Role of Internet Marketing at Tesco - Coursework Example

Role of Internet Marketing at Tesco Role of Internet Marketing at Tesco Tesco PLC is a general enterprise and multinational grocery retailer with its headquarters in Chesthunt Hertfordshire, England United Kingdom. Tesco provides a variety of products and services to the customers including food, wine, clothes, electronics, mobile phones, fuel, and other products and services. This is possible through different business platforms including supermarkets, telecoms, film making, record labels, petrol stations, Telecoms, Giraffe Restaurants, Tesco Tires, Your Beauty Salon, among other avenues. The success of these activities has been depicted by the global presence of Tesco in three continents, Asia, North America, and Europe. Tesco is the largest grocery market player in the United Kingdom with over 30% market share and is a commanding player in the retail industry globally, with over 2500 stores in 12 countries. Marketing is one of the reasons for the success of Tesco and has allowed the retail giant to rise and be the second most successful retailer globally after Wal-Mart. Internet marketing entails the online introduction of products and services of a business to allow for the products and services to appeal to client’s beyond the geographical location of the business (Mooradian et al., 2012). It is basing on the understanding of Tesco’s global success that this study aims at evaluating the role of internet marketing in the current integrated communications strategy at Tesco PLC, henceforth referred as Tesco in the paper. Marketing communications strategy Marketing communication entails the measures taken by a business in development of brand awareness through relaying information to the consumer on product specifics including qualities, price, benefits, and importance (Percy, 2008, p. 3). Marketing communication strategy are the plans taken by a business aimed at augmenting information dissemination and development of brand awareness. Different avenues are available for businesses to communicate to the consumer and develop a brand. Retailing allows for direct contact with the consumer whereas internet market allows for personalized and individualized information delivery. Other marketing communication strategies available to businesses include direct marketing, public relations, sales promotion, personal selling, and advertising. Despite the availability of different marketing communication channels, a marketing communication strategy has to have five main elements for success i.e. responsiveness, receptivity, relevance, recognition, and relationships (Dahlen et al., 2008, p. 107). Literature review of Internet integration in marketing strategies The importance of internet marketing has increased over the years resulting in a lot of research conducted in the area owing to the benefits it derives for the growth potential of the business. Marketing has also received a lot of attention to researchers owing to the part it plays the stimulation of sale and the determination of success or failure of a given business. The literature review will contain itself to the research on marketing with specific interest on the role of the internet marketing for retailers to allow it address the main aim of the study. Van Tonder (2003) believes that internet marketing allows for retailers and other marketers to get hold of the postmodern consumer who is technologically well informed and information oriented. He states that the internet allows retailers to convey specific information required by the consumer on the products within a very short time to allow for instant gratification and satisfaction to which the postmodern consumer is known for in marketing cycles (Van Tonder, 2003, p. 5). Brown (2012) in Post-Modern Marketing, states that the need to incorporate postmodern marketing, where internet marketing is one of the tools, allows firms to deal with consumer as an individual and a desire to retain existing customers (Brown, 2012, p. 26). Harridge-March (2004) state that internet marketing allow retailers and other marketers the opportunity to meet the needs of individualized consumers through tailoring of messages or offers to individual preferences (Harridge-March, 2004, p. 297). Burton brings to the fore the preference by postmodern consumers for virtual brands that have individualized offers in online shelves and voting with their mouse through the internet (Burton, 2002, p. 800). Another view taken in the available literature n the area is that internet marketing allows for the customization of products and services to the needs of the individual consumers. This made possible by the internet allowing for meaningful communication between the consumer and the companies or retailers allowing consumers to contribute to the creation of products and services (Auger, 2005; Marcolin et al., 2005; Grenci and Watts 2007; and Jiang, 2002). The availability and increasing use of mobile marketing are the other facet of internet marketing recognized by Simmons in his article allowing companies a direct connection with the consumers (Simmons, 2008, p. 302). Simmons believes that this direct connection through applications, GPS, personal digital assistant, and short message services allow for localized and personalized information services. From the varied literature, it is evident that internet plays a monumental role if organizations are to meet the needs of postmodern consumer and remain as competitive as ever in the retail market. Incorporation of the Internet in the marketing strategies at Tesco The internet provides platforms for businesses to augment sales, profits, and revenues through making products available online to the customers. This is evident in the marketing strategies used by Tesco where a number of measures have been made by the marketing team at Tesco to ensure clients have access to varied products and services through the internet. This section of the study will detail the various measures evident in the marketing strategies at Tesco that the internet has been used to augment sales, profitability, and revenue through integrating it in the marketing platforms at Tesco. This is well