Proceedings of 9th Annual London Business Research Conference
4 - 5 August 2014, Imperial College, London, UK, ISBN: 978-1-922069-56-6
Product Marketing To Relationship Marketing-A Strategic Shift
to Target the New Consumer
Lipi Choudhury
Back ground: The increase in competition and technological advancement has rendered product
differentiation a redundant basis for sustainable competitive advantage. In this competitive landscape
products are becoming increasingly homogeneous in their respec tive categories, thereby mak ing
service differentiation the k ey to customer retention and loyalty. Relationship mark eting, which
heavily relies on service differentiation, is evolving through emerging practices lik e crowd sourcing
and co-creation. Objective: The paper seek s to delve into the k ey consumer expectations underlying
service satisfaction and relationship building that leads to capturing of customer lifetime value in the
fashion retail sector in an emerging fashion superpower lik e India.Period of study: The study was
conducted over a period of 3 months from March-May, 2014. Design methodology: The research is
based on secondary literature surveys to form a basis of Indian consumer’s psyche affecting his
purchase behavior. The primary research is conducted with consumers belonging to SEC A and SEC
B categories. The sample size is 150 in each segment mak ing a total of 300. Judgmental and
convenience sampling is followed. The data are analyzed with SPSS and Microsoft excel. Findings:
The k ey variables for customer satisfaction in relationship mark eting that emerged are Reliability,
Responsiveness and Empathy which form the cornerstone of retail success. Companies, therefore,
should increasingly focus on continuously improving service standards and devel op innovative
service delivery systems and relationship mark eting tools to attract and retain the customers.
Research implications: The research will enable the Indian and International organizations planning
mark et expansion and mark et entry in the Indian mark et to understand the dynamics of the Indian
consumer mark et and design effective mark eting strategies to profitably target the different
demographic and socio-economic consumer segments.
Keywords: Relationship marketing, Service standards, Customer Loyalty, Indian
consumer, Fashion retail sector, Socio-economic segments
Field of Research: Marketing-Relationship Marketing
1. Introduction
In the current milieu of dynamic service environments, intense competition, plethora of
players, and general global slowdown, providing satisfactory value to customers and
customer retention becomes critically important. Various socio-economic trends and rapid
technological advances have made the customer more heterogeneous in his demands and
expectations. The traditional marketing mix is increasingly becoming ineffective to provide
product or service solutions to divergent consumer needs. Marketing, today cannot exist as
a separate functional department. It has to become more integrative where each internal
department of the organization works in a cohesive manner and marketing has to be
perceived as a cross functional discipline with active involvement of all parts of supply chain.
________________________________________________________________________
Lipi Choudhury, Assistant Professor, Department of Fashion Management Studies, NIFT-Mumbai
Mailing Address: NIFT Campus, Plot No.15, Sector-4, Kharghar-410210. Navi Mumbai, India
E-mail: lipichoudhury@ymail.com.Telephone number: +91 9004933894, +9102227747000 Fax:
+9102227745386
0
Proceedings of 9th Annual London Business Research Conference
4 - 5 August 2014, Imperial College, London, UK, ISBN: 978-1-922069-56-6
Marketing cannot be isolated from design, production, deliveries, technical service,
complaints handling, invoicing and other activities of the firm. Even the marketing
department of organizations has chances of becoming distant from the end consumers as
their dependence on market research and statistics increase as they start treating
customers as numbers rather than unique individuals. They end up designing strategies for
the customer without having met the “real customer” and these strategies end up becoming
futile exercises with no bearing on either increasing topline or bottom-line over a substantial
period of time.
The key to survival and sustainable growth in this dynamic industry is to realize the
importance of economics of long term relations. Long-term relationships where both the
customer and the organization in the course of their interaction learn how to complement
each other lead to decreasing relationship costs for the customer as well as for the supplier
or service provider. The Relationship Marketing route creates engaging relations between
the two parties and the customer becomes a key stakeholder in the value creation process.
It not only protects the customer base but also increases the average spend of the customer
thereby increasing bill values and increases market share by bringing in more referrals
through word of mouth publicity. The basic premise of Relationship marketing is to treat
each customer as a unique entity and study his buying behavior to tailor the market offering
as per the value desired by him. The socio-economic classification is a key differentiation
base to analyze the differences in buying patterns and consumer psyche. It is imperative for
the retailer to choose different formats and value propositions if it wants to successfully
target the varied socio-economic groups.
