Analyzing the Impact of Price Wars on Tesco and Asda Operations

This dissertation investigates the impact of price wars on the UK supermarket industry, focusing on Tesco and Asda. It examines how the entry of German discount retailers like Aldi and Lidl has affected sales, profits, and market share. The study employs a purposive sampling method to collect data from Tesco and Asda managers and uses quantitative data analysis. The findings reveal that price wars have impacted employees, suppliers, customers, and market share, and the dissertation recommends innovative product and service development to enhance competitiveness. The research explores the factors influencing customer shopping habits, retailer pricing strategies, and the future of discount retailers, providing a comprehensive analysis of the competitive landscape and the challenges faced by major players in the UK retail market. The study also addresses the significance of the research at both academic and organizational levels, highlighting its contribution to understanding the effects of price wars on business operations and strategy formulation.

Dissertation
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ACKNOWLEDGEMENT
I would like to thank all those individuals who have supported me in conducting the
present research and arrive at a valid conclusion. First of all I would like to thank my superior for
giving me opportunity to carry out the present research. Apart from this, I am thankful to my
friends and family members who have supported me at the time of data collection and analysis as
without their support it was not possible to carry out the entire research and accomplish its aim.
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ABSTRACT
The main purpose behind carrying out the present research is to analyse the impact of
existing price war among retail supermarket industry. It can be stated that earlier there was a
time when brands such as Asda and Tesco were considered as the main player in UK
supermarket industry. Further, the entry of German based discounted retailers like Lidl and Aldi
has affected the entire supermarket industry of the nation. The present study explores how sales,
profits and other related areas of Asda and Tesco has affected by the same. Nowadays, the UK
based market players are not able to generated adequate profits and they are also facing issues
regarding long term sustainability. For the purpose of carrying out the present study, the data has
been collected by managers of Tesco and Asda with the help of purposive sampling method.
Apart from this, quantitative technique of data analysis has been used here.
After conducting this study, the researcher has found that several areas such as
employees, suppliers, customers, sales, profits and market share has been affected by the price
wars. It has been recommended that Asda and Tesco should develop some innovative products
and services in order to sustain in highly competitive market place.
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TABLE OF CONTENTS
Chapter 1- Introduction....................................................................................................................6
1.1 Background of the study........................................................................................................6
1.2 Rationale of the study............................................................................................................7
1.3 Research aim, objectives and questions ................................................................................8
1.4 Potential significance of the study.........................................................................................8
1.5 Analysis and framework .......................................................................................................9
1.6 Structure of the dissertation.................................................................................................10
Chapter 2- Literature review..........................................................................................................11
2.1 Introduction.........................................................................................................................11
2.2 Concept of price wars..........................................................................................................11
2.3 Impact of price wars on customer loyalty............................................................................12
2.4 Factors for changing customer shopping habits..................................................................13
2.5 The concept of retail marketing mix....................................................................................13
2.6 Impact of German discount retailer on Asda and Tesco .....................................................14
2.7 Analysing retailer pricing strategy.......................................................................................16
2.8 Impact of price wars on employees and their earnings........................................................17
2.9 Impact of price wars on customers spending ......................................................................18
2.10 The future of discount retailers..........................................................................................19
Chapter 3 Research Methodology .................................................................................................21
3.1 Introduction..........................................................................................................................21
3.2 Research design...................................................................................................................21
3.3 Research Philosophy:...........................................................................................................22
3.4 Research Approach..............................................................................................................23
3.5 Data Collection....................................................................................................................24
3.6 Data Analysis.......................................................................................................................25
3.7 Sampling..............................................................................................................................26
Chapter 4-Data analysis ................................................................................................................28
4.1 Introduction..........................................................................................................................28
4.2 Data analysis of Asda .........................................................................................................28
4.3 Data analysis of Tesco ........................................................................................................38
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Chapter 5- Conclusion and recommendation ................................................................................48
5.1 Conclusion ..........................................................................................................................48
5.2 Recommendations................................................................................................................50
References......................................................................................................................................53
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CHAPTER 1- INTRODUCTION
1.1 Background of the study
In the modern era, the competition among businesses operating in retail supermarket of
UK has become very intense. There are many small and big market players which are trying very
hard to capture the market share. This includes development and implementation of aggressive
marketing strategies to attract customers and gain advantage over other market players. The use
of modern marketing tools and techniques has increased among retail supermarkets with an
objective to create more and more awareness among people in the market. It can be stated that
high or intense competition is a big threat to any organization as it has direct impact on four
major elements of marketing mix which are product, price, place and promotion. Nowadays, it is
required by supermarket retailer operating in UK to lay emphasis on the quality of products and
services delivered. However, it can be argued that in situations where satisfactory products are
not offered, there are opportunities that a business may start facing issues related to customer
retention and low market share.
At the time of carrying out their operations, it is also required by supermarket retailers to
adopt appropriate pricing strategy. Low prices can help in attracting more customers whereas
high prices will highlight clearly premium quality of products and services delivered. The issue
here is related to what kind of pricing strategy can be obtained to gain higher market share and
advantage over market players. In order to take care of overall cost of operations, supermarket
retailers has establishing their own manufacturing units. It can be stated that to a certain extent it
has helped the retailers to enhance their existing profits. There was a time when UK's retail
supermarket is mostly dominated by players such as Tesco and Asda.
Nowadays, these brands are facing intense competition from German based discounted
retailers which are Aldi and Lidl. It can be stated that during the initial stage, the prices war was
existing between market players such as Tesco, Asda, Morrisons and Sainsbury. Further, the
problem here is not linked with attracting customers towards store, the main issue is to encourage
customers to spend their money and purchase products/ services (Ruddick, 2015). In last few
years, German discount retailers such as Lidl and Aldi has emerged as the biggest competitors of
UK based supermarket retailer (Dentor, 2016). The reason why customers are getting more
attracted towards these stores is considered as their discounted pricing strategy.
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In UK, a price war has been developed wherein all the businesses in retailer supermarket
are competing with each other on the basis of their pricing strategy. Brands such as Asda and
Tesco has reduced their prices in order to sustain in market and compete with players such as
Lidl and Aldi. This can be considered as very good news for the people which fall under the
category of low income group but it has resulted in creating several kinds of issues for the
retailer. For example brands are required to offer products and services at low prices by reducing
their cost of operations. This has created challenges in carrying out smooth flow of operations
along with attaining high growth rate.
In last few years, brands such as Tesco and Asda has witnessed fall in existing market
share and sales because of intense competition from Lidl and Aldi (Quinn, 2015). In addition to
this, German based supermarkets have also expanded their operations and activities in the last
few years. This has resulted in creation of prices wars where businesses are competing with each
other to gain high market share on the basis of pricing strategy.
1.2 Rationale of the study
It can be stated that at the time of formulating pricing strategy or while deciding prices of
products and services there are large number of factors which needs to be taken into
consideration. This includes cost of operations, products quality, market demand, customer
buying behaviour, level of competition existing within marketplace etc. Any kind of changes in
prices of products and services has direct impact on sales, profits and market share of a particular
business enterprise. The main reason behind carrying out present researcher is to identify how
price war prevailing among UK supermarket retail industry has affected companies such as Asda
and Tesco.
It has been observed by researcher that the sales of Asda and Tesco has fallen but at the
same time Lidl and Aldi's sales has improved drastically. This means that the German based
supermarkets are forcing these brands to lower down prices of their products and services in
order to attract more customers and stay competitive in the marketplace. The present research
study explores impact of price wars on brands like Tesco and Asda. For this purpose, the
researcher has carried out in depth investigation on pricing strategies which has been adopted by
different supermarket retailers operating in UK. Another key rationale behind carrying out the
present research is that till now very limited number of studies has been conducted on price wars
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among retail supermarkets in UK. There are certain researches done on price wars but they also
not lay emphasis on the impact which such kind of wars have on overall operations of
supermarket retailers in the country.
1.3 Research aim, objectives and questions
The aim of the study is to “Analyse the impact of price war on the supermarket retailers:
Tesco and Asda”. The study has following objectives:
 To analyse on impact of `Germany discount retailers on Tesco and Asda.
 To identify and analyse the retailers pricing strategy. To investigate on the impact of price wars on employees and their earnings.
Research questions
The below mentioned questions has been used as a reference to assess the on the impact
of price wars for Tesco and Asda:
 What are the major factors of changing customers shopping habits?
 How do the retailers utilize the marketing mix concept?
 What is the future of discount retailers (Aldi and Lidl)?
 How are the suppliers effected due to retailer’s slashing prices?
 Does price war help customers to save on spending?
 How does price war effect on the employee?
 How does price cut effects on customer loyalty?
 How retailers can end price wars?
1.4 Potential significance of the study
The present research or carried out study can be termed as significant in context of both
academic and organizational level. It can be stated that at academic level, the study is important
because it will give a clear idea about the fact that how prices can affect activities and operation
of any business enterprise. This research can be used by other scholars in order to conducted
studies related to current topic under investigation. It will support in enhancing existing
knowledge of scholars and become aware about the significant impact of price wars. The
researcher has identified a gap between previous carried out researches and on the basis of that
the present study has been conducted. Earlier researches carried out on price wars were mainly
linked with buying behaviour and strategies which can be used for getting competitive advantage
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over other market players. The present research will support organization to identify what kind
of impact price wars may have on entire business practices and operations. Thus, it will help the
businesses in formulating the best possible and most effective strategies related to prices.
1.5 Analysis and framework
In the present research, there are various type of research methodologies which is adopted
by scholar to carry out study on analyze the impact of price war on the supermarket retailers:
Tesco and ASDA. The analysis and framework is mentioned below as:
Research design- It is the overall strategy which is adopted by a researcher to carry out
investigation on a particular topic. Furthermore, descriptive, experimental, exploratory, case
study, casual etc. are some key research designs that are commonly used (Jackson, 2011). It can
be stated that descriptive research design has been selected as it has helped in describing various
elements associated with the present research.
Research philosophy- At the time of carrying out any kind of research, it is required by
scholars to adopt for a suitable philosophy as it is directly linked with values and belief of a
researcher. It can be stated that the use of appropriate philosophy plays very important role in
process such as data collection and analysis. For carrying out the present research on analysing
the impact of price war on the supermarket retailers: Tesco and ASDA, positivism research
philosophy has been adopted. The rationale behind selecting positivism is that it has helped in
getting generalize information and eliminating any kind of biasness.
Research approach- It can be considered as the overall strategy which is used by
researcher to carry out a research and attain all its objectives. Research approach can be
classified into two main categories which are inductive and deductive (Crowther and Lancaster,
2012). For the purpose of conducting present inductive approach research which has supported in
carrying out literature review first and on the basis of same, hypothesis has been developed to
carry out data analysis.
Data collection- In the present study, both primary and secondary sources of data
collection has been taken into consideration. For gathering primary data, a well-structured
questionnaire is developed which consist of both open ended and close ended questions. Apart
from this, different online sources, books, journals has been considered for gathering information
through secondary sources.
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Data analysis- It can be termed as the process in which different types of techniques and
tools are used by researcher to carry out appropriate evaluation of raw data gathered from
different sources. For carrying out investigation on analysing the impact of price war on the
supermarket retailers: Tesco and ASDA, the scholar has adopted quantitative technique of data
analysis. Here, statistical tools such as SPSS is used for conducting evaluation of information
collected.
1.6 Structure of the dissertation
It can be expressed that every researcher is required to develop a suitable structure which
can provide them with direction regarding how the entire research can be conducted. The
structure for present dissertation is provided below as:
Chapter 1- Introduction: It is the first and foremost chapter of dissertation which gives
clear idea about the topic under investigation. This chapter is important because it supports in
developing interest of readers in a particular study. The chapter includes various areas such as
overview, rationale, aim, objective, research questions and significance of the work carried out.
Chapter 2- Literature review: This chapter is important because its supports in
developing appropriate knowledge about the topic which is taken under investigation. Here,
work of other researcher is presented in order to acquire in- depth knowledge about topic.
Critical analysis of work of other scholars is also carried out in this section.
Chapter 3- Research methodologies: The chapter of research methodologies consist of
tools and techniques which are adopted by a researcher to collect data and obtain suitable
findings. The use of suitable research techniques also supports in arriving at valid conclusion.
Chapter 4- Data analysis: It can be termed as one of the most important chapter of
research as it includes evaluation of raw data with the help of various tools and techniques. It can
be also stated that the quality of data analysis has direct impact on overall findings of a study
carried out.
Chapter 5- Conclusion and Recommendation: It is termed as the last chapter of
dissertation in which a suitable conclusion is derived on the basis of entire study. On the basis of
conclusion, some recommendation are provided to businesses such as Asda and Tesco.
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CHAPTER 2- LITERATURE REVIEW
2.1 Introduction
The section of literature review can be termed as another important chapter of a
researcher. Further, it plays a very important role in acquire in-depth knowledge about a
particular topic which can be selected for investigation. The chapter is also important because it
supports in accomplishing aim and objectives of research by getting aware of views and opinions
of other scholars. Here, analysis of existing literature is carried out in order to attain desired
outcomes. This section also explores impact on price wars in UK supermarket among on loyalty
of customers.
