MARKETING STRATEGIES FOR TARGETED MARKET SEGMENTS
BASED ON SHOPPING MALL IMAGES
Michael Adiwijaya
Lecturer Staff, Petra Christian University Surabaya
Email: michaels@peter.petra.ac.id
ABSTRACT
This research examined the market segmentation based on shopping mall image. The shopping mall image is derived from the customer perception toward the performances of shopping mall attributes such as merchandising, accessibility, service, atmosphere, entertainment, food, and services. There are four results from the market segmentation processes; they are market or customer segments, customer demographic profile, customer shopping behavior description, customer perception and customer opinion toward the shopping mall image. Three market segments are revealed in this research; namely
“Demander”
,
“Rationale”
, and
“Satisfier”
in which each of market segment had difference perception toward the shopping mall image but they had the same shopping behavior except for the amount of money spent per visit variable. Through the analysis of each market segments profile, then two segments, namely
“Rationale”
and
“Satisfier”
, are identified as potential target market. Finally the marketing strategies based on shopping mall image are developed for potential target market segments.
Keywords:
Shopping Mall Image Studies, Shopping Mall Attributes Performances, Market
Segmentation, Target Market, Marketing Strategies
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1.1 BACKGROUNDS
Nowadays one of the global market main challenges for shopping mall industry is the intense competition between the shopping mall both in the same region and also in the different region as well. (Soriano, 2003). This competition becomes more intense because the shopping malls not only compete with the other shopping malls but also with the other shopping centers format such as strip centers. Beside that, the shopping malls also have to compete with the indirect competitors both for the stores formats such as department stores, specialty stores, category specialist etc and for the non store formats such as online retailers, television home shopping, direct selling, etc as well. (Levy &
Wietz, 2007, p.192)
Another global market main challenge of shopping mall industry is the changing of consumer market. Spurred by several demographic and life style trend, consumers have become a heterogeneous market. One composed of numerous micro segments.
These trends include increasing ethnic diversity, an increasing proportion of elderly, smaller households due to the lower birth rate, higher divorce rate, greater double income, etc. (Dunne & Lusch, 1999, p.88).
In response to the intense competition and the changing consumer environment, several industry practitioners and academic experts have expressed the benefits of targeting specific consumer segments, positioning or repositioning the mall to attract those segments and differentiating the shopping mall’s attributes (Alexander &
Muchlebach, 1992, p.75). Shopping malls management realized the efficiency and effectiveness of targeting a few segment of the market. Before target markets can be
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selected, the market must be segmented into meaningful group that can be realistically with the communication and marketing mix (Kotler, 2004, p.9).
The understanding for the need and characteristic of each customer segment gives the advantages for management of shopping mall in designing appropriate marketing strategies in order to attract potential customer segments which result the increasing visitor traffic and the increasing of tenants’ revenue within the shopping mall.
2.1 LITERATURE REVIEW
2.1.1 Shopping Mall Images
Nowadays the development of shopping mall is growing very fast especially in the developed and developing countries that leads to tight competition within shopping centers, but although there are so many shopping malls even in the same area, however each of shopping mall has its own image in the customer perception. Shopping mall attributes created distinctive shopping mall image as the result of the combination of several attributes performance within the mall (Levy and Weitz, 2007, p.192).
2.1.1.1 Merchandising
Merchandising is an important image attribute because it represents the core product of shopping center based on Berman and Evans study (as cited on Sit et al. 2003).
The roles of merchandising are also supported by Wakerfield and Baker (1998) that highlighted the merchandising and tenant variety as stimuli that induce purchasing in a shopping mall setting and thus influence the consumer image of the mall.
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2.1.1.2 Accessibility
The definition of accessibility is the ease of getting in and out of a shopping center (Levy and Weitz, 2007, p.594). Accessibility can be further divided into macro accessibility and micro accessibility. Macro accessibility concerns access road condition to the center and the proximity of the center from the customer’s work place or residence.
Meanwhile according to Sit et al. (2003), the micro accessibility refers to parking facilities within the center and the ease of navigation within the shopping center. The definition of accessibility is close related with the site selection process and layout planning within the mall as one part of retail mix.
