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INNOVATIONS AND

CONSUMER BEHAVIOR IN
RETAIL INDUSTRY

PRESENTED BY : BHAVYA GUPTA


(6915),SHIVANI GOYAL(6908),RUHI
CHOPRA(6918),AASTHA
JAIN(6923),RADHIKA GANDHI(6912)
INNOVATIONS IN RETAIL
INDUSTRY
HOW SMART IDEAS CHANGE
INTO PROFITABLE BUSINESS
WHAT INNOVATIONS WORK
Small and simple ideas can be implemented much more easily
can have real impact on consumers and economics
Success is not linked only to the ingenuity of innovation
but in being able to tailor an existing practice to address time
and situation specific consumer/ market need
Adapting and adopting these practices can deliver benefits
Retailers face significant supply side challenges which directly
impact the consumer value proposition
Focused innovation efforts on the supply side can bring paradigm
change and also result in sustainable competitive advantage
Consumer needs and market dynamics are evolving at a rapid rate
As a result there is a need to evaluate the consumer value
Proposition and business model on an on-going basis
And make changes to sustain / strengthen market position
HOW INNOVATIONS WORK
Leadership and Resourcing
Demonstrate visible commitment and explicit support from senior leaders . Ensure adequate and tailored
resourcing both in terms of numbers and also capability by leveraging cross functional teams

Culture
Align organization culture and innovation strategy to deliver superior results . Invest in building
supporting attributes (e.g. pride in the companys products and services; openness to ideas,
experimentation and ability to take risks)

Capabilities
Build a set of capabilities which are coherent to the business strategy
This includes ideation (e.g. customer insights, application of technologies) as well as development
related (e.g. controlled roll-outs, supplier engagement)

Direct Customer Interaction


Ensure adequate listening to customers which helps develop innovations that have maximum impact
and sustainability Utilize multiple sources (e.g. observation, research, feedback, sales organization)

Process Discipline
Roll-out a structured and phased process that extends from innovation strategy to implementation
Develop and utilize supporting metrics to ensure compliance and decision making
KEY LESSONS FROM INNOVATORS IN INDIA

There are four key lessons that the innovators offer us,
bringing forth fresh perspectives on innovation in Indian
Retail

Successful innovations need not only be new and path


breaking ideas but can be an adopted model tailored to
meet specific market needs
A simple, well executed idea can lead to successful
innovation; large 1 investments are not always necessary

Innovations need to evolve and keep themselves relevant


to continuously deliver value ;it is not a one-time effort
TANISHQ S KARAT METER
INNOVATIONS
MC DONALDS PRODUCT
INNOVATION
MOM AND ME INNOVATIONS
Introduced a one-stop -store
combining a Mother Care and a Toys
R Us model dealing with products for
pre-pregnancy to age nine Provides
value added services such as play
areas for kids, feeding area, reading
lounge, nappy change-cum-wash
area, parenting forums and web
kiosks
The Customer and Retail
Business
Putting the customer at the centre of
your retail business
Understanding the value of service
Meeting the modern service
requirement
The store as a differentiator
Flexibility and agility of the supply
chain
Connecting the customer experience
Customer service a key
differentiator in retailing
Retail Customer Service Model
Leadership
Customer Journey
KEY PRINCIPLES OF
CUSTOMER FOCUS
Shared goals
Clear expectations
Positive working relationship
Introduction
In retailing customers are the most important
aspect of the business. If you are unable to
define who your customers are, or what they
are likely to buy, the business is unlikely to
survive.
Consumer behaviour is a complex area that
draws many of its concepts and theories from
general psychology and sociology.
So in this presentation we are going to discuss
about mapping out the society and
psychographics.
Mapping out society
It is important for the retailers to be
able to break down the market into
clearly defined segments they can
target.
The retail marketer defines these
segments using appropriate
measures.
This will enable the researchers to
group the customer population
conveniently and exclusively.
What are psychographics?
Psychographics are kind of like
demographics.Psychographic information might be
your buyer'shabits, hobbies, spending habits and
values.Demographics explain who your buyer
is, while psychographics explain why they buy.
Demographic information includes gender, age,
income, marital status the dry facts.
we can only effectively reach the target audience
when we understand both their demographics and
psychographics. The combination of both sets of data
starts to form your buyer persona a detailed picture
of the people you work with now, and would like to
work with in the future.
Example
Demographic Information:
Female
Aged 45-65
Married, with children
Dealing with issues of weight gain, diabetes, lack of
energy or hormonal imbalance
Household income 30k
Psychographic Information:
Concerned with health and appearance
Wants a healthy lifestyle, but doesnt have much time
Enjoys going online in the evenings, big fan of Pinterest
Tends to favor quality over economy
Finds fulfillment in her career and family
Values time with a small group of friends
Using Psychographics in Your Marketing

