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Reasons For Selecting A Grocery Store Marketing Essay

In 2009, the average customer visited a grocery store 148 times. Furthermore, 81% of all Dutch shoppers are switching between grocery stores. From these facts, two main questions arise: What reasons do people have to select the supermarket to do their groceries at and do these reasons differ on a regional basis? These questions will be examined in the current literature review by giving an overview of the store choice determinants found in literature and that are used in practice. It can be concluded that there are many store choice determinants and that further research should explore the regional differences between them.

About the author

Jan Bruin is a 21 year old student at the Vrije Universiteit Amsterdam and is currently following the Master of Marketing. Last year he acquired his Bachelor of Science (in Economics) by writing his thesis on “Effects of Framing Promotional Actions on Purchase Intentions at a Dutch Supermarket”. Next to his study, he is working at the Dutch supermarket Vomar Voordeelmarkt in his hometown Julianadorp and when he has some ‘free’ time, he enjoys cycling towards the beach or to drum along with music.

Contact: janbruin27@hotmail.com D:\Documents and Settings\Administrator\My Documents\My Pictures\Jan\Jan op bubbelbad.JPG

Table of contents

Chapter one: Introduction

In 2009 the total turnover of Dutch supermarkets amounted to € 31.05 billion (3.4% more than in 2008) as can be seen in figure 1. This turnover is the result of Dutch grocery shoppers who spent on average € 21.89 at each shopping trip (GFK Panel Services Retail Netherlands) and who visited a supermarket 148 times during 2009 (or 2.8 times a week (EMFI Business School & Dutch Food Retail Association Report, 2009, p. 16)). Moreover, 19% of these shoppers can be seen as a ‘one-stop-shopper’ who is visiting only one formula a month, while 81% of all shoppers do their groceries at two (34%) or more than three (47%) different formulas a month (EMFI Business School & Dutch Food Retail Association Report, 2009, p. 18). This switching behaviour between supermarkets is not surprising because in 2009 there were around 4,300 supermarkets where consumers could choose from, to do their groceries at (National Board for the Retail Trade). The main question that arises from these facts and figures is why consumers go to a certain supermarket, or stated differently, what are the determinants that play a role in the choices of customers of a specific supermarket (and the retailer that belongs to that supermarket) to do their groceries at. Noteworthy to say here is that consumers that are making these kinds of choices are faced with making trade-offs (e.g. between the service level or the location of a supermarket) and have to incur opportunity costs such as paying a higher price at another supermarket and spending time and money which they could have spent otherwise (Rindfleisch and Heide, 1997).

Source: GFK Panel Services Retail NederlandBecause we, as consumers, frequently visit a supermarket and we all have our own reasons to select the supermarket to do our groceries at, it is of high importance for retailers to know what these determinants are.

Furthermore, Ter Hofstede, Wedel and Steenkamp (2002) found that customers in different parts of Europe differ on the attributes of store image, even within the regions of one country. Therefore, the author of this review is curious if these differences between regions also occur when examining store choice determinants. Therefore the problem statement that will be investigated throughout this literature review will be: Are there regional differences in the importance of store choice determinants inside the Netherlands? [1] 

The reason why the author has selected store choice determinants as the topic of his literature review is because he is been working at Vomar Voordeelmarkt (a Dutch Supermarket, originated in 1968, with 54 outlets in the triangle Almere – Den Helder – Noordwijk (Bruin, 2009, p. 5 and the website of Vomar Voordeelmarkt)) for three years now and he frequently questioned himself why on average 19,500 customers (on a weekly basis) do their groceries at this store in Julianadorp and why they select this store out of multiple options, that are in consumers consideration set (Millet, 2009, p. 108), such as Lidl, Aldi and Deen that are located relatively nearby.

