This survey has been ready for ASDA Plc by Usman Khalliq of Business Builders Consultants. Business Contractors Consultants has been commissioned to write a report that considers the theoretical and practical issues of marketing for ASDA Plc. The survey investigates ASDA Plc Company's market and applies accepted theoretical marketing models.
The report addresses three key areas
A suitable tactical marketing planning process for ASDA Plc
Describing and Justifying the activities that would happen at each stage
Explanation and examples of tools and techniques that are highly relevant to ASDAPLC's marketing plan
Three marketing strategy options that ASDA PLC could realistically pursue
Estimation of the probable outcomes
A description of advantages and disadvantages of each option
A marketing audit for the organisation
Carries out a marketing audit for ASDA Plc and provides details of changes taking place in the exterior environment.
Analyse how ASDA could respond to the changes discovered and give reasonable marketing objectives that consider could be performed within three years.
State how areas of the organisation that are not part of the marketing section should modify over an interval of 3 years in order to meet up with the marketing objectives as specified.
Strategic Marketing Planning Process
The preferred Marketing Planning Process because of this article is Malcolm McDonald's marketing planning process.
2. 1 McDonald's Marketing Planning
Malcolm McDonald marketing planning process has 10 steps.
Figure 1: Malcolm McDonald Marketing Planning Process
The 10 steps of McDonald Planning Process are given below:
Table 1: Malcolm McDonald's Marketing Planning Process
Stage
Description
Stage 1 Mission
To make employees encouraged and give them overview about the business and its targets and goals, mission statement is essential. It gives course of what the business can do and how it'll get it done. The mission assertion provides guide of actions of the business, bring out its overall goal, give a sense of way, and guide decision-making. In addition, it provides the frame work with company's strategic decision.
Stage 2 Corporate and business Objectives
Mission statement explains overall aims of the business but corporate objectives describe the activities that might be taken up to successful the objective statement. Aims are those ends that the organization seeks to achieve by its existence and operation. Organizations are goal attainment devices.
Stage 3
To know the inner and exterior environment of the business marketing audit is essential. It provides information about the internal environment; employees' pay, customer satisfaction, and exterior environment; market show, political situation.
Stage 4 SWOT Analysis
Company's internal strengths, weaknesses, opportunities, and risks turn out by SWOT research. It helps the corporation to determine the required activities to contend with the opponents, increasing profit margin and available resources.
Stage 5 Assumption
Assumption is taken to discover the potency of the marketing plan. It can help the company select monitoring and analyzing process about the marketing activities.
Stage 6 Marketing Aims and Strategies
Marketing targets makes strategies for marketing activities and marketing strategies is all about how exactly the activities should be done in order to successful the business.
Stage 7 Estimate Expected Results
It is a monitoring and evaluating stage that is applicable judgement and evaluation of marketing activities to achieve business success.
Stage 8 Identify Alternative Ideas and Mixes
Business needs to learn the alternative plan as support for this strategies. Alternative marketing plan and combination gives the company capacity to operate its business if its fail with the lifetime marketing plan.
Stage 9 Budget
Budget gives important info about the expense of the strategies and implementation. Budget also helps the firms find out the choice ways if present activities go over the budget.
Stage 10 1st Yr Detailed Execution Programme
To implement the 1st season marketing activities, marketing planning operations gives twelve months detailed marketing plan.
2. 2 Justification of Marketing Planning Process
The justification stage tells about the activities and their justification of effectiveness of marketing planning procedures.
Table 2: Activities and justification of the Marketing Planning Process
Stage
Activities
Justification
Stage 1 Mission
Board of directors and professionals employees make mission state for the company. It may are the objectives of the company its future objective etc.
Mission statement is very important for the business in order to make employees more clear about the business's goals and goals. Without mission statement no one is aware of where they have to go and what they need to do.
Stage 2 Corporate Objectives
Corporate objectives made a decision the company's profit percentage, increasing brand images and tactical implementation.
Mission statement gives an overview about company's objectives and goals. Commercial objectives give specific direction and introduction about the business's objectives and vision; e. g. it selects the profit merging for the business.
Stage 3
Marketing audit gather information about the internal environment and external environment of the company.
It collects information about the market growth; gather information customer satisfaction, financial evaluation.
Marketing audit provides information about the external environment and the factors that affect the business's activities. Such as for example political situation of the company provides information about federal new guidelines and regulation and company can decide its new marketing plan.
Stage 4
SWOT Analyses
Analyse sources and business competitive advantages.
Experiment of information about new entrees.
Market research for new opportunities.
Making modification about present strategies and activities.
