MK5001 Sainsbury Group Report 555363 583227847 PDF

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Summary

This report is based on Sainsbury’s management and various stages of their IMC plan and data such as primary and secondary data, budgets, and meeting minutes. Sainsbury's deal with the business by giving quality services to their customers, so that they can be an incredible company in order to hold ...

Description

MK5001: Coursework Component 2 (Group Report) Front Sheet

Seminar Group: Group 4

Group Name: The 5 Stars

Student Numbers: U1631959 U1536967 U1511681 U1531404 U1618224 U1336003

Component

Comments

Weight

Actual Mark

Situation Analysis

10%

Evaluation of Primary and/or

15%

Secondary Data and Identification of Target Audience

Formulation of SMART Communication Objectives

10%

IMC Strategy for the Product/Service/Brand

30%

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IMC Budget

15%

Evaluation and Control of the IMC Plan

10%

Referencing, Presentation and Writing Quality

10%

Total 100% General Comments:

Agreed Mark:

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Table of contents

Executive summery……………………………………………………………………………………………………................................4 Introduction……………………………………………………………………………………………………………………...........................4 Situation analysis…………………………………………………………………………………………………………………………………..….4 -

Key market information……………………………………………………………………………………………………………....4

-

PESTLE analysis……………………………………………………………………………………………………………..……………..5

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SWOT analysis…………………………………………………………………………………………………………….……………….6

Mission statement…………………………………………………………………………………………………………………………………….8 Unique selling point……………………………………………………………………………………………………………….………………….8 Competitor analysis……………………………………………………………………………………………………………………………..……8 Positioning………………………………………………………………………………………………………………………………………………..8 Target audience………………………………………………………………………………………………………………………………………10 Communication objectives………………………………………………………………………………………………………………………11 IMC strategy……………………………………………………………………………………………………………………………………………12 -

IMC

campaign

(DRIP

module)…………………………………………………………………………………….

……………….12 -

Key IMC tools…………………………………………………………………………………………………………………..…………13

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Scheduling and Implementing of campaign strategies………………………………………………….…………….13

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Rational or Emotional based Approach…………………………………………………………………….………………..13

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Key stakeholders……………………………………………………………………………………………………………………..…14

Budgeting………………………………………………………………………………………………………………………………..………………14 Evaluation of control……………………………………………………………………………………………………………………………….16 Measure of Sales Response (Single Source systems)………………………………………………………………………………..17 Conclusion………………………………………………………………………………………………………………………………………………18 Bibliography…………………………………………………………………………………………………………………………………………….19

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Executive summary

This report is based on Sainsbury’s management and various stages of their IMC plan and data such as primary and secondary data, budgets, and meeting minutes. Sainsbury's deal with the business by giving quality services to their customers, so that they can be an incredible company in order to hold clients and long haul associations with providers and wholesalers. In such manner Sainsbury's appears to have prevailing as it’s last year's business figures have gone up by an extensive rate and it drives the market regarding deals, showing improvement over Tesco. The administration structure including corporate administration and the qualities, shortcomings, openings and dangers of the organization have been given indications on how Sainsbury's could utilize their business methodologies to be the biggest retailer within the UK and better than Tesco and different organizations for a bigger and more steady buyer base. The monetary report of Sainsbury's and the administration procedure all have been examined and further proposals are made for future reviews on showcasing methodologies of Sainsbury's and headings that the organization ought to take later on. A SWOT examination has been performed to demonstrate the qualities, shortcomings, openings and dangers of the organization. Considering the organization’s mission and targets, suggestions for better deals and to also concentrate on expanding benefits. Introduction This report will be based upon the marketing objectives of Sainsbury’s, and the IMC plan of the company we created for them. The issues discussed will focus on the positioning of the company, swot analysis, mission statement, budgeting of the company and the IMC strategy. As a group we have made great emphasis on creating the IMC plan and focused campaign for our chosen supermarket (Sainsbury’s). The SWOT analysis consist of strengths, weaknesses, opportunities and threats to evaluate the position of the company within its respectively market sector and to compare Sainsbury’s with their competitors. This will helped us to select and used the appropriate marketing tools and alternative strategies to produce a detailed market evaluation. Situation Analysis Key Market information & Data: Founded in 1869, one of the three largest major food retailing chains in the UK, currently has over 500 stores in the UK, consisting of supermarkets and convenient stores. Having built the Sainsbury’s brand on the basis of not only providing customers with healthy, fresh and tasty food but fair prices and a responsible approach to business, the company has a team of over 150,000 employees providing efficient service to over 19 million customers, weekly. With a market share of 16%, in 2014, Sainsbury saw itself taking 2nd place in the UKs food retailing sector followed by Tesco in 1st place with a share of 26%.

