Question

Retail Sector: Riding the changing waves of Consumerism Modern retail has entered India as seen in multi-storeyed malls and huge complexes offering shopping, entertainment and food under one roof. The Indian retailing sector is at an inflexion point where the growth of organised retailing and growth in the consumption by the Indian population is about to take a higher growth trajectory. A large young working population with median age of 24 years, nuclear families in urban areas, increase in disposable income levels, consumer awareness and prosperity to spend, along with increasing working women population and emerging opportunities in the service sector are going to be the key growth drivers of the organised retail sector in India. The modern consumers prefer the convenience of centrally located stores with ample car parking space, variety of brands and good ambiance. They now want to minimise time spent and maximise the pleasure derived. And retail is enchasing on all these factors to its advantage. Questions – Discuss the role of non-price determinants in affecting consumer preferences. Discuss the phrase “consumer is sovereign” in the background of the above case let.

Answer 1

Answer:

Discuss the role of non-price determinants in affecting consumer preferences.

Answer 2

Answer:

Non- determinants will affect demand for goods and services, but only up to a certain point where the price is reasonable.

Explanation:

a.) For instance, if non-price factors are increasing demand yet prices are extremely high, consumers may be compelled to look at alternatives.

Branding:

• Sellers can build such strong brand identities that customers have a strong preference for their products by using advertising, product difference, product quality, customer service, and other strategies.

Industry Size:

• Customers may be forced to make purchases based on criteria other than price if the market is growing quickly because the supply of goods cannot keep up with demand.

Demographics:

• Demand may vary in favor of those groups growing in size if the population's distribution by age range changes (and vice versa).
• The demand for arthritis medications will therefore rise as the population ages, whereas the demand for sporting items would rise as the population gets younger.

Seasonality:

• The demand for commodities fluctuates depending on the season; for example, lawn mowers are in high demand in the spring but not in the fall.

Accessible income:

• Their inclination to buy changes as the income that is available to them changes. Therefore, regardless of price, someone is more inclined to buy during an economic boom.

Additional Goods:

• The demand for a product may be impacted by a price change in a complementary good.
• Therefore, the price of neighboring parking, as well as the price of popcorn in a theatre, could affect the demand for films, as well as the price of popcorn in a theatre,

Future Projection:

• Customers' present-day purchase decisions may change if they predict that the market will change in the future, as may be the case if supply is expected to become more constrained.
• As a result, the current demand for petrol may rise as a result of an anticipated reduction in the availability of rubber.

b.) When consumers rule over producers in marketplaces, it is referred to as consumer sovereignty.

• Moneyed people can utilize their purchasing power to give commodity producers information that helps them decide what to produce and in what quantities.
• The economic principle of "consumer sovereignty" holds that the customer has some control over the products that are produced and that they are the best arbiters of their welfare.
• "Customer sovereignty" means "customer is a king".
• They rule the business industry to great extent.
• Customers during these recent times, prefer to go to shopping malls as they can avail anything they want at one stop.
• The shops in the malls have good parking slots, they lay off many discounts.
• These strategies and features are attracting customers these days.

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