The second method use it to allow the customers to look through Tesco’s product range, check prices and availability, place orders online, and also choose a delivery slot. All of this could be accomplished using the Internet through the Tesco Direct site (www.tescodirect.com). Tesco owned its own ISP network (www.tesco.net) and offered free Internet service to all its customers. The company had developed two Web sites that customers could access easily. The corporate website (www.tesco.com) provided relevant information regarding online shopping, specials and promotions as well as corporate information. Given the wider reach that was possible for selling dry goods, Tesco aimed to generate 40% to 50% of sales revenues from non-grocery products.
The way the order fulfilment process at Tesco is as shown:
Tesco was the first in the U.K. to set up a transactional Web site where customers could log in to a central system to buy groceries online. Since having an online presence, they slowly began to process into other non-food lines and added a much wider delivery region, and have been making millions of pounds in profit. In many ways, Tesco was a company that was waiting for the Internet to grow into the digital marketplace that at present had done.
ALDI is an international discount based in . It is actually two separate companies, but is commonly referred to as one. The company's name stands for Albrecht-Discount, using the founders' last name. In Germany Aldi is said to have been the first real discount supermarket. In 2006, its chain of over 5000 supermarkets with low prices on a limited range of goods can be found in sixteen countries with global revenue of 37 billion dollars (29.3 billion euros). The name Aldi is not used in all the markets it operates, in and the company trades under the Hofer brand. Also this company is in the track towards being successful in the U.K.
Aldi have two web sites, one which is based on the U.K website and another which is a worldwide website:
Even though having its own web site, not only in the U.K but across the world, the question being is that why isn’t Aldi listed in one of the top five leading supermarkets? Why isn’t it as successful as the leading Supermarket in the industry Tesco?
Both of these businesses have the same objectives but not the same aims, due to this reason one is successful than the other.
Even though both businesses have an online presence, the difference between the both is that Aldi having its many websites, doesn’t compare with the services provide by Tesco; one of the main uses of Aldi having an online presence is to promote its best-selling products, advertise its campaigns, recruiting employees and providing the internet surfers with information about the stores itself. Aldi do not sell its products online and provide a home-delivery service to its customers, but they only promote them, due to this fact they are falling back a step behind Tesco.
Task.2: Describe, with well-chosen examples, the impact of a business’s online presence on its customers.
Tesco has grown since it started its online presence; it has expanded to 250 outlets, more than a third of the chain's 690 British stores, enabling it to deliver to 91% of Britain's population. The business is on track to turn in revenues this year of more than $450 million and have a respectable net operating margin from groceries of around 5%, or more than $22 million, (estimated). Last year, the dot-com unit lost $13 million due to the cost of expanding into new businesses such as CDs and videos, but it was profitable on groceries.
Even today, Tesco.com handles more than 3.7 million orders per year and half of its online customers weren't previous Tesco customers.
When the online services was launched, majority of the customers weren’t aware of these new services, until Tesco began advertising online services on television, billboards, radio etc..
Even after the advertisement being launched the numbers of customers slowly increased, even thought not all customers had access to a computer; with a few downfalls Tesco knew that they had to attract more customers. Later customers began to realise that they can benefit from the online services, because it saves them from travelling to their local Tesco/convenience store, another point which they’ve realised is that purchasing online products are cheaper regardless whether they are food or non-food products, quickly this information was spread nationwide.
To attract customers Tesco launched different programmes aimed at different types of audience, for example they would show commercials of toys in between children television shows, or advertise kitchen tools more likely in the evening, so that parents/ chefs may be interested and so on…
Also they’re given a 24hour service, with customer choice, the availability of products, flexibility and also global availability.
Iceland was the first to do home-delivery in 1997, and wasn’t as much successful due to what they sell (only food), when Tesco began this operation, more customers are attracted to them due to the various products they sell.
Various other companies began changing their methods of trading due to how successful Tesco had become, therefore they try their best to keep on the same track as Tesco since they’re the nation’s no.1 leading supermarket.
Tesco’s online presence has helped its business to achieve its aims and objectives in certain areas, the main aim of a business is to make a profit, and the website is fulfilling its duties.
Often when a company sets up its own web site, goals are listed only in terms of the number of visits (for ad sales purpose) or in actual sales. Even though it’s true that everything comes down to the sales volume, there may be additional benefits that your online presence is providing, which could be relevant. Below is a list of five benefits in terms of financial savings, which can make a great difference to profitability over the course of a year.
