What would be the most effective way to market an on-line shopping service for Tecsave? Background info: Tecsave

What would be the most effective way to market an on-line shopping service for Tecsave?

Background info: Tecsave

Tecsave is now a supermarket store but when Tecsave was first established Tecsave was a grocery store situated somewhere in the Midlands. A sole trader named Robbie Peers in 1947 founded Tecsave. Within a decade Tecsave expanded internally by becoming a PLC (Private Limited Company) and by situating 56 branches somewhere in the Midlands. At the present time Tecsave have continued to expand by placing 187 branches situated in various parts of the U.K (131 branches situated outside the Midlands). Tecsave’s niche market is the supermarket industry. A sole trader is some one who runs/owns there own business. The advantages are easy to set up (few legal requirements, keeps all profits (from capital) decides what to do keep some as retained profit invest etc, complete control over business, choose holidays how long working for, close contact to regular customers can see demands are met to. The disadvantages are more responsibilities has unlimited liability if company goes in debt debtors can force Robbie Peers to sell possessions. These where the advantages and disadvantages implicated before Tecsave became a Private Limited Company. The main advantage of being a Private Limited Company is Limited Liability this is if Robbie Peers is in financial difficulties he can not be forced to sell personal possessions to pay of the debt.

Background info: Supermarket/grocery industry

The grocery market in the U.K is approximately valued at 104 billion this industry is dominated by few players the four major players are Tesco’s who lead the supermarket industry, Sainsbury’s, ASDA and Safeway. Selling food is the core product for these companies but are known to sell other products take Tesco’s for instance they do not only sell food the also sell electricals e.g. Televisions, VCR etc and cloth.

Some of the major companies also trade in other countries such as Tesco’s mainly in the MEDC (More Economically Developed Countries). The larger stores usually by there vegetables etc from non EU (mainly LEDC example India, Malaysia etc) countries because the will by them cheap and then sell them on for a lot more. In the supermarket industry sales have always grown even during periods such, as the 80s and 90s the retail market has always been kept secure from decrease in revenue.

Developments

The larger chains have continued to widen the choice of brands such as Tesco’s has Tesco’s economy class this is the cheap and have less quality then the rather more well known brands as well as developing on-line shopping. As the larger chains have continued to diversify in what products they sell or services take Tesco’s for instance they are beginning to sell electrical appliances, movies, books, gardening equipment, medicine and cloth etc. Companies are begging to do conglomerate integration for example Sainsbury’s are supplying gas and electricity with Scottish Power and Tesco’s have diversified into loans, mortgages ...

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Developments

Background info: The Market

The large chains have managed to boost their market share of the retail grocery market over the past decade. This is because the larger chains have money to invest in to make more branches and Metros. Metros are miniature versions of the larger stores for example Tesco’s

Background info:ON-LINE SHOPPING (e-commerce)

Research has shown that approximately 85,000 customers are likely to be affected by the new delivery charges which are £3.99 through out noon, at 5pm the charge is £5 and at peak times the charge will be £6.49 for groceries being delivered. The people who are (CRTP) Cash Rich Time Poor are being affected the most through higher delivery charges related to on-line shopping. Some companies have different charges for products being delivered at different times. Research has also shown that more people are starting to use the Internet rather then going to the shop and purchasing the product or service in person. This was advertised on the television (News). Some shops do not show some items on shop floors they can only be purchased on the Internet.

Some competitors such as Waitrose are very pleased with the way that their marketing strategy is working very well. Waitrose now this because they researched and found out that they are attracting more customers then Tesco’s (Market leaders) this is due to Waitrose having a free delivery service.

Background info: Marketing department

The function of the marketing department is to find out what the customers want to make new products or how to improve on existing products. The company will do this through primary or secondary data. The company could research primary data by doing a series of different techniques such as questionnaires, surveys, cold calling, and tests etc. The company could research secondary data by receiving data of other companies’ etc. The marketing department also decide about the four P’s which are Price, Place, Promotion and the product.

Price = How much the product will be sold for.

Place = Where the product shall be sold.

Promotion = How the product shall be advertised.

Product = A product is the merchandise which is going to be sold on to make a profit. This is the most important out of the four P’s because without this you can not have any of the other P’s other there will be no product to advertise etc.

Why companies want to grow

Companies may want to grow to increase revenue, attract bigger names (brands NIKE etc), increase amount of branches, employ more people, increase or upgrade machinery,

Introduction to report

The report is looking at Tecsave. Tecsave is second in the supermarket industry after Tesco’s. Tecsave want to become market leaders. A market leader is the company at the top level of production in their industry. Tecsave wants to become market leaders to grow, increase revenue and to become market leaders. To do this Tecsave are going to market an on-line shopping service. An on-line shopping service is when customers order products of the Internet to be delivered or picked up. There is usually a charge for the customer products to be delivered. For the on-line shopping service to have a positive influence on Tecsave. Tecsave need a strong effective marketing strategy. An effective market strategy is the plan of action the company will take to become market leaders. One acquisition that the company has made (effective marketing strategy) is to market an on-line shopping service. The target market that Tecsave will be aiming this strategy at is the elderly because they are old and fragile. Cash rich time poor (CRTP) people because the do not have the time to spend an hour or so to do the shopping instead the can just click on what they want and it will be sent to there house at what ever time is most suitable for them and the company.

The terminology that I have used is the four P’s Price Place Promotion Product, e-commerce, Market research, Primary research, Secondary research, niche market, Growth, MarketAlong with increased Internet usage, online shopping is also growing in the US. The Strategis Group found that average monthly spending on online purchases was $68.50 in 1999. Nearly 40 percent of Internet users spent an average of more than $50 per month. Like the Angus Reid study, Strategis found the US will keep adding new Internet users at a considerable rate. Thirty-five percent of non-users are likely to be online in the foreseeable future, Strategis found, meaning 35 to 40 million additional Internet users in the US. More than half (52 percent) of non-users are in households with an annual income less than $40,000. Only 29 percent of current Internet users are in this bracket.

According to the Angus Reid study, Canada ranks second behind the US in many categories, including Internet trial (64 percent), usage (56 percent), knowledge (54 percent), and home PC penetration. In Europe, Germany ranks third in terms of total Internet users with 18 million, and the UK fourth with 14 million. But the Angus Reid study also found that both Eastern and Southern Europe are showing stalled rates of PC penetration and Internet usage. These countries also have the highest proportions of adults with no interest in going online.

In Asia, Hong Kong (35 percent), Japan (33 percent), and Singapore (33 percent) made it into Angus Reid's top ten in terms of the percent of the population online. Japan, thanks to its wireless access options and wireless broadband initiatives, is sure to add millions of new users to its 32 million existing users, the study found.

The Angus Reid study also confirmed a strong link between initial trial and on-going Internet usage.

"This is no passing fad," Reid said. "Once you're hooked, adoption rates go through the roof. But now that the Web has achieved critical mass, the key to future growth involves breaking down barriers to access."

Cost is the biggest barrier to Internet penetration, but it is the cost of a PC, not the access itself, that is keeping people offline. Home Internet access trails almost every other household consumer electronic device in terms of ownership and usage. Almost all (97 percent) of the respondents have a TV, 48 percent have a cellular phone, 42 percent have home computers, and 20 percent have home Internet access.

According to Reid, making home Internet access cheaper and easier through TV-top boxes and video game consoles will be the answer, along with wireless Net access.

"There is a tendency to assume the 'North American' model of Web access from a home PC is the only the Web will continue to develop," Reid said. "The 'Euro-Asian' model of wireless Web access on cellphones and palmtops, and public access to the Web in cafes and kiosks must play a greater role."