A STRATEGIC ANALYSIS OF U.K E- RETAIL INDUSTRIESA STRATEGIC ANALYSIS OF U.K E- RETAIL INDUSTRIESA study of data over the period 2006-2010A study of data over the period 2006-2010

Name: Adnan ul HaqueName: Adnan ul Haque

Submitted in fulfilment of the requirements of the taught Masters Dissertation to the University of Wales, for the degree of Master in Business Administration (MBA).

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March 2011

AUTHOR’S DECLARATION

I declare that the work in this dissertation was carried out in accordance with the

Regulations of the University. The work is original except where indicated by special

reference in the text and no part of the dissertation has been submitted for any other

degree. Any views expressed in the dissertation are those of the author and in no way

represent those of the University of Wales. The dissertation has not been presented to

any other University for examination either in the United Kingdom or overseas.

SIGNED: .............................................................

DATE: ..........................

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Abstract

In this research I had analyzed that in the E retailing, there was a problem of growing

fast pace increase in the electronic retail services does affect the overall satisfaction

of customer. We have no idea of relationship between the E retiling services and

customer satisfaction. To what extent does it affect the behavior of the customer who

shop through online and what are the environmental factors involved that certain

customer behave in that particular way.

Aim of this research is to find the relationship between the E retailing services and

the overall satisfaction of the consumers in the United Kingdom E retailing industry.

To conduct my research I have gone through journals about E retailing, I have done

case study analysis about the chosen companies, prepared a questionnaire and filled it

out by selecting randomly 15 customers. I have interviewed for 10 minutes sessions

with the management of the selected organization.

After analyzing the expected findings I have learnt that my hypothesis that there

exists a strong relationship between the E retailing services and the overall

satisfaction of the customers is incorrect.

This research leads to a conclusion that there are other various factors such as price

variations, trends, etc which are responsible for customer satisfaction and in future if

the sampling set is expanded more results can be generated with more accuracy.

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Contents Page no.

Chapter 1 : Introduction1.1 Background to the research1.2 Relevance of the topic for management study1.3 Purpose of the research and aims

1.3 Structure of the Report

Chapter 2 : Literature Review2.1 Theory2.2 Results of various Empirical Research

Chapter 3 : Retail Industry of U.K.

Chapter 4 : Methodology4.1 The styles of research.4.2 The research problem and style chosen.4.3 Hypothesis4.4 Research Questions4.5 Method of Analysis4.6 Data Sources

Chapter 5 : Analysis and Findings5.1 Critical appraisal of literature.5.2 Graphical appreciation of data.5.3 Findings from Analysis

Chapter 6 : Discussions6.1 Interpretation of results of answer to the research question

6.2 Evaluation with existing theory and previous empirical researchChapter 7 Conclusion 7.1 Conclusion 7.2 Limitations of Current Research 7.3 Recommendations for further work.

References

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Appendix

Chapter 1: Introduction

This chapter is to explain the background, purpose and the area of the study to the

readers along with the delimitations. This section also briefly explains the role of

electronic commerce in retail segment of the United Kingdom and the behavior of the

consumers in online retail shopping.

1.1 Background

Undoubtedly, the Retailing sector is one of the major economic segments of the

country. According to the website www.prospects.ac.uk the retail sales has In 2009,

UK retail sales were over £285billion and during 2010, the industry created an extra

12,750 full-time jobs, it is 2.1% increase on the previous year. According to the

British Retail Consortium in 2010, there were over 286,000 retail units and more than

third of retail spending has been done through shops. This sector has been dominated

by the huge retailers of multinational businesses operating in small stores to big shops

in variety of markets all over the country.

The significance of Retailing can be view from social and economic aspects. It does

affect the every day population as most of the person goes out for shopping and most

of them are familiar with this word too. They some how daily come across the

retailers and thus the social network is formed. When these individual purchase

something the economic bondage is automatically formed. The boundaries of

traditional products have altered as the modernization has driven new ways and

modes. Retailers have modified their techniques from traditional to more advance

level in order o reach their target people and provide their variety at their

convenience.

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1.2 Relevance for MBA:

In my Masters of Business Administration in Retail Management, I gave two papers

in consecutively two semesters covering the all details about the Retailing world

including the retailing system in the UK market. This develops the keen interested to

explore in this dimension further. The research is to understand that to which extent

does the consumers behavior is being affected by the modern methods of the

electronic retailing. In our subject ‘the contemporary issues of the retailing’ has given

the specific ideas to carry out my research on. This will also enhance my skills in

retailing as my master is mainly concern with the retail management. This research

has close relevance with the MBA as it will give cover the major areas of my one

year study. It will serve as a ground to step into practical world with the practical

knows how about the e-retailing world.

1.3 Purpose and Aim:

The purpose of this research is to critically evaluate the different aspects of the E-

Retail market of the UK and therefore my research is to enhance understanding about

the affects of the e-retailing on the behaviors of the consumers and identify the

reasons of the rapid growth in the e-retailing sector. the aim is to scrutinize the

internal and external environment that are reason to this rapid expansion and how

these various factors affect the over all process of e-retail.

1.4 Structure of the Report:

The structure of the Report is to explain that which chapter speaks about what. In the

second chapter I have in detailed explained the different theories and the literature

work already done in the e-retail. It thoroughly covers the results of various empirical

researches. The third chapter covers the details of the e-retailing system prevailing in

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the UK market. It speaks about some of the leading players in e-retailing market

currently dominating this sector. The fourth chapter is about the research

methodology, covering the research design, problem, generating the hypothesis and

style chosen to conduct the research. This chapter I have discus the ethical issues

along with the sources from which data is collected. The fifth chapter contains the

critical appraisal of the literature, graphically the data is sorted and relations are

established through statistical tools. In the last and final chapter that is sixth chapter,

the discussion is done with the interpretation of the results. The results are evaluated

with the existing and previous empirical research.

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Chapter 2: Literature Review

Introduction

This chapter mainly deals with the theories and various empirical researches

concerning the research questions. The following are the research quarries:

1. Describe, relate and explain the importance of an electronic retailing concerning

both blogs (national and international).

2. Highlight the market movements in E-retail sector.

3. Understand the relationship of the buyer-seller.

4. Techniques of E-retail sector

5. Getting to know the customer’s act of E-retail division

2.1 Theories:

Kumar has defined literature review, as ‘Reviewing literatures is a long and

continuous process. Starting before a specific problem and carry on until the report is

finished’.

Executing a literature review involves four steps. They are as follows

1. Examine for at hand literature in relation to your study;

2. Next, reassess the literature selected

3. Create an exploratory framework for the chosen literature;

4. Finally, develop a conceptual structure.

2.1.1 Ever- Growing significance of E-retail industry

This E-retail shopping has turned into much more serious investigation rather than

just casual flirtation with online shopping. It has grown from a cosset task for any

marketing sector to more of an opportunity that the entire organisation would need to

integrate into future plans.

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There is a scope for the retailers to develop and change their existing retail channels

through continuous process. According to Chan H.(2001), Lee R.(2001), Dillon T.

(2001) and Chang E.(2001), E-retailing basically deals with the sales of goods and

services. In other words, this can be interpreted as sale of tangible and intangible

goods. This also includes E servicing.

2.1.2 Definition of E-Marketing

As stated by Dave Chaffey on the website www.wnim.co.uk, E-Marketing deals with

implementing digital technologies that helps in forming online channels like (web, e-

mail, database, digital TV) which contributes to marketing activities designed to

achieve fruitful acquisition and retain the customers through improving the

knowledge of customers in terms of their profiles, conduct, value and dependability,

after which it can be possible to deliver integrated communications and online

services according to the individual needs of the customers.

2.1.3 Online Retailing

Among many E-business models, online retailing is the most common and visible of

them all. Sellers or merchants can organise online storefronts to sell their goods to

both businesses and customers. Physical goods are shipped through logistics services

like UPS, USPS or Fed Ex while digital goods could be delivered over the internet.

This online selling or retailing sometimes proves to be very successful in terms of

time saving and flexibility in shopping. On the other hand, although a pre-Internet

presence carries brand equity, it does not guarantee online success. Business

organisations, which sell tangible goods online, could make any level of commitment

from pure play to dabbling.

Digital Products

One of the major advantage of selling digital products online is that it is less

expensive when compared to selling physical goods online. Though online shopping

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had a slow start in the beginning, it gradually attracted more and more customers.

People have begun to purchase more quantity and content online in this fast paced

world. Online shopping has helped people to save time and energy to a large extent.

Tangible products

All physical goods that are sold online, like clothing are dispersed through straight

channels. On the contrary, many digital products are delivered through customary

channels. Here is an example; some of the foremost record labels distribute most of

their recordings and music through warehouse, offline retailers and trucks. Whereas,

the internet consumer may book online but the CD will reach via local logistic

providers or postal service.

2.1.4 E-Retailing

The internet has given rise to a new kind of specialization. It has not only helped In

specialising in just a specific product line but also helped in specialising in a

particular class of customers and sellers. Lastminute.com is a by product of this

specialisation, which allows customers to purchase last minute travel tickets, gift and

entertainment which can be matched against last minute sellers of the same item. This

is a fit example of the above scenario because we are not only seeing a specialisation

in the product line, but in a class of sellers as well. This helps us to understand that

this would have not been possible without the invention or use of internet. Also, apart

from these specialised stores, there are general e-stores which sells common products

under a single management.

Some of the examples of these kind of stores are Tesco and Boots. Simultaneously,

there is another sector of business on internet which is growing swiftly is the e-

broker. The working of this e-broker is not as same as the e-retailing but it still serves

the purpose. It does not involve selling the goods and products directly to the

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customer but brings the customer in contact with a specific seller or supplier, which

may result in fulfilling the specific criteria of a specific customer.

E-broker can also be interpreted as a intermediary who collects an order from the

customer and passes it to the seller. This sector plays a vital role when it comes to

shopping online or over the electronic device like computer. Therefore, e-broking can

provide many services like shopping, taking orders from the customers and

fulfillment of the orders and also providing service to the customers. That is one of

the reasons why they are called to as electronic intermediaries. Some of the e-brokers

are ebay.co.uk, lastminute.com and priceline.com to name a few. On the other hand,

many manufacturers with popular brand name products have gone for direct selling

through internet. one of the best example here is ford. This company uses internet to

achieve straight path selling and also they use the dealer network to carryout

distribution and delivery. This approach allows mass customization to cater to

customer preferences. As a result of direct selling by the sellers and manufacturers

the cost to the end customer would reduce and also increases the profit to the

manufactures

2.2 Results of Various Empirical Researches

Conventional based business world presuppose that long- established businesses like

TESCO and Sainsbury’s might get affected to a greater deal by web-based retail. The

simple logic behind this is that these nationalized retail chains are hampered with a

pricey system of physical stores that are supplied through a costly complex

distribution network. Of late, Jeff Bezos, pioneer and CEO of Amazon.com, plainly

gave a statement that those retail based wholly on web would provide far more better

option and selection of goods than in the conventional retail stores. When we make a

closer study into the web-based sales, it indicates that the wide range of attributes that

a traditional or conventional tangible store offers its customers could in reality prove

to be advantageous to the online or electronic s shopping accomplishment. More so

physical retail is well thought-out to be original retail. Subsequently, the sister retail

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or in other words, second generation retail took form from the coming on of

electronic retail.

It is not only important to provide a web site to the online customers but should make

sure it is an well-designed one which could provide the customers a greater deal of

effortlessness and speed to access, shop and buy than when compared to physical

store. Another advantage of web technology is that it allows companies to meet the

specific line of interest of customers by guiding the customers to that part of the site

which could personalize their shopping experience. This enables the companies to

create a tailored, consistent and more importantly efficient shopping experience. The

computerized and centralized business process of e-retail allows a extensive variety

of highly economical products which is an added advantage to the online customers.

One of the best examples of well-designed e-retail is Amazon.com that has been

receiving high credits and high points for their exceptional customer service on a

continuous basis. The Amazon.com is equipped or designed in such a way that it

allows the shoppers to speed through the process of selection and placing orders for

their specific product in haste while at the same time giving the customers the

required assurance, guarantee and personal after sales service at a reasonable lesser

cost. This is simply one of the many reasons why Amazon.com has been at the top of

the list when it comes to online shopping. It can also be labelled as the typical model

of online customer service for all online businesses on the electronic machine.

