Challenges of Globalization: Tesco's Experience

The assignment discusses the challenges faced by a business, specifically Tesco, when using the internet as a marketing tool in a globalized market. The main challenges include disintermediation, payment security, and meeting customer expectations. Disintermediation refers to the elimination of middlemen, which can lead to increased efficiency but also disrupt traditional channels. Payment security is a concern for consumers who are wary of online transactions due to hacking and identity theft. Meeting customer expectations requires businesses to be available 24/7, provide personalization, price transparency, reliability, responsiveness, convenience, and speed in their online interactions.

INTERNET
MARKETING

TABLE OF CONTENTS
INTRODUCTION ..........................................................................................................................3
P1 ....................................................................................................................................................3
P2.....................................................................................................................................................4
P3.....................................................................................................................................................4
P4.....................................................................................................................................................5
P5.....................................................................................................................................................5
P6.....................................................................................................................................................6
CONCLUSION ...............................................................................................................................6
REFERENCES .............................................................................................................................11
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INTRODUCTION
Internet marketing has supported for enhancing the consumer experiences so that long
term growth of business can be ensured. I am going to prepare a report for the attention of the
management team for two contrasting organisations Sainsbury's and Easyjet. In this report I will
be introducing the unit of internet marketing, define what internet marketing is about and the role
of internet marketing. Also I will provide a section on which ways internet marketing is used
(Camusio, 2011). This report will also include information on how customers can benefit from
the online services and the online business itself. Procedure: In order to produce the report
successfully, I will use relevant websites such as: www.tesco.com and www.easyjet.com. These
will help me to check how well both businesses are operating online and how they promote their
online business. The Role of Internet Marketing
P1
The function of marketing is to operate en generate profit and also attract and keep
customers. Marketing exist wherever goods and services are bought and sold. Nowadays, in the
modern world, marketing is very important! Internet marketing is a continuation of the old
marketing practices (Chaffey, 2009).
Product
With internet marketing you sell your product in a different way. Nowadays is
Sainsbury's able to create an attractive page for each product, add information and
videos/photos. Sainsbury's wants to sell their products without a sales man when they
offer products online. So the information must be very clear and complete (Miletsky,
2009).
- Price
When Sainsbury's offers products on their website they can use the same pricing
strategies as if they offer their flights in the shop. I think that this part of the
marketing mix will not have much influence upon internet marketing (Eid, 2005).
- Place
The place where the products are offered to the customer normally in shops, with
Internet Marketing you only need a webpage, all potential customers can entry this
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site. This means that people have the possibility to buy a flight at their own home;
they do not need a shop or intermediate (Harden and Heyman, 2009).
- Promotion
Promotion will differ a little bit through internet marketing. Because with a lot of
shops you will make promotion by means of nice flyers and offers. For people who
buy their flight online, they need to be attracted via other methods. For example,
Sainsbury's can put a banner on a website (Currie, 2004).
P2
It is very important for a company to have a group of loyal customers with whom the
company has built a good relationship with, it is more profitable to keep customers then to
acquire new ones. The leaders of the current market will look on the internet to keep themselves
up-to-date on the new product/market platform because the Internet is the fastest and biggest way
to that type of research (Bruce and Ho, 2009).
Product development means that a business can gather new information about products
and post it online. Market development means that a business can faster reach global popularity
because of the low advertisement costs compared to the pre-internet time. When a business
decides to use the internet to achieve objectives, the objectives still have to be specific,
measurable, realistic and time-related (SMART). Some examples are: increasing customer
retention by 15% or achieving a top-ten ranking in market penetration in a specific country
(Mathur and Evans, 2013).
Customers can have advantages and disadvantages of dynamic pricing. When there are
many products in stock and the businesses doesn’t sell well, prices will be of influence of that
and will go down. When there is much demand to the product and there are not many products in
stock the price will go up. When you would like to buy tickets to go for Rome, it could be the
tickets are quite cheap but if the Pope dies the next day. All the tickets for Rome will go up
because many people than want to go to Rome to be at the funeral (Gay, Charlesworth and Esen,
2007).
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P3
There are many benefits to the different aspects of internet marketing with the main
points being that it should be easy for customers to use as well as not taking up much of the
customers time. It is extremely important for companies to meet the standards and expectations
of customers as, even though the competition with brick organizations or physical shops is low,
they still have to compete against them. There is then the addition of all the other online stores
on the vast internet meaning the competition is increased. There is only really one main benefit
of responsive transactions which is to save customer time (Roberts and Zahay, 2012).
This is because the main objective for companies is to keep customers interactive with
the website and to be happy with the speed of service which can't really be achieved if the
transaction process is slow and not up to a good standard. An additional benefit of this sign up
system is that, like the example link above with the company of Sainsbury's the email address of
the customer needs to be given. This gives the company an opportunity, with the customer's
consent, to be able to email and inform them of new goods and what promotional offers they can
have which forms an additional type of promotional marketing for the company (Fritz, 2013).
