Tesco CMR and Customer satisfaction.pdf
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Transcript of Tesco CMR and Customer satisfaction.pdf
CARDIFF METROPOLITAN UNIVERSITY
How far has the influence of E-Marketing strategy affecting the consumer patterns of purchase decisions within this current economy - A case study with Tesco Inc., Store at
Upton Park?
THIS DOES NOT FIT WITH THE RESEARCH QUESTION?
IF YOUR FOCUS IS CUSTOMER SATISFACTION THEN THIS IS THE FOCUS.
YOU USE QUESTIONNAIRES TO MEASURE CUSTOMER SATISFACTION
WHAT DO YOU MEAN BY E MARKETING? WHY IS IT IMPORTANT? ARE YOU TALKING ABOUT CRM?
WHY?
A qualitative analysis
By
Lissamma Shaji
Submitted to
Mr. Roger Fulford
TABLE OF CONTENT
CHAPTER # 1: INTRODUCTION
1.1 Background of the Study 1.2 Purpose of the Study 1.3 Research Questions (s) 1.4 Aims and Objective of the Dissertation 1.5 Company Overview – Tesco Plc Inc., 1.6 Scope and Limitations of the Study
CHAPTER # 2: LITERATURE REVIEW
2.1 Introduction 2.2 Service Industry and its importance 2.3 Elements of E - Marketing services and its services 2.4 Impact of E – Marketing upon Customer’s Satisfaction 2.5 Customer Satisfaction theories and its functionalities 2.6 Customer Vs Employee satisfaction Model
2.7 Types of Customers and their behavioural patterns 2.8 Behavioural patterns Vs purchasing power of the Customers based on
Marketing Mix strategy followed by Tesco Plc Inc. 2.9 Conclusion
CHAPTER # 3: METHODOLOGY
3.1 Introduction 3.2 Research Framework 3.3 Sampling Method – Overall Approach 3.4 Justifiable reasons for choosing Qualitative Analysis based on
Marketing Mix strategy implied by Tesco Plc Inc., 3.5 Data Collection Process – Customer participation 3.6 Data Analysis 3.7 Reliability, Validity and the Limitations of this Research
CHAPTER # 6: BIBLIOGRAPHY
CHAPTER # 7: APPENDICES
CHAPTER # 1: INTRODUCTION
Background of the Study
In recent times with growing pains of retaining potential and satisfied customers is the
greatest challenges faced by most businesses across the globe. Even more so for a business
like Tesco’s’ to sustain its continued stream of income and to make profit has to maintain its
highest level of customer satisfaction by developing products and services that customers
want, by making them available to them at reasonable price (Pride and Ferrell, 2012) as and
when required. However, there are various factors that determine the customers’ level of
participation even if the company has done all that it could in terms of its marketing research,
following the guidelines laid within the marketing mix: such as change in technological
advancements, economical conditions in conjunction with other marketers competing within
the given retail business arena (Bob E Hayes, 2008). To such an extent it is important for
companies like Tesco’s to define its strategy and create products or services that customer
wants and satisfying their needs, can be achieved by following a strategic strategy based on
surveys, questionnaires, feedback forms and above all having a club card which has been the
key determining factor accurately studying the behavioural patterns of its customers (Ron S
and Silvia S, 2011). In this dissertation the primary focus rests up the buying patterns of its
customers have changed drastically with the implementation of E-marketing strategy
especially in and around Upton park area in East London.
Purpose of the Study
Getting in touch with various customers and employees working at Tesco’s has enabled me
take up this research and the statistics that reveals the changing needs of the customers
buying patterns based on the ongoing recession in the UK. This has raised great concerns
with loss of employment and lower income where customers are forced to adopt their life
style and raise awareness of decision patterns based on environmental or ethical
considerations based on green consumption (Moisander, 2007). Added to it the stringent
competition faced by its retails traders like Wal-Mart, ASDA, 99p shops is the closest
competitors. However it has been recorded that nearly 35% of the UK consumers are
concerned about environmental issues (Defra, 2006), 50% of them prefer organic food and
only 10% determine the purchasing power unlike 5% being indifferent (Hughner et al., 2007)
are those pursuing their own selfish goal (Chatzidakis et al., 2007). An interesting fact that
led me to pursue this research is that me being a customer of Tesco can shop regularly at four
different retailers at a given point based on the influential factors like family, friends, retailer
websites includes price comparisons across the retailers has changed my behavioural patterns
later affirmed by the consumer research conducted by (Jim Blythe, 2007).
