2. Key to Success
 Enhancement of the business from customer at a
profit to the company.
“ Customer Satisfaction”

3. Who is Who??
 Who is a customer??
A person or organization that buys goods or services from a
store or business.
 Who is a consumer??
A person who purchases goods and services for personal
use

4. The need of the hour..
 A retailer should work upon the two important concepts:
Provide value to the customers
Maintain relationship with the channel members and
customers

5. What is Value?
 From the perspective of the manufacturer, wholesaler, and
retailer:
It is the totality of tangible and intangible products and
customer service offered to the customers.
 From the perspective of the customer:
It is the customer’s view of all the benefits received versus
price paid.

6. Why “Value” is important?
 Customers’ develop a trust on the brand when they get value
for their money.
 Provides differentiation to the brand name so that the firm is
not perceived as a “me too” brand.
 Retailers work too hard in order to make their customers
perceive the level of value provided in the same manner the
firms intends.
 Value is desired by all the customers.

7. What is a Value Chain?
 It is total bundle of the benefits offered to consumers through a channel of
distribution.
 It includes store location, parking, ambience, level of customer service,
products carried, product quality, retailer’s in-stock position, shipping,
prices, retailer’s image and other elements.
 There are 3 aspects to value-retailer strategy:
 Expected : minimum value chain elements that the customer segment
expects from a retailer.
 Augmented : Includes extra elements in a value chain that differentiate
one retailer from the other.
 Potential : comprises value chain elements not yet perfected by a
competing firm in the retailer’s category.

8. What is Relationship Retailing?
 It is a kind of retailing whereby the customer tries to
maintain long term bonds with customers, rather than
act as if each sales transaction is a new encounter with
them.
 In relationship retailing there are 4 factors to keep in
mind:
 Customer base
 Customer service
 Customer satisfaction
 Loyalty program

9. Customer Base
Customer base needs to be analyzed in terms of-
1. Demographics: objective, quantifiable, easily identifiable, and
measurable population data. It includes:
– Market size: How many people are in the potential target market?
– Gender
– Age: Prime age group
– Household size
– Marital (married/ single) and family status (do they have children)
– Income
– Retail Sales- What is the area’s sales forecast for the retailer’s
goods/services category?
– Mobility of target customers
– Distance between the residential area and the store
– Employment status
– Education

10. 2. Consumer Lifestyle
 Lifestyles are the ways in which individual consumers and
families (household) live and spend time and money.
 It is based on social and psychological factors, and influenced
by demographics.
 The social factors that are used in identifying consumers
lifestyle are:
Culture: A series of beliefs, norms and customs that passes on from
generation to generation.
Social class: Informal ranking of people based on income,
occupation, education etc.

11. Contd..
Reference groups: It influences people’s thought and
behaviour
○ Aspirational group- A person does not belong to it but wishes to join
○ Membership group- A person does belong
○ Dissociative group- A person does not want to belong
○ Face-to-Face group- Includes family and friends, this group has the
major impact
Family life cycle: How a person has moved from bachelorhood to
children to retirement. What changes has he/she gone through in terms
of attitudes, needs, purchases and income change.
Time utilization: Activities in which the person is involved and the
amount of time allocated to them.

12. The psychological factors that are used in identifying consumers
lifestyle are:
 Personality: Sum total of an individual’s traits, which make that
individual unique. It includes a person’s level of self-confidence,
innovativeness, sociability, emotional stability and assertiveness.
 Class consciousness: The extend to which a person desires and pursues
social status
 Attitudes: The positive, neutral and negative feelings a person has about
different topics.
 Perceived risk: Do potential customers feel risk in connection with the
retailer? Which goods and services have the greatest perceived risk?
 The importance of purchase: It affects the amount of time consumer will
spend to make a decision and the range of alternatives considered.

13. 3. Consumer Needs and Desires
 Before developing the retail strategy, a retailer needs to study
the target market profile thoroughly.
 The profiling includes the reason of their certain behaviour.
 Some questions to be answered includes:
 How far will the customers travel to get the product?
 How important is the convenience?
 What hours are desired? Are evening and weekend hours required?
 What level of customer service is preferred?
 How extensive a goods/service assortment is desired?
 What level of goods/service quality is preferred?
 How important is price to the customers?
 Do different market segments have different and special needs? If yes,
then what they are?

