Impact of Strategic Locations on Customer Dynamics in Business Outlets: A Case by Observation Method - IJIRP
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International Journal of Innovative Research and Publications (2021) 1(2): 37-47
https://doi.org/10.51430/IJIRP.2021.12.005
Article
Impact of Strategic Locations on Customer
Dynamics in Business Outlets: A Case by
Observation Method
Md. Zohurul Anis1,*, Ahasanul Haque2, Nur Fariza Binti Mustofa3, Md. Faisal-E-Alam4
Received: 02 May 2021 / Accepted: 30 May 2021 / Published online: 30 June 2021
Abstract
This paper investigated the impact of strategic location, a retailer's most expensive and long-term
marketing mix choice, on customer dynamics. The researchers used two aspects of retail location to
estimate consumer spending at a multinational café franchisee in the metropolitan area of Malaysian
capital. A qualitative observation method has been applied to collect the data and analyzed it
systematically. Several factors including proximity to customers, i.e. trip times, and closeness to other
shops, i.e. agglomeration are measured. Both are key indicators of customer spending and, as a result,
revenue for the business. Furthermore, across retail forms, location effects are diverse and frequently
asymmetric. Rush hour times to a retailer's general outlet have a significantly larger effect on customer
dynamics than they do on other outlets, according to the findings. Retailers are increasingly focusing
on providing a better consumer experience. However, there has been a scarcity of comparable academic
study on the subject. The researchers addressed particular factors in this study, emphasizing those that
need further investigation.
Keywords: Strategic location, Multinational franchisee, Retail shops, Customer dynamics, Malaysia
_________________________________________________________________________________________________________________________
1
Business Administration, International Islamic University Malaysia, Selangor, Malaysia
2
Professor, Kulliyyah of Economics and Management Sciences, International Islamic
University Malaysia, Selangor, Malaysia
3
Assistant Professor, Kulliyyah of Economics and Management Sciences, International
Islamic University Malaysia, Selangor, Malaysia
4
Assistant Professor, Department of Management Studies, Begum Rokeya University,
Rangpur-5404, Bangladesh
*
Corresponding Email: zohurul.anis@gmail.com
To cite this article:
Anis, M. Z., Haque, A., Mustofa, N. F. B., & Faisal-E-Alam, M. (2021). Impact of strategic locations
on customer dynamics in business outlets: A case by observation method. International Journal
of Innovative Research and Publications, 1(2), 37-47. https://doi.org/10.51430/IJIRP.2021.12.005
© 2021 by the authors. Licensee: MAC Arts & Communication. This article
is an open access article distributed under the terms and conditions of the
Creative Commons Attribution (CC BY-SA) license.
(https://creativecommons.org/licenses/by/4.0/)International Journal of Innovative Research and Publications www.ijirp.com
Introduction
The aspects of customer experiences and their impact on the customer's experience are referred
to as customer dynamics. Sometimes, customers may get “bored with” or used to the service
provided. Consumers' preferences for individual shops (as opposed to shopping malls) and the
impact of retail location on those preferences have been widely researched. When it comes to
selecting a business outlet, most customers say that spatial convenience is the most essential
factor (Reynolds & Wood, 2010; Arnold et al.,1978; Arnold & Tigert 1981; Arnold et al.,1981;
Arnold et al.,1983). Bell, Ho and Tang (1998) analyzed store choice as being influenced by
both fixed and variable shopping expenses. The main fixed cost of shopping in their panel-data
research was the distance from the consumer's house to the store, which was shown to be a
significant predictor of store choice. Travel time from the consumer's house to the shop was
utilized by Fox et al. (2004) to forecast patronage and expenditure at various retail formats.
Travel time was shown to have a significant impact on shopping and spending at grocery,
pharmacy, and discount stores. Consumer choice among retail centers is controlled by retail
gravity (Reilly, 1931; Huff, 1964), which rises with the size of the center but decreases with its
distance from the consumer's house. The central location theory, which is a variation of retail
gravity, states that consumers would select the nearest retail center based on the availability of
the goods they want (Ciari et al., 2008; Christaller, 1966). These ideas imply that consumers
reduce their travel expenses in order to acquire the products they want (Hubbard 1978).
However, empirical data is conflicting, with research indicating that consumers only buy food
from the nearest store around half of the time (Fox et al., 2007; Gollege, et al. 1966; Rushton,
et al. 1967).
