Morrisons' Expansion into Mexico: A Marketing Plan

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Principle and practice of marketing

TABLE OF CONTENTS
Introduction......................................................................................................................................1
Background to marketing related activities of Morrisons...............................................................2
Task 1...............................................................................................................................................3
SOSTAC model to the marketing strategy currently being used by Morrisons..........................3
Task 2...............................................................................................................................................9
An evaluation needs to be undertaken of the effectiveness of the retailer’s current SOSTAC
strategy currently used in the UK................................................................................................9
Task 3.............................................................................................................................................11
To what extent do you believe that the current marketing strategy used by the supermarket in
the UK, and evaluated in task two, could be implemented in the international market you
chose in task one?......................................................................................................................11
Conclusion.....................................................................................................................................13
References......................................................................................................................................14

LIST OF FIGURES
Figure 1: SOSTAC model...............................................................................................................8

Introduction
Marketing practices are effective that are majorly organised to increase the customer attention
and also to increase sales and revenues of the organisation. Current report has focussed on
application of principles and practices of marketing for the purpose of expanding business into
different market. In addition, such application is shown within the case study of Morrisons that is
planning to expand in Mexico. The report will also elaborate the current strategy that is applied
by the retailers in parts of UK. Report will show the application of SOSTAC model and different
strategies of marketing to be used in the supermarket of UK. Moreover, report will develop
greater understanding of the strategies used by Morrisons to optimise growth and enhance
expansion in different countries.
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Background to marketing related activities of Morrisons
Morrisons is one of the biggest retailer and chain of supermarkets in parts of UK that has steadily
grown its business and operates with almost 455 stores in parts of UK. It is mainly known as
fourth largest chain of supermarkets that deals in food drink, clothing, Books, Magazines, CDs
and DVDs (Clarke et.al.2012). In Morrisons, marketing plan different role with dealing in
different departments of the organisation that mainly need lots of improvement and changes.
Mainly direct and indirect activities of marketing are important for attaining the target market of
Morrisons. Competitive advantage of Morrisons with marketing is concerned with the effective
use of technology that builds the corporate image and better turnover of the Morrisons.
Marketing strategy of the Morrisons is based on putting right products and services at the
competitive price at right place in the market. In this, market segment is another tool that helps in
putting the products and services to the right targeted customers on the basis of their styles, taste
and needs. Market segmentation is based on geographic, behavioural and psychographic
segments (Howard et.al. 2012).
In addition, positioning of the Morrisons in the current market is very strong as it offers goods
and services at the reasonable and comparatively lower prices. In highly competitive and price
war market, it is provided reasonable cost products with organising regular loyalty schemes and
other promotional schemes. Mainly revenues of the business are increased with focussing on
maximising the online platform and providing enhancing deals to the customers. Strategies of the
Morrisons are based on using modern techniques that adds to product marketing and creativity of
the business (Toms, 2015). In addition, brand awareness is one of the major strengths for
Morrisons and with this organisation is focussing on commencing online activities such as online
and internet marketing. Also online marketing for Morrisons is cost effective in terms of
improving the key sales and revenues.
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Task 1
SOSTAC model to the marketing strategy currently being used by Morrisons
Current model is effective as it will help in implementing the appropriate strategies of marketing.
This model is effective to create the digital marketing plan and help in proper analysis of the
situations of the Morrisons in the current market. In addition, with this future objectives can be
designed easily that will help management to design the appropriate strategies. Moreover, this
model covers situational analysis, objectives, strategy, and application of tactics, action plan and
controlling methods (Toms, 2015). However, the proper application of model is being elaborated
below:
Situational analysis: This section mainly includes analysis of the macro environment that will
help in creating the digital market plan for future growth. In this model, current situation of the
Morrisons is being analysed. Some of the factors of macro environment include:
Political: the impact of Brexit in UK has majorly caused economic and political disturbances
that lead to bring uncertainty in the economy. This led Morrisons to feel the pressure of
escalation of prices that has leaded to make the imports more expensive. However, for expansion
in Mexico it is necessary to keep the current position stronger and efforts and needed to be paid
towards activities of marketing (Chaffey and Smith, 2013.). Moreover, Morrisons has the
stronger brand image and awareness among the customers that can help to maintain the steady
growth and expand effectively in achieving the competitive advantage.
Economic: Vote of Brexit has lead to cause continuous depreciation that has certainly led to
increase the inflationary pressure and increased prices of raw materials, packaging, energy and
transport cost as well as employment and other pressures of the business. In UK had lead to face
the high food prices and pressures are mainly levied on consumers to purchase high cost
products. But Morison’s have more than 15 manufacturing sites and that is one of the most
