Strategic Role of the Sales Person for Online Consumers
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This study aims to explore the role of online sales promotions in creating a sustainable competitive advantage for Shell. Based on the literature review and the research objective 4 propositions were developed.
- Shell's representation of the product online plays a key role in driving consumer attitude towards shopping online and the intention to buy.
- The consumer's perception of enjoyable online experience has a positive impact on impulse purchases leading to increase in sales for Shell.
- The online virtual experience created by the Shell promotion will play a major role in creating a competitive advantage.
- The communication of trust and credibility by the online promotions of Shell reduces uncertainty and adds perceived value to the brand.
Based on the exploratory nature of the research objective depth interviews were used to provide insights into the consumer motives for engaging in the online promotional activity of Shell and how they perceive the information communicated and what are its effects on their decision making process. The information captured was measured using the analytical framework in order to validate the propositions.
All the 4 propositions were proved to be valid however the research faces limitations in terms of the sample size and the attributes covered. Therefore using this research as a base it the strategic role of online promotions and its potential for establishing a sustainable competetive advantage could be further explored with a larger sample to reach a conclusion.
1 .0 Introduction
Shell is a global organisation with a huge portfolio of businesses across domains. The firm has used the web as a platform to support its business through online marketing and promotions. In 2009 the shell retail department has been involved in Shell fuels campaign which highlights the quote “Get the most out of every drop” and the Shell retail team is interested in conducting a post implementation review of their retail promotions in 2009, as the retail team is interested in knowing, if their current retail promotion for the Shell fuels campaign 2009 is successful in meeting its promotional objectives, as it has been investing £40,000 to £48,000 on its retail promotions. The objective of the promotion chosen is to drive online traffic to the forefront and to influence trial through portal web traffic. The implementation task is outsourced to external agencies and therefore the Shell retail promotions manager Carolyn Thomas is interested to know the perception of adoption by the external customers. Moreover the retail department does not want to cheapen the Shell brand through their promotion. The promotion which is tested in this research would be the e-vouchering promotion used in the U.K. Bowman (1997) states that 80% of sales promotion does not work in the U.K. For example: It has been discussed in the academic research arena that coupon promotions are inefficient. Moreover research suggests that sales promotion is unlikely to attain sustainable competitive advantage; there are exceptions to the above argument example: Tesco, BA (Yeshin, 2006).However this is the case with sales promotions relative to the traditional shopping environment. The existing academic literature in online consumer behaviour suggests that, with technological advancements on the web, the online sales promotion has the potential to achieve a competitive advantage (Ref).Therefore the role of online sales promotions in obtaining a sustainable advantage is explored in the context of Shell. Furthermore the significance of the promotional activity is analysed through qualitative in-depth interviews which tries to capture the different dimensions of online consumer perceptions on sales promotions. This in turn is validated with reference to the literature review conducted in the context of this research objective.
2.0 Problem Definition:
Sales promotion in this context is defined as a planned and implemented marketing activity that enhances product or service appeal and changes consumer behaviour in return for an additional benefit for a purchase or participation (Yeshin, 2006).However existing research suggests that sales promotions can either enhance or destroy brand value, it depends on how the consumer perceives the promotion. Furthermore it is also concluded that the techniques such as coupon promotions offer little in terms of brand sustenance and leads to no lasting positive change in the value of post promotion sales and could also result in damaging the existing perception of consumers on the brand(Ref).However in the case of Shell this would depend on the strategic contribution of the promotional activity implemented by Shell.
Therefore it is important to research the strategic role of sales promotion and its impact on the brand image of Shell, as the brand destruction by a sales promotion of one product would have an impact on the overall brand which caters to a wider portfolio of products and services (Ref).
3.0 Research Objective and Process:
The Objective of this research is to explore the strategic role of sales promotion in engaging online consumers and its likelihood of obtaining a sustainable advantage within Shell.
The methodology chosen for this research is qualitative and would involve depth interviews because this research is exploratory and requires the understanding of consumer perceptions and their feelings towards the online promotions. The sample used for this research involves Shell mangers responsible for the implementation of the promotion as well as the potential online consumers for Shell.
This would benefit the Shell retail department in using the interactive elements of the web relative to online consumer's perception on its promotion and reduce the risk of value destruction and potentially establish a sustainable advantage. This study would potentially give an understanding on the perceptions of their online consumers in the U.K which is one of their major markets. However this research does face limitations due to time constraints and access to resources ,this research would be considered as a pilot and could be explored in future with more detail for Shell's other major markets such as Europe, US , Africa and Middle-East with the leverage of time and resources. Moreover the validity of this research could be enhanced with more samples in the U.K.
4.0 Literature Review
This section would literally look again at the existing academic literature on what has already been written about sales promotions and online consumer behaviour within the context of this research (Lee and Lings, 2008).The existing academic literature on sales promotions has concluded that, it's less likely to achieve a sustainable advantage because it is often used by marketers as a short term measure to achieve sales targets (Ref). However there is a considerable amount of research happening in the area of online promotions which suggests that there is a potential for online promotions to establish a competitive advantage by taking advantage of the technological advancements on the web, such as the 3 dimensional and interactive features of the web, which could be used by marketers in creating perceived value to the brand and therefore contributing to the long term brand value (Ref). However there is limited research in the role of online sales promotions in establishing an online sustainable advantage because of the rapid technological developments. Therefore this research would contribute to the existing literature and also would attempt to answer Shell's question on if their promotion is creating or destroying its brand value. The research propositions are developed based on the literature review and also would form the basis of an appropriate research methodology.