2.2 Concept of price wars
Metzger, (2014) found that in then recent years, the price competition among retailers has
become vivid. Retail industry has witnessed obsessions of customers as well as organizations
towards the battle for lower prices. These have triggered price wars which not only last for
longer times but also have dramatic impact on the market players. Pepe, Abratt and Dion, (2011)
state that price war is a state or situation which is characterized by the market players struggling
to cut down the prices of goods and services. This indicates the efforts made by organizations to
offer lower prices to the customers so as to win them. The authors found that when the prices are
lowered by a competitor, the others also follow the same path to match the price cut. When the
prices are further reduced, there takes place another round of reductions.
Grewal and et.al., (2010) found out that there are various reasons behind price wars.
Product differentiation is one of the reasons behind price wars. There are some products which
are considered as merely commodities. In such situations, price becomes the main competing
factor. Another reason is penetration pricing. A new entrant in the industry adopts penetration
pricing strategy to get established in the marketplace. According to Haddock-Millar and Rigby,
(2015) process optimization is a factor that results in price wars. Along with this, predatory
pricing also leads to this situation. It can be analysed that in retail industry, when a competitor
targets a particular product, they sell its alternative at lower prices. This is done in order to gain
market share. Smith, (2010) asserted that there are various levels of distribution channel in which
a price war can emerge. Hence, these impact the firms as well as the customers in different ways.
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As per the views of Yoo and Lee, (2011) price wars are good for consumers in the short run as
they get advantage of the lower prices. However, it can be critically analysed that it is not
advantageous for the companies in the industry. This is because the profit margins of these firms
are reduced due to lower prices which acts as a threat for their survival. But, Shah, Kumar and
Kim, (2014) argue that price wars can be beneficial for the dominant firms in the industry in the
medium or long term. However, it can be critically evaluated that price wars cannot benefit the
firms unless the company that initiates them has cost advantage. As per the views of Sullivan and
Gouldson, (2012) price wars result in unsustainable prices.
2.3 Impact of price wars on customer loyalty
As per the view of Pepe, Abratt and Dion, (2011) customer loyalty can be defined as the
situation where customer buys products and services of a particular brand irrespective of what
other players in the market are offering. High rate of customer loyalty has direct impact on long
term sales and profitability of any business enterprise. It can be stated that the retail supermarket
industry of UK is getting more and more intense along with the passage of time. Further, intense
competition has resulted in creation of price wars which is a big threat to all the supermarket
stores operating in the country.
Nowadays, customers are considered as the king of market and if they are not satisfied,
businesses cannot sustain in long run. Greenslade and Parker, (2012) has explained that
improving and increasing customer loyalty has become one of the most crucial elements of
organizations activities and operations. Strong marketing strategies are developed and efforts are
placed by companies to make customer loyal towards them. The reason why customer loyalty
has become so important is that it helps in long term success and growth of firms.
However, Dawson, (2013) has argued that now price wars has resulted in creating several
kinds of obstacles in increasing the rate of customer loyalty. It can be stated that with the help of
price wars many supermarket retailers in the country are offering products and services at low
prices in order to attract loyal customers of other brands. In the present scenario, what customers
actually want is that quality products and services are delivered to them at convenient prices.
This means firms has started to lose their loyal customers because other market players are
offering almost same services and products at much cheaper rate (Martos-Partal and González-
Benito, 2011). It has been a trend that customers are attracted towards companies which offer
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quality products at convenient prices. Companies such as Aldi and Lidl are offering different
type of supermarket products and services to customers. This has resulted in attracting even the
loyal customers of Tesco and Asda towards products of Lidl and Aldi. Therefore, it can be stated
that price wars is having direct impact on business operating in UK supermarket industry.
2.4 Factors for changing customer shopping habits
In the modern era, customers is considered as king of any market and businesses are
required to offer products and services as per their needs. According to the view point of Oliver,
(2014) high rate of customer satisfaction has become very essential for the growth and success of
any organization. At the time of carrying out their operations, it is required by companies to
identify customer demand and then deliver products according to the same. It can be stated that
shopping habits of customer changes due to variety of reasons such as culture, social and
personal. Thus, it is required by business enterprise to take care of all the major factors which
results in changing the buying behaviour of people in the market. Liu-Thompkins and Tam,
(2013) has explained that culture can be termed as one of the basic and most important element
which results in defining behaviour and wants of an individual. The culture under which a person
is born and brought up has a significant impact on their buying behaviour.
However, Shah, Kumar and Kim, (2014) has argued that internal or psychological factors
can be termed as the main reason behind customer buying habit. In order to sustain in long run, it
is required by companies to become aware of the key factors which can results in influencing
buying behaviour of people in the market. Sometimes it is the internal need or desire of a person
which encourages him/her to buy a particular product or service. On the other hand, sometimes
people buys product because it has been referred by their family or friends. Thus, it can be stated
that there are several factors which are responsible for changing customer shopping habits.
2.5 The concept of retail marketing mix
Nowadays development of appropriate marketing mix has become very essential for long
term growth and success of a business entity. Further, the mix consists of four key elements
which are product, price, place and promotion. At the time of carrying out their respective
activities, it is required by organizations to focus on all the above mentioned elements. As per the
view of Yu, Ramanathan and Nath, (2014) retail businesses needs to make sure that they are
delivering quality products and services to their customers. Further, changes in products and
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services at regular intervals are required to meet ever changing needs of customers in a market
place. Thus, it can be stated that retailers needs to focus on delivering products and services
which are being demanded by customers. Prices of products can be termed as another important
factors which affects behaviour of people in market in terms of buying.
By adopting low price strategy, supermarket retailers are able to attract large number of
customers whereas the use of premium pricing strategy only helps in attracting individuals which
belongs to elite or higher income group. Therefore, most of the retailer opts for a low price
strategy with an objective to attract customers and gain higher market share. In the modern era,
the place from where good and services are being distributed has also started playing important
role in success and growth of organization.
In order to attract customers, market players such as Asda, Tesco has started delivering
their products with the help of both online and offline channels (Lewis, 2013). The above
mentioned brands has established retailer stores in different locations of UK and they are
offering products through online stores. The result of this is that it has made it more convenient
for customers to buy products, services and this has contributed in overall development of these
brands. Promotion can be considered as the last element of marketing mix which lays emphasis
on creating awareness among customers.
At present, retail supermarkets in the country has adopted for both online and offline
tools of marketing and promotion. Here, advertisement is carried out on channels such as
newspapers and televisions. Apart from this, promotional events are also being carried out by
brand such as Asda, Lidl, Sainsbury, Tesco in order to create awareness about their products and
services among people in the market. In last few years, internet has emerged as one of the
biggest and most potential platform to sell and market services or products (Pierce and
Alexander, 2013). Therefore, businesses are also carrying out promotion of their products and
services on social media such as Facebook and Twitter. This has helped companies to carry out
cost effective marketing and increase sales of their products.
2.6 Impact of German discount retailer on Asda and Tesco
It can be stated that the pricing strategy and operations of German based discounted
retailers is having direct impact on UK based supermarkets such as Tesco and Asda. This has
resulted in creating sense of satisfaction among UK customers as they are now getting quality
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products at comparatively low prices (Fernie, 2013). According to Shadbolt, (2015) a significant
rise in market share of Aldi and Lidl has been observed whereas market share of brands like
Tesco, Asda and Morrisons has fallen. Aldi and Lidl witnessed growth rate of 17.3% and 16%
respectively whereas Tesco, Asda and Morrisons has observed 1.4%, 2.9% and 1.4% drop in
their existing sales (Shadbolt, 2015). The German based retailers are growing with a very good
pace and at the same time UK based supermarkets are now finding it very complicated to attract
customers and retain them for long run.
As per the view of Elms and et.al. (2010) German based retailers are able to capture
higher market share because they are selling products at comparatively low prices. Further, their
low prices strategy is the one which attracting customers to stay no more loyal to a particular
brand. On the contrary of this, has argued that using a low prices strategy for long run can be a
huge mistake for retailers and it can result in creating several kinds of issues to a business. In
order to carry out operations with such kind of strategy, organizations are constantly required to
place efforts to lower down the cost of operations.
Apart from this, if other market players also drop tier prices, then it becomes very
complicated for a business to sustain in the marketplace. Insufficient profit margin can be termed
as another major drawback of using a low price strategy (Thompson and et.al. 2012). It can be
expressed that Aldi and Lidl has affected market share, customer base, sales and profits of Asda,
Tesco, Sainsbury and Morrisons (How Aldi's price plan shook up Tesco, Morrisons, Asda and
Sainsbury, 2014). These brands have started facing problems in attracting more and more
customers whereas German based supermarkets retailers are growing with very good pace and
has developed plan for future expansion. Brands such Aldi is planning to open 1000 outlets in
the country in order to maintain its existing growth.
As it has been already discussed that carrying out business operations with low price
strategy is not an easy task and there are large efforts which needs to be placed by Lidl and Aldi.
However, it can be argued that these German based supermarket retailers are able to lower down
their cost by the souring large volume of 2500 products (Sullivan and Gouldson, 2012).
Purchasing in bulk help these brands to reduce operational cost and give intense competition to
market players like Tesco and Asda. Grandhi, (2016) explained that Aldi and Lidl are looking
forward to build more stores than the UK based supermarket retailer. Here, the interesting fact
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about Tesco is that the total number of stores closed is higher than the total number of stores
opened by the brand. This clearly highlights the present situation through which Tesco is going.
The key reason behind those closures was that they were not performing or providing the brand
with desired outcomes (Gouldson and Sullivan, 2013). Further, such situations forced the brands
to take decision regrading closure of many non-profitable supermarket stores.
2.7 Analysing retailer pricing strategy
Prices can be termed as monetary value of any commodity, product or service. Further,
prices is considered as one of the most important and crucial elements of a firm's marketing mix.
As per the view of Stelder, (2012) the success of products and services depends on its prices to a
great extent. Generally organizations uses moderate or competitive pricing strategy in order to
sustain in market place. There was a time when Tesco was the leading market player in retail
supermarket industry of UK. Earlier it was attracting customers with the help of two major
strategies which were aggressive promotion and club-card loyalty program (Cleeren and et.al.
2010). However, Grewal and et.al. (2011) has asserted that in last few years due to the
emergence of Aldi and Lidl, the brand has been forced to lower down its prices. At present Tesco
has involved strategy of “The Big Price Drop” which includes cutting down price of 3000 food
products everyday by almost 30%.
The present pricing strategy has somewhat helped Tesco to sustain in highly competitive
market place. On the other side of this, its major competitor which is Asda is currently operating
with price guarantee scheme. According to this strategy, the supermarket retailer guarantees that
prices of all its products and services will be 10% lower than what other major market players or
its rivals are offering. It has been analysed that Asda and Tesco has always been direct
competitors of each other but now they are facing high degree of competition from German
based retailers which are Aldi and Lidl (Dasu and Tong, 2010). It can be also stated that Aldi and
Lidl are providing high quality of products and services and this is attracting customers to a great
extent. Further, they are also offering products such as organic food, baked goods, special soups,
fresh meat which supports in getting advantage over existing UK based supermarket retailers.
The concept which has been applied here by German based retailers is associated with
low price strategy or discounted price strategy. Here, higher quantities of products and services
are being offered at relatively low prices to attract more and more customers. Grewal and et.al.
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(2010) has asserted that in order to stay competitive in the market place, it is required by
businesses to take care of their overall cost of operations and take measures to lower down the
same.
2.8 Impact of price wars on employees and their earnings
In the modern era, employees are considered as the most valuable and important assets of
an organization. It can be stated that two businesses can have same kind of technological and
financial resources but what separates one organization from other is their human resources.
Therefore, it is required by firms or companies to focus on growth and development of their
employees in order to sustain in highly competitive market (Yoo and Lee, 2011). In situations of
price wars, staff members or human resource of an organization are greatly affected.
The concept of such wars clearly lays emphasis on offering products and services at
prices which are relatively cheaper than that of competitor. This restricts a firm to increase its
profit margin and carry out smooth flow of operations. Apart from this, prices wars also lower
down capacity of a firm to pay better salaries and incentives to their respective employees. For
example the price war among UK supermarket retailers has affected growth and development of
employees to great extent.
Yan, (2010) has explained that today firms are required to lay emphasis on their workers
in order to carry out smooth flow of operations. For this purpose, training and development
sessions should be organized to make staff members more productive by enhancing their skill set
and knowledge base. However, Dan, Xu and Liu, (2012) has argued that carrying out employee
training is not an easy task for companies as it requires lots of human, financial and
technological resources to be invested. Situations such as price wars directly results in lowering
down the rate of training sessions conducted in an organization. This creates sense of
dissatisfaction among workers and also affect their morale level to a great extent. On the other
side of this, supermarket retailers such as Asda and Tesco are not able to provide their employees
satisfactory monetary incentives (Dasu and Tong, 2010). Thus, it can be stated that morale,
motivational level and earnings of workers in UK supermarket retail industry has been affected
by the price wars existing in the country.
Another issue related to employees which has been caused by price wars is of retention.
For any company, it is very important to retain its staff members along with retaining customers.
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In context of supermarket retailers, it can be expressed that here employees are important
because they come in direct contact with customers (Pepe, Abratt and Dion, 2011). Further, they
interact with customers, understand their needs and then deliver satisfactory products or services
according to the same. The price war has resulted in increasing the rate of employee turnover
which can be considered as another major threat to supermarket retailers in the country. Grewal
and et.al. (2011) has explained that people working in UK supermarket industry are now
switching to other sectors because they are not able to find adequate or expected growth in the
industry.
2.9 Impact of price wars on customers spending
As per the view point of Smith, (2010) ultimately it is the customer in industry who has
been benefited by the price war prevailing in UK supermarket retail industry. There was a time
when Tesco was leading player in market as people in the market were having few alternatives or
options available with them (Greenslade and Parker, 2012). Along with the passage of time,
things has changed to a great extent and has affected dominance of many market players such as
Tesco and Asda. Further, entry of German based discounted retailers has affected sales and
profits of UK based supermarkets in negative sense and has provided several kinds of benefits to
people in the country.
It can be said that the power of customers has increased to a great extent and this means
that customers has power to drive away the prices. Nowadays, products and services are being
offered by supermarket retailers at comparatively low prices and this is ultimately benefiting the
customers (Baltas, Argouslidis and Skarmeas, 2010). By spending low amount on buying desired
products and services, the savings of people in the market has increased to a great extent. Now,
customers are not required to pay high amount to any retailer because the same products are
offered by other brands at low prices. However, Hyman, Kopf and Lee, (2010) has argued that
low prices not always guarantee that it will help in attracting more and more customers.
According to the model of customer buying behaviour or decision making, people in the market
buys a product in order to satisfy their need and demand which they have identified. Thus,
pricing strategy and marketing is of no use if the products and services which has been offered
by a particular business enterprise are not able to meet customer demand.
18

