Countdown and other online shopping retailers are creating greater customer value than physical stores. A benefit is that you can grocery shop anywhere, anytime on your device and they will deliver to wherever you want. Making products easy to obtain and being able to purchase whenever creates place, time and possession utility. Question 2 Major branded-goods manufacturers such as Watties and Coca Cola are well placed in the current marketing environment as they are already well established companies, however, they will have to keep up with the development of virtual supermarkets. The market is rapidly changing due to social and technological factors. Consumer behaviour is influenced by these factors and trends.
Before a customer can make a decision, they want to get as much information as they can about a product. Technology advancements have allowed consumers to gain information instantly with a quick search. A social trend is that consumers are perceiving themselves as being increasingly time poor. As consumers are becoming more purpose driven, they don’t spend a lot of time browsing through shelves of products so will likely go for the brand they usually get. The advancement of virtual shopping has implications for major brands as customers can now browse through lists of items in seconds online to find the cheapest option. A common feature for online shopping is a favourites page where a customer can save their items for future shops. This is good for major brands as it helps maintain brand loyalty. Once a customer has a list of their favourite items they will likely keep buying them until they become unsatisfied or want to try something new.
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Maintaining this brand loyalty will be key for keeping major brands from dying out with the advancement of virtual shopping. If a brand has great customer loyalty, they hold a significant competitive advantage over other companies in the marketspace. A big segment of the market are middle adulthood (40-65) and mature consumers (65+). These age groups have more disposable income but are not as open to change as younger generations.
When they are online they are more likely to purchase a product from a brand they are used to rather than trying out something new. This is good for major branded-goods manufacturers as more of this age group moves to virtual shopping, they will keep purchasing the brands that they trust and are familiar with. Trust can be quite difficult to build when there are no face-to-face exchanges online. Businesses can help build a customer’s trust through allowing them to become familiar with their brand. This means gaining knowledge of the brand and having positive experiences when purchasing products.I would be somewhat apprehensive as Countdown would be able to push their home brand goods by displaying their products first and through advertisements on the website.
They are able to do this because they hold significant distribution power. Coca Cola and Watties do not have their own stores. They rely solely on other companies to distribute their products for them. Major branded-goods manufacturers will need to make sure their products are not being pushed to the bottom of the page. They will need to invest more money into sidebar advertisements on online grocery websites to gain consumers attention. They can also make sure they are keeping up with supermarket’s homebrands through promotions that will push their products to the top of the page. Major branded-goods manufacturers already spend a large amount of expenses on advertisements and making sure they obtain the best shelving space in-store.
To keep up with the development of virtual stores, they will have to apply the same strategy. Instead of in-store shelving however, they will place their products in the best position online. However, overall I would feel positive about the development of virtual supermarkets as a major brand such as Coca Cola and Watties because consumers will not lose their loyalty to a brand unless they become unsatisfied with their experience with purchasing a product and it doesn’t meet their expectations. Major-brands can also create new innovative products to keep customers interested. Homebrands do not tend to focus on innovation as they are there to imitate another product or provide a cheaper alternative. The result of this is that home branded products are seen as being inferior compared with well known brands. Although more price conscious consumers will go for the home brands, other customers will still choose their preferred brand of product due to customers showing loyalty to a particular brand.