Without SWOT analysis company never is aware its internal advantages weaknesses, opportunities, and risks.
Stage 5
Assumption
Forecasting about the consequence of the activities used by marketing plan.
Fore casting about expected final result.
Assumption helps the business takes budget about marketing activates. It offers information about the success of the marketing plan.
Stage 6 Marketing goals and strategies
Selecting marketing goals by analyse marketplace.
Select the means of implementing the objectives.
Select necessary activities.
Helps to identify the suitable strategy for the present market and really helps to success the business enterprise.
Stages 7
Estimate expected result
Taking market research, analysis of client satisfaction to discover the potency of the marketing strategy
Help to make changes of strategy if necessary. Helps to discover alternative technique to minimise cost.
Stage 8
Identify Alternative Ideas and mix
Make ready choice plan to operate the actions smoothly.
Take market research and evaluate earlier experiences.
Analyse any inability record of marketing plan.
Alternative marketing plan and combine make the company effective it fails to operate in difficult situation. It makes the company adapt with changing environment.
Stage 9 Budget
Analysis of earlier record and make modification. Find out the cost related to marketing activities.
Budget helps the business to learn about its profit and loses. Really helps to make changes more expensive activities.
STAGE 10 1st Time Plan.
Crete clear 1st calendar year operation plan by examination of market condition, cost related to the activities, making proposal of activities, evaluation of available resources and so forth.
It is very useful for taking at least one year implementation plan and make the plan successful. Without 1st time implementation plan companies cannot find the potency of their activities.
2. 3 Tools and Techniques
Five tools and techniques are picked that are relevant to ASDA's marketing plan. This can be put in place under the next:
2. 3. 1 SWOT Analysis
SWOT analysis is a marketing tool and techniques that help the business find out its talents, weaknesses, opportunities, and dangers. Companies usually uses this tools when its need to recognize the existing market fads and company situation. It requires place when new decision is vital for the business. Pizza Hut uses SWOT evaluation to discover new technique to increase its sales in the recession time.
Figure 2: SWOT Analysis
2. 3. 2 Porter's 5 forces analysis
Porter's 5 makes evaluation is another marketing tools and techniques. Companies often takes Porter's five pushes when it launching new products. The fives talks about the bargaining electric power of the client, hazards of new entrants, hazards of substitute products, competitive rivalry in a industry, bargaining ability of the suppliers. Pepsi coal company uses Porter's 5 makes models when it launching Pepsi Diet.
Figure 3: Porter's Five Forces Diagram
2. 3. 3 The Ansoff's Matrix
Ansoff's matrix is another marketing tool. Companies take Ansoff's matrix when it made a decision to develop its market. Ansoff's matrix has four aspects, market penetration, product development, market development, and diversification. It offers overview about what the company must do if it would like to increase its business activities. Such as for example, when Apple launches IPad they will use the Ansoff's matrix to assistance with the decision-making process.
Figure 4: Ansoff's Matrix
2. 3. 4 Product Life Cycle analysis
The product development life routine is other marketing tools that help the business measure the present condition of a preexisting product. It includes four steps; launch, growth, maturity and decline. Each one of the steps provides information about the profit margin, market demand, the rivalry and the decreeing market demand.
Figure 5: Product Life Cycle
2. 3. 5 PEST analysis
PESTEL research is a marketing tool that company uses in order make marketing audit and find out about the exterior environment. PEST identifies as Political, Economical, Sociable, and Technological. Coca-cola uses Infestation analysis when it lunches diet-coke. .
Figure 6: PESTLE Research Framework
Strategic Options
This part describes three online marketing strategy with their advantages and disadvantages and possible out come.
3. 1 Market Penetration Strategy
Table 3: Market Penetration Strategy
Strategy Option
Market penetration strategy could be useful for ASDA. As ASDA is functioning with the lowest prices in market, compare to its rivals. ASDA can increase their market show and sales earnings by implementing this strategy. This strategy works on more advertising and campaign of existing products.
For example. Airtel promoting its services to penetrate in the Indian market
Probable Outcome
Probable outcome of this strategy would be that ASDA can increase its market shares and you will be able to increase its sales income.
Market penetration strategy makes customer think about alternate products as there are many option amiable and rival company may offer better products and more options.
Advantages
Increase sales income.
Increase income.
Customers satisfaction
Customers loyalty
Would be helpful in growing business.
Disadvantages
Needs extra expenses.
Tighter budget for company.
Affects could be worse if rivals take the same strategy.
There is a huge question tag if the market penetration strategy works or not. If not loses are significant.
Sometimes makes the business more competitive if the rival company can take same strategy.
