Analysis of Marketing Principles in the Retail Sector: Report

This report provides an in-depth analysis of marketing principles as applied within the retail sector, using Morrisons as a primary case study. The introduction establishes the importance of marketing in building brand image and customer retention, setting the stage for an exploration of marketing strategies. The main body delves into Morrisons' current marketing strategy, communication techniques including the 4Cs model (Consumers, Costs, Convenience, Communication), and the application of the 7S model in digital marketing. The report examines Morrisons' approach to customer engagement, pricing, store experience, and loyalty programs. Furthermore, it discusses the significance of digital marketing, strategies, structure, systems, staff, skills, shared values, and style within the company. The conclusion summarizes the key findings and implications of these marketing principles in the context of the retail industry.

MARKETING PRINCIPLES

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
MAIN BODY...................................................................................................................................1
Background of current marketing strategy..................................................................................1
Marketing Communication techniques used in marketing strategy............................................1
Elements of 7S model applied in digital marketing....................................................................4
Marketing Models.......................................................................................................................8
CONCLUSION..............................................................................................................................10
REFERENCES..............................................................................................................................11

INTRODUCTION
Marketing is used by companies to formulate strategies after analysing current market
trends to build brand image, promoting their product or customer retention etc. Although its
primary objective is to transfer goods and services to consumers along with branding and
marketing activities. Principles of marketing are helpful for any organisation to understand what
services or products could be sold and how to plan a successful marketing strategy. Report is
made with the purpose of explaining marketing principles in retail businesses. Morrisons is a plc
in United-Kingdom dealing in supermarket chain, headquartered in West Yorkshire. Having
more than 500 locations across nation, and its operating income is £470 million (2017),
employing 132000 people in the organisation. Analysis of the company is conducted from
consumer point of view to better understand the applicability and usefulness of marketing
principles.
MAIN BODY
Background of current marketing strategy.
With the declining sales and decreasing campaign activities future of Morrisons were
doubted by many. However, unpredictability of retail sector in the country are always impacting
operations of organisation. Along with the priorities set by the company they have currently
focused on customer listening programme at present and now it is back on head of marketing.
Priorities are to be highly competitive in market and serving best to its customers by developing
useful and best-selling services to them. By refitting and refreshing stores as per customers' ideas
and recommendations for making core market strong.
Marketing Communication techniques used in marketing strategy.
CEO of company has announced a huge investment in pricing strategy in near future and
reinforcing its value chain. Company is focusing presently on communication with its customers
to provide them value without making any compromise (Patti, and et.al., 2017). Additionally,
they have focused on best store experience for its customers and loyalty programme. However,
company is not all planning to get rid of its current brand ambassadors Ant and Dec.
Loyalty programme would take company to a higher level in market place as they would
be gaining customer retention for longer period. Communicating with potential buyers and
providing them with what they require and willing to buy would improve brand image.
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Company has currently made five plans that are unveiling its marketing plan: - Provide customer with values without making any compromise: Presently, the centre of
focus is consistent communication with customers without interruption. Here, company is
targeting to make consumers aware of what they are standing for. And after that they
should appraise the organisation. To provide them with right product at right price, hiring
and training of employees to develop proper care lines is a first step company should
take. It would help organisation in identifying problems of buyers and accordingly plan
proactively to eliminate them. After identifying their problem set up a self-service option
for customers so that they can directly communicate to company. Though,
communication not at all means that irritate them by sending unwanted company
information. Exclusion of everything else, just praise, promote and publicize: Company is aiming to
beat the drum, by fresh food to customers that other retailers are unable to provide them
with. It says consistent and altogether effort of company (Lilien, Rangaswamy, and De
Bruyn, 2017). It is centred on pricing, but Philips said 'perception of people that products
are more expensive than other discounters'. Company organised a campaign whose
slogan was “prices nailed down”, claiming that supermarket offers the cheapest milk in
the given sector. Improved Store Experience: Consumers are complaining about the longer ques in the
supermarket and lack of attenders on fresh food counters. Thus, retailer wants to make
the shop more clear and pleasant for buyers. Morrisons have been freeing up few
members of staff for only 'value added tasks'. They want to be a unique supermarket
retailer not a hypermarket or a discounter in the eyes of customers. Incomparable to market i.e. loyalty programme: Organisation is going to launch its own
card by this year named 'Morrisons-Card. Such that cardholders would be registered with
company and help the organisation to know members and get focused towards them.