Getting the psychographic data is important, but


really applying it to your marketing is how you
make it effective. How would you do this? Let's
continue with our on-going example about the
anti-aging, weight-loss product.
Once you understand what is important to her,
youll know where to find her and how to
motivate her. Youll know how to give her what
she wants - that offering deep discounts isnt
going to move her.
Instead, she wants to hear that your nutritional
counseling service has worked for others and how
it will give her better health without a huge time
commitment. So, make sure you highlight
Postmodern customers
In 1950s &60s general household shopping was
done by usually by one member of the family which
was mainly done by a female whereas, shopping in
purchase of expensive items such as furniture,
durables which includes a large scale investment is
mostly done by a male member or its a joint
decision of both.
This change in the role of retailing represents the
altered state of family life and integration of leisure ,
work and domestic activity.
And the desire to improve their position in the
society has become important.
What is an Attitude ?
Allport defined an attitude as a mental or
neural state of readiness, organized
through experience, exerting a directive or
dynamic influence on the individuals
response to all objects and situations to
which it is related.
A simpler definition of attitude is a
mindset or a tendency to act in a
particular way due to both an individuals
experience and temperament.
Continued
Typically, when we refer to a persons
attitudes, we are trying to explain his or
her behavior. Attitudes are a complex
combination of things we tend to call
personality, beliefs, values, behaviors, and
motivations.
As an example, we understand when
someone says, She has a positive
attitude toward work versus She has a
poor work attitude.
Example
A persons attitude toward preventive medicine
encompasses his or her point of view about the
topic (e.g., thought);
how he or she feels about this topic (e.g.,
emotion),
as well as the actions (e.g., behaviors) he or
she engages in as a result of attitude to
preventing health problems.
An attitude includes three components: an
affect (a feeling), cognition (a thought or
belief), and behavior (an action).
What is motivation ?
Motivationis atheoretical constructused to
explainbehavior. It gives the reasons for
people's actions, desires, and needs. Motivation
can also be defined as one's direction to
behavior, or what causes a person to want to
repeat a behavior and vice versa.A motive is
what prompts the person to act in a certain way,
or at least develop an inclination for specific
behavior.According to Maehr and Meyer,
"Motivation is a word that is part of the popular
culture as few other psychological concepts are."
Why do firms motivate ?
The major benefits of motivation in an
organizations are as follows:
Need satisfaction :Motivation satisfies the
needs of individuals as well groups. Every
individual or group of individuals joins an
organization to fulfill certain personal needs.
Job satisfaction :Motivation also promotes
job satisfaction. When an employees needs
are satisfied, he is on the whole happy. His
job satisfaction is of more direct concern.
Why do firms motivate ?
Productivity :An individuals
contribution to output is the resultant of
two variables-his capacity for work and
his willingness to work.
Learning :Motivation helps the learning
process. Without motivation learning
does not take place.
Discipline :Motivation promotes self-
discipline. The idea of discipline
generally carries a negative connotation.
Why do firms motivate ?
Dynamism :There is an element of
dynamism in motivation. When the rank
and file workers and managers are
properly motivated, a kinetic energy is
generated which produces a tremendous
impact not merely on the productivity
and profits of an organization but also on
its industrial relations, public image,
