ISSN 0798 1015

Vol. 40 (Issue 38) Year 2019. Page 30

Shopping behaviour and its relationship with final purchase decision in the organized retail sector of India

Comportamiento de compra y su relación con la decisión final de compra en el sector minorista organizado de India

MOHINTA, Shivaji 1 & MISHRA, Uma Sankar 2

Received: 13/09/2019 • Approved: 01/11/2019 • Published 04/11/2019

Contents

1. Introduction

2. Literature review

3. Research design and methodology

4. Results and Discussion

5. Conclusions

References

1. Introduction

In the current age of dynamism and stiff competition, most of the organised retailers are now having dual responsibilities, namely, acquiring new customers and retaining them for sustainable business. However, the operational cost associated with new customer acquision is much higher than customer retention. Therefore, the modern retailers must have to concentrate more on customer loyalty and their shopping behaviours, so that the current customers may be retained in long term. However, till now very little research studies are carried out giving more emphasis to this type of cost control mechanism (Wallace, Giese, & Johnson, 2004). Many of the past studies implicate that there exist various influencing factors of retail shopping behaviour and customer loyalty, which ultimately gives complex and mixed results to formulate retail strategy for sustainability. A series of antecedents of retail store loyalty are now found, giving ambiguous thought process of marketing strategists. Store image might be one of such determinants, which ultimately put impacts on making the customers’ loyal (Sirgy and Samli, 1985; Bloemer and de, 1998; Hartman and Spiro 2005). Again, it is also inevitable to say that customer trust and commitment are one of the major factors to create more loyal retail customers (Macintosh and Lockshin, 1997; Harris and Goode, 2004).

In an organizational context, the marketing function and in particular, a marketer’s understanding of consumer behaviour is key to business realising its goals - the success of marketing a product/service rests on understanding who the customer is and what they want which is translated into consumer-centric strategies. These strategies, in turn contribute to a businesses’ competitive advantage. In a societal context consumption, and specifically overconsumption, is becoming more topical as the sustainability mandate starts to work its way into business operations. An understanding of consumer behaviour and how to facilitate mindful consumption is thus gaining more prominence and importance. This unit investigates consumer decision-making and more specifically the internal and external influences on the purchasing and consumption process. The marketing challenges and implications for selling to consumers are discussed throughout from a consumer behaviour perspective. Assessment and tutorial activities simulate the professional environment and facilitate application of theory to practice. The marketer therefore tries to understand the needs of different consumers and having understood his different behaviours which require an in-depth study of their internal and external environment, they formulate their plans for marketing.

The modern marketing management tries to solve the basic problems of consumers in the area of consumption. To survive in the market, a firm has to constantly innovate and understand the latest consumer needs and tastes. It will be extremely useful in exploiting marketing opportunities and in meeting the challenges that the Indian market offers. It is necessary to understand Indian consumers’ motivations and intentions to patronize contemporary retail formats, such as shopping malls. As markets have evolved, domestic Indian retailers and small stores have also adjusted their formats and operational strategies to cater to different shopper needs and changing consumer trends. An increasingly urbanized demographic, rapid development of shopping malls, an emerging class of brand-conscious consumers, and various influences from the western world are changing the face of the Indian retail industry. Consumers in India are demanding more quality, entertainment, and lifestyle-related goods, along with brand-name merchandise at competitive prices. Consumers expect pleasant sales staffs and better customer services, including convenient return and exchange policies, as well as financing options. A growing number of Indian consumers want products, communication, entertainment, and marketing efforts that arouse their senses—they expect shopping to be a fun and entertaining experience. An understanding of Indian consumers’ shopping behaviours and mall preferences will empower international retailers, domestic retailers, and mall operators to market their products and services more effectively.

A thorough understanding of Indian consumers’ motivations and their mall-patronage intentions would benefit mall managers in drawing practical and constructive lessons on strategies to meet the needs of consumers in India.

In the above context, this paper aims at investigating the factors behind shopping behaviour and its relationship with final purchaging decision in indian organized retail sector.

