Supermarket Industry of PontyPridd - Research Paper Example

Business Research Contents Introduction 3 Research Question 3 Research Objectives 4 Rationale 4 Literature Review 4 Research Methods 7 Findings 10 Discussion and Analysis 16 Conclusion 17 Recommendation 18 Conclusion 18 Reference List 20 Appendix 22 Closed-ended Survey Questions 22 Descriptive Results 24 Introduction Since emergence of trade liberalization and globalization, the scope and scale of commercial activities have substantially enhanced in prominent world economies such as, the United Kingdom (U.K.). Business expansion across major industrial segments of the global economy is greatly attributed to the rise in aggregate demand for consumer use goods and services. The per capita income thresholds of individuals in the U.K. have gradually increased (Kunal and Yoo, 2010). Higher per person income level has stimulated the discretionary spending powers of consumers. However, it should be noted that due to greater demand, the number of entrants in each industrial segment has increased, thereby augmenting the degree of competition among the firms. This research paper attempts to throw light on the U.K. supermarket industry. Over time, it is observed that the degree of market rivalry faced by supermarket companies in the U.K. have enhanced. Consequently, the companies aim to acquire higher competencies in business by enhancing utility levels of the potential market buyers. Thus, analyzing the taste and preference pattern of consumers is an indispensible task for each and every company operating within the industry. At the same time, it is rational for consumers of PontyPridd to gather adequate knowledge about the best supermarkets in their town. This research paper aims to analyze primary independent causal factors that influence the purchasing intensions of buyers in the supermarkets of Pontypridd. Pontypridd is a long established town of Wales. The town is located approximately 19 kilometres away from the city of Cardiff. The business research will meet the established research aims and objectives with the help of quantitative as well as qualitative analysis tools. Research Question Major: What are the factors influencing shopping behaviour of the consumers in PontyPridd? Minor: What is the most important factor considered by the buyers of PontyPridd before selecting their ideal supermarket? Minor: Which supermarket is most popular to the customers of PontyPridd? Research Objectives The objectives of the current research are framed according to the major and minor research questions. To analyze the most important factor that helps to determine purchasing intentions of the consumers in supermarkets of PontyPridd To assess the most popular supermarket in PontyPridd. Rationale It is highly rational to conduct this research because it would foreground factors that residents and young students of PontyPridd should consider while selecting their ideal supermarket. On the other hand, analysis of the paper will help the companies to comprehend factors determining their customers’ utility. Productive business strategies can be framed by the companies based on such estimations. Long-term commercial growth and core competencies can be acquired by the supermarket companies only through these strategies (Newman, 2013). Literature Review It is true that PontyPridd is not a very busy city of the U.K., but the town is rapidly progressing over time. The shopping centres of the town have been renovated and rebuilt into modern shopping outlets. The popular supermarket company, Sainsbury is presently found to establish its chain factory in the town. However, it should be noted that along with economic growth, the supermarket industry therein is experiencing cut-throat competition. Prominent supermarket chains conducting business in PontyPridd such as, Tesco, Iceland, Sainsbury and ASDA, experience strict oligopolistic competition. A report published by the Institute of Global Food and Consumer Goods Expects have proved that aggregate demand faced by the supermarkets of the U.K. has substantially increased (GN, 2014). Figure 1: Rising Demand in the U.K. Supermarkets (Source: IGD, 2014) Nevertheless, rational buyers must make their purchases from the company that offers best quality products at the cheapest price value. Figure 2: Maximum Sales Generated from U.K. Supermarkets (Source: IGD, 2014) As shown in the above graph, the study also proved that proportion of sales generated in the U.K. is highest from the small supermarkets and large hypermarkets or superstores. Increased demand and higher returns have helped to increase the level of rivalry among supermarket companies operating in the U.K. Figure 3: High Supermarket Rivalry in the U.K. (Source: EconomicsOnline, 2014) Another research study shows that above firms are the primary competing ones within the supermarket industry of the U.K. Nonetheless, Iceland Foods Ltd, Sainsbury, Budgens, Spar, Tesco, Morrisons, Lidi and ASDA are the most popular supermarkets of PontyPridd. Market researchers state that these companies function according to strategic