StudentShare
Contact Us
Sign In / Sign Up for FREE
Search
Go to advanced search...
Free

Business and Service Marketing - Essay Example

Cite this document
Summary
The essay "Business and Service Marketing" focuses on the critical analysis of the major issues on business and service marketing. With intense competition and globalization, sustainable competitive advantage in any industry depends upon customer service…
Download full paper File format: .doc, available for editing
GRAB THE BEST PAPER96% of users find it useful
Business and Service Marketing
Read Text Preview

Extract of sample "Business and Service Marketing"

With intense competition and globalization, sustainable competitive advantage in any industry depends upon service. service has been greatly enhanced with the use of new marketing tools. New technologies and emerging market trends, for instance the growth of the customer power, disintermediation and reintermediation have had an impact on customer services (Perry, 2002). The e-commerce platform has contributed to the services being delivered in a more sophisticated manner. The retail industry too thrives on delivery of service in the face to stiff competition. Those with existing brand value have been successful in reaping the benefits of e-commerce. Tesco, the giant retailer, is UK’s largest retailer in terms of market share and the world’s biggest e-grocer (Yoruk & Radosevic, 2000). Sustained competitive advantage can be gained by offering what creates value for the customers. Porter defines value as ‘what buyers are willing to pay’. Bevan and Murphy (2001) contend that firms can do this by either lowering the costs or doing something different from competitors. Tesco had initially launched their online channel Tesco Direct but today they have moved beyond online grocery retailing and offer a wide range of products. Their website www.tesco.com enables the customers to buy online from their familiar local store. The pricing and inventory system is linked directly to Tesco.com so that the customers can select the good at the prices they are used to (Müller-Lankenau, Klein & Wehmeyer, 2004). They charge a nominal fee as delivery charges for their online customers. Besides, Tesco had the first-mover advantages in introducing online grocery shopping but in addition, it gained its market leading position by educating and empowering its customers to take up the online channel (Tse, 2005). This created the point of differentiation which added value to its service offering, thereby giving it the competitive advantage. Another point of differentiation in its services that Tesco has created is that it is the only retailer whose site is accessible by the disabled or the impaired people. The government of UK is attempting to make improve the quality of their life so that they live as normal a life as others. Tesco has taken the step and integrated accessibility into the main stream grocery site (Mairs, 2006). This accessible website was created for the partially sighted and blind people but had more of the normal visitors as well. This helped it to improve its customer base and the bran image. To ensure customer loyalty, according to Amit and Zott, a company must lock-in its customers by raising their switching costs to such a level that they have no incentive to shop elsewhere (cited by Tse, 2007). Websites should be able provide the customers opportunity to tailor their products, services and information to their needs. This enriches the relationship between the buyer and the seller. Recognizing the benefits of customer loyalty, Tesco has introduced the Club Loyalty Cards. Its Loyalty Cards helped it to move from the third position in the UK to the first (Ferguson & Hlavinka, 2006). Customer loyalty is based on the satisfaction that a customer feels during the purchasing process, which includes the display and until the payments and delivery. It could be expressed in different ways – either through repeated purchase or influencing the purchase decision of others. Loyalty Cards the carry the purchase history of the customer and through data mining technique this data can be transformed into a valuable source of information like targeting mail and personalized communications (Rowley, 2006). This data also helps the company in assessing the introduction of new services (Müller-Lankenau, Klein & Wehmeyer, 2004). The customers need to log in to get all the information. Tesco does not enable customer channel switching at any point during the transaction. This ensures that they keep the customers locked-in. Its Loyalty Cards have become an inter-industry benchmark for customer profiling and CRM. In addition to selling online, they focus on building customer loyalty by delivering personalized and value-adding services. It has integrated the physical and online channels and is thus able to serve the customers on several touch points (Müller-Lankenau, Wehmeyer, & Klein, 2006). The online strategy is an extension of the conventional marketing strategy. Tesco has segmented their Club Card shoppers into six behavior categories - price-sensitive, traditional, mainstream, healthy, convenience and fine-foods (Ferguson & Hlavinka, 2006). All their efforts are directed towards delivering relevant offers to specific sets of shoppers who behave in different ways. Their efforts have resulted in 20 to 40 percent redemption rate following their unique mailings to their 10 million members. Tesco has been very innovative is the use of data collected through their loyalty cards. As soon as they identify a new pet owner from the purchase of pet food segment, Tesco sends them a mailer containing information on caring for new pets. Their loyalty strategy is based on sophisticated application of recognition and reward. The data base helps them to decide on their store opening hours, on the pricing and promotional strategy and new store sites (Phillips, 2007). According to Porter, competitive advantage can be gained by building on the proven principles of effective strategy (cited by Delaney-Klinger, Boyer & Frohlich, 2003). Tesco did exactly this as they used their existing assets to grow. Online transactions require a great deal of trust and this enhances commercial competitiveness and advantage. In the digital economy there is greater reliance on technology and hence there is a shift towards people-oriented and process-oriented practices (Bryant & Colledge, 2002). The trust can help increase the sustainability of B2B relationships. Personal information of the credit cards has to be protected. Trust in e-commerce can reinforce the faith that customers have on any website and Tesco has been able generate