Marketing Analysis for Sainsbury's

This assignment provides an in-depth analysis of Sainsbury's marketing efforts, focusing on segmentation, targeting, and positioning. The document discusses the importance of marketing in the retail industry and how Sainsbury's can improve its work environment by adding products and expanding into more countries. It also emphasizes the need for social media advertising and website development.

PRINCIPLES AND PRACTICES OF
MARKETING

Table of Contents
INTRODUCTION...........................................................................................................................1
Q1. Effectiveness of Sainsbury’s marketing strategies..........................................................1
Q2. Digital marketing strategies used by Sainsbury..............................................................5
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................10

INTRODUCTION
Marketing is critical function of most if businesses. Marketing is a broad process which
includes all the activities of buying and selling of product or service. It includes everything that a
company does to attract its customers. It involves selling, advertising, research, designing of
product, promotion, development and all after sell services to satisfy customers. It is usually a
consumer based function which is done to meet needs and wants of customer. Spending on
marketing is healthful as it is going to benefit company for years to come (Lees-Marshment,
2014.). process of marketing gets complete only when exchange takes place. Making videos,
contents, application, advertisements and website and selling products online is a type of digital
marketing. We have covered about effectiveness of marketing strategies and digital marketing
strategies of Sainsbury.
Sainsbury is a supermarket chain, founded in 1869 by John James Sainsbury and his wife.
It is among the largest supermarket chains in the UK with 15.8% market share according to
2017. They have excellent branding and promotional techniques which draw attention of many
customers. Company has expanded its business by not only selling food and groceries but they
have entered into clothing, banking and energy as well. Whole business of Sainsbury is divided
into 3 groups which are supermarket, Banks and Argos.
Q1. Effectiveness of Sainsbury’s marketing strategies
Sainsbury is among the largest supermarkets in UK. The company currently has 16%
market share and reports shows that revenue of company was 23 billion in 2014. Though
company is operating at a huge amount of profits but a decline is being seen in profits and
revenues. But, over past few years’ company is facing downfall in their sales and few years back
company had generated lowest revenue. Company is seen moving out of track so a check on
plans and strategies of marketing is done on regular basis. A marketing audit is conducted to
keep a check, which allows them to find where they lack and what steps are required to improve
their position in market. Cultures and values defines their business strategy. Their main business
objective is to provide outstanding food, stylish clothes, necessities like electronic gadgets, home
appliances and merchandise. The market is segmented into different forms.
Important areas are market segmentation, positioning, targeting and promotional
marketing strategy which were analyzed. Division is based on geographical, market,
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demographics and behavior (Tanner and Raymond, 2015.). Segmentation is among the most
important elements and division of market is in small segments to reach target customers. The
market of Sainsbury is divided into segments of geographical and behavioral. Sainsbury includes
those products which can satisfy needs and wants of its customers situated in UK region.
Company when seen from behavioral point, is not too large and not very small, it is a mid-tier-
brand. The main aim is to conquer customer by selling the best products.
Targeting refers to breaking of large market into smaller sections in which focus is on
particular group of people present. It divides the customers with unique and same characteristics
together. It also shows in what way an organization represents itself in the market. Sainsbury
uses behavioral segmentation which helps in reaching the customers based on their attitude and
nature (Nowak and et.al., 2015). Positioning is determined by customer himself. Position is an
image of product in the eyes of customers. It is the location where brand occupies its space and is
different from that of its competitors. Sainsbury keeps prices of its goods and services low so
that it can grab attention of customers by selling low price, differentiated goods.
The marketing strategy of Sainsbury is based on factors being flexible which means
every market is different so needs of customers are also different. People of Japan prefers to buy
food products which come in small packets. Sainsbury saw this and started producing goods
which are preferred by consumers. They also maintained focus on customer’s wants, which type
of product and services they like and how much price should be tagged.
Marketing mix of Sainsbury
Product: Sainsbury offers variety of products to its customers. They regularly look for
innovation and development of new products for their brand and tries to improve existing
product's quality and quantity. Sainsbury works as a supermarket and they also have local stores
where more than 30,000 products are offered out of which 20% are their own product. They use
biodegradable waste of potatoes to make trays in which they sell their organic fruits.
Price: This factor refers providing customers with the best goods and services at minimum
prices. Sainsbury tries to keep the prices of their goods as low as possible to attract more
customers. They use competitive pricing strategy and price cutting policy in which prices of
goods as low as possible for a short time period. The products for kids are usually low priced and
high quality, which attracts people.
