Cereal Aisle Analysis - Case Study Example

Cereal Aisle Analysis This essay is about an analysis of a cereal aisle of a retail outlet. The information in this analysis is obtained through observation of how consumers behave when in the cereal aisle of a retail outlet. The retail store that I identify for my observation is the Wal-Mart, 850 Cherry Street. This store is found in the city of San Bruno, which is a town in the state of California. This store is among the biggest Wal-Mart stores in the United States and the biggest retail store in the state of California. According to Lamb (2011), Wal-Mart uses market basket analysis to determine where in their stores to place their products. This method has been found to be very effective in influencing consumer behavior and therefore that is why I decided to visit a Wal-Mart store. I decided to do my observation on a Saturday. On this day, majority of people in the United States, especially those in the state of California do not go to work. Them that go work work only during the morning hours. Thus, many people get time to do their shopping for the week. As a result, I knew that by visiting this store on this day I would be able to observe several customers within a very short period. I would also be able either to observe who would be visiting the cereal aisle for actual shopping or just to observe the prices and display. I made my observations between 5 pm and 6 pm. Being on a Saturday evening, most people would not be working in this time of the day and therefore they would be spending their time shopping. I believed that this time was the best and would enable me to observe as much consumer behavior as possible. In one hour, I was able to observe the behavior of thirty customers who visited the cereal aisle. Identify the store, the day and the time you made your observation The customers I observed on this visit could be categorized into three categories. One category is of the customers who visited the cereal aisle and bought at least one product from the aisle. The other category was the ones who looked at the cereal aisle from far and did not bother to get close. The last category are the customer who looked at the aisle from far they became interested and moved closer but did not buy anything from the aisle. The reason why I categorize the customers in this manner is because; each of them would represent a different consumer behavior. Looking at consumers from this point of view would promote our understanding of consumer behavior and its effect on product purchase from different manufacturers. Among the thirty customers who I observed, ten of them fall in our first category of consumers. These were customers interested in the products in the aisle and their interest led them to buying the products. Fifteen of the remaining twenty customers fell in the second category. The products in the cereal aisle interested this category but their interest was not strong enough to influence their behavior to buying those products. The last category had only five customers. The customers in this category were not interested at all on the products thus they viewed them from far. The distribution of customers we observed could suggest how consumers progress through consumer behavior process. The distribution I got in this store indicates that not all customer behavior is influenced by an attractive display. The distribution also indicates that consumer behavior is influenced by other factors like price, quality and perception on a product. This is the major reason why not all customer behavior is influenced after being attracted by the display. Actually, the number of customers who did not buy the product even after being attracted to the aisle by the display was larger than the number of customers who bought the products. This is an indication that factors such as price, quality and consumer perception have greater influence on customer behavior compared to product display in the aisle. Although the consumer behavior I observed varied with gender, the difference was insignificant and thus I could not conclude that gender variable influence consumer purchase. Analyze the behavior you observed to determine how consumers progress through consumer behavior process while in different aisles There is no general way used by all the customers to assess the value of their purchases. Various customers are believed to use different ways to assess the value of the products they purchase. A standardized way that majority of the customers especially the ones purchasing consumer products is the comparison of the utility derived from the product and the price of that product. Utility is what the customers receive from a product and is a function of various attributes of a product like its performance, design, and quality, point-of-sale and after sale service (Hill & Jones, 2012). If the utility derived from a purchase exceed the cost of the purchase then a purchase is said to have a high value. On the other hand, if the cost of a purchase exceeds the utility derived from the purchase, then the purchase is said to have a low value. The ways in which different customers determine the utility of a product depends on customer behavior. Some are more attracted by the physical display while others are influenced by their perception about the product. From the results that I got from my observation, I can conclude that majority of the customers in this store use their perception to determine the utility of the products they purchase. They compare this utility with the price of the product to predict the value they can acquire from the purchase. After doing this, they use the value they get to decide whether to make a purchase or not and thus, the mean they use to assess value of a purchase is utility-price comparison. Assess how consumers determine value for their purchases Two customers fascinated me a lot. One of the customers went directly to the aisle and picked the specific products she wanted without looking at both the price of the product and its display. The other one came several times at the cereal aisle, checking both the price and the display of the products in the aisle each time but lastly decided to buy a product from the aisle. These two types of customers revealed different characteristics. One of them was able to make decision of whether to purchase the products or not while the other one was not able to do so. Consumer perception process can be understood as the process in which customers use their sensory receptors to select, organize and interpret information about a product. The result of this process assists the consumer in making decision whether to purchase a product or not. According to Lantos (2010), the process is believed to take three major steps, which are exposure, attention and interpretation. Every consumer passes through all this three stages when making a decision whether to purchase or consume a product. However, the ways each customer passes through these stages differ across them in terms of place where they take place and the external stimuli stimulating them. The two customers I observed differed significantly in terms of how they progressed through the customer perception process. Although, both of them passed through all the four stages of the consumer perception process, one of them seemed to pass through the stages much faster than the others. This consumer did not spend much time to decide a purchase. This customer seemed to have undergone most of the consumer perception process stages prior to visiting the store for the purchase. On the other hand, the other consumer seemed to undergo all the consumer perception process stages while in the store. He paid attention to it, he compared and contrasted the product with other substitute products and used the information he obtained to make a purchasing decision. This is why he took a lot of time to make his purchasing decisions. Pick two specific consumers that seem to be very different from each other. Contrast how these consumers progress through the consumer perception process Every manufacturer aims to have a competitive advantage that would make the consumers to pick his specific brands when they visit a store. A good number of manufacturers use branding, packaging and advertising. In branding, the manufacturer chooses a brand name that would attract the attention of the customers. Goods are packaged in an attractive way to catch the attention of their target customers. Manufacturers also use advertisement to persuade customer to purchase their specific brands. The stores use several means to motivate purchases. They adapt some of these behaviors and tactics on their own while others are adapted with the assistance of the manufacturers where in-store promotion is one of such joint tactics. In this kind of a tactic the product from a specific manufacturer are promoted in a specific store. The promotions might include price reduction, rotary and awards for purchasing that specific product. A tactic that can be adapted by a store without the assistance of the manufacturer is the market-basket analysis. This kind of a tactic assists the store to place products bought together closer to each other to improve the customer access to those products. A good example is placing bananas in the cereal aisle so that the consumers can access them when purchasing cereals (Limb, 2011). This kind of a tactic is widely employed by Wal-Mart in almost all their stores. Analyze how different manufacturers motivate consumers to pick their specific brands. Articulate thoroughly the behavior displayed and tactics used by the store and manufacturer to motivate purchase References Hill, C. W. L., & Jones, G. R. (2012). Strategic Management: An Integrated Approach. Belmont, CA: Cengage Learning. Lamb, C. W. (2011). Marketing. Toronto, OT: Nielsen Education Ltd. Lantos, G. P. (2010). Consumer Behavior in Action: Real-Life Application for Marketing Managers. Armonk, NY: M.E. Sharpe. Appendix Consumer behavior Males Females Observed the products from near and bought them 4 6 Observed the products from far off the aisle and did not bother to get near 3 2 Observed the products from far, got attracted by the products but did not buy them 9 6 Total 16 14 Record all your observation in a table placed in the appendix Read More