PROGRAM – MASTERS OF BUSINESS ADMINISTRATION (MBA) SEMESTER – 2

COURSE CODE and NAME: DMBA 203 – Marketing Management

NAME : ROHIT
ROLL NO. RANJAN
2314512674
 Abstract

Knowing about the customer behavior in a grocery has been a long‐standing issue in the retailing
industry. The advent of RFID has made it easier to collect moving data for an individual shopper's
behavior. Most of the previous studies used the traditional statistical clustering technique to find the
major characteristics of customer behavior, especially shopping path. However, in using the clustering
technique, due to various spatial constraints in the store, standard clustering methods are not feasible
because moving data such as the shopping path should be adjusted in advance of the analysis, which is
time‐consuming and causes data distortion. To alleviate this problem, we propose a new approach to
spatial pattern clustering based on the longest common subsequence. Experimental results using real data
obtained from a grocery confirm the good performance of the proposed method in finding the hot spot,
dead spot and major path patterns of customer movements.
Definitions
Supermarket is a self‐service store offering a wide variety of food and household merchandise,
organized into departments. It is larger in size and has a wider selection than a traditional grocery stores
and it is smaller than a hypermarket or superstore.

Hypermarket is a superstore which combines a supermarket and a department store (where usually are
sold products like apparel, furniture, appliances, electronics, and additionally select other lines of
products such as paint, hardware, toiletries, cosmetics, photographic equipment, jewellery, toys, and
sporting goods), being the result a very large retail facility which carries an enormous range of products
under one roof, including full lines of groceries and general merchandise.
Introduction

THE goal of retailers (discount stores, department stores, convenience stores, supermarkets, etc) is to
increase the gross profit margin through sales and cost reduction. This requires improving the efficiency
of operation and providing attractive services for customers. Especially, the market focus of large
discount stores has been continuous low price sales in tandem with the expansion of new branch stores.
Recently, however, they have struggled with the decreased consumer spending due to the economic
recession. This has removed the competitive position of a low price strategy only. This situation
necessitates new marketing strategies such as aggressive promotions to customers. Traditional strategies
include basket analysis or regional analysis based on customer purchase history and demographic
information. Information about interested products is analyzed from customer purchase history and
products recommended to customers through customer segmentation. The location of future profitable
stores is identified using demographic information and regional analysis.

However, more aggressive promotional activities are needed as these traditional analyses do not
provide sufficient information to understand customer shopping patterns and behaviors in the physical
store environment.

Customers’ consumption, decision making processes, the store environment (in‐ store layouts, product
placement, etc.) closely affects customer consumption behavior. Therefore, improving the in ‐store
environment is an important consequence of increased understanding of customer behavior. If we can
determine the store areas where most sales activities occur and where customers tend to stay for a long
time, we can decide where to display products and how to build an effective store environment. A more
effective store environment can provide convenient services for customers and hence increases sales. Up
to now, however,

store managers have relied on experiences of the high‐sales locations and those where customers tend to
stay for a long time.
Customer Behavior Analysis using RFID‐based Shopping Paths Data
The retailers of large supermarkets have profited by supplying a massive number of products at low
price, and have recently begun to use various marketing strategies to gain a competitive advantage over
other stores. They have tried to understand customers by analyzing demographic and transaction data.
However, in order to understand customer shopping patterns inside a store, we need more data about
customer behaviors. Transaction data and personal information only provide basic information such as
how many times and when they have visited due to the limitation on customer behavior data collection
technique.
Different customers’ different distances need to be converted into an identical number, and the
normalization is applied to equalize the size of the trace. As in Fig. above we can choose between
temporal normalization and spatial normalization. During the process, since a different value from the
original distance is used as the input, the original information can be either deformed or lost.
Therefore, this.
research provides a technique for detecting a main customer shopping path pattern in which all these
path characteristics and store environment facts are taken into account.
SHOPPING PATH PATTERN ANALYSIS

