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Branding of Shopping Malls and Preference of Customers: A Study with

Reference to the City of Kochi

Conference Paper · April 2016

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 BRANDING OF SHOPPING MALLS AND PREFERENCE OF
CUSTOMERS: A STUDY WITH REFERENCE TO CITY OF
KOCHI
Mr. Sudeep B. Chandramana1
Mahatma Gandhi University, Kottayam, Kerala, India
sudeep@macfast.org
1
Sudeep B. Chandramana, Assistant Professor, Department of Management Studies, Mar
Athanasios College for Advanced Studies Tiruvalla (MACFAST), Thiruvalla, Kerala, India
(Affiliated to Mahatma Gandhi University, Kottayam, Kerala, India)
Mr. Arun Prem2
Mahatma Gandhi University, Kottayam, Kerala, India
arun@macfast.org
2
Arun Prem, Assistant Professor, Department of Management Studies, Mar Athanasios
College for Advanced Studies Tiruvalla (MACFAST), Thiruvalla, Kerala, India (Affiliated to
Mahatma Gandhi University, Kottayam, Kerala, India)

Abstract:

The organized retail industry in India is rated as the fifth most attractive emerging market,
and is being seen as a potential goldmine. It has been ranked second in a global retail
development index of 30 developing countries drawn up by AT Kearney. Among the
organized retail types, Shopping Malls have become a significant part of urban lifestyle
today. These shopping-cum-entertainment destinations are getting bigger and better and
attracting shoppers with sporting multiplexes and food courts. Dominant retail activity is
visible not only in the top cities, but tier II and III cities also. In a market like Kochi, where
there is no shortage of quality shopping and distance travelled, shopping mall developers
need to think something different and fast. The present study focus on determining latest mall
trends in India, the reasons for customers’ preference towards a particular mall, the relevance
of branding the mall, top challenges for mall managers and using best practices and
international standards aimed at enhancing the customer experience thereby increasing the
value of the mall through effective marketing for owners, mall managers, investors, tenants,
researchers, academicians and other stakeholders. Items related to mall attributes were
identified and analysed to find the leading factors that influenced customers in preferring a
mall. Finally, a retail marketing strategy has been proposed for mall managers to create
shopper’s loyalty i.e. to ensure repeat and dedicated patronage. The paper concludes that with
many purchasing options and channels available to today’s consumer, staying top of mind to
the consumer are very important to a shopping mall, for the long term survival. A well
branded shopping mall can dominate its market, provide superior sales opportunities for its
tenants, while also being more successful in attracting the most desirable tenants, all leading
to higher customer satisfaction and returns for the investors.
Keywords: Shopping Mall, Brand loyalty, Customer Preference, Organized retail, Retail
Strategy
1. Introduction