Considering the present lifestyle and shopping methods, we could also consider

another generation of retail that can blend into both online and traditional bricks-and

–mortar selling. This could prove to be working wonders if the hybrid business could

possibly mix both of the online retail and physical store retailing. John Quelch, dean

of the London Business School, states that amalgam of both online and physical retail

could work wonders for supermarkets, wholesale clubs that proffer a wide variety of

assortment of more likely low-end commodities. On the other hand, many other view

a broader role for hybrid retail in terms of building a personal relationship with the

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customers who would go to the store to view and examine the product before

purchasing it. On the parallel the website could help in the fulfilling the required need

of the customers and more over it helps the store to organize in order to handle

multiple orders at a low cost which is again a plus point. All these above features of

hybrid or high-end retail gives us an idea of how these could help in satisfying the

needs of the customers while maintaining the high profile customer service.

2.2.1 The characteristics of E-Retailing:

There are many features of e-retailing of which some important are discussed below:

1. Electronic retailing provides customers with the provision of an online catalogue

which allows the customers to surf through a variety of goods. Therefore it is self-

motivated and linked with the process of placing order.

2. Another striking factor of e-retailing is the provision of search engine, which then

in the traditional retailing was not available for the customers. This search engine

plays a vital role in the shopping because it helps the customers to look up for various

goods and commodities at a quick time and at a less waste of energy.

3. Yet another advantage of e-retail that it provides online customers with an shipping

cart which allows shoppers to select goods at their own convenience. Also It enables

mechanical or automatic price update.

4. The feature of personalized promotions, store layouts and marketing is an

outstanding characteristic of e-retailing.

5. Also it allows customers to download the digital goods and application

immediately because it has possess the ability to deliver the goods directly to the

shopper online.

6. It also helps the customers to navigate through the sites with ease by providing an

online customer salesperson.

7. Customers could check for their order status before confirming the placement. This

is another useful feature of e-retailing.

8. The feature of “stickiness”, which means creating a customer community by

forums, is yet another feature of electronic retailing.

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2.2.2 E-Retail Mix: (Adopted From Emerald Reports)

E-Retail Mix defined

The electronic retail mix can be defined as the sum total of goods and services that a

e-retailer could sell or offer to the general public(online shoppers),(Lazer and Kelly,

1961). For a wider understanding , it can be understood as the tools and techniques

that are blend together by the e-retailer to provide value service to customers. If we

date back to the history as far as the first half of the 20 th century, the job profile of a

marketing person was described as a “mixer of Ingredients” according to Culliton,

1948.

In the act of marketing mix, the marketers execute various strategies and plans

targeted at satisfying the needs of the customers and hence adding timeless value to

the customers. The phrase “Marketing Mix” was first termed or coined by Neil

Borden,1964 of Harvard Business School. The marketing mix is popularly known as

E. Jerome McCarthy’s (1960) “4ps”, namely, place, product, price and promotion.

While not being based on any theory, the parent 4ps, for instance, was strongly based

on the requirements of the manufactured goods department and at the same time,

need for the practitioners to simplify their decision making into a wide number of

peculiar and practicable headings(Palmer,2004). In the same manner, even the e-

retailers have the need to design their decision making in terms of their offers to

customers that are basically essential for success.

C1: Convenience for the customer

Offering convenience to the customers is the most essential part in any business.

Place, one out of the 4ps, is the technique of placing the products in the place where

the customers would like them to be. This can be in a sense understood as

“convenience for the customers”, thus getting to know the level of convenience of the

customers in buying the product. As for the physical or bricks retailer is concerned,

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“place” is the most vital and critical decision that he has to take in terms of

“location”, that should suit the customers’ shopping preferences, short travel distance,

facilities for parking etc. this applicable even for the e-retailer because majority of

the customers would use multi-channel shopping, meaning, they could browse for

the product online and then buy the product in store and even vice-versa. Physical

location is equally important for the e-retailer because it is more likely that customer

would place their trust in the e-retailer who is at leasts based in that same

geographical location as that of the customer.

In spite of having the online shopping facility, many shoppers would prefer to buy

their goods directly from the store. So it is necessary for an e-retailer to have a

physical presence to carry out his business with much more efficiency and with ease.

And for an e-retailer, “Location” could mean practical location and effectiveness in

finding the web sites. Thus, this results in registration with search engines, location in

e-malls and associate links.

C2: Customer value and benefits

“Product”, which is another P of the 4ps should be considered as a customer value

and benefit instead of just being considered as a commodity that a company has to

sell. When we refer to “Customer values and benefits”, we mean the package of

service and contentment which is wanted by the customer from the seller. Taking the

present mindset of the customers and sellers into account, e-retailers and physical

sellers now consider “Products” to a much more extent than in the past. As a result

reflecting the closeness and bridging the gap between the customer and sellers along

with the increment In the benefits that customers would be looking forward in terms

of uniqueness, selection, choice so on and so forth. One of the main and indispensable

task to retail and e-retail is the selection of products on a wide range for sale which

would target a specific sect of the customers.

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This selection is carried out from a diverse collection of data and information along

with the goods and services. One of the main standpoint for e-retailers is that they can

provide wide and deep range of products which is not that effective and practically

possible to physical retailers. It always does not mean that lowest price could result in

increased sales because many customers may consider factors like fashion, present

trends, styles. For instance; when customers buy products online, the chances of

asking for a help is much less than when compared to shopping in a store.

The chances are more that customers might ditch shopping online if the clear and

required information is not given in the website. Therefore, it is of high importance

that all online businesses and e-retailers make sure that they give clear description

about the products they display online in order to help the customers to have a clear

view about that particular product. In a nutshell, it means that the e-retailers or e-

business should be aware of describing about the product in the customer value and

benefits terms.

C3: cost to the customers

“Price” is something the business or companies decide to charge for their products to

their customers. But in this scenario, “cost to the customers” means what the

customers would be really paying for their product. Here is an example to understand

the above statement; a physical company could include their transportation charges

into the cost of the product. Even when we take online retailers or “clicks” e-retail,

there could be cost of carriage and along with it cost of taxes also. So these extra

charges will be added on to the quoted price or final market price of the product. In

addition to all this, at times customers may have to consider the cost of internet

access, which could be an added cost apart from the product cost. Even then, online

shoppers have an mindset that the prices of goods and products sold online should be

lower than the ones sold in the store.

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This kind of perception or thinking could lead to issues and problems because not

always the price quoted online could be lower than in the stores and therefore when

customers buy goods directly from the store, they have a feeling that they are paying

more than the online shoppers do, which in reality may not always be true.

C4: Communication and customer service

Communication can be considered equal to “promotion”, the last “p” of the “4ps”.

Promotion guides to the ways in which businesses can sway the customers to buy the

products, on the contrary, communication is a two way action or process which may

also involve feedback from the customers to the sellers or suppliers. As a result of

ever increasing control of factors of retail mix by the sellers rather than the

manufacturers themselves, retailers tend to spend more time and money on

advertising the products , partially assisted by manufacturers by granting advertising

allowance. This has hence led the retailers get more closer to the customers than the

manufacturers and also have more access to the customer feedback.

Communication cannot be considered as mere advertising, but all possible ways

deployed by the retailer to communicate with their customers. some of the many

ways practiced by the sellers are marketing research surveys, loyalty schemes, public

relations, mails, e-mails etc. some of the online advertising methods include banner

ads and pop-ups which are mostly incentivized; means, getting paid for listings in

search engines. It is not that easy to identify the emotions of the customers and fulfill

their wants according to their feelings and

emotions through online selling. This can be considered as one of the main drawback

of the online shopping. This has been a ever growing challenge for the e-retailers to

cope with and serve the customers to the fullest of their choice. Whereas, when we

take “bricks” retail or physical store sellers, they are in a much better position to

know the customers’ emotional needs and wants and fulfill them because they can see

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the customers face-to-face. Also physical store retailers can give the shoppers a

pleasing shopping experience by using the atmospheric behavior.

In order to create a pleasant online shopping for the online customers, e-retailers can

create a “web ambience” with the help of music and visuals like 3D displays and

soothing music. At times, when people are required to go through long downloads

like video clips, then such enhancements should be a compromise. Customer

relationships has been one of the main areas where doing well retailers like

TESCO(www.tesco.co.uk) have cashed In and gained a huge lead over other

competitors. In the above section there is an mention of emotional selling, i.e; selling

products tot the customers according to their emotional needs. In relevance to this, the

salespersons selling face-to-face in the physical retail store could use verbal and non-

verbal communication to sell the product and more importantly, it helps in building

rapport and confidence with the customers, therefore enhancing the emotional value

of the goods.

Of late, there has been a multiple of suggestions for constructing or structuring a

“retail mix” that is more or less equal to 4ps and 4cs of the marketing mix and

blending of other factors and aspects that can help a retailer to succeed. To examine

this McGoldrick (2002) used a 9 element mix. He also integrated proportions like

“brand image”, “logistics” and “information” in addition to the elements that had

been added into the 4ps frame work in the above lines. In spite of all that, majority of

the retail mix are not that convincing or likeable as the 4ps or 4cs of the marketing

mix. As a result of the inefficiency, there is a proposal for a more simplified form of

marketing mix, “7cs” for the e-retail mix combined with customer care and service,

customer outlets or franchise and computing and category management issues. As a

result of inclusion of these 3Cs, it enables the e-retailers to offer important headings

for the bundle of benefits that they provide to add value.

When we conduct a close and detailed study into our 7Cs, to some extent there is a

similarity or in other words, there is parallel comparison with the 7Cs of

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Kearney(2000) for conceiving a exceptional customer electronic shopping

experience. Kearney added “content” and customization to convenience,

communication and customer care, which has been included under our “customer

value and benefits”, connectivity”(in our “convenience”) and “community (which is

included in our “customer care and service”).

C5: Computing and category management issues

With the production or proliferation of goods and services, have come growing

consumer choices. As a result, if any e-retailer or retailer has to be successful in the

business, they have to produce and supply the goods and services that consumers are

in need of, at the right time and at the right place. This is the secret behind every

successful retailer or e-retailer for that matter. As per the data, superstores carry

20000 or more labelled products and department stores from 100000 which may

shoot up to even a million. In order to control this mammoth level of complexity

effectively, there is a need for effective computer and logistics systems. Noticeably,

there has been a rapid change in the retail logistics over recent decades. Initially, the

retailers took over more power and control over their supply chains leading to a fall in

the involvement of the whole sellers which in turn gives way to contract logistics

under the control of retailers. Subsequently, the link between suppliers and retailers

has become more efficient through the provision of supply chains, many based on

electronic data interchange(EDI).

Fundamentally, EDI is based on individually owned third party computer networks.

This method of EDI has had an great impact on the retailers because it has helped in

reducing the stock levels in the warehouse by enabling quick response and efficient

customer response (QR and ECR). But the negative side of this EDI networks is that

it is expensive to install these systems. Installation of these systems could add up to

couple of hundreds and thousands of pounds. As a result of the expensive nature of

EDI systems, there is a tendency for companies to adopt internet, specially, small

businesses. Big retailers like TESCO are giving the access to real time electronic

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point of sale to their suppliers to know the present stock level. This helps the retail

suppliers to change the supply of goods according to the changing demands of the

customers. One of the main key factors in supplying and satisfying the needs of the

customers has been the co-operation between the suppliers and the retailers while

contracting the stock and cost. this act of co-operation between the suppliers and

retailers on a large scale is known as “category management”,(CM).

Big retailers like TESCO have been largely succeeded because of the high efficient

use of the computer centred logistics systems. Sarcastically, the reason for the failure

in a number of pure play dotcoms that were concentrating on advertising and

promotion was the deficiencies in the area of computer-controlled logistics systems.

