7Eleven Jakarta Customer Bahavior

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BINUS Business School



2014Bernardus GandosFitriaGriffiano JulianR. Andika NugrohoYudha Bagja DiputraCustomer Behaviour ReportStalking Assisgment7-11 Convenience Store
2014
Bernardus Gandos
Fitria
Griffiano Julian
R. Andika Nugroho
Yudha Bagja Diputra
Customer Behaviour Report
Stalking Assisgment
7-11 Convenience Store

Overview

7-Eleven or 7-11 is part of an international chain of convenience stores. 7-Eleven, primarily operating as a franchise, is the world's largest operator, franchisor, and licensor of convenience stores with more than 50,000 outlets. 7-Eleven branded stores under parent company Seven & I Holdings Co. The stores are located in 16 countries with its largest markets being Japan (15,000), the United States (7,800), Thailand (6,800), Indonesia, Canada, the Philippines, Hong Kong, Taiwan, Malaysia, and Singapore. its globally operating parent company, Seven & I Holdings Co. Ltd. is headquartered in Tokyo, Japan.

In April 1991, 7-Eleven announced plans to expand its business in Indonesia through a master franchise agreement with Modern Putra Indonesia (a subsidiary of Modern Group, FujiFilm distributor in Indonesia) of Jakarta. Modern Putra Indonesia's initial plans are to focus on opening stores in Jakarta, targeting densely populated commercial and office areas, to offer working Indonesians a convenient place to shop for lunch, snacks, and emergency items. Other major cities, such as Bandung, Semarang, and Surabaya, offer future expansion opportunities. There are 128 7-Eleven stores in Indonesia as of 2013.

The Indonesian government stated in May 2010 that they would monitor 7-Eleven expansion since 7-Eleven is licensed as a convenience store not as a mini market. Indonesian law limits mini market ownership to local companies.

Concept of 7-11 in Indonesia quite differ than in other Asia countries such as Singapore or Hong Kong. They are:
In other country, they usually have a small store so they do not provide chairs or dining table for consumer dine-in.
7-11 in Indonesia provide few beverages that consumers could mix it required what they prefer and they provide electricity for consumers-used.
In Indonesia, the store-attendants wear uniform and usually in each store, there are 3-5 attendant in every work hours.
(Source: travel.detik.com)


Observation
We had observed 5 customers as our sample in order to know the description of 7-11 customers which is located in Pasar Festival Kuningan, Jakarta. In determining this location, we discussed in-group and all of us think that this location is suitable for doing research/observation since it has many visitors from different segments.
We chose our sample at random to make sure that we are going to have enough information to completely describe the behavior of 7-11's customers.

Customers Information:
Sample 1
Number of Shopper
One person

Age
30 - 35 Y

Gender
Male

Name of Location
7-11

In/Out
11.37 - 11.56

Duration
19 minutes

Number of shopping partner
0

List of product they bought
Buah Vita dan Isi pulsa

Sample 2
Number of Shopper
One person

Age
30 - 35 Y

Gender
Male

Name of Location
7-11

In/Out
11.40 - 11. 43

Duration
3 minutes

Number of shopping partner
Two persons (female and a girl)

List of product they bought
Aqua, Coklat Hersey, Lollypop




Sample 3
Number of Shopper
One person

Age
30-35 Y

Gender
Male

Name of Location
7-11

In/Out
11.39 - 11.44

Duration
5 minutes

Number of shopping partner
0

List of product they bought
Slurpee & cigarette

Sample 4
Number of Shopper
Two persons

Age
20 - 25 Y

Gender
Female

Name of Location
7-11

In/Out
11.50 - 11.52

Duration
2 minutes

Number of shopping partner
0

List of product they bought
Milo, Roti, Mogu-mogu

Sample 5
Number of Shopper
Two persons

Age
20 - 25 Y

Gender
Female

Name of Location
7-11

In/Out
11.50 - 11.52

Duration
2 minutes

Number of shopping partner
0

List of product they bought
Greenfield, Susu indomilk

Customer Description
After doing observation, we divide their characteristics into several groups as follows:
Motivation
Motivational strength: degree of willingness to expend energy to reach a goal
There are two types of motivational strength, they are:
- Drive theory: biological needs that produce unpleasant states of arousal (e.g., hunger)
-Expectancy theory: behavior is pulled by expectations of achieving desirable outcomes


As we know that, every customer who comes to 7-11 or any other convenience store has different motivation. Whether they just stopping by, hanging out with some friends or even just meeting someone.

Based on our observation towards five customers, we gathered some information related to their motivations. We concluded that 4 out of 5 customers who were stopping buy to get the product they need and one other was waiting someone to pick him up.

For them who stopping by to get the products, took only 3-5 minutes to decide what kind of product they really want to buy. In addition, we have assumed that they already know what product they need before they come to the store. This case reflects to drive theory where the motivation driven by biological needs.

The other interesting motivation that we discussed by our group is the motivation, which is driven by behavior of 7-11 customers who like to gather with friends or their community, and they expected to stay longer at the store while talking or chatting with friends. In this case, sometimes they also describe 7-11 as a meeting point to meet one and other.

