Question Part 1

My uncle Mr. Thilak Perera’s shopping behavior observation at Cargills Food City, Staples Street

Observation Defined

Observation is a means of describing the actions customers take in a realistic situation. More importantly, observation research data can assist in the effective planning of marketing strategies and in the monitoring of strategic marketing decisions.

It can shed light on questions such as: What can be done to enhance the sales of a product or a retail store department? What factors are apparently deterring the customer from making a decision to purchase an item? What important and feasible decisions can be made to enhance the customer’s shopping trip?

Worksheet of variables I have observed

A description of the individual observed.

Customer traffic patterns; department ingress and egress.

Profiles of the distribution of purchases and product inspections horizontally and vertically in the display cases.

Number of sections of display equipment from which purchases were made.

Number of sections which were shopped but from which no items were selected.

The shelves from which items were selected.

Relationships of customer characteristics and the location of a purchase in the display case.

Implications for improvements in a) Facility arrangements b) Barriers to buying products c) Customer satisfaction.

A description of the shoppers, such as: sex, estimated age, mix of adults, mix of adults and children, ethnicity.

The use of shopping aids such as: the newspaper, coupons, a shopping cart, a shopping basket, a shopping list.

Requests for assistance such as: asked for service—rang bell, asked for assistance of employee nearby, went to back room for product or service.

Other shopping characteristics: number of items purchased, number of items inspected but not purchased, amount of time spent in the department, shopping cart content, time of day.

Employee interactions with: customers, other employees.

Discussion Guide

Q.1 Which of the following best characterises the way you typical do your groceryshopping? Do you…?

DO ONE LARGE SHOP ONLY FOR THE WHOLE WEEK? DO ONE LARGE SHOP AND A FEW SMALLER SHOPS? DO A NUMBER OF SMALLER SHOPS THROUGHOUT THE WEEK?

Q.2 And overall about what percentage of your shopping is made at the supermarket, what percentage at specialty stores and what percentage at convenience stores such as service stations and market?

SUPERMARKETSPECIALITY SHOPSCONVENIENCE STORES, SERVICE STATIONS, MARKETS, ETC.

Q.3 How far do you normally travel to get to your regular supermarket?

LESS THAN 1 KM 1-2 kms 3-5 kms 5-10 kms More than 10 kms

Q.4 And why do you always shop at the same location? Any other reason?

PRICE TRAVEL TIME RANGE OF TYPES OF PRODUCTS STOCKED RANGE OF BRANDS STOCKED AVAILABILITY OF FAVOURITE BRANDSFOOD QUALITY PARKING STORE CHARACTERISTICS FUEL DISCOUNTS CUSTOMER LOYALTY PROGRAMS ATTACHED LIQUOR STORE OPENING HOURSCUSTOMER SERVICE/PERSONAL SERVICE CLOSE TO OTHER SHOPS OTHER (Specify):DON’T KNOW

Q.5 Do you compare prices across a wide range of products or just on certain products?

WIDE RANGE CERTAIN PRODUCTS ONLY DON’T KNOW/DEPENDS

Q.6 On a scale of 1 to 10 where 1 very important and 10 is not at allimportant, how important do you think are each of the following factors

when you personally chose where to shop for groceries?

Q.7 Thinking about when you go supermarket shopping, do you always go to the same store for your supermarket shopping or do you sometimes go to other supermarket stores?

ALWAYS SHOP AT SAME STORE OFTEN VARY THE STORE DON’T KNOW

Q.8 Do you always shop at the same supermarket chain or do you regularly shop at more then one chain?

ALWAYS SHOP AT SAME CHAIN SHOP AT MORE THAN ONE CHAIN REGULARLY DON’T KNOW

Q.9 Which of the following supermarket chains do you shop at regularly, that is, at least once a month?CARGILLS FOOD CITYKEELLS SUPERARPICO SUPER CENTERLAUGFS SUN UPSOME OTHER SUPERMARKET CHAIN (SPECIFY)

Q.10 And overall how satisfied are you with the choice of grocery retailers available to you?

VERY SATISFIED SOMEWHAT SATISFIED NEITHER SATISFIED NOR DISSATISFIED SOMEWHAT DISSATISFIED VERY DISSATISFIED DON’T KNOW

Q.11 Please rate the following aspects about this supermarket using 5-excellent, 4-good, 3-average, 2-poor and 1-very poor.

