Internet Marketing Strategy of Argos Essay

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Internet Marketing Strategy of Argos

The purpose of this essay is to examine the Internet marketing strategy of Argos. Argos is a home retail group and market leader in retail sales of home and general merchandise. Argos reports that it is a "unique multi-channel retailer recognized for choice, value, and convenience." (Argos Website, 2011)

Argos and the Online Market: Size and Growth

Argos customer base is approximately 130 million and reports state that 26% of Argos sales are via the internet channel with approximately 4 million customers placing orders by phone or online. The Argos website is touted as the website visited the most among high street retail websites in the United Kingdom in 2008. (Argos, Website, paraphrased) Argos is environmental conscious and caters to customers with disabilities. Argos was named the 'Online Toy Retailer of the Year 2009' by the British Toys & Hobbies Association (BTHA). (Argos Website, 2011) In addition Argos received 'The Oracle Retail Week Awards 2009', Hitwise Top 10 Online Performance Award 2008', 'Institute of Sales Promotion Award 2008', 'Precision Marketing Response Awards 2008', 'Hitwise Top Ten Website 2007', 'Retail Week Awards 2006', and 'Retail Week Awards 2004'. (Argos Website, 2011) It was reported in April 2011 that Argos online and mobile application-based sales in combination with customer TV orders, "hit nearly half of the company's total revenue, delivering £1.9 billion in the last year." (CIO, 2011) Argos was reported to be the second largest Internet retailer in the UK after Amazon and to have had "400 million website visits in the past year." (CIO, 2011)

II. Use of the Internet for Research, e-Service, and Purchasing

Argos appears to stay abreast of the latest needs for optimization of their website functionality. It is reported that the Argos Retail Group required a search-marketing agency that was able to understand the traditional Argos catalogue business in addition to the complex nature of the Argos business-to-business division. The specific issue was the need of Argos "to improve conversion rates from visits to leads, across its Rewards and Procurement businesses." (iVantage, 2011) Argos sought to understand who the website visitors were and who it was that was purchasing vouchers and those leaving and failing to make an enquiry as well as needing to more effectively track its campaigns. (iVantage, 2011, paraphrased)

Web analytics were used and specifically 'Urchin' from Google across the Argos website for improving management of information. It is reported that the results included problems of conversion with PfP as well a lack of crawling search engine traffic that assisted the team in setting out objectives that were clear and making decisions about the short- and medium-term focus. The solutions utilized by Argos are reported to have increased visits from 3,500 to 5,000 each month with a 10% improvement in web site leads. (iVantage, 2011)

III. Forecast of the Future Development of the Online Market Segmentation

John Burnett writes in the work entitled "Core Concepts of Marketing" published in 2008 makes the important observation that marketing is and will remain "the pivotal function in any business" as the determination and satisfaction of the customer's need "is the general purpose of any business. It is also a fundamental definition of marketing." (2008) Burnett notes the following which are held to light and reexamined in the present study in order to better understand the theoretical framework that marketing principles rest upon: (1) First, Burnett states that the overall directive for the organization is"…the mission statement or some equivalent statement of organizational goals. It reflects the inherent business~ philosophy of the organization." (2008) (2) Secondly, Burnett states that there are a "set of functional areas [in] every organization." (2008) He notes that within these functional areas are performed tasks that are critical for the organization and these must be effectively managed to realize optimum performance. (3) Next, Burnett notes that each of these functional areas are "…guided by a philosophy (derived from the mission statement or company goals) that governs its approach toward its ultimate set of tasks." (2008) (4) Fourth, Burnett notes that marketing differs from the other "functional areas in that its primary concern is with exchanges that take place in markets, outside the organization (called a transaction)." (2008) (5) Burnett concludes finally with the statement that marketing is at its very highest level of excellence when "the philosophy, tasks, and manner of implementing available technology are coordinated and complementary." (2008) There are reported as little doubt among marketing professionals that key to the success of the marketing relationship is quite simply 'communication' where the parties attitudes are often

"…skeptical, the nature of the contact is hardly intimate, and the message delivery system tends to be impersonal and imprecise. It's because of these factors that communication plays such an important role in a marketing organization. Marketers know that consumers are constantly picking up cues put out by the organization, or about the organization, that they use to form attitudes and beliefs about the organization. Many of these message-laden cues are controlled by the organization, including factors such as product design, product quality, price, packaging, outlet selection, advertising, and the availability of coupons." (Burnett, 2008)

It is important to understand according to Burnett that there are "message-laden cues" that are strongly imprinted in the customer's mind that the marketer is often unaware of however, marketers in the know realize that the sources most prominently delivering this information are: (1) employees; (2) competitors; and (3) the media. (Burnett, 2008) Included in this grouping is the media, including editors and reporters and advertising celebrities or representatives who communicate to and with the media. Added to this is the new media including the Internet in the form of "chat rooms, websites, and propaganda campaigns?" (Burnett, 2008) It is important to note that high value customers are identified through 'relationship marketing' which is stated to create a bond between the individual and the brand through personal attention or customization such as demonstrated in the case study reports on Argos and its interaction and communication strategy with its online customers.

IV. Analysis of Online Competitors and Argos Website Design and Usability

It is reported in a 2010 report that at that time online retailers only represented a small but growing share of the non-food, non-clothing market." (Charlton, 2010) Amazon is one of the biggest competitors of Argos. (Scribd, 2010) Argos is reported to beat its competition however, with its user-friendly web design. (Real Eyes, 2011)

V. Use of Social Media for Marketing Purposes

It is reported by MarketingWeek (2011), that Facebook Europe "has invited a select group of journalists to an event on Monday when it is likely to reveal when Deals will be available in the UK." (O'Reilly, 2011) Facebook is reported to have launched its Deals platform which provides brands a method of offering various types of deals including one-time discounts, free merchandise, loyalty deals rewarding regular customers, friends deals when two friends check in together and charity deals which allow businesses to donate to an organization when customers check in." (Baker, 2011) Argos is reported to be among the Facebook Deals launch partners. (Baker, 2011, paraphrased) Baker (2011) states that Argos plans to donate "1 to its national charity partner Teenage Cancer Trust for the first 10,000 customers that check in this week." (Baker, 2011)

VI. Integration of the Internet with the Overall Marketing Strategy of the Firm

Integration f the Internet with the overall marketing strategy at Argos has been approached through customization of Internet shopping for its customers. A case study is reported in the work entitled "Argos Boost Sales with Award-Winning User Generated Content" reports that Argos desired to "introduce a new product review section on their website and identified email as the key channel to help them achieve this goal." (eCircle, 2011) Customers of Argos making online purchases for home delivery or reserved online to pick up in the store are reported to have been sent "a branded email thanking them for their purchase and asking them if they wanted to review the products they recently purchased." (eCircle, 2011)

Response rates were maximized and each email sent approximately two weeks following purchase, which allowed the customers the necessary time to use the product and its use to still be fresh in the customer's mind. Rather than sending one email that was generic to each customer each generated email was unique to the individuals based upon the products purchased by the customer. Following the product review, the email was uploaded within 72 hours, which made it possibly for Argos to directly engage with customers through sue of "highly targeted, personalized content, providing communication on an individual level with the objective of boosting response rates, generating customer reviews for multiple products and driving sales of reviewed products." (eCircle, 2011)

Argos is reported to use "a mixture of different channels such as television, radio, newspapers, magazines, and posters, depending on which is the most effective and efficient from time to time. The method of buying goods seems to be very appreciated…[continue]

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