Customer Preference to Shop in Supermarket or Open Market

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- Literature Review

Based from the five journal that we have studied, we want to highlight the important variables that will influence consumers’ decision making and shopping behavior. Several studies have been done to determine the factors that influence customers’ preferences to shop. From the variables, we can see the differences between supermarket and open market and the customer will make a wise choice to shop. A number of studies have been conducted in Turkey, Taiwan and China to determine customers’ preferences for supermarkets such as their price, quality, availability of products, market condition and the location of the market.

From the journal of the modernization of fresh food retailing in China, we can see the condition of the market is the important influence for customers to shop. The disadvantages of open markets are stores are cluttered, dirty, and disorganized (Goldman et al., 1999), which not only results in a poor shopping environment, but also causes food safety issues because of the difficulty of supervising food sources. However based on journal quantifying barriers impeding the diffusion of supermarkets in China, good store atmosphere can enhance the consumer shopping experience, hence adding shopping value and influencing store patronage intentions (Grewal et al., 2003; Pan and Zinkhan, 2006; Hsu et al., 2010). Especially, cleanliness is an important element of store atmosphere. Food shoppers have a natural concern for cleanliness of a store (Birtwistle et al.,1996), as quality and safety of food products from a clean store is more trustworthy. We also can conclude from the journal differences in factors attracting consumers to Taiwan's supermarkets and traditional wet markets, open markets provide variety and satisfaction but do not offer promotions or a good environment. However, a poor environment and a lack of promotions may have less negative impact on older consumers than on younger consumers unless traditional markets improve the shopping environment and their market offerings. Supermarket shoppers are different from traditional shoppers because they are attracted by the good environment, good product quality, and good service. From all this journal we can conclude that supermarket have a better market condition compare to open markets.

Based on journal the modernization of fresh food retailing in China said that wet markets have several competitive advantages such as providing fresher products at a low price. Moreover, residents can satisfy their own preferences from a wide variety of fresh products and they can bargain over the price of the products, which for some consumers is enjoyable. The supermarket chains usually adopt centralized bulk purchasing, the cost of purchasing fresh food has been reduced greatly and fresh food prices are even lower than in the traditional wet markets. While in journal quantifying barriers impeding the diffusion of supermarkets in China, regarding price there exist different points of view on which retail formats offer lower price for fresh food. Some research found that consumers perceive the price of food much lower in supermarkets while others suggested that price is much cheaper in traditional retail formats. Furthermore, the journal Wet Markets, Supermarkets and the “Big Middle” for Food Retailing in Developing Countries said that critically regarding value, they assert that wet markets possess advantages in terms of costs, freshness and food preparation, which make them more attractive to consumers. This is because weak production and distribution systems raise the costs of supermarkets, limiting their ability to compete on price. For example for fresh produce, Asian supermarkets traditionally bought through the same supply system (wholesale markets) as wet market traders, implying a lack of buying advantages. Supermarkets also incur higher labour, rental, and other overhead costs and greater losses from waste and shrinkage. Wet markets can undercut supermarkets on price for fresh produce and in food preparation. Meanwhile in journal Outlet Attributes as Determinants of Preference of Women between a Supermarket and a Traditional Open Market said that women prefer price tag as a pricing method than haggling as haggling which is the pricing mechanism adopted in traditional open market is seen as time wasting while price tag as a mechanism saves time.

In journal Outlet Attributes as Determinants of Preference of Women between a Supermarket and a Traditional Open Market display their study result showing the attitude of respondents to both supermarket and traditional open market on the basis of outlet attributes on quality of products merchandized in the two outlets supermarket. Using the mean scores of variables, it can be seen that in order/rank of importance, quality of product on offer in the outlet occupies the 1st position. Price of products in the outlet is in 2nd position. The 3rd position, in order of importance is outlet location while cleanliness of shopping environment takes the 4th position. Variety of products on offer (product assortment) is in the 5th position followed by pricing mechanism in the 6th position and finally, availability of parking space is placed in the 7th. On comparative basis it is found that the breadth of product assortment (variety of products on offer) is wider in supermarket than in the traditional open market. Both in quality of products offered and cleanliness of shopping environment, supermarket is found to be better than the traditional open market.

While all the outlet attributes investigated in this study are found to be important to the respondents, they ranked differently in order of importance in their influence on preference of women for an outlet for essential goods. As the results show, the order of importance of these attributes is as follows: quality, price, location, cleanliness, product assortment, pricing mechanism and parking space.

In journal Differences in Factors Attracting Consumers to Taiwan's Supermarkets and Traditional Wet Markets, supermarket expansion is slowing because new hypermarkets, convenience stores, and warehouse stores are competing to satisfy the needs of the younger, more mobile target population. Overall, store formats that provide lower prices, sales promotions, a good environment, good product quality, and good service have the greatest opportunity to build consumer loyalty and increase market share.