Research Questions (s)
• How far E-marketing strategy does affected the customers decision process in
purchasing the products or services from Tesco’s based on their level of satisfaction.
• By analysing the retail trends in comparison with Tesco’s competitors like ASDA and
Wal-Mart how far has Tesco been successful in satisfying its customers buying
patterns and influence its decision process in retaining its potential customers and
returning customers.
• With the evolution of Green products has Tesco’s been able to influence and bridge the
gap between The Customer Loyalty Ladder (Club card) and CRM retaining existing
customers for long term with the changing mood swings and behaviour patterns of the
customers.YOUR RESEARCH QUESTION NEEDS TO BE FOCUSSED. YOU
HAVE TOO MUCH - E MARKETING, CUSTOMER SATISFACTION, CRM
DECIDE WHAT IS THE FOCUS IT CANNOT BE ALL THREE.
YOU WILL NOT HAVE THE RESOURCES TO COMPARE ASDA AND
WALMART
IF THE FOCUS IS CUSTOMER SATISFACTION THIS NEEDS TO BE STATED;
Aims and Objective of the Dissertation
The primary aim of this dissertation is to analyse the changing behavioural patterns based on
E-marketing techniques in relation to the services provided by Tesco.
Objective
• To analyse the factors that determine the decision process and influence the buying
behavioural patterns at Tesco based demographically, age, employment etc.
• Has the impact of technology been influential in bridging the gap between CRM and
Customer Loyalty Ladder based on Kano model of Customer Satisfaction?
Company Overview – Tesco Plc Inc., Upton Park IT IS A PLC
Tesco is known for its brand retailer helping in providing its customers what they want with
the slogan every little helps saving money during these difficult times (Tesco, 2013). They
are known for their brand loyalty diversified across the globe having and work force nearly 1
million people at various levels, backgrounds and age groups. However since 2008 there
seems to be a decline within the global retail industry overall sales yet Tesco’s has shown an
incredible growth of 13% within the UK and 26% across internationally (Tesco, 2013) and
expanding regularly.
Scope and Limitations of the Study
One of the greatest limitations of the dissertation is that the analysis conducted based on the questionnaire and interview techniques are limited to one particular branch and does not
reflect the overall behavioural patterns of the customers in relations to Tesco’s. Secondly in terms of the comparison with Wal-Mart, ASDA and 99p Shops a qualitative method has been chosen to determine Tesco’s price point noticing the buying patterns of the customers having
different loyalty margins within these retailers does not give an exact analysis of the behavioural patterns. Due to lack of time and resources it is hard for a researcher to conduct
interviews and surveys engaging in complex sampling techniques within the given time
frame. IF YOUR FOCUS IS CUSTOMER SATISFACTION THEN THIS WILL BE THE FOCUS.
WHY THIS?
CHAPTER # 2: LITERATURE REVIEW
YOU NEED TO CONCENTRATE ON CUSTOMER SATISFACTION THEORIES – WHERE ARE THE MAIN
THEORIES ON CUSTOMER SATISFACTION?
Introduction
Service Industry and its importance
Whether it is online or offline customers form the back bone of any organisation and in
particularly within the E-Marketing platform marketers have analysed various strategies and
methodologies required in retaining a potential customer called lead while meeting customers
expectation (Gundalch, Bolumole, Eltantawy and Frankel, 2006). In order to optimize the
importance of profitability having right market mix deliverable strategy that requires a
balanced integrated approach between the companies and the customers (Angelina Close,
2008). Achieving such integrity costs time and extensive research especially in gauging the
customer’s attitude towards the organisation and brand awareness followed by loyalty
satisfaction in exchange for their services (Neslin et al., 2006). However with the growing
competition within the retail sector where customers buying patterns and behaviours are
changing at a rapid pace in comparison of the service quality based on feeling (Geffory Paul,
2010). Thus it is important for an organisation like Tesco’s to measure the existing gap
between the CRM and Customer Loyalty ladder (Tesco, 2012) can be achieved with the aid
of servqual an instrument used to measure both customers and organisational service patters
in delivering their products based on performance, quality, responsiveness, reliability,
security, knowing the customers patterns through their purchasing power especially in
today’s economy with a fleeting crowd (Pride and Ferrell, 2012).