2.1.1.3 Service
Shopping center services are confined to behavior of retail employees such as courtesy, knowledge, and friendliness. Thus these services can be classified as personal service. By Lovelock et al (as cited in Sit et al, 2003). However, according to Berman &
Evans (as cited in Sit et al, 2003) besides personal service, shopping mall also provides communal services in terms of ambulance such as escalators, lifts, and sign boards and amenities such as restrooms. Sit et al. (2003) stated that both personal and communal services are central to the shopping mall image because they represent the augmented product that support the core product (merchandising) and also add value to the total shopping experiences of the customers.
2.1.1.4 Atmospherics
Atmospherics refer to the design of an environment via visual communicators, lighting, colors, music, and scent to stimulate customer’s perceptual and emotional response and ultimately to affect their purchase behavior (Levy & Weitz, 2007, p.510).
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According to Smith and Burns (as cited on Sit et al, 2003), the atmospherics are critical because they act as environmental cues that consumers use to imply the quality of a shopping center. Further, atmospherics have been reported to stimulate consumer purchase at a shopping mall (Wakefield & Baker, 1998).
2.1.1.5 Entertainment
Entertainment is pivotal for shopping center because it induce an exciting or fun shopping experience, which in turn can entice consumer patronage. Entertainment in the shopping center can be categorized into special event entertainment and specialty entertainment. The key distinction between these two types of entertainment is the length of duration or span of operation. Special entertainment is offered on an occasional or seasonal basis for a short period of time. Conversely, specialty entertainment is generally incorporated into a shopping center’s property for longer duration (Haynes & Talpade,
1996).
2.1.1.6 Food
Food is pivotal to shoppers because they: first, create an entertaining ambience within a shopping centre conducive to a pleasant or exciting shopping experience. And second, provide a needed break from hours of shopping and or as a conclusion to an extended shopping excursion (Haynes & Talpade, 1996).
2.1.1.7 Security
Besides attracting consumers, shopping centers also appeal to the criminals. The consumer behavior literature by Schiffman & Kanuk has revealed that many consumers are risk averse and thus they may be reluctant to visit a shopping center that is perceived to be dangerous (as cited in Sit et al. 2003). Despite its significance, Sit et al. (2003)
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elucidate that limited studies have examined the contribution of security to shopping center image. There are three security variables; they are quality of the center, safe place to be, and the personal security.
2.1.2 Customer Perception
Perception is defined as the process by which an individual selects, organizes, and interprets stimuli into a meaningful and coherent picture of the world (Schiffman and
Kanuk, 2004, p.158). Meanwhile customer perception according to Cutlipp (1999, p.120) is the interpreted of scene of actions, included people, places, actions, and entire range of phenomena, which is give perceptions of that scene to the customer and respond based on the perception.
Two individuals may be exposed to the same stimuli under the same apparent conditions, but how each person recognizes, selects, organizes, and interprets this stimuli is highly individual process based on each person’s own need, values, and expectation.
(Schiffman and Kanuk, 2004, p.158)
2.1.3 Market Segmentation and Targeting
Market segmentation can be defined as the process of dividing a market into distinct subsets of consumers with common needs or characteristics and selecting one or more segments to target with a distinct marketing mix (Schiffman and Kanuk, 2004, p.50). Based on Kotler, there are two kind bases for market segmentation. They are descriptive base and causal base (as cited in Lee Hew & Fairhurst, 2000). The descriptive segmentation base uses demographic, socio-economic, geographic, personality, lifestyle, product usage and brand loyalty as the characteristic of customer in the market.
Demographic and socioeconomic bases, which include age, gender, education, marital
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status, and life cycle stage, have been utilized most frequently. There has been empirical support for the validity of using the descriptive segmentation bases (Plummer, 1974).
The causal segmentation bases include self concept, attitude or preference or perceptions, benefits and usage situation. These bases typically are preferred over descriptive ones, by academicians and practitioners, because of their link to the actual behavior of the consumer. There has been empirical support for the validity of using the causal segmentation bases (Finn and Louviere, 1996).
