Price Strategy and Retail Success

This assignment examines the role of price strategy in achieving competency within retail operations. It analyzes how a large retail company utilizes price strategies for competitive advantage, drawing upon concepts from marketing principles, consumer behavior, and specific case studies. The analysis emphasizes the connection between pricing decisions and overall business success in the retail sector.

Marketing
Principles

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
1.1 Elements of Marketing Mix .................................................................................................1
1.2 Benefits of market orientation...............................................................................................1
2.1 Macro and micro environmental factors which influence marketing decisions....................2
2.2 Segmentation criteria to be used for products in different markets......................................3
2.3 Targeting strategy for a selected product/service..................................................................4
2.4 How buyer behaviour affects marketing activities in different buying situations................4
2.5 New positioning for a selected product/service....................................................................5
3.1 Product development to sustain competitive advantage.......................................................6
3.2 Arrangement of distribution to provide customer convenience............................................6
3.3 How prices are set to reflect an organisation’s objectives and market conditions................7
3.4 How promotional activity is integrated to achieve marketing objectives.............................7
3.5 Extended elements of marketing mix....................................................................................8
TASK 2 ...........................................................................................................................................8
4.1 Marketing mixes for two different segments in consumer markets......................................8
4.2 Differences in marketing products and services to businesses rather than consumers.........9
4.3 Difference between international and domestic market ......................................................9
CONCLUSION..............................................................................................................................10
REFERENCE.................................................................................................................................11
1

INTRODUCTION
Marketing is a fundamental social process which exists in a society to conduct efficient
resolution of it. Every thing needs management if a person want anything to put it into right
direction then it needs proper and effective ( management.Abdullah, K. and Ismail Ahmad, M.,
2010.)Marketing is that process through which the management of a company can create proper
and effective strategy to promote its products and services. In this report, it has been discussed
that how to develop the product and services. Further, various elements of marketing process are
mentioned which helps an entity to develop its products and services. As these are various
elements which help in making strategies regarding sales technique, development and
information.(Bühler, A. and Nufer, G., 2015)
TASK 1
1.1 Elements of Marketing Mix
Marketing contains a number of various activities. These activities needs to be done in
process of marketing. The four elements of marketing mix are as follows :
1. Research : if sainsbury wants to launch its products then the first and the foremost thing
that would need to be done by its management is to make research over the needs and
requirements of customers.
2. Strategy : Once the research over the requirements of customers has been done then the
second step that management needs to take is to draft a strategy that needs to be made in
accordance with the needs and requirements of customers and organisational objectives.
3. Planning : Now after making a proper strategy the third step is to make proper planning
that needs to be implemented that is concentrated on objectives of strategies.(Armstrong,
G. and et.al., 2014)
4. Tactics : Tactics are the short term plans which are made to attract customers towards
products and services. Management can offer various small benefits to customers that
will help them in long run. Like sainsbury can give offer of “buy one get one” to their
customers.
1.2 Benefits of market orientation
Market orientation is a very basic aspect of managerial process which is intended to focus
on needs of the customers. It further drives operational activities in a way which is totally based
on customer needs. Various advantages and cost of market orientation are as follows:

1. Production in a focused manner: Sainsbury, if adopt market orientation then it can
produce those products which is based on customer needs. Sainsbury through a deep
analysis of market orientation can produce such products which are matching with needs
of customers.(Coduto, D.P., 2015Dann, S., 2010)
2. Concentrated Strategies: Sainsbury through market orientation can produce its products
by adopting strategies which are based on needs and requirements of the customers. It
means that they can frame such strategies which are concentrated on needs of customers.
3. Long term profitability: Out of certain other advantages, the most appropriate and
significant advantage of market orientation is to earn profitability which is long term in
nature. Concentrating on short term return could be harmful as they tend to avoid long
term results of any other better opportunity.(Dann, 2010)
On the other hand, market orientation has certain cost or disadvantages. Management of
Sainsbury needs to analyse these disadvantages so that they can implement strategies of market
orientation effectively. Market orientation is purely based on getting information about external
and internal factors and then implementing certain ideas and strategies to cop up with those
factors. Hence it is a bit time consuming process because of involvement of research. On the
other hand, it is not economical because research includes high cost. Constantly, developing
products and services as per the needs of customers leads to invest in new machinery and new
equipment which makes it more expensive.
2.1 Macro and micro environmental factors which influence marketing decisions
There are two factors which are related with external marketing environment; first one is
micro and second one is macro. Marketers cannot make control these two factors. But still when
the managerial persons draft or frame any strategy related with marketing then these factors will
make a significant role over them. Some of the environmental factors are mentioned below:
Micro Environmental Factors
1. Suppliers: suppliers play an important role when management wants to draft a strategy.
Suppliers can control over operational activities once they get power.
