A CRITICAL ANALYSIS OF ONLINE MARKETING IN RETAIL INDUSTRY IN THE UK, A CASE STUDY OF TESCO

Abstract The study is to analyse the online marketing in the retail industry UK in the context of Tesco Plc. Online marketing means the development and advertisement of goods and services through the internet, which is also familiar as e-marketing. These types of marketing lead the consumers to the companys website. Online marketing connect the buyer to the companys website and helps the company to inspire its customers to buy its goods and services via internet, otherwise using the frequency of other internet sites. To achieve the research objective the researcher will follow the qualitative research method and the primary data will be collected from the sample size of 20. The sample includes customers and employees of Tesco. 10 customers and 10 employees including the senior marketing manager of Tesco will be selected through the stratified sampling method. Collected data will be analysed using content analysis and narrative analysis, frequency distribution, and descriptive statistics.

Table of Contents Contents Chapter 1 (Introduction) 1.1 Research Background 1.2 Aim and objective of the study 1.3 Research Question 1.4 Rationale behind the Chosen Research Topic 1.5 Background of Tesco (Case Company) 1.6 Structure of the Study Chapter 2 (Literature Review) 2.1 Introduction 2.2 Marketing, E-marketing and Marketing communications 2.2.1 Marketing 2.2.2 E-marketing 2.2.3 Marketing communications 2.3 Decision making factors 2.4 Online promotion 2.5 Impact of online marketing on Businesses Chapter 3 Research Methodology 3.1 Introduction 3.2 Research Philosophy 3.3 Research Approach 3.4 Research Method 3.5 Research Strategy: 3.6 Sampling technique and Sample Size: 3.7 Data Collection Techniques 3.8 Data Analysis & Presentation Method 3.9 Ethical Considerations & Limitations Page No. 01 01 02 02 02 03 04 05 05 05 05 05 05 06 07 08 11 11 11 11 11 12 12 12 13 13

Conclusion References

13 14

Chapter 1 Introduction 1.1 Research Background Online marketing means the development and advertisement of goods and services through the internet, which is also familiar as e-marketing. These types of marketing lead the consumers to the companys website. Online marketing connect the buyer to the companys website and helps the company to inspire its customers to buy its goods and services via internet, otherwise using the frequency of other internet sites. As per Verdon (2007), the objectives of online marketing is not only to leads its consumers to the websites to purchase its goods and services but also a effective strategy to build a connection with the stakeholders and customers for keeping adaptation to the profit. Besides, Krishnamurthy (2007) said that, online marketing is the combination of different tasks to take grounding for the companys website which is able to advertise on the website and it also provides electronic mail to the potential customers. And also advertisement on the search engine could be done. The development of online marketing is on high speed. The organizations are now able to attain new capacities and use new scopes in the more successful way through modern technology. The business is now able to offer new goods and services for the same or more valued with the help of online marketing. According to Epstein and Yuthas (2007), revenue about twelve billion USD for businesses throughout the world is gained because of online marketing. However, the frequency of online marketing is now increasing over last few years. In UK, the growth rate of online marketing is assumed to be around forty percent and it is also assumed that it will be continued in increasing its growth rate over the next few years. Online marketings foundations behind its rapid growth is on the development considering the segmentation marketing, feedback to the behavior of internet use, at last on custom-made experience. Online marketings advantages are expanded and sometimes out of the consumers. According to the Office of Fair Tradings (2011), researched statistics say that 2.5% of entire household expenditure is at present spending on the online market as well as its amount is around 18 billion per year. It was 560 in 2005 that was expensed by the consumers. A very low coverage in UK market is still represented by online market. But the sector of music, tickets and other electrical products is growing very rapidly.

1.2 Aim and objective of the study This study is to analyse the online marketing in the retail industry UK in the context of Tesco Plc. The objectives of this study are: i. To identify and analyse the online marketing tools used by Tesco; ii. To evaluate the impact of online marketing on customer buying decision making process; and iii. To explore the impact of online marketing on the performance of the retailing company in the context of Tesco 1.3 Research Question

i. What online marketing tools are used by Tesco? ii. How online marketing impact on customer buying decision making process?

