SOSTAC Model for Marketing Expansion

The assignment analyzes the SOSTAC (Situation, Objective, Strategy, Tactics, Action, Control) model and its application in expanding a product line. It emphasizes understanding the model's various components – from analyzing the market situation to implementing specific tactics and controlling results – for successful marketing expansion. The report highlights the importance of clear objectives, tailored strategies, and consistent action for achieving growth.

Principal and
Practice of
Marketing

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
SOSTAC model of marketing.....................................................................................................1
TASK 2............................................................................................................................................5
Effectiveness of retailers current SOSTAC strategy...................................................................5
Marketing mix: ...........................................................................................................................6
Current marketing strategy used by the supermarket in the UK, and evaluated in task two,
could be implemented in the international market you chose in task one?.................................7
CONCLUSION................................................................................................................................9
REFERENCES .............................................................................................................................10

INTRODUCTION
Marketing refers to all those activities which are done for the development of product or
brand in order to conduct sales. Principle of marketing are defined as the activities in which the
goods can be transferred to consumers through advertising, storing and selling. Sainsbury's is a
Public limited company, headquartered in Holborn, London. It deals in selling various products
like home products, luxury beauty and food products (Allyson Dooley, Jones and Iverson, 2012).
The company was founded by John James Sainsbury 150 years ago, in 1869. In this report,
Sainsbury's has been taken which is not established in India for the development of Sainsbury.
SOSTAC model is popular for marketing and planning of business. This model is focussing on
movement and operation of Sainsbury in India. In the present study, detailed study of SOSTAC
model will be done and evaluation of retailers current strategy used .
TASK 1
SOSTAC model of marketing.
This model is defined as the marketing model which was developed in 1990 by PR
Smith. It stands for six fundamental aspects of marketing, they are, situation, objective, strategy,
tactics, action and control. The model was developed to do business planning in easier and
quicker way. The model considered SWOT analysis which helped in executing the campaign of
marketing. In the context of expanding Sainsburry in India,SOSTAC model is explained as
following:
1.Situation Analysis
For rendering a detailed marketing of Sainbury in India, various steps were performed .
The first step constitutes Situation analysis, it refers to various methods used by managers to
analyse internal and external business environment in order to understand abilities and
customers of the organisation (Alserhan, 2017). Different tools were used to conduct this audit
an which begins with macro environment.
Macro Environment: It constitutes the external environmental factors which influence the
success of business, strategies and decision-making and are considered uncountable in business.
Macro environment considers social, political, economical, technological, legal and
environmental factors.
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Political factors : The political factors in India have a great influence on different organisations
which are working in the country. In India, rate of interest is high on government and consumer
debts, it impacts the attitude of customers and have great pressure on business condition.
Sainsbury has a great opportunity to explore the market opportunities in India as there are very
less supermarkets so government is contributing in providing manpower and domestic resources. Economical factors : These factors play an important role in every industry as they
affects costs, demand, prices and profitability (Armstrong and et. al., 2014). Growth in
rate of unemployment and Inflation in food prices are the factors due to which Sainsbury
will threaten to enter the Indian market. Social factors: These factors include all those aspects which are causing any harm to the
society which may be values, beliefs, etc. In the modern environment, customers prefer to
have all products available under one roof. So by introducing non-food products in India,
as there is growing demand in certain type of products Sainsbury can extend its market .
Ethics and cultural diversity will affect the social relations, as they contribute a major
role in development of company in India. Technological factors : These are the factors which effect the operations and success of
every business. Technological development helps an organisation to expand its capacity
in the areas of growing demands. As there is huge advancement in technology, Sainsbury
can start some online services in India because online culture is prevailing there which
will help him in increasing customer awareness, brand image in the competitive world. Environmental factor : These are the known characteristics present in the environment
which effects the growth, survival and operations of an organisation. Organisations
impacts environment either in direct or indirect way (Baker, 2016). In the context of
Sainsbury, there is environmental issue of water scarcity and pollution is prevailing in
India, so sainsbury can take some initiative that effectively manages waste, packaging
and recycling.