The retail sector in India is witnessing a revolutionary change as traditional markets make
way for new formats such as departmental stores, supermarkets, hypermarkets, specialty
stores and shopping malls. Western-styles malls have been flourishing in metros and Tier-2
cities alike, introducing the Indian consumer to a shopping experience like never before. The
structure of retailing is developing rapidly with shopping malls becoming increasingly
common in large cities, and development plans being projected to 500 shopping malls by the
end of 2016. In India, the growing middle class and its nearly untapped retail industry are the
key attractive forces for global retail giants looking to enter into newer markets, which in turn
will help the Indian retail Industry to grow at a faster rate. As per the McKinsey Report
(2007), “The rise of Indian Consumer Market', the Indian consumer market is expected to
grow fourfold by the year 2025.
Globally, India is among the top 10 retail markets. In 2013, the Indian retail sector was
estimated at US$520 billion and was among the largest employers in the country. By 2018,
the Indian retail sector is likely to grow at a CAGR of 13% to reach a size of US$950 billion.
The Indian retail sector is set to grow rapidly with a gradual shift toward organized retailing
formats. Organized retail penetration is expected to increase from 7.5% in 2013 to 10% in
2018 at a robust CAGR of 19-20% during the same period. This will be driven by a
combination of demand, supply and regulatory factors, which are expected to be the growth
engines of the Indian consumer and retail market (EY-RAI Retail Survey, 2014). The future
of the India Retail Industry looks promising with the growing of the market, with the
government policies becoming more favorable and the emerging technologies facilitating
operations. Thus, the Indian retail sector is booming and mall growth is being seen as a clear
indicator of the economic prosperity in the nation. These shopping-cum-entertainment
destinations are growing bigger and better, at the same time attracting shoppers mainly with
extravagant multiplexes and food courts. A shopping mall for the purpose of study has been
defined as a mall which is typically enclosed with a climate-controlled walkway between two
facing strips of stores.
1.1 Significance of the Study and Research Problem Identification
India with its current retail growth rate turns out to be one of the most prominent
countries for global retailers. High consumer spending over the years by the young
population (more than 31% of the country is below 14 years) and sharp rise in disposable
income are driving the Indian organised retail sector’s growth. Even Tier I & Tier II cities
and towns are witnessing a major shift in consumer preferences and lifestyles, the result
of which, they have emerged as attractive markets for retailers to expand their presence.
This will be driven by a combination of demand, supply and regulatory factors which are
expected to be the growth engines of the Indian consumer and retail market
(Chandramana, Sudeep B, Menaka R, 2015).
In the markets like Kochi in Kerala, where there is no shortage of quality shops and long
distances can be easily travelled via well connected roads, shopping mall developers need
to think something different and fast. Still there is untapped opportunity in Kochi, and if
planned carefully and in the right direction, it would be fruitful to all the stake holders.
The present study focuses on determining latest mall trends in India, the fundamentals of
good shopping centre investment, top challenges for mall managers, need for mall
managers to focus on running properties in perfect condition and operating using best
practices and international standards. Thus, the question comes up, "What strategies need
 to be formulated and implemented by mall developers and operators for the success of
shopping malls?"
1.2 Objectives
Organised retailing formats in India are becoming more popular these days. While
modern retailing is going through transition in India, upcoming mall players have to face
very tough competition from traditional as well as other modern formats. The main
objectives of the present study are:
1. To identify how various shopping mall attributes rate on shoppers’ evaluation in
shopping mall selection
2. To propose strategies for branding the mall and creating shopping mall loyalty

1.3 Hypothesis

This study considers the following Hypothesis for the achievement of the first objective
of the research:

Ho: Different shopping mall attributes have different importance as perceived by

customers.

2. Methodological Design of the Study

2.1 Universe of the Study and Target (survey) Population
The universe comprise of all adult male and female shoppers (above 18 years)
residing in the city of Kochi, Kerala. The survey population is all adult shoppers
(above 18 years of age) visiting shopping malls in Kochi.
2.2 Sample Design
2.2.1 Sampling Unit: Customers (above 18 years of age) visiting selected shopping
malls in Kochi
2.2.2 Sampling Size: 400 respondents constituted sample covering five main malls in
Kochi – Lulu International Shopping Mall, Oberon Mall, Nucleus Mall, Central Mall
and Gold Souke.
2.2.3 Sampling Design: Purposive sampling technique was used to collect data
2.2.4 Sample Area: The area covered for the study is the city of Kochi, Kerala
2.3 Data Collection
Data was collected using both primary and secondary data collection methods.
Primary Data was collected from mall shoppers via mall intercept survey using a
structured questionnaire. Some of the Secondary Data collected was also based on
available information published in newspapers and industry journals, and that released
by retail companies or shopping mall developers via internet.
 2.4 Data Analysis Tools
Factor analysis based on Principal Component Analysis method via SPSS and Chi-
Square analysis.

3. Analysis and Findings

The results of the research are presented below in accordance with the objectives and
hypothesis of the study.
3.1 Shopping mall attributes considered by shoppers on mall selection

Ho: Different shopping mall attributes have different importance as perceived by

customers.

The primary objective of this study was met by testing the first hypothesis. The
ratings given by respondents on the shopping mall attributes were subjected to a
Factor Analysis based on the Principal Component Analysis (PCA) method using
SPSS. Factor Analysis was used here to group the variables by examining correlation
between them, and to create an entirely new set of less number of variables, which
can be considered as factors for prediction.

