E-COMMERCE PROBLEM IN ASDA FROM OPERATIONAL

AND MARKETING PERSPECTIVE

Table of Contents
Introduction......................................................................................................................................3
Operational and Marketing Problem...............................................................................................4
Relationship between operation and marketing issue......................................................................5
Customers of ASDA........................................................................................................................6
Customers Expectations..................................................................................................................7
Strategies to meet expectation of Customers...................................................................................8
Customers Desires and ASDA services Discrepancies....................................................................9
Effects of Discrepancies on ASDA................................................................................................10
Recommendations..........................................................................................................................11
Conclusion.....................................................................................................................................12
References......................................................................................................................................13

Introduction
ASDA is the UKs second largest supermarket; the company was founded in 1949 under the
name of Associated Dairies and Farm Group. However, the name was shortened to ASDA in
1965. This supermarket is mainly focused on food, clothing, electronic, toys, and general
merchandise. Moreover, ASDA is the largest supermarket chain in the world, and it has become a
subsidiary of Walmart in 1999. Walmart currently employs over 2 million colleagues in 27
countries. In The UK, there are over 175,000 colleagues working across its many aspects in
ASDA, which have become one of the largest employers. These were divided into several of
roles in supermarkets, home offices and ASDA living. Recently, ASDA continues to expand their
operations in the UK, and also increased their local number of supermarkets from achieving the
number of stores from NETTO (ASDA Ltd., 2015).
ASDA Company operates as one of the biggest food retailers in the United Kingdom. There are
more than 350 stores operating all over the UK with over 160.000 colleagues in this large
community, around 42000 square feet have been built as food retailers. And also this companys
stores sell a wide variety of products which including food, apparel, housewares, music videos
and books. However, in 1999, this company was acquired by Wal-Mart Stores Inc. ASDA
occupied 16.4 percent of UK grocery market share which lower than that TESCO achieved with
31.1 percent (Corporatewatch.org, 2015). This report will focus on the e-commerce issues and its
impact on marketing and operating aspects and also current market and customers expectations
will be explored, which will establish a gap between customers expectations and customers
perception. At the same time, this report will analyze what remedial measure organization have

provided to narrow the gap between the customers expectations and customers perception. At
least, a conclusion and some recommendations will be made at the end.
Operational and Marketing Problem
The retail industry in the UK has grown to a great extent, and the biggest opportunity for ASDA
is to focus on their online retail maintenance. The ASDA has maintained its online grocery store
too like another retail store in The UK, ensured operational efficiencies and is also focusing on
the performance of the website. The major problem faced by ASDA is that less amount of the
customers purchases through their online stores. According to Burt and Sparks, (2001) tough
there has been seen enormous progress in the field of e-tailing yet there is a need to be done
more in this regard because still customers are not much comfortable in e-tailing. The online
customers are less loyal than the traditional customers which are creating a problem for ASDA in
its operations.
Tough there are a lot of online grocery stores have been introduced by the retailers but still
customers do not feel comfortable in purchasing the products online. The major reason behind
these are the security problem, shopping habits, difficulties faced in the payment process, less
control in selection of product and delivery charges, etc. are the problem which are faced by the
customers while doing online shopping through ASDA website. According to Kirby, (2000)
despite e-tailing being very popular among the citizen and shift of retail stores towards e-tailing
still they have to face problems because of customers attitude towards e-tailing. Still in many
countries customers do not have much inclination towards e-tailing or some technical problem
compel them to no shop online. The biggest operational problem is the effective management of
the online business and providing the customers with enough variety of choice that they start
changing their shopping habits and turn to the online business of the ASDA (Whysall, 2001).

Another issue faced by the ASDA is related to marketing. The issues concerns regarding the
education of customers regarding the online shopping. Effective advertisement and marketing of
their website and online products that people turn towards the online products of ASDA. Along
with the operations of the organization, marketing is also a very important thing on which ASDA
has to focus. If ASDA wants to earn maximum revenue through its online business, then it has to
focus on the effective marketing of its website. Marketing is the major thing that play a
significant role in the progress of the company (Whysall, 2001).
Relationship between operation and marketing issue
According to Lambin, Chumpitaz and Schuiling, (2007)marketing and operation management
are two separate departments of the organizations but still there are some issues that have a
relationship between both these departments and issue in one department creates problems in the
other departments. Maintenance of online retailing and marketing of products of ASDA are
closely related. Website development and presenting the products of ASDA is the operational
problem of the organizations but till the effective marketing of online products and website of
ASDA would not be done till then ASDA would not be able to generate effective revenues
(Whysall, 2001). However, development of effective marketing strategy of the website and
products depend on how much the good website has been developed and how much variety the
consumers are getting on the website of the ASDA. Burt and Sparks, (2002) states that for the
effective marketing it is important for the organization to make its operations effective and
efficient. If the website of the ASDA is not providing the customers with a variety of products
and the product mix is low on the website of ASDA then ASDA would not be able to generate
enough revenue from their website. So it is the responsibility of the IT department of ASDA to