1.4 Rationale behind the Chosen Research Topic

Measuring the importance of online marketing is the aim of this study and to find the paths how the customers behavior upon purchasing pattern has been influenced. In line with Harris and Dennis (2008), research linked to e-consumer behavior become more significant due to the rapid growth of modern technology in online marketing. To be updated and to cope up with the pace of technology as well as are supposed to being dependent on it due to the rapid development the organization at present becoming more accessible. It is considered as famous path to gain a leading place in business. So, the todays consumers are now capable of shopping from home, office or anywhere. In line with BRC (2008), shopping on online is becoming more popular as well as the traditional pattern of shopping is declining related to shopping in online. The measurement of affects of online shopping in consumers behavior is very significance. So the project topic A Critical Analysis of Online Marketing in Retail Industry in UK, A Case Study of Tesco is more up to date and is related enough. 1.5 Background of Tesco (Case Company):

At present Tesco is operating its business of food items in London which is the largest body of this place. Tesco is originated by Jack Cohen and selling the surfeit else spare quantity of grocery supplies at the last area of London was its main purpose. After beginning its tasks Tesco took its name according to T.E. Stockwel. In 1929 Tescos opening stall was established.

1.6 Structure of the Study The basement of this study is the structure described below-

Chapter 2 Literature Review

2.1 Introduction Different types of empirical researches linked to a study can be understood through literature review. This studys literature review prepared for marketing relation, decision making forces in online else traditional purchasing as well as online promotion. 2.2 Marketing, E-marketing and Marketing communications 2.2.1 Marketing According to (American Marketing Association, 2004), Marketing is a policy to produce, and to provide the superior services towards the consumers and a strategy to create a strong link between the company and the customer for maximum profit and building trust for future relation. 2.2.2 E-marketing E-marketing means the development marketing of goods and services via the internet which is

familiar as internet marketing as well as online marketing. It is being suggested in leading consumers to the companys website. It helps the company to inspire the consumers to buy their goods and services online else to utilize other internet frequency by driving the consumers to the companys website. The objective of e-marketing is not only to lead customers to the website to buy goods but also building a strategy to build effective link with customers and stakeholders for coping up with profit concern (Verdon, 2006). Various tasks are mixed up in online marketing such as developing a website for the company, advertising on the web, and sending email to the expected consumers as well as advertising on search engine (Krishnamurthy, 2007). It does these tasks to make the consumers known about goods and services of the company. So, emarketing is useful for the investors as well as consumers as well as stakeholders. 2.2.3 Marketing communications Businesses take the help of marketing communications to enhance the company, their goods and services. Various marketing tools are: brochures, mail shots, as well as website. The aim of these tools is to gain growing sales so it is significant that you communicate efficiently. The objective of marketing communication is to deliver a set of information to the potential customers in the system that inspire a positive, else purchasing response (Chatterjee, 2010). Marketing communication hints the total process of goods and services, which starts with understanding the customers needs and wants, and it ends with interpretation of after buying decisions. Marketing communication begins with understanding of demand of consumers. Various consumers have various demands. Therefore, marketing communications efforts will be demolished if one targets it at the irrational market niche. Making adjustment to promotional message is significance to fill the demands of each different market segments. When consumers pinpoint their demands then they should be with available information about goods and services. Therefore, information to purchase a product or service is being searched by the customers. In the mean time, informations about goods and services are provided by the organizations (Chatterjee, 2010). Nowadays, the online system is the most significant way of providing information and making information available. Companies consider attributes of the goods and services to provide information to the consumers via the online system. There are several ways to provide this information. Such as: through website of the customers, electronic add, email system, social communication site and other online system. Consumers can also examine information by the online system (Broekhuizen & Huizingh, 2009). Customers take their purchasing decisions through examining information. Therefore, in marketing communication online marketing system can play an important role. 2.3 Decision making factors For a required product decision making vary following different factors. To examine before setting marketing strategies these factors are important. The male and female customers are considering purchasing a product which varies in each situation (Zhou & Dai & Zhang, 2007). Such as: Male customers are supposed to purchase more in hardware, software, financial services and electronics, on the other hand female customers are supposed to purchase more in food, beverages, beauty and clothing. Male oriented products were more available on the online in the early stage of e-commerce. Women couldnt find products of their interest; as a result they had lower intention to shop online. In different way of shopping, both online and traditional, previous literature measured the affect of factors on customer decision making process. In the online shopping with the most important forces mutually in one study these decision positions have been measured by a few studies.

