College Papers

MARK101 bag of cookies appear the most delicious,

MARK101 INTERNET ASSIGNMENT

JUSTINE ZHANG 300380196

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Question 1

Online virtual grocery shopping is a
growing trend as the technological age progresses and convergence of the
virtual and physical world advances. In modern times, people are increasingly
becoming accustomed to a culture of instant gratification, convenience, and
comfort due to new technology finding methods to do things easier and more
efficient. These trends will affect the grocery industry with consumers receiving
different benefits and limitations between physically going to supermarkets and
purchasing from online stores such as the Countdown site. These strengths and
weaknesses satisfy different types of utility and provide different marketing
mixes for consumers.

 

Firstly, physically going to the
supermarket has the consumer benefit of sensory feedback. When choosing grocery
items, especially fresh produce, visual and somatosensory information for the
customer plays a large role in the decision-making process. The perception of
potential purchases is important as customers are trying to decide what items
they are going to ingest and put into their body. Which punnet of strawberries
look the freshest, which bag of cookies appear the most delicious, which
avocado feels the ripest are some examples of the senses of touch and vision
being used to make decisions. Physically going to the supermarket to see and
feel these physical items are a benefit to the consumer.

 

This sensory feedback ties in to the
benefit of more informed choices which leads to greater utility from the
products. A customer will be more satisfied when they can make their own
choices on what they are going to purchase. By being in a physical store they
can see all the options clearly laid out and interact with them, before
deciding on a final good. They can filter out and select items by being able to
be with the tangible items themselves. The factor of choice is crucial for
consumers when making purchasing decisions, physical stores allow for more informed
choices.

 

The level of service available in
physical supermarkets is another benefit to customers. Service levels range
from self-service, to limited service, to full service1.
In most modern supermarkets, including Countdown, self-serve areas are available
with limited service if the consumer needs more help. Self-service provides a
simple and quick option for smaller grocery shops2.
This may be appreciated from shoppers who need to purchase a quick item such as
a bottle of water or a sandwich for lunch. The limited service provided by
supermarkets usually is in the form of checkouts, service desks, and employees
who are available to ask for help in locating items. Checkouts are necessary
when doing large grocery shops as an experienced employee will scan and bag
your groceries for you. Customer service desks are important for customer
enquiries, refunds, complaints and other such query’s. Supermarket employees
who roam the aisles doing their jobs are always also available for questions.
By having real-life people around to help and provide a service, consumers can
get answers to questions and issues which is a great benefit of these physical
stores.

 

Another benefit for physical supermarkets
is the ability to browse to find new products. Supermarkets are laid out with aisles
and displays, all to provide a good experience shopping for consumers to browse
and see new items. Displays especially, showcase new or popular items to
consumers who might not have known about them otherwise. Browsing is important
for consumers and firms. Consumers learn about and are exposed to new products,
whilst firms may receive increases in sales when they push an attractive item
for customers to purchase. Store layouts for easy browsing can be improved with
sales statistics and consumer research quantitative data. As stores collect and analyses
information about what items are popular, they can recommend actions to improve
sales with careful arrangement and presentation. The key part of browsing for consumer grocery shopping is only able to
be well implemented in physical stores.

 

Lastly, consumers have the benefit of possession
utility when shopping in a physical store. This is letting customers have the ability
to obtain and consume the products. Physical
supermarkets let customers have a choice of how they would like to pay and
obtain goods. Cash, credit cards, debit cards or a combination of all are ways
you can pay in physical supermarkets. This allows flexibility in the way
consumers obtain possession of the items they would like to purchase and is a
benefit.

 

Along with these benefits, the
limitations from physically going to the supermarket include affecting
consumers scarce time. There are only 24 hours in a day, where most grocery
stores are open only 12 of those hours. Weekend hours often are shorter as
well. This leaves a margin of time a busy full-time worker can go to shop. Time
utility is when a product is available for consumers, this is limited with a
physical grocery store. Along with opening hours, other factors that may take
up valuable time in physical stores are queues, time to navigate through stores
and crowds. After the general work day, people are doing their supermarket shop
often leading to big lines and slow-moving crowds taking up time. Time is
important to most people as it is scarce, physical supermarkets take up much of
this time for consumers. Limited opening hours, waiting times, and actual slow
traversing the stores are a negative factor affecting the value of time in
physical supermarkets.

 

Place utility is another limitation of
physical stores for consumers. Place utility is getting the product to the
customer where they want it. Physical stores have their own locations, needing
commute to and from. Often these locations may be further away requiring
methods of transportation. Consumers who rely on public transport may find it
difficult to do large weekly grocery shops and may need to do several smaller
shops instead. All these inconveniences regarding a lack of place utility is
another limiting factor for physical stores.

 

Consumers also face the limitation of
physicality when shopping at physical stores. Doing a weekly grocery shop often
results in many products being purchased. For the demographic of fulltime
workers, this may be physically taxing after a long day of work. For the demographic
of families, especially with young children, this may be exhausting and a feat
in its own to so a successful shop with children at your heels. Large loads may
also be difficult to do alone, with weight and volume of groceries a limiting
factor for consumer satisfaction for shopping at a supermarket. The physical
limitations of shopping for consumers is a factor when shopping at a store.