 Legislative factors : These are the various policies which have direct impact on the
organisational performance. In context of Sainsbury in India, it can adapt new tax by
modifying its products compiled according to the legislative requirements.
2. Objective
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objectives are the plans made in regard of achieving a desired result. Sainsbury has a number of
objectives .The objective is largely dependent upon size, resources and the market in which it
functions. Ever organisation objectives should be specific, measurable,realistic, achievable and
time bounded. In the present context of Sainsbury is:
 To attain high level of customer satisfaction by providing high quality of products. This
means they go beyond customer expectation by providing high quality products at fair
prices.
3. Strategy
Strategy is a desired plan of action in order to achieve results. The strategy used by Sainsbury is
STP(segmenting, targeting, positioning) strategy which allows the company to expand more in a
diverse role (Burns, Bush and Sinha, 2014). This strategy allows firm to re-position itself on the
basis of current market demand. The strategies are explained in detail as follows : Segmentation : It is the process of dividing the market into different segments on the
basis of needs, wants and other characteristics, so that the marketers can easily modify
their marketing movements. Segmentation in Sainsbury is done by dividing customers
into different groups on the basis of different characteristics. It is based on geographic
(region, density), demographic(age, gender, income, occupation) ,psycho
graphic(lifestyle , personality), behavioural bases(attitude, status, occasion). Targeting : It is the process of breaking a large market into small segments in order to
concentrate on specific group of customers. It focuses solely on serving a unique
customer base. Sainsbury focus to develop a target market which is both value and
quality conscious. The main focus of the organisation should be necessarily on the
development of wide target audience which is linked directly to the range of products
offered.
 Positioning : It refers to the ways in which image or identity of brand could be
established in order to attract customer segment. Position is a way through which a
company can outshine and give good competition in the market. Sainsbury has
positioned itself at the mid-tier of the market (Christopher and Peck, 2012). The idea
behind it was to introduce a product which can compete in market from pricing point of
view which would allow the organisation to develop its market presence.
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This is a critical view for development of an organisation and re-position itself on the basis of
current market trends.
Under this concern ,Tactics are the actions taken to support strategy. These are the goals
which can be achieved in a shorter time frame and includes specific plans, resources, best
practices,etc. Various tactics are : Product Tactics : It refers to any product or service . It is an integral part of any business
which is linked with offering of the brand. Product tactics arises when a product is not
satisfying the need of customers. These tactics could be avoided by developing a new
product line of the bestsellers (Corrigan, 2011). In Sainsbury, by selling its products
using cost conscious approach with high quality products which will generate a product
line which can compete directly with the discounted market segment. Price Tactics : It is the most crucial element of marketing-mix which is decided by
keeping in mind the market price of goods and services. These tactics arises when a
competitor is selling same product at less price. These tactics could be avoided by
analysing the competitive market. In sainsbury, the pricing models needs to be improved,
which could be done only by using different pricing strategy. It will let the organisation
to improve its market position and develop a wide audience spectrum.
 Place Tactics : It is referred as the area in which organisation wants to sell its products.
These tactics arises if the outlet is not located in a good area. In Sainsbury, planning will
be done regarding how to distribute products and offer services, the basic approach used
here is primary location of the business. It will establish the store where there is need and
demand for the product. The company can use different strategies such as online selling
or taking order from customer.
It will allow the organisation to have a much stronger position in the market and will improve
the position.
6. Actions:
It refers to allocation of different responsibilities and duties to individuals for attainment of
specific task. They are the goals which a company desires to achieve (Ennew, Waite and Waite,
2013). In the context of sainsbury, to open its branch in India they need to become more
responsible about their work . Sainsbury can make some plans for the improvement of their
working. For attainment of desired goals, Sainsbury can hire new individuals who can give better
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suggestions for the needed improvement in their services, as they are facing the problem of
innovation.