LOCATION:ACCESSIBILITY:PARKING SPACE: GENERAL PRICES OF OUR GOODS: VARIETY OF FOOD STUFFS: VARIETY OF FRESH VEGETABLES AND FRUITS:VARIETY OF HEALTH AND SPECIAL DIET FOODS:SHELF ARRANGEMENT: POLITE:HELPFUL:COMPETENT:PROFESSIONAL: RUDE:IMPOLITE:DISGRUNTLED: UNPROFESSIONAL: INCOMPETENT:

Q.12 Thinking now about the last 10 times that you shopped for household meat, fish and vegetables. How many of the last 10 meat, fish and vegetables purchases were made at a supermarket, and how many at a specialty grocery stores such as a butcher, fish market, Pola, vegetable store or market ?

SUPERMARKETSPECIALITY SHOPS SUCH AS BUTCHERS & FISH MARKET, POLA, VEGITABLES STORE & MARKETSDON’T BUY MEAT/FISH/VEGITABLES

Q.13 Why have you shopped at Cargills Staples Street? Any other reason?

PRICE/CHEAPER BETTER VALUE FOR MONEY BETTER QUALITY PRODUCTS CLOSER LOCATION/CONVENIENCE SELL NON-GROCERY ITEMS BETTER VARIETY OTHER (Specify)DON’T KNOW

Summary of My findings

As far as my uncle’s current and previous experiences were concerned regarding the Cargils

Staple Street, they were a mixed i.e. good and bad. He has visited Keells Super Union Place

and Arpico Super Center Hyde Park earlier and had a good and bad experiences too.

Today when so many retail stores are opening up, each one is competing hard for the

customers' money. There are more choices available for consumers than ever before. In such

situation retail stores must develop business strategies that focus on creating as well as

maintaining customers, one by offering customers a differentiated shopping experience.

Each and every individual has certain self-concepts, which means that they have certain role

models and they want to react and interact according to their role models. This effect can be

seen in their purchase decision also. Their dressing sense, hair style, and table manners etc.

are somewhat influenced by their role models. There can be contradiction between perceived

image and actual image.

Many marketers are now using self concept related to personality- a person’s self concept also

called self image. The basic self concept premise is that people’s possession contributes to and

reflect their identities, that is, “We Are What We Have”.

Since economy and marketing are shifting from a goods to a service dominant logic, creating

and directing memorable customer experiences in supermarket environments has become a

valuable differentiation strategy for retail stores. Competing in today’s global market is becoming

increasingly difficult. Since customers nowadays often perceive products and services as

homogeneous, supermarkets continuously need to look for different strategies. Differentiating

oneself from the competitor by creating memorable customer experiences is therefore becoming

one of the central objectives of many retail store environments.

In the current experience economy, customers ask and expect more than just being satisfied

with the purchased brand or product and the delivered service level. Instead, they look for

personal, intuitive relationships with brands and retailers Directing the store’s retail design

towards the creation of memorable customer

experiences by appealing to their senses can contribute to the creation of such companyclient

relationships. Since customer experiences in retail settings appear to immerse customers at a

cognitive, emotional and intuitive level, they can be considered as a new source for value

creation. A retail experience which succeeds in delivering value to the customer can become

the key to long-term retailer success. While ‘customer experiences’ continually receive more

attention, literature on how to create and direct these experiences often lacks definitions of

central concepts and empirical support.

Merchandising is much more than simply the arrangement of products on the shelf, it is also

about understanding the way customers shop. Hand written boards, posters covering the door

and walls, lack of lighting, untidy displays convey that retail stores are not serious about their

business. So retail stores need to create an environment that not only attract customers but

also give feeling of comfort and satisfaction during shopping, which act as inducing factor for

their next visit.

It is commonly found that many retail stores specially “Cargills” spends lot of money in getting

high traffic location but it is very painful for the customers to reach that store by crossing such a

high traffic. Customers don’t find anything systematic, unique and attractive, they may just pass

away from the door or if visited will try some other place to shop next time. So my personal

recommendation for the retail stores is that not to try to locate their stores in such a traffic zone

for which a customer has to think again and again before visiting the store.

If the store has big front and windows, a retail store should exploit it by putting creative displays

and offers. It may include sale announcement, about any new product introduced, or about new

season’s collection. Any information to be put on front should be attractive and in accordance

with cultural norms in order to make customer aware about the schemes and discounts.

A retail store must put the most popular and latest products in front. New products which are

attractive and create interest in the mind of customers should be put in the most visible place. A

store should not try to keep everything on display. Rather keep the display clutter free.

A retail store should give a balance view with respect to color as well as size of item placed.

