Chapter 1: INTRODUCTION

1.1General

Malls have had an indelible impact on the structure of retailing

(Christiansen,Comer,Feinberg, & Rinne,1999). Malls offer economic

utility because consumers are more likely to find what they want

at a mall than at an individual store. There is one more aspect

about malls that is now being studied and that is malls as

entertainment. A new word has now been coined based on this

phenomenon and this is called “retailtainment” (Hoban, 1997).

The Mall model evolved in the west in the mid-1950s.

Entertainment has always been part of the mall culture.

Entertainment may be only music or a central court with some

event or show or seasonal decoration. During Christmas it could

be a Santa claus and a Christmas tree and during easter it could

be the Easter Bunny, and so on. However major entertainment as

found today, was absent in malls till the 1970s(White,2011).This

changed in the 1980s , with many malls offering rides and

attractions. Some examples are West Edmonton Mall in Canada with

rides, attractions and even a roller coaster. Mall of America in

Minnesota opened in 1992 with 292,000 square feet for an

amusement centre. However inspite of entertainment being

introduced in parks in the 1980s, till the 2000s, there have been

few malls offering entertainment on a large scale. On the other

hand entertainment in malls is more common in Eastern Europe, the

middle east, India and Asia ( White, 2011).

Mall managements created places that shoppers can enjoy, not just

buy goods. It is now an experience economy where goods alone

cannot drive the mix. New Malls were modeled as lifestyle centers

with an outdoor design and architecture that resembles a street

or a plaza. People experienced a strong sense of the ambiance and

are inspired to gather and meet in such places( white, 2011).

These Lifestyle centers have entertainment, dining along with a

mix of stores. Their format is different from that of enclosed

malls. Many older malls are de-malling and going in for a more

open air design.

Mall managements examined their current and future mall

patrons, which provide guidance for store design and marketing

strategy.

Americans consider eating out a great value because of their time

pressure and Americans on an average eat out almost four times a

week( White,2011). Therefore, combining a restaurant with

entertainment is very appealing to Americans, with the time and

fuel saving option.

Malls in the USA lost their department stores, as consumers

looked for a unique shopping ambiance( white, 2011).

With commoditization of retailing, what differentiates one mall

from the other is entertainment”. The National Research Bureau

(1999) defines a shopping center positioned for entertainment as

consisting of food, specialty retailers and entertainment

facilities. With reducing footfalls, retailers are trying to

build entertainment into their merchandise strategy. Malls are

being built now with skating rinks, rides, amusement parks, movie

theatres, museums and virtual reality centres. Many malls are

suffering from the loss of department stores, as consumers are

looking for an exceptional shopping experience. Consumers are

looking for many distinctive facets of entertainment as part of

the Mall experience. Academic research in investigating shopper

behavior has not been adequate.

High school students tend to like clothing with prominent logos,

while college students seem to dislike symbols on clothing (wall

street journal, 2001).

The idea of adding a major entertainment center to a Mall has

been gaining popularity. Typically these large scale malls

feature entertainment attractions such as bumper cars, rides for

children, gaming arcades, bowling alleys, skating rinks, 3-D and

4-D shows and other entertainment avenues. The idea is that such

entertainment avenues make the shopper stay longer in the mall

and increases revenue for the mall and for the stores in the

mall.

The shopping center industry originated in the year 1950s.

Entertainment has been an integral part of the marketing program

used by mall owners to attract customers. Malls have also

allocated considerable resources to improve the ambiance of the

mall. Benches, concerts, flash mobs, have been entertaining

consumers. The addition of movie theatres and food courts to the

entertainment mix, have also drawn more people into malls.

Triggered by a fall in footfalls in malls ( Haynes & Talpade,

1996) Mall owners turned to amusement rides, museums, games and

so on to draw customers.

Retail has now evolved with mere shopping going defunct and

entertainment and restaurants anchoring the retail experience in

Malls. The fun and social experience is an integral part of the

retail experience.

The growth of retail in India has been fueled by the phenomenal

growth in consumer expenditures. The explosion in retail can be

attributed partially to well laid out Malls in major cities in

India. Consumers are no longer satisfied with the usual

facilities offered in Malls. The Indian consumer is now exposed

to a variety of retail formats, leading to change in buying

behavior. A large number of environmental forces have been

buffeting the Indian retailer. Mass discounts, online shopping,

lifestyle retailing and other phenomenon have been forcing the

retailer to go beyond the conventional. The entertainment part of

retailing or “entertailing”, is becoming a crucial tool for

retailers. High levels of services, quality staff and a fun and

entertaining environment are some of the tactics that retailers

now deploy to retain consumers. With the retail landscape fast

evolving, there is no limit to the hedonistic experiences that a

customer can now have (Hemlatha & Ravichandran,2009).

