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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