How Does Argos Market Itself so as to Differentiate the Company - Assignment Example

Name: XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX Institution: XXXXXXXXXXXXXXXXXXXXXXXXXXXXX Professor: XXXXXXXXXXXXXXXXXXXXXXXXXXXXX Course: XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX Date of Submission: XXXXXXXXXXXXXXXXXXXXXXXX Argos How Does Argos Market Itself So As To Differentiate The Company From Others Competitors Measure, Market Share? Introduction Argos is one of the UK's top general goods retailer with sales of over £3.3 billion (The Times 100.co.uk). Currently in business, any company tries to attract consumers and make their business stand out from rivals by making it unique. In this essay the history and development of the Argos Company will be examined as well as consideration of the key points of change in this company with analyses how successful the company has been in terms of staff retention. In addition, the paper will explore promotion techniques that differentiate it from other competitors and its marketing share. History and development of Argos Established in 1973, Argos is an exclusive catalogue retailer well known for value, choice and convenience. It deals in general products and merchandise for the home from more than seven hundred stores in the Republic of Ireland and throughout the United Kingdom, over the telephone and online. Its uniqueness is derived from the fact that it can display its goods to the customers using the catalogue. Richard Tompkins, who had initially established the Green Shield Stamps in the United Kingdom, founded the Argos Company. During his holiday in Argos, a Greek city, he invented the idea that customers could buy goods from his Green Shield Gift House suing cash instead of using saving stamps. He then renamed his Green Shield Stamps catalogue shops and called it Argos in July 1973. The company was then acquired by BAT industries for a deal of 32 million pounds in 1979. In 1990, the company was detached from BAT industries and listed in the London Stock Exchange. GUS plc then purchased it in 1998 and became part of Home Retail Group that was detached from GUS plc, its parent company, in October 2006. The company has now been re-branded with a re-launch of its main shopping website, career website and new shopping catalogue. Today, Argos is the legal owner of various brands that feature on a significant number of products within the catalogue such as Mega Games, Pro Action, Opticom, Grosvenor, Beanstalk, Cookworks, Aquarius, Visiq, Mikomi, Steamworks and Challenge. It incorporated the Alba, Chad Valley and Bush brands in 2009. Key points of change When companies are planning to manage change, there are various key principles that need to be kept in mind. Argos, a general goods retailer in the United Kingdom has taken various measures to ensure that, it changes for the better at the same time remaining competitive in the market (David, 2007, p 24). One of the key points of change for Argos is customer service. Argos acknowledges that, offering exceptional customer service is a rewarding, yet a challenging action within a company. Good customer service results to increased revenues, increased customer satisfaction, increased profits and reduced staff turnover. Among major retailers in the United Kingdom, Argos is considered as unique due to its broad means of demonstrating products to clientele through catalogue. During purchase, consumers just browse through the catalogue, choose the goods to purchase, make payment, and have their goods transported to their homes. Customer service is a strategy for managing an organization’s interaction with clients, customers and sales prospects. Another key point of change for Argos is through product prices. Certainly, price is one of the reasons why customers buy goods. Argos uses a daily low price strategy that is combined with greater product variety which is attained mostly by reducing costs though the type of retailing channels it uses that does not need a lots of employees as well as large shop space. The company is able to reflect these cost-cutting in the prices of goods it charges consumers. By means of shared communications with Home base, Argos is also able to achieve low prices for its products. The low pricing strategy enables a company to be more competitive in the market, increase sales which as a result leads to increased revenues and profits. Product strategy is the other key point of change used by Argos. It begins with a strategic vision stating where a company heads and the means it will use to get there as well as reasons for its success. Argos uses a number of fundamentals of competitive product strategy which includes reduced prices and product differentiation which ensures that the company remains competitive in the market. Argos offers a variety of products including TVs, DVDs, TV stands and Home cinema speaker systems which indicates product differentiation. How Successful the Company Has Been in Terms of Staff Retention Argos has its own recruitment website that pays greater attention towards personal development. This depicts the value that the company attains to achieve in ensuring that its employees do the kind of jobs they are suited. This also supports staff retention levels by ensuring that the existing employees feel treasured and that they are utilizing their potential and expertise. Although an average level of staff turnover is considered good for a business, the company has a staff retention strategy in place to ensure the company’s top employees are retained in order to give it a competitive advantage over others companies (David,2007, p108). Disregard of such strategies can be very costly, as it tends to cause loss to the business, destroy the company’s reputation and lower staff morale. The company also has