The population growth and the demographic mix in India have paved

way for drastic changes in lifestyle and explosive growth in

spending by consumers. The Indian population is a teeming 1.28

billion now and is slated to reach 1.4 billion by 2025(population

pyramid, 2014). What is also economically attractive about the

Indian population is the large population of 500 million people

in the productive age group between 25 and 54 and 570 million

who are under 24 (the world facebook, 2014). With this vast

population of prime age groups, it comes as not a surprise to see

the galloping consumption patterns that is witnessed now in India

( Sinha & Kar, 2007). The economic liberalization that began in

1991 has unleashed a new wave of retailing with an emphasis on

consumption ( Sinha, 2011). India is now the fourth largest

economy ( the world facebook, 2014). The rapid economic growth

has driven consumerism in India ( Halepete & Iyer, 2008) .

Studies on the India retail boom indicate that the factors that

are driving this retail explosion arethe encouraging

demographics, shifting mindsets, habits and attitudes, rising

disposable incomes, liberalization and increasing number of women

in the workforce(McKinsey Global Institute, 2007; Ranganath &

Babu, 2011).

There are two types of retailing formats that are witnessed in

the Indian retail scenario- unorganized and organized. India has

been the home for small stores that exist in the nooks and

crannies of the Indian geographical spread (Sternquist,2007).

Channels have been traditionally long with many intermediaries

between the manufacturer and the retailer(Sternquist,2007).

Organized retail is modeled on western retailing and utilize

modern corporate management concepts ( Mann & Byun,2011).

Organized retailing in India accounted for a mere 4% of Indian

retail in the year 2006 ( Kaur & Singh, 2007). This reached 7.5%

in the year 2014(Pulse of Indian Retail, 2014). The rapid growth

in the sector in the recent years is expected to touch 20% of the

retail share by 2020 (Retail Global, 2011). This portends a

bright future for organized retailers setting up shop inside

shopping malls ( Saraf, 2005).

Malls generally have space ranging from 60, 000 square feet to

7,00,00o square feet and are the most popular type of organized

retailing. Malls are now common not only in Tier I cities like

Mumbai and Delhi, but also Tier 2 cities like Coimbatore,

Ahmedabad, Jaipur and Nagpur( Ghosh, Tripathi & Kumar, 2010,

Sinha & Kar, 2007).

Malls offer entertainment, apart from an opportunity to shop, all

under one roof ( Kiran & Jhamb, 2011).

Major cities in India now have a plethora of Malls. These malls

attract a heterogeneous group of customers belonging to different

socio economic segments ( Anuradha & Manohar, 2011).

Family outings are planned to Malls that have food courts,

theaters and play areas, apart from shopping ( Kiran & Jhamb,

2011; Sinha & Kar, 2007).

Entertainment in Malls is more popular in countries like India

where entertainment options are limited in crowded cities. Also ,

countries like India have a history and tradition of people

meeting, socializing, having fun, eating and shopping in markets,

in contrast to the American culture which did not evolve that

way. The market tradition has been carried over into the mall

where entertainment is considered an essential part of the

experience. Also, in most eastern cultures the family with

children are the dominant type of household, unlike the west

where the family is not dominant. Therefore in countries like

India, shopping is more of a social activity, unlike in the west

where it is more functional. Where shopping is collaborative,

satisfying all members of the family becomes important. This is

where entertainment for children becomes important for mall

success.

1.2 Indian Consumers – The Generational Advantage to Mall Owners

Interestingly, India has the largest population under the age of

45 in the world. Ranganath & Babu ( 2011) in their study state

that 150 million of the 800 million below the age of 45 years,

belong to the upper middle class, the segment that augurs higher

consumption, productivity and demand for goods and services.

India’s young and upper middleclass provide an extremely

favorable environment for organized retail ( Walker, Mukherjee

and Gupta, 2011). While older Indians tend to save, the younger

generation Indians are more free with spending on goods that are

branded and stylish( Dash & Chandy, 2009, Jain, 2010). The new

Indian youth values branded goods as much as he values saving for

his child’s education( Sinha, 2011).