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Place: Sainsbury is divided into supermarkets and convenience store and has more than 1000
stores out of which 45 stores work 24*7 and other stores opens till midnight on Friday. They are
also located online where you can buy their products from website and apps. They provide
service of home delivery to their customers. Sainsbury currently has 2 National distribution
centers, 2 store houses to keep frozen food, 13 regional distribution centers and other few depots.
Promotion: They use various strategies to grab attention of its customers such as above and
below the line (Kotler and Armstrong, 2015). These strategies help to build brand name. In
Above the line they use TV, radio, pamphlets and in Below the line they use sales promotion,
direct mail marketing, in store marketing, brand activation etc. They also launched cards at store
for its customers so that they can earn points at time of purchase and may redeem those points on
their next purchase.
Sainsbury’s focus is to reach more and more customers by using various techniques of
discounting so that they can generate more profits and make more revenue. Sainsbury can be
explained through porter's model. The company is currently operating at large scale in market
having store at various locations and faces a huge threat from new competitors. It is easy to enter
and exit retail industry but it requires huge amount of investment (Tanner and Raymond, 2015).
Another threat is pricing and maintenance of quality products at store. There are many
organizations who have failed as they were unable to meet the customer choices and preferences.
There is high threat of substitutes because only 20% of products are of their own brand
and rest of them are of other common brands which one may find at local stores. Customers can
buy such common products from other stores which may increase competition in the market.
Sainsbury ensures that they keep in touch with their old customers by offering them coupons and
discounts. The bargaining power of supplier is usually low as when they increase price of good
Sainsbury may switch to another suppliers selling same kind of product.
The degree of competition is very high. There are already so many retail brands present
in the market providing great competition (Serrat, 2017). Sainsbury will have to put efforts to
make itself different from others and grab position in the market. By introducing the concept of
online shopping, it has become possible to attract more customers and increase revenue of
company. Their stores have the best quality baskets and trolleys.
Sainsbury can use these strategies to gain advantage in market:
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 Due to increasing health issues, people are more concerned about their health so company
can look for investing into this by producing organic food, dietary food and using
recyclable and biodegradable bags.
 They can also open training institutes for retailing and safety clinics for their human
resource.
 They can also focus on a geographical location to target its customers. They must open
stores with products that people of that region prefer. Like, there are countries where
people prefer vegetarian food. So, it can help to increase sales. They must also adopt
differential strategies to promote their products. Sainsbury are already known as
environmental friendly retailer.
Recommendations:
Recommendations for Sainsbury to improve its business activities to attract more
customers. The innovative activities and methods that company should adapt to become different
from others in the market are:
 Sainsbury has quite a good range of electronic products at their store but there is a need
to add more variety of electronic goods. It is suggested to them to add affordable range of
laptops as they are so much in trend and are handy. There is a good range of laptops
available in market to meet demand of customers and company should adopt this, to
increase their sales and revenue in the market.
 They can expand their business by collaborating with other businesses who are working
in online market. They can do a tie up with local retailers of various countries to sell their
products online on Sainsbury websites. British products are of huge demand in various
countries.
 They can also expand by stepping into digital marketing. Not all the products of
Sainsbury are accessible on their sites but are available in stores. There is a need to look
after this. And they should expand their online presence to reach more customers.
 They can even open their stores in rural markets as people of rural areas prefer to buy
products which are branded. They move to urban areas to buy branded products.
 Opening of stores in countries where disposable income of people is good enough. An
economist is to be appointed to keep a check on financial position of different countries
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that would help in expanding into those countries. Also, opening of store where there is
less competition and more demand would be more beneficial for Sainsbury.
A proper planning is to be done to find if the implemented plan is beneficial or not. What
tools and techniques one should implement while developing strategies? Proper planning helps in
reaching the right customers, at right time, with right products. Planning is all about what is to be
produced, when and how it should be produced, will it be beneficial or not. A gap arises when
actual plan or performance does not match with standard plan. Marketing tools are road to
success if used properly. Market planning helps to determine Sainsbury’s competitors, what
plans and strategies they used to reach the customers, trends in market, type of product to be
produced etc. Sainsbury appoints many researchers to do research on changing market trends and
keep a watch on its competitors (Goworek, McGoldrick and McGoldrick, 2015). They make
small plans which may be daily, weekly or monthly. They have a proper chain of command
which flows from higher to lower authority. This helps in easy flow of instructions.