Thus, it has been analysed by the researcher that prices war has resulted in increasing
customers saving as they are not required to invest large amount of money to buy products and
services of their need and demand. .
2.10 The future of discount retailers
According to the view point of Thompson and et. al., (2012) at present the market or
industry of supermarket retail has become highly intense. Further, it has become very
complicated for market players such as Tesco, Asda and Sainsbury to maintain their existing
market share. This means that the future of these supermarkets retailer is in a big threat. On the
other side of this, market players such as Aldi an Lidl are growing with a very good pace and
their future seems to be very bright. According to Sullivan and Gouldson, (2012) the German
based discounted retailers has entered UK supermarket industry with the best strategy to
penetrate the market. The low price strategy has helped these brands to attract more and more
customers and gain higher market share.
However, Piercy and Alexander, (2013) it can be argued that it is not necessary that the
selected strategy will work for long run. In the future, brands such as Asda and Tesco will come
up with new strategies and innovations which can prove to be a big threat to discount retailers.
Apart from this, operating with a low cost is not always easy as there are various issues and
challenges which needs to be faced by a business enterprise. For example organizations are
required to carry out procurement of raw material and other related things at a very low cost.
Businesses cannot spend large amount of resources in growth and development of workers as it
will enhance operational cost.
The future of above mentioned discounted retailers is very bright but they cannot offer
same kind of products and services for long time. They will be required to make changes in
products and services as per the demand of customers or people in the market. Other than this, it
can be also stated that at the time of carrying out their operations, German based discounted
retailers needs to carry out competitor analysis at frequent intervals. Martos-Partal and González-
Benito, (2011) has asserted that at present low price strategy is providing several kinds of
benefits to German based discount retailers but it is not necessary that this kind of dominance
will sustain in long run. In the future, the existing market players will definitely come up with
new strategies and innovation in their products. This will result in creating several kinds of
19

