100Mkt Coursework 2
Ocado fails to adjust supply chain accordingly to demand
Submitted by: Padurean Adrian Octavian
Student ID: 4508405
Submitted to: Prof. Anna Wos
Date of submission: 11 January 2013
Word Count:3488(including references)
Table of Contents
Definition of the task 2
Terms of reference
1 Definition of the task
You are the business owner of one of the following business:
A retail store chain
A Mercedes dealership in Coventry
A distributor of milk and milk products
A local pub
Your task is to identify and discuss about a marketing problem which could be solved by making appropriate research. After deciding on which kind of research you should best use, you need to state how that would help you in the decision making process. According to you problem you should state which type of research would be most suitable and justify your answer. After deciding which of the methods is best to be used propose a sampling strategy and a data collection method for your proposed research.
This report will show how important forecasting the demand is, and how it can impact the perception of customers on a company. The subject of this report is Ocado, a British Internet retailer specializing in groceries.
It will cover the subject of marketing research and how it can go a long way if money and time are invested into the process, how the decision making process can be aided by marketing research and which type of research method would be most suitable for online businesses.
Even if the online grocery market is just 5% of the total grocery sales, I will try and create a way of showing how even in this untapped market, retaining customers is still more important than attracting new ones.
1 Company Information
Ocado is a United Kingdom based internet groceries retailer, with their headquarters in Hatfield, Hertfordshire. It was founded in April 2000 by Tim Steiner, Jason Gissing and Jonathan Faiman initially named L.M. Solutions (UK) Limited. In the same year they started cooperating with Waitrose, engaging into branding and sourcing operations with them. As part of Ocado’s commitment to the environment, customers can request ‘green van’ booking slots. Customers can take advantage of a scheduled delivery van already allocated for their area and reduce the number of deliveries the vans have to do.
Ocado’s website includes branded groceries from other suppliers as well as its own-label offering. The website also features a Newsagent aisle selling stamps and magazines.
Ocado’s online grocery range consists of 21,000 products. Across 2012, this number is expected to increase this to 30,000 while during 2011, Ocado doubled the number of its own-label range online to 620.
In June 2001 they changed their name to Ocado Limited, they occupied their first warehouse and started pilot deliveries in October, the same year. They moved to their customer fulfilment centre in Hatfield and by 2003 they centralized all warehousing operations to it.
Although their market share is relatively small, they have a market leading customer proposition.
2 Industry information
Since this is called the internet era, some of the business developed online have sky-rocketed. An example is the online grocery sector which, according to John Mercer(2012), has doubled in the 2007-2012 time period.
It is forecasted to grow an additional 79 % in the time period 2012 to 2017.
The online grocery sector size is defined as the online sales of food and drink for in-home consumption, including store-based grocers’ FMCG sales online, food and drink specialist retailers’ online sales, online-based...