Chapter 2 Ocado

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Chapter II

Literature Review

2.1 Introduction

This chapter is based on the critical review of the literature available on marketing, relationship

marketing, and customer relationship management. The academic researchers from credible

sources like books and academic journals are used to access relevant studies. The introduction of

the selected company Ocado and its CRM strategies review is also part of this chapter.

2.2 Definitions of Marketing, RM, and CRM

2.2.1 Marketing

According to the UK Chartered Institute of Marketing, marketing is defined as, the management

process responsible for identifying, anticipating and satisfying customer requirements profitably

(2010). It is clear from this definition that the key consideration is the customer and their needs. A

common misconception with the concept of marketing is that it refers solely to the production of

promotional materials. However, marketing encompasses much more; marketing is a management

process whereby the resources of the organisation are utilised to satisfy the needs of selected

customer groups... first and foremost an attitude of mind rather than a series of fundamental

activities (Wilson and Gilligan, 2005, p.8)

Marketing is not just a case of taking existing products and promoting them to more customers; it is

one of the core management processes of an organisation to assist them in improving current

products, and developing new ones. It also encompasses the staff within the organisation, the brandperception within society, and any potential method of customers receiving a message about the

company, its products, or its services (Broady-Preston, 2008).

Fig. 2.1 Marketing Process


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2.2.2 CRM

Customer relationship management (CRM) is often referred to in a similar vein to relationship

marketing. Although the two concepts differ slightly, with CRM concentrating purely on customer

relationships and incorporating systems and processes... to integrate all sources of information about

a customer (Palmer, 2011, p.210), they have a similar philosophy; both CRM and RM are

concerned with building successful long term and trusting relationships with customers for mutual

benefit (Broady-Preston and Felice, 2006, p.527). A successful customer interaction for a library is

one whereby the users needs are understood and taken into account w hen constructing the library

offering.


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2.1.3 Relationship Marketing RM

Relationship marketing can be defined as business and marketing strategy that encompasses all

activities and technological methods must be revolved around customers (Anton and Hoeck,

2002). The approach of RM has got huge attention since 1990s and afterwards new approaches

have been generated such as one to one and CRM. CRM and one to one have suggested the same

aspects and are now being offered by various organizational experts.

2.3 Relation between Marketing and CRM

2.3.1 Relationship Marketing Concept

This concept was the foundation of marketing in which consumers get products and services

from suppliers. The marketing concept was derived from commodity-based culture; in which

goods are being produced by families in order to create cooperative civilization for example

selling of cereals requires some marketing aspects. The marketing word has been arrived from


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the term market which implies that the place where group of people interchange products and

services. The Berry (1983) gave the useful approach called relationship marketing (RM), which

elaborates the method that bring customers and the manufacturers at a same platform. The goal

of RM is to create customers loyalty that will bring business for the company in the upcoming

future.

As per stated by Sheth (2002) that three key incidents have attracted companies towards RM.

Energy crises and subsequent economic inflation in 1970 decreased the demands of products and

services, which affected the profitability of organizations up to great extent. Sheth et al., (1988)

stated that the worsening situation of the market led companies to realize the need of marketing

approaches that transferred the approach of transactional marketing into relationship marketing.

Second, various researches concluded that traditional marketing was failed to create demands for

the products and services and new type of marketing would be needed to attract customers. Last

but not the least, product quality were creating issues for companies, so new programs have been

launched to develop a stronger bond between suppliers and companies. It enables companies to

get desired raw materials on time that help them to improve quality of goods. Sheth (2002)

discussed the three essential factors, which derives the fundamentals of relationship marketing.

The facility of internet and IT has helped companies to get engaged in customer

relationship marketing.

The techniques of selecting a desired segment has emerged the concept of relationship

marketing rather than selling their products to mass market.


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The theory presented by Sheth and Sisodia (1999) suggested that organizations should

employed customers outsourcing in order to tackle non-profitable customers.