SEC Classification (also called the Socio-Economic Classification) is a classification of
households used by surveyors, market researchers, media and marketing companies in
India to categorize consumer behavior. Originally developed by IMRB International as a way
of understanding market segments, and consumer behavior it was standardized and
adopted by the Market Research Society of India in the mid-1980s as a measure of socioeconomic class and is now commonly used as a base for market segmentation. The SEC
classification helps the marketers to identify segments that have high consuming potential.
The high potential types: A1, A2, the medium ones and the bottom of pyramid ones. The
modern socio economic classification method uses two major variables to classify the
population at large i.e. EDUCATION and OCCUPATION of the chief wage earner. The Chief
Wage Earner is defined as the person who contributes the maximum to the total income of
the family. This was relevant for the Indian condition, as the main contributor to income
usually had the maximum say with regards to purchase decisions in the family. Various
combinations of these variables, consumers can be classified into different socio economic
classes like A1, A2, B1, B2, C, D, E1 and E2 (in that order from affluent to deprived).The
modern socio economic classification system has two versions: i) The urban version and ii)
The rural version. The urban version uses variables as INCOME and OCCUPATION while
the rural version uses EDUCATION and TYPE OF HOUSE, as occupations can be almost
similar across most Indian villages.
1
Proceedings of 9th Annual London Business Research Conference
4 - 5 August 2014, Imperial College, London, UK, ISBN: 978-1-922069-56-6
The Media Research Users Council (MRUC) and the Market Research Society of India
(MRSI) unveiled a new Socio-Economic Classification (SEC) system in May 2011, under
which all Indian households are classified. The system classifies Indian households by using
two parameters Educational Qualifications of the chief wage owner in the household; and
the Number of Assets Owned (out of a pre-specified list of 11 assets). Based on these two
parameters, each household is classified in one of 12 SEC groups A1, A2, A3, B1, B2, C1,
C2, D1, D2, E1, E2 and E3. These 12 groups are applicable to both urban and rural India.
With the growth of the economy and of small towns and rural, it has become imperative to
look at a single SEC classification system for both urban and rural India.
The top-most new SEC class A1 comprises of 0.5% of all Indian households. Nearly 2% of
urban households and less than 0.1% of rural households belong to the new SEC A1. More
than half of all SEC A1 households reside in the top six Indian cities Delhi, Mumbai, Kolkata,
Chennai, Bengaluru and Hyderabad. At the bottom-most new SEC class E3 comprises of
10% of all Indian households. Only 2% of urban households and 13% of rural households
belong to new SEC E3. Nearly 93% of all SEC E3 households are in rural India.
2. Literature Review
The term relationship marketing was first contributed by (Berry, 1983) as a new rubric for
services marketing. Relationship marketing is a defence against mental straitjackets and
marketing myopia. Specifically, the goal is not only to encourage guests to return, but also to
get them to tell their friends how wonderful the property or organization is.
Relationship/loyalty marketing can also be defined as an ongoing process of identifying and
creating new value for individual customers for mutual value benefits and then sharing the
benefits from this over a lifetime of association.
In this sense, it differs from our usual definition of marketing, although it is certainly part of it,
in the following ways:
• It seeks to create new value for customers and share the value so created.
• It recognizes the key role of individual customers in defining the value they want
(i.e., value is created with customers, for customers).
• It recommends that a company define its organization to support the value that individual
customers want.
• It is a continuously cooperative effort between buyer and seller.
• It recognizes the value of customers over their purchasing lifetimes.
• It seeks to build a chain of relationships between the organization and its main
stakeholders to create the value that customers want.
2
Proceedings of 9th Annual London Business Research Conference
4 - 5 August 2014, Imperial College, London, UK, ISBN: 978-1-922069-56-6
Figure 1: Evolution of Relationship Marketing
Some long-lasting customer relationships, where the customers are obviously satisfied with
what they get, are not profitable even in the long run. Therefore, segmentation based on
customer relationship profitability analysis is a prerequisite for customer retention decisions.
To conclude, there is clear evidence that from a profitability point of view intelligent
relationship building and management make sense.
Relationship marketing creates both customer bonding and customer understanding, which
is integral to the company‟s sustenance and growth. The benefits of a strong and vibrant
relationship with the customer is that the customer develops such a strong faith in the
product and service offering of the company that he rules out considering competition‟s
products completely and exclusively patronizes the offers, products and messages of the
chosen brand to the extent of giving enthusiastic referrals. The price sensitivity reduces and
average bill value increases. They do not switch easily and express their solidarity to the
firm even in times of duress. They provide honest and constructive feedback rather than
abusing the company and its personnel.
