Academic journal article IUP Journal of Marketing Management

Understanding the Repatronage Intentions of Supermarket Customers: A Cluster Analysis

Academic journal article IUP Journal of Marketing Management

Understanding the Repatronage Intentions of Supermarket Customers: A Cluster Analysis

Article excerpt

Introduction

The competitive retailing market compels retailers to strive for customer satisfaction and retention. Customer satisfaction increases the likelihood of strengthening customer loyalty and repatronage intentions (Law and Zhao, 2004; and Hicks et al., 2005). Repatronage intention is consumers' desire to make repeat purchase (Yang and Chang, 2011), positive shopping intentions, and repeat patronage (Hu, 2011). Previous studies have explored various factors influencing customers' store choice and shopping frequency, which further determine store patronage (Zinkhan and Pan, 2006). Store attributes are important predictors of store choice, while consumer demographics such as gender and income are important predictors of shopping frequency (Zinkhan and Pan, 2006). Thus, retailers can control store attributes to increase store choice and hence, customer repatronage, whil e they cannot control the shopping frequencies (Zinkhan and Pan, 2006).

The key store attributes studied in patronage literature include product quality (Juhl et al., 2002), price (Theodoridis and Chatzipanagiotou, 2009), product variety (Hansen and Solgaard, 2004), discounts (Schiffman and Kanuk, 2008), location (Craig et al., 1984), home deliver y (Ganesh et al., 2010), store atmosphere (Tripathi and Sinha, 2006), service (Laroehe et al., 2005), checkout delay (Thelen and Woodside, 1997), store layout (Ghosh et al., 2009), friendly and helpful staff (McGoldrick, 2002), loyalty programs (Bellizzi and Bristol, 2004), parking (Sam, 2011), and opening hours (Seiders et al., 2000).

Different customers consider different store attributes as important. Three customer segments (based on variables such as education, family income, and age of the household head) placed different levels of importance on supermarket attributes such as variety, price, service, convenience, and atmosphere (Hortman et al., 1990). It might be interesting to follow a reverse process of clustering respondents based on the level of importance placed on store attributes and then attempt to describe the clusters on the basis of demographic variables.

Challenges of Supermarkets

Indian retail is divided into traditional and modern sector, with traditional sector contributing 92% and modern retailers contributing 8% of revenues of the total Indian retail sales (IBEF, 2015). Modern retail formats of food and groceries contribute to 2-3% of modern retail revenues (IBEF, 2015). 70% of these food and grocery modern retail formats comprise supermarkets (Nandita Bose, 2012). Supermarkets are large, low cost, low margin, high volume and self-service retail stores, designed to meet the needs for food, groceries, and other non-food items (Saxena, 2009). Ever y major supermarket chain is losing money due to tight profit margins, expensive real estate, and supply chain issues with high competition from traditional retail and emerging online retail (The Economist, 2014). There are many instances of supermarkets closing down either completely (for e.g., Subhiksha in 2009) or shutting poor-performing stores and relocating to new stores [Nilgiris coming down from 86 in 2007 to 30 stores by late 2008 (Krishna, 2010; and Business Standard, 2012), Spencer's, Food World, Food Bazaar, and More closing down or relocating some of their stores (Mukherjee, 2012)].

In order to tap the share of wallet of Indian customers, the supermarkets need to understand customers' patronage behavior and design customer-specific retail strategies. This study aims to identify different profiles of the supermarket customers with respect to how they rate key supermarket attributes. Further the paper provides a comprehensive demographic description of these customer segments and their purchase outcome of repatronage intentions and highlights key implications for the marketers.

Literature Review

The most widely used definition of supermarket is that of a store with a selling area of between 400 sq. …

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