This literature review has high managerial and academic relevance. It has academic relevance, because if it can be found that the current literature does not speak about regional differences in the store choice determinants, then this literature review has found a gap in the current literature which can be a good starting point for further research. It has managerial relevance, because at the moment competition between Dutch supermarkets is fierce, a lot of formulas are disappearing from the Dutch market (such as Super de Boer which is taken over by Jumbo and the cooperation between Dirk van den Broek and Dekamarkt (Distrifooda,b) and another price war is evolving in a time of economic downturn. Therefore it is meaningful for retailers such as Dirk van den Broek, Jumbo and others to know why people choose for a specific supermarket to do their groceries at, in order to be “stayin’ alive” (Arboportaal) and to beat the competition in the future. And if these retailers know the regional differences (if there are any) between the importance of the store choice determinants, then they could focus on what is important to attract the customers in a specified region to let these customers select their stores instead of going to a competitor. For instance, if customers that are living in Julianadorp find location the most important store choice determinant, then the retailer should make sure that she is located on a convenient and easy to reach location, while for example that same retailer should focus more on the price she is asking for her products in the region of Amsterdam. Therefore, if there are any regional differences, it is relevant to know for a retailer, because then she can ‘customize’ her offered values to the ones that are the most important for the customers that are in that region.

This literature review will, as stated previously, take a closer look at the determinants of the store choice of consumers on deciding where to do their groceries and if these determinants differ on a regional basis. The latter was included in this review, because as will be stated later on in this review, a lot has been written about store choice determinants and in practice companies such as Deloitte and Nielsen examine these store choice determinants on a yearly basis.

The remainder of this review will be as follows. In chapter two, the method that was used for acquiring the relevant literature will be discussed. In the third chapter, which is divided into four paragraphs, the literature itself will be reviewed. In the fourth chapter, a discussion regarding the used literature will be held and directions for further research will be given. In the final chapter of this literature review, chapter 5, the author draws a conclusion regarding the problem statement and summarizes the main findings of this literature review.

Chapter 2: Method used for acquiring literature

To acquire the literature that was necessary for writing this review, the author has gone through the following steps.

Step 1: Using Web of Knowledge

First, the author started to use the Web of Knowlegde on the website of the library of the Vrije Universiteit Amsterdam (UBVU) and typed in “store choice* determinants”. When he then took a look at the number of citations each year, he saw that the articles that were found were frequently cited in the year 2009. So this is another indication that the research regarding store choice has academic relevance. However, the articles that were stated there were not about supermarkets (when we included the keyword (supermarket*) only 4 results were shown). Unfortunately, even the four articles regarding supermarket store choice determinants were not relevant into the eyes of the author and therefore the author went to step 2.

Step 2: Doing the same, but then on Google Scholar

By using Google Scholar and its functions of searching for the citations and related articles, the author of this review has found many of the literature that was used for writing this literature review. First the search terms that were used were the same as in step 1; this for instance led to the article of Baltas and Papastathopoulou (2003). Then the author used the search terms: “store choice + supermarket” and this led for instance to the articles of Fotheringham (1988) and Popkowski Leszczyc, Sinha and Timmermans (2000). Other search terms that were used were “Where to shop”, (which led to the article of Bell, Ho and Tang (1998)), “shopping centre choice” (which led to the article of Finn and Louviere (1996)) and “Deciding where to buy + store choice” led to the article of Sinha, Banerjee and Uniyal (2002). Furthermore, the author doubted for a long time where to write his literature review about and therefore had investigated the topics regarding assortment and location too, which led him to the articles of Briesch, Chintagunta and Fox (2009), Baumol and Ide (1956) and Lancaster (1990).

Step 3: Browsing through the found literature of Google Scholar.

In the article of Bell, Ho and Tang (1998) the Progressive Grocery Magazine of 1995 was quoted and some of the articles referred to other articles that were found by the author. This citation of the Progressive Grocer of 1995 turned the author to step 4.

Step 4: Using Google to search for relevant research done in practice

Using Google and the search term “store choice”, led to the Nielsen Global Consumer Report of January 2008. When looking at the website of Distrifoodc (an independence news site for supermarkets), the author was linked forward to GFK Panel Services Retail Netherlands. When the author searched for “Consumententrends 2009”, he found the research of EMFI Business School in cooperation with the Dutch Food Retail Association (Centraal Bureau Levensmiddelenhandel (CBL)). In a same manner, the research of Deloitte and the figures of the National Board for the Retail Trade (Hoofdbedrijfschap Detailhandel) were found.

Step 5: Using articles from previous and current courses

Because the author wrote his Bachelor thesis about Vomar Voordeelmarkt, he could use relevant information from it and because he was still working there, he could give examples from practice. Furthermore, in his master year, the author has followed many courses from which the author could use articles and sheets from lectures. This final step led to the articles of Millet (2009); Rindfleisch and Heide (1997); Soares, Farhangmehr and Shoham (2007); Ter Hofstede, Wedel and Steenkamp (2002) and Larson, Bradlow and Fader (2005).