 

Lastly, a limitation to physical stores
is the layout. Whilst this may be a positive as previously mentioned, all
supermarkets will have different layouts with different goods. Consumers would
likely find it difficult to remember and figure out the individual layouts of
individual stores. The aisles stock different products throughout all stores.
Along with this, customers may also be unaware of where goods are exactly.
Whether almond milk is kept with the milk goods, health food goods or breakfast
goods for example. This may lead to overlooking of items and assuming the store
does not stock them due to conflicting and confusing store layouts. This is a
limitation of physical stores.

 

Purchasing groceries on an online store
such as the Countdown website have benefits of time utility. Time utility gets
the product to the customer when they want it and is the major selling point of
online grocery stores. Customers may fill up their virtual “shopping cart” in
all hours of the day or night, they may start filling it up and come back to it
later. The stores are essentially open 24/7 virtually. Alongside this, they do
not need to take time out of busy schedules to go to stores to pick up the
goods. Instead they are delivered straight to their door saving more time and energy.
The benefit of time is what makes virtual grocery shopping so successful.

 

With time utility, place utility is also
satisfied for consumers with virtual shopping. Customers do not have to leave
their homes to receive their groceries, they are delivered straight to their
door. This gets the product to where the customer wants it and is a benefit.
Some people may struggle to commute to the stores making virtual place utility
necessary.

 

The ease of finding goods, sales, and savings
is another benefit of virtual grocery stores. To find a product a simple search
in the search bar for the exact item will bring it forward for consumers to
buy. Sales are clearly marked on the virtual sites with red lettering on the
Countdown website. Online sorting systems allow customers to choose how they
want their food choices displayed on the screen; from price low-high, most
popular, alphabetical and even unit price low-high. Filters also are used to
make finding products simple and easy, with the options of just looking at
items on special, new and so forth.

 

Budgeting and impulse buying are more
easily controlled with virtual stores. A balance will sit nicely in the virtual
shopping cart so there is no need for mental arithmetic and the amount you are
spending is clear for consumers always. Also, by shopping on the website, less
impulse purchases are made as you will not see the chocolates or candy with out
searching for them. Even if you do search for them there is still a delay in
the time these treats will arrive so there is a smaller chance you will bother
you buy them.

 

Purchasing on virtual stores also have
limitations of a lack of sensory input. Consumers do not know which bunch of
bananas they are purchasing, or which head of lettuce. Many customers likely
would not know how many bananas or apples make up 1kg, only knowing the number
of them they want. This is an issue as consumers may not be sure of what
exactly they are purchasing.

 

Delays in purchasing the product online
and when you receive is another issue with virtual grocery shopping. Consumers cannot
leave the grocery shopping to the last minute if they want the items sooner. If
an item was overlooked in the ordering process for a recipe planned for later
in the day, consumers will end up going in to the physical store anyways.
Consumers must be forward thinking and aware of future meals to use virtual grocery
shopping successfully.

 

Delivery logistics, fees, and delays are
a negative for virtual shopping. Time slots must be allocated for delivery to
consumer households, and the customer is highly recommended to be there in
person. Two-hour time slots that may not be available in your desired time is a
limited to virtual shopping, as consumers cannot pick a specific time and
in-demand time slots might be taken up. Delivery fees are also a deterrence for
consumers, many people do not have the extra money to spare on delivery fees
when they are on a budget. Often the more you spend the cheaper the fees, but
this is not helpful for the people who need the lower fees. Delivery issues are
a large limitation for virtual grocery stores.

 

Virtual grocery stores are designed best
for urban centers only. Consumers who do not live in the right areas are not
able to get the most out of virtual shopping. Areas outside of main cities may
not be about to purchase goods that require refrigeration. Delivery charges may
also be much higher. There would also be areas where the stores would simply
not deliver to. This is a limitation that excludes population demographics from
using virtual grocery shopping.

 

Comparisons and contrasts can be made
between these two different methods of shopping for the consumers. Both methods
aim to make finding goods for consumers to purchase easy. Virtual stores have simple
filters and search bars, whilst physical stores have displays and clear signs;
both to help consumers shop for their goods. They also both show off deals and
sales, this gives consumers good bargains and increase sales for firms as well
when people buy something they may not usually. Clear red text is shown for
marked down products on the Countdown website for example, and large billboards
and posters in store direct your attention to their information about the current
sales and specials.

 

Contrasts between these two alternative
shopping methods, most importantly is the act of physically going to the
supermarket. The difference of time and place utility between online and
physical shops is evident. Virtual shops can be done anytime anywhere whilst
physical stores have set opening hours at their specific locations. Consumer
choice is also a difference as when physically in stores consumers can pick out
the specific good that they want which is important with meats and produce.
Overall, there are similarities and differences between online and physical grocery
shopping.

