CONSUMER PREFERENCES AND BUYING PATTERNS OF STUDENTS AT TSHWANE UNIVERSITY OF TECHNOLOGY WITBANK CAMPUS

by

MELANIE WIESE

Submitted in fulfillment of the requirements for the degree MAGISTER TECHNOLOGIAE: MARKETING

in the

Department of Marketing FACULTY OF ECONOMIC SCIENCES TSHWANE UNIVERSITY OF TECHNOLOGY

Supervisor: Prof JW de Jager Co Supervisor: Mr GAP Drotsky

January 2004

DECLARATION BY CANDIDATE

I hereby declare that the dissertation submitted for the degree M Tech: Marketing, at Tshwane University of Technology, is my own original work and has not previously been submitted to any other or quoted are indicated and acknowledged by means of a comprehensive list of references.

M.Wiese

Copyright Tshwane University of Technology 2004

ABSTRACT

This study focuses primarily on the decision-making process and the resulting buying patterns and preferences of students at Tshwane University of Technology, Witbank campus. The demographical profile of students, their media and expenditure patterns as well as their preference for retail shops on campus were investigated.

Personal interviews were used to collect the final data through a structured questionnaire. A sample of 368 respondents were taken from a population of 1173 by making use of quota sampling, based on gender, academic year and study course.

The student population is almost an equal distribution of male and females, with the majority of students being black and between the ages of 20 24 years. Students media patterns include; magazines (True Love & Drum), TV (E - TV & SABC 3), radio (Jacaranda & Metro) and newspapers (Witbank News & Sowetan). The average students main source of income is their parents and students have between R317 and R489 spending money per month. The majority of students spend their money on clothing, groceries and transport. Students indicated that they would like to shop at retailers on campus such as fast food outlets, entertainment providers, bookstores and cell-phone stores.

Students mainly make use of their own previous experiences as a source of information and usually search for information to obtain a better price. They follow the brand first, store second decision-making sequence and make use of price and quality to evaluate available alternatives in the market place. When choosing a retailer features like quality, services and easy return policies

are very important to students. The majority of students indicated that they do change their minds once inside a retailer, mainly because of special in-store price deals. Students prefer to shop close to where they stay or at big shopping centers and usually shop over weekends. Students pay cash or make use of lay-buy facilities. The majority of students indicated that they usually experience guilt after a unneeded or expensive purchase. Students usually play the role of information gatherers and product users in their families and dispose of products /packaging by throwing it away.

The information obtained through this study should help retailers to identify opportunities and to develop effective marketing strategies for the student market.

EKSERP
Die studie fokus op die besluitnemingsproses, aankooppatrone en voorkeure van studente by Tshwane Universiteit van Tegnologie, Witbank kampus. Studente se demografiese profiel, media- en bestedingspatrone sowel as hul voorkeure vir kleinhandelaars op kampus is ook bepaal.

Persoonlike onderhoude is met behulp van n gestruktureerde vraelys uitgevoer met 368 respondente uit n populasie van 1173 studente deur middel van kwota steekproeftrekking gebaseer op geslag, akademiese jaar en studierigting.

Daar is bykans n gelyke verdeling van mans en vroue studente met die grootste groep, swart studente tussen die ouderdom van 20 24 jaar. Studente het hul media patrone soos volg aangedui: Tydskrifte (True Love & Drum), TV (E-TV & SABC 3), radio (Jakaranda & Metro) en koerante (Witbank News & Sowetan). Die meerderheid studente voel positief oor kitskoswinkels, vermaak, boekwinkels, banke, sellulrefoon en lugtydverskaffers op kampus. Die gemiddelde student se hoofbron van inkomste is hul ouers. Studente het tussen R317 en R489 per maand sakgeld wat hul op klere, vervoer en kruideniersware bestee.

Studente maak gebruik van hul eie vorige ervarings as die hoofbron van inligting en soek gewoonlik na inligting as hul n beter prys daardeur kan verkry. Studente volg die handelsnaam eerste, winkel tweede besluitnemings volgorde en maak gebruik van prys en kwaliteit on die beskikbare alternatiewe in die markplek te evalueer. Eienskappe soos kwaliteit, diens en n

maklike omruilbeleid is baie belangrike eienskappe vir studente as hul n kleinhandelaar moet kies. Die meerderheid studente het aangedui dat hul wel van besluit verander binne in winkels as gevolg van spesiale prysaanbiedings. Studente verkies om by kleinhandelaars te koop naby hul huise of by groot winkelsentrums, en koop gewoonlik oor naweke. Studente maak gebruik van kontant of brekoop fasiliteite. Die meerderheid studente het aangedui dat hul gewoonlik n skuldgevoel ervaar na n onnodige of duur aankoop. Studente speel gewoonlik die rol van inligtingsoekers en produkgebruikers in hul families en wil produkte en /of die verpakkings weggooi na gebruik.

Die inligting verkry uit die studie behoort kleinhandelaars in die Witbank omgewing in staat stel om geleenthede te identifiseer en omn effektiewe bemarkingstrategie daarvolgens op te stel.

ACKNOWLEDGEMENTS

I would like to express my sincere gratitude and appreciation to:

Prof. J.W. de Jager and Mr G.A.P Drotsky, my supervisors, for their positive attitude and guidance.

Technikon Pretoria for financial assistance.

Mr E. Sibanda from the Department Statistical Support, for his help with the statistical manipulations.

The participants and respondents who honestly and reliably completed the survey questionnaire.

Mr M. Dieperink, for language editing.

My parents, for all their support and encouragement throughout my studies.

My parents-in-law, for taking a interest in my studies.

My children, Melandri and Jandr, who gave me the freedom to complete this study.

My husband, Ben, for his continued motivation and support throughout my research.

LIST OF FIGURES
PAGE FIGURE 2.1: Marketing strategy and consumer behaviour 30

FIGURE 3.1:

Overall model of consumer behaviour71

FIGURE 3.2:

Process of problem recognition...96

FIGURE 4.1:

Sampling methods139

FIGURE 5.1:

Gender of respondents.154

FIGURE 5.2:

Age of respondents..155

FIGURE 5.3:

Race of respondents.156

FIGURE 5.4:

Academic year in 2002158

FIGURE 5.5:

Home language of respondents159

FIGURE 5.6:

TV viewing patterns.164

FIGURE 5.7:

Programme type165

FIGURE 5.8:

Daily viewing time of respondents..166

FIGURE 5.9:

Source of income.167

FIGURE 5.10:

Average spending money per month..170

FIGURE 5.11:

Average number of days spend on campus175

FIGURE 5.12:

Preference for shopping facilities on campus176

FIGURE 5.13:

Products students would prefer to buy on campus179 Other needs/preferences regarding retailers on campus188 Shopping companions.190

FIGURE 5.14:

FIGURE 5.15:

FIGURE 5.16:

Reasons for making use of shopping companions.192

FIGURE5.17:

Conformity on brands..193

FIGURE 5.18:

Family roles194

FIGURE 5.19:

Source of information.198

FIGURE 5.20:

Reasons why respondents search for information.199 Decision making sequence 203

FIGURE 5.21:

FIGURE 5.22:

Decision making styles..204

FIGURE 5.23:

Decision making styles..205

FIGURE 5.24:

Preference for novelty205

FIGURE 5.25:

Changed purchased intentions.. 206

FIGURE 5.26:

In-store influences that changes purchase decisions

209

FIGURE 5.27:

Buying behaviour of students210

FIGURE 5.28:

Payment methods used by students213

FIGURE 5.29:

Transport methods.215

FIGURE 5.30:

Preferred shopping days.216

FIGURE 5.31:

Shopping locations.217

FIGURE 5.32:

Students tendency to experience guilt..219

FIGURE 5.33:

Reasons for experiencing guilt..222

FIGURE 5.34:

Post-purchase dissonance..223

FIGURE 5.35:

Disposition options224

LIST OF TABLES
PAGE TABLE 5.1: Registered study course of respondents.157

TABLE 5.2:

Magazine readership.161

TABLE 5.3:

Newspaper readership162

TABLE 5.4:

Preferred radio station163

TABLE 5.5:

Source of income versus gender.168

TABLE 5.6:

Source of income versus race.168

TABLE 5.7:

Average amount of spending money.171

TABLE 5.8:

Average amount of spending money versus race..171

TABLE 5.9:

Monthly spending of respondents..173

TABLE 5.10:

Shopping on campus versus gender..177

TABLE 5.11:

Shopping on campus versus age...177

TABLE 5.12:

Shopping on campus versus race..178

TABLE 5.13:

Supporting a fast food outlet versus gender181

TABLE 5.14:

Supporting a fast food outlet versus race.181

TABLE 5.15: TABLE 5.16:

Supporting a fast food outlet versus age182 Supporting a banking outlet versus gender..182

TABLE5.17:

Supporting a banking outlet versus

race...183

TABLE 5.18:

Supporting a banking outlet versus age183

TABLE 5.19:

Supporting a entertainment outlet versus gender.184

TABLE 5.20:

Supporting a entertainment outlet versus race.185

TABLE 5.21:

Supporting a entertainment outlet versus age185

TABLE 5.22:

Supporting a cell phone outlet versus gender..186

TABLE 5.23:

Supporting a cell phone outlet versus race186

TABLE 5.24:

Supporting a cell phone outlet versus age.187

TABLE 5.25:

Preference for shopping on campus according to race191

TABLE 5.26:

Preference for shopping on campus according to

gender.191

TABLE 5.27:

Family role (information gather) versus race.195

TABLE 5.28:

Family role (information gather) versus gender.196

TABLE 5.29:

Family role (product user) versus race...196

TABLE 5.30:

Family role (product user) versus gender.197

TABLE 5.31:

Important features in store selection.201

TABLE 5.32:

Changing their minds versus gender.207

TABLE 5.33:

Changing their minds versus age..207

TABLE 5.34:

Changing their minds versus race.208

TABLE 5.35:

Comparison of buying patterns between college student in USA and Tshwane University of Technology, Witbank students214

TABLE 5.36:

Shopping frequency of students at different retailer stores..210

TABLE 5.37:

Tendency to experience guilt according to gender.220

TABLE 5.38:

Tendency to experience guilt according to age..220

TABLE 5.39:

Tendency toe experience guilt according to race...221

CHAPTER 1

INTRODUCTION, PROBLEM DEFINITION AND OBJECTIVES

1.1 INTRODUCTION

South African retailers face new opportunities and threats due to constant changes in the marketing environment. Competition from overseas companies entering the South African market, the government that is forcing the pace of change in meeting basic consumer needs, the development of new consumption patterns as well as changes in the existing consumption patterns because of social upliftment programmes and redistribution of income, are just some of the changes taking place. All these changes are taking place in a very short time and are ultimately causing retailers to lose touch with the needs of their customers. Consequently a major challenge facing retailers is to develop and implement appropriate corporate and marketing strategies to achieve sustainable success in the domestic multicultural environment. Retailers will also need to search for opportunities and new markets to which they can sell in order to grow and survive in todays competitive arena.

Tshwane University of Technology, Witbank campus has moved to new premises. This relocation offers a big opportunity for retailers in the Witbank area who is interested in serving the student market. Not only is there a huge concentration of potential consumers in one place but the students may be a feasible market segment which retailers have overlooked until now. If retailers have the necessary knowledge about students buying behaviour they can decide if

2 Witbank campus students represent a feasible market segment and, if so, the information obtained should enable them to develop a marketing strategy specifically aimed at the needs, wants and preferences of the student market.

1.2 FORMULATION OF THE PROBLEM

McDaniel & Gates (2001:23) define a marketing research problem as a statement of specific information needed by a decision-maker to help solve a management decision problem, thus the marketing research problem is information oriented.

The abovementioned authors state that there are three key questions that always have to be answered at the problem definition stage:

Why is the information being sought? Does the information already exist? Can the question really be answered?

There is a lack of research data relating to, decision-making, consumer preferences and buying patterns of students at Tshwane University of Technology, Witbank campus, as a customer group. Retailers need information about customers in their market environment in order to effect meaningful changes in existing retail. Statistical information such as number of students, income and age structures may be useful to determine market potential, but the retail sector needs information on student decision-making and resulting buying patterns and

3 preferences to enable retailers to develop effective marketing strategies to satisfy the specific needs of the student market.

According to Zikmund & dAmico (2001:130) a research process is not only focused on a problem: it may also be focused on an opportunity. Therefore the relocation of Tshwane University of Technology, Witbank campus to new premises presents opportunities for retailers in the Witbank area.

1.3 PURPOSE OF THE STUDY

This study focuses on the decision-making process and resulting preferences and buying patterns of students at Tshwane University of Technology, Witbank campus. It provides information that may help retailers to identify opportunities and to help them to decide if the student market is a potentially profitable segment, after the evaluation of the size, growth, accessibility and responsiveness of the student market. It provides answers to questions about the buying patterns of students and provide retailers with the necessary information to develop effective marketing strategies with answers on questions such as:

Which products do students currently buy? Which products would they like to buy on campus? How often do students buy certain products? Where do students buy their products? (Shopping patterns) What are they willing to pay and what can they afford?

4 Which media are they exposed to? (Media patterns) Which factors influence the decision-making process of students? Spending patterns of students. Demographical profile of students.

This study attempts to provide answers to the above questions in order to assist retailers in making decisions about aspects such as positioning, repositioning, branding, outlets, distribution channels, product modification, pricing strategies and methods and

communication media with the student market.

Questions related to consumption patterns are often referred to as direct or market classification, which according to Barrie & Furnham (1992:16) allows direct targeting of the marketing activities and media planning. According to Du Plessis & Rousseau (1999:4) the customer is the focal point during the marketing actions and customers` behaviour is critical for the marketer to predict future buying behaviour, and develop strategies and actions to accommodate customer needs, aspirations, perceptions and values.

Based on this information it is necessarily to study the decision-making process and buying patterns of students at Tshwane University of Technology, Witbank campus to determine which products they buy, how they choose to buy certain products and services and how they are motivated to make such purchasing decisions.

5 1.4 OBJECTIVES OF THE STUDY

According to McDaniel & Gates (2001:23) a marketing research objective can be defined as the specific information needed to solve a marketing research problem. The abovementioned authors state that specific information is needed to answer the marketing research problem. Lamb, Hair & McDaniel (2004:250) point out that managers must combine this information with their own experience and other information, to make a proper decision.

Kent (1993:320) states that research objectives are there to spell out what the research is designed to explore, measure and explain and agrees with Aaker, Kumar & Day (2000:71) that objectives may be spelled out in terms of a hypothesis or even be formulated as a question.

1.4.1 Primary objective

The primary objective of the study is to determine the buying patterns, decision-making process and preferences regarding products, price, distribution and promotional activities of students at Tshwane University of Technology, Witbank campus, to enable retailers to develop an effective marketing strategy.

1.4.2 Secondary objectives:

To investigate the integration between marketing and consumer behaviour through a literature study.

6 To investigate the consumer preferences, buying patterns and the decision-making process through a literature study. To investigate the demographical profile of students at Tshwane University of Technology, Witbank campus. To determine the media usage and exposure (media patterns) of students to provide information to retailers to develop an effective promotional campaign. To analyse the students expenditure patterns. To determine the need for retail shops on campus.

1.5 RESEARCH METHODOLOGY

Kotler (2003:129) state that: Research, in the broadest sense, is search for truth. Consumer research attempts to discover the truth about consumers. Hair, Bush & Ortinau (2000:10) define consumer behaviour research as theories and methods based on a combination of cognitive, social, economical, statistical, cultural and behavioural psychology in order to understand consumer choice and behaviour. It can therefore be defined as the gathering, recording and analysis of facts about problems relating to final households. Consumer research helps retailers to understand the buying environment, identify problems and opportunities, and develop and evaluate the course of marketing action to reach existing and potential target markets. Hoyer & MacInnis (2001:47) state that research relating to consumer decision-making focuses on analysing purchase motives, needs, buying habits, attitudes towards brands, perceptions of stores and cultural and social influences. For the purpose of this study the focus is on analysing consumer behaviour with specific focus on the decision-

7 making process and resulting buying patterns and preferences of students at the Tshwane University of Technology, Witbank campus.

According to McDaniel & Gates (2001:20) and Dillon, Madden & Firtle (1994:41) all research approaches can be classified into three general categories:

Exploratory research is used to gain insight into the general nature of a problem. This type of research also provides information on possible decision alternatives and relevant variables that need to be considered.

The purpose of descriptive research purpose is to provide an accurate picture of a particular aspect of the market and consumer environment. According to Churchill & Peter (1998:112) this type of research is helpful to describe the characteristics of a certain group, to estimate the proportion of people who behave in a certain way and to make specific predictions.

Casual research is utilised when a researcher wants to indicate that one variable cause or determines the value of other variables.

In this study descriptive and exploratory research are used to focus on the behaviour of students as a consumer group. The research methodology used in this study is briefly discussed in the rest of the chapter, because a detailed discussion is done in chapter four.

8 1.5.1 Source of data

According to Kotler (2003:127) it is always advisable to do desk research, which entails scanning of all available secondary data sources, before engaging in primary data. This approach will guide the researcher in identifying unanswered questions and prevent him/her from replicating research without the necessary background knowledge of what has already been achieved. Relevant literature as well as previous research on the topic were used to supply the necessary background for this study.

1.5.1.1 Secondary data

According to Lamb et al. (2004:250) and Aaker et al. (2000:76) secondary data can be defined as information already compiled and readily accessible to the researcher who knows how to find and use it. Jackson (1994:20) sees secondary data as data that already exist and have been collected in the past for some purpose unconnected to the project at hand.

In order to understand the customer better, and specifically the decision-making process and buying patterns and preferences of students of the Witbank campus, a literature study on consumer behaviour was done from available secondary sources. The literature review consisted of an extensive review of journal articles, research reports and textbooks covering a wide range of disciplines: marketing (definition, marketing concept, marketing strategies), retailing (definition, retailing and the consumer), consumer behaviour (definition, internal and external factors influencing buying patterns and the decision making process), research methodology and statistics.

9 Although much data on marketing, consumer behaviour and retailing are available, only limited data was available on the student market. The available secondary sources of data on students buying patterns and decision- making were not sufficient for the purpose of this study and primary data was required to support the secondary information.

1.5.1.2 Primary data

Jackson (1994:21) defines primary data as data specially collected by the researcher to meet the particular needs of the project. Martins et al. (1996:122) and Hoyer & MacInnis (2001:27) state that primary data is obtained through qualitative methods: telephone, mail and personal interviews. In this study focus groups were used initially to determine the questions and multiple-choice options that were used in the final questionnaire, while personal interviews were used to collect the final data through a structured questionnaire.

1.5.2 Data collection method

In this study a quantitative research tool, the questionnaire, were used. This tool is more systematic and structured and aims at obtaining information from respondents in a direct and open manner. According to Hair et al. (2000:237) results obtained from personal interviews are easily quantifiable and the questionnaire and personal interview have a potentially high degree of reliability. Martins et al. (1996:146) point out that the personal interview consists of an interviewer asking questions for one or more respondent in a face-to-face situation. Shao (1999:183) points out that interviews may be structured, consisting of direct questions to obtain factual data, or indirect (semi structured), allowing more flexibility on the part of the

10 interviewer in setting questions in an indirect manner, or probing for answers. The personal interview provides an opportunity for obtaining more information than through telephone or mail questions.

1.5.3 Sampling

Dillon et al. (1994:220) define sampling as the identification of a group of individuals or households who can be reached by mail, by telephone or in person and who possesses information relevant to solving the marketing problem at hand. According to Martins et al. (1996:252) the following five steps are evident in sampling:

1.5.3.1 Defining the population

Shao (1999:73) defines a population or universe as the aggregate of all the elements. A population must be defined in terms of elements (students), time and size (Witbank).

1.5.3.2 Identifying the sample frame

Hair et al. (2000:330) define a sample frame as a list of population members used to obtain a sample. A frame may be a register of industries, a telephone directory or even a map. In this study a headcount list of registered students at the Witbank campus, provided by Tshwane University of Technologys Strategic Information and Planning Directorate, was used.

11 1.5.3.3 Selecting the sampling method

According to McDaniel & Gates (2001:335) selecting the sampling method involves the choice between probability and non-probability sampling methods. The selection depends on the objective of the study, financial resource available, time limitations and the nature of the problem under investigation. Aaker et al. (2000:375) point out that in a probability sample, all population members have a known probability of being in the sample. Non- probability samples are a form of sampling where there is no way of determining exactly what the chance is of selecting any particular element or sampling unit into the sample and include convenient sampling, quota sampling and judgemental sampling.

According to McDaniel & Gates (2001:338) and Jarboe (1999:87) quota sampling involves the selection of specific numbers of respondents who possess certain characteristics known or presumed to affect the subject of the research study. In this study quota sampling was used based on gender, academic year and study course.

1.5.3.4 Sample size

According to Martins et al. (1996:257) and Shao (1999:365) the sample size of a study refers to the number of respondents to be interviewed. A sample of 368 respondents were taken from a student population of 1173 at the Tshwane University of Technology, Witbank campus, based on the sample calculation done by the Statistical Department of Tshwane University of Technology. (Appendix A)

12 1.5.4 Questionnaire

McDaniel & Gates (2001:289) and Lancaster, Withey & Ashford (2001:39) define a questionnaire as a set of questions designed to generate the data necessary to accomplish the objectives of the research project. As previously mentioned a structured questionnaire with mainly structured responses were used in this study to make it as easy as possible for the respondents to provide the necessary information.

1.5.5 Fieldwork

Hair et al. (2000:40) point out that the role of the interviewer in marketing research is the collection of primary data through the administration of the questionnaire, the asking of questions and the recording of answers. Lancaster et al. (2001:42) point out that like the questionnaire the interviewer is a very important link in the survey chain.

In this study the researcher personally conducted the interviews. She has the necessary information on the study and interviewing skills and therefore no additional training was deemed necessary.

1.5.6 Analysing the data

Lamb et al. (2004:267) state that after the researcher has completed the fieldwork by gathering the data needed to solve the research problem, the data must be manipulated, or processed. The purpose is to place the data in a form that will answer the marketing managers questions.

13 According to Zikmund & dAmico (2001:142) this step consist of three parts:

(1) Editing

According to Shao (1999:76) editing consists of checking completed questionnaires or other data collection forms for omission, incomplete or otherwise unusable response, illegibility and obvious inconsistencies. The researcher checked that the majority of questions were completed and that the handwriting of the respondents were legible.

(2) Coding

Perreault & McCarthy (1996:114) point out that coding is the establishing of meaningful categories for responses collected by means of surveys or other data collection forms, so that the responses can be grouped into usable classifications. In this study pre-coding was used, which Jarboe (1999:78) defines as the assignment of codes to the different responses on the questionnaire before the questionnaires are distributed. In this study the codes V1 - V210 (V = variable) were assigned to the responses of the questionnaire.

(3) Data analysis

Zikmund & dAmico (2001:142) define this stage as the statistical and qualitative considerations of data gathered by research. In this study the analysis of the data is done in chapter five by making use of tables, figures, cross tabulations and chi-square tests.

14 1.6 OUTLINE OF THE STUDY

Chapter one contains the formulation of the problem, purpose of the study, objectives of the study and research methodology.

Chapter two reviews the literature on the integration of marketing and consumer behaviour. Marketing, consumer behaviour and retailing are defined and the marketing concept is explained. The process of formulating a marketing strategy, with emphasis on the four marketing mix instruments (price, product, promotion and place), is discussed.

Chapter three investigates the consumer buying behaviour model by explaining the internal and external factors that influence consumer behaviour (buying patterns and preferences) as well as the steps in the decision-making process.

The research methodology is discussed in chapter four and explains the source of data used, data collection - and sampling methods, questionnaire design as well as the preparation and analysing of the data.

Chapter five concentrates on the results of the empirical research performed and analysis of the findings from the study.

A summary, conclusion and recommendations based on the study form chapter six.

CHAPTER 2

THE

INTEGRATION

OF

CONSUMER

BEHAVIOUR

AND

MARKETING

2.1 INTRODUCTION

The aim of this chapter is to explore the literature available on marketing and to investigate the link between marketing and consumer behaviour. To be a successful retailer, like any other business, retailers should know the marketplace and how to research it. Lack of marketing knowledge and skills have proven detrimental to the functioning of any business. According to Van der Walt, Strydom, Marx & Jooste (2000:12) a well formulated marketing plan will assist a retailer in achieving its goals of maximizing profit on the long term and providing customer satisfaction.

Asseal (1995:23) describes marketing as a process of delivering a market offering, using the companys resources, to specific groups of customers in exchange for money. An important component of this process is associated with the buying behaviour of consumers in the target market. Du Plessis & Rousseau (1999:3) state that it is imperative to know how the different segments perceive your products and what the values, needs and expectation of these consumers are.

Although understanding their consumers is an important component of a retailers market analysis, retailers must also focus on determining internal influences in order to identify their

16 own capabilities, strengths and weaknesses.

According to Hawkins, Best & Coney (2001:14) retailers must consider the external influences in their business environment and should try and answer questions such as: What is the effect of inflation, recession, interest rates, new technological products and the internet on their business? Dunne, Lusch & Gable (1995:6) agree with Hawkins et al. (2001:14) and add that the behaviour of competition, the behaviour of consumers as well as social trends must be continuously monitored by retailers. These effects influence consumers` buying decisions and therefore their behaviour towards purchasing. South Africas business environment as well as the international arena has become increasingly turbulent in recent times. Competition is much stronger than before, with more and more retailers joining the market. Now, more than ever before it is imperative to understand the actions and strategies of competitors. After retailers have analysed their market they can identify potentially profitable segments and then choose a target market.

Lamb et al. (2004:104) point out that to survive in this competitive environment a retailer must have a competitive advantage, which means the retailer provide the target market with more value than competitors. In order to provide superior value to students retailers need to anticipate and react to students` needs. Thus understanding students behaviour is the basis for marketing strategy formulation. Students reaction to the retailers marketing strategies will determine a retailers success or failure.

This studys aim is to provide the necessary information for retailers on the buying patterns, preferences and decision-making of students, to enable retailers to formulate effective

17 marketing strategies. This chapter will first define marketing and consumer behaviour and then focus on the importance for retailers of understanding consumer behaviour in order to develop successful marketing strategies.

2.2 DEFINITION OF MARKETING, CONSUMER BEHAVIOUR & RETAILING

2.2.1 Marketing

Marketing plays a major role in any business and is viewed by Jones (1999:1) as a process that starts with identifying customer groups, finding out about their needs and wants, matching what the business can offer with what the customer wants and then effectively communicating and selling to the customer. Jones (1991:2) and Kotler (2003:5) agree that marketing is much more than selling, advertising and sales promotion. Although the primary aim of marketing is to satisfy the needs of customers, it involves a cluster of activities such as product/service innovation, design, development, distribution, advertising, selling and how the product/service is acquired and used by the customer. Baker (1999:9) regards marketing as the process of planning and executing the conception, pricing, promotion and distribution of ideas, goods and services to create exchange that satisfies individual and organizational objectives. Mercer (1992:12) agrees with the above definitions but points out that the key element of marketing, unlike other business activities, is looking outward: It is firmly centred with the customer. The key aspect of marketing is a state of mind. It requires that, when taking marketing decisions, the business owner must approach these decisions from the viewpoint of the customer. The customers needs and wants will drive these decisions. The most difficult part of marketing, the key to success, is that of adapting to the customers viewpoint. According to Czinkota,

18 Kotabe & Mecer (1997:4) the American Marketing Association formally defines marketing as: The process of planning, executing the conception, pricing, promotion and distribution of ideas, goods and services to create change that satisfies individual and organizational objectives.

Although the abovementioned definition emphasizes the importance of the exchange concept, Mowen (1995:6) points out that it neglects the concept that marketing aims to fulfil the needs and wants of consumers. In Mowens view downplaying a consumer focus is a setback for marketing. Understanding consumer behaviour can assist the retailer in obtaining the information on consumers needs and wants, which will enable him to develop the most effective marketing strategies. Mowen (1995:7) continues by stating that the importance of understanding consumer behaviour is found in the definition of marketing as a human activity directed at satisfying needs and wants through a human-exchange process.

From these definitions emerge two key marketing activities: First the marketer attempts to satisfy the needs and wants of the target market and secondly marketing involves the study of the exchange process between two parties and the exchange of resources. Consumers receive products and services from companies in return for monetary and other methods of compensation. For a retailer to create a successful exchange, he must understand the factors that influence the consumers buying behaviour. Baker (1999:8) states that marketing is the whole business seen from the point of view of its final result, that is, from the customers point of view.

For the purpose of this study marketing is defined as the process of planning and executing the

19 conception, pricing, promotion and distribution of ideas, goods and services to create exchanges of resources between two parties to reach the organisations objectives but ultimately to satisfy the needs of the customers.

2.2.2 Consumer behaviour

Berman & Evans (2001:15) use the previously discussed definitions of marketing to define consumer behaviour as the study of buying units and the exchange process involved in acquiring, consuming and disposing of goods, serves, experiences and ideas.

Hawkins et al. (2001:7) define consumer behaviour as the study of individuals, groups or organisations and the processes they use to select, secure, use and dispose of products, services, experiences, or ideas to satisfy needs and the impacts that these processes have on the consumer and society.

Peter & Olson (2002:6) see consumer behaviour as the dynamic interaction of affect and cognition, behaviour, and the environment by which human beings conduct the exchange aspects of their lives.

The link between marketing and consumer behaviour is not just evident in the definitions discussed above but also in the marketing concepts that indicate the important role of the consumer and understanding the consumers buying behaviour, to ensure success for retailers.

For the purpose of this study consumer behaviour is defined as the study of the buying

20 behaviour (acquiring, consumption and disposing of goods, services and ideas) of final consumers individuals and households who buy goods and services for personal consumption.

2.2.3 Retailing

Because this study focuses on supplying information to retailers in the Witbank area, a brief explanation of retailing is necessary. Terblanche (1998:22) points out that a retailer is a business that focuses its marketing efforts on the final consumer. It also takes many forms, such as shop retailers, sales over the telephone, door-to-door sales as well as vending machines. According to Dunn et al. (1995:4) retailing can be defined as the final activities and steps needed to place merchandise in the minds of consumers or to provide services to consumers. Cox & Brittain (1996:3) see retailing as the sale of goods and services to the consumer for personal, family or household use.

For the purpose of this study retailing is defined as the business activities or steps required to sell goods and services to final consumers for use or consumption by themselves, their families or their households.

2.3 THE MARKETING CONCEPT

According to Van der Walt et al. (2000:20) the marketing concept is a management philosophy with the basic premise that a business needs to research the needs and wants of customers and then produce products or services that will satisfy these needs and wants.

21 Churchill & Peter (1998:12) describe the marketing concept as an organization that satisfies customer needs and wants as a means to achieve their own objective of maximizing profit. Although it seems simple, it is complex in the sense that changes within the economic, social, political and technological environment constantly leads to changing customer needs and wants. According to Lamb, Hair & McDaniel (2004:17), retailers who want to survive in the future will have to be customer focused, market driven, global in scope and flexible in its ability to deliver superior value to customers whose preferences and expectations change continuously as they are exposed to new product offerings. Foxall & Goldsmith (1998:7) feel that consumer orientation stems from retailers adoption and implementation of the 4 Ps (Price, Product, Promotion and Place), but adds that the adoption and implementation of the marketing concept has four major implications:

The success of any firms depends above all on the consumer and what he is willing to accept and pay for.

The firm must be aware of what the market wants, preferably well before production commences.

Consumer wants must be continually monitored and measured so that, through product and market development, the firm keeps ahead of competitors.

Top management must achieve the integration of all components of the marketing strategy into a single strategic plan, based upon knowledge of consumer behaviour.

Mowen (1995:4) underlines the importance of the marketing concept by stating that the marketing concept embodies the view that an industry is a customer-satisfying process, not a

22 goods-producing process. An industry begins with the customer and its needs, not a patent, raw material, or selling skill. The general acceptance of the concept that a business functions to fulfil consumers needs and wants through understanding their exchange partner (customer) makes the study of consumer behaviour essential. Mowen (1995:5) and Churchill & Peter (1998:13) agree that the basic idea of the marketing concepts is to give the customers what they want. However, consumers are not always sure of their wants or what they are being offered, and are much more open to persuasion than is commonly acknowledged by the marketing concept. Du Plessis & Rousseau (1999:204) summarize their viewpoint of the marketing concept by stating that instead of trying to change the world, the philosophy suggests that the retailer should find out what the world wants and try to change it. The central idea of the concept is that the whole company should look outwards to find out what the customer wants.

According to Kotler (2003:20), the above-mentioned definitions of the marketing concept indicates that there are four basic principles on which the marketing concept is based:

Consumer orientation / Target market Long-term maximisation of profitability. The integration of all business activities directed at profit and the satisfaction of consumer needs, demands and preferences.

Social responsibility.

If retailers want to be successful in todays dynamic, competitive arena they should adhere to

23 principles of the marketing concept, especially being consumer oriented, when doing business.

The abovementioned principles will be discussed in the next section.

2.3.1 Customer orientation

According to Kotler (2003:20) retailers have to carefully choose their target markets and then prepare a tailored marketing program. Engel, Blackwell & Miniard (1995:36) view consumer orientation, as the first principle of the marketing concept, indicating that all actions should be aimed at satisfying consumer needs, demands and preferences. Although this implies that the consumer objective is to achieve total need satisfaction, it does not mean that a retailer must provide for unrealistic consumer needs. According to Van der Walt et al. (2000:21) the retailer can provide need satisfaction only as far as its resource enable it to do so. Achieving the profitability objective must also be taken into account in the endeavour to provide for consumer needs. However, failure to appreciate what the consumer wants creates opportunity for competitors and can adversely affect profit. Cox & Brittain (1996:4) identified several functions that a retailer can offer their customers:

Convenient location. An assortment of merchandise appropriate to the particular market. Reducing bulk so that small quantities can be sold. Helping to effect change of ownership. Providing information not only to customers but also to suppliers.

24 Providing credit and hire purchase facilities. Providing some facility for social interaction. Holding stock for instant availability at relatively stable prices. Providing guarantees, after sales services and dealing with customer complaints.

