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Managing Consumer Relationship Online Marketing Essay

In this report we would be evaluating three e-Business websites. The website we have chosen for evaluation sell electrical & electronic goods, home appliances and computer peripherals.

The report will give an in depth idea about how these website are SEGMENTED i.e. What are the methods used by the website to identify different segments and how would these website meet the need of the different consumer groups.

The report will also give an in depth idea about how the website go about managing CONSUMER RELATIONSHIP- ONLINE i.e. the physical evidence observed in the website which proves the website has Consumer Relationship Management and how does it vary for different consumer segment.

Last but not the least this report will also give an in depth idea about how the PRICING has been carried out for the entire product range they offer i.e. It will answer if there are any methods of dynamic pricing involved and how does pricing vary for different consumer segment.

This report will take you through extensive literature required to analyze an e-Business company or website with valid academic principles with proper reference to appropriate literature with quotations. This has been referenced with Harvard referencing system embedded in Microsoft Word 2007.

Introduction:

LASKYS:

It is a UK based firm and which deals in household electrical products and appliances. They are the part of Europe’s largest electrical retail group but they do not have direct overheads of high street stores.

NEXT WAREHOUSE:

It is US based international company which deals in electronic goods and computer peripherals. It offers almost thousands of computer peripherals from 500 different manufacturers and distributors and it stocks more than 150, 00 products including Batteries, Scanners, cable to laptops, Printers and Motherboards.

RGB Direct

RGB Direct was established about 20 years ago and is division of RGB Hi-Fi & Video and is now one of the largest independent retailers of the United Kingdom. It is the member of C.I.H (combined Independents Holding) Ltd. This group has a buying power of over half a billion pound and is Europe’s largest electrical buying group having a wide range of exclusive products.

It is the member of RETRA (Radio, Electrical & Television Retailers Association). RETRA is the UK’s largest trade association and regulatory body for electrical retailers.

Normal distribution strategy process:

For any organisation market penetration is very important in order to have a significant market share. And to obtain such a level market segmentation plays a very important role as it provides a base to achieve considerable market share. And sometimes it becomes a bit difficult for an organisation when it is struggling with the competition from other competitors in the market in the form of e-business. Moreover it is believed that consumers get attracted easily by the overall look of the website in spite of the quality of the products the website is selling. This made us clear that the conceptual approach for a brand is very important.

Obviously having a well-defined set of plans is very important for an organisation as to boost up the sales through e-business is a difficult task. Conversely if the objectives or process mapping is well defined by the management, then desired objectives or goals can be achieved easily. These days e-business is adopted by companies on a large scale where customers often tend to purchase goods and services through internet. Even though the main objective of every organisation is to earn profit but it depends on the organisation how to diversify their business strategies.

1 - Level distribution strategy is normally used in all the business process.

Though, in e-business the process is different as the level of distribution channel would change. Organisation is required to focus more on direct marketing. As in the retail, e-business strategy should be emphasized rather than focusing on the periodical goals.

Literature review

For any business to be successful their planning strategies should well defined and spot on and I addition planning should go on along with the process of implementation. The main aim of this review is to examine the pros and cons attached to the process of segmentation adopted by various firms for their diverse product line. The segmentation methods in e-business are quite different as that of retail marketing. And hence target market would also differ accordingly.

The main aim of market segmentation is to classify the potential for a product in a particular domain or group and it also facilitates the producers to position their products well in the market. And attaining market share would not be that much difficult once it is successfully done.

Instead of following the segmentation technique through age or sex these websites are segmenting the market according to the products they are selling. It illustrates the fact that these websites penetrates the consumers buying behaviour through their products. And definitely this strategy would have a positive effect on the sales of the products they are selling.

Market development strategies (Use internet for targeting)

New geographic methods (To expand the reach of their product)

New customer segments (Attracts customers of a particular age group)

In all of the cases integration with the suppliers and the intermediaries is very important.

Segmentation process

FRANK BRADLEY defines market segmentation as a process of dividing the market into the groups of customers which may merit different market mixes, reflecting different benefits of products (‘MARKETING MANAGEMENT’ FRANK BRADLEY p.g. 122 marketing segmentation).

The primary task for any organisation is to recognise the potential market and the procedure of segmentation starts once the research technique proves to be useful.

With the help of process of segmentation target market could be easily identified and it enables the firm to enhance the sales which in turn raises the market share and profitability of the company. But every organisation is does not have the same impact in spite of having all the required resources. Therefore all the available resources should be utilized at their best.