 

With personal use of the Countdown online
shopping website, I ended up with items out of the ordinary that I would not
normally have purchased if I had gone instore. These items were the type of
goods I would usually purchase, however were from brands I had not previously
tried before. Examples of these were cheaper pasta and pasta sauce. These foods
I do not care too much about quality and am not brand loyal. I could not even
recognize the usual brand of pasta I buy which I recognize only by being in the
same place in the supermarket. My brain knows the pasta packet is green and on
that specific shelf, I could not recall the name of the pasta. This was because
I as a university student on a budget, could easily use the filters for price
to see which brand of a good was the most affordable. It was easy to find the
best price per gram for products as this was clearly listed, as opposed to
being in small font scattered around aisles in a physical store. These more
affordable products made it easier for my consumer wallet to decide which exact
pricing and quality of good I was looking for on my income.

Whilst I purchased items from different
brands, I did not end up with anything that was not on my grocery list. Whilst
this saves money, controlled impulse buying and saved time, the layout of the
website was that it was too simple to type in the specific goods you want and
add them to your cart without taking time to browse items. This option was
available, but the entire store would be in the database making browsing online
more difficult and time consuming than instore. I did not pick out new products
or items like candy bars which are normally conveniently laced by the checkout
counters. This was good for my budget, but I may have missed out on treats that
were on special or I would have also appreciated.

 

Question 2

If you were a major branded-goods
manufacturer of grocery products (e.g. Wattie’s, Johnson and Johnson,
Unilever), would you be feeling positive or apprehensive about the development
of virtual supermarkets? Provide reasons for your answer.

 

The possibilities of online grocery
shopping for major branded-goods manufacturers could create positive opportunities
or also threats. Major brands would likely feel positive as many customers would search for trusted brands or
hold brand loyalty. Another
reason for positivity is the common assumption that when shoppers cannot see
the items in person, interact, and sense the tangible good; they will likely purchase
the well-known major brand. Customers
are also more skeptical of unknown brands. Brand loyalty and trust is built
from a young age with adults often preferring to use brands they used as a
child from their parents. Generations of families may have used the same long
standing major brands such as Edmonds or Wattie’s.

 

Apprehension could take form for these
major branded-goods manufacturers as online websites make it easier for
consumers to price compare goods. This could result in more affordable unknown
brands being pushed forward as they are more budget friendly. It is also easier
to find new branded products online. Online stores are a database of the goods offered
instore. Whilst instore consumers are unlikely to read and observe every
individual brand of a good, online websites make it easy to find these products
which may not be displayed well. Lastly, on online stores the major brands and
smaller ones all share the same amount of online space. Each get allocated with
a square on a webpage and their prominence in searches may be adjusted by the
consumers. With no location, promotional advantage major branded goods will not
have the advantage they may be accustomed to.

 

Overall, major branded-goods should be
apprehensive about the development of virtual supermarkets. The ease online
grocery shopping creates for customers to compare and contrast products that
are clearly laid out on a screen will likely result in more people discovering
and trying out new brands of goods that they would not usually reach for in a
physical store. Popular brands are also usually laid out in physical stores to
stand out and be noticed. This advantage does not exist online where every item
is given their own little square and the playing field is leveled between these
brands and smaller unknown brands. The brand loyalty and trust that major
brands carry is a factor that could be positive, however this would be
outweighed by customers trying a different branded product which may seem more
appealing on the screen. As grocery items are usually inexpensive and used
within a week, a customer taking a chance on an unknown brand would not result
in any large loss to themselves. If the product did not turn out to be good,
they could always try something else the next grocery shop. The informative
online shopping is likely to be more harmful to major branded-goods
manufacturers as it gives people the information and exposure to buy other
brands.

 

Question 3

As ecommerce applications like this
mature, is it going to be better to be a startup virtual store (previously
unknown brand such as “Netgrocer.co.nz”) or an existing physical
chain that goes online (such as Countdown, New World, etc.). Briefly evaluate
the pros and cons of each.

 

Virtual ecommerce applications like the
online grocery stores, will attract startup sites previously unknown along with
existing physical chains looking to expand their distribution channels.

 

Startup ecommerce sites have the
advantages of

-establish as wholly
focused on the site

 

-no negativity
carried across

-novel new

 

-less effort to
align physical and virtual

 

Along with the advantages, startup business
negatives would be

-Wary of new

 

-No physical store for consumers to have
physical evidence

 

-no personal service feel

 

Positives for existing physical stores on
the other had include,

-Trusted

-already established brand and values

 

-physical places and online places would
promote each other

 

-already know what goods popular and have
stats from instore

 

The negatives for existing stores would
be

-ensure quality and align in both physical
and virtual

 

-expansion would require staff retraining
to add in virtual side, costs to train people for both virtual and physical,
costs to run a duo distribution

 

-consumer habit, would rather go into
this already established physical store than try something new and do the
online route when habit is going physical

-establish consumer trust in an avenue
new and unknown

 

 

Overall, an existing physical chain that
goes online such as Countdown, will likely be better suited to ecommerce
applications like online grocery shopping. Consumer trust, confidence and
certainty is very important when buying any goods online as you cannot see the
physical products. By being an existing physical chain, the customers already
know that you can be trusted and will likely have seen the stores and shopped
their themselves in the past. This creates a sense of physicality rooted to the
online purchases and would likely be the consumers preferred option when buying
goods online.

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