Morrisons Marketing Strategies: A SOSTAC Analysis for UK and India

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Principles and Practices of
Marketing

Table of Contents
Introduction............................................................................................................................. 2
Morrisons - Marketing Strategy...............................................................................................2
Task-1 (Total Words - 1500).....................................................................................................4
Task – 2 (Total Words – 740)..................................................................................................13
Task – 3 (Total Words – 700)..................................................................................................18
Conclusion.............................................................................................................................. 21
Reference List.........................................................................................................................22
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Introduction
The assignment considers different aspects of the marketing Strategy and practices of the
Morrisons. Wm Morrison Supermarkets Plc or Morrisons is considered to be one of the five
largest supermarket chains in the UK. It’s based at Bradford, West Yorkshire, England and it
operates nearly 500 stores with an employee base of over 100000 employees. The task-1 of
the assignment will be focused on applying the SOSTAC marketing model with a focus on
starting its operations in India, one of the emerging Asian Economies. Task-2 will be focused
on evaluating the current SOSTAC strategy employed by the Morrisons in the UK. Lastly,
task-3 will be analysing the viability of the current marketing strategy of the Morrisons in
the context of the Indian Market.
Morrisons - Marketing Strategy
The marketing function refers to the processes and activities incorporated by the
organisation that promotes the selling or buying of their offered services or products.
Marketing includes activities like an advertisement, sale, and delivery of the offered services
and products. Morrisons being a 120-year-old company has incorporated many types of
marketing strategies and practices according to its changing requirements. The current
marketing function of the Morrisons is focused on achieving its aims and objectives.
According to the Annual report of the Morrisons, their Aim is, “We make and provide the
food we're all proud of, where everyone's effort is worthwhile, so more and more people
can afford to enjoy eating well" (Morrisons, 2018). Their objectives include being more
competitive, providing better customer service, identifying local solutions, developing useful
and popular services, simplifying and speeding up, and making the core supermarkets
stronger (Morrisons, 2018).
As part of its changing marketing preferences, requirements and long-term strategy
Morrisons underwent a change in its Brand Logo in 2016. The marketing strategy of
Morrisons is based on the segmentation strategy that involves targeting the customers
according to their demographic segmentation. With a focus on online ordering and home
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delivery, Morrisons is expanding its online presence as well as facilitating ease of customer
interaction and improving their satisfaction levels. It focuses on expanding its product
portfolio that is offered under its brand name that is easily available through both online
and over the counter shopping. It also focuses on pricing its products cheaply to attract
more of customers and enhances the loyalty of its existing customer base through loyalty
cards, “More”. These cards provide the cardholding customers additional benefits while
shopping. The company focuses on both online and traditional advertisements to attract
customers and promote its products and brand. Currently, the operations of the Morrisons
are limited to the UK market with a subsidiary in Hong Kong to support the procurement
process of the company from the Asian market (Morrisons, 2018).
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Task-1 (Total Words - 1500)
The SOSTAC Marketing Model
The SOSTAC marketing model is a popular marketing tool developed by PR Smith. It’s used
for creating a marketing strategy by considering six aspects of marketing. The Following are
the six aspects considered in the SOSTAC marketing model (Zook and Smith, 2016)
Situation Analysis–It involves the assessment of the current situation of the
organisation through the question, "Where are you now?"
Objectives–This aspects of the SOSTAC Model focuses on the establishment of
objectives or goals of the organisation by understanding its future inclinations,
“Where the organisation want to be?”
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1: SOSTAC Model
Strategy–It involves creating the processes and procedures to achieve the above-
defined goals and objectives.
Tactics–These are the strategic details such as the marketing mix.
Action–This aspect considers the methodology of ensuring successful
implementation of the decided strategy.
Control–It involves continuous monitoring of the progress to identify the direction
potential success of the business strategy (Zook and Smith, 2016).
SOSTAC Marketing Model for Morrisons- Indian Operation
Morrisons is considering initiating its operations in India. India is a growing economy that
developing at a fast pace. India has a population of over 1.3 billion and it’s considered to be
the seventh largest country in terms of area and second most populace in the world. India
presents an attractive business opportunity to retailers and the presence of another UK
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based retailer Tesco in India is an endorsement of this fact. As the first step of SOSTAC
marketing Model, we will be conducting a PEST analysis of India (Zook and Smith, 2016)
1.1 Situation Analysis
1.11 PEST analysis of Indian Market
Political Factors–The political structure of India is federal and democratic. The political
inclination of the Indian Government usually favours the businesses and the country has a
well-defined tax structure. Although, there’s a limitation in the stake a foreign company can
hold in a retail company operating in India. Morrisons will be required to partner with an
Indian organisation to initiate its Indian Operations (Rakesh, 2014).
Economic Factors–The Indian Economy has been consistently growing since the economic
reforms of the 1990s. The consistent growth of the GDP at a rate that’s higher than the
global average rate will help the company grow its Indian Operations. The government
promotes Foreign Direct Investments and provides a variety of tax rebates and a Company
like Morrisons can avail subsidies on various things like land acquisition prices. The labour
cost in India is quite cheaper than the labour cost of the UK along with the prices of
groceries and other products. This will be beneficial for the Morrisons since it will allow the
company various avenues of acquiring profits (Rakesh, 2014).
