unit 12 p4 p5 p6 m2

UNIT 12 P4 P5

Describe the benefits and opportunities to the business of using internet marketing within the marketing mix of a selected business

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In this assignment I will be describing and explaining the benefits and opportunities of how Tesco use their internet marketing within the marketing mix. The internet is a place which offers many opportunities for businesses, however it also offers challenges due to it being an increasingly global marketplace.

Benefits and opportunities of Tesco's internet marketing within the marketing mix.
By Olivia Spalter

Price
Tesco's benefits
Tesco have complete control over how they price their products, this illustrates Tesco's value as they depend on the products they choose. For example, Tesco can decide to price their fruit at a higher price as this will make their value better compared to their competitors. On the other hand. Tesco could decide to reduce their prices for fruit, making them better value for money compared to their competitors. However, Tesco's have to set fixed prices for some products such as; electronics, make-up products etc. This is because these products are expensive therefore they need to make profit on them still.

Also, the benefit of price in Tesco customers is that it can simplify things for customers for example; when looking online, you can use price comparison websites where this compares Tesco's products and similar products, to find the best budgeted price for them. Using their website to stand out is another benefit for Tesco, seeing as the supermarket industry is huge and extremely competitive. They are able to use this to their ability and update their website accordingly to their competitors and customers and keep it modern and up to date. This is beneficial for Tesco because they will attract more customers than their rivalries and this will increase profit for Tesco.

Tesco's opportunities
Tesco offer the availability of food to buy immediately which is to maximise their shelf life. The longer the shelf life, the better quality the product is however, this depends on the type of products as some products run out quicker than others such as; fruit, meat.
If Tesco didn't use internet marketing strategies like updating their website frequently to keep it modern, then Tesco's competitors will be less interested in buying from Tesco because they will go to the supermarket which has the most up to date website because they feel they are more appealing. Additionally, it will be hard for customers to compare prices and find the best bargained price for a product because it is not easy to do, it is time consuming and expensive. Whereas, online is easier, quicker and not expensive.

Product
Tesco's benefits
Using internet marketing allows extra and additional product information online so that customers can make an easier decision. Customers like this because, obviously when buying online you can't see the product, however if there is additional information on all of Tesco's products this will help customers to understand the products more which is more useful for customers and beneficial for Tesco because they will get more sales. If all the products are available online, then this will improve the number of products sold because e.g. when someone runs out of something they can just order it online which is easier and takes no time to go out and get it physically.

Tesco's opportunities
Being online allow Tesco to display their products easier and appealing, because in store there is always a risk of not having enough space, being too cluttered, not having enough stock to to fill the store etc. Whereas online, there is enough space to be able to display all of Tesco's products. Products such as clothes or jewellery can be modelled online to show people wearing them to entice customers which is a benefit for Tesco because people like to see the product on and what it actually looks like on before they buy a product.
Tesco could use a stock checking device in order to check for different sizes of an item if people needed. It scans the product and then checks the sizes that are available in store. This is positive for Tesco because it allows customers to be able to ask staff in store for another size and they will be able to buy it if its available. This allows more items to be sold because if they didn't ave this system then customers wouldn't be able to purchase another size.


Place
Tesco's benefits
Having internet marketing is essential now a days for businesses if they want to be successful because mostly everyone is using the internet now which is how things get spread almost instantly. Social medias sites e.g. Twitter, Facebook, Instagram are commonly used by businesses to get people to be aware of their business. This is a benefit because Tesco will be able to use social media to interact with their customers and other businesses to see what their competitors are like. By having social medias accounts, customers are more likely to want to purchase from that business because customers know they will be able to interact and contact Tesco if they have social media pages compared to businesses who don't use social media. Another benefit for Tesco by using social media sites is that customers can leave reviews, complaints and feedbacks on their page for the business to see and this can help them to improve their business. This is beneficial for Tesco because they will be able to know specific problems that their business face from a customers point of view.

