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Introduction
Background to the research
Research Proposal on the Impacts of Discounted Products on Consumer Buying Behavior will be presented in this blog. The concept of discounted products has become a buzzword in the retail marketing landscape. Retailers perceived discounts as a key means of increasing sales, cash, and growth (Haas, 2019). Zhu & Gao (2019) noted that discounted products simply sell products and services at a discounted price compared to their regular price. For example, Tesco, the largest retailer giant in the UK, has recently unveiled its Aldi price-matching strategy to grab customer attention. To Hoang et al., (2019), the discount is a sales promotional tool based on price reduction. Discount is related to the pricing strategy of a company. Griva et al., (2018) found that price is a critical component of a customer purchasing decision. Accordingly, the reduction of the product price in the form of a discount directly hits the psychology of price-sensitive customers who tend to purchase products at a lower cost than their regular price. There is substantial theoretical and empirical evidence that discount influences consumer psychology.
Tesco Plc. Is a UK-based retailing MNC having operations in the United Kingdom, Ireland, India, Malaysia, Thailand, Czech Republic, Slovakia, Hungary, and Poland (Tesco, 2020). Tesco has 6,800 shops worldwide; it has 450,000 employees in all countries (Tesco, 2020). The company made total revenue of £63.911 billion in 2019 (Tesco, 2020). Tesco-1 (2020) revealed that its prices had been cut widely for a large range of products. In business terms, such price-cut is called discounts which have a significant influence on the perceptions of customers. Proactive Investors (2017) have revealed that sales of Tesco have increased highly amid discounted prices in its UK stores.
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According to the cognitive model, consumer behaviour is a result of a complex mental process, in which consumers attempt to find out the relationship between variables to make decisions (Griva et al., 2018). For evidence, consumers tend to find out the relationship between discounts and individual affordability. This influences consumer behaviour. Discount, in contrast, has an opposite influence in the case of high-end products (Sung & Huddleston, 2018). This is because consumers tend to purchase high-end products at a premium price. Retail items, such as merchandising, accessories, and clothing, are basic items, and therefore, the discount has a tremendous impact on selling retail products (Hoang et al., 2019).
Therefore, discounted offers might have either a positive or negative impact on consumer behaviour at Tesco’s Bethnal Green Metro London, which is a prominent location of the company. However, it is not proved by research how discount offers affect consumer behaviour among shoppers visiting Tesco’s Bethnal Green Metro London. This study will critically assess the impact of discount offers on consumer behaviour. The proposed research work is also triggered by the paucity of literature in the field of discounted products and consumer psychology. Most notably, it has become a burning issue to examine consumer buying behaviour towards discounted products. The study contributes to the existing literature by studying discounted products and consumer behaviour.
Research Questions:
The main research question is what the impact of discounted products is on the consumer behaviour of Tesco at Bethnal Green Metro London. To investigate the main question, some sub-questions have been compiled:
- How do different types of discounts, offered by Tesco at Bethnal affect consumers’ attitudes toward Tesco?
- How do different factors affect consumer buying behaviour in different ways?
- How discounted products have an impact on the consumer buying behaviour of Tesco at Bethanal Green?
- What could be some strategic directions in which Tesco can positively influence customers’ buying behaviour other than discounting?
Research aims and objectives:
The main aim of this research is to identify and critically evaluate the impact of discounted products on the consumer behaviour of Tesco at Bethnal Green Metro London. To achieve the main aim, some sub-aims have been compiled:
- To identify and critically evaluate the impact of different types of discounts, offered by Tesco at Bethnal, on consumers’ attitudes about the brand.
- To investigate the factors that affect consumer buying behaviour in different ways
- To critically evaluate the impact of discounted products on the consumer buying behaviour of Tesco at Bethanal Green
- To make some strategic directions in which Tesco can positively influence customers’ buying behaviour other than discounting.
Research Rationale:
The topic of the research is “exploring the impacts of discounted products on consumer buying behaviour: The case study of Tesco at Bethnal Green Metro London”. Understanding consumer behaviour and the factors affecting consumer behaviour have always been important topics in business (Pappas, 2016). The mentioned topic is an important research topic because it will critically evaluate the impact of discounted products on consumer behaviour. Therefore, understanding the impact of discounts can have either a positive or negative impact on consumer behaviour; and their perceptions towards the company. This topic has become important right now because Tesco has been offering a large range of discounted products at all of its stores. Therefore, it has become important for the company to understand if discounted products positively or negatively affect consumer behaviour. This will help Tesco to effectively revise its strategies.
Research Methodologies:
Research methodologies are a set of principles, process and system which evaluates the research credibility, authenticity, and justification of the research methods, procedures and approaches (Saunders and Townsend, 2016). Research must go through the stages of research methodologies, and the stages should go from the outermost stage to the innermost ones. To increase the credibility of research findings, a researcher should show his methodological choices with justifications (Jamshed, 2014). Saunders and Townsend (2016) revealed that when the research onion is viewed from the outside, it is clear that the stages go smoothly from a broader view to core views offering different methodological choices to a researcher. The importance of the research onion lies in its adaptability to any research because the same research onion is applicable to scientific research, social science research or business research (Chilisa, 2019).
