Consumer Analysis for Tesco in the UK - Book Report/Review Example

Introduction: The capa to pace ahead of the market is contingent upon the internal organization of a business and their approach to service quality. Specifically, we focus on the Tesco gas stations in the UK. While there are several key alternative that can be accessed by this organization, the objectives of my research were to identify how and if Internal marketing is the primary means through which the company can increase its brand appeal. This is crucial when considering how consumers perceive brands as opposed to how companies deliver the message of their brand image. Consumers at times cognitively organize brands into categories which make it increasingly difficult for brands to compete with juggernauts such as Coca-Cola because they have seemingly captured their own market (Nedungadi 2005, 498-503). Furthermore, research in psychology and consumer behavior in terms of the information processing paradigm have analyzed the “strength of association” between concepts and has demonstrated the importance that variables including frequency and recent exposure have in impacting the brands strength of association. This becomes important when consumers attempt to retrieve information when given relevant cues (Nedungadi 2005, 498-503). Modern studies regarding categories and categorization processes have set a precedent for the importance of “prototypicality as a determinant of the associated strength between a category concept and members of the category (Nedungadi 2005, 498-503).” Prototypicality is simply a measure of how representative an object is of a category (Percy 2007, 265). This is done by individuals rating how good an example they consider an object to be of a category. This is crucial when considering how consumers perceive brands as opposed to how companies deliver the message of their brand image. Consumers at times cognitively organize brands into categories which make it increasingly difficult for brands to compete with juggernauts such as Coca-Cola because they have seemingly captured their own market (Nedungadi 2005, 498-503). Furthermore, research in psychology and consumer behavior in terms of the information processing paradigm have analyzed the “strength of association” between concepts and has demonstrated the importance that variables including frequency and recent exposure have in impacting the brands strength of association. This becomes important when consumers attempt to retrieve information when given relevant cues (Nedungadi 2005, 498-503). Modern studies regarding categories and categorization processes have set a precedent for the importance of “prototypicality as a determinant of the associated strength between a category concept and members of the category (Nedungadi 2005, 498-503).” Prototypicality is simply a measure of how representative an object is of a category (Percy 2007, 265). This is done by individuals rating how good an example they consider an object to be of a category. Internal Marketing: The marketing strategy that I chose to focus on is the Internal Marketing model. This model is defined by 5 key features: 1. The creation of an enabling culture: this is accomplished when employees are empowered by management through encouraging and fostering creativity and innovation. Furthermore this can be accomplished by allowing initiatives and accountability and responsibility of their decisions. 2. Participative Hiring: this occurs when the current staff has a word in the hiring of new staff. This allows employees to feel as if they have a critical part in the creation of the corporate structure. 3. Incentive and Reward: Through the recognition of employee accomplishments, company’s can retain employees and foster creative and healthy competition. 4. Demonstrating fairness during conflicts and unpredictable situations: fair treatment of employees when confronted with unpredictable situations and difficult moments like death of the near family members. This can be achieved by setting aside emergency funds. 5. Human Capital Investments: By making regular investments in employee training an organization is capable of ensuring that its structure grows stronger (Hugh, 2006). The primary understanding of internal marketing is that employees of an organization are its first market. Consequentially, the concept of internal marketing is predicated on the idea of the employee as a customer. Internal marketing posits that personnel are the first market of a service organization. Furthermore, the framework of internal marketing is not limited to the “Business to Consumer” customer service staff alone. Even the employees who do not interact directly with customers may have an impact on the perceived service quality because they directly influence the service providers. If all employees perform their jobs well or even exceed expectations they become a value-added aspect of the provision of service and product (Hugh, 2006). The literature analysis in my report revealed that it is possible to classify different forms of Internal Marketing according to their scope and dominant perspective into the following groups: A: internal marketing as a form of human resource management. B: internal marketing as a form of marketing techniques in internal marketplace. C: internal marketing as a precondition for satisfied external customers. D: internal marketing as a source of competitive advantage (Hugh, 2006). For the purpose of our research project, we focused on 1,3, and 4. This is key to identifying not only how consumers react to internal marketing, but employees as well. In fact, organizational responsibility becomes a major topic when discussing those groups. This is because the organizational structure has a huge impact on the way that consumers perceive customer service by proxy of the way that employees treat the customer. Organizations increasingly acknowledge the necessity of internal or employee communications. Due to the fact that contemporary organizations become increasingly focused on retaining a satisfied workforce with changing values and different demographics, they have necessarily had to think more seriously about how they communicate with employees. Its becoming more and more evident that modern management needs to give the internal audience equal attention to those external to the organization. Internal marketing follows along the lines of communication that occur within an organization. Internal communications can be described as various transactions between individuals and groups in organizations at various levels and in different areas of specialization. In order to have effective internal communications, there needs to be 3 primary objectives: 1. The information that is communicated to the employee audience is understood and accepted by the audience with respect to the content, intent, relevance, and merit of the message. 