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The main company is split into 2 main divisions, Sainsbury's Supermarkets Ltd which consists of the various convenience stores and Sainsbury's Bank which runs in-store banks in the UK that offer financial services with things such as mortgages or personal loans. PESTLE analysis of Sainsbury’s Political: Globalisation today is increasing and for Sainsbury’s this has pros and cons which effect and influences both opportunities and challenges for the business. Challenges Sainsbury’s faced was ‘having to compete against unknown forces and to find the sources of the products with economical and quality values’ this means that prices raised and the quality of their products lost value due to international factors and influences. In 2015 ‘the corporation tax was set at 28% compared to a few years before that when it was at 30%’, this shows that taxes have dropped by 2% and Sainsbury’s have since gained more profit because of the low rate drop in corporation tax. Economical: Prices raising in the economy today have an effect on supermarkets like Sainsbury’s because it affects the supply chains causing prices of products to increase. Big cases like credit crunch have massive effects on a big supermarkets like Sainsbury’s because customers become more mindful when shopping and purchasing products because they want to buy products that are more essential rather than luxury products that they want. This results in Sainsbury’s having dramatic proficient loss within their company which could lead to employees losing their jobs. On the other hand economic factors that have a positive impact on Sainsbury’s is the high volume of unemployment. Unemployment allows Sainsbury’s to employ more people to work for them which leads to more stores being opened, more vacancies and more customers which equals more profit. Social: Today healthy eating is a massive topic encouraging people to live a healthier lifestyle which means eating healthier foods. This is a great opportunity for Sainsbury’s as this social trend increases, this is because Sainsbury’s will be able to keep up with customers’ demands by introducing healthy products, snacks and meals that have less calories in order to keep their customers satisfied and to also gain new ones. As Sainsbury’s have other supermarket competitors, they train their staff to deliver good customer service, including being friendly and helpful to increase sales. Sainsbury’s also keep up with society and give back by being a part of different charities and fund raising, this shows they are socially active. Technological: Sainsbury’s needs to keep up with new technology that is being developed and introduced frequently. Sainsbury’s is ensuring all their stores are being updated with new technology, for example in 2011 when self-service checkouts were introduced Sainsbury’s quickly adapted to the 5