A customer-oriented retailer decides who the target customer is and then finds out what their needs and wants are. The net result should be the creation of goods and services that satisfy customers` expectations. According to Foxall & Goldsmith (1998:8) companies must start out with the customers utility, what the customer buys, what the realities of the customer are and what the customers values are this is what marketing is all about. This study attempts to gather the necessary information to enable retailers to uncover the needs and wants of the student market in Witbank and to decide which functions they must provide for the students to satisfy their needs.

2.3.2 Integration and coordination of activities

Machado & Niewenhuizen (1996:42) define a system as an integrated whole a group of related units working together to achieve a joint objective. This second dimension suggests that marketing activities should be closely coordinated with each other and with the other functional areas such as production, finance, human resource and purchasing. The marketing concept has been a useful mechanism in helping to unify the independent functional areas to increase customers satisfaction and improve profits.

25 All four marketing instruments (prices, product, promotion & distribution) should complement and reinforce one another in such a way that the student market will prefer the retailers marketing offerings to that of competitors in Witbank.

2.3.3 Maximizing long-term profit

According to Strydom et al. (1997:21) it is of crucial importance in the free market system to achieve long-term profitability. Maximizing profitability is the primary objective of a profit seeking enterprises and can be achieved only through the consideration of consumer needs. The third objective is directed at achieving the market share, return on investment and personal goals of the owners of the business. Marketing plans and corporate goals must be closely coordinated to ensure profitability.

According to Zikmund & dAmico (2001:20) the pure marketing concept disregards environmental changes and problems and focuses on short-term customer satisfaction rather then on the long-term well being of society. Involvement and concern for the environment and the society in which the marketing task is performed are typical characteristic of a strategic approach to marketing management. The retailer should therefore strive to obtain the goodwill of the society rather than only the support of the student market. Kotler (2003:22) agrees with this view of the pure marketing concept by stating: It asks if the firm senses, serves and satisfies individual wants, and is always doing what is best for consumers and society in the long run. The pure marketing concept ignores the possible conflict between short-term consumer wants and long-term welfare.

26 The above discussion shows the importance of adding a fourth dimension to the marketing concept social responsibility to ensure a retailers long-term survival.

2.3.4 Social responsibility

Lancaster et al. (2001:21) point out that social responsibility does not just involve external groups such as the authorities, consumers and the public, it is also the responsibility towards an enterprise's own employees and goes much further than mere welfare programs. All employees must be made aware of the importance of marketing. Van der Walt et al. (2000:23) state that one way of making employees aware of the importance of marketing is to use informal marketing programs. Informal marketing programs inform employees about marketing objectives, the nature of environmental threads, successes that have been achieved and even the content of marketing communication messages. Social responsibility also means retailers will abstain from any action that is in conflict with current norms of society or moral and ethical standards. Contravention of the norms may lead to a loss of goodwill and consumer resistance. The retailer must further show responsibility by adherence to formal rules and regulations. Spending money on social responsibility projects results in a lot of criticism. Some marketers feel that as a profit seeking enterprise its responsibility is only for profits for its shareholders, since deliberate profit seeking will ultimately benefit society as a whole. Dividends acquiring to shareholders is regarded as wasted on projects aimed at the well being of society. Although these are valid arguments, Van der Walt et al. (2000:24) and McGolddrick (1994:56) defend their viewpoint by stating:

Projects aimed at well-being do have marketing advantages. By sponsoring a retailer can

27 establish brand loyalty for its product in specific target markets, like Pick `n Pay sponsoring the Olympic Games and providing retailers with exposure in the community. An imaginative and unusual social responsibility program can result in favourable publicity because it is regarded as newsworthy by the mass media.

By demonstrating social responsibility the retailers in Witbank can earn the goodwill of the public. This has a long-term dimension that can favourably influence the future profit position of a retailer.

2.3.5 Application of the marketing concept

Since the marketing concept focuses on the customer and its needs, it is also applicable to retailers because they all serve customers. Like every good concept the value of the marketing concept lies in its use and application by retailers. According to Moerdyk (2001:43) the marketing concept is often just words framed on the wall of a company like we care for our customer, instead of a genuinely caring attitude. Moerdyk feels that it is too often just a cute saying in the reception area that actually means nothing. The marketing concepts four principles definitely have merit and phrases like We care and The customer is king are all extremely valid concepts that can work as a sound business strategy. It is just that consumers nowadays dont believe them anymore. In addition, companies who use those concepts dont believe them either because most companies regard these concepts as a quick fix. Retailers must be true in their attempts to run their business according to the marketing concept, otherwise students will see through their facade. In the discussion of the marketing concept and the four underlying fundamentals, it is clear that the marketing concept has certain

28 implications for consumer behaviour and the understanding of consumer buying behaviour. According to Asseal (1995:9) and Mowen (1995:16) the following implications of the marketing concept can be identified:

Providing a spur to consumer behaviour research. Due to the fact that consumer satisfaction is one of the four fundamental principles underlying the marketing concept, and understanding of the consumer will enable maximising profit in the long run.

Creating a more customer oriented framework for marketing strategies because marketing strategy will only be successful if the price, product, promotion and place are coordinated with the customers needs in mind.

Encouraging measurement of the factors that influence consumers to purchase, in order to use those factors to make effective decisions and choose successful marketing strategies.

Emphasising market segmentation in order to satisfy needs better with a market offering specially develop for a specific group of customers.

Emphasising product positioning to meet consumers needs. Products are developed and advertised to establish qualities that set them apart from competitors and to relate these qualities to the needs of a defined market segment.

From this it is clear that by accepting the marketing concept, retailers have recognized that consumer behaviour has a direct bearing on the formulation of a marketing strategy.

29 2.4 MARKETING STRATEGY AND CONSUMER BEHAVIOUR

Berman & Evans (2001:218) point out that a retailers ability to devise and apply a sound strategy depends on how well that firm identifies and understands its customers, and forms its retailer strategies to appeal to customers. This entails identifying the characteristics, needs and attitudes of consumers as well as recognizing how people make purchase decisions and then devising an appropriate market stratetgy.

Hawkins et al. (2001:14) point out that a marketing strategy basically answers the question: How will we provide superior customer value to our target market? The answer requires the formulation of a consistent marketing mix.

From the previous two sections it is evident that retailers need to study and understand their consumers behaviour. Lamb et al. (2004:12) state that if retailers have the necessary knowledge about students, they can evaluate the feasibility of serving them as a target market and develop an effective marketing strategy, which will result in maximizing long-term profit while simultaneously satisfying their needs. According to Hawkins et al. (2001:7) an effective marketing strategy is based on knowledge of consumer behaviour. This process, as seen in Figure 2.1, begins with the analysis of the market, the retailer is considering. It requires a detailed analysis of the retailers capabilities, strengths and weaknesses, competition, the economical and technological forces affecting the market and the current and potential customers in the market. Based on the consumer analysis portion of the first step, the retailer identifies groups of individuals with similar needs. The identified market segments, in step two can then be described in terms of demographics, media preference and geographic

30 FIGURE 2.1: MARKETING STRATEGY AND CONSUMER BEHAVIOUR

OUTCOME Customer Satisfaction Sales Product/brand image

CONSUMER DECISION PROCESS Problem recognition Information search Alternative evaluation Purchase and Use Post purchase process

MARKETING STRATEGY Product Price Promotion Place/Distribution

MARKET SEGMENTATION Identify product-related need sets Group customers with similar need sets Describe each group Select attractive segment(s) to target Product positioning

MARKET ANALYSIS Competitors Company Consumer Conditions

Source: Adapted from Hawkins, Best & Coney (2001:8)

31 location. One or more of these segments are then selected as target markets, based on the retailers capabilities relative to those of its competition, taking into account current economic and technological conditions. The third step entails the marketing strategy formulation. Lamb et al. (2004:12) point out that this step involves the determining of product features, price, communications and distribution that will provide the customer with superior value. The total product is then presented to the target market, which constantly engages in processing information and making decisions to enhance and maintain their lifestyles. The decision making process of consumers and outcomes will be discussed in chapter three. The other three components of Figure 2.1: market analysis, market segmentation and marketing strategy will now be discussed.

2.4.1 Market analysis

According to Strydom et al. (2000:34) a retailers objective is to provide superior value to customers. In order to provide superior value a retailer must know (a) how consumers determine value, (b) its own capabilities, (c) its competitors capabilities with respect to customer value creation and (d) relevant economic, physical and social environments.

The environmental factors/ market conditions (economic, physical & social) that can impact on retailers in South-Africa, and specifically in the Witbank area, will now be analysed.

2.4.1.1 Conditions

In order for retailers to understand the environment in which they operate, Cox & Brittain

32 (1996:34) point out that the larger forces in society should be studied to detect social and economic trends and the effects of technology as well as government policies.

According to Mowen (1995:19) an environmental analysis consists of the assessment of the various external forces that act upon the firm and its markets. Through environmental analysis, retailers can identify potential marketing opportunities and liabilities. The state of the economy, physical environment, government regulations, social-cultural changes and technology can affect consumers` needs and expectation as well as a retailers capabilities and the competitive arena. According to Walker, Boyd, Mullins & Larreche (2003:25) retailers do not function in isolation and therefore they are influenced by the external market conditions in the country in which they operate. Conditions in the external environment constantly change and these changes either result in a favourable situation, which retailers can utilise to expand and grow, or it may result in a negative situation which threatens the existence, survival or growth of the retailer. It is vital that retailers in the Witbank area constantly scan the environment in order to be prepared to make use of these opportunities or to defend themselves against possible threats.

These social and economic trends that can lead to opportunities or threats for retailers will now be discussed.

(1) Urbanization

According to McCann (2000:6) Africa is undergoing rapid urbanization. It is predicted that by the year 2010, 60 percent of the African population will be living in cities. No country can

33 build an infrastructure that fast, so squatter settlements are likely and retail media will thus be able to reach more people. The increase in urbanization will amplify television penetration in cities. According to ABSA: Economic Perspective (2001:7) the fast rate of urbanization in Africa has now become a variable retailers must consider. The economists continue by stating, An annual influx of about one million blacks in urban areas is likely to occur over the next two decades. In the year 2000 about 74% of the South African urban population was black, rising to a possible 81% by 2004.

Increasing in urbanization accompanied by employment could result in wage increases and increased purchasing power, which increase the capacity of customers to consume more and more goods and services. According to Malumu (1992:67) an increase in disposable income means an increase in the range of demand, which impacts on retailers sales.

(2) Economy

Frain (1992:34) states that a retailer or any other firms activities will be affected by changes in the value of money (inflation rate), the general level of economic prosperity, and the cost of resources. According to ABSA: Economic Perspective (2003:1) their was a decline in the average growth rate from 3.8% in 2002 to 1.8% in 2003. In 2004 the economy is expected to respond positively to lower interest rates and the growth rate is expected to pick up to 2.4% in 2004 and in 2005 the economy is expected to achieve a 3% average growth rate. According to ABSA Corporate and Merchant Bank (2003:84) the Rand is expected to return to a gradual weakening trend in 2004. The domestic economy was in a downward sweeping phase due to worldwide economic downslide but according to ABSA: Economic Perspective (2003:13) the

34 economy will recover slowly from the recent growth slump. This will lead to stronger export and eventually will cause an increase in consumer spending, which is good for retailers. The increase in the petrol price, which leads to other increases, is another negative aspect affecting possible consumer spending. Inflation showed a rise on a year-to-year basis from 9.2% in 2000 to 14.2% in 2002 but ABSA forecasts a decline to 1.4% in 2004. If the inflation rate decreases, consumers can buy more with their money and retailers` sales improve. According to ABSA: Economic Perspective (2003:20) households will try to maintain their standard of living by decreasing savings from 12% of disposable income in 1970 to 0,4% in 2002 and is expected to remain at a low average level of 0.3% for the period 2003 - 2004. On the other hand an increase in consumer borrowing occurred from 42% in 1979 to over 52.4% in 2002 and a average of 51.5% - 53.29% is expected for the period 20032007. According to Coetzee (2002:42) South Africa had the highest unemployment rate of developing countries, 23.3% for 1999. Unemployment is currently estimated as 30% - 42% of the total workforce. From the abovementioned it seems that if consumers are unemployed, their purchasing power decreases and that leads to retailers markets shrinking.

Slabber (2002:254) states that higher interest rates and high inflation reduce consumers` disposable income and that retailers will feel these effects rapidly. Inflation, unemployment and the exchange rate (discussed above) have a big impact on all businesses selling goods and services, because as soon as the economy and customer are influenced, business will feel the results in increased cost, and a decrease in their sales and profits.

Economists argue that as some peoples living standard improve, the poor are getting even poorer. This may impact negatively on retailers selling to the lower-income groups of which

35 may include students.

(3) Social Trends

The Intelligence Factory (2001:3) states that people are better informed now than ever before. Students are stimulated by new ideas and sensations, and react more quickly and in greater volume to fashion changes. This puts greater pressures on retailers, no mater what they are selling. Retailers must be able to recognize an emerging trend early to capitalize on it. According to Walker (2003:91) factors affecting consumers` choice, and social changes are of great interest to retailers. All consumer goods companies are directly influenced and sometimes speedily affected by changes in the states and attitudes of consumers.

There is currently an increase in women between the ages 20 40 joining the work force. These women have dual responsibilities in terms of career/studies and household, and therefore require goods and services that will make their task easier. Ample opportunities exist for retailers to satisfy the needs of these women and to help them to cope with their dual responsibilities. In recent times a substantial number of single households has developed, which means more opportunities for retailers to explore in terms of satisfying their needs. According to Statistics South Africa (2002) a massive socio economic shift has taken place over the past few years. The study shows remarkable growth in expenditure by Asians and Blacks, modest growth for Coloureds and virtually none for Whites. Retailers that focused on white market segments will have to rethink their choice of target market. Spending by black households on housing and electricity has increased by 23% per annum compared to an increase of only 5% among whites. Furniture and household spending increased by 13% for

36 blacks and decreased by 0.4% for white consumers.

The Population of South Africa was estimated as 44,819,778 during the 2001 census and according to ABSA: Long-term Prospects for South Africa (2003:11) Africa is expected to continue to show the highest population grow at a average rate of 2.3% compared to the rest of the world, 80% being black and almost 10 % being white in South Africa. This means that markets are growing and that there is a bigger group of potential customers out there for retailers to sell to. As the population and disposable incomes of different racial groups change, so will their buying patterns change. The above figures indicate the number of people who will need basic consumer goods such as food and clothing. This offers retailers tremendous opportunities to explore and invest in meeting those needs

According to Malumo (1992:33) an educated and longer living customer provides a longer lasting and more accessible market to the retailer. Increased development often means increased health and education for the general population. Although this sounds good in theory the effect of AIDS on health care and population growth must be taken into account. According to the Department of Health: Summary report 2002, South Africa is regarded as having one of the highest HIV/AIDS (Acquired Immune Syndrome) prevalence rates in the world with a estimate of 4.7 million South African living with HIV/AIDS. The study conducted by the Department of Health found that HIV prevalence in the South African population to be 11.4% with the 1525 age group, which is the age group the majority of students belong to, being most vulnerable to infection. They envisage that by the year 2005, about half a million people would have died of AIDS, which will reduce the population growth rate to 1,7% per annum. The US Census Bureau predicts that by 2010, life expectancy

37 will have declined from 60 years to around 30 years in the worst affected countries, of which South Africa is one. The social and economical implication is far reaching. Health care expenditure, poverty and cost of labour, productivity, income distribution and ultimately lower economic growth will impact on every business worldwide. Household spending affected by AIDS will change from spending on non-durables to services, especially health care.

A decline in the population growth will have a negative impact on non-durable and to a lesser extent semi-durable consumption, as these expenditure components are influenced by the size of the population and will negatively influence the profitability of retailers. Retailers need to be aware of the fact that students form part of the age group that is the most vulnerable to AIDS/HIV infection and as seen from the above discussion can influence their buying behaviour.

2.4.1.2 Consumer analysis

According to Cox & Brittain (1996:33) potential customers should be studied to determine their motivations: how, why, what and where they buy and if there are needs which are not being totally satisfied.

According to Hawkins et al. (2001:9) it is not possible to react to customers` needs and desires without a complete understanding of their behaviour. Knowing customers` current needs is reasonably complex but can be determined through research. According to Penstone (1998:115) consumer insights indicate that, psychologically, the black middle class is remarkably the same as the traditional white middle class. The author states that while there is

38 some difference between the white and black middle class, the gap is narrowing. Ives (1999:122) asserts that the evolving black middle class segment is expected to continue to surge to become the countries most formidable consumer group. This view is supported by the AMPS study, which indicates this social- economic shift. Knowing your customer, according to Dunn et al. (1995:69), will provide the necessary information that will enable retailers to develop long-term strategies and objectives. In order for retailers to understand their consumers they need information on the following characteristics:

Demographic characteristics such as, age, gender, income and marital status are essential descriptors that help retailers know their customer. Although they do little to tell us how customers think or what they actually do they give retailers labels for certain customer groups, which help retailers to track and analyse the same customers through different segmentation schemes. According to Berman & Evans (2001:220) it is important for retailer to determine the following:

What are the prime age groups to which the firm appeals? Is the target market predominately male /female? Is the target market lower, middle of higher income? How many consumers are there in the target market? What is the customers level of education? Ethnic/racial background: Does the target market consist of a distinctive racial or ethnic subgroup.

39 Another variable that provides insight into customers is their economic characteristics, i.e. measures of prosperity or lack thereof in the environment that a retailer seeks to operate.

Psychographical characteristics are the measure of attitude, interest and opinions of the population. These characteristics help retailers to understand trends and difference between consumer segments, identify unserved market needs and understand market positioning image.

Behavioural characteristics describe the annual shopping behaviour and buying patterns of consumers such as recognizing a need for merchandise, selecting a store and comparing prices and purchases. Behavioural information can help retailers enhance their sales productivity.

This study will provide the necessary demographic information as well as economical and behavioural characteristics of students at Witbank campus, to enable retailers to better understand the student market.

2.4.1.3 Company analysis

A retailer must fully understand his own ability to meet customers needs. According to Asseal (1995:43) this involves evaluating all aspects of the firm, including its financial condition, general managerial skills, production capabilities, research and development capabilities, technological sophistication, reputation and marketing skills. Marketing skills include aspects

40 such as new product development, advertising abilities, service capabilities, marketing research ability and market and consumer knowledge. In order to select the appropriate strategies, retailers must analyse both the internal and external environment.

One way of accomplishing the above-mentioned environmental scanning is to do a SWOT analysis. Kotler (2003:104) define it as a systematic evaluation of the organizations internal strengths and weaknesses and external opportunities and threats. Strengths of retailers may include customer loyalty, financial resources or the ability to produce goods and service at a relatively low cost. Possible weaknesses may include high cost, lack of financing, brands that are not well known or a poor location. According to Berman & Evans (2001:71) in order to succeed a retailers strategy must anticipate and adapt to the changing business environment. A good retailer fully utilizes emerging opportunities and threats, which are identified in the external environment. Cox & Brittain (1996:33) points out that factors to be considered in determining strengths and weaknesses include variables such as the retailers location, merchandise, personnel, store layout, management capacity, financial aspects, market share position, retailing mix and operations. Terblanche (1998:92) agrees with Cox & Brittain (1996:33) and adds that with respect to the above areas of strength or weaknesses, retailers must ask themselves the following questions in respects of each area:

How good are we in this area of operation or activity? How do we compare to our competitors with respect to this area? Which area has unique capabilities that can be turned into a sustainable competitive advantage?

41 Will we be able to maintain this strength under competitive pressures? Which areas have weaknesses that can inhibit our performance?

Retailers will be able to deal with some threats without major inconvenience or loss of profit, while other threats could mean the end of a business. However, it is important that retailers should list all possible threats and consider measures to deal with each.

The SWOT analysis needs to be done by each retailer and will assist the retailers in Witbank to differentiate their business from those of the competition.

2.4.1.4 Competitor analysis

It is not possible for a retailer to meet the customers needs better than the competition without an understanding of competitors capabilities and strategies. It is important for retailers to identify a competitive gap. Czinkota et al. (1997:294) state that a competitive gap refers to the differences in effectiveness of a firms marketing strategy relative to its competition in the same product market. According to Mowen (1995:19) retailers must try to answer the following questions in order to acquire knowledge on competition:

If we are successful, which competitors will be hurt? (lose sales or sale opportunities) Of those firms that are affected, which have the capabilities (financial resources and marketing strengths) to respond?

How are they likely to respond: reduced prices, increased advertising or the introduction of

42 a new product? Is our strategy robust enough to withstand the likely action of our competitors or do we need additional contingency plans?

According to Baker (1999:22) retailers need to anticipate competition from existing competitors, new entrants, substitute products, suppliers and buyers on a global basis.

Retailers in the Witbank area have to investigate the number and size of competitors locally as well as nationally and evaluate competitors` strengths and weaknesses to gain a competitive advantage.

2.4.2 Market segmentation

Once a retailer is aware of whats happing in the environment, who the competition is and who the customers are, the retailers can move on to the next step, as reflected in Figure 2.1. A retailer must keep in mind his own capabilities, look at the heterogeneous market and try to group customers in homogenous subgroups in order to satisfy their needs better than competitors. In marketing theory, segmentation is a central component of strategic or target marketing. According to Du Plessis & Rousseau (1999:49) it is not the only part, but rather the first part of a three-phase process called STP marketing: Segmenting, targeting and positioning.

43 2.4.2.1 Definition and importance of segmentation

A strategy of market segmentation requires identifying customers with similar needs or characteristics and targeting these segments with a product offering. Foxall & Goldsmith (1998:16) define segmentation as the necessity of subdividing the large mass market into smaller segments containing a relative homogenous group of consumers. According to Asseal (1995:411) the basis for segmentation is grouping customers according to similarities in what they want (benefits and attitudes) and who they are (demographics, lifestyle and personality). In addition to segmenting, marketers must position their product to meet the needs of these segments. Before targeting market segments for marketing effort retailers must first identify these groups. Once the needs, brand attitudes, demographics and lifestyle characteristics of a target market are identified marketers can develop products and a marketing strategy to appeal to them.

Foxall & Goldsmith (1998:49) argues that segmentation is important because retailers need to create a marketing mix that reflects consumers` subjective, perceptual and cognitive processing of information about such matters as their lifestyle, values and motivation. Segmentation and selection of the markets make the allocation of corporate resources more efficient in the sense that funds and manpower are allocated to relatively smaller groups of consumers than would be the case if the whole market were targeted. Strydom et al. (2000:105) state that a large, growing segment may be allocated a greater proportion of the marketing budget, while a shrinking one may be scaled down. Segmentation makes the design of marketing strategy more effective because the retailer has the sense of directing resources at specific identifiable groups of people instead of a diverse collection of individuals. According

44 to Foxall & Goldsmith (1998:9) effective market segmentation is impossible without thorough consumer research that leads to an incisive understanding of the economy as well as social and (where relevant) psychological position of the consumer. Therefore, the identification of the needs and characteristics of target groups is a prerequisite to product positioning. In addition, the success of positioning strategies depends on how the target segments react to the marketing strategies directed at them.

According to Dunn et al. (1995:69) market segmentation helps retailers to understand who their customers are, how they think, and what they do, enabling them to build a meaningful picture of consumer needs, desires, perceptions, shopping behaviour and the image these consumers have of the retailer in comparison with other retailers.

The study of consumer behaviour will provide retailers with information so they can decide which basis of segmentation to use, which techniques to use to develop customer profiles and to help them to determine if the student market is a feasible market segment.

2.4.2.2 Bases for segmentation

Retailers can utilise different variables when segmenting the student market. Gilbert et al. (1998:205) point out that in choosing a basis of segmentation, retailers rely on their knowledge of the market and current trends in purchasing and marketing research. According to Asseal (1995:413) there are five bases for segmentation:

45 (1) Benefit segmentation

Here retailers first identify the needs or benefits consumers seek and then segment consumers by differences in benefits sought. According to Van der Walt et al. (2000:114) consumers may seek different benefits like economy, convenience or prestige when buying a specific product from retailers. Czinkota et al. (1997:208) define benefit segmentation by pointing out that different customers, or groups of customers, look for different combinations of benefits, and it is these groupings of benefits that then define the segment. Retailers can segment on the basis of quality, for example Pep Stores aiming at the lower quality end of the clothing market. The price of products, charging goods to their accounts and loyalty status are other examples of possible benefits sought by the student market.

The information obtained from this study attempts to identify the benefits students seek.

(2) Behavioural segmentation

According to Cox & Brittain (1996:73) behavioural segmentation is the grouping of customers according to certain aspects of their behaviour in relation to the store. One such example is occasion-segmentation, where customers are grouped according to when they develop a need. Identifying the characteristics of users and non-users of your products to determine if they are the target market is called behavioural segmentation.

According to Mowen (1995:236) the following variables can be used in behavioural segmentation:

46 Brand usage (non-user, ex-user, potential user, regular user). According to Gilbert et al. (1998:215) existing customers may be more profitable to serve than potential customers, but serving only existing customers limits growth potential. Product category usage: In many situations, the consumers most likely to purchase a product are those who have purchased the same or similar product in the past. Level of product use (heavy, light).

Information on the brand usage and level of usage of students can provide retailers with the necessary information to apply behavioural segmentation.

(3) Response elasticity

A third type of segmentation, according to Asseal (1995:414), is response elasticity. Marketers may wish to identify consumers by their responsiveness to a marketing strategy. Examples are brand switching, user frequency and the influence of advertising. In essence: Is the consumer sensitive to change?

(4) Demographic segmentation

According to Terblanche (1998:102) demographics are suitable for segmenting retail markets:

Age is one variable that can be used, for example the teenage market contains many buyers of music tapes and compact discs.

47 Gender: Clothing retailers can specialise on the basis of gender, for example ladies boutiques. Ethnic groups: Ethnic groups may in some instances have particular food requirements. Income: Low-income groups may shop at Pep Stores, who aims for the lower income groups, while higher income groups shop at Stuttafords. Educational level is also a useful tool for bookstores or even computer equipment firms to segment the market.

The age, gender, ethnic group, income and educational level are all demographical variables that retailers in the Witbank area can make use of to segment the students market.

(5) Generation-based segmentation

Mowen (1995:54) agrees with these three bases of segmentation but adds that demographics can also be used as a basis for segmentation. After segmenting a market with one of these criteria, he suggests determining the demographics and lifestyle characteristics of this segment. Mulrooney (2001:25) states the only way to precisely target your market is through segmentation. At the most basic level customers can be divided into segments according to demographics, psychographics, lifestyle, life stage and behaviour. Mulrooney (2001:26) adds a new dimension: customers can be classified according to those factors that have shaped their lives so far and that continue to influence their everyday decisions. In other words, they are segmented according to their value system, the most deep-rooted reason for peoples behaviour. According to Mulrooney (2001:26) this unique method of segmentation is called

48 generational marketing. Although it largely overlaps with segmentations based on age, its underlying assumption is that people develop these value systems at an early age and leave them pretty much intact for the rest of their lives. Basically, this means people with the same value system react to messages in the same way. From the above discussion it appears that students of the same age will have more or less the same value systems and will more than likely respond to stimuli in a similar way. Penstone & Codrington (2000:7) agree and state that a value system develops right through a persons life, but is actually in place at the age of ten. Although significant life events can change a persons value system, it is very unlikely.

Penstone & Codrington (2000:8) explain generational marketing by saying that every human being is an individual with a unique set of values, attitudes and opinions. Although grouping individuals into categories, depending on their birth date, may at first appear grossly unjust, it later emerges as a valuable marketing tool. The above-mentioned authors point out that while all individuals have unique influences on their value systems as they grow and develop, these individuals all grew up in a similar time span, and were influenced by the same global forces. Improved communication allows people all over the world to experience the same events and face similar situations at similar times. Thus by studying historical data socialists can make predictions about current and future behaviour of generations. The generation model can best be described as a theory of social history that illustrates and explains changes in public attitude. Family, friends, the community and significant events shape a persons value system, but also the general era in which a person is born.

Mulrooney (2000:270) states that global research has shown that generational attitudes tend to group together in 20-year blocks, with obvious differences between people born earlier and

49 later within the 20-year generation. To recognize each generations influences and different traits more easily, four generational groupings typical of South African society have been identified:

Silent Generation: Born between 1930 and 1949 and were influenced by the Great Depression and World War II.

Boomer Generation: Born during the 1950 and 1969 with the concept of freedom and more disposable income per person.

Generation X: Born between 1970 and 1989, strongly influenced by constant change and terror that gripped the country during those violent times. This is possibly the student generation this study deals with.

Millennial generation: Born during 1990 2000, with little recognition of apartheid and influenced by the need for reconstruction.

This study attempts to provide insight to the generation into which the student market fall, the benefits students seek, demographic information and behavioural patterns of students. This information will help retailers in the Witbank area to segment the market and understand and approach the student segment more effectively.

2.4.2.3 Steps in segmentation

Retailers need to follow the steps in segmentation in order to identify profitable segments in the market and to develop separate market offerings and marketing strategies for the various

50 market segments. According to Strydom et al. (2000:104) segmentation will aid retailers in allocating marketing resources better; it may lead to the identification of excellent new market opportunities if the research reveals an unexplored student segment; and segmentation compels retailers to focus more accurately on students needs. According to Hawkins et al. (2001:11) segmentation consists of five steps:

(1) Identifying product related need-sets

According to Lamb et al. (2004:26) retailers begin the segmentation process by combining their existing knowledge with marketing research to analyse the relationship between customers and the products to be offered. Retailers may explore what kind of consumers is most likely to buy the products, how those buyers define value and how they make the purchase. The first task of a retailer is to identify need-sets that the organization is capable of meeting. The term need-set is used to reflect the fact that most products or services satisfy more than one need.

(2) Grouping customer with similar needs

The next step is to determine who has the need-sets that have been identified. This step involves consumer research, such as this study, that attempts to identify the need-sets of students.

51 (3) Describing each group

Once the consumers with similar need sets are identified, they should be described in terms of their demographic, lifestyle and media usage. Kotler (2003:299) calls this step profiling the segment and adds that each segment should be given a name that best summarizes its dominant characteristic. Proper attention should be given to naming segments, since their names influence how those who have to apply the segmentation perceive them. Strydom et al. (2000:118) state that such a profile, which this study provides, will enable retailers to develop products that will provide the need satisfaction desired by customers, and to design marketing communication messages that will appeal to the specific segment members.

(4) Selecting an attractive segment to serve

Once retailers have a thorough understanding of each segment, they must select those segments they wish to target. According to Du Plessis & Rousseau (1999:78) this decision is based on the firms ability to provide each segment with superior customer value at a profit. During the process of targeting, the marketer matches the needs and wants of the consumer with the resources and objectives of the company and selects those segments that offer the greatest potential return for the company. The size and growth of the segment, the intensity of current and potential competition and the cost of providing superior value are important considerations. It is important to remember that each segment requires its own marketing strategy. Strydom et al. (2000:104) state that before retailers select students as a segment they must make sure that the segment meets the following criteria:

52 It must be measurable: The size, purchasing power, potential profit and profile of the student segment must be measurable. If this were not possible, it would be extremely difficult to compare this segment with others or to assess its attractiveness. According to Hawkins et al. (2001:14) marketers prefer segments that are relatively stable and that are likely to grow in time. It is easy to keep track of a stable and predictable market; the risk involved in serving such a market is much lower because of its predictability. Witbank Campuss student segment will be measured in terms of size, purchasing power and demographical profile.

It must be large enough: A segment must be the largest homogenous group of people worth exploiting with a tailored marketing offering and marketing strategy. For a market segment to comprise a worthwhile target segment, it must contain a sufficient number of people to warrant developing products and promotional campaigns that are specifically tailored to the segments needs and wants. Witbank campus had only 1173 registered students at the time of the study, but Van der Walt et al. (2000:126) state that a target market need not necessarily be large. A small target market can often be more profitable, but retailers must be convinced that there are growth opportunities and that investing in the target market does not have a short-term dimension. The so-called black tourism market may have been fairly small in size in the beginning of the 1990s, but growth potential is immense making it a very attractive segment. A similar trend may emerge in the black student market.

It must be accessible. The retailer must be able to cost-effectively reach the student

53 segment with his marketing offering and strategies. Van der Walt et al. (2000:126) agree that if the cost to reach a segment is too high, the segment as a target market should be reconsidered. The student market is accessible to retailers through mass media such as radio, newspapers and TV.

Responsiveness: Retailers must be reasonably sure that they choose segments that will respond favourably to their market offering. Du Plessis & Rousseau (1999:50) state that loyalty to current brand is often a factor worth considering when determining responsiveness. Hawkins et al. (2001:140) state that investigation into customer satisfaction with existing brands and products should be measured to get an indication of the possible response of the segments. This study tries to determine the products and retailers students will positively respond to on campus, in order to determine if they are a segment worth serving.

It must be differentiable. Different segments must exhibit heterogeneous needs, demands and behaviour. When dividing the segments, the marketer must be able to identify consumers with those characteristics that are pertinent. Instead of serving a number of small segments it would be much better to combine interested segments. Interrelationships will exist among segments that use the same raw material, similar production methods or joint distribution channels. This study provides information on the needs of students and retailers, to enable retailers to determine if the student market exhibits different needs compared to the retailers` other/existing customers.

According to Marsland (2001:7) consumer research plays an important role in providing

54 insight into a retailers market and how the market can be researched. It also assists managers with the development of marketing and communication strategies for their brands. This study attempts to provide retailers with insight into the student market and how it can be researched. If retailers know their target market they can develop a marketing strategy to meet their specific needs, wants, lifestyle and preferences. In this study the target market is students born between 1970 1985, who can therefore be categorized as Generation X. According to Mulrooney (2001:26) the following information could be useful for marketers selling to Generation X:

They are attracted by visuals, music and dynamics. They are intelligent and prefer information given to them in a direct and straightforward manner.

They get bored easily so marketers must be innovative. Friendship is valued, they want to be treated as individuals and prefer customisation and interactive media.

They are never loyal to a product, only to a concept of lifestyle. Mass communication is the best way to reach this segment.