Elements of E - Marketing and its services
What are the primary elements of E-Marketing services? Smith and Chaffey (2002) suggest
that it is a mode of practising marketing strategies with the aid of digital technology within
which customer satisfaction takes precedence (Lucas, 2002). With the change in
technological development the customer preferences and organisational strategic plans have
drastically changed the way market works. Irrespective of the type of services rendered by
the company it is important that the website has reliable hosting, fast, easy to access and
navigate with 24/7 functionality, relevant information that helps one to make informed
decisions about products and services, email capabilities followed by auto responder
messages are essential to build a relationship with the customer database and above all a
secure merchant payment gateway followed by the number of people visiting the website
(Rayport and Jaworski, 2008). Simons et al., (2002) further suggests an element of synergy
existing between the website and the direct mail, physical channels of communication
allowing customers to add value through their feedbacks and comments (Don Schultz, 2005).
Impact of E – Marketing upon Customer’s Satisfaction
While taking into account various advertising mediums employed by the organisation her for
our purposes Tesco will not only be able to provide customer satisfaction but also know their
customers behavioural patterns such as: the demographic understanding, age, sex, income,
marital status and occupational standards can be easily analysed. Visitors landing on the
website allows Tesco’s to have insight into the customer itself knowing their personal
preferences upon which the direct marketing or email marketing be based on further leading
to campaign effectiveness in brining newer customers while retaining the existing ones. Other
benefits includes knowing their behaviours obtained through life questionnaires based on
attitudes, interests, opinions, emotional buying power including the days on which these
campaigns be run (Richard Gay, Alan C, Rita Esen,2007 ). However E-marketing like any
other medium of advertising has got its own limitations: Due to frequent visitors there has
been difficult to validate and integrate the data obtained through samples, use of pop-ups
surveys forces the customer to participate rather than willingly take up the survey has irritable
consequences, due to change in customers emails it is hard to reach potential customers
followed by false responses can be manipulated (
Customer Satisfaction theories and its functionalities – Types of Customers
As mentioned above that the primary focus is on the customer which is the paramount in any
business as the adage goes customer is always right (Tam, 2004). In order for Tesco’s to
provide a quality service in satisfying a customer has to measure the preferences of the
customer and translate into a series of parameters (Grigoroudis and Siskos S., 2010). One can
measure customer satisfaction parameters are directly linked to their jobs, motivational
factors, feedbacks, knowing companies correlation to feedbacks and comments as indicated
in fig. 1.1 (Hill, 1996). It is also important to identify customers of a specific nature
Edosomwan in 1995 had identified customer under three categories: Internal customers,
External customers and Self-unit customers what is currently known as TQM. One can
analyse the behaviours of the customers based on Direct Measurement Methods – where the
data is coming straight from the customers through surveys, complaints, personal interviews
basically connected directly with the customers. MUSA approach (MUlticriteria Satisfaction
Analysis) – directed to a more rational customer who is keen on spending yet very
systematic. Another Model can be Simple Quantitative Model – is based on frequent
responses of a particular question that are assumed critical in relation to satisfied or
dissatisfied customers.
Customer Vs Employee satisfaction Model
IF YOUR FOCUS IS CUSTOMER SATISFACTION THEN THIS WILL BE THE FOCUS.
WHY THIS? STICK TO THE CUSTOMERS
It is essential for any business to be successful has to bridge this gap between the customer
and the organisational expectation, management expectation with the existing gap on the
level of quality service rendered, intended level of service vs unsatisfied quality service
experienced by customers (Derek Allan and Morris W., 2002). In order to achieve the
highest level of satisfaction one can apply Marginal resource model which emphasises on the
relocation of the services is better than Derived importance model can be unreliable (Bryman
and Bell, 2003). On the other hand employee motivation is critical for the success of the
organisation in providing quality services to the customer. If the employee is satisfied within
the organisation can influence their productivity, increase high level of participation, reduce
absenteeism and have tremendous influence on the customer which exactly coincides with the
six sigma system developed by Motorola (Salih Kusluvan, 2003) which most companies
follow in achieving their desirable profits.
Behavioural patterns Vs purchasing power of the Customers based on
Marketing Mix strategy followed by Tesco Plc Inc.
IF YOUR FOCUS IS CUSTOMER SATISFACTION THEN THIS WILL BE THE FOCUS.
WHY THIS?
The key determinant of the Customers behavioural patterns and their purchasing power
largely depends upon the Marketing Mix which Tesco are good at achieving it. As most
marketers are aware that the marketing mix implies 4P’s namely consisting of Product, Price,
Promotion and Place (Kotler and Armstrong, 2006). Each element has various elements that
are key to a particular customer and does influence their purchasing power in exchange of
profits (Peter and Donnelly, 2007).