2. The goals of the communications with regard to motivating, directing, informing, or gaining the participation of the employee audience is achieved among the majority of employees. 3. The end result of an improved internal dialogue is achieving improvement in one or more of the core success components: product quality, sales, profitability, workforce performance and satisfaction, and, ultimately, customer satisfaction (Hugh, 2006). Furthermore, internal communication has specific goals: 1. To create the sense that employees are an important asset to the organization. 2. To improve morale and foster goodwill between employees and management. 3. To inform employees about internal changes. 4. To explain compensation and benefit plans. 5. To increase employee understanding of the organization and its products, organization, ethics, culture, and external environment. 6. To change employee behavior toward becoming more productive, quality oriented, and entrepreneurial. 7. To increase employee understanding of major health/social issues or trend affecting them. 8. To encourage employee participation in community activities. Internal communications help ensure that internal marketing serves its purpose by communicating specific messages throughout a company. Where there is a lack of communication within an organization, this breaks down the potential for each employee to represent a singular message. Internal marketing has several benefits to an organization. First of all, it encourages the internal market to perform better. Through the provision of rewards and incentive based programs, a company can ensure that its human resources have the proper motivation to meet company expectation. Furthermore, Internal marketing empowers employees and gives them accountability and responsibility. This is key to them adopting the same brand image consistent with the organizational framework. This helps create a common understanding of the business organization and encourages employees to offer superb service to clients by appreciating their valuable contribution to the success of the business. When employees adopt this mindset, they have the tendency to increase the brand equity of a business. It is important to help non-marketing staff learn and become capable of performing their tasks in a marketing-like manner. When employees identify that at all times, their brand is being represented, they become increasingly conscious of the consumer experience that they are creating. When employees become conscious of their role in representing the brand, it can help improve customer retention. Internal marketing is also valuable because it helps integrate the business culture, structure, human resource management, vision and strategy with the employees professional and social needs. When employees can self identify with the organization, they become increasingly likely to represent the organization in their personal lives. Furthermore, internal marketing is key to fostering good coordination and cooperation among the differing departments within a firm. This is the result of the proper flow of information within the firm. When individuals do not communicate, it creates the potential for human error. Error can be minimized with the use of Internal marketing and focusing on internal communication. This is also key to employees following a set of rules that are key to ensuring they represent not only the company brand but also decreases their liability to the firm. But lastly, Internal marketing provides a bases for periodic evaluations of employee performance (Hugh, 2006). While internal marketing is a relevant marketing model, there are a couple of barriers to implementation that make it less attractive as an approach. First of all, managerial incompetence in interpersonal, technical and conceptual skills is some of the stumbling blocks against successful internal marketing. It is hard for organizations to access competent managers, 100% of the time. It is increasingly difficult for companies to retain competent individuals without expecting to pay above their pay rate. This can also lead to having employees with a poor understanding of the internal marketing concept. This means that a company needs to ensure that its employees are proficient prior to hiring which makes the hiring process much more tedious. Furthermore it becomes difficult to implement when there is individual conflict and conflict between departments. Furthermore, in situations of rigid organizational structure coupled by bureaucratic leadership, the success of internal marketing is diminished. Companies with a large structure tend to have managerial staff who ignore subordinate staff. Moreover, treating employees as a means to an end will also cause this form of marketing to breakdown. Also, when companies prevent employees from accessing information about the company and resist change, it becomes increasing troublesome for an organization to implement successful internal marketing. Research Findings Evaluation Building a strong, healthy relationship with customers tops the Marketing Science Institute (MSI)’s 2006-2008 research priorities. Understanding customer behavior resulting from this relationship in tandem with the customers’ socio-cultural context continues to top MSI’s 2008-2010 hot topics. This is not surprising given the consensus that customer retention has a bigger impact on a firm’s profitability than does customer acquisition (Ataman 2010, 866-882). Two major ways firms build this relationship are through brands and value creation (Ataman 2010, 866-882). “Branding has emerged as a top management priority in the last decade.” Meanwhile, in the relationship marketing literature, the inter-relationships among perceived value, satisfaction, brand loyalty, and market share figure predominantly (Davis-Sramek 2010, 215-230). While there is consensus that satisfaction is positively related to loyalty, marketing researchers concur that satisfaction is not enough (Davis-Sramek 2010, 215-230). Similarly, deep down satisfaction lies satisfaction strength that is critical in translating stated satisfaction into loyalty. In this vein, researchers suggest that perceived value, defined as customers’ overall assessment of “the utility of a product based on perceptions of what is received and what is given” (Osinga 2010, 173-185), might represent an economic construct at a higher level of abstraction with broader