obstacles in growth and success of them. One of the best way to sustain in long run for these
market players is of carrying out market researcher to understand customer need and demand. By
focusing upon changing customer needs and then delivering products according to the same with
help discounted retailers to sustain in long run (Sullivan and Gouldson, 2012). Apart from this,
effective marketing will need to be carried out by these brands in order to attract customers and
maintain their existing market share. It can be also stated the retail supermarket industry of UK
get more intense in the future.
20

CHAPTER 3 RESEARCH METHODOLOGY
3.1 Introduction
In common parlance, research referred as searching for knowledge and it can also be
regarded as a scientific and systematic search for pertinent information on a specific subject
matter. Thus, it is called as an art of scientific investigation which includes several tools and
methods to reach towards the objective of the study. In the present study, several techniques have
been applied for analysing the feasibility of research work. Research is not only integrated with
the process of data collection; but it involves various other phenomenon to generate and produce
new ideas and knowledge. Therefore, it can be said that research methodology is the way to
systematically solve the research problem. Prior applying any method and technique in the
research study, it is essential for researcher to know the criteria through which certain techniques
and procedures can be utilized for research work. In the below mentioned section, detailed
information regarding applied philosophies and approaches have been mentioned.
3.2 Research design
Research design can be determined as a process which enables to develop a systematic
plan or technique which enables to shape up the research. It enables to identify the reliability of
aim of the research. Moreover, it provides a solid base in conducting the research. It enables to
expand the understanding and knowledge related with the topic. There are of mainly four
different types which are descriptive, correlation, semi-experimental and reviews. Among all
these descriptive research will be conducted. This will be helpful in identifying the main issue of
research and conducting the research in an effective manner (Kothari, 2011). There are different
set of elements which are involved in the research and this will be helpful in determining
different aspects. Present research is over understanding the impact of price war on supermarket
retailers.
There are different organization s which provide similar products and services. It
becomes difficult to achieve the goals through until firms make use of strategies to be different
from other and to achieve their goals and objectives. In order collect the data managers are
selected as they are the one who know the actual strategies which are used by the organization.
In this context, managers of both Tesco and ASDA are considered and they will be provided
with questionnaire in which all the relevant questions will be included with the help of which
21

strategies used by both organizations in relation with price will be determined. Pricing can be
determined as a one of the main factor through which firm aims at attracting customers. The
technique has proved to be helpful in identifying hidden aspect of subject matter. With this
respect, there are two different type of methods through which data is analysed. In this context, it
includes qualitative and quantitative methods. In accordance with the aim qualitative method was
selected as it enables to know the individual perception of managers towards the strategies which
are implemented for their product that also by ASDA and Tesco. In order to know the perception
of managers, qualitative research is effective for the researcher to conduct the study in an proper
manner.
As per the case, at Tesco and ASDA, there are many departments and each of the
departments have different set of managers who are responsible to make sure that all the business
operations are conducted properly. When all departments work together, then they goals and
objectives are achieved. In this current study, managers are helpful enough to know the different
type of strategies which are taken by the firm so that cost can be reduced. From different
research it is found that customers prefer to buy the product which are provided to them at high
quality and that also at low price. In order to reduce the cost it is important that the cost which is
incurred in develop each unit of product can be reduced. However, descriptive study has enabled
the researcher to know the strategies and perception of each managers working at ASDA and
Tesco.
3.3 Research Philosophy:
In simpler term, research philosophy can be defined as values and beliefs of a research
which support in process such as data collection and analysis. Furthermore, this sections helps
researcher to obtain the best possible and desired outcomes of the study. The use of appropriate
research philosophy also assist in determining the right tools and techniques which can be used
for carrying out analysis of data (Saunders and et. al. 2009). Therefore, it is required by every
researcher to be very careful at the time of selecting appropriate research philosophy for
conducting a study. The concept of research philosophies can be broadly categorized into two
different forms which are positivism and interpretivism.
Further, it can be stated that on the basis of aim and objective of a research, appropriate
philosophy can be used a researcher. For the purpose of conducting the present research,
22

positivism research philosophy has been used by the researcher. Here, the use of above
mentioned philosophy has supported the scholar in getting more generalized results has been
gathered by researcher on. It can be considered as the overall strategy which is used by
researcher to carry out a research and attain all its objectives. Research approach can be
classified into two main categories which are inductive and deductive (Crowther and Lancaster,
2012). For the purpose of conducting present inductive approach research which has supported in
carrying out literature review first and on the basis of same, hypothesis has been developed to
carry out data analysis topic analysing the impact of price war on the supermarket retailers:
Tesco and ASD. It can be also expressed that the use of interpretivism philosophy would have
resulted in providing more specific results which were not required in context of the present
research. Thus, the use of positivism research philosophy has supported in getting desired and
most reliable outcomes.
3.4 Research Approach
Research approach is a significant tool which is applied in the research study for the
purpose of conducting it in systematic manner. The categories of research approach can be split
into two types such as inductive and deductive. Deductive approach starts with a social theory in
which researcher finds the data compelling and then the test is implied within the data. The
approach moves from a general level to more specific level and it is also the one which is
associated with scientific investigation (Singh, 2010). It is considered as one of the most integral
part of the study and selection of right approach leads to favourable outcomes. Generally the
relevance of hypothesis is regarded as one of the main distinctive point between two approaches
inductive and deductive one. It is totally based on observations which are being taken. Two type
of approaches being present named inductive and deductive depends on the nature of research.
Basically deductive approach supports in testing the validity of assumptions in hand and
inductive one contributes to emergence of new theories.
Deductive approach is based on assumption that premises are true and on the basis of
same conclusion must also be true. Results in this type of approach moves from general to
specific. Further, the data collected in this type of approach is used for evaluating propositions
and the overall hypothesis developed is linked with existing theory in the research. Theory
verification takes place in deductive approach and this makes applicability of this approach
23

effective. On the other hand inductive approach is based on the logic that premises are being
used to develop testable conclusion and the overall results in this type of approach moves from
specific to general. Data being collected is employed to explore phenomenon, identifying themes
and they are being located in conceptual framework. Generation of theory takes place in this type
of approach and due to this reason this approach is considered to be much more valid.
Considering the nature of the present research focus is on analysing the impact of price war on
the supermarket retailers where two companies have been chosen named Tesco and Asda. The
entire research being carried out is based on two firms and the overall influence of price wars has
been identified. Therefore, for conducting this research in effective manner inductive approach
has been employed where entire study has been carried out from point view of Tesco and Asda.
This approach is appropriate from point view of present research as specifically Asda and Tesco
have been chosen as the two firms.
On the basis of results it is possible to provide recommendations to other firms in general
firm and findings are applicable to entire retail sector. On the other hand main reason behind not
selecting deductive approach is that research is not carried out in general form and it is based on
some specific companies. Due to this reason this approach is not applicable for the present study.
Applicability of inductive approach has supported in conducting literature review in proper
manner and on the basis of same hypothesis has been developed.
3.5 Data Collection
The most crucial part of the research methodology is data collection. With the help of
data collection, appropriate information related to the subject matter can be acquired and through
this, feasibility of the research topic can be identified. The categories of data collection can be
segregated into two types such as primary and secondary and both seems to be useful for the
research study (Bruce, 2009). According to the intended problem of the research, suitable data
should be collected. In the present study, primary and secondary both the methods have been
utilized for enhancing the efficiency of the research work. Primary data has been used for the
purpose of collecting fresh and relevant information which is not used in any of the research
before. Survey has been conducted in which questionnaire is being provided to the participants
consists of open ended and close ended questions. Through this technique, adequate data has
been collected for the study which is unused from all prospects.
24