Product Strategy – defines as something that the market needs for personal consumption
(Ferrell, 2005). Customers buy products based on various factors with careful consideration
and in comparison with the available brands based on price without foregoing other elements
like brand name, size, features of the product, newness and its profitability to the consumer,
packaging Place (Kotler and Armstrong, 2006). Some customers will rely on the products
durability, reliability, product –trial attitude (Kim and Jon, 2007). However with the
development of technology it is becoming even significant that the customer is able to get
information on the product at their finger tips indicates that products do have significant
influence on the consumer’s motives (Uusitalo, O and Maija, R, 2007).
Pricing Strategy – Tesco is perceived to have followed this strategy quite well has kept it
prices relatively low in order to attract more customers and to retain the existing ones
especially in a given economy where the customer is more value-based than price itself
(Skoras, 2005). Tesco follows a High-low pricing strategy based on EDLP strategies in
providing premium quality products where quality is assured by purchasing private label
products at a lower price. In this way the product differentiation led by Tesco’s can profit
itself by providing and satisfying a customer yet benefiting itself through low buying concept
(Cataluan, Francisco J.R., 2004).
Promotional strategy – Promotions and price strategy goes hand in hand as it greatly
influences the customer’s behaviour (Ferle and Steven, 2006) and turn well especially with an
offer followed by bonuses. However research indicates that most in-store promotions had
negative influence on the customers’ than advertising mediums had great sales (Shi, Ka-Man
and Gerald, 2005).
Place Strategy – Plays a key role in the distribution of the product to its end users depending
upon its wholesalers and retailers located not only at key strategic places but also be available
to the customers in need and satisfies his wants (Kotler and Armstrong, 2006). The Customer
sees stores as a pre-requisite to build stronger bond with the organisation as an emerging
category that satisfies his needs and desires just around the corner (Feil, 2003).
CHAPTER # 3: METHODOLOGY
Introduction
Most businesses consider feedback as the process of integral growth (Griffin and Moorhead,
2011) that determines the productivity, customer behavioural patterns and ability to use
advertisements effectively. Even more so as the technology develops more and more
advanced testing marketing systems have been placed in order to get the ROI. Considering E-
commerce as becoming more and more customer friendly has manipulated the consumers
buying and decision powers are transforming the way the products and services are delivered
in conjunction with the customer’s choices and preferences (Johnston, Wade and McClean,
2007). As mentioned earlier that this research is primarily based on quantitative analysis
using a casual and descriptive research. The chosen population has basic understanding of the
internet and has some experience of online buying capabilities. The target population has
been given a closed – ended questionnaire in order to gather an in-depth behavioural pattern
of the population selected randomly from 1 to 5 where one is strongly disagree and 5 being
strongly agreeing. Based on the simple random method has been chosen as most of the
recipients are readily available within the study environment of the researcher. Finally the
whole research rests upon the quantitative analysis represented in the form of graphs,
diagrams, statistics and interpreting it within the given analytical data (Saunders, Philips and
Adrian, 2012).
Research Framework
Research framework coincides with Literature review based on the simple sampling method
where the participants are free to participate within the research process and free to withdraw
at any given time. No incentives are manipulations are encouraged in line with the ethical
aspects laid within the UWIC’s policies and procedures. This type of sampling method
detailed by Bryman and Bell (2003) insisted that this type of research needs quantitative
analysis as this allows the researcher to investigate the problems in the realistic settings. The
primary focus with be on the three major components as laid within the aims and objectives
based on four primary variables like generation gap, lack of technological awareness, income
upon which the decision process rests within the e-marketing arena. Nearly 100 participants
will be given a questionnaire to fill and using the Cronbach’s alpha coefficient for reliability
in validating the research including the time spent on the internet.
Sampling Method – Overall Approach
The participants are the customers of Tesco’s in and around Upton park area upon which this
research is based on. All the participants will be given a copy of the questionnaire after
passing through the HRM consultant at Tesco’s upon approval the participants will be
contacted through Email initially and then gathered later on for 30-45mts in case they have
any questions to clarify. The questionnaire is based on Likert Scale method of rating ranging
from 5 being the highest and 1 being the lowest with Strongly agree, agree, disagree, Strongly
disagree, Neutral and Not sure. The participants have to circle the ratings consisting of three
parts: First part is based on the age, gender, access to the internet, Hours of Usage. Nearly 5
questions, second part is based on the E-marketing strategies employed by Tesco’s is mainly
for the employees of Tesco nearly 10 questions including marketing mix and finally the third
part will be based on the customers purchasing and decision making process 10 questions.
