Store attributes preference in selecting a store: a study of large scale retail stores in South Africa

Abstract

Segmentation always been considered an important marketing strategy in the marketing literature. Review of literature has indicated that appropriate segmentation ensures efficient utilization of resources and contributes to the overall value offering. Various recent studies highlighted the importance of segmentation strategies in the current economic context. The review has also revealed that demographics and store attribute preferences play important role in segmenting the retail market. The review of previous research studies also indicated that knowing customers preferences towards store attributes helps marketer in shaping their marketing mix strategies. In this context, this paper presents findings of a research conducted during the year 2010 in South Africa. Customer demographics and their store attribute preferences in selecting a store were examined in this study. The data collection instrument used in this study was based on a scale developed by Swinyard and Rinne (1995). It is important to indicate that this study was limited to the large scale stores in formal retail sector. Moreover, the scope of this study is limited to urban areas as the collected data had customers responses only from five major cities of four provinces. After cleaning and transforming data, only 418 customers responses were found usable for the data analysis. Five factors based on key dimensions of store attribute preferences were identified through an exploratory factor analysis. Based on these identified factors and customer demographics, cluster analysis was conducted and five segments of customers were described and discussed.