Tesco's opportunities
The opportunities arise for Tesco's fan base to get wider and reach a greater field of more people. This will mean Tesco will gain more customers and a wider target audience. They will do this is by using social media to target different target audiences from different types of people who use different social medias for various purposes. Additionally, Tesco could seek to create a 24 hour availability of their services and products, which makes them more easily avaliable. This is a great opportunity to benefit Tesco because their store is not open 24 hours which means people cannot access certain things they may need to purchase which means they are losing out on sales. However, if they have a 24 hour website open, then customers can purchase them online at any time they need.


Promotion
Tesco's benefits
Operating Tesco's website is much cheaper than maintaining the physical store because you have to pay for the up keeping of the physical store as well as various things such as electricity, rent etc. Also, with a store you would have to pay for individual advertising although, Tesco's advertise within their website which saves them a lot of money. If their are any promotions they want to offer, it is easier to spot out on their website because its all in one place because people may miss the offers in store because Tesco's have a big store.

Tesco's opportunities
To get more promotion and advertising across their website, they could use banners across the website to catch peoples attention. Seeing as the supermarket industry is extremely competitive, keeping up with trends and the current market is important which is why Tesco could introduce an app which is available on IPhones, IPads, Samsung etc. This is beneficial for Tesco because they will gain more sales as this is an easier and more accessible option to shop from peoples mobile phones or tablets. It makes it a lot easier for people and they can purchase any time and anywhere therefore it won't be a hassle to buy from Tesco. Other ways Tesco could advertise their products is by using online websites like YouTube, where they can pay to have their advert play at the beginning of specific videos which are compulsory to watch, which makes people watch the adverts. By using banners, or adverts people will recognise that it is Tesco because people will familiarise with Tesco's logo and brand which will help them associate with the business.


People
Tesco's benefits
Being online means that they need less staff to run it which is saving Tesco money, which results in fewer employees being needed in the physical stores due to the increase in online shopping because of Tesco's website. Tesco can use their money on other things within the business such as improving the website, creating better customer service, more training for staff etc.

Tesco's opportunities
Setting up online chat rooms that are connected to Tesco's website would be super beneficial for Tesco along with their customers because this allows customers to give their feedback, opinion and general information about Tesco as well as Tesco being able to access this information and can improve their business based on the information received.


Physical evidence
Tesco's benefits
Tesco have their website set out really clearly and everything is on display which is beneficial because customers can make an informed decision and whilst doing this, they can scan through every product and could possibly purchase another item they weren't expecting to buy just because they came across it on the website. On Tesco's website, they have directions to each physical store they have which helps people locate which store is nearest to them and makes it easier for people. If they live too far away from a store, then they can just purchase online which is beneficial for having an online store. This is beneficial and good because customers can plan their journey to get to Tesco's physical store.

Tesco's opportunities
Something that would be beneficial and worth while for such a large store like Tesco, is having a store plan, showing where the different departments and where products you want are. There could be a search button where you type in the product you want and it shades the area in which the product is located on the store plan. This is beneficial because it will save customers time as they can just go directly to the location in the store where the product they want is. Also, this is useful for repeat customers because they will be able to know for future where everything is in the store, this is especially good for customers who do big food shops at Tesco as it saves them a lot of time.

Processes
Tesco's benefits
Tesco have a ordering system online for product stock which allows the stock level to never go below a certain level. This means the stock level will never run out which means customers can't purchase products. It will automatically top up the stock from the factory which means customers will consistently be able to buy products. Tesco are saving a lot of money by using technology rather than hiring multiple different employees to run the physical stores.

Tesco's opportunities
New and quicker ways for delivery options and delivering should be thought off. Delivery is usually the main time consuming part of shopping online which is why Tesco should find a new method to stand out from their competitors which will make customers that shop from their competitors shift to Tesco. One way they could improve the delivery option is by having customers to enter their card payment details once and it automatically stores the details and saves it securely into a database where it registers back in every time the same customer go to purchase something. This saves a lot of time and is very efficient and safe. It is beneficial because it encourages customers to purchase from Tesco because they know the buying process is easy.

Efficiency and efficacy

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Internet marketing has helped to improve the efficiency and efficacy of Tesco majorly. Tesco's has drastically changed because of internet marketing in many ways. I will be explaining the various changes that have been made to Tesco and whether they were successful or not. When businesses use internet marketing, they need to think about if the internet is going to add value to their business through; acquiring materials, storing materials and working with materials to product something.

