To provide some context, this question occurred to me while I was considering the cement retail market. If one considers retailers selling cement of only one brand, then the concept of brand loyalty is useless as there is only one brand. In order to understand the behaviour of consumers, one must consider store-loyalty (An idea first introduced by Ross Cunnigham in 1969). If the retailers are trying their best to maintain store loyalty then what can be said about the kind of competition they are engaging in, given that there is a large number of retailers?

I think that the competition should be monopolistic in nature, as retailers, like shopkeepers, are trying their best to attract consumers. But the only difference lies in the fact that consumers make repetitive purchases at shops whereas a majority of the consumers going to a cement retailer make a one-time purchase(Mainly for the construction of houses). Also, the target of the shopkeeper is to not only increase his sales but also to maintain consumer loyalty, whereas the cement retailer cannot aim for the second option due to the aforementioned reason but yes he would too, want to increase his sales by expanding his consumer base.

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    $\begingroup$ Haven't you already asked this once? economics.stackexchange.com/questions/9527/… $\endgroup$
    – Giskard
    Dec 14, 2015 at 14:58
  • $\begingroup$ That question was a bit more general. Currently, I am focusing on just one aspect(Store Loyalty) to improve my understanding. But, do pardon me if I have repeated something. I have been researching for a while now... $\endgroup$ Dec 14, 2015 at 15:31
  • $\begingroup$ There is no reason to assume that cement retailers don't want to retain customer loyalty. By the nature of the business, cement retailers have general contractor companies as their customer base, not "regular" people. The successful general contractor is most certainly a repeat customer to the cement retailer, as the general contractor works on multiple building projects throughout the year. $\endgroup$
    – rocinante
    Dec 14, 2015 at 18:55
  • $\begingroup$ @rocinante Thank you for correcting me on that point. But, recently I found out that there are a few consumers who'd like to build their own homes without the intervention of a dealer (Primarily to save costs). In that case don't you think that an element of store loyalty plays some role? $\endgroup$ Dec 15, 2015 at 17:01
  • $\begingroup$ @ShreyAryan For those few customers, no. For one thing, cement retailers typically don't sell their products to consumers, and restrict their customers to companies. Just like you can't call up Intel directly and tell them you'd like a computer chip to build your computer if you're not a registered business, you can't call up a cement retailer directly and ask for cement to build your house. Home improvement stores that carry a huge variety of products (not just cement) are where regular people who want to build their own homes go. The issue here is that cement retailers are wholesalers. $\endgroup$
    – rocinante
    Dec 16, 2015 at 11:15


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