LASKYS segmentation strategy:

It seems that in regards to consumer market, lot of research is conducted by the organisation as the website looks quite unique. This should attract a large number of consumers towards the website. As discussed earlier not only the looks but the quality of the product should also be excellent otherwise the consumer might look into the website and also can end-up buying from the website.

LASKYS has categorised their products into different segments according to the interest of the consumers and their preferences as follows:

Kitchen and home

TVs and DVDs

Home cinema and Audio

Computing

Photography

I-pods, gaming and MP3

Sat Nav and phones

This will facilitates the customers to endeavour their preferred product which reduces the time and also it enhances the quality of the service the website is providing to the customers without having a direct contact with the customers.

Main findings

Target market is very specific and allows them to enlarge their product line.

Customers can get a clear idea about the product and services they actually want to purchase.

The website doesn’t contain any link for FAQ which can reduce the contact of producer and customer but have a link for giving feedback.

The website has an advanced security to safeguard the personal details of the visitors and there is no scope for any fraud.

NEXT WAREHOUSE segmentation strategy:

Unlike LASKYS, NEXT WAREHOUSE was not able to pierce the market efficiently and perfectly. In spite of the fact that the segmentation process is quite unique and different it could not manage to achieve the similar market share as compared to its competitors. Here segmentation is done product wise and not area wise. They have a wide range of products but these are not segmented in a better way. Very less emphasis is made on market segmentation.

Next Warehouse segmentation of products:

Industrial control

Hardware

Data storage

Network

Consumer electronics

Communication

Main Findings:

The website lacks in attraction which could possibly decreases the sales for their products. As mentioned earlier instead of having a large range of products, segmentation is not done efficiently. Therefor targeting a specific group of people will be difficult task for the company.

They have displayed the products in different segments but not in a classified way. The products are clustered and sometimes it might make an adverse impact on the reputation of the brands they are selling. This would in return decrease the market share of the company and results in increase in the bounce rate.

It seems that company is adopting an open market strategy where anyone can have a considerable amount of products. This could be one of the major setbacks.

RGB Direct segmentation strategy:

RGB Direct has a wide range of products and it had classified its products in a very perfect manner. The presence of this success is visible on company website. On the home page itself customers has a number of options to select.

Product category of RGB Direct:

Appliances

Television

BLU RAY

Home Cinema

Computing

Photography

Accessories

Bundles

Promotion

Bose

Brands

Main findings

RGB Direct holds a wide range of products to promote. They have the potential to fulfil the needs of all the customers. But they still can extend their product line.

It seems that the website is following a chain and because of this customers are not facing any hindrance while collecting any information.

Promotional strategies for online business:

For every type of business promotion of goods and services is very essential even if the products are performing well, management need to invest more finance to bring fresh promotional events for the specific product. This will have a positive impact on the performance of the products and also restricts the consumers to get deviate from the product.

Promotional strategy of LASKYS:

An aggressive step has been taken by LASKYS towards marketing and has gained a remarkable name and position for supplying premium brand Household Electrical Products and Appliances at very competitive prices with unparalleled levels of service. The remarkable impact made by these industries has made them renowned on huge in retail world.

Extensive promotional activities have been adopted by this website. As soon as a visitor enters the website of LASKYS, consumers can get the information about the current promotional discounts and benefits it is providing to the customers like Christmas special and free delivery, discount on TV’s and music and videos on discounted rates. The home page of the website clearly tells about the customer services in detail and other important features of the products. These kinds of promotional activities will definitely enhance the sales of the products.

Promotional strategy of NEXT WAREHOUSE:

The home page of NEXT WAREHOUSE does not displays ant promotional activity, however if a visitor go through different links, then they can find some information about the promotional activities of the company. And also it provides its visitor links to FACEBOOK basically a social networking site to become a fan. This would definitely make a positive impact on the buying decision of the customers as now they can share their thought about the product and also can read the feedback of other customers who are already using the products the website is selling. And it is also providing separate links for customer service where customers can send e-mails to company and can ask about their queries. The company also ask the customer to make an account of their on the website through which they can buy the products and can more benefits and also it facilitates the company to be in contact with the customers and can make them aware about the new offers and deals. These things reflect the confidence of the website on its quality and it makes a positive impact on consumers which is one of the factors of building brand equity.

Promotional strategy of RGB Direct:

The home page of the website is full of promotional activities the website is doing. Current on-going discounts on the products, warranty, cash back on selected items of selected brand and how to get the VAT back and many more. As these activities are on the home page of the website this would surely attracts the customers and might make them to purchase from the website. Even there is a separate link for the promotional activities where the website is giving free warranties, off in price on selected products and etc. The website also shows that it is the winner of the best consumer electronic retailer award of 2010. This would be really helpful for the website to create a strong brand.