There is an exception to this case, Amazon.com because this website was structured

on efficient logistics systems supported by outstanding customer care and services. In

countries like the Uk, Amazon is using its logistics proficiency to execute distribution

services for physical retailers like WHSmith(www.whsmith.co.uk) and Toys R

Us(www.toysrus.co.uk). A best example of telemarketing and direct selling since the

late 1980s has been Dell (www.Dell.co.uk). They set an example by demonstrating

that a composite product like computer can be sold to the customer without having a

face-to-face contact. Ever since then, this company has been worldwide market leader

for computer hardware and is one of the first e-retailers.

C6: Customer franchise

In the present competitive and business world many or almost all retailers try to

create a positive profile and image in the market world. In the quest to achieve this,

many “successful” retailers have invested a great deal in customer care and service

and quality in order to achieve the highest standard in the commercial market. The

term “customer franchise” refers to the accumulated value of image, trust and

branding to the retailer.

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Retailers have “progressed from being just merchants to retail brand managers”

(McGoldrick,2002, deriving support from Kumar, 1997). As result, many physical

retailers have high quality brands with apparent personalities supported by long term

endorsement. One of the main factors that hinder the expansion has been the lack of

trust. as earlier stated by McGoldrick (2002), with the availability of greater choice,

customers tend to choose the products that they rely on and trust. this simply means

that the new products will have to work their way to gain the trust of the people.

C7: Customer care and service

Often times e-retailers may offers the goods and services that is similar to that of their

competitors. As per McGoldrick (2002),tradionally retailing has been grouped as a

“service industry” but, the preoccupation with service quality and services offered is

of more recent origin. When we look from a wider perspective, most of the activities

of the retailers deliver a kind of service to the customers. On the whole, all these

activities performed by the retailers play a vital role in providing customer

satisfaction.

A good service for a e-retailer means, providing exceptional, fast and reliable

supplies to the shopper at the right time, in addition to this, access to telephone help

and more importantly, return and refund facilities. Looking back at the early e-

retailers, these were the aspects where they were poor at. As a result online customers

had a very bad experience. As far as the “bricks” retailers are concerned, store

personnel play a vital role in creating retail image and benefaction intentions. But to

an extent the e-retailer is at loss but the happy news is that elements like bulletin

board, chat rooms and click-through telephone help can change the e-shopping

experience more lively and interactive. The bottom line though is that any successful

e-retailer makes the online shopping more enjoyable, convenient and at the same time

less worrying for the customers.

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Customers would value and expect good and personal customer service, especially,

when purchasing costly and high priced commodities like cars etc. in order to provide

customers with this kind of personal customer service, Virgin(www.virgin.co.uk)

provides with a pop-up window with a phone number to contact a sales executive.

Particularly, the extra 3Cs of the e-retail mix could be decisive for the retailers. Of

late, many e-retailers, pure play dotcoms in particular were lacking far behind in the

areas of supply chain management, computing, category management that resulted in

affecting the trust, image and customer care. On the other hand, stronger brands along

with excellent customer outlets are possibly having higher sales and potentially huge

profits like Tesco and Next.

Those with a strong and established computer and supply chain systems are making a

difference in the e-retailing. Some of the exceptional companies in this category are

Amazon and Dell. Both these establishments are known for effective and efficient

systems, quality service and also communication and one-to-one interaction.

2.2.3 Process of Internationalization

As per the information from Corporate Intelligence 1991, there has been around 654

instances of market entry in around 16 European countries during 1980s in

comparison to the 182 entries in the preceding decade. In spite of this entry and

invasions into new international markets, many businesses packet their big size of

turnovers and profits from local or domestic markets. Marks and Spencer’s, One of

the huge leading retailer of Britain, derive their 14% of yield from international

markets. In the recent years, internationalization has concentrated its attention

towards either improving newly established markets or invading home based markets.

These two distinct features of internationalization are understandably a worry, in

relation to their demands upon the administration of time and their real effects on the

balance sheets.

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According to Burt 1994 and Kacker 1985, the gush of plans, ideas and acquaintance

has resulted in international influences to trading formats well before the recent rise

of activity. Lamey 1996 states that “Global retailing demands huge investment and

gives no guarantee in return”.The process of retail internationalization has gained

haste in recent times.

2.2.4 International development positions

As a result of internationalization, trade (retailing) has given birth to a varied styles of

procedure, ranging when compared to MNCs. Treadgold (1991) explains that

globally positioned markets like Benetton differ their overall format slightly across

their national precincts, in return attaining the huge economies of scale but

concentrating less on local receptiveness. On the contrary, multinationals try to

achieve a range of formats globally, mostly gaining less benefits from amalgamation.

In between these two a middle itinerary may be defined as ‘transnational’ retailing.

As per this type of retailing is concerned, company looks to achieve international

competence while

at the same time giving heed to national issues, needs and opportunities. Few of the

recent past developments by Marks & Spencer’s could be described as transnational.

This is because of the realization by M & S that even the most commanding and

successful retail formats that is within the domestic markets may require different

adaptations in order to fit within the global market.

2.2.5 Trends in retail internationalization

There are some common or convergent trends within the European retailing

regardless of the mammoth multiplicity. These common trends are more remarkably

towards greater division or segmentation, competition and absorption. In spite of this

common trends in some sectors, there Is always room for differences which prevails

in the levels of expansion within a variety if countries ranging from conventional

retailing of Greece and Portugal to the sophisticated retailing of Germany and United

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Kingdom. Andre Trodjman 1989 states that in the time period of last three decades,

Europe has undergone tremendous makeover. As a result of this change, each country

in the Europe has tailored the character and clause of its business-related product

range in order to meet with the changing market environment. More so, traditional

retailing is being replaced by a more organized and rigorous distribution that

contributes a great deal to European economic goings-on. On the whole, similar

trends in environmental advancement has given rise to convergent swings towards

structural changes in European business markets.

2.2.6 Strategic Dimension

There are three basic strategies acknowledged by Salmon and Tordjman (1989)

approach along with a inactive partner investment strategy. The main focus of this

paper Is on global approach to retail internationalization explicitly ‘the faithful

imitation, of a concept abroad… as to their centric market was homogenous, in so

doing ignoring all local or regional differences and on the other hand, substitute

multinational approach whereby retailers count their subsidiaries to be a collection of

geologically spread retail business, for each of which they adopt the standard

formulae to suit the local conditions.

Williams 1991 firmly states that significance of discrepancy in the firm advantage as

a part in the internationalization process and draws out 4 sources, namely, retail

marketing skills and professionalism, retailing on a huge scale, strong band and

distinct retail concept.

As far as (Vida and Firhurst, 1998) are concerned, it is easy to believe in the

inhibiting factors which basically takes root from the inner atmosphere of the firm

will have a effect on the decision to invade new countries. During the succeeding

cycles of the process, these decisions may turn to a operation of external environment

and cautions planning and execution.

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2.2.7 Consumer Behaviour

According to (McGoldrick 2002), it is very important that all retailers have to

comprehend the fundamental parameters that is around the consumers structures and

behaviours in the economic market they operate in. the changes in the trends that can

be spotted out in all markets have had their impact on the consumers or customers

and this impact differs from country to country. A key

demographic and socio-economic indicators fro the official national statistics can

illustrate simple variations in the trends that prevails in the consumer markets.

As per Gist 1968, (p.85-86), consumer behaviour is largely constituted by production

relations, purchasing power of consumers, demographic, social and psychological

features and also the consumption prototype of the consumers take different scope

according to various market conditions. Sometimes, retailing systems might get

influenced by the different characteristics of the consumers in various societies. To

support and understand this here is the example; because of downfall in the traditional

store, along with its inefficiency of adaptation to the other environmental changes, it

is highly necessary to notice the transformation in consumption patterns also. Some

of the changes in consumer behavior may be benefitting and encouraging the retailers

while it could be discouraging for some other retailers as stated in Advances in

Consumer Research; 1987 Vol.14 Issue 1, p439. A general increase in the income

may be pleasing but its uneven distribution has conflicting results on different

combinations of consumer characteristics. As a end result, various combinations of

consumer characteristics may have all together a different impacts under various

appropriate and historical conditions.

As Ohmae (1998) observes; strategy is not all about overcoming the competition, its

all about serving customers’ real needs. In order to further support his statement, he

cites the opinion of the great Sun Tzu (500 BC) as cited by Ohmae 1998: ‘The

smartest strategy in war is one that allows you t chieve your objective, without having

to fight’ the vastly visible battles relating prices, promotions, advertising etc. on the

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other hand, the bigger part, often being invisible, is the search to find the ways to

satisfy consumers’ needs in a more effective way. Chenet and Johansen 1999,

expands the concept of ‘self actualized customer’ in the following manner, 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.

According to the observation by Meyers and Eagle,1982; It is very evident that

consumers would not make choices by observing how good different substitutes are

with regards to a multi feature utility works. Instead, the selections repeatedly appear

to be made hierarchically; means, the elements use to distinguish amidst alternatives

change as different candidates are eradicated. Yankelovich 1964 earlier had sensed

the need for dissection or segmentation bases that could possibly relate more to the

defiance and opinions to demographic natures. He further states that markets should

be examined or tested for valuable and vital differences in buyer attitudes,

inspirations, usage styles, appealing likings and amount of vulnerability.

Mittal B. 2005 gives his view that segmentation includes getting to know the

differences among e-consumers. Since e-retail is a new channel of shopping al

together, it is vital to understand and categorize consumer segments or sub-divisions

that diverge their insights and patronage of the e-market place. Rohm and

Swaminathan 2004 engaged 4 intentions of shoppers or consumers, be it online or

offline, they are; total ease, nature of physical store, use of information in planning

and execution of shopping and finally, assortment seeking.

This study or observation also brought four customer segments to the view; well-

adjusted buyers, convenience shoppers, store-based shoppers and variety seekers.

Convenience shoppers are predominantly known as heavy users of online shopping.

Secondly, store-based shoppers are those who would be looking to possess the

product immediately and hence would love the social environment that prevails in the

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physical store. It is also very obvious that these kind of shoppers would score less in

online shopping. There is another set of customers, variety seekers. They are kind of

shoppers would like to try new brands, new products, new stores and also would shop

online to an extend. Yet another group of shoppers are the balanced shoppers or

buyers. They score almost equally on all four aspects and are again substantial online

shoppers.

Customer Satisfaction

Reichheld 1996 says satisfaction is frequently recommended as an result of relational

strategies and a pre-requisite for trustworthiness and retention. However the view that

is, ‘customer satisfaction is the key to securing customer loyalty’ is distant from a

fully healthy philosophy. According to Buttle 1997, satisfaction or gratification does

not necessarily end in retention and it is correspondingly apparent that discontent or

dissatisfaction does not result in defection. It is generally imagined that consumers

would make some primary effort to shop around where consumer purchases would

create high emotion. When this passion or emotion is less, the chances of

investigating other sources of supply is considered to be very low.

Therefore, be it any model, there should be scope to differentiate between true vendor

or seller loyalty and simple recurrence purchase behaviour. Miserably, these two are

regularly missing from the mainstream of consumer studies. Intrinsic satisfaction

could be the base for one of a kind of loyalty, predominantly, where the consumer

exerts some of his/her efforts in forming the best deal, but on the contrary, other

situational drives like time and opportunity costs may end up in default loyalty.

Therefore, satisfaction plays little or no part at all when there is no need for this

effort.

Buyer-Seller Relationship

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When we try to use a contingent approach to relationship marketing, basically it is

necessary to understand when and why customers are most approachable to

relationship maintenance according to Bendapudi and Berry (1997, p31). As far as

relationship marketing literature is concerned, “customer retention orientation” is a

new concept altogether. It basically builds on related concepts like “relational selling

behaviour” from a customer-salesperson relationship context( Beatty et al.1996;

Crosby, Evans; and Cowles 1990) and also the perception of “market orientation”,

meaning, strategic events aimed at delivering grander value of customer orientation.

First of all, the idea of customer retention orientation passes beyond the restricted

scope of salespersons’ efforts that is pressed upon in the studies probing relational

selling behaviour. Secondly, the extent of a consumer’s relationship with the store is

purely assessed by relationship quality, whereas, the factors that determine or decide

the quality of this maintained relationship is monitored by customer retention

orientation. The next point is that the perspective of the consumer is at the basis of

customer retention orientation. Another concept to be discussed is Customer

Relationship Management(CRM). The primary aim of CRM is to deliver high

customer equity. It is natural that the more reliable the customers, the higher the

customer equity.