Because the Generation-model ignores issues such as population groups, culture and gender, it should be seen as a supplemental model rather than a complete solution itself. The information on Generation X can help retailers to form an idea about the student market.

55 (5) Determining a products position

Du Plessis & Rousseau (1999:49) state that after targeting, marketers must position their brands so that they are perceived to satisfy the needs of the target market better than competitors` offerings. The retailer must develop a unique appeal for the brand in the consumers mind and position the brand as filling a particular need of the consumer. Berman & Evans (2001:122) point out that through positioning retailers devise their strategy in a way that projects an image relative to the retailer category and its competitors, and elicits consumers` responses to their image.

According to Czinkota et al. (1997:217) retailers must first determine how they want to position their products and use their products position as bases for developing their marketing strategy. According to Hawkins et al. (2001:289) a products position refers to the schematic memory of a brand in relation to competing brands, products and stores. Brand image, a closely related concept, can be defined as the schematic memory of a brand without reference to competing brands.

According to Du Plessis & Rousseau (1999:276) the important underlying principle is recognizing that the marketing battle today is fought in the minds of the consumer. Research shows those products or services that enjoy high awareness levels usually enjoy dominant market penetration and market share. But awareness is not enough; the product must have a meaningful position in the mind of the consumer and stand for something of value to the consumer.

56 Mowen (1995:18) defines product differentiation as the process of positioning the product by manipulating the marketing mix so that students can perceive meaningful difference between a particular brand and competing brands. A highly differentiated brand may have strong competitive advantages because it is easily recognizable as being different from competitors. Retailers need to know how products are positioned in the studentss mind. The stimuli that marketing managers employ influence the products interpretation and thus its position. According to Hawkins et al. (2001:289) marketing managers frequently fail to achieve the type of product image or position they desire because they fail to anticipate or test the consumers reaction. These positions have developed and evolved over time. Therefore the message received from the firm must be consistent or changed in a deliberate manner to reflect or alter a desired change in brand position.

McGolddrick (1994:54) points out that as a retailers target market changes, new needs and trends evolve, making it necessary for retailers to rethink their position and often to reposition in order to satisfy the new needs or trends.

The study of consumer behaviour and specifically the behaviour of students will provide retailers with the necessary information to answer the following questions concerning positioning:

Which attributes are important to differentiate? Should we reposition our product? How are competitive products being perceived?

57 Du Plessis & Rousseau (1999:53) add another step: translating the results into a marketing strategy. The real test of segmentation is whether the information it provides may be successfully translated into a strategy. Any segmentation study should, however, provide data for selecting target markets and should go some way to defining the possible brand position. The next section will focus on the retailers marketing strategy.

2.4.3 Marketing strategy

Baker (1999:16) describes a marketing strategy as consisting of two distinct yet interrelated parts. The identification of a target market the relatively homogeneous groups of consumers to whom a retailer will direct its appeal; and the marketing mix and the determination of a mixture of variables which the organization will combine to satisfy this target market.

The development of a marketing strategy, according to Mowen (1995:19) and Hawkins et al. (2001:6), involve the coordination of activities in the four areas: Product, promotion, pricing and distribution. It is the combination of the marketing mix that meets customers` needs and provides customer value. According to Du Plessis & Rousseau (1999:12) a marketing strategy is concerned with the identification and selection of the target market for products and services. The customer must be provided with a product, which will provide need satisfaction. Retailers must also know how much customers are willing to pay for a product, what their competitor prices are and which substitute products are available for their target marketer. The marketing communication strategy will depend mainly on the profile of the target markets and the characteristic of the products. Products must be made available and distributed to the target market at a convenient location. The retailer must know where and how customers shop.

58 The four components of a retailers marketing strategy, and how these components can be tailored for the student market, will be discussed in the next section.

2.4.3.1 Products

According to Hawkins et al. (2001:15) a product is anything a consumer acquires, or might acquire to meet a perceived need. Lamb et al. (2004:292) define a product as everything, both favourable and unfavourable, that a person receives in an exchange. To be successful a product must meet the needs of the target market better than the competition does. This is not a simple task, because making specialized products for a few customers will provide them with product features very close to their needs, but it is usually expensive to manufacture only one version of a product. The retailer must balance the benefits that the target market derives from customisation of product features against the cost of providing multiple versions of the product. Strategically speaking, Van der Walt et al. (2000:191) see product decisions embrace the intentional and purposeful decision by management to adapt the product mix to the existing marketing environment and expected change in the environment punctually, economically and effectively.

According to Student Watch: Campus Market Research (1998:6) 96% of American college students in their survey, purchased music tapes/CDs. Ungerer (1999:12) found in his research that cars are the most important status symbol in the emerging black middle class market, followed by cellular phones and clothing. They respond favourably towards new products and feel inclined to buy them. The black market is known for spending money on designer clothing and cellular phones. This study attempts to identify the products students prefer to

59 buy, especially on campus.

According to Czinkota et al. (1997:109) information provided by consumer behaviour research will help retailers to answer the following product-related questions:

Which products are used / consumed by the student market? Which opportunities are there for new products? What are the core benefits students would like to have from products? What are the packing requirements of students? How important is branding to students? How environmentally friendly must the design and packaging be? Is there a need to develop new products or reposition?

Hoyer & MacInnis (2001:40) point out that developing products and services that satisfy consumers wants and needs is a critical marketing activity. Consumer research can provide useful information about several product decisions.

What attributes can be added to or changed in an existing offering? What should our offering be called? What should our package and logo look like? What about guarantees?

Cox & Brittain (1996:3) point out that the decision of which products to offer is one of the

60 most important decisions a retailer must make. However, a product is more than just tangible goods. The consumers perception of a product is anything that satisfies a particular need or want, and as such the retailer must consider more than just the physical or technical specifications. Information provided by this study will enable retailers to decide which types, quantity and quality of products to provide to the student market.

2.4.3.2 Price

Dunn et al. (1995:300) point out that the pricing decision should be interactive with other retailer decisions like credit offering, lines of merchandise carried, location, promotion, customer services, store image the retailer wishes to convey as well as legal constraints.

According to Van der Walt et al. (2000:65) price is the amount of money one must pay to obtain the right to use the product or as Lamb et al. (2004:570) point out, that which is given up in a exchanges to acquire a good or service. Throughout history buyers have set prices, sellers negotiated with each other and through bargaining they would arrive at an acceptable price for both parties. This is a good principle in theory, but Van der Walt et al. (2000:66) points out that in a modern economy prices are mainly predetermined by the retailer, although negotiations still play an important role in the marketing of industrial products and services. Hawkins et al. (2001:83) agree with Van der Walt et al. (2000:66) and add that price sometimes serves as a signal of quality. It could be fatal for a retailer to assume that a low price would necessary result in more sales than a higher price. Price setting requires a thorough understanding of the symbolic role price plays for the product and the target market in question. According to the Intelligence Factory (2001:20) price resistance from consumers

61 will start lower than ever before. They predict that as consumer confidence increases and competition weakens the notion of fixed prices throughout the retail world will disappear.

Czinkota et al. (1997:110) state that understanding the behaviour of students will help retailers to answer the following question concerning price:

What are students willing to pay for the product? How price sensitive is the student market? How important is price in decision-making? How will we meet competitive pricing? Pricing for different segments.

The role of price in the marketing mix should also be determined. If the price is seen as a key element in the consumers purchase decision, then price will be used to establish a differentiating role. The pricing decision, according to Cox & Brittain (1996:133), should closely follow the requirement of the target market: if the target markets need is for the best possible price a low price should be offered, but if exclusivity, service and status are required higher prices would be in order. Terblanche (1998:109) points out that competition and authority are other factors that influence prices.

Prices do not only have to be appropriate to the market segment aimed for students, but must also produce sufficient gross profit to pay all selling costs and leave an acceptable net margin for retailers.

62 2.4.3.3 Promotion

According to Hawkins et al. (2001:17) marketing communication includes advertising, the sales force, public relations, packaging and any other signals that the firm provides about itself and its product. Dunn et al. (1995:327) defines promotion, as the activity retailers use to bring traffic into their stores, move the traffic to various selling areas and entice the traffic into purchasing merchandise. According to Lamb et al. (2004:466) a integrated marketing communication / promotional strategy is a plan for the optimal use of the elements of promotion - advertising, sales promotion, publicity and personal selling.

(1) Advertising

Lamb et al. (2004: 467) define advertising as impersonal, one way mass communication about a product of organization used to reach the target market and fulfil the organizations overall goals.

(2) Sales promotions

Terblanch (1998:241) define retail sales promotion as all the activities, methods and incentives designed to speed up the response from customers. Examples include: Aisle displays, banners, contests, premiums, demonstrations, coupons, point-of-purchase materials, samples, special events and vouchers.

63 (3) Publicity

Lancaster et al. (2001:148) point out that publicity is any type of news story and information about an organisation and/or its products transmitted at no charge through a mass medium. Public relations are activities to create understanding and goodwill between an organisation and its publics. Examples include: Press releases, company open days, press conferences and third-party endorsements.

(4) Personal selling

According to Lamb et al. (2004:469) and Lancaster et al. (2001:146) personal selling is a paid-for type of marketing communication that normally calls for a personal and often one to one contact between marketer and customer.

An effective communication strategy, that consist of a combination of publicity, personal selling, advertising and sales promotions, requires answers to the following questions:

Whom, exactly do we want to communicate with?

Lamb et al (2004:482) point out that while most messages are aimed at the target market, others focus on channel members or those who influence the target market members. In this study retailers want to communicate to students.

What effect do we want our communication to have on the target audience?

Lancaster et al. (2001:150) point out that often the propose might be stated as increasing

64 sales, but this is the ultimate objective, which usually needs a behaviour objective like seeking more information on the product, learning something about the product or company, or recommending the product to others. The objective of the communication will depend on the specific retailer.

What message will achieve the desired effect on our audience?

According to Hawkins et al. (2001:410) marketers should ask themselves: Which words, picture and symbols should we use to capture attention and produce the desired effect? Understanding students` needs, preferences and lifestyle will aid retailers in deciding on the messages of their communication.

What means will achieve the desired effect on the audience?

Should retailers use personal sales to provide information or will printing it on the packaging be more effective? Will advertising on mass media or direct mail be the most effective method. According to Penhalrick (1999:5) radio is the most economical medium for receiving information for consumers; it continues to have the deepest penetration in the black middle class, with Radio Metro and SABC radio stations the most popular. Black listening figures extend beyond the so-called black stations. Black listeners comprise 30 % of Highveld Stereos audience and 40 % of 702s audience.

Penhalrick (1999:6) points out that two niche newspapers have aggressively sought to capture the elusive black audience, City Press sells 400 000 newspapers and the Sunday World reports a print of 80 000, with close to 100% black readers. According to figures listed in Ogilvy and Matherss immediate report in 1995 there were 4.1 million black

65 newspaper readers and potential readers. This number is predicted to grow to 8.8 million by the year 2005. The Sunday Times report a 43% black readership, and according to ABC research Bona and Drum have the highest magazine circulation figures, followed closely by True Love and Pace. The impact of outdoor advertising cannot be underestimated. The AMPS (1998:25) survey showed that among all population groups billboards, taxis and bus shelters have the highest impact of outdoor advertising media. Printed media pose a few problems for retailers. According to McCann (2000:7) 90% of advertising is in black and white and therefore retailers` print advertisements have to work in black and white colours.

When should we communicate with the target market?

Should we concentrate our communication near the time the purchase tends to be made, or evenly throughout the week, month or year?

What is the most effective way to communicate with my customer?

According to Hawkins et al. (2001:70) this question requires a investigation into (a) available media and who attends to each type, (b) the needs the product fills, (c) values associated with the product and its use and (d) the verbal and nonverbal communications system of your target market.

The mix of advertising and promotion which a retailer will use is determined by the student market expectations and requirement of the products, together with the other elements of retailers marketing decisions.

66 2.4.3.4 Place/Distribution

According to Berman & Evans (2001:7) retailing is the last stage in a channel of distribution. Retailers play a key role as the contact between manufacturer, wholesalers and other suppliers to the final consumer.

Hawkins et al. (2001:9) point out that having the product available where the target customer can buy is essential for success. Van der Walt et al. (2000:239) agree with Hawkins et al. (2001:9) that efficient marketing requires careful consideration and selection of the most suitable outlet to present the enterprises products to its target markets: simultaneously the most economic method of distribution to the various outlets must be chosen. According to McGolddrick (1994:204) as a consequence of changes like the decentralization of the population as well as new developments of suburban centres and regional shopping centres retailers have to take an increasing number of decisions about where to site new outlets and how to rationalize their existing portfolio of stores. If retailers trade from a poor site the company will not realize its full potential. Retailers need to look for a location that will generate sufficient expenditure to make a profit. Competition from other retailers and sometimes retailers` own existing stores needs to be considered in location and distribution decisions. According to Student Watch: Campus Market Research (1998:7) college students in America most often shop in supermarkets (5.8 days per month) followed by convenience stores (5.7 days per month) and the college bookstore (4.9 days per month). This study tries to provide retailers with the locations students prefer to shop at and therefore aid retailers in making effective distribution and location decisions.

67 2.5 CONCLUSION

From the definitions of marketing and consumer behaviour it is evident that retailers in the Witbank area need to understand their customers in order to satisfy their needs and wants. Retailers further need to adhere to the principles of the marketing concept of choosing a target market and then focusing on their customers by integrating all their business activities direct at the long term profitability of the company and the satisfaction of consumer needs and preferences while being social responsibility.

Retailers ability to devise and apply a sound marketing strategy depends on how well they identify and understand their customers and forms retailer strategies to appeal to them. In order to accomplish this, retailers need to understand the conditions of the market and the impact of urbanisation, the general level of the economy and social trends on their customers and business. Retailers need to investigate the preferences of their consumers and identify the competitors in the market in which they operate, along with their own strengths and weakness, and be able to utilize opportunities and defend themselves against threats. Based on the above information retailers can then segment the market, choose a target market and positioning their products.

This study attempts to provide the necessary information needed by retailers in the Witbank area to segment the market and to develop a price, product, place and promotional strategies that will satisfy the specific needs of the student market.

CHAPTER 3

CONSUMER

PREFERENCES,

BUYING

PATTERNS

AND

THE

DECISION-MAKING PROCESS.

3.1 INTRODUCTION

One of the important areas in the study of consumer behaviour is the consumer decisionmaking process and the resulting buying behaviour. The study of the consumers decisionmaking process involves the analysis of how people choose between two or more alternative acquisitions, the behaviour that takes place before and after the choice and the buying patterns that emerge as a result of this process. Mowen (1995:420) identifies five stages in the decision-making process: problem recognition, search, alternative evaluation, choice and postacquisition evaluation. It is important for retailers to understand students decision-making processes and buying patterns to determine if they are a feasible market segment. If they are, retailers should develop effective marketing strategies based on students` buying behaviour, to satisfy students` specific needs. This chapter has two major purposes. First, the factors influencing buying behaviour will be described and their impact on retailers will be shown and secondly, each step in the consumer decision-making process will be discussed.

3.2 MODEL OF CONSUMER BEHAVIOUR

Berman & Evans (2001:19) describes a model of consumer behaviour as anything used to

69 represent all or part of the variables of buying behaviour. Buying behaviour models indicate the structure of consumer behaviour and buying behaviour and how it is represented by the decision-making process.

According to Du Plessis and Rousseau (1999:18) studying consumer behaviour and buying patterns will aid retailers in:

Providing a reference framework for research and a method by which research findings can be combined into an integrated whole.

Facilitating the acquisition of existing knowledge concerning consumer behaviour.

Representing interrelationships between marketing variables in a logical structure that is reasonably easy to understand.

Improved marketing decisions.

Providing a lever for the prediction of behaviour due to the comprehensiveness of the theory.

Providing explanations for behaviour. Through model developments relationships are explained and it becomes possible to predict the results under various circumstances.

70 From the above discussion it is evident that retailers need a thorough understanding of their consumer preferences, buying patterns and decision-making.

According to Berman & Evans (2001:233) and Hawkins et al. (2001:12) the basic model of consumer behaviour, Figure 3.1, (p.71) consists of two parts: the process itself that consists of fives steps, and the internal and external factors that influence the process.

The remainder of the chapter will be used to discuss the different components of the model of consumer behaviour as seen in Figure 3.1.

3.3 EXTERNAL INFLUENCES ON THE DECISION-MAKING PROCESS

According to Mowen (1995:10) external influences represent those factors outside of the individual that affect individual consumers, decision-making units and retailers. The following external buying behaviour influences are identified:

3.3.1 Situation

Retailers should consider, in the light of the situation that the consumer faces, the consumer and marketing activities designed to affect and influence that consumer. Hawkins et al. (2001:487) define a consumer situation as a set of factors outside and removed from the individual consumer as well as removed from the characteristics of the product.

71 FIGURE 3.1: OVERALL MODEL OF CONSUMER BEHAVIOUR

External influences
Experiences and Acquisitions

Situation Culture Social Class Reference Groups Family / Household Firms marketing mix Lifestyle Internal Influences Demographics Perceptions Learning Motives Personality Emotions Attitudes
Preferences Buying behaviour Needs

Decision-making Process

Problem recognition Information Search Alternative Evaluation and Selection Outlet Selection and Purchase Post Purchase Process
Dissonance Product use Disposition Purchase evaluation

Experiences and Acquisitions

Source: Adapted from: Hawkins, Best & Coney (2001:12), Lancaster, Withey & Ashford (2001:50), Lamb, Hair & McDaniel (2004:143) and Hoyer & MacInnis (2001:1).

72 According to Peter & Olson (2002:272) situational influences can be divided into five groups: The physical surroundings (dcor, sounds, location, weather); social surroundings that deal with other people present who could impact on the individual behaviour; temporal perspective (time of day, time since last purchased); the task definition that reflects the purpose for engaging in consumption behaviour and antecedent states that are features of the individual person that are not lasting or enduring, for example feeling sick or depressed.

According to Hughes (1999:7) retailers have to predict and fulfil the shopping requirements of different consumer groups and they have to cater for customers who display different buying habits depending on the day of the week. Research conducted by Grossman & Wissenblit (1999:79) show that a products colour plays an important role in a consumers purchase decision. The authors state that associative learning conditioning can help to explain consumers` colour choices. Knowledge of consumers` colour choices are important because it helps retailers to recognize which colours in their line sell the best and which colours to use for a stores interior. According to the authors a study of colour preference in products suggests that consumers often conform to norms in their colour choices for certain product categories, particular high-risk purchases. Consumers learn colour preferences for particular products based on associations they have formulated through their experiences. A favourable experience with a colour leads to a preference for the colour. In others instances, consumers develop preferred colours for particular products because they learn through association that certain colours are appropriate for certain products.

Grossman & Wissenblit (1999:80) further state that cool colours such as blue and green are considered calming and warm colours such as red and orange are arousing. An example is the

73 colour red in casinos to stimulate gambling. However other associations that the consumer has may interfere with retailers` intent for the use of colour. For instance, outdoor colours such as green and blue are associated with sporting goods stores and even though red may stimulate, it is not appropriate for such a retail outlet. Determining peoples colour associations may be difficult because consumers may have trouble articulating associations that are complex. An alternative strategy for retailers is to create new colour associations that they can control, making use of classical conditioning.

Spears (2001:67) identified time pressure as an important extraneous variable with the ability to influence consumer buying behaviour. Retailers can react to time pressure by providing delivery services, Internet shopping and fast service.

Retailers in the Witbank area should design their advertising and segmentation strategies based on the situations that students are likely to encounter, given their selected lifestyle to affect and influence the students.

3.3.2 Culture

According to Van der Walt et al. (2000:54) culture is defined as a complex whole which includes knowledge, beliefs, art, law, morals, customs and any other capabilities acquired by humans as members of society. Peter & Olson (2002:461) add that it is also the typical behaviour and rules plus the characteristics of the physical and social environment. According to Du Plessis & Rousseau (1999:81) cultural influences refer to implicit beliefs, norms, values

74 and customs that prescribe conduct in a society. These beliefs, norms and values are learnt from society and lead to common patterns of behaviour.

Hoyer & MacInnis (2001:17) point out that culture operates primarily by setting boundaries for individual behaviour and by influencing the functioning of such institutions as the family and mass media. The boundaries or norms are derived from cultural values. Values are widely held beliefs that affirm what is desirable. Culture changes when values change, the environment changes or when dramatic events occur. Cultural values can have both positive and negative effects on consumers and society. Some negative effects are addictive consumption, compulsive purchasing behaviour and anti-social behaviour such as shoplifting and fraud. Asseal (1995:488) states that overall, cultural values have a positive impact on consumers by directing their behaviour into constructive channels.

Retailers need to understand students` culture in order to know which values are important to them, and make use of those important values when planning marketing strategies.

3.3.3 Social class

Asseal (1995:40) defines social class as the ranking of people in society into a hierarchy of upper, middle and lower classes, based on their power and prestige. Peter & Olson (2002:466) define social class as a status hierarchy by which groups of individuals are categorized based upon esteem and prestige. The opinion of friends and neighbours, judgement of ones peers and the influence of family are all social influences. Each social class is different in occupations, education, income, ownership and affiliation. According to

75 Cox & Brittain (1996:66) social class is important to retailers because people of different social classes have different behaviour. As a result, social class characteristics have been related to every aspect of a marketing strategy; research on this topic can provide retailers with insight and allow them to develop more effective programmes directed at students.

3.3.4 Reference groups

Hawkins et al. (2001:144) describes a group in its broadest sense as two or more individuals who share a set of norms, values and beliefs and have certain implicit or explicit relationships so that their behaviour is interdependent. Du Plessis & Rousseau (1999:81) define a reference group as any group that the individual identifies with in such a way that he tends to use the group as a stand for self-evaluation and as a source of personal values and goals. According to Peter & Olson (2002:465) these groups serve as a reference point for the individual in the forming of beliefs, attitudes and behaviour and can influence students in three ways:

Informational influence occurs when the individual acquires information shared by a group member. Example: A student hearing about Edgars red-hanger sale from a fellow student.

Identification influence is when individuals use the group norms and identify with them as part of their self-concept. A student will behave in a manner consistent with the groups values for example, many of the friends of the student regularly eat health foods and the student decides to consumer health food as well.

76 Normative influence occurs when individuals conform to group expectations to gain approval or avoid punishment. Example: A student notices that his friends buy expensive beer and although he can not taste the difference and do not buy these beers for home use, he buys the expensive beer for a party with his friends.

Hawkins et al. (2001:148) point out that communication within groups is a major source of information about products. It is a particularly important source of information when an individual has a high level of purchase involvement and a low level of product knowledge. Opinion leaders are product category specific with an enduring relationship with the specific product category.

According to Dawin (1996:497) opinion leaders are often selected because of their product knowledge or expertise. It is therefore important for retailers to identify reference groups and opinion leaders and to aim their research, advertising, product sampling and personal selling activities at the opinion leaders; and the opinion leaders will then distribute the information to the rest of the group members. According to Kusela, Spence & Kanto (1998:559) experts ask more questions, use more decision-making rules and have less misunderstanding than novices. Consumers frequently misinterpret printed communication, especially first time novice buyers like students.

Consumers often employ the help of a shopping pal. Hawkins et al. (2001:244) state that a shopping pal can be defined as a person not directly involved with the purchase in terms of finance but assisting and giving advice frequently either a member of the family or a close friend. According to Ward & Sturrock (1998:337) a shopping pal act as a psychological crutch

77 for the consumer to lean on in the early stages of the decision-making process and also proves an additional source of information and advice. It is important for retailers to know if students make use of shopping pals and what influence shopping pals have on students.

According to research conducted by Rook & Fisher (1995:306) among college students the social visibility and social composition of a shopping trip will also influence students` behaviour. When a student is shopping alone, he or she may feel less socially visible, which lowers inhibitions. When friends or family are present, students may alter their buying behaviour. Roberts (1998:296) found that peer pressure is a strong influence among young adults and therefore friends play a significant role in a students consumer experiences. Reliance on others for feelings of self worth and acceptance levels might lead to negative behaviour such as compulsive buying.

Retailers can use this concept by constructing advertisements to appeal to the group, for example a bookstore displaying their new books at the library of Tshwane University of Technology.

3.3.5 Households

According to Feltham (1998:380) reference groups provide standards and values that can influence individual consumption behaviour. Primary reference groups exert the greatest influence and the family is one of the most important references groups in terms of its role in attitude formation, structuring and conditioning behaviour. The author continues that the

78 family is the first group to which a person belongs and usually maintains the longest affiliation with them.

Consequently Engel et al. (1995:79) view the family as a dominant agent of values in most cultures. Although there is the diminution effect of the role that parental choice plays, parents still play a role in a lot of product categories, especially those entailing risk. Research done by Feltham (1998:371) also showed that parental choice is more significant for female students compared to male students, reflecting the brand socialization of girls by their mothers. These findings suggest that brand owners need to assess how they market to young people during their first years away from their family home. A widely held believe is that brands purchased by the family will continue to be purchased by children when they become adults.

However research done by Feltham (1998:372) showed that correspondence with parental brand choice decreased significantly with more years at university or college. As parental influence lessened, brand choice correspondence with roommates or friends increased. The reduction in parental influence may indicate an important marketing opportunity. When a student leaves home, their brand loyalties shift significantly from that of the family unit. Most consumer goods marketers do not design specific programmes targeting young people leaving home for the first time. Retailers can take advantage of this because students can be researched easily. Most students live and work within a defined area. White (2000:23) agrees with Feltham (1998:371-372) and states that the college market is particular interesting because for many products and services it represents an age where purchases are made for the first time. Teens often have a strong influence on purchasing, it is really the 18 24 year old group who first buys without the input from parents retailers need to focus on them. Students often do

79 not need to justify their purchases to their parents; therefore they are a critical segment to reach and listen to.

Du Plessis & Rousseau (1998:81) as well as Cox & Brittain (1996:62) state that family members enact different roles in their families/households decisions-making process:

The individual who has expertise and interest in a particular purchase plays the information gatherer role; often this is the role of children and students.

The Influencer is the person who influences the alternatives evaluated, the criteria considered and the final choice, also a role often played by children and students.

The Decision-Maker is the individual who makes the final decision: the mother or father often plays this role.

The Purchaser is the household member who actual purchases the product: the adult. User the user of the product, the whole family.

Research done in this study supply information on the roles students play in their families and retailers can make use of this information the develop effective marketing strategies based on the specific roles students play in their families.

Asseal (1995:319) states that retailers are interested in understanding consumer behaviour of the family because its considered the most important decision-making and consumption unit. Lee & Collins (2000:1190) state that family units and the role of young adults are an important unit of analysis for marketing well planned and well executed marketing strategies often fail

80 because retailers have an incomplete understanding of family buying. Understanding choice and family influence on the decision-making process provides retailers with the opportunities to shape brand choice and consumer behaviour. In order or increase the effectiveness of promotional campaigns retailers must examine the influence of family members at each stage of the decision-making process.

According to Ward & Sturrock (1998:334) retailers must direct the message of their promotional campaigns to the family member who dominates the particular stage of the decision process. Marital roles change throughout the decision-making process. In the information gathering stage a high degree of role specialization occurs, while in the purchase decision itself there is more synchronous decision-making both partners having equal levels of involvement and influence. Engel et al. (1995:83) identified the nature of the purchases routine or infrequent and cost as factors influencing the roles and approaches of partners in marital roles. This also provides a basis for the fact that decisions with higher perceived risk levels involve higher joint decision-making, as a potential source of risk reduction.

Research done in this study provides the necessary information to enable retailers to determine which roles students play in their families, and if they do buy the same brands as their parents.

3.3.6 Marketing mix

Retailers can influence their consumers decision-making process by making them aware of their needs, supplying information and convincing them to purchase and use their products by means of their four marketing mix instruments, price, product, promotion and place. These

81 four components are coordinated with one another and aimed at a specific group of customers. The marketing strategies of retailers are discussed in detail in chapter two and will therefore not be discussed again.

The above-mentioned external influences play an important role in influencing a students decision-making process and subsequent buying patterns. Therefore it is important for retailers to take note of these influences and understand how they can use them to their advantage, to satisfy the needs of students better than competition.

3.4 INTERNAL FACTORS INFLUENCING THE PURCHASING DECISION

According to Hawkins et al. (2001:241) these influences deals with how the individual react to group influences, environmental changes and marketing efforts. First perception and processing of information will be discussed followed by the learning process necessary for consumer behaviour and motivation, personality, emotion and self-concept of consumers. Consumer lifestyle and all the other topics tied together influences the consumers actual and desired lifestyle.

3.4.1 Demographics

According to Hoyer & MacInnis (2001:384) gender roles are changing and men and woman differ in terms of consumer traits, information processing, decision-making styles and buying patterns. Lamb et al. (2004:166) point out that the age of a consumer can have a significant

82 impact on their behaviour. The age of a consumer generally indicates what products he/she may be interested in purchasing or which media they are exposed to.

Understanding the ages and gender distribution of students can help retailer to determine the products that may appeal to them, media they may be exposed to and advertising appeals to use in order to attract their attention.

3.4.2 Perception

Du Plessis & Rousseau (1999:80) define perception as a process by which people select, organize and interpret sensory stimuli into a meaningful cohered picture for example, how students view a product, brand or service. Hawkins et al. (2001:260) describe perception as those activities by which an individual acquires and assigns meaning to stimuli. Perception consists of three components: Firstly exposure occurs when a stimulus comes within range of one or more sensory receptors of consumers. Consumers are exposed to only a small fraction of the available stimuli and this is usually the result of self-selection.

Attention is the second part and occurs when the stimulus activates one or more sensory receptor and relates the sensation to the brain for processing. Because of the amount of stimuli consumers are exposed to, they selectively attend to those stimuli that physically attract them (stimulus factors) or personally interest (individual factors) them. Stimulus factors are physical characteristic of the stimulus itself such as colour, size, movements, isolation and format.

83 Interpretation is the third part of the perception process and consists of the assignment of meaning to stimuli that have been attended to. Interpretation is a function of the individual as well as stimulus and situation characteristics. Cognitive interpretation appears to involve a process whereby new stimuli are placed into existing categories of meaning while affective interpretation is the emotional response to be triggered by stimuli.

Hoyer & MacInnis (2001:100) point out that retailers use their knowledge of information processing in a variety of ways, the fact that media exposure is selective is the basis for media strategy; retailers can enhance their operation by viewing their outlet as a information environment. Both stimulus and personal factors can be used to attract attention to advertisements, packaging and products. Consumers perceptions of words are use by retailers when choosing names for their products and for selecting brand names to stock.

An individuals response to purchase a product depends on the way in which he/she perceives it. Cox & Brittain (1996:64) point out that it is imperative that retailers realize that a customers perception is reality for the customer and determine how they act towards the retailer and his products. Mabote (2001:60) feels strongly that perception is the fifth P in the marketing mix. Marketers are often convinced that customers only react to the 4Ps (price, product, promotion and place) and are not concerned about what customers think about their companies.

Because of the historical difference in opinions between public relations and marketing, the two sides continue to ignore each other and they refuse to recognize each others strengths and weakness. On the one hand marketers believe that the solution always lies in the four Ps and

84 that Radio, TV and promotions are enough to attract clients and sell. They are expected to market solely to sell and not to create awareness. On the other hand the public relations specialists are hung up on publicity. Marketers must learn that one of the ways of dealing with customers other that price, product, place and promotion is to manage the customers perceptions about the company. Mabote (2001:62) continues by saying that perception is equal to the truth, which if not managed, can destroy a business. Mowen (1995:73) state that retailers must realize that their companies are in business not only because they have well packaged products and prices; they are also in business because customers hold particular views about them. Those views are called perception and need to be managed.

Consumers develop images of products, brands, store, advertisement and institutions as a result of their perception. Retailers must therefore know what media students expose them self to, how they interpret information and how to capture their attention.

3.4.3 Learning

According to Asseal (1995:105) consumers learn from past experiences and their future behaviour is conditioned by such learning. Du Plessis & Rousseau (1995:80) and Asseal (1995:116) both state that learning reflects the changes in the probability of behaviour as a result of past experiences. The law of effect is the basis for enforcement of learning experiences, which may eventually lead to habitual buying. Consumers must learn almost everything related to being a consumer - product existence, performance, availability, values, preference and therefore retailers are very interested in the nature of learning. Consequently, the purchasing act, whether rational and deliberate or impulsive, is the results of a learning

85 experience. If needs are satisfied, continued reinforcement lead to brand loyalty for a particulate brand, product or service, and if the consumer learning experience has been negative the consumer will respond to the stimuli from competitive brands. According to Hawkins et al. (2001:104) high involvement learning occurs when individuals are motivated to acquire information and low involvement learning occurs when an individual is paying only a limited amount of attention to the advertisement or message.

Peter & Olson (2002:223) point out that there are two basic forms of learning, conditioning and cognitive learning that are used by consumers. The cognition approach to learning encompasses the mental activities of humans as they work to solve problems and cope with complex situations to function effectively in their environment. Conditioning refers to the process of using an existing relationship between a stimuli and response to bring about learning in the long-term memory. If retailers make use of classical conditioning, their product is paired appropriately with an unconditioned stimulus (music) and then their product may become the condition stimulus. The product may then elect the conditioned response of positive feelings.

Lamb et al. (2004:174) point out that operant conditioning involves the actual usage of the product followed by positive reinforcement. Retailers commonly use operant conditioning by stocking quality product so that the product will meet the needs of the consumer and lead to positive reinforcement. Other examples of retailers using operant conditioning includes; giving extra reinforcement for shopping at their store such as prizes, giving free product samples, and making stores interesting and pleasant for shopping by providing entertainment and attractive displays.

86 Retailers need to understand how students learn best and make use of that information when developing their promotional strategies to ensure that students learn about the products and services they have to offer.

3.4.4 Needs and motivation

Berman & Evans (2001:67) point out that from a retailers perspective, needs are a persons basic shopping requirements, consistent with his of her background and lifestyle. Desires are discretionary shopping goals than have an impact on a persons attitude and behaviour. When the retailer gears his strategy to satisfy needs and desires, it must appeal to consumer motives, the reason for their behaviour.