Literature Review
For retail success, location is everything. A retailer's most expensive and long-term marketing-
mix choice is the placement of their store. A poor shop location, unlike poor pricing or
promotional decisions, has a long-term negative impact on retailer success. We all know that
merchants want to be near to their customers, but this puts them in competition with other
stores who also want to be close to their customers. In the eyes of the retailer, closeness to
customers equates to proximity to other shops.
Agglomeration refers to the occurrence of shops clustering together. In shopping malls
and shopping centers, various kinds of stores are often co-located (inter-type agglomeration).
Restaurants, motels, jewelers, furniture shops, and car dealerships, for example, are often
clustered together (intra-type agglomeration). Though agglomeration is driven by merchants'
38International Journal of Innovative Research and Publications www.ijirp.com
desire to be close to their customers, it may also be advantageous to retailers on its own. Arentze
et al. (2005) investigated the impact of agglomeration on the purpose and destination of
shopping trips. They discovered that agglomeration enhances a retail location's appeal and
attracts both multi-purpose and single-purpose shopping visits. Consumers often visit several
grocery shops on the same trip, according to a more recent research that utilized scanner panel
data. This behavior is known as cherry-picking (Fox & Hoch, 2005). Retailers of the same kind
may be able to improve their earnings by agglomerating since it makes searching easier
(Brown, 1989; Masud et al., 2021).
Regardless of the store placement process's dynamic—simultaneous movements,
deterministic entry sequences, discretionary move timing with or without information delays,
etc. Formal models that capture this complexity do not seem to be analytically tractable. It is,
nevertheless, possible to enquire into the causal factors that underpin our overall conclusions.
In a Nash equilibrium, symmetric Darwinism between shops with category overlap, for
example, may result simply from an increased marginal incentive to attempt to steal consumers
from competitors via price drops as proximity rises. The marginal incentive for business theft
rises as businesses become closer because their client pools have increasingly comparable
travel durations and are therefore simpler to entice away. When shops are spread out, each one's
client base is dominated by customers who are closer to them than their competitors.
Valero Energy Corporation, for example, is dedicated to providing consumers with a
pleasant retail experience by emphasizing convenience, value, and quality. Dell Computers
focuses on offering the greatest customer experience in the markets it serves, while Toyota's
goal statement is to provide the best customer experience and dealer assistance in order to
maintain profitable development. Similarly, it has been said that X Cafe' success is due to their
ability to provide a unique consumer experience (Michelli, 2007). Pine and Gilmore (1999)
claimed that providing a unique customer experience may offer significant economic benefit
to businesses, while Frow and Payne (2007) used qualitative case studies to infer managerial
implications, such as the careful control of client "touch points." Only a few publications, to
our knowledge, have looked into customer experience in detail from a theoretical standpoint.
The construction of a WMT Supercenter across the street from a grocery store was utilized by
Singh et al. (2006) to investigate changes in the purchasing behavior of the grocery store's card
members. Card members continued to shop at the grocery store but spent less; 17 percent of
their spending was lost when the supercenter opened, according to the authors.
39International Journal of Innovative Research and Publications www.ijirp.com
Methods
Observation is a type of qualitative research method which not only included participant's
observation, but also covered ethnography and research work in the field (Jamshed, 2014).
Researcher relies on his or her own power of observation what he or she witnessed rather than
communicating with people in order to obtain information what they say or think about issues.
Observation is the recording of the behavior of the respondent. This research focused on
customer dynamics of X Coffee Outlets which are located in different places in Selangor states
of Malaysia under observational method. The researchers choose two different locations’ of X
Coffee outlets to observe the consumers’ perceptions, attitudes, patterns of mobility and to find
out some differences on the basis of their locations.
Choice of Naturalistic Observations
Naturalistic observation is a research method generally used by psychologists and other social
scientists. This technique includes observing subjects in their natural environment. This
technique involves observing involves studying the spontaneous behavior of participants in
natural surroundings. The researcher simply records what they see in whatever way they can.
This type of research is often utilized in situations where conducting lab research is unrealistic,
cost prohibitive or would unduly affect the subject's behavior. Researcher focuses on behavior
in natural settings to describe themes that emerge from responses. Data are non-numerical and
express in languages or images. Researcher chose naturalistic observation method over
participant observation method to confirm objectivity. Concealment was other issue that forces
researcher to disguise his purpose among the sample as there is a high possibility to alter the
outcome due to reactivity. One of the biggest advantages of this type of research is that it allows
the investigators to directly observe the subject in a natural setting. It allows researchers to
study things that cannot be manipulated in a lab due to ethical concerns.