Some customer has negative reviews and they feel that penetration means low quality product.
3. 2 Market Strategy
Table 4: Niche Marketing Strategy
Strategy Option
Niche marketing strategy could be proved as helpful for ASDA in a sense that ASDA has strong brand image, It can select any part of the business and focus on that. Just lately ASDA took a major step following this strategy and decided clothes industry as market strategy while working normal on other usual products.
ASDA has launched new team known as GEORGE which includes all clothing items.
Probable Outcome
Probable outcome for this strategy is the fact that ASDA will have high profit margin alternatively than having increased sales revenue.
Advantages
Being specialize in one category could effectively decrease the cost.
Low cost associated with marketing process.
It is not hard for the company to identify the prospective market and make sure they are in touch.
Disadvantages
Niche market is very quickly full up and company need to learn alternative otherwise competitors may take advantages to lunch services.
The likelihood of success is suprisingly low and customer might not exactly take area of interest products as there are so many alternatives products available.
The marketplace is very small, there for the price tag on the merchandise is very because of low production.
Niche market is easily match its necessity, and customers looking for another topic products.
Market Development strategy
Table 5: Market Development strategy
Strategy Option
Market development strategy can help ASDA in becoming no1 store in UK. As ASDA is operating with very big stores. This plan would require ASDA to open up convenient small stores in several parts of the country so that everyone can access easily. In a sense ASDA will increase customer's loyalty.
Probable Outcome
This strategy would lead ASDA to be most convenient store in UK working from every single place from UK. This can help out to increase income for ASDA and much more job opportunities for folks. Furthermore it can be executed internationally.
Advantages
Increase customers trust
Increase profit margins anticipated to more stores
Increase market share
Can be used globally
Company get competitive advantages that produce barriers for new entrants.
Increase market share and make the business more profitable.
Create strong brand images.
Disadvantages
Needs a great deal of investment
Local business could be threat
The failing of the products causes significant deficits for the business.
Requires high level proper plan and related to high risk of success.
The marketplace is mass and the necessity huge effort to attract the prospective market.
Marketing Audit
Marketing audit talks about both exterior marketing environment and interior marketing environment.
4. 1 Exterior Marketing Environment and Marketing Audit
4. 1. 1 Market Size/Talk about 2009
As of March 2009, Tesco has a 30. 4% share of the UK food market while ASDA's talk about is 17. 5%, accompanied by Sainsbury's at 16. 1%, and Morrisons at 11. 8%
Table 6: Market Size/Show 2009
Source: ASDA publishes financial infromatio.
The market talk about of ASDA shows that it is followed by the large market leaders TESCO. Nonetheless it has competitive market share as the distinctions are not too much. ASDA has chances to increase its market show by taking appropriate strategy.
4. 1. 2 Market Growth
The market development data shows the positioning of Alliance Boots Plc last few years. The marketplace growth data has listed below by using diagram:
Figure 7: ASDA market growth report (the times, and the Euromonitor, 2009)
The market development data implies that ASDA Plc has increasing market growth and it offers potential market advantages. If ASDA may take suited market strategy and attempts to expand its business it will do that.
4. 1. 3 PORTER'S Five Forces
For the factors that highly influence the business environment are modelled by the Porter. Porter called these major factors as Porter Five Forces. These five causes are:
BARRIERS TO ENTRY:
Due to level of popularity and operating of grocery business there is always a potential risk of entering new competitors in this business. Although ASDA has strong brand image and customers are determined so there would not be any issue.
SUPLIER Electric power:
The local organisations have limited selection of purchasing their goods from the local suppliers. Therefore suppliers produce an immense impact on deciding the rate because of their goods. Organisations have to deal with the suppliers, and this discount is more in the favour of dealer somewhat to be natural.
BUYER POWER:
The buyer has a high vitality of bargaining when compared with organization because the end product is made purposefully to satisfy the buyers. Furthermore buyers have significantly more options of moving over to other brands as the clients always want to get high quality product in low price.
RIVALRY:
Organizations have to face an immense competition in marketplaces. There is a vigorous competition in the retail industry of food, food, etc which is majorly due to price cutting strategies of the organizations to catch the attention of the potential buyers towards them. Therefore ASDA has to always consider the purchase price trimming strategies of its rival organizations in deciding the cost for its products in order to capture the marketplace because of its product.
THREATS OF SUBSITUTES:
The risks of substitutes for ASDA are extremely much reduced than its competitors because ASDA always follow the style of introducing the good quality in as much less price as it could.