Hawkins et al. (2001:320) define consumer motivation as the energizing force that activates behaviour and provides purpose and direction to that behaviour. Du Plessis & Rousseau (1999:80) see a motive as an inner state that energize, activate, motivate and direct behaviour towards purchasing goals. Motives make a consumer aware of his needs and give him a reason for acting on these needs. In terms of specific product purchases, consumer motivation is dependent on the situation. It is therefore necessary for the retailer to understand what motivation and behaviour is influenced by specific situations when consumers engage in goaldirected behaviour.

In research conducted by Nisel (2001:223) results indicated that availability, price and quality of the products are perceived by consumers as significant motives for buying decisions. This has implications for retailers because how often the consumer buys a product is an important

87 determinant for a firms marketing mix. If the consumer buys some products often, they expect to find these products on every shelf and out-of-stock situations must be avoided at all cost. When frequency of purchase decreases, the buying decision motive will be other than availability. Nisel (2001:224) states that when considering quality, the results showed that if consumer frequency of purchase increased then quality loses its effects as a motivator in the buying decision, thus consumers base their decision for buying or not buying on motives other than quality. If frequency of purchase decreases, the consumer seeks products with a higher level of quality, thus they become quality seekers.

According to Cox & Brittain (1996:63) advertising and personal selling are useful methods of increasing motivation, as well as in-store provision of discounts, special offers and competitions.

Retailers need to be aware of what motivates students because different motives need different marketing approaches. With the many motives consumers have and the many situations in which these motives are activated, there are frequent conflicts between motives. The resolution of motivational conflict often affects consumption patterns. In many situations the retailer can analyse situations that are likely to result in a motivational conflict, provide a solution to the conflict and attract the patronage of the student facing that motivational conflict.

88 3.4.5 Personality

According to Du Plessis & Rousseau (1999:321) personality is a combination of unique individual characteristics that reflect consistent and enduring behavioural patterns. The personality of a consumer guides and directs the behaviour he chooses to accomplish goals in a direct situation. Hawkins et al. (2001:321) define personality as relatively long lasting personal qualities that allow people to respond to the world around them. Although all individuals have internal characteristics, there are measurable differences between individuals` characteristics. Brands, like individuals, have personalities and consumers tend to prefer products with personalities that portray their own or a desired personality.

Studying information on the desired personalities of students can aid retailers in developing similar personalities for their stores or products that they are selling.

3.4.6 Emotions

According to Peter & Olson (2002:49) emotions can be described as strong, relatively uncontrollable feelings that affect behaviour. Emotions occur when environment, events or consumers` mental processes trigger physiological changes. These changes are interpreted as specific emotions based on the situation. They affect consumers thoughts and behaviour. Foreman (1998:9) states that it is important to measure emotions before, during and after the purchase and that the consumers emotions are influenced by the social and cultural context during the decision-making process. Retailers design and position products to both arouse and reduce emotions. According to Hawkins et al. (2001:321) advertisements with emotionally

89 arousing material lead to an increase in attention, a higher degree of processing, better remembering, and brand preference.

Consumer purchase decisions can be influenced by many emotions, including guilt. Burnett (1994:33) defines guilt as a violation of ones internal standards, or a negative emotion that results from a consumers decision to violate his values or norms. Guilt that enters into the consumer purchase decision is identified as consumer guilt and may provide opportunities for retailers to influence the consumer decision-making process. Consequently the consumer will experience a lowering of self-esteem as a result of his decision. Individuals experience feelings of guilt in the consumer decision-making process. Brunet (1994:40) identifies four dimensions of guilt:

Financial guilt is characterized by feelings of guilt that result from making purchases that are not easily justified, like unneeded or extravagant expenditures, impulse shopping or a lack of bargain shopping. Retailers attempt to convince consumers that they have earned or deserved the purchase they have made in order to minimize this type of guilt.

Health guilt occurs if an individual believes that he is not taking care of his physical welfare. This definition includes purchasing decisions that are not beneficial to ones health, such as consuming foods high in fat or smoking cigarettes. Advertisers of health foods and exercise equipment often make use of a health-guilt appeal to sell their products.

Moral guilt occurs when a purchase decision is made that violates a consumers moral values. For example various religious groups believe that smoking, drinking and gambling

90 are immoral. Thus when a purchase is influenced by acquired moral values the consumer experiences moral guilt. Social responsibility guilt occurs when a consumer violates his perceived social obligations as a result of a purchase decision. Situations that have the potential of generating social responsibility guilt include purchase/no purchase decisions involving charity contributions, environmental issues, family obligations and gift-buying behaviour.

It is clear that retailers should be concerned with the types of consumer guilt present when students make decisions because of guilt and other emotions` influence on the students attitude forming and repurchasing behaviour. Guilt is an emotion that can have a significant impact on the behaviour of consumers. As a relative new construct in the field of marketing, consumer guilt may help to explain consumers` purchase behaviour and provide opportunities for retailers to make use of persuasion tactics to influence students to buy their products.

3.4.7 Attitudes

Peter & Olson (2002:459) explain an attitude as a process by which consumers elect information in the environment to interpret; and view a attitude as the point at which consumers become conscious or aware of certain stimuli. Hawkins et al. (2001:244) define an attitude as an enduring organizing of motivational, emotional, perceptual and cognitive processes with respect to some aspect of the environment. Du Plessis & Rousseau (1999:80) agree with this definition and states that attitudes are enduring systems of positive or negative evaluation, emotional feelings and action tendencies with regard to an object as a result of all the influences vide paragraph 3.3 & 3.4. Asseal (1995:313) states that retailers can use their

91 knowledge of consumer attitudes to develop two strategies. One strategy reinforces existing attitudes and another tries to change them.

Attitudes consist of three components. Firstly the cognitive component, that consists of the individuals beliefs and knowledge about the object. Secondly feelings or emotional reaction to an object represent the affective component, and thirdly the behavioural component reflects actions and statement of behavioural intention. Generally the three components are consistent with each other and if retailers can influence one component, the other components may also be influenced accordingly.

Dholakia (1995:284) states that this assumption of consistency means that a favourable attitude will lead to favourable behaviour consistent with the attitude such as buying or trying out the product. This has tremendous face value and has been widely used in mass

communication. Retailers provide a variety of product and company information to their buyers with the hope that it will lead to a favourable evaluation by the audience and that their attitudes will lead to brand selection and purchase behaviour. According to Asseal (1995:295) retailers can use the measurement of attitudes to identify benefits segments for which they can develop new products, and to formulate and evaluate promotional strategies.

Retailers should try and aim to generate and maintain a positive attitude towards the store.

92 3.4.8 Lifestyle

Peter & Olson (2002:463) define lifestyle as the manner in which people conduct their lives, including their activities, interest and opinions. Lifestyle is a function of ones inherent individual characteristics that have been shaped through social interaction as one moves through ones life cycle. According to Asseal (1995:423) lifestyle variables are defined by how people spend their time (activities), what they consider important in their environment (interest) and what they think of themselves and the world around them (opinions).

Retailers can make use the differences in lifestyles between students to segment the market, to select appropriate media and to choose advertising themes.

The above-mentioned internal influences, just like the external influences, have an impact on every step of the decision-making process of students; and understanding these influences will provide valuable insight for retailer into the behaviour of students and aid them in determining successful marketing strategies.

3.5 THE STEPS IN THE CONSUMER DECISION-MAKING PROCESS

The previous section explained the factors that influence the consumer decision-making process; the next section will explain the process itself. The five-stage decision-making process views the consumer as a problem solver and information processor who engages in a variety of mental processes to evaluate various alternatives and to determine to which degree they might satisfy needs or purchase motives. According to Du Plessis & Rousseau (1999:79)

93 decision-making is seen as a problem-solving activity. Wells (1996:58) describes decisionmaking as the tool consumers use to choose among alternative actions that are available to them. Decision-making plays a role in the search for alternatives, evaluation and the purchase of the product, as well as providing feedback and ending the consumption process. Satisfaction of consumer needs is the ultimate goal for success in a business. Hence, an effective marketing strategy must focus on serving consumers` needs better that the competitors.

Nisel (2001:223) states that the retailer should be interested in revealing the complexity of an individual buyer and the dynamics of consumer behaviour, and should try to understand consumers` differences so that retailers can segment the total market in terms of those differences. Differences in the consumer decision-making and buying patterns can aid retailers in classifying individuals into homogeneous subgroups. Retailers must understand how information is obtained, how beliefs are formed and what product criteria students seek, and should therefore carefully study students` preferences and buying patterns. Products can then be developed that will fulfil the appropriate requirements of students. As mentioned in the introduction, the consumer decision-making process consists of five steps, namely recognition, search activity, information evaluation, the purchase decision and post-purchase decision. The primary decision made by a consumer when engaged in a particular buying situation is whether to purchase or not.

The steps, as seen in Figure 3.1 (p.71) will now be discussed in detail, to gain insight in the buying patterns and preferences of students. Although risk is often associated with the last step in the buying process post purchase behaviour Mitchell (1994:56) states that risk is present

94 at each stage of the buying process and therefore risk will be discussed at each stage of the buying process.

3.5.1 Problem recognition

This section will focus on the process of problem recognition; the uncontrollable determinates that influence problem recognition and the marketing strategies based on the problem recognition process.

3.5.1.1 Definition of problem recognition

Engel et al. (1995:146) clearly state, The initial stage in any decision-making process is need/problem recognition. The individual senses the difference between what he/she perceives to be the ideal state of affairs (the condition the consumer would like to be in) compared with the actual state of affairs (the condition the consumer perceives himself to be in) as illustrated in Figure 3.2. According to Du Plessis & Rousseau (1999:83) a problem exists when a consumer has some purchasing needs and is uncertain about how to satisfy the needs, or if he/she is unsure about his goals, achievement or outcomes of a decision. Both the desired state and the actual state are influenced by the consumer lifestyle and current situation. Berman & Evans (2001:234) point out that if the discrepancy between the actual and desired states is sufficiently large and important, the consumer will begin to search for a solution to the problem. A number of factors beyond the control of the retailer can affect problem recognition. These factors will be discussed in the next section.

95 3.5.1.2 Factors influencing the actual state

According to Mowen (1995:463) a variety of factors, may cause the actual state (the current situation) of a student to decrease below an acceptable level (level at which the students is satisfied):

A student may run out of the product, such as toothpaste. The product could wear out, for example clothing. The product may simply go out of style, like shoes. Students could use the product and find that it simply fails to meet their expectations. Another set of factors that influence the actual state concern the internal state of the student. People sometimes experience strong negative affective states, which are uncomfortable and will lead to a change in the actual state of students. Wilkie & Dickson (1990:568) gives such an example as the increase or decrease in finance, which will change the current state of students.

3.5.1.3 Factors influencing the desired state

According to Mowen (1995:436) the desired state, as seen in Figure 3.2, tends to be influenced by factors that affect the aspirations and circumstances of the consumer. Influences such as culture, reference groups and lifestyle trends can cause a person to change his or her desired state. Wilkie & Dickson (1990:570) points out the following reasons causing change in the desired state of students:

96 FIGURE 3.2: PROCESS OF PROBLEM RECOGNITION

Desired consumer lifestyle The way the consumer would like to live

Current situation Temporary factors affecting the consumer

Desired state The condition the consumer would like to be in at this point in time

Actual state The condition the consumer perceives himself to be in.

Nature of discrepancy Difference between the consumers desired and perceived conditions

No difference

Desired state exceeds actual state

Actual state exceeds desired state

Satisfaction No action

Problem recognized Search decision initiated

Source: Hawkins, Best & Coney (2001:427)

97 New need circumstances: As students encounter changes in their everyday lives, they often find that entirely new categories of consumer needs arise. New want circumstances: New circumstances can create problem recognition or a want variety. For many students the move to a Tshwane University of Technology opens new possibilities like travel, classical books, music or art. New product opportunities: Once a product has been explained to students through advertising or a friend, students can experience a substantial increase in their desire for it. Purchase of other products: Having purchased a different product sometimes sparks problem recognition. Having bought a computer students are likely to recognize opportunities for using certain software packages and other computer accessories.

Retailers need to be aware of how to influence students perceptions about their actual state or desired state in order to create problem recognition and so doing initiate the decision-making process that will hopefully lead to the purchase of their products and services.

3.5.1.4 Risk and problem / need recognition

As mentioned earlier in paragraph 3.5, risk is not just part of post purchase evaluation, but it is present throughout the decision-making process, even in the first step. Mitra, Reiss & Capella (1999:209) point out that retailers can and frequently do use perceived risk to stimulate consumer problem recognition or need recognition; this is primarily done through the use of appeal based on risk perceived by consumers. According to Mitchell (1994:58) financial risk is used to stimulate problem recognition when retailers highlight the difference

98 between what consumers currently pay for a product and what they will pay for the same product at a similar retailer. A product may also be promoted on the base of time risk by showing that the existing type of product that the consumer is currently using is wasting time.

3.5.1.5 Retailer concerns related to problem recognition

Before retailers can respond to problem recognition generated by outside factors, as mentioned above, they must be able to measure consumers` problems. Hawkins et al. (2001:428) point out that surveys and focus groups using activity, product or problem analysis are commonly used to measure problem recognition. Once retailers are aware of the problem recognition patterns among their target market, they can react by designing their marketing mix to solve the recognized problem. This may involve product development, repositioning, a change in store hours, a different price or a host of other marketing strategies. Cox & Brittain (1996:57) state that retailers often want to influence problem recognition instead of reacting to it. They may desire to generate generic problem recognition, a discrepancy that a variety of brands within the product category can reduce; or they may want to induce selective problem recognition, a discrepancy that only one brand in the product category can solve. Attempts to activate problem recognition generally do so by focusing on the desired states. In addition retailers attempt to influence the timing of problem recognition by making consumers aware of potential problems before they arise.

In conclusion it can be said that retailers have to address the following issues in order to be successful in the market place:

99 Know what problems students are facing. Know how to develop a marketing mix to solve the students` problems. Activate students to recognize problems.

If retailers in the Witbank area are aware of the problems students face, they can develop a marketing mix to solve these problems. If students are not aware of their problems, retailers can make them aware of their problems through their advertising campaigns in order to encourage product purchasing behaviour.

3.5.2

Information search

According to Terblanche (1998:79) the next step in the decision-making process begins after a consumer perceives a need that may be satisfied by the purchase and consumption of a product or service. Cox & Brittain (1996:59) point out that the natural response of a consumer to problem recognition is to seek a solution; and the process of solution leads naturally to the search for information After identifying a problem of sufficient magnitude to propel the students into action, the search process is activated to acquire information about products or services that may eliminate the problem. According to Du Plessis & Rousseau (1999:87) this is the stage in the process where the search for information and the organization thereof within the individuals frame of reference begins. Consumer search and the information process entail a learning process. The investigation of the consumer search process is highly important to retailers because it influences their promotional and distributions strategies.

100 Information, product and money constitute the elements exchanged by buyers and sellers in the marketing process. According to Dholakia (1995:283) the managerial problem of providing information to the market can be presented in terms of certain questions:

What information should retailers provide? How much information should retailers provide? How should retailers provide information? In what form must the information be provided and which media should retailers use? Whom should retailers provide the information for?

One of the objectives of this study is to investigate the search, acceptance and use of information by students to enable retailers to answer the above questions; and opportunities to influence students search patterns in the decision-making process.

3.5.2.1 Sources of information

Mowen (1995:199) identifies two types of consumer search processes: internal and external search. Internal search happens when a student attempts to retrieve information from his longterm memory on products and services that may help to solve the problem at hand. In contrast, external search involves the acquisition of information from any outside sources such as friends, advertisements, packaging or sales personnel. External information search is conscious goal-oriented behaviour whereby consumers acquire information to clarify or

101 evaluate a particular product or brand. According to Hawkins et al. (2001:452) and Dholakia (1995:229) the following sources of information can be used:

Memory of past searches, personal experiences and low-involvement learning. Personal sources such as friends, families, reference groups and opinion leaders. Independent sources such as consumer groups and government agencies. Marketing sources such as sales personnel and advertising. Experiential sources such as inspections or product trials by students.

If retailers know which sources of the above-mentioned information sources students usually make use of, they can ensure that they supply information about their companies and products in those sources.

Research done by Mitra et al. (1999:223) support the common marketing belief that consumers prefer personal information sources to impersonal information sources. Word-ofmouth information, in particular, is regarded as highly credible and believable.

3.5.2.2 Type of information sought

In order to increase product and market knowledge that will lead to higher buying efficiency and personal satisfaction or pleasure, consumers need different types of information. According to Berman & Evans (2001:234) consumers engage in internal and external search for three types of information:

102 (1) The appropriate evaluative criteria for the solution of a problem:

According to Dunne et al. (1995:90) evaluative criteria can be described as those features or characteristics that consumers are looking for when buying a specific product or services. During and after the time that students gather information about various alternative solutions to a recognized problem, they evaluate the alternatives and select the source of action that seems most likely to solve the problem. Evaluative criteria are used to compare the different brands. The number, type and importance of evaluative criteria used differ from student to student and across product categories.

According to Hawkins et al. (2001:482) the measurement of which evaluative criteria are used by the consumer, how the consumer perceives the various alternatives on each criteria and the relative importance of each criteria are the critical first step for retailers in utilizing evaluative criteria to develop marketing strategy. Students can judge evaluative criteria such as price, size and colour easily and accurately. Other more intangible criteria like quality, durability and health benefits are more difficult to judge and in such cases consumers might make use of prism brand names, which is another variable used as a surrogate indictor for the desired characteristic, when purchasing a product.

(2) The existence of various alternative solutions:

After searching for appropriate evaluative criteria students seek appropriate alternative brands or retailers. According to Lamb et al. (2004:144) the brands that students think of as a possible solution for their product is called the awareness set. The brands that are given further

103 consideration from the awareness set are called the evoked set. Those brands that the students feel is completely unworthy for further consideration is the inept set and the brands which are seen as possible backups are called the inept set.

Retailers need to ensure that their store and brands are in the students evoke set in order to stand a chance of being considered or purchased by the student.

(3) The performance level or characteristics of each alternative solution on each evaluative criteria:

Hawkins et al. (2001:526) point out that to choose among the brands in the evoked set, consumers compare them on the relevant evaluative criteria. This process requires the consumer to gather information about each brand in each pertinent evaluative criteria.

3.5.2.3 Amount of search

Lamb et al. (2004:145) point out that consumers generally should engage in relatively extensive external search prior to purchasing an item. However, this view ignores the fact that information search is not free of costs. It takes time, energy and money and can often require giving up more desirable activities. Therefore consumers should engage in external search only to the extent that the expected benefits like a lower price or more satisfaction outweigh the expected cost.

Heaney & Goldsmith (1999:395) found that the perceived benefit, cost and knowledge influence the amount of external information search by students. Students in Heaney &

104 Goldsmiths study felt that it was more beneficial to obtain more information when the perceived benefit of lowering risk was high and when they had some form of prior product knowledge. According to the cost-benefit analysis of information search, consumers would search for more information if they perceived that the additional information would assist with the decision-making process.

Heaney & Goldsmith (1999:396) point out that students sought more sources of information in high-risk purchasing situations. Low accessibility to shopping malls and high cost of trying out products decreased the information search and it seems that a student who has some knowledge of a product category feels more comfortable in searching for more information about the product. The authors concluded that students in his study appeared to evaluate the effect of information search on decision-making and appeared to be rational in terminating or furthering their information search depending on the information ability to affect risks, cost and benefits.

Wilkie & Dickson (1990:84) identified several variables that could influence the extent of prepurchase information search:

Situational determinants like time constraints could limit the amount of information search of students.

Prior experience and knowledge that the students could build on also may influence the amount of search conducted by students

Stores visits and salesperson interactions.

105 Retailers need to understand how the above-mentioned variables influence students in order to encourage more information search, which will enhance the chance that the student will receive information about the retailers products and services.

Ward & Sturrock (1998:327) states that in the information gathering stage of the decisionmaking process there is an invariable high degree of role specialization (where one partner assumes more responsibility that the other) in marital roles. Retailers should therefore know who pursues the role of information gatherer in the household to ensure that the information is presented in such a way to satisfy the needs of the information gatherer.

3.5.2.4 Risk and search behaviour

According to Mitra et al. (1999:212) information search is a common method implemented by consumers to reduce perceived risk. Risk encountered in product or service can be reduced through increased brand loyalty or by seeking additional information. The higher the level of risk the more search will occur, and vice versa. Mitchell (1994:52) states that within the search process the consumer faces sources of uncertainty. Students may be unsure about how much weight to give to advice from salespeople or a claim in advertising. Students may also experience uncertainty about the sources of information that exist and which sources have the most credibility. The more sources used, the greater the amount of data gathered, the greater the likelihood of conflicting reports being received. This may result in confusion. Furthermore, information acquisition may alert consumers to risk and pitfalls within the product choice, of which they were previously unaware.

106 Research done by Mitchell (1994:53) identified two types of uncertainties. First, knowledgeuncertainty regarding information about alternatives available and second choice-uncertainty about which alternative to choose. Choice uncertainty appears to increase the search while knowledge uncertainty has a weaker negative effect. Pre-purchase risk reduction essentially focus on increasing the amount of certainty that a satisfactory product will be purchased as well as reducing the negative consequence, should the purchase be unsatisfactory. Postpurchase risk reduction, on the other hand, focuses solely on the reduction of the consequences of an unsatisfactory purchase. Mitchell (1994:55) found in his research that the higher the magnitude of perceived risk in a purchase the greater the importance of personal sources in making the decision. Consumer preference for personal sources stems from the flexibility and credibility components of these sources.

3.5.2.5 Information search patterns

Knowledge on information search patterns of consumers are very important to retailers because it will influence the appropriate strategies that retailers need to follow to make sure that consumers come in contact with their particular information in their search. Sound marketing strategies take into account the nature of the information search engaged in by the target market. According to Wells (1996:362) retailers want consumers to include their products in their evoked set. Therefore they must ensure that the consumer is aware of their products and the needs that their products can satisfy.

To do so, retailers in the Witbank area can employ a number of different strategies:

107 To be included in the evoked set of involved students who gather information through ongoing search activity, retailers must provided detailed background information about their products. They can place information-rich advertisements in specialized media targeted at students. Retailers adopt a different strategy to influence highly involved students who have begun a specific information search to satisfy a new need. Advertising emphasizing brand names and attributes are often used to accomplish this task. To gain awareness among uninvolved students, who have only incidental knowledge, widespread distribution must be used because consumers learn of products through their presence in retail outlets.

Wilkie & Dickson (1990:584) states that while most experts agree that consumers should be as fully informed as possible, they disagree over how this is best accomplished. Retailers need to answer the following questions in order to solve the above problem:

What information should we provide students? How much information should we provide them? In what forms should the information be provided? Will the students use the information?

The information search patterns, sources of information used, types of information required and the amount of search of students will be evident from the information obtained through this study and should enable retailers to answer the above questions.

108 According to Cox & Brittain (1996:59) it is important for retailers to make problem solving easier for the consumer by ensuring that the consumer include his or her store in the list of alternatives; and has a positive image of the store as being the place that stocks the consumers preferred products and brands.

3.5.3 Alternative evaluation

Once a consumer has searched for and selected the necessary information the next stage focuses on organizing, categorizing and interpreting the incoming information. Berman & Evans (2001:235) point out that evaluative criteria are selected the standards and specification used by students to compare different product and brand the importance of each criteria is establish and thereafter, alternatives are ranked. The number, type and importance of evaluative criteria used differ from consumer to consumer and across product categories.

This study attempts to supply retailers with the evaluative criteria used by students in choosing products and stores.

3.5.3.1 Risk and the evaluation of alternatives.

This stage of the decision-making process is essentially concerned with how the consumer chooses between alternative products and brands. The first source of uncertainty, according to Mitchell (1994:55), is which criteria or attributes consumers should use when choosing products. The consumer may also be unsure about how important the possession of each

109 attribute is. The amount of pre-purchase satisfaction is also influenced by the risk involved in the buying process up to the decision-making step. According to Simintiras & Diamantopoulos (1997:857) the importance of satisfaction/dissatisfaction derives from its important impact on repeat purchase behaviour and brand loyalty. An effective customer satisfaction system

provides retailers with early warning signals, which enable the prevention of loss of market share. In his study Simintira investigated the satisfaction prior to purchase and linked it to first time buyer behaviour. Understanding the buyer behaviour of first time buyers are essential for retailers, since first time buyers, of whom students form a big part, are potential repeat purchasers and brand loyal customers. Simintira & Diamantopoulos research indicated that consumers could anticipate the satisfaction that they will receive from a planned purchase. Possible cognitive and emotional satisfaction and feelings can be anticipated. Wells (1996:363) indicates that retailers make use of this knowledge to try and influence consumer to consider evaluative criteria on which their products and services perform well. Retailers also try to encourage brand loyalty by influencing consumers to adopt a routine purchasing process.

Durvasula, Lysonski & Andrews (1993:55) state that consumers have different decisionmaking styles based on the evaluative criteria that are important to them. If retailers can understand the styles, they can use it to understand consumer shopping behaviour or segment the market into various niches for product positioning. Durvasula et al. (1993:56) identified several decision-making styles when analysing the mental orientation of students in making decisions, focusing on the cognitive and affective orientation:

Perfectionism or high quality conscious students

110 Brand conscious students Novelty or fashion conscious students Price and value for money conscious students Impulsiveness Habitual and brand loyal students

This study attempts to identify the decision-making style of students based on the evaluative criteria they use in evaluation and decision-making.

3.5.4 Decision-making: Outlet selection and purchase

Wilkie & Dickson (1990:605) state that as the buying process moves through problem recognition, information search, alternative evaluation and then decision-making the consumer finally reaches the point at which the actual purchase is made. The purchase transaction is the key point at which retailers and consumers come together in the economic system. According to Asseal (1995:88) the outcome of brand evaluation is an intention to buy or not to buy. The final sequence of complex decision-making involves purchasing the intended brand, evaluating the brand during consumption and storing the information for further use.

Dunn et al. (1995:90) point out that if the consumer has the information needed for making a decision and has evaluated this information according to important criteria, the point is reached where a purchase decision will be made. First to buy or not to buy, hereafter the consumer is faced with additional buying decisions such as store choice and time of purchase.

111 According to Walsh (1992:8) consumers worldwide are adapting to a modified way of shopping in difficult financial times. Because they are experienced shoppers they can make better decisions. Consumers do their homework by comparing prices and knowing precisely what they want before they head off to the store. Consumers read advertisements, compare circulars and read about their product choices before they make their buying decisions.

According to Dholakia (1995:291) retailers can try to increase the probability of brand selection by adopting retail strategies affecting the placement of their brand, retail displays of the brand in terms of shelf location and total shelf space that will affect the probability of exposure and selection. Emphasizing the attributes of ones own brands, without mentioning or comparing alternative brands is another strategy aimed at increasing the salience of a brand used by retailers.

Information obtained from this study can assist retailers in ensuring that student do select their outlet and do make a purchase at their store.

3.5.4.1 Sequence of decision making

According to Hawkins et al. (2001:599) the appropriate marketing strategies for retailers differ depending on the decision sequence generally used by the target market. It is therefore important for retailers to know which sequence their target market follows to enable them to use the appropriate strategy. Here are three basic sequences a student can follow when making a purchase decision:

112 Brand or item first and outlet second: In this scenario retailers must make use of price specials on brands, co-operative advertising featuring brands, yellow page listings under brand, many brands or key brands. Outlet first and brand second: When faced with this decision-making sequence retailers must concentrate on image advertising, appropriate pricing and location analysis. Brand and outlet simultaneously: Retailers use strategies such as training sales people and making use of multiple brands/key brands. High services levels or low price structures are other strategies to be used by retailers in this sequence of decision-making,

If retailers have the necessary information, which this study attempts to supply, they will know the sequence of decision-making use by students and can then apply the correct strategies, as discussed above.

Consumers select a specific retail outlet whether before of after a brand decision by comparing alternative outlets according to specific evaluative criteria. In the next section a number of evaluative criteria commonly used by consumers to select retail outlet will be discussed.

3.5.4.2 Criteria for selecting a retail outlet

Retailers need to be aware of the criteria which students make use of when deciding on a specific retailer. This will enable retailers good performance levels on the appropriate criteria.

113 Buying intentions also help retailers to establish stock levels and other elements of the shopping experience on which they must concentrate to influence consumer purchase. According to Student Watch: Market Research (2000) on College students in America, good promotion and merchandise quality are rated among the most important criteria used by students when choosing a retail outlet. Good sale prices and the right assortment of products are also important. Effort to make stores easy to shop in and in-store displays also got a high rating. Especially the younger consumers, 18 35 years, were very conscious of the difference between retailer brands and national brands.

3.5.4.3 Store characteristics and outlet choice

Terblanche (1998:63) identifies three criteria that consumers make use of to select retail outlets:

(1) Outlet image

Terblanche (1998:64) defines a retail outlets image as a given consumers perception of all the attributes associated with a retail outlet. Retailers make extensive use of image data (service, convenience, promotion, physical facilities, and merchandise) in the formulation of retail strategies. Retailers control most of the elements that determine the image of their outlet, but different groups of consumers desire different things from various outlets, which complicates the retailers task. It is therefore essential for retailers to match target market desire and the image of the store. Retailers should be concerned not only with their own image

114 but also the image of their store type (discount stores, department stores), area (downtown, mall, and neighbourhoods) and shopping method (television, catalogue or internet).

(2) Retail advertising

Hawkins et al. (2001:583) point out that retailers make use of advertising to communicate their attributes, sales prices and special promotional deals to consumers. Price advertising can attract people to a store. Retailers must decide on the following when using price advertising:

How large a price discount should be used? Should comparison or reference prices be used? What verbal statement should accompany the price information?

In order to answer above questions retailers must continuously conduct research studies on their target market. This study attempts to determine the role and importance of price for students to enable retailers in the Witbank area to answer the above-mentioned questions.

(3) Outlet location and size

The location of a retail outlet plays an important role in the consumer store choice. According to Hawkins et al. (2001:606) if all other things are equal, the consumer generally will select the closest store. The size of the outlet is an important factor in store choice. Unless a customer is particular interested in fast service or convenience, larger outlets are preferred

115 over smaller outlets. This study attempts to determine if the latter statement is true for the students at Witbank as well, and so doing helping retailers making the right decisions concerning their location and size.

This study attempts to provide retailers with the necessary information on features/criteria which is important to students when selecting a retail outlet, to enable retailers to develop a competitive advantage and to ensure that students buy from their stores.

3.5.4.4 In-store influences that impact on alternative evaluation and purchase

It is not uncommon for consumers to enter a retail outlet with the intention of purchasing a particular brand, and to leave with a different brand or additional items. According to Terblanche (1998:68) influences within the store induce additional information processing and subsequently affect the final purchase decisions and identified six variables that can influence brand decision in retail stores.

Point of purchase displays: Point-of-purchase displays are common in the retailing of many products and if combined with advertising it generally leads to a strong increase in the sales of the displayed product.

Price reduction and promotional deals (coupons and gifts): According to Hawkins et al. (2001:593) the general pattern is a sharp increase in the sales of the product when the price is first reduced, followed by a return to near normal sales over time or after the price reduction ends.

116 Store layout: The location of items within a store has an important influence on the purchase of both product categories and brands. Typically, the more visibility a product receives, the greater the chance it will be purchased. Store atmosphere: The store atmosphere affects the students mood and willingness to visit and linger in a store. Store atmosphere is influenced by attributes such as lighting, layout, presentation of merchandise, fixtures, sounds, colours and odours. Stock out: Lancaster et al. (2001:51) point out that a store being temporarily out of stock forces the consumer to rethink the purchase. Students are then faced with different options: to buy the same brand but at another store, switch brands, delay the purchase and buy the desired brand later at the same store, or forgo the purchase altogether. Sales personnel: The effectiveness of sales efforts is influenced by salespeoples knowledge, skills and attitudes.

The information that this study supplies on in-store influences can help retailers to influence and change students behaviour once in side their stores, to buy more or additional products.

3.5.4.5 Purchasing

Dunne et al. (1995:90) point out that once the outlet and brand have been selected, the consumer must acquire the rights to the item. Traditionally, this involved giving cash to acquire the right to a product, but using credit cards and store accounts are becoming more and more popular as a way of financing a purchased decision. Berman & Evans (2001:235) point

117 out that it is important for retailers to get an idea of the purchasing patterns of consumers in term of the place of purchase and purchase terms. According to an American study done by Student Watch: Campus Market Research (2001) among college students in the United States the following student buying patterns were evident:

56 % of the students interviewed bought products and services they do not need on a regular basis.

44% of the students used shopping as a way to celebrate. 33% of these students buy without planning the purchase (impulsive buying) 27% of the students admitted they could not resist a sale. 16% buy products and services they cant afford. 15% admitted to hiding their spending habits from friends and family. 11% admitted that credit debt created problems for them.

This study attempts to uncover the buying patterns of students at the Witbank campus, to determine the similarities or differences compared to the above-mentioned buying behaviour of American college students.

Retailers do not realize just how students` profiles have changed. Today college students have a lot more money and they are not opposed to spending. In a study done by Student Watch: Campus Research (2000) in the United States, more than half of the students interviewed had cars, two thirds had credit cards and two thirds had a telephone calling cards or cellular phones. These findings indicate that students represent a big and lucrative market for retailers.

118 Because students are changing every day and moving more than any other segment of the population it is important for retailers to do research on their shopping patterns.

(1) Compulsive buying

A study done by Roberts (1998:295) indicated that college students have a high tendency to experience compulsive buying. The author describes compulsive buying as chronic, repetitive purchasing that becomes the primary response to a negative event or feeling. Todays young adults have been raised in a unique and radically changing environment, which warrants an investigation of the factors that lead to compulsive buying in these age groups.

Roberts (1998:293) identified possible factors that contributed to high levels of compulsive behaviour in college students: family influences, psychological influences (low self-esteem and buying for status) and sociological influences such as television viewing, materialism, peer pressure, shopping frequency and credit card use and accessibility. Compulsive buying usually leads to personal bankruptcy and high credit card debt and the experiencing of guilt. This raises an ethical issue: Should retailers target young adults and students as the focus of their aggressive marketing campaigns? Students are a vulnerable population group and monitoring credit card limits, requiring minimum income levels for accounts, ethical advertising, educating young people in responsible shopping and monitoring credit card use can help to prevent and limit compulsive buying.

