Marketing Strategy for Sainsbury’s Grocery

The UK grocery market is controlled by four companies which have approximately 64% market shares. Sainsbury is a chain of the supermarket which is the second biggest in the UK, with approximately 16.9% shares in the segment (Mehta 2016).  Additionally, it provides home distribution and clienteles can place online orders on the website or through a phone call (Melis, Campo, Breugelmans and Lamey 2015).  The paper discusses the principles of marketing for Sainsbury grocery.

3.1 Place of Marketing Mix Apply in the Product Context

The place segment of the marketing mix is referred to as the how and where Sainsbury’s grocery products get sold. Currently, online purchasing has enabled the place to entail both website and physical distribution as well as the delivery of the grocery products (Mehta 2016).  The marketing plan of Sainbury’s cover aspects of a wholesaler, retailer, storage and intermediaries (Mehta 2016).  Drop-shipping is also considered in the context if Sainsbury’s sell, but does not distribute the final grocery product to the end consumer.

Initially, Sainsbury’s had personal initiatives of handling grocery delivery, but the 1970 dispute with the drivers prompted the company to contract specialists such as DHL and NFT(Mehta 2016).  Currently, it has 13 regional distribution centers, 2 national distribution centers, new depots and 2 storehouses (Keogh 2016). Notably, the national distribution centers are meant for slow-moving groceries whereas the storehouses focus on frozen food category.

Alternative Use of Place by the Organization

Sainsbury’s Website

Sainsbury’s offered a key online revamp with an omnichannel approach to ensure that total online presence is similar in appearance. It maximized the Sainsbury’s co.uk homepage to ensure that the experience of shopping and browsing was easy in all devices such as personal computers and tablets (Keogh 2016). The responsive revamp was designed to make sure that the website has the capacity to recognize any device that a customer uses and reshape itself (Keogh 2016).  Currently, Sainsbury’s is focused on designing a new digital experience for consumers in all media channels.  The firm has developed a home page that is supported by a content management system (Mehta 2016). It leads the marketing team to add specified campaign information that runs in-store or diverse marketing initiatives.

Sainsbury’s Regional Distribution Centers

Sainsbury’s Waltham Point Distribution Center is located in Essex and employ more than 1,200 people and covers more than 700,000 square feet (Mehta 2016). It also delivers grocery products to 89 Sainsbury’s stores across South East of England and London.  The center’s HVAC solution encompass frost protection to the system of sprinkler and 0.5 ach-1 of fresh air ventilation to ensure that summertime temperature is at a recommendable level. The process is necessary for offsetting 1,050kW of internal gains from MHE equipment (Keogh 2016). The design of the ambient store system incorporated future cooling as the load increases.

Sainsbury’s National Distribution Centers

The national distribution center at Crick can hold the entire general merchandise range of Sainsbury’s and have the capacity of storing 220, 000 full pallets (Mehta 2016).  The site serves more than 550 stores at the national level and delivers 2.4 million units on a weekly basis (Keogh 2016).with.  Sainsbury is proud to work with work with SSI Schaefer on different projects and business related to grocery distribution.

Sainsbury’s Store Houses

The store helps Sainsbury to enhance its sales growth and promote the delivery network as well as the means of selling products to every customer. The firm offered 1.3 billion euros to acquire Argo’s concessions.  It identified 150 to 200 stores that it will shut and move in a nearby location (Mehta 2016).  The move of Sainsbury’s made sense because it fulfilled the need of shoppers who were interested in fast and fresh groceries (Keogh 2016). Stores enable Sainsbury’s to serve consumers where they want it and when they need the grocery products. 

Sainsbury’s New Depots

 Basingstoke depot has 615,000 square feet and serves 69 supermarkets as well as 24 convenient stores (Keogh 2016).  The depot helps the firm to server customers and promote its operation through a central location which supports the growth of retail in the south.  The new depot has environmental features such as LED light fittings, rain water harvesting and car charging point making it in line with 20 X 20 sustainable target (Keogh 2016).

4.1 The Details of the Market Segment the Product Targets

The UK grocery market is controlled by four companies which have approximately 64% market shares. The players in the grocery market customers are categorized into two groups which include top-up shoppers and primary shoppers.  Sainsbury’s adopted discount strategy and diversification of its grocery chain to rural areas. They were in the form of convenience stores and targeted individuals who had limited access to a supermarket.

A market segment is a process of determining the way in which people and organizations with the same characteristics were combined to have a vital implication of strategic market determination.  Sainsbury’s understand that each buyer can operate as a potential separate market as a result of unique demand and requirement.  Similarly, Sainsbury attempts different strategies of segmenting its market. The categories are divided into four groups and that include behavioral, geographic, demographic and psychographic segments.  The company also focuses on a neighborhood, ethical and fair trade market as well as top-up shoppers.