4.1 Conceptualization of Promotions:
Promotions have perhaps witnessed both dramatic growth and change over the years than any other area of marketing communications (Yeshin, 2006).Therefore it is important to review the different definitions relative to the changing nature of promotions (Table 1).
The institute of sales promotions(2004)
Describes, “A planned and implemented marketing activity that both enhances product or service appeal and changes customer behaviour positively in return for additional benefit for purchase or participation ”
Suggests that “a promotion is any incentive used by a manufacturer to induce the trade and/or consumer to buy a brand and encourage the sales force to aggressively sell it”
Kotler et al(1999)
Defines sales promotion as “Short-term incentives to encourage purchase or sale of a product or service”
Schultz, Robinson and Petrison(1992)
Provide a more strategic definition of sales promotion, they suggest that “Sales promotions are marketing and communication activities that change the price/value relationship of a product or service perceived by the target, thereby (1)generating immediate sales and (2)altering the long term brand value”
The Direct marketing association(1994)
Similarly argues that “Sales promotion activities that communicate distinctive brand attributes and contribute to the brand development and reinforcement of brand value are consumer franchise building promotions”
Writing in marketing suggests:” Sales promotion conducts an interactive relationship with its audience. It invites participation, invites consumers to enter ,to apply, to collect”
Table 1: Sales promotion definitions
Therefore the above contradictions in the definitions, leads to a confusion in the role and purpose of sales promotions, and therefore it's been argued seriously in the academic arena, and concluded that the techniques offer-little in the way of brand sustenance, and leads to no lasting positive change in the value of post promotion sales, and as a consequence could result in damage to the existing brand perceptions (Ehrenberg et al, 1991; Ehrenberg, 1994; Jones, 1990; Yeshin, 2006).
However this would depend on the strategic contribution of the promotional activity implemented by Shell (Ref).Moreover it's been pointed by Gupta et al (1997) that empirical research in the area of sales promotions has been focusing on the short term effects of sales promotions and therefore it's been used by most marketers as a tactical tool. In support Peattie and Peattie (1997) argue that the bundling of all the different types of promotions for the purpose of research and study gives a very limited view of the potential achievements of sales promotions and also has encouraged a negative perception on the impacts that promotions can potentially have on the brand. Furthermore in the following paper Peattie et al (1997) argues that most of these preconceptions are caused because of the tendency to view sales promotions as only price based and exclude the promotional activities that add value to the brand. This point is reiterated that the tendency of most researchers in this area has been to generalize sales promotions under money off and coupon promotions (Peattie, 2002). Moreover it has been argued that much of the research on sales promotions has been conducted considering the short term effects of sales promotions and has rarely conducted any research on the more long term contribution of sales promotions such as the communication oriented impact of sales promotion on consumers (Peattie,2002).This implies that in order to make sense and obtain reliable results it is necessary to disaggregate the different sales promotional techniques into their individual components(Yeashin,2006).
Therefore in this research the long term contribution of Shell's E-vouchering promotion is evaluated. Moreover it is argued that generalising all the promotions to achieve the same goals irrespective of their individual execution would imply incorrect results (Yeashin, 2006).Furthermore it is also pointed out by various authors that in order to focus on the long term impacts of sales promotions a more strategic focus is required and is illustrated by the following quotes
‘Sales promotions have come a long way from the time when it was ‘simply a short term inducement to increase sales' (Robinson and Hauri, 1995).
‘Promotions are no longer simply short-term initiatives to lift sales, they are increasingly being used to reinforce brand values' (Gay, 1997)
The above definitions suggest the need for a long -term focus and the strategic application of sales promotions considering broader dimensions of the potential impacts of sales promotions (Yeshin, 2006).Therefore it is important to explore the broader strategic dimensions of Shell's sales promotions in order to reach a credible conclusion on its contribution to the Shell brand.
4.2Strategic dimension of sales Promotions:
Research suggests that more often sales promotion is considered as a short term-tactical tool (Yeshin, 2006).Although sales promotion is widely used to fulfil a variety of short-term objectives it often fails to recognize the strategic contribution on the long term, and it could often result in destroying the image or value of the brand (Yeshin, 2006). In order to evaluate its long term benefits it is critical to analyse the contributions of Shell's online sales promotion in reinforcing its brand image, enhancing customer loyalty and developing strong relationships with its consumers because this can strengthen its brand position(Ref). Therefore it is important to explore the role of strategy within Shell's online sales promotion and its contribution to the long-term effectiveness of the brand.
4.2.1Role of strategy:
The strategy should provide a framework to measure and research on the type of sales promotion implemented (Head, 1998; Yeshin, 2006). Although it is suggested that sales promotions should be considered in line with the overall brand building process (Yeshin, 2006). An alternative definition by Schultz et al (1992) provides a more strategic focus on the on the consideration of the sales promotion activity.
“Sales promotions are marketing and communications activities that change the price/value relationship of a product/service perceived by the target, therefore by generating immediate sales and altering long term brand value”
The above definition is considered important because it recognizes the need for generating short term sales volume and also promotes the need to consider the long term issues related to the brand (Schultz et al, 1992; Yeshin, 2006).Therefore based on this definition the strategic significance of Shell's promotions in engaging online consumers should be evaluated because this definition gives a base for evaluating the promotions of Shell by recognising the short term objective of generating sales volume whilst appreciating the long term issues relative to its brand (Schultz et al,1992).For this reason it is required to explore the impact of sales promotions and its implications to the Shell brand. In order to understand its significance to the Shell brand it is important to identify the strategic use of sales promotions (Yeshin,2006).This would benefit Shell in communicating consistent overall brand image whilst helping each individual promotion achieve its objectives by creating increased awareness(Yeshin,2006).