7. Control : It determines to what extent goals are achieved and what all responses are
given by the customers availing that service and work in an efficient manner.
TASK 2
Effectiveness of retailers current SOSTAC strategy
Strategy : It precise the operation, imagination and direction of an organisation. Strategy used by
Sainsbury is STP which is the most ordinarily applied marketing model in practice.
Segmentation : It is the process of dividing market into parts or segment having buyers
of same characteristics, so that company will able to meet their need successfully. Sainsbury
have outlet throughout the world. It uses two variables for segmentation one is sociology
variable and the other is psycho graphic variable (Gbadamosi, 2013). Sociology variable have
segmented the market by using factors such as income, education, sex, age, family size,
occupation and nationality. Segmentation helps the company to increase sales by improving the
standard of service provided to customer. It helps the company to expand to a nearby territory.
Segmenting into group will help the company to have better communication among each other
and also improve the brand image and thus will lead to the profitability of the firm.
Targeting: It is the process of selecting the customers from the potential customers. It
mainly target the family units. As at this supermarket customers are able to get what they want at
their convenience. Sainsbury by reaching to the right customers is able to build the customer
loyalty which lead to the customer retention. It is not possible for the company to speak to every
customer in the market , targeting will help the company to differentiate the brand from other
competitors who are available in the market.
Positioning: It is the last step of STP strategy. Positioning refers to the position of
product in relation to other similar offering in the market place. A good position makes the
product stand best out of the rest (Horner and Swarbrooke, 2012). Sainsbury positioning in the
UK gave it a competitive advantage s compared to other supermarket available as it has many
outlets there this lead to increase in market share as well as also improves the customer service.
Positioning of Sainsbury will help the company to introduce a new product in the market
successfully as by taking advantage of product market can be easily penetrated.
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Marketing mix:
It refers to set of action that company uses to promote its product in the market. It is one
of the important marketing tool because it helps the company to improve its business. The 4P of
marketing mix are discussed below:
Product: It refers to the item produced by the company to satisfy the needs of customers.
Sainsbury has both supermarkets as well as local convenience store which are offering more that
30,000 products which includes wide range of products like fruits and vegetables, Fish and
meats, chilled product, Dairy , bakery , Beer , wine, Health and beauty products. It works after
developing of new products and raise the existing products (Kotler and Armstrong, 2013).
Place: It refers to the location of product which can be easily approachable to the
customers. Sainsbury has its headquarter in London. It has 598 supermarket and 714
convenience store. The company is also having an online portal for internet shopping where
customer can order their product online. It also offers a free home delivery for its product to its
regular customers.
Price: It is the amount which customer has to pay for the product. Sainsbury offers wide
range of product with different pricing for different product. It maintain quality of products and
services and thus the pricing strategy is based on value for money. It does not work on the
strategy of price cutting instead it made a use of price discrimination. Groceries rate are
relatively low as compared to other companies because it it directly brought the product from
local market. It provide wide range of products in kids section at affordable price as compared to
other companies.
Promotion: It is very necessary for the company to promote product which enable the
customer to know about the product. Sainsbury has promoted its product by using newspaper,
radio, television and so on to build a brand name (Kotler and et. al., 2014). By official website it
in able to upload product information which works as a effective promotional tool . Sainsbury
has also launched 'Nectar reward card' to increase the sales and it helped the customers to earn
reward point on every purchase made at the store. This card also helped the company to build a
strong customer database.
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TASK 3
Current marketing strategy used by the supermarket in the UK, and evaluated in task two, could
be implemented in the international market you chose in task one?