new means and introduced self-checkouts in their stores. Other technological equipment that have been introduced that Sainsbury’s have adapted to is efficient scanners, computerised stock checking, online shopping and home deliveries. This shows that Sainsbury’s is keeping up with new trends and making improvements to their stores by having everything computerised which means less paper work and less staff mistakes as their systems will be designed to do the job automatically. Environmental: Sainsbury’s ‘aim to be the UK’s greenest grocer, not only by reducing their impact on the environment but by engaging their suppliers and others to do the same’. This shows that Sainsbury’s is taking environmental impacts serious and encouraging other company’s they are linked to, to participate in making greener choices. Sainsbury’s have an organic range which they have available and sell to their customers, by Sainsbury’s having these products available they attract customers and sell them at reasonable prices. Legal: Sainsbury’s needs to keep up to date with law polices in order to run their supermarket smoothly, they also need to follow regulations concerning consumer laws, employee laws and health and safety, etc. If Sainsbury’s fail to keep up to date with these laws, it could lead to many consequences such as being taken to court and being fined. SWOT Analysis Strengths Sainsbury’s is one of the four biggest chains in the supermarket industry and has over 150,000 employees working in their supermarkets, also Sainsbury’s leadership team is trained to be experienced in every aspect, so their customers get the best customers service when they come and shop at one of their stores. Sainsbury’s has over 550 supermarkets and it has over 350 convenience stores across the U.K which are opened every day. Not forgetting to mention, each store typically stocks around 30,000 lines of which around 20% are Sainsbury’s "own-label" goods. Sainsbury’s has a really excellent advertising and branding method that works for them and their brand. Sainsbury is well known for their strong brand name as they have a good reputation in the supermarket industry. Sainsbury’s mainly operate in the UK therefore they focus on competing with other branded stores such as Tesco, as they have stores in other countries. Whist this limits the market to which Sainsbury’s can appeal to it allows them to put all their focus on the UK market. Sainsbury’s have also been successful by persuading customers to shop at their stores rather than at their competitors stores. They have been successful in this with their brand scheme, whereby if products were cheaper at one of their competitor stores, Sainsbury’s would offer customers a discount coupon to get the same product at the same price, this intrigues customers to stay loyal and continue to shop with their brand. Weaknesses

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Sainsbury’s weaknesses is selling at higher prices compared to its competitors, this is due to the rising amount of food prices over the world which has an impact on Sainsbury’s and their prices. Sainsbury's weakness is that they do not have any extension plans, their market only based within the UK. In June 2008, Sainsbury's online shopping service was suspended for 2 days due to technical problems, this affected more than 10,000 online shoppers. Sainsbury are one of the establish supermarkets within the UK grocery market. The supermarket chain has started its operations ahead of their competitors, but they didn’t capitalise on the opportunities to increase and maintain their market share in the grocery market. Also, Sainsbury has problems with inventory management and supply chain management that affected its products in 2004. Sainsbury eventually scrap the inventory system after suffering loss in the same year.

Opportunities Product line extension can beneficial opportunity to Sainsbury as it allow them to expand their product portfolio by introducing new products on established product lines. This method can assist the company with growing their market share. Also, by launching a new product line, Sainsbury can use their strong brand presence to spread awareness and promote its new products. For example, Sainsbury did a collaboration with Vodafone to introduce a variety of mobile products and services. The “Mobile by Sainsbury” was created to “reward customer loyalty, offer great quality value-for-money mobile products, and Nectar points”. ("J Sainsbury’s Launches Mobile By Sainsbury’s") Licensing: Sainsbury should license their patency and product line. Essentially, to make it difficult for new competitors to enter the market. Licensing can restrict competitors (ASDA, Tesco and Morrison) from the grocery market from manufacturing, duplication and selling identical version of Sainsbury’s products.

Threats Competition from leading Retailers in the UK grocery market such as ASDA, Morrison and Tesco are changing their prices levels as food prices has increased due to grocery inflation. Grocery inflation has risen by 0.2% in the market, which could affect the market share of Sainsbury. The UK market has been recessions in the past. This would have an impact on their consumers as they would be more careful about their spending which would make a difference on their sales. This would lead to Sainsbury's having a reduced profit and they would have to reduce their prices or introduce products which are more suitable for the current economic situation. Another threat are Sainsbury's competitors such as Aldi and Lidl are also cheaper retailers which have multiple stores. Sainsbury's would have to be really careful to keep up their service and

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maintain their reputation. Increasing competition from other retailers means that it could affect Sainsbury's margins and market shares.

Mission statement Sainsbury’s vision and values always remain the same and have not been changed. Sainsbury’s initial goal is to reflect their current commitment to meeting their customer’s needs. Their aim is to facilitate their customers’ lives by offering good quality products at affordable prices and by serving their customers effectively with good customer service. Sainsbury’s aspire to be the consumer’s first choice for good food, delivering products of outstanding quality and great service at a competitive cost through working ‘faster, simpler and together.’ Sainsbury’s has already found ways to improve their daily activities with their services, this includes recreating universal customer appeal through giving their customers an ever improving shopping experience. This indicates that Sainsbury’s are willing to find different ways of improving their business brand and making it much better for their customers. They hope to get better every single day by having great service, driving their sales, individual team responsibility and keeping their vision simple. Sainsbury’s have taken the extra mile by looking into their stores to understand what the best way to satisfy their customers, and they have begun this by fixing the basics and will accelerate through getting better every day as they strive to achieve their goal.