According to Kiang & Chi (2001), for the success in marketing internet product characteristics plays a major role. Besides communication, transaction, and distribution via the internet product characteristics have substantial consequence on purchasing the product. Customers perception of the quality and scope of physical merchandise is known as merchandise quality (Broekhuizen & Huizingh, 2009). According to Foucault & Schufele (2002) study, for online shopping examine numerous social and perceptual motivations. This method used in online textbook buying. The predictors of online buying are previous online buying, positive social environment, and knowledge of online retailers. Online textbook seller should focus on the social consequences of professors which were recommended. 2.4 Online promotion There are 4Ps in the marketing mix and promotion is one of them. It plays an important role to the market success. Organization makes its goods and services available to the customers and promotion is aware of assuring that customers are careful about these products. Consumer behavior is converted to the out of general price or quantity balances, altering the time that consumers purchase the goods and how much customers purchase by promotion. Customers online purchasing decision can also be influenced by the e-promotion factor. The web and internets exponential and developmental growth has accelerated the enthusiasm towards upgrading customer-responsive promotions. According to (Chatterjee & McGinnis, 2010), Online promotion has incurred about $1.6 billion of $25.7 billion in entire US online ad expense in 2009. Online promotions are generally used with the promotional offer across the utilization of development or provide opportunity for codes or relate to certain pages at the website. Eventual evidence gives direction that achievement from such customized promotion to a specific area is realized by some retailers when many of them are frightened to accept the customized online promotion because of privacy concerns, misbelieves and technological challenges. Web tracking related to online targeting and customization is one of the main concerns of numerous customers that attack its privacy. Online promotions generally use three categories and these are retail website promotion, third party promotion and email or push promotion. Incretion in total exchange rate and also exchange rate for suggestions are contributed by the online promotion categories because of growth in gross revenue, projecting sales. There was an observation that most of the customers assumed high risks in web shopping which develops developmental opportunities as a better tool to lessen the assumed risks by assumed values supposed to prevail over the assumed risks (May & Wong & Sculli, 2005). 2.5 Impact of online marketing on Businesses The usage of internet because of the change in upgrading expansion of business and their activities is the dependence of Product cycling and payment system (Law et al, 2000). In this period of business, internet services and service models are altering their shapes. Business of all sectors is now becoming more dependent on internet and their services are becoming more internets oriented and thus increasing in their implications. Positive and negative impacts towards the organizations are included in it. Todays business uses the internet as a basic marketing tool. The Companies now communicate with both the individuals and the customers to retain their position in the internet. Interactive and two available communications are the most significant implications of internet use. Except all, at lowest possible time with no hesitation information exchange can be occurred. According to Lacovou (2004) Effective communication is one of the main achievements of an organization that can be gained from internet usage and it reduces total marketing cost. Companies utilize email marketing as internet marketing which reduces cost comparing with the traditional marketing. The internet marketing provides website services, target market with the help of internet, segments them on the basis of internet use and also gives feedback to customers FAQs via internet also known as e-marketing. E-marketing promotions provide better communication with consumers and their services become available to customers very quickly. They find better profit and reduce costs in return. Antony (2007), said that modern business organizations profitability depends on the effective use of online marketing communication. To