2.2 CONCEPTUAL FRAMEWORK
This research is started with the main challenges that the shopping malls management faced nowadays. Those main challenges replace the mass marketing strategy into the segmented marketing strategy for shopping mall management. Moreover this research did causal market segmentation based on shopping mall image. The next phase is the market targeting process that was conducted by measuring each market segment based on their perception toward the performances of shopping mall attributes and based on their shopping behavior in order to identify and to select the potential market segment to be served and treated specially.
After finding the potential market segments together with their perception information and their shopping behavior; then the development of marketing strategy can be established. The summary of the theoretical framework can be seen as flow chart on figure 1.1
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Figure 1.1 Conceptual Framework Chart
The Global Shopping Mall
Challenges
The movement from mass marketing strategy to the segmented marketing strategy
Customer Shopping
Behavior
The Causal Market
Segmentation based on
Shopping Mall Image
Market
Segments
Target Market
Marketing
Strategies
Shopping Mall
Attributes
3.1 ISSUES FOR INVESTIGATION
3.1.1 Purpose of Research
1.
To make the customer segmentation based on the customers’ perception toward the performances of shopping mall attributes or based on shopping mall image.
2.
To collect information regarding the demographic profile of customer, the customer shopping behavior, customer perception towards shopping mall image and the customer’s opinion toward Tunjungan Plaza Surabaya as the places (object) of the research.
3.
To identify the potential market segments as target markets.
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4.
To develop marketing strategy based on shopping mall image for target markets.
3.1.2 Problem Statement
“How to formulate the marketing strategies for shopping mall based on shopping mall image in order to attract the targeted potential market segments to visit and to shop at the mall?”
3.1.3 Hypotheses
Hypothesis 1:
H
0
: There are no differences of customer perception toward shopping mall image for each market segment
H
1
: There are differences of customer perception toward shopping mall image for each market segments.
Hypothesis 2:
H
0
: Each customer segment does not perform different shopping behavior
H
1
: Each customer segment performs different shopping behavior.
4.1 RESEARCH METHODOLOGY
4.1.1 Place of Research
The place for this research will be done at Tunjungan Plaza (TP) which is located in Surabaya, East Java Province – Indonesia. The considerations in choosing TP as the place of research are as follow; firstly TP is the largest shopping center in Indonesia, secondly TP is strategically located in the heart of Surabaya's central business district
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4.1.2 Instrument Research Design
There were four sections of questions on the questionnaire design; they are the demographic questions, the customer shopping behavior questions, the customer perception questions and the customer opinion question. The first section of the questionnaire is containing some questions related with the demographic information of the customers such as gender, age, marital status, education background, occupation, and monthly income. At the mean time, the second section of the questionnaire is containing some questions related with the customer shopping behavior information. There are six shopping behavior that will be investigated; they are shopping preference, frequency of visit per month, amount of money spent per visit, desire to stay, amount of variable purchased per visit, and re-patronage intention.
The third section of the questionnaire is containing some questions related with the customer perceptions toward the importance of shopping mall attributes performances. Finally, the last part is the open questions which are consisting of two questions connected to the customer opinion regarding the shopping preferences and the uniqueness of the shopping mall
4.1.3 Research Population
The population for this research is the entire customers of TP who were doing shopping activities within the mall, at the time that the field study was conducted.
Therefore the customers who were not doing the shopping activities at that moment were not covered as the population for this research
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4.1.4 Sampling Type and Method
This research used the non-probability sampling as the type of sampling design and convenience samples as the sampling method.
4.1.5 Sample Size
Since standard value of ordinal data is similar to nominal data then the maximum value of the variance (quadratic standard deviation) is 0.25. It is gathered by multiply the p (probability of success) by q (probability of fail) which will reach maximum at p=0.5 and q=0.5. (Maholtra, 1996, p.413)
The number of observation n for unknown size of population will be count by: n

 
2
D
2 pq
α = stand for alpha (significant level)
D = stand for error (precession level)
Z = standard normal
In this research, the significant level or alpha score is determined 10% and the standard for error is also determined 10%. Then by using the formulation, the total respondents required is around 270 respondents.