There are three factors or drivers of customer equity; they are; value equity, brand

equity and relationship equity. Further down it can be said that the sub-dividers of

value equity are quality price and convenience. In order to spot out the programs to

improve the value equity, it is the duty of all industries to outline the actual factors

underlying each sub-driver. One of the main feature of value equity Is that is drives

the customer equity in the economic or business market. On the other hand, brand

equity is the invisible and customer’s subjective assessment of the brand, is this

assessment is exceedingly and beyond its empirically seeming value. And the factor

which drives the brand equity are the customer brand awareness, customer

assertiveness toward the brand and other communication tools to mark these sub

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dividers. Among all drivers, brand equity is the most important driver of customer

equity because it has more expressive impact capped by less product differentiation.

Lastly, relationship equity is the inclination of customer to hold on to the particular or

specific brand, again this exceeds the objective and subjective assessments of its

value. Loyalty programs, special acknowledgement and management programs,

community building programs and knowledge based programs are some of the sub

drivers of relationship equity. Relationship equity seems to a very important and

crucial factor in the case of a customer who would like to continue with the seller or

supplier out of habit and more importantly where personal relationship is taken into

count.

2.2.8 Competitive Analysis

One of the main and likely aim or goal for strategic movement on the business level

is to achieve a viable edge that is virtual to the competitors. There are four keystone

of competitive advantage according to Peteraf (1993). If the competitive advantage

has to prevail in the industry or economic market, basically it has to be shaped by (1)

heterogeneity, as a result, Recardian rents may be pocketed. (2) Ex post limits to

competition to control the rent to be bearable. Also it is very important that industry

and market should be categorized by (3) flawed mobility to sustain the rents within

the firm and finally (4) ex ante limits to competition in order to make sure that rents

are not counterpoised by costs and expenses.In order to procure the above average

rents and force a competitive advantage, the advantage itself needs to be justifiable or

sustainable. This simple means that it needs to be able to hold it uniquely for a period

of time.

Notably, it is possible to accomplish sustainability in the short period but it is not

possible to contain the advantages in the long run. in simple terms, they evaporate in

the process. This process of evaporation takes place because of either due to (1) shifts

in the pattern that restructures what establishes a industry wide advantage (2)

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contenders or competitors attaining and overtaking the advantage due to a speculation

of lack of long term protection of the advantage. As a result of these two factors,

competitive advantage either converts into out dated or a need to compete factor.

Grant (1991) states that sustainability could get affected by 4 factors, namely,

durability, transparency, transferability and Replicability. In order to influence the

sustainability of an advantage, companies should leverage or counter these factors,

which ever possible.

2.2.9 Innovation

E-retailing could be viewed as an revolution in retailing that is fabricated around a hi-

tech innovation, that is internet. Unique distinction is between sustaining and

disruptive innovations according to (Christensen,1997). The effect of innovation on

customer benefits could serve as a basis for this kind of division. A sustaining

technology operates in such a way that it escalates the customer benefits by taming

the performance of the product qualities which are currently being treasured by

present customers.

On the contrary, a disruptive technology manipulates the attributes of a product that

are not being valued presently by the existing customers and simultaneously

decreases the attributes of a product which are valued traditionally in the small run.

therefore, on the whole, it is understandable that a new group of customers would get

benefitted by this disruptive technology.There is yet another dissimilarity to be made

between incremental and radical innovations ( Henderson and Clark, 1990).

This division or distinction deals with changes in the production of the product. This

means that there could be a change in the core mechanisms of the products or in the

construction of the product. a component can be defined as a fragment of the product

which performs a specific and well-defined task. the specific way in which the

components of a system are referred to as architecture. A radical innovation or

invention features a new dominant design of principal fragments embodying new core

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concepts that are reconfigured in new architectural configuration.The incremental

innovation alters, refines and prolongs a current design by improvising the distinct

apparatuses or components. On the other hand, architectural innovation tries to

redesign a system or machine to chain existing components in different ways. During

this changeover, the components might be changed or improved but the core or basic

design impression would remain the same.

However, the focus of both the sustaining/disruptive and incremental/radical

differentiation of innovation is towards the product development or improvement.

This poses a question to the applicability of e-retailing. But there is a way in which

they can be generalized in order to be applied to e-retailing. Eventhough e-retailing

and retailing are not a physical product, they could be considered as services to the

consumers. During the process of innovation the performance of service retailing

characteristics like price, convenience and haste delivery could alter. It is also

believed that this service can also consist of constituents representing core concepts

combined in architectural structures. To sum it up, it is understandable that the

thoughts of sustaining/disruptive and incremental/radical could be applied to e-retail

to figure out to what range the factors of competitive advantage and key success

factors vary from conventional retail.

Strategic Perspective

There is no one individual economic theory on acquiring competitive advantage

pretty much like the indefinable “Unified Theory of Everything” in physics. In its

place, there are numerous strategic groups or perspectives that deals the question

from different angles. The danger in examining or studying the competitive

advantage from a single standpoint is that there are chances of missing out on the

phases of practical data that could have a different meaning altogether from a

changed strategic side. Therefore, in order to achieve an in-depth picture of

competitive advantage, we present six strategic ideas or perspectives along with their

methodology towards the creation of competitive advantage.

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Brand Perspective

According to Kotler(1997;p443), a brand is just not a logo or a name but its much

more than that. He defines a brand as “ a name, term, sign symbol or design or

combination of all of them which is intended to identify goods and services of one

seller or group of sellers and to differentiate them from those of competitors.” Brand

equity and brand extension are the two aspects of brand based competitive advantage.

The word brand equity introduces the customers’ perception of the brand to the brand

concept. Keller 1993 defines customer based brand equity as “the effect on a

customer of previous knowledge about a brand when confronted with a new

marketing effort for that brand” Sustained positive brand equity could improve or

increase margins, reduce price elasticity or price flexibility, increase consumer

pursuit activity and intensify the effect of market communication. From a company’s

point of view, this can be considered as a plus point for increasing the possibility of

brand choice thereby creating greater consumer loyalty and decreasing susceptibility

to opponent’s marketing.

Brand equity can be considered to have two dimensions as a result of the associative

nature of memory. They are; (1) brand awareness (2) brand image. Brand awareness

or brand responsiveness can be termed as the ability or the potential to identify a

brand on the basis of strength of acknowledgment and brand recollection.

The decision of a brand becoming a part of the considered set in a choice is controlled

by brand awareness. There are also chances that it could affect the selection of a

brand from a well thought-out set. This occurs mostly where there is less involvement

of choices wherein fluency and establishment can be adequate base for a definite

decision. Not to forget the fact that brand awareness has the probability to affect the

structure and strong point of new associations.Brand image can be referred to as a

collection of associations that the brand offers for the consumers or customers. These

associations can be abstracted on different levels like benefits, values and culture.

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And these associations on each level could be affected by their favourability,

strengths and distinctiveness.

The strength of association is totally depended on how the association was shaped or

formed, in other words, encoded and secondly, how it is managed and maintained, in

other words, stored. The significance of the association to the customers decides the

favourability. This significance or importance can sometimes be situational. In other

words, definite associations are esteemed more in certain contexts or situations.

finally, uniqueness or individuality relates to the placing of the brand in relation to the

competitors. The force behind compelling the customer to choose it is the competitive

advantage or unique selling point. Cohesiveness is one of the important characteristic

of image. It is more easier for the competitors marketing to operate the diffuse brand.

It makes life harder to recall old associations or even forming new associations

becomes weak and less favourable.

Brand Extension

Brand extension Is the process of informing the customers about a ne product or

service in a more effective and efficient manner using the fundamental products or

services( Keller, 1993). The reason or the logic behind this kind of brand extension is

that when lengthening an current or existing brand, it gives room for the new product

to follow the existing brand equity, as a result, attaining awareness and conditional

associations.

There are a number of ways through which a customer would evaluate or examine.

Firstly, customer would evaluate on the basis of the kind of information that sparks in

the mind, secondly, relevance, that is, the practical application of the thought

information to the prevailing choices and finally on the basis of how good or positive

it is in relation to the extension as well as competitors’ brands. The end result of a

brand extension is not only affecting the new product or service but also forms a

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feedback to the fundamental product or service. This affect could be positive given

the scenario that there is an total likeness between the extension and the core product

or service and also similarity among all brand extensions. It is also possible that a

brand could be thinned through brand extension. Dissimilar products or services

could diminish strength of association and also it can create a undesirable criticism

from existing brand owners whose brand has changed associative meaning.

In many respects, e-retail could be similar or related to mail orders as it work for the

same customers with the same needs as in retail. Yet, it has the potential or character

to appeal to new customers. Some of the advantages of e-retail are convenience,

reliability, accessibility and updated information. Even then, these advantages are not

major hop forward. Subsequently, the ability to check the goods and products

physically is not possible and thus judging the quality is not possible. On the whole,

retailing is a advanced market with very good grounded players in almost all

segments. It could take several years to construct a brand and the chain of contacts in

order to compete in retail markets.

This might turnout to be a strategic advantage for primary starters, particularly, brand

is supposed to be the largest value-driver in e-retail. It is very much a necessity that

e-retail should understand the new business concept or logic in the whole value chain.

This consists of competencies, organizational roles and units and also an ever

increasing need for communication between entities. The intimacy of brand linked to

the biggest seeming challenge in selling tangible goods online or over the internet by

using pictures. In this regard, branding also comprises of the potential to place the

products in a framework and sell on the basis of fashioned feelings. As a result, when

this is combined with huge technical costs, it makes the setting up of e-retail business

expensive. It is understandable that even from a local outlook e-retail gives the

possibility of reaching more customers than would be practical. One of the main

problems of e-retailing is the negotiation of quality. Thus this draws the focus on

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brand and conception of understanding. Also another issue is the creation of a

constant image.

Chapter 3: Retail Industry

Retail industries buys good in sufficient quantity from the producer or manufacturers,

or the wholesalers and then in minor quantities sell it to the customers who demands

for it.

UK has one of the biggest and finest Retail industry that generates high profits every

year. Most of them are at the maturity stage or at growth stage. This Retail industry

has created the job opportunities to thousands of people. Some of the most prominent

retail industries are discussed in this chapter. These Retail industries are existing from

more then centuries or they are the subsidiaries of the leading players in retail world.

Retails consists of the sale of the merchandise from one fix location that may be a

store, kiosk or stall. It includes subordinated services such as delivery purchasers etc.

ASDA

ASDA stores limited are a British chain which is the subsidiary of the American

Retail Giant “Wal-Mart”. The head office for ASDA is situated in Leeds. It is very

popular with the e retailing in their target audience. The large number of varieties is

available at ASDA for its valued customers. It has different sections available from

household items such as groceries, magazines to tools and clothing for all types of

customers. The self-service and the staff are also available in ASDA to help

customers in each aspect. It has its online shopping system for the ease of customers.

It has signed up to the Ethical Training Initiative which does mean that respect

towards their employees.

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Tesco

Tesco is another retail industry that has its own strong clientage and potential

customers. It was founded in 1919 in East London. Presently it is located in 4811

locations. Their products are mainly groceries, consumer goods, financial services

and telecoms. It is a global and general merchandising retailer in the United

Kingdom. It is the fourth largest retailers in world today and generates the second

highest profits after Wal-Mart. The Revenue last year was over six billion. It has

472000 employees working in different segments until last year. According

to Citigroup retail analyst David McCarthy, "[Tesco has] pulled off a trick that I'm

not aware of any other retailer achieving. That is to appeal to all segments of the

market". Tesco slogan is ‘Every little help’ and Tesco has its own brand products too

in the market that circulates all over the UK markets.

Sainsbury’s

Sainsbury’s currently operates 537 hypermarkets and supermarkets along with

537convenience stores. It also operates the Sainsbury’s Bank. Its online servies are

worthwhile as it is third largest supermarket chain in the UK since its recovery in last

few years. It also highly emphasizes on the quality products and has the quality online

services. It has subsidiaries that are as follows Sainsbury’s Bank, Sainsbury’s

supermarket Ltd and Sainsbury’s convenience store Ltd.