4. 1. 4 Synopsis of Exterior Audit
The external audit of ASDA plc demonstrates ASDA has increasing its market and they have market share word to TESCO. If it can able to take suited business strategy it'll in a position to make competitive advantages and become leading supermarket in UK.
4. 2 PESTEL Analysis
Table 7: PESTEL Analysis
Political
Economic
The Government has provided such legislation for work that strongly appreciates retailers to employ new employees having salaries from low and high both. Therefore by hiring new employees and by training them ASDA can give a hard time to its rivals.
According to BBC News in '09 2009 there are 10 more countries in Eu marketed the trade between western and eastern European countries, which is is actually a good signal for ASDA to make its business huge in the whole Europe.
The new upsurge in the worthiness Added Tax (VAT) will cause the prices to rise and eventually reduce the profit benefits.
Increasing interest rates can also be a harmful factor for the business.
Due to the credit crunch there are large numbers of peoples are unemployed and it can have a negative effect on the business enterprise of ASDA.
Recession is leading to increase unemployment rate.
High inflation rate can also be an alarming factor for ASDA.
The slowdown in international grocery store and UK grocery store as well can vigorously impact the ASDA as ASDA is highly reliant on its food items.
Availability of type of products for the Asian and EU people.
Social
Technological
Large influx of the EU citizens in the UK requires extra accommodation, health insurance and care.
An ageing populace may lead to improve the unwillingness to do work and also to rely on pensions.
People are becoming more brand conscious and favor to choose their respected brands only.
Consumers have become more health conscious and always look for a nutritious diet.
Changing developments in the consumer's needs and increase in the demand of ready to use items.
Increasing demand in self-checkout systems by consumers is highly appreciated by ASDA.
Cash machines are installed within the store premises.
Enabling of online shopping facility made life easier.
Improved efficiency in maintaining stocks by using the bar-coding or RF-ID tags.
Introduction of new product types (mobile phones, mp3 players, etc. ) in ASDA.
The new technology is effective for both consumers and retailers as it provides convenience to consumer, reliability and efficiency to stores.
Environmental
Legal
More awareness for the environmental issues has been spread out among people.
Recycling is now turn into a common functional.
To save energy is more required and it is the demand for the coming future.
Reduction in the dangerous carbon products affecting the environment becomes a main aim to be performed.
ASDA is also taking its responsibilities to use the actions against all these environmental issues.
Limitations in trade legislation can have an adverse impact on ASDA's business.
The VAT increased by the federal government may also be impacting both food and non-food parts of ASDA.
4. 3 Internal Marketing Environment and Marketing Audit
4. 3. 1 Sales Data
The two years Sales data of ASDA Plc has listed below:
Table 8: Sales Data
Source: Euromonitor Record, 2009
The sales data demonstrates ASDA plc has increase its sales comparing with 2007 and 2009. Which means that ASDA's market is increasing daily. It could improve its market more if it can in a position to take suitable online marketing strategy and activities to success its business.
ASDA spend more income in its marketing sectors in 2009 2009 than 2008. It demonstrates ASDA incising its marketing activities and making business widened.
4. 3. 3 SWOT Research:
SWOT analysis operates as a fundamental part of any marketing plan as it determines the advantages, weaknesses, opportunities and risks for the business. A business plan its marketing strategy by considering what advantages it have over its rivals and what should be upgraded to conquer its weaknesses as much as possible.
Table 10: SWOT Analysis
Strengths
Weaknesses
2nd in ultra marketplaces in UK
Has strong brand image
2nd biggest market talk about in UK
Products are cheap
Providing healthy and fresh food
Peoples trustworthy
No small outlets where everyone can approach
Always working with bigger stores which costs a lot
No proper layout for recycling which leads to huge wastage of money
Opportunities
Threats
Have experience of international expansion, so that it can use it to explore new emerging markets.
Data basic of customers could be used to generate new business
Reliable to travel in virtually any business
Rivalry supermarkets are biggest danger.
Decreasing prices influences profits
Not available in all elements of country.
Others supermarkets aren't so far in contest of market show.
By doing the SWOT evaluation it can be clearly determined that what advantages ASDA have that must definitely be taken in mind while developing its marketing strategies in future.
4. 3. 4 BOSTON CONSULTING GROUP MATRIX:
Figure 8: BCG show matrix (image extracted from google images)
The Boston matrix details the four phases of the businesses/products in terms of their earnings and the marketplace growth potential. It identifies the four levels as a function of market development and market talk about.
Question Marks: This is the stage where in fact the businesses/products have high market growth rate but having low market share. These businesses/products have the capability to fully capture market but do not have enough resources to promote them. The business can choose a promotion strategy for such products to increase their market talk about.