Chapter three: The literature review

In this chapter we will review the literature that was mentioned in the preceding chapter. This chapter consists out of four paragraphs. In the first paragraph of chapter three, §3.1, a definition of store choice will be given. In paragraph §3.2, the determinants that are found in the literature will be handled. In the third paragraph of this chapter, we will compare the store choice determinants that are found in literature with those that are used in practice by Nielsen, Deloitte and EMFI Business School in cooperation with the Dutch Food Retail Association (Centraal Bureau Levensmiddelenhandel (CBL). In the last paragraph, §3.4, an overview of the used literature throughout this review will be given.

§3.1 Definition of store choice

Fotheringham (1998) mentioned that brand choice and store choice are dominating the marketing literature and that the decision processes of these choices are similar, except that they differ on the importance of the spatial dimension that is involved in these choices. According to Fotheringham (1998, p. 299), brand choice is not influenced by location while for the choice of a store location plays a significant role [2] . Sinha, Banerjee and Uniyal (2002, p. 14) agree with the view of Fotheringham (1998) and state that store choice can be seen as a cognitive process which is similar to that of choosing a brand, because both involve a process of acquiring information, selecting or integrating information and making a final decision. This process therefore looks to be similar to any purchase process that consists out of forming a consideration set, choosing a product and buying a product (Noordhoff, 2009) and even can be found in the decision regarding which shopping center to visit (Finn and Louviere, 1996, p. 242). Bell, Tang and Ho (1998) mention a similar ‘shopping process’. They assume that consumers formulate a shopping list, calculate the total costs of shopping and finally select the store that has the lowest total cost of shopping for that consumer. So, this shopping process can be seen as a utility-function in which the customer selects the option that generates the highest utility and that has the lowest costs. The total shopping cost that were mentioned by Bell, Ho and Tang (1998) consists out of fixed costs such as the distance to the store (also referred as “proximity effect” (Boter, 2010)) and variable costs such as the expected prices listed at the store. Noteworthy to say is that Bell, Ho and Tang (1998, p. 354) mention that the assumption they make regarding the decision-making process is not the only process a consumer can use when deciding which store to choice, because other factors can play a role in the store choice decision too. Popkowski Leszczyc, Sinha and Timmermans (2000, p. 324) investigated these other factors and come to the conclusion that choosing a store is a dynamic and interrelated decision in which a consumer must decide on when and where to shop. Furthermore, Popkowski Leszczyc, Sinha and Timmermans (2000) conclude that these interrelated decisions (the decisions when and where to shop) are dependent on the characteristics of a consumer. So, according to this view, the store choice is time, location and customer dependent. Now, that we know that choosing a store is a dynamic process that involves generating information, selection and making a final decision, we will take a closer look on what reasons consumer use to select and decide on what store to go to. Therefore, we will investigate in paragraph §3.2 which determinants in choosing a store are found in literature and in paragraph §3.3 we will compare these determinants with those that are used in practice by companies such as Deloitte and Nielsen.