 Fewer, but highly impactful promotional activities: Company is focusing on promotions
but they are planning to cut down to centring on 'winning-deals'. Moreover, it has
planned to cut down the discount given yearly by ten percent from current spending of
£1.5 bn.
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4C's marketing communication used by Morrison: The 4c” model of business communication
provides a framework for the companies who want to increase their customers and also want to
retain them. The revised 4 C's model is customer oriented model of marketing communication
(Armstrong and et.al., 2014.). Once a business organisation has segmented its marketing and
identified the target customers, should move towards the next stage of positioning the business.
The four variables in this 4 C' s model is:
 Consumers
 Costs
 Communication
 Convenience.
In this we have focused on the application of this 4 C's model by the company Morrison.
The company used this 4 C's model as a tool to create a positioning statement or to build
an online value proposition. Morrison company believes that this marketing model is a
powerful tool to aid thinking. Such model is probably required for reviewing the strategic
options and selecting the best future direction for a company.
A) Consumers/Clients: This element of marketing mix is about determining needs and demands
of consumers before creating products and services. Marketing campaign should be focusing on
bringing value to customers. Unify the goals of company and its stakeholders so that it can
generate more income and delivering good value to people. Current digitalization strategy which
is focusing on providing public with what they want from company. Listening to customers on
time, speeds up consumer handling, delivering proactive solutions to them are positive
advantages of digitalization in supermarket.
B) Costs: It is the cost that is used to design to replace current price of product. Commodity
goods are considered rather than brand items offered by company. It requires company to
implement cost cutting measures to avoid extra cost incurred in production of food items. Main
objective of company is to satisfy buyers by ensuring discounting does not take place and
consumers are not willing to switch. If company succeeds in providing better services to its
consumers they would be able to gain customer loyalty.
C) Convenience: It is concept that enables consumers to buy products according to their
convenience. Traditional concept of purchasing from 9 am to 5 pm is gone when people used to
close shops during lunch hours. Now companies are focusing on making products available to
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consumers according to their convenient timings. Additionally, middleman is removed from
supply chain with the introduction of digitalization in retail sector. Online shopping has brought
ease to buyers and sellers both, manufacturer is benefited by costs involved in maintaining
warehouses. Moreover, customers can buy according to their choice and convenience and at
home, no need to waste time on shopping on stores.
D) Communication: It is manipulative in present context, previously one-way system used to be
followed in given sector. Such that company was unable to know their customer well, their
desires and wants were not known to manufacturer (Porcu and et.al., 2017). With digitalization,
company is able to reach consumers and better understand them and their desires. Loyalty
programme held by company is very efficient to identify its customer segment.
Elements of 7S model applied in digital marketing.
Below image depicts the dimensions of Model
(Source: <https://www.pinterest.com/pin/61080138667967834/>)
This model is used by companies in retail sector for mainly four purposes-
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1. Facilitating a digital transformation in organisation.
2. For successful implementation of new strategy.
3. Evaluating the ways in which changes may occur in different areas related to company.
4. Expansion of company by mergers or acquisitions.
Areas in the model are divided in two 'Soft' and 'Hard', where systems, strategy and structure are
hard areas when compared to skills, staff, shared values and style in the model (Zentes,
Morschett and Schramm-Klein, 2017). To keep themselves ahead in the competition digital
marketing is very useful. It is basically promoting brand using forms of digital advertising.