Dogs: These are the businesses/products having low market development rate and low market talk about as well. When the organizations see potential to increase in such products they set up some promotional and marketing activities for the coffee lover.
Cash Cows: They are the low-growth businesses/products having relatively high market talk about. These are matured products that make major revenue for the business and they only require relatively really small investments in order to generate large revenue that could cause them to be a superstar product/business of the business.
Stars: They are the businesses/products having high expansion rate along with high market talk about. They are the major and revenue generators of the organization. Initially the products require heavy investment funds to capture the market and match the consumer's demand.
The business of ASDA falls into the category of Cash Cows as they have high market share with relatively low market-growth.
4. 3. 5 ANSOFF MATRIX:
The ANSOFF matrix identifies the ASDA's present products and how ASDA can improvise in its business using its potential products at the moment and in the arriving future. The four progress approaches for ASDA have been reviewed including the possibilities of diversifying the business enterprise of ASDA in different areas are also discussed in the matrix below.
Table 11: Ansoff Matrix for ASDA
EXISTING PRODUCTS
NEW PRODUCTS
EXISTING MARKETS
Value chain
Insurance
Mobile mobile phone services
Discounts brands
Cash Back again (short lived loan)
Halal beef and food
Expansion in non-food segment
Mobile wide band
Club card introduction
Mobile phones
Cooked halal meat and food
NEW MARKETS
International expansion
New market segment
Restaurants
Diversifying its market in a new way
Banks
Mortgages
Cars
4. 4 Key Conclusions of the Marketing Audit
The exterior and internal marketing audit finds out today's situation of ASDA plc. For the marketing audit it is clear with the ASDA increasing its market talk about as well as its business expenditures. ASDA will competitive market position within three to 5 years if it performs its business in a same ways.
4. 5 Analysis of potential responses to the changes identified
ASDA has stable business market at the moment. In case of changing environment ASDA will take the following steps:
ASDA expand its business internationally and open more stores in UK.
It will take more brand extension to draw in customer.
It will take market penetration technique to make customer pleased with various offers on their existing products.
In case of drop market show ASDA will take research and development program to determine market trends and its suitable strategies.
Government effort of giving financial and non-financial incentives to the companies buying the overall economy of UK is a superb advantage for ASDA as they are putting large investments in current economic climate of UK.
4. 6 How Non-Marketing Departments should change over 3 years
There are three main non marketing departments that can immensely influence marketing division are as follows:
Finance office: Among the major departments in an group is the financing department. It is crucial to think about this department before making any strategies into action because it is the section that estimates the cover rest of the departments.
1st year plan:
In 1st calendar year finance division should detect and examine all the taxes, competitor's performance, inflation rate, costs, exchange rate, profit percentage etc. The finance department also needs to inform other departments to expose changes where it is mandatory.
2nd calendar year plan:
After evaluating first year's performance it will generate cover 2nd year
It should Assist in setting corporate objectives for new calendar year.
Should forecast next yr sales goals and implement any strategies if needed.
3rd time plan:
Announce the results for efficiency of past years
Evaluate and access prior strategies and records to produce practical cover next year
Should evaluate prior corporate objectives to include new targets.
Examine performance for previous years
Produce necessary financing if necessary for 3rd year.
Sales office: sales division have importance of its own. On this scenario all the talked about departments work meticulously. More effectively sales team will be working side by side with marketing section. For the increment in the sales volume of the company both departments are in charge.
1st time plan:
Introduce better customer services and versatility.
By improvisation with various essential techniques it can benefit in increasing sales.
Include talented personnel in their groups to increase their sales
2nd calendar year plan:
To improve customer service.
Efforts must be made to increase the shares in market. It could be done by attracting the customers by giving them some special deals.
Sales targets must be set.
3rd 12 months plan:
Create environment for team working
Make environment of team issues and try to achieve these challenges
Enhance customer support standards
HR division: It is the duty of the HR division to recruit and choose the best staff for the organization and to teach them after.
1st calendar year plan:
Recruit desired people concentrating on their experience and motivation.
Recruit people for all your departments.
Conduct the process for the original recruitment, select the best available individuals focused on their works.
2nd yr plan:
Motivate staff giving them bonuses
Encourage these to work hard by investing in some targets.
Forecast the manpower/workforce required for the near future.
Develop skilful employees for the organization
Organize a person responses form.
3rd yr plan:
Give performance honors to those who achieved good grades in previous calendar year targets.
Introduce more tournaments.
Arrange activities and workshops to improve the skills necessary for customer services.
Design and provide management development programmes for managers.