It was recommended by Gronroos (1990) that relationship marketing should be abandoned when

it is not suitable for the particular set of customers. As stated by Coviello et al. (1997) that RM

can be described as set of integrating activities involving various functions of the company, in an

attempt to built, facilitate and maintain relationships with people over time.

2.3.2 Customer relationship management concept

CRM has put emphasis on the technology that will enable organizations to built close

relationship with customers and manage their data in the organization. CRM includes the ERP,

the support of customers, the help desk, and data mining facilities (Peel, 2002). The elements of

CRM were introduced in 1990s, emphasizing on arranging activities of call centre (Roya Rahimi,

2007). Systems integration, enhanced communications, internet adoption, information

technologies, improved analytics and data management systems have contributed in the

development of CRM (Greenberg, 2001). After the emergence of information technology, CRM

has been seen as integrated techniques derived from technologies such as: data mining, websites,

data warehouse, helpdesk, sales, accounting, intranet/extranet and ERP. Information technology

accumulates useful integrated data in order to assemble relevant information needed to make a

close connection with consumers (Bose, 2002).

CRM utilizes the information technology which must be employed with the strategies of

relationship marketing in to make a closer relationship with customers (Gummesson, 2008).

Nairn (2002) has further elaborated that CRM is the business strategy for the long run time

period, which emphasized on accumulating and evaluating customer information. Different

customers should receive distinct treatment from the organization and best customers of the

organization should have right to get excellent services in order to enhance loyalty of customers,

which brings profitability for the organization.

The concept was endorsed by Buttle (2003) in his studies that CRM should be considered as core

business strategy, enabling the organization to form a linkage between internal and external


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networks so as to build and distribute value to selected consumers. Buttle (2003) has explained

the significance of high-quality consumer data that should be gathered by the company to

enhance value in the packages (Ngai, 2005). These days everyone is familiar with the approach

of CRM but in 90s it was not considered a useful approach. It would be accurate to say that RM

talks about broader prospectus, while one to one and CRM encompasses the concept of supplier-

customer interaction. CRM has also utilized the strategies and frameworks of relationship

marketing, but it mainly points out the practical application of customer relationship (Evert

Gummesson, 2002).

2.4 Process of CRM and its features

The process of CRM started with the data collection activities in order to evaluate characteristics

of consumers, which must be employed in specific marketing activities (Swift, 2001). The

concept of CRM is very old, but it highlighted recently due to following reasons. 1) Customers

relationship has started recognizing as the useful competitive strength of the company in the

industry 2) Facilities of data warehousing and data mining has enabled companies to acquire

piles of data regarding customers in order to ensure the effective management of customers 3)

The technology of Internet has introduced new dimensions for the marketers and organizations,

through which information can be accessed promptly. It would be accurate to say that demand of

one to one market has been increased due to the technological facilities, enabling the

organizations to evaluate customersbehaviour efficiently.


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Parvatiyar and Sheth (2002) and Ngai et al. (2009) have categorized CRM into four major

aspects: (1) customer recognition, (2) customer attraction and attention, (3) consumer increment

or development and (4) customer management and retention. All these dimensions are closely

related to each other and should be employed together (Au et al., 2003). The above dimensions

of CRM have been illustrated in the following points.


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1. Customer acquisition: It is the basic step of CRM, which includes customer

segmentation and analysis of selected segments. (Kracklauer et al., 2004). Customer

segmentation is the process, in which the whole market is sliced into certain groups and

each group contains homogenous customers (Woo et al., 2005). After customer

segmentation marketers get involved in the process of targeting, in which the selected

segments are chosen by company on the basis of customers characteristics. Qualitative

and quantitative data approaches facilitate the selection process and enable the company

to choose a particular group for targeting.

