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Evaluation of an Online Shopping Service for Groceries

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Marketing Management and Distribution via Internet platform directly to the customer (B2C) is rapidly gaining importance, because consumer show an increasing demand of individual contact. According to Keller [Keller_2006, p. 12f] online business has already become a professional distribution channel to be reckoned with. Therefore marketing activities via e-mail newsletters and social media have to be combined with traditional online and offline advertisements. By fulfilling the demands and wishes of the customer, marketing aims to establish long-term relationships with customers and deliver value to him. For this essay it was difficult to find literature about the field of groceries, therefore I relate to the Belgian Supermarket chain called “Delhaize” [Delhaize_2011], who offer a service of taking online orders from their customers to be picked up later. Using marketing instruments I will analyse the electronic business process and evaluate the advantages and disadvantages. It must not be forgotten that it is important to keep competition at a distance, this is as true for electronic business processes as for any other process. Due to the limited space here and the small time frame of the presentation I won’t describe the marketing instruments in detail, but instead concentrate on the service with its advantages and disadvantages.

Ersin Tosun: Evaluation of an Online Shopping Service for Groceries

2 Electronic Business Process for Retailers

2 Electronic Business Process for Retailers
2.1 E-Shop via Internet Platform

The high attractiveness of online market and a high online marketing potential respectively is usually the result of coinciding factors regarding the product and the potential customers. See [Rupp_2010, p.33] Combining an online shop with a pick-up service more customers can be reached by a supermarket. Generally, distribution of groceries via online shops has proven difficult. Thus the idea of just making the groceries ready for pick-up by the customer has come up and shown to be feasible and successful.

2.2 Analysis of Target Group
According to [Peter/Olson_2001 page 382] ,the target group analysis is an instrument for the marketing and media research resulting in determination of the target group. The following five criteria are taken into account. See [Mittelstanddirekt_2011]: 1. Analysis of Needs Groceries have to be bought at least several times per week in order to have fresh food in the house. Only very few people tend to eat out all the time, although coffee to go has become more and more popular over the past decade (Starbucks). For most urban professionals walking long distances in large stores and queuing at the cashier is a hassle especially at peak hours. 2. Defining the Scope of the Target Group Professionals live under constant time pressure and have therefore very limited time for their daily shopping. Placing an online order which is ready for pick-up after work on their way home would be a big time-saver for them, even if they have to drive a little detour.See [Blackwell/ Miniard/Engel_2006 page 171]. 3. How to Contact Potential Customers Potential customers show up at one of our supermarkets at least every now an then, which gives us the chance of informing them about the new service. All ways of sales promotion can be used, e. g. leaflets, posters in the shop, ad-prints on the receipts. People now shopping only in superErsin Tosun: Evaluation of an Online Shopping Service for Groceries page 3 of 7

2 Electronic Business Process for Retailers markets of competitors will have to be reached by traditional advertisements.See [Schmidt_2004, page 159]. 4. Size of the Target Group Since we want to concentrate on urban professionals, it is crucial to estimate the number of professionals living in the area of the supermarkets. All professionals equipped with Internet access – with will be a very high percentage nowadays, especially taking into account mobile Internet access – and living close to one of our supermarkets are potential users of the new service, although the figures may vary from one supermarket to the next. See [BR-Online_2011]. 5. Purchasing Power Since the customers we want to attract to our new service already buy their groceries – from competitors or already our supermarkets –, no new purchasing power is necessary to make the new service a success. Instead, we strive to make customers switch from tradition buying at other supermarkets towards our new service, thus increasing our market share. By using the current “Kaufkraftatlas” of the GfK [GfK_2011] we can find out where most of the potential customers live in the vicinity of our supermarkets.

3 E-Shop Service for Supermarkets
The targeted user is the urban professional under time pressure who would like to have fresh food in the house when returning home after having worked long hours. Several ideas of delivery services have failed, because the customers often cannot tell in advance when they will be back home, so delivery was difficult to plan. Therefore, our new kind of service was developed. The ordering part has changed very little, it is still an online shop people nowadays are already accustomed to. But the customer only enters a time frame of two hours when he will show up to pick up his order. Queuing at the cashier is not necessary. Instead, after presenting his customer card, the employee hands over the bags with the groceries, so in a jiffy

E-Shop Service for Supermarkets the customer is on his way home again. Even refrigerated and frozen products can be kept at the necessary temperatures until the customer shows up. In order to make life even easier, the web shop will present products he regularly buys on the start page. Even certain “bags” of products – related to certain recipes – can be saved and recalled easily. The online service could be extended to be use on smartphones by establishing a mobile version of the web shop.

figure 1: Shopping cart icon of an Supermarket

In order to make our new service known and popular, using the traditional marketing mix will be of great help. All four “P”s can be used here, see [Kuß_2006 page 163]: 1. Product: Our products are already well-known and accepted by our customers. This is not to be changed for the new service, because it is already one of our strengths. 2. Price: Basically, the price will be the same as in the supermarket and thus very competitive. 3. Promotion: This seems to be very easy, because we already have e-mail addresses of most of our customers. Some kind of e-mail newsletter will always remind them of our service.See [Kilian/Langner_2010 page 27f.] 4. Place: There is no physical place of the ordering service, which actually is its main advantage. Virtualisation of the buying process makes it ubiquitous and universal. The typical customer has constant access to an office computer connected to the Internet. The pick-up service point next to the supermarket is the only physical part of the service.

Basically, it is difficult to predict how customers will react to something totally new to them, but in the case of our new service we have several arguments why it is going to be a sucess: • The Belgian customer is not very different from the German customer, because all socio-cultural aspects are very similar. Since the service has shown to be a success in Belgium, the chance is high that transferring the idea over to Germany will work well. • The online affinity of people is still growing, online shopping of all kinds of goods has grown rapidly over the last few years. People even spend lots of their leisure time online. Especially mobile Internet access has become very popular, most online shops already have mobile variants, many offer special apps for smartphones. • There is only one visible risk that the service might fail: If competitors offer similar service, profitability may suffer.

5 Conclusion
The order and pick-up service for groceries seems to have high potential. Binding more customers, especially professionals with high purchasing power by offering them a true time saver, will establish long-term relationships between customers and the supermarket chain. Since the investments in order to offer such a service will be quite low – more detailed planning is not the topic of this essay – even the risk of a failure can be taken.

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