Efficiency is the comparison of what is actually produced with what can be achieved with the same consumption of resources such as; time, money etc. Tesco use their website to promote their business as well as using our promotional methods like YouTube, banners, websites, advertisements etc. This allows Tesco to reach out to a wide audience in a short amount of time. Efficiency has increased by using internet marketing because, Tesco can email or post updates, information, deals etc to their customers which are filtered to pick the appropriate customers. This is to increase opportunities for sales from their existing customers as they are keeping customers up to date with latest news and updates. This has increased efficiency because for example, a customer got an email about Tesco's ovens being on sale, customers will think 'maybe we should get a new oven whilst there on sale because there really expensive' so then they will go purchase a discounted oven. They would only have know about this offer because of Tesco's email or post. The sale is instant as well as it being easy and convienant to purchase online.

Tesco's efficiency is shown by ordering loads of the same product at the same time which means they get a better price for this, compared to if they were buying a lower quantity. This allows them to make the most profit they can as well as ordering a large amount of stock so that the online store never runs out of stock. This improves the customer service last end delivery will be quicker and the customers will have positive feedback and hopefully repeat purchase. This is mass production, it is effective because Tesco get all the stock at one time rather than getting different products in dribs and drabs.

Using internet marketing is effective because it allows Tesco to not have to have anymore stores which saves them a massive amount of money which can be put into the customer service, quality of products, delivery etc. Being online reaches a wider and new audience because they will be able to offer delivery for people who may not have been bale to access or travel to one of the physical stores. Additionally, using internet marketing reduces the cost for staff because they do not that many staff as the business will be half run online. This means that Tesco are saving money because it takes a few seconds to communicate through electronic devices which saves time and money for Tesco.

Success

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As well as Tesco using internet marketing to be efficient, its also made Tesco become the successful well-known business we know. This is due to multiple factors which I will be explaining.

Tesco are an extremely successful and well know business, which is due to multiple reasons. One of the reasons is due to their efficient pricing, as they are consistently offering new deals and offers on products to constantly entice customers on products that aren't selling so well as they would like. Tesco does this by using web analytics to look at what products most customers purchase and what products are the most popular and which aren't selling at all. They then do a appealing deal/offer on this product that they feel will entice customers. This is successful because Tesco's profits will increase as well as getting products more known about. Tesco offer cultures attitudes towards payment methods, where they offer different way to pay e.g. credit card, debit card, cash etc. It differs for different countries which is something that customers will like.

Being online makes the whole process a lot cheaper because they do not have a physical store to maintain and pay for. Also they need less staff for the overall business as more online transactions have come about. It also means Tesco can use disintermediation, which is when a business can cut out the 'middle man' in the process. The products that people order will go straight to the customer and no retailer is involved in the process now as it is unnecessary. Disintermediation makes Tesco's successful because it saves money for Tesco's due to them not having to deliver the products to retailers first, then onto the customer. This allows Tesco's to make more profit and allows a faster delivery process for the customer which will result in better customer service. Although, this could be a problem as some retailers may refuse to sell products to Tesco and then they will become redundant. On the other hand, if Tesco's introduces a new online distributional channel, this could cause problems such as channel conflict.


Challenges of internet marketing
Globalisation
This is the process of the world becoming interconnected as a result of massively increased trade which the world is becoming increased the production of goods and services.

Managing overload of market feedback
One challenge that Tesco face from being global, is that their website can have information fatigue. It may not be 100% accurate and trustful all the time which is misleading to the customers and Tesco can get sued for providing inaccurate information and data. Tesco will need to decide which information is useful which is done through data systems and market segmentation. As well as this, the information and data is analysed to make sure it makes sense. Being online means Tesco receive a lot more customer feedback than other businesses who don't use internet marketing. Feedback includes things such as opinions, concerns, praises, reviews, questions etc. Tesco can manage their feedback by having a FAQ page on their website, which is frequently asked questions by customers to give the most asked and most popular questions on one page to save customers from constantly asking the same questions.