A study was conducted by Sharma Sunanda et al (2012) discuss the various methods of measuring consumer behaviour and the impact of changing consumer behaviour on growth of business. Qualitative methods are used to explore specific aspects of consumer behaviour and for probing below the surface for effective drivers and subconscious motivations. Their findings show that personal habits and previous experience on of the consumers have a direct impact on the consumers’ purchase decision. Willems. H.J.H.M (2012) defined consumer behaviour as “those acts of Individuals directly involved in obtaining, using, and disposing of economic goods and services, including the decision processes that precede and determine these acts”. An exploratory study by in-depth interviews was conducted to determine the reasons why people shop. This widely cited study hypothesized that people’s motives are a function of numerous variables, several of which are unrelated to the actual buying of a product or the need for services. This unrelated need is fulfilled by a variety of psychosocial needs that go beyond the acquisition of products or services. These general motives have been classified by into two main dimensions – personal and social motives. Nam et al. (2007) examined the apparel shopping preferences of mature women in America. They found that mature subjects purchase apparel for pleasure or need, but less for conformity. Their purchase decisions are influenced more by fit and comfort than by fashion. Tang Christopher S et al (2001) studied the shopping habits of consumers to form an idea of whether or not the store concepts, product ranges and strategies of the companies are appropriate towards consumer requirements. He believed that consumer behaviours are unpredictable and changing continuously changing; while trying to under try to understand how individual or group make their decision to spend their available resources on consumption-related items. Wesley Scarlett et al (2006) conducted a study to assess how consumers' decision-making styles relate to their shopping mall behaviour and their global evaluations of shopping malls. Based on exploratory data analysis including the use of comparative method, the article provides a theoretical model of antecedents and consequences of consumer- decision making styles. And it was found that the influence of CDM styles on mall shopping consequences is subtle and indirectly influences activities during mall visits via influencing planned expenditure levels. Canabal, M.E. (2002) investigated the decision making styles of South Indian Consumers utilizing Customer Style Inventory. Using data collected from 173 college students from two institutions of higher education in the city of Coimbatore, South India, Canabal (2002) identified five decision making styles of South Indian. These styles are (1) Brand Conscious Style, (2) High Quality Conscious / Perfectionist Style, (3) Confused by Over choice Style, (4) Impulsive / Brand Indifferent Style, and (5) Recreational Shopper Style.

Again, customer loyalty has been seen as a fundamental element for long term business achievement (Srinivasan, Anderson, and Ponnavolu 2002; O’Brien and Jones 1995; Jones and Sasser, Jr. 1995; Oliver 1997; Dick and Basu 1994). Clients who are faithful to specific items or brands might will pay cost premiums, participate in positive view, and are more opposing to competitor communications (Srinivasan, Anderson, and Ponnavolu 2002; Zeithaml, Berry, and Parasuraman 1996). Such advantages empower the foundation of customer loyalty as a fundamental objective for any firm. Customer loyalty is the connections that can be built up among buyers and retailers (Hartman and Spiro 2005; Fullerton 2005; Harris and Goode 2004; Macintosh and Lockshin 1997). Researchers propose that such connections must exist among purchasers and retailers all together for client retail devotion to rise (Macintosh and Lockshin 1997; Reynolds and Arnold 2000; Wong and Sohal 2003). Such connections can influence the state of mind of shoppers, bringing about a more inclination to shop at one retail store over another.

3. Research design and methodology

For the purpose of this study data were collected from retail consumers via questionnaire survey. A total of 300 respondents had participated in this survey, out of which 201 cases were finally considered for data analysis after validation. Method of simple random sampling was adopted for selecting the respondents. Data from the survey were analysed using descriptive statistics, factor analysis and Pearson correlations. Exploratory Factor Analysis was used to identify the factors influencing shopping behaviour of customers while purchasing from organized malls. Further to investigate the influencing factors relationship with the final purchase decision Pearson correlation method was applied. Information relating to the theoretical background and past research outcome were gathered from various secondary sources like websites, research journals, books etc

4. Results and Discussion

Table 1 represents the KMO (Kaiser-Meyer-Olkin) statistics of Exploratory Factor Analysis applied to extract factors behind shopping behaviour of retail customers.  

Table 1
KMO and Bartlett's Test Results

From table 1 it was clearly observed that the KMO value is above 50%. Hence the sample data is adequate for applying factor analysis. Bartlett’s Test of Sphericity also gave significant result to substantiate the above statement.

Table 2
Total Variance Explained

From table 2 it may be interpreted that there are seven factors that have been extracted out of 27 number of variables whose Eigen values are more than 1. The total variance explained by these 7 factors is 78.617%, out of which 20.187% of variance is explained by 1st factor, 18.700 % of variance is explained by the 2nd factor and so on as per the table.  The 7 extracted factors can be named as, 1- mall facilities, 2- shopping partner, 3- shopping intention,4- urge, 5- internal layout, 6- location convenience, 7- discounts and bargain.

Table 3
Rotated Component Matrix

The respective factor loadings of the concerned variables for each of the factors after rotation are given in table 3.

Table 4
Karl Pearson Correlation Matrix

From table 4, it may be interpreted that shopping partners, urge and location conveniences are positively correlated with the partners influencing decision. Urge, internal layout, location conveniences and discounts or bargain are positively correlated with the decision to purchase from a particular mall. Urge and internal layout are positively correlated with the co- worker influences. Shopping intention, urge and internal layout shopping partners, urge and location conveniences are positively correlated with parents influencing decisions to purchase. Mall facilities and urge are positively correlated with the likely hood of the malls. Shopping partners and shopping intention are positively correlated with merchandise of the malls. Mall facilities, shopping partners and urge are positively correlated with recommend to friends. Mall facilities, shopping partners, shopping intention, urge and location convinces are positively correlated with future shopping. Shopping partner, shopping intention, urge and location convinces are positively correlated with possibly and purpose fir future shopping.

