Consumer Behaviour Footwear Industry

Consumer Behaviour Project Study of Consumer Behaviour & Consumption trends in Footwear Retailing Outlets

Contents Contents................................................................................................................ 2 Footwear Industry: Introduction............................................................................. 3 Footwear Market Trends........................................................................................ 4 Literature Review................................................................................................... 4 Future Outlook....................................................................................................... 6 KEY PLAYERS:......................................................................................................... 6 Attributes:.............................................................................................................. 7 Attribute Concept............................................................................................... 7 Measures of Product Attributes...........................................................................7 Apparel Attributes and Stimuli............................................................................8 METHODOLOGY...................................................................................................... 8 Conceptual Framework....................................................................................... 8 Selection of the Sample...................................................................................... 9 Development of the Questionnaire.....................................................................9 Collection of the Data......................................................................................... 9 Variables of the Study........................................................................................ 9 Analysis of data:............................................................................................... 10 Footwear opinion leadership:........................................................................10 Footwear Consumption Pattern:....................................................................11 Footwear Preferences:...................................................................................11 Footwear Characteristics:..............................................................................12 Personal Characteristics:...............................................................................12 Conclusions- Implications and Inferences:...........................................................12 Annexure: Questionnaire..................................................................................... 13 BIBLIOGRAPHY:.................................................................................................... 15

Footwear Industry: Introduction Retailing is the most active and attractive sector of last decade. While the retailing industry itself has been present since ages in our country, it is only the recent past that it has witnessed so much dynamism. The emergence of retailing in India has more to do with the increased purchasing power of buyers, especially post-liberalization, increase in product variety, and increase in economies of scale, with the aid of modern supply and distributions solution. Footwear is a necessity to every person and at the same time is now a lifestyle as also a performance enhancement product; and is thus a segment with vast potential. The Indian footwear market is estimated to be worth Rs.13, 750 Crore and constitutes just about one percent of Indian retail. About 37.8 percent of Footwear retail is in the organized segment, which qualifies it as the second most organized retail category in India, next only to Watches. The footwear market today is showing a trend where more and more competitors within the segment are coming together and forming alliances through cross-promotions and tie-ups benefits for enhanced reach and offering the consumer access to a wider range of products and brands. “Customers around the world are heavily influenced by the image that a brand portrays and, as a result, leading companies are carrying out a number of wide-ranging initiatives to strengthen and re-position their brands.” These initiatives range from launching new products and new advertising campaigns to selective sponsorship and brand placement. Consumer retention remains a vital factor for footwear companies' continued success, and a market position can be improved or lost depending on customer numbers. Brand equity of products is becoming - and will continue to be - one of the most important factors affecting consumer purchasing decisions. Increasing competition and falling prices have driven suppliers to re-think their strategies and develop additional capabilities such as: - Product development and design - Logistics management - IT infrastructure - Inventory control. Some of the Key features of Indian Footwear Retail are as follows: •

The Indian footwear retail market is expected to grow at a CAGR of over 20% for the period spanning from 2008 to 2011.

•

Footwear is expected to comprise about 60% of the total leather exports by 2011 from over 38% in 2006-07.

•

Presently, the Indian footwear market is dominated by Men’s footwear market that accounts for nearly 58% of the total Indian footwear retail market.

•

By products, the Indian footwear market is dominated by casual footwear market that makes up for nearly two-third of the total footwear retail market.

•

As footwear retailing in India remain focused on men’s shoes, there exists a plethora of opportunities in the exclusive ladies’ and kids’ footwear segment with no organized retailing chain having a national presence in either of these categories.

•

The Indian footwear market scores over other footwear markets as it gives benefits like low cost of production, abundant raw material, and has huge consumption market.

•

The footwear component industry also has enormous opportunity for growth to cater to increasing production of footwear of various types, both for export and domestic market.

