J Sainsbury plc is a huge UK centered food merchant with involvement in financial services. Its string of supermarkets has survived the challenges of competitive retail business since 1869, which makes it the longest ranking major food retailing string in UK. Along with the history of providing customers with healthy, safe, fresh and delicious food it includes indeed come a long way from a little store from Drury lane to the present headquarter in Holborn, London. Presently it is providing over 18 million customers just in a week and have market share of an astounding 16%. Along with its 502 supermarkets it offers over the course of time varied its business to 290 Sainsbury's convenience stores, an internet-based home delivery shopping service and Sainsbury's Bank. The internet-based home delivery shopping is available noticeably to about 88 percent of the UK households. They plainly recognized five areas to give attention to in order to keep up their superiority in the retail business which were a) Great food at good prices b) Accelerating the progress of complementary non-food ranges c) Attaining more customers through additional channels d) Growing supermarket space e) Active property management.
In order to execute the problem review as a Marketing Advisor I have decided to conduct a SWOT evaluation of J Sainsbury Plc. The real reason for my collection of SWOT analysis is the fact that it has been used for a long period and is a trusted tool of strategic and marketing research. Its importance in looking at the situation of the company is substantial as it advises ways in which the organisation can profit from advantages and opportunities and shield itself from weaknesses and threats (Adams, 2005). After the explanation of every SWOT components of J Sainsbury Plc I've also stated the likely effect of such elements to their competitive advantages and brand. However it is a method that needs to be used very carefully because if not thought or looked into properly the results won't provide the genuine picture.
There are several strengths of Sainsbury that needs be highlighted when performing a predicament review that are analysed below:
- Sainsbury's as a brand: Brand of Sainsbury's stands it out amidst the audience of other supermarkets. The goodwill that is built over 140 many years of service in its business is symbolized by its brand and that has several benefits like customer commitment, brand familiarisation, increase and maintenance of customer perception etc. If Sainsbury's want to increase its stores the cost engaged for ad for the local areas will be far less than that for a smaller organisation with a smaller known brand. Having such a strong brand is unquestionably continue to boost its competitive edge as other new competition will have a hard time building up such a good brand as it requires a lot of time and effort.
- Use of effective ONLINE MARKETING STRATEGY: Sainsbury's like any other large company has to use effective marketing strategy. It has been doing so very well and which explains why it stood up the test of time. Sainsbury's use of Jamie Oliver one of Britain's most high profile chefs who famously launched campaigns regarding healthy eating in different sections of the community in its advertisements can be considered as a good marketing move. It was like utilizing a renowned dentist to promote toothpaste as it adds to the customers the trust for balanced diet once and for all price. The positive effects of the marketing campaign were clear as shown in the progress of the sales in Sainsbury's. With its effective online marketing strategy Sainsbury is significantly likely to attract more customers and increase their competitiveness and improvement of these already powerful and attractive brand.
- Human Resource Policy: There is equivalent opportunities insurance policy in Sainsbury on different functions like recruitment, promotional, training and development etc. Their insurance plan basically focuses on keeping their employees determined and providing them with proper training. These sorts of guidelines have increased the trustworthiness of Sainsbury as a good employer.
Having a good HR coverage is only going to have excellent results in terms with their competitiveness and brand as people could be more inclined towards subscribing to using their team & most importantly staying with them.
- Conveniently located: Because of its huge network of shops there is always a Sainsbury nearby. This is a good advantage to possess which backs up the consequences of the brand. Although Sainsbury had built up a good brand most people will be only be considering going to buy groceries and daily requirements when there is a Sainsbury near by. Groceries and daily essentials are excellent products of Sainsbury and to be able to improve their sales location is of best importance.
Like I brought up convenience is a key to a retailer's success and its own wide spread wall socket helps those to provide customers with opportunity to stay loyal to them.