Reliability of Observation
Reliability of data refers to the degree of agreement between sets of observational data collected
independently from the same scene by three different observers (inter-observer agreement) or
by the same observer at different times in the data collection process (intra-observer
agreement). Reliable data are a first prerequisite for answering research questions. It is
important to determine whether data sets that are collected by different observers or at different
times differ so little that one can safely assume that they are equally valid for analysis.
Reliability analysis is also used to train new observers in coding schemes and observational
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data collection for example, by testing their data against a reference data set, both collected
from the same video recording.
Selection of Sample
Since the research based of Strategic locations on customer dynamics in X Cafe Outlets in
Selangor area, so researchers have been chosen the two branch of X Cafe which situated in two
different locations in Selangor. One branch located was Batu Caves and another was Federal
Territory of Kuala Lumpur city in Selangor. Researcher observed the location, service
providing style, external and external setup, interior decoration of both branches of X Cafe as
well as also observed customers’ demographic profile, perceptions, frequencies, gesture and
posture, body language etc. Two different weekdays for two points of X Cafe, we completed
our observation to collect data. Every point we spent same hour and same time at 4.00PM to
5.00PM.
Methods of Data Collection
Researchers utilize a number of different techniques to collect data from naturalistic
observation. This involves writing down the number of times a certain behavior occurred in a
specific period of time or taking pictures of the subjects of interest.
a) Tally counts: The observer writes down when and how many times certain behaviors
occurred.
b) Observer narratives: The observer taken notes during the session and then goes back
later to try to collect data and discern behavior patterns from these notes.
c) Picture: Depending upon the type of behavior being observed, the researchers also
decide to make actual picture of each observation session.
Ethical Issue of Observation
Researchers undertaken the observation in private place i.e., coffee shop so there may use
ethical issue. So, we went there with a formal application to submit them for collecting
observational data, if required. But after expressing our purpose to the authority as well as
showing them prove documents as students of PhD program then they gave us verbal
permission to collect data regarding our research.
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Observational Issues
This study has been observed the two parties’ specialty upon the of impact of location. These
have been perspectives of X Cafe and consumers’ ethnicity.
Observational Issues of X Café:
a) Location
b) Layout & Interior Decoration
c) Food menu
d) Volume of customer
e) Rush hour
f) Promotional offer
g) Waiting time after giving order
Observational Issues of Consumers’ Ethnicity of X Café:
a) Gender
b) Age group
c) Race
d) Class of customer
e) Dress up
f) Noisy (manner of customer)
g) Ordered food
h) Time spend in the cafe
i) Intention to visit
j) Comfortability
k) Friendliness
Results and Discussion
Location: The researchers have observed two branches of X Café, one situated in Batu Caves
and another in KLCC. X Café in Batu Cave is beside the Genting Highland highway as well as
attached with a petrol pump and a departmental store. On the other hand, another observed X
Café branch situated at the ground floor of a Five Star hotel building which is beside the
Petronas Twin Tower.
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Layout and interior decoration: The Batu cave branch (BCB) has two part of sitting
arrangement: one is internal of the restaurant and other part is outside. The chair-table set up is
divided by three different styles. Interior decoration is good as well as the uses of artificial light
fitting is limited. In addition, due to beside the high way it offered drive throw facilities to the
customers and car parking facilities is there. On the other hand, the Premium reserve X Café
(PRS) has four types of sitting arrangement with lucrative interior decoration. The different
types of modern furniture placed within this café. Different shapes of sofa placed in different
corner which feels comfortable for taking service form them.
Food menu: Almost the same items foods offered to both points of X Café. But one special
items of coffee named “Nitro cold brew” which is available only at PRS.
Volume of customer: When the researchers visited the X Café, there were a good number of
customers enjoying their coffee and snacks. There were 56 number of people (34 males and 22
female) presented and most of them were professional people as well as shoppers. On the other
hand, there were 24 number of customers presented at BCB. Out of 24 persons (9 males and
15 female), most of them were student and non-professional people and some were tourists.
Rush hour: The researchers observed as well as informally collected information from the
employees of X Café that the rush hour at PRS is 4pm to 10 pm, whereas for BCB, it is 12.00
noon to 4.00 pm.
Waiting time after giving order: BCB provided the researchers coffee within 6 minutes’ time
after giving order. Whereas PRS took 10 minutes’ time after giving order.