envisaged by the words of Sir Richard Broadbent in the 2014 financial statements, “The capacity for consumers to communicate instantly with each other, with us and with other retailers is driving completely different expectations for service levels, choice, convenience, indeed the whole shopping experience” (Tesco, 2014). The implication of these words are the recognizing for the need to augment internet use allowing for instant communication between Tesco , other retailers, and the customers to create convenience, choice, quality service, and better customer experience. Integration of the internet in the marketing strategies of Tesco is evident in the Click & Collect service where the internet is the main communication and payment method by the customers. Click and collect is among the most innovative measures that Tesco has implemented to gain customers and expand the availability of Tesco experience to customers in just a click. Click & Collect allows customers to view goods in Tesco’s website, choose the items they would like to purchase, pay for them, and state the time they would love to collect the items at their own convenience in the store nearest to them. Tesco employees receive the order, pack the items, and when the client comes, the items are packed and off they go within a very short time. Many clients using the service are satisfied with the convenience and innovativeness through which Tesco is using the internet to reduce service time and meet consumer needs for speed and convenience at its stores. By 2013, Tesco had made over 70 million deliveries, and the figure has been rising with an aim of reaching 80 million Click & Collect deliveries by the end of 2014 (Tesco, 2014). Tesco has effectively integrated the internet in its marketing initiatives in recent years as a measure of reaching the digital age consumers. Consumers have a need for effective and efficient marketing strategies that reflect time saving and quick access to products and services. The need for efficiently and instant services and product delivery have led to the development of Tesco direct, an online retail platform by Tesco for its consumers to request and purchase products offered by Tesco and other retailers. This allows customers to view the products, details, prices, and other characteristics to aid in purchase decisions at the comfort of their home. The internet proved a vital tool for Tesco in the generation of consumer profile using data collected on the need, preferences, and characteristics of the consumer in the development and launch of the Tesco Club card. This enabled Tesco to have a customer experience and created a profile for the clients individually using the data analysis effectiveness of Dunhumby. Club card is another of internet use at Tesco as a marketing strategy that has enabled the company gain competitive advantage and shows the commitment of Tesco to long-term customer loyalty programs since 13 February 1995 when the Club card was launched. Club card allowed Tesco to treat each customer individually, which is the main role the internet plays in marketing to the postmodern consumer. Development of Tesco.com is the other way through which Tesco has expanded the incorporation of the internet as a marketing tool in its marketing strategies. Through Teso.com, the official website of Tesco, consumers can access virtually all the products and services offered at Tesco through analyzing the different services, prices, characteristics, and making enquiries, and location of the nearest stores from which a person can access these products and services. Through the website accessed via the internet, Tesco can be able to access customer feedback that is constructively used in the improvement of the business offering at the company. Tesco website also offers communication and information opportunities with the customers including the offering of new products and the development of new platforms for client satisfaction and loyalty programs offered at Tesco. Website use further depicts the importance of the internet in the marketing strategies used at Tesco in meeting the global needs of the customers. The success of the Tesco website is due to the global reach it offers Tesco, as it surpasses geographical boundaries in its reach to all the customers of Tesco with internet connection, regardless of geographic location. Mullin clearly depicts the success of Tesco at customer feedback and use of the internet as a marketing strategy when he states, Tesco “ looks at what its customers are looking for in their website and makes easy for them to do it” (Mullin, 2002, p. 77). The success of Tesco.com is evident having made deliveries to over “one million homes, rent over 200,000 DVDs in a month, and augmented sales” (Humbyet al., 2008, p. 4). To the improved sales and profitability of the site, Sir Terry Leah attributes the success to client data from Club card. Tesco.com has grown to be the world’s largest online grocery seller. Tesco has used the internet as a marketing tool through augmenting the visibility of the business via promotions and product characteristics statement through the internet. Tesco has also managed to increase visibility through search engine optimization, development, and relaying of information via blogs and being active on the internet on the news release from statements of financial position and other publications. The success of Tesco in online sales in the United Kingdom is due to the embracing of the internet market and service provision that ensured trustworthy and delivery of food and nonfood items as stated. The other reason was diversifying to nonfood items allowing for flexibility of the buyers when choosing the products to purchase at Tesco.com. Use of in-store picking service allowed Tesco to gain a strategic advantage for its online stores in terms of national geographic coverage. Online sale allowed for faster geographic expansion to counteract the purchase of ASDA by Wal-Mart. Success of this service with 91% of the United Kingdom being served saw the role out of the service to Ireland and South Korea depicting another way of internet use for marketing at Tesco (Ellis-Chadwick et al., 2007, p. 714). The development