◊INCREASED PRODUCTIVITY OF SALES PERSONNEL
Even though the company establishes its own web site, its sales staff would normally explain everything to potential new customers. Questionnaires would have to be carried out, brochures need to be mailed, phone calls would have to be made, all of which take time and effort (time is money). But when a company develops a web site that effectively describes all products and services and shows the strength and reliability of the company, customers often require only a few phone calls before they are ready to buy. This translates directly into "achieving more while doing less", a goal of any marketing tool.
◊DIRECT REDUCTION OF COSTS
As a result of a sales staff's increased productivity, many marketing fees can be reduced by a decent web site. Cost reductions are the result of, having fewer and shorter long-distance calls and faxes, reduced overnight deliveries and mailings, reduced need for designing and printing of brochures and other sales materials, and the possibility of replacing a high percentage of phone calls with E-mails.
All of the above points are especially relevant for reducing expenses when handling customers nationwide.
◊EASE OF ADDING NEW PRODUCTS
When a company's marketing materials contain only written brochures, flyers, etc., it's costly and time consuming to add new products. Most of the time companies need to completely re-design and re-print brochures when adding just a single new item.
But with a web site, all that's required is to add a new page, and to refer customers to it. Information about all products can be much more general than when using printed brochures because there is, practically speaking, no limit to space on a web site. Every part of product and service can be set forth in detail, including model features and prices, servicing, warranties, etc. The cost of this is condition compared to the cost of creating new written material.
◊REDUCED CUSTOMER SUPPORT COSTS
Without a website; a company is strained to handle all customer inquiries and complaints over the telephone phone, fax or by sending letters. This often requires frequent keen employees and may even need round-the-clock availability of technical staff. But a company can use part of its web site particularly for taking care of product questions. Many companies encourage customers to E-mail, rather than to call. This allows employees to respond at their convenience, and enables them to gather all required information before responding.
◊TWENTY-FOUR HOUR PRESENCE CAN HELP A COMPANY'S MARKETING ADDRESS A WIDERAUDIENCE
Majority of the internet users prefer to shop or gather information in the evenings and on weekends at times when a company's sales staff may not be available. A web site, fairly plainly, is available for access 24 hours a day, 7 days a week. And being "open" all the time doesn't cost a penny more. This can allow a company to reach a wider market than if its sales personnel simply sat at their desks calling prospective customers during regular business hours. Using the Internet also helps the customer to choose from a wide range of businesses and to pick out what’s the cheapest price of that particular product.
Even when a company tries to reach its aims and objectives, it is not always successful due to some minor/major downfalls.
◊Lack of Visual and Verbal Cues
It can be difficult enough to understand exactly what someone is saying in a face-to-face setting, but exposed of the kinds of visual and hearing verbal cues that the business takes for granted when communicating in person. The lack of visual cues is also especially important for customer’s who would like to discuss a visible physical disability and would like their staff (at the business) to be able to see exactly what they are talking about.
◊Lack of Physical Presence
The lack of a physical presence of a service adviser may make some people feel that the service is less friendly, which would result Tesco in gaining fewer customers.
◊Asynchronous Nature of Email
It can be annoying to have to wait for the service advisor to reply when using email and other forms of communication that are asynchronous (meaning that two people are writing at different times, as opposed to conversing in real time). Therefore customers would be unsatisfied.
◊Urgency
In a similar situation, the expected time delay related with email exchanges precludes the kind of urgent attention (or even emergency response) which is possible in a face-to-face setting.
◊No Regular Appointment Times
The choice to work without fixed appointment times can be an for some customers; not having fixed appointments can be a disadvantage for others. Many customers prefer 'having' to attend and meet a customer service adviser face-to-face.
◊Computer Concerns
Relying on computers can also bring its disadvantages, because not every customer has a computer, or even having one they may or may not know how to operate one.
◊Equipment and Internet Service Failures
Hardware or software failure or internet service failure can impact the online availability of both the business and customers.
◊Negative Publicity
When an organisation tend to invest money in advertisement, the risk of doing I whether if they do or do not get negative publicity. At times the media may create stories that would discourage customers to come to your store, therefore you would lose customers. On the internet customers/buyers are able to find out information about a particular business, its good and bad, it also provides chat rooms where different customers would debate on what is the best business to go to and why?
Task.3: Analyse and explain, using specific examples, how having an online presence would help a business to support its aims and objectives by attracting additional customer interest.
Tesco having an online presence had proven to be slightly unsuccessful in the beginning but after a short while it become VERY successful, putting the business on top of the list in supermarket trading. Being beneficial for customers and the business itself, the business would find many uses using the internet, it is used for the freedom of operation and the find out where a business can be located, i.e. somewhere where labour and land is cheap.