1. Strategy: It is a plan developed by company for achieving sustainable competitive
advantage in the industry. Strategies are articulated in such a way that company is able to
fulfil its mission and vision. Mission statement of company is to provide consumers with
the best value for their money. Vision is to be the food specialist in supermarket chain by
having own packaging and production facilitates. Company has recently organised a
loyalty programme with the help of which it can identify the customers and their
requirements from company. Digital campaign can be organised by Morrisons to attain
competitive advantage by creating own website or applications. Campaign can be held by
company with the goal, 'ask customers to install app' to attract wider consumer segment.
It would help organisation to understand customers and better perform to achieve its
mission and vision. Company can use applications like Twitter, Instagram, Facebook etc.
2. Structure: It is the plan that represents who is accountable to whom by dividing
organisation in different units. It is chart reflecting elements of organisational framework.
Morrisons follows vertical hierarchical communication system starts from President and
further divided in different departments. Company is not having any line manager.
Following chart gives overview of structure followed in the company.
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Source: <https://creately.com/diagram/example/gzjemxpq2/Supermarket%20Chain>
 With digitalization company can organise its communication system in a better
way by implementing new techniques like creating a network. It would help
organisation in using a central server for sharing information and data in
company. With the use of advanced techniques employees may not have ton
physically reach to every other employee in department. Sometimes, for some
direct conversation manager can straight away contact to line workers or low level
workforce.
3. Systems: Processes followed and implemented in companies in daily operational
activities which helps in decision making process. Digitalization in daily operating
activities would help Morrisons in cost cutting and managing productivity. System
defines how business should be managed and it must be focused while making any kind
of organisational change. Company has recently incorporated a software for the purpose
of increasing efficiency in operational ratio. Three-year IT investment program is
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announced by company. Previously, four types of systems were used in organisation in
POS functional areas' viz. checkout lanes, dry cleaning service counters, in-store quick
service restaurants and fuelling sites (Ascarza, Fader, and Hardie, 2017). Retalix software
implemented in the organisation would help in creating more systematic and easy
operations. Company is has recently used replenishment optimization for faster product
availability to buyers by automated ordering facility. Additionally, this system helps in
forecasting order requirements and managing stock levels. Presently company is making
thirteen million online orders per day.
4. Staff: It is most important factor to be considered while implementing an organisational
change. Company should have suitable workforce for carrying out is digitalization
strategy. By implementation of digital strategy in the organisation it can bring more
innovative and productive workforce. It would also add up to employment opportunities
being created in the sector. According to Computing technology association it is
acknowledged by many companies that digitalization adds up to benefits, by improving
staff's digital skills. Still, only few companies want to organise IT staff training for their
workforce. Organisations can call consultants to help staff in adapting digitalization in
business (McKinsey 7's Model. 2017).
5. Skills: Company must ensure that it has skilled workforce who perform well, having
good capabilities and competences. During the process for bringing change in
organisation it has to be focused upon that what skills are required to implement new
structure or strategy. Morrisons has been focussing on customer loyalty and improving
brand image. In order to do so they need to find out skills their staff possess at present
and identify whether any training is required.
6. Style: It is the management style of any business that is reflected by how well top-level
managers are taking actions for business. Simply put, it is the style of top level managers
for performing organisational activities. Digitalization requires a campaign and it should
thematically fit the style of other drives.
7. Shared values: These are the foundation of every business, or say they are standards that
guides organisation and employee behaviour (Kumar, Sharma and Gupta, 2017). Before
implementing any kind of digitalization step, it is essential for company to check if both
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the strategies old or new go simultaneously. It should target customer segments that are
more important form company at present. In present strategy in which company is
focusing on customers and communicating with them to provide them with values.
Digitalization would help company to connect to customers by using social media as a
medium. Either Morrisons may make online services available to consumers otherwise its
current plan of loyalty programme is working good (Schultz and Malthouse, 2017).
Offering multiple payment options to customers is also helpful in given context.
Marketing Models.