- Reliability and trust: Sainsbury have developed over the years, a feeling of the trust and stability among customers. Customers believe on Sainsbury that it could not compromise on health and safety issues. In addition they trust Sainsbury on providing very competitive charges for the merchandise if not the least expensive.
When there exists trust among customers about your product and services they'll continue to continue to be your customers. Extra health care is considered by Sainsbury which will in future continue to enhance their image.
- Environment Friendly: Sainsbury has always been environmentally aware while undertaking its business. Some of Sainsbury's attempts are talked about below:
- It uses environmentally friendly till printers.
- It provided away eco-friendly loo rolls as promotional offers.
- It opened environment-friendly store in Dartmouth, Devon which was constructed with recycled materials and will help in lowering its energy charges.
- It agreed upon a landmark deal that has enabled the creation of a fresh 8 million blowing wind task at Lochhead in Scotland, due to be completed in Summer season 2009. The Power Purchase Arrangement (PPA) means that Sainsbury's will purchase energy direct from A7 Lochhead Ltd. for the next a decade.
These efforts mean that customers will have in the rear of their head that Sainsbury is doing its part in the great cause of saving the environment. The reputation has been slowly building in this respect and will continue steadily to expand further.
- "Try something new today": Even by the slogan we can understand that there are a range of products available in similar categories. Sainsbury take every possible treatment to complement the changing needs of different cultures and neighborhoods using its products and on doing so provides multi selections to customers. For example, Frozen Poultry Tikka Masala (Indian dish), Chicken Dumplings (Chinese language dish) etc within Sainsbury.
This durability of Sainsbury means that it will increase its customer bottom part, sustain its customer by spoiling them with choice and draw in new suppliers as well, enhancing its competitive advantages and brand name along the way.
- Lack of international growth: Sainsbury is definitely a brandname that is famous only in Britain. It hasn't ventured in to the international market that much as yet. Quite simply it is not ambitious enough. Its main competitor Tesco has been more successful in this respect than them which will hamper their development and market domination.
This weakness will definitely haunt them as with more international coverage its rival could be more powerful and have more flexibility which means they'll gain more competitive benefits and an improved brand name.
- No self-service: In today's world time is money. The service should be up to the standard at the same time it ought to be time efficient. Because of which self-service system has shown to be very effective over the years. However, there are no self-service systems like self-checkout counters in the majority of the Sainsbury's stores. Providing time productive service atlanta divorce attorneys way is a key to any company's success and Sainsbury has not fully integrated this theory in their practice which will have negative effects in their competitive benefits and brand.
- Implementation problem: There have been many such instances in Sainsbury where they have been found brief on the execution of the pre-determined programs. It could be regarded as one with their major weakness.
There is not a point of planning if it were not be implemented. It will affect adversely to their morale and brand doing a world of good compared to that of their opponents.
Every organisation in order to make it through and contend in a market must keep a detailed eyes on any opportunity of expansion, enlargement, diversification, merger etc. Opportunities are something if not grabbed at the right instant the value from it later will be significantly diminished or elapsed.
On the existing situation I have tried to categorise a few of the opportunities that lay before J Sainsbury, which can be the following:
- Growth: Sainsbury has been involved in other jobs as well like its assets in property, bank, environmental issues etc. These kinds of alternative business present great opportunities for future development.
Growth is essential for just about any company's competitiveness and then for Sainsbury its no different.
- Suppliers and Associates:
Food for Britain (FFB) is Sainsbury's spouse and supplier. FFB helps its clients gain access to new opportunities in another country through a network of nine international offices, associates in producing markets and a range of London-based services.
Maintaining a good supply chain can help Sainsbury to be affordable and hence competitive.
- Technology: This is a modern age group of technology where every company must find ways to upgrade their services using technology. Sainsbury has already established bad activities for not planning technology better when they had to buy again 1. 8b well worth of technology outsourcing deal with Accenture. However there are huge opportunities before Sainsbury in the future for further development in technology.