Marketing strategy plays a great role in any organisation. Without using proper Strategy
of marketing organisation cannot create awareness in the mind of the customer. STP is currently
used by Sainsbury for its regular operation. In segmentation , it divides the group on the basis of
social and and psychological factors which help the company to expand worlwide. In targeting ,
the main focus is on the family unit and in positioning it mainly has focus over UK as it gives
competitive advantage. Competition is growing at a fast pace, so to compete with it and expand
the market international company has to follow other strategies also. The international market
taken in first context is India (Lilien, Rangaswamy and De Bruyn, 2013). As STP alone in the
India will not work much as there segmentation will be done on the basis of income of the people
as it is not that developed country as UK and major targeting will be done to both middle as well
as high society group because normally the people of lower group prefers to buy the product
from retail market as there are so many local market are available which provides product at
cheap rate. In order to get success in the operation of Sainsbury other strategies need to be
followed. Some of them are discussed below:
 Diversification: Sainsbury can diversify its product from one to another as his plays a
important role in the growth of the company.
 Awareness: It is very important for the company to increase the awreness of the product.
As sainsbury is investing in lot of products in different sector it is very important to tell
about the product as after that only maximum profit can be achieved.
 Customer acquisition : After creating awareness inj the mind of customer abnout the
products, Customer starts trusting the company which turns them to be loyal and if such
customer joins with us they will definitely promote the company in one or other way.
 Digital marketing: This is one of the most effective strategy often used by the company.
By implementing this strategy in India, customers are able to see the review of the
product online and get proper information for the same (Shaw, 2016). This can be the
positive aspect for the organisation.
 Brand positioning: Sainsbury is one of the top brand in supermarket in UK and its only
successful there because the company was successful in gaining the trust o customers. In
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order to expand in India, firstly the company has to take the help of marketing strategies
to position the brand (Yeshin, 2012).. With the brand name it has to target the middle
group as well as high class group.
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CONCLUSION
As discussed in the above report it has been concluded that SOSTAC model is defined as
the model which consider different strategy which can be applied in different situation. In order
to expand the product the organisation uses SOSTAC model. Here S stands for situation which
means environment of the place where the organisation stands and this can easily be understood
by the political factors . Next is objective, which means that object of the company should be
clearly defined which company can achieve. For achieving the object company need tyo use
certain strategies. In this model different tactics are also used to create customers. After
implementing the plan take action and control by correcting the problems. In order to increase
the sales of the organisation one has to understand the SOSTAC model as well as different
strategies.
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REFERENCES
Books and journals
Allyson Dooley, Jones and Iverson, 2012. Web 2.0: an assessment of social marketing
principles. Journal of Social Marketing 2(3). pp.207-221.
Alserhan, B. A., 2017. The principles of Islamic marketing. Routledge.
Armstrong, G. and et. al., 2014. Principles of marketing. Pearson Australia.
Baker, M. J., 2016. What is marketing?. In The Marketing Book(pp. 25-42). Routledge.
Burns, A. C., Bush, R. F. and Sinha, N., 2014. Marketing research (Vol. 7). Harlow: Pearson.
Christopher, M. and Peck, H., 2012. Marketing logistics. Routledge.
Corrigan, P. W., 2011. Best practices: Strategic stigma change (SSC): Five principles for social
marketing campaigns to reduce stigma. Psychiatric Services. 62(8). pp.824-826.
Ennew, C., Waite, N. and Waite, R., 2013. Financial services marketing: An international guide
to principles and practice. Routledge.
Gbadamosi, A., 2013. Principles of marketing: A value-based approach. Macmillan International
Higher Education.
Horner, S. and Swarbrooke, J., 2012. Leisure marketing. Routledge.
Kotler, P. and Armstrong, G., 2013. Principles of Marketing (16th Global Edition).
Kotler, P. and et. al., 2014. Principles of Marketing, 4th European edition. Financial
times/Prentice hall.
Lilien, G. L., Rangaswamy, A. and De Bruyn, A., 2013. Principles of marketing engineering.
DecisionPro.
Shaw, S., 2016. Airline marketing and management. Routledge.
Yeshin, T., 2012. Integrated marketing communications. Routledge.
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