Consumer Behavior AuditShoaib Rafi (BD-65/2007)

Syed Hamza Habeeb (BD-70/2007)Syed Ammar Zaheer (BD-69/2007)

Samad Farooq Dandiya (BD-59/2007)

Chase Department Store Started out in 1984 as a

family owned garments outlet.

Rapidly expanded into home textiles and crockery / kitchenware

Currently operating 5 outlets in Karachi.

6th outlet at Shaheed-e-Millat is under progress and will start operations very soon.

Chase Department Store Prices are the same

throughout all the outlets in the city.

No plans to expand in to other cities.

However, they are willing to open more outlets in the city in long run.

Chase Outlets NIPA – Gulshan-e-Iqbal

Hasan Square – Gulshan-e-Iqbal

SeaView (Near Afridi Inn) - Clifton

Schon Circle – Clifton

Khalid Bin Waleed Road – PECHS

Shaheed-e-Millat – PECHS (upcoming)

PortfolioChase Sea View

Chase Schon Circle

Grocery Ladies Fabric Jewellry Crockery Kitchenware Cosmetics Garments Home textile Shoes Undergarments Watches Gifts & more

Ladies Fabric Jewellry Toy World Crockery Kitchenware Cosmetics Garments Home textile Shoes Undergarments Watches Gifts & more

Chase NIPA Ladies Fabric Jewellry Crockery Kitchenware Cosmetics Garments Home textile Shoes Undergarments Watches Gifts & more

Characteristics of Customers

Lower-middle / Middle-income families of Karachi.

70% customers come in groups of more than three (families)

30% come in twos or threes.

Characteristics of Customers Loyal customers go there about 3 to 5 times a

month (Chase SeaView) and at least once a month at other outlets.

Some customers even come from Hyderabad and Thatta.

Customers buy more stuff atthe beginning of the month.

Customers end up buying more stuff than they intended since the prices are so low.

Customers are driven by the need to buy their household items and other at the lowest possible price available in the market. There reference price is plausible low.

Usage level is high since families are growing, there needs grow with them.

Customer Behavior

A large number of customers have been visiting Chase for more than a decade.

Customers trust that they will get the best price in the market at Chase.

Customer Behavior

Customers are increasingly focusing on price when they are sure of the quality.

Customers are also now aware of the minimal difference in quality between branded products and standard products.

Motivations

Buying Influences Word of mouth (family and

friends)

Strategic store layout

◦ Toiletries at the checkout◦ Ladies / Children’s garments /

jewellry at the beginning◦ Crockery / Kitchenware at the

front and in the middle◦ Gents clothing at the back

Rising inflation

Sales (Buy 3 lawn suits for PKR 1500)

Introduction of grocery and toy world

Buying Influences

Defected items are replaced if they have not been used and are returned within a specific time frame.

Garments are of average quality.

Defects in electronics are also taken care of promptly.

Consumers suggest that grocery and toy world should be introduced in other outlets also.

Consumer problems

Marketing Strategy Currently print media is used to advertise

various promotional schemes at Chase.

Ticker on Cable TV.

Pamphlets / Flyers distributed at traffic signals.

Chase’ marketing strategy is built on ‘STP’:

◦ Segmentation: Dividing their market into a distinct subsets of consumers with common needs or characteristics and selecting one segment with a distinct marketing mix.

◦ Targeting those customers that the company can satisfy in a superior way.

◦ Positioning its offering so that it is perceived by the consumers in the target segment as satisfying their needs better than other competitive offerings.

Marketing Strategy

Psychographic Segmentation Chase has divided the market

into different groups based on social class / lifestyle.

For this class of customers, shopping at Chase results in high transaction utility.

These consumers know that the low price means less than desired quality but settle for the product because of budgetary limitations.

Analysis Experience / gut feeling is

used when deciding on changing store layout or inclusion of a new product line.

Organizational strategy seems to be of incurring losses on a few products while gaining small profits on maximum number of products in order to achieve overall profitability.

Chase management should invest in consumer research activities to gain valuable insight about consumer perceptions.

Sales staff should have a uniform so that they are easily identifiable and to give a sense of belonging.

Sales staff should be well-groomed and courteous .

Suggestions

Although Chase has been around for 25 years, it has only been in the last 5 years that they have seen rapid growth.

The reason for this rapid growth has been the elimination of several established middle-men who had been associated with the organization for a long time.

The savings thus realized were passed on to the consumer resulting in increase in number of customers (turnover).

The strategy so far has been to refine and improve the supply chain (including warehousing) so that prices remain the lowest in the market (cost leader pricing).

Conclusion