Digital Marketing of Tesco and ASOS – (CB9067)


Digital Marketing of Tesco and ASOS – (CB9067)

Digital Marketing. CB9067. Kent Business School.

This is part of an essay comparing Digital Marketing between a Multichannel company and a dot com firm.

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Fitzen (2009) defines multichannel retailing as a distribution strategy that companies apply to serve customers through more than a single sales channel. The example given for these channels includes television, the internet and retail outlets. The attribution to the burgeoning of application of multichannel retailing, as offered by Gajanan and Basuroy (2007), is the revolution the internet brought to the realms of retailing and distribution. Customers have more access to information and Gajanan and Basuroy (2007) emphasize that only those firms that understand the customer and use all possible channels to reach them shall succeed. On the other hand, a .com (dot com) firm is defined by Buell (2001) as a firm that conducts most of its business online. In other terms, the definition of .com companies includes all e-commerce firms. Ireland, Hoskisson, and Hitt (2008) emphasize that .com companies have seen growth because of increased usage of the internet and the dynamic nature of online markets which favor even start-ups.

The intent of this essay is to compare and contrast a dot com firm and a multichannel retailing firm with keen interest on how they reach their customers and how they satisfy the customers. To achieve this, the essay shall firstly offer and introduction to the two firms. the essay will also discuss how the firms attract customers and how they drive satisfaction. Lastly, a brief discussion of lessons learnt is offered.

A background to Tesco and ASOS

Tesco Company is selected as the multichannel retailing company. Tesco was established in the year 1919 by Jack Cohen as a stall for the sale of groceries in London. In 1947 Tesco had grown to a private limited company under the name Tesco Stores Ltd. According to Clark (2014), the main attribution to the growth and success of the firms was buying up of the rivals businesses. It bought stores with already established distribution channels such as the Williams Store. Over the 90s the chain store had managed to achieve a great share of the UK market, it is also during this period the store launched its online portal. Its aggressive marketing campaign saw it rise to the top as a major groceries store with ever increasing profits. Only recently (in 2013) did the store observe a decline in profits. According to Winterman (2013) Tesco is the third largest world supermarket and the biggest UK private employer. Further, the firm has a massive reach with over 27 million people holding its loyalty cards. ASOS on the other hand is a British online retail company that was founded in 2000 (Asos, 2015). The firm has seen tremendous growth over the years to winning the best internet retailing awards in the year 2014. Stocking over 36,000 fashion items and employing over 1,000 people, the firm is arguably UK’s leading internet fashion retailer (Carter, 2010). Carter (2010) adds that the firm is the trend setter in fashion because of the reach it has on online consumers. The firm is selected as the .com company dues to its familiarity.

Comparison of methods ASOS and Tesco have used to attract online customers

The fundamental of any business is based on the ability to understand the customer and to satisfy him/her. This sentiment is based on the position taken by Gebauer, Gustafsson and Witell (2011) who insist that the contemporary business world is coupled with stiff competition that has driven the bargaining power to the customers. Thusly, the customers are the central piece for any organisation. It is also factual to posit that without constant flow of customers no business can succeed. Tesco and ASOS are no different. This section compares and contrasts their ways of attracting customers online.

Firstly, it is imperative to note that ASOS is wholly internet-based and thusly as posited earlier has its entire operations online. As such, the firm’s target market being online customers, it applies a lot of different methods to reach them. Basing on Carter’s (2010) discussion of the rise of ASOS, a number of methods of attracting online customers are apparent. The firm has a wide range of collections at fairer prices than those of competitors. Therefore any customer navigating websites looking for fashion items is likely to end up at ASOS’s website. In addition, the firm has designed appealing web aesthetics and further customised websites for different locations including US, Africa, Germany, UK and France. This can be viewed as part of the promotional mix specifically sales promotion through the ‘place’ perspective. Other marketing campaigns include the recent ASOS ethical collections’ that encompasses clothes made through eco-friendly methods and recyclable fabrics (ASOS, 2015b). Such a differentiation strategy is bound to make ASOS more appealing to a certain group of shoppers especially those concerned about the environment. As a way of appealing to end users the firm also uses celebrities to lure customers. As evidenced at Red Carpet Fashion Awards (2015), the firm clothed most of the celebrity figures. Lastly according to a research done by E-digital – an online research firm – ASOS has reaped from social media application more than any other retailer (E-digital Research, 2015). This is majorly because the firm expanded its Facebook store and continually gave uses offers including price discounts, gifts, coupons et cetera.

Tesco on the other hand has employed almost similar tactics in attracting its online customers. A review of Tesco strategies done by Steinner (2012) evidences this. For starters, the firm has in 2012 adopted a big move whereby it is customising its website relative to the wealth of the customers. In this case, customers showing affluent spending based on their Tesco club card data are exposed to luxurious items when they visit the firm’s website. The hard-up customers get different items on display. This is similar to ASOS’s move of customising websites for different locations only that Tesco categorises its website according to purchasing power.

The Instructions

Your task is to compare and contrast a well-known multi-channel firm and a well-known dot com firm (i.e. 1 firm of each type).

1.        On page 1 the standard KBS cover page plus a word count.

2.        On the next page the Table of Contents [TOC] page which includes all headings and page numbers after the TOC.

3.        On the next page the Executive Summary [400 words approx].

4.        Introduce your work, explain your choice of firms giving key background on the firms [500 words].

5.        Compare and contrast the key methods the firms you have looked at use to attract online customers [950 words].

6.        Using the model outlined by Anderson and Swaminathan (2011), which will be covered in lectures and seminars, compare and contrast how the twofirms drive customer satisfaction, which in turn influences loyalty [950 words].

7.        Identify the most important 3 things you have learnt from doing the assessment [350 words].

8.        Briefly conclude your work, summarizing your findings and areas you think you could be looked at in more detail [350 words].

9.        Reference list with full details provided.

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