4.1.6 Statistical Analysis
4.1.6.1 Cluster Analysis
Cluster Analysis is used to identify and to classify the customers at TP into several groups or segments based on their perception toward the performances of shopping mall attributes.
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4.1.6.2 Factor Analysis
This analysis eased the researcher in making general interpretation toward the differences of perception of each customer segments by reducing some variables in the same dimension into one factor that represent the others.
4.1.6.3 ANOVA
This analysis is used to support the cluster analysis to determine the ideal number of cluster by observing the trade off between the average F score and the standard deviation. Ideal cluster has maximum average F score and minimum standard deviation.
4.1.6.4 MANOVA
This analysis is used to test the hypothesis 1. The determination whether to reject or to receive null hypothesis can be used by observing the significance level on the general linear model.
4.1.6.5 Chi Square Analysis
The result from this analysis is the identification of the relationship between segments’ perception toward mall attributes performances with their shopping behavior.
4.1.6.6 Descriptive Analysis
This analysis is used to describe the profile regarding the demographic profile, the shopping behavior description, the customer perception, and the customer opinion for each market segment. Then next phase is to identify the potential customer segments.
Finally, to develop marketing strategy based on potential market segments perception toward the performances of shopping mall attributes.
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5.1 DATA ANALYSIS
5.1.1 Market Segmentation
Table 1.1: ANOVA Cluster 2, 3, 4, 5
Cluster 2
Average St
Cluster 3
Average St
Cluster 4
Average St
Cluster 5
Average St
F Score Deviation
55.964
F Score
30.787 38.095
Deviation
16.406
F Score
30.439
Deviation
15.695
F Score
24.709
Deviation
12.751
As can be seen on table 1.1, the cluster which has maximum average F score and minimum standard deviation is cluster 3. It means that the ideal numbers of clusters for market segmentation in this research are three clusters or three market segments.
5.1.2 Market Segment Analysis
5.1.2.1 Demographic Profile for Each Market Segment
The description of demographic profile for segment 1 is as follow: This segment is dominated by female teenager with average age on 13-19 years old. Their marital statuses are single with education background at senior high school and some of them at bachelor level. They are student with monthly income below Rp 1 million (± US$ 100) and only small number of them has income between Rp 1 – 3 million (± US$ 100 – 300) per month. Meanwhile the description of demographic profile for segment 2 is as follow:
This segment is dominated by young female with average age on 20-25 years old. Their marital statuses are single with education background at senior high school and small number of them at bachelor level. Most of them work as an employee with monthly income below Rp 1 million (± US$ 100) but also many of them have income between Rp
1 – 3 million (± US$ 100 – 300) per month. Finally for segment 3, the description of its
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demographic profile is as follow: This segment is dominated by male with average age on
20-25 years old. Their marital statuses are single and some of them are married with more than one child. Most of them have education background at senior high school but also many of them have bachelor level. They work as an employee with monthly income below Rp 1 million (± US$ 100) but also some of them have income between Rp 1 – 3 million (± US$ 100 – 300) per month.
5.1.2.2 Shopping Behavior Description for Each Market Segment
The description of shopping behavior for segment 1 is as follow: most of them visited mall 1-2 times per month but many of them also visited mall 3-4 times a month.
Their spending per visit below Rp 250.000,- (± US$ 25) but some of them also spent between Rp 250.001 – Rp 500.000,- (± US$ 25 – 50) per visit. The desire to stay is 3-4 hours per visit but many of them also spent time less than 3 hours per visit. The majority purchased 2-4 items per visit and many of them also purchased 5-6 items per visit. Most of them are sure to come back again and doing shopping, but some of them are doubt whether to come again next month for shopping.
The description of shopping behavior for segment 2 is as follow: most of them visited mall 1-2 times per month and some of them also visited mall 3-4 times a month.