Due to the increasing effects of globalization, consumer demands, retail structure, and technology, retailers are identifying market opportunities through intensified gathering of data on consumer footwear purchase behaviour and shopping orientations via loyalty cards. The bottom line is that both retailers and manufacturers are after the same thing: customer loyalty. Market segmentation provides a way to understand and enhance customer loyalty by enabling marketers to tailor products and efforts to the needs of particular groups of customers (Kelly, 1998).

Footwear Market Trends Footwear is much more than simply a functional item to keep the feet warm and dry. Footwear is part of a person's overall attire and appearance and it is perceived by the wearer to reflect their individuality and status. Shoes are essentially a fashion item subjected to periods of fluctuating demand throughout the year. Trends in colour from companies that produce dyes for tanners, information on new shoe components, and styling are Important for the leather shoe industry in developing potentially profitable commercial products. Other factors that now affect the footwear industry are: extension of branding in clothing to footwear, less footwear sold through specialty footwear retailers, growth In home shopping though catalogs and the Internet, availability of custom-made footwear, 3D visualization of footwear, less stock being carried at retail, and intensified gathering of data on shopping habits through loyalty and similar product differentiations techniques.

Literature Review  Market Segmentation Segmentation has evolved from an academic concept (Smith, 1956) into a key marketing planning tool (Sheth, Sisodia, & Sharma, 2000). In this context, segmentation provides a strategic marketing approach to understanding a particular group of consumers' purchasing behaviour (Kelly, 1998). In

turn, the accuracy of a firm's use of segmentation is an important criterion of competitive market advantage (Sauerman, 1998). The objective of segmentation research is to analyze markets, find unique opportunities, and increase market share (Cross, 1999). Segmentation Concept: A customer-based versus product/service-based classification scheme often is used as a theoretical framework for segmentation research. Customer based classification entails finding unique characteristics of consumers; for example, demographics, psychographics, values, and needs, that distinguish them in significant ways for marketing planning purposes. In comparison, a product/service-based approach determines the types of benefits customers want from specific attributes of certain products or services, usage rates or patterns, and other aspects of the product/service usage situation. Segmentation Bases: Customer-based segmentation variables within the observable classification fit into four groups: cultural, geographic, demographic, and socioeconomic. Observable product/service bases comprise variables related to buying and consumption behaviour: user status, usage frequency, brand loyalty, store loyalty and patronage, stage of adoption, and usage situations. Customer based unobservable segmentation variables fit into four groups: psychographics, values, personality, and life-style.

 Product Involvement The theory of consumer Involvement has had a major impact on the study of consumer behaviour in the last 30 years. While researchers agree that the study of involvement is important to explaining and predicting behaviour of the consumer there is little consensus on how to best define and measure the construct of involvement. Involvement is generally considered to be a function of three factors: (a) individual characteristics; (b) situational factors including purchase situation and the degree of risk perceived in the purchase; and (c) physical characteristics of the product. The literature reveals involvement can be related to ego, product, situation, values, brand, interest, and purchase.

 Product Attributes Why consumers buy particular products has been an Issue addressed in empirical and conceptual studies (Vriens & Hofstede, 2000). Market research often aims at understanding the reasons underlying consumers' product preferences. Most methods for investigating product preference assume that preferences are based on combinations of utilities consumers get from separate product cues or attributes (Creusen & Schoormans, 1997). Differences in consumer preferences are thus expected to be related to differences in product attributes. Attribute Concept: According to consumer behaviour theories, the purchase of a product is guided by consumers' assessment and evaluation of the attributes defining the product. Consequently,

consumers are influenced in product evaluations and buying decisions by factors such as brand, price, and colour. Consumer researchers are interested not only in which cues are used and the relative impact of each cue, but also with the ways the cues are combined to arrive at judgments and choices.

 Footwear Industry The footwear industry has continued to grow and maintain market share even though new materials are being developed for footwear. However, thoughts on how the footwear market will evolve are split. Some believe that footwear is a global market that can be standardized, perpetuating mass production of high volume uniform styling. Others see different countries and markets having their own specific needs, encouraging a move away from volume production. In either view, future success in the footwear industry will depend on efficient global resourcing to ensure that the right quantities of shoes in the right sizes are in the right retailers at the right time.