Other studies ( Ghosh et al, 2010, Goel & Dewan, 2011) show that

Indian consumers who are 45 years or less, enjoy visiting malls.

High disposable incomes have also been fueled by the boom in the

IT sector. This has given a boost to organized retailing with

well paid IT professionals in tier I cities like Mumbai, Chennai,

Bangalore and Hyderabad, showing a high propensity to spend in

Malls( Halpete & Iyer, 2008).

The extremely conducive climate for shopping malls has been the

reason for undertaking this study on shoppers’ behavior towards

malls. Mall owners, retailers and entertainment companies ought

to study the minds of shoppers, their attitude and behavior when

it comes to malls. The various parameters that are involved in

the motivation to visit malls, and the factors that dictate their

behavioral pattern within malls need to be studied so the malls

can respond in a way that helps attract more patronage and

spending in their malls.

There are old malls that have lost patronage owing to the

competition triggered by the proliferation in malls. However,

only a limited number of studies exist in India that have

explored the phenomena of changing consumer lifestyles and

patterns, when it comes to Mall patronage. Batra ( 2010), Mann

( 2012) and Virdi (2011) are some of the few studies that have

dealt with this subject .

1.3 Motivations for Visiting Malls

The main motivation to visit a mall may be shopping. However

Indian shoppers are also looking for a hedonic experience when

they visit malls ( Goel & Dewan, 2011).

Many studies have been undertaken on the utilitarian and hedonic

aspects of shopping (Arnold & Reynolds, 2003; Babin, Darden, &

Griffin, 1994; Batra & Ahtola, 1991; Cox, Cox, & Anderson, 2005).

When shopping is rational, logical and goal oriented then these

aspects are said to be ‘utilitarian’. In other words, it is the

supposedly main purpose of shopping (Arnold & Reynolds, 2003;

Babin et al., 1994; Batra & Ahtola, 1991; Fiore & Kim, 2007). On

the other hand, hedonic aspects are the fun and entertainment

aspects of shopping ;the hedonic aspects include emotions like

arousal, fantasy, imagination and escapism (Arnold & Reynolds,

2003; Babin et al.,1994; Fiore & Kim, 2007; Holbrook & Hirschman,

1982). Studies now indicate that the hedonic aspects seem to be

eclipsing the utilitarian aspects, especially with Indian

consumers below the age of 45 (Kaur and Singh , 2007). Malls now

need to appeal to these consumers who are looking for varied and

innovative hedonic experiences when they visit malls (Kuruvilla

& Ganguli, 2008). This segment is also willing to spend for these

highly appealing experiences.

Gilmore(1999) also supports the same concepts where consumers

wish to have engaging experiences when they come shopping. He

calls it the ‘experience economy’ concept. Gilmore also describes

the four stages of economic progression of consumers from

commodities to goods to services to experiences. The concept of

experience realms was proposed by Pine and Gilmore (1999). This

concept proposes four realms that will fully engage the consumer,

viz, educational, entertainment, escapist and aesthetic

experiences. These were termed the 4Es. When one studies the

features offered in shopping malls through the window of the 4Es,

multiplex theaters offer entertainment. Children play stations

also offer amusement. The opulent and beautiful architecture of

malls and the branded store interiors satisfy the aesthetic

experience.

While such studies have been done in the area of tourism, they

are yet to fully analyse the 4 Es of consumer experience in

Malls. Therefore shopper’s behavior in malls remains an

unexplored area.

The current study seeks to set this right by undertaking a

comprehensive study on shopper’s behavior in malls.

1.4 Problem Definition

Having stated that Malls and Mall retailing is a booming business

proposition, the right formula of attributes and features is yet

to be uncovered for Malls. Retailers have failed because of a

lack of understanding of shopper behavior and cultural factors.

Even while attracting high footfalls, the financial success of

malls and mall retailers is still mixed. Only about 30% of retail

stores in malls have achieved return on investment (Virdi, 2011).

Recessionary conditions have made shoppers shy away from heavy

spending and only 10% to 15% of mall visitors actually buy or

spend substantially in malls. 70% of malls are therefore

struggling to recover their investments. The dip in consumption

could slow down the growth of organized retail ( Ghosh et al,

2010, Khare,2011; Malyadri & Rao, 2011). Mall Profitability and

return on investment is of concern to mall owners and retailers (

Pulse of Indian Retail, 2014).

