Task 1 OB Essay

Submitted By alexio79
Words: 1601
Pages: 7

The plan to close stores, whose fate will be decided on the basis of profitability and desirability of location, comes as the retailer unveils a £100m investment aimed at boosting its multi-channel operations.
Stores and catalogues will support the revamped digital offer. Argos says it will invest in its IT infrastructure to develop its online, mobile and tablet channels in a bid to make them its “primary channels for interacting and communicating with customers”.
“Stores will be focused on product pick-up and customer service for transactions that will increasingly be managed online or through mobile”, it adds.
The retailer has been buoyed by growth in multi-channel sales, which it says now account for 51 per cent of total sales. Mobile shopping represented 7% of total sales in the half-year, it adds.
Elsewhere, plans were unveiled to increase the size of its product range as part of an effort to bolster its appeal beyond the “less affluent customers” it says currently make up its customer base.
An increase in the number of exclusive products and “ranges to meet the needs of the broader target customer groups” are promised.
Investment in digital infrastructure will also boost CRM capabilities, Argos says, allowing for the provision of “more relevant and personalised offers”.
The shift to e-commerce will be reflected in its marketing mix, with money moving to digital channels.
Plans to repoint the business come as parent company Home Retail Group, which also owns Homebase and Habitat, reports pre-tax profit fell 37 per cent to £17.9m in the six months to the start of September. Sales fell 1 per cent to £2.5bn.
Argos’ transformation plan at a glance
Shifting the role of stores to focus on product pick-up and customer service for transactions made online or via mobile channels.
Investment in CRM to boost targeting.
Increasing its “universal appeal” by broadening product offer.
Exclusive brands to account for a third of total sales by 2018.
Shifting marketing budget to digital channels.

http://www.marketingweek.co.uk/news/argos-repositions-as-digital-retail-leader/4004440.article Wed, 24 Oct 2012
As well as changing the culture at Argos, management appreciated the need to change the extended marketing mix to improve the customer experience. Argos has always been associated with 'low prices, more choice, less hassle'. The management team wanted to build on these values and develop the marketing mix to boost the company's sales and profits.
The product
Market research following the 1998 takeover showed that the Argos brand was seen as boring and stuffy. Argos set about modernising the brand to give it greater appeal. This included a new brand strap line -"Brighter Shopping"- and a new logo.
The company has also widened its product range; by 2002 it offered twice as many products than four years earlier. In 2002 alone it added an extra 2,400 product lines, taking the total to nearly 12,000. In particular, Argos has moved further into furniture and white goods such as fridges as well as services such as pet insurance.
Given that the brand is so well known and that over 70% of the population shop at Argos, the company's management thinks the best strategy to boost revenue is to convince existing customers to buy more rather than work specifically at attracting new customers. It aims to do this, in part, through offering a wider choice.
Promotion
The company has used advertising to appeal to its different market segments. Argos segments its market not just in terms of the traditional demographics (e.g. age and gender) but also in terms of people's brand awareness. Argos divides its customers into 'the don't get its' (who use Argos only occasionally) and 'the get its' (who regularly shop at Argos). The latest advertising campaign has two characters - an ageing rock star (a 'don't get it') and his personal assistant (a 'get it'). In the course of a series of adverts, the 'get it' gradually introduces the 'don't…