Morrison

Wm Morrison Supermarket plc is the fourth largest chain in the United Kingdom and

its head quarter is in Bradford (Yorkshire). It is located in 403 different places all

onver the United Kingdom. The key products that Morrison deals in are groceries,

home appliances and consumer goods. It has 124000 employees working in different

shifts. The quality drink award 2010 has been awarded to the Morrison’s. It has the

privilege to be finalist for few consecutive years. It has been awarded with Multiple

Retailer of the year that is the grocer own label excellence award. In 2008 and 2009

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Morrison achieved Retailer of the Year award, which is its biggest accomplishment in

retail world.

PRIMARK

Primark is a clothing retailer, operating around in Europe but its main head quarter is

in Ireland. It is a chain subsidiary of Associated British foods plc (ABF). It is

operating in the UK at 250 spots out of total 251 locations. The biggest unit is

situated in Manchester. Their main products are menswear, womenswear,

childrenswear, footwear, accessories, lingerie and homeware. It was approximately 36000

employees working in different units. It has its own brands such as atmosphere for womenswear

and footwear, active for menswear, Backswing for men and women sports, cedarwood state for

casual menswear etc. It is well known for selling cloths at the budget end of the market. The

company’s success is based on the sourcing of the supply cheaply, making cloths with simple

designs and fabrics.

Iceland

Iceland is a supermarket chain operating in the United Kingdom, the Republic of

Ireland and Iceland. Iceland's primary product lines include frozen foods, such as

frozen prepared meals and frozen vegetables. The company approximately has a 1.8%

share of the UK food market. According to the 2009 survey it is located in 682 places

which show its strong retailing chain in the UK market. The head quarter of the

Iceland is in Deeside, Wales in United Kingdom.

Iceland was renamed the Big Food Group in Feb 2002, and attempted a refocus on

the convenience sector with a bid for Londis Grimsey remained until the takeover and

demerger of the Big Food Group by a consortium led by the Icelandic company,

Buagur Group in February 2005. Walker returned to his previous role at Iceland.

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Under Walker's control Iceland's website contains pages of polemic against Grimsey's

period in control. The company has recently made large scale changes to the kinds of

promotions it offers on products. In the past "Buy One Get One Free" and Meal Deals

(a selection of products for a set price) were common in stores, although these have

now been reduced and replaced with products offering bigger packs at the original

prices. The pricing system has also been changed with many products having their

prices rounded up or down to the nearest multiple of 25p (i.e. £1.29 becomes £1.25),

this is known as Clear Cut Prices and aims to simplify the pricing system.

2006 also saw a huge surge in 'Home Delivery' promotion. This service is now one of

the main focuses of the company. When a customer spends £25 or more on their

shopping they have the option of free same-day home delivery.

Poundland

Poundland is a British-based variety store chain which sells every item in its stores

for £1. Established in April 1990 by Dave Dodd and Stephen Smith, Poundland stock

a variety of around 3,000 home and kitchen-ware, gifts, healthcare and other

products, across 16 categories many of which are brand name and clearance products.

Like many of its rivals, Poundland operates a constantly rotating product line with

products sold at the single price point of just £1. Although price-point retailing was

invented in the United States during the 1870s, the chain claims to have introduced

this concept to Europe and is the largest single-price discount retailer in Europe.

Poundland have enjoyed strong sales growth and have maintained steady profit

growth against increasing inflation. This, among other factors, has been aided by a

strong customer base of predominantly female shoppers every week in the C1, C2, D

and E categories (the working classes in a system of demographic classification used

in the United Kingdom). The chain employs 7,000 staff and their company union is

the Union of Shop, Distributive and Allied Workers (USDAW). Their closest rival in

the market is 99p Stores, who undercut Poundland's prices by a penny.

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It was announced in September 2008 that Poundland's owners, Advent International,

are said to be cashing in on the resurgence in value retailers by preparing to put the

chain up for sale.

Marks and Spencer

Marks and Spencer plc (also known as M&S) is a British retailer headquartered in the

City of Westminster, London, with over 700 stores in the United Kingdom and over

300 stores spread across more than 40 countries. It specializes in the selling of

clothing and luxury food products. M&S was founded in 1884 by Michael Marks and

Thomas Spencer. Headquarter of M&S is in Leeds and the number of location is

1010 stores. It has over 6 million assets and generated last year approximately 9

billion revenue. The number of employees in M&S is 76250.

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Chapter 4: Methodology

Introduction

The sole purpose of this part is to clearly justify and describe the means and

techniques that have been use in research study. In this segment, we are discussing

and providing logical reasons for the course of action. Before each methodology, a

theoretical definition and brief explanation has been given to support our views and

the process. I began my research with the research strategy, followed by the case

study design, the means and the data collection procedure. Finally, the analysis of the

gathered data and the evaluation of the research are elaborated.

According to (Zikmund), Business research is defined as the systematic and objective

process of gathering, recording, and analysing data for aid in making business

decisions. Research information is neither intuitive nor gathered on randomly bases.

Literally, research is to search again which connotes detail study and systematic

investigation.

Research should be carried out by using suitable methods for the collection and

analysis of data; finally research should address an explicit issue. Research enables us

to apply research process to elucidate the problem and must contribute to our general

understanding for processing the solutions. According to (Jill, Hussey 1997), the sole

function of research can be summarized as

To investigate some existing unique problem.

To review and enhance our existing knowledge.

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To provide a suitable solution to a problem.

To explore more general issues.

To design new procedure.

To explain a new phenomenon.

To generate new awareness.

4.1 Style of Research

According to Yin, there are several research strategies to select from when

conducting research. Depending on what the researcher wants to investigate. The

researcher has to find out which approach paramount suites the objective of study.

The five appropriate situations for research approaches are; surveys, archival

analysis, case study, history, and experiments. Each research approach implies

Establishing the problem definition

Selecting unit of study

Choosing methods of investigation for the

problems and unit of study

Writing publication of the Report

Methods of Data Analysis and Interpretation

Date Analysis

Sampling

Data collection

Research Design

Report

Representation of the Research Process (Blaxter, Loraine 2001)

41

different ways of collecting and analyzing the empirical evidence containing for

various merits and demerits.

Purpose of Research

Research can be categorized into three dimensions

1. The use of the research study.

2. The goals in undertakings the research;

3. The type of information required.

The above mention three categorize are not entirely mutually exclusive because a

research study which is classified from one angle of ‘application’ can also be

categorized on the basis of purposive.

Types of ResearchFrom the viewpoint

Objectives Types of information

sought

Application

Quantitative Research

Applied Research

Explanatory research

Correlation Research

Exploratory Research

Descriptive Research

Qualitative Research

Pure Research

Types of Research

42

Exploratory Research

Exploratory research is carried out in order to investigate the possible chances of

considering of specific research study. It is generally carried out when a researcher

wants to discover area about which he or she has not knowledge or possess a very

little knowledge.

Exploratory Research is most beneficial in the early stages of a research project when

the stages of uncertainty are at their highest peak. The main objective of this research

is to discover the borders of the environment in which the threats, problems,

opportunities or situation of interests are expected to lie and not only this, but

moreover the variables that are relevant to research project might be found in there.

Advantageous of exploratory research includes the opportunities to make its

impression that may occur with any temporal effects.

Descriptive Research

If the main purpose of exploratory research is to unravel the variables that are

significant, then the objective of descriptive research is to provide a valid depiction of

the salient variables which is equally filled with the accuracy. Descriptive research is

probably the most often used form of the research. It may be used to investigate the

sales of the units produced in production process or the market share of the

company’s product. On the basis of demographic distribution the targeted market

might be detailed or the target markets may be investigated. The details of date may

be obtained from various available sources but the massive bulk of it will come out

from the secondary sources of date and from the surveys.

Explanatory Research

Explanatory research attempts to specify the co relation between two aspects of a

phenomenon or the situation. It clarifies why and how the relationship exists between

different phenomenons. In such research, the researcher is analysing the causes and

43

the relationship between different salient variables. This type of research is basically

designed to develop the explicit theory which is used to elaborate the empirical

evidences that are developed during the descriptive research stage. This is also the

last stage of the cycle of research.

As the area of research in the thesis is to avail an insight in the various aspects and

dimension in distribution channels in international retailing. In the consideration of

my research area and the sole objective of the thesis it is clear that my research is

more of descriptive in nature. The initial stage of the dissertation can also be defined

as Exploratory in nature as we do not know much about the research area ad we are

still in the process of exploring and investigating various areas about we have a very

little knowledge or not knowledge at all. And this exploration will lead us to the

target of achieving our aim in research area and our targeted aim is to understand and

analyze the ways and trends in the distribution channels in international retailing. The

areas that we will be uncovering during the course of action that is a research project

is to understand the market trends in the retail section, entry manner strategies,

procedure of retail internationalization, understanding the relationship of the buyers

and sellers and also the consumer behaviour.

4.2 Research Design

4.2.1 Research Problem

The research problem is based on the uniqueness of the situation. In every applied

research the problem is a significant one to determine and for that purpose research is

conducted. Here on our hand the problem is the determination of the electronic

retailing has to what extent affects the consumer behaviour and how much the market

share and the quality of E-retailing service to customers and their satisfaction are

affected due to environmental factors. The problem in this research is that what are

the main reasons that are affecting the retail industry of the United Kingdom?

44

4.2.2 Style of Research

As there are two basic types of approach, one is qualitative and the other is

quantitative data approach. Both types of approaches are empirical research

approaches but qualitative researches are not in the form of numbers where as

quantitative researches are in the form of numbers. The determination of the

quantitative is on the basis of counting it but the determination of the qualitative is on

the basis of its quality.

The numeric form of data which is quantitative in nature is generally collected and

analyze and it tends to emphasize more on large scale and representative sets of data.

On the other hand the qualitative research is linked with collecting and scrutinizing

information in non numeric forms. It focuses on the finding the details in depth.

Qualitative research is more suitable for the circumstances which will enhance

understanding, and clarifying issues, develop hypothesis, explore the range of

behaviours and uncover the consumer motivations attitudes and behaviour, and it will

provide a new input to the future stage of the research development.

Qualitative research, is usually used for

Fundamental exploratory studies,

New Unit development

Deliberate research projects

On the analysis of above qualitative and quantitative, I would use both qualitative and

quantitative approaches both as it would facilitate me to work out on my research

project with better understanding of more difficult issues. It will also be helpful for

me in identifying the objective of the research, these approaches will guide me in how

to measure different variables and it will help me to understand how to scrutinize the

information. Quantitative research approach will be use to spotlight on the statistical

data and contradict the conclusion based on numeric data analysis.

4.2.3 Hypothesis

45

Before conduction of the research, the researchers have to consider some points,

which also serve as the basis for applying the various methods. In other words before

the research starts, the researcher generate some hypothesis which serves as a ground

for his research. Our main hypothesis in this research is mentioned below,

There is a strong relationship between the quality of E-retail service and overall

customer satisfaction.

In this research the hypothesis is that the technology has serves a vital aspect in

creating the strong relationship between the quality of E-retailing services and overall

satisfaction in the retail companies. There is another hypothesis that retail

competition has also served an important aspect in the E retailing and the third

hypothesis that is very crucial one or may be the sole reason for the strong

relationship between the quality of E-retailing is the buying behaviour of the potential

consumers. It may be possible that one of this is the reason for the rapid growth and

popularity of the e-retailing and it may be possible that in the course of uncovering

this new hypothesis may arise.

There may be exists a co relation in between these variables and the e-retail

industries. This projection may be because of the line regression between different

environmental factors.

Based on the hypothesis I would conduct a survey to check whether the hypothesis is

null or not. For the survey, I would design a questionnaire which will contain open

ended questions asking the consumers views about the e-retailing and face-to-face

interview from the management of the Tesco and Sainsbury’s available in Hounslow.

For the generation of the data I would use the hypothetic inductive deductive model

which means first I will induce all the data gathered from different sources like

articles, books, journals, interviews, questionnaires and various case studies. After

inducing the data, I would separate the relevant data from the irrelevant data. This

process is the deduction process which means the unwanted data will be detached out

46

from the whole data and remaining vital data will be processes to gain the right

information.