Their spending per visit below Rp 250.000,- (± US$ 25) but many of them also spent between Rp 250.001 – Rp 500.000,- (± US$ 25 – 50) per visit. The desire to stay is 3-4 hours per visit and only small number of them who stayed less than 3 hours per visit. The majority purchased 2 – 4 items per visit and some of them purchased only 1 item per visit. Most of them are doubt whether to come again next month for shopping but some of them are sure to come back again and doing shopping.
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The description of shopping mall behavior for segment 3 is as follow: most of them visited mall 1-2 times and small number of them visited 3-4 times a month. Their spending per visit below Rp 250.000,- (± US$ 25) and small number of them spent between Rp 250.000 – Rp 500.000,- (± US$ 25 – 50) per visit. The desire to stay is 3-4 hours per visit but many of them also spent time less than 3 hours per visit. The majority purchased 2-4 items per visit and some of them also purchased 5-6 items per visit. Most of them are sure to come again next month for shopping and the rest are doubt about it.
5.1.2.3 Perception Description for Each Market Segment
For Segment 1, most of the performances of shopping mall attributes are perceived important.. Therefore this segment 1 can be identified or named as
“Demander”
because as the customer, this segment demand the entire attributes to perform well in satisfying them.
In the meantime for Segment 2, some of the performances of shopping mall attributes are perceived important and some are not. Therefore this segment 2 can be identified or named as
“Rationale”
because it is the nature of customer to demand well performances from shopping mall attribute in satisfying them but they didn’t demand the entire variables and only for selected variables which they perceived important.
The last is for segment 3, some of the performances of shopping mall attributes are perceived important and some are not. Therefore this segment 3 can be identified or named as “
Satisfier” because as the customer, this segment only need short number of variables to be satisfied (easy to be satisfied). Meanwhile for others variables, they perceived them as neutral.
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5.1.2.4 Opinion Description for Each Market Segment
Segment 1 or “Demander” segment refers TP as the convenience place where they can do the shopping activities on many stores that offer many type of products with good services and also can enjoy the atmosphere within the mall. In retail perspective, this segment perceived that the quality performances of TP can be seen on merchandising, service, and atmosphere dimension or attribute.
Meanwhile, segment 2 or “Rationale” segment refers TP as the strategic mall because of its location in the center of Surabaya which ease the customer to access the mall from many directions all around the city; also because of its history as the first mall in Surabaya and because of many occasional entertainments such as celebrities visit, exhibition, etc. In retail perspective, this segment perceived that the quality performances of TP can be seen on accessibility and entertainment dimension or attribute.
Finally, segment 3 or
“Satisfier”
segment have the combination of opinion from segment 1 and segment 2. Therefore in retail perspective, this segment perceived that the quality performances of TP can be seen on merchandising, service, atmosphere, accessibility, and entertainment dimension or attribute.
6.1 HYPOTHESES TEST
6.1.1 Hypothesis 1
Table 1.2: Multivariate Test
Effect
CLUSTER Pillai's Trace
Multivariate Tests(c)
Value
0.851
F
27.432
Hypothesis Error df df
14
Sig.
518 0.000
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Wilks' Lambda
Hotelling's Trace
0.265 34.778(a)
2.339 42.929
14
14
516 0.000
514 0.000
Roy's Largest Root
2.133 78.909(b) 7 259 0.000
From table 1.2 Multivariate Test, on the cluster part showed that most of the significance level for several test is below 0.1 (alpha 10%). This means that null hypothesis is rejected or in another word that there are differences on perception toward the performances of shopping mall attributes for each segment.
Table 1.3: Test of Between Subject Effects
Source
Tests of Between-Subjects Effects
Dependent
Variable
Type III Sum of
Squares
Mean df Square
Merchandise
Access
Services
11.683
34.21
39.335
2
2
2
5.841
F Sig.
5.67 0.004
17.105 46.779 0.000
19.668 40.318 0.000
CLUSTER Atmosphere
Entertainment
Food
Safety
48.581 2
29.686 2
21.206 2
29.068 2
24.29 39.051 0.000
14.843 39.619 0.000
10.603 38.608 0.000
14.534 75.292 0.000
In addition, based on table 1.3 Test of between Subject Effects confirmed that the significance level of the entire attributes is below 0.1 (alpha 10%). This evidence also supported to reject null hypothesis or in another word that there are differences on perception toward the performances of shopping mall attributes for each segment even the perception for the performance of each attributes.