Technology is one of the key aspects in the current IT age to stay competitive.
- Previously overlooked Market Segments:
I've mentioned earlier that Sainsbury hasn't ventured into many international markets. This thus provides it with great opportunities for future to move forward towards those markets which were not considered fruitful.
Markets changes with the market and previously forgotten markets have to be analysed occasionally which might confirm very helpful to edge ahead of your rival.
- Social Habits: Understanding of the changing interpersonal habits is a task as well as chance for Sainsbury. Understanding the necessity of the existing society is essential.
Threats are other exterior factor that needs to be give extensive attention to be able better prepare the company to handle them in a proper way. It really is one of the major element on determining the business's performance and situation. There will definitely be some underlying threats for each and every kind of industry and the business must take appropriate steps to deal with them. Threats however cannot continually be identified ahead of time so awareness of the surroundings is the key.
Some of both the underlying/imminent and possible risks of J Sainsbury's are explained below:
- Entrance of new opponents: Sainsbury needs like any other company look out for access of any new competition.
This is a significant threat and growing tournaments should be watched.
- Too much environmentally friendly: Huge assets have made in environmental and inexperienced issues without immediate benefits. There's a threat of carrying it out somewhat too much.
Actually an equilibrium should be looked after and cost should be controlled to remain competitive.
- Technological Changes: Technology is changing at all times and it is a massive risk to Sainsbury as well.
- Expansion of Competitors: Expansion of its competitors like Tesco have to be monitored carefully as their expansion is a clear danger to Sainsbury's market coverage.
This danger if not dealt with properly could harm gravely to the competitiveness of Sainsbury and its own brand as well.
- Foreign company takeover: We can say that Sainsbury symbolizes the British isles people. It lacks of international enlargement does mean that most of their customers are English. However there is a takeover bid by the Qataris Private collateral firm which can have serious implications as its customers who are predominantly English will gravitate towards other United kingdom companies at the chance of Sainsbury's being governed by the foreign firm.
This is also a significant threat as it'll diminish the competitive benefit and brand name built by Sainsbury on United kingdom people.
Explanation of various marketing strategies and exactly how they can be used by J Sainsbury Plc to attain competitive advantages and long-term growth.
In order to satisfy the visions of an company by fulfilling the its goals a proper marketing strategy must be produced. Marketing strategies will be the corner stones upon which marketing ideas can be centered. Market strategies add a series of practices to produce a marketing plan far better in order to achieve marketing goals. Marketing strategies amalgamates the organization's marketing goals, policies, and tactics into a powerful unit. Markets change their aspect and behavior constantly so for marketing ways of become successful it requires not only to be properly designed but should be active and interactive.
Marketing strategies have to be formulated as per the need of the market situation for any given company. However there are of ways of generalizing a few of the common strategies. There are many basic marketing strategies that have emerged of which some are presented below:
- 1. The strategies that are based on market dominance - Here there are basically three types of market dominance strategies:
- Close followers
- Late followers
- Horizontal integration
- Vertical integration
Michael Porter explained the general strategies as not strong or industry dependant but standard. These strategies were initiated in the first 1980s, and till time frame it's been widely used. Corresponding to Porter for any company go generate revenue the attractiveness of the industry itself may be the main factor however even if the industry does not so well the company can still make good results if it keeps a good position in the industry. In order to position itself properly in the industry the firm has to leverage its strengths. When these talents are applied in either extensive or narrow range the following universal strategies are developed:
- Cost leadership
- Cost leadership: The motto of this kind of strategy is to remain affordable and gain competitive benefits though having the ability to produce at the lowest cost at a given quality level. Using its low cost the business can benefit in two ways. One, it can obtain higher comes back against its rival while offering at commercial average and two it can benefit from increased market talk about while reselling below industrial average which it can do without making loss. There are various ways to do this kind of leadership some of which are mentioned below:
- Improving the efficiency of processing
- Research in obtaining cheaper raw materials
- Utilising the great things about outsourcing
- Avoiding various leakages in cost controls.