A) Value Chain analysis: It is tool used by companies to identify potential sources of
advantages in economic sector by their internal competences integrated with external
environment. VCA divides the business actions into a sequential chain. It separates activities in
the analysis in two parts primaries and secondary (The Value Chain. 2017).
1. Primary Activities
Inbound logistics: Morrisons is having vertical integrated supply chain with abattoirs, fresh fruit,
bakeries and pack-houses for vegetables with food making division. Having owned
manufacturing department Morrisons can save costs by using measures foe avoiding wastes and
cost cutting measures.
Outbound Logistics: Morrisons is having more than 13 distribution centres across United-
Kingdom. Fast delivery speed to shop from warehouses and growers. Moreover, company is
cutting travelling distances by declining carbon footprints.
Operations: In house manufacturing of food enables company to quickly respond to customers.
It helps in reducing wastes by making food available to consumers according to their demands.
100 percent fresh food is delivered and mission of company is getting fulfilled.
Sales and Marketing: Morrisons is having high profile campaign for advertising, in last summer
highlighting street in market which could still be recalled by viewers.
2. Secondary or Support Activities.
Technological development: Company has developed an Information Technology replacement to
improve cost cutting measures. Moreover, new online investment in E-commerce are made, like
kiddicare.com. and Freshdirect.com.
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Human resource development: Company has organised a training development to help youth
after their graduation to get work and reach a position desired by them in any organisation.
Company is employing more than 40 percent people for over 5 years.
Firm Infrastructure: Morrisons supports all of its stakeholders, being corporate responsibility as
first priority.
Segmentation, targeting and positioning (STP model) of Morrison
Morrison is the UK's biggest food retailer. Segmentation, targeting and positioning is a
marketing strategy which every kind of organisation have to manage. Segment of a market is
reduced the market size on the basis of market need. Targeting is to which type of customer
targeted. And positioning also a strategy to maintain a product into better position in the market.
 Segmentation of Morrison: - UK is the multi- cultural country and their habits and taste
is depended upon their religion, community etc. Morrison is divided the market into
various segment on the basis of age, gender, income, occupation, family size etc.
Segmentation of Morrison is divided as follows -
1. Demographical- the company is divided into regions and all the regions are divided into
cities and cities are divided into east, west, north, south or central. So, it’s easy for
company focusing on all sites.Behavioural: - it is based on the customer behaviour,
attitude and nature. For example, customer is like to finer food, traditional food or
healthy food. So, company produces the new product on the basis of them.Psychological:
- this segment is basically based on the basic psychological needs of the customer and life
style. The basic needs of the customer are based upon the income, occupation and family
size religion and community etc.Targeting: - target customer of Morrison is the students,
singles, occupied and engaged people. It aims to save the money of students with are
engaged in their schedule and bachelors who are single. Target market is the choice of the
company it saves money and time of the student and another thing is to traditional foods
are very popular in the UK, so it is like by working women and household. Morrison
another strategy in the target is a technical factor which is ready food and packed foods is
the modern like by many customers, so they offer ready foods.Positioning: - In the
positioning strategy of Morrison is a low cost of products and they cut the prices of
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products online and 1200 retail stores. They used the tag line such as “love 'em cheaper
and love it cheaper”. So main positioning strategy of Morrison is to good food at cheap
rate. Morrison is created a new logo with a “tree” which focus on highlighting its fresh
product made in store through the new advertisement, it can be another positioning
strategy of Morrison.
CONCLUSION
By summing up this report conclusions made are in order to improve brand image and
high customer loyalty organisation should use appropriate marketing principles. Retail sector in
United-Kingdom is facing a lot many changes and challenges in their survival due to emerging
digital services. However, Morrisons being in retail sector has recognized that to lead in sector
they have to follow digitalization for maintaining high customer retention. Although, company
has organised a customer loyalty programme as per current marketing strategy. Further, to 7C
analysis, value chain analysis is conducted after assessing marketing communication techniques
used by retailer.
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