FINAL REPORT
SUBMITTED TO: Ms Yasmin Zafar GROUP MEMBERS: Mohammad Rohail Khan Sajjad Ali Ossama Habibi
December 6, 2015
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ACKNOWLEDGEMENT
It is important to acknowledge the participation of several individuals, who provided us with the necessary skills, interests and information to create this report. First and foremost, our sincerest gratitude goes to our teacher Ms Yasmin Zafar, whose teaching and dedication have been of tremendous help to us. It would have been impossible for us to complete this report without her kindness to answer every question asked by us, irrespective of time and place. Furthermore, we would like to thank Mr. Arsalan Hanif, Business Development Executive, Daraz.pk. He provided us with all necessary information as and when required by us. He answered every question in complete detail and did not leave any point of confusion unclear. It is also the effort of every member of the group who worked hard and cooperated with each other. Without this commitment and cooperation, it would have been a difficult task to accomplish this report.
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Contents ...................................................................................................................................................................... 1 ...................................................................................................................................................................... 1 INTRODUCTION ............................................................................................................................................. 5 Mission .......................................................................................................................................................... 5 Core Business ................................................................................................................................................ 5 Business Category ......................................................................................................................................... 6 Overall Strategy............................................................................................................................................. 6 Goals & Objectives ........................................................................................................................................ 6 MARKETING MIX STARTEGY .......................................................................................................................... 7 Product ...................................................................................................................................................... 7 Price .......................................................................................................................................................... 7 Place .......................................................................................................................................................... 7 Promotion ................................................................................................................................................. 7 DIRECT MARKETING STRATEGY: TOOLS & OBJECTIVES ............................................................................... 8 SURVEY FINDINGS ......................................................................................................................................... 9 DATABASE MANAGEMENT SYSTEMS .......................................................................................................... 10 CUSTOMER RELATIONSHIP MANAGEMENT (CRM) .................................................................................... 11
Customer Acquisition ...................................................................................................................... 11
Customer engagement ................................................................................................................... 13
Satisfaction & Feedback .................................................................................................................. 14
Customer Retention ........................................................................................................................ 15
Customer Loyalty ............................................................................................................................ 16
GAPS IN POSITIONING/TARGETING/EFFECTIVE MARKETING ..................................................................... 16 Lack of credibility .................................................................................................................................... 16 On ground presence ............................................................................................................................... 17 Product Quality Assurance ...................................................................................................................... 17 ACTION PLAN SPECIFIC TO DIGITAL INNOVATIVE TECHNIQUES/TOOLS..................................................... 18 Research .................................................................................................................................................. 18 Analysis of alternatives ........................................................................................................................... 18 Selection of medium ............................................................................................................................... 19
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Plan Execution ......................................................................................................................................... 19 Evaluation ............................................................................................................................................... 19 REFERENCES ................................................................................................................................................ 20
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INTRODUCTION Daraz.pk is one of Asia’s leading online shopping platform formed in 2012. Daraz offers a shopping experience that is unparalleled in Bangladesh, Myanmar and Pakistan, providing the most stylish, trendy and reliable shopping platform that is affordable with an unmatched level of convenience. Daraz.pk strives to offer the most stylish, personalized and secure online shopping experience. Daraz.pk showcases products from a wide scope of brands: from established foreign names to local retail entities. Payment is simply cash on delivery by our rider; a wider range of options are also available during checkout. Delivery is door-to-door and handled by trusted logistics partners. Profile: SEC Age Group Number of Users Demographics Area Served
A+, A, B 17 – 45 years old ~ 35 million Mostly working class male Karachi, Islamabad, Lahore are main centers
Mission “To Become the World’s Largest Internet platform outside USA and China.”
Core Business Daraz.pk is a subsidiary of Rocket Internet and it deals in providing its customers with the products of different categories through online purchases. In a nutshell, Daraz.pk offers everything from cloth to mobile phones. It has a well-established network of local and international suppliers that assist the company in getting goods at best possible cost. Daraz.pk relies a lot on direct marketing of the online venture, as it is not manufacturing any good but acting only as an intermediary and for that it has to build a trust with the consumers, who are the final destination. Efficient logistics along with a strong focus on customer relationship
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management, it has managed to reap great benefits from developing market of online customers.