Meeting higher customer expectations
By Tesco having a website and using internet marketing, it has increased the customer service Tesco's offers and the expectations of the businesses. There are various factors that Tesco have to think about though such as; secure payment, communication, quick delivery, competitive pricing etc. Tesco need to keep up with their competitors and keep on top of the other successful supermarkets otherwise they will lose their customers to their competitors because it is a constantly changing market. Customers are able to compare prices online which means Tesco have to ensure they beat their competitors prices otherwise customers will go elsewhere and get a bad reputation. Also, Tesco should make sure they have quick delivery to entice repeat customers because customers love quick delivery service. Tesco offer customers the chance to email them or give feedback about any problems or concerns they have which means Tesco have the chance to reply instantly which will improve customer service. Personalisation is something Tesco's customer are getting more demanding over because a lot of people want personalised products. Tesco's customers are now expecting more personal attention and for other products to be able to personalise, the causes a lot of pressure on the business.

Security and payment methods
This is a huge problem for some customers, as they are unaware of whether it is safe to give their bank details out online. They are concerned about payment security due to the amount of hackers, fraud and scams that are occurring now a days. They feel hackers can access their information through viruses which can put some customers off from purchasing products online as they would rather go into store than give their security details out online which can stop Tesco's from receiving online purchases. Tesco's should include clearly on their website policies to reassure customers and to ensure that their details are safe and secure when entered onto Tesco's website and no one else can access this information. This could be expensive to imply however, if Tesco wants to keep up with their competitors this is a good way because this will draw in a lot more customers who are holding back to purchase online because of payment security. Over this, they could plan security by using authorisation which is when Tesco determines who has access to application and information establishing a policy which is maintained. Encryption is when data is changed into a hidden format which makes data unrecognisable unless the person accessing it has a data key. This is done by using SSL (Secure Sockets Layer) and SET (Secure Electronic Transactions). Passwords and logins should be applied in order to identify a customer accusing the website from a hacker.

UNIT 12 M2

In this assignment I will be analysing the marketing opportunities and challenges faced by Tesco when using Internet marketing.

Tesco use direct marketing, letters, leaflets and emails to create and build good relationships with their customers as well as to update their customers on new products or services that Tesco are offering. They also offer deals and promotions to existing customers to increase repeat purchases. The use of their official website is to access peoples data such as their names, address, preferences and phone numbers. This is all put into a database which is used to filter them and send appropriate emails, letters, leaflets to the appropriate and specific people. Customers are given a chance to c rate an account on Tesco in order to store all their information for the future which entices customers because it makes it easier for the next time. After customers create an account, Tesco's webpage alters accordingly to their previous purchases or searches. This opportunity is important for Tesco because it can increase the amount of customers who will lead to an increase in profit and sales for Tesco.

This could be seen as a problem and challenge for Tesco, which is because some customers don't look at their emails because they receive a heap of the same ones from different businesses. They may get frustrated and unsubscribe which means they do not receive the emails anymore. On the other hand, customers would continuously send the emails straight to junk mail without even looking at them. This is a problem for Tesco because this is a waste of their time and a waste of money as they aren't being effective. To overcome this problem, Tesco could send less frequent emails and maybe have a routine or set days they get sent e.g. every 2 weeks a subscribed email gets sent instead of every week. This could be a challenge for Tesco because reducing the amount of emails they send, could decrease their sales because less customers would be aware of the sales, promotions and updates of products. Also, it can be hard for Tesco's to understand if customers are still reading the emails or just deleting them straight away.

Tesco have a technique which they use to entice customers to buy similar products they have searched for or looked at on the website. Whenever a customer buys a certain product or looks at something, Tesco tries to recommend similar products for them to buy that they think are suitable for them to buy. Additionally, Tesco allows the customers to pay in different currencies which is a huge opportunity for Tesco because this means customers from all over the world can pay using their own currency which will increase the amount of sales Tesco's receive. Although, this could be a challenge for Tesco because the delivery cost to have products sent over to specific countries can be very expensive and not worth their while for such minimal orders. Also, it may take longer to deliver to specific countries which means the customers abroad will complain and give negative customer service and this may make other customers not want to purchase from Tesco.

In conclusion, Internet marketing offers Tesco many different opportunities including deals and promotions through emails and the post. However, Tesco also face many challenges due to internet marketing such as; the delivery time is too long to deliver to some countries which can make their customer service negative.