Future Outlook The future growth and prosperity of the footwear market will depend, in part, on how accurately the target market is defined and on the development of product assortments based on distinct purchase behaviour. Segmentation based on consumers' product involvement and their perceptions of product attributes can contribute to successful targeting of specific profitable markets. In order for segmentation to be successful, the market must be described in measurable terms, be accessible, be divided into homogeneous groups, and be potentially profitable (Cross, 1999). By segmenting the market, companies can determine the best marketing mix or products needed to target particular consumers (Sauerman, 1988). Current changes affecting marketers such as, micro marketing segmentation, global market segmentation, direct marketing segmentation, retail segmentation, geodemographic segmentation, segmentation for optimizing service quality, segmentation for customer satisfaction evaluation, segmentation for new product development, segmentation using single-source data, and so on (Wedel & Kamakura, 1998; Myers, 1996; Wensley. 1995; Weinstein, 1994) will all impact footwear retailers and manufacturers. An effective segmentation program based on product Involvement and product attributes will help analyze markets, find unique opportunities, and increase market share (Cross, 1999). The footwear industry has continued to grow and maintain market share. However, the future profitability of the footwear industry depends in part on how well marketers can continue to provide consumers with the right mix of products and effectively target consumers based on their footwear preferences. Segmentation based on product Involvement and product attributes can become an effective tool to this end.

KEY PLAYERS: Bata is name that is synonymous with quality and durability. Over the years, this shoe company has retained this quality of value for money by producing products that are easily within the reach of

common consumers. With an exclusive showroom in Ahmedabad, today Liberty Shoes Ltd. produces footwear for the entire family and is a trusted name across the world. Another popular shoe store among the locals is Metro Shoes. Metro offers a wide variety of footwear for all age groups like shoes, sandals, chappals etc. for both men and women. It is a one stop shop for all your footwear needs. Another name to reckon with in the footwear market of Ahmedabad is Woodland. The brand name itself is an icon of simplicity blended with trustworthiness. The rough and tough shoes, sandals and chappals can be worn on the toughest of excursions and they will never let you down. Lifestyle's footwear section offers a wide range of latest model shoes of various brands. Khadims Started footwear retailing in 1993, it is one of the pioneer in footwear industry in India offering quality products at affordable prices. Besides this there are some small retailers as well fighting for the market pie.

Attributes: Why consumers buy particular products has been an Issue addressed in empirical and conceptual studies. Market research often aims at understanding the reasons underlying consumers' product preferences. Most methods for Investigating product preference assume that preferences are based on combinations of utilities consumers get from separate product cues or attributes. Differences in consumer preferences are thus expected to be related to differences in product attributes.

Attribute Concept According to consumer behavior theories, the purchase of a product is guided by consumers' assessment and evaluation of the attributes defining the product. Consequently, consumers are infiuenced in product evaluations and buying decisions by factors such as brand, price, and color. Consumer researchers are interested not only In which cues are used and the relative impact of each cue, but also with the ways the cues are combined to arrive at judgments and choices.

Measures of Product Attributes The majority of studies, which examined the effects of product attributes on product evaluations and the purchase decision process, have focused on rating or rankings of product attributes However, the rating and ranking approaches cannot capture consumers' willingness to compromise. Ranking can provide some measure of trade-offs between attributes. Also rating and ranking measurements do not effectively handle attribute levels in order to allow the determination of how much of one attribute will compensate for a deficiency in another attribute. The range of attributes is limited to the specific preselected cues included on the rating and ranking measurement scales. To elicit a wider range of attributes used by consumers In the evaluation process, researchers have used an open-ended discussion approach for data collection via quantitative and qualitative research designs. A disadvantage of free response data is that subliminally used criteria for product evaluation may not be

recognized by the naive consumer who is unaware of the importance of the criteria. As with predetermined lists, social desirability may have some effect if the respondent is embarrassed to acknowledge Influence of some criteria. Conjoint analysis was developed as a different measurement approach to avoid the biases of explicit measurement of attribute importance. The conjoint approach derives the importance individual consumers attach to each attribute by observing consumers' preferences for or choices of various combinations of product attributes and then decomposes these judgments to estimate the respondent's utilities for each attribute and each level of each attribute.