Collection of shopping data using RFID We installed an RFID sink node (Reader) on the ceiling of
the store, an RFID repeater inside the shelves and an RFID tag in the shopping cart to collect
customer shopping The active tags were installed in the shopping carts and a reader received data in a
predefined interval. All collected data were sent to the storage server.
Analyzing the Data and Making Inferences
The result showed that most customers started their shopping from the
entrance and mainly shopped in a counter‐clockwise direction because the entrance and the cashier’s
counter are located in the lower left and the upper left of the picture, respectively. This layout made the
customers tend to move in a counter‐ clockwise direction. Notably, products in the top 10 sales ranks
were
mostly located on the lower side of the store layout, whereas products displayed in the upper part of
the layout (interior products, hobby products, car products) were rarely included in the shopping
sequence and accordingly had very low actual sales.
reveals that the circled areas were mostly located close to the entrance, and that the areas within 5
meters of the entrance were the first Hot Spot.
Furthermore, the area before moving to the casher’s counter after the shopping had been completed
had the most overlapping patterns and was determined to be the second Hot Spot. Although few
purchases were made in this area, it is likely to be a highly effective area for demonstration and should
be used to display promotional products and hot products in order to generate more purchases.
The triangle area is a bridge area that connects the first Hot Spot and the second Hot Spot, and most
seasoning products and kitchen product purchases were made in this area. However, few purchases
were made in the area to the left side of the triangle, even though the customers’ shopping paths
included this area. These results indicated that the store manager needs to change product display and
promote sales through product analysis.
Results of finding shopping movement patterns CONCLUSION
Existing customer analysis in retail stores has relied on basket analysis or sales statistics, and has rarely
included analysis for service efficiency or customer behavior pattern. However, our study provides a
method to identify customers’ shopping paths or major sales areas by collecting and analyzing
information on
customers’ main travel path, about customers’ shopping sequence and to determine meaningful spots
in stores.
Based on this analysis, the results will increase understanding of the customers’ consumption behavior
and will assist in deciding whether product display and layout need to be changed. The proposed more
quantitative method improves existing qualitative analysis which mainly relied on store employees’ daily
experience and provides objective numbers in order to provide high‐quality services to customers and
increase revenues accordingly.

Applying the Research to Improve sales and win over customer

In these modern times the different chains use all kind of strategies to increase their sales, becoming
the sales process almost a science. That is because in the process of merchandising are involved
studies of psychology, science and business, which seek to know the tastes, habits, needs and way of
thinking of consumers. For this reason and in these times of ruthless competition is an excellent idea
to have tools like “merchandising”, to try to gain advantage against the other competitors.
A whole theory has been developing about this topic. The base of the theory is “promotion” (tool of
“marketing mix”) and is focused in the POS (point‐ of‐sale) merchandising. It has several tools to carry
out its aim, but in this research will analyse tools that the consumers can find in the supermarkets. These
are, advertising on the point of sales, through posters and displays; how the shelves are distributions on
the establishment and also the product on them; the different use of music, lighting and colours on the
establishment.
Theory
The research uses the theory of “marketing mix” and merchandising’s
theory. Marketing Mix
The set of marketing tools ‐product, price, promotion and place‐ is used by companies to achieve
their objectives.
Satisfaction and it results in higher sales and market share.
To understand marketing mix is necessary to understand its tools. “These 4‐Ps – Product, Price,
Promotion and Place‐, are the four key decisions areas that they satisfy or exceed customer needs better
than the competition each element of the marketing mix is designed to meet a customer’s need. He
assumed this being aware of the importance of the four Cs –Costumer solution, Customer cost,
Communication and Convenience. The figure 1 shows this relationship between four Ps and four Cs.
Product
The product decision involves what goods or services should be offered to different groups of customers.
The product policy is undoubtedly the most important element of the marketing mix. The product is the
vehicle used by companies to satisfy consumers’ needs and it should be always to orientated to consumer.
Price
The price is a key element of marketing mix because it represents on a unit basis what the company
receives for the product or service which is being marketed. In other words, price represents revenue
while the other elements are cost.
Often an organization is willing to spend a hundred thousand dollars on researching its new product
concepts, but it is loathed to spend one per cent of that on researching the different customer perceptions
to various price levels.
Place (or Distribution)
“Place” involves decisions concerning the distribution channels to be used and their management,
the location of outlets, methods of transportation and inventory levels to be held.
Manufactures are concerned with how to distribute and deliver product to customers, and service
providers are concerned with the location of service points and customer accessibility To sum up:
“Distribution and place” answers the question: “Where would our customers expect to find our products
or services?”
Promotion
“Promotion” is defined as the whole array of methods and procedures by which the organization
communicates with its target market. Promotion is the element of marketing mix used to inform,
persuade and remind to the target audience the capability of the company to satisfy their needs, and they
use it willing to influence audience’s feelings, beliefs and behaviour.
“Promotion” uses different tools to achieve its purpose. The next figure (figure2)16 shows these tools,
which are Advertising, Publicity Direct marketing Sponsorship, Exhibitions, Packaging, POS (point ‐of ‐
sale) merchandising, Sales Promotion and Personal Selling.
Merchandising
The research focuses on POS Merchandising, to be more exactly, on Merchandising in the supermarkets.
POS merchandising is promotion via various forms of displays, acting as a reminder to consumer of
previously noticed promotional message. Merchandising has two definitions; the first definition
emphasizes the promotional activities applied inside stores, like displays for their products, and the
second one focuses on identifying and choosing correct decisions about products or products portfolio.
Some researches verify that the sales process mostly consist of communication visual process, where the
vision represents 80% of the human perception, and the hearing is the 10% and the other senses as touch,
smell and taste represent the remaining 10%19. This means that the visual effect is crucial to sales, as
customers’ participation in the buying process. Merchandising includes all activities in sales outlet which
aims to reaffirm or change the buying behaviour for the benefit of the company, so merchandising as a
concept is composed of the quality, assortment (brand and product mix), styling and fashion of products
and pricing.
Supermarkets are in a highly competitive market, and they need to make different strategies
of merchandising for achieving loyalty of consumers and getting new.

