Comparing Thorntons-co-uk and Ocado-co-uk - Coursework Example

Interactive and digital marketing: Comparing Thorntons.co.uk and Ocado.co.uk BY YOU YOUR SCHOOL INFO HERE HERE Interactive and digital marketing1.0 Project background and intent In order to assess the viability and success factors of contemporary interactive and digital marketing, this research report scrutinised the marketing prowess of Thorntons.co.uk, a leading chocolatier in the UK maintaining both a bricks-and-mortar presence in the UK and an online website. Comparatively, the same marketing criteria was utilised in relation to Ocado.co.uk, a direct-only supermarket. Through scrutiny of both retailers, the success and failures of both companies in relation to marketing capability was determined, offering recommendations for website improvement for both online retailers. 2.0 Information relevancy and site navigation – Thornton’s Thorntons.co.uk provides highly relevant information that makes it simplistic to navigate the site. The most valuable feature on the site was a search toolbar to find specific products, prices and special offers (See Appendix A). The company even maintains a social media log-in option, letting users of social media to access the site with an inter-linkage with Facebook. This is critical as Scoble and Israel (2006) assert that companies which provide expressive dialogue between customer and the organisation improve a brand image and serves to humanise the company. Goodson (2011) supports this notion, suggesting that the key to success in branding is being able to promote transparency and build solid relationships with important constituents. The company boasts information not expected to be found on a retailer website, including distinct links to the history of chocolate production, Thornton’s role as a master chocolatier, and the ability to meet internal chocolate experts with a rich history working at the long-standing company. The company even offers consumers a step-by-step guide to effective chocolate tasting, much like wine tasting sophistication, to enrich their interactive experience with the brand. Offers the company on an easy-to-navigate link, “before you polish off that tray of Thornton’s in record time, follow these tips and get ready to impress your friends” (Thornton’s 2014, p.1). Thornton’s not only recognises the importance of interactivity with the brand, but also consumer behaviour traits for the upscale consumer. The opinion of important peer reference groups is highly important for high resource buyers that utilise premium products as a means of enhancing their social status, a phenomenon known as conspicuous consumption (O’Cass and McEwen 2004). This is a major success factor for brand positioning and also engaging consumers effectively by selling the brand as a social experience rather than just a chocolate sale. What was lacking at Thorntons.co.uk was a well-developed site map that maintained more than simply products, prices and special offers. The site map did not include any links to corporate history, corporate data for investors, or other customer service-oriented linkages. Some consumers rely on site maps to give them a rich and full picture of all features and products for a company. Additionally, the site does not maintain live agents to assist with customer service and ordering issues. A recent Consumer Channel Preference Survey indicated that 50 percent of respondents heavily rely on live agents to handle their support needs as consumers often find these tasks difficult to manage without live support (Callfinder 2013). Lack of a developed site map and having no live support, only a phone listing and an email option, could seriously jeopardise consumer perceptions of quality customer service for this organisation. 2.1 Information relevancy and site navigation – Ocado Ocado.co.uk, the online supermarket, has a very sophisticated website. A flash presentation provides a visual image of its product line, ranging from foods to clothing and accessories, clearly illustrates what consumers can expect from the website. The company provides an incentives-based link illustrating a £10 coupon off a customer’s first visit, an important marketing conception to gain attention from price-sensitive consumer segments. Unlike Thornton’s, the company has a very well-developed and informative site map that is inclusive of not only products, but customer service opportunities, investment opportunities, special offers and even an opportunity to browse careers at the firm. In terms of navigation, Ocado is far superior to Thornton’s site map model. Like Thornton’s, Ocado provides an opportunity to log-in using Facebook, hence improving social media visibility and communications engagement. This allows Facebook users to share recipes and comment on the special promotions that are available weekly at the company. As indicated by Scobel and Israel (2006), this type of dialogue is critical to