stability and future development.
How to motivate customers ?
Lets face it. Customers have more
ways to purchase, and more sales
people knocking on their doors. They
too, have quality products and
services to offer. They too, boast high
levels of customer satisfaction. Below
are three simple yet effective ways
to motivate customers to want to
purchase from you rather than your
competition.
How to motivate customers ?
Make your customer your best
friend.Treat your customer as a best friend
who opened a business and you genuinely
want to do all you can to help them succeed.
Give them all youve got.
Portray a higher level of professionalism
than your competitors.:When you are
calling a prospect and they say they are not
interested in your product/service at this time,
graciously ask if they mind if you connect with
them from time to time, and that you will not
pester them.
How to motivate customers ?
Motivate customers by applying the
superior communication skills of a
seasoned sales pro, or rainmaker.:Create
and memorize a list of questions to ask that will
elicit a conversation that will uncover customers
problems, needs, challenges, and expectations.
Create and memorize a list of words and phrases
that influence and motivate customers to buy
from you. For example, What we keep hearing
back from our clients over and over again is how
much they benefit from,
How to motivate customers ?
It is more important to be well trusted
than well liked: In a world of repeat
purchases, consolidated buying, inter-
dependencies, and partnerships, greater
power may have shifted to the buyer but so
has greater risk. When risk to the buyer
increases, customers make buying from
someone they trust their top priority.
You sell to a customer network, not a
collection of isolated customers. :Your
customers are more connected to each other
than ever before.
How to motivate customers ?
Information is a commodity, knowledge
is power: The old adage that, information is
power predates the Internet. Customers can
now access more information than ever and
make informed decisions without ever talking
to a salesperson.
You will sell more as an agent of change
than as an agent selling products.
:Salespeople have always been an agent of
change. The job is to change non-buyers into
buyers and buyers into greater or more loyal
buyers.
How to motivate customers ?
You are your clients personal brand
manager. :The two most important parts of
your brand are your brands promise and your
brands deliver on that promise.
For your customer, you are the key to both.
Customer loyalty is the result of better
customer strategy not better customer
service. :Excellent customer service has
never been more important. It has also never
been more common. Today, excellent
customer service is only your admission to the
game.
How to motivate customers ?
It is easier to differentiate your product
in the future than in the present. In
times of rapid change customers want to know
that what you sell them today will stay current
and maintain support into the future.
The biggest sales will go to the most
aggressive customer motivators, not
the most aggressive customer pushers.
:What has not changed is that aggressive
salespeople still make the most sales. What has
changed is how the aggression is channeled.
How to motivate customers ?
COMMUNICATE A CONSISTENT
MESSAGE : Every business needs a
consistent voice. Define your primary
target audience, and dont try to be
everything to everyone.
Offer testers
Factors Motivating Customers
to Buy
Current dissatisfaction.Every purchase
decision (everydecision,noexceptions)
begins with a buyer's current dissatisfaction.
Feeling dissatisfied with something
automaticallymakesa person a buyer.
Future promise.With a well-defined idea
of what is wrong in your buyer's world, focus
next on what right looks like.Future
promise is the mental picture buyers carry
around in their heads that helps to move
them forward.
Factors Motivating Customers to Buy