To measure the questions on the scale, respondents were asked to rate the importance
of mall attributes considered by them in the selection of mall on a 5-point Likert scale,
with 5 being extremely important and 1 being extremely unimportant. 20 shopping
mall attributes were factor analyzed to produce new factors. Statistical significance
was set at a level of 0.05 for all analysis. To test the suitability of Factor Analysis (for
this study), the KMO score was found to be above .50 (.806) and the Bartlett’s test
was also observed to be significant ( 2 = 8315.399, df = 190). Varimax Rotation
Method was used and it converged in four iterations. Only these factors were retained,
which had latent roots or Eigen value more than 1, since these were considered
significant. A total of five factors accounted for 80% of the total variance, well above
the desired level of 60% of the total variance.
 Table 1: Shopping Mall Attributes
Factors Loading Eigen Value % of Variance
Factor 1 : One Stop Store
Merchandising 0.958 4.704 23.518
Physical environment 0.949
Sales Person behaviour 0.974
Guarantees 0.941
Loyalty Programs 0.954
Factor 2 : Convenience
Locational Advantage 0.981 3.686 18.431
Parking Facility 0.979
Security 0.983
Shopping Time 0.045
Factor 3 : Value
Value for Money 0.981 2.905 14.527
Utility oriented 0.967
Credit Facilities 0.952
Factor 4 : Entertainment
Multiplexes 0.973 2.640 13.199
Food Courts 0.942
Game Zone 0.953
Festival Programs 0.074
Factor 5 : Specialty
Different Stores 0.649 2.153 10.766
Complete Department Store 0.759
Brand Availability 0.848
Anchor Stores 0.787
(Source: Analysis of Primary Data using SPSS)
From the above table it is clearly inferred that the attributes considered by customers
in selecting shopping mall are one stop store, convenience, value, entertainment and
specialty.

From this analysis it can also be concluded that the null hypothesis “Different
shopping mall attributes have different importance as perceived by customers” (Ho) is
accepted.
3.2 Time spent by Shoppers while shopping at Malls

Table 2 : Time Spent by respondents in Shopping Mall

% of
Time Spent Number of Respondents
respondents
< 1 hour 48 12
1- 2 hours 76 19
2 - 3 hours 140 35
3 – 4hours 44 11
4 - 5 hours 36 9
> 5 hours 56 14
Total 400 100
(Source: Primary Data)
From the above table it can be inferred that about 69% of the respondents spend more
than 2 hours while visiting Malls.

3.3 Frequency of visit for shopping in Malls

Table 3: Frequency of visit to Shopping Malls

% of
Frequency Number of Respondents
respondents

Once in a week 64 16

Once in a
76 19
fortnight
Once in a month 192 48

More than 4
68 17
times in a month
Total 400 100
(Source: Primary Data)
The above table shows that 48% of the shoppers visit only once in a month, but 33%
(16% + 17%) of the shoppers go to Malls at least once in a week on an average. This
indicates that there is a clear preference by shoppers towards Malls.
3.4 Occasion of visit to Shopping Malls

Table 4 : Occasion of visit to Shopping Malls

% of
Occasion Number of Respondents
respondents
Regular 176 44
Festive seasons 60 15
Holidays 96 24
Discounts 68 17
Total 400 100
(Source: Primary Data)
The above table gives further confirmation about customers’ preference towards Malls, as
it shows that 44% of the respondents are regular visitors of Shopping Malls.

3.5 Retail marketing strategies for branding the mall and creating shopping mall loyalty

Modern retail offers product width and depth and a better shopping experience
whereas the kirana shops have a low- cost structure, convenient location, and
customer intimacy. The organized retailers are also having a greater advantage
because of the store image, variety of product availability, and discounts and offers
(Chandramana, Sudeep B, 2015).

Based on the present study, a retail marketing strategy has been proposed for mall
operators and managers. The marketing strategy is devised to build the brand and
create shoppers’ loyalty, in order to ensure repeat and dedicated patronage. With more
and more Malls being opened in Kochi, it becomes imperative for Mall operators to
build a strong brand to get distinguished among the many choices that shoppers have.

Mall managers’ marketing strategies could be formulated considering three major

objectives of attracting shoppers to shopping malls, encouraging them to buy, spend
and influence the type and quantity of items, motivating them for further purchases,
specifically for repeat purchases in the same product categories. The important
shopping mall attributes identified from the factor analysis, could build shopping mall
loyalty, and could be used for designing the right retail mix.

3.5.1 Retail Marketing Mix for Shopping Malls

Kotler et al (2013) indicate that marketing mix is one of the key concepts in modern
marketing theory.