achieve more business opportunities, e-marketing is helpful. There are lots of advantages of internet marketing compared to other traditional marketing. Some of these are discussed below: Oconnor (2003) said that, internet marketings promotion cost is much lower than traditional marketing. The printing advertisement faces the size problem but it doesnt count the size problem. Online marketing missing its effectiveness only in the advertising rather than printing advertisements are in the newspapers and other media just the next day of promotion. E-marketing is the expands of Hyper-linking pages of other promotional activities or particular information of any goods and services. Ultra-comprehensive and extra personalized brochure structured by multimedia structure that is obtainable most of the time can be build by e-marketing. In line with Wymbs (2000), relationship marketing had implication by the internet marketing and it gets the two way dialogues from customers as well as the components are devoted to customer loyalty. Such as: all the information of the customers can be filed up by a computer store and it is able to reuse information if it is required for future sales. Companies can records customers first choices in the internet and it will be applicable for future choice of product. To meet the needs and wants of the customers product offerings and services should be customer oriented if the organizations get the information about customers before. To understand the customers choice and preferences e-marketing provides information. For justifying offerings and demands the companies are now using internet. In line with Lacovou (2004), to calculate the return on investment (ROI) of any firms investment firm can use the measurement of the advertisements. Marketers are able to expand their global reach beyond the national border and it is an important benefit for the global marketers. Both the weaknesses and threats are available in field of marketing and depending on the usage of internet the advantages and implications of internet vary. In line with Lacovou (2004), internet marketing has not only advantages but also some negative effects and these negative effects are connected with the personnels whose dependence on internet is increasing day by day. The areas of negative impacts are described by him. Some weaknesses of internet marketing are pointed below: Customers dont find any suggestion regarding which site to visit. Belch and Belch (2004) said that, which website to visit must be decided by themselves. Customers are bound to see what advertisement were printed in newspaper or posted in television in the traditional advertising system. Antony (2000) said that, there is intense competition in the internet market; as a result companies have to compete with the millions of websites of the companies. Marketers dont know whether the target customers get the needed information in online marketing. Customized information cant be given to the customers in online marketing. When internet speed is slow it takes a huge time to download the website. Besides, when there are lots of visitors on the website it also takes huge time to be downloaded. Belch and Belch (2004) said that, individual with bad motives can make a website very low speedy to be operated. The installation process of internet is supposed to be very expensive. The features of the software changes day by day thats why organizations have to update their technologies. In business arena the advantages and disadvantages of internet have different explanation and importance. The marketers can identify different classes of customers with the help of information provided by the internet marketing and let them to switch in another product at any time.

Chapter 3 Research Methodology

3.1 Introduction This chapter includes the research methodology that will be adopted by the researcher in conducting this study. 3.2 Research Philosophy: In line with Saunders et al (2007), there are three supreme philosophies in gathering and analyzing research. The philosophies are positivism, realism and interpretivism. This study will test and crop size of the assumed hypothesis to gather research data in large amount, which is linked up with physiological and ongoing matter. Interpretivism gives details of understanding reality only by involvement and slanted reality of the study. The interpretivism philosophy will be followed by the researcher. 3.3 Research Approach: Generally there are two familiar research approaches; these are deductive and inductive research approach. According to Saunders et al (2007), by means of gathered data, inductive research approach is linked up with the set of theory. To examine the gathered data with theory, deductive research approach is used. Inductive research approach will be used by this study because of the start of study with gathering of data, examination of various patterns and creation of idea in mind which guides to a theory. 3.4 Research Method: To carry out a research the most significant factor is research method. Two research methods are lying with it. These are qualitative and quantitative research method. Roulston (2001) said that, qualitative research gives importance on the certain people or condition. The foundation of this method is words but not numbers. Besides Gorard (2009) said that, the total basement of quantitative research method is numerical data. This study helps us to estimate online promotion approaches and also asses how the purchasing decision is being influenced. However, this study is linked up with a condition rather than the numerical data and it will consider the qualitative research method. The inflexibility of qualitative method doesnt refer a different quantitative method. Usage in academic observation is better related to qualitative method than direct plain measuring. The researcher will use qualitative research method to conduct this study. 3.5 Research Strategy: As stated by Yin (2009), there are five category of research process in making any research. These are Experiments, surveys, histories, case study and an archival study. From the above mentioned types case study is the most admired approach. This type of process is preferred at the time where why and how types of words remain in the questions. Therefore, case study approach will be used. 3.6 Sampling technique and Sample Size: Sampling can be defined as the way o gathering information from the respondents of the