2. Competitors : micro environmental factors includes competitors. They impacts operations
of organisation very intensely.
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3. Customers: Sainsbury needs to get knowledge that who are the customers and why they
need to buy those products which are offered by sainsbury. Cited entity needs to
impliment better policies which are concentrated on the requirements of customers.
Macro Environmental Factors
1. Political factors : PESTEL analysis can be made for this. As elements of PESTEL like
politics makes an huge influence over the marketing strategies. As political decisions
has to be followed by organisation as they are mandatory in nature.
2. Economic factors: Economic factor is the only aspect which can affects decisions of both
management of Sainsbury and demand of consumers. As in case of inflation an average
buyer will not buy products from Sainsbury. Further, the company will also face
difficulty in buying products from their suppliers.
2.2 Segmentation criteria to be used for products in different markets
Customers have different needs and requirements and they are willing to buy products of
different range and and different price with various features. In order to fulfil those requirements,
managerial persons of sainsbury needs to put them in different categories through their
segmentation(Henley, Raffin and Caemmerer, 2011). Management wants to sale their products to
the most potential buyers. The various criteria for segmentation are as follows :
11 Geographic Segmentation : Segmentation can be done based on the market area or in
other words segmentation could be done on the basis geographic area. Sainsbury can deal
with its customers more effectively if those customers are differentiated in various
geographical segments. Using this criteria can be termed as the starting point or basic
step of segmentation.11 Demographic Segmentation : Segmentation which is based on demographic factors is
termed as demographic segmentation. Various demographic factors are age, sex, marital
status, language , education level etc. Sainsbury can make segmentation on the basis of
these aforementioned factors then it can deal with the customers more appropriately and
much efficiently.11 Psycho graphic segmentation : This is basically a process through which Sainsbury can
make segmentation on the basis of personal characters and lifestyle of customers. In this
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process customers having same character, attitude towards products offered by Sainsbury
and having same kind of lifestyle is kept in one segment.
2.3 Targeting strategy for a selected product/service
The selection of strategies which are based on the selective customers or targeted
customers is known as targeting strategy. It involves segmentation of local market, after
segmentation a particular segment needs to be selected in which customers having same
demographic interest are kept. It also termed as targeting. Sainsbury is offering a new product for
a particular segment. Sainsbury has launched a leather jacket which is made for ladies who has a
working lifestyle. Those women who works in offices and needs to be in formal outfits. For such
women , Sainsbury has launched that leather jacket. Its price has been kept at level which is
affordable for working women. As Sainsbury is a retail store chain, offering a large number of
products hence it can determine if those various segment receives generic products.
Segmentation is done on market diversity and maturity level(French, 2010). If Sainsbury opt for
targeting strategy then it can offer them the product as per their needs. In targeting strategy,
management select a target market which is based on segmentation. These strategies focuses on
target market through factors of marketing mix. They can target one segment through one
marketing mix and if sansbury wants to target many segment then they can apply multiple
marketing mix. Without marketing mix an organisation cant get the successful results. As the
products which they are offering needs to be in accordance with needs of various customers.
After segmentation Sansbury can opt for various targeting strategies. As sansbury has launched
new variety of leather jackets which are specifically designed for working women. So in this
case management has analysed needs of working women.
2.4 How buyer behaviour affects marketing activities in different buying situations
Buyers behaviour affects marketing activities in a strong way. As buyers are most
important aspect for any business. If Sansbury wont care about needs of buyers and maintaining
their needs then they cant get its predetermined objectives(Kiel, 2014). There are various types
of buying behaviour, like complex buying behaviour, variety seeking behaviour, habitat buying
behaviour and dissonance buying behaviour. These buyer behaviour influences marketing
strategies. Some of the influences are mentioned below :
1. Cultural influences : Culture is also known as tradition. Culture is lifestyle or a way in
which local people deals with society. Culture is the most important and basic cause
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person's behaviour. Management while drafting marketing strategies concentrates on
cultural shifts. Because that would be new requirement of customer. Hence in that case
sainsbury needs to offer them products as per their new requirement.
2. Social Influences : It is a very basic human tendency to opt for something on the basis of
requirement of others. Customers ask their friends and members of their families about
products in other words they took reviews of them before buying that product. So this is
termed social influence.
3. Personal Influences : Personal influences can be defined as factors which are related with
personal attitude of customer, his character and his lifestyle.
4. Psychological Influences : Without having knowledge about psychology of customers,
Sainsbury cant offer them a product which they want. Sainsbury needs to analyse
behaviour of customers that in a particular situation how they react. Only through such
analysis they can make their customers satisfied.