Apart from this, under secondary source, data has been collected through books, journals,
articles and online web pages. This is regarded the traditional method of data collection which
helps the researcher to enhance the value of the research study. Books, journals have been
reviewed according to the subject matter and through this, proper information related to the
subject matter is also ascertained. Secondary data includes published data because it is based on
academic research and government reports; hence this is the reason it is being selected for the
present study. With the help of secondary source, previously researched materials are being
identified; thus according to that loopholes can be identified in the present work. Another aspect
through which data can be collected is Quantitative and Qualitative. With the help of Qualitative
method, relevant information is being collected through survey where in questionnaire is being
given to each and every participant. It has been presented through natural language not in
numerical terms.
However, on the other hand, researcher has also used Quantitative method where in data
is collected by using questionnaire where in open ended and close ended questions are
formulated. According to the aims and objectives of the study, questionnaire has been formed
and according to that data is being collected for the present study. In order to get more accurate
data, Likert type questionnaire has been used.
3.6 Data Analysis
After collecting the data, the researchers turns to the task of analysing the data through
appropriate tools and techniques. Data analysis is termed as the process of evaluating data
through using analytical and logical reasoning to examine each and every component of the
available data. According to the views of author, data analysis is the process of systematically
applying statistical techniques to describe and evaluate the data (Franklin, 2012). An essential
component of ensuring data integrity is the accurate and appropriate analysis of findings of the
research. The categories of data analysis can be segregated into two types such as Qualitative and
Quantitative.
Both the techniques are useful for showing the responses of participants in proper
manner. Qualitative methods are often part of survey methodology which includes interview,
observation and survey to derive meanings of the phenomenon. Thus, it is called as the process
in which researcher moves from the raw data which is being collected as a major part of the
25

research study. It also provides explanation, understanding and interpretation of the phenomenon
which is studied for the research report. The main aim of applying qualitative tool is to examine
the meaningful and symbolic content of the data. Thematic analysis is one part of qualitative tool
in which several themes are required to be constructed so as to describe the subject matter in
effective manner.
However, the other category of data analysis is Quantitative method in which researcher
can apply several statistical tool for analysing the facts and findings. In the present study,
researcher has made use of Quantitative method in which SPSS has been utilized. As per the
method, data has been evaluated with the help of numerical technique. Therefore, it is clear that
data has been presented through multiple ways using graphs, histograms, pie charts and tables.
This is yet another method through which data is presentably evaluated in the research work.
This is also useful in analysing data through two variables. The research has also used mean,
mode, median, percentile, regression and correlation.
3.7 Sampling
It is considered as one of the most important part of any research as it lays emphasis on
selecting appropriate sample for gathering reliable and accurate primary information. It can be
also stated that a researcher is required to be very careful at the time of selecting appropriate
sample as the effectiveness of study also relies on the sample and sampling method selected. The
concept of sampling is broadly divided into two main categories which are non-probabilistic and
probabilistic (Crowther and Lancaster, 2012). Furthermore, on the basis of aim and research
objectives appropriate sampling method can be selected by a researcher. In order to carry out
investigation on analysing the impact of price war on the supermarket retailers: Tesco and Asda,
purposive sampling which is a part on non-probabilistic sampling method had taken into
consideration.
The rationale behind using the above mentioned sampling method is that the researcher
has approached the sample with a purpose to gather information on impact of price wars.
Further, managers of Tesco and Asda are here selected as sample. In order to collect primary
information, the scholar has developed a questionnaire on the basis of aim and objective of
present study. Apart from this 10 managers of Asda and 10 managers of Tesco has been selected
as the sample size. The main reason behind selecting managers is that they have provided more
26

reliable, accurate information regarding what kind of impact does price war is having on
supermarket retailers such as Tesco and Asda.
27

CHAPTER 4-DATA ANALYSIS
4.1 Introduction
The chapter of data analysis is considered as very important part of any dissertation. It
can be stated that different tools and techniques are used in this section in order to carry out
evaluation of raw data collected from various sources. For conducting research on impact of
price war on supermarket retailers Tesco and Asda, both qualitative and quantitative technique of
data analysis has been used. The information collected has been presented with the help of
different tables. The researcher has also used statistical tool such as SPSS with an objective to
achieve desired outcomes and arrive at a valid conclusion.
4.2 Data analysis of Asda
Gen
der Age
How
would you
rate
existing
level of
competitio
n in UK
supermark
et industry
loyalty
has
become
very
essential
for
growth
and
success
of your
company
What
are the
factors
which
results
in
changin
g
custom
ers
shoppin
g habits
How
would
you rate
the
pricing
strategy
of
German
based
discounte
d retailers
What
kind of
pricing
strategy
has been
adopted
by the
organiza
tion to
sustain
in high
degree
of
competit
ion
Price
war
resulted
in
increasi
ng the
rate of
employe
e
turnover
N Valid 10 10 10 10 10 10 10 10
Missi
ng
0 0 0 0 0 0 0 0
Mean 1.40 2.70 4.00 3.80 3.90 3.40 2.00 3.00
Median 1.00 3.00 4.00 4.00 4.50 4.00 2.00 3.50
Mode 1 3a 5 4 5 4a 2 4
Percentil
es
25 1.00 1.75 3.00 2.75 2.75 1.75 2.00 1.75
50 1.00 3.00 4.00 4.00 4.50 4.00 2.00 3.50
75 2.00 4.00 5.00 5.00 5.00 5.00 2.00 4.00
28

Your
organizati
on facing
challenge
s in
increasin
g the rate
of
customer
loyalty
Do
you
think
that
the
price
war
has
resulte
d in
provid
ing
benefit
s to
custo
mers
in
terms
of
saving
s
recent
price
war has
affected
sales
and
profits
of your
organiza
tion
Germa
n
discou
nt
retailer
such
as
Aldi
and
Lidl
are
giving
tough
compe
tition
to
your
brand
The
slashing
prices in
market has
negatively
affected the
organizatio
n’s
relationship
s with
suppliers to
a great
extent
Price war
has forced
your
organizati
on to
lower
down its
cost of
operation
. The
organization
is facing
obstacles in
paying
monetary
incentives
and higher
salaries to
employees
due to price
war
N Vali
d
10 10 10 10 10 10 10
Miss
ing
0 0 0 0 0 0 0
Mean 3.70 3.30 3.60 4.00 4.10 3.40 2.90
Median 4.00 4.00 4.00 5.00 5.00 3.50 3.00
Mode 4 4 4 5 5 5 2a
Percenti
les
25 2.75 1.75 2.00 2.75 3.50 2.00 2.00
50 4.00 4.00 4.00 5.00 5.00 3.50 3.00
75 5.00 4.25 5.00 5.00 5.00 5.00 4.00
Price war has
lower down the
rate of training
and
development
programs
carried out for
employees
Competitive
entry is a
threat to your
retail
organization
Your
organization has
gained good
reputation in the
marketplace
What is
existing
level of
your
organizatio
n's brand
loyalty
What kind
of
customer
do you
attract the
most
N Valid 10 10 10 10 10
Missing 0 0 0 0 0
Mean 3.40 3.40 3.10 2.30 2.80
29

Median 4.00 3.50 3.50 2.00 3.00
Mode 4 3a 4 2 4
Percentiles 25 2.00 2.75 1.75 1.00 1.75
50 4.00 3.50 3.50 2.00 3.00
75 4.00 4.25 4.25 3.25 4.00
Your
organization's
customers are
sensitive
about prices
Are you
offering
products
which
differ
from
other
market
players
Firm's
character is
important for
long term
sustainability
in the highly
competitive
market
Is there any
kind of price
war existing
between
businesses
in retail
supermarket
of UK
Rank the
degree of
price war
with in retail
supermarket
of UK on
following
scale
N Valid 10 10 10 10 10
Missing 0 0 0 0 0
Mean 3.50 3.80 3.20 3.60 3.40
Median 4.00 4.00 3.50 4.00 4.00
Mode 4 5 4 4 4a
Percentiles 25 2.75 2.75 2.00 2.00 1.75
50 4.00 4.00 3.50 4.00 4.00
75 4.25 5.00 4.00 5.00 5.00
Frequency tables
How would you rate existing level of competition in UK supermarket industry
Frequency Percent Valid Percent Cumulative
Percent
Valid
Low 1 10.0 10.0 10.0
Moderate 2 20.0 20.0 30.0
Somewhat Intense 3 30.0 30.0 60.0
highly intense 4 40.0 40.0 100.0
Total 10 100.0 100.0
From the information collected, it has been found by the researcher that existing level of
competition among UK supermarket industry has become highly intense. The managers of Asda
30

e explained that earlier they use of face very tough competition from market players such as
Tesco and Sainsbury. Further, they explained that the entry of German based discounted
supermarket retailer has made the level of competition more intense.
Loyalty has become very essential for growth and success of your company
Frequency Percent Valid Percent Cumulative
Percent
Valid
Disagree 2 20.0 20.0 20.0
Neutral 1 10.0 10.0 30.0
Agree 4 40.0 40.0 70.0
Strongly disagree 3 30.0 30.0 100.0
Total 10 100.0 100.0
It has been found by the researcher that at the time of carrying out its operations, Asda
focuses on developing customer loyalty. Nowadays the company has started to face several kinds
of issues or challenges regarding increasing the rate of customer loyalty. The managers also
explained that customers are no longer interested in remaining loyal because the German based
discounted retailers are providing same kind of products and services at discounted rates.
What are the factors which results in changing customers shopping habits
Frequency Percent Valid Percent Cumulative
Percent
Valid
Cultural 1 10.0 10.0 10.0
Social factors 1 10.0 10.0 20.0
Personal Factors 1 10.0 10.0 30.0
Price 2 20.0 20.0 50.0
All the above 5 50.0 50.0 100.0
Total 10 100.0 100.0
31