USP Sainsbury’s unique selling proposition

“Get healthier, Get Active, Live Better… Every Day” This USP place great importance on the well-being of individuals, who can physically, emotionally and economically make a difference to their lifestyles. The socioeconomic status of families and communities can affect the physical and mental state of kids and adults. The lack of recreational activities, playground facilities and healthier food options can cause “higher likelihood of being sedentary” among individuals. Therefore, Sainsbury will collaborate with the Active kids’ scheme to spread awareness of the Healthy Living range products and offer promotional incentives such as discounted tickets. The benefits of the “Healthy Living” campaign are advertised to parents and potential participants’ instore and through schools and educational institutions. We also encourage the participating organisations to advertise the scheme to kids and parents, by providing them with banners, posters, leaflets and other advertising material. This helps to ensure that as many people are aware of the campaign as possible.

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Essentially, the main objective of the “Healthy Living” campaign is to strengthen the links with local communities, encourage consumers to purchase the products of the healthy living range and incorporate physical activities and healthy eating into their daily routines.

Competitor analysis This section of the situation analysis is going to focus on the competitor analysis of Sainsbury and their competitors in the Food Retail Industry. The purpose of competitor analysis is to identify the strength and weaknesses of current and potential competitors within the same market. Sainsbury Plc is the parent corporation which is split into two subsidiaries branches: Sainsbury supermarket and Sainsbury’s Bank. Sainsbury is one the largest organisation in the United Kingdom, which have a market share of 16.9% across the UK grocery market. The main competitors of our chosen organisation consist of the current market leader Tesco, ASDA and Morrisons. Sainsbury have a large store portfolio which consist of 500 super markets and 700 convenience stores and they have a workforce of around 160,000 employees within the organisation. In 200 Sainsbury extended it entry into the convenience market by securing the purchase of Jackson which comprise of 114 stores and have a establish workforce of 2000 employees, as well as this help to Also, Sainsbury establish a joint venture with the bank of Scotland in 1997 to operate in the banking sector, Sainsbury’s bank provide the same financial services as commercial banks such as loans, insurance, checking and savings accounts. In 2014, Sainsbury PLC were able take complete ownership of their subsidiary branch. This happen because “many companies avoid having joint venture due to the complexity involved in-coordinating policies, decisions and execution with a different company (Foley, CF & Hines, JR 2004)”. Also, this allow the organisation to enter into different market without the complexion or interference of their previous partners.

Figure: Market competitors of Sainsbury’s

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Figure 1: Perceptual mapping of Sainsbury’s vs Competitors

Positioning

When evaluating Sainsbury’s position in the supermarket industry, they hold a good position and by maintaining this, they take into consideration how their brand targets their target audience and how their target audience perceive the brand individually. A way in which Sainsbury’s therefore meet consumer expectations, demands and targets to obtain their marketing positioning, is by introducing a ‘new pricing strategy of regular low prices’. Sainsbury’s puts low prices on everyday household items such as bread, milk and washing-up liquid, to evaluate their positioning and differentiating the brand to their competitors. This keeps customers happy knowing they will regularly get good prices at Sainsbury’s. This then stimulates customers to be a continuous loyal customer as there is consistent incentives to keep them coming back which gained Sainsbury’s their title to be ‘the second largest supermarket chain in the UK after Tesco’, (FATRICIA, 2017). In 2015 Sainsbury’s was able to overtake stores such as Asda with sales taken over at around Christmas time, ‘when the London-based chain benefits from shoppers seeking out the quality fresh food it is known for’, (Butler, 2017). Sai...