Factors Affecting Purchasing Decision of Customers from

Large-Scale Retailing in Bangladesh

1. Introduction:

Consumer behaviour is the study of how individual customers, groups or organizations select, buy,
use, and dispose ideas, goods, and services to satisfy their needs and wants. It refers to the actions
of the consumers in the marketplace and the underlying motives for those actions. Whereas, the
consumer market refers to buyers who purchase goods and services for consumption rather than
resale. However, not all consumers are alike in their tastes, preferences and buying habits due to
different characteristics that can distinguish certain consumers from others.

Purchase decision is a kind of decision-making that studies the reason to buy a particular brand by
consumer. The Englel Kollat Blackwell model shows consumers buying-decision process, based
on the basic of consumer psychology that reviewed play an important role in consumers
actual buying decision. It indicates that consumers pass through five stages: problem recognition,
information search, evaluation of alternatives, purchase decision, and post purchase
behavior. Clearly the buying process starts long before the actual purchase and has consequence
long afterward.

Culture: Culture, subculture, and social class are particularly important influences on consumer
buying behavior. Culture is the fundamental determinant of a person’s wants and behavior.
Through family and other key institutions, are influenced by beliefs, knowledge, work language,
and art. Culture can be considered as a lifestyle and passed on from one generation to the
next generation under the different culture, people may have their own views of selves, or
relationship to others. Marketers must closely attend to cultural values in every country to
understand how to best market their existing product and find opportunities for new products.

Social: Social factors are the factors that comes from reference groups, family, social roles
and status that influence the consumer behavior to make purchase something. The researcher
found that the social factors is the facts and experiences that influence individuals
personality, attitudes and lifestyle comes from people around.

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Personal: Personal factors are the factors that using the characteristics of each consumer that
influence consumer behavior they are age and stage in the life cycle, occupation and
economic circumstance, personality and self-concept. Researcher defined that personality is
the set of traits and specific characteristics of each individual it is the product of the
interaction of psychological characteristics of the individual of something such as brand.

Psychological: Psychological factors influencing consumer behavior and divided into 4

categories: motivation, perception, learning as well as beliefs and attitudes. It can be
define that one of the definition of psychological is the process through which an individual
selects, organizes and interprets the information he/she receives in order to do something that
make sense.

2. Objectives:

The specific objectives of the study are to:

i) Analyze the present scenario of the retail chain stores in Bangladesh;
ii) Analyze the attitudes towards the retail chain store services in this country;
iii) Analyze the buying behaviour of consumers separated by different market segment;
vi) Provide some suggestions and recommendations on the basis of findings.

1. Present Scenario of The Retail Chain Stores in Bangladesh:

Retail environment in Bangladesh can be segregated into two streams; organized retail and
unorganized retail. Although the entire industry has shaped around unorganized retail over the
years, organized retail is gradually becoming popular to the new generation convenience seeking
consumers. While the local mom and pop shops (In Bengali Mudir Dokan) are still larger
contributors to turnover of consumer goods, super shops are slowly turning those customers into
their value chain while creating new customers as well.

1.1. Organized Retail is yet to Accept by Mass:

Compared to the total retail market, organized retail i.e. supermarket contains only over 1 %.
According to Bangladesh Superstores Owners’ Association (BSOA), some 30 companies with
over 160 outlets are currently operating across the country, albeit the stores are mostly located in

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cities and urban areas.
The rise of the middleclass and their growing purchasing power are driving the growth of the
supermarket business in Bangladesh, said insiders.
According to the market players, the sector is likely to witness further growth riding on rapid
urbanization and higher per capita income

The market size of the country's supermarket is roughly Tk 2,500 crore and the growth has been
almost 15 percent per year for the last couple of years, said Sohel Tanvir Khan, business director
of Shwapno, the market leader.The concept of supermarket is not very old in Bangladesh.
Agora began the journey in 2001 in the capital. Shwapno, Meena Bazar, Nandan, Almas,
Carrefamily, Pick & Pay, Daily Super Shop, Unimart and some others entered the business to
attract the attention of middleclass consumers.
According to a recent review report by IDLC Finance, there are 121 supermarket outlets in the
country. Of them, Shwapno has 76 outlets in Dhaka, Chattogram, Cumilla, Gazipur and Sylhet.
The other super shops in Dhaka city are Almas, Carrefamily, Pick & Pay, Daily Super Shop,
Unimart and Prince Bazar. The IDLC report said the supermarket industry's market size was
around Tk 1,500 crore in 2015. With rapid urbanisation, the industry is expected to grow by 15
times by 2021 from the current one.
Yet, the share of the supermarket in terms of general trade is very insignificant: it stands at only
1.52 percent, indicating an untapped potential for further growth of the sector.