this confidence. To keep the confidence level high among the customers, they do not charge the credit or the debit card till the packing is done. Besides, the virtual shopping card at Tesco Direct is stored each time the shopper leaves the virtual store thereby making it easier for the multiple family members to contribute to the shopping cart. Frequent users are offered special prices, discounts or access to special information. Virtual communities is another concept that allows the members to share their ideas and concepts and it also induces some degree of stability, growth, loyalty and commitment among the members (Flavian & Guinaliu, 2005). The visitors to the site feel a sense of belonging and it has helped to increase customer loyalty. The internet is a cheap medium to bring customers together and the more people interact with each other the richer the system becomes. iVillage (http://www.ivillage.co.uk) is a website owned by Tesco’s internet distribution division offering large number of services for women, like advice on health, beauty, leisure and work (Guinaliu, 2004). Information on this website comes from other users’ advice and this guides them for further action. This virtual community targets the high potential customers and caters to their specific needs. It has a precise and effective impact on such customers. The huge database thus collected helps them to identify what services should be offered. Segmentation becomes easier and promotional campaigns can be personalized. The same product may be distributed through Tesco physical stores but would have more value when distributed through iVillage especially most demanded products meant for women. iVillage is a virtual shopping centre for women and designed to serve their needs. The managers are deeply involved in this program and the degree of involvement has led to creation of an emotional link with the brand. In the US, Tesco will approach the American consumer the same way as it did in Eastern Europe and Asia. In countries where Tesco does not have the loyalty club cards, it sends its executives to live with the customers, to watch them shop and to watch them cook and eat (Phillips, 2007). They determine every detail about how they spend their leisure time and what they worry about. This is its way of researching into the consumer behavior and then deciding on what to offer and when. Thus it is evident that Tesco is the leader in customer service innovation and is used as an industry benchmark. Its loyalty card is very effectively used. Many firms have such loyalty cards but the data is not as effectively analyzed and made use of as Tesco. For the US they are adopting the same approach and would most likely meet with the same success. They are charging a nominal fee from their online customers for home delivery. This Tesco could do away with which could possibly increase their online customer base. They could even have a section for the youth over 18, who are eligible to place orders independently. A virtual community of the youth could help them understand the needs of the youth and introduce products and services aimed at them. This is a growing segment to tap and the potential is high. Overall, Tesco, as an online retailer, is leading the industry and demonstrates innovative use of data from its loyalty cards and iVillage platform. References Bevan, J & Murphy, R 2001, The nature of value created by UK online grocery retailers, International Journal of Consumer Studies, vol. 25, no. 4, pp. 279–289 Bryant, A & Colledge, B 2002, TRUST IN ELECTRONIC COMMERCE BUSINESS RELATIONSHIPS, Journal of Electronic Commerce Research, vol. 3, no. 2 Delaney-Klinger, K Boyer, KK & Frohlich, M 2003, The return of online grocery shopping: a comparative analysis of Webvan and Tescos operational methods, The TQM Magazine, vol. 15, no. 3 pp. 187-196 Ferguson, R & Hlavinka, K 2006, Loyalty trends 2006: three evolutionary trends to transform your loyalty strategy, Journal of Consumer Marketing, vol. 23, no. 5, pp. 292–299 Flavian, C & Guinaliu, M 2005, The influence of virtual communities on distribution strategies in the internet, International Journal of Retail & Distribution Management, vol. 33, no. 6, pp. 405-425 Guinaliu, M 2004, LA COMUNIDAD VIRTUAL, Retrieved online 12 February 2009, from http://catedratelefonica.unizar.es/ECE/2006/Guinaliu_CV.pdf Mairs, C 2006, Inclusion and Exclusion in the Digital World, THE COMPUTER JOURNAL, vol. 50, no. 3 Müller-Lankenau, C Klein, S & Wehmeyer, K 2004, Developing A Framework For Multi Channel Strategies – An Analysis Of Cases From The Grocery Retail Industry, Retrieved online 12 February 2009, from http://ecom.fov.uni-mb.si/proceedings.nsf/0/fbb45414baf2bdafc1256ee00030ea56/$FILE/34Mueller.pdf Müller-Lankenau, C Wehmeyer, K & Klein, S 2006, Strategic channel alignment: an analysis of the configuration of physical and virtual marketing channels, Information Systems and e-Business Management, vol. 4, no. 2, pp.187-216 Perry, R 2002, Digital brand building, Corporate Edge, Retrieved online 12 February 2009, from http://www.cim.co.uk/mediastore/pp2629_R_Perry_ThesisLR.pdf Phillips, T 2007, Approaching the U.S. Market, Global Retail Giant Tesco Will Continue to Build Loyalty Through Research, Retrieved online 12 February 2009, from http://www.customerthink.com/article/tesco_does_research Rowley, J 2006, Customer relationship management through the Tesco Clubcard loyalty scheme, International Journal of Retail & Distribution Management, vol. 33, no. 3, pp. 194-206 Tse, T 2007, Reconsidering the source of value of e-business strategies, Strat. Change, vol. 16, pp. 117–126 Yoruk, D E & Radosevic, S 2000, International Expansion and buyer-driven commodity chain: The case of Tesco, Retrieved online 12 February 2009, from http://profesores.ie.edu/enrique_dans/TESCO/international%20expansion.pdf Read More
Cite this document
  • APA
  • MLA
  • CHICAGO
(“Business and service marketing 1 Essay Example | Topics and Well Written Essays - 1500 words”, n.d.)
Business and service marketing 1 Essay Example | Topics and Well Written Essays - 1500 words. Retrieved from https://studentshare.org/miscellaneous/1551652-business-and-service-marketing-1
(Business and Service Marketing 1 Essay Example | Topics and Well Written Essays - 1500 Words)
Business and Service Marketing 1 Essay Example | Topics and Well Written Essays - 1500 Words. https://studentshare.org/miscellaneous/1551652-business-and-service-marketing-1.
“Business and Service Marketing 1 Essay Example | Topics and Well Written Essays - 1500 Words”, n.d. https://studentshare.org/miscellaneous/1551652-business-and-service-marketing-1.
  • Cited: 0 times