The above mentioned frequency table clearly highlight the fact that there are several
factors which results in changing shopping habits and buying behavior of people in the market.
The information collected reflects that culture, social, price and personal are some common
factors which results in changing customers shopping habits.
How would you rate the pricing strategy of German based discounted retailers
Frequency Percent Valid Percent Cumulative
Percent
Valid
Completely Ineffective 2 20.0 20.0 20.0
Somewhat ineffective 1 10.0 10.0 30.0
Moderate 1 10.0 10.0 40.0
Somewhat effective 3 30.0 30.0 70.0
Highly effective 3 30.0 30.0 100.0
Total 10 100.0 100.0
It has been evaluated by the researcher that the pricing strategy which has been adopted
by German based retailers is highly effective. The managers of Asda explained that Aldi and Lidl
has entered the market with low prices strategies and this is attracting customers the most.
Further, they also explained that the pricing strategy is effective because of it has helped these
retailers to acquire market share and customer base.
Price war has forced your organization to lower down its cost of operation
Frequency Percent Valid Percent Cumulative Percent
Valid
Strongly disagree 1 10.0 10.0 10.0
Disagree 2 20.0 20.0 30.0
Neutral 2 20.0 20.0 50.0
Agree 2 20.0 20.0 70.0
Strongly disagree 3 30.0 30.0 100.0
Total 10 100.0 100.0
32

In terms of impact, it has been analyzed by the researcher that price war has forced the
Asda to lower down its entire cost of operations. The main reason behind lowering down cost of
operations is to offer products, services at low price and sustain in the highly competitive
marketplace. The managers also explained it has become very important for them to cut down
operational cost in order to survive in highly competitive market place.
German discount retailer such as Aldi and Lidl are giving tough competition to your brand
Frequency Percent Valid Percent Cumulative
Percent
Valid
Strongly disagree 1 10.0 10.0 10.0
Disagree 1 10.0 10.0 20.0
Neutral 1 10.0 10.0 30.0
Agree 1 10.0 10.0 40.0
Strongly disagree 6 60.0 60.0 100.0
Total 10 100.0 100.0
From the information collected, it has been found by the researcher that Aldi and Lidl has
started giving intense competition to Asda. In last few years, the brand is witnessing several
challenges in attracting customers and retaining them for long run. The managers also said they
the competition has become so intense that Asda's market share is constantly declining. At
present the supermarket retailer is using aggressive marketing strategy to communicate
customers about its products and attract them.
The organization is facing obstacles in paying monetary incentives and higher salaries to
employees due to price war
Frequency Percent Valid Percent Cumulative
Percent
Valid
Strongly disagree 1 10.0 10.0 10.0
Disagree 3 30.0 30.0 40.0
Neutral 3 30.0 30.0 70.0
33

Agree 2 20.0 20.0 90.0
Strongly disagree 1 10.0 10.0 100.0
Total 10 100.0 100.0
The above mentioned frequency table clearly depicts the fact that now Asda is facing
issues in providing salaries and other related monetary benefits to customers. At the time of
collecting data from managers of Asda, the scholar found that the due to lower sales, the paying
capacity of company has restricted to a great extent. The impact of this is that staff members are
no longer satisfied and their overall productivity has also degraded to a great extent.
Price war has lower down the rate of training and development programs carried out
for employees
Frequency Percent Valid Percent Cumulative
Percent
Valid
Strongly disagree 1 10.0 10.0 10.0
Disagree 2 20.0 20.0 30.0
Agree 6 60.0 60.0 90.0
Strongly disagree 1 10.0 10.0 100.0
Total 10 100.0 100.0
Another major impact of price war can be seen on training and development of workers.
At the time of collecting data, managers of Asda stated that the organization understand
significance of training program but they are not able to provide frequent training programs. The
is because of lower profits which has restricted the brand to invest large amount of financial
resources in overall growth and development of workers.
Regression
ANOVAa
34

Model Sum of
Squares
df Mean
Square
F Sig.
1
Regression 22.345 8 2.793 50.856 .108b
Residual .055 1 .055
Total 22.400 9
a. Dependent Variable: Rank the degree of price war with in retail supermarket of UK on
following scale
b. Predictors: (Constant), Competitive entry is a threat to your retail organization, Is there any
kind of price war existing between businesses in retail supermarket of UK, What is existing
level of your organization's brand loyalty, Your organization's customers are sensitive about
prices , What kind of customer do you attract the most, Are you offering products which differ
from other market players, Your organization has gained good reputation in the marketplace,
Firm's character is important for long term sustainability in the highly competitive market
Coefficientsa
Model Unstandardized
Coefficients
Standardized
Coefficients
t Sig.
B Std. Error Beta
1 (Constant) 1.461 .686 2.130 .279
Is there any kind of
price war existing
between businesses in
retail supermarket of
UK
-.760 .071 -.689 -10.760 .059
Firm's character is
important for long term
sustainability in the
highly competitive
market
-.907 .200 -.706 -4.533 .138
Are you offering
products which differ
from other market
players
1.079 .189 .957 5.718 .110
Your organization's
customers are sensitive
about prices
.228 .121 .184 1.883 .311
35

What kind of customer
do you attract the most -1.572 .113 -1.225 -13.931 .046
What is existing level
of your organization's
brand loyalty
.900 .088 .763 10.187 .062
Your organization has
gained good reputation
in the marketplace
.208 .118 .201 1.758 .329
Competitive entry is a
threat to your retail
organization
1.283 .135 1.029 9.508 .067
a. Dependent Variable: Rank the degree of price war with in retail supermarket of
UK on following scale
From the above mentioned table, it has been analyzed by the researcher that there is very
intense price war existing in UK supermarket. Further, the data collected from managers of Asda
clearly highlights that firm character has become very important for long term success of the
company. The managers also explained that the existing level of brand loyalty is declining
because of the price war. Along with this, it can be also stated that there is a positive relationship
between price war and competitive entry. This means that increasing price war has made it more
complicated for a new firm to enter the UK supermarket industry. The above mentioned
regression highlights that price firms character and price war share a negative relationship with
each other.
Correlation
Correlations
Rank the degree of
price war with in
retail supermarket
of UK on
following scale
Price war resulted in
increasing the rate of
employee turnover
Rank the degree of
price war with in retail
supermarket of UK on
following scale
Pearson
Correlation 1 .448
Sig. (2-tailed) .194
N 10 10
36

Price war resulted in
increasing the rate of
employee turnover
Pearson
Correlation .448 1
Sig. (2-tailed) .194
N 10 10
From the above mentioned correlation, it has been analyses by the researcher that there is
a positive relationship between degree of price wars and employee turnover. The data collected
from managers of Asda highlights the fact that the recent price wars in the nation has created
obstacles in achieving higher sales and profits. This has limited capacity of Asda to pay salaries
and monetary benefits to all its employee and it has ultimately caused increasing the rate of
employee turnover.
Correlations
Rank the degree
of price war with
in retail
supermarket of
UK on following
scale
Do you think that the price war
has resulted in providing
benefits to customers in terms
of savings
Rank the degree of price
war with in retail
supermarket of UK on
following scale
Pearson
Correlation 1 .415
Sig. (2-tailed) .233
N 10 10
Do you think that the price
war has resulted in
providing benefits to
customers in terms of
savings
Pearson
Correlation .415 1
Sig. (2-tailed) .233
N 10 10
From the data collected, it has been also analyzed that there is positive relationship
between price wars and customer savings. Here, increasing price war has resulted in rising
savings of people in the market. The managers explained that due to low prices of products and
services, here individuals need to pay low prices which ultimately results in savings.
37

Correlations
Rank the
degree of price
war with in
retail
supermarket
of UK on
following
scale
What is existing level of
your organization's brand
loyalty
Rank the degree of
price war with in retail
supermarket of UK on
following scale
Pearson
Correlation 1 .095
Sig. (2-tailed) .795
N 10 10
What is existing level
of your organization's
brand loyalty
Pearson
Correlation .095 1
Sig. (2-tailed) .795
N 10 10
The data collected from managers of Asda clearly highlights the fact that organizations
brand loyalty has decreased to a great extent. The correlation here is .095 which is quite low and
clearly reflects the impact of price war existing in the UK supermarket industry.
4.3 Data analysis of Tesco
Gender Age How
would
you rate
existing
level of
competiti
on in UK
supermar
ket
industry
Do
you
think
custo
mer
loyalty
has
becom
e very
essenti
al for
growt
h and
succes
What
are the
factors
which
results
in
changin
g
custom
ers
shoppin
g habits
How
would
you rate
the
pricing
strategy
of
German
based
discoun
ted
retailers
What
kind of
pricing
strategy
has been
adopted
by the
organizat
ion to
sustain
in high
degree of
competit
ion
The
recent
price
war has
affected
sales
and
profits
of your
organiz
ation
38

s of
your
compa
ny
N Va
lid
10 10 10 10 10 10 10 10
Mi
ssi
ng
0 0 0 0 0 0 0 0
Mean 1.30 2.80 1.40 1.60 4.00 2.30 1.60 2.40
Median 1.00 3.00 1.00 1.00 5.00 3.00 2.00 3.00
Mode 1 3 1 1 5 3 2 3
Percenti
les
25 1.00 1.75 1.00 1.00 2.75 1.00 1.00 1.00
50 1.00 3.00 1.00 1.00 5.00 3.00 2.00 3.00
75 2.00 4.00 2.00 2.25 5.00 3.00 2.00 3.00
German
discount
retailer
such as
Aldi
and Lidl
are
giving
tough
competi
tion to
your
brand
The
slashing
prices in
market
have
negativel
y affected
the
organizati
on’s
relationsh
ips with
suppliers
to a great
extent
Price
war has
forced
your
organiza
tion to
lower
down its
cost of
operatio
n
The
organiza
tion is
facing
obstacle
s in
paying
monetar
y
incentiv
es and
higher
salaries
to
employe
es due to
price
war
Price war
has
lower
down the
rate of
training
and
develop
ment
programs
carried
out for
employe
es
Do you
think
competit
ive entry
is a
threat to
your
retail
organiza
tion
Do you
think your
organizatio
n has
gained
good
reputation
in the
marketplac
e
N Valid 10 10 10 10 10 10 10
Missi
ng
0 0 0 0 0 0 0
Mean 2.60 2.10 2.50 2.80 2.60 1.80 1.20
Median 3.00 2.50 3.00 3.00 3.00 1.50 1.00
Mode 3 3 3 3 3 1 1
Percenti
les
25 2.00 1.00 1.75 3.00 2.00 1.00 1.00
50 3.00 2.50 3.00 3.00 3.00 1.50 1.00
75 3.00 3.00 3.00 3.00 3.00 3.00 1.00
39