It has been pointed that the reduction in product differentiation is one of the reasons for the increased usage of sales promotions(Yeshin,2006).Furthermore various studies suggest that similarities between brands can cause reduction in brand loyalty and is a consequence of increased usage of price oriented promotions(Ehrenberg,1993;Mela et al,1997). However there are various promotions that have demonstrated the potential to enhance the brand and generate loyalty in the long-term. For example: The frequent flyer schemes by airlines, Levis Flat Eric and Pepperami Fanimal(Yeshin,2006).Therefore as Lisa Campbell(1996)work in Promotions and incentives journal suggests ‘It's not the tool we should be blaming but the users'.
This implies that the sales promotion tool used by Shell is not to be blamed but the way in which it is applied. Therefore it is required to review the literature on the strategic application of sales promotions and its potential benefits.
4.2.2The Strategic Application of Sales promotions:
Davies (1992) and O'Malley (1993) provide a contrasting view which suggests that sales promotions that are consistent with the overall marketing communications plan can enhance long term brand value and therefore could be considered strategically valuable.Similarily its been argued that sales promotions offering a rebate or discount are likely to cheapen the brand(Aaker,1991).However there are ways to apply promotions strategically and enhance the brand equity rather than destroying it(Aaker,1991). Furthermore the brand equity can be reinforced by strengthening its brand awareness and associations (Yeshin,2006).However based on the research conducted by Peattie et al (1997) it is concluded that sales promotions have the potential to:
1.Improve brand awareness.
2.Stimulate product trial.
3.Act as a communications channel between a company and its customers.
Based on the research by Peattie et al (1997) the strategic application of Shells sales promotion is identified to stimulate product trial and act as communication channel between Shell and it consumers. However its contribution to the brand depends on how the consumer perceives the promotion.
Furthermore the potential reasons behind using sales promotions needs to be identified in order to understand the reason underpinning Shells Online promotions (Yeshin, 2006).
Lee (2002) suggests four reasons for using sales promotions:
1. Reaction to competitor's promotions
2. Inertia: This is what the firm always did
3. Meeting short term-sales objectives
4. Meeting long-term objectives
However research suggests that most sales promotions fall in the first 3 categories mainly for price based promotions (Lee, 2002).Moreover in most cases it is not used strategically but used as a panic measure. Furthermore it is suggested that sales promotions should be used at a higher level where it is integrated with main strategy (Lee, 2002).Therefore the usage of Shell's online promotions and its relationship with the overall strategy needs to be explored. In order to understand this relationship within the context of this research it is important to identify the type of sales promotion strategy used by Shell.
4.2.3Type of strategies:
As sales promotion can reflect both push and pull strategies it is important to distinguish between the types of strategies that could be potentially used by Shell (Yeshin, 2006).The push strategy motivates distribution channels and encourages them to promote the product or service to the consumer, whereas the pull strategy is targeted directly towards end users to purchase products or services from the distribution channel (Yeshin, 2006). Based on the above definitions and Shells promotional objective its promotional strategy is identified as a Pull strategy.
These definitions of strategy are derived based on its intention to achieve results or goals for the firm(Craig,1983).Therefore in this case Shell's choice of Pull strategy is based on its intention to drive online traffic to the forefront and increase the number of trials through its web portal. However there are multiple objectives for a firm at the corporate level and this leads to the design of different strategies to achieve different objectives at the expense of others (Craig, 1983; Shendel and Patton, 1978).Therefore this research tries to focus on the chosen sales promotion and its objective and does not consider the impacts of other objectives and strategies of the firm.
Furthermore many research scholars have suggested that sales promotion is unlikely to attain sustainable competitive advantage (Yeshin, 2006).However there are exceptions to the above argument example: Tesco club card, BA Air miles (Yeshin, 2006).
Therefore the sustainability of Shell's online promotions is not ruled out and therefore needs to be explored. Moreover it is important to adopt a strategic approach rather than a tactical approach, which has been the focus in most cases (Yeshin, 2006).
In order to evaluate the effectiveness and sustainability of Shell's retail promotions, it is necessary to consider the potential impacts of sales promotion on the consumer.
Raghubir et al (2004) argues that promotions may have three forms of impact on the consumer
1. Economic: The monetary benefits derived from the type of the promotional offer and its potential decrease in transaction time that lead to a simplified purchase decision.
2. Informational: It is about communicating the information about a brand which is unknown to the consumer.
3. Emotional: The feelings or emotions that are aroused as consequence of the exposure to the promotion.
Therefore the impact of Shells online promotions in the above three forms would be explored in order to evaluate its contribution t
5.0 Measuring the effectiveness of promotions
Although sales promotion is argued to be a marketing technique which is beneficial in the short-term. It is important to measure its long term-effectiveness in order to analyse the strategic significance of the activity. As cook (1995) argues it is important to consider the objective of the promotion before evaluation of the promotion in order to choose the best approach. Therefore in this case the post implementation review is done and its long-term effectiveness is considered.
Based on the literature review and Yeshin (2006) suggestion the following factors could be used to measure the long term effectiveness of sales promotions:
1. Does the promotional concept fit well with the brand and expected consumer perceptions?
2. Is the promotion perceived to be credible by the consumers?
3. Are there any constraints for the consumer to overcome in responding to the promotion?
4. Is the recommended promotion most likely to achieve the desired objectives?
5. Is the promotion perceived as a value addition in satisfying consumer needs?
In order to explore the long-term effectiveness and its contribution to obtain an online competitive advantage for Shell the existing literature on competitive advantage is explored relative to Shell's online promotions.
