MARKETING COMMUNICATION STRATEGY FOR AN ONLINE STORE .CASE OF OSCAR BUILDING STORE, BAMENDA
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The purpose of this thesis is to create marketing communication strategy for an online store launch operating in sanitary, heating and plumbing (SHP) retail based on a study of the behaviour and technology acceptance of their customers. Primary quantitative research was conducted in form of a survey and 80 responses from current customers of case company were obtained. The data were analysed descriptively as well as explanatorily. Technology acceptance model (TAM) was used as adoption model and outlined relationships of the studied variables were tested by hypotheses.
The main findings of the research revealed that the behaviour of the customers of SHP retail towards the online shopping is quite neutral and based on the finding, they are not persuaded to shop online for this category products. However, they are open to learning to use the online store. Their intention to shop online is significantly influenced by the perceived usefulness and ease of use. Moreover, two new constructs, perception of benefits and perception of positive attributes of online store were disseminated to have a strong effect on intention as well. Concrete benefits and attributed should form a significant part of the launch communication message. Channels suitable for communication with customer are offline channels which seem to work better than the online. Communication strategy is based on deciding what strategy, tactics and control steps should be undertaken for a successful launch
This introductory chapter presents the background of this study which delimitates the research gap. The research questions from which theoretical framework of this study is derived. Moreover, Definitions of most important concepts, delimitations of the study, methodology and structure of the thesis are outlined in this section.
The technological development from the end of 20th century and increased importance of World Wide Web led to various retailers opening online stores becoming a huge success from Its beginning. Opening an online store does not require to overcome high entry barriers. Moreover, retailers’ costs are lower compared to the operations in physical stores leading to Increase of production or service improvements. These are some of the reasons for the major Adaptation to the trends followed by the online boom. Not only new e-commerce companies Emerged but also the traditional brick and mortar companies started to implement online Channels additionally to their established physical stores. However, the business works only if the customers visit the stores and buy the products. The problem of new online channels was,That the customers needed to adapt to the new technologies as well, this often took much longer.It was necessary for the customer to start trusting the internet and to give up the services Connected to face-to-face selling (Browne et al., 2004).
Over the years, customers started to adopt to the e-commerce trend as the statistics show, that The worldwide e-commerce sales in 2017 reached 2 304 billion USD and even though slower Growth is expected it is still predicted to reach 18% in 2021 (Statista, 2019). Online shopping Channel is gaining a lot of attention all around the world, however, in the European Union in 2018 only 17% on average of all the enterprises operated through online stores. Ten years earlier, companies with online stores accounted for 16% (EUROSTAT, 2019a). The growth of online channel adoption among the EU is slow. However, Western European countries such as the United Kingdom, Germany and France are the biggest online markets in Europe and were accountable for 81, 5% of sales in 2017 (Enterprise Europe Network, 2018). On the other hand, in the countries of Central Europe such as Hungary, Poland and Slovakia, online channels are not as developed within the retailers as in the Western Europe. According to the statistics (EUROSTAT, 2019a) these countries are under the average of the EU. Taking into account
These facts, there is a lot of room for the companies in Central Europe to establish their online stores and gain competitive advantage from it. When it comes to the European customers using online channels for buying, they adopted to the new technology little bit faster than the companies. In average 60% of the EU population aged 16 to 74 shop online (EUROSTAT, 2019b). The adoption of online channels by customers seems to be faster as the percentage of online buyers doubled in the last ten years. Customers from Western countries are again ahead with approximately 75% of customers shopping online, however the Central European countries are close to the average (ibit). The lowest number of online channel users represented the customers from Eastern Europe.
European Statistical Office (EUROSTAT, 2019c) studied the goods purchased according to the demographic selection of the customers. The office divided the customers into three groups according to their age to 16 – 24, 25 – 54, and 55 – 74. The three groups have the major share of purchases in clothes and sport equipment followed by travel and accommodation, and household goods. Comparing the groups, in addition to the previously mentioned product categories the youngest customers are the ones who shop the most for video games, software (31%) and film and music (29%). The age group 25 – 54 has the highest proportion of buying household goods, tickets for the event and groceries accounting for 50%, 41% and 28% respectively. The oldest group, 55 – 74, are dominant in buying magazines, books (34%) and medicine (19%) online. 54% of both groups, aged 25 – 54 and 55 – 74, shop online for travel and accommodation (EUROSTAT, 2019c).
It is defined by the United Nations (2017) that the products such as sanitary ware, plumbing and heating fixtures, which are studied in this research, are included in the household goods. Therefore, it is assumed, that the potential customers of the online store from SHP industry will be from the age group 25 – 54 years old. However, toys, decorations and furniture fall under the category of household goods, as well. There is little evidence on customers shopping for products from SHP industry online and offline. This fact creates a room for customer behaviour and online store adoption study in this particular industry.
More than 20 years had passed from the big dot-com boom in 1990s and when looking at the reasons, why customers do not want to shop online, these are the same from the research conducted in 2004 and statistical data from 2018. The first reason listed is the inability to see and touch the product before the purchase, followed by the trust issues towards the payment.
In 2018 the lack of internet knowledge accounting for almost 20% was considered as a reason number three (Browne et al., 2004; EUROSTAT, 2019c). Even though the e-commerce sales revenues grow, customers are still holding back, and therefore, the benefits as well as safety of the online payments need to be communicated to attract customers who have not shopped online yet.