What is
your
existing
level of
brand
loyalty
What
kind of
customer
do you
attract
the most
Are
your
custom
ers
sensitiv
e about
prices
Are you
over
competi
ng with
existing
market
players
Do you think
firm's
character is
important for
long term
sustainability
in the highly
competitive
market
there any kind of
price war
existing between
businesses in
retail
supermarket of
UK
N Valid 10 10 10 10 10 10
Missin
g
0 0 0 0 0 0
Mean 1.30 3.10 1.60 1.90 1.50 1.20
Median 1.00 3.50 1.50 2.00 1.00 1.00
Mode 1 4 1 2 1 1
Percentil
es
25 1.00 2.00 1.00 2.00 1.00 1.00
50 1.00 3.50 1.50 2.00 1.00 1.00
75 1.25 4.00 2.00 2.00 2.25 1.00
Frequency tables
How would you rate existing level of competition in UK supermarket industry
Frequency Percent Valid Percent Cumulative Percent
Valid
Intense 7 70.0 70.0 70.0
Moderate 2 20.0 20.0 90.0
Low 1 10.0 10.0 100.0
Total 10 100.0 100.0
It has been analyses by the researcher that manager in Tesco believes that the existing
level of competition among retail supermarket industry in UK has become highly intense.
Majority of respondents which was 7 were in favor of intense competition whereas 2 manager
feels that level of competition is moderate. The remaining 1 manager of Asda stated that degree
of competition is quite low.
40

Do you think customer loyalty has become very essential for growth and success of your
company
Frequency Percent Valid Percent Cumulative Percent
Valid
Yes 6 60.0 60.0 60.0
No 2 20.0 20.0 80.0
Can't Say 2 20.0 20.0 100.0
Total 10 100.0 100.0
The information collected from managers of Tesco, highlights that customer loyalty has
become very important for long term growth and success of a business enterprise. Out of the
total 10 respondents, majority which were 6 managers agreed with this fact. The highest
cumulative percent was in favor of the fact that customer loyalty is very important.
What are the factors which results in changing customers shopping habits
Frequency Percent Valid Percent Cumulative Percent
Valid
Culture 1 10.0 10.0 10.0
Social Factors 1 10.0 10.0 20.0
Personal Factors 1 10.0 10.0 30.0
Prices 1 10.0 10.0 40.0
All the above 6 60.0 60.0 100.0
Total 10 100.0 100.0
It has been analyzed that there are many factors which results in changing the shopping
habits of customers. The manager of Tesco favored factors such as price, social and culture
which leads to modification in buying behavior of people in the market. The managers which lies
in cumulative percent 40 stated that at the time of carrying out its operations, Tesco is required to
take care of all the above mentioned factors.
How would you rate the pricing strategy of German based discounted retailers
Frequency Percent Valid Percent Cumulative Percent
41

Valid
Completely
Ineffective 3 30.0 30.0 30.0
Somewhat Effective 1 10.0 10.0 40.0
Highly effective 6 60.0 60.0 100.0
Total 10 100.0 100.0
From the primary data collected through managers of Tesco, it has been found that the
pricing strategy which has been adopted by German based supermarket retailers is very effective.
60% of the total respondents clearly stated that pricing strategy adopted by Aldi and Lidl has
resulted in affecting sales and profits of UK based retailers. Furthermore, the above mentioned
German based retailers are also growing with a very good pace in UK market and managers said
that this has become a threat to Tesco.
Price war has forced your organization to lower down its cost of operation
Frequency Percent Valid Percent Cumulative Percent
Valid
Disagree 2 20.0 20.0 20.0
Neutral 1 10.0 10.0 30.0
Agree 7 70.0 70.0 100.0
Total 10 100.0 100.0
It has been analyzed by the researcher that at the recent price war has forced Tesco to
lower down its overall cost of operations. Out of the total 10 managers of Tesco from which the
data has been collected, majority which is 70% agrees with this fact. Further, they explained that
now customers are getting products and services at lower prices from discounted retailers such as
Aldi and Lidl. Now in order to sustain in the marketplace, it is required by Tesco to offer its
products and services at same or competitive prices. This means it needs to lower down its cost
of operations along with profit margin.
German discount retailer such as Aldi and Lidl are giving tough competition to your brand
Frequency Percent Valid Percent Cumulative Percent
Valid
Disagree 1 10.0 10.0 10.0
Neutral 2 20.0 20.0 30.0
Agree 7 70.0 70.0 100.0
Total 10 100.0 100.0
42

From the information collected, it has been found by researcher that German based
discounted retailers are giving very tough competition to existing UK based supermarket retailer.
At the time of providing information, majority of Tesco's manager stated that the retailer
supermarket industry of UK was already competitive and the entry of Aldi and Lidl has made
the level of competition more intense. The above mentioned brand are able to compete with
market players such Tesco because of their pricing strategy which focuses on delivering products
and services at low prices. The managers explained that now their organization (Tesco) is facing
issues related to increasing their market share, customer base and current sales.
The organization is facing obstacles in paying monetary incentives and higher salaries to
employees due to price war
Frequency Percent Valid Percent Cumulative Percent
Valid
Disagree 1 10.0 10.0 10.0
Agree 9 90.0 90.0 100.0
Total 10 100.0 100.0
The information collected through managers of Tesco highlights that there are several
kinds of issues or challenges which the organization has started to face. At the time of providing
information the managers said that Tesco is also facing issues in terms of employee.
Furthermore, the retail supermarket is not able to pay adequate salaries and monetary benefits to
all its employees due to decline in profits because of price war. In order to cut down its cost of
operations, it was being required by the organization to lower down its pay to employees. The
manager also explained that this has resulted in creating very high amount of dissatisfaction
among workers and this is not beneficial for long term success of the brand.
Price war has lower down the rate of training and development programs carried out for
employees
Frequency Percent Valid Percent Cumulative Percent
Valid
Disagree 1 10.0 10.0 10.0
Neutral 2 20.0 20.0 30.0
Agree 7 70.0 70.0 100.0
Total 10 100.0 100.0
43

It can be analysed that price war has not only affected Tesco's relation with suppliers and
its paying capacity but it has also resulted in affecting growth and development of people within
the organization. The managers said that training and development program has become very
essential for long term success and growth of any company. Further, they explained that such
kind of program support businesses by increasing their knowledge base and skill set. However,
they also argued that during the last few years, the price has affected operations of Tesco so
badly that it is not able to focus on training program of workers. It can be stated that conducting
training and development sessions requires lots of time, financial resources and the brand is not
in situation to invest the same.
Regression
Coefficientsa
Model Unstandardized
Coefficients
Standardized
Coefficients
t Sig.
B Std. Error Beta
1 (Constant) .064 9.888 .007 .995
Do you think firm's
character is important
for long term
sustainability in the
highly competitive
market
-.162 1.317 -.128 -.123 .914
Are you over
competing with existing
market players
.910 5.064 .268 .180 .874
Are your customers
sensitive about prices .808 1.870 .526 .432 .708
What kind of customer
do you attract the most .662 1.054 .677 .627 .594
What is your existing
level of brand loyalty -.329 1.762 -.207 -.187 .869
Do you think your
organization has gained
good reputation in the
marketplace
-.220 1.527 -.129 -.144 .899
44

Do you think
competitive entry is a
threat to your retail
organization
-.335 .881 -.287 -.381 .740
a. Dependent Variable: Rank the degree of price war on scale of 5
The results generated from information collected from managers of Tesco is somewhat
different from that of Asda. Here, there is a negative relationship between price war and long
term sustainability of the company. Apart from this, customer character and price war share
positive relationship with each other. It has been also analyzed by the researcher that brand
loyalty and price war existing in UK market are negative related to each other.
Correlations
Rank the degree
of price war on
scale of 5
Has Price war
resulted in
increasing the
rate of employee
turnover
Rank the degree of price
war on scale of 5
Pearson Correlation 1 .219
Sig. (2-tailed) .543
N 10 10
Has Price war resulted in
increasing the rate of
employee turnover
Pearson Correlation .219 1
Sig. (2-tailed) .543
N 10 10
From the information collected through managers of Tesco, it has been analyzed by the
researcher that the recent price war has resulted in increasing the rate of employee turnover.
Along with this, there is a positive relationship between the two variables. The managers
explained that due to low sales and profits, the brand is forced to cut low salaries and monetary
benefits to customers in order to lower down their cost of operation. This has resulted in causing
high rate of employee turnover as the employees are highly dissatisfied.
Correlations
45

