Argos Strategy

Topics: Marketing, Research, Scientific method Pages: 11 (2909 words) Published: March 3, 2011
1.Literature review

Developing with your customers may be an effect way to eliminate your competitors, because it is difficult to imitate (Buttle, 1996). In this case, you should understand what you can do for customers. Firstly, it is crucial to identify the customers who are going to be provided services and are cared for, if satisfying the needs of customers has been seen as a precondition before considering any marketing (Egan, 2001). Stone & Young (1992) pointed out that target groups of customers should be chosen in terms of some criteria: 1) the customers are known to have the need for the general kind of services that organisation supplies; 2) there are enough customers who must be willing to pay for the services; 3) the customers have a particular need to which the supplier can offer better than others. The target groups lead the organisations to make plans and strategies to achieve effective and efficient influences on customers‘ satisfaction and competitive advantages.

Customer Satisfaction
Since 1980s, customer satisfaction has been considered as a remarkable topic in the field of marketing literatures (Rajshekhar, et al., 2006). Customer satisfaction is also a key feature of RM. According to Oliver‘s study (1997), customer satisfaction is very relevant to the customer‘s evaluation of product/service features. Furthermore, satisfaction is visibly seen as an affective response and opinion to the consumption experience 28 (Zeithaml & Bitner, 2003). Therefore, the outcome of customer satisfaction tends to be intertwined with customer loyalty, repeatable purchase intentions and retainable relationship (Berry & Parasuraman, 1991). Satisfied customers not only would become loyal customers but also would be active to spread positive word-of-mouth communications, which in turn would bring the company new customers (Ndubisi & Chan, 2005). In addition, satisfied customers tend to be forgiving and less easily to be influenced by competitive offerings (Lovelock et al., 1998). Customer satisfaction in RM requires companies to pursue to provide excellent service. According to Storbacka, Strandvik & Gronroos (1994), there is a close link between service quality and customer satisfaction, resulting in relationship strength. Moreover, to achieve customer satisfaction, the firms should often listen to their customers to understand their need and meet their expectations.

Background of Argos
Argos was founded in 1973 and is now the UK's leading general merchandise retailer and the UK's leading catalogue store chain with sales of over £3 billion (about 5 billion Euro) in the period between April 2002 and March 2003. Last year its sales grew by 12% and its profit by 17%. It is a non-specialized store, selling a large number of households goods such as furniture, sound & vision, household appliances, home wares, photography, baby products, DIY, garden & pets, sports & leisure, toys & games, office, PC & games, personal care, jewellery & watches. Argos has a very strong position in some of these markets. It is in fact the first UK retailer for toys and small electrical appliances and a leading store in many other markets including DIY (Do It Yourself) and gardening, consumer electronics and furniture. It also has a significant market share in jewellery and sports equipment. This company is based on a simple idea: combine the comfort and the convenience of home selection via the catalogue with the closeness of high street stores. For advertising, it uses a mixture of different channels such as television, radio, news-papers, magazines and posters, depending on which is the most effective and efficient from time to time. This method of buying goods seems to be very appreciated by the English people. In fact during 2002, Argos received over 2.6 million telephone orders, not including the orders that were placed via the website. Consequently the home delivery service has grown during last years, so much that the delivery of...
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