building strong brand relationships with important market segments. What was unexpected was that the company provides access, via a link, to an updated company magazine known as Ocadolife. The magazine provides lifestyle-related information for consumers, inclusive of sweepstakes drawings, suggestions for feel good food recipes, and lower-cost seasonal products that are incentives for consumers to try out the various recipes provided by the company. This promotes interactivity with consumers, establishes a lifestyle enhancement activity between brand and the consumer, and even promotion of the company’s focus on human resources with a spotlight on internal employees and their competencies. This is very important as a brand enhancement strategy as there is growth in ethical consumption, a phenomenon in which consumer segments show more loyalty to a company that has a strong ethical stance (Grande 2007). In fact, a survey of 5,000 consumers indicated that 33 percent would even pay higher prices if they felt the company had a potent ethical principle and structure (Grande). What was lacking at Ocado.co.uk was a solid guarantee of liability in the event of security problems. Though the company has a well-developed security policy that indicates the steps the business takes to prevent fraud or other security problems related to privacy and financial information, there is no mention of the company taking responsibility for any failure in this scenario. This is important as Wind and Mahajan (2001) state that trust between company and consumer is built by providing such guarantees. Ocado does not have a long-standing brand reputation like that of Thornton’s that has been in operation since 1911, thereby fostering trust through brand longevity. Ocado has only been in business in the UK since 2000 and did not even have brand recognition until 2002. Security guarantees would likely provide Ocado with more consumer trust. 3.0 Differences between bricks-and-mortar retailing and online presence Even though both Thorntons.co.uk and Ocado.co.uk offer delivery services to consumers, Ocado maintains much more substantial emphasis on delivery processes, prices, and timing of delivery not only on the home page, but throughout many product pages. The whole of Ocado’s business model is reliant on having convenient, cost effective and reliable deliveries as they have no traditional bricks-and-mortar presence in the UK. The company boasts, “place an order in minutes”, illustrating the ease of ordering processes to give the company a brand reputation for expedience and convenience. Delivery as a key selling point is illustrated by offering information regarding the availability of one-hour delivery timeframes, thereby illustrating to consumers that they will not be burdened with elongated delivery schedules requiring them to remain present in their home environment for an entire morning or afternoon. Thornton’s, on the other hand, makes no such guarantees about delivery and even charges higher prices for expedited delivery services, likely as a result of not relying solely on website sales revenues to sustain its profit objectives. Additionally, Thorntons.co.uk does allow for tracking of a delivery, but a consumer must contact their customer service agents by phone to do this. If the customer logs in via Facebook, they can view their current order status and previous orders to enhance the shopping experience and build trust in Ocado’s business model for convenient delivery services. This self-service feature via Facebook provides consumers with fewer burdens to rely on agents at the company to perform this task, creating an expedient service experience. Moreover, Thornton’s, the only digital retailer with a bricks-and-mortar presence, actively wants consumers to visit and find their traditional stores across the UK. The company’s home page has a store locator link that is posted in large and easy-to-recognise font size to ensure consumers are familiar with its bricks-and-mortar stores. This is not necessarily surprising considering that Thornton’s in-store sales have declined dramatically as a result of emerging competition. The company even acknowledges that the online sales division, known as Thornton’s Direct, is only a small revenue producer for the company (Thornton’s 2013). Ocado, on the other hand, must focus on customer service for the direct-only business model if the company hopes to sustain profit expectations and gain consumer loyalties. With sales down in 2013 by 10 percent, Thornton’s must actively promote opportunities for consumers to visit their local stores as this is the most significant revenue contributor to the company. 