The above research Onion demonstrates six areas of research methodologies which are research philosophy, research approaches, research strategies, research methods, timeline, research techniques and procedures. Srinivas & Babu (2017) mentioned that justification and validation of research outcomes depend on the correct selection of research methodologies because methodologies should be selected based on the nature of the research.
The proposed research aims to identify and critically evaluate the impact of discounted products on the consumer behaviour of Tesco at Bethnal Green Metro London. With respect to the aim, the study will employ a hybrid research method, the study shows the justification of research philosophy, research approach, research method, research design, and data collection method, sampling, and data analysis treatment.
Research Philosophy: Positivist
Clarke & Hoggett (2019) revealed that research philosophy refers to the underlying knowledge, and beliefs on which the research is based. Research philosophy can also be defined as a frame through which different perspectives and issues are viewed. Research philosophies can be categorized as positivist research philosophy, realism research philosophy, and interpretive research philosophy. Interpretive research philosophies perceive that knowledge and ideas vary based on people’s perceptions in different societies (Grove & Gray, 2018). This implies that one concept which is perceived as true in one society and culture can be perceived as misleading in another society. The advantage of this research philosophy is that it leads to an in-depth discussion of the study; however the drawback is that there is little chance of reaching research outcomes through interpretive research philosophy. Realism research philosophy perceives that knowledge is created not by human beings, rather knowledge is created from the real natural issues and factors that really exist in nature (Chilisa, 2019). Additionally, realism research philosophy is used in scientific research, which can be proved through experiments. Therefore, the realism research philosophy is not suitable for this study since this is research in the business field. Positivism research philosophies imply that knowledge is something that has a theoretical background and that can be measurable in quantitative measures (Srinivas & Babu, 2017). The topic of this study is “impact of discounted products on consumer behaviour at Tesco”. It is clear that it has a theoretical background that discounted products somehow affect consumer behaviour: either positively or negatively. This research will use positivist research philosophy because this study will conduct scientifically and in a quantitative manner in which outcomes can be measured specifically. As a result, positivist research philosophies will yield much control to the researcher in terms of making quantifiable research outcomes.
Research Approach: Deductive
Research approach refers to the styles of conducting research which can further be categorized as a deductive research approach and inductive research approach (Mackey and Gass, 2015). The inductive research approach implies that research hypotheses are not set at the beginning of a research (Ospina-Pinillos et al., 2018). Therefore, research is conducted in-depth to using available data to find a theory. This is not suitable for this study because the underlying theory is already outlined. A deductive research approach is used when the research theory and objectives, and hypothesis are known at the beginning. This research will use a deductive research approach because the objectives and theory are outlined at the beginning. The theoretical background is that discounted products somehow affect consumer behaviour: either positively or negatively. Thus, the study will be conducted to evaluate if the research theory is right. Moreover, the deductive research approach is used in quantitative research, and it is aligned with the positivist research philosophy.
Research Purpose: Explanatory
Research purpose refers to the intention of conducting the study based on the availability of research variables and research problems (Flick, 2015). There are different research purposes, such as exploratory research purpose, explanatory research purpose and finally, analytical research purpose. Research problems and research variables are two important concepts in this research. Here, the research problem is consumer behaviour, and research variables are the issues that affect consumer behaviour (in this research, discounted products are one research variable). Clearly, the research problem is known, and the research variables for this research are unknown. Grove & Gray (2018) revealed that explanatory research purpose is used when the research problem is known, but the variables are unknown. On the other hand, exploratory research purpose is used when both problems and variables are unknown. Finally, analytical research purpose is used when both research problems and variables are known. As can be seen, the research problem (consumer behaviour) is known in this study; in contrast, research variable (discounted products and its consequences) are unknown to the researcher. As a consequence, this study will use exploratory research purposes because it is used when only research problems are known, but research variables are unknown. This research is intended to explore the impact of discounted products (variables) on the consumer behaviour of Tesco (problems).
Research Method: Hybrid
The research method refers to the method of collecting data (Ledford and Gast, 2018). Different research methods include qualitative methods, quantitative methods, and mixed research methods. There are advantages and disadvantages to both qualitative and quantitative methods. Qualitative research methods use qualitative techniques such as the open-ended approach to conducting the research (McNulty et al., 2019). The most prominent advantage of the qualitative approach is that it gives the respondent the opportunity to express their opinions in great detail. However, the problem with this method is that the results cannot be measured in a scientific manner. In contrast, a quantitative research method uses quantitative methods to conduct the research (Ullah & Ameen, 2018). The advantage of this method is that it helps the researcher to make quantifiable and measurable results from the study. But the problem is that respondents cannot go beyond the framework of data collection. Finally, a hybrid research method uses both quantitative and qualitative methods to conduct the study.
