MARK1227 : Brand Management

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Course MARK1227: Brand Management Course School/Level B/UG
Coursework Report Assessment Weight 100.00%
Tutor EO Mogaji Submission Deadline 03/04/2020
Coursework is receipted on the understanding that it is the student's own work and that it has not,
in whole or part, been presented elsewhere for assessment. Where material has been used from
other sources it has been properly acknowledged in accordance with the University's Regulations
regarding Cheating and Plagiarism.
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Executive summary:-
This report is an overview of the UK’s supermarket merger between Asda and Sainsbury’s. This
report includes all the elements of branding. Starting from the introduction, the market
competition, distribution policies, brand equity and customer-based brand equity.
Introduction:-
The United Kingdom’s supermarket sector has always been competitive and to continue the
survival it requires a relentless focus on what an individual wants and how will he/she behaves
and the ability to respond quickly. This report is about the merge between the UK’s two
supermarket retailer giants Asda-Sainsbury’s. Also, this report will identify some approaches
which retailers in the grocery sector can adapt to survive in a highly competitive market. I will
describe some in-depth merging strategy of Asda-Sainsbury’s. This will also identify the
competitive position of the supermarket sector. I have created a new brand for the merger of
Asda-Sainsbury’s i.e. Bodega.
Current situation of the brands:-
Asda sores Ltd. is a British supermarket retailer, headquartered in Leeds, West Yorkshire. The
company was founded in 1949. Asda has now more than 300 stores across the UK. The
company’s stores have been selling a wide variety of merchandise including food, apparel, and
along with housewares, entertainment items.
Talking about its revenue Asda made £803.2 million in 2019. Asda has been making profits and
its percentage has been increasing every year. Further, Asda has an advantage because their
parent company Walmart are with them since 1999. The main advantage of Asda is that
Walmart is giving out its resources to Asda so that they can headstart in the digital market. Ever
since Asda’s mobile app is in top both in app store as well as play store, more than half of the
sales of Asda’s supermarket is done online. Asda currently has a market share of 15.4
% taking over Sainsbury’s and making itself UK’s second-largest supermarket behind Tesco.
Sainsbury’s was founded in 1869, this British supermarket retailer is headquartered in London,
United Kingdom. It has around 1415 stores all over the United Kingdom. Sainsbury’s have 45%
of its sales from their own brand lines product. Sainsbury’s have started expanding their network
by introducing the non-foods product. Their online operations have been developing and
growing with good pace sales at 20%.

In 2019, Sainsbury’s made £219 million profits but it was less than that of 2018 which was at
£309 million. Their main aim is price sensitivity which means they will provide customers with
products at a fair price and to lead cost leadership.
The main competitor:-
Tesco is the United kingdom’s largest supermarket retailer which holds 27% of the market
share. They have over 3400 stores around the United Kingdom. During the fiscal year, 2018/19
Tesco made a whopping £52 billion revenue, this revenue was £7 billion more than its prior
year. Tesco operates in 12 countries across Europe and Asia. Tesco maintained its top position
for years because of their strategies like branding and marketing.
Other than its originality Tesco have started providing financial services in the name of Tesco
Personal Finance (TPF) and also proving internet connections. This helped Tesco in generating
the revenue and therefore increase in profit margin. As a matter of fact, the competitive rivalry
has always been a concern for Tesco, the merger between Asda and Sainsbury’s will risk Tesco
of losing its market leadership. But to overcome this Tesco has focused more on declining the
prices of the product without compromising the product quality.
The use of Tesco’s Clubcard has helped them in retaining the customers, as it is a promotional
being used by Tesco. The Tesco Clubcard gives a discount and keeps customers loyal. To
ensure that their new pricing policies have introduced Tesco also adverts in T.V, radio,
newspapers to keep in touch with their new pricing and promotions.
Tesco’s success is because of the brand they build over the years. Its brand equity and the
associations have helped the brand to expand into new sections of the market. They analysed
the business environment around them, saw the dynamic changes and went on launching
Tesco.com, therefore, gaining a first-mover advantage.
The merger?
The merge between Asda and Sainsbury’s has been in talks to take on supermarket giant
Tesco. In the theoretical term, this merge is called as Brand extension. This a marketing
strategy used by the company to establish a new brand with an established brand name. To
mark the success this extension should be logically associate between the original product and
the new product. The increase market share, boosting profits and expanded offerings is what
successful brand extensions are about. Some of the successful mergers like Disney and Pixar,
Google and Android.
Asda and Sainsbury’s merger of £15 billion and to increase the market share to 31% to take on
Tesco is appalling. The main idea of merger is to lower the product prices and making them
more competitive on the basis of pricing.

Not only the business environment is dynamic but also customers minds are dynamic.
Customers demand value and quality. The technological changes have been the main tool for
the merger because technological advances have been disrupting the grocery sectors to some
extent. Unlike Asda-Sainsbury’s, Amazon have stepped into the UK’s grocery sector working
with Morrisons to offer a plenty of fresh and quality products as a part of its Amazon pantry,
prime now and Amazon fresh.
What is a Brand?
A brand is the name of the product or service which is made by a particular company. The
brand has its own identity which helps to differentiate from the competitors. A good brand
attracts customers and its the most valuable asset that a company holds.
In the business world, brands have their own identity which is why it has to be protected.
Companies usually secure a trademark or service mark from legal departments for their Brands.
Brands are ofter presented in the form of logos, designs or graphic presentations.
Today Amazon.com and Apple inc. are the most valuable brands in the world. Amazon has a
brand valuation of $315.5 billion whereas Apple has $309.3 billion. Here are some examples of
famous brands.