Apparel Attributes and Stimuli Previous research related to apparel has used intrinsic and extrinsic product attributes to investigate overall judgments made by consumers. The effects of extrinsic cues on overall judgment have been investigated more frequently than the effects of intrinsic cues. Among the extrinsic cues, price and brand name have been studies most extensively, both in isolation and in conjunction with other cues. The intrinsic cues most frequently examined include style, fit, design, fiber content, color, care, and appearance. Intrinsic and extrinsic cues have been related to perceived usefulness, performance, and quality. Application of a variety of stimuli and methods in the examination of product attributes has been suggested as desirable to counteract the indigenous forms of bias associated with any stimuli, measure, and data collection situation. Stimuli used to assess clothing have included actual products, photographs of products, and illustrations of products, written product category descriptions and, product names or lists. Attributes have been measured by rating and ranking scales as well as openended questions eliciting free response data.

METHODOLOGY The purpose of this study was to determine If High Involvement (HI) consumers and Low Involvement (LI) consumers differed in their purchase of their footwear and what are the criteria that they consider while buying the footwear.

Conceptual Framework The conceptual framework underlying this research is the relationship between product involvement and product attributes that impact consumer purchase behaviour. Consumer involvement is defined as a person's perceived relevance of a product or service based on inherent needs, values, and interests. Clothing was one of a few high involvement products, because clothing is perceived as reflecting on one's self-image, clothing is costly, the risks of a wrong decision are high, and/or when the act of purchase or consumption takes place. It is of high personal importance or relevance to the decision maker. However, the level and risks may vary with the type of clothing. Consumer involvement with a particular product is important because different levels of Involvement may lead to different

perceptions of attributes and to different choices. A basic premise underlying consumer behaviour is that when making purchase and consumption decisions, consumers search for product information in order to discriminate between comparable products and make efficient. The information-processing paradigm suggests that in evaluating products, consumers seek and process Information about alternative products and multiple product attributes. In turn, product characteristics, including intrinsic and extrinsic attributes, are cues used by the consumer to develop perceptions of a product and have an influence on the purchase decision and consumption process The concept of involvement appeared to be useful to segment consumers by the degree and level of product involvement and then to investigate product attributes used in the evaluation of a product that might result from different levels of involvement.

Selection of the Sample The target population for this study was employed female and male consumers from the Ahmedabad city who wear footwear to work at least one day a week. A sample of 50 respondents were taken. All subjects had an equal and independent chance of being selected for the sample.

Development of the Questionnaire A questionnaire was utilized for data collection. The instrument was designed to elicit responses from females and males age 25 to 65 years in the U.S. who wear leather dress shoes to work at least one day a week. A self administered mail questionnaire was constructed regarding the respondent's (a) footwear opinion leadership, (b) preferences regarding footwear worn for business wear, (c) favorite and purchased footwear brands, (d) stores shopped for footwear, (e) footwear Involvement, (f) footwear purchase criteria, (g) footwear consumption patterns, (h) footwear characteristics, and (i) socio-demographic characteristics.

Collection of the Data The research data were collected using the Total Design Method for implementing mail surveys. A self-administered questionnaire was mailed and also taken in person to randomly selected representatives of 25 females and 25 males in Ahmedabad. Participation was voluntary and respondents were informed of the confidentiality of the investigation and rights as human subjects. A complete Implementation theme was followed for collection of the research data. Correspondence was personalized.