a business motivation unit that specializes in offering rewards and incentives to the employees in order to change their attitudes and behavior. This helps to boost the company’s ability to retain its staff. The company has similarly achieved staff retention through its staff empowerment programmed. Argos Marketing Strategies In order to differentiate itself from other competitors’ measure and market share, Argos has used different measures to market itself in the United Kingdom. The company uses a unique selling preposition price in the retailing industry, and seeks to focus on a unique selling personality. Through advertisements which are done online or through television media, Argos is able to market its products uniquely which as a result leads to increased sales. These advertisements emphasize on the advantages and the features of Argos products informing and reminding consumers as they shop for other products (Laermer & Simmons, 2007, p59). Other factors such as the Argos regional distribution centers (RDCs) in the United Kingdom are vital for the company’s success. Every regional distribution centre employs about 400 employees, and this number can double during peak times. Together with Home base, its sister company, Argos forms part of Home Retail Group (HRG). Argos’ Business Structure Analysis As noted earlier, Argos has a different way of reaching its clientele which has given it a better competitive advantage as opposed to the rest of the companies engaged in the same service provision. This unique way of marketing is what forms the largest part of its business structure. Essentially, the company relies on advanced information technology as will be discussed at the next level (The European e-Business Market Watch, 2004, pg 28). Reliance on ICT From the time this company was founded, it is well known for its innovative utilization of technology. It is through the advanced computer system that the company has gone miles ahead of the rest of its competitors (The European e-Business Market Watch, 2004, pg 28). The importance of relying on ICT is well seen in controlling of the company’s stock movement, recognition of market performances so that the company does not operate at a loss when transformations are made within the market structure. This similarly helps the organization to get rid of tendencies of stock outs. For the success of any company, communication is imperative. Argos has as well utilized ICT in improving the structure of its internal communication and external communication which entails client and supplier interaction. The system aids the company in getting feedback after services have been delivered so that changes are made where necessary to reduce the gap between consumer perception and satisfaction (The European e-Business Market Watch, 2004, pg 29). The feedbacks received have facilitated the implementation of inventive systems of frequent client feedback occasions whereby clients are called upon to attend meetings and suggest on areas that require improvement for their satisfaction. Based on this, every store within the company is e-mail and intranet enabled. This has gone as far as to the distribution centers and the headquarters of the company. The ICT has influenced an increased speed and range of communication between the company and the outside environment. Multi-channel Approach The business structure for Argos can be taken as being multi-channel in which clients are given diverse kinds of retails for their purchases and shopping (The European e-Business Market Watch, 2004, pg 30). Before the implementation of the current electronic channels, consumers could only find the products and offers from the catalogue or visit the main store for their needed information. However, as it stands at the moment, clients can find any information at their own convenience either through the cell phones, the company’s website or television. Payments and confirmation of available products is simpler now for those clients that have access to Vodafone services. In cases where clients own digital television sets, it has even become easier since these customers can request for goods as well as purchase them through the television. Argos Company as well has online retailing attributed to the rapid technological growth as well as the spread of internet accessibility in houses. The company’s website was initially launched in 1995 and therefore has undergone a number of transformations to make it more reliable for use by both customers and suppliers. A lot of features have ever since been added to the extent of making the company the initiator and head in electronic commerce in the region. In the UK, Argos is now the second organization in the application of clicks and bricks in its retail transactions which merge both store oriented and online business transactions (The European e-Business Market Watch, 2004, pg 34). Even though Argos has a website which is utilized at a wide range and has become familiar to clients, online transaction at this moment form part of a considerably good section of 5% in the entire business activities. To improve its business structure, Argos is keen at making the home site user friendly so that the services render to clients are as practicable as possible. This includes indication of the delivery time for every goods delivered to the consumer. Another significant section that the company has streamlined within its structure of business operation is online security particularly from internet fraud. Through this, only orders that utilize the Security Socket Layer (SSL) are accepted by the company so that individual information is not revealed by customers utilizing insecure links (The European e-Business Market Watch, 2004, pg 34). To further confirm security of the client transacting online, the company has