24/7 Accessibility: is one of the major reasons for a company to go online. For Sainsbury's to go
online it will mean that more customers can get to their stores at their own time. “Your store is
open, 24 hrs. a day, 7 days a week. Further, your customers are worldwide in reach, and can
shop anytime that they want to” (Trusov, Bucklin and Pauwels, 2009). This is the benefit that
internet marketing provides to Sainsbury's because their customers can shop online at any giving
time. As Sainsbury's is both online and offline they do not worry about after hours shopping as
their customers can shop anytime on their website. With the company’s presence online their
customers will not be disappointed as they can always shop at any time of the day without
leaving the comfort of their house.
P4
Internet marketing has many opportunities that will benefit a business for example it can
help businesses to reach a wider audience, to reduce overhead cost of the business and to expand
the company.
Target Market and Broadband user Personalities
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What is the target market? The target market is basically the audience and the business that will
do anything to attract their target market to the business (Hsia, Chen and Chen, 2009). In the
target market there are different types of customer that prefer different types of products for
example:
Demographic segmentation
Age, Gender, Price, Lifestyle and cultures
Puma’s main target market is the youth for example teenagers and early adults, this target market
is spread all around the world, being satisfied with Puma’s products. Puma’s Target Market are
both gender male and female and also they target to different cultured, sporty people and
lifestyles people live around the world (Kriemadis, Terzoudis and Kartakoullis, 2010).
P5
Internet marketing has offered Sainsbury's more efficiency, effectiveness and
successfulness as with internet marketing supply chain efficiencies have been offered as buying
and selling has become more smoother, faster and can substantially save on costs and get their
product to the markets more quickly.
Internet Marketing has allowed Sainsbury's to procure online with this they can purchase the
materials instantly making the process of their production of finished goods quicker which offers
them the efficiency of time saving. Also internet marketing has offered Sainsbury's customer
power as they have a wide range of choice in buying materials which has made them efficient in
cost saving as they can procure form cheaper suppliers and be in contact with new suppliers
which they wouldn’t have reached offline (Benson and Barclay, 2006). These efficiencies have
made Sainsbury's effective as they know produce goods quicker and effectively sell them online
for private customers to buy. Also with internet marketing Sainsbury's more successful as they
gain immediate cash sales before delivering the product so no credit is delivered whereas with
internet and online choice they can be given credit from their suppliers making them effective in
improving cash flow.
Efficiency:
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Sainsbury's is efficient when it comes to promotion, as they always offer promotions of products,
which encourages people to buy products. Sainsbury's also is efficient with promotion, as they
send out promotional e-mails offering you products, that they think you will like based on your
previous purchases (Blumentritt, 2006).
Effectiveness:
Sainsbury's uses promotion effectively because when they offer new promotions there is more
opportunity to gain sales. This is because when Sainsbury's send through personalised
promotional e-mails, then customers may see products that they like and then go forward to
purchase them.
Success:
Sainsbury's uses promotion in order to increase profits, as they can offer products to existing
customers, which may encourage them to buy them. Sainsbury's web analytics to see what
products are most popular and then try to promote those products even further, to gain more
customers (Dennis, 2002).
P6
In this task I have been asked to explain the challenges of globalization facing a selected
business when using the internet as a marketing tool. The business I have chosen is Tesco.
Globalisation
Globalization is a core of economic globalization, including the mutual links between the
countries in various regions of ethnic politics, culture, science and technology, military, security,
ideology, lifestyle, values and other multi-level, multi-field impact, constraints diverse concepts.
Challenges of globalisation (El-Ansary, 2006.).
Disintermediation
The internet offers the chance to use a direct channel of supply to clients or customers, wherever
they are. This process, called disintermediation, is the tendency to cut out the middle man, like
the suppliers to factory to distributor and finally sent to the customers. This creates obvious
efficiencies and savings, but at the danger of destabilising many older traditional channels that
might still be valuable sources of revenue to the business (Miletsky, 2009).
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Payment security
Consumers are often concerned about payment security with transaction via the internet. There
are frequent stories about attacks by hackers, ‘identity theft’ and so on – all of which leave us
feeling vulnerable. The internet offers the chance to use a direct channel of supply to clients
/customers this process is known as disintermediation and is the tendency in order to cut out the
middle man.
Customers are often concerned about purchasing products from the internet customers and often
have stories of hacking and scammers and therefore reluctant to give credit or debit card details
online it is a organisations responsibility to inform customers how payments are taken and to
reassure potential customers that it is safe purchasing products online with that business.
Meeting Customer Expectation
The internet continues to expand customer expectations and this is a challenge to all online
businesses. The 24/7 availability and convenience of the internet has been reinforced with
increased personalisation and price transparency (Organizational structure. 2016). More
importantly customers are starting to expect higher levels of reliability, responsiveness,
convenience and speed in terms of the time taken in visiting the website and delivery of items
once the order has been placed (Charlesworth, 2009).
Merchandise is becoming available in mass customisation as it enables customers to enter
personal measurements/requirements online before ordering or the ability to configure their
machine such as a computer before they order it. The challenge for online marketers is to
anticipate and understand what customers’ expectation will be within the market context in
which the organisation operates in.
CONCLUSION
Business can easily check the top seller products/services through the internet. This is
done by checking what the customers are viewing and buying. There is also the rating check that
will enable the business to examine whether the customers are interested in a certain
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product/service or not. Sainsbury's can check which products are more preferable by checking
the feedback and the rating of the products. If customers are interested in the products,
Sainsbury's can work towards improving the products and adding more varieties or flavours of
that product because customers will increase their interests toward the product.
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