Generally heavy looking items and darker items should be placed near the bottom of a display.

Placing too many items, or heavy items on one side create unbalanced view.

As lighting is also very important factor to be considered. Proper lighting on display can catch

attention of customer and even arouse interest for the product. Dull lighting can make

customers yawn so a store must avoid using dull lights. Light should not be thrown directly from

the top; also shadows that spoil the beauty of display should be avoided. Lighting should

enhance the three dimensional image of the product. When display arrangement is changed,

lighting should also be adjusted. Track lighting can enhance colors. Track lighting can be used

as accent lighting to show up specific merchandise and adding excitement. It can also be used

in illuminating wall displays. Ambient lighting is the general lighting, which in many cases is

fluorescent lighting. A retail store can upgrade lighting whenever it is essential. Retail Store

windows can be a good source of lighting.

A pleasing aroma can create a wonderful ambience which adds to the customers' shopping

experience for any retail store. Many of the stores are using scents to boost retail performance.

It is observed that with a pleasant aroma flowing in the air, individual experiences a flow state

which results in spending more time in the store, and thereby they buy more items from the

store.

My researched have found Cargills has strong organizational cultures and values. And these

are manifested in a superior customer experience.

Relationship Model of the Present Research

The implementation of the supermarket experiential marketing and the statistical analysis on the

questionnaire regarding customer satisfaction have concluded that emotional experience,

thinking experience, action experience and interaction experience impact positively the

customer emotional loyalty while emotional experience, thinking experience and action

experience impact positively the customer behavioral loyalty. Besides, there is a positive

relationship between the emotional loyalty and behavioral loyalty. All of these have also

illustrated that the level of the satisfaction customers gain from

These experiences would directly influence the customer loyalty on a supermarket and on the

development of a supermarket. The sensory experience presents a negative correlation to

customer loyalty and the related analysis has presented the reasons as below. On the one

hand, it is obvious that prices and quality of commodities are the core interests most concerned

by customers of a supermarket and, on the other, the environment of a supermarket would

include indoor temperature, light, crowding, air, flow of goods and background music, etc. which

are basic circumstances. Along with the firce competition of supermarkets as well as the

diversification of promotions, onsite tasting or live cooking are getting more and more common.

The lack of these basic factors, customers may be dissatisfied. However, because these needs

are “expected” by customers, providing of such needs available will provide no improving of

customer loyalty.

Question Part 2

Gillette Sri Lanka

Gillette has been the leading brand in men’s grooming product in Sri Lanka and across the globe. Gillette with its wide range of products caters to the premium segment of the men’s grooming market. Gillette faces intense competition in the shaving preparations market (shaving gel / foam / cream) whereas the competition in the razor market is not that intense. With the intense competition Gillette has to cater to the various needs of the consumers and monitor it’s consumers behaviors.

The objective of the research is to understand the consumer attitude and buying behavior for Gillette Shaving Gel And Foam. To understand the former part, I created a focused group questionnaire and conducted a focused group discussion on Shaving Cream, gel and foam. I analyzed the questionnaire and the focused group discussion to create an extensive questionnaire understanding the buying behavior of consumers of Gillette Shaving gel / foam and other brands. My analysis has revealed that the consumer is satisfied with the brand Gillette and its attributes. However Gillette has not performed well with the customers who are slightly price sensitive. This following detailed analysis is presented in My assignment.

Gillette’s Strategy in Sri Lanka

Sri Lankan shaving products market is characterized by a 90% share of double edged blades a business dominated by the BIC, with brands like BIC Orange and white. Instead of going head on against them in this highly price sensitive market. The strategy has been to bring more people into the twin edged segment, and then gradually move them towards even more premium products. Also, by segmenting the market with offerings at different price points 7 O'Clock, Sensor Excel and Mach III.

Product Details

Gillette Sri Lanka has a wider portfolio of core business of shaving products sold under Gillette, 7‟0 Clock, March and Sensor Excel brands, oral care products (Oral B). Company has strong presence in shaving razor blades market. It has the premium quality 7 O'Clock shaving brush, 7 O'Clock P II shaving system with a metal spine and a shave cream in three variants, under the Brand 7 O'Clock Ready II, tooth brushes under the well known international brand name Oral-B, Gillette Sensor & Sensor Excel shaving systems which met with an excellent consumer and trade response, Gillette Shave Foam, Gillette Aerosol" shaving cream & Gillette shaving gel, new generation triple blade shaving system Mach3 Turbo and Gillette Cologne & Aftershave. Company also entered into ladies personal care segment with the launch of the Gillette Sensor Excel for women. Company has strong diversified portfolio to increase its male personal products coverage.