6.0 Competitive Advantage:
The information revolution has given firms new ways to outperform their rivals and therefore allows the firm to create a competitive advantage(Ref).This conceptualisation of competitive advantage is important because it is relative to the research objective which explores how the information presented by the sales promotion could contribute to the overall brand.
The research by Porter and Miller suggest that it is hard to underestimate the strategic significance of the latest developments in information technology. It demonstrates that Information technology has been transforming the nature of products, processes, companies, industries and even competition itself (Porter and Miller,1985).Although it has been treated as a support service it is suggested that organisations should understand that on a broader perspective, as Information technology could create sustainable competitive advantage (Porter and miller,1985).Therefore with ongoing developments on the web, the strategic significance of Shell's online promotions needs to be explored in order to identify its potential in obtaining an online competitive advantage.
Information technology should be perceived as medium that can process the information created by businesses and use them through the various technologies that are linked in order to create a competitive advantage (Ref).Therefore it is relevant to discuss the reasons that underpin the strategic significance of Information technology and its impacts on business in order to understand how it could be used to create an online competitive advantage for Shell (Ref).
Research suggests that information technology changes the way in which products and services are created and the information provided in order to create value to the consumers (Ref).In the case of Shell the value created is determined by the amount the consumers are willing to pay for their product or service (Ref).Therefore the Shell retail promotions could be considered profitable if the value it creates through the implementation of its promotion exceeds the cost of performing the promotional activity(Ref).This implies that Shell should either perform the promotional activity at a lesser cost or should create perceived value that leads to a premium price(Ref).
6.1Sustainable Competitive Advantage:
The online environment is changing the existing roles of competition and strategy because there is a pressure on the average profitability of the industry which is created by the internet (Porter, 1991).Therefore with competition from firms such as B.P, ESSO and Total it is important for Shell to set itself apart from the others (Ref). This could be possible only by achieving a sustainable competitive advantage (Ref).However this could be achieved either by operational effectiveness or strategic positioning(Ref).In the case of operational effectiveness it is required for Shell to do things better than competitors where as in the case of strategic positioning Shell has to do things differently from competitors there by offering something unique to customers(Ref).However the improvement of operational efficiency using the internet does not provide a competitive advantage because the best practise established by Shell can be imitated by its competitors(Ref).Moreover it is argued that competitive advantage tends to be short-lived in the online environment because competitor can easily monitor and offer a similar offer or service(Chaffey et.al., 2000:134).Therefore it becomes difficult to sustain the operational advantage. Hence strategic positioning is considered more important in this case where strategic positioning should involve a series of tailored activities to develop a product or service appeal that would offer a unique value perception (Ref). Moreover the online environment can be used to draw long lasting customer relationships (Ref).The interactive nature of the online environment can be used to build relationships (Ref). This is supported by Gronroos(1994). Buttle (1996:1) statement “Enduring relationships with customers cannot be duplicated by competitors, and therefore provide a unique and sustainable competitive advantage”.
Therefore in order to explore the contribution of interactive online environment in building relationships with the consumer it is required to conceptualise the online consumer behaviour and the factors influencing them.
7.0Online consumer Behaviour:
The strategic role of sales promotions in engaging online consumers is explored. Therefore based on the research objective it is important to have a significant understanding on online consumer behaviour and factors influencing them. Research suggests that more than 20% of consumers across several countries are buying products online using the internet and more than 50% of internet user's in the U.S buy products and services online (Kim et al, 2009). In the U.K around 40% of internet users buy products and services online (Kim et al, 2009).
Although it could be argued that there is no difference between online and traditional consumers (Constantinides, 2004). The new addition is building trust or confidence and is suggested to have a significant influence on online buying process (Ref).Therefore the factors influencing online consumer behaviour needs to be discussed based on the existing literature in order to understand their implications to the online promotions of Shell.
7.1Factors Influencing consumer Behaviour:
Based on the previous academic research it is inferred that there are controllable and uncontrollable factors which influence consumer behaviour (Constantinides, 2004). The interaction of controllable and uncontrollable factors determines online decision making process just as in traditional markets (Constantinides, 2004).However in this research the factors that are under the control of the E-marketer would be explored. The existing research on online consumer behaviour indicates a set of controllable factors influencing consumer behaviour (Ref)
* The functional attributes of the website such as interactivity and usability.
* The psychological elements intended in lowering the level of consumer's uncertainty by the communication of Trust and credibility of the website.
There has been considerable amount of research on the components of web experience. However there has been minimal attention in their integration. Therefore this research attempts to explore the contribution of these elements in obtaining a competitive advantage. Based on the research objective the online consumer behaviour is conceptualised.
7.2Conceptualisation of Online Consumer behaviour:
The online consumer behaviour is the key theme around which this research is based. Therefore it is imperative to introduce the online consumer considered in this research. Based on previous academic research the online consumer is considered to be a computer user and a shopper (Koufaris, 2002).The online consumer's could be classified as potential customers and repeat customers as they posses different amount of information and use different criteria to make a purchase decision (Kim et al, 2009).Although it is suggested that different promotional strategies should be used to create initial sales and to generate repeat sales (Ref). This leads to less clarity on the differences in decision making by the two groups of consumers. However the research by Kim et al (2009) shows that the value perception of the transactions made online are strongly influenced by the non-monetary factors like perceived risk factor than by monetary factors like perceived price for potential consumers, in contrast the repeat customers are strongly influenced by monetary factors than non-monetary factors(Ref). Therefore it is suggested that the promotion needs to be customised for the two different groups. But the extent of customisation and its influence on the consumers need to be tested and validated in the case of Shell (Zhang, 2009).