§3.2 Determinants used in literature

The view of Popkowski Leszczyc, Sinha and Timmermans (2000, p. 324) is supported by an industry research in 1995 that suggested that location could explain up to seventy percent of the variance of the decisions made by consumers regarding where to do their groceries (Progressive Grocery Magazine, 1995). Moreover, since the introduction of Hotellings’ landmark analysis of spatial competition in 1929, location of a store was taken into account as an explanation for the store choices of consumers (Briesch, Chintagunta and Fox, 2009, p. 177 and Lancaster, 1990, p. 195). But a lot has changed since 1929 and even the statement made by the Progressive Grocery Magazine in 1995 seems to be outdated when we take a short look at what determinants are found in practice. The Grocery Store Choice & Value for Money report of 2008 made by Nielsen (p. 2 & 4) stated that the mantra “Location, Location and Location” used by retailers needs to be revised. There it is found that globally “Good Value for Money” is the most important factor in determining where consumers do their groceries and that location is on the third place, after the “Better Selection of High Quality Brands and Products” made by a retailer. This report therefore indicates that location is not the only determinant for the choices of consumers where to do their groceries and furthermore it indicates that countries differ in their level of importance of these determinants: location (“the one closest”) is more important for the Asian Pacific (3.62 on a 5-point scale (where 5 = high)) than it is for North America (3.48) or Europe (3.45). However, when returning to what determinants are used in literature, it can be seen that location is one of the important store choice determinants. Already in 1956, Baumol and Ide stated that it is necessary for a store to have a minimum number of items. The number of items should increase respectively by the distance of a consumer to that store, to induce the customer to shop at a specific store. Thus according to the view of Baumol & Ide (1956, p. 96), a grocery store that wants to attract customers which are located relatively far away from a store, should have a large assortment. The reason behind this logic is that a customer that is having high shopping costs, in terms of having to put more effort and time into it because he or she has to travel a large distance, will only visit the relatively far-away located store if the probability of a successful shopping trip is high. This probability of success is however dependent on the chance of finding the product the customer needs and wants. From this vision of Baumol and Ide (1956) it can be concluded that assortment and its size also play a role in the store choices of consumers. This is also concluded by Briesch, Chintagunta and Fox (2009, p. 187) who state that store choice decisions of consumers are more sensitive to assortments than to prices. In the research of Baltas and Papastathopoulou (2003, p. 4) that come up with a list of store choice determinants for Greek inhabitants, a lot of determinants are taken into account next to location and assortment. The determinants they find, in order of decreasing importance are: merchandise quality (4.79), merchandise variety (4.06), location (4.01), store atmosphere (3.99), price level (3.79), service (3.46) and the brands carried by the store (2.59) [3] .

Next to some of the variables that were used by Baltas and Papastathopoulou, Briesch, Chintagunta and Fox (2009, p. 187) further took into account the store loyalty, the category-specific store loyalty and the category need specification (time and quantity of last category purchase) of a customer. When we compare these determinants with the research of Hutcheson and Moutinho (1998, p. 711) under 637 respondents at the city of Cardiff (Wales) that measured the mediating effect of store choice criteria on the preferred store satisfaction, then a lot of overlap can be seen. They also took into account “location” (convenience) and “merchandise quality” (e.g. quality of packaged goods or quality of fresh goods), but what is surprising to see is that Hutcheson and Moutinho do not take into account the assortment of the store, like Briesch et al (2009) did, while Hutcheson and Moutinho do mention that the amount of non-grocery products is also a reason for choosing supermarkets (mean of 2.67 on a 5-point scale, where 1 indicated minimal importance and 5 indicated high importance). This reason and the important reasons (mean value of 4.33) “length of queues at counters and checkouts” and “Customer service and assistance facilities” (mean of 3.93) were not mentioned in one of the six classes of store determinants that were found by them when doing a factor analysis (Hutcheson and Moutinho, 1998, p. 713). Noteworthy to state here is that when comparing the research of Hutcheson and Moutinho (1998) with the research of Erdem, Oumlil and Tuncalp (1999, p. 142) that it is surprising to see that while both are using a principal components factor analysis, are more or less using the same explaining ‘reasons’ and only differ on their rotation method; that they either find six and respectively three classes of store choice determinants. Furthermore, what is striking in literature is that all articles that were used for this review are more or less using and ending up with the same determinants such as merchandise quality and merchandise variety (which can be seen as assortment), price and promotional level, location, service of personnel, (in- and out-) store environment, store reputation and consumer loyalty to a store. In literature, also the importance of the characteristics of a customer such as gender, income and size of household was mentioned (Erdem, Oumlil & Tuncalp (1999), Hutcheson & Moutinho (1998), Baltas & Papastathopoulou (2003) and Popkowski Leszczyc, Sinha & Timmermans (2000)).

§3.3 Determinants used in practice

Now that we have seen which store choice determinants are used in literature, we will compare these store choice determinants with the ones that are used by EMFI Business School & Dutch Food Retail Association, Deloitte and Nielsen. We have selected these companies, because they measure the store choice determinants under a lot of consumers on a yearly basis.

When we take a look at the research of these three companies, we see that they all are showing similar types of store choice determinants as can be seen in table 1 and 2. In table 1 the six determinants that can be subdivided into sub-determinants found by the EMFI Business School & Dutch Food Retail Association Report (2009, p. 28) are shown in decreasing order of importance. In table 2, the store choice determinants found by Nielsen are shown and in the third column of table 2, the store choice determinants found by Nielsen are linked with the determinants found by EMFI Business School & Dutch Food Retail Association that were shown in table 1.