behaviour and invest large sums of money in marketing activities (Hansen, 2011). Through numerous discount and promotional offers, these firms attract wider base of customers and encourage them to make bulk purchases. It is found that consumers have diverse reasons to select their ideal supermarket in PontyPridd. Some researchers claim that factors like, product availability, brand image, perceived product quality and perceived product price, influence buyers’ purchasing decisions in the supermarkets. Some studies suggest that demographic factors such as, gender, significantly affect perceptions of consumers while choosing a shopping destination. For instance, female shoppers are risk averse individuals (Beynom, Moutinho and Veloutsou, 2010). They desire to shop from the supermarket, which lies nearest to their residential location. On the contrary, men are likely to shop at late nights and are less concerned with the distance to be travelled. Moreover, women prefer to shop from locations that are popular and busy, unlike men. Certain researchers have claimed that accommodations of the students notably influence the sales and business of food items. These studies have proved that if accommodations of the students are cheap, then their disposable income levels are high (Ness, Gorton and Kuznesof, 2002). With rise in disposable incomes, discretionary expenditure of the students related to food items is found to rise. At the same time, shopping intensions of the students largely depend on quality of the products. If the products sold by a supermarket are of good quality, then young buyers are willing to pay premium prices for them. From the above review, it can be claimed that social and economic factors substantially determine purchasing intensions of the consumers in supermarkets. PontyPridd’s population comprises a large proportion of young students. Hence, these theories and interpretations are highly relevant in order to estimate purchasing intensions of the students of PontyPridd. The supermarket companies of PontyPridd should realize that along with external market features, buyers’ demand for their products and services are also determined by the internal aspects of their business. Studies have proved that supermarkets with innovative designs and offers attract a wider base of customers (Hansen, Jensen and Solgaard, 2011). Furthermore, night shopping is seen to be popular among most students residing in the U.K. So, the supermarkets that are kept open for long hours are able to cater to as well as capitalize upon demands of the university students (Richbell and Kite, 2007). Since PontyPridd constitutes a large number of universities, demand created by the students represents a large proportion of the aggregate demand experienced by supermarkets. Above all, product quality is a significant factor influencing buyers’ purchasing intentions in the U.K. supermarkets (Närhinen, Nissinen and Puska, 2000). The rate of repeat purchase becomes directly proportional to quality of the products offered by the companies. From the above literature review, it is analyzed that any supermarket can enhance its commercial prosperity in PontyPridd by providing superior quality products to customers. The products must be easily available and purchasing intensions of the buyers will be directly proportional to the level of efficiency of marketing mix strategies of a firm. On the other hand, it is seen that social attributes, such as, gender and economic powers, determine the buyers’ ideal supermarket selection. Research Methods Philosophy The entire research was conducted on the basis of interpretive research philosophy. This is because; results and theories of the research were not procured in quantitative terms. The research work aimed to analyze qualitative factors that discern purchasing intensions of consumers in supermarkets of PontyPridd. Thus, all relevant information and data were accumulated by the researcher as per interpretive research philosophy (Hatch, 2002). Approach The entire business research work was prepared under inductive research approach. As per this approach, valuable data and information related to the subject matter were firstly collected. Subsequently, applicable theories or hypotheses were formulated. Design The research design was framed according to availability of data and information. The researcher had implemented a comparative research design for conducting the research (Kumar, 2011). The analysis involved comparison of different popular supermarket companies of PontyPridd. Strategy The researcher had strategically assumed certain factors to be exogenous. This is because if these factors were endogenous, then analysis results would significantly differ. It was assumed that all required data and information were readily available. At the same time, the external business environment of PontyPridd did not experience any changes during the research process (Srivastava and Rego, 2011). Method The business research was accomplished through qualitative as well as quantitative analysis tools. Qualitative The qualitative analysis was conducted with