The supermarket heightened its focus on the Little Ones by redesigning and splitting the site into five life-stages which include pregnancy, weaning, newborn, pre-school and toddlers. The new Mum Zone space gives users an opportunity to send to send personal tips, stories, and product recommendation.  They also have a segmented e-mail campaign for monthly Little Ones which include targeting strategy for clubs to exact pregnancy stage and child development. Sainsbury retrieves the age of children from data offered at registration. It asks the potential members to offer the due date and details of children they have as well as the dates of birth.   Sainsbury’s hope to enhance sales with a renewed focus on Little Ones by emphasizing healthy family meal recipes which are aimed at providing the shoppers’ basket size. 

Brand Identity in Relation to Target Segment

Sainsbury had a total sales of 16.36 euros bill and 65 million euros profit after tax. It is compared with low sales in the previous years and a large profit of 404 million euros. Sainsbury struggled from price competition which was exhibited by Tesco and Asda. Furthermore, the implementation of its new logistic system failed, therefore, leading to ou of a stock problem that alienated with consumers. The company had 727 stores of which 262 were convenience store while the remaining 465 were supermarkets.

Sainsbury’s focuses on a change program which is dubbed as “making Sainsbury great again”. The elements of the program are relevant to the position and segments of the target market. The firm has embarked on the restoration of the universal appeal of the brand. They include attractiveness to all market segment. It has a notable product hierarchy of good, better and best. Furthermore, it invested in price and quality which costed the firm approximately 400 million euros.  The aspect translates to the position of a consumer which entails great food and fair prices, complementary non-food, quality and innovative market and straightforward market.  The advertisement of Sainsbury’s focuses on a lowered price of 400 lines and persuading potential customers to try something new. 

Sainsbury’s launched a campaign referred to as ”buy and try the Sainsbury’s Range” and it installed a PoS in the store which indicated the brand price along with its equivalent. The example is that Sainsbury’s chocolate ice cream sold for 2 euros while Ben and Jerry’s ice cream went for 2.50 euros. The objective was to make shoppers by the version of Sainsbury’s as the favorite brand.  The strategy can be applied to the groceries so that the company can enhance brand identity.

5.1 Identify and Explain How the Product is differentiated from Competitors

Sainsbury’s have a strong and differentiated grocery proposition which offer consumers and market-leading quality, value, and choice. The company has completed more than 3,000 Sainsbury’s quality investment program for a personal brand. It also reviewed 125 food ranges and touched around 60% of food sales.

  Quality and Fair Prices

Grocery market remains competitive in the UK, but Sainsbury’s made grew by 2% because they invested in quality and fair prices (Woo and Lee 2018).  It launched an ”On the Go” range of snacking line, breakfast, and lunch. The market worth of the product was 16 million euros, but the company invested 8 million euos in the range (Jiang, Kumar and Ratchford 2016).  The values of Sainsbury’s make it highly competitive, different and have a strong sense of commerce.  It assists in creating a relationship with stakeholders, reducing the cost of operation and building trust.

Geographical Differentiation of Products

The major part of the strategy is to be present to the consumers in the time and place they want to shop. Currently, Sainsbury’s have 605 supermarkets and 806 stores (Mortimer 2016). The supermarket sales lowered by 2% whereas sales at convenient stores increased by 6% (Mortimer 2016).  Supermarkets are the leading grocery channels of shopping and they are responsible for more than a half of UK’s grocery expenditure.  The convenience business of consumers heightened by 6% and the firm opened 42 new shops which included seven franchise trials in the forecourts of Euro Garage’s petrol station (Mortimer 2016).

Online Channels

The sales in groceries online platform increased by more than 8% while the order heightened by 12% in 2016 (Woo and Lee 2018). The company delivered 276,000 orders on a weekly basis and there is an expectation that online grocery service in London is twice as much in the upcoming eight years (Woo and Lee 2018).  The firm has 151 groceries online Click and collection place (Mortimer 2016)s. Sainsbury also provides the same day delivery from 29 stores in the UK. Similarly, it trails one-hour delivery to more than 40,000 postcodes in London using the Chop Chop bicycles (Keogh 2016).

6.1 Explain and Evaluate the Role of Promotion and Pricing Strategies

Unit Pricing

Unit pricing offers consumers the opportunity to get the best deal and compare products.  The strategy is relevant for promotion because it gives customers the best value comparison between product advertisings.  The concerns associated with unit pricing legibility of the pricing strategy, inconsistency in the unit and complexity in regulatory requirement.  Sainsbury’s have a good and appropriate system to comply with regulatory needs.  They have competent management who curb potential errors and utilization of incorrect measurement units (Woo and Lee 2018).  However, customers should seek advice about unit pricing standards and confirm it with the retailers or wholesalers. 

