(Article) Consumer behaviour and retailing decisions

Does consumers' selection of retail outlets depend on the brands available or is it the retail outlet first and the brand
next? Marketers need to do in-depth research on the various aspects that link brand and retail strategy, says S.
Ramesh Kumar

DECISION-MAKING with regard to retail outlet selection is very similar to consumer decision-making on brands
where the consumer goes through a process starting from identifying needs to post-purchase issues. There are a few
interesting and important dimensions associated with consumer behaviour and retail outlet selection.
 Does the retail outlet have psychological implications on the target segment? When Titan and Timex watches
were retailed through exclusive shops, consumers wanting lower-end watches probably felt that a typical Titan
showroom was too elitist, which could have had a negative impact.
 Does selection of outlets vary in accordance with types of product categories? While buying a TV or a washing
machine, would consumers visit an exclusive showroom of BPL, Onida or Sony, or would they visit a multi-brand
outlet?
 Would there be differences in the psychographic (and demographic) profiles of consumers choosing outlets? What
is the sequence in which consumers are likely to go about their decisions? Will they select the brand or the category
first before choosing the outlet?
 What is the impact of the image developed by a retail outlet? Is FoodWorld different from a neighbourhood
grocery shop in the minds of consumers? What kind of perception are consumers likely to have with regard to
shopping from an online outlet such as Fabmart vis-à-vis a brick-and-mortar outlet like Fountainhead or Landmark?
 Would consumers be interested in store or retail brands? Traditionally, retailers have been carrying manufacturers'
brands. But in recent times (at least to a significant extent in the foods category), supermarkets such as FoodWorld
have started carrying retail or store brands. Nilgiri's is another example in the South which carries its own brands of
chocolates, biscuits and other commodities.
 What contributes to retail equity or retail image or retail loyalty?
 How do retail outlets handle perceived risks?
Marketers need in-depth knowledge about the various dimensions which link retailing and consumer behaviour.
There is research required to handle retail decisions in a competitive context. McDonald's found that a major chunk
of its consumers decide to eat a few minutes before they make the purchase decisions and hence it is building small
outlets in large supermarkets such as Wal-Mart and Home Depot. It is providing play areas to ensure a number of
families visit its outlets with children. A few companies also operate through kiosks in airports, malls and high-traffic
areas. Sunglass Hut is a brand which operates kiosks at various places which displays about 1,000 different models
along with their prices. Consumers could place an order through these kiosks and the product is home-delivered.

Retail outlet selection and brand selection

There are three fundamental patterns which a consumer can follow and they could be:
(I) Brand first, retail outlet second
(ii) Retail outlet first, brand second
(iii) Brand and retail outlet simultaneously.
A consumer wanting to buy a car may collect information on brands and purchase it from a retail outlet based on his
perception of price offered or after-sales service provided by the outlet (typically, search for information on brands is
followed by retail outlet selection in durables). In certain product categories, especially where `category killers' exist,
consumers may think of the retail outlet initially and then the brands (television, refrigerator and audio products
retailed through outlets like Vivek and Co. in the South, could be an example).
One more dimension may be to compare brands in the evoked set at retail outlets which also exist in an evoked set of
their own. This is highly possible, especially in the Indian context where dealers develop a social relationship with
consumers, especially in semi-urban and rural areas. Primary research could be used to discover the specific sequence
involved in a situation of this kind. A `brand first' dimension may need feature-based advertising and a `retail outlet
first' dimension may require a set of point-of-purchase (POP) materials and special training to sales personnel to
recognise the needs of consumers.
Further, if it is known that a number of consumers may be oriented to visit their favourite retailer (before obtaining
information on brands) in a geographical area, there would have to be more emphasis on regional/local advertising
which highlights the retail shop rather than regular brand-based national advertising.
Strategies and sequences
Retail outlet first and brand second: When a number of consumers follow this sequence of decision-making, display
of point-of-purchase material and building the image of the outlet becomes important. The manufacturer of the brand
may have to ensure that the brand (and the variants demanded) will be available at the key outlets in a locality. Point-
of-purchase materials which are to be used at the retail outlet may require primary research - should visuals be used,
should product features be used, should the POP material be in the regional language. There may also be a need to
monitor competition from other retail outlets to ensure that consumers are kept satisfied in terms of service, price,
promotional deals and ambience. This is especially applicable to durables retailing in India (in cities). Retailers
attempt to increase consumer traffic by providing a number of `add-ons'.
Brand first and outlet second: The brand was probably thought of by the consumers because (i) the consumers may
not have developed a relationship with any retailer which is strong enough to get into the `evoked retail set' or (ii) the
brand has got into the evoked set because of advertising or positive word of mouth. Local advertising with the
mention of brand names which have already got into the evoked set would enable consumers to be `pulled' to the
outlet.
Primary research may be required to identify the brands in the evoked set. This feedback may have to be provided by
the manufacturers of a brand to retailers in various regions (especially if it is a brand with a major chunk of the
market and one which is nationally advertised). Even multinational outlets could make use of this approach and
mention the brands in the evoked set (in a given geographical area). This is likely to improve traffic to the outlet.
Besides, the evoked set could also change from time to time depending on the strategies of brands.
About two decades ago, brands like Solidaire, Dyanora and Crown may have been top-of-the-mind (in a specific
geographical area) but slowly gave way to other brands - these changes should be captured (how often this happens,
why, and the differences between markets) to formulate retail strategies. The local advertising could be different from
the national advertising for the brand. A brand may be advertised on features nationally but the retail outlet in may
prefer to highlight the effective after-sales service associated with the brand as this may be a priority of consumers.
The combination of `push-pull' strategy is shown in the table.
The interest generated in the brand would have to be backed by good pre-sale services at the outlet.
Brand and retail outlet simultaneously: When consumers think of the brand and retail outlet together, it means that
they have a certain preference for the outlet and would like to check the evoked set of brands there. The marketer
would have to carry out primary research to find out specific markets where consumers have a very positive
relationship with retailers. This is important because of the influence of retailers over the purchase behaviour of
consumers in the Indian context.
It may also be worthwhile to check if the evoked brands are carried by the retailers who have a positive relationship
with the target segments. This is to ensure that the retailers who have a favourable perception among the target
segment carry the desired brands. Failing this, consumers may turn to a different retailer, which would be to the
disadvantage of a retailer who has already won the confidence of consumers. Retail sales personnel also become
important in this situation. The prospective consumers are "carried over" to the purchase stage by the store personnel
and hence there should be incentive programmes for the store personnel.
If a company such as BPL or Videocon is dealing with a number of brands/sub-brands, it has to ensure the
availability of specific brands which may interest the consumers. If the retail outlet is a large one dealing with a
number of brands (like Vivek), a shop-in-shop arrangement may be preferable. This model puts the brand in focus
and reinforces the positive association a consumer may have about it. A considerable amount of pre-sale service
would have to back up the shop-in-shop concept.
The shop-in-shop concept creates an aura of exclusivity. Consumers tend to have higher expectations about the pre-
sale service and the attention given to them. A large store also is likely to stock several brands and hence all brands in
the evoked set would have to compete with each other to progress from the evoked set to choice set. Large outlets
may also have a built-in provision for a lower price (because of volumes) and hence may be in a better position to
clinch the deal with consumers who may simultaneously consider both the brand and the retail outlet.