Variables of the Study Sample Size: 40 The variables of the study were as follows:

1. Footwear opinion leadership data were summated by a response to Q-01 of the questionnaire. Footwear opinion leadership was analyzed to determine the level of leadership. Subjects responded to a 5-point Likert scale ranging from strongly agree (5) to strongly disagree (1), with a mid-point of Indifferent (3). Opinion leadership was treated as a continuous variable.

2. Footwear consumption patterns were measured by responses to Q-02 and Q-03 of the questionnaire. Consumption patterns were product specific preferences with regard to leather dress shoe wardrobe. Consumption pattern data of the respondents were analyzed to determine consumption motivation as an act toward extrinsic and intrinsic product attributes 3. Footwear preferences were measured by responses to Q-04 through Q -07 of the questionnaire. Shopping preference data of the respondents were analyzed to determine shopping preferences toward leather footwear. 4. Footwear characteristics were measured by response to Q-08 in Section 6 of the questionnaire. Footwear characteristics were product specific feelings about the pair of footwear. Footwear characteristic data of the respondents were analyzed to determine feelings as a motivation toward extrinsic and intrinsic product attributes. Subjects used a Likert scale using 5-place response formats. The feeling measure was composed of 6 extrinsic and 11 intrinsic product attributes used in the purchase criteria measure. The extrinsic product attributes were fashion, contemporary versus traditional, price, attractiveness, versatility, and brand. The intrinsic product attributes were conservative versus casual, comfort, colour, quality, breathability, care, natural leather, touch, construction, durability, and fit. 5. Q-09, Q-10 and Q-11 asked about personal characteristics such as marital status, age and current employment. These characteristics affected the choice of footwear to a great extent.

Analysis of data: Footwear opinion leadership: Q-01: As per the responses to the survey, 23% women responded that they try new fashion ideas before their peers, while 64% felt that it is important that the footwear I wear be of the latest styles.

This can be attributed to the increasing urbanization and exposure to mass media like television. 45% ladies said they try new and different places to shop for footwear. All the respondents were looking for quality product and comfort at affordable prices.

Footwear Consumption Pattern: Q-02 and Q-03: On an average, ladies purchased 1 pair of shoes, approximately 3 pairs of sandals and 2 pairs of chappals. Q-03: 67% of the responses fell in the range of somewhat satisfied to very satisfied. The individual break up is as follows: Somewhat satisfied- 20% Satisfied- 37% Very Satisfied- 10%

Footwear Preferences: Q-04 to Q-07: Q-04 received a mixed response as customers today are not very brand loyal. Q-05: Some of the favorite brands cited by the respondents are Bata, Metro, Nike, Liberty. The respondents who were not very fashion conscious preferred brands like Bata, Khadims, Mumbai Store, Eagle shoes and local unbranded footwear retailers. Responding to Q-06, most of the customers shopped at the exclusive retail outlets of retailers. Q-07: The proportions of responses are as follows: Quality- 79% Selection- 36% Comfort- 67% Price- 39% Fit- 42% Other factors stated were durability and styling.

Footwear Characteristics: Q-08: In describing footwear, females stated their feelings were related to 70% of the intrinsic and 57.1% of the extrinsic characteristics. The intrinsic were fit well (82.0%), comfortable (74.9%), high quality (73.4%), basic in color (69.0%), and easy to care for (66.2%). The extrinsic were durable (74.2%), fashionable (69.1%) and attractive (67.7%). Working females did not express exact feelings related to three intrinsic characteristics (i.e., conservative versus casual, not breathable versus breathable, and not natural versus natural) and three extrinsic characteristics (i.e., contemporary versus traditional, inexpensive versus expensive, and unfamiliar brand versus familiar brand).

Personal Characteristics: 40% of the respondents were in the age group of 16-30. The remaining respondents were above the age of 30 yrs. Also, 20% of the respondents were single and the remaining respondents were married. Regarding current employment status, around 30% of them were students.