Table 1: Store choice determinants of EMFI Business School & Dutch Food Retail Association

Table 2: Store choice determinants of Nielsen and linkage with table 1

Nielsen store choice determinants ( in decreasing order of importance):

Can be linked with the following determinant of EMFI Business School

Good value for money.

Better selection of high quality brands and products.

The one closest.

The most convenient / easy parking.

Uses recyclable bags and packaging.

Quality & advantage

Quality

Proximity

Efficiency

Extra

Very insightful from the research of 2008 by Nielsen is that it shows differences around the globe and that countries differ in the importance of the different store choice determinants (as was already mentioned in paragraph §3.2). From this research it must therefore be concluded that ‘shoppers’ differ on their motives to do their groceries at a certain store and that they differ on what is important to them in making the decision what store to visit.

The research of Deloitte (Deloitte Report, 2009, p. 28 – 30) shows that there are a lot more determinants that should be taken into account, next to the ones that were found by EMFI Business School & Dutch Food Retail Association (2009) and Nielsen (2008), such as having free parking space, having low levels of out of stock, having placed products in a logical and or easy to find way, having broad aisles inside the supermarket, the supermarket offers good working trolleys, having a good complaint-handling, having an large assortment of Fair Trade and biological products, having an easy to read folder and having fresh bread all day long (even at closing time). These store choice determinants of Deloitte were not used yet in the literature that was examined in paragraph §3.2.

After an overview of the used literature in this review in the following paragraph, we will continue with a discussion, come up with possibilities for further research and finally will draw a conclusion regarding the problem statement that was investigated in this literature review.

§3.4 Overview of used literature

In table 3, which is shown below, an overview of all articles that are used in this literature review is given.

Table 3: An overview of the used literature

Paper

Independent variable(s)

Dependent variable

Data used

Baltas and Papastathopoulou (2003)

International Journal of Retail and Distribution Management

Consumer characteristics

Brand choice criteria

Store selection criteria

Brand and store choice behaviour of grocery shoppers

200 personal in-store interviews and the interviews were distributed over the grocery chains according to their market shares in the Greek grocery market.

Baumol and Ide

(1956)

Management Science.

Number of items stocked by a retailer and the relation to his sales, costs and profits

Variety in retailing

None, but comes up with a lot of economical equations.

Bell, Ho and Tang (1998)

Journal of Marketing research

Total cost of shopping (= fixed cost + variable costs)

Store choice visit behaviour (of households)

Two years (June 1991 – June 1993) of shopping basket purchase histories for 520 households at five supermarkets (which contains merchandise information, purchase histories and demographic information)

Briesch, Chintagunta and Fox (2009)

Journal of Marketing research

Product assortment

Convenience

Prices

Feature advertising

Grocery store choice decisions

Enhanced multi-outlet panel from Chicago, covering 104 weeks (October 1995 – October 1997). Panellists recorded purchases at all grocery stores. Used 169 out of the 581 available households of the dataset to test their model.

Bruin (2009)

Framing

Promotional actions

Purchase intention

Used a survey under 44 employees and 88 customers of Vomar Voordeelmarkt Julianadorp.

Erdem, Oumlil and Tuncalp (1999)

International Journal of Retail and Distribution Management

Customer values

Importance of store attributes

Patronage behavioural orientations of shoppers

Structured questionnaire was mailed to 700 panel members of the Arkansas Household Research Panel (containing over 900 households). In the end, 603 usable questionnaires were received back (response rate of 86%) and used to test their model.

Finn & Louviere (1996)

Journal of Business Research

Anchor stores

Other stores,

Centre size

Location

Image perceptions (high quality, wide selection, good service, low prices, high prices, latest fashion)

Shopping centre image, consideration and choice

Measured when shopping for apparel. Three similar data sets, collected in 1988, 1992 and 1993 in Edmonton, Canada.

1988 dataset: mail survey of a systematic

sample of 796 names drawn from the City and Vicinity Street Address Telephone Directory; response rate of 66%, after elimination processes a complete dataset for 339 individuals remained.