2. Customer attraction: At this stage, companies get engaged in allocation of resources and

other efforts to attract the selected segments. Customers can be attracted through certain

drivers such as price or distinct features in the product. The approach of direct marketing

is also considered the valuable driver in order to attract customers. It is the component of

the marketing mix, which motivates and encourages consumers to buy the product (Liao

and Chen, 2004; Prinzie and Vandenpoel, 2005). Direct mail and distribution of coupons

are the segments of direct marketing. However, it requires an appropriate technique to

clearly communicate the message to buyers (Kracklauer et al., 2004).


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3. Customer development: This dimension has emphasized the concept of increment in the

transactional activity and profitability of individual customer. However, the integral part

of this dimension is to analyze the lifetime value of customers and to initiate the approach

of up/cross selling. Lifetime value of customers can be defined as the expected net

income of the company, which might come from the specific customer (Rosset et al.,

2003). Up/Cross selling can be considered as promotional activities, utilizes to enhance

the customers consumption of closely related products or services in the given company

(Prinzie and Van den Poel, 2006). These activities are based on the market basket

analysis to evaluate customer purchase behaviour (Kubat et al., 2003).

4. Customer retention: It is the most essential dimension of the CRM. As per stated by

Kracklauer et al. (2004), customer satisfaction is required to achieve customers retention.

Customer satisfaction is described as the expectations of customers (evaluated through

company image, personal standard, knowledge about alternatives, etc) with the actual

performance (evaluated through actual experience, the significant intuition regarding

products performance, product and service appropriateness with the requirement etc).

The value provided by the company to customer will be reflected in their perceptions

which generate customer retention. Utilization of high quality products generates the

affirmative and surprising feeling for customers, which leads the company to gain loyalty

of customers. CRM dimension have three components including bonus and loyalty

programs, complaints management and 1to1 marketing. One-to-one marketing requires

personalized and customized marketing schemes designed to support, analyze, detect and

forecast changes in customer behaviour (Chen et al., 2005a; Jiang and Tuzhilin, 2006).

Bonus and loyalty programs include certain supporting activities required to establish a

long term customer relationship. Loyalty programs involve service quality, credit scoring

and churn analysis to analyze competitive position as compared to competitors (Ngai et

al., 2009).


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2.5 Relation between CRM and development of customer service

Evaluating customer attraction, the scholar Baesens et al. (2002) has applied the model of

purchase incidence on the direct mail organization of the Europe. The model was analyzed the

repurchase behaviour of customers. Buckinx et al. (2004) has designed a model, which predicts

the behaviour and for this purpose coupons were circulated by a FMCG retailer. The model

utilized the past behaviour of consumer and its demographics in order to predict about

repurchase. Ahn et al. (2006) gave an algorithm, which is used to classify the types of customers

and divides into non-purchasing and purchasing groups.

Brijs et al. (2004) have sorted out the issues regarding goods assortment analysis, and introduced

a microeconomic integer-programming model for product selection, utilizing all goods that are

bought in a set. Data has been gathered from the purchase department of automated convenience

store. Chen et al. (2005b) proposed a technique to elaborate and identify patterns of customer

purchasing behaviours and for this purpose data was utilized by database of stores. In their study

Prinzie and Van den Poel (2006) evaluated the purchase sequences of buyers to recognize cross-

buying patterns required to analyze the chance of cross-selling. Later, Larivire and Van den Poel

(2005) have evaluated descriptive variables and their influence on the churn probability.

Variables, which includes in the research were historical customer behaviour, buyers

heterogeneity and some other traditional variables linked to intermediaries. These three variables

determined the three outcome measures: customers profitability evolution, partial-defection,next buy.