- Differential Command: As its name suggest, this strategy attempts to dominate the market by expanding products and services which will vary and at the same time also liked by customers more than other products and services available generally in the market. The customers are hence prepared to pay a little extra because of the uniqueness of the merchandise. Nonetheless it needs the next kinds of advantages to have success in this plan:
- Able to purchase research and trends.
- Highly skilled manpower.
- Creativity and understanding.
- Proper marketing tools and marketing.
- Goodwill when it comes to quality and technology.
- No close swap of product/service available in the market.
- Focus Strategy: This strategy basically focuses on attempting to achieve either cost or differentiation gain upon a narrow segment of market. The assumption behind this strategy is that when strategies are focussed on the narrow segment of market the genuine needs of such market can be attended to. It tries to accomplish just as much customer loyalty as it could in order to be competitive. The primary drawback of the strategy is the fact that it will lose its bargaining ability with the suppliers while focussing on a thin market and producing less. Other hazards might be a broad-market head may influence its target market as its market is limited there will be no flexibility or room for tackling such competitiveness. With that said, if the focus strategy is dependant on differentiation advantage because of its uniqueness it will be able to maintain steadily its competitiveness.
In light of the marketing strategies propounded by Michael Porter, J Sainsbury Plc may use these ways of gain competitive advantage and long-term goals in the next ways:
- As the brand of Sainsbury is of such worth it may use differential strategy to spend money on research and production of its organic food, special diet food, environmentally friendly recycle handbags and other products.
- Due to its huge coverage of market and large human resources it could be beneficial for them to use differential strategy like opening its own training institute for retailing, health insurance and safety clinics etc.
- As close closeness of its stores is a major power of Sainsbury it may use focus strategy to increase its sales. For example: starting special vegetarian oriented store in a community which is thickly filled with Gujrati people ( a tribe of Indian folks who are mainly vegetarian).
- Due to its strong and long collaboration with Food For Britain (FFB) and its own operation in a wide opportunity with good purchasing power it can use cost authority strategy and reduce its cost of purchase.
- Differential strategy may be used to promote its products as it already has goodwill as environmentally friendly retailer.
- With its possession of good HR system and profession security it may use differential strategy and can acquire capable human reference at affordable price.
Analysis of Current marketing environment for J Sainsbury Plc and Suggestions how the marketing combine elements may be developed to contribute to enhance their goals and worth.
In order to touch upon the marketing mix that may be developed by Sainsbury to donate to enhance their goals and beliefs I've first analysed the existing marketing environment of J Sainsbury Plc and then explained further about the marketing combination.
- Globalisation: With quick upsurge in globalization Sainsbury like any other company has to face a whole lot of challenges. The basic problem is to combat to off the competition to achieve best value for quality supply of its products. Opportunities like going into new marketplaces via joint venture and partnerships etc also come up scheduled to globalisation.
- The price correcting scandal: Sainsbury is one of the four merchants within the UK who are most likely to be affected by this scandal or allegation. Sainsbury has a strong presence in the market and ownership of a good general population image there is a serious threat of this being hampered by the recent allegations.
- Tax rate: Corporation Duty rate is set by the federal government in UK like any other country. It retains on fluctuating generally after the necessity of the industry. Currently UK federal government has modified the tax rate to 28% from 30%. Plenty of duty is paid with a company like Sainsbury every year and this change of 2% is a massive lower in the duty rate this means you can find more margin in revenue.
- Cost of products prices: Food prices have risen dramatically since the increment in global food problems resulting in the surge in Sainsbury's costs. This means that the increased expense will be offered to the customers and they'll have to pay more. Unstable fluctuations in the fuel costs also has made it even harder to plan and control the cost of creation and delivery.