1992 dataset: 12-page survey, sent to 2,000 households from the electronic version of the City Telephone Directory. Two waves of questionnaires and a follow-up postcard produced an overall response rate of 52%.

1993 dataset: same questionnaire was sent to the 1,042 household responded in 1992 plus 500 new households. After two waves and follow-up postcard produced a total sample of 841 households.

Fotheringham (1988)

Marketing Science

Assumptions regarding evaluating all options, hierarchical evaluations with or without cluster membership uncertainty

Consumer store choice and choice set definition

Not described, but comes up with three models:

Logit model

Nested logit model

competing destinations model

Hutcheson and Moutinho (1998)

Journal of Marketing Management

Variables related to supermarket choice

Supermarket choice criteria (as a mediating factor)

Preferred store satisfaction

A stratified sample of 637 respondents was obtained. Fieldwork took place in Cardiff, Wales, covering the most important geo-demographic clusters (gender, age, composition of household, marital status, household gross weekly income, type of dwelling, economic status, occupation and post code) in the city associated with the location of the most important supermarkets in the area.

Lancaster (1990)

Marketing Science

Aspects of product variety (such as the individual customer, the individual firm, market equilibrium, the social optimum, locational concepts)

Product variety

No data is used, but examines different economical models to survey the problem of product variety from the economist’s point of view.

Larson, Bradlow and Fader (2005)

International Journal of Research in Marketing

Zones visited

Time in store (2 – 10 minutes; 10 -17 minutes and 17 minutes up to 2 hours).

Supermarket shopping paths

RFID (radio frequency identification) tags located on shopping carts were used. In total they had 27,000 shopping paths, but for their research they drew a systematic sample of 9000 paths, drawing every 3rd path from a random starting point, which left them with 8751 paths.

Longley, Goodchild, Maguire and Rhind (2001)

Geographical information systems and science.

Millet (2009)

Lot’s of different subjects and describes multiple researches.

Consumer behaviour

Popkowski Leszczyc, Sinha and Timmermans (2000)

Journal of Retailing

Consumer characteristics

Consumer grocery store choice and switching behaviour

Scanner panel data from 1986 – 1988, provided by A.C. Nielsen, Inc. The data consist of all shopping trips for 1438 consumers at 21 groceries stores from five different store chains in Springfield Missouri. Used a random sample of 167 households consisting of 29,743 shopping trips out of a complete dataset of 1367 consumers (after elimination processes) to test their hazard model.

Rindfleisch and Heide (1997)

Journal of Marketing

Past, Present and Future applications

Transaction Cost Analysis

Integration and synthesis of 45 representative empirical TCA articles published from 1982 to 1996 in a variety of academic joumals in marketing, management, strategy, law, and economics.

Sinha, Banerjee and Uniyal (2002)

Vikalpa: The journal for Decision Makers

Demographics

Type of store

Distance

Image perceptions

Store choice behaviour of Indian shoppers

Conducted a field survey across different stores in Ahmedabad, India. 247 respondents were approached at the shop after they had finished shopping and were leaving the store, which filled in a questionnaire consisting out of 43 statements that were measured on a Likert-scale.

Soares, Farhangmehr and Shoham (2007)

Journal of Business Research

Gives an overview of the approaches that are used in a lot of articles.

Conceptualizing and operationalizing culture in marketing studies

Ter Hofstede, Wedel and Steenkamp (2002)

Marketing Science

Customer needs

Spatial information on the location of consumers

Identifying international spatial segments

1966 subjects from 120 regions in Europe (out of the following countries: Belgium, France, Germany, Italy, Portugal, Spain and the Netherlands) were used to come up with different spatial segments.

Chapter four: Discussion and further research possibilities

In paragraph § 3.1, the view of Fotheringham regarding the influence of the spatial dimension in the choice of a brand and a store was mentioned. The author of this literature does not totally agree with the standpoint of Fotheringham, because in his eyes location does play a role in choosing a brand. Two examples are given to support this view: 1) For instance when a new brand is introduced to the market; this brand can be chosen by consumers in certain areas of a country (where it is quickly introduced), while at other area’s consumers can not choice it yet. 2) If you want to buy the brand Sourcy [4] (see figure 2) and go to a certain store, but become aware that unfortunately this store does not sell the brand or the flavours you like and you therefore will decide to go to another store to buy this brand (or make the decision to buy another brand); then location do has some influence in the choice of a brand. So, the question that comes forward out of these examples is if the choice for a certain brand still remains uninfluenced by the spatial dimension? Furthermore, from these examples it can be argued what drives what? Does store choice has its influence on the brand choice; is it the other way around as is more or less found in the “status” factor in the research of Erdem, Oumlil and Tuncalp (1999, p. 142) or are they influencing one another?