The purpose of having a two way questionnaire between the employees and the customers is
to validate what the Tesco’s think about its customer’s decision process and whether to know
E-commerce has changed any aspects of the decision process within the customers including
their expectations. Once the questionnaire is collected will be placed in the excel data matrix
coded using numerical codes displayed through charts.
Justifiable reasons for choosing Qualitative Analysis based on
Marketing Mix strategy implied by Tesco Plc Inc.,
IF YOUR FOCUS IS CUSTOMER SATISFACTION THEN THIS WILL BE THE FOCUS.
WHY THIS?
Most researchers agree that there isn’t one way of doing research in normal cases it swings
from one end to another between qualitative and quantitative researches depending upon the
nature of the research. As part of the quantitative method includes deductive and positivistic
methodology as Marketing Mix is seen as a process of knowing what the customer wants
which is the key in knowing the behavioural factors influencing the way customers buy
products.
Data Collection Process – Customer participation
Nearly 100 customers are chosen on simple random methods and 10 Employees in answering
the questionnaire within a week’s time after submitting and being approved by the Tesco’s
HRM.
Data Analysis
Primary data Analysis is the Customers from the Tesco’s and its Employees who are
willing to participate voluntarily in the research programme and of course are free to leave
the questionnaire unfilled or do not like to participate at any given time.
Secondary data Analysis largely rests upon the periodicals, internet, library, newspaper and
other business journals.
Reliability, Validity and the Limitations of this Research
In order to make any research being reliable and validating the findings of the research one
cannot reach the exact or closest proximity which is difficult to achieve however with
consistent observation one will be able to express reliability with correlation (Danie Mullis,
2004). In context of this dissertation the measurement of scores is based on two tests one
from the side of the employees and the other from the side of the customers are then
correlated to get reliability correlated. However this reliability test though does not reflect
entirely the total population of the Tesco’s within the scale of zero to ten where zero is
considered as poor and 10 is quite beyond the measures of proximity which is hard to
achieve. Nevertheless anything close to 10 is considered as reliable and is acceptable. In this
context utilizing the SPSS (Statistical Packages of Social Sciences) in order to calculate the
reliability of the data to be gathered within the Likert-Scale measuring from one to five is
quite achievable.
Validity
However it is accepted that there exists a close relationship between reliability and validity as
long as the data is considered as valid based on the accurate data collected and interpreted in
the light of qualitative analysis in the light of the three part questionnaire conducted within
the employees of Tesco’s and the data collected from the customers (Jerry R, Jack N and
Stephen J.S., 2011).
CHAPTER # 6: BIBLIOGRAPHY
• Berman, Berry (2004). Retailing management: A strategic approach. New York: Prentice hall.
• Bob E Hays (2008). Measuring customer satisfaction and loyalty. USA: Quality Press. • Cataluna, Francisco & Javier Rondan. (2004) Price discrimination in retailing.
International Journal of Retail and Distribution Management, 34 (4), 205-215. • Feil, Kim.(2003) Reevaluating beverage’s place at retail. Beverage Industry, 94,(2),
36. • Ferrell. O.C.& Michael D. Hartline (2005). Marketing strategy (3rd Ed.) Mason,
Ohio: SouthWestern Thomson. • Jayaraman, Munusamy and Wong Chee Ho. (2008) Relationship between marketing
mix strategy and consumer motive: An empirical study in major Tesco stores, UNITAR E-Journal, Vol 4, No.2, 41 – 56.
• Jim Blythe (2007). Consumer Behaviour. USA: Thompson Learning. • Kotler, Philip & Amstrong, Gary (2006). Principles of marketing (11th ed.). New
York: Pearson International. • Miqual, Salvador & Eva M. Caplliure (2002). The effect of personal involvement on
the decision to buy store brands. The Journal of Product & Brand Management, 11 (1), 6-18.
• Pride and Ferrell (2012) Marketing. New York:South-western learning. • Ron S and Silvia S (2011). Modern Analysis of Customer surveys: with Applications
using R. USA: Wiley Publications. • Shi, Yi-Zheng, Cheung Ka-Man & Gerald Prendergast. (2005). Behavioral response
to sales promotions tools: A Hong Kong study. International Journal of Advertising, 24 (4), 467-486.
• Skouras, Thanos, George J. Avlonitis & Kostis A. Indounas (2005). Economics and marketing on pricing: how and why do they differ? Journal of Product & Brand Management, 14 (6), 362-374.
• Uusitalo, Outi & Maija Rokman.(2007) The impacts of competitive entry on pricing in the finish retail grocery market. International Journal of Retail and Distribution Management, 35 (2), 120-135.