Other Strategies Implemented

Strategies which are applied that acts as critical success factors for the brand image of a company are as follows

Website interface: The visual appearance and graphical quality of the website is very important to make the positive perception of the visitor as it is the first thing a visitor can see on the homepage of a website. The overall look of the home page means coherent use of graphics and colours, adequate use of animation can highly influence user appreciation.

Consistency: it basically describes the attractiveness of a website throughout its all pages instead of only a few been attractive and other are not. LASKYS and RGB direct are very well designed as compared to NEXT WAREHOUSE as it does not contain that much of graphics and animation. At least a little animation should be there to increase the interest of the visitors and to make them to stay on the website for longer.

Contact Information: A website should provide with the internal and external information by providing the facilities like email to the company, phone, FAX, postal mail and also FAQ page where customers can get the answers for their queries. A first time visitor is sometimes not very much sure about the product features and what he/she actually looking for. So it is really helpful for these visitors to have pages of FAQ and email links so that they can get timely feedback about their questions and can help them to choose the product of their choice. LASKYS AND RGB Direct stands out on this as they provides their customers with these kind of above mentioned facilities and this signifies user friendliness which can create brand loyalty. On the other hand NEXT WAREHOUSE retrieving contact information is difficult and no links for FAQ is given on the website which gives a negative brand image to the visitors.

http://www.laskys.com/pages/info/help.html

http://www.nextwarehouse.com/onlinehelp/search.cfm

http://www.rgbdirect.co.uk/contact.asp

Website Navigation: Good navigation tools can increases the perceived usefulness of the content website is containing. So the website should be well organised and logically structured and should be easy to navigate so that the visitors can find the right product or information easily. If the navigation is not easy to access it can deviates the visitor and in turn it harms the website as it will make the buyer to leave the page. Navigating through NEXT WAREHOUSE is not that much easy when compare to LASKYS and RGB Direct. In the aspect of navigation RGB Direct is the supreme of all the three.

Recommendations and Discussion

The main focus of a retailer providing online services should be concerned with development of e-business products that mainly serves the wants and needs of the vastly segmented consumers to use a common platform which is online. To avoid the tag of a once-upon-a-time leader of the market, the firm is required to adopt the essential changes in order to retain their competitive advantage and also to maintain their growth prospects.

To study the current operations of the business and to examine the new opportunities, the e-business planning process is discussed as below:

Classify whether the adopted approach of e-business enhances the efficiency or decreases the operation cost of the company.

Use of e-business’s process architecture to examine the scope of each and every project.

As there is a possibility that internet interaction of the brand can be copied by the competitors, this step is to analyse the sustainability of the benefits of each initiative.

And the final step is to arrange the projects of e-business as how they will adjust with the other on-going projects.

Fig. Organisational elements

An e-business strategy is not only defining the internet technology direction but it includes modifying the interconnected and inter-related activities and elements of organisation (Business processes, staffing, organisational culture, strategy and skills) which are the necessity of a successful e-business operations.

In order to distinguish your brand from the competitors brand awareness and credibility is necessary as the e-brands pioneers like Amazon and yahoo are using. Brand development is a universal process. Building awareness is not same as branding and is only one aspect of brand development. Creating a powerful online brand is as much important as the influential distribution partnerships and customer loyalty. A good mixture of business practices and marketing can create a strong and powerful brand and can activate magic in business world as there is no specific strategy for this. (Phil Carpenter, 2000, eBrands: Building an Internet Business at Breakneck Speed, Harvard Business press).

Conclusion

“Magnify the profitability through new lens of loyalty” (Carpenter, P., 2000, HBP)

Through e-business value chain can be improved in order to reduce the operation cost and thereby profitability can be increased. E-business can provide immense opportunities to the new as well as the existing products in a completely new set of market. The current formulated paper evaluates the e-business approach of three brand selling consumer electronic goods: LASKYS, NEXT WAREHOUSE and RGB Direct. All the three brands can be termed as ‘pure-play’ companies which are formed to take the advantage of the advanced web. Segmentation approach followed by the companies to satisfy the needs of different consumer groups is also analysed in this report.

In order to magnify the profitability, there is a need for a new shape of loyalty for these brands. And this can be gained by improving the experience and user interface on their websites. Whether or not still a question is there that the e-business is a evolution, revolution or just hype. E- Business can be termed as revolution for business. It can be concluded that the electronic selling firms need to rebuild some of their strategies and managerial responses in a reflective way.

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