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MARKETING RESEARCH PROPOSAL

Impact of E-retailing on the overall satisfaction of a consumer

Adnan ul Haq

Abstract:

This research investigation study is to strategically evaluate the role of e-retailing as a mean of marketing in the early development of consumer satisfaction, quick sales promotion, and enhance the companys reputation to a better level by attaining the competitive advantage over its competitors in the dynamic market. This investigation study is to provide the details about the correlation between the variables that are eretailing and the consumers overall satisfaction, as measured and tested through the means of statistical tools. The different strategic dimensions are discussed to understand the importance of need of change in techniques and methods of retailing system. To what degree does e-retailing affects the consumers behaviour when costumer came in contact with the firms through online and why to certain behaviour is demonstrated by some of the customers. Moreover, the environmental factors that are playing a vital role in the customers particular behaviour will be investigated and discussed in depth. In this study investigation electronic retailing is examined in a critical mode from various strategic dimensions such as the managements perspective and the consumers perspective. Since there has been a noticeable and clear expansion in the e-retailing services so it becomes vital to investigate the impact of this increase on the customers overall satisfaction. This study is carried out to elaborate the fast growing services impact on the behaviour of its consumers.

Introduction:

Marketing is regarded as the tool to narrow the gap between the product and consumers by creating the brand image in potential consumers mind and eyes so that the business can prosper in the right direction. Consumers behaviour and overall

satisfaction is a vital element to be considered by the marketers, researchers, and analyst and business world. To attain the competitive edge in the market, different industries are trying different strategies. One of these strategies is the method electronic retailing which means that a consumer can shop online. In the present world, one of the significant contributors of a country in terms of economy is the retailing sector. With the passage of time retail sales has kept on improving its statistics in sales division and most of the credit goes to the channels use to market their product and the methods and techniques used by this vital sector to improve the economic standard of retail industry. The sales if retail in United Kingdom at the end of 2009 had been approximately over 285 billion and more than 12700 full time jobs are created in the duration of 2010 which is indicating that from last year there has been 2.1% increase in the creation of full time job opportunities (prospects.ac.uk, 2011). This shows that how well the organisations involved in the retailing sectors are progressing. Not only this, the fact that with the progress there is always competition in the market which strives the firms to adopt the ways and means to increase the overall satisfaction of a consumers. The marketing tactics has always come up with the new ways to attract the customers so that the edge over the competitors can be availed by the organisations. Today the business is all about the satisfaction of a customer, if the customer feels that he is being valued by the firms, his choices and preferences are well understood by the marketers and firm, they will be more satisfied from the one firm that is able to satisfy their wants, understand their need and respond to their demands. The increasing demands of customers have created the strong competition in the market among the players of the market. This has led to the increase not only in the retails units operation in the market but also brought changes in the strategies, techniques and methods of retailing. There are estimated that over 286,000 units of retail and further more through shops retail spending is done over more than one third (British Retail Consortium, 2010). Retail sector is a sector that is subject to domination by the big and huge retailers of cosmopolitan businesses functioning in stores ranging from small one to big supermarkets in a large and extensive diversity of markets all over the country.

The vitality of the retailing could also be understood by social and economic dimensions. The everyday population is coming in close contact with the retailing world in various ways because numerous numbers of people from a large population shop on regular basis therefore, familiar with the retailing word. People do come across somehow with the retailers when they shop which forms a social network automatically. With the purchase of a commodity, an economic link is established in automatic mode between the retailers and the consumers of a product. The modernization era is credited with the alteration of traditional boundaries of products purchasing as the new means and techniques have driven from the modernization. The techniques and methods of selling are modified by the retailers to a more advance and improved level from the traditional ways. It is done so that the products can be reached by the potential buyers in the most convenient way. Today where on one side the consumers has a large variety of products available to access at ease; on the other side the firms are using these methods to gain competitive advantage by attaining the satisfaction of customers. Marketing has a prominent role in the expansion of a retail industry in a quick manner because it provides a foundation to organisations to know about their customer and demand of customers. It provides important details about the buying behaviour of the consumers and continuously updates the firm about the preferences and choices of the customers. Since retailing industry is expanding at a rapid rate therefore, the competition has also increased at a constant rate. It is the era where those firms survive which the tendency to remain has fit in all situations. Only those firms will attain the competitive advantage over rivals that have the ability to adopt to necessary changes in all aspects including sales methods and techniques. With the passage of time, firms have realised that customers satisfaction is the main element to achieve profitability and become market leaders which is their ultimate objectives. The satisfaction of customers will increase the profitability of a firm which will automatically increase the competitive edge over other rivals and this will lead to improve the market credibility and establish goodwill in the market. This research also focuses and identifies the reasons that have contributed to the increase in the growth at a rapid rate at the retailing sector. The internal and external factors which are contributing to the quick expansion have been scrutinized. Since