This study attempts to uncover if student at Witbank do experience guilt and for what reasons.

119 (2) Multi-category purchase decisions

Consumers often make multi-category decisions during a shopping trip. The choice of one category may affect the selection of another category due to the complementary nature of the two categories. In such a situation the marketing activity (price or promotion) in one category can influence consumer purchase of the other category. Manchada (1999:95) points out that alternatively, two categories may co-occur in a shopping basket, not because they are complementary, but because of similar purchasing cycles or because of a host of other uncontrollable reasons. While complementary product use gives retailers some control over consumer buying behaviour (changing the price of cake mix could change the purchase probability of cake frosting), co-occurrence or co-incidence is less controllable. Consumers may shop for many items on the same shopping trip because of economic reasons or due to habit, time pressure or the consumers mood. The physical environment of the store may also induce joint purchases. Other factors that may affect multi-choice may be household This is pertinent to retailers who are trying to

preference or household demographics.

optimise pricing and promotional strategy across many categories, as well as designing multicategory marketing strategies. The above can also help retailers to identify traffic generating categories. Retailers can also devise better promotional policies for categories that are complementary, if they know what consumer view as complementary products.

120 (3) Impulse buying

Berman & Evans (2001:239) define impulse purchases as when consumers buy products and/or brands they had not planned on buying before entering a store. Terblanche (1998:78) identifies three forms of impulsive buying:

Pure impulse, which is a novelty purchase that breaks from the normal buying pattern. Reminder impulse, where a student sees an item and is reminded that the stock at home needs replenishment.

Suggestion impulse occurs when a student, having no previous knowledge of the product, sees it for the first time and visualises a need for it.

Hausman (2000:404) points out that various products, merchandising and consumer characteristics are responsible for impulsive buying. Product characteristics such as low price, small size and ease of storage, as well as price-promotions, point of purchase displays and product information are some in-store marketing factors that can influence impulse shopping.

When retailers understand impulse buying they can use their knowledge in the design of their shop layout, displays and allocating merchandise as well as point of purchase displays to trigger and encourage impulse shopping by students.

121 3.5.4.6 Risk and the purchase decision

The evaluation of alternative brands lead to the consumer forming preferences for brands in their chosen set. Mitchell (1994:56) states that the highest preference, according to the theory of perceived risk, will be associated with the brand with the least perceived risk. The actual purchase of the item may be subject to various unanticipated situational factors, such as temporary out of stock or time availability. If the item cannot be purchased, a substantial risk may be involved.

Mitra et al. (1999:227) point out that when the least risky brand is not available, the penalty for non-purchase must be weighed against the risk of purchasing an unfamiliar brand, which has more risk. Which retailer to choose, number of items required as well as when to buy and how to pay will lead to future uncertainty. Future intention to purchase may be a method that students use to reduce risks of future product purchase decisions and a method of economizing decision efforts.

The purchase transaction is important, as it is the last impressions the customer (students) has of that purchase situation. Ease of packaging, lack of queues, credit facilities, treatment by salespeople and effective handling of problems and complaints can make lasting impressions. Therefore this study attempts to determine what retailers should do to ensure that the purchase transaction will leave a favourable and lasting impressions with students.

122 3.5.5 Post purchase processes

The final step in the decision-making process consists of four components: Post purchase dissonance, product use, product disposition and purchase evaluation.

3.5.5.1 Post purchase dissonance

(1) Definition

Hawkins et al. (2001:514) define post purchase dissonance as the doubt or anxiety experienced after making a difficult, relatively permanent decision. Berman & Evans (2001:236) point out that a purchase decision usually involves two or more close alternatives and the decision could go either way. According to Asseal (1995:90) consumers, having made their decisions, may feel insecure about their choice and any negative information about a chosen product causes post purchase dissonance, that is conflict resulting from two contradictory beliefs.

(2) Magnitude of post purchase dissonance

According to Cox & Brittain (1996:61) the probability of a consumer experiencing post purchase dissonance as well as the magnitude of such dissonance depends on:

The degree of commitment to the decision: The easier it is to alter the decision, the less likely the student is to experience dissonance.

123 The importance of the decision to the consumer: The more important the decision, the greater the likelihood that dissonance will occur. The difficulty of choosing among the alternatives: The more difficult it is to select among the alternatives the more likely the experience and magnitude of experiencing dissonance. The individuals tendency to experience anxiety: Some individuals have a higher tendency to experience anxiety than others do. The higher the tendency to experience anxiety, the greater the possibility to experience dissonance.

Knowing what may cause students to experience post purchase dissonance can help retailers to develop strategies to reduce or prevent post purchase dissonance.

(3) Reducing post purchase dissonance

Each time students make purchases, they have added to their buying experiences. The more often a product is purchased, the more routine the purchase decision becomes. In routine buying situations consumers are likely the have little second thought as to the wisdom of purchases. However, buyers will typically experience some post purchase anxieties when the purchase is less routine. Therefore, an important component of the post purchases process for retailers is to reduce the uncertainty or doubt that the consumer might have about the purchase. Retailers can increase the desirability of the brand purchased, decrease the desirability of rejected alternatives or decrease the importance of the purchase decision in order to try and

124 reduce dissonance. Consumers try to reduce dissonance by rationalizing their decisions as being wise, returning the purchase or turning to satisfied owners to be reassured.

According to Hawkins et al. (2001:515) the consumer`s search for information after the purchase greatly enhances the role that advertising and follow-up sales efforts can have. To build customer confidence in choosing their brand, retailers design advertisements for recent purchases in the hope of helping to reduce post purchase dissonance.

Retailers need to reduce the dissonance that students experience after purchasing at their store in order to increase the probability that the student will buy from them again. This study attempts to determine if students experience post purchase dissonance, so that retailer can take the necessarily action to prevent or reduce this negative experience.

3.5.5.2 Product use

Cox & Brittain (1996:61) point out that even when post purchase dissonance occurs, it is still generally followed by product use by the purchaser or by another member of the purchasing unit. Retailers are interested in product use for many reasons. First, consumers use products to fulfil needs. If the product does not fulfil the need, a negative evaluation may result. Observing consumers as they use products can be an important source of new product ideas to retailers and the knowledge of how products are used can help retailers to develop more effective packaging. Retailers can also take advantage of the fact that the use of one product may require or suggest the use of another product, leading to multi-category purchases.

125 Finally, monitoring product use can indicate product modification and appropriate advertising themes.

Retailers have to make sure that they teach students the proper way to use their products, to limit confusion and increase satisfaction.

3.5.5.3 Disposition

Hawkins et al. (2001: 614) point out that disposing of a product or the product`s container may occur before, during or after product use. In the case of products that are completely consumed, such as an ice-cream cones, no disposing is involved. According to Mowen (1995:531) there are three options available to consumers regarding disposing: Firstly, keeping the product or packaging by using it to serve the original purpose, converting it to serve a new purpose or to store it. Secondly, to get rid of the product or packaging permanently by recycling, throwing or giving it away, trading or selling. Thirdly, by getting rid of the product or packaging temporarily by renting or loaning.

Why should retailers be concerned about the disposition of a used product? Peter & Olson (2002:281) state that the primary reason is that disposition decisions affect purchase decisions of both the individual making the disposition and other individuals in the market for that product category. Sometimes disposition must occur before acquisition of a replacement because of physical space or financial limitations. Decisions by consumers to sell, trade or give away used products may result in large used product markets, which can reduce the market for new products.

126 This study attempts to determine the disposition options students usually make use of to help retailers to develop effective packaging strategies.

3.5.5.4 Purchase evaluation

The final step in the post purchase process is evaluation Hoyer & MacInnis (2001:279) state that after acquisition, consumption or disposition decisions, consumers evaluate the outcomes of their decisions. Dunn et al. (1995:92) point out that post purchase dissonance, product use and disposition are all potential influences on the purchase evaluation process. According to Asseal (1995:90) once the product is purchased the consumer will evaluate its performance in the process of consumption. Satisfaction occurs when consumers expectations are met or exceeded and the purchase decision is then reinforced. The word satisfaction has been fundamental to the marketing concept and means a release from uncertainty.

Parker & Mathews (2001:38) sees satisfaction as an outcome of a consumption activity or experience that may also be represented as a process. Hawkins et al. (2001:619), Hoyer & MacInnis (2001:280) and Lancaster et al. (2001:51) agree that satisfaction can be described as a process of evaluation between what was received and what was expected, by looking at satisfaction as a process with the focus on the antecedents to satisfaction rather that the satisfaction itself.

Dissatisfaction occurs when the consumers expectations are not met. Such disconfirmation of expectations is likely to lead to negative brand attitudes and lessens the likelihood that the consumer will buy the same brand again. Du Plessis & Rousseau (1999:89) add another

127 response instead of just a positive or negative outcome, the outcome may just be neutral. A positive assessment would result in post purchase satisfaction, a negative assessment in dissatisfaction, while a neutral outcome will result in indifference.

Consumers may respond to these outcomes verbally or through their behaviour. According to Athanassopoulos, Gunaris & Stathkapoulus (2001:687) the behavioural consequences of customer satisfaction are threefold: A decision to stay with the existing services provider, engagement in positive or negative word-of-mouth communications, and intentions to switch service providers.

Post purchase response from students is very important to retailers. In the case of positive reinforcement, successful marketing strategies are confirmed and in the case of negative response they provide guidelines for corrective action to be taken by retailers. Most importantly however is that post purchase response may serve as an indication of the student`s level of involvement with the purchases.

3.5.5.5 Risk and the post purchase process

According to Mitra et al. (1999:211) perceived risk is two-dimensional, comprising of the uncertainty involved in a purchase decision and the consequences of taking an unfavourable action. Six types of risk can be identified:

Financial risk when a product is not good value for money. Performance risk when a product does not perform as expected.

128 Physical risk if purchasing and using the product cause physical injury or harm. Social risk when purchasing or using the product results in humiliation. Psychological risk when a consumer doubts his own abilities after purchasing and using the product. Time risk and the possible loss of convenience or time associated with the unsatisfactory purchase or use of a product or service.

People with greater perceived risk are more likely to engage in word-of-mouth discussion. Mitchell (1994:56) indicated that the higher the magnitude of perceived risk in a purchased the greater the importance of personal sources in making the decision.

The study attempts to determine the type of risk that students usually experience, to enable retailers to reduce these risks to ensure more repeat sales and higher customer satisfaction.

3.6

CONCLUSION

The consumer decision-making process and resulting buying patterns and preferences are a important area of study in consumer behaviour. The model of consumer behaviour consists of the decision-making process as well as the internal and external influences of the process. The decision-making process consists of five steps: Problem/need recognition, information search, evaluation of alternatives, selection and purchase as well as the post purchase processes.

129 The external influences are those factors outside the student that influence and affect them such as, the situation they face when receiving marketing communication, purchasing, using or disposing of the product. Their cultural background, social class, groups and the marketing mix used by retailers are other external factors that could influence students decision-making process.

The internal influences deal with how students react to group influence, environmental changes and retailers marketing mix. The demographics (age, gender and race) of students, their processing of information (perception), learning, needs and motivation as well as their personalities and emotions such as guilt are examples of such factors. Students attitudes towards products, brands and retailers as well as the way students live (lifestyle) are other internal influences that may influence the decision-making process of students.

The steps in the decision-making process are a good point of departure for retailers in the Witbank area, helping them to identify areas in which they can manipulate or influence students behaviour. The first step, problem/need recognition, occurs if there is a difference between the actual and desired state of students. Retailers can react by supplying products and services to satisfy the recognised needs or initiated needs through a good advertisement campaign whereby students are made aware of new products and new needs. The emphasis of the second step is the provision of information. The source of information that student make use of, type of information and amount of search students engage in, supply retailers with knowledge on which information to make available at which sources to reach students. The third step is the choice between the available alternatives and are based on comparing important evaluation criteria. The fourth step involves the sequence of decision-making used

130 by students as well as the criteria students use to select a store. The factors that influence and change in-store behaviour, where, when and how products are purchase are also part of this step. The fifth step consists of the post purchase processes: disposition and evaluation. Dissonance, product use,

The studying the consumer decision-making process provides a basis for developing a total marketing strategy, since it presents an integrated view of all the characteristics that may influence consumer behaviour. This knowledge will aid retailers in the development of effective price, product, distribution and advertising strategies in order to make long-term profit and create customer satisfaction.

CHAPTER 4

RESEARCH METHODOLOGY

4.1 INTRODUCTION

Perreault & McCarthy (1996:155) states that, Research, in the broadest sense, is search for truth. Consumer research attempts to discover the truth about consumers. The authors define consumer research as the gathering, recording and analysis of facts about problems relating to final households. Consumer research helps retailers to understand the buying environment, identify problems and opportunities and develop and evaluate courses of marketing action to reach existing and potential target markets. According to McDaniel & Gates (2001:8) research relating to consumer decision-making focuses on the analysis of purchase motives, needs, buying habits, attitudes towards brands, perceptions of stores and cultural and social influences. For the purpose of this study the focus will be on analysing the consumer decisionmaking process and the resulting consumer preferences and buying behaviour as well as the spending patterns, media patterns and demographical profile of students at Tshwane University of Technology, Witbank campus.

According to Barrie & Furnham (1992:20) all research designs can be classified into three general categories: exploratory, descriptive and causal.

Hair et al. (2000:654) point out that exploratory research is used to gain insight into the

132 general nature of a problem. This type of research also provides information on possible decision alternatives and relevant variables that need to be considered.

Descriptive research provides an accurate picture of some aspects of the market and consumer environment. According to Churchill & Peter (1998:65) this type of research is helpful to describe the characteristics of certain groups, to estimate the proportion of people who behave in a certain way and to make specific predictions.

Webb (2002:21) points out that casual research is used when a researcher wants to indicate that one variable causes or determines the value of other variables.

In this study a combination of descriptive and exploratory research were used in order to investigate the buying patterns, preferences and decision-making of students.

4.2 SOURCE OF DATA

According to McDaniel & Gates (2001:76) it is always advisable to do desk research, which entails the scanning of all available secondary data sources before engaging in primary data search. This approach will guide the researcher in identifying unanswered questions and prevent him/her from replicating research without the necessary background knowledge in what has already been achieved.

133 4.2.1 Secondary data

According to Webb (2002:34) secondary data can be defined as information already compiled and readily accessible to the researcher, who knows how to find and use the data. Jackson (1994:20) sees secondary data as data that already exists and has been collected in the past for some purpose unconnected to the projects at hand. According to Du Plessis & Rousseau (1999:280) secondary data includes:

Existing company information on sales and distribution figures. Information from customer feedback and reports. Information from government bodies such as the Bureau of Statistics. Information from syndicated research. Information published in magazines, newspapers and other literature.

The researcher has done a literature study about consumer behaviour, from available secondary sources, to better understand the customer and specifically the buying patterns of students at the Witbank campus. The literature review consisted of journal articles, research reports, internet searches and textbooks, covering the following range of disciplines: marketing, retailing, consumer behaviour, research methodology and statistics.

4.2.2 Primary data

Kent (1993:7) and Hair et al. (2000:661) define primary data as first hand data that the

134 researcher gathers for the problem under investigation. Jackson (1994:21) agrees with this definition and views primary data as data especially collected by the researcher to meet the particular needs of the project.

4.3 DATA COLLECTION METHOD

According to Martins et al. (1996:122) primary data is obtained through qualitative and quantitative methods. Quantitative research focuses on gathering a large amount of information through mail, telephone and personal interviews. Shao (1999:51) points out that qualitative research methods intend to gather in-dept, detailed information through methods such as in-depth interviews, projective techniques and focus groups.

The biggest advantage of using quantitative methods, according to Martins et al. (1996:140) and Jarboe (1999:51) is the great amount of data that can be collected about the individual respondent. Du Plessis & Rousseau (1999:28) state that the data collected with quantitative methods include:

Attitudes, interests and opinions: In this study the attitudes of students about the possible location of retailers on campus were determined.

Behaviour past, present and intended. In this study the buying behaviour/patterns (where, when, why, how) of students were investigated.

Classification of variable such as demographics. The age, gender, home language, study course and study year of students were determined.

135 In this study mainly quantitative research was used. Barrie & Furnham (1992:20) state that quantitative studies are very versatile because they can be applied in virtually any setting and can be adapted for any research objective. According to Perreault & McCarthy (1996:165) there are three types of surveys: mail, telephone and the personal interviews. The latter was used in this study and consisted of an interviewer asking questions to one or more respondents in a face-to-face situation. Interviews may be structured, consisting of direct questions to obtain factual data, or indirect or semi-structured. This allows the interviewer more flexibility in setting questions in an indirect manner, or probing for answers. Thus the personal interview provides an opportunity for obtaining more information than using the telephone or mail.

Aaker et al. (2000:224) point out that through a personal interview an interviewer can arouse interest and thereby increase the rate of participation and establish continuing rapport. Hague (1993:24) states that other advantages of personal interviews include the interviewer gaining a deeper understanding of the validity of the response and greater accuracy due to the fact that the respondents have more time to reflect and consider. According to Martins et al. (1996:148) the limitations of this type of interview are increased cost and the response bias that may be reduced by properly trained interviewers. Aaker et al. (2000:226) see high cost as well as difficulty in administration as disadvantages of this type of research. Hague (1993:27) points out that the fact that these interviews take a long time, is another disadvantage.

In this study students were interviewed in their classrooms on campus to prevent additional costs and inconvenience, making use of a pre-coded structured questionnaire with mainly structured responses, which decreased the interview time and simplify the administration.

136 According to Churchill & Peter (1998:178) focus groups are where small groups of individuals are brought together rather than being interviewed one at a time, as in in-dept interviews. The interaction of the groups member is loosely directed and provides information on:

Generating hypotheses that can be further tested Stimulating new ideas for new products or older products Providing overall background information on product categories Generating information helpful in structuring consumer questionnaires

In this study focus groups were used, as mentioned in chapter one, to provide information for the structuring of the questionnaire.

4.4 SAMPLING

According to Dillon et al. (1994:220) sampling involves the identification of a group of individuals or households who can be reached by mail, by telephone or in person and who possess information relevant to solving the marketing problem at hand. Lamb et al. (2004:265) define a sample as a subset of the target population from which information is gathered to estimate something about the population. According to Lancaster et al. (2001:40) the following five steps are evident in sampling:

137 4.4.1 Defining the population

Webb (2002:48) points out that a population or universe is the aggregate of all the elements. A population must be defined in terms of elements, sample units, time and size:

Element: Registered Tshwane University of Technology students: Witbank campus. Sample unit: Registered Tshwane University of Technology students: Witbank campus.

Time: The temporal boundaries within which the research is to be conducted. Size: Witbank.

4.4.2 Identifying the sample frame

Aaker et al. (2000:367) define a sample frame as a list of population members used to obtain a sample. A frame may be a register of industries, a telephone directory of even a map. Hair et al. (1996:330) state that a sample frame must meet the following requirements:

It must represent all the elements of the population. There must be no duplication of elements. It must be free from foreign elements.

In the study a headcount list was obtained from the Directorate Strategic Information and Planning (Tshwane University of Technology) and used as a sample frame. The headcount list

138 consisted of all the registered students at the Witbank campus at the time of the study and therefore represented all the elements of the population and was free from duplication and foreign elements and thus met all the requirements of a good sample frame. (Appendix B)

4.4.3 Selecting the sampling method

According to McDaniel & Gates (2001:335) this step involves the choice between probability and non-probability sampling methods, as seen in Figure 4.1. The selection depends on the objective of the study, financial resource available, time limitations and the nature of the problem under investigation.

Non-probability sampling includes elements from the population that are selected in a nonrandom manner such as convenient sampling, judgemental sampling and quota sampling. Nonrandomness occurs due to incidents when population elements are selected on the basis of convenience, or because they are easy to reach. According to Shao (1999:358) non-probability sampling is easy, quick and cheap to use.

According to Aaker et al. (2000:371) in a probability sample all population members have a known probability of being in the sample such as simple random sampling, systematic sampling, cluster sampling or stratified sampling. The authors continue that probability sampling has several advantages over non-probability sampling. First, it permits the researcher to demonstrate that the sample is representative. Second, it allows an explicit statement as to how much variation is introduced, because a sample is used instead of a census of the population; and finally it makes possible the more explicit identification of possible biases.

139 The drawback, according to McDaniel & Gates (2001: 335), is that they are more expensive and take more time to design than non-probability methods.

FIGURE 4.1: SAMPLING METHODS

SAMPLING MEHODS

Probability

Non-Probability

Simple random Systematic Cluster Stratified

Convenient Judgemental Quota

Source: Adapted from Kent (1993:46) & Webb (2002: 5256)

According to Webb (2002:57) three types of non-probability sampling methods can be distinguished:

Hair et al. (2000:354) define convenient sampling as a study in which respondent participation is voluntary or which leaves the selection of sampling units primarily up to the interviewer.

140 The abovementioned authors and Aaker et al. (2000:376) see judgmental sampling studies as studies in which respondents are selected because it is expected that they represent the relevant population and meet the specific needs of the research study.

According to McDaniel & Gates (2001:338) and Jarboe (1999:87) quota sampling involves the selection of specific numbers of respondents who possess certain characteristics known or presumed to affect the subject of the research study. In this study quota sampling was used based on gender, academic year and study course.

Shao (1999:583) states that quotas are predetermined proportions of respondents that have to be samples from different subgroups (in this study gender, study year and study course). Quotas are generally regarded as non-probability sampling, mainly because the interviewer makes the final selection of respondents, so human judgment enters into the selection process. The interviewer, instead of being issued with a pre-selected list of names and addresses, is given an assignment in the form of a quota. Sample calculations were done by the Statistical Department at Tshwane University of Technology, by a Statistical Analyst. (Appendix A)

4.4.4 Determining the sample size

According to Jarboe (1999:95) it would be too costly and time-consuming to contact all the people in the survey population. A stratified sample of 368 respondents (Appendix A), determined by Statistical analysts as being representative, was taken from a population of 1173 students at Tshwane University of Technology, Witbank campus.

141 4.5 QUESTIONNAIRE

McDaniel & Gates (2001:289) define a questionnaire as a set of questions designed to generate the data necessary to accomplish the objectives of the research project. A questionnaire provides standardization and uniformity in the data gathering process. It standardizes the wording and sequence of questions and ensures that every respondent sees and hears the same words, and every interviewer asks identical questions. It can thus be seen as a control device. According to Webb (2002:89) a questionnaire is designed for four purposes:

To maximize the accuracy and relevancy of information to be obtained. To maximize the participation of relevant elements in the sample. To facilitate the gathering of information. To meet research objectives.

Lamb et al. (2004:262) state that by arranging the questions logically and observing other sequencing rules the researcher enhances the standard of the interview, helps the interviewer and induces a logical flow through the questions. The following principles were followed in the design of the questionnaire:

The first question should be simple and interesting to motivate the respondent to react. Ensure a logical sequence of questions. Use the funnel approach, by going from general to particular.

142 Position sensitive questions, or question on embarrassing subjects, as close to the end of the questionnaire as possible. Ensure that a structured answer to a question does not provide respondents with the answer to other questions.

Baker (1999:162) point out that a good questionnaire should meet the following criteria:

It should provide the necessary decision-making information.

Any questionnaire that fails to provide important insight for management in decisionmaking information should be disregarded or revised. In this study questions were grouped under the heading of the objectives of the study. This ensures that the necessary information is obtained, to reach the objectives of the study and to enable retailers to make the correct decisions regarding the student market.

It should fit the respondent requirements.

When designing the questionnaire the researcher must consider the topic, the type of respondent, interviewing environment and length of the interview, to ensure that respondents will give their cooperation. In this study, focus groups and the pre-testing of the questionnaire were used and the necessary changes implemented to ensure that the respondents` requirements were met.

It should meet editing, coding and data processing requirements.

The questionnaire was assigned codes before distribution, and thoroughly discussed with

143 the data processor and editor, to ensure that all the requirement were met.

According to Aaker et al. (2000:307) two types of questions can be distinguished. Openresponse or structured questions with unstructured responses are used first, which allow the respondent to give his own answer in his own way. Webb (2002:99) points out that this type of question forces the respondent to think; it is ideal in situations where all possible answers to a given question are not known. But they elicit much irrelevant information, lengthen the interview and make coding and processing more difficult as well as confusing the students: therefore they were used to a lesser extent in the questionnaire.

Open questions

Example:
Indicate any other needs/preferences regarding retailers (stores) on campus.

The second type is structured questions with structure responses: Here the respondent is given various possible answers and has to choose one or more. Structured questions include:

Dichotomous questions

Example:
Do you sometimes change your mind about what to purchase when you are inside a store? Yes No 1 2

144 Multiple-choice question with single answers

Example:
Indicate your academic year. 1st year 2nd year 3rd year 1 2 3

Multiple-choice questions with multiple answers

Example:
Indicate the payment methods you make use of. (You may choose more than one) Credit card Accounts Cash Lay-buy Cheque Hire purchase Other 1 2 3 4 5 6 7

Checklist & Grids

Example:
Indicate the average amount that you spend monthly on the following items: 0-R50 Transport Music (CD) Cell-phones Entertainment R51-100 R101-150 R151-250 R251-350 R351+

145 Ranking and scaled questions

Ranking questions were not used in the final questionnaire, as the pre-test phase of the original questionnaire showed that students are not able, or do not feel confident enough to answer ranking and scaled questions. Those questions were then converted into multiplechoice questions.

According to Jarboe (1999:70), the advantages are the same regardless of the type of closedresponse format. Such questions are easier to answer, require less effort by the interviewer and make tabulation and analysis easier. The answers of these questions are also directly comparable from one respondent to another and therefore closed-response format questions were used in the study. According to Churchill & Peter (1998:214) the researcher must ask himself the following about the questions in the questionnaire:

Is the question necessary? Are several questions needed instead of one? Do respondents have the necessary information? Will respondents give the information?

The questionnaire (Appendix C) that has been developed consisted of five sections:

Demographical information (Question 1 6) Media Patterns (Question 7 14) Spending patterns (Question 15)

146 Need for retail shops on campus (Question 16 19) Student buying behaviour and preferences (Questions 20 34)

The questionnaire used in this study was subjected to several pre-tests, and necessary changes and improvements were made before fieldwork commenced.

4.6 FIELDWORK

The role of the interviewer in marketing research is the collection of primary data by the administration of the questionnaire, the asking of questions and the recording of answers. Like the questionnaire the interviewer is a very important link in the survey chain. According to Aaker et al. (2000:312) interviewer instructions are very important, to establish parameters under which the research is to be conducted. It is important that the nature of the study is explained, sampling methodology is given and reporting forms and times are given to interviewers. Martins et al. (1996:238) identify three ways of training interviewers:

A training manual, which is a booklet that provides the necessary background, importance of the study and information and instruction on how to conduct a proper interview.

Training classes which consist of role-play and watching videos on real life interviewing.

Field training where assistance is given by the researcher in conducting a proper interview.

147 Perreault & McCarthy (1996:166-167) and Webb (2002:75) identified five common sources of field work errors: selecting respondents, non response errors-refusals, errors created by the method of seeking data, errors resulting from the interviewer misinterpreting or misreporting answers, and an interviewer who cheats. Errors were limited in this study, because the researcher personally conducted the fieldwork, in the classrooms where students attend classes. Students were familiar with the researcher. The researcher faced difficulties in motivating the respondents to complete the questionnaires and getting respondents to be committed, to report accurately and comprehensively.

4.7 ANALYSING THE DATA

Once the researcher had completed the fieldwork, by gathering the data needed to solve the research problem, the data had to be manipulated, or processed. The purpose is to put the data in a format that will answer the marketing managers/researchers questions. According to Zikmund & dAmico (2001:142) this step consists of three parts:

4.7.1 Editing

According to Shao (1999:381) this stage consists of checking completed questionnaires or other data collection forms for omissions, incomplete or otherwise unusable responses, illegibility and obvious inconsistencies.

Jarboe (1999:108) points out that the researcher has four options if the questionnaires do not comply with the requirements as set out above: relevance, comprehensiveness, legibility,

148 consistency and uniformity:

Review the quality of questionnaires and interviewers. After a pilot study some questions students had problems understanding or answering were rephrased, to ensure a better quality.

Go back to the interviewer or respondents. In this study it was not possible to go back to the respondents, because the questionnaire was confidential and identification of respondents were not required.

Have questions completed or corrected by the editor. Where questions were not completed, but answers from other questions could supply the necessary information, the editor completed some of the questions. For example question 23 of the questionnaire could be completed using the information in question 23.1. (Appendix C)

Disregard part of the questionnaire. Between twenty and thirty of the questioners were incomplete or had unusable answers. Those incomplete parts or unusable answers were left out, but the rest of the questionnaire was then used.

Disregard unsatisfactory questionnaires. Shao (1999:383) points out that in severe cases, where the questionnaire is not

149 completed at all or answers were inconsistent, the whole questionnaire must be disregarded. Approximately twenty-five to thirty questionnaires were disregarded completely.

After the researcher checked each questionnaire and ensured that the data contained were legible and accurate, the researcher proceeded to the next step.

4.7.2 Coding

Jarboe (1999:108) points out that coding is the establishing of meaningful categories for responses collected by means of surveys or other data collection forms, so that the responses can be grouped into usable classifications. After the questionnaires were edited and the responses placed into the proper classes and categories, the data must was entered into the compute onto an EXCEL spreadsheet.

In this study the codes V1 V210 (V = variable), were assigned to the different responses of each questions before the respondents completed the questionnaires. This made the coding process easier and quicker (Appendix C).

4.7.3 Tabulation & Analysis

Shao (1999:393) and Lancaster et al. (2001:43) point out that tabulation is the counting of the number of cases falling into various categories. There are two methods of tabulation:

150 Manual Mechanical/Electronic

In this study data were tabulated electronically/mechanically with the help of a computer programmer. Once the data was captured on computer disc by the researcher, the computer programmer instructed the computer how to process the data. Tabulations can be simple tabulations also called one-way distribution or univariate tabulations, which are concerned with only one variable and simply indicate the number of cases in each category. The univariate tabulations of each question of the questionnaire will be discussed, in chapter five, through the use of figures and tables.

Cross tabulation, on the other hand, makes it possible to obtain more useful information, from the answers of two or more questions that are sorted and counted in combination rather than separately. In order to establish the existence and extent of the relationship between variables, cross tabulation needs to be done. According to Lamb et al. (2004:268) a cross tabulation comprises of bivariate observations, each cell containing those observations that correspond both to the appropriate column heading and the appropriate side heading.

In order to determine if the differences indicated by the cross tabulation are significant, the chi-square test is used. A chi-square test can be described as a test applied to nominal data and is concerned with whether the differences between an observed set of frequencies and a theoretical, expected set of frequencies are significant, thus determining the likeliness that the row and column variables are related. The level of association is indicated by p, the probability that the variables are not related. The smaller the value of p, the higher are the chances that the

151 variables are related. P must be < 0.05 in order to indicate a significant relation (95% or more). If p > 0.05 there is not a significant relation between the two variables. In applying the chisquare technique it is important that each cell in the theoretical table should have a frequency of at least five, otherwise the results of the chi-square test may be invalid. For this reason some of the age groups were combined, and the study focused on the two main race groups: black and white, as the other race groups had a frequency of less than five The results of the various cross tabulations will be presented in tables and discussed in chapter five.

4.8 CONCLUSION

In this study a combination of descriptive and exploratory research was used to investigate the buying patterns, preferences and the decision-making process of students. After consulting available secondary source, like magazines, journals and textbooks, it was decided to collect primary data by means of personal interviews.

A structured questionnaire with mainly structured responses consisting of 34 questions was used. A non probability sample method, quota sampling based on gender, academic year and study course, was used to interview 368 of the 1178 students at the Witbank campus.

The researcher completed the fieldwork by interviewing the students on campus in their classrooms. Once the data was collected, the researcher edited, coded and analysed the data by using statistical analysis, cross tabulations and chi-square tests. The results of the analysis will be discussed in chapter five.

CHAPTER 5

TABULATION AND ANALYSIS OF THE FINDINGS

5.1 INTRODUCTION

Zikmund & dAmico (2001:142) define the analysis and tabulation stage in the research process as the statistical and qualitative considerations of data gathered by research. In this chapter, tabulation and analysis of data will be done.

A structured questionnaire was used, with mainly structured response consisting of 34 questions, completed by 368 of the 1170 Tshwane University of Technology students on the Witbank campus. The questionnaire was set by following the theoretical guidelines for a reliable questionnaire, as discussed in chapter four. Questionnaires from similar studies were used as a source of reference, and a pilot study was used to check that the respondents understood the questions and were able and willing to answer them. Each question was checked to see if it contributed to the research objectives, as stated in chapter one, to ensure a high quality questionnaire and reliable results.

The data capturing was done after the editing process, where the completed questionnaires were checked for accuracy and completeness. This was done by transferring the pre-assigned codes of the questions responses, V1 V210, to an Excel spreadsheet. These codes were checked for mistakes, the necessary corrections were made and a statistical program was used to analyse the final results. Cross tabulations were done in order to assign meaning to the data

153 and to make suggestions in the next chapter. McDaniel & Gates (2001:386) define validation as the process of ascertaining that interviews actually were conducted as specified. Because the researcher conducted the interviews herself it was not necessarily to check if the respondents were actually interviewed, if the interviewer covert the entire survey or if the interviewer were courteous, as with making use of outside interviewers.

The demographic profile of students, their media patterns, expenditures, preference for retailers on campus and buying patterns results will be discussed.

5.2 DEMOGRAPHICAL PROFILE OF STUDENTS

The first section of the questionnaire (question 1 6) was devoted to students` demographical information. This was done to develop a demographic profile of the students at Tshwane University of Technology, Witbank campus, as stated in paragraph 1.4.2, as one of the secondary objectives of this study. It is important for retailers to obtain information on their potential target markets in order to develop a customer profile. According to Machado & Niewenhuizen (1996:7) demographical information can be used to describe market segments to help retailers to develop a marketing strategy for a specific group of customers.