This leads to a proposition where it is important to understand and measure online consumer behaviour. A multidisciplinary approach needs to be taken as it is important to consider Information systems, marketing and physiological perspectives to do a comprehensive analysis on online consumer behaviour (Straub and Watson 2001). There have been various attempts from academics in building models around online consumer behaviour. The key attributes identified from the research are on converting web surfers into web consumers and, reasons for not shopping online. It is interesting to see transaction cost theory being applied to understand the impact of I.T on market structure and consumer behaviour (Malone et al. 1987).Based on the frame work it is inferred that if buyer search costs are substantial it could influence consumer behaviour (Bakos 1997).However it is important to see how effective it is in the context of online consumers. It is argued that online consumers cannot depend on all 5 senses to make purchase decisions as they are limited to product or services represented through photographs and text descriptions (Koufaris, 2002).However research shows that the representation of the product online and the web experience play a key role in driving consumer attitude towards shopping online and the intention to buy (Burke et al. 1992, Jarvenpaa and Todd 1997a and b, Nowlis and McCabe 2000,Novak et al. 2000).However the online consumer could depend on well designed WebPages and powerful web features such as one click-checkouts and recommender systems(Koufaris, 2002).Moreover there could be a difference in the exposure of social and working environment between the consumers(Koufaris, 2002). As research suggests, the consumer's intentions to buy online is influenced by lack of leisure time, but also depends on their type of life style (Bellman et al. 1999).However online consumers are generally more powerful, demanding and utilitarian in their expeditions(Koufaris, 2002).Therefore Morrisette et al (1999) argue that the overall customer loyalty in the web is low. But it could be argued that there are potential influences by the availability of the relevant content and the overall experience (Rice 1997, Eighmey 1997, Eighmey and McCord 1998).The other key concern which affects online consumer behaviour is the risk involved in buying or having transactions on the web. For example: credit card fraud and not getting the right product .The perceived risk in online transactions and perceived ease of use of the website has influences on attitudes towards online purchasing (Koufaris, 2002).However the impact of perceived ease of use varies depending on the task the consumer performs as research suggests that the impact is more significant when consumers use the website to inquire about products or services than to purchase them (Gefen and Straub 2000).
The double identity of online consumer as a traditional shopper as well as a computer user implies that although attracting and retaining customer revolves around the marketing communication techniques, technology also provides tools to support the process (Straub and Watson 2001).Therefore in order to understand why such a consumer returns to the store, it is critical to examine the interaction of the consumer with the website as a store and as a system (Koufaris, 2002). The research on online consumer behaviour suggests that purchasing decisions on the web could be complex as traditional shopping is restricted by time and geographical location, whereas the online consumers can buy at any time from any location increasing the potential for more impulse buys (Koufaris, 2002).It could also be argued that the web provides more privacy to the consumer in buying products or services that are embarrassing offline (Koufaris, 2002). The importance of online experience relative to enjoyment has been challenged in the past (Ref).However it is suggested that if online consumers enjoy the shopping experience they might indulge in more impulse purchases (Koufaris, 2002).Moreover research suggests that an experience is the integration of both emotional and psychological conditions such as intensity, communicated meaning, the perceived gains in quality and value (Mathur, 1971,457).The internet is suggested to have a stronger impact on consumer experience as the three dimensional interactive environment creates a compelling virtual experience(Ref,458).It is also suggested that there is a link between the human mind, the technology and the environment that engages users(Ref). Therefore it is suggested that the interactive nature of the internet could offer the marketers from Shell the ability to offer user controlled interactive experiences (Ref).This form of three dimensional interactive experience simulates a virtual experience to consumers (Ref).However in order to explore the impact of the virtual experience of shell consumers it is suggested to conceptualize the virtual experience (Ref).
Research suggests that marketers could use the developments in computer technology and the expansion in the internet to deliver highly targeted persuasive messages, strengthen customer relationships and as a consequence could potentially generate sales (Tedesco,1999,485). Furthermore it is also suggested that by creating online virtual experiences with products that are compelling, marketers could potentially increase the value of the product information presented (Ref,485). Therefore creates a online competitive advantage by engaging consumers in an active shopping experience and increasing the number of repeat and unique traffic visitors for the site (Ref,485)
The impact of firms using the internet as medium to support their promotional strategies has an emergent trend in many academic studies (Avlonitis and Karayanni, 2000; Bennet, 1997; Hamill, 1997; Poon and Jevons, 1997; Quelchand Klein, 1996; Wilson and Abel, 2002).The online environment allows the sales departments of firms to use the interactive nature of the web to communicate with consumers (Eid and Trueman,2002).However the management of the Shell brand would be a critical issue for the sales team who uses the internet for their sales promotions(Ref).For example: Shell uses its promotions on websites other than its own site such as Yahoo(Secondary data).Moreover research suggests that consumers might get confused about promotions being communicated on different websites with different content ,messages and images(Ref).Furthermore Barnett(1997) states that its becoming increasingly common for firms to use their sales promotion on websites other than their own and this might not be well received by consumers(Ref).The Secondary data obtained from Shell shows that the consumer engagement for the promotions on the Shell website is more than the promotions on Yahoo(Appendix).
It has been pointed by many researchers that the online environment would create a perceived paradigm shift in the way goods and services are marketed (Barnes-Vieyra and Claycomb, 2001; Brynjolfsson and Smith, 2000; 1998; Eid et.al., 2002; Hamill and Gregory, 1997; Hoffman and Novak, 1996a; Morgan and Hunt, 1999; Papows, 1998; Porter, 2001; Quelch and Klein, 1996; Rayport and Sviokla, 1995; Werbach, 2000; Wilson and Abel, 2002).