there are number of factors involve in the quick and rapid expansion of electronic retailing therefore, it is essential to understand the whole process in which various factors are affecting the overall process of e-retailing.

It has been observed that electronic retail is not only casual services provided for online shopping but it has emerged as a serious method that is based on the ease of access and convince. Today, marketing sectors are exploring it as a blessed opportunity to improve their work efficiency that can create a solid foundation for entire firm to make its all departments united for their bright future. In other words, from a routine and cosset task it has exceeded from marketing sector to whole of the organisation.

Purpose:

To elaborate and investigate the correlation between the electronic retailing and the consumers overall satisfaction is the main purpose of this research study. The strategic evaluation of the UK retailing world will be explored further more as the management literature indicates that overall satisfaction of consumer is vital for attaining the competitive advantage in the dynamics of market. In modern time researches have developed a keen interest of various scholars towards the linkage between the e-retailing and the overall satisfaction of consumers.

Research Questions: There are research questions that are the part of this study investigation. These questions are as following.

Q1. Is the relation perceived between e-retailing and consumer satisfaction is significant or not?

Q2. Is e-retailing affects the consumer behaviour in a positive manner or not?

Aim of research investigation:

To identify the impact of e-retailing on the customers overall satisfaction in the retailing sector of United Kingdom.

Objective of research investigation:

The following are the set objectives of this research investigation to be attained:

To investigate the impact of electronic retailing on the overall satisfaction of consumers. To evaluate the effects of e-retailing on consumers overall satisfaction to increase work efficiency by commencing primary research of targeted customers of Tesco.

To explore the internal and external factors affecting the behaviour of the consumers towards the electronic retailing. To conclude the effect of e-retailing on the behaviour of consumers.

Hypothesis:

For this research there are two types of hypothesis assumed such as H0 is a null hypothesis and H1 is alternative hypothesis.

H0- The correlation is strong between e-retailing (independent variable) and overall satisfaction of customer (dependent variable).

H1- The correlation between e-retailing (independent variable) and overall satisfaction of customer (dependent variable) is not strong.

Scope:

The scope of this research contains the perspective of management as well as consumers. The main focus is on the strategic evaluation of e-retailing system that is currently operating in the United Kingdom. Furthermore, to find out how firms use e-

retailing to increase their profitability and what are the buying behaviour of the potential consumers of e-retailing mode. Trough continues process the retailers have a clear scope to modify and develop vital changes in the current channels of retailing. According to Chan H.(2001), Lee R.(2001), Dillon T.(2001) and Chang E.(2001), the basic connection of the electronic retailing is with sales of products and services. In other words, the tangible goods like products and intangible goods like services sales are dealt by the mode of e-retailing.

Literature review:

According (McGoldrick (2002) retailers have advanced from a simple merchants to brand managers of retail. As changes has occurred the consequences are noticed that most of the retailers who are having strong physical presence are possessing a high quality brands that are distinguish by prominent personalities with a long term approval support. But one of the crucial features that stops the growth and expansion of retailers is the lack of trust. McGoldrick (2002), consumers has the tendency to relay and trust more on the product due to the wide range of choices available to select from. This argument of McGoldrick indicates that new product will have to strive more hard in their approach to win the confidence and trust of people. Considering the fact that not only the products but the methods also have to show clear advantages so that people adopt them in a quick and prompt manner, electronic marketing is one of the new methods used by the sellers to promote their products and services. It has to show the benefits to be in the focus of the users.

Dave Chaffey on his blog (wnim.co.uk, 2010) argues that electronic marketing is mainly concern with the digital technologies implementation that is useful in assisting channels in online formation such as (database, e-mail, web, digital TV) that add to activities of marketing basically devised to accomplish the productive acquirement and customers are retained via getting better by means of understanding the customers profile, needs, values, requirements, dependability and conduct. Once the full knowledge is generated about the customers than there is a bright possibility to deliver online services in accordance with the customers individual need and the communication can become clear between sellers and buyers.