Relationship marketing:
 Emphasizes a relationship, rather than a transactional, approach to marketing;
 Understands the economics of customer retention and thus ensures the right amount
of money and other resources are appropriately allocated between the two tasks of
retaining and attracting customers; highlights the critical role of internal marketing in
achieving external marketing success;
 Extends the principles of relationship marketing to a range of diverse market
domains, not just customer markets;
 Recognizes that quality, customer service and marketing need to be much more
closely integrated;
3
Proceedings of 9th Annual London Business Research Conference
4 - 5 August 2014, Imperial College, London, UK, ISBN: 978-1-922069-56-6


Illustrates how the traditional marketing mix concept of the 4Ps does not adequately
capture all the key elements which must be addressed in building and sustaining
relationships with markets;
Ensures that marketing is considered in a cross-functional context
Figure 2: The transition to relationship marketing
Figure 3: Differences between Transactional Marketing and Relationship Marketing
Maximizing the lifetime value of a customer is a fundamental goal of relationship marketing.
Researchers at management consultants Bain & Co have found that retained customers are
more profitable then new customers for the following reasons:
 The cost of acquiring new customers can be substantial. A higher retention rate
implies that fewer customers need be acquired more cheaply;
 Established customers tend to buy more;
 Regular customers place frequent, consistent orders and, therefore, usually cost less
to serve;
 Satisfied customers often refer new customers to the supplier at virtually no cost;
 Satisfied customers are often willing to pay premium prices for a supplier they know
and trust;
4
Proceedings of 9th Annual London Business Research Conference
4 - 5 August 2014, Imperial College, London, UK, ISBN: 978-1-922069-56-6

Retaining customers makes market entry or share gain difficult for competitors.
Figure 4: Exchanges of mutual value within a six markets network of relationships
In transaction marketing there is not much more than the core product, and sometimes the
image of the firm or its brands, which keeps the customer attached to the seller. When a
competitor introduces a similar product, which is quite easily done in most markets today,
advertising and image may help in keeping the customers, at least for some time, but price
usually becomes an issue. A firm that offers a lower price or better terms is a dangerous
competitor, because in transaction marketing the price sensitivity of customers is often high.
5
Proceedings of 9th Annual London Business Research Conference
4 - 5 August 2014, Imperial College, London, UK, ISBN: 978-1-922069-56-6
Figure 5: The marketing strategy continuum between Transactional Marketing and
Relationship Marketing
(Bowen
and
Shoemaker, 2003) argue that: The reduction in marketing costs is a result of the facts that it
takes fewer marketing dollars to maintain a customer than to create one and that loyal
customers help create new customers through positive word of mouth. Loyal customers are
less likely to switch to a competitor solely because of price, and loyal customers also make
more purchases than do comparable non-loyal customers. (Youjae and Suna, 2004) found
that „loyal customers tend to maintain their positive expectations relatively longer than lowloyalty consumers, so they are not likely to adjust expectations based on episodic factors‟
(p. 359). They also discovered that „loyal customers tend to show a special preference,
attachment, commitment, positive WOM, low switching to competitive brands, and
willingness to pay premium price‟
Relationship/loyalty marketing is not database marketing, frequent traveler programs,
partnerships. These are the tools to build relations. The main purpose of relationship/loyalty
marketing is to maintain customer relationships and build loyalty with the expectation that
both parties will continue in the relationship even after the formal production/consumption
process has ended. (Levitt, 1981) compares the relationship to something like a marriage.
The sale merely consummates the courtship. Then the marriage begins. How good the
marriage is depends on how well the relationship is managed by the seller. That determines
whether there will be continued or expanded business or troubles and divorce and whether
costs or profits increase. As in a good marriage or a good relationship, both parties have to
„get something.‟ For the firm, it is repeat patronage, expectation that the guest will spread
positive word of mouth, and belief that the guest will tell management when things go wrong.