Trivedi (2008) has reiterated the value conscious behavior of

mall shoppers. People gather at malls for socializing with

friends and relatives, eating, watching movies, visiting

entertainment centres and window shopping, apart from actually

shopping, in malls. Mall visitors have the potential to spend,

given the right value proposition. Therefore there is a need for

mall retailers to study the needs and expectations of mall

visitors. The success of a Mall is dependent on the success of

its tenents. Consumer perceived value plays a crucial role in

consumer satisfaction and patronage of the mall. This perceived

value pertains to both retail and non retail experiences in the

mall.

Therefore malls need to consider both the retailer tenants and

what they offer to the shoppers as well as the non-store factors

such as ambience, facilities and layout that influence

satisfaction and patronage.

Mall owners must understand and deliver the value desired by mall

visitors. Shopper loyalty and patronage is influenced by the

value that they perceive from visiting the mall. With the

competition between malls heating up, the mall that offers better

value will be the winner. The changing values and lifestyle of

shoppers requires to be monitored and analyzed so that the malls

can formulate their marketing mix in keeping with the shifting

needs of shoppers( Raut & Dash, 2011; Sinha & Kar, 2007, Sinha,

2011).

The present study attempts to understand shoppers’ demographic

profile and shopping preferences. It seeks to understand the

purpose of mall visits and their reasons for selecting malls and

thereby arrive at the perceived value of malls. This study seeks

to understand shoppers’ purchase preferences, attitudes and

satisfaction. The perceived value with the non store elements

such as location, parking, ambience and air circulation are

studied. The satisfaction with the mall marketing mix is also

studied.

Mall owners need to provide hedonic benefits such as a visually

appealing environment, a fun and enjoyable atmosphere and

attractive merchandising (Srinivasan & Srivastava, 2010).

Utilitarian benefits also cannot be denied to the shoppers. These

are affordability, billing efficiency, convenience and variety.

There are many studies that have analyzed the relationships among

value, satisfaction and patronage intentions (Babin, Lee, Kim,

& Griffin, 2005; Carpenter & Fairhurst, 2005; Cottet, Lichtle, &

Plichon, 2006; Cronin, Brady, & Hult, 2000; Kumar, Garg, &

Rahman, 2010).These studies show that mall success and sustained

satisfaction and patronage is dependent on the value offered

(Ghosh, Tripathi, Saini, & Agrawal, 2010). The current study

deciphers this value through the study of consumer satisfaction

with store and non store factors and the analysis of satisfaction

with economic, social, marketing and repatronage factors.

The conceptual framework for this study is based on :

1. CEV Model : The consciousness-emotion-value model

2. CAB Model: The cognition-affect-behavior model

3. SOR framework: Stimulus-Organism-Response

framework(Mehrabian & Russell, 1974)

The above conceptual framework is proposed by Fiore and Kim

( 2007). The stimulus-organism-response model proposed by

Mehrabian & Russel ( 1974), asserts that the physical environment

contains a stimuli ( S) that influences the person’s internal

state (O) and ultimately these internal states determine a

consumer’s approach-avoidance behavior ( R). The current study ,

while learning from the 4ES- educational, entertainment,

escapist and aesthetic experiences proposed by Pine and Gilmore (

1999, 2011), seeks to understand the perceived value through the

study of consumer satisfaction levels with store and non store

factors.

1.5 Purpose

The present study explores the effects of perceived value

associated with shoppers’ experiences in malls through the study

of their satisfaction and patronage intentions with various

experiential factors related to Malls. Further the study seeks to

identify the difference in perceived value between malls that do

not offer a 4E experience as compared to those that do. Using the

4Es and perceived value as the underpinning notion, the

satisfaction of the mall shopper has been captured. The topic is

unexplored in that earlier studies have failed to capture all the

experiential aspects of mall shoppers. This study will benefit

malls and their retail tenants. It will benefit consumers as

Malls reinvent themselves and woo them with the best and most

enjoyable products and experiences. The study will provide

valuable inputs for the formulation of business strategies for

national and international mall tenants, marketers, managers and

developers. The theoretical and conceptual contribution of the

present study lies in expanding and adapting the Pine and Gilmore

( 1999) 4E model in the Indian concept. Various research

methods and statistical analysis techniques have been used to

test the theoretical framework.

1.6 Objectives of the Study

The primary objective of the study is to examine the factors that

influence mall patronage intention of Indian consumers.