CHECK THESE SAMPLES OF Business and Service Marketing

KL Accountants Business Need for E-Marketing Strategy

Seeing the importance and role of e-marketing in present day business, KL Accountants Business has decided to implement a most modern and effective e-marketing strategy for its business in order to improve its business and corporate working along with operational aspects.... Business marketing has always been one of the most important business activities.... Since the day when the first business deal took place, no matter what it was that they initially bought or sold, but business marketing was there....
12 Pages (3000 words) Essay

Service and Relationship Marketing

This paper is fundamentally concerned about service and relationship marketing in the tourism industry, with special reference to Werribee Park in Victoria, Australia.... Customer relationships are of key concern to make marketing strategy of the Werribee Park.... Changes have to be brought in with a strategic marketing approach on the basis of the service and relationship marketing.... "Relationship marketing is not only a new or improved way of communicating with customer it is much more than that....
5 Pages (1250 words) Essay

Application of Service Marketing through the Restaurant Business

Because marketing is concerned with both goods and services, there is a difference between product marketing and service marketing.... The paper 'Application of service marketing through the Restaurant Business' evaluates the application of service marketing in the real-life context.... To see service marketing at work, a case study was employed with Nahm, one of the leading Thai-inspired restaurants in London.... The author states that with the known information about service marketing, Nahm's service marketing was examined....
18 Pages (4500 words) Assignment

E-Marketing, Web Design, Business-to-Business, Sales & Customer Service in Modern Banking

With expanding information technology it is wise for the banks to adopt and leverage it, for expansion of business and better and faster delivery of services to the customer.... The paper "E-marketing, Web Design, Business-to-Business, Sales & Customer Service in Modern Banking" using the example of a well-known bank, it demonstrates that given the complexity of banking services and increased customer demands, banks are forced to constantly improve their Internet technologies to optimize customer service....
9 Pages (2250 words) Case Study

Service Marketing

trong positive connections between loyalty and image have been reported broadly in the area of service marketing.... Positioning strategy starts with products that could be a type of service, merchandise, an institution, a financial product or service, a person, or even a company.... Positioning strategy is a part of service marketing1.... The strategy and effective service process will be discussed later in the study....
4 Pages (1000 words) Research Paper

Service Quality and Marketing Performance in Business to Business Markets

The directors of SPSL have decided to employ a sales force to promote their business and services within the potential business clients of Manchester.... The current study "Service Quality and marketing Performance in Business to Business Markets" is based on the analysis of business to business (B2B) marketing relationship of hypothetical plumbing service providing company known as Saxon Plumbic Services London Ltd.... Apart from motivating the consumer to purchase a service, the sales force is also responsible for building the image of an organization, imparting information on services, maintain two-way communications and handling queries and complaints (Jaramillo and Marshall, 2004)....
18 Pages (4500 words) Research Paper

Service Marketing: Products and Services

This essay "service marketing: Products and Services" discusses service which involves a degree of intangible properties and interaction with a customer.... It is easier to state the conceptual differences between products and services than to develop the elements of the marketing mix in an appropriate manner.... The additional elements of the marketing mix that services require new competencies and skills that organizations must acquire.... he distinctive nature of Services is highlighted by the following quote:Services and goods have some conceptual differences and numerous tactical differences that must be considered in designing their optimal marketing and management....
11 Pages (2750 words) Essay

Relationship Marketing

The paper "Relationship marketing " describes the relationship marketing efforts as suggested by a number of researchers involve customer loyalty reward programs and direct mailings.... For each customer segment, companies develop unique marketing strategies segment using IT and new media to attract and retain customers.... With tailored relationship marketing strategies, customers become loyal to the company.... Relationship marketing efforts as suggested by several researchers involve customer loyalty reward programs and direct mailings (Matz, et al....
15 Pages (3750 words) Essay
sponsored ads
We use cookies to create the best experience for you. Keep on browsing if you are OK with that, or find out how to manage cookies.
Contact Us