Tesco.com increases product range and uses triggered communication to support CRM

The strategic approaches which have helped Tesco.com achieve success online are as follows:

Tesco.com use what he describes as a ‘commitment-based segmentation’ or ‘loyalty ladder’ which is based on recency of purchase, frequency of purchase and value which is used to identify 6 lifecycle categories which are then further divided to target communications:

• “Logged-on”

• “Cautionary”

• “Developing”

• “Established”

• “Dedicated”

• “Logged-off”

Tesco then use automated event-triggered messaging can be created to encourage continued purchase. For example, Tesco.com have a touch strategy which includes a sequence of follow-up communications triggered after different events in the customer lifecycle. In the example given below, communications after event 1 are intended to achieve the objective of converting a web site visitor to action; communications after event 2 are intended to move the customer from a first time purchaser to a regular purchaser and for event 3 to reactivate lapsed purchasers.

2. Identify customer profile characteristics. This is a traditional segmentation based on the type of customer. For B2C e-retailers this will include age, sex and geography. For B2B companies, this will include size of company and the industry sector or application they operate in.

3. Identify behaviour in response and purchase. As customers progress through the lifecycle, by analysis of their database, they will be able to build up a detailed response and purchase history which considers the details of recency, frequency, monetary value and category of products purchased (RFM analysis).

4. Identify multi-channel behaviour (channel preference). Regardless of the enthusiasm of the company for online channels, some customers will prefer using online channels and others will prefer traditional channels. This will, to an extent be indicated by RFM and response analysis since customers with a preference for online channels will be more responsive and will make more purchases online. Customers can also be asked direct through surveys. It is useful to have a flag within the database which indicates the customers channel preference and by implications, the best channel to target them by. Customers that prefer online channels can be targeted mainly by online communications such as e-mail, while customers who prefer traditional channels can be targeted by traditional communications such as direct mail or phone.

5. Tone and style preference. In a similar manner to channel preference, customers will respond differently to different types of message. Some may like a more rational appeal in which case a detailed e-mail explaining the benefits of the offer may work best. Others will prefer an emotional appeal based on images and with warmer, less formal copy. Sophisticated companies will test for this in customers or infer it using profile characteristics and response behaviour and then develop different creative treatments accordingly. Companies that use polls can potentially use this to infer style preferences.

Touch strategy

To deliver relevance also requires a plan specifying the number, frequency and type of online and offline communications and offers. This is a contact or touch strategy. A good starting point is to ask ‘what will annoy’ the customer. Clearly if e-mail communications are too frequent, then the customer is less likely to have the time or inclination to open an e-mail. So one approach is to monitor the response for e-mail communications. But higher frequencies will likely lead to higher response. This helps explain the high volume of e-mails sent by Tesco.com to its consumers, which averages between 1 and 2 per week for me. But Tesco.com have recently been exposed as ‘bombarding UK consumers with a massive e-mail marketing campaign’ Based on the E-mail tracking service E-mail Monitor from Interactive Prospect Targeting Services, Tesco is blitzing the nation with 16-20 million e-mails per month. It reports that in September it issued 44 separate e-mail campaigns last month which was more than Sainsbury, Asda, Waitrose and Somerfield put together. Part of this activity can be explained by Tesco’s market share. A Tesco spokesman was reported as saying ‘More people shop with us online than with anyone else and we do communicate with a lot of them by email.

Napster Case Study: The New Napster changes the music marketing mix

Marketing Mix

• Product

1. Product- Legal Music Downloads with the following benefits:

2. Music Downloads (Legal rights to 500,000 songs)

3. CD Burning

4. View Music Videos

5. Access Billboard Chart Information

6. Synchronize music to other devices

7. Message Boards

8. Detailed Artist and Album information

9. Parental Controls

• Price

1. $.0.99/ song

2. $9.95/ album

3. Premium Service $9.95 (includes all products above)

• Promotion

1. Promote through partnerships with Microsoft, Gateway, Yahoo and Samsung

2. Partnerships with XM Satellite Radio, Tower Records in Japan, a marketing agreement with BellSouth Corp. of Atlanta

3. Possible partnership to rollout with cell phones on LM Ericsson of Stockholm

7 P's and Payment system for e-marketing

Name of the website: www.amazon.com

Analysis of www.amazon.com from 7 Ps point of views and its elaboration

1 P Product: This is the website which offers each and every type of product.

2 P Price: Amazon.com purchases the product directly from manufacturer and they sell it. They purchase and give discount that’s why their all the product are 20 to 25% less than market price.

3 P Place: It is the most contradicting issue of Online Marketing. Website now launch their links on different web pages and other social media sites.

4 P Promotion: They send emails, coupons to promote. They also ask questions about their updated or to get free monthly e- magazines, etc. They now also put their advertisements on boards and hoardings.

5 P Physical evidence: They put their website web page in other web pages. They also have their position with certain keywords which make it easier to visitors to come and visit that website.

6 P Process: In order to purchase the products in the cart they need to select the checkout action. The checkout is a five step Purchase Process with the following tasks:

1. Identify they client

2. Select shipping address and special options

3. Select payment method

4. See overview of the entire order

5. Confirm and place order

6. Receive confirmation by email

The users can abort the checkout procedure at any step. When users retry the checkout later, they start again at the first task. Consider a wizard to guide the user through these tasks while minimizing the number of web pages used. However, a wizard is not always needed for just a purchase. Often sites ask for details that are not strictly necessary to process the order. In many cases, all of the order information may easily fit on one page and hence eliminating the need for a wizard.