Bangladesh's consistent economic growth of over 7 percent for the last three fiscal years and the
rising middle and affluent class who are estimated to be around two crore will drive the growth of
the supermarket in the years to come.

The consumers belonging to the middle and affluent class want to buy everything under a roof and
here comes the supermarket where a wide array of products are available -- groceries, dry foods,
fish & meat, household goods and equipment, electronic items, clothing and so forth.

Mahbubul Haque, acting branch in-charge of Agora's Uttara outlet, said an increasing number of
customers were coming in to their outlets.
The super shop culture was introduced 17 to 18 years ago, they had to struggle a lot to attract
customers who were not familiar with the concept.
The first intervention of superstore was in 2001 by Rahimafrooz Superstores Limited, namely

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Agora with 4 outlets. In quick succession, Agora was followed by Nandan, initially with two large-
scale outlets and Meena Bazar with four medium-scale outlets. In 2008, ACI Ltd. launched its own
retail chain, Shwapno. Inside Dhaka there are other smaller chains such as Daily Shopping (9
outlets), Almas (4 outlets), Carrefamily (2), Pick & Pay (2 outlets), Lavender (2 outlets) and Prince
Bazar (2 outlets). In addition to Dhaka, Agora, Shwapno & Meena Bazar operates in Chittagong,
Khulna, Sylhet and Rajshahi.

With larger customer coverage & the most number of outlets (60 outlets), Shwapno is currently
the market leader; serving approximately 35,000 customers daily on an average. In numbers,
Shwapno has 60, Meena Bazar has 18 & Agora has 10 outlets. Also, Khulshi Mart, Basket,
Chawkbazar Supermarket, Shopping Bag Super market is very popular in Chittagong city.

SOURCE: LightCastle Partners Primary Research

Total market size is around BDT 1,500 crore and growth rate is around 15 % for the last 3-4 years.
By 2021, the industry is expected to grow 15 times than today’s industry size.

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We have Choosen The Basket Supershop for our study:
The Basket is Chittagong’s largest and most convenient superstore which enables you to buy
grocery, bakery, fruits & vegetables and other products that you need every day, directly from it's
local shop located at 2464/C Zakir Hossain Road, Khulshi, Chittagong. Now The Basket is also
offering it’s products via online through your mobile or web browser.

What kind of products do they sell?

You can choose from over 40,000 products spread across various categories such as grocery,
bakery, fruits & vegetables, beverages, personal care products, baby care products, pet products
and much more.

What cities and locations do they deliver?

The Basket currently operates it's home delivery services in Chattrogram City.

What is the minimum order value?

There is no minimum order value.
Delivery Charge?
They have a minimum order value worth 3000TK to qualify for free delivery. In case you do not
reach the limit, 29Tk delivery charge will be levied against that order.

Factors that affect consumers purchase decisions according to The Basket

Some other main factors responsible for Retailing are as follows:

• Change in social structure: The steady rise of nuclear families, coupled with the influx
of women in the workforce means less time for shopping. Thus, it is becoming increasingly
important to have a huge variety of products under one roof.

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• Change in per Capita Income: Per capita income has increased to above USD 1,000 in
2018 and is expected to grow further, especially in urban areas. This change in socio-
economic structure has given rise to a new breed of middle-class who are willing to spend
their higher disposable income in supermarkets rather than wet markets in pursuit of
convenience and social status.
• Change in Taste and Fashion: Globalization through internet penetration, international
trade, and myriad of international television channels have exposed consumers to new
ideas. Shopping from supermarkets, long considered a Western concept, is slowly being
accepted by mainstream consumers in Bangladesh.
• Consumer Awareness: Due to widespread media coverage over usage of formalin and
chemical contaminated consumable products; consumers are more aware of possible health
repercussions of consuming these products
• Less Time for Shopping: In recent times the graph of working population has seen a steep
increase in urban as well as rural areas thus changing their spending habits & income
structure. It becomes very difficult for the working people to spend enough time in
shopping at different locations. This enables a retailer to provide them various products at
one place, creating a platform for development.
• Value for Money: Big & organized retail outlets basically deal in volumes & can offer a
good range of products at reasonable price thus attracting customers at a very large scale.
This in return also creates a good opportunity for retailers to get more profits & enables
new business groups to enter into this sector.
• Enhanced Delivery Options: When it comes to delivery, consumers like choices. They
may want your product or service as soon as possible. They may want it delivered in a
specialized way. Work with your prospects and customers, allowing them to feel like your
delivery process was custom-tailored to fit their unique needs. Maybe this means offering
free delivery if applicable. Or maybe it means that your business will host a training
workshop upon delivery to ensure that your customers understand how to get the most out
of their purchase.
• Payment Options: Providing simple payment options makes money exchange seamless
and ultimately, is a key factor in influencing consumer purchase decisions.