made it automatic for provision of card billing address when clients make their payments. After transactions have been made between the customer and the company, no personal information it stored in the company’s system to avoid vandalism from outsiders who can access the website. The company has as well the promotional section within its business structure which allows for clients to register online for electronic newsletters to update themselves on the company’s current products and special offers. However, Argos has maintained that link between physical store marketing of products and online marketing. There is especially no difference between the two activities and therefore either way clients find satisfactory information about Argos’ brands. The UPS Supply Chain Management Following the company’s numerous stores, the flow of products has to be efficient. As a result, the business structure contains UPS supply chain strategy. This manages the movement of merchandise from a complex point of view of above 750 suppliers to the distribution centers within the country. Within the UPS supply chain management scheme, Argos uses the “Nominated Carrier Scheme” which is faster and therefore delivery to the right clients is done in the desired timeframe (The European e-Business Market Watch, 2004, pg 36). Before this scheme was adopted, the supply chain situation at the company was a bit hard since every supplier had to use their independent transportation systems, particular means of record keeping as well as personal standard business lead periods. This resulted into the company’s management structure to make a better decision that could put together all materials from suppliers and deliver through a single supply chain (The European e-Business Market Watch, 2004, pg 36). The function of the UPS supply chain solution is to receive, authenticate and handle batches from a wide range of the company’s suppliers. It then ensures that the request from clients is in the right state, combines the requests with the rest before sending to the headquarters for ultimate dispatching. It is however clear that the supply chain functions through direct computer associations. The activities carried out through the UPS supply chain management hence are electronically controlled. Importantly, Argos has adopted a better supply chain to assure customer satisfaction through better services being delivered to him. The efficiency of this system is that all the information concerning the company’s operations from suppliers to delivery is put in a central system. This enables clients to make follow-up on the movement of their orders. In addition, the system cuts down on the company’s number of transportation means like trucks on the road while increasing the fill rate (The European e-Business Market Watch, 2004, pg 37). It as well combines delivery logistics through ensuring of wholesome loads. In addition to the UPS supply chain, the company is in a position to deliver goods in roughly fifteen thousand truck loads every year. This could have been more expensive if simple methods of delivery were utilized. The RETEK Supply Chain Management This is one of the sophisticated mechanisms adopted by the company in 2003 to entrust the control of warehouses to another company, Retek Inc. This company has an advanced inventory planning system which was meant to optimize the supply chain of Argos. The targeted area is the in-stock that had to be made available at all times. This still concerns order plans as well as harmonizing supply with clientele perceptions and requirements in the multi-channel system. It then should improve and optimize the performance of inventories (The European e-Business Market Watch, 2004, pg 39). Conclusion Every company wants to make sure that its operational aspects are efficiently synergized. Argos is such a company and seeks to ensure that its marketing plans are well incorporated to attain maximum efficiency and effectiveness. This essay focused on history and development of Argos, its key points of change which include pricing strategy product strategy and customer service and how the company has used staff retention measure in order to remain successful in the market. In order to differentiate itself, Argos has used unique advertisement and increased regional distribution centers across the United Kingdom. The advertisement systems used by the company have concentrated on technological applications. To increase clientele trust and faster company operations, the company focused on the supply chain management system which similarly uses ICT systems. The multichannel approach by the company to attend to client needs way meant to speed up delivery and order reports so that the gap between customer perception and satisfaction is reduced. Noted as well is the fact that the company has in the recent times incorporated the UPS supply chain management system as well as entrusting of some of its operations to the Retek Inc. for faster deliveries. Reference: Argos – “www.argos.co.uk".Retrieved from http://www.argos.co.uk/webapp/wcs/stores/servlet/ArgosStaticPageSecondLevel?include Name=AboutArgos.jsp&langId=-1&storeId=10001&catalogId=1001 (Accessed February 23, 2011). Argos, identifying customers and meeting their needs. Accessed (February 15, 2011) Retrieved fromwww.Thetimes100.co.uk/downloads/argos/argos 10 full.doc David, J, (2007). Principles and Practice of Marketing, 5th Ed. London: Maidenhead, 2007. Laermer, R. & Simmons, (2007) M. Marketing, New York: Harper Collins, 2007. The European e-Business Market Watch. Electronic business in the Retail Section: key issues, case studies, conclusions. Sector Report: No. 06-11, August 2004. Retrieved from: http://ec.europa.eu/enterprise/archives/ebusinesswatch/studies/sectors/retail/documents/Retail_2004_II.pdf Read More