Hung et al. (2006) predicted the churn prediction in mobile telecommunication, using service

register, call records, customer demographics, data regarding billing and contract data. A method

was established by Chen et al. (2005a), by integrating demographic variables, transactional

database and consumer behavioural variables to recognize and identify changes in the behaviour

of consumers. Ha et al. (2006) have described recommender system which suggests web content,

which enables the company to identify users preferences, while visiting a site. Cho et al. (2005)

gave a new framework about product recommendation and suggestion in order to predict

customer purchase behaviour. The empirical study of Chang et al. (2006) utilized consumers

online navigation to identify users search products and in this case digital cameras products

were considered in E-store.


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2.6 Benefits of e-CRM

E-CRM or electronic CRM has been designed to cater the needs of the customer efficiently and

provide compensatory advantages to the customer. It enables the organization to achieve its

essential goals such as reducing costs and increasing profits. Advantages E-CRM

implementation has been explained by Web associates (2000).

2.6.1 Improved Customer Satisfaction

Due to E- commerce or electronic business, consumers are able to collect a huge amount of

information about products and competitors products. Online facilities provided to companies

have enabled them to create environment filled with information, which utilized by companies to

bring innovation in the product design. Those companies, which identify the desires of

consumers and serve their needs swiftly, are able to generate values and attain loyalty of

customers (Singh, 2001). Services should be provided to customers in accordance with their

needs and convenience

However, as compared to the conventional method of sales, services provided through e-

commerce is more difficult as compared to the traditional methods as the relationship between

merchants and customers is week because of having less chances of meeting. Customers can


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switch to competitors products, by browsing a new website. It has been seen that online

customers would like to serve promptly, together with high quality service. Various features,

convenience and reactive services are the demands of online customers (Zhao and Gutierrez,

2001). The e electronic commerce has provided solutions to advertisers and marketers, by

generating significant information about customers. Moreover, the efficient value chain and

various retail channels have enabled the companies to create maximum and customized

satisfaction (Adam et al., 1999).

2.6.2 Increase in Customer Loyalty

As per recommended by Turban et al. (2000) customer loyalty is based on customer satisfaction.

Jarvenpaa et al. (2001) have proposed the suggestion of Doney and Cannon (1997) that purchase

decisions are highly depended on the trust. The facility of self service in e-commerce must be

relevant, immediate, private and easily accessible: E-services provided by company should

include relevant factors such as desired goods and services can be searched as quickly as

possible, product features must be elaborated, safe electronic system, up to date information

about product should be available and feedback to customer queries should be given quickly.

These factors will earn loyalty of online customers and increase the likelihood of repeat

purchasing (Turban et al., 2000). As per suggested by Ruyter (2001, p. 186) that online service is

an interactive medium for buyers through which companies provide technology driven customer

service. It has strengthened the bond between customers and companies as companies are

providing value added packages and services through E-commerce. The new facilities have been

utilized by companies to generate personalized, customized and appropriate information about

customer. Customers appreciate companys efforts if details of facilities are available such as

delivery and payment details on B2C e-commerce.

2.6.3 Technology Advancement Support

Other features of E-services such as interactive and personalized customer communications,

accuracy and speed have improved the tracking facilities and also kept the records of

transactions. Moreover, 24x7 services are provided to consumers, which have enhanced loyalty

of consumers. Companies can provide quick feedbacks to customers and encouraged them that

their queries will be solved in accordance with their needs. Email, fax and e-mail have been

utilized to answer queries of customers regarding E-commerce.


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Initially, the phone medium was used for interaction, handled by the staff of call centres, which

was later furnished by electronic commerce and technology driven products, which have

extended the productivity of traditional call centres and these days email, games and web

interactions that have been utilized to serve customers. The new e-front office integrates various

web channels for example computerized e-mail response, self service portals, call centre

negotiators or and advisors, web knowledge portal, etc. These centres are usually called

telewebs.

2.6.4 Enhancement of Service Design

The study of Ho and Wus (1999) concluded that following services launched by companies in e-

commerce department have been liked by customers up to a great extent: product characteristics,

homepage presentation, information characteristics, technological characteristics and logistical

support. In order to provide logistical support, companies need to provide instant response to

consumers through fax or e-mail and should deliver goods as quickly as possible. Company

should also offer after sales service, which enables it to accumulate the response about products.