Social Factors– As mentioned earlier, India is the second largest country in terms of
population and the majority of its population is within the age bracket of 15 years to 65
years. The Morrisons focus on cheaper pricing of products and wide product range will be
instrumental in capturing a good market share and positioning due to the inclination of
Indian masses towards cheaper products (Rakesh, 2014).
Technological factors – The presence of a strong information technology sector as a result
of the focus of India on developing its IT sectors will benefit Morrisons in the form of a
strong IT support, also, the widespread use of the internet and online service due to the
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easy availability of a strong 3G and 4G GSM network. Morrisons will not only have access to
cheaper IT support but also to a high-value online market (Rakesh, 2014).
1.12 Hofstede’s Cultural Dimensions
Hofstede's Cultural Dimensions can be used as the guidance tool of marketing in India by
Morrisons to acquire a strong market presence. Hofstede’s Model considers the following
five cultural dimensions (Hur et al., 2015)
Power Distance–The world average for this dimension is 56.5 while for India it's 77. This
indicates the presence of a hierarchical, top-down structure within the Indian society.
Morrisons can focus on the advertisement with an authoritarian figure in the lead to
promote its products and services. The marketing for rural areas can be done through local
communities for best results (Hur et al., 2015).
Individualism/collectivism –A score of 48 indicates a mix of both individualistic and
collectivistic traits within the Indian Society. The marketing and advertisement of Morrison
can be centred on Families with a family specific product for best benefits (Hur et al., 2015).
Masculinity – A score of 56 indicates a masculine society hence it will be competitive and
focused on the display of success and achievement. The Morrison advertisement should
include the display of feminine aspirations for females and masculine aspiration for males.
The women can be shown in traditional roles, especially in rural advertisement campaigns.
Brand value of products will be a major selling factor (Hur et al., 2015).
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2: Hofstede's Cultural Dimension for India
Source: Hofstede’s
Uncertainty Avoidance–The score for India is 40 indicating the patient and welcoming
nature of Indian culture towards new products and services.
Long Term Orientation – The score of 51 is confusing without an inclination towards a fixed
direction. Although, the holistic beliefs of India can be used to deduce their preference of
reliable products due to the long term view of Indian Society (Hur et al., 2015).
1.2 Objectives
Smart Objectives for Indian Operations of Morrisons (Zook and Smith, 2016)
Establishing a joint venture with an Indian Company with organisational culture and
purpose similar to Morrisons within one year
Initiating the first retail outlet in Bangalore by 2021
Making the supermarket at Bangalore profitable in terms of Volume sold and
revenue generated by 2023
Expanding the Indian Operations to 5 Supermarkets and 10% of group revenue by
2025
1.3 Strategy
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1.31 Porter’s Generic Strategies
3: Porter's Generic Strategy Model
Source: Porter's Generic Strategies
Porter's Generic Strategies provide three different strategically sound approaches that
Morrisons can choose in India. These include the following (Tansey et al., 2014)
Cost Leadership Strategy – Morrisons has already employed this strategy in the UK market
successfully. The cost leadership is a viable strategy that can be incorporated in the Indian
Market as well. This will be facilitated by lower labour costs and procurement costs. Also,
the scale at which Morrisons can operate will outclass most of the small and mid-level
retailers in India giving Morrisons a strong competitive advantage (Tansey et al., 2014).
Differentiation Strategy–Morrisons can employ differentiation strategy by offering self-
branded products that assure the customers of quality at relatively competitive prices. This
will allow the company to differentiate its products from competitors (Tansey et al., 2014).
Focus Strategy – The focus strategy is appropriate for a narrow market segment and due to
its ability to compete on a broad scale this strategy becomes impractical (Tansey et al.,
2014).
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1.32 Ansoff’s Matrix
Ansoff’s Matrix can be useful for Morrison in determining the market and product growth
strategy. Morrisons is entering the Indian Market hence the ideal strategy for the company
will be New Market Development Strategy. This strategy focuses on selling existing products
and services to new markets. The company can start by exporting its existing product range
to India and seeking local producers of its trademark products such as grocery (Shaw, 2012).
This will allow the company to operate on its
4: Ansoff's Matrix
Source: Ansoff's Matrix
strong product knowledge and establish itself into the new market. Also, the Indian
partner's expertise can be utilised to seek a market advantage.
1.4 Tactics
The tactics of Morrisons can be based upon the 4P’s of Marketing Mix (Londhe, 2014)
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5: 4P's of Marketing Mix
1.41 Product
The product portfolio can be analysed by using Boston's Matrix to choose products that
should be offered. Boston's Matrix categorises the product into four categories depicted in
the below figure. These parameters can be applied to the product mix to find suitable
products for the Indian market in terms of market share and growth (Londhe, 2014).
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