of different computer software at Tesco through its branch of innovative Tesco Lab show other measures through which Tesco has used the internet in its strategic marketing needs. This diversification of product offering and development of new and innovative product lines by Tesco allows the company to gain further virtual market and generate more revenue. Development and roll out of the Tesco App is the other means through which Tesco used the internet as a strategic marketing tool. This is because of the ease of use and the ability of the customer to make payments for products conveniently and with the use when they have the Tesco App using their mobile phones. The Tesco App has a barcode scanner that integrates the Smartphone’s camera with precision and cleverness allowing the client to scan the products on their own and takes them to the product page to add the product to their basket. The barcode scanner also allows the clients to scan their club card instead of typing card’s 18 digit number, saving time and providing convenience. The role of internet marketing at Tesco would never have been completely analyzed without the mention of the use of social media sites to augment and develop customer relationships and loyalty (Global strategic management Inc., 2010). Tesco has had many Facebook pages aimed at catering at differing needs of the customers with the pages dedicated to the beauty, green living, clothing, mobile phones, pets, and Tesco diets. In 2011, Tesco launched a new Facebook page aimed at creating a platform for customers to make enquiries, seek clarification on Club card offers and promotions, provide information on charities, and provide market outline for offers and promotions aimed at Facebook fans (Tesco, 2014). Tesco brilliantly used the internet as a marketing platform for expansion of its product range without having to incur many costs to develop new product lines. Tesco was mainly known as a grocery retailer until it ventured online and augmented product offerings to include mobile phones, clothing, pets, and many other products currently offered at Tesco aimed at meeting and satisfying consumer needs. The need for convenience and meeting the needs of each consumer visiting the Tesco online platform is clearly visible with the introduction of the blinkbox on Tesco website allowing visitors to stream movies and other entertainment forms online. This offers a relaxing experience and a chance to keep another segment of the Tesco customer satisfied, showing the other way through which Tesco is internet marketing. Tesco ha a rating check for its online business offers allowing customers to provide their feedback on certain products. This allows Tesco t gain customer insight and feedback on the use of products and the feeling of the consumers on these products allowing for the incorporation of customer insight in the development of new products at Tesco. Rating allows Tesco to augment the variety of the products, increase flavors of well-liked products, and reduce products that have low ratings. Use of images and other interactive media in the Tesco website allows for customer interaction and offering tokens and promotions through the website allow for further sales showing the use of the relationship market. How to improve the effectiveness of internet marketing at Tesco Effectiveness of internet marketing efforts at Tesco can be improved through tailoring the promotional media through online activity to cater for differences in cultural and geographical location of clients i.e. UK, South Korea, and Ireland. Clear identification of different market segments including psychographic, demographic, geographic, and behavioral of the online community will allow Tesco to tailor promotions to the different market segments increasing internet marketing efficiency. Ensuring the needs of the clients are met through provision of best quality products in the online platform at Tesco and increasing navigability and accessibility of different products is another measure for the improvement of Tesco’s internet marketing. Innovation and technology development has seen the introduction of new features and products through new product development and site remodeling. This will increase navigation, allow Tesco to offer new products tailored for on the go customers, and generate high traffic to the site increasing chances of making sales. From the success of Tesco in the use of the internet as marketing tool through effectively and efficiently, it is evident that the internet marketing is a powerful tool when integrated with the marketing strategy of the business. Firms can be able to augment productivity and generate sales when they harness the enormous potential offered by the internet. The different measures through which Tesco used in internet market as a marketing strategy include Tesco,.com, Club card, Social media, expansion of product ranges online, Tesco Direct, search engine optimization, Click & Collect service, and Tesco Application use. This has allowed Tesco to achieve tremendous growth and success, which could not be achieved in the brick and mortar stores owing to geographical and location boundaries. Improving the Tesco internet marketing would require segmenting the market and tailoring offers and promotions, augmenting product quality in both brick and motor stores and online platforms, and augmenting navigability of the website. Another improvement area by Tesco and is the other measures available for further improvements include innovation and development to allow Tesco to include new features and product offerings. References AUGER, P. (2005), “The impact of interactivity and design sophistication on the performance of commercial websites for small businesses”, Journal of Small Business Management, Vol. 43 (2), pp. 119 BROWN, S., (1993). Post Modern Marketing. European Journal of Marketing. Vol. 27 (4), pp. 19-34. BURTON, D. (2002), “Postmodernism, social relations and remote shopping”, European Journal of Marketing, Vol. 36 (7/8), pp. 792-810. DAHLÉN, M., LANGE, F., & SMITH, T. (2010). Marketing communications: a brand narrative approach. Chichester, U.K., Wiley. 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