Specialization of new type has emerged due to the birth of internet. The specialization in a specific type of customers and sellers are being backed by the means of internet along with the specialization in the particular product lines and channels. One of a by product of internet specialization is a website lastminute.com that facilitates the customers to buy gifts, tickets and other entertainment on the last minutes. This is similar to the sellers who are selling their goods on a very last minute. This explanation enables us to understand that nowadays there is a specialization in class of sellers too. This also shows that internet is a vital source today because without the facility of internet this type of sells would not have been possible. Not only nowadays we have specialised stores but there are electronic stores that particularly deals in the selling of a common and general products under the management of a single head. Firms use the electronic retail mix model to enhance their sales and profitability.

Lazer and Kelly (1961), defines the model of electronic retail mix as the aggregate total of products and services which an electronic retailer can offer or even sell to the common masses that are opting for online shopping. In the broader context, the eretail mix is regarded as a methods and equipment which are mixed all together by the electronic retailer in order to present the worth full service to customers. Culliton (1948), describes in early 20th century the job credentials of a person associated with the marketing world as a mixer of Ingredients. The satisfactions of a consumers needs are the essential component for the markers therefore they carry out numerous types of plans and strategies through the marketing mix so that the timeless value is added to the customers. Neil Borden, 1964 of Harvard Business School has the first person to use the terminology of Marketing Mix. This marketing mix helps the retailers in attaining the overall satisfaction of consumers (Kolter, 1997). E. Jerome McCarthys (1960) 4ps, namely, place, product, price and promotion are mainly regarded as the marketing mix. The fundamental parent four Ps was form on in a practical sense for the departments involved in manufacturing goods requirement and simultaneously for the top management to make a rational and simplified decisions into broad number of specific and practicable headings except on theoretical basis (Palmer, 2004). In the identical way, still the electronic retailers possess the demand to architect their ability to make

a rational decision in particular aspects of its suggest to consumers which are fundamentally significant to prosper and succeed in future.

According to Burt (1994) and Kacker (1985), the flow of tactics, information and association has consequence in global impacts to operating designs well ahead of the current increase of action. Lamey (1996) declare that International retailing stress and requires enormous venture and provides no assurance in return. The procedure of retail globalization has attained swiftness in current era.

Treadgold (1991) elucidates that internationally situated promotes like Benetton is change from there on the whole layout to some extent transversely their general grounds, in return accomplishing the enormous financial system of degree but intending less on limiting and local receptivity.

Fundamental strategies of three types identified by Salmon and Tordjman (1989) are a strategy that goes besides stationary partners investment approach. Williams (1991) strongly argues that that importance of differences in the organisation provide upper edge in the process of globalization and usually represents four main sources, such as large scale retailing, reputable brand, distinguish concepts of retailing, and professionalism and skills for marketing retail.

According to (Vida and Firhurst, 1998) the internal factors are essential in decision making as it affects the outcomes of the organisation. Marketing strategies of a firm in a retail sector has an impact of the final presentation of the product in the market. Though the internal factors do influence the decision of e retailing marketing strategies but in the process of success in the overall operational activities, external environment is also a crucial consideration for any organisation.

McGoldrick (2002), explains that in external environmental factors significant component are the customers because their behaviour and structures have a strong influence on the progress of a company. Therefore, all types of retailers, irrespective of small and huge businesses must fully understand the basic parameters around which revolves the structure and the behaviour of consumers revolve in the economic market these retailers are operating in. the marketing strategies are changing due to

the changes in the preferences of consumers and therefore the trends in the market keep on changing at a rapid rate so that customers satisfaction is attained at any cost. There exists a huge variation in the trends of consumer markets as per notational statistics officials who calculated it by the help of key demographic and socioeconomic indicators.

