Argos Marketing Environment Analysis: A Comprehensive Report

Desklib provides solved assignments and past papers to help students succeed.

Marketing and Communications
1

Executive Summary
This study focuses on evaluating the marketing environment of Argos. It is seen here that the
middle managers have the chances to lose their job because of the shrinking down of the
management structure. However, excellent online and offline services of the organisation are
useful to reach target customer market.
2

Table of Contents
Introduction......................................................................................................................................4
Main body........................................................................................................................................5
Conclusion.....................................................................................................................................11
Reference List................................................................................................................................12
Appendix........................................................................................................................................13
3

Coursework 1
Introduction
The organisations have to analyse the preferences of their target customers at time of offering
products and services to them. The main purpose of this report is to analyse the marketing
environment of Argos. This study will highlight the differences in between demands and wants
of people. In addition to that, the requirements and preferences of the target customers of Argos
will be evaluated here. The influences of social and environmental factors will be mentioned
here along with two competitors of Argos. Furthermore, an identification of two internal
influencing factors of Argos will be performed in the current study. 7ps of marketing mix will be
described to analyse present marketing mix of Argos.
Argos is a well-known catalogue retail of UK offering consumer goods to the customers. The
individuals are provided with printed catalogue to choose the product and fill an order form for
purchasing the selected products. The organisation has more than 845 retail shops including
online and physical shops. All most 29 million customers purchase products from Argos on
annual basis (Argos.co.uk, 2019).
In 1998, GUS plc bought Argos and after that in 2006, the company has become a part of Home Retail
Group (Argos.co.uk, 2019). This company is currently working as a subsidiary of Sainsbury's. In
2016, an acquisition has been performed Sainsbury's to close the separate shops of Argos and
integrate all of them. The company does not display all of the offered products and instead of
that, the organisation gives catalogue to their customers. Main aim of this company is to offer
expected products to the customers and give them the facility of not to carry their purchased
products from the physical stores. However, for this reason, the consumers need to share their
contact details with the stores for getting the product delivery (Argos.co.uk, 2019).
4

Main body
Task 1: Needs, Wants and Demands (LO1)
a). Explain how wants differ from demands
As commented by Horgan (2017), wants are completely dependent on the needs of people. The
things those are not so necessary for people to live their daily life can be called as wants however
these wants can make the life of individuals more easier. On the other hand, demand can be
considered as an expectation of the customers (Jia and Tong, 2016). The willingness of the
customers to pay for any particular product can be known as demand. In case of demand, the
budget of the individuals needs to be considered while purchasing the products and fulfilling
own demands. The organisations have to identify and evaluate the wants as well as demands of
the target consumer market for manufacturing and offering expected products to them. After
fulfilling the daily needs, if the individuals do not have any budget issue then they can fulfil their
demand and wants.
b). Using examples, discuss the needs, wants and demands of Argos customers
The management of Argos prioritises the end-to-end experience of the customers so that the level
of satisfaction of the customers can be maintained. In case of this company, the target customers
are the affluent customer group of UK so that the management can be able to make their
expected profit and enhance their business.
The target consumers have the need of getting their required consumer products from the
physical stores or online stores of Argos. The customers want reliable delivery of services in
effective product price. As commented by Quan and Williams (2018), sometimes the customers
can face difficulties to purchase products because of high price rate. For this reason, higher
authority of Argos has decided to give leasing services to their customers and make sure that the
individuals return the lease products on time.
Circular business model of Argos can be helpful to meet the requirements of future household
(theguardian.com, 2014). As per this model, the customers can be able to get the products on
lease and return the products to the organisation after using this.
The modern consumer market of Argos has the demand of getting online services on time. For
this reason, Argos is highly focused on providing online services to their customers to make sure
that the individuals are not facing any problems while booking products via online or receiving
5

the services. Besides that, Argos is providing all details of their offered products on their official
website to ensure that their customers are receiving the information.
6