For the guest, the expectation is that the firm will ensure a comfortable purchase
experience. Good relationships involve commitment and trust. Trust is an antecedent of
loyalty because the customer trusts the organization to always deliver on its promises
keeping the customer‟s interest above all other operational facets. However, the firm should
6
Proceedings of 9th Annual London Business Research Conference
4 - 5 August 2014, Imperial College, London, UK, ISBN: 978-1-922069-56-6
not only be giving promises with the objective of persuading consumers to take actions in
the marketplace. A firm, which continues to make new promises, may attract new customers
and establish relations but if it fails to honour the promises, it will erode the consumer base
thereby disrupting the long-term profitability. (Oliver, 1999) presents excellent definitions of
cognitive, affective, conative, and action loyalty. He sees each type of loyalty as a phase
consumers go through, with action loyalty being the final, desired phase.
• Cognitive loyalty is based on available information about the brand that convinces a
customer that a brand is better than alternatives.
• Affective loyalty- customers are less easily persuaded to switch in this phase, data
shows that people switch brands despite having been previously satisfied with their
original brand.
• Conative loyalty is when a customer desires to repurchase the brand. However, it is
not until the final phase – action loyalty – that they engage in actively repurchasing
the brand.
Cognitive loyalty is shallow and runs no deeper than whether or not a customer was
satisfied with the service provided. If satisfaction continues, a customer moves into the next
phase, affective loyalty. If repurchase action begins, an action inertia develops, which
facilitates further repurchasing.
The most widely accepted indicator of customer satisfaction is a stable or rising market
share. However, it is very difficult figure out if the firm has a stable customer base or if the
firm is losing it old customers who are being replaced by new ones due to its marketing
campaigns. Retaining market share in such situations cannot indicate the number of
unsatisfied customers or the deteriorating image of the firm. A firm that applies a
relationship-type strategy can monitor customer satisfaction by directly managing its
customer base by some kind of direct knowledge customers through employees interaction
with consumers across touch points, taking their feedback and on-line, real-time information
capture which is used by a management team that thinks in terms of people with personal
reactions and opinions rather than homogeneous numbers.
Customer experience lifecycle: In the research phase, the customer analyses the
information available from various touch points, such as word of mouth, newspaper
advertisements, mailers or the web, etc. services. In the purchase phase, the customer
takes the buying decision on the product and pays for it. Various touch points in this phase
include the web, the physical store, sales associates, assortments, layouts, etc. In the
service phase, the customer service and loyalty programmes are the key touch points. After
sales customer service includes installation of an appliance or return and exchange of
merchandise.
Localized experience: Given the amount of information retailers have about the customer
behaviour, buying habits, etc. the consumer expects the retailer to ensure that the goods
and services are available in the stores when the customer needs it.
Seamless experience: Consumers want to traverse multiple channels easily and enjoy a
seamless experience. This means the physical store, web, catalogue, call centre and kiosks
have to be integrated to ensure a consistent customer experience across these channels.
7
Proceedings of 9th Annual London Business Research Conference
4 - 5 August 2014, Imperial College, London, UK, ISBN: 978-1-922069-56-6
Distinctive experience: Apart from the competitive price, the customers seek a distinctive
shopping experience driven by best customer service and innovative practices.
3. Research Objectives
I)
To understand the differences in the expectations of SEC A and SEC B
consumers from Retailers.
II)
To understand the underlying factors that to customer loyalty across these two
groups.
III)
To develop managerial insights which will enable retailers to adopt relationship
marketing for creating long term sustainable relations with customers.
IV)
To provide insights into designing tailor-made marketing mix to effectively target
these two divergent groups of consumers.
4. Research Hypotheses
H1: There are significant differences in the expectations of SEC A and SEC B
consumers from Retailers.
H2: SEC B consumer values price based benefits more than customer service based
benefits.
H3: The Need for Uniqueness is much lower in SEC B consumers compared to the SEC
A consumers.
H4: There is significantly lesser degree of loyalty in SEC B consumer and they switch
easily for price-based benefits.
5. Research Methodology
Secondary Research: Articles, Research Papers, Books, Journals and Websites.
Primary Research
i) Sample Size: A sample size of 150 respondents in each segment of SEC A and SEC
B was taken making a total sample size of 300.
ii) Sampling Method: Stratified random sampling method is used to capture the
differences between SEC A and SEC B consumer segments. Thereafter, the
respondents were chosen as per Judgement and Convenience.
8
Proceedings of 9th Annual London Business Research Conference
4 - 5 August 2014, Imperial College, London, UK, ISBN: 978-1-922069-56-6
iii) Research Tools: A structured Questionnaire was developed
psychographics and understand the drivers of purchase behavior.
to
capture
iv) Data Collection Method: The data was collected through Questionnaire Survey in
both physical and telephonic platforms.
v) Data Analysis: The data was analyzed using SPSS and Microsoft Excel software.