For this purpose companies need to install latest technological gadgets such as structured

information systems, modems, etc. The information factors enable the company to process and

generate authentic output information and transactions to be conducted in the secured

environment.

2.7 The Online Retail Environment

The progress of Internet medium and e-commerce has attained new hikes in last two decades

(Constantine & Lockwood, 1999). Nevertheless, the Internet medium is the best platform for the

deliverance of products at cheaper rate, but it has also raised some questions regarding customer

satisfaction and loyalty. As the medium has also permitted consumers to shift to competitors

products promptly, so it would be accurate to say that e-businesses have increased competition

between companies. Heskett (1994) has put an emphasis on the satisfaction and loyalty which is


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needed to achieve extraordinary financial performance. Certain risks have also associated with

the e-business as there is a high chance that company might lose potential customers, when the

customers are unable to approach due to some technical issues or other reasons.

E commerce usually forces to design aesthetic websites, which might have an appealing look but

will create frustration as customers are unable to utilize it appropriately. As per suggested by

Ody (2000), speed and convenience are the two primary factors that forces customers to get

engaged in the online transactions. Ziff-Davies (2000) points out that the concept of the Internet

has raised customers' sensitivity regarding efficient service. So if the company designs websites

that is easily approachable and accessible to customers, it will enhance the satisfaction of

customers. As suggested by Donlan (1999) that delivery is one of the significant components in

meeting the needs, expectations and perceptions of customers. So the company should keep in

mind these factors, while designing the website of the company, which will be utilized to attract

customers. The decision of adding any particular feature in the website must be based on the

needs and segments of customers, as these features will add value in the companys package

(Cox & Dale, 2002).

2.8 Ocado- Company profile

Ocado was formed by three ex-Goldman Sachs directors (Jonathan Faiman, Jason Gissing and Tim

Steiner) in early 2000 and was originally named Last Mile Solutions. Financed by a 46 million

investment and 40% ownership stake by Waitrose, Ocado has taken a deliberate and carefully

planned approach to developing its business, under co-Managing Directors Nigel Robertson and

Roger Whiteside and Logistics Director Robert Gorrie. AlthoughOcado is closely associated with

Waitrose, it is a separate business that also delivers own-brand goods. In 2011, Waitrose re-

launched its own website to compete with Ocado within the M25 area, raising tensions between

the two companies. Waitroses existing deal to supply Ocado with products is due to expire in

2020.The company is separated from Waitrose only domain after developing new opportunities in

own brands and other labels. After this separation, company has defined new ways in online grocery

purchasing with a customer oriented and fast delivery model.


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This approach is in stark contrast with the shoot for the stars approach taken by many of the failed

Internet grocers such as Webvan and Home Grocer. Ocado, renamed from Last Mile Solutions in late

2001, spent the better part of 2 years developing and planning all aspects of its business with a core

group of 15 20 employees. This planning phase was followed by a phased rollout of service,

starting north of London and working down toward central London between March and July of 2002.

This approach is based on recognition that the idea of mass-market home delivery requires new

techniques on the part of both companies and customers. Equally important to the long-term success

is the understanding that customers need to be nurtured and guided to learn a new (and hopefully

easier) way of shopping for groceries About 20 miles north of central London, in the town of

Hatfield, Hertfordshire, England a 300,000 square foot distribution centre is in its 13th year of

operation. This distribution centre is the centre of Ocados operations built to handle orders placed

over the Internet for home delivery to customers in the London metropolitan area. The ultimate

capacity of the distribution centre is equivalent to the sales volume of approximately 20 stores.

Ocado was listed on London Stock Exchange on July 2010 and is member of FTSE 250 Index.