Pack Size Pricing

Consumers are concerned that grocery products reduce in sizes without the accompaniment of lower prices.  The strategy masks the rise in prices and makes it hard for consumers to identify the best product (Keogh 2016).  Customers should receive information about the reduction of the size of a product and its non-corresponding price decrease. 

Prize Matching

Sainsbury’s introduced price matching strategy in 2011 and offered shoppers a money-off voucher if they bought a brand that is cheaper at Asda (Keogh 2016). However, the firm ditches the price-matching scheme and invested in providing lower prices for every product. The news followed the plan of the supermarket to phase out multi-buy promotion strategies (Mortimer 2016).

It is evident that the groceries market in the UK is highly competitive, but it is currently dominated by the big four companies. Sainsbury’s launched a campaign referred to as ”buy and try the Sainsbury’s Range” and it installed a PoS in the store which indicated the brand price along with its equivalent (Mortimer 2016). The firm uses limited marketing strategy and that lowered the ability of discount stores to get traction.  My recommendation is that the firm should increase the pricing spectrum and introduce a grocery product line which targets discount store provisions (Mortimer 2016). It should also use promotional approaches that target different age groups, especially children and youth.

Part B

1.1    How Sainsbury is Marketing Brand and Products

Sponsorship of Paralympic Games

The retailer development momentum when it sponsored the London 2012 Paralympic Games and revived the positioning strategy which was dubbed ”live well for less. The event enabled Sainsbury to increase its sales by 4.9% and boost its market share by 16.4% (Birkin, Clarke and Clarke 2017).  It became the first single sponsor of Tier One Paralympic by signing details of sponsoring the London 2012 Paralympic games.  The company published its 16-week quarter trading statement and confirmed that it outperformed the key rival by 1.9% increment in sales (Cohen 2013).  The company continued with its legacy by signing a four-year contract with British Paralympic Association as an official partner in Sochi and Rio games which happened in 2014 and 2016 respectively.  The commitment encompassed the promotion of disability sport and local communities in schools using Active Kids for All campaign.

Marketing Genre for 2013 Festive Campaign

Sainsbury launched a genre in an advertisement for a 2013 festive campaign which was a 50-minute sponsored documentary that entailed user-designed footage of the way people spent Christmas (Crane and Matten 2016). The campaign was a highly exciting communication project developed by the firm. The achievement made Sainsbury to win the Marketing Society 2013 Brand of the Year and overpowered rivals such as Paddy Power and the Crown (Cohen 2013). The company has utilized marketing communication to depict an understanding of the problems that shoppers undergo during tough economic times.

Brand Match

Brand matching against comparable items guarantees consumers that they will not spend more on shopping identical brands online.  Sainsbury’s distribute approximately 215,000 orders on a weekly basis and the strategy aim at ensuring a wide recognition of brand match in the UK (Cohen 2013).  The customers will receive information that the brand had a better value than the substitute in Asda or get a money off brand match coupon (Cohen 2013).

Sainsbury has been able to neutralize the concept that it is expensive to the consumers through brand matching guarantees.  Sainsbury focuses on ensuring that customers benefit from the branded grocery basket and stop purchasing a substitute from a rival supermarket.  The online extension for Sainsbury brand match system offers difference back to the buyers as the coupon code (Crane and Matten 2016). The maximum can be 10 euros is a comparable grocery basket with a brand is cheap in Asda.com.  Shoppers have to purchase 10 or more diverse items which have to include one comparable branded item to gain from the Sainsbury’s online brand match (Cohen 2013).

Nectar Promotion

Nectar is a system for loyalty system that Sainsbury uses to reward its customers for shopping at different supermarkets.  Shoppers earn a nectar point in every 1 euro expenditure at Sainsbury. However, the exchange of 1,000 for the double-up voucher is worth 10 euros (Hoang 2016).  Sainsbury confirmed to the customers that they could spend 200 double-up vouchers in any of the level selected segments. The promotion gave the clients the opportunity to double their value (Haney 2018). They had the chance of exchanging the points for double-vouchers in stores and online at a different date.

Personal Branding

Sainsbury launched a new grocery brand with the slogan” by Sainsbury’s” and it accounted for approximately 40% of its sales (Hoang 2016). The business reported a double-digit growth in the grocery market share. The focus of the company was to assist the consumers to live well for less and grow its sales and profit.  The grocer also planned to acquire and own the remaining 50% of its shareholdings (Cohen 2013). Sainsbury’s index ranking is 31.2 and that made it be the second best after Marks & Spencer among 26 supermarkets (Hoang 2016).  It is the most satisfying grocer with a score of 39.4 and the third in reputation, impression, and quality.

2.1 Market Research Techniques

Competitor Analysis

It is fundamental for business owners to understand the emerging trends in the rival companies.  A firm understands its business position by analyzing the way markets operate and the perception of customers on the competitors. It is easy to track the rivals and ascertain the elements of products and service which are unique to the brand.  Other factors are the strengths, weakness, opportunities, and threats that the competitor face (Hoang 2016).