6. Data Analysis And Interpretation Of Results
Table 1: Customer_Type * Key_shopping_Driver Crosstabulation
Customer_Type
Current
Weddings,
Fashion
Festivals and
Trends
Special Occasions
SEC A
121
29
150
SEC B
16
134
150
137
163
300
Total
Finding: 81% SEC A consumers consider Current Fashion Trends as their key driver of
shopping, while 89% SEC B consumers‟ shopping in Occasion specific.
Table 2: Saving_Time_Energy * Customer_Type Crosstabulation
Customer_Type
Saving_ Yes
Count
Time_
%Saving_Time_Energy
Energy
%Customer_Type
Total
Count
%Saving_Time_Energy
%Customer_Type
SEC A
SEC B
Total
150
150
300
50.0%
50.0%
100.0%
100.0%
100.0%
100.0%
150
150
300
50.0%
50.0%
100.0%
100.0%
100.0%
100.0%
Finding: Both the consumer groups prefer retail destinations that lead to saving of time and
energy.
9
Proceedings of 9th Annual London Business Research Conference
4 - 5 August 2014, Imperial College, London, UK, ISBN: 978-1-922069-56-6
Table 3: Extra_Efforts_Better_Deals * Customer_Type Crosstabulation
Customer_Type
Extra_Efforts_ No
Count
Better_Deal
%Extra_Efforts_Better_
Deal
% within Customer_Type
Yes
Count
%Extra_Efforts_Better_
Deal
% within Customer_Type
SEC A
SEC B
Total
134
14
148
90.5%
9.5%
100.0%
89.3%
9.3%
49.3%
16
136
152
10.5%
89.5%
100.0%
10.7%
90.7%
50.7%
Finding: While 90% SEC A customers are not willing to make spend Extra efforts for better
deals, 89.5% SEC B customers are willing to proactively look for stores with better deals.
Table 4: Extra_Efforts_Exclusive_products * Customer_Type Crosstabulation
Customer_Type
.
Extra_Efforts No
Count
_Exclusive_
%Extra_Efforts_Exclusive
products
_ products
%Customer_Type
Yes
Count
%Extra_Efforts_Exclusive
_ products
%Customer_Type
SEC A
SEC B
Total
0
134
134
0.0%
100.0%
100.0%
0.0%
89.3%
44.7%
150
16
166
90.4%
9.6%
100.0%
100.0%
10.7%
55.3%
Finding: All SEC B consumers refuse to take extra efforts for exclusive products while 90%
SEC A consumers are willing to take extra efforts for exclusivity.
10
Proceedings of 9th Annual London Business Research Conference
4 - 5 August 2014, Imperial College, London, UK, ISBN: 978-1-922069-56-6
Table 5: Price_Premium_Packaging * Customer_Type Crosstabulation
Customer_Type
Price_
No
SEC A
SEC B
Total
11
137
148
Count
Premium_
%Price_Premium_Packaging
7.4%
92.6%
100.0%
Packaging
%Customer_Type
7.3%
91.3%
49.3%
139
13
152
%Price_Premium_Packaging
91.4%
8.6%
100.0%
%Customer_Type
92.7%
8.7%
50.7%
Yes
Count
Finding: Around 90% SEC A consumers are willing to pay price premium for betterpackaged products, the response is reverse for SEC B consumers.
Table 6: Price_Premium_QCert * Customer_Type Crosstabulation
Customer_Type
Price_
No
SEC A
SEC B
Total
11
137
148
Count
Premium
%Price_Premium_ QCert
7.4%
92.6%
100.0%
QCert
% Customer_Type
7.3%
91.3%
49.3%
Count
139
13
152
%Price_Premium_QCert
91.4%
8.6%
100.0%
% Customer_Type
92.7%
8.7%
50.7%
Yes
Finding: Around 90% SEC A consumers are willing to pay price premium for Quality certified
products, the response is reverse for SEC B consumers.
