Consumer Behavior In Malaysia Marketing Essay

As many researchers have been asserted that good store image of retail stores able mean the success or failure of the business. This review will focus on the variables that the further study will centre on. This focus and previous research conclusions will be included in the chapters of the store image where the variables are integrated.

2.1 Consumer Behavior in Malaysia

Malaysia’s consumer lifestyle has been evolving and changing due in part to rising affluence and education levels. High profile international retailers and the global mass media have also played a hand in shaping consumer-buying behavior. Malaysians are becoming more westernized, sophisticated and cosmopolitan.

Malaysians spend a high percentage of their household income on food, groceries and personal care items, ranking third out of the ten major economies in the Asia-Pacific region (excluded Japan). According to ACNielsen, Malaysians on average spent MYR505 per month on food and groceries, with just under half of that on fresh food like meat, fruits and vegetables.

Since the emergence of the foreign-owned hypermarkets, Malaysians who live in urban areas have become accustomed to shopping for groceries at hypermarkets and supermarkets. Meanwhile rural people continue to purchase from traditional grocers, convenience stores and mini-marts.

High and middle-income households spend most of their money at hypermarkets, followed by supermarkets and traditional grocery stores. The high-income group has household income of more than MYR3500 per month.

2.2 Retail Store Growth and Evolution

Large-size store becomes a trend in the global. Hypermarkets are one of the manifestations of organized retailing. Srivastava (2008) observes that organized retailing, globally, has played a major role in nations’ GDP and employment. According to Srivastava, the ratio (composition) of organized versus traditional retailing is increasing in countries such as the US (85:15), Taiwan (81:19), Malaysia (55:45), Thailand (40:60), Indonesia (30:70), China (20:80), and India (3:97). The data in parenthesis describes the organized versus traditional ratio of retailing for each country.

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Offering large premises with both food and non-food items, everyday low prices (EDLP), and large car parks; the hypermarket format has been in existence for more than 35 years since the inauguration of Carrefour (the first French hypermarket) on 15 June 1963 (Roberts, 2005). The phenomenal success of hypermarkets in France affected other formats so adversely that certain legal restrictions were imposed on them. To counter the restrictions, the internationalization of French hypermarkets began in the 1970s, when Carrefour went global to countries such as Spain, Brazil and Argentina (Roberts, 2005). Carrefour along with other leading French chains such as Euromarche, Auchan and Leclerc subsequently marked their presence in the US market too between 1985 and 1993 (Roberts, 2005).

The evolution of hypermarkets was quite revolutionary and their growth rate far surpassed the traditional formats in different parts of the world. In Spain, the number of traditional outlets dedicated to the retail food business fell by almost 50% between 1980 and 1995, where hypermarkets and supermarkets multiplied 6 and 11 respectively during that period (Flavian and Polo, 1998). In a similar manner, Taiwan’s traditional farmers’ markets disappeared at rates between 3-5% per year with the opening of at least 100 new supermarkets and 50 new hypermarkets all over Taiwan between 1988 and 1996 (Chang and Tu, 2005). Supermarkets and hypermarkets almost doubled to 941 from 544 in the Czech Republic too, in a time span of seven years, acquiring 55% of total retail sales (Healey & Baker, 2002).

2.3 Store Formats

2.3.1 Hypermarket

Hypermarket has clearly emerged as one of the most important retailing entity in most countries, offsetting the traditional and supermarket (Barros, 2006).

Malaysian had her first hypermarkets opened for business in 1994. According to the Economic Transformation Programme announced in October 2010, Malaysia has 121 hypermarkets, included Giant, Tesco, Carrefour, Mydin. The general rule for one hypermarket is for every 250,000 people.

The evolution of the various retail formats, in one way or the other, customers benefit by having greater access and choice. The concept of all the items under one roof has been submitted to different customers and have brought some changes in their preferences and behavior. With the presence of hypermarkets, customer expectations have changed and their importance to the acquisition have been affected (Oruc N, 2005); Terblanche and Boshoff, 2004; Vignali et al., 2001). Expectations and preferences, was different in different cultural environments, the study aimed to study the perceptions of consumers and their preferences on the store image of traditional wet markets and hypermarkets.

2.3.2 Traditional Wet Market

A traditional wet market is an open food market, it is also called as traditional market (Wordie, 2002). The main features of the market have been traditionally associated with a place that sells live animals. The raw meat may include poultry, fish, reptiles, and so on. Depending on the region, the animals are usually caged and killed for the preparation. Fresh fruits and vegetables are also available. Wet markets usually include butchers and fish markets, which are in a separate section of the fruit and vegetable stalls.

The highest hygiene standards of supermarkets have forced many traditional markets to operate in the interior. In general, the owner of a wet market, owns and maintains the building. The stalls are rented to retailers, who buy and sell their products independently. This is in contrast to a hyper store operated by a single company.

In 2011, a total of 23 traditional wet markets and 3075 stalls inside the traditional wet markets in Penang Island are belong to Penang Municipal Council (Majlis Perbandaran Pulau Pinang, MPPP).

