Street Markets Influencing Urban Consumer Behavior in Mexico

ABSTRACT

Street markets in the urban setting form the bottom of the pyramid market structure, which caters to consumers of semi-urban settlements. Consumers favor these markets for farm-fresh agricultural products and low-priced consumer goods. This study empirically investigates the role of street markets in urban sociodemographic clusters in the shift of consumer behavior against large shopping malls and supermarkets. Data were gathered from 490 respondents engaged in buying products at 373 vending stalls across 14 street market locations in Mexico City. Data were collected on 31 variables and analyzed using structural equation model. The study also addresses street markets as change agents of consumer behavior in the context of marketplace ambience, vending patterns, ethnic values, and interactive customer relations. The conventional shopping wisdom of customers, competitive gains, and socio-cultural advantages are also addressed based on an empirical survey. The study revealed that shopping behavior is largely motivated by the physical factors such as location of marketplace, distance, and vending stall type within the street market. Findings also indicate that consumers possess a strong conviction that street markets offer fresh products of farm and animal origin as well as ethnic food irrespective of hygiene standard.

RESUMEN

En el escenario urbano, el comercio callejero es la base de la estructura piramidal del mercado que abastece a los consumidores de los asentamientos semiurbanos. Los consumidores prefieren adquirir los productos agrícolas frescos y bienes de consumo de bajo precio en este tipo de mercado. Este estudio examina, empíricamente, el papel desempeñado por el comercio callejero en los agrupamientos sociodemográficos urbanos, en lo que atañe al cambio comportamental del consumidor, comparativamente hablando con aquel que mantiene en los “shopping centers” y grandes supermercados. Recopilamos datos de 490 entrevistados que compran sus productos en 373 puestos de venta ubicados en 14 puntos de venta callejera en la Ciudad de México, relativos a 31 variables, que analizamos empleando un modelo de ecuación estructural. El estudio también analizó los mercados de calle como agentes de cambio comportamental del consumidor en el contexto de la ambiencia del mercado, patrones de venta, valores étnicos y relaciones interactivas de los clientes, y ejecutó un meticuloso relevamiento empírico de las ventajas socioculturales, la ganancia competitiva y la sabiduría convencional de los clientes para adquirir los productos. El estudio concluyó que el comportamiento de adquisición está ampliamente motivado por factores físicos, tales como la ubicación del mercado, distancia y tipo de puestos de venta en el comercio callejero. Los hallazgos del estudio indican también que los consumidores están plenamente convencidos de que el comercio callejero ofrece productos frescos de origen animal o agrícola, además de comida típica, independientemente de lo que se refiera a los patrones de higiene.

RESUMO

O comércio de rua, no cenário urbano, constitui a base da estrutura piramidal do mercado que abastece os consumidores das regiões semi-urbanas. Os consumidores dão preferência a esses mercados para produtos agrícolas frescos e bens de consumo de baixo preço. Este estudo examina, de modo empírico, o papel do comércio de rua em agrupamentos sociodemográficos urbanos, no que diz respeito à mudança do comportamento do consumidor, em comparação com “shopping centers” e grandes supermercados. Foram coletados dados de 490 respondentes, que compravam produtos em 373 barracas de venda em 14 locais de comércio de rua na Cidade do México. Foram coletados dados sobre 31 variáveis, analisados com um modelo de equação estrutural. O estudo também debateu os mercados de rua como agentes de mudança do comportamento do consumidor no contexto da atmosfera do mercado, padrões de vendas, valores étnicos e relações interativas dos clientes. As vantagens socioculturais, o ganho competitivo e a sabedoria convencional dos clientes para fazer compras também são tratados no estudo, com base em um levantamento empírico. O estudo revelou que o comportamento de comprar é amplamente motivado por fatores físicos, tais como a localização do mercado, distância e tipo de barracas de vendas, no comércio de rua. As descobertas também indicam que os consumidores estão imbuídos de uma crença forte de que o comércio de rua, além de comida típica, oferece produtos frescos de origem animal ou agrícola, independentmentee dos padrões de higiene.

KEYWORDS:

• consumer behavior
• consumer satisfaction
• ethnic markets
• market attractiveness
• Mexico
• sales differentiation
• street markets

This paper has been developed out of the research project conducted by Rajagopal, Professor of Marketing (EGADE), ITSEM, Mexico City Campus on Consumer behavior in urban shopping locations under the aegis of Research Group on Consumer Behavior and Competitiveness, Monterrey Institute of Technology and Higher Education-ITESM, Campus Santa Fe, Mexico during 2008–09. Author expresses sincere thanks to Dr. Jorge Vera, Professor of Marketing, ITESM-CCM and Coordinator of the research group for extending administrative support to this project.

Notes

VS = Variable Segment. Figures in parentheses indicate number of variables.

VS = Variable Segment. Figures in parentheses indicate number of variables.

*p < 0.01, **p < 0.05, ⁺p < 0.10, SE = Standard Error.

All significance levels are based on two-tailed tests.

*p < 0.01, **p < 0.05, ⁺p < 0.10, SE = Standard Error.

All significance levels are based on two-tailed tests.

*p < 0.01, **p < 0.05, ⁺p < 0.10. All significance levels are based on two-tailed tests.

^a Parameters for measuring consumer value have been adapted from equation (5). Each parameter in defined in the section on Model Specification in the paper.

Figures in parentheses indicate Eigen values of the weighted correlation matrix.

Figures in italics show values of correlation coefficients.

Source: adapted from (a) Grupo Elektra, 2000 Annual Report (b) Chu, M., and Garcia-Cuellar, R (2007), Farmacias Similares: Private and Public Health Care for the Base of Pyramid in Mexico, Harvard Business School Case, Boston, MA.

For details see Marvelous Markets, El Universal, November 23, 2003.

The goodness-of-fit statistics that the Tucker-Lewis index (TLI) also known as the Bentler-Bonett non-normed fit index (NNFI), comparative fit index (CFI), and incremental fit index (IFI) tend to range between 0 and 1, with values close to 1 indicating a good fit. The TLI (NNFI) has the advantage of reflecting the model fit very well for all sample sizes. It is observed in past empirical studies these indices need to have values above 0.9 before the corresponding model can even be considered moderately adequate.