implications for predicting customer loyalty than customer satisfaction (Osinga 2010, 173-185). Three questions come to mind: (1) Has this prediction been consistently supported? (2) How does the role of the economic driver change when a psychological driver is included? and (3) Does this hold true for behavior under abnormal conditions such as brand transgressions? The research that I conducted confirmed that hypothesis of the Internal Marketing model. It indicated that a company can benefit from marketing within its organization (Uncles, 2010). This is key to not only increasing employee morale but also to the retention of customers. Given the context of the research that I conducted, I found that the model only supports organizations with massive infrastructures. For a situation like Tesco, it becomes increasingly difficult to localize the marketing platform. Because the company has several locations in a small market, their goal is to not compete with themselves but the other brands. This can function best when the employees localize their strategies. We found that individuals have regular stores that they stop and and unlike the model, a company cannot survive on an overarching strategy. In fact, employees require a degree of freedom to ensure that they retain a dedicated and loyal customer market. This is not due to a failure in the model, rather it is the context in which the model is applied. By allowing employees to have more freedom on the front end, we found the Tesco is more likely to retain loyal customers. On the other-hand, the theory reaffirms the research findings and can be said to be correct in its reaffirmation of the initial hypothesis. Personal Reflection I learned that they are various marketing models but there is no such thing as a one size fits all solution in the marketing world. In fact, solutions require a degree of tailoring to ensure that they fit the specific situation. for example, in the context of Tesco, the Internal Marketing model fails to emphasize a reliance on input from employees on the front line. While it expresses a degree of importance, it fails to realize the efficacy of the employees in capturing loyal consumers from the local market. Especially in terms of the degree of segmentation, there is a need to reinforce the importance and value of the retail end employees. I am extremely satisfied with the way that this research project was carried out. Furthermore, if I were to re-do the project, I would use a different model. The reason why is because I would like to know more about how consumers make purchasing decisions when attempting to purchase gas. This is different because a consumer behavior based model is uniquely different to the internal marketing model . The use of a consumer based brand equity scale would have been crucial in helping identify some key areas where the research could have been improved (Vukasovic, 2009). The consumer-based brand equity scale was comprised of five constructs related to brand equity: brand awareness, brand associations, brand superiority, brand affect, and brand resonance (Wilcox, 2008). This dissertation represents one of the first attempts to operationalize The 22 Immutable laws. The measurement items were established based upon an extensive review of the literature and in the case of brand associations, by examining data collected from consumers by means of a qualitative elicitation. More specifically, results from an exploratory factor analysis showed that brand associations was comprised of two dimensions which are attributes and benefits. This analysis is specific to goods and products. Brand resonance was found to be comprised of two dimensions: sense of community and active engagement. Furthermore, minor item modifications were made to the other constructs of interest (brand awareness, brand superiority, brand affect) to ensure the reliability and validity of the measures. In order for Tesco to maintain its superiority, a re-evaluation of their marketing strategies will not only optimize their marketing expenditures but also maximize their implications in terms of consumer perceptions (Wong, 2008). Furthermore, in terms of socialization within the family it was found that individuals are more likely to adopt the brand preferences of their household. Results prove that positive brand information provided by the family has effects on the formation of brand awareness-associations and perceived quality, and this may lead in turn, to brand loyalty and overall brand equity. The effects of the information provided by the family are higher than those of the marketing variables studied. Results also show that brand loyalty is much closer to the concept of overall brand equity than brand awareness-associations and perceived quality. References Ataman, M. Berk. Harald J. Van Heerde, Carl F. Mela. (2010) The Long-Term Effect of Marketing Strategy on Brand Sales. Journal of Marketing Research 47:5, 866-882 Davis-Sramek, Beth. Richard Germain, Theodore P. Stank. (2010) THE IMPACT OF ORDER FULFILLMENT SERVICE ON RETAILER MERCHANDISING DECISIONS IN THE CONSUMER DURABLES INDUSTRY. Journal of Business Logistics 31:2, 215-230 Hugh Burkitt and John Zealley (2006). Marketing Excellence: Winning companies reveal the secrets of their success. John Wiley & Sons Ltd.. p. 295. ISBN 978-0-470-06027-8. Nedungadi, Prakash J. Wesley Hutchinson (2005), "THE PROTOTYPICALITY OF BRANDS: RELATIONSHIPS WITH BRAND AWARENESS, PREFERENCE AND USAGE", in Advances in Consumer Research Volume 12, eds. Elizabeth C. Hirschman and Moris B. Holbrook, Provo, UT : Association for Consumer Research, Pages: 498-503 Osinga, Ernst C. Peter S.H. Leeflang, Jaap E. Wieringa. (2010) Early Marketing Matters: A Time-Varying Parameter Approach to Persistence Modeling. Journal of Marketing Research 47:1, 173-185 Percy, L. and Rossiter, J. R. (2007), A model of brand awareness and brand attitude advertising strategies. Psychology and Marketing, 9: 263–274. doi: 10.1002/mar.4220090402 Uncles, Mark D. (2010) Broadening the scope of brand management. Journal of Brand Management 17:6, 395-398 Vukasovic, Tina (2009) "Searching for competitive advantage with the aid of the brand potential index", Journal of Product & Brand Management, Vol. 18 Iss: 3, pp.165 - 176 Wilcox, James B. Debbie A. Laverie, Natalia Kolyesnikova, Dale F. Duhan, Tim H. Dodd, (2008) "Facets of brand equity and brand survival: a longitudinal examination", International Journal of Wine Business Research, Vol. 20 Iss: 3, pp.202 - 214 Wong, Ho Yin. Bill Merrilees, (2008) "The performance benefits of being brand-orientated", Journal of Product & Brand Management, Vol. 17 Iss: 6, pp.372 - 383 Read More