Source: http://www.vitaminwater.nl/#/smaken

Figure 2: The brand SourcyFurthermore, based on the findings of this literature review, we see that a lot is written about this topic and that this topic is of high managerial relevance because every year a lot of companies such as Nielsen, Deloitte and the CBL in cooperation with the EMFI Business School investigate consumer grocery store choice determinants. In this review it was shown that there is a lot of overlap between the determinants used in literature and in practice, even though there are some differences in the number of determinants taken into account. What further is surprisingly to note is that the research of Nielsen showed that the importances of the determinants differ on a global scale, but that there is not spoken about such differences in the literature that was used for this review. Therefore, further research could examine why these differences occur: is the country more individualistic or collectively oriented and how does the country scores on the other four dimensions (power distance, uncertainty avoidance, long term orientation and masculinity) of Hofstede (Soares, Farhangmehr and Shoham, 2007, pp. 280- 282)? Another area for further research can be the problem statement of this review because when searching for literature regarding regional differences, to the best of my knowledge, there were no records found when using the keywords “store choice* determinants and regional”. Thus further research could investigate if the differences that were found in the Nielsen Global Consumer Report (2008) do not only differ on a global scale, but even within one country on a regional level. The likelihood of finding these regional differences is quite large, because “every customer is a different customer, while most of them can be placed in one of the five customer types (the child, the judge, the negotiator, the bargain-hunter or the adult)” (Academy for Life Leadership). Further research could therefore not only investigate if consumers that select different stores have different determinants, but also if the different customer types have differences in their determinants on what grocery store to choice and it could compare the characteristics of these customer types. From the literature it was already found that customer characteristics have an influence on the store choice determinants. So, if these customer characteristics can be linked to the different customer types, then retailers with a lot of customers of type X will know immediately which store choice determinants they will find important and therefore know where they should focus on.

Figure 4: Store choice determinants that are based on the top 10 customer annoyances

Figure 3: Store choice determinants based on customer annoyancesIn paragraph § 3.3 a lot of store choice determinants were mentioned. However, there are some store choice determinants that could be taken into account (shown in figure 3), which are based on the top 10 of customer annoyances. These top 10 of annoyances remain somewhat stable, because the annoyances that were mentioned in 2006, are still in the top 10 annoyances of 2009 (EMFI Business School & Dutch Food Retail Association Report, 2009, p. 39 and Editie NL, 2006).

Source: EMFI Business School & Dutch Food Retail Association and Editie NL

Source: hyves Vomar Julianadorp

Figure 4: ‘Mirroring-effect’Moreover, from own working experiences at the supermarket, the author of this literature review suggests to seriously consider to take along the annoyance “Re-stocking of shelves by store-employees is done when the supermarket is open” as a store choice determinant in further research. The author recommends this, because during the three years he is working at the supermarket he frequently heard customer statements such as “You are walking in the way”, “You and your fellow employees are behaving somewhat ‘rude’, because you have lost the ‘touch’ with me as a customer”, “Can’t you fill when the store is closed” or “It is a mess when you are refilling the shelves”. Furthermore, it is recommendable to take along the so-called ‘mirroring-effect’ (see figure 4) as a store choice determinant, because this increases turnover by as much as 3.5% according to research of Vomar Voordeelmarkt (Bruin, 2009, p. 12).frisdranken (3)

Figure 5: Supermarket paths for consumers that do groceries within 2 – 10 minutesAnother potential route for further research could be to use a Geographical Information System (GIS) in a same manner as was done by Ter Hofstede, Wedel & Steenkamp (2002, p. 171) to show how the determinants differ on a spatial dimension, but then only for the Netherlands instead of identifying spatial segments in international markets. So, further research could for example compare which determinants are of high importance in e.g. the Northern part of the Netherlands and which at the Southern part (and potentially taking into account the different retail formats). Potentially the differences between people regarding their grocery store choice determinants can even be linked with the way consumers walk through a supermarket when actually doing their groceries (Larson, Bradlow and Fader, 2005, p. 401). Then it for instance can be found that consumer that stay longer at a store potentially have different store choice determinants than consumers that do their groceries in a relative shorter time or that there are differences in the store choice determinants between shoppers that usually are walking clock-wise or anti-clockwise throughout a store (see figure 5).

