Factors Influencing Store Choice Behavior: South Korea Consumers

This report provides a comprehensive analysis of consumer store choice behavior in South Korea. The study examines various factors influencing consumer decisions, including the choice between organized and unorganized retail formats, the impact of consumer attributes (age, gender, family size, occupation), and the importance of factors like quality, price, location, and brand selection. The research methodology involves a survey of 110 respondents, analyzing their pre-purchase preparations, purchasing frequency for different goods, and the factors they prioritize when choosing a retail outlet. The findings reveal preferences for organized retail, the influence of psychological pricing, and the significance of merchandise display and brand variety in attracting consumers. The report also highlights the different priorities of males and females, as well as different age groups and family sizes, in their store choice behavior. Ultimately, the study aims to understand the key drivers of consumer behavior within the South Korean retail landscape, providing insights for retailers to optimize their strategies and improve customer satisfaction.

A STUDY ON STORE CHOICE BEHAVIOR OF CONSUMERS in SOUTH KOREA
Chapter 1: Introduction
The shoppers are fairly involved in the decision related to the choice of the store. The retail owners find
it important and necessary to understand the store choice behavior of the consumers because they use
this information to develop the appropriate marketing strategies so that the people are attracted
towards the store and the retailers are able to maintain their clientele (Coe, 2006). The major factors on
which the buyers base their choice of store are the primary factors and the image based factors. But, the
factors depend on the type of store that the customer is visiting. In a place like South Korea, the
shoppers do not have a variety of choices to choose from, so they simply like to go to a store which is
recognized and sells many different products (Coe, 2013). Also, the people here like to travel less, so
they visit the store which is nearby to their residence. But, different people have different choices and
preferences; therefore, the study tries to understand the behavior of different buyers regarding the
retail setup in the country. The buyers are explored in this study and the primary aim for that are the
reasons due to which they chose a particular store. All over the world, the store choice and the
patronage is studied by the researchers. With the growth of the stores and the retail setups in South
Korea, this phenomenon has gained significance in the market. New stores chains are being set up and
they provide new options to the buyers and leave them with new experiences (Neilson, 2014). The
evaluation phase is going on with the retailers and the buyers in this place and there is no clear verdict
as to what drives a person towards a particular store. Unfortunately, due to this, there is increase in the
footfall in the stores, but there is less purchases that happen in the stores. The conversion rate of the
actual purchases is very less which leads to high costs of giving service to the customers and reduction in
the level of profitability of the buyers. The small shops are the hallmark of this place and this has held
back the people to the traditional ways of shopping (Bronnenberg, 2015). Many people still believe that
the new formats of the retail shops are not effective in adding any value to them; it is just a concept of
novelty. There are many popular retail chains that are holding back the new expansions. Therefore, the
current study aims to understand the behavior of the people regarding the choice of stores.
Basically, the process of choosing the relevant store is quite cognitive. It is very similar with the choice of
brand. When the consumers chose a particular brand, they, do not consider the geographical limitations
which is not the case with choosing the stores (Chkanikova, 2015). In case of the store choice by the
customers, the location of the store plays a major role. It is believed that the cost of traveling while
shopping is counted by the customers when they determine their total cost of shopping from a retail
outlet. Therefore, they regard the distance of the store from their residence as an important factor
while selecting the store (Cho, 2015).
It has been observed that the socio-economic background of the consumers, their personality and the
way they have made the shopping decisions in the past have influenced the store choice behavior of the
consumers (Shin, 2013). Apart from this, the shoppers have been observed to consider the brand that is
being sold in the various stores. Since the consumers regard the brand and consider it for shopping,
therefore, they also see that which of their favorite brands is sold in which of the retail setup. Thus, the
brand and the location have a strong link with the choice of stores (Chkanikova, 2015). Apart from this,