the help of a literature review. The researcher had naturalistically completed the qualitative analysis with special interpretive skills. Authentic secondary sources in the form of journals and books were employed for preparing the literature review. Quantitative The quantitative analysis was performed with the help of a pilot study and a closed-ended questionnaire survey. The questionnaire included 11 questions and the survey participants were university students of PontyPridd. Hence, quantitative analysis of the paper was made by considering primary data resources. The questionnaire was distributed to the students over internet sites such as, SurveyMonkey (Hair, 2011). The results obtained from the closed-ended survey were examined with the help of descriptive statistical tools such as, graphs, frequencies and cumulative percentage analysis. The survey questions are provided in the Appendix. Data Collection and Sampling The sample of participants for the closed-ended questionnaire survey was selected as per the random sampling method. The interview process was conducted on grounds of the principles of randomization and experimentation. The probability of selecting each student was 0.5. The size of the randomized sample, primarily comprising university students, was 50. Ethical Considerations The researcher had accomplished the study by strictly following the ethical and moral norms of research. The personal information of the respondents, such as, address and names, were not disclosed by the researcher during or after the research process. The conclusions drawn from the literature review did not directly influence results of the quantitative analysis. In addition, results accrued from the quantitative analysis were robust because the sample was not purposive in nature. In order to ensure that the sampling process was appropriate, the researcher had conducted a preliminary pilot study with a smaller sample of 10 students. Limitations In the current research work, quantitative analysis was performed based on the results of closed-ended survey. Even so, very limited information could be obtained by the researcher from this survey. It was assumed that responses gathered from the questionnaire survey were authentic (Kothari, 2008). Findings Figure 4: Student Academic Background (Source: Author’s Creation) From the above pie graph, it can be stated that majority of the students in the sample are studying in the university of South Wales. Figure 5: Gender Distribution (Source: Author’s Creation) The above bar graph shows that the sample included 30 female and 20 male respondents. Figure 6: Primary Purchasing Means (Source: Author’s Creation) It was surprising to note that most of the students preferred to purchase products over the internet media as opposed to conventional stores in PontyPridd. Figure 7: Preference for Cooking (Source: Author’s Creation) The above graph indicates that majority of the respondents preferred to cook than purchase edible items from stores. Figure 8: Frequency of Store Visits (Source: Author’s Creation) From the above graph, it is evident that most respondents visited supermarkets in PontyPridd, as and when required. However, a considerable number of individuals appear to visit once in a week. Figure 9: Most Preferable Supermarket (Source: Author’s Creation) The above bar graph shows that Iceland is the most popular supermarket in PontyPridd, followed by Tesco and Sainsbury. Figure 10: Primary Factor Analysis (Source: Author’s Creation) As shown in the above graph, distance and quality are considered to be the two most crucial factors influencing supermarket preference reflected by the students within the sample. Figure 11: Most Reasonable Pricing Supermarket (Source: Author’s Creation) Majority of the respondents claimed that Sainsbury, followed by Tesco and ASDA, sells products at most reasonable prices. Figure 12: Best Food Availability (Source: Author’s Creation) From the above graph it can be claimed that majority respondents believed that the food sold in the supermarket of Iceland was of the best quality, followed by that of ASDA. Figure 13: Degree of Product Variability (Source: Author’s Creation) As per the above graph, majority of the respondents believe that largest variety of products is available in Iceland’s superstores, followed by Sainsbury. Figure 14: Superior Service Delivery (Source: Author’s Creation) Based on respondents’ perception, the above graph proves that customers’ services were most appropriate in ASDA, followed by Sainsbury. A descriptive discussion of the survey answers are provided in the Appendix. Discussion and Analysis The demographic results of the survey proved that 40% of the respondents were male and remaining 60% were female. As a result, feminine perspectives of shopping were more dominant within the sample compared to the masculine preferences (GN, 2014). It was found that 84% of the respondents within the sample were students of the South Wales University; the remaining 16% were non-students (Loves, 2006). Since the random sample primarily included students, it can be stated that the