Open University of Mauritius

Master of Business Administration Cohort 15

[CEMBA / MBA General / MBA Specialisation,
MBA Educational Leadership/MBA Project Management]
Assignment Questions

Assignment: 2020 Year 1 Semester 1

MODULE: Marketing Management

INSTRUCTION TO CANDIDATES
1. This Assignment consists of 4 Questions
2. Answer ALL Questions
3. Total Marks: 100
4. Submit a hardcopy to your Tutor in class and a soft
copy to: oumtutorvd@gmail.com
assign@open.ac.mu
5. Submission’s Deadline: 9th May 2020
6. Word Limit: Not exceeding 3500 words

March 2020

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New Role of Segmentation in the

Retail Sector:
The Digital Boom

Adapted from Mc Kinsey Quarterly - July 2014

Customers are becoming more powerful, more knowledgeable and more sophisticated, and
modern consumer behaviour is increasingly important for the retailing sector. Research into
retailing and how to attract consumers via better environments, service and policies is an
important area to improve today’s consumer experience to help better understand the modern
society and to support retailers to attract and retain customers with better efficiencies and
effectiveness.

Retailers need to adapt to the new digital landscape, especially the social media phenomenon
to make most of the enormous opportunities they present. It's hard to talk about the effects of
digital and social media on how businesses operate without hearing about the 'disruption'
these new technologies are causing.

The increased desire for involvement by customers is opening up opportunities to collect data
around a customer's attitudes and interactions. Retail customers have ever more demanding
expectations of value, choice, availability and accessibility of products and services. Finding
ways to service these expectations is forcing the retail landscape to change very rapidly.

Many of these changes are clear and well documented. The dexterity of customers, with
access to e-commerce, social media and mobility enabling them to seek out the best deals, is
forcing traditional bricks and mortar retailers on line in an attempt to compete with e-tailers
with different margin and operational structures. The power of social media to make or break
a brand is forcing retailers into communication strategies that are interactive and immediate,
a far cry from the traditional communication approach retailers have been used to.

The other reality of the retail landscape is the current economic climate, which is creating
consumers who are happy to wait for special deep discount promotions to make their
purchases. This is forcing retailers into long sale periods, which can impact the bottom line.

In retail, inevitably, business intelligence starts with understanding the customer. Therefore,
the most significant strategic decision is to ramp up data collection, analysis and use. Just as
exceptionally strong corporate commitments to data have fueled the success of the biggest

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retailers such as Walmart and Tesco, these same principles apply to all retailers, whatever
their size.

The really good news is that as consumer behaviour with retail brands is changing so is the
availability of data that can drive meaningful insights and 'intelligence' that allow the brand to
manage the customer engagement and experience. Retailers who can delight their customers
across all contact points and occasions will build relationships that will deliver incremental
revenues.

The consumer behavioural trends of personalisation, virtualisation, mobility and interactivity

are delivering customers who both want to be involved with brands and to be seen to be
involved. This involvement may be as simple as 'liking' a brand on Facebook. These trends
are allowing for the collection of new data about customer engagement.

For some time retailers have been collecting demographic and transactional details about who
the customer is and what, where, when and how much did they purchase, etc. Collection of
demographic data is one of the major hurdles to entry for loyalty programmes due to lack of
interest in filling out lengthy forms. One example of the way new customer habits are opening
up improved data capture is just the simple ability to extract personal data information from a
customer's Facebook page or quickly through a mobile app after receiving authorisation from
the customer.

The increased desire for involvement by customers is opening up opportunities to collect data
around a customer's attitudes and interactions. Attitude data is information about a customer's
preferences. Interaction data reflect the customer's offers, responses, likes, dislikes. The other
information capture their non-transactional interactions. These new data sources are easiest
to understand in an online retail world where we are used to recommendations being
presented to us based upon products we have looked at but not bought (that is our interaction
preferences).

One way of creating value from this increased understanding is simply a function of timing.
Traditional customer relationship management programmes have been limited by the fact that
the customer in physical retail is more often than not identified only at the end of their store
visit. While in such a scenario the customer's next visit can be influenced through the analysis
of data and targeted interaction, the opportunity to really delight a customer and offer a winning
engagement experience is a little limited as the customer is leaving the store.

In the online retail world, a customer is typically identified early on in the transaction, by logging
in, which allows the understanding of the customer to be used to manage that engagement
and drive greater sales. Pulling this capability into the physical world allows a seamless brand
experience for the customer. For large format stores the technology can allow tracking of the

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customer's store footprint. This data can be used in conjunction with real-time communication
of offers to a customer around the store presenting additional purchasing options.