Task 2: Marketing Environment (L02, 3)
a). Considering the macro environment of Argos, identify and discuss one social and one
environmental factor that could impact Argos’ business operations
Changing preferences and needs can be the customers can be the major social factor for Argos
while offering services to the customers. In case of the customers of retail industry, they prefer to
get online services from the organisations. The target consumers of Argos are offered with online
services through their official website. Mobile shopping service is provided to the customers of
Argos so that they can purchase the products in an easy manner. In order to make the experiences
of the customers better, the company has launched “AI-powered visual search” to make
connection in between the online channels and physical catalogues (Skeldon, 2019). After that
the customers can be able to get effective online experience and achieve high level of
satisfaction.
Introducing the use of recycling methods by Argos can be considered as one of the major
Environmental factor. Environmental Protection Act 1990 indicates that it is the responsibility
of the UK organisations to ensure that their business process is not affecting the environment in a
negative way (legislation.gov.uk, 2019). For this reason, Argos has to prefer recycling
approaches to reduce environmental pollution. Their decision of providing products on lease can
be effective to manage household needs of the consumers.
b). Considering the micro environment of Argos, identify two key competitors and discuss
their potential threat to the business
The two competitors of Argos of UK are Tesco and Marks & Spencer. In case of Marks &
Spencer as well as Tesco it can be seen that the companies have a strong brand image in UK
market and for this reason the individuals prefer to purchase products from them. Both of the
companies are giving high quality products to the customers to maintain their strategic position
in UK market. Their pricing strategy is also effective for grabbing customer attention.
Tesco offers club-card to the customers while they are purchasing products from them
(Tesco.com.my, 2019). The customers get point after purchasing every product. Rewards and
cash vouchers are offered to them to maintain their loyalty towards the company.
The customers get attracted towards the brands that offer rewards for their loyalty towards the
brand. Argos has also needed to introduce this type of programme otherwise; their customers
would not continue to purchase consumer goods from them.
7

On the other hand, it is seen that Marks & Spencer has conducted “technology transformation
programme” in order to make the departmental stores of high street into “digital-first driven
business” (Hendriksz, 2018). Due to this digital transformation, the consumers can be able to get
the retail services as per their expectations. They always look for better option while purchasing
the products. For this reason, the customers of Argos can prefer to purchase the goods from
Marks & Spencer and as a result, Argos would become unable to survive in the competitive
market of UK.
c). Identify and explain two (2) internal environmental factors that could be considered as
strengths or weaknesses of Argos business operations
Organisation Resources and the Capabilities of Argos are the two internal environmental factors
that are influencing the business of the organisation.
Argos has an omnichannel capability that is helping the organisation to offer high quality of
shopping experiences to the potential customers. The company is concentrating on giving
expected in-store experience to the customers. There are 845 retail stores of Argos to offer good
shopping experience to the customers (Argos.co.uk, 2019). Digital kiosk of Argos helps the
customers to save their valuable time instead of waiting in the queue for paying the bills. Besides
physical stores, the company also offer the facility of mobile shopping. The user-friendly site of
Argos is useful to ensure that their customers are receiving expected services.
The employees and financial resource can be considered as the two major organisational
resource of Argos. The management of Argos has made a decision to shrink down middle
managers of the company in order to restructure the management positions and improve internal
communication. After the implementation of the plan, almost 9,000 employees of Argos can lose
their job (Munbodh, 2019). For this reason, they are getting de-motivated due to their job-
insecurity. As a result, the company can encounter challenges to survive in the market and
achieve their target position by delivering products by considering customers’ demands.
However, the management team of Argos is supporting its internal staffs to perform their
individual tasks. Receiving proper guidance from the management team is helping the employees
to meet organisational objectives and aim.
8

Task 3: Marketing Mix (LO1)
a). Using the 7Ps of marketing, Identify and describe Argos’ current marketing mix
providing detailed examples for each of the 7Ps discussed
As commented by Loo and Leung (2018), marketing mix can be considered as the marketing
tool that helps the organisations to meet their marketing objectives (Refer to Appendix). In case
of Argos, the company has to adopt efficient pricing strategy as well as select a proper place to
reach target people. This tool can be helpful for the company review the issues associated with
the marketing strategy of their products. After that, they can make proper decision to meet their
target of the business and generate revenue.
Elements Description
Product Argos is providing consumer goods to the
target customers. From technology to home
appliances are offered by Argos.
Place Argos has 845 retail shops to offer consumer
goods to the target customers (Argos.co.uk,
2019). Providing both online and offline
services is essential for Argos to increase
profitability.
Price Premium pricing strategy is followed by Argos
to maximise their profitability and ensure
success. The company has adopted this pricing
strategy because their target consumers are the
affluent buyers.
Promotion According to Saidani and Sudiarditha (2019),
the organisations have to search for effective
way of promoting their products to reach their
target customers. Argos is promoting the
products by using official website of the
company. Besides that, they can use social
networking sites like Twitter and FaceBook to
promote their products and achieve customers’
9