Table 7:
Customer_Type
Price_
No
Count
SEC A
SEC B
Total
11
137
148
Premium_
% _Cat_Info
7.4%
92.6%
100.0%
Cat_Info
%Customer_Type
7.3%
91.3%
49.3%
139
13
152
91.4%
8.6%
100.0%
Yes
Count
% _Cat_Info
%Customer_Type 92.7%
8.7%
50.7%
Price_Premium_Cat_Info * Customer_Type Crosstabulation
11
Proceedings of 9th Annual London Business Research Conference
4 - 5 August 2014, Imperial College, London, UK, ISBN: 978-1-922069-56-6
Finding: Around 90% SEC A consumers are willing to pay price premium for brands which
give relevant information, the response is reverse for SEC B consumers.
Figure 6: Expectations of SEC A Consumers from Retail Store
Expectations from Retail Store-SEC A
5.00
4.00
3.00
2.00
1.00
0.00
4.47
4.27
3.33
3.07
1.20
Better Variety
of products
I can shop
whenever I
want
Lower prices
Alteration , Knowledgeable
and better Home Delivery and Customer
offers
and Easy
friendly store
Returns
personnel
Figure 7: Expectations of SEC A Consumers from Retail Store
Expectations from Retail Store-SEC B
5.00
4.00
3.00
2.00
1.00
0.00
4.33
3.27
3.07
Better Variety
of products
I can shop
whenever I
want
Lower prices
and better
offers
3.33
2.67
Finding: While the
SEC A consumer
ranks Better Variety
products
and
Knowledgeable Store
Personnel as the key
expectations; for the
SEC B consumer it is
Lower Prices followed
by Basic services that
are important.
Alteration , Knowledgeable
Home Delivery and Customer
and Easy
friendly store
Returns
personnel
Figure 8: Need for Uniqueness in SEC A
CONSUM ERS’ NEED F OR
UNIQUENESS-SEC A
Buy similar products at competitive prices and easy accessibility
Pay marginal premium for exclusive products
Identifying stores with exclusive products & pay marginal premium
Pay significant premium for extremely customized products
0%
11%
36%
53%
12
Proceedings of 9th Annual London Business Research Conference
4 - 5 August 2014, Imperial College, London, UK, ISBN: 978-1-922069-56-6
Finding: Majority of consumers is willing to pay premium for exclusive and customized
products.
Figure 9: Need for Uniqueness in SEC A
CONSUM ERS’ NEED F OR UNIQUENESSSEC B
Buy similar products at competitive prices and easy accessibility
Pay marginal premium for exclusive products
Identifying stores with exclusive products & pay marginal premium
Pay significant premium for extremely customized products
15%0%
23%
62%
Finding: Majority of consumers are willing to buy similar products at competitive prices which
are easily available.
Figures 10 :Definition of Shopping Enjoyment-SEC A
Shopping Enjoyment (SE) is defined by: SEC A
5.00
4.50
4.00
3.50
3.00
2.50
2.00
1.50
1.00
0.50
0.00
4.30
Ease of
Locating
Merchandise
4.53
3.80
Music and
Colors in the
store
3.67
3.33
Innovative
Ease of
Personalized
Window
transaction at
attention
Displays and
POS
In-store Visual
Merchandising
Finding: While the SEC A consumer ranks Personalized Attention as highest and Ease of
locating merchandise followed by Music/Colours and Innovative Displays; for the SEC B
consumer it is more basic priorities like Ease of locating merchandise and Ease of POS
transaction & Personalized Attention is ranked the least.
13
Proceedings of 9th Annual London Business Research Conference
4 - 5 August 2014, Imperial College, London, UK, ISBN: 978-1-922069-56-6
Figures 11: Definition of Shopping Enjoyment-SEC B
Shopping Enjoyment (SE) is defined by: SEC B
5.00
4.50
4.00
3.50
3.00
2.50
2.00
1.50
1.00
0.50
0.00
4.47
4.33
3.07
2.67
2.33
Ease of
Locating
Merchandise
Music and
Colors in the
store
Innovative
Ease of
Personalized
Window
transaction at attention
Displays and
POS
In-store Visual
Merchandising
Figure 12: Expectations of SEC A consumers from Store Staff
Expectations from Retail store staff
members: SEC A
Long-term relations-know the…
4.46
Empathize&personal stylist
4.40
Knowledgeable and offer advice
4.09
Inform-deals and offers
2.57
Help in locating merchandise
2.90
0.00
1.00
2.00
3.00
4.00
5.00
Finding: SEC A consumers value long-term relations and empathetic store staff.