The sample of the survey conducted from the consumers through the open ended as

well close ended questionnaire is available as a reference at the end of this research

work in the appendix.

4.2.4 Research Questions

I will begin this research with the following questions and try to find out the proper

answers to these questions through research findings and analysis.

Q1. Is E retailing the most important factor for super market customers?

Q2. What are the core competencies of the company that affect the consumer’s

behaviour?

Q3. Is there exist a strong relationship between the E retailing and the overall

customer satisfaction?

4.2.5 Method of Analysis

In order to evaluate critically my research I would use the case study approach. I

would study in detail some of the vital players in the world of E-retailing like Tesco,

Sainsbury’s and examining their strategies adopted by those companies in order to

distribution channels and hence understand what effects are on the market and to

what extent have they been successful in gaining market share. I would also have

interviews with the few members of the management of the respective companies.

Apart from this I have used different tools for analysis, such as SWOT analysis, and

CHI TEST.

In chapter 5.1 I will be explaining in detail “the critical appraisal of literature”.

In chapter 5.2 I will be elaborating in detail “the Graphical representation of Data”.

And in chapter 5.3 I will be elucidating the in detail “the study through Statistical

analysis and theoretical Models”.

47

4.2.6 Data Sources

Once the research objectives and research proposal are decided then it is essential to

specify the methods for the gathering of the data. It is the role of marketing research

to understand and interpret the research objectives such as the suitable and required

data is collected.

The data should be applicable and dependable, easily and promptly gained,

reasonable and appropriate to the circumstances in question.

The two vital sources used in this research are primary source and the secondary

source. Primary data collected by first hand that is through interviews and it is for the

use of a precise study. There are primary data collections, such as documentation,

past records face-to-face interviews, direct and participant observation and physical

object where as secondary data is previously gathered information, and it contains

information from various articles about retail industry, books and internet.

Primary Data Collection

Primary data is collect particularly to avail answers for the questions posed by the

present research purpose.

Webb has classified primary data can be into following

Qualitative research

Observation

Survey research

Experimental Research

48

As mention above in research methodology, I would conduct case study for my

research. It is one of the most traditional methods in researches. The purpose of the

case study method is to gain information from either one or few past situations, which

are familiar to the problem situation of the researcher. It is the study of the records

that are available and provide a better understanding of the familiar situation, which

had been experienced by any other researcher or organization in familiar

circumstances. In other words, a familiar situation serves as a guide or reference for

the researcher to carry out research at hand.

Steps in Case Study Approach

The steps in this particular approach is as following

Selection of Suitable Case

Initial Research

Data Phase

Analysis

Construction of the Report

Following the steps in case study approach, I stared to go through the relevant cases

following the pattern of Cohen and Manion (1995:123).

After reading carefully different case studies, I have learned about the trends and

modes of the E-retailing, from where the idea conceived for E-retailing and how its

progress has been so far in fast pacing world.

There are some limitations to case study method as the complexity of a case can make

analysis difficult to determine. Some time the perception of the researcher can be also

a factor that serves as a limitation. The researchers perceived things according to his

understanding that may lead to biasness.

Interviews

49

Due to the limitations of the Case study approach, some time researchers use different

more methods in the research. Interviews involve inquiring or conversing issues with

the individuals. It is one of the beneficial and cost effective techniques for collecting

data, which would probably not be accessible while opting for techniques like

questionnaires or observations. Many discrepancies on the interview mode are

possible. In the modern era, there are focus groups and internet interviews also. Now-

a-days through electronic mails interviews are conducted at a distance place. This is

also very cost effective way.

Interviews are categorised on the basis of the extent of flexibility:

For my research, I have opted for the structured interviews, which are all the

questions have multiple answers from which the interviewee has to respond. The

interviewees will respond on the basis of their past experiences, their competencies in

particular field or their view points.

Questionnaires

Interviews

Structured Interviews

Unstructured Interviews

Semi Structured Interviews

50

Questionnaires are one of the most commonly used collective research methods. The

main spotlight of formulating exact written questions to those whose experiences and

views we are interested. It is a strategy for finding the solutions to the problems that

interest us.

Questionnaires are less expensive and it offers greater anonymity, though they are

limited applicable and has low response rate but the approximate results are always

close to the actual say of public’s view. I would concentrate extra on the

questionnaires that I would forward to related people on the internet, and this mode

might help me to gather some appropriate information for my research on E-retailing.

I would use the close-ended questionnaires as the basic tool to carry out my primary

research. (The sample of questionnaire is available in the appendix).

Secondary Data Collection

Secondary data is one that has already been gathered for some objective but other

than the present one which is under consideration. Secondary data are already

collected and are recorded by someone else earlier to the present needs of the

researcher. Secondary data are often past records assembled and require no access to

the subjects or respondents.

I would gather secondary data for my research and the main sources of secondary

data collections are as following:

Newman & Cullen (2002). Retailing: Environment & Operations : Thomas

Learning

Levy & Wietz (1996). Essential of retailing : Irwin

Alexander (1995) The Internationalisation of retailing: frank Cass

Levy & Wietz (1995). Retailing Management : Irwin

Alexander (1997) International retailing: Blackwell

Akhehurst, G. and Alexander, N, (1995) (eds) The internationalisation of Retailing

Cass, London

51

Dawson (1999). European cases in retailing: Blackwell

Fernie, John and Sparks, Leigh, (1998), Logistics and Retail Management, CRC

Journals

Journals of business research, journals of marketing, the services journal will be used

to fulfil my research purpose. Along with this, Libraries, government’s sources

(Current Business) will be used.

International Journal of retailing

International Journal of retail & distribution management

International Journal of purchasing and materials management

The European retail digest

Harvard Business Reviews

Online Reports

Key note reports

Retail intelligence

Euro monitor

Mintel Reports

Websites

www.retailwire.com

www.ukbusinessQ.ark.co.uk

www.retailing.mg

http://strategies.ic.gc.ca

www.euromonitor.com

Data Analysis

It is the logical application of raw facts to understand and interpret the data that has

been gathered about the related subject. It involves systematic interpretation of data

52

aftr summarizing it into meaningful form. It is the important aspect of the research as

it is complex and a very demanding task, therefore requires immense devotion and

concentration.

There are some key steps that are very important for the process of analysis. First step

is to arrange the data in a pattern form, once data is sequenced, then we have to

classify it according to categorize and kinds. I would be able to access to the data and

once questionnaires are analyzed, I would focus on one procedure within the data at

hand and narrow down it to one significant process and compare it with different

areas.

Steps followed for the analysis of Qualitative information

1. Read thoroughly all the Data

2. Arranging all the comments and vies into similar categories, for instance

concerns strengths, suggestions, weaknesses, inputs, recommendations,

outputs and indicators.

3. Identify patterns and casual relationships in the frame work.

4. Keeping the working papers and all materials for several years in case needed

for future references.

4.2.7 Ethical Issues

While conducting research some of the ethical questions are always arising which

needs a serious address from the researchers. For researchers it is some tie an

immense task to determine whether the consent given to prior research was informed

on the bases of personal preferences, cognitive or psychiatric problems which became

evident throughout the research r not to consent these all.

53

Often while conducting research a conflict of confidentiality can arise such as to what

extent a company can reveal about its inner plans. 

IT has been often noticed that most o the time, a human cannot be completely biased.

To some extent his personal feelings can mingle in the research and not only this but

the results and findings are sometime subject to 'reflective listening' and 'acceptance

of individual realities' and this may also has a strong influence. This can also be

proved as damage to the personal beliefs of the individual. 

Often it is noticed that the role of interviewer can merge with that of counsellor. Rather than

a simpler interviewer, his role is more of the counsellor who tries to take interview in a one

particular direction.

54

Chapter 5: Analysis and Findings

5.1 Critical Appraisal of Literature:

The main purpose of this chapter is to critically review the literature that clearly

explains the acceptance and application of internet technologies, by the retail players,

for the support and sale of products. In particular, this research seeks to clarify project

a realistic and critical review of what is at present known, in order to assist set up the

spaces that will need to be addressed in future research studies.

In my research electronic commerce (e-commerce) is scrutinized in the framework of

the relationship between organizations and their potential customers and the

implications for firm’s accountability. The technology of e-commerce explains what

can be offered to customers sitting at home, but only those customers decide which of

those technologies will be accepted. The author argues that offering the maximum

client delivered worth by e-commerce can be seen as making an actual input to

consumers, that is shopping through the Internet will be accepted by clients. Shopper

satisfaction is of significant value when measuring seems customer delivered

importance that is offered by e-commerce. Three main dimensions which play a

important part in persuading customer satisfaction are (1) client need, (2) customer

value and the cost of the customer.

The Literature provides an important insight for conducting the research as it explains

the expert views of the authors and the earlier approaches in the familiar

circumstances. It explains the minor details about each and every aspect that is

possible and provide a theoretical framework to build a strong structure on. It serves

as a platform to build a strong and huge work on it.

55

In the modern regime e-business expansion is very clear and visible because a

product is set up in and access to those products is just by single click. It is true that it

does give to certain extent provides the brand equity but there is no guarantee that the

deal customer has made will be a success. Establish business is to an extent free from

cultural constrains.

Internet has provided a hope of being a medium for the quick access to various items

such as news, software, movies etc and the cost of the distribution have also lowered

when the comparison is made with the tangible products. Most of the websites has

made its mark and profit from providing the online services. The sales of household

stuff are done through the online but to distribute it, the conventional methods are

used. It is right to say that internet has provided a new kind to get specialized in.

Majority of retail big units has installed the electronic counter. Even electronic malls

such as yahoo are active in recent times. It is rightly mentioned and we can observe

that electronic brokers have developed in rapid succession. Their indirect sell is to

make their customer feel valuable and provide them satisfaction. They facilitate their

customers by providing them exactly the same products or services customers are

keenly interested in.

It is not incorrect to say that broker is an intermediary who passes the orders to the

supplier placed by his customers along with the services to his clients such as

comparison between different products, on the determination of quality, price etc.

The regime has changed with the development. The manufacturers are at the

advantage with the direct mode of selling through electronic media to their customers

and customers are also satisfied as it is advantageous to both parties because the cost

reduction towards the potential customers of the company and at the same time profit

for the producers also increases. It is obviously true that the traditional ways has

56

changed into modern sphere. Electronic has added its role and signifcane to the

business.

The web retailing has provided solution to the costly physical network which increases the

cost of the organizations. Though the traditionals thought that it will be a threat to many

retailing companies but it has provided exceptional results. Web retailing has a very highly

automated and very centralized procedure that gives a large range discounted vairety

products to the consumers. The online shopping does allow the business to make substantial,

cinsistent patronized, and highly effective and efficient experience.

Jerome McCarthy 4Ps is exactly the important ingredients of the marketing mix though it has

been criticized by Lauterbourn but McCarthy’s marketing mix hold important place for the

manufacturers when it comes to decision making. Mostly the actions are made on the basis of

marketing mix as it provides a ground for making a realistic decision and E retailers also

have alike needs to carry out their action plan that are more suitable and leads to the success.

More than the product company should value the customers, seeking their ease and comforts.

It just takes a simple click that answer the query customer has. E retail offers wide range of

choices to its customers and customer has one more score to look at such as their online

shopping go smooth. They do not have to make requests for help while buying online

products.

The strategic dimension has its potential worth as The Salmon and Tordjan

approaches the basic strategies in retail internationalization whereby retailers in every

locality dispersed their units through their subsidiaries. This assumption that how

consumers do approach retail purchases identify does human make rationale choices

when they select from available choices. In my research, I have found that majority of

the consumer make choices based on the rationality. The approach towards product is

always for the satisfaction of inside and therefore logic stands for it. The satisfaction

is only possible to the majority of the consumers when they attain their products.

Though to sociall behaviour of some exceptional is different, but most of the

57

consumers are opting for the choice which brings the comfort to them. E retail has

brought the ease and comfort to them.

5.2 Graphical Appraisal of Data

5.2.1 UK E-retail section

UK online market growing with the rapid speed (according to the Verdict Report).