Business Category Daraz.pk falls in the category of E-Commerce. Technological development has gained pace in recent decades that have brought about a good prospect for companies like Daraz.pk, which is an important E-commerce player. E-commerce category has also recently gained prominence in Pakistan. Daraz.pk has positioned itself as a brand that provides its customers with the best online shopping experience that entails friendly user interface, availability of renowned local and international brands and outstanding customer service. Its competitive advantage is based on its customer oriented solutions such as return policy, free shipping, cash on delivery etc. It is one of the topmost brands that come to customers mind when they opt for online shopping because of its innovative customer engagement activities. It’s a venture of Rocket Internet which makes it a more reliable option in comparison to local competitors due to brand association.
Overall Strategy The company’s strategy is to tap the online market by creating awareness about the ease of shopping experience using this platform. It provides 24/7 services using different engagement tools. Daraz.pk focuses on providing customized shopping experience to its customer on the basis of online user interface options. It also focuses on developing a secure online shopping environment through engagement thereby developing interest of the audience towards this mode of shopping. It has an active IT team and a strong network of suppliers to fulfill customer needs on time.
Goals & Objectives Daraz.pk has been engaged in the in this industry for the past 3 years and has established itself as one of the leaders of this particular industry with recently launching the Black Friday Campaign that garnered even more attention. In essence its objective as quoted by Mr. Arsalan is “to establish itself as the go to shopping solution for nearly every good”. This indeed is an
immense goal in itself and requires the use of a combination of marketing strategies and since it is entirely online based, the Direct Marketing Tools have been thoroughly used. Daraz.pk | Business Category
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MARKETING MIX STARTEGY Product Daraz.pk has engaged itself a wide array of products that range from jewelry to sports equipment. There are a lot of other successful ventures out there which have focused solely on a particular category of products like cuisine in case of foodpanda.pk, however, Daraz.pk has basically diversified its risk. Furthermore when talking about the Product mix, it is not just what it offers on its websites but also how it does as well. The discounts and easy purchase options has enabled the customers to do more.
Price This is another component where Daraz.pk has managed to gain a completive advantage over its competitors. The company essentially operates on a virtual platform thus eliminating the fixed costs associated with physical stores and therefore passing on those savings to consumers in terms of deals and discounts. Furthermore through the means of various offers which shall be discussed later. But the most influential measure in this regard has been the Black Friday Campaign that has offered products with discounts up to 70%.
Place The E-Commerce is one of the rising trends in the world due to the fact that it enables the consumers to purchase their needs and wants without having to go mobile and utilizing that time to their priorities. Daraz.pk is based on this model precisely and this feasibility has allowed it to grow so quickly, this is also due to the fact that consumers have become more aware and due to the propagation of the internet.
Promotion The whole marketing strategy of Daraz.pk is primarily based on Direct Marketing measures which shall be discussed later in detail. However the following strategies are use which were discussed earlier.
Relationship Marketing
Online Marketing
Drip Marketing
Database Marketing
Search Marketing
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DIRECT MARKETING STRATEGY: TOOLS & OBJECTIVES
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SURVEY FINDINGS The survey results are based on 18 of the 39 responses received over a period of 4 days, the file is attached on the LMS since the table cannot be copied here.
The following are some of the inference through graph that can be made that define how the consumers generally perceive Daraz.pk. In the pie chart it clearly shows that Daraz.pk has an upper hand over the rest of the field when choosing which online shopping site to go for. The second graph tells the instance of how many consumers have actually bought an item from Daraz.pk ever and it again turns out to be a good 70% who have once purchased from Daraz.pk, showing its popularity among the masses. The most abundant reply regarding the touch points of Daraz.pk was indeed the “Social Media” which constituted to almost all of the answers e xcept for one. In terms of what the consumer look for when purchasing goods online, we conclude that Customer Service, Return Policy and Different Payment Options are the most popular choices and termed as necessary by a majority of consumers. Lastly the age group was mainly 20 -22 years old
Which brand would you prefer?
Daraz.pk Homeshopping.pk Kaymu.pk
Count of Have you ever purchased an item from Daraz.pk?
Shophive.com 14 12 10 8 6 4 2 0
No
Yes
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DATABASE MANAGEMENT SYSTEMS Daraz.pk incorporates OMS (Order Management System) for database management. This system enables the company to monitor the entire logistics of the order placed by the customers, control and manage inventory levels, monitor customer behavior and direct the shipment process. Current details and status of the order are tracked. For instance; the order is at the stage of ready to ship. Customer accounts are maintained by the system and transactions in various accounts are recorded and maintained. On the basis of analysis of past records in the database, offers are made to the customers. For instance, if a customer has ordered Smart phones on various occasions so incase a new brand of a smart phone has arrived in the market, the information regarding that smart phone will be communicated to that customer via EMAIL. This helps in aligning the day to day functions as per customer requirements. A financial control mechanism is also established due to a well integrated system.