7 P People: People in these websites includes those person who bring the product to the customer. The service provided by the website to deliever the product to the destinations and the person involve in that process comes in People.

Selection: In the website there is search word written at the top, so by the help of it you can search department wise or you can directly search by click on go button.

User-friendly Approach: In this if the visitor have account in the website then when he/she signing in then account then there will appear that welcome with name of person and it also shows the result of last visit that what you have searched and selected last time.

Payment System: The option present it in to order now and in which add to cart. Therefore when we click in it then it tells check out your cart and payment option will appear. By this we dp the payment through our credit card numbers.

Mohit Gupta

Q1. What are the problems, which E-bay is currently facing? How e-bay is trying to solve there problems? Are there any other solutions that e-bay should consider?

Ans. E-bay is the leader of the online auction industry and was unchallenged for quit some time. The e-bay company become the leader in the online auction industry by not only allowing every day consumer to purchase and sell items but it also allowed big companies to clear up their stock to bargain shoppers. E-bay has become serious competitors in the traditional e-tail, their secure online payment system.

Problem which e-bay is currently facing are:

1. Less control over auctions which create problems for e-bay.
2. Unscrupulous sellers, who collect fees for goods that are not legitimate, do not exit.
3. Unauthorized use of seller accounts which lead to fraudulent sales.
4. Unsatisfied customer: E-bay is struggling with the task of satisfying online buyers and seller
5. Only use of credit card on the internet.
6. No protection of sellers on e-bay from fraud customers.
7. Chargeback: In this after receiving goods by customers he instruct the card company to reverse the charge

Steps taken by e-bay to solve these problems:

1. Automated response to fraud complaints encourages buyer and sellers to dispute on their own
2. Programme called voices bring buyer and seller together 10 times a year to remain in touch with community users.
3. Continuous enhancement of technology to protect both buyers and seller.
4. Feedback place or space for buyer and seller to communicate experience

Q2. Do you think a critical mass of seller needed in order for a company like e-bay to service? What steps should e-bay take to ensure seller critical mass?

Ans. E-bay is earning from various means like automated auction services, fee and commissions associated with trading services and direct advertising on the site. To establish business like e-bay need a huge chunk of money to be invested in infrastructure this is fixed cost. That same infrastructure also needs high maintenance expenses. So income from only auction services and advertising on site can not turn into profitability. So, I think a critical mass of seller needed on order for a company like e-bay to service.

Steps to ensure critical mass of sellers at e-bay:

1. Less fee and commission: E-bay needs to charge less fee and commission changes to ensure critical mass of sellers. It has already seen reduction in no. of seller at the time of increase in fee and commission
2. Protection from fraud customers: To ensure critical mass of sellers, e-bay need to protect its sellers from fraud customer. They are already angry over e-bay for it.
3. Prompt dispute settlement: E-bay need to ensure prompt dispute settlement, because it takes time which lead to unsatisfied customers and seller, which is harmful for e-bay

Q3. There is a lot of skepticism out over that whether e-bay will be monetize voice transfer call skype? What type of risk you see by adding communication functions to e-bay

Ans. Following are the risks by adding communication functions to e-bay:

1. Seller may not accept the function of communication: The most important need of success of the skype in business function is acceptability of sellers. Customers are always ready to experience these kind of value added services but sellers may not accept it due to increase in cost and efforts
2. High traffic may lead to customer dissatisfaction: Due to high traffic over VOIP may lead to high waiting to customers which will lead to customer dissatisfaction.
3. High fixed cost: It may increase service cost to customer due to high fixed cost. It will harm cost competitiveness of e-bay
4. Loss of sellers: Many sellers are not happy with skype which will lead to loss of number of seller which is prime need of e-bay to service.

Q4. Suggest few secured e-payment mechanism to retailers for minimizing various risk mentioned in the case?

Ans. Secure e-payment mechanisms:

1. E-wallets: It refers to a set of digital information that is associated with a particular individual. It may include Id. Password access control lists, public key etc.
2. Smart cards: Smart Cards have microprocessor chip in it. One can manipulate information over it to secure payment.
3. E-cash

a) Micro payment: These are very small payments. There are also suitable for small payments which credit card can’t provide

b) Wireless payment: Many mobile phones companies use it. Their customers can purchase goods and pay their expenses over mobile. It reduces risk of theft of cards

c) Q-pass: This was used to pay tiny-payments. Customers can pay small payments through Q-pass.

Q5. Will e-bay be successful in long term? Why and why not?

Ans. According to me, e-bay will be successful in long term. The business plan which e-bay has chosen is unique. It is the prime need of various sellers and buyers.

It is very expensive to have all infrastructures to start a e-business.

E-bay has that kind of infrastructure which it is sharing with various customer base.

Automated auction services helps seller and buyer to reach optimum price. It is only possible because of high interaction of buyer and seller at e-bay, which is not possible if any seller go alone. E-bay have always been innovative which is also prime need of the industry. Today’s customers are not only looking for product and services, they are looking for experience through various additional services. Auctions of various sites by e-bay is example of innovation of e-bay to provide experience to customers.

The need of the hour is to deal with current issue related to payment mechanism, fraud trading need to be taken care off by e-bay to service, which I believe e-bay is doing.

So I think, that e-bay will be successful in its business in long term.