Conclusions- Implications and Inferences: Retailers often want to know how to more effectively tailor their marketing, advertising, and promotional activities based on a specific market segment to which a consumer belongs but lack precise identifiers needed to predict group membership. Overall, the analyses offer considerable support for the assumption that identified extrinsic and intrinsic product attributes can influence their purchase decisions for footwear. Classification analysis can address target marketing by consumers to groups based on footwear purchase criteria and footwear characteristics. Then market share can be predicted in terms of the contributions each product attribute makes to the share. Therefore, product development and introduction, retail merchandise assortments, and market share predictions can be built on a data set with both group membership and individual characteristics.

Annexure: Questionnaire CONSUMER FOOTWEAR PROFILE 1. How would you describe your clothing and shoe purchasing practices for business wear? (Circle only One response per statement) Strongly Indifferent Strongly Agree Disagree I often try new fashion ideas before my co-workers 5 4 3 2 1 It is important that the footwear I wear be of the latest styles

5

4

3

2

1

I like to try new and different places to shop for footwear

5

4

3

2

1

When a new footwear store opens, I am among the first to visit it

5

4

3

2

1

In purchasing footwear, I feel that quality is highly important

5

4

3

2

1

In purchasing footwear, I feel that Fashion styling is highly important

5

4

3

2

1

When purchasing footwear, I feel that comfort is highly important

5

4

3

2

1

2. How many pairs of footwear have you purchased for yourself during the past 2 years? Shoes

sandals

3. How satisfied were you with the selection in the retail stores: • Very Satisfied • Satisfied • Somewhat Satisfied • Somewhat Dissatisfied • Dissatisfied • Very Dissatisfied 4. Do you have a favorite brand(s) of shoes/sandals/chappals?

chappals

Yes

No

5. If Yes, what are your favorite brand(s) of shoes/sandals/chappals? _____________________________________________________________________ 6. Where do you most often shop for footwear? (Check One) • Factory Outlet Stores • Discount Stores • Department Stores

• Apparel Specialty Stores • Shoe Stores • Other (Specify)

7. What would get you to purchase more footwear? • (Check all that apply) • Better Quality

• Better Selection

•Better Comfort

• Lower Price

• Better Fit

• Other (Specify) ______________

8. Listed below are characteristics one might consider when describing their feelings about footwear. Use the scales below and circle the number which best reflects your feelings about their footwear. (Circle One number per single scale.)

I would describe my footwear as: Conservative

1234567

Casual

Unfashionable

1234567

Fashionable

Comfortable

1234567

Uncomfortable

Contemporary

1234567

Traditional

Inexpensive

1234567

Expensive

Attractive

1234567

Unattractive

Basic in Color

1234567

Unique in color

Low Quality

1234567

High Quality

Breathable

1234567

Not Breathable

Hard to Care For

1234567

Easy to care for

Durable

1234567

Not durable

Fit Well

1234567

Do not fit well

9. What is your present marital status? (Check One) Single

Married

10. What is your age? 11. What is your present employment status? (Check One)

• Employed ~ full-time • Employed ~ part-time • Full-Time Homemaker

• Full-Time Student • Unemployed • Retired

*********************************Thank You*********************************

BIBLIOGRAPHY:  http://ahmedabad.clickindia.com/business/shops/sportsfootwear.html  http://footwearsinfoline.tripod.com/indian_retail_overvw.htm  http://footwearsinfoline.tripod.com/retail_current_scene.htm  http://footwearsinfoline.tripod.com/footwear_retail_overvw.htm  Aaker, D.A., & Day. G.S. (1990). Marketing Research. (4^^ Ed.). New York: John Wiley and Sons.  Andrews, J.C, Durvasula, S., & Akhter, S.H. (1990). A framework for conceptualizing and measuring the involvement construct in advertising research. Journal of Advertising. 19(4). 27-40.  Assael, H. (1984). Consumer behaviour and marketing action. Boston, MA: Kent Publishing.