The sample calculation for this study (Appendix A) was done by a Statistical Analyst at the Department of Statistical Support at Tshwane University of Technology. It was used as a guideline for the minimum respondents of each gender, study course and study year to ensure

154 a representative sample of the entire Witbank campus student population at the time of the study.

Because the Asian and Coloured ethnic groups were so small, as discussed in paragraph 4.7.3, only the black and white ethnic groups were used in further analysis concerning race/ethnic groups, to ensure valid cross-tabulation and chi-square tests.

FIGURE 5.1: GENDER OF RESPONDENTS

46.00%(173)

54.00%(204)

Female(54%) Male(46%)

The results of Figure 5.1 indicate that out of the 378 respondents, 204 (54%) are female and 173 (46%) male. This represents the total number of students (1173), of which 637 are female and 512 male at Tshwane University of Technology, Witbank campus. It can be concluded that male and female students are represented equally at the Witbank campus.

155 FIGURE 5.2: AGE OF RESPONDENTS

5.82%(22) 26.72%(101)

67.46%(255)

Under 20 (26.7%) 20 -24 (67.46%) 25+ (5.82%)

Figure 5.2 indicates that 67.46% (255) of the respondents are between 20-24 years of age. Twenty six percent (101 respondents) are under the age of 20 while 5.8% (22 respondents) are older that 25 years. From the results obtained in Figure 5.2, it can be concluded that most of the students who study at Tshwane University of Technology, Witbank campus are in the age group: 20-24 years. This means that the student market at the Witbank campus is young people.

156 FIGURE 5.3: RACE OF RESPONDENTS

1.06%(4) 1.59%(6) 13.76%(52)

83.60%(306)

Asian(1.06%) Black(83.6%) Coloured(1.59%) White(13.76%)

Figure 5.3 indicates that 316 (83.6%) of the 378 respondents are Black, 52 (13.76%) White, 6 (1.59%) Coloured and 4 (1.06%) Asian. The conclusion can be made that the majority of respondents are from black ethnic groups. This information is a reflection of the total number of students (headcount) per ethnic group at Witbank campus (Appendix B). Black students constituted 1007 (85%) of the 1173 students, 142 (12%) were White, 8 (0.7%) students Coloured and 10 (0.85%) Asian students. Retailers need to focus their marketing strategy especially on the black students, as they are the biggest group on campus. However, this does not mean that the white students should be ignored, a small group can also be a profitable segment to serve and the similarities between the black and white groups may mean that the same products, prices and promotions may appeal to both groups.

157 TABLE 5.1: REGISTERED STUDY COURSE OF RESPONDENTS

Course Cost & Management Accounting Engineering Financial Information Systems Human Resource Management Information Technology Internal Auditing Marketing Office Management & Technology Public Management Total

Number students 28 121 10 35 68 9 38 43 26 378

of % of students 7.41 32.01 2.65 9.26 17.99 2.38 10.05 11.37 6.88 100.00

Table 5.1 indicates that the majority of respondents (71.42%) are registered for Engineering, Information Technology, Marketing and Office Management and Technology.

All the programmes offered by the Witbank Campus are represented in the sample (Appendix A). It can be concluded that there is a mixture of different students from different study fields at Tshwane University of Technology, Witbank with Engineering and Information Technology students being the biggest groups.

158 FIGURE 5.4: ACADEMIC YEAR

25.40%(96)

44.97%(170)

29.63%(112)

I Year(44.97%) II Year(29.63%) III Year(25.4%)

As reflected in Figure 5.4, 170 (44.97%) out of the 378 respondents are registered first year students, 112 (29.63%) are second year students and 96 (25.4%) are third year students. The majority of students at Witbank campus are first year students while the third years are the smallest group. The difference between the first, second and third year student numbers are due to the fact that the intake of first year students always results in a relatively large number of students, which decreases in the second and third year due to students dropping out. The sample calculations (Appendix A) were used as a guideline to determine how many first, second and third year students were to be included in the sample, to ensure a true reflection of the students population (Appendix B) at the Witbank campus.

159 FIGURE 5.5: HOME LANGUAGE OF RESPONDENTS

100.00% 90.00% 80.00% 70.00% 60.00% % 50.00% 40.00% 30.00% 20.00% 10.00% 0.00% Afrikaans English Zulu Sotho Tswana Pedi Venda Ndebele Other 8.73%(33) 5.03%(19) 9.79%(37) 1.06%(4) 0.79%(3) 6.35%(24) 30.95%(117) 21.96%(83) 15.38%(58)

From Figure 5.5 it is evident that 33 (8.73%) of the 378 respondents indicated their home language as Afrikaans, 19 (5.03%) English, 117 (30.95%) Zulu, 37 (9.79%) Sotho, 4 (1.06%) Tswana, 83 (21.96%) Pedi, 3 (0.79%) Venda and 24 (6.35%) Ndebele. The biggest group of respondents indicated their home language as Zulu (30.95%), followed by Pedi (21.95%) and Sotho (9.79%). Other languages such as Swazi, Xhosa, Tshonga and Siswati constituted 15.38% of respondents` home language. Although only 5% of the students indicated English as their home language, all the students at Tshwane University of Technology, Witbank campus are able to speak and understand English because it is the language used to present lectures. This information will help retailers to identify the language to be used in communicating with students to ensure that they do understand the information and to determine possible cultural influences.

160 5.3 MEDIA USAGE AND EXPOSURE PATTERNS

Retailers should ensure that their communication reaches their customers. Choosing the right media, which your target market is exposed to regularly, will contribute to a successful promotional campaign. The second part of the questionnaire (questions 7 12) deals with the media exposure of students in order to determine students` media patterns as stated as one of the secondary objective of this study, paragraph 1.4.2. Focus groups conducted with students, before the setting of the questionnaire, indicated several options of radio stations, magazines, newspapers and TV channels that students make use of (usually, seldom, never) which was subsequently used in the questionnaire. The next section will be the discussion of the media usage and exposure patterns of students, as illustrated in Table 5.2, Table 5.3, Table 5.4 and Figure 5.2 Figure 5.4.

From Table 5.2 below it is evident that out of the 377 students interviewed the majority of respondents usually read the True Love, Drum and Sport magazines. Less than 10% of the respondents usually read other magazines like Sarie, Mens Health, Fairlady, Cosmopolitan and Rooi Rose.

It can be concluded that the two most popular magazines that students read on a regular bases (usually) are the Drum and True Love magazines.

161 TABLE 5.2: MAGAZINE READERSHIP

Magazine

Sarie Mens Health Bona Y magazine You True Love Drum Health magazines Sports magazines Financial magazines Cosmopolitan Rooi Rose Pace Fairlady

Frequency of readership Usually Seldom Number % Number % 13 3.44 23 6.08 30 55 57 43 175 143 70 90 39 22 9 82 23 7.98 14.55 15.16 11.38 46.42 37.93 18.77 23.80 10.32 5.84 2.38 21.75 6.08 55 98 85 113 98 128 90 100 82 69 25 104 62 14.63 25.93 22.16 29.89 25.99 33.95 24.13 26.46 21.69 18.30 6.61 27.59 16.40

Never Number % 342 90.48 290 255 234 222 104 106 213 188 257 286 344 191 293 77.13 59.52 62.23 58.73 27.59 28.12 57.10 49.74 67.99 75.86 91.01 50.66 77.51

Total Number % 378 100 375 378 376 378 377 377 373 378 378 377 378 377 378 100 100 100 100 100 100 100 100 100 100 100 100 100

162 TABLE 5.3: NEWSPAPER READERSHIP

Newspapers Readership frequency Usually Seldom Number % Number 161 42.82 109 Sunday Times 111 29.44 106 Sunday World 121 32.10 121 City Press Rapport Beeld 19 27 5.07 7.18 42.97 12.73 50.79 21.60 27.93 24 27 109 53 81 104 77

% 28.99 28.12 32.10 6.40 7.18 28.91 14.06 21.43 27.73 20.47

Never Number % 106 28.19 160 135 332 322 106 276 105 190 194 42.44 35.80 88.53 85.64 28.12 73.21 27.78 50.67 51.60

Total Number %
376 100

377 377 275 376 377 377 378 375 376

100 100 100 100 100 100 100 100 100

162 Witbank News Middelburg 48 Observer 192 Sowetan Star 81

Sunday Sun 105

From Table 5.3 it is evident that 161 (42.82%) of the 376 respondents usually read the Sunday Times, 111 (29.44%) read the Sunday World, 121 (32.2%) read the City Press, 18 (5.07%) read the Rapport, 27 (7.18%) read the Beeld, 162 (42.97%) read the Witbank News, 48 (12.73%) read the Middelburg Observer, 192 (50.7%) read the Sowetan, 81 (21.6%) read the Star newspaper, 105 (27.94%) indicated that they usually read the Sunday Sun and only 16 (3.19%) of the students read other newspapers. It can be concluded that the Sowetan, Witbank News and Sunday Times are the three most popular newspapers students usually read. The Rapport, Beeld and Middelburg Observer are the least popular. Because the Witbank News is a regional newspaper, it seems to be the appropriate newspaper in which retailers can

163 advertise, especially for products sold only on regional level and products aimed especially at student at Witbank campus.

TABLE 5.4: PREFERRED RADIO STATIONS

Radio Station Radio 702 Highveld Stereo Jacaranda 5 FM Y FM Ikwekwezi

Listening frequency Usually Seldom Number % Number % 5 1.33 27 7.2 12 102 85 147 148 3.19 27.13 22.61 39.30 39.47 22.99 6.91 70.32 19.25 42 123 99 82 107 94 63 44 91 11.17 32.71 26.33 21.93 28.53 25.14 16.76 11.76 24.33

Never Number % 343 91.47 322 151 192 145 120 194 287 67 211 85.64 40.16 51.06 38.77 32.00 51.87 76.33 17.92 56.42

Total Number % 375 100 376 376 376 374 375 374 376 374 374 100 100 100 100 100 100 100 100 100

Iqwaqwala 86 SA FM Metro Tobela 26 263 72

From Table 5.4 it is evident that of the 375 interviewed students only 5 (1.33%) usually listen to Radio 702, 12 (3.19%) usually listen to Highveld Stereo and 26 (6.91%) usually listen to SA FM, which makes them the three least popular radio stations. The most popular radio stations were Jacaranda, which 102 (27.13%) of the students listen to, 263 (70.32%) listen to Radio Metro, 147 (39.3%) usually listen to YFM while 148 (39.47%) usually listen to Ikwekwezi.

164 It can be concluded that Metro, YFM, Ikwekwezi and Jacaranda are the four radio stations students usually listen to, while Radio 702 and Highveld Stereo are the least popular. Retailers can use this information to select the right radio station in order to reach the students at Witbank campus.

FIGURE 5.6: TV VIEWING PATTERNS

Usually 81.33%(305) % Seldom Never 55.01%(203) 65.28%(235) 73.53%(272)

100.00% 90.00% 80.00% 70.00% 60.00% 50.00%

51.62%(191)

41.44%(155)

40.91%(153)

36.76%(136)

26.56%(98)

20.27%(76)

20.28%(73)

18.16%(67)

17.65%(66)

14.44%(52)

13.07%(49)

11.62%(43)

40.00% 30.00% 20.00% 10.00% 0.00%

7.20%(27)

5.60%(21)

Figure 5.6 indicates that 305 (81.33%) of the 375 respondents usually watch SABC 1, 136 (36.76%) of the 370 respondents indicated that they usually watch SABC 2, 153 (40.91%) of the students usually watch SABC 3, 272 (72.53%) indicated that they usually watch E TV, 67 (18.16%) of the students usually watch M Net, while only 52 (14,44%) of the 368 students indicated that they usually watch DSTV. It can be concluded that SABC 1 and E TV are the two TV stations that students usually watch. M Net and DSTV are the least popular. Retailers

SABC 1

SABC 2

SABC 3
TV station

E -TV

M - NET

DSTV

165 can use this information to select the right TV station if they wish to make use of television as advertising media.

FIGURE 5.7: PROGRAMME TYPES

71.54%(264)

100.00% 90.00% 80.00% 70.00% 60.00% 50.00% 40.00% 30.00% 20.00% 10.00% 0.00%

53.70%(198)

52.20%(193)

45.10%(165)

46%(169)

Figure 5.7 shows that 123 (33.6%) of the 365 respondents usually watch documentaries, 193 (52.2%) of the respondents indicated that they usually watch soap operas while 169 (46%) of the respondents usually watch sport programmes. News is usually watched by 198 (53.7%) of the respondents and 264 (71.54%) of the respondents usually watch movies. It can be concluded that movies are the program type most often watched, followed by news and soap operas. The choice of programmes indicates that students watch TV for the relaxation and entertainment provided by movies and soap operas, but also watch news to keep up with the latest developments around the world and should consequently be well informed.

33.60%(123)

33.10%(122)

32.30%(119)

27.30%(101)

21.80%(80)

21.20%(78)

21.30%(77)

20.50%(75)

13.90%(49)

7.80%(29)

7.30%(27)

Documentaries

Soap Operas

Sport

News

Movies

Other
Usually Seldom Never

166 FIGURE 5.8: DAILY VIEWING TIME OF RESPONDENTS

19.57%(73) 36.73%(137) 43.70%(163)

Less than 2 (19.57%) Two - Four (43.70%) More than four (36.73%)

Figure 5.8 indicates that 73 (19.57%) of the 373 respondents watch TV less than two hours a day, 137 (36.73%) of the respondents watch more than four hours per day and 163 (43.7%) of the students watch TV between 2-4 hours a day. The conclusion can therefore be made that the majority of students spend a lot of time in front of a TV set watching movies, sport, news and soap operas (Figure 5.7).

5.4. SPENDING PATTERNS

The third part of the questionnaire (question 13-15) deals with the monthly spending of students and is designed to determine students expenditure patterns, which is a secondary objective of this study, as discussed in paragraph 1.4.2.

167 FIGURE 5.9: SOURCE OF INCOME OF RESPONDENTS

100.00% 90.00% 80.00% 70.00% 60.00% % 50.00% 40.00% 30.00% 20.00% 10.00% 0.00% Parents Job Bursary Source Loans Other 8.22%(31) 13.53%(51) 5.84%(22) 0.53%(2) 71.88%(271)

According to Figure 5.9, 271 (71.88%) out of the 377 respondents indicated parents and family members as their main source of income, 31 (8.22%) indicated their main source of income as part-time jobs, 22 (5.84%) have bursaries, while 51 (13.53%) use loans as their main source of income. The conclusion can be made that the main source of income for the majority of respondents is thus their parents (71.88%) followed by loans (13.53%). The majority of respondents indicated their parents as their main source of income and this has certain implications for retailers. This link between the financial situation of parents and the amount of spending money of students needs further investigation.

The differences and/or similarities between the different gender and race groups and their source of income will be illustrated in Table 5.5 and Table 5.6 where cross tabulation and chi square tests were applied.

168 TABLE 5.5: SOURCE OF INCOME VERSUS GENDER

Source of income Gender Female Male

Family Friends & Loans Part-time job Bursary Other Total

P-value

73.68% 154 69.64% 117

14.35% 10 12.50% 21

4.78% 13 12.50% 9

6.22% 30 5.36% 21

0.96% 2 0.00% 0

100% 209 100% 168

0.0632

The P-value for Table 5.5 was calculated as P > 0.05. This indicates that there is not a significant difference in the source of income between the different gender groups. Retailers can make use of this information when developing their pricing strategies for students.

TABLE 5.6: SOURCE OF INCOME VERSUS RACE

Source of income Race Black White

Family Friends & Loans Part-time job Bursary Other Total

P-value

75.63% 239 49.02% 25

15.19% 48 5.88% 3

3.80% 12 35.29% 18

5.06% 16 9.80% 5

0.32% 1 0.00% 0

100% 316 100% 51

< .0001

The P-value for Table 5.6 was calculated as P < 0.05. This indicates that there is a significant difference between black and white groups and their source of income. Friends and family members are the main source of income for 75.63% of the black students while only 49.02% of the white students depend on their families or friends for income. As for part-time jobs: 35.29% of white students use part-time jobs as a source of income while only 3.8% of the black student have part-time jobs. The fact that more white students use part-time jobs and that

169 they are not solely depended on their families for spending money, may have an effect on their amount of monthly income.

Although there is no significant difference between gender and source of income, there is however a significant difference between ethnic groups, with black students more dependent on their family and friends than white students. White students depend more on part-time jobs as a source of income and that may be a reason why they have a higher monthly income, as seen in Table 5.8, than the black students. Retailers must be aware of this dependency on family for income as this may have an indirect influence on the spending of students. For example, if a parent loose their job, the student will have no/little spending money.

170 FIGURE 5.10: AVERAGE SPENDING MONEY PER MONTH

100.00% 90.00% 80.00% 70.00% 60.00% % 50.00% 29.10%(110) 40.00% 30.00% 20.00% 10.00% 0.00% 0 - R150 R151-R350 R351-R500 R501-R750 R751-R1000 R1000+ Rand value 19.58%(74) 19.05%(72) 16.40%(62) 7.94%(30) 7.94%(30)

Figure 5.10 indicates that out of the 378 respondents who completed this question: One hundred and ten (29.1%) have R150 and less to spend, 208 (54.03%) have between R151R750 to spend, while 60 (15.88%) have R750 and more to spend.

It can be concluded that almost half of the respondents interviewed (48.68%) has less than R351 per month to spend, 35.45 % of the respondents have between R351 R750 per month to spend and only 15.88% of the respondents interviewed have more than R750 per month to spend. Based on the minimum and maximum Rand values of each interval, for example: Interval R0 R150 (R0 is the minimum Rand value and R150 the maximum Rand value) the average student has between R317 (minimum) R489 + (maximum) per month to spend.

171 Cross tabulation, as reflected in Table 5.7 and Table 5.8 of students average spending money per month, provides retailers with insight into possible differences or similarities between the students in terms of the amount of spending money at their disposal.

TABLE 5.7: GENDER VERSUS AVERAGE AMOUNT OF SPENDING MONEY

Average spending money per month Gender Female Male

R0 R150 R151-R350 R351R500 R501-R750 R751R1000 R1001 + Total

P-value

32.54% 68 24.85% 42

19.62% 41 19.53% 33

18.66% 39 19.53% 33

15.31% 32 17.75% 30

6.70% 14 9.47% 16

7.18% 15 8.88% 15

100% 209 100% 169

0.6212

The P-value for Table 5.7 was calculated as P > 0.05. This indicates that there is not a significant difference between male and female students amount of monthly spending money. Retailers should make use of this information when developing their pricing and product strategies, as no gender have significantly more or less income than the other, the same prices and products (durables/non-durables) should be affordable for both groups.

TABLE 5.8: RACE VERSUS AVERAGE AMOUNT OF SPENDING MONEY

P-value
R751-R1000 R1001 + Total

Average spending money per month Race Black White

R0 R150 R151R350 R351R500 R501-R750

31.65% 100 13.46% 7

19.62% 62 21.15% 11

19.30% 61 21.15% 11

15.82% 50 17.31% 9

7.91% 25 9.26% 5

5.70% 18 17.31% 9

100% 316 100% 52

0.0181

172 The P-value for Table 5.8 was calculated as P < 0.05. This indicates that there is a significant difference in the monthly spending money between the different race groups. Results from Table 5.8 indicate that 43.88% of the white student population have more than R500 per month to spend while only 29.43% of the black students interviewed have more than R500 per month to spend. It can be concluded that white students have more spending money than black students per month. This may be due to the fact that white student depend more on part-time jobs than black students as a source of income, as seen in Table 5.6, with the implication for retailers that the white students would be able to buy the more expensive products where as it would be difficult for the black student due to limited financial resources.

The products students buy and how much money they spend, as well as the process they follow, are very important for retailers, in order to determine which products to sell and to determine the market and sales potential for their products.

In Table 5.9 the monthly spending patterns of respondents are given according to the items they spend their money on. The purpose of the calculation is to indicate how students spend their money.

173 TABLE 5.9: MONTHLY SPENDING OF RESPONDENTS

Income Spending
Savings Furniture & Appliances Alcohol & Cigarettes Textbooks Beauty & Hair care Stationery Fast Foods Groceries Entertainment Cell phone & airtime Music Transport Clothing

0-R50

R51R100

R101R150

R151R250

R251 R350

R351+

Total

Min

Max

223 60.12% 296 79.57% 304 81.28% 167 44.66% 198 52.94% 215 57.18% 194 51.46% 86 22.83% 173 45.77% 211 55.82% 226 60.11% 116 30.93% 117 31.03%

70 18.87% 17 4.57% 21 5.61% 44 11.76% 82 21.03% 67 17.81% 88 23.34% 39 10.34% 78 20.63% 74 19.56% 76 20.21% 47 12.53% 58 15.38%

34 9.16% 8 2.15% 11 2.94% 34 9.09% 49 13.10% 36 9.57% 57 15.12% 60 15.92% 58 15.34% 47 12.43% 53 14.10% 57 15.20% 72 19.10%

15 4.04% 12 3.23% 19 5.08% 31 8.29% 29 7.75% 13 3.46% 21 5.57% 77 20.42% 32 8.47% 22 5.82% 12 3.19% 76 18.67% 55 14.59%

14 4.04% 13 3.49% 4 1.07% 23 6.15% 9 2.41% 12 3.19% 7 1.86% 51 13.51% 25 6.63% 11 2.92% 2 0.53% 46 12.27% 34 9.02%

14 3.77% 26 6.99% 15 4.01% 75 20.05% 7 1.87% 33 8.77% 10 2.65% 64 16.98% 12 3.17% 13 3.44% 7 1.86% 39 10.40% 41 10.88%

370 100% 372 100% 374 100% 374 100% 374 100% 376 100% 377 100% 377 100% 378 100% 378 100% 376 100% 381 100% 377 100%

R48 R99+ R43 R92+ R30 R113 R48 R63 R82+ R160+ R102+ R111+

R50 R101+ R145 R66 R51 R37 R120 R109 R204+ R122+ R102+ R88+ R180+ R166+

The calculation of the monthly spending of students per product in Rand value was calculated as follows: The minimum monthly spending per product item is based on the minimum Rand value of each interval, for example in the interval, R0 - R50, R0 will be used in the calculation for minimum spending, while the maximum monthly spending is based on the maximum Rand value of each class interval, for example in the interval, R0 - R50, R50 will be used. This was done with each interval and multiplied by the number of students that indicated their monthly

174 spending in a particular interval, and then divided by the number of responses to determine the spending per student. This calculation is done to estimate the range of monthly spending on each item in order to establish the items on which students spend the most and least amount of money per month. It can be concluded from the above information that the respondents monthly spend between (R145 - R204 +) on groceries, (R120 - R180 +) on transport, clothing (R109 - R166 +) and books (R113 - R160 +). On average students spend the least amount of money per month on alcohol/cigarette (R30 - R82 +) and music (R37 - R88 +) per month. This information will help retailers to choose specific products aimed at the student market.

5.5 NEED FOR RETAIL SHOPS ON CAMPUS

The fourth section of the questionnaire (questions 16-19) was used to determine students preferences for retail shops on campus, as one of the secondary objectives of this study.

Due to the fact that there is only a small bookstore on campus and the fact that students do not always have the time to visit the nearby shopping centre, the possible need for retail outlets on campus was investigated. The results are visible in Figure 5.11, Figure 5.12 and Figure 5.13. The purpose of this illustration is to determine if students have a need for retailers on campus and if so, which retailers they would prefer.

175 FIGURE 5.11: AVERAGE NUMBER OF DAYS SPENT ON CAMPUS

100.00% 90.00% 80.00% 70.00% 60.00% 53.97%(204) 32.28%(122)

50.00% 40.00% 30.00% 20.00% 10.00% 0.00% 1 2 3 0.53%(2)

9.26%(35) 2.38%(9) 1.32%(5) 0.26%(1) 4 Number of days 5 6 7

The results of Figure 5.11 show that out of the 378 respondents only 2 (0.53%) spend one day a week on campus, 9 (2.38%) students spend two days a week on campus, 35 (9.26%) three days, 122 (32.28%) four days, 204 (53.97%) five days, 5 (1.32%) six days and only 1 (0.26%) spends seven days a week on campus. It can be concluded that the majority of respondents (86.25%) interviewed spend between 4-5 days per week on campus. Only 1.58% of the respondents interviewed spend 6-7 days per week on campus: this may be due to the fact that students only come to campus on weekdays for classes, or the absence of a residence on campus and needs to be investigated further. Retailers can use this information to determine if there are enough traffic (students) on campus during the week to sustain a outlet on campus.

176 FIGURE 5.12: PREFERENCE FOR SHOPPING FACILITIES ON CAMPUS

32.28%(112)

67.72%(235)

Yes(67.72%) No(32.28%)

Figure 5.12 reflects that 67.72% (235) out of the 347 respondents indicated that they would like to shop at stores on campus while only 32.28% (112) are not interested in shopping on campus. It can therefore be concluded that students would like to shop at retailers on campus.

The differences and/similarities between the gender, race and age groups and their preference for retailers on campus will be illustrated in Table 5.10 to Table 5.12, where cross tabulation and chi-square test were applied.

177 TABLE 5.10: SHOPPING ON CAMPUS VERSUS GENDER

Would you like to shop on campus?

P-value Total 100% 187 100% 160

Gender Female Male

Yes 62.57% 117 73.75% 118

No 37.43% 70 26.25% 42

0.0263

The P-value for Table 5.10 was calculated as P< 0.05. This indicates that there is a significant difference between genders and their preference to shop on campus. The results of Table 5.10 show that although the majority of both genders would like to shop on campus, male students (73.75%) are much more eager to support retailers on campus than their female (62.56%) counterparts. Retailers can make use of this information when deciding which products and advertising themes to use for their on-campus stores, by choosing those products and themes that would especially appeal to the male students.

TABLE 5.11: SHOPPING ON CAMPUS VERSUS AGE

Would you like to shop on campus?

P-value Total 100% 96 100% 229 100% 22

Age < 20 20 24 25+

Yes 65.63% 63 67.69% 155 77.27% 17

No 34.38% 33 32.31% 74 22.73% 5

0.5737

178 The P-value for Table 5.11 was calculated as P > 0.05. This indicates that there is not a significant difference in the different age groups and their preference to shop on campus.

The above-mentioned implies that retailers planning on locating on campus do not have to focus only on one specific age group, but rather on everyone, as all the age groups indicated that they would like to shop on campus.

TABLE 5.12: SHOPPING ON CAMPUS VERSUS RACE

Would you like to shop on campus? Race Black White Yes 67.13% 192 72.55% 37 No 32.87% 94 27.45% 14 Total 100% 286 100% 51

P-value

0.4451

The P-value for Table 5.12 was calculated as P > 0.05. This indicate that there is not a significant different in the different race groups and their preference to shop on campus.

Therefore retailers planning on locating on campus have to focus on both race groups when designing their marketing strategy for their on-campus stores, as both race groups indicated that they would like to shop on campus.

Although there is no significant difference between age and race groups and their preference for retailers on campus, there is however a significant difference in the gender, with males

179 being more eager to support retailers on campus than females. For retailer this is positive as the majority of students no matter gender, age or race are eager to support retailers on campus.

FIGURE 5.13: PRODUCTS THAT STUDENTS WOULD PREFER TO BUY ON CAMPUS

80.95%(306)

75.66%(286)

100.00% 90.00% 80.00% 70.00% 60.00% 57.14%(219)

55.29%(209)

52.12%(197)

56.06%(213) 19.30%(73)

25.39%(96)

50.00% 40.00% 30.00% 20.00% 10.00% 0.00% Banking services Entertainment

17.72%(67)

16.30%(61)

4.23%(16)

From Figure 5.13 it is clear that 306 (80.85%) out of the 378 respondents prefer to have fast food outlets on campus, 286 (75.66%) of the respondents would support a stationery retailer, 219 (57.14%) of the respondents would support a banking service provider, 213 (56.06%) would like entertainment, 209 (55.29%) indicated cell phone & airtime providers and 197 (52.12%) prefer to buy sport equipment on campus. Only 96 (25.39%) prefer to buy from an

Hair&Beauty

Furniture&Appliances

Sports equipment

Products

Groceries

Fast Foods

Clothing

Electronic goods

Cell phones

Stationery

180 electronic goods store, 73 (19.3%) from hair and beauty stores, 67 (17.72%) from clothing stores, 61 (16.13%) would like to buy their groceries on campus, and only 16 (4.23%) indicated that they would like a furniture and appliance store on campus. It can be concluded that the majority of students would support fast food outlets, stationery stores, banking services, entertainment outlets and cell phone outlets on campus. Students feel less confident about supporting groceries stores, clothing, hair and beauty, and electronic goods. Stationery is indicated as a product that the respondents would like to buy possible due to the fact that stationery is needed for their studies on campus. Banking services, cell phones and entertainment were also indicated as services they would like to see. These preferences of students are possible indication of the type of retailers that they would support on campus. Although students indicated that they spend a lot of money on groceries and clothing and visit these stores often they do not necessarily want these products/stores on campus as indicated in Figure 5.13.

Cross tabulation and chi-square tests on gender, race and age with the most preferred retailers, as identified in Figure 5.13, provide further insight into the products students prefer to buy on campus.

181 TABLE 5.13: SUPPORTING A FAST FOOD OUTLET VERSUS GENDER

Supporting a Fast Food outlet on campus Gender Female Male Yes 77.51% 129 81.06% 115 No 22.49% 37 18.49% 27 Total 100% 166 100% 142

P-value

0.3992

The P-value for Table 5.13 was calculated as P > 0.05. This indicates that there is not a significant difference between the two genders and their support of a fast food outlet on campus. Thus a fast food outlet should appeal to both genders.

TABLE 5.14: SUPPORTING A FAST FOOD OUTLET VERSUS RACE

Supporting a Fast Food outlet on campus Race Black White Yes 79.74% 202 90.38% 43 No 20.26% 52 9.26% 4 Total 100% 254 100% 47

P-value

0.0694

The P-value for Table 5.14 was calculated as P > 0.05. This indicates that there is not a significant difference between the two race groups and their support of a fast food outlet on campus. A fast food outlet should appeal to both race groups.

182 TABLE 5.15: SUPPORTING A FAST FOOD OUTLET VERSUS AGE

Supporting a Fast Food outlet on campus Age < 20 > 20 Yes 39.79% 33 82.31% 185 No 60.21% 50 17.69% 40 Total 100% 83 100% 225

P-value

< 0.001

The P-value for Table 5.15 was calculated as P < 0.05. This indicates a significant difference between the two age groups and their support of a fast food outlet on campus. Results of the cross tabulation indicate that the older age groups (20+) would be much more inclined to support a fast food outlet than the younger age groups. Fast food retailers can focus their marketing strategies on the older students, as they should be much more inclined to supporting the retailers than the younger students.

TABLE 5.16: SUPPORTING A BANKING OUTLET VERSUS GENDER

Supporting a banking outlet on campus Gender Female Male Yes 50.24% 56 62.13% 68 No 49.76% 54 37.87% 41 Total 100% 110 100% 109

P-value

0.0213

The P-value for Table 5.16 was calculated as P < 0.05. This indicates that there is a significant difference between the two genders and their support of a banking outlet on campus. The

183 results show that although both gender indicate that they would support a banking service, males are more likely to support a banking service on campus than their female counterparts. Banking outlets should thus focus more on male than female students if they plan on locating on campus.

TABLE 5.17: SUPPORTING A BANKING OUTLET VERSUS RACE

Supporting a banking outlet on campus Race Black White Yes 55.69% 100 65.38% 22 No 44.31% 79 34.62% 12 Total 100% 179 100% 34

P-value

0.1917

The P-value for Table 5.17 was calculated as P > 0.05. This indicates that there is not a significant difference between the two race groups and their support of a banking outlet on campus. Therefore banking outlets locating on campus should focus on both race groups.

TABLE 5.18: SUPPORTING A BANKING OUTLET VERSUS AGE

Supporting a banking outlet on campus Age < 20 > 20 Yes 28.06% 16 58.12% 92 No 71.49%% 42 41.88% 66 Total 100% 58 100% 158

P-value

< 0.001

184 The P-value for Table 5.18 was calculated as P < 0.05. This indicates a significant difference between the two age groups and their support of a banking outlet on campus. Results of the cross tabulation indicate that the older age groups (20+) would be much more inclined to support a banking outlet that the younger age groups and therefore banking outlets that plan on locating on campus should pay special attention to the older students.

TABLE 5.19: SUPPORTING AN ENTERTAINMENT OUTLET VERSUS GENDER

Supporting a entertainment outlet on campus Gender Female Male Yes 51.19% 57 58.58% 60 No 48.81% 54 41.42% 43 Total 100% 111 100% 214

P-value

0.1523

The P-value for Table 5.19 was calculated as P < 0.05. This indicates that there is not a significant difference between the two genders and their support of an entertainment outlet on campus. Entertainment outlets planning on locating on campus should therefore appeal to both genders.

185 TABLE 5.20: SUPPORTING AN ENTERTAINMENT OUTLET VERSUS RACE

Supporting a entertainment outlet on campus Race Black White Yes 57.91% 107 44.23% 10 No 42.09% 77 55.77% 13 Total 100% 185 100% 23

P-value

0.0664

The P-value for Table 5.20 was calculated as P > 0.05. This indicates that there is not a significant difference between the two race groups and their support of an entertainment outlet on campus. Entertainment outlets should focus on both race groups if they plan on locating on campus.

TABLE 5.21: SUPPORTING AN ENTERTAINMENT OUTLET VERSUS AGE

Supporting a entertainment outlet on campus Age < 20 > 20 Yes 31.63% 18 54.15% 84 No 68.37% 39 45.85% 71 Total 100% 57 100% 155

P-value

< 0.001

The P-value for Table 5.21 was calculated as P < 0.05. This indicates a significant difference between the two age groups and their support of an entertainment outlet on campus. Results of the cross tabulation indicate that the older age groups (20+) would be much more inclined to support an entertainment outlet that the younger age group. Entertainment outlets should focus

186 especially on the needs and preferences of the older students, as they should be more inclined to support them on campus, than the younger students.