The company is operating on a warehouse model, deprived of physical stores and operating as an

online business. Ocado operates in Englands South East, South Coast, Midlands, North West

and most of the Yorkshire. (History, Ocadogroup.com)

2.8.1 Ocado Customer Oriented Operations

Ocado is an online business; it has also launched iPhone, iPod touch, iPad and Android device

applications which are most convenient way to shop for groceries. People do not require desktop

PCs or laptops to shop online; they can use their phones to shop for groceries. Ocado allows its

customers to price match with other main grocery stores in the UK. Ocado has launched online

price match with its competitor store Tesco. Ocado is one of the rapidly growing online

businesses in the UK with delivery area expanded to cover over 10 million households.


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In addition to its current area of strategic focus, the company intends to investigate growth

opportunities by improving the customer offering continually through maintaining and

improving the customer experience; increasing its core product range; and continuing to offer

value to customers (Annual Report 2013, Ocado limited). Ocado sells more than 20,000 different

products, vast majority of these products are sourced through Waitrose, a leading high quality

UK supermarket. Approximately 4,300 of the products sold by Ocado are Waitrose-branded

products. Ocados product range includes a small but expanding range of Ocado brandedproducts (ocadogroup.com).

Choices of the different range of products enable the customers to buy the products that match

their lifestyles and are within their budget. Also the availability of every type of product on one

channel increases the chances of sale because customer did not want to go elsewhere if he/she

finds everything at one place. It helped consumers to spend less without compromising on choice

or quality.

2.9 Process of CRM in Ocado

2.9.1 CRM Challenges

When building a business from scratch and seeking to achieve rapid growth it is critical to get a

marketing campaign that rapidly builds brand awareness. Management of Ocado realizes that there is


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great pressure on her to launch the business and attract customers to both a new name and a new way

of buying groceries. The marketing effort faces two key, yet conflicting challenges. First, it is

essential to grow the market very quickly in order to fill up the Hatfield distribution centre. Similarly,

Ocado is under substantial pressure to fill its Hatfield facility (designed to handle the equivalent

business of 20 supermarkets) with orders since the break-even point for such a facility is at least 70%

utilization.

The second key marketing challenge is in many ways in conflict with filling the distribution centre.

While it is important to generate orders, it is also critical to generate orders that fit together in some

type of densely concentrated pattern in order to facilitate delivery In short, the ideal goal is to attract

customers in closely packed areas. In theory this is possible, but in practice there are numerous

complicating factorsincluding variations in daily ordering patterns, travel times and order sizes.

2.9.2 Home Delivery Market of Ocado

Home delivery of groceries is both an attractive concept for harried, busy consumers who dislike

their weekly shopping duties and an amazingly complex challenge for businesses to achieve at a

reasonable cost. The ideal target customer for this service is a person who leads an extremely busy

and hectic life, dreads visiting busy grocery stores (where they often are jostling with fellow busy

people who also cant get to the store any other time) and has a fairly high income. While the group

of customers that fit this profile will never be a majority of the market, it has been estimated that

there is a market of between 3 billion and 9 billion (5 15% of the total market) in the U.K. and

between $5 billion and $25 billion (1% - 5% of the total market) in the U.S. Grocery stores are

increasingly looking at home delivery as an alternative channel to grow their business and capture or

divert business from other grocers in a cutthroat industry.


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Ocado seeks to rollout its service by focusing tightly on fairly dense geographic areas and by

developing a high route density within each area. Simultaneously, Ocado has tightly profiled its

sweet spot customers: according to Katie these customers are primarily female, with both spouses

working and with one or more children under 15 at home. A big selling point to these customers is to

avoid trolley rage from having to shop in crowded stores at late hours. Ocado is selling more than

just groceries; it is selling a personal relationship that saves time for its time-starved customers.