Tesco also improvises its flexibility of location.
Tesco didn’t just create a website and relied on its customers to use it, they had to create a reason for customers. They had to make the website look attractive so it would be eye-catching in a customer’s point of view, it has been created so that it is easy to use, and also a major point is that it gives the customer satisfaction that it’s safe and secure, because customers have to give in important details, i.e. home address, bank details etc…
Therefore it is given the title, user friendliness.
With a successful online presence, this means that majority of the staff at Tesco plc have no reason to be trained to become customer service advisors due to its web page doing most of the work; since the employees aren’t to be needed in that department, they are given other targets, like to do more work in its shops and warehouses. Using the spare time they have, should be used to improve their connection with the suppliers AND also being responsive to industry demands and trends.
Not being governed by their opening hours, Tesco created an opportunity for its customers to be open 24 hours a day, at the superstore and even on the web page. Giving the business opportunities of trading during the night, and also creating jobs for employees to fulfil set targets, e.g. re-stocking the shelves with its products, or discussing ideas for future investments or plans.
Tesco benefits a lot from their online presence, one of the main uses they have with it are the use of cookies, this Is where the business are able to find out what customers are often buying, checking what they often purchase, with this information, they promote the most commonly bought products and give the customers special set prices.
Task.4: Evaluate to the extent to which the website created may both attract customer interest and facilitate greater freedom of operation, thereby supporting the achievement of business aims and objectives.
When the website was first launched it became popular in particular areas around the world, for example the US didn’t take use of Tesco’s online presence as the UK and Europe. An estimate of over 500,000 online customers accepting online orders from over 100 different stores, after the debut was launched.
At this present time the business is making most of its profits coming from online customers, mainly due to the reason of which they purchase non-food items, making over £31.2 billion in the first quarter in the year 2000 and now its 6 years later and it has progressed much more.
With the web page Tesco, have provided online customers various opportunities to find out more information about the business, and image shown above on (on page 2) of the main home website, shows other links like, Groceries and wine, entertainment and books, healthy living, finance and support, and even showing more stores online, indicating the nearest Tesco store near you. It provides a high extent of information, showing why Tesco is the best place to buy your daily needs, from finance and insurance, to groceries and wine.
The service provided even indicates the prices of Tesco’s products compared with other businesses.
For example:
Here is a fine example of how much you exactly save from the product Tropicana. This service provided is so advanced that you could type any item of your choice, which Tesco provide and see how much you exactly save. It may be as little as 1p but it all adds up. Personally I thing this is a great service which Tesco provide.
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All prices listed were collected on 02 October 2006. Source -
With clear understanding on how to use the Internet and the quality of service provided, customer’s new and old ones are attracted to Tesco. Facilitating a greater freedom of operation.
The aim of the business is to fulfill the needs of its customers by providing every possible kinds of products from food to non-food, instead of going to a shop like PC WORLD or CURRYS to buy CD’s they can go to Tesco, instead of buying DIY equipment from B&Q, Tesco also provides a large selection of products under the same category. Another major part of a business’s aim is to make a profit for itself, and clearly standing Tesco IS no.1 on the in supermarket trading, earning billions more than other rival organisations.
So far the company has been meeting with all its objectives, with customers spending more time by buying products online, this gives time to the employees, managers, directors etc… to create more targets and objectives for themselves so that they’re able to keep their position to be no.1.
By meeting these objectives, results in customer satisfaction and in this kind of business, their number 1 priority are the customers.
There has been negative point of views that have been mentioned, like media trying to make money by making stories against Tesco, for example, there was once a claim that there are insects in some of the food products, which was cleared through a process of a lawsuit.
A minority of the customers may complain about the slow service provided or the web page wouldn’t load up properly, but always Tesco comes back with a method to satisfy its customers, by giving discount on late deliveries and vouchers for particular products.
Tesco have face its bad periods, but it had always found a solution to sort it out and to improve on any mistakes made.
With a leading industry like Tesco its surprising in which limits they would go to, to be no.1. And what they have realized that with great power, comes great responsibilities.
But after the successful launch of their online presence Tesco’s income per year has increased, clearly showing the increase during the period from when they launched the programme up to this present time:
Received from: (http://www.tescocorporate.com/page.aspx?pointerid=14F28D6E0F584823BBB3DDDBE9B14EB4)
Bibliography
Information gathered from:
http://www.tescocorporate.com/page.aspx?pointerid=DA49BE38CB2142D988B436E900B44B78
Images gathered from:
http://www.bized.ac.uk/educators/16-19/business/strategy/presentation/busobjectives2map.gif
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