develop an affective website and introduce a much variety of their websites as they could
(Gummesson, 1994).
On the other effectiveness of marketing strategies also depend on the variety of products
introduced by the ASDA. If customers do not have enough variety and choice on the website of
ASDA then no matter how much money ASDA spend on developing marketing strategy to
persuade the people to buy their products they would not buy. So effectiveness of the marketing
strategies also depend on the operations of the organizations if the organization is lacking in the
operational sector then no matter how much money they spend on marketing of their products
they would not be able to generate enough revenue and increase their customers. Lambin, (2008)
opines that if any organization wishes for its marketing strategies to yield good results then its
operations must be in synchronization with its marketing strategies otherwise all the efforts on
marketing would be vain. ASDA can increase their online customer base creating effective,
interesting website where customers could enjoy the liberty of choosing their favorite products.
In this era of internationalization and e-commerce, every organization is offering their products
online (Kerin and Peterson, 2010) if ASDA would not provide a variety of products to their
customers on their online stores then they would move to any other online store. This would also
affect the marketing of ASDA, despite spending large amount of marketing of their products and
online stores they would not be able to attract more customers.
Customers of ASDA
Customers of ASDA come from different walks of life. At ASDA customers belong from every
age group. ASDA being a retail store offers a variety of products on its outlets and franchise that
are purchased by not only young people but from old people. Its customers include students,
housewives, businessmen, professionals, lawyers and doctors, etc. The same customer base is

targeted on ASDA website and to facilitate the customers more and save their time ASDA offers
a variety of products to their customers on their websites too. The performance of the traditional
and online retail stores of ASDA depend on the marketing and operations of the ASDA that how
effectively their market their online products and how much variety of products is available on
their websites for their customers (Doherty and Nelson, 2010).
The success of every retail is dependent on their customer base and the marketing strategy how
effectively they target their customers. To know about the needs and expectations of their
customers ASDA has developed and effective feedback system, where their customers can write
their feedback and give suggestions to ASDA. ASDA aims at offering quality products at low
price that is why it is becoming very popular among the customers as compared to other retail
stores and another major reason is their effective feedback system through which they involve
their customers in their business and keep updating their products according to needs of their
customers. ASDA keeps on meeting the expectations of its customers and same it is trying to do
for its online retail store to provide the customers maximum products at minimum prices (Xie
and Allen, 2013).
Customers Expectations
The major expectation of the ASDA customers is low-price high-quality products. ASDA is
already providing their customers high-quality products at low price. The customers who are
loyal to ASDA want more variety at their stores and online retail store as well. ASDA always
strives hard to provide their customers with the maximum variety they of products. Customers
are having a great variety of good retail stores but those who are loyal to ASDA want ASDA to
offer them all those products that they could get from any other retail store at low prices.
Provision of high-quality products at low price is one of the competitive advantages of ASDA,

which keeps its loyal customers stick to it (Graves, 2014). Another greater demand and
expectation of ASDA customers are reduction or removal of delivery charges if they shop from
their online retail store. A major reason for less online shopping from the ASDA stores is that
customers have to pay extra delivery charges after they purchase products online. Sometimes
while shopping online customers have to face problems in payment processing. They have to
face a problem is paying so ASDA has to fix the problem of payment on its website so that their
customers could easily pay for the products that they purchase. Moreover, another major problem
is product variety that is less on online retail stores of ASDA (Hutcheson and Moutinho, 2010).
Strategies to meet expectation of Customers
According to Hutcheson and Moutinho, (2010) for every retail store meeting the expectations of
customers is very important if the expectations of the customers are not met effectively then, the
retailing store cannot make progress. ASDA always tries hard to meet expectations of theirs
customers. The customers of ASDA want high-quality products at the low level of prices which
ASDA is providing them. The customers of ASDA sometimes found to complain about the
improvement of the customer services of ASDA. ASDA has strategy training programs of their
sales officer to improve their customer services along with that they introduced the feedback
portal on their website too where the customers can complain about their products and tell them
about their shopping experience (Macaulay and Cook, 2001).
Customers are always kept as a priority by every retailing organization to maintain their position
in the market that is why every organization creates an effective feedback mechanism to know
about the demands of their customers. ASDA always encourages their customers to provide them
suggestions that could help them to improve their services. In case of the online shopping, the
ASDA is trying to increase its products mix and variety on their website so that customers have