According to Rayport and Sviokla (1995) most business operates in the physical world made up of resources and the virtual world made of information. However the value creation process is different for both the environments. Therefore this leads to conceptual challenges because the physical world consists of the value chain activities which consider information as a supporting element of the value adding process and not as a source of value. In contrast the virtual environment information is the source of value for consumers. Therefore in this research it is required to explore the value perception of the consumers on information communicated through Shell's promotions. Moreover this research would not include the activities involved in the physical world as it is not within the scope of this research.
Information is pointed out to be a source of value in the online environment. However in order for the consumer to perceive the information valuable the consumer needs to have Trust and credibility on the source providing the information. Therefore in order to understand the contribution of trust it is required to examine the concept of Trust and its importance to Shell within the online environment.
8.0 The role of Trust in influencing consumers:
It is suggested that websites communicating trust and integrity could persuade customers to stop exploring and start interacting online (Constantinides, 2004).Fears or doubts regarding transaction security and data misuse could influence consumer behaviour (Constantinides, 2004).However it is suggested that the consumers are likely to use information about the source in order to evaluate the communicated message. Therefore the perceptions on the similarity of the source message with the reader could lead to a greater persuasive effect (Hass,1981;McGuire,1969; Price, Price,Feick,&Higie,1989).Furthermore the lack of trust is considered to be one of the most frequent reasons for consumers not engaging in online transactions or shopping activities(Sonja,2003).Although empirical research on the role of trust has conflicting conceptualisations. The role of trust is important in social interactions such as online promotional activities which involves uncertainty and dependency (ref).However it has been increasingly recognised by academics and practitioners that initiating, building and maintaining trust between the consumer and vendors are key facilitators of successful e-commerce(Ref).Although these elements are used based on the appropriateness of the study(ref).The contribution of these elements in the context of Shells online promotions should be explored(Ref).
The online transactions do not offer exchange of goods for money in most cases (Ref). In this case the online promotion of Shell which includes the redemption of E-Vouchers does not offer immediate return of product after the transaction ,as the voucher needs to be printed and needs to be returned to the customer assistant in the Shell Petrol station in order to obtain a £1 off of a fill of a V-Power fuel. Moreover the fierce competitive environment on the web makes the online consumers face many such offerings which are similar and are flooded by conflicting marketing messages (Ref). This also includes consumers sharing sensitive information such as telephone number and email address. The online consumers do not have an option of inspecting the products and services online and is uncertain about the reliability of the retailer who has collected information as there is limited assurance on the security of information (Ref).Therefore research suggests that the availability of cognitive resources is limited and therefore consumers seek to reduce the level of uncertainty and the complexity of relationships in online transactions using mental shortcuts(Ref).Trust is suggested as an effective shortcut in reducing uncertainty involved in such transactions(Luhmann,1989;Ref).Therefore the extent to which the consumers trust their interaction with the Shell online promotion and what drives their perceptions of trust on their interaction and submission of personal information needs to be explored.
As in the case of most academic research in the area of trust this exploratory research also faces time constraints and therefore does face limitations in terms of exploring a larger set of variables and therefore would focus on online trust in the context of Shell's promotions (Ref).
Concluding Summary :
Based on the literature review it could be inferred that sales promotions could enhance and destroy brand value based and it depends on the consumer's perception on the sales promotion. However research also suggests that attributes such as brand image, customer loyalty and strong relationships with the consumer could contribute to the value. Therefore these attributes are evaluated in the context of Shell to understand the strategic role of sales promotions.
P1: Shell's representation of the product online plays a key role in driving consumer attitude towards shopping online and the intention to buy.
P2: The consumer's perception of enjoyable online experience has a positive impact on impulse purchases leading to increase in sales for Shell.
P3: The online virtual experience created by the shell promotion will play a major role in creating a competitive advantage.
P4: The communication of trust and credibility by the online promotions of Shell reduces uncertainty and adds perceived value to the brand.
In this research the term methodology refers to the way in which the research is driven and determined considering the theoretical and philosophical assumptions(Saunders et al ,2009).It would be a research process map which highlights the appropriate arguments relative to the research objective and also includes the choice of samples and collection of appropriate data and their analysis and finally the validation of the findings from the research and the way it is reported(Silverman,2006).Moreover it will be a map that describes the major steps and tasks that together lead to the way in which the research question is answered(Silverman,2006).The research methodology is chosen based on the literature review and the research objectives.
10.1Purpose of research - Exploratory
There are three different methods to accomplish a research - ‘Exploratory', ‘Descriptive' and ‘Explanatory' research (Saunders et al, 2009). These are ways in which research data is obtained and analysed (Saunders et al ,2009).In this case the literature review concentrates on several areas such as promotions and online consumer behaviour and how the interaction of these elements with technological advancements could create a perception on consumers that could potentially create a sustainable advantage. Furthermore the research requires clarification on the problem and there is uncertainty on the precise nature of the problem as there has been considerable evidence on the performance of the promotion from the quantitative data obtained. This doesn't indicate the perceptions of consumers on the promotion which is important to identify if the promotions is creating or destroying value for the Shell brand. Therefore an exploratory research is chosen as it is the appropriate method to conduct the research due to the flexibility involved in the approach where a broader area could be narrowed as the research progresses, making it a suitable choice considering the current nature of the problem (Saunders et al, 2009).
10.2Research Philosophy - Phenomenological (or) Interpretivism
The research philosophy chosen is interpretivism as it is necessary for the research to understand online consumer or human behaviour in response to a sales promotion. As Saunders et al (2009) suggests phenomenology refers to the way in which humans make sense of the world around us. It is important to understand and interpret consumer behaviour post implementation of the promotions by Shell in order to determine the perceptions created by the implemented promotion. The challenge here is to enter the social world of the consumers and understand the consumers from their point of view (Saunders et al, 2009).Therefore this philosophy is appropriate for this type of research where individual behaviours are interpreted at a specific time and a particular set of circumstances(Saunders et al, 2009).