2.4 Store image

Store image can be described as a concept of the way of consumers see a store in their mind, regarding touchable or untouchable attributes. It is a way of the store being defined in the consumers’ mind, partly is functional qualities of the store and partly is the atmosphere of psychological attributes of the store (Martineau, 1958). The store image will affect the shopper’s buying behavior and this was a conceptualization with included store attributes by the researchers (James et. Al, 1976). Besides that, store image is also described as the concept of combination of consumers’ or shoppers’ perceptions of a store on different attributes (Bloemer and Ruyter, 1998).

There are several researchers ever tried to identify the store attributes as these are the foundation of the overall image of the store. According to Lindquist (1974), store image have 9 elements, included vending, consumer, facilities, service, comfort, promotion, atmosphere, institutional and post transaction satisfaction. Later on, Doyle and Fenwick (1974) simplified and categorized the store image to 5 elements: price, product, variety, styling and location. While addition attributes of parking facilities and friendly personnel has been put forward by Bearden (1978). According McGoldrick (1990), the image is the indicator of the asset value of the “branding”, it corresponds with the long-run result of retailing activities. The understanding of the relationship between image and buying behavior of consumers are very important for better strategies in attracting consumers.

2.5 Consumers’ perception On Store Image

2.5.1 Variety of Goods

The main attraction of the retail store is the trading of the goods. According Lindquist (1974), the main components of trading goods are quality, variety and selection of the goods. The stores which provide variety of goods will never lose its attraction. According Golledge et al. (1966), assortment or variety of the goods offers shoppers with more choices and enhances the ability of the stores to satisfy their needs. This makes them unnecessary to visit different stores to fulfill their needs. Based on this reason, a large size of stores such as supermarket or hypermarket has advantage in the retail sector, this kind of store able provide variety choice to consumers and makes them has benefit in reducing their time in visiting different stores (Huff, 1962). Thus, the stores which are able to provide variety and assortment of goods and services have their advantage to attract more consumers and to be preferred by the consumers as well.

2.5.2 Store Atmosphere

Atmospheric of a retail store is a very important element. Atmospherics of retail store is the effort to design retail environments to produce specific emotional effects in the consumer that enhance his buying probability (Kotler, 1974). Ghosh (1994) found that atmospherics of store refers to the environment that is brought about by a coordinated visual display of goods and the ease of accessibility and mobility within the retail store. Moreover, Donovan and Rossiter (1982) assert that the physical surrounding will produce an emotional reaction and directly affected the consumers’ buying behavior. Thus, atmospheric of store becomes a strategy of the retailers, providing a favorable environment with spacious space, clean and comfortable, lighting and so on to affected shopping behavior of consumers. Thus, atmospheric of store is a key factor in stimulating consumers’ perception and retail store with attractive atmosphere increase preference of consumers.

2.5.3 Quality of Service

Consumer patronage of retail stores often extends beyond the impact of the acquisition of goods. Bitner et al. (1994) describes the visiting of consumer to retail stores usually considers as a recreational activity whose dignity is enhanced by the level of service within the store. Thus, the quality of service has great affected to the consumers’ buying behavior (Shycon, 1992). As describe by Lindquist (1974), service includes giving information of goods, answering to consumer question, showing the goods location and so on. With providing this kind of service, consumers are able to find the goods and service in the retailer store in shorter time. Reynolds and Beatty (1999) asserted that service or retail store is to strengthen the relationship between retail store and consumer, it encourage them prefer to visit the store again in the future.

2.5.4 Accessibility of Retail Store

Retail stores that are ease on accessible able to reduce the travel time between home and stores. Consumers’ time and effort in obtaining the service convenience will influence their buying behavior (Grewal et al., 2002). Eppli and Shilling (1996) described the easier the retail store be accessible, the more preferred by the consumers. The location of retail store can be determined whether the establishment of the store success or failure. Retail stores that provide car parks may have larger “catchment” to adjacent area to the consumers who own private vehicle, as Lindquist (1974) assert that accessibility as having a convenient location and this includes parking facilities. While stores which are equipped bus stops will increase the accessibility as well. Thus, better accessibility of retail store able to reduce the travel time and fewer “barrier” is likely to be preferred by consumers.

2.5.5 Price of Goods

Compare to the promotion and goods variety, the influences of price to consumer shopping behavior have less important (Fox et al., 2004). On the other hand, Sieder and Costley (1994), assert a different point of view, they observed that pricing is a major determinant of store choice in the retail store shopping context. According to their study, the result reported that perception of goods pricing inter-related with their preference in choosing a store. Most of the consumer will take consideration of the pricing of the goods before going to shop at a particular retail store. Price is a determinant in store choice and to be a key factor of patronage motivations, this study was also linked the pricing policies to consumers’ perception and shopping behavior.

2.5.6 Quality of Goods

Retail stores have an image of providing goods in better or lower quality and have influenced the decision which is made by consumer as where to go (Schiffman et al., 2007). The pricing of the goods is inter-related with design of the physical environment of the retail store, product variety, and service and so on. Alba et al. (1994) assert that a study of comparative pricing strategies found that buyers prefer to buy in the store that offers discount on a smaller number of products (for example, the frequency of price advantage) that have lower prices for overall compare to a store which is offering bigger discounts on a small number of items (eg, the magnitude of price advantage).

2.5.7 Store Displays

Store displays were in purpose for promotion in older time. Nowadays, the store displays have new role for effective displays. Bell and Ternus (2002) described that store displays have been discovered new role in displaying product information, helping the shopper in making decisions, and creating attractive shopping environment.