Source: Larson, Bradlow and Fader, 2005, p. 401

Two clusters (shown in the figure above) of shopping paths are found for shoppers that need 2-10 minutes to do their groceries. For shoppers that stay 10 – 17 minutes, there are 4 clusters of shopping paths and for shoppers that stay longer than 17 minutes - up to two hours, there are 8 clusters of shopping paths.

Potential store choice determinants:

Assortment

Large or small

High selection of high quality brands

Large number of private brands

Location

Proximity

Enough parking space (kind of parking space; free or not )

Convenience

Price / Quality

Perceived price

Attractive promotions

Good offering of ‘cheap’ products

Low prices

Good quality of fresh products

Good quality of products

Quality of trolleys

Service

Customer friendly employees

Child Friendly store

Other services (customer complaint handling, drycleaner, etc.

Referral

Recommended by friends or family

Store choice

Potential Moderators:

Consumer characteristics

Customer type

Region Based on the store choice determinants which were found in literature and mainly from the research of EMFI Business School & Dutch Food Retail Association, Deloitte and Nielsen a potential model for further research can be drawn. It is a potential model, because the researcher can add more store choice determinants and/or select only one moderator. Furthermore it must be mentioned here that further research can not only investigate the influence of each store choice determinant on the final store choice, but also can investigate the relative importance that the different store choice determinants have on each other. For instance, referral of a store by friends or family can have a low importance, but when investigated in combination with service it can for instance have a high importance; more than the individual importance of referral and service. Therefore, further research should not only take into account the individual store choice determinants, but also the interrelated influence.

Chapter five: Conclusions and discussion

From this literature review it became clear that there is written a lot about the store choices of consumers and the determinants that they use for selecting the store to do their groceries at. For a long time, location was seen as the ‘key’ to get the customers to your store, as is seen by the used mantra of retailers (‘Location, Location and Location’) and by the returning theme of location in many papers since the ‘introduction’ by the work of Hotelling (Longley, Goodchild, Maguire and Rhind, 2001, p. 271.).

Overall, in the literature similar determinants are found but the number of factors in which these determinants can be classified differ. In practice the store choice determinants that are found in literature are used, but when comparing the different practical research of Nielsen, Deloitte and EMFI Business School, we also see differences. Some companies take many determinants into account (Deloitte), while others only take a few (EMFI Business School & Nielsen). This creates an opportunity for further research to investigate the optimal number of determinants that should be used in practice. Moreover, Deloitte and EMFI Business School are only considering the Netherlands, while Nielsen uses a global view and finds that the store determinants are different per country. None of the scientific literature in this review does however look why there are differences between these store choice determinants, which is another possibility for further research. In the directions for further research more suggestions were given.

Furthermore, to the best of my knowledge, it can be concluded that the problem statement that was investigated in this review (“Are there regional differences in the importance of store choice determinants inside the Netherlands?”) can not be answered, because as well as in literature as in practice, regional differences in store choice determinants were not investigated. However, it must be stated that only a few of the many articles that can be found regarding store choice determinants were used for writing this literature review. Therefore, we recommend other researchers to investigate (by using other literature) one of the suggestions given in the description for further research. We conclude that this literature review has given an overview of which store choice determinants are found in academic research and which are used in practice by companies such as Deloitte and Nielsen. Examples of these store choice determinants are merchandise quality, merchandise variety, price, service and location (more examples are given in paragraphs§ 3.2 and § 3.3).

The main conclusions that can be drawn from this literature review is even though “store choice is dominating marketing literature” (Fotheringham, 1988, p. 299), that there are still a lot of possibilities that can be investigated in further research such as the effect of customer type, the way of walking inside a store or by using the possibilities of GIS to investigate e.g. if there are differences in the store choice determinants between regions. Thus in short, there is still a lot that needs to be done in order to know what the store choice determinants and their level of importance are for each different customer.


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