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At Daraz.pk, the integrations of OMS (Order Management System) and the interaction between them are explained with the following step by step procedure:
Online Store: Customer access Daraz.pk
Shopping cart: Daraz.pk is notified when customer places orders in the shopping cart
Inventory: The inventory system is being automatically updated in the system
Payment: The account system is also updated when customer make payments and settle accounts
Shipping: Labels are generated and order is dispatched to fulfillment centre
CUSTOMER RELATIONSHIP MANAGEMENT (CRM) Customer Relationship Management is about managing company’s interactions with customers, clients & sales prospects. CRM at Daraz.pk revolves around the principle of database marketing, since there are personal interactions face to face, virtual network is the only available method which needs to be handled carefully. Since Daraz.pk is an intermediary organization, therefore customer relationship management is an important tool for increasing customer base and overall profitability of the venture. The CRM process incorporated at Daraz.pk is explained ahead:
Customer Acquisition
At the customer acquisition stage, the main aim of Daraz.pk is to increase awareness and gain attention of the consumers through innovative content. Some of the examples highlighting this fact are as follows: Field Representatives Program:
According to Mr. Arsalan, there is a program under consideration that representatives of Daraz.pk will be divided into teams of 5 and will be visiting in various busy market places like Sadder and engage themselves in conversation with customers in order to make them aware about various brands of Daraz and that they can get all the things they want to buy with mere few clicks. This is more personal selling, but at B2B level where the potential of clients are
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exponentially greater and since Daraz.pk is an intermediary, its priority is indeed first securing all the potential major brands.
Black Friday:
The most apt example here is this which is one of a kind sales campaign seen only in the Western countries that offer discounts beyond the regular discounts. This has managed to increase not only Daraz.pk’s popularity but other brands as well.
Banner Ads Pop up advertisements, banner advertisements and social media advertising especially on facebook are key advertisement mediums used by Daraz.pk. They are used to increase awareness among the audience and directly target the main customer segment of youth. Any new product which in the market is instantly advertised on the Facebook page which reaches nearly 2 million potential customers.
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Daraz.pk Blogs (Inbound Marketing): Daraz.pk uses blogging tool (https://blog.daraz.pk/) to increase its customer base through interaction and content marketing. Valuable content that is entertaining, educational, and inspirational is used to develop interest of the audience and provide an easily accessible platform for communication. Frequent blogging helps increasing the visibility which causes customers to read the blog and become a valuable prospect.
Customer engagement
Share and Win Campaigns: This is the most common tactic used by any other brand, However since Daraz.pk is not only limited to just one kind of products, they usually offer a range of them. An example here shows how effectively they market not only their brand but others as well.
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The amount of likes is an instant feedback meter which tells approximately of how well response does a particular promotion has received, this signals, them to enable to develop a trend to what kind of discounts, products and even timings do potential consumers like to see the posts. Impediments also include the time at which the posts appear.
Satisfaction & Feedback
Satisfaction and feedback is an important component in the CRM Process. The customer service team at Daraz.pk is vigilant enough to reply to any comments made by a customer on its facebook page. SMS is used to update customers regarding the status of their orders. It is imperative for the Daraz representative to respond within 12 hours of any complain at hand. Detailed information regarding shipment and delivery of order is processed through Email as well.
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Customer Retention
Discount voucher on damaged goods: If damaged item is delivered to a customer, then he is provided with an apology letter and in that letter there is a code that can be entered when making the next purchase in order to get a discount. The code is actually a discounted voucher.
Debit/Credit Cards: Master and Visa cards customers also enjoy lucrative discounts 5% to 10% upon exceeding an order amount of Rs. 10000. In any part of the year, 15 minutes are allocated where up to 25% discount is given to the customers. UBL Omni:
UBL Omni customers are given priority. Interesting offers are given on various festivals and events e.g EID and Black Friday. Easy Paisa: Discounts are given on easy paisa account with recently Black Friday offer an additional 25% off flat on any purchase made through Easypaisa.
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Customer Loyalty
Daraz.pk is a young 3 year old venture but growing rapidly and as such it does not have such
strong loyal customer, since gauging a Customer Lifetime Value also requires enough amount of time to properly assess the potential and benefits form a customer. Customer Service of Daraz.pk is a very important force that keeps the customers intact with Daraz.pk. Representative can be accessed on various platforms and customers can make various inquiries about their order and they are dealt with proficiency.