This study will use a hybrid research method. A hybrid research method has elements of both qualitative and quantitative methods, and thus the hybrid method can overcome obstacles of both, at the same time yield both qualitative and quantitate data. The most important benefit is that it will add both qualitative and quantitative questions for the respondents.
Research strategy: Survey Questionnaire Strategy
Research strategy refers to the strategies applied to collect primary data (Kumar, 2019). The types of research strategies include survey questionnaire strategy, observational group, in-depth interview questionnaire, and focused group study (Tamers et al., 2018). This study will use a survey questionnaire strategy in which both qualitative and quantitative questions will be presented, which will be compiled based on the research questions and objectives. Quantitative survey questions will be presented in a lighter-scale format. A survey questionnaire strategy will help the researcher to efficiently collect a large number of data in the most convenient manner. There are several reasons for using a survey questionnaire strategy to collect the primary data. Firstly, the survey questionnaire strategy will help the researcher to efficiently collect the big volume of data in less time because completing a survey questionnaire might take 7 to 8 minutes per respondent. In contrast, an in-depth interview is not logical in this study because this strategy will take extensive time to conduct an interview per respondent. In fact, the study needs to engage as many quality respondents as possible to assess their perceptions about discounted products at Tesco Bethnal Green Metro London. This is clear that the survey questionnaire strategy will enable the researcher to collect a large volume of data on customers’ perceptions of discounted products at Tesco Bethnal Green Metro London. The researcher will collect data from customers visiting Tesco’s outlet at Bethanal Green Metro London. The researcher will request respondents to spend only 7 to 8 minutes on the mentioned study.
Data collection method: Data, Population, and sample
Data collection method selection is one of the most important jobs in research because the proper selection of data collection method determines the authenticity of the research findings (Tuohy et al., 2013). Two types of data will be used in this study: primary data and secondary data. Secondary data will be collected from secondary sources such as the website of Tesco, from e-journals, articles, online books etc. On the other hand, primary data will be collected through a survey questionnaire. The research population of this study is all the customers visiting Bethnal Green Metro London. The total population is assumed to be between 40,000 to 50,000. However, it is not possible to include the population in the survey. Now, there are two options to select a sample population from a range of the total population: probability sampling and non-probability sampling. Probability sampling implies that respondents have different perceptions, and all populations should be given even chances of being selected as the sample population. In contrast, non-probability sampling implies that all population has a generalized opinion; thus, it does not create an even opportunity for all population to be selected as the sample population. Therefore, random sampling will be used to conduct the survey questionnaire, this will ensure that the sample population will be selected evenly, and opinions of randomly selected samples will reflect the opinions of all populations. The total population is expected to be approximately 50,000 customers who visit Tesco Bethnal Green Metro London. At a 90% confidence level and 7% of marginal error, 150 sample populations will be selected randomly. Random sampling will be assured by randomly picking the customers who come to Tesco Bethnal Green Metro. The researcher will seek help from 2 people during the survey.
Data analysis and presentation:
A large amount of data will be collected through the survey questionnaire. The study will generate both qualitative and quantitative data. Analysis and presentation of the data play the most important role in providing research outcomes to the target audiences. Among the techniques used to analyze data, SPSS and MS Excel are widely used. In this research, MS Excel will be used because it will help the researcher to conduct the analysis without further training on the tools because the researcher is already adept in MS Excel tools. Collected data will be used through MS Excel, and different statistical measures such as Mean, median, and mode; standard deviation will be used to reflect the opinions of surveyed customers on discounted products. Moreover, line graphs, bar charts, and pie charts will be utilized the present the research outcomes. The study is also expected to make some findings on the qualitative opinions of customers. Qualitative data will be linked with the findings and insights derived from quantitative measures and will then be presented through an analytical framework. On the other hand, SPSS has been avoided because it will require the researcher to further training to use SPSS tools.
Research Project timeline:
References
Chilisa, B., 2019. Indigenous research methodologies. Sage Publications, Incorporated.
Griva, A., Bardaki, C., Pramatari, K., & Papakiriakopoulos, D. (2018) Retail business analytics: Customer visit segmentation using market basket data. Expert Systems with Applications, 100, 1-16.
Proactive Investors, 2017. Tesco’s sales rise as price cuts attract customers but analysts warn inflation may hit margins. Retrieved from: https://www.proactiveinvestors.co.uk/companies/news/179359/tesco-s-sales-rise-as-price-cuts-attract-customers-but-analysts-warn-inflation-may-hit-margins-179359.html [Assessed on 17 June 2020]
Tesco, 2020. Annual Report 2020. Retrieved from: https://www.tescoplc.com/media/755761/tes006_ar2020_web_updated_200505.pdf [Assessed on 19 June 2020]
Tesco-1, 2020. Half Price. Retrieved from: https://www.tesco.com/groceries/en-GB/promotions/halfprice [Assessed on 22 June 2020]