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Almost every Possible payment method available in Market

• Information About Products and Services: Super Markets offer informative content are
perceived as experts who care more about educating consumers than making a buck. It
goes without saying that this greatly increases the chance of making a sale.
• Brand Value creates social Identity: Customers, more than often, either purchases
products that suit their personality; or who they want to be and at times, both. It is all about
how the customer sees himself/herself; prettier, popular, eco-conscious etc. Another side
of it is how they perceive others look at them. Marketing researchers are of a firm opine
that people buy products to enrich their identity in their own eyes and get closer to their
ideal selves.
• Customer care: Stores, products, services experience that consumers enjoy – which
unfortunately is usually and easily forgotten. Customer needs and desires vary and the
factors which influence these customers vary, too. However, that one thing common among
all of them is that they never hesitate in expressing their opinions and reviews about a
brand, product or service they used. It is the overall experience, the good, the bad and the
ugly – everything – and most of the times – online. For this reason, it is just as important
that brands gather and understand customer interactions to identify the factors that
influence customer purchase decisions.
• Digitalization: Now, consumers can easily price check and order online—which can drive
down prices and make it more difficult for retailers to make a profit. About 8 in 10 shoppers
make at least some of their purchases online, which is why retailers need to understand
both the competition down the road—and the competition on the web.
• Buy now, pay later/ Monthy, Weekly buying offer: Retailers know that allowing
consumers to delay payment can dramatically increase their readiness to buy. One reason
delayed payments work is perfectly logical: the time value of money makes future
payments less costly than immediate ones. This explains why people have an easier time
spending money on credit cards as opposed to spending real money.
As a marketer, it helps to ask yourself pertinent questions such as: what motivates your
consumer buying decisions? Are consumers rational? It has often been said that consumers

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 do not act purely on logical basis. More often than not, the emotional part of their brains
wins when it comes to making purchasing decisions. Therefore, there are several factors
that affect online consumer buying behavior and one of them is product discount.

Study:

SurveyMonkey is a tool that allows users to create their own surveys using question format templates. It
is a tool that allows you to launch any kind of online survey project, be it for the purpose of market
research, a quick poll, competitive analysis or customer or the employee feedback. This easy-to-use
platform allows you to tailor your surveys according to your defined target audience. We used
SurveyMonkey to create a poll for 150 consumers who frequently go to Basket supershop but only 123
customers responded to the survey. We let them answer the following questions which is from each
factor affecting purchasing decisions of customers.

1. Are you the primary decision maker in your household regarding purchasing this product
category? (Cultural factor)
2. Regarding purchasing this product category, do you typically make a decision about brands
beforehand or at the time of purchase? (Psychological factor)
3. What is your approximate average household income? (Social factor)
4. How often do you purchase this product category? (Personal factor)

The results are given below:

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Findings:

From study we clearly see,

• Most of the customers came to Basket were the primary decision maker in the family
regardless men & women. So, gender is not a factor in buying pattern in retail shop.
• Two-third of the people are predetermined on which brand of products they would
purchase, remaining people decided on the spot.
• People of various household income came for shopping but low-income people (Tk. 0-
10000) & high-income people (Tk. more than 80000) have a tendency to come more. That
is because low income people are mostly young who are more attracted to chain shop to
avoid bargaining & high-income people go there for a bulk shopping & convenience.
• Almost all people who were shopping are frequent customers of Basket chain shop. Only
6% according to study came there for occasional shopping.

Limitations:

• Only online survey is conducted; insufficient for actual but sufficient for probable
decision making on consumer buying pattern.
• Questionnaire consist of only 4 questions of 4 factors affecting purchasing decision of
customers.
• Study conducted on only one kind of super shop.

Recommendations & Conclusion: From the study it is clear that customers’ buying behavior in
retail shop depend on 4 factors but following recommendations can help enhancing customer
satisfaction.

• Chances of product browsing make client’s alert for new offerings of store and a variety
of promotional schemes.
• Effective training and development programs for employees so that they can continue
to work on maintaining good customer relationships.
• Encouraging good positive behavior for customer retention.

The End

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