TABLE 5.22: SUPPORTING A CELL PHONE OUTLET VERSUS GENDER

. Gender Female Male

Supporting a cell phone outlet on campus? Yes 51.67% 57 57.39% 57 No 48.33% 53 41.61% 42 Total 100% 110 100% 99

P-value

0.2676

The P-value for Table 5.22 was calculated as P < 0.05. This indicates that there is not a significant difference between the two genders and their support of a cell phone outlet on campus. Cell phone outlets should appeal to both genders.

TABLE 5.23: SUPPORTING A CELL PHONE OUTLET VERSUS RACE

Supporting a cell phone outlet on campus? Race Black White Yes 55.38% 97 67.69% 20 No 44.62% 78 32.31% 10 Total 100% 175 100% 30

P-value

0.7562

The P-value for Table 5.23 was calculated as P > 0.05. This indicates that there is not a significant difference between the two race groups and their support of a cell phone outlet on

187 campus. Therefore cell phone outlets should focus on both race groups when designing their marketing strategies.

TABLE 5.24: SUPPORTING A CELL PHONE OUTLET VERSUS AGE

Supporting a cell phone outlet on campus? Age < 20 > 20 Yes 28.06% 16 55.59% 85 No 71.26% 40 44.41% 67 Total 100% 56 100% 152

P-value

< 0.001

The P-value for Table 5.24 was calculated as P < 0.05. This indicates a significant difference between the two age groups and their support of a cell phone outlet on campus. Results of this cross tabulation indicate that the older age groups (20+) would be much more inclined to support a cell phone outlet that the younger students. As the older students should be more inclined to buy from cell phone outlets on campus, retailers should aim their strategies on the older students.

From the cross tabulation done in Table 5:13-Table 5:24, it was found that there is no significant difference between gender, race and the support of a fast food outlet, entertainment outlet and cell phone outlet. There is a difference between age and the support of fast food, entertainment and cell phone outlets, with the older age groups more inclined to support these store on campus than the younger age groups. There is no significant difference between race and the support of a banking outlet. There is however a difference between age, gender and

188 the support of banking outlets, where males and the older age groups are more prone to support banking outlets than the younger groups. Retailers can thus focus more on the older student market if they plan on opening a store on campus.

FIGURE 5.14: OTHER NEEDS/PREFERENCES REGARDING RETAILERS ON CAMPUS

100.00% 90.00% 80.00% 70.00% 60.00% % 50.00% 40.00% 30.00% 20.00% 10.00% 0.00% Bar 2.90% 1.90% 1.90% 1.30% 0.80% 1% 1%

Figure 5.14 shows the results of students needs and preferences, other than those specified in the questionnaire. Students were given the opportunity to give additional needs or preferences regarding retailers and their campus but did not really make use of this opportunity as only 44 of the 378 students respondent to the question. Public telephones were identified by 11 (2.9%) of the 378 students as a service they would like on campus, access to Internet facilities and entertainment were indicated by 7 (1.9%) of the 378 respondents as a need on campus. Therefore it can be concluded that all the important needs were addressed in the questionnaire.

Entertainment

Internet

Take aways

Residence

Telephones

U.S. Clothing labels

189 5.6 CONSUMER PREFERENCES, DECISION-MAKING AND BUYING PATTERNS OF STUDENTS

The primary objective of this study is to determine the consumer preferences, decision-making and buying patterns of students at Tshwane University of Technology, Witbank campus, as discussed in paragraph 1.4.1. The fifth and last part of the questionnaire (questions 20 34), was devoted to obtaining this information and will be explained in the next section.

5.6.1 Group influences

Many internal influence and external factors influence the students in their decision-making process, as discussed in chapter three. Examples of important external factors are group such as friends and families. The influences of these groups will be illustrated in Figure 5.15 Figure 5:18 and Table 5:25 Table 5:30.

According to Ward & Sturrock (1998:337), a shopping companion can be defined as a person not directly involved with the purchase in terms of finance, but assisting and giving advice, and is frequently either a member of family or a close friend. It is important for firms to know if their consumers make use of shopping companions and what influence shopping companions have, because they can alter the consumers buying behaviour (paragraph 3.3.4).

In Figure 5.15 and Figure 5.16 the shopping companions as well as the reasons for using shopping companions are illustrated. The purpose of this illustration is to show the importance of shopping companions to students and the influence they have on students.

190 FIGURE 5.15: SHOPPING COMPANIONS

4.57%(17)

20.16%(75)

26.98%(97)

49.19%(183) Alone(26.98%) Friends(49.19%) Family(20.16%) Friends&Family(4.57%)

The results of Figure 5.15 indicate that 183 (49.19%) of the 372 respondents interviewed like to shop with friends, 75 (20.16%) like to shop with family members and 17 (4.57%) usually take friends and family members a long when going shopping. Only 97 (26.98%) of the respondents indicated that they prefer to shop alone. The conclusion can therefore be made that the majority 275 (73.92%) of the respondents prefer to shop with companions, be it friends or family members. Friends are the number one choice of companions, followed by family members. Cross tabulation and chi-square test (p-value) provide further insight into the difference between race and gender groups and their tendency of making use of shopping companions as illustrated in Table 5.25 and Table 5.26.

191 TABLE 5.25: PREFERENCE OF SHOPPING COMPANIONS ACCORDING TO RACE

Shopping companions Race Black White Alone 26.45% 82 28.85% 15 Friends 50.00% 155 48.08% 25 Families 19.68% 61 15.38% 8 Both 3.87% 12 7.69% 4 Total 100% 310 100% 52

P-value

0.5662

The P-value for Table 5.25 was calculated as P > 0.05. This indicates that there is not a significant difference between the Black and White students and their tendency to make use of shopping companions. Both groups make use of shopping companions and like friends to accompany them on a shopping trip.

TABLE 5.26: PREFERENCE OF SHOPPING COMPANIONS ACCORDING TO GENDER

Shopping companions

P-value Families 24.64% 51 14.55% 24 Both 7.25% 15 1.21% 2 Total 100% 207 100% 165

Race Female Male

Alone 21.26% 44 32.12% 53

Friends 46.86% 97 52.12% 86

0.008

The P-value for Table 5.26 was calculated as P < 0.05. This indicates a significant difference between the shopping companions of males and females. While both groups like having friends as shopping companions, females make more use of families (24.64%) as shopping companions than males (14.55%). Males on the other hand are more inclined to shop alone

192 (32.12%) than their female counterparts (22.26%). The majority of females (77.74%) like to have friends or family members as shopping companions, while males prefer to shop either with friends or alone.

Male and female students of both race groups enjoy having friends or/and family members a long when shopping. These friends and family members can influence students buying behaviour, as discuses in chapter three. Therefore retailers should make use of these group influences in their personal selling and advertising strategies.

FIGURE 5.16: REASONS FOR MAKING USE OF SHOPPING COMPANIONS

4.36%(12)

2.18%(6)

27.60%(76)

65.81%(181) Provide company(27.60%) Give advice(65.81%) Company& Advice(4.36%) Other reasons(2.18%)

Figure 5.16 indicates that of the 275 respondents who shop with companions, the following reasons were indicated: Shopping companions provide advice for 181 (65.81%) of the 275 respondents, and 76 (27.6%) indicated that their friends and family members provide companionship. Only 6 (2.18%) of the respondents indicated other reasons like helping them

193 to carry or paying for the purchases. The conclusion can therefore be made that students make use of companions on their shopping trips mainly as a source of advice. The influence of groups on the brands students buy is illustrated in Figure 5.17.

FIGURE 5.17: BRAND CONFORMITY

100.00%

59.18%(216)

90.00% 80.00%

47.92%(173)

32.88%(120)

70.00% 60.00% 50.00% 40.00% 30.00% 20.00% 10.00% 0.00%

42.66%(154)

Usually Seldom Never

9.42%(34)

Buy same brands as family

The results of Figure 5.17 indicated that only 7.95% (29) of the respondents usually buy the same brands as their family and only 9.42% (34) buy the same brands as their friends. The conclusion can thus be made that although students indicated in Figure 5.16 that they make use of friends and family as a sources of advice, they do not necessarily buy the same brands as their friends or family members.

7.95%(29)

Buy same brands as friends

194 As discussed in paragraph 3.3.5, Du Plessis & Rousseau (1999:81) identified five roles family members enact: information gatherers, influencers, decision makers, purchasers and users. The roles respondents play in their families are illustrated in Figure 5.18.

FIGURE 5.18: FAMILY ROLES

100.00% 90.00% 60.22%(218) 80.00% 53.85%(196) 56.04% 70.00% 60.00% % 50.00% 40.00% 30.00% 20.00% 10.00% 0.00% Information gatherer Influencer Decision maker Purchaser User

53.04%

40.22%

32.04%(116)

37.71%

Usually Seldom Never

34.53%

Results from Figure 5.18 indicate that the majority of respondents, 218 (60.22%) usually play the role of product users in their families. In the study, 196 (53.85%) of the 364 respondents indicated that they usually played the role of information gatherer. Only 117 (21.14%) of the 364 respondents usually play the role of influencer, 79 (22.07%) of the 358 respondents play the role of the decision maker while the role of purchaser is played by 116 of the 362 (32.04%)

33.24% 12.91%

21.14%(117) 11.81%

22.07%(79)

14.92% 5.25%

195 respondents. It can be concluded that students usually play the role of information gatherer and product user in their families, while they seldom play the role of influencer or decision maker. Cross tabulation between gender, race groups and the role of product user and information gatherer provide further insights in the roles students play and are illustrated in Table 5.27 Table 5.30.

TABLE 5.27: FAMILY ROLE (INFORMATION GATHERER) VERSUS RACE

Information gatherer Race Black White Usually 54.30% 164 53.85% 28 Seldom 34.40% 104 25.00% 13 Never 11.26% 34 21.15% 11 Total 100% 302 100% 52

P-value

0.0995

The P-value for Table 5.27 was calculated as P > 0.05. This indicates that there is no significant difference in the two race groups and their tendency to play the role of information gatherer in their families. Retailers should supply information two black and white students as both groups indicated that they play the role of information gatherers in their families.

196 TABLE 5.28: FAMILY ROLE (INFORMATION GATHERER) VERSUS GENDER

Information gatherer Gender Female Male Usually 56.16% 114 50.93% 82 Seldom 31.03% 63 36.02% 58 Never 12.81% 26 13.04% 21 Total 100% 203 100% 161

P-value

0.5678

The P-value for Table 5.28 was calculated as P > 0.05. This indicates that there is no significant difference between the two gender groups and their tendency to play the role of information gatherers in their families. Retailers should supply information two male and female students, as both groups indicated that they play the role of information gatherers in their families.

TABLE 5.29: FAMILY ROLE (PRODUCT USER) VERSUS RACE

Product user Race Black White Usually 59.93% 181 58.00% 29 Seldom 34.11% 103 40.00% 20 Never 5.96% 18 2.00% 1 Total 100% 302 100% 50

P-value

0.4275

The P-value for Table 5.29 was calculated as P > 0.05. This indicates that there is no significant difference between the two race groups and their tendency to play the role of product user in their families. Retailers should ensure that their products are easy to use and

197 that the usage or installation instructions are understandable by both race groups as the majority of both groups usually play the role of product users.

TABLE 5.30: FAMILY ROLE (PRODUCT USER) VERSUS GENDER

Product user Gender Female Male Usually 66.18% 135 52.53% 83 Seldom 27.94% 57 43.04% 68 Never 5.88% 12 4.43% 7 Total 100% 204 100% 158

P-value

0.0112

The P-value for Table 5.30 was calculated as P < 0.05. This indicates that there is a significant difference in how often the different gender groups play the role of product users. Although both genders usually play the role of product user, females play the role of product user more often than males. Retailers should focus especially on female students when designing their products and usage instructions to ensure it is easy to use and understand.

The cross tabulations indicate that there is not a significant difference between gender or race groups with regard to how often they play the role of information gatherers in their families. Although there is no significant difference in how often race groups play the role of product user, there is a significant difference between the gender groups, with females more prone to playing the role of product user in their families than their male counterparts. Retailers need to ensure that the information they supply about their products and stores are accessible for both gender and race groups. When supplying information/instructions on how to use the product,

198 although it must be accessible and understandable for both genders and race groups, retailers can focus more on female students.

5.6.2 Information search patterns

Students search for information in order to identify the possible alternatives available to satisfy their needs or solve their problems. The sources of information used by students as well as their reasons for searching for information are illustrated in Figure 5.19 and Figure 5.20. The purpose of this illustration is to determine where and why students search for information, to enable retailers to supply the correct information at the correct source.

FIGURE 5.19: SOURCES OF INFORMATION

100.00% 90.00% 51.41%(183) 80.00% 70.00% 60.00% 46.28%(168)

41.85%(149)

30.34%(108)

34.71%(126)

30.34%(108)

27.81%(99)

50.00% 40.00% 30.00% 20.00% 10.00% 0.00%

14.88%(54)

14.88%(54)

Use past experiences

Use advice of friends

Use advice of family

Usually Seldom Never

Statements

199 From Figure 5.19 it is evident that 183 (50.14%) of the 363 respondents make use of their own past experiences as a guide to decide which brands to buy, while only 54 (14.88%) of the 363 students seek advice from their friends before they go shopping. Ninety-nine (27.81%) of the 356 students depend on their family members for advice when they go shopping. The conclusion is that the major source of information is past experiences and, to a lesser extent, advice from family members. Retailers need to be aware of the fact that apart from advertisements and articles create by retailer themselves, students will use their own experience before asking advice from friends or family members. This implies that if a student had a bad experience with a retailer the chances are slim that he/she will buy from that retailer again.

FIGURE 5.20: REASONS WHY RESPONDENTS SEARCH FOR INFORMATION

100.00% 90.00% 58.50%(210) 80.00% 70.00% 60.00% 52.73%(193) 63.61%(229)

49.72%(179)

38.06%(137)

Usually Seldom Never

8.89%(32) 27.50%(99)

33.61%(123)

50.00% 40.00% 30.00% 20.00% 10.00% 0.00%

Buy expensive products

27.02%(97)

14.48%(52)

Unsure

Reason for searching for information

13.66%(50)

Purchase is risky

12.22%(44)

Better price

200 The results in Figure 5.20 show that 229 (63.61%) out of the 360 respondents usually search for information to obtain a better price, 210 (58.5%) out of the 359 respondents usually search for information when they purchase expensive products, 193 (52.73%) of the 366 respondents search for information because they feel unsure about a purchase and 179 (48.72%) of the 365 students to limit risk. It can be concluded that the main reason why students search for information is to obtain a better price, and when the products are expensive. This information helps retailers to determine what information they should provide students, as discussed in paragraph 3.5.2.

5.6.3 Selecting a retail outlet

As explained in paragraph 3.5.4.2, students make use of different criteria to select a retail outlet. Table 5.31 illustrates the importance of different evaluative criteria for students at Witbank campus. The purpose of this illustration is to indicate to retailers which criteria are more important than others, to enable them to focus on the most important criteria to gain a competitive advantage through better satisfying students needs.

201 TABLE 5.31: IMPORTANT FEATURES IN STORE SELECTIONS

Very Important N % Spacious 79 22.77 Displays 133 37.78 Layout 151 42.90 Cleanliness 252 71.39 Accessibility 111 31.81 Brands 124 35.03 Quality 305 83.33 Advertising 154 43.75 Location 101 29.97 My friends shop there 25 7.31 Credit 93 27.60 Parking 104 30.68 Return policies 211 62.24 Quick service 230 66.86 Extended store hours 111 32.74 Accurate cashiers 169 49.85 Friendly personnel 204 59.48 Low prices 203 57.67 Large selection 117 34.62 Store Features

Important N 145 153 165 74 152 171 56 132 159 79 137 143 105 104 138 138 100 107 158 % 41.79 43.67 46.88 20.96 43.55 48.31 15.30 37.50 47.18 23.10 40.65 42.18 30.97 30.23 40.71 40.71 29.15 30.40 46.75

Not Important N % 123 35.00 65 18.47 36 10.23 27 7.65 86 24.64 59 16.67 5 1.37 66 18.75 77 22.85 238 69.59 107 31.75 92 27.14 23 6.78 10 2.91 90 26.55 32 9.44 39 11.37 42 11.93 63 18.64

Total N 347 351 352 353 349 346 366 352 337 342 337 339 339 344 339 339 343 352 338 % 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100

Table 5.31 shows that 83.3%(305) of the respondents indicate quality, 71.39%(252) cleanliness, 66.86% (230) quick service, 62.24% (211) ease of returning unsatisfactory items, 59.48% (204) friendly store personnel and 57.67% (203) low prices, as very important feature when selecting a store.

From Table 5.31 it is evident that 48.31% (171) of the respondents indicated that the brands the store sell, 47.18% (159) the location of shop, 46.75% (158) a large selection of products, 46.88% (165) a good store layout, 43.55% (159) easy reachable premises (Accessibility),

202 42.18% (143) parking facilities and 41.79% (145) spaciousness, as important features when selecting a store to buy from.

The conclusion can be made that students view numerous features as very important/important when selecting a store to buy from. Quality, service, return policies, cleanliness and accurate cashiers were the top five features viewed by students as very important/important, while only 30.41% of the student indicated that they choose a store based on whether or not their friends shop there. The latter is the least important criteria used by students in selecting a retail outlet. This information can help retailers by indicating which evaluative criteria are important to students in selecting stores, and thus retailers can make sure that they have the competitive edge in the important fields and can focus on those aspects in their communication to the students.

5.6.4 Decision-making

According to Hawkins et al. (2001:599) and as discussed in paragraph 3.5.4.1, the appropriate marketing strategies for retailers differ depending on the decision-making sequence generally used by their target market. There are three basic sequences: Brand or item first and the outlet second, outlet first and brand second or brand and outlet simultaneously. Figure 5.21 illustrates how often (usually, seldom or never) students make use of these sequences in their decision-making.

203 FIGURE 5.21: DECISION-MAKING SEQUENCE

100.00% 53.13%(178) 90.00% 80.00% 70.00% 60.00% 50.00% 40.00% 30.00% 20.00% 10.00% 0.00% Brand/Store

54.84%(170)

43.44%(139)

32.81%(105)

36.72%(88)

Figure 5.21 indicates that 178 (53.13%) of the 335 respondents usually first choose the brand they want to buy and then the outlet where they want to purchase the brand; 139 (43.44%) of the 319 respondents usually decide simultaneously which brand and outlet to choose, while only 88 (36.72%) of the 310 respondents usually first choose the outlet and then the brand. It can therefore be concluded that the majority of students usually follow the brand first and outlet second sequence in their decision-making. Retailers should use the appropriate strategies (paragraph 3.5.4.1) aimed at the brand first and outlet second sequence of decisionmaking.

Durvasula et al. (1993:55), as discussed in paragraph 3.5.4.1, states that consumers have different decision-making styles, based on the evaluative criteria that are important to them. Figure 5.22 and Figure 23 reflects the decision-making styles used by students.

28.39%(123)

23.44%(75)

Usually Seldom Never

16.77%(52)

10.19%(335)

Store/Brand

Simultaneously

204 FIGURE 5.22: DECISION-MAKING STYLES

87.40%(319)

100.00% 90.00% 80.00%

Very Important Important Not Important

69.41%(245)

63.79%(222)

47.56%(166)

70.00% 39.54%(138) 60.00% 50.00% 40.00%

46.42%(162) 28.37%(99) 25.21%(88) 24.65%(87)

30.17%(105)

12.61%(44)

10.41%(38)

30.00% 20.00% 10.00% 0.00%

6.03%(21)

5.67%(20)

2.19%(8)

Quality

Brand names

Novelty/Fashion

Price

Service

Figure 5.22 indicates that 319 (87.4%) of the 365 students interviewed feel that quality is a very important evaluative criteria. Out of 352 respondents 254 (69.41%) indicated price as a very important evaluative criteria and 222 (63.79%) of the 348 respondents indicated that service is a very important evaluative criteria. Only 99 (28.37%) of the 349 respondents indicated that novelty is a very important evaluative criteria, while 138 (39.54%) of the 348 indicated that brand name is a very important evaluative criteria when making a final purchase.

205 FIGURE 5.23: DECISION-MAKING STYLES

100.00% 90.00% 80.00% 70.00% 60.00% 50.00% 40.00% 30.00% 20.00% 10.00% 0.00%

Usually Seldom Never

47.38%(163)

47.05%(159)

38.24%(130)

37.79%(130)

Buying out of a habit

Figure 5.23 indicated that only 14.83% (51) respondents usually buy out of a habit, while 14.71% (50) usually buy impulsively. From the results of Figure 5.22 and Figure 5.23 it can therefore be concluded that the decision-making style of the majority of respondents is quality consciousness, followed by price sensitivity and service.

FIGURE 5.24: PREFERENCE FOR NOVELTY

14.83%(51)

14.71%(50)

Impulsive buying

100.00% 90.00% 47.29%(166) 80.00% 70.00% 60.00% 41.88%(146) 52.10%(185)

40.46%(142)

50.00% 40.00% 30.00% 20.00% 10.00% 0.00%

10.83%(38)

6.84%(24)

Try new brands

Try new shops

Usually Seldom Never

Statements

206 Figure 5.24 indicates that 47.29% (166) of the respondents usually try out new brands and 52.1% (185) usually try out new shops. It can be concluded that although novelty is not the main decision-making style and consequently not the most important evaluative criteria used by respondents (Figure 5.22), they do like to try out new brand and new stores.

As discussed in paragraph 3.5.4.4 it is not uncommon for consumers to enter a retail outlet with the intention of purchasing a particular brand/product and to leave with different or additional items.

FIGURE 5.25: CHANGED PURCHASED INTENTIONS

11.11%(42)

88.89%(336)

Yes (88.89%) No (11.11%)

It is evident From Figure 5.25 that 336 (88.89%) of the 378 respondents indicated that they do sometimes change their minds about what to purchase when they are inside a store. Only 42 (11.11%) of the respondents indicated that they never change their mind about what to purchase once inside a store. The conclusion can be made that the majority of students do change their minds about what to purchase, once inside a retail shop.

207 TABLE 5.32: CHANGING THEIR MIND VERSUS GENDER

Change mind Gender Female Male Yes 91.87% 192 85.21% 169 No 8.13% 16 14.79% 144 Total 100% 209 100% 169

P-value

0.0405

The P-value for Table 5.32 was calculated as P < 0.05. This indicate that there is a significant difference between the two genders and the tendency to change their minds: while both genders tend to change their minds about what to purchase once inside a store, females (91.86%) tend to change their minds significantly more than males (85.21%). Retailers should aim their in-store strategies more on females as they are more easily influenced than their male counterparts.

TABLE 5.33: CHANGING THEIR MIND VERSUS AGE

Change mind Age < 20 20 24 25+ Yes 94.06% 95 87.06% 222 86.36% 19 No 5.94% 6 12.94% 33 13.64% 3 Total 100% 101 100% 255 100% 22

P-value

0.1541

208 The P-value for Table 5.33 was calculated as P > 0.05. This indicates that there is not a significant difference between the age groups and their tendency to change their minds inside retailer shops. Retailers should take note that students of all ages can be influenced once inside a store.

TABLE 5.34: CHANGING THEIR MIND VERSUS RACE

Change mind Race Black White Yes 89.56% 283 86.54% 45 No 10.44% 33 13.46% 7 Total 100% 316 100% 52

P-value

0.517

The P-value for Table 5.34 was calculated as P > 0.05. This indicates that there is not a significant difference between the two race groups and their tendency to change their minds once inside a store. Both groups can be influenced by retailers in-store strategies to buy more or additional products or brands.

There is not a significant different between race, age and changed purchase intention. However there is a significant difference in gender, with females more prone to changing their minds than males. Retailers can thus focus their in-store displays and price specials especially on female students as they are more proned to changing their minds.

Hawkins et al. (2001:497), as discussed in paragraph 3.5.4.4, identified six variables that influence brand/purchase decisions in retail stores: Point-of-purchase displays, price

209 reductions, store layout, store atmosphere, stock-out and sales personnel. Figure 5.26 illustrates the factors that influence the respondents to change their buying behaviour.

FIGURE 5.26: IN-STORE INFLUENCES THAT CHANGE PURCHASE DECISIONS

100.00% 60.56%(215) 90.00% 80.00% 70.00% 31.36%(111) 60.00% % 50.00% 40.00% 30.00% 20.00% 10.00% 0.00% Displays Special deals Out of stock Sales people Store atmosphere Store layout 39.83%

32.39%(115)

38.76%

28.90%(102)

38.53%

28.29%(101)

35.85%

35.49%

35.85%

27.81%(99)

33.43%

32.57%

32.11%

28.82%

26.48% 12.96%

Usually Seldom Never

In Figure 5.26, 215 (60.56%) out of the 355 respondents indicate that special prices and promotional deals are usually the reason for the changes in their purchase behaviour. The other variables, like displays, were indicated by 111 (31.36%) of the respondents, out-of-stock situations were indicated by 102 (28.9%) of the respondents, sales people chosen by 115 (32.39%) of the respondents, store layout by 101 (28.29%) of the respondents and store atmosphere by 99 (27.81%) of the respondents, thus contributing less to changed behaviour. Only six students indicated that other variables influence them to change their minds once

210 inside a retailer, however they were not specific about what these variables were. The conclusion can be made that special deals are usually the reason why students change their minds about what to purchase once inside a retailer. Retailers can therefore focus on special prices deals in order to influence students to buy more products/different brands, once inside their stores.

5.6.5 Purchase Where, when and how students buy, as well as their buying patterns, can provide retailers with valuable insight and will be illustrated in the next section.

FIGURE 5.27: BUYING BEHAVIOUR OF STUDENTS

100.00% 90.00% 80.00% 31.08%(106) 42.52%(145) 26.97%(92) 70.00% 60.00% 50.00% 40.00% 30.00% 20.00% 10.00% 0.00%

Usually Seldom Never

50.58%(175) 32.37%(112) 17%(59) 45.24%(157) 40.63%(141) 14.12%(49)

73.07%(255)

71.55%(249) 17.24%(60) 11.21%(39)

53.34%(186) 26.72%(93) 19.83%(69)

Can't resist a Buy product sale you can't afford

Hide spending habits

Figure 5.27 indicates that 92 (26.95%) of the 343 students usually struggle to resist a sale, Sixty-nine (19.83%) of 348 students usually experience debt problems and 49 (14.41%)

45.88%(156) 39.70%(135) 14.41%(49)

19.2%(67) 7.74%(27) Unneeded purcahses

Credit/Debt problems

Shop to celebrate

Unplanned purchases

211 usually hide their spending habits. Only 39 (11.21%) of the 347 students interviewed indicated that they usually buy products they cannot afford, and 14.12% (49) indicated that they usually purchase without planning. It can be concluded that the majority of students dont usually engage in buying behaviour that could affect them negatively, like hiding spending patters or buying products they cannot afford. Although retailers must try and market their products and stores ethically retialers objective is to maximise profit by increasing sales. Retailers must however be aware of debt problems student experience, as retailers will suffer losses if students do not or cannot pay their accounts. Retailers can make use of the fact that some students cannot resist a sale by promoting and emphasising sales that take place at their stores.

In order for retailers to understand students` buying behaviour and purchasing patterns, as discussed in paragraph 3.5.4.5, students at the Witbank campus were asked the same questions (Figure 5.27) as American College students (Campus Market Research 2001), to identify their buying behaviour. Table 5.35 reflects the purchase behaviour of the students at Witbank campus and American College students.

212 TABLE 5.35: COMPARISON OF BUYING BEHAVIOUR BETWEEN COLLEGE STUDENTS IN USA AND TSHWANE UNIVERSITY OF TECHNOLOGY, WITBANK CAMPUS. Behaviour American College students Tshwane University of Technology, Witbank students 8% 17% 14% 27% 11% 15% 19%

Unneeded purchases 56% Shop to celebrate 44% Unplanned purchases 33% Can not resist a sale 27% Buy products they can not afford Hide spending habits Debt problems 11% 16% 15%

From Table 5.35 it is evident that American College students make more unneeded purchases on a regular base, than students at Tshwane University of Technology, Witbank campus. This may be due to a difference in students` financial positions. The fact that Witbank students experience more debt problems may be a further indication of the possible differences in students financial situation. Tshwane University of Technology students plan their purchases better than American students, which may be another reason why they buy fewer unneeded products than American students. The fact that American College students do not plan may be why they buy products they cannot afford, while Tshwane University of Technology students dont display this tendency to the same extent. American students engage much more in shopping as a way to celebrate than Tshwane University of Technology students. There are however some similarities, as 15% of both groups hide their sending habits from friends or family members and 27% of both groups cannot resist a sale. This may indicate an emerging

213 trend: that students worldwide exhibit similar buying patterns. Further research is needed to investigate this possible trend.

FIGURE 5.28: PAYMENT METHODS USED BY STUDENTS

100.00% 90.00% 43.12%(163) 80.00% 70.00% 60.00% 16.60%(63) % 50.00% 40.00% 30.00% 20.00% 10.00% 0.00% Credit card Accounts Lay-bye Cheque Hire purchase 37.57%(142)

88.36%(334)

Payment methods

Figure 5.28 reflects that 334 (88.36%) out of the 378 respondents use cash as a method of payment. 163 (43.12%) make use of lay-buy, and 142 (37.57%) of the students make use of accounts. Only 63 (16.6%) respondents have credit cards, 22 (5.8%) use cheques, and only 1 (2.11%) of the respondents make use of hire purchasing. The conclusion is that students mainly make use of cash and to a lesser extent account and lay-buy facilities. Students dont usually make use of banking services like credit cards or cheques.

If a retailer knows how often students visit his store, he can plan properly for the number of staff needed, whether to introduce more outlets, and whether to introduce promotional

5.80%(22)

2.11%(1) Cash Other

1.05%(4)

214 campaigns and competitions. In Table 5.36 the shopping frequency of students at retail outlets in Witbank is illustrated.

TABLE 5.36: SHOPPING FREQUENCY OF STUDENTS AT DIFFERENT RETAIL STORES

Store Type

Never

Everyday 81 21.89% 87 24.79% 40 10.96% 16 4.53% 26 7.41% 12 3.45% 16 4.46% 11 3.15% 3 0.90%

0 0.00% 29 Fast Food 8.26% 7 Clothing 1.92% 53 Book shop 15.01% 47 Music shop 13.39% 74 Cell phone 21.26% 24 Banks 6.69% 58 Entertain16.62% ment Furniture & 176 52.54% Appliances Groceries

2/3 times a week 146 39.46% 85 24.22% 94 25.75% 40 11.33% 68 19.37% 38 10.92% 85 23.68% 31 8.88% 4 1.19%

Once a Once a Once a Total week month year 94 25.41% 71 20.23% 90 24.66% 80 22.66% 77 21.94% 64 18.39% 104 28.97% 104 29.80% 15 4.43% 45 12.16% 66 18.80% 125 34.25% 99 28.05% 107 30.48% 124 35.63% 126 35.10% 121 34.67% 64 19.10% 4 1.08% 13 3.70% 9 2.47% 65 18.41% 26 7.41% 36 10.34 3 1.12% 24 6.88% 73 21.79% 370 100% 351 100% 365 100% 353 100% 351 100% 348 100% 359 100% 349 100% 335 100%

Table 5.36 indicates that 321 (86.8%) of the students shop at least once a week or more (everyday or 2/3 times a week) at grocery stores, 243 (69.2%) at fast food outlets, 224 (61.36%) at clothing stores, 205 (57.1%) at banks and 171 (52.62%) at music stores. Only 136 (38.5%) of the respondents indicated that they visit bookstores at least once a week or more, 114 (33.07%) visit cell phone outlets and only 22 (6.57%) visit furniture and appliance stores on a regular basis (once a week or more). It can be concluded that students visit grocery stores,

215 fast food outlets and clothing stores the most regularly, while furniture and appliance stores are seldom visited.

FIGURE 5.29: TRANSPORT METHODS

100.00% 90.00% 80.00% 70.00% 60.00% % 50.00% 40.00% 30.00% 20.00% 10.00% 0.00% Own vehicle Public transport Lift Walk Bicycle Other 13.23%(50) 2.11%(8) 0.20%(6) 27.40%(103) 39.95%(151) 65.87%(249)

Transport method

Figure 5.29 indicates public transport as the most frequently used method of transport with 249 (65.87%) of the 378 students indicating this as their method of transport, followed by walking, indicated by 151 (39.95%) of the students to get to where they want to be. Only 103 (27%) of the students have their own cars, 50 (13.23%) of the students use lifts and only 8 (2.11%) students indicated bicycles as a method of transport, followed by 151 (39.95%) who walk. The conclusion can be made that public transport (taxis) is the main method of transport for students.

216 FIGURE 5.30: PREFERRED SHOPPING DAYS

100.00% 90.00% 80.00% 70.00% 60.00% % 50.00% 40.00% 30.00% 20.00% 10.00% 0.00% Monday Tuesday Wednesday Thursday Friday Saturday Sunday No special day 6.87%(26) 3.70%(14) 3.70%(14) 2.11%(8) 12.69%(48) 5.55%(21) 39.15%(148) 60.88%(230)

Shopping day

Figure 5.30 indicates that 14 (3.7%) out of the 378 respondents prefer to shop on Mondays, 8 (2.11%) of the students shop on a Tuesdays; 26 (6.87%) of the students shop on Wednesday; 14 (3.7%) of the students shop on a Thursdays; 148 (39.15%) of the students indicated that they shop on Fridays; 230 (60.88%) of the students indicated Saturdays as their shopping day, 21 (5.55%) of the students shop on Sundays and 48 (12.69%) of the students indicated that they do not have a special day on which they always shop. It can be concluded that Fridays and Saturdays are the days most preferred for shopping.