Figure 13: Expectations of SEC B consumers from Store Staff
Expectations from Retail store staff
members: SEC B
Long-term relations-know the…
Empathize&personal stylist
2.33
2.67
Knowledgeable and offer advice
3.07
Inform-deals and offers
4.33
Help in locating merchandise
4.47
0.00
1.00
2.00
3.00
4.00
5.00
14
Proceedings of 9th Annual London Business Research Conference
4 - 5 August 2014, Imperial College, London, UK, ISBN: 978-1-922069-56-6
Finding: SEC B consumers value help in locating merchandise and information.
Figure 14: Expectations from Marketing-SEC A consumers
Expectations from Marketing/promotion offers run by Retail Stores:
SEC A
Treat customers as Co-creators in Value Creation
process
Incorporation of Customer Feedback in decision
making
Differentiate offers for premium and general
customers
4.46
4.43
4.23
Inform about New Arrivals
2.83
Offer the best deals
2.90
0.00 0.50 1.00 1.50 2.00 2.50 3.00 3.50 4.00 4.50 5.00
Finding: SEC A consumers want to be co-creators and have their feedback included.
Figure 15: Expectations from Marketing-SEC A consumers
Expectations from Marketing/promotion offers run by Retail
Stores: SEC B
Treat customers as Co-creators in Value
Creation process
Incorporation of Customer Feedback in
decision making
Differentiate offers for premium and general
customers
Inform about New Arrivals
Offer the best deals
2.24
2.67
3.63
4.33
4.57
0.00 0.50 1.00 1.50 2.00 2.50 3.00 3.50 4.00 4.50 5.00
Finding: SEC B consumers want to have the Best Deals and information about New Arrivals
from the firm.
15
Proceedings of 9th Annual London Business Research Conference
4 - 5 August 2014, Imperial College, London, UK, ISBN: 978-1-922069-56-6
Figure 16: Customer Loyalty-SEC A consumers
VIEWS ON CUSTOMER LOYALTY-SEC A
I shop from stores/brands that offer the best prices and competitive quality
I prefer to shop from a particular s tore/brand but don’t mind s witching i f I get better deals
el sewhere
I a m extremely l oyal and don’t mind taking extra efforts and spending more for my
preferred store/brand
I always shop only from my favourite brand and recommend the same to my family and
friends
0%
15%
38%
47%
Finding: SEC A consumers are either Brand Apostles always buying from the same
store/brand and referring it to others or always at least try to shop from their favourite brand
even if it means extra effort and spending more.
Figure 17: Customer Loyalty-SEC A consumers
VIEWS ON CUSTOMER LOYALTY-SEC B
I shop from stores/brands that offer the best prices and competitive quality
I prefer to shop from a particular s tore/brand but don’t mind s witching i f I get better deals
el sewhere
I a m extremely l oyal and don’t mind taking extra efforts and spending more for my
preferred store/brand
I always shop only from my favourite brand and recommend the same to my family and
friends
13% 0%
27%
60%
16
Proceedings of 9th Annual London Business Research Conference
4 - 5 August 2014, Imperial College, London, UK, ISBN: 978-1-922069-56-6
Finding: SEC B consumers are extremely price sensitive and either buy from stores which
offer the best deals or easily switch to other stores offering better price advantage even if
they prefer the stores under normal circumstances.
7. Managerial Implications
a) It is imperative for the retail store to target these two different groups- SEC A and
SEC B consumers differently as their expectations and purchase criteria are
starkly different from each other.
b) Since the SEC B customer has still not evolved into a stage where a Relationship
Marketing strategy can be adopted for him, basic value added services
differentiated just enough to address his basic needs and provide some
excitement can contribute to keeping him satisfied.
c) The marketers need to create Flanker brands to capture SEC B while maintaining
a Premium Image for SEC A. The designing of the marketing mix has to be in
tune with the differing aspirations of these two consumer groups.
i) Product:
SEC A- since the Need for Uniqueness of this group is high and they value
exclusivity; the marketer needs to constantly offer innovative and differentiated
products with up-to date technology and in keeping with current fashion trends.
The products should be packaged well and have quality certifications and
testimonials from respectable sources.
SEC B- since the consumer is satisfied with basic products but values price based
benefits, the back-end team should explore R&D to bring about cost cutting so
that the benefit is passed on to this customer. Firms should look at offering nofrills or basic value added products with significant differences in prices.
ii) Price: creation of Price-Tiers is important.
SEC A- this consumer group appreciates exclusivity and is willing to pay a
premium. But the consumer has a discerning taste and the price must match the
product expectations. Product development is the key to Price Premium.