Q2. Digital marketing strategies used by Sainsbury
About 70% of the people in UK shop online. And this data is expected to increase in
coming years. It is vital for retail sectors to use online industrial tools like social media, digital
ads, online payment facility to promote their goods.
Sainsbury has started using social media as medium of exchange for goods and services.
Social media marketing is very trending. It includes creation of websites and applications which
helps users to share contents with rest of the world so that they can get connected. Social media
is most emerging tool for promotion of goods which is used by Sainsbury to achieve its goals
and objectives in a better way. Marketing strategy of Sainsbury are mostly TV ads. The company
recently made very attractive Christmas ads which featured the voice of famous TV
personalities.
There animated ad named “Tale of Father” was among trending videos on You Tube list
with the highest number of view. Most of the firms uses social media marketing to communicate
with its customers and external parties by using multi-pronged strategy used at various level.
People also use social media for internal communication which is known as Enterprise social
media (ESM). These social media platform helps employees to communicate with their co-
workers and make easy to broadcast message or instruction to all the people at large. It has made
communication easy and fast.
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Sainsbury, a leading supermarket retailer based in UK has expanded their business and
entered into banking and energy sector. They have current market share of 16.8%. This company
currently has entered in the line of social media which gives platform to everybody. Sainsbury
currently operates 4 twitter accounts and one Facebook account (Seddon, 2015). They have their
own You Tube channel and an account on Flickr. They have made their content community
which is called Trolley talk which helps stakeholders to discuss regarding any issues arising in
retail stores. Sainsbury’s social media platform helps them to meet customer services, increase
sales and control crisis. They have increased their sales through use of social media accounts like
Twitter and Facebook account by promoting recipes and competition. Their twitter account
profile has captioned as 'delicious recipes, food inspiration and competitor as well as customer
service. Got a question? Our team is here to help'.
Company entered into online market and home shop development in recent years. They
also hired new staff having technical knowledge and marketing skills. Company's online market
operates from 144 stores and there 2 picking centres for online business only. Those centres are
not open for public. Tesco.com is online food service site where who can shop for food items.
Sainsbury to you is another website of the company.
The manner in which Sainsbury is using social media is leading company on map of
success. Klout, a tool for measuring brand influence has found out that Sainsbury has great
influence on social media in UK. The company has merged with Conversocial, a social media
crisis management software which helped them in finding issues that consumer face on social
media. This strategy helped a lot to find out crisis and mismanagement done by various
organizations (Armstrong and et.al., 2014). Conversocial software has helped Sainsbury to reach
large number of customers in one go and respond comments and feedbacks of their customer
within 45 minutes. This software not only helped in solving issues but also helped to reach large
number of customers which help them to gain large market share. The company is also launching
an app called shop-and-go app which will allow its customers to shop online with all the
products as in store. With the rise in online sector more technical jobs will be generated for
employees.
Sainsbury expanded its non-food online service by merging with TU website where their
sales expanded in the initial years. At Tu sites they sell clothes. Sainsbury uses their own social
media websites Trolley talk and Yammer to connect large population of UK. These websites
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allow them to reach approx. 4000 customers per week and grab position by solving their issues.
Trolley talk allows company a great chance to reach its customers and know about them.
Conversocial helps to efficiently engage with people who require attention. A study has shown
that brand which sale their products online have substantially more sales than that of shops or
stores. An example of social media crisis on Trolley truck was found out during price war in UK
on milk which might had negative impact on the farmers. Sainsbury saw this and advertise that
they pay their farmers more (Rigby, 2015). They use Facebook, Twitter and YouTube account to
generate recipe and food based content.
Though Sainsbury is growing at a rapid speed, but in online market they are meeting with
what their mission statement says. Sainsbury have efficient website like Trolley talk and
Conversocial to reach customer and fulfil the needs but what they lack is in encouraging the
values which they claim. They have 4 twitter accounts and they tweet 4 times a day averagely on
each account. Any of the customer has subscribed to more than one account of Sainsbury on
twitter then these post will create crowd on person's wall which may force them to unfollow
accounts which will further reduce their followers. There another ESM site which is Yammer has
only 10,000 subscribers as per data collected in 2015. Company has employed more than 100000
people but ESM is only for small group of people. It can be seen that company is lacking on
social media platform.
A comparison of Sainsbury can be made to Tesco which is only a retailer company
selling groceries, telecoms and financial services which are quite similar with that of Sainsbury.