4.0 Expressing image and market positioning – Thornton’s Thornton’s, a company operating in the UK since 1911, is positioned against competitive forces based on its premium ingredients. The firm’s catch slogans, “Chocolate Heaven since 1911” and “The Art of the Chocolatier” has given the company a reputation for quality in many consumer segments. The company has a link on the main home page that promotes the ability to personalise gift chocolate products, sustaining an important linkage to its long-standing brand reputation for premiumisation. (See Appendix B). This opportunity provides important consumer interactivity with the company which is promoted by Godfrey, Seiders and Voss (2011) as being vital for building brand equity and influencing positive perceptions of value in desirable consumer segments. Having information available to consumers that already believe in premium quality and exclusivity through its bricks-and-mortar marketing positioning find this same level of sophistication on the company’s website. Concurrently, Thorntons.co.uk provided very distinct pricing structures and promotions that serve as incentives to consumers. This is highly important as Thornton’s now operates in a highly saturated competitive market, with such supermarkets as Tesco and Morrison’s now selling gourmet chocolates. In fact, Thornton’s was forced to close 180 stores in 2011 because of this competitive problem (BBC News 2011; Hawkes 2011). Therefore, to gain a more diverse consumer following, other than just high resource buyers with a taste for quality and sophisticated chocolates, pricing is now a viable competitive tool. Furthermore, price promotions are known to be the most successful method of gaining consumer attention and interest as this is the primary criteria by which most consumers judge product and company quality (Dawes 2004). Thorntons.co.uk also utilises the same colour patterns and logo of its long-standing brand personality on High Street, with most pages consisting of purple and black that are indicative of the company’s image. This is highly important as colour serves to strengthen brand distinction and wholeness as perceived by consumers (Sametz 2010). 4.1 Expressing image and marketing positioning – Ocado Ocado maintains a very strong focus on corporate social responsibility, emphasising the company’s ethical stance toward sustaining the environment and eco-friendly products. Sainsbury, a competing bricks-and-mortar supermarket, has found significant successes in this effort, especially with the assertion by Grande (2007) that ethical consumption is rewarding companies with this CSR stance with higher revenues and disparate market loyalties. Known as the Ocado Way, the company boasts its energy efficiencies, its role with support for the Woodland Trust and Soil Association, and even promotes what is referred to as a Meat Free Monday emphasising opportunities to reduce consumer carbon footprints associated with meat production. The breadth and diversity of its green initiatives are substantial marketing tactics that build a positive identity for the brand and trust in the firm’s integrity. Companies that illustrate strong corporate responsibility are finding profit growth in many consumer segments today. Even though they represent higher supply chain expenditures, Ocado also boasts a significantly-wide variety of organic products that are aligned with its brand stance on corporate social responsibility. Offers Whole Foods Market, a U.S. based organic supermarket with substantial revenues, “shoppers want more information about what’s happening to their food” (Grocer 2010, p.5). Through the company’s online magazine and clearly defined links to environmental responsibility initiatives, and easy-to-navigate organic product links, the company builds a solid brand reputation for responsible business practices. 5.0 Recommendations To improve its website, Thorntons.co.uk should be including a blog opportunity on its website so that real-time communications can occur with consumers that value this premium brand. Though the company maintains a presence on Facebook, upon visiting the Thornton’s Facebook presence, there is limited updated information about corporate activities, objectives and supplementary consumer-centric learning about Thornton’s business model. Unlike Ocado which provides opportunities to share about recipes and the experience with Ocado, Thornton’s Facebook data is rather outdated and not relevant to changing business practices. By incorporating a blog directly on the website, the company can gain important demographic information, learn about consumer preferences, and better produce interactivity with the brand that is vital for building relationships. The company also allows for sign-up with the company, asking for only an email to receive a recurrently updated newsletter. It does not, however, ask for demographic data. The company, therefore, does not have functionality in terms of metrics to determine their most viable market segments, inclusive of their ages or gender (to name only a few demographics). A more sophisticated sign-up sheet would provide valuable marketing data that could alter business models, inclusive of advertising strategy or