2.5 New positioning for a selected product/service
Effective product positioning is necessary for sainsbury to achieve its predetermine goals
and objectives. If sainsbury wants to launch a new product into market then it needs to analyse
product positioning strategies. In the process of development, measurement and tracking of a
new product, a Plan is necessary. Product positioning can either be controlled directly or its can
also managed manually. Product positioning is necessary to make a growth trend in sales. As
sainsbury has introduced a new healthy fruit juice “Cranberry and Raspberry”. So in that case
sainsbury needs to find out that this product is economical or not. The other thing which matters
a lot is that weather it is available to potential consumers or not. In other words the potential
consumers for this healthy fruit drink are kids and sports person as they consume more energy so
they need to get hydrated(Kotler and Armstrong, 2010). So sainsbury needs to find that is this
product is available to such potential consumers or not. Finding potential buyer is an important
factor in case of product positioning. As if sainsbury offers a luxury product who cant afford to
buy these product, then in this case as product isn't available to potential buyers hence revenue of
sainsbury gets down through this product. Small business units usually don't have large
marketing budgets. But sainsbury has sufficient marketing budget so it needs to focus on
marketing strategies in regards of product positioning.
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3.1 Product development to sustain competitive advantage
Sustainable advantage of competitive environment is main point where corporate
strategies are focused. This will allow an entity to survive in competitive environment. Further it
also allows maintenance of product and its improvement. In long run, if sainsbury opt for such
strategies then it can survive in competitive environment(McDaniel, Lamb and Hair, 2011). If
Sainsbury reduces its product cost and offer product to its consumers in low price for giving a
tough competition to its rivals Then it can be termed as Competitive advantage. Competitive
advantage only exists if sainsbury will provide same goods and services with same quality as of
its rivals to its customers at a price lower than its rivals. This can also be termed as cost
advantage. And if sainsbury delivers products which has a better quality as compared with its
competitors, It will be termed as differentiation advantage. In case of “Cranberry and
Raspberry” a healthy fruit juice, sainsbury should take the competitive advantage, in case if
rivals are offering other fruit juices at same level of price then sainsbury can reduce its cost to
sale Cranberry and Raspberry at a price below than the level of its customers then it can earn
competitive advantage regarding cost. Further if quality of Cranberry and Raspberry is better
than other healthy fruit beverages then it can also get differentiation advantage.
3.2 Arrangement of distribution to provide customer convenience
Marketing distribution acts as a significant factor to attract consumers. Hence it can be
concluded that customer's convenience can be a key ability of cited entity. Cited entity makes an
accurate and strong distribution method(Nowak and et. al., 2015). So that products and services
offered by Sainsbury is easily available to its potential customers. For example if Cranberry and
Raspberry isn't easily available in open market and customers are not able to buy that product.
Then in this situation distribution strategy of sainsbury would not be effective. For this sainsbury
needs to develop its distribution channel to provide its products to its potential consumers. In
case of its new product , Cranberry and Raspberry which is a healthy fruit drink management
team of sainsbury needs to identify and target its potential customers. As sports persons and kids
can be classified as potential consumers for a healthy fruit juice, then sainsbury needs to
distribute Cranberry and Raspberry in local area of those customers as they cant manage to go
retail stores of sainsbury(Sheth and Sisodia, 2015).
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3.3 How prices are set to reflect an organisation’s objectives and market conditions
What is price? Price is actually a charge which is imposed on certain goods and services.
Price is that amount which an entity will get in place of its products and services. Price can be
defined as just a number printed on any product. But actually its a complete strategy behind
which several minds has been applied and several strategies has been implemented(Tanner and
Raymond, 2010.)). There are several strategies that can be used to by sainsbury and objectives
they are showing are defined below :
1. Penetration pricing : In this process prices are set at a low price to take cost advantage
over the rivals. In this process sainsbury needs to diminish its cost to reduce prices in
competitive environment. From this step it can be clearly understood that sainsbury
wants to take advantage over its rivals and to dominate them.
2. Skimming pricing : In this strategy an entity has an aim to target its market by offering
their products to customers at a high price. This can be done in case of luxury goods
services. This strategy can be implemented in case where they are introducing some new
products in local market. The objective behind implementing this strategy is to make
return in market to capture it by taking a leading edge of market share. As sainsbury
sales some of its luxury products comparatively at a high price which helps it to retain a
massive market share.
3.4 How promotional activity is integrated to achieve marketing objectives
Achievement of marketing objectives needs a number of integrated strategies. Strategies
also involves promotional strategies. It plays a vital role in the accomplishment of objectives that
are set by an entity. Marketing mix also give importance to promotion. In promotional strategies,
objectives are focused on providing information to public(Wright and Watkins, 2010).