research work would be accomplished, provided shopping intensions of the female university students of PontyPridd are analyzed. However, it was noted that majority of the respondents preferred to shop online. This is because university students remain busy with their academic activities. Under such circumstances, they rarely get time to visit conventional supermarkets. In addition, young students are more familiar with the usage of smart internet enabled electronic products. They prefer to purchase food items such as, pizzas and other products, through internet. Even so, prices and discounts provided to these consumers over online stores are more attractive than that in conventional brick and motor retailing outlets. As 52% of the respondents preferred cooking at home, it is likely to assume that these individuals obtain grocery products from supermarkets present in the area. Perhaps this is why most of the respondents were found to be frequent supermarket visitors. Thus, the above context proved that the existing supermarkets of PontyPridd experience high demand for goods and services from university students residing in the town. The following table presents a comparative analysis about the primary supermarkets of PontyPridd. Factor Supermarkets Tesco Iceland Sainsbury ASDA Others Most Frequently Visited 4 5 2 3 1 Most Reasonable Price 3 4 5 3 2 Best Food 3 5 2 4 1 Product Variability 2 5 4 3 1 Good Service Delivery 3 3 4 5 2 Total Score 15 22 17 18 7 Based on the above factors, it can be stated that Iceland is the best performing supermarket of Pontypridd. This is because if strength of the responses is quantified in terms of scale, then the total score is highest for Iceland. Nevertheless, performances of Sainsbury, ASDA and Tesco are more or less closer to each other. However, distance and product quality appeared to be two of the most significant factors determining the consumers’ supermarket selection (GN, 2014). The buyers prefer to make purchases from supermarkets that are closely situated to their residences. This is because shorter distance helps to lower transportation costs borne by the students of PontyPridd while visiting the supermarkets. At the same time, quality of the products also influences buying decisions of the respondents. This proves that majority of the buyers in PontyPridd are rational consumers. Other factors affecting purchasing decisions of the buyers in PontyPridd are price, product variability and after sales services. Consequently, if a supermarket company of PontyPridd wants to enhance sales, then high quality products at low or reasonable prices must be provided. The buyers must rationally select an appropriate supermarket in PontyPridd, considering certain factors such as, stores distance, product variability, product quality, pricing and after sales services (Springer, 2013). Conclusion From the above analysis, it would be correct to state that quality and distance are the two most important factors determining consumers’ purchasing decisions in the supermarkets of PontyPridd. As a consequence, supermarket companies of PontyPridd, such as, Iceland, Sainsbury and Tesco, are found to have established their stores in convenient locations of the town. It appears that product variety available in the supermarkets is not a very significant factor influencing the consumers’ purchasing decisions. This is because Iceland is the most popular supermarket in PontyPridd according to the respondents, despite the fact that extent of product variability in its stores is quite low. Nonetheless, ASDA stores with the highest variability of products are less popular than Iceland in PontyPridd. At the same time, the research has proved that Tesco and Sainsbury, which are the two biggest supermarket giants of the U.K., are moderately fair performers in the supermarket industry of PontyPridd. All independent causal factors incorporated in the analysis are fairly good for these two firms. Therefore, some respondents prefer these companies over others because on an average, their performances are good in the market (GN, 2014). However, there are some limitations to the study. The entire analysis was mainly conducted through descriptive statistical tools. Most of inferential analyses were not included. Improved empirical conclusions could be drawn from the inferential statistical analysis. Then again, the study failed to show way in which brand value and recognition of a supermarket company determines purchasing decisions of the consumers in PontyPridd. Recommendation After conducting the research work, it is advisable for all supermarket companies to establish their stores close to the residential locations of their target population. For instance, the supermarkets that primarily aim to sell products to the students of a university must set up their branches near to the university campus. At the same time, the companies should maintain a proper balance between product variety, prices and quality. This is because by improving these aspects, the companies would be able to enhance revenue and popularity in PontyPridd in long run (Pegler, 