population to evaluate the characteristics of the total population. As expressed Saunders et al (2009), sampling is the accumulation of information or data which is picked from some respondents instead of huge scale of respondents. 10 customers will be selected to provide information. All of those participants are should Tesco customer and 10 employees including the senior marketing manager also will be taken. Thereby, total sample size is 20 for this study. Secondary also be collected from various recent research journals and publications to justify and facilitate primary data. 3.7 Data Collection Techniques: There are various types of method to gather primary data, such as: survey, interviews, questionnaire, focus groups and experiment. To understand the employees and customers views of Tesco, we will use questionnaire and interview tool. Three types of interviews generally used in research. These are structured, Semi structured and Unstructured interviews. A certain set of questions are asked to be answered in certain array by the respondent in structured interviews. There is low chance for variation when it considers closed end questions. Unstructured interviews also known as non-standardized which is open ended. We can ask various questions to be answered to various respondents on the similar topic of the research which is the main flexibility of unstructured interviews. Semi-structured interview is the mixture of both structured and unstructured interview. Semistructured interview will be followed for this study. 3.8 Data Analysis & Presentation Method Collected data will be analysed using content analysis and narrative analysis, frequency distribution, and descriptive statistics. 3.9 Ethical Considerations & Limitations: Moral authorization is required to the researchers before taking place supplementary work. Saunders et al., (2007) stated that, the participants privileges in terms of significance by the research work appropriateness are the research ethics. Each researcher should read the Ethical Code Conduct for Research. Then the researchers should concentrate on authorization, judgment and respondent burden. They will keep respondents data secrete through not using the names of them at any point of time with the researchers personal integrity.

Conclusion The study is to analyse the online marketing in the retail industry UK in the context of Tesco Plc. Online marketing means the development and advertisement of goods and services through the internet, which is also familiar as e-marketing. These types of marketing lead the consumers to the companys website. Online marketing connect the buyer to the companys website and helps the company to inspire its customers to buy its goods and services via internet, otherwise using the frequency of other internet sites. To achieve the research objective the researcher will follow the qualitative research method and the primary data will be collected from the sample size of 20. The sample includes customers and employees of Tesco. 10 customers and 10 employees including the senior marketing manager of Tesco will be selected through the stratified sampling method. Collected data will be analysed using content analysis and narrative analysis, frequency distribution, and descriptive statistics. References

Antony, J. 2007. Customer Connections Electric perspective July/August pp15-21. Belch, G. & Belch, M.A. 2004. Advertising and promotion: An integrated marketing communication perspective. Fifth edition, Boston mass: Irwin/McGraw Hill. Broekhuizen, T and Huizingh, KRE 2009, Online Purchase Determinants. Is their effect moderated by direct experience?, Management Research News, vol. 32, no. 5, pp. 440450 Chatterjee, P and McGinnis, J 2010, Customized online promotions: Moderating effect of promotion type on deal Value, perceived Fairness, and Purchase Intent, Conference Proceedings, IABR & ITLC, Orlando, FL. Crossan, F., 2003. Research philosophy towards an understanding. Nurse Researcher. Vol. 11(1), pp. 46-55 Foucault, B. and Schufele D 2002, Web vs Campus store? Why students buy textbooks online, Journal of Consumer Marketing, vol.19, no.5, pp.409-423. Kiang, M Y and Chi R T 2001, A Framework for Analyzing the potential benefits of internet marketing, Journal of electronic commerce research,vol.2, no.4, pp.157-163 Lacovou, C. 2004. Internet marketing and its impacts on the four star hotels in Cyprus. Unpublished PhD thesis. University of Winconsin-stuot: Cyprus. Law, R., Law, A. & Wai, E. 2009. The impact of the internet on Travel Agencies in Hong Kong, Journal of Travel and Tourism Marketing, Vol. 11, No.2, pp. 105-126. Oconnor, P. 2003. Using computers in the hospitality industry. 3rd edition, Thomson hall. Saunders, M. et al,. 2007, Research Methods for Business Students 4thed, Prentice Hall Financial Times, UK. Verdon, M.C. 2007. Marketing communication methods used by Tour operators in Gauteng. Ms Thesis (Unpublished), University of South Africa. South Africa. Yin, R.K. 2009. Case Study Research: Design and Methods (4th Ed). Thousand Oaks. Sage Publications. Zhou, L and Dai, Liwei and Zhang, D. 2007, Online Shopping Acceptance Model-A critical survey of consumer factors in Online Shopping, Journal of Electronic Commerce Research, vol 8, no 1, pp. 41-56.