The company, which wants to transform itself from brick and mortar to click and mortar firm, has to take into account the situation of the market and the adaptability of its consumers to the innovation, in this research particularly the launch of an online store. The company’s adoption Of new online channels in Central Europe is under the average of the EU, and therefore the room to success is present. It is crucial for the companies to develop a marketing strategy focusing on attraction and adoption of the new purchase channel by customers. The essential for doing so, is to get to know the customers, and recognize the drivers which would make consumers buying products from internet. This research focuses on sanitary, heating and Plumbing industry, which products are in statistics included under the household goods. Consumers and their adaptability to innovations have not been studied in this industry context.
According to the research provided by Roland Berger (2013) the customers of SHP retailers are divided into three groups installers, specialized retailers and end customers, meaning, that they are operating B2B with the other retailers and installers, and B2C selling to the end Customers. Understanding the types of customers, their needs and motivation enables companies to prepare marketing communication for new online store launch and its adoption by customers. This step should benefit both, the company and the customers. This research will have a closer look at the behaviour and technology adoption motivators of the customers. Based on the gathered information a marketing communication strategy will be proposed to launch an online store.
This research should benefit all the small and medium enterprises operating as brick and mortar companies in SHP industry who want to enlarge their selling channels and need to attract customers to it. The aim of this thesis is to create theoretical background of the customers’ adoption of new technologies in SHP industry and contributing to the management of the industry by developing a marketing communication strategy to attract customer to the firms’ online stores.
1.2 Definitions and concepts
Adoption is defined by Kotler and Keller (2012) as person’s decision to accept and start using
a product in regular bases. They specify the factors influencing the process of adoption to readiness of person to try a product, personal influence, differing rates of adoption and readiness of an organization. Davis (1989) also adds to the factors the influence of the culture. Click and Mortar business is a multi-channel business selling its products through both online and offline channels. The customers can buy products or services in physical stores or in online stores by ordering them through the internet. This type of business is very often between the retailers (Cambridge Dictionary, 2019).
Electronic commerce also known as e-commerce, arose in 1991 including all the business activities of sales cycle. It is a business operated on internet which involve selling, buying and interchanging products, services and information (Mourya and Gupta, 2014).
Launch is an event of a new product or service introduction to the public. Launch strategy are therefore activities needed for product to enter the market and start generating revenue (Hultink et al., 1997).
Online store is an internet shop where people can purchase products or services without visiting physical store. The payment can be realized in advance through the web page with Credit or debit card, after the delivery arrives or at the physical store when picking up the product.
Perceived usefulness is person’s expectation of the extent to which the information technology improves his/her job performance. Based on the perceived usefulness, people tend to adapt and use new technology or not. This concept is studied together with perceived ease of use in the Technology acceptance model (Davis, 1989).
Perceived ease of use is the comprehension of the amount of effort person needs to make to use the new technology. Easier it is for person to use the technology, higher is the chance of Adopting it. Perceived ease of use is a second factor studied in the Technology acceptance model right after perceived usefulness. Perceived ease of use is tightly related with the learning as many people are motivated by “learning by doing” and learn to work with new technology by using it rather than study the manuals (Davis, 1989).
Sanitary, Heating and Plumbing industry is closely related with building materials and equipment industry as both are providing products for basic house arrangements. SHP market is a retail market for sanitary products such as taps and showerheads, sinks and toilets, bathroom furniture, showers and baths as well as related accessories. Different types of products are sold in the heating section for example heaters and boilers, radiators, floor heating and their accessories. Under the plumbing section belong pipes, valves and fittings and others.
Marketing is the managerial process which match the product and marketing either in satisfaction consumer in affected.
Communication is a continuous process of exchanging, sharing, sending, receiving information between two entities.
1.3 Problem Statement
Marketing communication includes everything that helps in delivering value to a customer. Companies must ensure that the right communication mode is relevant to different target markets are employed appropriately important part of the marketing communication’s planning processing is competitive analysis. What are customer’s preferences? How do messages be developed and how would they be communicated and they type of strategy that can be used?, which media should be targeted?, what is the delivery mode?.
The research work will be able to answer the above questions and which marketing communication strategy can help the organisation achieve its stated objective.
1.4 Research questions
The world of e-commerce has developed dramatically quickly and become a trend in many industries. That is also the case of the sanitary, heating and plumbing industry studied in this research. Many of the companies adapting the online store in addition to physical store are, however, not able to bring their customers online. The objective of this research is to create a marketing strategy to communicate an opening of online store in the sanitary, heating and plumbing industry. This research should help any company in selected industry targeting differentiated customers such as another businesses and end customers to develop their own marketing communication strategy on launching an online store.
The research questions are designed to help achieve the objective of the thesis, and therefore concern the creation of marketing strategy and deeper study of the customers.
1.4.1 General research questions
How to create marketing communication strategy for an online store operating in sanitary, heating and plumbing industry?
1.4.2 Specific Research questions
The main research question is supplemented by following sub-questions:
1) What are the elements of the marketing communication strategy?
2) What are the key drivers that influence customers to choose online channel for their Purchase?
3) How does the customer’s perception of usefulness and ease of use of the online store influence the intention to use it?
1.5 Research Objectives
1.5.2 Main Research objective
This research aim at examining the extent online marketing impacts and improves the effectiveness of integrated marketing communication in reaching the targeted audience.
1.5.2 Specific research objectives
The research will aim at achieving the following specific objectives;
- To determine the extent online marketing can be effective in achieving organisation marketing strategy
- To examine the extent integrated marketing communication can be effective in achieving organisation marketing strategy
- To ascertain the effectiveness of online marketing communication strategies in achieving efficient and effective integrated marketing communication in the organisation
- To examine the key indicators used in measuring online marketing communication performance.
- To examine the trending online marketing tools employed by organisation to reach more targeted audience and accomplish more results.