enough variety to choose their favorite products. ASDA is tried hard to make their payment
system more efficient and user friendly so that no customer would face any problem while online
payment process and also they have introduced complaint portal on their website if any customer
face any kind of problem regarding payment of delivery procedure they can contact their
customer services department that remain online 24/7 for the customers help (Doherty and
Nelson, 2010).
ASDA has also reduced its product delivery charges to facilitate their customers so that their
online customer base could increase to much they have a traditional customer base. ASDA also
provides their customers variety of the financial services like general insurance, personal loans,
credit cards and life insurances. The basic purpose of financial services of ASDA is to take the
hassle out of the lives of their customers. ASDA also provides different discount and promotional
offers for their customers on any special occasion so that they could increase their customer base.
ASDA is providing online shopping coupon to their regular online shopping customers so that
they could get a discount if they keep shopping through the online store of ASDA. This strategy
is increasing the greater online customer base of ASDA (Kirby, 2000).
Customers Desires and ASDA services Discrepancies
According to Graves, (2014) customer services is a priority of every organization, but sometimes
there are discrepancies that are found in customer services of every organization. ASDA also has
some discrepancies in its tradition store and online store customer services. It has been observed
most of the time ASDA customers has been found complaining about the rude customer services
behavior (Matusitz and Leanza, 2011). According to some of the customers of ASDA their
queries are not effectively answered by the ASDA customer services department. There are some
other discrepancies like ASDA offers their customers money back guarantee or they provide

them facility to exchange their product for any other product if they are not satisfied with their
product but when the customers desire to return to exchange their products they are not able to
get alternatives (Matusitz and Leanza, 2011).
In case of traditional stores of ASDA, it has been seen that people mostly complain about the
lack of staff and hassle in the stores. Owing to lack of staff in ASDA stores so much time of the
customers is wasted in waiting in long queues to purchase something. ASDA needs to recruit
new counter staff, so less time for the customers is wasted. Another most important discrepancy
is a lack of variety of their online store and no synchronization between the stock and stuff on the
online store (Smith et al., 2004). According to customers, some products on ASDA online store
are written to be in stock but when they try to order, then they come to know that these are not
present in stock. Another major problem is with their delivery system when customers order any
product online then they are not able to get it in time. Some of the time it happens that they offer
some other product and what they get is totally some other product.
Another major discrepancy that has been reported by the customers regarding the online services
of ASDA is that they do not have an effective payment system. Even if the payment in the
account of the customer is enough to make a purchase still, they are not able to process on ASDA
online store and would not be able to get their product on time. One of the major discrepancy
reported by the customers regarding the ASDA home delivery service is that most of the time
customers get damaged product and they are not even able to get its replacement and are forced
by ASDA to keep the and pay for damaged stuff (Set-Pamies, 2012).

Effects of Discrepancies on ASDA

According to Smith et al., (2004) efficient and excellent customer services is considered as key
to the success of every retailing organization. According to research study, there have been many
discrepancies in the customer services of ASDA not only in the traditional stores but also on their
online stores and delivered system. The main reason behind the lack of customer attraction
towards the online stores of the ASDA is the problems faced by the customers while shopping
online that is why fewer customers are attracted towards the online stores of ASDA. Problems
and discrepancies in customer services of ASA can severely damage the reputation of the
organization and would also decrease in the large amount of customer base. The customers are
the only key to the progress and revenue generation for any retail organization according to SetPamies, (2012) opinion. If ASDA is not able to provide effective customer services and its
customer base kept reducing then, its profit ratio will also fall.
Recommendations
Below are some recommendations for ASDA to improve its customer services and e-commerce
issues.
The greatest complaint about ASDA by its customers is bad customer services. ASDA must
provide its staff training to deal with customers and improve their customer services.
Lack of staff is another problem found in the ASDA stores. ASDA must recruit new staff to
facilitate their customers so that they could save more time while purchasing any product.
ASDA offers money back and product exchange guarantee to their customers but still customers
are deprived of this facility. ASDA management must ensure that if they offer money back and
product exchange facility then customers must get it.

Online stores are ASDA do not have product variety. ASDA must increase the variety of products
in its stores.
Moreover, there is no synchronization between stock and the products listed on the website.
ASDA must create effective synchronization between stock and products on the website if it is
written on the website that the product is in store then they must get it.
ASDA must give their customers compensation or replace the product if the product gets
damaged during the delivery.
The payment system of ASDA must also be made efficient so that customers do not have to face
payment processing problems.
Conclusion
ASDA is considered as one of the best retail stores in the UK but like many other retail stores it
also has discrepancies that have very drastic effect on not only customer base and revenues of
ASDA but they are affecting its reputation too. ASDA is also having many discrepancies in its ecommerce that is why it is not able to attract more customers to its website and create enough
customer base for its e-tailing services. The report was based on the identification of problems in
e-commerce of ASDA from both operational and marketing perspective. Operations and
marketing of every organization are directly proportional to each other. If there is a problem in
operations of the organization, then it effects the marketing of organization too. The impact of
discrepancies on the customers and organization too was evaluated, and some recommendations
were also given to improve the discrepancies found in the operations and marketing of ecommerce business of ASDA. In the nut shell if the ASDA wants to increase its customers base
for its online business and traditional business then it must improve its operations of customer

services so that effective results could be yielded and if ASAD fails to do so then its marketing
strategies would also be badly affected and would not be able deliver good results no matter how
efficient they are.

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