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6.1.2 Hypothesis 2
Table 1.4: Chi Square Test
Shopping Behavior Variables
Frequency of Visit
Money Spent
Desire to Stay
Amount of Purchase
Re-patronage Intention
Chi-Square
3.089
8.148
8.636
3.531
1.742
6
4
2 df
6
4
Sig.
0.798
0.086
0.195
0.473
0.419
Based on table 1.4 can be seen for frequency of visit, desire to stay, amount of purchase, and re-patronage intention variables had the significant level above the alpha 10% which means for those variables; null hypothesis is accepted which means that each customer segment does not perform different shopping behavior. But for money spent variable, it had the significant level below the alpha 10% which means for that variable; null hypothesis is rejected which means that each customer segment performs different shopping behavior.
7.1 CONCLUSION
Hypothesis 1 has significant level below alpha score 10% which does not support the hypothesis or in another word, each market segment has its own perception toward the performances of shopping mal image. This hypothesis test result shows the significant evidence for management of shopping mall to do market segmentation based on shopping mall image for its market (customer) because customer perception toward shopping mall image can not be generalized into one same perception.
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Meanwhile, hypothesis 2 has significant level above alpha score 10% which supports the hypothesis or in another word, each market segment performs the same shopping behavior. This hypothesis test result shows the significant evidence for management of shopping mall not to use the customer shopping behavior as the consideration in identifying potential market segment.
8.1 MARKETING STRATEGIES RECOMENDATIONS
Based on the research analysis result; there are three market segment revealed, namely
“Demander”
,
“Rationale”
, and
“Satisfier” . Market segment “
Demander” refers to customers who demand the entire shopping mall attributes to perform well in reaching their expectation and satisfaction. Meanwhile market segment “
Rationale” refers to customers who are rationale that can balance between which attributes performances are perceived important and which are not. Finally, market segment
“Satisfier”
refers to customers who have less demand on the performances of shopping mall attributes.
Moreover, based on the observation and analysis the profile of each market segment especially on the perception of each market segment toward the performance of shopping mall attributes, then two potential market segments are identified; they are
“Rationale”
and
“Satisfier”
.
The recommendations for marketing strategies in serving the target markets are explained as follow: For merchandising attribute; the brand options variable is perceived important which means the mall management should manage the stores or tenants within mall to offer many brand options. Meanwhile for accessibility attribute; the road access to
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the mall is perceived important which means the mall management should coordinate with the local government in providing good road access condition into the mall.
For service attribute; the personal service and amenities service should be managed and be maintained well. Courtesy, prompt service and knowledge of the staff at information desk are the important variables to be noticed on personal service. Therefore mall management should schedule the training program for staffs at information desk in order to prepare them to be courtesy to customer, having appropriate mall knowledge, and help the customer promptly. While the restrooms which are clean, easy to be found, and strategically located are the important variables to be noticed on amenities service.
Therefore mall management should monitor the cleaning service department and the traffic into the restrooms location.
At the mean time, for atmosphere attributes; comfort situation within mall is perceived as the important variable Therefore mall management should manage the customer traffic to flow smoothly within each part of location within mall. For entertainment attribute; both permanent and occasional entertainment are perceived important. Therefore mall management should manage the contract with stores that supporting the permanent entertainment such as cinema, game zone, toys stores, etc. In addition, mall management can arrange many occasional entertainments such as live music, performances by celebrity, conducting exhibition, etc to provide occasional entertainment at the mall.
Finally for food attribute and service attribute; the entire variables are perceived important. Therefore food court center, types of food offered, food price, and the quality of food should be managed well by monitoring the performances of food department at
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the mall. Meanwhile the safety of the mall facilities such as escalator and lift, safety in all mall areas such as restroom, parking space, and inside mall, safety of vehicle, and the security guard on duty should be developed or at least maintained at the good level by mall management through the monitoring of security department at the mall in partnership with local police department and also through the coordination with its customer via security campaign within mall.
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