attention in an effective way.
People The staffs of Argos need to support their
customers to achieve effective in-store
experience. Management team of Argos can
make sure that their staffs have the required
knowledge to provide necessary services to
their customers.
Processes In case of Argos, the customers can select their
products from the company catalogue. After
that, they need to fill the order form and make
payment through Digital kiosk. However, the
customers do not have to carry the products
from store as the company provides them with
delivery of products at home.
Physical Environment The physical environment of Argos has been
designed in a proper manner so that the
customers can get good purchasing
experiences. The staffs are always present in
the stores to help the customers while buying
the products. Moreover, the company has
introduced Digital kiosk within the stores that
can be essential to help the customers in saving
their time, as they do not have to wait while
they are making the payments in the cash
counter.
Table 1: 7Ps of marketing mix
(Source: Created by Learner)
10

Conclusion
From this study, it is seen that the organisation has to make sure that their potential customers are
getting expected products. For this reason, an analysis of customers’ preferences can be
performed by the organisation to manufacture and design services based on their demands. It is
found here that Argos is highly committed towards maintaining customer satisfaction and due to
this reason; they are offering both offline and online product services to the individuals. On the
contrary, the recent decisions of the management to shrink down the internal people for
restructuring the current management structure is negatively affecting the motivation level of the
staffs. This can be a barrier for the organisational management to increase productivity as well as
business revenue.
Online promotion of the products is helping the company to reach large number of customers.
The individuals are able to get information regarding the products from company’s official
website. Furthermore, it is noticed here that because of Digital kiosk the customers do not have
to wait in the cash counter while making the payment. The company has to offer rewards to the
loyal customers to compete with the giant organizations of UK and overcome the threats of their
business.
11

Reference List
Argos.co.uk (2019). About Argos. [online] Available at:
https://www.argos.co.uk/browse/technology/c:29949/?clickOrigin=header:cat:menu:technology
[Accessed 26 Jun. 2019].
Hendriksz, V. (2018). Marks & Spencer reveals technology transformation programme. [online]
Fashionunited.uk. Available at: https://fashionunited.uk/news/business/marks-spencer-reveals-
technology-transformation-programme/2018010927558 [Accessed 26 Jun. 2019].
Horgan, T., 2017. From supervenience to superdupervenience: Meeting the demands of a
material world. In Supervenience (pp. 113-144). Routledge.
Jia, L. and Tong, L., 2016. Dynamic pricing and distributed energy management for demand
response. IEEE Transactions on Smart Grid, 7(2), pp.1128-1136.
legislation.gov.uk 2019. Environmental Protection Act 1990, Available at:
https://www.legislation.gov.uk/ukpga/1990/43/contents [Accessed on: 1st Jan, 2019]
Loo, P.T. and Leung, R., 2018. A service failure framework of hotels in Taiwan: Adaptation of
7Ps marketing mix elements. Journal of Vacation Marketing, 24(1), pp.79-100.
Munbodh, E. (2019). Number of Argos jobs at risk over plans to axe managers in stores. [online]
mirror. Available at: https://www.mirror.co.uk/money/hundreds-argos-jobs-risk-over-14977314
[Accessed 26 Jun. 2019].
Quan, T.W. and Williams, K.R., 2018. Product variety, across‐market demand heterogeneity,
and the value of online retail. The RAND Journal of Economics, 49(4), pp.877-913.
Saidani, B. and Sudiarditha, I.K.R., 2019. Marketing Mix-7Ps: The Effect on Customer
Satisfaction. Jurnal Pendidikan Ekonomi Dan Bisnis (JPEB), 7(1), pp.72-86.
Skeldon. P., 2019. Argos launches AI-powered visual search to connect physical catalogues with
online channels, Available at: https://internetretailing.net/themes/themes/argos-launches-ai-
powered-visual-search-to-connect-physical-catalogues-with-online-channels-19245 [Accessed
on: 1st April, 2019]
12