SEC B- this consumer is familiar with products and their respective prices, the
moment they perceive that the products are more expensive than competitors
they will switch.
iii) Place: the Retail Venues have to imitate the Brand Positioning and hence
should tap the two groups through different formats.
SEC A- the store experience cannot be lackluster. It has to embody the Brand
experience. This consumer is very demanding. The stores have to focus on
personalized attention, merchandise accessibility as well as Visual Merchandising
to hold the interest of the consumer. An upscale EBO or a shop-in-shop format in
a premium department store should be ideal.
SEC B- the customer expects basics and should be given the same. Average
MBO with hygiene focus on aesthetic and display techniques should be a good
option.
iv) Promotion:
17
Proceedings of 9th Annual London Business Research Conference
4 - 5 August 2014, Imperial College, London, UK, ISBN: 978-1-922069-56-6
SEC A- the customers want to be treated as a valued partner and have a share of
voice in key strategic decisions. The firm should promote itself as a customer
friendly organization which values the feedback given by its key stakeholders. The
firm needs to promote its allegiance to Relationship marketing forming long-term
relations through collection previews; customer meets and giving differentiated
treatment to its loyal customers.
SEC B- the customers look forward to price based deals, hence, promotional
schemes should highlight price advantages compared to competition.
v) Physical Evidence:
SEC A- the customer expects to be blown away by the store ambience. Innovative
fixtures, materials and display methods should be incorporated.
SEC B- the store ambience should be practical and simple. This consumer is not
used to larger than life experiences and might feel intimidated in such a setting.
vi) People: the store personnel are representatives of Store/Brand philosophy and
DNA.
SEC A- this consumer is very loyal to the brand he prefers. Hence, he also
demands a preferential treatment. He expects the store team to be able to
empathize with him and act like his stylist. He also expects the staff to be well
groomed and knowledgeable so that the customer can trust his judgement. The
firm must train its front-end team so that it believes in the ideals of Relationship
marketing. The maximum numbers of moments of truth happen at retail floor and
the retail staffs are the champions whose interactions determine if the firm will be
able to capture the lifetime value of the customer and make him a hard core loyal
thereby getting referral based sales too.
SEC B- the front end should be trained in basic customer etiquettes and should
have knowledge about product offerings and deals in store so that he can share
the correct information with the customer and help him make informed decisions.
Also, he should ensure that the customer should go back with a pleasant
experience so that the retailer continues to be in his consideration set
8. Limitations
Due to shortage of time the sample size was restricted and an in-depth interview could not
be conducted. Capturing the correlation between psychological and socio-economic
nuances could have been more interesting.
9. Conclusion and Future Scope
The purpose of the research is to profile the consumers on the basis of their shopping
motivations and to understand the differences between these groups on the basis of buying
behaviour and decision-making process. Such an analysis provides an understanding of
the consumer placement in the continuum between transactional marketing and
relationship marketing. It enables the retailers/brands to design a differentiated marketing
mix as per the requirements of the target group.
18
Proceedings of 9th Annual London Business Research Conference
4 - 5 August 2014, Imperial College, London, UK, ISBN: 978-1-922069-56-6
The future scope of the project will be to delve deeper into the consumer psyche by
conducting focus group interviews and in-depth interviews.
10. References:
Adam Lindgreen (2001). A framework for studying relationship marketing dyads, Qualitative
Market Research: An International Journal Volume 4. MCB University Press ISSN
1352-2752
Chaudhuri, A. and Holbrook, M. (2001). The chain of effects from brand trust and brand
affect to brand. Journal of Marketing , 65(2), 81–93.
Martin Christopher, Adrian Payne and David Ballantyne (2002). Relationship marketing:
Creating Stakeholder Value
Jayesh P Aagja, Toby Mammen and Amit Saraswat (2011). Validating Service Convenience
Scale and Profiling Customers: A Study in the Indian Retail Context VIKALPA,
VOLUME 36, NO 4
Levitt, T. (1981). Marketing intangible products and product intangibles.Harvard Business
Review , 53(2),
Shoemaker, S. and Lewis, R. (1999). Customer loyalty: The future of hospitality marketing.
Hospitality Management , 18, 349.
The Market Research Society of India(2011).The New SEC system.
Youjae, Y. and Suna, L. (2004). What influences the relationship between customer
satisfaction and repurchase intention? Investigating the effects of adjusted
expectations and customer loyalty.Psychology & Marketing, 21(5), 351–373.
19