product offerings, relevant to their majority market segments. In terms of Ocado, the only relevant change to its website would be inclusion of the ability to contact live support agents. Since this business is reliant on online sales, and it was recognised previously in this report that 50 percent of consumers rely heavily on live agents, having live chat support could enhance brand reputation. Godfrey et al. (2011) asserted that digital marketing failures occurred when communication speed and frequency is insufficient. Ocado does maintain a “Contact Us” feature, but this is inclusive of email and telephone consistent with Thornton’s service model. With deliveries being scheduled with only one hour windows, it might be difficult for consumers to cancel or reschedule a delivery in the event of a sudden inability to accept delivery within a one hour window. Live agents could facilitate a much faster response than email and telephone systems that often have queues that frustrate consumers and hamper consumer perceptions of service quality. Ocado also does not emphasise its pricing promotions effectively. The only mention of a price guarantee is in a fast-moving flash presentation on the home page which does not effectively illustrate to consumers the pricing incentives for choosing Ocado over competitive forces. This should be emphasised more effectively utilising pop-ups, a form of online advertising that appears over a web page (Ryan and Jones 2009). This would ensure that consumers are aware of these guarantees, gain much more attention, and perhaps even gain a marketing edge over major competitors that also have online websites such as Tesco and Morrison’s. So long as pop-up frequency is limited, they are more effective (CNN Money 2004). Since pricing promotions are often how consumers judge quality of a brand, this would enhance its digital marketing effectiveness for Ocado. References BBC News. (2011). Thornton’s set to close up to 180 shops. [online] Available at: http://www.bbc.co.uk/news/business-13939089 (accessed 1 March 2014). Bhatnager, P. (2004). Pop-up’s pop-off point, CNN Money. [online] Available at: http://money.cnn.com/2004/04/07/technology/popups_study/index.htm (accessed 1 March 2014). Callfinder. (2012). Consumers rely heavily on the contact center to resolve issues. [online] Available at: http://www.mycallfinder.com/blog/2012/06/consumers-rely-heavily-on-the-contact-center-to-resolve-issues/ (accessed 1 March 2014). Dawes, J. (2004). Assessing the impact of a very successful price promotion on brand, category and competitor sales, Journal of Product and Brand Management, 13(5), pp.303-314. Godfrey, A., Seiders, K. and Voss, G. (2011). Enough is enough: the fine line in executing multi-channel relational communication, Journal of Marketing, 75(4), pp.94-109. Goodson, S. (2011). Is brand loyalty the core to Apple’s success?, Forbes Magazine. [online] Available at: http://www.forbes.com/sites/marketshare/2011/11/27/is-brand-loyalty-the-core-to-apples-success-2/ (accessed 2 March 2014). Grande, C. (2007). Ethical consumption makes mark on branding, The Financial Times. [online] Available at: http://www.ft.com/cms/s/2/d54c45ec-c086-11db-995a000b5df10621 .html#axzz2kT95cwFY (accessed 1 March 2014). Grocer. (2010). Whole Foods Market and Non-GMO project celebrate consumers’ right to choose foods without GMOs, 233(7976), October 9. Hawkes, S. (2011). Choc horror at Thornton’s – Chocolatier flees the High Street by closing 180 shops, The Sun. [online] Available at: http://www.thesun.co.uk/sol/homepage/news/money/3665462/Chocolatier- Thorntons-to-close-180-shops.html (accessed 1 March 2014). O’Cass, A. and McEwen, H. (2004). Exploring consumer status and conspicuous consumption, Journal of Consumer Behaviour, 4(1), pp.25-38. Ryan, D. and Jones, C. (2009). Understanding digital marketing. London: Kogan. Sametz, R. (2010). Achieve compelling visual coherence: build a brand identity toolkit that’s flexible, durable, shareable – and yours. [online] Available at: http://www.marketingprofs.com/articles/2010/3520/achieve-compelling-visual-coherence-build-a-brand-identity-toolkit-thats-flexible-durable-shareableand-yours/?adref=znnpbsc41410 (accessed 1 March 2014). Scoble, R. and Israel, S. (2006). Naked conversations: how blogs are changing the way businesses talk with customers. Hoboken: John Wiley & Sons, Inc. Thornton’s. (2014). Chocolate tasting. [online] Available at: http://www.thorntons.co.uk/content.jsp?pageName=tasting_guide (accessed 2 March 2014). Thornton’s. (2013). Annual reports and accounts 2013 – Rebalance and grow, revitalise and restore. [online] Available at: http://investors.thorntons.co.uk/download/pdf/Annual_Report_And_Accounts_2013.pdf (accessed 2 March 2014). Wind, J. and Mahajan, V. (2001). Digital marketing. New York: John Wiley & Sons. Inc. Appendix A: Screen Shot of Company Home Page Appendix B: Personalised gift opportunities related to brand identity Read More