Vision and Future Growth

The company’s vision is to build total brand value by innovating to deliver consumer value and customer relationship faster, better and more effectively than its competitors. This vision statement has led to the development and introduction of various newer products especially in male grooming division and adoption of a more customer oriented approach.

Restructuring in 2002-03 brought about a major shift in the future strategy of the company. The company decided to disassociate itself from non-profitable and non-strategic businesses to focus on profitable businesses. It started focusing on the grooming and oral care business. Gillette currently, is the market leader in the male grooming division and is expanding very aggressively into female grooming business through introduction of products such as wet shaving products and hair expiation devices. The company is also focusing on exploring ways to capture the expanding oral care segment in the near future. Oral care segment contributed approximately 07% of company’s revenues in 2009 as against only 5% a year ago.

Industry Analysis

Due to increased awareness and rising income levels, the industry is expected to undergo a major shift from traditional disposable razors segment to twin and triple blades razors segment. Razor blade market has tripled in 2009. In value terms, in 2005, However, current consumption is still below many countries in Asia which shows that there are further growth opportunities. In 2009, market size of men's personal care segment is estimated at approximately Rs 150 million, with Gillette having the largest market share.

Thus, the industry is growing at a decent rate but still is at an infant stage and this offers great opportunities to players like Gillette and BIC to expand their customer base to include higher number of lower middle class people and thereby increase their revenues and profitability.

Products

Gillette has always remained the technological, market leader in the razor division of the men’s grooming segment. Its‟ high brand awareness, market acceptance as a technological leader for high performance razors and high brand equity were compelling reasons to penetrate and develop the entire value chain of the men’s grooming industry (razors, after shave and shaving gel & foam).

Gillette has a range of shaving products for different types of skins and user requirements. However, Gillette has consciously not chosen to have shaving cream in its product line. Gillette worldwide have cited the following reasons for not launching a shaving cream and restricting itself to only shaving gel and foam:

Technically speaking, gels offer more lubrication than that of creams. This means that gels have more anti-friction properties than creams. This enhances the effectiveness of the razor’s glide on the skin.

Weight to weight, gels are cheaper than creams.

Gel, being a solid in a liquid, can include any additional ingredients like moisturizer, aloe vera, vitamin E etc.

Foams have been pre-perfected with the optimum lather required for shaving and Gillette was already a market leader in the foam segment. The demand for foams was on the rise due to minimal effort required on the part of the consumer.

All of Gillette’s shaving gel, shaving foam, Gillette razor & Gillette Aftershave cologne products come under the brand name “Gillette Series”. All the 18 variants are in the premium segment. Gillette has virtually no presence in the basic and core product categories. Our analysis has shown us that shaving gel, shaving foam, Razor & Aftershave cologne are more commoditized in Sri Lanka.

Following are the variants in the product width:

Foam Conditioning Gel Moisturizing

Foam Deep cleansing Gel Sensitive Skin

Foam Pure and Sensitive Gel Ultra Comfort

Foam Moisturizer 7 O'Clock Razor

Foam Sensitive skin Sensor Excel Razor

Foam Lemon Vector Razor

Plus Disposable Razor Blue II Disposable Razor

March III Razor March III Turbo Razor

Sensitive Skin Cologne Sensitive Skin Aftershave

The Gillette shaving series has been developed as a technologically superior product. Gillette is the only company to have 18 product variants in this category. No other competitor has even more than 5 variants. So, Gillette has the deepest product line and the widest product width. Gillette Series has many firsts to its credit in the Sri Lankan market:

First to introduce Shaving gel in the Sri Lankan market

First to include ingredients like Aloe vera and Vitamin E in its gels and foams.

First to introduce triple blade razors

Brand Development Index and Category Development Index Gillette has the highest brand equity in the men’s grooming industry. The brand Gillette is more of a life style product than just a grooming product.

With shaving cream/gel perceived as a commodity by the majority in Sri Lanka, the packaging, Point of purchase plat an important role in the consumer’s mind while deciding which product to buy.

The Gillette Series has been designed and packaged with a futuristic theme to communicate to the consumer the subtle message that only Gillette offers you the most advanced in shaving products. Gillette was the first in Sri Lanka to introduce gels in tubes & triple blade razors . The shaving tube for gel is very different in design. It is glossy and can rest on its cap unlike the competitor’s tubes.