GAPS IN POSITIONING/TARGETING/EFFECTIVE MARKETING As per the research, we have identified the following gaps in the marketing strategy of Daraz.pk
Lack of credibility
One of the main challenges that are being faced by Daraz.pk is developing credibility and authenticity among people on the use of online platform for shopping.
Pakistan is a price sensitive market so the customers are not inclined towards risk taking behavior. It is difficult to convince customers to try the online platform when online fraud chances are high in the country due to lack of education and lack of regulations in this sector. A Daraz.pk |
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proper campaign must be initiated directed towards informing and educating customers towards the advantages of online shopping and how to tackle credibility issues by highlighting the safety measures taken by the company for its customers.
On ground presence
Although Daraz.pk is an online store, it must still have strong ground presence to direct customers towards online form of shopping. It’s a relatively new brand in the market so in order to penetrate efficiently and quickly, it must apply on ground direct marketing tools such as brand activation, event sponsorships, TV advertisement etc in its early years. This will help in gaining customer attention through different mediums enhancing brand reach. Since, the main target audience of Daraz.pk is youth; therefore it can sponsor university events in which one session can be allocated for Daraz.pk. Brand information, shopping advantages, unique selling proposition etc can be highlighted in those sessions with engagement activities such as lucky draw. Customer feedback and testimonials can be presented to develop a good image about the brand in the minds of the customers.
Product Quality Assurance
Product Quality is a serious issue faced by Daraz.pk which is negatively affecting its brand image as per the interview with Business Development Executive of Daraz.pk, Mr Arsalan. When the products ordered by the customers are delivered to them, product quality issue is being reported. This is developing a wrong perception in the minds of the consumers regarding Daraz.pk which is based on brand values of quality, innovation and up to date trends. The supply chain network can establish a quality assurance centre with the key responsibility of Daraz.pk | GAPS IN POSITIONING/TARGETING/EFFECTIVE MARKETING
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monitoring the goods received from suppliers so that goods that reach the customers are of good quality.
ACTION PLAN SPECIFIC TO DIGITAL INNOVATIVE TECHNIQUES/TOOLS
Analysis of alternatives as per needs and requirements
Selection of medium based on targeting, frequency and message
Execution: Simple, accessible and understandable
Evaluation: Projections vs actual results
Consumer Research to gain insights
The action plan for Daraz.pk to devise a strategy for digital innovation techniques is as follows”
Research The brand must conduct thorough research to examine the behavioral patterns of customers. It is imperative for the decision makers to be aware of various aspects that consumers consider while deciding to purchase a product or deciding to choose a particular medium to purchase a given product of their choice. The subsequent strategies are based on this aspect therefore its importance and relevance is high. Surveys, in depth interviews, focus group discussions, online research etc must be conducted to gain valuable insights from consumer research.
Analysis of alternatives
On the basis of the above research and need of the situation at hand, various alternatives are evaluated. Content Marketing, marketing automation such as behavioral email marketing, Daraz.pk | ACTION PLAN SPECIFIC TO DIGITAL INNOVATIVE TECHNIQUES/TOOLS
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search engine optimization, paid search marketing etc are various alternatives that can be categorized in the latest trends of digital marketing. For instance, while analyzing the alternatives, if the focus is more towards generating personalized experience using database, then behavioral email marketing is a better alternative to choose from t he given options.
Selection of medium
The third step is the selection of digital marketing tool. The selection criteria is based on the targeting strategy, for instance, if the product is related to fashion then the medium selected must be easily accessible to the audience of this market segment. It is also dependant on the message and the reach the brand wish to achieve. If the message is about a new product, then mass medium is preferred to enhance awareness effectively. Content marketing is crucial in breaking the clutter and making people retain the message.
Plan Execution
The execution of the digital marketing technique must not be very complex. It’s fast growing tool so audience must be given the leverage to comprehend the process easily. The tools must also be accessible to multiply reach and the message must be conveyed in a way which is easily understandable by the target audience.
Evaluation
The last stage is the evaluation stage in which performance of the initiative is evaluated. The projections are based on the nature of the tool/technique, consumer demand, external factors etc. The projections are compared with the actual results to identify gaps and shortcomings that can be improved in future.
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REFERENCES Burnson, F. (2015) Improve E-Commerce Performance with Order Management Integrations Industry View. Retrieved from http://www.softwareadvice.com
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