Personality and Lifestyle
Personality


Pattern of ConsumptionIf we looked to the major sample, most of customers sought the additional value rather than just a product. For the example, they tried to find new experiences through special beverage called "Slurpee" offered by 7-11. Buyers are free to pouring ice blended by themselves as much as they want as long as it fits to the glasses.
Pattern of Consumption


Regarding their appearance, most of the customers dressing properly. We have assumed that they are type of people who concern on their appearance and they might have a plan to meet someone else at 7-11 store or any places around the store.

Lifestyle
Pattern of consumption influenced by three elements; person, product and setting which will create new element called lifestyle. Firstly, let's discuss about lifestyle. What is the definition of lifestyle? Lifestyle defines a pattern of consumption reflecting a person's choices of how one spends time and money. In marketing perspective, lifestyle is related with group of people who differentiated by something that they like to do, how they spend leisure time and how they spend disposable income.

As we know that Indonesian people not only for young generation, they love to gather with their community, it is part of our culture or most of Indonesian personality. This kind of culture could be one of the elements that makes 7-11 grow much bigger and faster in Indonesia, in other words, Indonesian people have easily accepted 7-11's concept. This sample clearly describe lifestyle of Indonesian people based on those differentiations.

Finally yet importantly, based on our observation, 60 percent from sample of customers used their card to pay. We have assumed that 7-11 customers are type of practical person; they might think that cashless payment method is much more efficient and save compared with bringing your cash around.

Movements and Attitudes
Movements
Based on our observation, most of sample customers already know what kind of product they need to buy before they get in to the store, the rest were still confuse to decide what kind of product they need to buy. They went around the store from one to other goods shelf to find interesting product.

Since most of sample customers went to beverage shelf at first, we have assumed that they get into the store to buy a drink then go to other shelf to find companion product, such as cigarette, snacks, candy and/or others.

Attitudes

Attitude Commitments:
INTERNALIZATION
Highest level: deep-seeded attitudes become part of consumer's value system
IDENTIFICATION
Mid-level: attitudes formed in order to conform to another person or group
COMPLIANCE
Lowest level: consumer forms attitude because it gains rewards or avoids punishments

In relation to their attitudes during shopping at 7-11, most of sample customers tried to mingle with others while they were sitting and chatting at 7-11 store. It could be one of attitude commitments called IDENTIFICATION while attitudes formed in order to conform to another person or group.

Another case is we saw our sample customers opened the bottle of drink before they get in line at cashier table. It showed that they actually buy the product to fulfill their needs. The product (beverage) becomes their first list to buy before they get in to the store.

During shopping, some of them were keep using their mobile phones while finding other products. From that situation, we could conclude that some of our samples already know what kind of product that they wanted thus will be less of distraction from another product. This case is one of the effects of attitudes since attitudes can influence our product selections.

Persuasion and Decision Making
In taking decision to buy, our sample customers influenced by friends of family who accompanied them during shopping. For example, Mr. A; who wanted to buy a drink, influenced by his daughter to buy other products such as Hersey and Lollipop. In addition, another sample is Ms. B who wants to buy a bottle of drink, but she confused what brand should she consider buying. At that time, her friends persuaded her to buy a familiar brand rather than the new brand that is lesser-known product.

From this case, we have learned that someone else, either shopping partners or people around us, can influence decision making sometimes. Not only buyer's decision.

Problems

7-11 offers new experiences by selling Slurpee, where buyers/customers could pouring "ice blended" by themselves. Most people are interested to try, but sometimes the beginners found difficulties in using the machine.

Another thing that we have to consider is bookshelf. Based on our observation, no customers who paid their attention to it. All magazines and other publications seemed careless and less attentions from customers or even from the store itself.

Customers who only buy one or two products sometimes stay too long at store and they are not willing to give their space to the new comer. It might reduce the revenue because newcomer might leave and choose another convenience store to buy product and hang out with their communities.

Recommendation

Firstly, 7-11 should assign one staff to taking care of customers, helping customers who have difficulties in operating Slurpee's machine.

Secondly, 7-11 should concern on bookshelf location, they need to move the shelf close to cashier table, so people in line could aware that 7-11 also selling magazines and other publications.

Lastly, 7-11 staff should more active in taking care of customers, they could offer the customers who stay longer at store to buy other products or any other services they need.

Conclusion

Overall, based on our observation, we assume that motivation of customers who come to 7-11 store in Pasar Festival Kuningan are to buy a drink to fulfill biological needs, secondly, are those who want to gather with friends and or meeting someone at the store.

Our lifestyle (gather with friends and/or community) becomes one of the elements why Indonesian are easily accept convenience store concept. Personality and attitudes of customers are also influence their preference in choosing a brand.

In choosing product or brand, they prefer well-known product rather than lesser-known product. Moreover, sometimes in taking decision to buy, their shopping partner influence them to decide what kind of brands or products they should buy, not purely their desicions.