Rather than employing mass media techniques such as television, radio and newspaper/magazine

advertising, Ocado concentrates on direct marketing to a focused area. In order to build initial

customer awareness, Ocado developed a four step-marketing plan:

1. Every customer in the phased roll-out areas was sent an introductory letter. This letter

described the Ocado business model, emphasized the partnership with Waitrose and provided

an initial introduction to the website for ordering.

2. Potential customers were sent an introductory packet including an Ocado branded coffee

packetalong with an invitation to sit and have a cup of coffee with Ocado. The idea was

to introduce Ocado as a relaxed, value-added business that would help free up customers

time.

3. The third mail out was a follow-on packet with an offer of 10 off each of a customers first

five orders. This packet also contained an Ocado apron.


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4. The 2nd

Follow-on packet was sent several weeks after the apron packet. This packet served as

a reminder to customers and included an Ocado oven mitt.

Another important component of the marketing campaign is backfilling, which involves targeting

specific areas that have already been direct marketed and seeking to increase route density. This is

done through follow-up direct mailings, passing out fliers and advertising at train stations and by

using available customer service team members (CSTMs that deliver customer orders). In the early

stages of rollout, the CSTMs are likely to have routes that include a lot of downtime in which no

deliveries are scheduled (this is necessary to ensure that deliveries during peak periods are met).

Rather than having CSTMs return to the central DC or simply wait around for the next delivery,

Ocado uses the CSTMs to approach potential customers on a door-to-door basis in areas where there

are a high proportion of sweet spot customers. The CSTMs are trained to introduce themselves andthe Ocado service, leave a brochure and generally provide a personalization of the service.

2.10 Current trend/present situation with connection to CRM

Ocados focus on customer experience quality is causing its competitors to rethink how they

manage logistics. The major supermarkets are now investing heavily in "dark stores" and more

accurate forms of stock selection as they seek to combine efficiency with customer satisfaction.

Ocado knows customers are willing to pay a small but significant premium for excellent

experiences. Since the depths of the double-dip recession, a significant retail trend has emerged

which has helped to sort the winners from the losers; brands with a crystal clear target consumer

and proposition have tended to do well, while those which have tried to deliver customer

experience to suit multiple segments have largely failed.

For many shoppers the online grocery marketplace is ideal because all operators are equally

convenient; they all deliver to your door and can be accessed from any device, wherever you

may be. As a result, brands operating in this space live or die by range, pricing and the customer

experience they deliver. Ocado knows its customer well. It knows they are willing to pay a small

but significant premium for excellent experiences. Most importantly - once you have the hygiene


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factor of range in place - it understands what really matters is minimising substitutions,

maximising flexibility and offering person to person service.

Ocado's model is optimised to deliver a perfect customer experience. Its warehouse-based model

means the picking process is rapid and easier to manage. Item locations can also be designed for

picking efficiency, rather than worry about shopper preferences. Ocado's target customers have

well understood expectations and its infrastructure allows it to stay ahead of the pack. Asda and

Tesco have "dark stores" established, but the likelihood is that most customers, most of the time,

are still serviced from standard store-pick models.

2.11 Conclusion

This chapter reviewed the available literature in customer centric relationship marketing

approaches that are used to develop the customer relationship management programs. The CRM

approaches designed for the company are based on four pillars of customer identification,

retention, satisfaction, and long term commitment. ON the basis of CRM models, the review on

the benefits and disadvantages of electronic CRM is performed as the company selected for

study possessed a state of art e-CRM system. The latter part of the chapter is comprised on the

history, achievements, CRM approaches, and challenges faced in competitive retail market for

the selected company Ocado. This chapter provides a comprehensive discussion and theoretical

framework to design the conceptual framework and research design as presented in the next

chapter of research methodology.


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Wiley, New Jersey, 2 edition.

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implementation and control. 3rd edn. Oxford: Elsevier Butterworth-Heinemann.

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focus across the firm. 5th edn. Boston: McGraw-Hill.

Chapter 2 Ocado

Documents

Transcript of Chapter 2 Ocado