Cost and fear.Current dissatisfaction


and future promise both serve to
motivate buyers. On the other side of the
scale, we find the inhibiting factors of
cost and fear.
They need the product
Convenience
They will save time ,money , energy
Exclusiveness
Best value for price
What is perception ?
Perception(from theLatinperceptio, percipio) is
the organization, identification, and interpretation
ofsensoryinformationin order to represent and
understand the environment.All perception
involves signals in thenervous system, which in
turn result from physical or chemical stimulation of
the sense organs.For example, vision involves
lightstriking theretinaof the eye, smell is
mediated by odormolecules, and hearing involves
pressure waves. Perception is not the passive
receipt of these signals, but is shaped bylearning,
memory,expectation, andattention.
Customer perception
A marketing concept that encompasses a
customer's impression, awareness and/or
consciousness about a company or its
offerings. Customer perception is
typically affected by advertising, reviews,
public relations, social media, personal
experiences and other channels.
Consumer Perception Theory

Merchants aim to increase their sales by


determining what drives their customers'
purchase decisions. Consumer perception
theory attempts to explain consumer
behavior by analyzing motivations for
buying -- or not buying -- particular items.
Three areas of consumer perception theory
relate to consumer perception theory: self
perception, price perception and
perception of a benefit to quality of life.
Self Perception
Self perception theory attempts to explain how
individuals develop an understanding of the
motivations behind their own behavior. Self
perception by customers relates to values and
motivations that drive buying behavior -- which is
also an important aspect of consumer perception
theory. For instance, a study by researchers at the
University of Massachusetts at Amherst
addressed how self perception shaped
consumers' buying behavior. The study
considered the question of whether consumers
believed their buying decisions had a real effect
on issues such as environmental impact. The
researchers concluded that consumers' self
perception was a driving factor in whether or not
Price Perception

While mass merchandisers such as Wal-Mart


emphasize low prices as an inherent virtue,
upscale merchants attempt to emphasize quality
and value for money to appeal to potential
customers. Researchers at the School of Business
Administration at LaSalle University and LeBow
College of Business at Drexel University
considered several factors, including price
perception -- whether consumers believed they
were being charged fair prices -- in determining
whether online shoppers would make repeat
purchases through the same website.
Benefit Perception

It's good, and it's good for you." Many consumers


are familiar with this phrase frequently associated
with food advertising. Researchers from
Marquette University, Louisiana State University
and the University of Arkansas surveyed
customers to determine how nutrition claims
associated with food affected their perception of
that food's nutritional value. The researchers
found that consumers tend to reject general,
unsupported claims of enhanced nutrition,
especially concerning high nutritional value for
foods that are traditionally viewed as unhealthy.
steps to start building
stronger brand awareness
The first step in developing a strong
brand within your marketing program is
to list the stated and unstated needs
and wants of your target market.
List every place a prospect and
customer will touch your company.
As you develop strategies for fixing your
brand in the minds of your customers,
this path will invariably lead you to the
subject of operating processes.
steps to start building
stronger brand awareness
You cannot develop a strong brand in
the minds of your customers if you
are not aware of what you
competitors are offering.
HOW DO YOU CHANGE A NEGATIVE CUSTOMER
PERCEPTION OF YOUR BRAND?

Challenge negative perceptions as soon as


they arise, defend your brand and manage
its reputation, especially in the face of
negative feedback on service and quality.
Focus on your brand values and
positioning, as this is key to demonstrating
your true brand value.
Focus on the customer and listen to their
issues research and customer feedback
are key.
HOW DO YOU CHANGE A NEGATIVE
CUSTOMER PERCEPTION OF YOUR
BRAND
Never get complacent. This in many
respects it the first rule of brand. One
mistake can end it all.
Communicate your message and own
your brand perception. If the first rule
of brand is never get complacent then
the second must be communicate or
lose your identity.
Use Short, Simple and Rewarding
Feedback Surveys
HOW DO YOU CHANGE A NEGATIVE
CUSTOMER PERCEPTION OF YOUR
BRAND
Keep a Track of Individual Complaints and
Widely Complained Service Issues
Understand Your Customers Needs and
Analyze Your Service
Check Social Media Pages Regularly to know
How You are Being Perceived
Pre and Post Sale Communication would
help you in Measuring Customer
Satisfaction
Share Your Upcoming Ventures with Your
Customers and Ask for their Opinion

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