Although online retail is confine to limited segment, not everyone does web shopping

but it has keep on improvising from its birth. Online shopping has so far successfully

availed the confidence of consumers because one out of every four customers is now

buying products via internet which means that the market share of online consumers

are increasing and the e retailing industry is developing.

Pie Chart Representation of increase on E retail in United Kingdom

This above Pie Chart shows the improvement in e retailing in the United Kingdom in

the last three years. In 2008, the percentage of E retailing was 15.1%, in 2009 it

increased to 15.8 and in 2010; it has paced to 16.4%

58

16.6%

15.8%

15.1%%

5.2.2 Graphical Representation of Questionnaire:

0.00%

5.00%

10.00%

15.00%

20.00%

25.00%

30.00%

35.00%

40.00%

45.00%

Discount Price Variation Product fromRetailers

Offers fromRetailers

Series1

After the interviews and the questionnaires, I have generated these finding on the

basis of respondents answers and on those answers the bar charts and graphs are

designed.

Sainsbury’s consumers respondent to the first question that which of the following

attracts them to do online shopping and the response was 6 out of 15 opt for discount,

4 answered price variation, 2 answered product from retailers and 3 responded offers

from the retailers.

59

0.00%

5.00%

10.00%

15.00%

20.00%

25.00%

30.00%

35.00%

40.00%

45.00%

50.00%

Discount Price Variation Product fromRetailers

Offers fromRetailers

Series1

When same question was asked from Tesco’s consumers, the response to the first

question that what attracts them to do online shopping was 7 out of 15 ticked for

discount, 3 responded price variation, 1 said product from retailers and 4 responded

opt for offers from the retailers.

0.00%10.00%20.00%30.00%40.00%50.00%60.00%

Series1

60

In the second question that how often the shoppers do online shopping. The feed back

from the Sainsbury’s consumers were 2 out of 15 said daily, 8 marked weekly, 1

answered monthly and 2 each marked frequently and fortnightly.

0.00%10.00%20.00%30.00%40.00%50.00%

Series1

For the same question, the response from the Tesco Consumers were 6 out of 15 said

weekly, 3’s response was fortnightly, whereas 2 each respondents opt for daily,

frequently and monthly.

61

0.00%5.00%

10.00%15.00%20.00%25.00%30.00%35.00%

New

Pro

duct

Dev

elop

men

t

Stro

ng B

rand

Loya

lty

Stro

ngP

rodu

ct's

life

Stro

ngM

arke

ting

Cha

nnel

Series1

The third question from the consumers of Sainsbury’s was that what attracts them to

shop online and the feedback was out of 15, 5 answered strong brand loyalty, 2 said

strong marketing channels and 4 each replied strong product life and new product

development.

0.00%10.00%20.00%30.00%40.00%50.00%

New

Pro

duct

Dev

elop

men

t

Stro

ng B

rand

Loya

lty

Stro

ngP

rodu

ct's

life

Stro

ngM

arke

ting

Cha

nnel

Series1

Tesco’s consumers responded to third question differently, 3 said new product

development, 6 marked strong brand loyalty, h opt for strong product life and only 1

responded strong marketing channel.

62

0.00%5.00%

10.00%15.00%20.00%25.00%30.00%35.00%

Secu

rity

Frau

ds

Conf

using

Pres

enta

tion

of P

rodu

ctan

d Se

rvice

s

Chec

k-ou

tTi

me

Series1

sanisbury’s customers response to a question what could be the cause that stops them

from shop online was 3 answered security is the main reason, 3 replied frauds, 4 said

confusing presentation of goods and services, whereas 5 marked check-out time.

63

0.00%10.00%20.00%30.00%40.00%50.00%

Secu

rity

Frau

ds

Conf

using

Pres

enta

tion

of P

rodu

ctan

d Se

rvice

s

Chec

k-ou

tTi

me

Series1

for the same question the responses from Tesco consumers were 4 said security is the

cause which stops them from online shopping, 3 responded frauds, 6 answered

Confusing presentation of Products and services and 2 marked Check-out Time.

Comparison of core Competency of Sainsbury and Tesco:

64

0%

10%20%

30%40%

50%

TimeSaving

Weather LargeChoice ofProducts

FreeDelivery

Saisnbury

Tesco

One of the question asked from the management and employees of the Sainsbury’s

and Tesco’s were that what are the core competency according to them from the

following options and 6 people of Sainsbury’s responded by saying Time saving

whereas 5 of Tesco answered Time saving, 4 opt for weather in Sainsbury and 5 opt

for weather in Tesco, 3 of the Sainsbury said large choice of products whereas 4 in

Tesco, and 2 of the Sainsbury answered free delivery whereas 1 person of Tesco

opted for Free delivery..

65

0%10%20%30%40%50%

TimeSaving

Weather LargeChoice ofProducts

FreeDelivery

Saisnbury

Tesco

In the graph above it is noticed that Tesco is a huge company and their core

competencies are different than the Sainsbury’s. Sainsbury has clear advantage in

time saving and free delivery but Tesc has more upper edge in the weather and large

choice of products because they are not much confined to baking products but are

extended o appliances and other household stuff.

66

0%10%20%30%40%50%

Saisnbury

Tesco

The question about the level of E-retailing services of the company generated the

results of 4 of the Sainsbury and 5 of the Tesco responded Very satisfied, 6 of

Sainsbury and 7 of Tesco answered satisfied, 3 out of 15 of the Sainsbury and 1 out

of 15 of the Tesco marked not satisfied, whereas no one marked disappointed from

either Sainsbury or Tesco.

0%10%20%30%40%50%

Saisnbury

Tesco

67

The graph above shows that Tesco has a slight upper edge over the Sainsbury’s about

the level of the E-retailing services satisfaction as we can see clearly that red line

which represents Tesco is above the Sainsbury.

0.00%5.00%

10.00%15.00%20.00%25.00%30.00%35.00%

Series1

The results generated from the questionnaire about that what is your over all

satisfaction about this company (Sainsbury’s), the 5 people marked very satisfied, 4

respondents answered satisfied, whereas 2 each replied less satisfied, not satisfied and

disappointed. This is been represented in the graph above.

68

0.00%5.00%

10.00%15.00%20.00%25.00%30.00%35.00%

Series1

0.00%5.00%

10.00%15.00%20.00%25.00%30.00%35.00%

Series1

For the Same question that what is your over all satisfaction about this company

(Tesco), the respondents has responded by 5 each marked very satisfied and satisfied,

2 each answered less satisfied and not satisfied, where as one respondent replied

disappointed.

69

0.00%5.00%

10.00%15.00%20.00%25.00%30.00%35.00%

Series1

This is also represented in the bar diagram to show the number of respondents and

theirs respective responses.

70

5.3 Study through Statistical Analysis and Theoretical model

5.3.1 Chi-Test

Sainsbury E- retailing Services

RatingResponses 1 2 3 4 Totalvery Satisfied 0 2 1 1 4Satisfied 2 3 0 1 6Less Satisfied 1 1 1 0 3Not Satisfied 0 0 1 1 2

3 6 3 3 15

expected factor0.81 1.62 0.81 0.81 0.2666671.2 2.4 1.2 1.2 0.40.6 1.2 0.6 0.6 0.20.39 0.78 0.39 0.39 0.133333

P VALUE=0.621525

As we know that if the P VALUE >0.05 then the null hypothesis cannot rejected and in this test our value is 0.621525so therefore there is no relationship between the different variables

71

Sainsburys Overall Satisfaction

RatingResponses 1 2 3 4 5 TotalVery Satisfied 2 2 1 0 0 5Satisfied 0 2 1 1 0 4Less Satisfied 0 1 1 0 0 2Not Satisfied 0 0 1 1 0 2Disappointed 0 0 0 1 1 2

2 5 4 3 1 15

Expected Factor0.66 1.65 1.32 0.99 0.33 0.3333330.54 1.35 1.08 0.81 0.27 0.2666670.26 0.65 0.52 0.39 0.13 0.1333330.26 0.65 0.52 0.39 0.13 0.1333330.26 0.65 0.52 0.39 0.13 0.133333

P VALUE =0.358872As we know that if the P VALUE >0.05 then the null hypothesis cannot rejected and in this test our value is 0.358872 so therefore there is no relationship between the different variables

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Tesco E-Retailing ServiceRating

Responses 1 2 3 4 TotalVery Satisfied 3 1 1 0 5Satisfied 4 2 1 0 7Less Satisfied 0 0 1 0 1Not Satisfied 0 0 1 1 2

7 3 4 1 15

expected Factor2.331 0.999 1.332 0.333 0.3333333.269 1.401 1.868 0.467 0.4666670.469 0.201 0.268 0.067 0.0666670.931 0.399 0.532 0.133 0.133333

P VALUE=0.211764As we know that if the P VALUE >0.05 then the null hypothesis cannot rejected and in this test our value is 0.211764 so therefore there is no relationship between the different variables

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Tesco Overall Satisfaction

RatingResponses 1 2 3 4 TotalVery Satisfied 3 1 1 0 5Satisfied 1 3 1 0 5Less Satisfied 0 1 1 0 2Not Satisfied 0 0 1 1 2Disappointed 0 0 1 0 1

4 5 5 1 15

Expected Factor1.332 1.665 1.665 0.333 0.3333331.332 1.665 1.665 0.333 0.3333330.5332 0.6665 0.6665 0.1333 0.1333330.5332 0.6665 0.6665 0.1333 0.1333330.268 0.335 0.335 0.067 0.066667

P VALUE=0.274025As we know that if the P VALUE >0.05 then the null hypothesis cannot rejected and in this test our value is 0.274025 so therefore there is no relationship between the different variables

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5.3.2 SWOT Analysis of Sainsbury

SWOT Analysis of Sainsbury’s

Internal Strength

Consecutive High

Turnover and

Increased Sales

Active in Social

Corporate

Responsibility

Celebrity endorsing

Products

Skilled Staff

Internal Weaknesses

It is confined to only UK market

Consumers switching from local brands after take over by foreign firm.

External Opportunities

Diversification in to new Business

Increase more its online sales in market.

External Threats

Investment without returning benefits

Regulatory Requirement

STRENGHS

• Sainsbury's has had consecutively thirteen quarters of growth. Its turnover is

increasing every year and profit after tax is (Annual Report 2007).

• It has a very skilled and experienced employees working as a team under a very

good leadership of its Chief executive.

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• Sainsbury's has been working very well on social corporate responsibility. It has

taken initiatives like fair-trade banana for showing their positive concern on green

and environmental issues.

• Celebrity endorsing products has increased its overall sales as it is one of the few

supermarket chains to use this technique.

WEAKNESSES

• There is a possibility of consumers switching from Sainsbury’s local brands as

Qataris Private equity firm took over the bid which is a foreign company and British

locals who have more implication towards British companies may do so more often

now. • Sainsbury is confined to only United Kingdom. Its market is limited which can

lead to a problem of needs to be a source of exceeding the growth within the food

retailing in the United Kingdom. 

OPPORTUNITIES

• In future Sainsbury's has a good opportunity to expend as it has alternative business

of investment in property. Through banks also they can make more profit presents a

great opportunity for future growth. Its investments in property have more chances to

expand in forth coming years.

Sainsbury has more opportunity to exceed its online sales as its online sales

margin is higher leading to high profits. This will increase investment

opportunities. 

THREATS

• There has not been any immediate benefits after so much investments already made

on the green and environment. Sainsbury consumers are withstanding the worst of

high prices due to bio fuel and it is directly affecting the supply chain.

• Regulatory requirements are bending its back on Sainsbury's operations and most of

issues are very critical in nature to planning, rivalry and environmental matters,

employment, pensions and tax laws.

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5.3.3 SWOT Analysis of Tesco

SWOT Analysis of Tesco success

Internal Strength

E-commerce lead

Market Leader in UK

and European

countries

Accomplishment of

internal Development

Innovations

Internal Weaknesses

High prices as compare to rivals

Lacks development in non food areas

External Opportunities

Open to Ready meal developments

Grand exporter of new formats.