14. 4. The Consumer Decision Process
• A retailer should also be aware of how people make decisions.
• He should remain familiar with the consumer behaviour which is a
process of determining
 What a customer wants?
 Where they want?
 When they want?
 Why they want?
 How will they get it?
• The consumer decision process can be divided into two different
perspective:
a) What good or service the consumer is thinking about buying?
b) From where, will he/she purchase it?

15. Contd..
 The consumer decision process has six steps:
Stimulus Problem Information Evaluation Purchase Post
awareness Search of purchase
alternatives behaviour
Demographics
Demographics Lifestyle
Lifestyle
All blue arrows connect all the elements of decision making process and show the
impact of demographics and lifestyle upon the process.
Yellow arrow between lifestyle and demographics shows the impact of lifestyle on
certain demographics such as: family size, location, marital status etc.
The other one shows the impact of a purchase on elements of lifestyle, such as social
class, reference groups, social performance etc.

16. Contd..
1. Stimulus: It is a cue (social or commercial) or a drive that is
meant to motivate a person to act.
2. Problem awareness: Recognizes that the good/service under
consideration may solve the problem of shortage or
unfulfilled desire.
3. Information search: It has 2 parts-
– Determining the alternatives that will solve the problem at
hand and,
– Ascertaining the characteristics of each alternative.

17. Contd..
4. Evaluation of alternatives: Person selects one option that is
superior than all the other available.
5. Purchase: It is further dependent on 3 things-
– Place of purchase
– Purchase terms
– Availability
6. Post Purchase Behaviour: It falls under two categories-
– Further purchases
– Re-evaluation

18. Types of Consumer Decision Making
1. Extended decision making:
 It occurs when a consumer makes full use of the decision process.
 A lot of time is spent gathering information and evaluating alternatives.
 Perceived risk is high.
 Consumer traits such as class consciousness, education, age and income
play a major role in decision making.
2. Limited decision making:
 A consumer uses each step in the purchase process but does not spend a
great deal of time on each of them.
 This category includes items that have been bought before but not
regularly.

19. Contd..
• Perceived risk is moderate.
• Relevant to retailers such as: department stores, specialty stores
and non-store retailers.
• Shopping environment and assortment plays an important role.
3. Routine decision making:
• It takes place when the consumer buys out of habit and skips steps
in the purchase process.
• This category includes items that are bought regularly.
• Perceived risk if very little.
• Problem awareness is very important as it leads to a purchase.

20. Customer Service
 It refers to the identifiable, but sometimes intangible
activities undertaken by a retailer in conjunction with
the goods and services it sells.
 In consistency with the value chain concept, the two
concepts of customer service:
Expected : The level of service that customers want
to receive from any retailer.
Augmented : Activities that enhance the shopping
experience and give retailer a competitive advantage.

21. Vital Decisions
 What customer services are expected and what customer services
are augmented for a particular event?
 What level of customer service is proper to complement a firm’s
image?
 Should there be a choice of customer services?
 Should customer services be free?
 Measure the benefits of providing customer services against their
costs?
 Can customer services be terminated?

22. Customer Satisfaction
 Customer Satisfaction occurs when the value and customer
service provided by a retailer, through a retailing experience
meet or exceed consumer expectations.
 In retail satisfaction consists of 3 categories:
 Shopping system satisfaction which includes availability and types of
outlets
 Buying system satisfaction which includes selection and actual
purchasing of products
 Consumer satisfaction which is derived from the use of the product

23. Contd..
 To continuously improve upon the customer
satisfaction, retailers should take care of the following-
Focus on customer concerns
Empower frontline employees
Show that you are listening to the customers
Express sincere understanding
Apologize and rectify the situation

24. Customer Loyalty Programs
 It reward a retailer’s best customer.
 These rewards stimulate the short and long run purchases.
 Make the customers feel ‘special’.
 Loyal customers contribute to the retailers image by
spreading a positive word of mouth.
 Adds a lot to a retailers success.

25. THANK YOU