10.3 Quantitative Vs Qualitative:
Based on the secondary data collected from Shell it clearly indicates what the consumers are doing. Although it is suggested that more depth on what the consumers are doing could be obtained through a quantitative study (Silverman,2006). The Research objective focuses on the strategic role of sales promotions within the context of Shell and based on the literature review this requires the understanding of brand perceptions, customer loyalty and the contributions of trust and relationships in order to obtain a sustainable competitive advantage. Moreover it is suggested that these attributes are based on what consumers think or feel about the promotion. Therefore a Qualitative research methodology is chosen (Silverman,2006).
10.4 Data Collection Method
The types of data collection method employed in the research are explained in order to justify the rationale behind their choice and their relevance to the research. There are two types of data collection methods employed in this research.
This data is obtained by the researcher and is tailored to obtain support, in order to address the research objective (Malhotra, 2006, 85).
This data is readily available and has been already collected by the organisation for purposes that might be different from the research objective (Malhotra, 2006).
Based on the above definitions and the research objective it is imperative that both forms of data are required for this research. Because the secondary data obtained from Shell gives and understanding of the online consumer statistics such as number of times the consumer engaged with promotional on the Shell website and the number of consumers engaged with the promotion on external websites such as Yahoo. For example: The secondary data from Shell suggests that there was a 17% redemption rate on the Shell website in comparison to 14 % on Yahoo which implies that more consumers visit Shell over Yahoo. Whereas the intention and the thought process involved post and pre engagement of the consumer with the promotion is captured through primary data. For example: The Qualitative interviews with consumers suggest that they are more likely to click on the promotion on Yahoo rather than on Shell. This gives to contrasting information and therefore collectively both the sources of data are required to answer the research question. The secondary data obtained from the literature review has been useful in understanding the link between the interactive nature of the web and its potential to create a long lasting effect on consumers. However this theory is explored further in the context of Shell through the analysis of the primary data collected through interviews and their relationship with the secondary data obtained from the academic literature and the data obtained from Shell.
10.5 Secondary Data:
The secondary data was obtained from the Shell retail department and is attached in the Appendix (Appendix 1).This data is specific to the E-Voucher promotions of Shell fuels campaign 2009 .The research is conducted within the context of this promotional activity in Shell and therefore this data is important in answering the research question. Moreover the data from academic articles, textbooks are used to form the theoretical basis for the research objective. .
10.6 Primary Data:
The project aims to analyse the online consumer perceptions and interpretations of the Shell's retail promotions in the UK. Therefore based on the exploratory nature of the research objectives depth interviews were used to provide insights into the consumer motives for engaging in the online promotional activity of Shell and how they perceive the information communicated and what are its effects on their decision making process (Curtis et al, 2005, pg41).There were 11 informants who participated in the research process who claimed to surf online almost every day for a minimum of 3 hrs. The choice of participants is based on the research objective as 1 participant from Shell retail team responsible for the implementation of the promotion was chosen in order to understand the perception of the decision maker from online consumers and considering the time constraints of the research there were 10 consumers chosen from the U.K to represent the online consumers. The author conducted the interviews that lasted approximately 20 to 30 minutes. The sample size chosen is based on convenient sampling considering the research duration of 3 months and the access to consumers. However it is been suggested that a sample size of 10 could be acceptable in qualitative research (Malhotra et al, 2007)
10.7 Data Analysis:
Primary Research & Interview Method: The research methodology chosen is qualitative and the most popular technique suggested in academic literature on qualitative research is interviewing (Lee and Lings, 2008; Malhotra et al ,2007 ; Silverman,2006,). However it is useful to consider the other qualitative techniques available in order to justify why the interviewing technique chosen is appropriate for this research. The commonly used qualitative interviews are in-depth interviews which gives insights on psychology and psychoanalysis (Lee and Lings, 2008). Furthermore these interviews are less structured in comparison with quantitative analysis and are to a greater extent driven by interviewees and not the interviewer (Lee and Lings,2008). Moreover these interviews when driven by interviewees have the potential to go off track leading to interesting examples and discussions which might not be relevant in answering the research questions (Lee and Lings,2008).Furthermore in this research it is necessary to look for rich in-depth answers from consumers that potentially assists in tapping the feelings, experiences and opinions of consumers on Shells online promotions. Therefore the primary research method chosen is in-depth interviews (Lee and Lings,2008).However there are two types of in-depth interviews such as unstructured and semi structured that could be chosen for this research. But in the case of a unstructured interview the interviewer uses a few topics or just one topic to prompt the interviewee who in turn is allowed to communicate whatever they intend to (Lee and Lings,2008).This would not provide the desired results to this research because the interviewer probes only to follow up on areas of interest and allows the interview to flow smoothly (Lee and Lings,2008).Where as in the case of semi-structured interviews the interview is guided by a topic guide which is derived from the research objective and the information required to answer or test the validity of the research propositions. This approach is more suitable for this research where the consumers are asked fairly specific questions based on the information required and probed to obtain the required information (Lee and Lings, 2008). Although this approach gives a lot of flexibility in terms in following up individual points it also allows the interviewer to ask the same questions to all the interviewees (Lee and Lings,2008).It is also suggested that unstructured interviews are less likely to generate useful data as there is no guarantee that the interviewee would talk about anything relevant to the research objective (Lee and Lings,2008).However based on the literature review there is a clear appreciation of the research topic which would be useful in developing a structured interview guide(Lee and Lings,2008). Therefore semi structured in-depth interviews is chosen as the technique to gather primary data for this research (Lee and Lings, 2008).