The changes to more sophisticated data analysis and insights can be distinguished easily by
thinking of a very simple standard lapsed customer case. Traditionally, we have identified a
target list of customers who have stopped visiting and made them an offer to entice them back.
However, if we further analyse the target group utilising a broad range of earlier data such as
offer responses and likes and dislikes, it gives the chance to personalise the 'influence' to the
specific customer. This increases the chance of success.

In retail, we hear of mobile commerce, peer-to-peer referrals, group buying and many other
terms having a disruptive impact on the fairly rudimentary act of a customer buying a product
from a seller. There needs to be a way of understanding where this 'disruption' has taken
place, and more importantly how retailers can actually take advantage and adapt.

One of the most fundamental models from consumer behaviour theory relates to the consumer
decision making process – it also provides a framework to look closer at this 'disruption'.

New technology is raising the awareness of what is now available; traditional advertising has
evolved to become more personal and personalised – Facebook advertising, for example, can
target individuals based on what they've said they like and is almost creating the need before
it has been recognised.

With the ability for research to be undertaken in real time from any location, information search
has been disrupted to such an extent it's now not enough for retailers to have a presence on
the major review websites that customers visit.

Retailers must listen out for customers looking for information, and then give it to them – almost
before they have had the chance to look for it themselves. The process has become much
quicker and more pro-active.

The simple comparison engine that has become ubiquitous throughout online retail sites has
made the evaluation of alternatives more cutthroat. Customers are empowered to evaluate a
retailer's product against their competitors using any feature or metric they want.

Even in the purchase phase, the channels through which your product can be bought have
evolved. We've almost moved past online purchasing into mobile optimised websites and
smartphone apps – and with Facebook credits social media could prove another fertile
battleground.

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Post purchase evaluation through comments on forums, social media and review sites now
need monitoring; positive feedback can generate immense goodwill but equally negative
feedback can spiral into a full blown PR crisis.

The individual platforms are constantly evolving. Consider social media — in the past three
years we have witnessed the emergence of group buying with Groupon, location based
targeting through platforms such as Foursquare and Facebook Deals (now evolved
into Facebook Offers) and the newest kid on the block in Pinterest — now responsible for
driving more sales to retail websites in the United States than Facebook.

All this makes the retail marketer's job harder than ever. A deeper understanding of the
customer, their online habits and their purchasing habits has become essential. No retailer
can ignore the fact their customers live in an integrated online/offline world and they need to
make sure they have an appropriate presence on the channels where their customers are.

Moreover, retailers need to make sure they are constantly learning. It's impossible to predict
how and when new platforms and technologies will become mainstream. Retailers must
instead always be on the ball and ready to react and adapt when the technological landscape
changes, be that through mobile, social or web.

But retailers should also be reassured that new technologies present enormous opportunities
to foster deeper and more loyal relationships with new and existing customers. By embracing
these tools, retailers will be able to turn customers into product and brand advocates much
sooner and hopefully reap the rewards from their investment in new media channels.

Given these challenges, it can be safely concluded that it is a difficult time to be a retailer. On
the one hand increasing consumer demands are driving significant strategic decisions around
new channels, new business models, new operations and new communication, on the other,
the bottom line is not exactly glowing with the necessary good news to fund these new
directions.

However, all is not lost. The trick is in servicing consumers economically. As in all walks of
life, the chances of making good economic decisions is directly proportional to the quantity
and quality of 'intelligence' or data insights about the factors involved that are available to the
decision maker.

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QUESTION 1

Identify the stages in the ‘consumer buying process’ model and discuss using
materials from the case study how some of the stages of the model is changing in the
retail sector with the emergence of technologies?
[Max 900 words] [25 Marks]

QUESTION 2

Critically analyse the concept of the STP process model and its relevance in the
way the retail sector has to henceforth segment customers/ stakeholders?

[Max 900words] [25 Marks]

QUESTION 3

Briefly explain the key characteristics of service. Using examples from the case
study, explain how the retailers of today are moving out from selling commodities but
engaging more and more the consumers in the transaction and service co-creation?

[Max 900 words] [25 marks]

QUESTION 4

Critically analyse the concept of Big Data and its relevance in the way companies are
doing Marketing Research today

[Max 900 words] [25 Marks]

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