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MM07

Consumer Behaviour

(For CNM Cases)

Assignment – II

Assignment Code: 2016MM07A2                                                                Last Date of Submission: 30^th April 2016

                                                                                                                                  Maximum Marks: 100

Attempt all the questions. All the questions are compulsory and carry equal marks.

Section-A

1.         a.         The self concept plays   a   strong   role   in   influencing   consumer behavior.  Products                          often play a pivotal role in defining self concept.  Discuss with relevant examples.

b.         How do Eastern and Western cultures differ in terms of how people think about self?

(10+10)

2.         Collect ads for 3 different product categories that target families.  Find another set of ad for      different brands of the same item that don’t feature families.  Analyze and comment which           specific categories would benefit from family emphasis and why?

3.         a.         What is social class?  Is it different from income and if so how?

            b.         What is conspicuous consumption?  How is it boosting sale of selected brands.     (10+10)

4.         a.         What are tweens, and why they are emerging as important segment for marketer in                               India?

            b.         List out the product categories where tweens influence purchase and how marketers are  

                        enchasing them?                                                                                                          (10+10)

Section-B

Case Study: Shoppers Stop

In June 2006, Govind Shrikhande, chief executive officer (CEO) of Shoppers Stop, India’s biggest chain of large-format department stores (in terms of retail space), was reviewing the Brand Navigator study that had landed on his desk. This study was conducted periodically to measure customer perceptions of the Shoppers Stop brand compared with its closest competitors.  According to the 2006 study, Shoppers Stop was perceived as a “caring” brand.  This perception seemed to harmonize with the characteristics of its core customer group, adults aged 25 to 45.  But the study also showed disengagement with younger customers.  The lack of connection was evident in how customers perceived the three competitors’ brands.  Lifestyle, Pantaloon, and Central, which were described as “fashionable,” “trendy,” “flashy,””modern”,” sporty” and “lively”.

                Shrikhande had been appointed CEO two months earlier, after having joined Shoppers Stop in April 2001 as director of Buying and Merchandising.  Previously, he had worked at Bombay Dyeing & Manufacturing Co, Ltd., a branded apparel maker and a Shoppers Stop vendor.  Since Shoppers Stop’s inception 15 years earlier, the company had sustained its focus on the department store format.  The retailer had also built up a loyal customer base, which had become a source of competitive advantage over its peers.

                Shrikhande needed to establish a fit between the company’s strategic goals and the necessity to connect with younger consumers.  The company’s major competitors were all weighing their options for pursuing the youth market although none had yet formulated any specific, long term plans.  Shrikhande had to ensure that any attempt on the part of Shoppers Stop to connect with younger consumers would neither detract from the Shoppers Stop’s business focus, dilute its brand identity, nor alternate existing customers.

Brand Perception Study of Shoppers Stop Compared with Lifestyle, Pantaloon and Central

India’s Tiered Cities

Company Background

Promoted by K Raheja Corp., a real estate and hospitality enterprise based in western India, Shoppers Stop pioneered modern retailing in India when it opened its first, 2,800 square foot store in suburban Mumbai in 1991.  By7 2006, its operations had grown to 20 stores across 10 cities, covering a total retail space of 950,000 square feet. Sixteen stores were located in the Tier I cities of Mumbai (seven stores), Bangalore (two stores), Kolkata (two stores), Pune (two stores) and Hyderabad, Chennai and Delhi (one store each).  For the year ending March 2006, the company had a sales turnover of INR6.6 billion and after-tax profit of INR271 million.

                Shoppers Stop’s target was to cover 22 cities with 39 stores by March 2008, occupying an area of 2.5 million square feet.  The company was also planning to extend its footprint into the country’s Tier 2 and Tier 3 cities.

Young India

Shoppers Stop Customer Segmentation

	Premium-Conscious	Value-Conscious	Time-Conscious
Percentage of Shoppers	26	46	28
Socio-Economic Classification	A1	A1 and A2	A1
Age Group (years)	15-49	15-35	15-40
Profile	Males & females in almost equal numbers: married and single people in almost equal numbers	Single males	Single males
Shopping Habits	Visits with family and friends 80 percent are First Citizens	Visits with friends and family; most likely walk-in customers	Visits with friends and family, 70 percent are First Citizens
Spend	High	Average	Average
Shopping Statements	*Shopping helps me buy the latest * I want to be the first to buy the latest * I buy only brands * I do not mind paying extra for quality * I don’t like designs which are common * I like to check out new outlets * I prefer a mall because you can do other things as well * I prefer exclusive outlets offering premium products  * I often buy on impulse* I don’t mind spending time while shopping * Shopping is like an outing with friends * We don’t just shop, we also like to eat and drink at the mall * Shopping is a way of spending quality time with the family	* I do most of my shopping during the sales * I shop where there are special offers or sales. * I like to browse around and may not always buy * I don’t think brands are worth the price * When I buy items at full price I feel I am paying too much	* I don’t care about the ambience as long as the store is conveniently located.  * I like to finish my shopping quickly * I do not like sales people disturbing me * I compare prices before deciding to buy * Shopping frees me from daily tensions of life * I first buy what was planned and then, if I have time , browse

Customers

Shoppers Stop had one of the most successful loyalty programs among Indian retailers.  First Citizen, which was introduced in 1994, had enrolled 630,000 members by March 2006.  Membership had been growing by 10 to 15 percent every year. 

                The typical Shoppers Stop customer belonged to SEC A urban, was between 15 and 40 years of age, earned a household income of INR30,000 per month, owned a car, shopped in groups (with family or friends), visited Shoppers Stop at least once a month and spent between INR2,000 and 2,500 per month on apparel and accessories.

                On the basis of the findings of a sample survey by Customer Satisfaction Management & Measurement (CSMM), and independent, specialist unit of IMRB International, the company had classified its existing customers into three categories premium conscious, value-conscious and time conscious.

5.            Case Questions:

a.       Should shoppers Stop target premium-conscious, value conscious, or time-conscious consumers with its promotional program?  Defend your choice.

b.      The strong customer centric approach employed by Shoppers Stop has been featured in advertisements and promotions over time.  Should the company maintain this approach or move to a more product oriented promotional program?  Why or why not?                                                                                              (10+10)