Consumer Behaviour & Retail Research

Introduction

• Consumers have wide choice• Retailers- who understand the needs and wants of the

customer- are successful• Many variables to identify and understand the retail

consumer• Retailer that integrates the above information is able to

achieve profitability• Thus retailers need to research on their customers – who,

and why for a decision• This data can be used to select the target market and

integrate it into RIS- Retail Information system

Consumer information- four parts

• Demographics• Psychographics• Geographics• Behavioristics

Demographics• Statistics about any given population base• These variables are used to help retailers about selecting better

target markets/segments for business• Retailer can use this data to help forecast product/service sales• and to develop better communication with customers• Includes data on population sizes,no of households in a given

market area,household sizes,income levels,education,gender age occupation etc

• Most popular method and easiest to obtain• Alone may not be enough but when tied to product buying

situation- leads to info about consumer preferences• Most common- age ,income,ethinicity

Psychographics

• Refers to lifestyle analysis• Provides insights into what consumers do• includes info on activities,interests,and

opinions• utilizes also VALS

Geographics

• helps to find out where the customers are located

• divided into separate geographic area• Nation,state,region etc

Behavioristics

• Subdivided into retailers current or potential markets based on buying responses,product usage pattern,product/store loyalty

• Develop user profiles and their responses to retail mix elements

• Eg 80-20 rule

Consumer behaviour

• Relates to how consumers buy products• Reflects to the totality of consumers decisions

wrt to acquisition,consumption,disposition of goods services etc

• Clear picture will help retailer to understand how to increase sales

• How they make purchase decisions- which store to enter and which merchandise to select

Consumer decision making process

Problem awareness

• Consumer buys only when he is aware of the need• Problems are associated with unsatisfied consumer

need• Need recognition – conscious and subconscious• Eg exam and textbook, food retailing• Need to study needs to formulate as to why a

consumer buys from a particular outlet• never fully stated• Need to develop better understanding about customer

motivations

Information search

• Next step after problem recognition• Consumer will search for information to solve the

problem• Depending upon the time,effort and cost associated –

info search may take long or short time• Internal search- based on experience• External search- find out info• Thus retailers need to provide info about itself so that

the consumers are aware when they attempt to satisfy needs and wants

Alternative evaluation

• After search and gathering all information to solve, the consumer must make the decision for best alternative

• If routine- less time• If new- long term phase- for this phase,

retailer must supply all info and prove that how he can satisfy the needs and wants

Purchase

• Actually purchases or does not purchase the product

Post purchase evaluation

• if consumer is happy- he will make further purchases

• If not happy- will make reevaluation• Customer service is important in this phase• Happy customers- positive word of mouth

advt• Cognitive dissonance: consumers doubt about

products – research and customer feedback

In store decision making process

RETAIL INFORMATION SYSTEMS AND RETAIL RESEARCH

RIS

• Data: News facts and figures which are unorganized • Information: A meaningful body of facts organized

around any topic• Once raw data is gathered and organized- retail

information results• Retailers managers need to inform themselves with

sufficient information to make decisions possible• Data used- from customers, the marketplace, the

retail environment, employees and competition

RIS

• A method for systematically gathering, analyzing, storing,utilizing valuable retail information and data

• facilitates the process of finding solutions to problems• The process of collecting, organizing, analyzing, disseminating

data relating to particular area is called as Market research• can be high tech or low tech• could be used in almost all areas of operation• Generally accessible to all users but specific enough to

generate solutions to any retail problems• RIS – could be used among store groups,vendors,internal

buyers,planners,dc

RIS

• Could be used in Supply chain mgt• Data warehousing• Distribution • Pricing• Merchanidising• IMC• Product acquisition• Strategy

RIS

Inputs-Mission--Vision- Objectives- Situational analysis- Environment scanning- strategic plans

Processes-Data collection and interpretation- Control of information

SystemsData

storage ,retrieval and updates

Outputs Data dissemination

to internal and external public

Benefits of RIS

• Development of an effective RIS helps to ensure that the system is fully integrated into the overall retail management plan

• Effective RIS- allow for continuous data updation• Necessary to be competitive in todays retail

environment• Use RIS to access data regarding which items

have the highest turnover rates and where EOQ items have to be ordered

RIS- facilitators

• Universal Product Code (UPC): Used along with a optic scanner to read the bar code and gather the particular data

• A barcode which stores all pertinent product information• Quality of codes is important : unscannable, erroneous-

concern- additional expense for improper information fed into an RIS

• A typical UPC has a company identifier,specific SKU built into it

• US and Canada- 12 digit• EAN 13 EAN 8

RIS- facilitators• Point of sale terminal (POS) • Data from UPC collected and sent to centralized location for analysis• Used by managers to make decisions regarding

inventory,merchandise advt,accounting,planning etc• POS – another facilitator in RIS• A computer workstation designed to collect info from sale of

products or services• Each workstation has optional peripherals- barcode

readers,scanners,invoice printers,magnetic card readers. Can be fixed ,handheld or both.

• Effective in providing data to generate retail information• RFID

RIS- facilitators

• Self checkout systems: A format in which shoppers scan,bag and pay for their own purchases

• Outsourcing: certain expertise

MARKETING RESEARCH

Marketing research

• Research conducted to identify and define marketing opportunities and problems, generate, refine and evaluate marketing actions, monitor marketing performance and improve understanding of marketing as a process

Marketing Research process

1. Formulate the research problem2. Conceptualize a research design3. Create a data collection instrument4. Select a sample5. Write the research proposal6. Data collection7. Analysis and interpret the data8. Conclusion

Formulate the research problem

• looks for cause• Formulate the research problem• Internal/External• Clearly define the problemResearch design:Depends on the type of data to be collectedCan be observationSurveyStudyIt is a guide for the entire process