Promotional strategies specifically includes the following :
1. Advertising : it occurs when a company wants to provide information about the product
and services which it offers. This can be done through various methods. There are two
categories for advertisement, first one is modern techniques and second one is traditional
techniques.
2. Personal selling : When a person or employee of an entity interacts personally with the
potential buyers then in that case it will be referred as personal selling. Sainsbury and its
management should opt for personal selling for its product like Cranberry and
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Raspberry. As the potential buyers for this product are kids and sports persons. So they
cant manage to make visit at stores of sainsbury, in that case personal selling will be
helpful and profitable for sainsbury.
3.5 Extended elements of marketing mix
Previously marketing mix had only four P's. But after some time make marketing mix
more rigid. And to increase its efficiency three P's are merged into the previous four p's and these
are termed as extended elements of marketing mix(Weinstein, 2013). Extended p's of marketing
are mentioned below :
1. Packaging or Physical evidence : Physical evidence refers to the process where
managerial persons stands back and physically verify the production process and
packaging process to be assured about the right and attractive packaging. Employees of
sainsbury needs to physically verify its products and services to ensure about the
packaging of its products.
2. Positioning : next P is positioning. An entity needs to develop an habit top perfectly
position its products. So that it can earn the maximum response. It is really important for
an organisation to gain the faith of consumers. Which will ultimately beneficial for it in
case market gets highly competitive.
3. People : This is the final P of among the extended P's of marketing mix. Final P
concentrates at habit of people inside and outside an entity. Sainsbury needs to take care
about people inside and outside of its premises. Because they can highly affects its
sales , its operations, strategies and other activities.
TASK 2
4.1 Marketing mixes for two different segments in consumer markets
Marketing mix can be implemented on a particular segment. But there can be multi
marketing mixes for various segments. After making segmentation the strategies which are
related with particular segment needs to be implemented on that particular segment. Two
segments are discussed below :
1. Segments of kids : for kids there are various products which are offered by sainbury. The
management has put the kids as per the factor of age and some other demographic factors
into a segment. And offered them Cranberry and Raspberry which is a healthy fruit
drink. So they need to apply marketing mix elements on this segment. As the product has
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already launched as per the need of kids. Second thing is price , as generally kids buy
these products out of their own pocket money. Hence sainsbury needs to keep the price of
Cranberry and Raspberry as low as possible. Promotional part needs to be very craetive
as kids would love it if commercials of Cranberry and Raspberry is creative and
colourful. Which makes it attractive.
2. Segment of senior citizens : This segment is entirely different from the first one. It
contains old persons which has different requirements and needs. So the management of
sainsbury needs to launch such products which can provide them immense satisfaction.
Like providing them pharmaceutical products and other medical equipment like blood
pressure measurement equipment. Further they can offer them food products which
contains less cholesterol and other elements which can be harmful for them. Next
elements of marketing mix that can be applied on this segment is place. As senior citizens
cant easily visit the stores. So the employees of sainsbury can offer them their required
products through personal selling.
4.2 Differences in marketing products and services to businesses rather than consumers
Marketing products and services can differentiated on the basis of following :
1. Marketing to B2B : When an organisation is marketing with B2B the management of
sainsbury needs to made a focused view on product's logic. They can do it on the basis of
features of products. B2B market has requirement of knowledge and they seeks
information. Sainsbury needs to be in-depth with the marketing material. So the
marketing strategies will focus on products that how it saves time , resources and funds of
sainsbury.
2. Marketing to B2C : When an entity is marketing to consumers then it needs to focus on
elements of product which are beneficial for it. Thier decisions are much emotional as
compared to marketing B2B. With consumers the message of sainsbury needs to be
simple, effective and straigh forward.
4.3 Difference between international and domestic market
There are some difference in international and domestic marketing. Like in domestic
marketing the area covered by it is small as compared with international. Government
interference is less in domestic market whereas it is comparatively higher in international market.
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Domestic market uses less technology but international market uses more technology. These are
some key differences in domestic and international marketing.
CONCLUSION
The report here discussed with about marketing principles of a leading retail store namely,
Sainsbury , in which marketing process of the company is being discussed. the report shows the
process starts with identifying the needs of the respective customers, which is then followed by
fulfilling their needs . The cited company being one of the largest retail store has opted price
strategy to obtain competency in their operations.
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Influences On Consumer Buying Behaviour Marketing Essay [Online] Available Through
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behaviour-marketing-essay.php?essayad=carousel&utm_expid=309629-
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