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

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• Bob E Hays (2008). Measuring customer satisfaction and loyalty. USA: Quality Press. • Cataluna, Francisco & Javier Rondan. (2004) Price discrimination in retailing.

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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.