217 FIGURE 5.31: SHOPPING LOCATIONS

100.00% 65.23%(227) 90.00% 80.00% 70.00% 60.00% % 50.00% 40.00% 12.46% 30.00% 20.00% 10.00% 0.00% Usually Seldom Never 46.38%(160) 56.09%(198)

79.45% 50.14%(175)

Close to where you stay

From Figure 5.31 it is evident that 65.23% (227) out of the 348 respondents usually shop at big shopping centres, 56.09% (198) of the 353 respondents usually shop in town, 46.38% (160) of the 345 respondents usually shop close to where they stay and only 4.29% (14) of the 326 indicated that they usually make use of mail/catalogues for shopping. The majority of student 50.14% (175) usually shops where it saves time. From Figure 5.33 it can be concluded that students usually shop at big shopping centres, shops in town and at stores where they save time. This information can help retailers to determine their distribution strategies for students.

41.16% Big shopping centres 27.01% 7.76%

37.25%

Shops in town Shop locations

33.99% 16.26% 4.29%(14) 9.92% Mail

Shop where it saves time

12.32%

218 5.6.6 Post-purchase behaviour

The following tables and figures will reflect the post-purchase behaviour of students. Following some purchases, consumers experience doubts or anxiety about the wisdom of the purchase. This is known as post-purchase dissonance. Whether or not the consumer experiences post-purchase dissonance and/or guilt, most purchases are followed by product use. Disposing of the product of packaging may occur before, during or after product use. The next section will report on the respondents` reasons for experiencing post-purchase dissonance and guilt, and will explain respondents disposing behaviour.

Guilt is one of the emotions that can influence the consumer decision-making process, by impacting on buying intentions and attitudes, and can be manipulated by retailers (paragraph 3.4.6). According to Burnett (1994:33) is important for retailers to take note of post-purchase dissonance and guilt. They must try to reduce dissonance in order to increase sales, ensure repeat purchases and customer satisfaction. Figure 5.32 illustrates respondents` tendency to experience guilt.

219 FIGURE 5.32: STUDENT TENDENCY TO EXPERIENCE GUILT AFTER AN UNPLANNED PURCHASE

19.75%(69)

81.25%(299)

True(81.25%) False(19.75%)

Figure 5.32 reflects that 299 (81.25%) out of the 368 respondents indicated that they do experience some sort of guilt after making purchases. Only 69 (19.75%) of the 368 respondents indicated that they never experience guilt after they purchased an unplanned product. It can be concluded that the majority of students do experience guilt after an unplanned purchase.

This is confirmed by cross tabulation and chi-square tests, which provide further insight into the differences/similarities between students tendencies to experience guilt.

220 TABLE 5.37: TENDENCY TO EXPERIENCE GUILT (GENDER)

Experiencing guilt Gender Female Male True 85.78% 175 75.61% 124 False 14.22% 29 24.39% 40 Total 100% 204 100% 164

P-value

0.0129

The P-value for Table 5.37 was calculated as P < 0.05. This indicates a significant difference between the two gender groups` tendency to experience guilt after an unplanned purchase. Females are more prone to experiencing guilt than their male counterparts and therefore retailers should focus more on reducing guilt in female shoppers.

TABLE 5.38: TENDENCY TO EXPERIENCE GUILT (AGE)

Experiencing guilt Age < 20 21 24 25+ True 81.19% 82 82.11% 202 71.43% 15 False 18.81% 19 17.89% 44 28.57% 6 Total 100% 101 100% 246 100% 21

P-value

0.4842

The P-value for Table 5.38 was calculated as P > 0.05.This indicates that there is not a significant difference in age groups and their tendency to experiencing guilt after an unplanned purchase. Students of all ages should be targeted by retailers guilt reducing strategies.

221 TABLE 5.39: TENDENCY TO EXPERIENCE GUILT (RACE)

Experiencing guilt Race Black White True 85.71% 264 59.62% 31 False 14.29% 44 40.38% 21 Total 100% 308 100% 52

P-value

<.0001

The P-value for Table 5.39 was calculated as P < 0.05. This indicates that there is a significant difference between the different race groups and their tendency to experience guilt after unplanned purchases. Black students are more prone to experiencing guilt after a purchase than white students.

Although retailers must try and limited or prevent the experiencing of guilt for both race, age and gender groups they must focus their guilt - preventing strategies especially on black and female students.

Burnet (1994:33) identifies four dimensions of guilt: financial guilt (unneeded or expensive purchases), health guilt, moral guilt and social responsibility guilt. These reasons are illustrated in Figure 5.35.

222 FIGURE 5.33: REASONS FOR EXPERIENCING GUILT

100.00% 90.00% 80.00% 70.00% 60.00%

%

54.73%(162)

50.00% 40.00% 30.00% 20.00% 10.00% 0.00% Unneeded purchase Too expensive Risk to health Reason for guilt Not inline with morals Socially unacceptable 5.74%(17) 27.36%(81) 10.14%(30) 1.69%(5)

Figure 5.33 indicates that 162 (54.73%) of the 296 respondents experience guilt because they felt that the purchase was unneeded; 81 (27.36%) of the respondents felt guilty because the purchase was expensive; 17 (5.74%) felt that the purchase was a risk to their health, 30 (10.14%) felt that the purchase was not in line with their morals, while only 5 (1.69%) felt guilty because the purchase was socially unacceptable. It can be concluded that the major reason for students experiencing guilt is that they feel they have made an unneeded purchase, followed by the feeling that the product was to expensive. This type of guilt may have led to students indicating that they are price sensitive (Figure 5.22) and dont usually buy unneeded or unplanned products (Figure 5.27). Retailers should focus on reducing or preventing guilt after an unneeded or expensive purchase.

223 FIGURE 5.34: POST-PURCHASE DISSONANCE

100.00% 90.00% 80.00% 70.00% 60.00% 50.00% 40.00% 30.00% 20.00% 10.00% 0.00% Post purchase dissonance

47.09%(162)

28.49%(98)

Figure 5.34 indicates that 24.42% (84) of the 344 respondents usually experience postpurchase dissonance, and only 28.49 % (98) never experience doubt about their purchase. It is important that retailers pay attention to reducing or preventing post-purchase dissonance, because if they dont, the result may be returned products or a negative evaluation of the purchase.

24.42%(84)

Usually Seldom Never

224 FIGURE 5.36: DISPOSING OPTIONS

100.00% 90.00% 51.06%(193) 80.00% 70.00% 60.00% % 50.00% 16.66%(61) 40.00% 30.00% 20.00% 10.00% 0.00% Throw away Trade it Sell it Give it away Store it Convert Rent/Loan Recycle Use 13.49%(51)

In Figure 5.36, 193 (51.06%) of the 378 respondents indicated that they throw the product or packaging away after use, while 136 (36.24%) of the respondents give the product/packaging away after use. Only 51 (13.49%) use trade to dispose of products/packaging, while 54 (14.84%) of the respondents use the packaging afterwards to serve its original purpose. Students indicated that they do not make use of recycling very often, with only 61 (16.43%) indicating that they sometimes recycle. It can therefore be concluded that students throw or give away the product or packaging.

35.24%(136)

28.89%(112)

21.69%(82) 3.96%(15)

16.13%(61)

14.81%(54)

225 Thus products and packaging that are easy to use and dispose of will suit students` lifestyles. Understanding disposing is important to retailers because of the ecological concerns of consumers, the cost and scarcity of raw materials and government legislation.

5.7 CONCLUSION

In the first part of chapter five the demographical profile of students was reported. The student population is almost a equal distribution of male and female students, with the majority of students being black and between the ages of 20 24 years. Engineering and Information Technology were the study courses with the most students and the first year students comprise 44.97% of the student population. This information helps retailers get an idea of the typical Witbank campus student, and aids them in the development of a customer profile.

Secondly the media usage and exposure of students were investigated. Students indicated that they usually read the Drum and the True Love magazine and prefer to read the Sowetan, Witbank News and Sunday Times newspapers. They usually listen to radio Metro, YFM and Ikwekwezi. The majority of students spend between 2-4 hours a day watching soap operas, movies or news on SABC 1 and E TV. Knowledge about students` media patterns will be of value to retailers, to determine the right type of media to use and to develop cost-effective communications strategies with maximum exposure.

Thirdly the spending patterns of students were investigated. The average student have between R317 - R489 spending money per month which they receive mainly from their parents. Students spend the majority of their money on groceries, clothing and transports. This

226 information will be useful for retailers to determine if the student market is a profitable segment to serve, and to develop effective price strategies.

Fourthly students preferences regarding retailers on campus were determined. The majority of students indicated that they would like to shop on campus at retailers such as fast food outlets, entertainment providers, bookstores and cell-phone stores. This information helps retailers to decide on the location of retail outlets, as well as to identify retailers student might support on campus.

Lastly the decision-making process, buying patterns of students and preferences of where, when and what they buy were discussed. Students mainly make use of their own previous experiences as a source of information and usually search for information to obtain a better price. They follow the brand first, store second decision-making sequence and make use of price and quality to evaluate available alternatives in the market place. When choosing a retailer features like quality, services and easy return policies are very important to students. The majority of students indicated that they do change their minds once inside a retailer, mainly because of special in-store price deals. Students prefer to shop close to where they stay or at big shopping centres and usually shop over weekends. Students pay cash or make use of lay-buy facilities. The majority of students indicated that they usually experience guilt after a unneeded or expensive purchase. Students usually play the role of information gatherers and product users in their families and dispose of products /packaging by throwing it away.

227 This information will enable retailers to understand student behaviour better. This will allow retailers to develop their marketing strategies to satisfy student needs better than the competition, and to gain a competitive advantage.

CHAPTER 6 SUMMARY, CONCLUSION, RECOMMENDATIONS AND PROBLEMS.

6.1 SUMMARY

The primary aim of this study is to investigate the preferences, buying patterns and decisionmaking of students at Tshwane University of Technology, Witbank campus. The benefits of this study are threefold. Firstly, retailers in the Witbank area can use this information when they develop their marketing strategies, position their products and make location decisions. They should also be able to understand the student market better. Secondly, the consumers students at Witbank campus should benefit from the results, since their needs and buying behaviour are identified and can thus be better satisfied by retailers in the Witbank area and the students should benefit from retailers conveniently relocating on campus. Lastly, the Witbank community should benefit from better service and customer satisfaction, as there may be an overlap between the needs of students and other residents in the Witbank area.

The information for the study was collected in two parts. The first part (vide chapter two and three) is a theoretical discussion based on the relevant theory on consumer behaviour, marketing and retailing, from magazines, journals and literature reviews. The second part (vide chapter four and five) is a practical collection of information directly from the students at Witbank campus: their demographic profile, spending patterns, media usage and exposure, preferences for retailers on campus and buying patterns, consumer preferences and decision-

229 making. The rest of the chapter is a discussion of the conclusions and recommendations, based on the information obtained from this study. The last section of the chapter will address the problems experienced in this study.

6.2 DEMOGRAPHICAL PROFILE OF STUDENTS

Retailers need information on the demographical profile of their target markets in order to develop a price, product, promotional and distribution strategy for their specific markets. Findings from the study indicate the following demographic information that should aid retailers in Witbank with their marketing strategies.

6.2.1 Gender

Conclusion: There is almost an equal distribution of female (54%) and male (46%) students on the Witbank campus. As seen in the cross tabulations done in chapter five, there is a very small difference between the two gender groups as they indicated that they would support the same retail outlets on campus. They should therefore be treated as one single entity, by retailers that plan on locating on campus.

Recommendation: Retailers should view males and females as one potential target market. It is important that retailers focus on both gender groups in their products` selection and make use of universal advertising themes.

230 6.2.2 Age

Conclusion: The students are young people with their own unique needs. The majority of students fall in the age category 20-24 years. This implies that they were born between the years 1979-1983 and can therefore be classified as generation X, as discussed in paragraph 2.4.2.2.

Recommendation: Retailers need to keep the youthfulness of students in mind when developing their promotional strategies and product strategies. Being the X generation, retailers should keep in mind that visuals and music attract students attention; they get bored easily and constantly look for new, innovative products and communication themes. They prefer information given to them directly and although they value friendship, as seen by their use of friends as shopping companions, they want to be treated as individuals. This sense of individuality is also clear from the fact that they mainly make use of their own past experience as a source of information, and do not necessarily buy the same products or brands as their friends or family members.

6.2.3 Race

Conclusion: The majority of the students at Tshwane University of Technology, Witbank campus is black (83%), with the second largest groups (13.67%) being white. There was almost no difference between the two race groups` needs and preferences concerning retailers on campus, roles they play in their families, changing their minds

231 once inside a retailer or the tendency of making use of shopping companions, with the exception of income-related questions. This correlates with the discussion in paragraph 2.4.1.2, that the black middle class is remarkably the same as the traditional white middle class, and the gap is narrowing. An additional study is necessary to determine if the gap between white and black students on the Witbank campus is closing even further.

Recommendations: Although retailers may be aware of possible differences in income and cultural background between the race groups, the same advertising themes, products and retailers should be used to appeal to both race groups in the light of their similarities.

6.2.4 Study course

Conclusion: There is a mixture of different students from nine different study fields at the Witbank campus. The biggest groups of students are Engineering and Information Technology students.

Recommendation: The education level of a target market is important for retailers in order to develop marketing communications that the target market will understand. The respondents are registered Tshwane University of Technology students, which implies that they have completed high school; retailers should aim the marketing communication at that particular educational level. The number of students in each

232 study course indicates to retailers especially stationery and bookstores the type of books, stationary and other products students need. Retailers should make use of this information when making product decisions. Although there are general, universal products that will appeal to all students regardless of their study courses, other products like textbooks, calculators and computer accessories may be more specific to a certain study course. Information Technology students may, for example, prefer to buy CDs and stiffys for their computers.

6.2.5 Academic year

Conclusion: The biggest groups of students, 44% of the 378 are in their first year, 31% are second years and 25% third year students. This is a reflection of the student population (Appendix B) at Witbank campus. Financial and study problems lead to a large reduction in student numbers from first to second year.

Recommendations: The decrease in student numbers is usually due to poor results or financial problems, which force students to stop their studies. Retailers in Witbank should do their market forecasting and planning based on the dropout percentages and average number of first year students.

233 6.2.6 Home language

Conclusion: Although all the students can understand English (classes are presented in English on Witbank campus) the biggest group 30% speak Zulu.

Recommendations: English will be an effective communication medium, because Afrikaans and English students understand it. It is a universal language. Zulu can also be used, especially if retailers advertise on black radio stations like Ikwekwezi. This will differentiate one retailer from another, by showing commitment to a certain group while simultaneously reaching other Zulu-speaking customers.

6.3 MEDIA USAGE AND EXPOSURE PATTERNS OF STUDENTS

If marketing communication is to be successful, it must first reach the target market and then capture their attention. Interest must be cultivated and the communication must create the desire to buy. Therefore the media exposure and media patterns of students should provide valuable insight for retailers in terms of which media to utilise for advertising, so that the student market is reached.

234 6.3.1 Print

6.3.1.1 Magazines

Conclusion: The majority of students indicated that they usually read the Drum and True Love magazines.

Recommendation: Retailers should obtain a high exposure rate and reach their target market if they advertised in one of these magazines, due to high circulation numbers. Retailers should keep in mind the cost of reaching the students, as these magazines do not cover just the Witbank area. Retailers should decide if it would be cost effective, when they only want to reach the Witbank student market.

6.3.1.2 Newspapers

Conclusion: The Sowetan, Witbank News and Sunday Times are the three newspapers most preferred by students.

Recommendations: The Sunday Times is circulated once a week, Sowetan daily and Witbank News twice a week. Although students usually read all three newspapers, the fact that Witbank News is a regional newspaper gives it the added benefit of lower cost and it is aimed specifically at people in the Witbank area. Newspapers are not only cheaper for retailers to advertise in, but also cheaper for students to buy. Price is an important consideration due to the fact that students dont have much money to spend.

235 If retailers advertise in these newspapers, which students read regularly, retailers ensure that students might be exposed to the advertisements, instead of advertising in newspapers which students seldom read and where their advertisements will not be seen.

6.3.2 Radio

Conclusion: Metro, Y FM, Ikwekwezi FM and Jacaranda are the most popular radio stations that students listen to on a regular basis.

Recommendation: Retailers who want to advertise should consider any of the four radio stations, because they have many listeners and are cheaper and more regional than TV. Jacaranda has 1.73 million listeners a week and covers good music, news and lifestyle oriented features. The majority of its listeners are in Gauteng, but many are also in North West, Mpumalanga and Limpopo provinces. Y FM is a popular youth station that includes Y magazine aimed at educated black urban youths.

6.3.3 TV

Conclusion: Students usually watch SABC 1 and E TV, while M Net and DSTV are less popular. Students prefer movies, followed by news and soap operas. The majority of students spend two and more hours per day in front of the TV. The fact that they

236 spend a lot of time watching TV and news implies they are probably well informed about news events.

Recommendation: Retailers should advertise on E TV or SABC 1 during news, movie or soap opera broadcasts, students are bound to notice retailers` advertisements, because students spend a lot of time watching these programmes and stations on TV.

6.4 STUDENT SPENDING PATTERNS

6.4.1 Source of income

Conclusion: Parents and family members are the main source of income for students.

Recommendations: This implies a direct link between students` spending money and their parents` income, job security and salary increases. Because the majority of students does not have jobs and depends on parents or bursaries, definitely limits their spending power. Retailers should keep in mind the financial position of students` parents, when they determine prices. It would be wise for retailers to investigate the income levels of the parents as well.

237 6.4.2 Average spending money per month

Conclusion: The average student has between R317 and R489 per month to spend. Almost 70 % of the students have less than R500 a month to spend.

Recommendation: The spending power of a target market indicates to a retailer which product and pricing decisions to make. The low average income per student as well as their indifference towards stores that sell durables on campus can be an indication that semi-durable or non-durable products will be popular among students. Retailers can make use of this information to decide on their pricing policies and account policies, and to determine if students have enough buying power to be classified as a profitable market segment.

6.4.3 Monthly spending of respondents

Conclusion: The majority of students spend their money on groceries, transport, clothing and books.

Recommendation: This might indicate to retailers that students will support products that specifically appeal to the student market. If retailers are considering serving the student market, clothing, transport, groceries and books are the product types to consider.

238 6.5 Need for retail shops on campus

6.5.1 Average number of days spend on campus

Conclusion: The majority of students spend between 4-5 weekdays on campus.

Recommendation: Retailers planning on locating on campus should consider if it will be worthwhile to be open 7 days a week if students are only on campus 4-5 days of the week.

6.5.2 Preference for shopping on campus

Conclusion: The majority of students (67%) indicated that they would support retailers on campus.

Recommendation: This information should be used by retailers to decide if they want to open a store on campus, to calculate their sales potential and to do a feasibility study.

6.5.3 Products students would prefer to buy on campus

Conclusion: The majority of students indicated that they would like to have the following stores on campus: fast food outlets, bookstores, stationery retailers, banking services, entertainment, cell phone and airtime providers as well as outlets selling sport

239 equipment. Clothing stores, groceries stores and hair and beauty stores were less popular; students have no need for these stores on campus.

Recommendation: If retailers plan on opening stores on campus they should ensure that they sell the products student indicated they would buy; and steer away from those that students have no need for on campus. It is important for retailers to note that although students spend the majority of their income on clothing and groceries, and visit those stores often, students do not necessarily want to buy these products on campus.

6.6. STUDENTS PREFERENCES, BUYING PATTERNS AND DECISIONMAKING PROCESSES

The consumer decision-making process and resulting preferences and buying behaviour are influenced by internal as well as external factors, as discussed in chapter three. The internal factors consist of factors such as needs and motivation. Students indicated that they have physical needs for food (groceries and fast food) as well as clothing. They also value friendship (social needs) and want to improve their education. These basic and more advanced needs are the driving force behind the shopping behaviour of students. Other factors like age, lifestyle, learning and personality also play a role. Emotions, like the experiencing of guilt after an unplanned purchase, also influence their behaviour.

External factors consist of culture, social class, and family/household and reference groups. In this study the relatively low income of students (low-middle social class) influences the

240 products they buy more non-durable and semi-durables than durables as well as the prices they are willing to pay. One of the important external factors is groups (friends & family), which will be further discussed in the chapter.

The five steps in the decision-making process, on which these factors have an influence, and the buying patterns and preferences evident from this process, will now be discussed.

6.6.1 Group influences

6.6.1.1 Shopping companions

Conclusion: The majority of students like to shop with shopping companions. Their first choice is friends, followed by family members.

Recommendation: Retailers should make use of reference group influences by focusing on friends and family in their advertising strategies, and personal selling strategies. For example: Bring along a friend!

6.6.1.2 Reasons for making use of shopping companions

Conclusion: Students make use of shopping companions like friends and family members, mainly as a source of advice.

241 Recommendation: Retailers should target their marketing communications on opinion leaders (friends/students and family members), as students use them as a source of information and advice. Students are friends and opinion leaders for other students.

6.6.1.3 Group brand conformity

Conclusion: The majority of students usually do not buy the same brands as their friends or family members.

Recommendation: Retailers should focus on the individuality of students, which is typical of this age group, and steer away from advertising campaign with themes like blending in or being like everyone else. For examples, slogans like Be your own person or For the individual. should appeal to students.

6.6.1.4 Family roles

Conclusion: Students indicated that they usually play the roles of information searchers/gatherers and product users in their households.

Recommendation: Because it is important that retailers supply information to students, they should ensure that the information is placed in a media to which students are exposed to, as mentioned in section 6.3. However, students are usually not the final decision makers and retailers should also include information for parents, who usually

242 play this role. Retailers should keep in mind, when designing instruction manuals or learning consumers how to properly use their products, that this information should focus especially on students as they usually play their role of product users in their families.

6.6.2 Need recognition

Conclusion: Students at Witbank campus have indicated their needs in general through the products they buy, vide paragraph 6.4.3, and retail stores they would support on campus, vide paragraph 6.5.3. They share a need for education, which implies other needs like books and stationery, transportation to get to the University, fast food outlets for daytime meals, and clothes.

Recommendation: Retailers selling products that can satisfy these needs of students should react to this, by structuring their marketing mix to solve these problems or satisfy these needs. Retailers selling other products that students do not have a need for, or are not aware of, should in turn focus on activating students needs by influencing students actual or desired states.

243 6.6.3 Information search

6.6.3.1 Source of information

Conclusion: Students tend to make use of their own previous experience (internal source) rather than friends or family members (external sources) as a source of information.

Recommendation: Although students` main source of information is not external sources, which provide retailers with a direct link to consumers, the external sources still play a very important role. At same point however, students acquire information from external sources, such as a direct product experience, friends or marketing sources and then store the information in their long-term memory. Retailers should ensure that their distribution, price, promotion and product messages that provide the underlying or basic information for all sources (internal & external) are available in the market.

6.6.3.2 Reasons for information search

Conclusion: Students search for information to obtain a better price and when they plan to buy expensive products.

244 Recommendation: This implies that retailers need to supply the relevant price information for example, retailer price, discount or payment options, about their products, especially if they are selling expensive products.

6.6.4. Alternative evaluation 6.6.4.1 Decision-making styles based on evaluative criteria used

Conclusion: There are different decision-making styles, as discussed in chapter three. These styles are based on the evaluative criteria that consumers use to make a final product choice. The majority of students decision-making style is quality consciousness, followed by price sensitiveness and services orientation.

Recommendation: Retailers should make use of their knowledge of decision-making styles to segment the market, to do niche marketing and better understand the market. Retailers should ensure that their quality, price and services are better than the competition, in order to gain a bigger share of the student market.

6.6.5 Outlet selection and purchase

6.6.5.1 Outlet choice versus product choice (decision-making sequence)

Conclusion: Students make use of the brand first and outlet second sequence in their decision-making.

245 Recommendation: Retailers need to know the sequence of decision-making, to develop effective marketing strategies. Retailers should focus on the brands they carry and ensure that they stock a variety of brands, or the key brands students buy. They should make use of price specials on brands, and co-operative advertising where brands are emphasized, instead of concentrating on image advertising.

6.6.5.2 Attributes affecting retail outlet selection

Conclusion: Features that are important for students when they select a store are quality, services, easy return policies, cleanliness and accurate cashiers. The fact that their family or friends shop there, spaciousness and credit facilities are not that important to students.

Recommendation: Knowing what is important to students are helpful for retailers. By ensuring that they meet their customers` expectations concerning those features should help them gain a competitive advantage. Retailers in the Witbank area should therefore focus on quality, cleanliness and efficient cashiers, and ensure that it is easy to return purchases, so that students choose their store.

6.6.5.3 Changed purchase intentions

Conclusion: The majority of students indicated that they do change their minds about what to purchase, once inside a retailer.

246 Recommendation: Retailers should therefore influence students to change their purchase intentions to buy more of the same brand, or additional products.

6.6.5.4 In - store influences that change purchase intentions

Conclusion: Students indicated that the reason they change their mind about what to buy, once they were inside a store, was mainly because of special price deals.

Recommendation: Retailers should make use of special price deals to influence students buying behaviour. Retailers should be aware that it is possible in same products, that a sharp increase in sales can occur after the price is reduced, followed by a return to near normal sales over time, or when the price reduction ends.

6.6.5.5 Frequency of visiting stores

Conclusion: The majority of students indicated that they most often (every day or 2/3 times a week) visit groceries stores, fast food outlets, clothing stores and banks. Furniture and appliance stores are seldom visited.

Recommendation: Retailers should use this knowledge to do planning for the number of staff needed, possible opening of more stores, and the development of promotional campaign and competitions. Certain stores are characterised by infrequent visiting patterns, a fact which should be investigated by retailers.

247 6.6.5.6 Purchase

(1) Days of the week students prefer to shop

Conclusion: Students tend to do the majority of their shopping on Fridays and Saturdays.

Recommendations: Retailers should use weekends for new product launches, competitions or promotional campaigns.

(2) Locations at which students shop

Conclusion: The majority of students like to shop at big shopping centres or shops in town. They do not usually make use of mail/catalogue shopping.

Recommendation: Retailers should ensure that they are located at these convenient shopping areas.

(3) Transport methods students make use of when going shopping

Conclusion: The majority of students indicated that they usually make use of public transport, such as buses or taxis, or walk when they go shopping.

248 Recommendation: It is important for retailers to keep students method of transport in mind when considering location and distribution strategies. It should be easier for students to support retailers who are conveniently located near public transport routes, or who are within walking distance from the campus or students` homes.

(4) Payment methods

Conclusion: Students usually pay by cash and to a lesser extent, accounts and laybuys.

Recommendation: Retailers specialising in financing should take note of the gap in the market, by providing financial products and services for the student market`s unique needs. It would be prudent for retailers to provide students with account and lay-buy facilities, especially in the case of expensive products. This will ensure that students are assisted financially, and purchases will be encouraged. Special cash promotion deals and discounts will attract the student market, due to the fact that they pay cash and are very price conscious.

6.6.5.7 Buying behaviour

Conclusion: The majority of students indicated that they do not usually engage in negative buying behaviour. Only 26% (92) of the students indicated that they usually

249 cant resist a sale, 11.21% (39) indicated that they buy products they cannot afford, 14% (49) hide their spending habits and 19% (69) experience debt problems.

Recommendation: In the light of the above information it is clear that some students are vulnerable. Retailers need to put limits on credit cards, require minimum income levels to qualify for accounts, make use of ethical advertising and educate students in responsible shopping.

6.6.6 Post-purchase process

After the purchase of a product, students use and dispose of the product and tend to experience guilt and sometimes post-purchase dissonance.

6.6.6.1 Product use

Conclusion: Students are usually one of the product users in their families, vide section 6.6.1.4

Recommendation: Retailers should teach students to use products properly, by providing information through marketing communication, instructions on the product packaging, instruction manuals or training, especially when selling complex products. This will ensure complete satisfaction.

250 6.6.6.2 Guilt

Conclusion: The majority of students usually experience guilt after a purchase, with females more proned to experiencing guilt than males, and blacks more proned than whites. Students indicated that they usually feel guilty after they made an unneeded purchase.

Recommendation: The experiencing of guilt is a negative emotion, which may inhibit or prevent a student from buying the product again. Therefore retailers should make provision in their marketing strategy for decreasing this emotion by adapting price policies, focusing on need satisfaction and emphasizing in their advertising campaigns that customers deserve the best.

6.6.6.3 Post-purchase dissonance

Conclusion: The results of the study indicated that 25% (84) of the students usually experience dissonance, 48% (162) seldom experience dissonance and 29% (98) never experience dissonance.

Recommendation: Dissonance, just like guilt, may prevent or decrease the chances of a student buying the same product again, or even buy at the same retailer again. It is therefore important that retailers try to reduce this doubt. Retailers should use strategies like advertisements that focus on increasing the desirability of the chosen

251 brand or decreasing the desirability of the rejected brand, encouragement of the wisdom of choice, and follow-up and after sales service to try and reduce the experiencing of post purchase dissonance.

6.6.6.4 Disposing

Conclusion: Students usually make use of the disposing option of throwing away or giving away the product, packaging or part of the product.

Recommendation: Retailers should ensure that it is easy and convenient to throw or give away the product, packaging or any parts of the product. The ecological concerns, the cost and scarcity of raw material and legislation are other concerns retailers need to deal with. An example is new government legislation forcing people to pay for plastic shopping bags.

6.7

RECOMMENDATIONS FOR RETAILERS IN THE WITBANK AREA FOR DEVELOPING EFFECTIVE MARKETING STRATEGIES, BASED ON THE PREFERENCES, BUYING PATTERNS AND DECISION-MAKING

PROCESSES OF STUDENTS.

The primary objective of this study, as stated in chapter one, is to determine the decisionmaking process, buying patterns and preferences regarding product, promotion, price and distribution of students. In order to develop an effective marketing strategy with the four components of price, product, promotion and distribution, certain information is needed and certain questions need to be answered, as indicated in chapter two. By using the information provided by this study especially the conclusion and recommendations made in this chapter

252 retailers should have the answers to the questions, to enable them to develop effective marketing strategies.

6.7.1 Products

Retailers need to answer product-related questions, vide chapter two, in order to develop their product strategies. Based on the findings from this study retailers now have the answers:

Which products to sell to the student market? Through studying the expenditure patterns of students and preferences for retailers on campus, clothing, fast food, books, banking, groceries, transport, entertainment and cell phones are products that appeal to students.

Which product features are important? Students indicate quality and price as the most important evaluative criteria they use in evaluating and choosing among brands and products.

Is branding important? The majority of students indicated that branding of products is important to them, thus retailers should stock well-known brand names and focus on brand names in their advertising campaigns.

How environmentally friendly must the packaging be? Only 16% (61) of students indicated that they recycle products or packaging and thus recycling may not be so important to students. Government regulations are still an important issue to consider for retailers.

253 6.7.2 Price

To enable retailers to develop an effective price strategy they need answers to the following questions, vide chapter two.

How important is price to students? The majority (70%) of the students indicated that price is a very important criteria in making a final purchase decision.

How much are they willing to pay? Students low income/spending money definitely puts a ceiling on the price retailers can ask. Credit facilities need to be supplied, especially for expensive or durable products.

Price sensitive? Students are very price sensitive as they indicated that the major reason they change their purchase intentions is because of special price deals. They also search extensively for information to obtain a better price especially when a product is expensive.

How important is price in decision-making? Students` main reason for searching for information during decision-making is to obtain price information. Retailers should thus ensure that they supply price information to students to increases students awareness of the brands and prices retailers have to offer. Retailers prices should reflect good-value-for-money and affordability, if they want a competitive advantage in the student market.

254 6.7.3 Promotions

Retailers in the Witbank area need to keep the following information in mind in order to develop successful promotional campaigns aimed at the student market.

Whom to advertise to? Students, male and female, black and white between the ages of 20-24 years.

What message will achieve the desired effect? Because of the youthfulness of students, visuals, music and an innovative, direct approach should work well.

Which media to communicate in? Magazines (True Love and Drum), TV (E TV and SABC 3), radio (Jacaranda, Metro, Y FM and Ikwekwezi), newspapers (Witbank News, Sowetan and Sunday Times).

When? Early in the morning, on their way to the University of Technology, or later in the afternoon during the week, and Fridays and Saturdays when they are shopping.

Literacy? Although students are able to read, write and understand English, English language problems encountered in the pilot study indicate that retailers should steer away from complex concepts or difficult words in their communication. Retailers should therefore test their advertising copies for legibility and pronounceability to ensure that students do understand the words they are using in their campaigns.

255 6.7.4 Distribution

Retailers should be able to develop an effective distribution strategy, using answers to the following questions:

Where do students currently shop? The majority of students shop at shopping centres or shops in town or where they can save time. The majority of students do not make use of catalogue shopping or mail shopping. Retailers should ensure that they are located in these convenient areas.

Would they like to shop on campus? The majority (67%) of the students indicated that they would like to shop at retailers on campus, such as fast food outlets, entertainment providers, bookstores and cell phone stores. Such retailers should do a feasibility study to determine if it would be profitable for their specific company to try and satisfy the needs of students, by locating their outlets on campus.

6.8

PROBLEMS / LIMITATIONS OF STUDY

This study is explorative and descriptive in nature. A complete study of the total population of students in South Africa would be necessary, to determine with total certainty the buying patterns and consumer preferences of students. The researcher experienced a negative attitude from students with regards to the completion of the questionnaires, especially where personal and confidential information had to be given. A lack of interest was also a problem in certain parts of the questionnaire that took long to complete. Students struggled at first to complete the questions, and needed a lot of help and explanation because they do not have a lot of

256 experience in completing questionnaires. Language problems were also experienced, as students do not always have the necessary understanding of the English language and were afraid of making mistakes. Time constraints also had a negative effect on the study, because students were in a hurry to attend their next class.

6.9 CONCLUSION

This study reached the secondary objectives, set out in chapter one, by providing a demographic profile of students at Tshwane University of Technology, Witbank campus, identifying students` media usage and exposure, determining students` expenditure patterns as well as determining students` needs for certain retailers on campus.

The primary objective was research, as this study provided information on student preferences, buying patterns and decision-making process, in order to aid retailers to develop an effective marketing strategy (price, product, promotion and distribution).

The information provided by this study should help retailers in the Witbank area to better satisfy the student market through their existing distribution channels and store location, or even by relocating on campus. This study also identified further information that needs to be collected, to supply an even better and more comprehensive understanding of the consumer preference and buying patterns of students at Tshwane University of Technology, Witbank campus.

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