External Threats

Too much concentration on international Development

Change in planning regulatory Requirement

Strength

Tesco has a clear lead in E-commerce as compare to its rivals. From decades,

it has been on top of the list of the best retailers and it still holds its position

very firmly.

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Undoubtedly, Tesco is the current market leader not only in the United

Kingdom but also in the most of the European countries. It has been

recognized as one of the best retails in the chain today.

In has successfully made its mark in the international regime as it has a clear

dominance and strong brand name in the world.

Tesco has been one of the best innovators as it has always come up with new

formats. It is also the trendsetters for the other retailers.

Weaknesses

One of the area in which Tesco has to work out is their prices. The rival

retailers offer prices that are as compare to Tesco offer very less and it can

lose its customers to rivals if not been catered well.

Tesco should plan to work more vigorously in the non-food areas. It’s all

concentration is in food items.

Opportunities

Tesco has an opportunity to expand its business by investing in the ready

meal. This introduction will increase its market share as well market

credibility.

As Tesco has been innovative in its approach so it can produce net formats in

international market too.

Threats

Too much concentration in the European market can make it loose its grip in

the United Kingdom. These new emerging retailers can make their grounds

strong in United Kingdom as Tesco is mainly concentrating in the

International market rather than national market.

Change in the technology and international regulations can affect the

strategies and planning of the Tesco.

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Chapter 6: Discussions

6.1 Interpretation of Results

Research Q1. Is E retailing the most important factor for super market

customers?

After analysing our assumed hypothesis from different angels with the help of

statistical tools, analysing models, and interviews with the different people now we

can answer our first question that whether the E retailing is the most important factor

for the super market customers. To certain extent E retailing is an important factor for

the super market customers as those who do shopping do not always feel same about

it all the time so for few e retailing is a blessing but not for the others. It is one of the

important factors but than again it is not the only important factor for the super

market customers. More of the at home customers will perceive it as important factor

because it will save their time.

Research Q2. What are the core competencies of the company that affect the

consumer’s behaviour?

The core competencies if the company can affect the consumer behaviour because in

case of Tesco, innovation of new formats are one of their core competencies and it

has been a significant factor in the affecting the behaviour of the consumers. The

customers feel more attraction towards the brand name and they are willing to use a

band which is not only good but also the distinct one.

SWOT he have mentioned that for Sainsbury the bid taken by foreign firm will drive

few British locals, who have more implication towards British companies will divert

from them. Sainsbury’s investments in green and environmental issue are affecting

the behaviour of the customers. They feel that company is taking care of them and

they therefore are more inclined to use the same company products.

Research Q3. Is there exists a strong relationship between the quality of E

retailing services and the overall customer satisfaction?

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No, E retailing is not the most important factor for the super market customers as it

has no co relation between these two different variables. There exists no strong

relationship that the quality of electronic retailing is the essential reason for

customer’s satisfaction. It is not the only genuine factor which will drive people

towards satisfaction. Most often people only do online shopping in order to escape

from long travelling but not all of the online customers are overall satisfied with the

electronic retailing. There are various other factors such as the prices of the

commodities, if there is more variation, the overall customer satisfaction will be

increasing more. Another important factor may be the brand quality which will bring

more satisfaction to the customers. Most of the consumers want a bundle of benefits

with good quality because if a consumer spends money his psychology is that I get

something fine in return. The quality of the commodity brings more satisfactions.

We have conducted the chi-test to establish the relation between these two different

variable but the results finding are totally different than what was assumed in the

beginning of the research. There is no relationship between quality of electronic

retailing and the overall customer satisfaction because customers are only satisfied

when they have bunch of benefits. They are only attracted to those items which has

either a good quality or a low price etc. there satisfaction can not be because of the

electronic retailing of the company.

6.2 Evaluation of the Results

After the critical analysis of the UK retailing and interpretation of the data we can say

that our findings have been close to previous empirical evidences as well the existing

theory. According to Chan H.(2001), Lee R.(2001), Dillon T.(2001) and Chang E.

(2001), E-retailing basically deals with the sales of goods and services which means

that it is about the sales of goods and services via electronic media and from our

research finding it has been similarly proved the same way.

With our findings, we come to a point that Electronic retailing can do much more

miracles for the supermarket sales and this idea was also narrated by the dean of

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London Business School Mr. John Quelch, he said that e retailing can do wonders for

the sales of the supermarkets.

With this piece of research it can also be justified that with the expansion of

Electronic media has changed the outlook of the Retailers, they have also progressed

from their traditional sellers to the specialized brand executors. According to

McGoldrick, 2oo2, Retailers have “progressed from being just merchants to retail

brand manager”. This means that our finding has been similar to the statement of

McGoldrick.

In this research we know that E retailing has gained its reputation in recent era and

with the passage of time, it has continuously exceeded which requires massive capital

but there is no surety that returns on investments will be quick one and this findings

are also similar to Lamey 1996 states that “Global retailing demands huge investment

and gives no guarantee in return”.

According to (Vida and Firhurst, 1998), the decision occurring from the inner

atmosphere has a great impact on the over all and in my research I have noticed that

the decisions of E retailing have an immense impact on the business. One wrong

selection can take away all the customers from the firm. If any one of the decision is

not fulfilling the customer satisfaction than it will be automatic disaster for the

company.

In this piece of research, it has been significantly notified that customer loyalty is

subject to customer’s satisfaction and this is similar to the empirical evidence of the

research by the (Reichheld 1996). Here in the SWOT analysis we noticed that

customer’s loyalty towards the companies are on their satisfaction. According to

Reichheld ‘customer satisfaction is the key to securing customer loyalty’.

In our Research, through the SWOT analysis we have come to the point that it is not

always that all the customers who are not satisfied will resent the company. Our

interviews via questionnaire also show this behavior of the consumers that it is not

always a one particular thing on their mind, as for some the reasons could be different

ones too and this is exactly similar to the empirical evidences of the previous research

81

on the consumer behavior. According to (Buttle 1997), Dissatisfactions or satisfaction

does not always lead to defection. Not all sorts of consumers will have emotional

enchantment with the same supermarket. It’s more about the price and qualities.

From our research it has been clearly evidenced that consumer behavior can be

intrinsic as well extrinsic for instance if its intrinsic than this would be of one kind of

loyalty where the consumer puts more efforts just for a good deal and this would

automatically brings two things in frame, one is time factor and the other is

opportunity costs which will reduce the loyalty of the consumer and this is also being

one point that gives more support to the already empirical evidences available in the

literature review. Hence we can say that situational approach is more in account for

the consumer’s behavior in different settings and satisfaction has no significant role

to play when the efforts are not too much required and this is also proved our chi test

that the overall satisfaction of the customer has nothing to do with the E retailing

services.

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Chapter 7: Conclusion

7.1 Evaluation of Hypothesis

After the Chi-test and generating the graphs and charts about the different variables,

the results are available and I reach to the conclusion that our hypothesis that there

exists a strong relationship between the quality of E retailing industry and the overall

satisfaction of the customers is wrong. Our assumed hypothesis is not the correct one

because P value in both cases (Tesco and Saisnbury’s) is more than the standard

required value of 0.05.

Sainsbury’s E retailing services result is 0.621525, which means that P value is

greater than the hypothetical value of 0.05 and there for the result shows that

hypothesis is incorrect one. The chi test secures the result of the overall satisfaction of

the customers as 0.358872 and it is also greater than the required hypothetical value.

For Tesco the numeric result occurred is 0.211764 and this P value is not meeting the

standard value of 0.05 so the retailing services are not as we have assumed and the

Chi test has generated the result of 0.274025 for the overall satisfaction of the

customers of Tesco. This P value is also more than the required value of 0.05 that we

have assumed in the beginning of the research so this hypothesis that we have

assumed in the beginning, now it can be rejected due to the results on hand.

The graphs and the bar diagrams about the e retailing services of the respected

organizations and the consumer behaviour also suggest that there are different factors

responsible for the customer satisfaction.

According to the SWOT analysis there are some weaknesses and threats from

consumer’s changing behaviour but it is no clear that customer satisfaction is not

based on the e retailing.

There can be other factors that may be responsible for the customer satisfaction such

as price strategies and offers made by the sellers and retailers, the quality of the

83

products and services etc. These variables may play vital role in the customer’s

satisfaction but quality of e retailing is not the whole sole vital and crucial factor for

the customer satisfaction.

7.2 Limitation of the Research:

The research is conducted with the time constrain as there was not much time to go in

more detail to explore the research to deeper level. The respondent selected were only

on the basis of random selection method and the number of respondents were very

small, of more people were included, the result finding could has been more different

or brighter than the one currently occurred from this research. The present results

cannot be regarded as comprehensive because it was only limited to two selected

Retail organization. The selected respondents were a small part of the overall but if

more respondent were included and few more similar sort of industries were included

in the research, the results would have been more generalized as the research is only

conducted. Limitations

Moreover, the questionnaires are filled to generate the data but it is not been

confirmed that the responses are true in nature because the possibility is alive that our

respondents might have answered few questions differently than what they really felt.

Their phase of mood is unknown so we do not know whether they answered correct

or incorrect.

7.3 Recommendation for Further Work

The limitations I have mentioned above must be overcome by the in the future

research pieces. In the future researches, the researcher must conduct more detailed

interviews with the op management and should also conduct the interviews of the

employees and people associated with the E retail industry. The future researcher

should also have more direct approach to gather information and should also include

interviews sessions with the members of Chamber of Commerce in order to increase

the generalizability. The results of the future researches will be more acceptable when

the appropriate method of sampling is used which would cover the good proportion

84

of the population. The results finding will bring more generalizabilty if sample is

taken from other retail companies also in the future researches. If the sample is a

large one that will be more successful for the future researches as large spectrum of

consumer satisfaction and E retailing will comes under one big umbrella and the

chosen hypothesis will bring more possibilities to work on. In the future, researcher

must also consider conducting the researches in the other parts of the world to find

the relationship between the quality of E retailing and the overall satisfaction.

With this research it is clear that there are few areas that the E retailing industry has

to think serous about such as the technological advancement and changing consumer

behavior. It has to improve the online services by introducing digital live camera so

that a consumer can not only see the still image but can also see live picture. This will

give the buyer exact idea about the product. These cameras in the supermarkets will

also have the function of magnifying the labels so that consumer can read the

ingredients of the product and has a complete knowledge about the hygiene level.

The E retailing companies should also start to conduct the workshops in order to keep

its employees informed about the new technologies and help with sessions in order to

meet the challenges in the dynamics of the environment. It should also groom its

workforce to understand the needs of the customers and how to satisfy the online

consumers about their purchases.

7.4 Reflection on the work:

I believe I am very satisfied with my work as it was a great learning experience for

me. Now I clearly understand most of the things about the E retailing world. I have

learnt how to conduct research and how the data can be accessed. My knowledge

about various products and consumer behavior has improved largely. While

commencing this research I communicated to different people from different

backgrounds and it was a great working experience communicating with them. I got

an opportunity to put the theories in to practices.

85

I have an opportunity to understand the dynamics of the environment and how the

professionals approach to their targets. I have also learnt through this research how to

critically analyze and evaluate the organizations.

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QUESTIONAIRE

Age: __________________ Education:

__________________

Occupation: __________________ Gender:

__________________

Income: __________________

Q1. Which of the following attracts when you shop online?

Discount

Price variation

Product from Retailers

Offers from Retailers

Q2. How often do you shop online?

Daily

Weekly

Fortnightly

91

Frequently

Monthly

Q3. What are the following attracts you to shop online?

New product development

Strong brand Loyalty

Strong products life

Strong marketing channel

Q4. What are the core competencies of your company?

Time saving

Weather

Large choices of products

Free Delivery

Q5. Which of the following cause you not to shop online?

Security

Frauds

Confusing Presentation of Products and Services

Check-out Time

Q6. Are you satisfied with the level of E-retailing services of this company?

Very Satisfied

Satisfied

Less Satisfied

Not Satisfied

Disappointed

Q7. Do you often use same company’s E-retailing services?

Yes

No

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Never noticed

Q8. What is your overall satisfaction about this Company?

Very Satisfied

Satisfied

Less Satisfied

Not Satisfied

Disappointed

Thank you for your cooperation~

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