Price

Gillette has 18 product variants of shaving gel, razors & cologne for the Sri Lankan market. All the 18 products are in the premium category ranging from razor Rs 150 to Rs 950 for the

minimum, Shaving Gel Rs 450 to Rs 850 and Cologne Rs 650 to Rs 1350 maximum SKUs. Gillette has priced its shaving gel and foams well above the industry average. For instance, Gillette razor priced at Rs. 150 costs 60% more than BIC & Super Max razor.. The pricing strategy suggests that Gillette is leveraging its customer loyalty ( i.e. the consumers who are brand loyal to Gillette razors).

Segmentation

In the shaving cream/foam/gel market there exist different categories of customers who have different needs and are willing to pay different amount for the product that meets their demand. Introduction of shaving cream would help Gillette identify the needs of the customers and take advantage of the segment which has not yet been targeted by the company. Price sensitivity, importance of attributes, point of purchase decision makers and customers influenced by additional features are the factors on which we will segment the shaving cream market.

Segment One - is most price sensitive and values additional features the least. This segment has one third of our sample size. As Gillette is a premium brand which focuses on differentiating its products from the competitors and upgrading the customers in the value chain, targeting this segment will not be a strategically appropriate decision.

Segment Two - is more influenced by attributes of the products and is not a price sensitive segment. Gillette through its shaving gel and foam series is currently catering to this segment. This segment has more than one fourth of the survey sample.

Segment three - is concerned about the attributes, additional features as well as price. This segment comprised of more than forty percent of the survey sample. Gillette through its shaving cream can enter this segment.

SWOT Analysis

Strengths

Strong brand equity, Gillette’s portfolio contains well established brands such as of shaving gel, razors & cologne. It eases the introduction of new products, as consumers are already well acquainted with the names and more receptive to promises of improved user experiences. The strength and quality image of these brands allows the company to charge higher prices and achieve high margins.

Market Leadership, The company’s product are well known with a reputation of quality are also market leader in their respective segment.

Well Diversified portfolio, Gillette has a well diversified portfolio in terms of product diversification and market diversification. Diversification of this nature helps the company avoid the risk of overdependence on any one source for its revenue stream.

Weakness

Profitability highly dependent on core business

Gillette’s profitability is highly reliant on the performance of its razors and blades business. A substantial portion of its revenues come from this sector. Any downturn in the sector or in Gillette’s competitive position within it could have a serious negative effect on the company.

Opportunities

Gillette is known for constantly introducing new products in the market with better technology and performance. This new product launches will help the company to gain competitive advantage over its competitors.

Threats

Gillette’s ability to sustain a price premium and earn an attractive return on its extensive investment three blade platform is threatened by the numerous imitators of the Mach3 / Mach3 Turbo franchise, including disposables and private label systems, and even including Gillette’s own three blade disposable. This numerous imitations are threat to the company in the long term as they going to reduce the sales of the original products.

How consumer behavior information used by Gillette

Consumer behavior results have been analyzed on Gillette products. The following conclusions are help to identifying the positioning of the Gillette products

Target market:- The target market has been identified as the customers who are concerned about the attributes of the shaving product but are not willing to shift from the current price band to a higher price band.

Competitor Brands:- The Gillette Shaving Form & Razors will be competing with brands like BIC and Super Max.

Choice Criteria:- Consumer behavior factor analysis that contribute to the Shaving Form, Razors, Cologne purchase decision are:

Factor 1 - Product attributes (Fragrance, Brand Name, Foam Formation, Antiseptic Attributes and Ease of Use)

Factor 2 - Price Sensitivity (Price, It keeps my Skin Soft And Offers / Discounts)

Factor 3 - Point of Purchase (Availability in Stores and Stylish Package Design)

Factor 4 - Additional Features (Color of Shaving foam, Razor & Ingredients)

Customer Evaluation:- Consumer behavior shows how the customers evaluate Gillette with respect to competitive brands.

The Consumer behavior surveyed found Gillette to be significant along both factor 1 and factor 3 giving it an image of high quality brand with attractive packaging and best availability.

- BIC and Super Max are its closest competitors in factor one and two respectively.

- Gillette lags behind all its competitors in factor 2 which includes price and offers.

- In factor 3, additional features, all companies have below satisfaction level performance which implies that the variants introduced in the market for Shaving Form, Razors, Cologne are not able to satisfy the demand of the consumers.

Gillette Consumers Age Profile

Place of Buying

Brand Satisfaction of Gillette

Brand Loyalty in the Shaving Form, Razors, Cologne Market

Price Sensitivity in the Shaving Form, Razors, Cologne Market