5. Conclusions

A successful mall positioning strategy should be beneficial to the mall developers, retailers in the mall and shoppers. It will include attributes like allocating space to retailers in the mall, choice of leasing or selling, and attributes like size of store, type of floor and location/Zoning (centre, corner, street side, near atrium, across the main entrance etc.) on the floor.

From cities as malls venture into smaller towns, they can bank on location as an advantage if there is no other mall in that place. However if there is competition, mere location based advantages may not lead to mall success. A positioning strategy needs to be developed. A sound positioning also needs to work on zoning apart from the tenant mix. Retailers’ success in the mall is the success of the mall, good mall positioning needs to include decision regarding zoning which includes the most profitable position for each retailer.

References

Bloemer, Josee, & de Ruyter, Ko. (1998). On the relationship between store image, store satisfaction, and store loyalty. European Journal of Marketing, 32(5/6), 499-513.

Canabal, M.E. (2002), Decision Making Styles of Young South Indian Consumers: An Exploratory Study. College Student Journal 36(1), 12-20.

Dick, Alan S., & Basu, Kunal. (1994). Customer Loyalty: Toward an Integrated Conceptual Framework. Journal of the Academy of Marketing Science, 22(2), 99-113.

Fullerton, Gordon. (2005). The Impact of Brand Commitment on Loyalty to Retail Service Brands. Canadian Journal of Administrative Sciences, 22(2), 97-110.

H.J.H.M. Willems (2012). Shopping Behaviour: An Empirical Study into the Appreciation of Atmospheric Characteristics  of  Inner-City  Shopping  Areas  given  the  Shopper’s Motivational Orientation, Graduation Project: Real Estate Management & Development Faculty of Architecture, Building & Planning Eindhoven University of Technology 

Harris, Lloyd C., & Goode, Mark M.H. (2004). The four levels of loyalty and the pivotal role of trust: a study of online service dynamics. Journal of Retailing, 80, 139-158.

Hartman, Katherine B., & Spiro, Rosann L. (2005). Recapturing store image in customer-based store equity: a construct conceptualization. Journal of Business Research, 58, 1112-1120.

Jones, Thomas O., & Sasser, Earl W., Jr. (1995). Why Satisfied Customers Defect. Harvard Business Review, (November-December), 88-99.

Macintosh, Gerrard, & Lockshin, Lawrence S. (1997). Retail relationships and store loyalty: A multi-level perspective. International Journal of Research in Marketing, 14, 487-497.

Nam, Jinhee, Reagan Hamlin, Hae Jin Gam, Ji Hye Kang, Jiyoung Kim, Pimpawan Kumphai, Cathy Starr, and Lynne Richards (2007), “The Fashion-Conscious Behaviours of Mature Female Consumers,” International Journal of Consumer Studies, 31 (1), 102-108.

Brien, Louise, & Jones, Charles. (1995). Do rewards really create loyalty? Harvard Business Review, (May-June), 75-82.

Oliver, Richard L. (1997). Satisfaction: A behavioral Perspective on the Consumer. New York: Irwin/McGraw-Hill.

Reynolds, Kristy E. & Arnold, Mark J. (2000). Customer Loyalty to the Salesperson and the Store: Examining Relationship Customers in an Upscale Retail Context. Journal of Personal Selling & Sales Management, XX(2), 89-98.

Scarlett Wesley, Melody Le Hew , Arch G. (2006), Consumer decision-making styles and mall shopping behavior: Building theory using exploratory data analysis and the comparative method,  Journal of Business Research, 59(5), pp:535-548

Sharma Sunanda and Lal Kashmiri (2012) Changing Consumer Behaviour-A Challenge for Sustainable Business Growth, International Journal of Marketing, Financial Services & Management Research Vol.1 Issue 8, pp: 149-158

Sirgy and Samli, A. Coskun. (1985). A Path Analytical Model of Store Loyalty Involving Self-Concept, Store Image, Geographic Loyalty, and Socioeconomic Status. Journal of the Academy of Marketing Science, 13(3), 265-291.

Tang, Christopher S., David R. Bell and Teck-Hua Ho (2001), “Store Choice and Shopping Behavior: How Price Format Works,” California Management Review, 43 (2), 42-49.

Wallace, David W., Giese, Joan L., & Johnson, Jean L. (2004). Customer Retailer Loyalty in the Context of Multiple Channel Strategies. Journal of Retailing, 80, 249-263.

Wong, Amy, & Sohal, Amrik. (2003). Service quality and customer loyalty perspectives on two levels of retail relationships. The Journal of Services Marketing, 17(4/5), 495-511.

Zeithaml, Valarie A., Berry, Leonard L., & Parasuraman A. (1996). The Behavioral Consequences of Service Quality. Journal of Marketing 60 (April), 31-46.

1. Research Scholar, Faculty of Management Sciences, Siksha O Anusandhan (Deemed to be University), Bhubaneswar, India

2. Professor, Faculty of Management Sciences, Siksha O Anusandhan (Deemed to be University), Bhubaneswar, India, *Corresponding Author (Email: connectuma123@gmail.com)