- The market meltdown: The mentioning of credit crunch while speaking about about the current market situation has been an responsibility recently. A couple of basically two ways that it'll affect Sainsbury's. One getting funding has become very much difficult as the market has become almost deceased and two market meltdown have reduced the purchasing ability of consumers. This has created a sense of distrust and suspicion on the market. Sales of luxury items have gone down and even basic products are being bought less. Another section of Sainsbury that is hit by this is its bank. The Sainsbury bank is not really a very established lender and when even the big players in the banking systems are in trouble it has been really difficult time for Sainsbury's loan company. Nowadays there seems to be more focus on fresh, easy style cooking food. This serves an opportunity for Sainsbury's to encourage new quality recipes and unfussy
- The Internet sales: In order to stay competitive nowadays, internet sales is a sensation that has to function well. THE WEB accounts for 8% of global advertising spend and keeps growing rapidly (The Economist, 2007). Sainsbury's can further develop in this field. It could either develop itself or outsource the internet system to increase its sales.
It is a widely used marketing term probably the most famous one. It is also known as the Four P's which can be product, price, place and campaign. It is the mixture of the elements of marketing and what tasks each element performs in promoting your products and services and delivering those products and services to your customers. In short the 'marketing combine' is a couple of controllable, tactical marketing tools that work together to attain company's aims and goals.
Product: The product is the first factor of marketing combine elements that should be explained. The merchandise or services wanted to your customer have physical features what they do, how they differ from your rivals and what benefits they offer to the clients. The product/service must maintain quality, features, product packaging, guarantees, and after-sales service.
The basic purpose of Sainsbury's Supermarkets is stand as the first choice of the pack as it pertains to consumers choosing their food. They want to deliver products of remarkable quality and great service at a competitive cost through working faster, simpler and along. To the their product has to be given top priority in support of quality products can do for that reason. Environmental friendliness also needs to be considered while considering on the merchandise. Services like bank should be produced efficient and easy to use.
Price: Price is the next most important thing of marketing mixture elements. How you price your product or service which means that your price remains competitive but allows create a good profit. How price is important in your marketing strategy regarding differentiating your products from your competitors. The pricing insurance plan including savings, allowances and credit guidelines. Your costs should be based on a realistic assessment of your entire costs and take into account what the market will tolerate and the image you are trying to create.
To stay competitive, price should be competitive as well as it is a perfect aspect in the marketing combine. If the purchase price is either very high or suprisingly low in regards to its competition the permanent goals will be hindered.
Place: Place could also be used in your online marketing strategy to differentiate you from your rivals on the market. Where your business markets its products and exactly how it gets those products or services to your visitors. By considering good locations, suppliers, inventory implications, travel and warehousing you can reach near your customers. It will obviously give you a competitive edge.
Place is another important factor that should be considered by Sainsbury to achieve its permanent goal. It offers a huge number of shops around UK and is also in close proximity with its customers. It should however always turn to build after it more.
Promotion: Promotion is employed to communicate with the clients and share the features and benefits of your products/services to your focus on customers. Promotions may include advertising, personal offering, pr, networking, web-based marketing etc. By doing this you will share your product and its own features to the clients to attract those to by the merchandise and it'll be helpful to earn revenue.
Sainsbury has generated up its image as a good retailer in terms of its product quality, environmental friendliness, services etc. Partially its such success in creating this image goes to its campaign and advertisements, like using Jamie Oliver in its adverts. There are much rooms for improvements in that area as well.
- Lecture notes provided by our lecturer Dr. Roman Puchkov
- Mica R. Endsley, Daniel J. Garland, 2000, Theoretical Underpinnings of Situation
- Awareness, 2nd Model, Lawrence Erlbaum Associates, Inc. , Mahwah, NJ, 383pp.
- O' Connor J and Galvin E, 1999, Marketing in the Digital Years, 2nd Edition, Prentice Hall.
- Doyle P, 2001, Marketing Management and Strategy, Prentice Hall.
- Official website of Sainsbury, www. Sainsburys. co. uk