the age of people in South Korea, the age group of people, the size of their family and the occupation in
which they are involved are also a factor that helps them in deciding that which store they must visit to
shop from (Cho, 2015). Thus, the personal attributes of the people are also connected to the factors that
influence the choice of the format of the retail stores i.e. the organized retail and the unorganized retail.
Organized retail is that retail setup where all the trading activities are undertaken by those retailers who
have the license to do that, and who have registered their retail outlets for the payment of the sales tax;
income tax; etc. (Yi, 2013). But, the unorganized retail is those low cost retailing shops that follow the
traditional formats. In South Korea, there are roadside vendors who sell the food items and in some
places, the clothes too. These all are the unorganized ones. But, the shops that are located in the
popular supermarkets, or the famous retail chains, forma a part of the organized retail in South Korea.
Objectives:
The study attempts to inquire about the factors that pull the consumers in South Korea towards a
particular retail store. The study aims to determine this in general and then the findings are based on
the particular attributes of the consumers. The objectives for the current study are as follows:
1. To study the factors that make people chose a particular format of the retail store i.e. the
organized or the unorganized retail store.
2. To determine the attitude and the perceptions of the consumers towards the formats of the
retail store.
3. To find out the type of goods that the consumers look for in the organized and unorganized
retail setup.
4. To analyze the impact of consumers attributes on their choice of retail store.
5. To understand the various factors and their relative importance in determining the buying
behavior of the shoppers.
6. To find the level of consumer satisfaction from their choice of retail format and to ask for the
type of improvements that they are looking for in that particular format.

Chapter 2: Literature Review

Chapter 3: Research Methodology

Chapter 4: FINDINGS AND ANALYSIS
There are 45% males and 55% females in our study.
45%
55%
GENDER
MALES FEMALES
The age group profile is given as follows. The maximum number of people i.e. 35% of people in our
study are in the age group of 20-25. 19% are in the age group of 26-30, 10% in 31-35, 17% in 35-40 and
18% are above the age of 41. This shows that are study mostly include young people.
20-25 26-30 31-35 36-40 ABOVE 41
39
21
11
19 20
AGE GROUP

In the sample of 110, 39% of people are doing job, 30% are students, 11% are doing business, 6% are
teachers, 9% people are retired and only 3% are doing other than these things. Since most people are
young in our study therefore either they are students or doing job.
30%
12%
39%
6%
9%
4%
OCCUPATION
STUDENT BUSINESS JOB TEACHER RETIRED OTHER
In the study, most people have a family of 4. Size of family is small for most people so there would be
less frequent purchases of goods and they will not be purchasing in bulk.
2 3 4 5 6 ABOVE 6
7
19
32
24
18
10
SIZE OF FAMILY

Most people prefer to go to organized retail stores-52%. 29% people say that their choice depends and
is not fixed. Only 18% go to unorganized retail outlets. Among these, only 34% of males go to organized
retail stores and 75% go to unorganized, whereas 65% of females go to organized and only 25% prefer to
go to unorganized. Then the people doing job or business prefer to go to organized shops but retired
people go to unorganized.
53%
18%
29%
ORG UNORG DEPENDS
While studying the pre purchase preparation of consumers it is found that most of the people shop with
a list. Few of them go for unplanned visits, emergency shopping. As compared to females (68%), less
males (31%) shop with a list, and more males go for emergency shopping as compared to females.
Students, job persons and teachers shop with a list but retired people go for emergency shopping. As
per the family size, mostly all of them shop with a list. In today’s world people don’t have much time to
visit the market again and again because most of them are doing job, that’s why they shop with a list so
as to get all the required things in one go.