 Sainsbury versus Tesco

Tesco started to operate on the internet from 1994 and it was the first grocer to provide a home-shopping platform in 1996 (Birkin et al 2017). It underwent a formal launching in 2000 with online activities in South Korea and the Republic of Ireland.  The food sales are present within a selected stores delivery range. Customer’s hand-pick items within every store as opposed to the warehouse model that most rivals utilized. Currently, Tesco operates the largest grocery in the world. Besides, it was the only shopping retailer that made a profitable online purchase in 2016 (Birkin et al 2017).

Comparatively,   Sainsbury has been engaging in e-business and home-shopping strategies from 2000. That is the time it started ”Sainsbury’s to You” banding.  The company hired new employees with marketing and web skills and received specific training on e-business and cross-functioning education.  The ”Sainsbury’s to You” did not have a complete spinning, but it occupied a separate building. The approach enabled it to combine entrepreneurial flexibility with security and strength of the brand (Birkin et al 2017).

Currently, the Sainsbury’s online operate from more than 144 stores and utilizes two picking centers which are not open the community.   In 2007, Sainsbury got about 80,000 orders on a weekly basis. The strategy presented a strong growth and an increased market share.  Customers of Sainsbury spent more money per order compared to Tesco with an average of 80 euros(Cohen 2013). The online shoppers in Sainsbury also purchased more items per order and it was estimated at 69 units per order in comparison to Tesco customers’ expenditure of 58 units per order.  Lastly, Sainsbury’s consumers were charged 3 euro for delivery compared Tesco online clienteles that paid 4 euros (Hoang 2016).

Ethnographic Research

 It is a technique that concentrates on the study of customers through observation. It is essential to observe the behavior of individuals in a firm to enable them to determine how they behave or interact. Market observation is an effective strategy for a business that focuses on tapping a new market. In such a scenario, the most fundamental aspect is to confirm the extent to which consumers are ready for a brand (Haney 2018).

Customers are happy with the initiatives of Sainsbury because they can use Smart apps and skip checkouts, especially in Clapham store located in London. In 2017, the company enabled lunchtime shoppers to trail the Scan and go application to purchase more than 3 euros on The Go meal without checkout visitation (Haney 2018).  Customers affirmed that it is easy to scan shopping on the app as a person places then in a trolley or basket after which it is paid through a smartphone (Crane and Matten 2016).

Consumers who pay the product within the store has no need of queuing at the till. The technology and the changing behavior of clients have transformed the way people purchase groceries. The Sainsbury team is constantly operating with current and convenient shopping knowledge. The firm is delighted to be the first grocery to provide customers the checkout-free shopping method (Hoang 2016).

Focus Group

It is a personal approach to the exploration of an industry and it tends to feature small groups of people who are considered to be the target market. Focus group is a brilliant approach if a person requires to understand the psyche of a particular consumer base and learn about their perspective on a brand.  It is difficult for a researcher to successfully be unbiased in the entire discussion.  Engineering of a conversation to ensure that the responses from a focus group are impartial. The selection of an experienced focus group moderator will be effectual in discussing the success and legitimacy of arguments (Crane and Matten 2016).

Sainsbury aimed at changing how shoppers purchase was significant in its growth of online and offline sales. The grocer reported a group sales of 14.6 billion euros in 28 weeks in 2017(Haney 2018). That was an increment of 16% in one year.  The grocery sales in the Sainsbury online increased by 7.2% with only grocery orders placed by mobile apps reaching 15% (Haney 2018).  The convenience sales went high by 8.2%.  The underlying profit was 251 million euros which were a 9% reduction from 277 million euros in 2016 (Haney 2018).  The consumers preferred to shop at Sainsbury and that was a depiction of its increased market share.  The reason was that the firm offered shopping pathways that reflected the changing behaviors of the consumers.

Sainsbury adapted to meet the changing habits of shopping and saw positive momentum in the business.  It updated more than half of the food ranges in 2017 and the strategy covered 40% of the whole food sales and improved 70 food ranges.  Furthermore, the company improved its offers across spaces of supermarkets by 15% and opened a total of 73 Argos stores (Sivarajah, Kamal, Iraniand Weerakkody 2017).

Conclusion

In summary, Sainsbury’s had a 6.8% increase in its sales to 24.5 billion euros in 2013 irrespective of the fierce competition in the groceries sector. It also managed to increase its market share in the shrinking grocery market.  Precisely, it rose to 16.6% which is the highest improvement in many decades. The results indicate that a few points of approaches are fruitful for Sainsbury. Furthermore, the firm exhibited 8.2% growth in the personal brand taste and basics range growth of 6.8%.  The number of stores also rapidly increased where there were 19 new supermarkets and 73 convenience store.

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