Gender and age group: The researchers spent 1 hour in every X Café locations at two separate
days. In their observed time, there were 34 males and 22 female consumers took service form
X Café reserve. Majority of them belongs 30 to 40 years old and others were below 30 years
old. Only one child, who perhaps 5years old, stayed with her parents. However, 9 males and
15 females passed their time as consumers while the researchers were observing the batu caves’
X Café. Among the existing consumers, most of them belongs 20 to 30 years old and only two
were more than 30 as well as they were not wait long time compare to others.
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Race: In X Café reserve, the researchers observed that most of the consumers (28) were Malay
and remaining consumers (20) were Chinese as well as a few numbers of consumers were
foreigners (8). On the other hand, there were a good number of Chinese (15) present at X Cafe
and rest of the others were Malay (9).
Class of customer: The researchers noticed while observing in X Cafe reserve that most of the
consumers were professional people and remaining were shoppers as well as tourists. Besides,
majority consumers were student, and some were professional and tourists at X Cafe general
during our observing duration.
Dress up: The researchers observed from X Cafe reserve that most of the people wear in formal
dress up. However, the majority consumer wear in casual dress up while we observed at X Cafe
general.
Noisy: In our observation, the researchers found that the environment of X Cafe reserve was
not noisier in compare to X Cafe general. The researchers also observed some reasons for this
scenario, i.e X Cafe general was beside the highway and PETRONAS as well as majority of
customers were youth community and non-professional. So, external noise and internal
conversational situation had converted a noisy environment but it’s not so intolerable.
Intention to visit: The researchers identified some reasons to visit at X Cafe reserves for
consumers form their observation, such as (a) have taking some coffee (b) consultation meeting
in formal or informal issues (c) take rest within shopping interval and have some drinks (d)
doing some works. On the other hand, when the researchers observed to find out some reasons
to visit X Cafe general then they identified some reasons such as (a) have some more coffee
(b) casual meeting with classmates and friends (c) doing some work (d) drive thru (e) take some
rest (transit).
Time spend and comfortability: In X Cafe reserve, people spent more time, but it was not
longer than X Cafe general branch, though their sitting arrangement is significantly quiet and
relaxing. That’s why, consumers felt more comfortable but due to high frequencies of
customer’s, people could not more time compare to X Cafe general. On the other hand, people
spent more time in X Cafe general due to less frequencies of consumers compare to X Cafe
reserve.
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Friendliness: The researchers observed that employees of X Cafe were more friendly while
providing and managing their service to consumers.
Limitations
It was hard to find the perfect circumstances due to private business outlets. The researchers
observed two branches of a multinational fast-food restaurant which has maintained their own
organizational policies strictly. During the period of collecting data, the researchers discussed
with the cafes’ employees regarding data collection, but they did not provide any information
as well as not allowed them to consult cafes’ consumers unless getting permission from the
higher authorities. At last, after submitting the researchers’ application and showing ID Card
to the concern branch manager, the café owner allowed the researchers in the cafe by granting
them through only oral permission to observe there for completing the data collection.
Therefore, the business outlet that the researchers selected for observation was inconvenient
about the policies as well as distance. Future researchers should consider an outlet which will
have favorable circumstances for collecting data as well as convenient place for frequent
movement for them.
Conclusion
Observational learning is learning that occurs through observing the behavior of others. It is a
form of social learning, which takes various forms, based on various processes. The application
of photography and video has a number of important strengths for qualitative research.
Photographic methods also allow researchers to record and analyze behavior in its situational
context. The use of photography and vedio provides the researcher with time to reflect and
analyze behavior. Photography and video are often employed in individual or group interviews,
usually as an alternative to audiotapes that are more conventional or field-noted interviews.
Photography and video to prove people’ understanding and representation of their own
behaviors, consumption activities and response.
This study identifying the consumer behavior in terms of different branches of X Cafe
in Selangor state. It also examines the relationship between the service providing scenarios to
the consumers and their located place of branch. In addition, the researchers observed that due
to the variation of location, customer perceptions as well as mobility of customers have been
differ from each other. Retailers are increasingly focusing on providing a better consumer
experience. However, there has been a scarcity of comparable academic study on the subject.
45International Journal of Innovative Research and Publications www.ijirp.com
We addressed particular factors in this study, emphasizing those that need further investigation.
We also identified broad strategic problems worth examining from the viewpoint of customer
experience management. The field of customer experience management has a plethora of
further research opportunities.
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