The specific objectives of the study are to:

1. To study all aspects of the mall shoppers’ profile and

experiences as given below :

a) Profile the mall shopper.

b) To analyse the purpose of mall visits.

c) To study the reasons for selecting malls

d) To study the goods preferences in malls.

e) To study attitude of consumers towards malls.

f) To study consumer satisfaction with various aspects of the

mall

g) To look at consumer satisfaction with the 4 Ps ( product,

price, place and promotion) of the mall.

h) To analyse consumer satisfaction with economic and social

factors of the mall.

i) To study the core factors that favor repatronage of malls.

j) To compare the malls offering high 4E value( Entertainment

malls) as compared to those that offer lowe 4E value( non

entertainment malls).

2. To present conceptual models that encompass the above

variable.

3. To operationalize and test hypothesized relationships

between these variables.

4. Empirically test the presented models

1.6 Definition of terms used throughout the study

Mall Retail stores: Retail stores in the mall that sell goods such as

apparel, electronics, footwear, beauty & skin care products,

books, gifts, and so on.

Non-store aspects of mall: These are services such as beauty parlour,

restaurants, theatres, food courts, gymnasium, health club, play

areas, discotheques and entertainment events.

Experience economy dimensions (4Es): Educational, entertainment,

escapist, and esthetic

experience dimensions proposed by Pine and Gilmore (1999). The

following definitions of the

four experiences are based on Pine and Gilmore’s (1999) work.

Educational experience: Experience through consumer’s active

participation,

where the mind and/or body is actively engaged to increase skills

and knowledge

by absorbing information presented.

Entertainment experience: Experiences that occur when consumers

passively

observe or absorb activities and/or performances

Escapist experience: Experience wherein consumers actively participate

and

immerse themselves in the events to become part of the activity.

Esthetic experience: Experience where consumers passively engage and

immerse

themselves with a sensory-rich setting without altering the

nature of the setting.

Perceived value: Overall assessment of utilities, returns, functional

and experiential

benefits, and meanings derived from products, services, and/or

experiences (Babin et al., 1994).

Efficiency value: The benefits derived from the efficient and

effective completion

of the tasks (Mathwick, Malhotra, & Rigdon, 2001).

Emotional value: The benefits derived from feelings such as pleasure

and joy or

the affective states that a product generates (Sweeney & Soutar,

2001).

Price value: The benefits derived from the product due to the

reduction of its

perceived short-term and long-term monetary sacrifices (Sweeney &

Soutar,

2001).

Quality value: The benefits derived from the characteristics or

attributes, such as

reliability, superiority, and durability and expected performance

of the product

(Sweeney & Soutar, 2001).

Sensory appeal value: The benefits derived from the elements of the

retail setting

that please the five senses of the consumer (Smith & Colgate,

2007).

Service quality value: The benefits derived from the services,

specifically those

performed by retail staff (Cengiz & Kirbir, 2007; Sweeney &

Soutar, 2001).

Social value: The benefits derived from the product’s ability to

enhance social

self-concept—gaining status that requires validation by others

(Sweeney &

Soutar, 2001).

Satisfaction: “Consumer satisfaction refers to an evaluative response

concerning the

perceived outcomes of experiences in the consumer domain,

comprising acquisition,

consumption, and disposition activity” (Westbrook & Oliver, 1981,

p. 94).

Willingness to buy: Likelihood that the consumer intends to purchase

products (Grewal,

Monroe, & Krishnan, 1998).

Mall patronage intention: An overall measure capturing likelihood and

willingness to

shop at the mall and willingness to recommend the mall to others

(Grewal, Baker, Levy, & Voss,

2003).

S-O-R framework: The Stimulus-Organism-Response framework, proposed

by Mehrabian & Russell (1974), used in environmental psychology.

The stimulus (S) is conceptualized as environmental cues that

stimulate consumers’ affective and cognitive internal states and

processes (O) that determine consumers’ response (R).

Shopping mall (or simply mall): A shopping mall is a shopping center, or

shopping arcade is a building or set of buildings that contain

stores, and has interconnecting walkways enabling visitors to

easily walk from store to store. The walkways may or may not be

enclosed.

1.7 Outline of the thesis

The thesis will follow the following chapterization.

Chapter 1: Introduction

Chapter 2: Literature Review

Chapter 3: Research Methodology

Chapter 4: Interpretation and Data analysis

Chapter 5: Results, Recommendations and Conclusion