Gist (1968, p.85-86), suggest that buying power of a consumer along with the relations of production department, social, demographic, and psychological characteristics forms a peculiar type of behaviour of a consumer. He furthermore urges that prototype of consumption of a consumer opts for a distinct scope in order to adjust in accordance with the different types of conditions prevailing in the market. Occasionally, there lies a huge possibility that numerous types of characteristics of consumers in different types of societies have a strong impact on the system of retailing in that society. In other word, the consumers behaviour has various types of features that play a vital role in shaping the retailing system in that region. To create a more understanding about this view, consider an example of transformation in the pattern of consumption. The traditional methods of retailing have changed from traditional stores to internet stores. Those stores which were reluctant to adjust according to the required changes emerged from the environment have faced a serious setback. Similarly the transformation in the consumption patterns of consumers is very visible to be noticed that indicates that for organisations the change in methods and techniques are associated with the consumers taste and preferences. Few of the changes occurred in the behaviours of a consumer may be advantageous and enticed the retailers to work more efficiently while these changes may create a discouraging impact for the other retailers as defined in (Advances in Consumer Research; 1987 Vol.14 Issue 1, p439).

The observance of Ohmae (1998) revealed that planning and tactics are not just to get the upper edge in the competition but also about meeting the actual need of a consumer in a plan, rational and a definite manner. Ohmae support his views by quoting the ideas and opinions of great Sun Tzu (500 BC). The strategy which is smart one in a war is that which enable a person to attain his objectives without getting involved in a fight the clearly visible combats are related to prices schemes, promotions tactics, and advertising methods etcetera. On the other hand, the huge part

which is immensely being unable to be clearly viewed is the investigation to explore the means to fulfil the wants of a consumer in a satisfactory mode (Ohmae, 1998).

Chenet and Johansen (1999), further elaborate the idea of a consumer who is self actualized in this way, quote; We do not buy products and services anymore-more and more what we buy are concepts and experiences that build up our self-identity and uniqueness. Unquote, concepts and experiences must provide different requirements.

Meyers and Eagle (1982) observed in their research investigation that it is viewed that choices of a consumers are not made on the observance of how many other distinct substitutes are with holds to works undermined by multi featured utility. In its place, process of selecting a product is based on the hierarchy of repetition; this indicates that alternative changes are not only different than the one consumer preferred but most of the consumers are eliminated from the pool of targeted audience when a change in product is brought to create a substitute. This means that if the methods or channels of electronic retailing are established, there are chances that some of the consumers are automatically eradicated from the pool of organisations target. Yankelovich (1964) has analysed that there are sufficient differences in the attitudes of a buyers, style of using a product or a service, likings and inspirations, and amount of vulnerability.

Mittal B. (2005) argues that segmentation also posses to understand the differences in electronic consumers. We know that e retailing is a different channel of shopping so the consumers are also placed differently in the market, in fact their market will be known as e-market. Rohm and Swaminathan (2004) involves ease, nature, use of information in planning and execution of shopping and finally, assortment seeking in the intentions of a consumer. Reichheld (1996) states that rational strategies and trust in particular method or product forms satisfaction. Nevertheless the view is regarded as a healthy philosophy, that is, to secure a loyalty of a customer the key is satisfaction of a customer. According to Buttle (1997), retention is not always attained if there is a satisfaction and similarly defection is not always caused by dissatisfaction.

When a reliant method to relate marketing, it is vital to find out the maintenance relationship through exploring the reasons that when and why customers react in certain way Bendapudi and Berry (1997, p31). Marketing literature explains the relationship as a new concept, customer retention orientation. It chiefly constructs on concepts similar to relational selling behaviour from a customer-salesperson relationship context (Beatty et al.1996; Crosby, Evans; and Cowles 1990) and also the observation of orientation of market, which shows that attaining the customer satisfaction all the tactics should be focusing on the delivering to create the value of customer orientation.

Customer orientation also leads to competitive edge over competitors. These strategic movements help firms to attain edge over rivals. Four keystone of competitive advantage according to Peteraf (1993) are heterogeneity, Ex post limits to competition to control the rent to be bearable, flawed mobility to sustain the rents within the firm, and ex ante limits to competition. This will ensure the sustainability in the market for some period of time.

Above literature review reveals that overall satisfaction of a consumer can be attained by means of marketing through brining sustainability and new methods. E-retailing is a revolution in the world of marketing and sales and therefore, (Christensen, 1997) regards it as matchless difference between sustainability and disorderly innovations. But so far the relationship between the e retailing and overall satisfaction of a customer is not identified and measured in a statistical manner. This research is to find out in depth the real impact of electronic retailing on the consumers behaviour.

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