consumers.
Seventy percent of purchasing decisions are made during shopping. Hence the sales outlet becomes very
important, because it may change the consumers’ behaviour and their habits of purchasing.
The supermarkets use different tools to lead consumers in their purchasing. These tools can act individual
or with each other, and every store chooses the most suitable tools to achieve its purpose.
Advertisings (displays and posters)
In this research, “advertising” is defined as the use of posters and displays inside super and hypermarkets,
excluding advertising made outside the store, like advertising on TV, magazines and newspapers. The
best method to rise sales is using advertising and promotion tools. Is in the sales outlet where the battle
can be won of the decision‐making final consumer. He talks of the importance of the promotions
supported by displays and posters
Displays are defined as those features or promotional activities at point of sale that show the product and
make aware customers of their existence, such as cards, exhibitions and other instruments to induce the
purchase. Merchandising display factor tends to focus on in‐stores location and the shopping route to
positively affect consumers’ propensity to browse. In addition, attitudes towards visual product
presentation influence purchasing behaviour in the store. A positive attitude leads to more browsing and
purchasing, whereas a negative attitude towards the visual product presentation results in an immediate
exit from the store.
Effective merchandise display guide and coordinate shoppers’ merchandise selection. POS (point‐of‐
sale) displays can be either gondolas, straight and circular racks, or cut cases which are useful for
showing the merchandise properly.
Posters are those paper sheets, sketches or other items that can be placed in malls, stores or on the
streets and which purpose is to inform or announce some matters, some particular products or services.
Regarding to malls, stores or super/hypermarkets, posters can have two different functions. On the one
hand they can promote the sale of products offered there, for instance “sales” or discounted products. On
the other hand they guide customers through the establishment using indicating posters of different
sections, or in the case of super/hypermarkets, the different zones where the different kinds of products
are placed.
Shelves
“Shelves" strategy is focused on the collocation of products on the shelves (how supermarkets put or
organize them). Shelves of supermarkets have three levels where products are placed; eyes, hands
and feet.
The first level and the most important one is the eyes level, because the consumer is able to see clearly
the product. Super/hypermarkets use this level to place the most expensive products which usually
belong to the most well‐ known brands. Brands often pay supermarket because they want to place their
products on this level.
The second level is hands level. This level is also easily accessed by the consumer. Here, the products
are frequently cheaper than on the eyes level, but more expensive than on the feet level. The brands are
well‐ known as well.
The third level is the feet level. On this level the cheaper products are placed. Access is more difficult
than to the other levels, and the consumer has to do effort to take the product. The “private label brands”
are frequently placed on this level. “Private label brands”(also called “private brands”) are those owned
not by a manufacturer or producer but by a retailer or supplier who gets its goods made by a contract
manufacturer under its own label.
Speaking about shelves in a horizontal line, the most expensive products are placed in the beginning
and in the end. In this way consumers who want to buy inexpensive products have to walk two times in
front of the expensive ones being tempted to buy them.
Another characteristic feature of shelves is their beginning, also called gondola. Gondolas are parts of
shelves situated in their endings and placed next to main corridors. There are placed products that
marketing managers want to sell easily. Products placed on gondolas not necessarily have to belong to
the same “family” of products placed on their respective shelves; for example, if products of the shelf are
snacks, on gondolas can be placed drinks.
Product placement
This strategy consists of organization of products using “cold‐zones” and “hot

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