WITH LIST UNPLANNED EMERGENCY OTHER
54
28
21
7
PRE PURCHASE PREPARATION
In the study it is observed that 50% of people purchase food weekly and 55% of them buy it from
organized retail. 70% buy hard goods monthly and 76% from them go to organized retail. 83% buys soft
goods monthly and again 86% of them go to organized retailer. Both males and females prefer organized
or unorganized equally for the purchase of food. But they prefer organized for hard and soft goods. The
difference in gender behavior is not observed here because people look for good quality in food, and
other goods, therefore they have a similar choice. The people with large family size go to unorganized
retail for purchase of food because they have to purchase it more frequently and in large quantities so
location from home is to be considered. Retired people also prefer to go to unorganized stores because
they have generally developed a personal relation with the store person and they get service form him
like home delivery, discounts etc.
FOOD HARD SOFT
23
0 0
56
32
18
31
78
92
DAILY WEEKLY MONTHLY

FOOD HARD SOFT
60
84
95
50
26
10
ORG UNORG
The rating of various factors in choosing a retail outlet is as follows. Consumers consider quality, price
and location from home as most important and home delivery and ambience as less important. For
males, quality, location, price and parking facility are important things to consider, for females, price,
quality, offers and discounts are important. For a retired person price is the most important factor to be
considered an also location from home, all under one roof and services, but for earning people price is
not as important as quality or ambience or variety. Retired people generally don’t have a source of
income and hence price consideration is important for them. People with large family size look for price
and variety and they also try to get everything under one roof, because they have to meet the demands
of many people in the house.
PRICE
OFFERS
LOCATION FROM HOME
VARIETY
SERVICES
SELF SERVICE
QUALITY OF PRODUCT
HOME DELIVERY
AMBIENCE
ALL UNDER 1 ROOF
68% 54% 68% 65% 51% 43%
83%
32% 33% 46%
IMPORTANCE OF FACTORS

39% of people are attracted towards a particular store because of the display of merchandise. 24% due
to cleanliness in stores, 20% like the delivery of product and 15% are attracted because of friendliness of
sales people. Males are mostly attracted by the friendliness of sales persons whereas women are not.
Women are attracted due to the display of merchandise. This shows that women do not get influenced
by sales persons easily. Young people generally look for display and retired people look for good delivery
mechanism because they are unable to carry heavy loads of their purchases.
FRIENDLINESS DISPLAY OF
MERCHANDISE CLEANLINESS DELIVERY
17
43
27
23
ATTRACTION TOWARDS RETAIL
STORE
40% respondents judge the genuineness of retail store by the variety of brands it offers. 21% judge by
status and perceptions. Only 18% consider price as a way to judge retail outlet. Mostly male judge the
genuineness by variety of brands offered and women by their perceptions. Young people look at the
status whereas retired people look for the price. The people with large family size also look at the
variety of brands offered. Variety of brands shows that a store is reputed enough that’s why many
different brands are putting their goods in that store and hence people go to that store.

STATUS VAREIETY OF
BRANDS OFFERED PRICE PERCEPTIONS
24
44
20 22
GENUINENESS
64% of respondents look for psychological pricing and 35% suggested. Both the gender prefers
psychological pricing. Our study includes majority of working class so they don’t have time to indulge in
bargaining for the prices. They consider the tagged price as genuine. But the people who prefer
unorganized store like retired people or people with large family size, they look for suggested pricing.
35%
65%
TYPE OF PRICING
SUGGESTED PSYCOLOGICAL
40% people prefer to go for shopping in the evening. 33% go in the afternoon and only 25% go in the
morning. Since our study includes working people so they prefer to shop in the evening because they
don’t have time in the morning or afternoon. Females and retired people generally go for shopping in
the morning because retail outlets are less crowded at that time and they have enough space to select
the product.

25%
34%
41%
TIME OF SHOPPING
MORNING AFTERNOON EVENING
30% of people say that they are often influenced by the word of mouth publicity of any retail store. 25%
say that they are occasionally influenced and 21% of people are always influenced. As compared to
males, females more often get influenced by word of mouth publicity of any retail outlet.
NEVER RARELY OCCASSIONALLY OFTEN ALWAYS
8
17
28 33
24
INFLUENCE OF WORD OF MOUTH
PUBLICITY
43% agree to the statement that organized and unorganized retail have their own advantages and
disadvantages. People whose preference of organized or unorganized retail outlets depends on the
variety of product they purchase generally agree that both has its own advantages and disadvantages.