Is your organization
facing challenges in
increasing the rate of
customer loyalty
Rank the degree
of price war on
scale of 5
Is your organization facing
challenges in increasing
the rate of customer
loyalty
Pearson Correlation 1 .073
Sig. (2-tailed) .842
N 10 10
Rank the degree of price
war on scale of 5
Pearson Correlation .073 1
Sig. (2-tailed) .842
N 10 10
The recent price war in UK has also resulted in creating several kinds of obstacles for
Tesco in terms of enhancing rate of customer loyalty. From the above mentioned table, it has
been analyzed that the two variables which are degree of price war and customer loyalty has
positive relationship with each other. Increasing in price war is directly affecting the rate of
customer loyalty as people in the market are more interested in buying products and services of
German based discounted retailers.
Correlations
Rank the
degree of
price war on
scale of 5
Do you think that the price war
has resulted in providing
benefits to customers in terms of
savings
Rank the degree of
price war on scale of 5
Pearson
Correlation 1 -.131
Sig. (2-tailed) .719
N 10 10
Do you think that the
price war has resulted
in providing benefits
to customers in terms
of savings
Pearson
Correlation -.131 1
Sig. (2-tailed) .719
N 10 10
Correlations
46

Rank the degree of
price war on scale
of 5
Do you think that the price
war has resulted in
providing benefits to
customers in terms of
savings
Rank the degree of
price war on scale of 5
Pearson
Correlation 1 -.131
Sig. (2-tailed) .719
N 10 10
Do you think that the
price war has resulted
in providing benefits to
customers in terms of
savings
Pearson
Correlation -.131 1
Sig. (2-tailed) .719
N 10 10
The above mentioned table depicts that price war is providing some of benefit to
customers in terms of savings. However, the managers of Tesco argued that the products and
service quality which German based discounted retailers are offering is not satisfactory and
therefore customers are not able to save adequate money.
47

CHAPTER 5- CONCLUSION AND RECOMMENDATION
5.1 Conclusion
From the above carried out study, it can be concluded that the degree of price war which
is existing in UK supermarket is getting more and more intense along with the passage of time. It
can be inferred that there are large number of factors which can be held responsible for the
changing buying behaviour of people in the market. At the time of carrying out their operations,
it is required by a business enterprise to make sure that all those factors are well taken care of.
The present study explored factors such as price, culture, social and personal responsible for
changing buying behaviour of customers. The information collected also highlights the fact
companies cannot sustain in long run if they are not aware about the key factors which results in
changing customer buying behaviour. Apart from this, it can be also concluded that development
of appropriate marketing mix is also essential for businesses in order to sustain in highly
competitive marketplace. The marketing mix of an organization consists of four major P's which
are product, price, place and promotion.
It can be stated that at the time of carrying out their operations, it is required by retailers
to take care of all the above mentioned factors. The recent price war has affected business
practises and operations of UK supermarket retailers to a great extent. It has also created several
kinds of obstacles in increasing sales and profitability of the businesses. It can be concluded that
the recent price has forced UK retailers to carry out some modifications in their existing price
wars. For example at present the retailers are using low price strategy with an objective to attract
more and more customers. Earlier businesses in this sector were using moderate and high price
strategy in order to carry out smooth flow of operations and activities.
However, the entry of German based discounted retailer such as Aldi and Lidl forced UK
based retailers to carry out changes in existing prices related strategy. Now, a low price strategy
has been adopted by most of the retailer to attract customer and sustain in highly competitive
market place. The rate of promotional activities carried out has been degraded in order to lower
down the cost of operations. In terms of distribution it can be stated that now both online and
offline channels of distribution has been adopted by the UK based retailers.
48

From the above conducted study, it can be also concluded that employees and their
earnings has been affected by price wars in UK supermarket industry. In the modern era,
employees are considered as one of the most important or crucial aspect of any business
enterprise and thus, it is required by companies to focus upon the same. In last few years, the
price in UK supermarket industry has affected Tesco and Asda so badly that their rate of
employee turnover has increased to a great extent.
At present these brands are not able to focus on training and development of their
workers. In addition to this, reduction has also been done in existing salaries and monetary
benefits which are offered to workers. This has created high dissatisfaction among workers and
also increased the rate of employee turnover. It can be concluded that employees and their
respective earnings has affected in negative sense and in order to sustain in long run, Tesco and
Asda will be required to develop effective strategies to deal with the same. Right now very less
focus is laid on areas such as training and development. This has created several kinds of
obstacles in personal growth and development of people working in the organization.
In the present scenario, customer loyalty is very essential for long term growth of any
organization. Further, a loyal customer can offer company with several kinds of benefits such as
increasing sales and profits. It can be stated that competitive advantage is the thing for which UK
based retail supermarket are looking after. It can be defined as the situation in which customers
stay loyal to a particular company and purchase its products and services irrespective of what
other market players are offering. For this purpose companies now trying hard to retain
customers and make them loyal.
The reason behind the fact that why customer loyalty is important is that such kind of
customers are considered as more profitable to any organization. Apart from this, they also help
firms to gain competitive advantage over other market players which are operating in the
industry. Now, the recent price war has created issues in enhancing the degree of customer
loyalty for brands such as Tesco and Asda. At present customers of these companies are no more
interested in staying loyal as the German based discounted retailer are offering products at low
prices. From the above carried out report, it can be also concluded that nowadays customers have
become very sensitive to prices and this characteristic has affected the overall operations and
profits of the UK based supermarket retailers. Thus, there are several areas which has been
49

affected by the current price war which is prevailing within the country. However, it can be
inferred that ultimate customers are the one which are getting positively affected by price war.
Now they are not required to spend very large amount of money to buy product and service.
They are now available with wide variety of options available with them and in last few years the
prices of products has also lowed down to a great extent. On the other hand, because of price war
people in the market are able to save more money as they are required to invest very less amount
in buying desired products. Currently German based supermarket retailers are growing in UK
with a very good pace and they have also developed aggressive strategies for growth and
expansion in the country. On the other side of this, companies such as Tesco and Asda are
finding it very difficult to attract customers and maintain their existing market share. Sales,
profits, customer base and market share of the UK based supermarket retailer are constantly
declining. This means these brands will need to come up with a very aggressive or innovative
business strategy to sustain in market and retain their existing customers.
Asda and Tesco's relationship with suppliers is also affected by the price war and now
this has also become a very big for the above mentioned brands. Presently, suppliers are being
offered and paid with very less amount of money for products which they are delivering. This
means it has become very complicated for them to get adequate or fair prices of all the services
and products which they have delivered to UK based supermarket retailer. The impact of this can
be seen on relationship which exists between suppliers and retailers. It is also possible that in
future, suppliers may not deliver products and services on time and this will have impact on
overall brand image of Asda and Tesco. It can be concluded that there are certain strategies
which has been developed by the above mentioned brands. However, those strategies are not
been able to provide expected or desired outcomes. Now, UK based retailers can come up with
products which are innovative and different from German based discounted retailer such Lidl
and Aldi. At the time of developing any kind of new strategy, Asda and Tesco also need to focus
upon their respective employees and suppliers. This will directly contribute to long term growth
and success of the same.
5.2 Recommendations
As per the findings, it can be stated that there are many organizations which provide
similar products and services. In this context, companies make use of different set of strategies
50

with the help of which customers are attracted. However, one of the main strategy which are
used by organizations are providing their products at low price. Price plays vital role in
identifying the changing customers perception and in influencing them to buy the product. As
per the findings, following are the recommendation made in order to reduce the price war as
follows:
Government interference: The economy of the country will get affected if price of the
products are reduced. In this context, government should get involve in the pricing strategies
which are used by the organizations. This will enable to have equal opportunity and competition
among all retails. When any company reduces its price of a product when compared to price in
which other firm sells their products, then customers prefer to buy the product which is provided
at low cost. With government interference, price war can be reduced at high extent.
Competitive pricing: Pricing plays vital role in changing customers perception towards
buying the product. Competitive pricing is a type of pricing in which organization will charge the
price which other firms are charging for the product. This will enable to have and fair and equal
competition. When goods are sold at similar price, then customers will prefer to buy the product
and this will be helpful in creating a fair competition. However, the only difference which can be
made is by providing customers with high quality products. When a product is sold by all the
organizations at same price, then firm should focus on providing their products at high quality.
This will enable to develop high competition and this way price war can be reduced.
Mutual concern: Managers of different organizations should have concern with each
other and set up a price which for the product. When there will be mutual concern, then firm will
be able to reduce the price war and this will be helpful in attracting customers.
As per the research conducted, it is clear that pricing play vital role in influencing
customers perception towards product. Service users tent to purchase the product which are
provided to them at low price. However, Tesco and ASDA should consider that this will enable
to achieve their goals and objectives. However, the only difference which can be made in this
context is by making sure that the good are provided at high quality. In case when price is low,
then people do not mainly go for quality but when the product is provided at same price, then
quality highly matters. With this respect, it is important to make sure that products are provided
at high quality when price are kept low.
51

Tesco and ASDA should make sure that the materials by which products should be of
low cost, then firm can deliver their products at low cost. Any how when price of the product is
reduced, then the quality is high affected as organization start making use of low quality
materials. Tesco and ASDA being the highest share holders they should always maintain the
quality of products. In this context, managers of cited firms should have interaction with
suppliers and should explain that short term profit will not be helpful other than developing a
strong relationship. With strong relationship, management can develop trust and confidence
among customers mind and this will help the organization to make loyal customers.
ASDA and Tesco should make use of low pricing strategy but not in stake of low quality.
By providing the products at low price the goodwill of the organization will get reduced and the
trust and confidence which they have developed will get affected negatively. With this respect,
frequent meeting should be conducted with supplier so that they make sure that products are
delivered at high quality.
By following these strategies the price war can be reduced. Further, Tesco and ASDA
should maintain their standards and make sure that products are provided at high quality. Price
plays vital role in attracting customers but cited firms should not provide their good at low price
if it affects the quality.
52

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