2002). Conclusion From the entire research work, I personally realized that the supermarket industry of PontyPridd is gradually becoming more competitive. The companies such as, ASDA, Tesco, Sainsbury and Iceland, are few popular supermarket companies of the town. However, I reckon that long-term commercial success of these firms will depend on the extent to which consumers’ demands are satisfied. The conclusions drawn from the qualitative literature review have conformed to that of the quantitative analysis. This proved that factors such as, product quality, accessibility, prices, variety and after sales services, affected demand created by consumers within the supermarket industry of PontyPridd. This is the era of “consumerism” and the profit making companies should implement product, pricing, place and promotional strategies in ways that will maximize the buyers’ satisfaction. If I consider myself to be a student in PontyPridd, I will make my purchases from the retailing outlets of Tesco or Sainsbury as they are moderately good in terms of all influencing independent factors (Khasawneh and Hasouneh, 2010). Reference List Beynom, M. J., Moutinho, L. and Veloutsou, C., 2010. Gender differences in supermarket choice: An expositional analysis in the presence of ignorance using CARBS. European Journal of Marketing, 44(1), pp. 267-290. EconomicsOnline, 2014. Supermarkets. [online] Available at: [Accessed 13 June 2014]. GN, 2014. U.K supermarkets. [online] Available at: [Accessed 27 June 2014]. Hair, M. E., 2011. Essentials of business research methods. New York: M.E. Sharpe. Hansen, T. J., 2011. When supermarket consumers get stocked in the middle. International Journal of Retail and Distribution Management, pp. 836-850. Hansen, T., Jensen, J. M. and Solgaard, H. S., 2011. When supermarket consumers get stocked in the middle. International Journal of Retail & Distribution Management, 39(11), pp. 836-850. Hatch, J. A., 2002. Doing Qualitative Research in Education Settings. New York: SUNY Press. IGD, 2014. UK grocery retailing. [online] Available at: [Accessed 27 June 2014]. Khasawneh, K. and Hasouneh, A. B. I., 2010. The effect of familiar brand names on consumer behavior: A Jordanian Perspective. International Research Journal of Finance Economics, 43, pp. 34-57. Kothari, C. R., 2008. Research methodology: Methods and techniques. Delhi: New Age International. Kumar, R., 2011. Research methodology. New Delhi: APH Publishing. Kunal, S. and Yoo, B.H., 2010. Interaction between price and price deal. Journal of Product & Brand Management, 19(2), pp. 143-152. Loves, J., 2006. Supermarkets. New York: Macmillan Library. Närhinen, M., Nissinen, A. and Puska, P., 2000. Changes in supermarket sales during and after a staged health promotion campaign. British Food Journal, 102(4), pp. 308-319. Ness, M., Gorton, M. and Kuznesof, S., 2002. The student food shopper: Segmentation on the basis of attitudes to store features and shopping behaviour. British Food Journal, 104(7), pp. 506-525. Newman, K., 2013. The secret financial life of food: From commodities markets to supermarkets. New York: Columbia University Press. Pegler, M. M., 2002. Designing the worlds best supermarkets. New York: Visual Reference Publications. Richbell, S. and Kite, V., 2007. Night shoppers in the “open 24 hours” supermarket: a profile. International Journal of Retail & Distribution Management, 35(1), pp. 54-68. Springer, E., 2013. The changing roles of supermarkets in global supply chains: from seedlings to supermarket: Agri-food supply chains in transition. London: Springer. Srivastava, T. N. and Rego, S., 2011. Business research methodology. New Delhi: Tata McGraw-Hill Education. Appendix Closed-ended Survey Questions 1. Are you a student of the University of South Wales? A. Yes B. No 2. Your sex: A. male B. female 3. You prefer shopping in the store or online A. In the store B. Online 4. Do you usually cook? A. Yes B. No 5. How often do you shopping in the supermarket? A. Everyday B. Once a week C. Twice a week D. It depends 6. Which supermarket do you shopping most? A. Tesco B. Iceland C. Sainsbury D. ASDA E. Other ___ 7. Which is the most important factor when you choose a supermarket shopping? A. Distance from your home B. Cheaper price C. Quality products D. Variety of products 8. Which supermarket do you think is the most reasonably priced? A. Tesco B. Iceland C. Sainsbury D. ASDA E. Other ___ 9. Which supermarket do you think has the best quality food? A. Tesco B. Iceland C. Sainsbury D. ASDA E. Other ___ 10. Which supermarket do you think has the most variety of products? A. Tesco B. Iceland C. Sainsbury D. ASDA E. Other ___ 11. Which supermarket do you think have the best delivery service? A. Tesco B. Iceland C. Sainsbury D. ASDA E. Other ___ Descriptive Results Table 1: Primary Purchasing Means Table 2: Preference for Cooking Table 3: Frequency of Store Visits Table 4: Most Preferable Supermarket Table 5: Primary Factor Analysis Table 6: Best Food Availability Table 7: Most Reasonable Pricing Supermarket Table 8: Degree of Product Variability Table 9: Superior Service Delivery Read More