The important retail marketing mix elements for shopping malls, as identified from
the study are:
1. One stop store: Merchandising, Physical environment, Sales person
behavior, Guarantees and Loyalty programs
 2. Convenience: Location advantage, Parking facility, Security and Shopping
time
3. Value: Value for money, Utility oriented and Credit facilities
4. Entertainment: Multiplexes, Food courts, Game zone and Festival
programs
5. Specialty: Different stores, Complete department store, Brand availability
and Anchor stores.
A Mall format is proposed, keeping in consideration the retail marketing mix elements,
i.e., shopping mall attributes as identified above. Strategies related to each of these
attributes are formulated as explained in the following section.
3.5.2 One stop store Strategy

The proposed one stop store of a Mall could be a place wherein routine purchases are
made, besides spending quality time with family comfortably in a climate controlled
environment under one roof. Interior and exterior design of the mall, basic amenities
and ambience play motivating role for customers to spend more time while feeling
comfortable and stress-free. In case of defective or damaged goods, fast and hassle-
free response strategy is proposed. “No questions asked” policy could be adopted for
returns or replacement. In the case of chin of Malls an option to return /exchange at
any store across the country in case of chain stores could be a differentiator service.
Other services like suggestions to shoppers, polished behaviour, and guidance might
help in retaining the customers and ensuring revisits.
3.5.3 Convenience Strategy

If the Mall cannot be centrally placed in the heart of the city, it could be built in the
adjoining residential areas or can be located in a pleasant and peaceful environment.
Multi-level hydraulic parking could be adopted to address parking constraints. A
branding strategy could also include zoning of shops inside the Mall, maintenance
activities without disrupting the smooth functioning of stores, positioning with respect
to competitors, unique promotion and marketing activities for the whole mall during
festival seasons and special occasions. Malls should have well trained security
personnel and state-of-the-art digital security systems.
3.5.4 Value Strategy

The pricing methods followed by most retailers (stores inside the Mall) are cost-plus
pricing, discounting for students, youth and senior citizens. In the case of items for
daily/frequent use, discounting may be followed, which could result in high volume
sales. A low pricing strategy may be followed for low and medium stores, as shoppers
would be expecting more value for money from these shops.
3.5.5 Entertainment Strategy

Shopping Mall is expected to have a balance between the major attributes like
entertainment, food and game zones for kids. This strategy could attract shoppers,
especially family shoppers thereby motivating them to make more visits. In addition
to this, a variety of events related to festivals and special occasions could draw the
attention of new customers as well. But, in order to retain them and to encourage them
 to visit malls repeatedly, the mall managers need to develop strategies to increase
loyalty towards the Mall.
3.5.6 Specialty Strategy

Based on the brand positioning and brand image of the Mall among the public, it
should have the right mix of national and global brands along with private labels. It
shall have a full department store as well as different stores offering specialty product
categories. A carefully planned selection of stores could help the mall to build its
unique position and become as the first preference of shoppers, amongst immense
competition.

4. Conclusion
One of the primary objectives of any shopping mall has become Brand Building, based on
specific set of attributes, so that it can stand out among the crowd. Malls in Kochi are
increasingly focusing on offering a one stop store solution to shoppers at the same time
providing enough options for entertainment. The components related to brand building
include developing a competitive advantage, positioning and communicating the same to the
customers. Emerging trends could be identified from the internal historical data and customer
feedbacks. Based on this, the marketing strategies with respect to attributes like one stop
store, value, convenience, entertainment and specialty could be formulated since these
attributes play a major role in building a specific brand image for the Mall. Thus, mall
managers and retail shops in the Mall could focus on the above attributes to design,
communicate and deliver appropriate customer loyalty strategies for positioning the Mall and
promoting the retail shops, thereby facilitating prospective shoppers in choosing the Mall.
These strategies are expected to alter the shopping experience at malls and make customer
visits at malls lot more pleasurable and substantial, resulting in more customer loyalty. With
many purchasing options and channels available to today’s consumer in a city like Kochi,
staying top of mind to the consumer is very important to a Shopping Mall, for its long term
survival. A well branded Shopping Mall can dominate in its market, provide superior sales
opportunities for its tenants/stores, while also being more successful in attracting the most
desirable tenants, all leading to higher customer satisfaction and returns for the investors.
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