Although the research uses convenience sample and has taken 11 interviews out of which 1 interview is from Shell marketing manager responsible for the promotional implementation. The other 10 participants have been chosen based on the purpose of the research where the participants can provide the relevant information for the study (Ref).Therefore a mixed population of individuals who are regular online users and often shop online and use vehicles to commute were chosen. Since the research objective focuses on the interactive experience provided by the online promotion. It is suggested to take an emotionalists perspective and focus on open ended interviews (Lee and Lings, 2008; Silverman, 2006).
The research sample was chosen based on the purpose of the research with the specified characteristics such as online users with vehicles and who use either Shell or competitor petrol stations to fill fuel for their vehicles and have been in the U.K.Therefore factors such as age and demographics were not considered while choosing the research sample.
Analysis of data using the analytical framework:
Code List and Themes:
Discussion of Research Findings:
This research was conducted through semi-structured in-depth interviews in order to prove or disprove the propositions which were derived from the literature review. Therefore the interview questions were linked to the information objectives required to validate the 4 propositions. Based on the analytical framework developed for this research and the literature review this section would critically analyse and discuss the results from the interview for each of the 4 propositions.
Proposition 1: Online product Representation drives consumer Behaviour
“Shell's representation of the product online plays a key role in driving consumer attitude towards shopping online and the intention to buy.”
This proposition is derived from the research conducted by many academic authors who suggests that the representation of the product online and the web experience play a key role in driving consumer attitude towards shopping online and the intention to buy (Burke et al. 1992, Jarvenpaa and Todd 1997a and b, Nowlis and McCabe 2000, Novak et al. 2000).The objective of this proposition is to understand if the representation of the product by Shell's online promotion drives consumers to shop online or stimulates their intention to buy. Furthermore it also supports Shell's strategic approach to stimulate product trial.
This proposition was tested amongst 10 online consumers and 1 online marketing manager from Shell in order to confirm if the perceptions from the responses are convergent with the proposition. Based on the interview with the participants two themes emerged: Effort, Convenience and Innovation. These three themes would be discussed relative to the proposition 1.
Effort: X out of the 10 consumers responded that it was too much effort to get a 1 pound off and moreover reported that the printer set up suggested on the voucher print off page communicates too much effort for the consumer. Furthermore consumer 2 stated that “but what would put me off is that its lot off effort for just 1 £...I'm not keen to download a s/w to print off a voucher even if there is no spyware or anything”
Both these perceptions suggest that the product features do not communicate enough value to justify the effort involved
However the online marketing manager from Shell felt that it was fairly “simple and easy process” and felt that “there was quite a lot of web traffic and quite a lot of consumers downloaded it” However the secondary data provided from Shell show that although x % of consumers downloaded the voucher only y % of consumers redeemed it. This supports the fact that most consumers feel that it was too much of effort for a 1 pound off. However there were suggestions from consumers that instead of asking to take a print out Shell could offer an easier option for example: pin number or code which could be used at the petrol station.
Based on the analysis of the responses from the in-depth interviews proposition 1 is proved to be true. The results clearly show that product has not been represented clearly to the consumers and there has been conflicting messages on the promotional ad which has diverted the consumer's attention. For example the information about adding printing software to print the voucher has lead the consumer to think that it was too much effort for a 1 pound voucher. However the online marketing manager perceives that the voucher redemption process is simple and easy. Moreover thinks that the promotion communicates the message that the fuel is high quality high performance. However most consumers have said that they perceive all fuels to be same and in turn make a choice based on convenience.
Proposition 2: Enjoyabale online experience leads to increase in sales.
“The consumer's perception of enjoyable online experience has a positive impact on impulse purchases leading to increase in sales for Shell.”
This proposition was developed from the research conducted by (Koufaris, 2002) which is supported by many studies (Burke et al. 1992, Jarvenpaa and Todd 1997a and b, Nowlis and McCabe 2000, Novak et al. 2000).The secondary research from the literature suggested that the consumers perception of enjoyable online experience through powerful web features and well designed web pages might influence consumers positively to engage in a impulse purchase. The objective of this proposition was to understand if the consumers enjoyed interacting with the online promotions of Shell and did that stimulate them to engage in a purchase. The question with the Shell online marketing manager is around the perception and experience they intend to create for the consumer.
Based on the analysis of the responses from the interviewees the following themes emerged
“The online virtual experience created by the shell promotion will play a major role in creating a competitive advantage.”
Proposition 4: Trust and credibility reduces uncertainty and adds perceived value
“The communication of trust and credibility by the online promotions of Shell reduces uncertainty and adds perceived value to the brand.”
The is proposition was
The research topic is derived from the complexity of online consumer psychology, which remains a nightmare for most marketers' in spite of numerous scientific and behaviouristic frameworks suggested by reputed academics. This research concludes that the online promotion by Shell neither creates nor destroys value to the brand. creating value. However this is just the case with selected promotion and cannot be generalised to the topic of online sales promotions. Based on this research and the literature review it is suggested that the interactive nature of web could be used by marketers to communicate trust, credibility and perceived value which in turn could establish a sustainable advantage for firms.
7.0 Limitations of the Research:
This is a pilot research on the strategic role of online promotions in establishing a sustainable advantage for shell in the U.K.The sample size of the research was limited to 11 due to access constraints to actual consumers whose contact information could not be disclosed by Shell. Therefore based on the research objective a sample of 10 online consumers was chosen based on the following criteria.
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