They started providing online services to its user in year 1995. They also have their own service
provider which is Internet Service Provider. Tesco spend millions of amount to boost up their
online service in digital market. Tesco has more of online customers than that who visit stores.
There online service is more easy and feasible for customers so they prefer more of online
service. They have easy online payment facility too. They have software too which track what
products are in demand, which products are more preferable and which products need marketing.
Tesco.com has merged with big mouth media for SEO campaign to become the best
multichannel retailer.
They also do SEO is search engine optimization is process of ranking website of
company on top, so whenever anybody searches they appear on top. Company also uses email
marketing technique in which they send mail to keep in touch with their customers by offering
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then discounts and most importantly to be in touch. They have started online advertisement
which appears as pop-up on their websites (Pike, 2018). They have a good hand on social media
networks. They have 19 Tesco themed twitter feeds. They have also started a campaign on
Facebook to sell their clothes. The sites' goal is to win mind and heart of its customer. They have
designed their website in such a way that customer find it easy to use. Tesco has also introduced
loyalty cards for its regular customers. At the time of purchase the points get add up into that
card which can further be redeemed on next purchase (Hyder, 2018). They are regularly working
on creating more websites to sell their products.
When compared to Sainsbury, Tesco has more advanced and focused technology.
Sainsbury’s website focuses more on customer services and their satisfaction whereas Tesco
focus more on advertisement. Sainsbury can make use of social media advertisement and expand
globally. Sainsbury receives only 80,000 order online as compared to Tesco who had received
250000 orders in the year 2007 which is far more.
The 5S's of digital marketing are sell, speak, save, serve and sizzle.
Sell: Every organization is made for selling either their services or goods. All the
company are opting to sell online to reach large number of customers. Retail companies like
Sainsbury and Tesco have their own apps and websites selling products at minimum prices.
Speak: Communication of our brand is very necessary. There is a need for promotion of
our brand through online tools. Digital channels are appropriate tools for communicating about
brand and build trust. Websites should instantly respond to feedbacks and crisis of its customers.
Sainsbury have changed name of its product when they received a feedback from 3-year-old girl.
Tesco have all the products available on their site which a customer can find offline. They
provide free home delivery service.
Serve: Whenever a customer face issue or crises while shopping online, there are chances
that some questions might arise in his mind. So there are web pages on sites where they insert a
frequently asked question block Sainsbury and Tesco both have webpages where they solve
query of customers, any further information regarding policies and a block of FAQ's.
Save: refers to saving by giving ads on website, before there were advertisement through
prints, flyer, postage but once social media and websites came over all these have reduced.
Sainsbury and Tesco advertise their ads online and also offers coupons to its customers. They
also have their own web page.
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Sizzle: It's all about creating an image online. If your website provides amazing services
than people will shop from there, they will also suggest to their friends and family. The services
provided should be satisfactory and recommendable to others is main objective of sizzle. Tesco
is among the top retail seller in supermarket industry selling its products online in UK. Sainsbury
twitter account needs to be improved and they should only post the content which is worthwhile
and which is in likeable by their audience.
CONCLUSION
It can be concluded from above discussion that marketing is the most important tool in
market which can be used to promote products and services. Sainsbury is a type of retail
organization who uses limited marketing tools to reach its customers. It has discussed about
segmentation, targeting and positioning of Sainsbury. Many recommendations are suggested to
company to improve its work environment and also add on products in their company. The idea
of promoting and pricing are best and there is a need for expansion into more countries.
Company also need to focus on social media advertisement and on development of their
websites.
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REFERENCES
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Principles and practice. Harlow, UK: Pearson.
Hyder, S., 2018. Momentum: The 5 Marketing Principles That Will Propel Your Business in the
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Seddon, J., 2015. The Brand in the Boardroom: How Ogilvy & Mather Reinvented The
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Serrat, O., 2017. The future of social marketing. In Knowledge solutions (pp. 119-128). Springer,
Singapore.
Shaw, S., 2016. Airline marketing and management. Routledge.
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Tanner, J. and Raymond, M., 2015. Principles of marketing. University of Minnesota Libraries
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Tanner, J. and Raymond, M., 2015. Principles of marketing. University of Minnesota Libraries
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Online
Rigby, C., 2015, “Multichannel a 'strategic advantage' for Sainsbury's: online, convenience
grow but overall retail sales fall”. [Online]. Available through
:<https://internetretailing.net/themes/themes/multichannel-a-strategic-advantage-for-
sainsburys-online-convenience-grow-but-overall-retail-sales-fall-13597>
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