vertically integrated supermarkets in the UK that act as one of the active strengths to maintain
the supply of products and services (Chaffey and Smith, 2017). Moreover, Morrisons need to
expand the business into the emerging market and manage the risk that is associated with
maintaining economic conditions.
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Social: This factor includes changing tastes and preferences of the customers and business need
to provide friendly shopping customers. Morrisons is working towards increasing the sales of
non food items that meet with the satisfaction of the customers. In addition, Morrisons provide
the opportunities for many of the female individuals to get employed into the stores. The
business is being concerned towards ethical buying that has helped Morison’s to position in the
competitive market.
Technological: In the concerned food industry, specialised equipments and trucks such as deep
freeze trucks are being used to supply the tasty and healthy food products. The fear of
competition has forced Morrisons to invest in the big degree in this area of technology.
Moreover, marketing is being done through online and internet platforms. External and internal
communication methods are being used to increase the use of extranet, intranet, etc. Moreover,
competitive advantage of the business is focussed on increasing the chain of deliveries and
creation of value to promote in achieving the competitive advantage (Chaffey and Bosomworth,
2013).
Legal: Due to the environmental friendliness and ethical issues, it is major concerns for the
business. There are some of the legal laws and regulations that are needed to be followed by
supermarkets as permission is required by the local council to provide employment possibilities
and start the stores in suitable locality. It is needed for Morrisons to expand in other markets with
keeping in consideration the legal factors.
Environmental: Recent trends that influence UK retail industry includes the rise of ethically and
environmentally conscious consumers that adopt practices of using paper packages and recycled
materials. Environmental issues are global concerns for today and with this Morrisons are taking
sustainable decisions for protection of environment and optimising the resources of the
organisation (Zook and Smith, 2016.).
In addition macro environment, Customers is one of the important aspects that are liable to
optimise the overall growth and development. The customers of Morrisons belong to different
age groups, social class and genders. Organisation provides effective employment opportunities
to both and male and female to serve convenient facilities to the customers.
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Competitor analysis: There are different leading competitors of Morrisons that mainly include
Asda, Tesco and Aldi. Competition is being faced by the business in terms of facing discounts
pressure and also products are offered at low prices. This requires Morrisons to stay prepared for
dealing with the competition and take strategic decisions for achieving the competitive advantage
(Howard et.al. 2012). It is necessary for the business to adopt new competitive strategy and apply
tactics for enabling effective expansion in the localised markets.
Objectives: It requires Morrisons to expand business in international market with the help of
improved promotional and marketing strategies. This includes business to plan effective
objectives to expand business into new markets. Some of the realistic objectives are explained
below:
 Morrisons is offering the lower pricing and to expand price of key commodities are
needed to be lowered and value is needed to be delivered with simplifying prices and at
round pound price points.
 Objective is mainly to launch express checkouts and separate customer desks with proper
use of technology and improving the queuing items. Significant improvement is needed
to be made in customer satisfaction with offering discounts, schemes, etc (Haleem and
Jehangir, 2017).
 Another objective is based on increasing more technology that would help in reducing the
operating cost as well as adding to more focus on value added services.
Strategy: It is required Morrisons to take effective decisions with application different
strategies. Some of the strategies include:
Segmentation: The segmentation would be done on the basis of demographical, psychological
and behavioural. It has identified by Morrisons that purchasing behaviour of the customers is
being divided into finer foods, healthy foods, traditional foods and formulating new product
range. Morrisons is able to deliver the products on the basis of their lifestyles and meeting with
different motives of the customers (Jenkins and Williamson, 2015). Moreover, focus is being
made toward expansion of stores into different demographic locations that will add to customer
access of consuming the products
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Targeting: Morrisons have high focus towards introducing the new product line that might be
non food items and mainly target market is for high and middle group of people. It is necessary
for the Morrisons to organise different activities of marketing and launch business on social
media for increasing the demand of the customers.
Positioning: This includes targeting the new market such as Mexico and positioning must be
effective regarding offering reasonable prices to attract both price sensitive customers and also
high income of people. It is necessary for the customers to focus on the target market such as
expansion in Mexico generally with the low pricing strategy (Simkin, 2016).
Tactics: The strategies that are applied to achieve the well defined objectives are mainly termed
as the suitable tactic. This tactics helps to enhance the revenues of the business with focussing on
successful use of technology and taking different decisions. Some of the tactics of Morrisons
includes:
Price: Pricing strategy of Morrisons is based on offering products at low and comparatively
cheaper prices. It has proved to be giving the best price by Price check test and also price drop
campaign is being organised for reduction of products for its customers. In addition, online sales
would be majorly focussed for covering the higher market share and offering products at
reasonable prices (Halme et.al. 2016).
Product: Currently, Morrisons is planning to focus on having high sales of food products in UK
and with expansion in Mexico it can be effective for the business to add new product line. For
this, premium range products can be offered to the customers with offering initially discounts
that will develop the suitable customer base. Morrisons is hoping that adding premium range and
dealing with Amazon to supply fresh, frozen and perishable goods through online platform
would be effective.
Place: Morrisons serve across different parts of UK and have physical presence in the form of
660 stores but with the high availability of transportation system Morrisons can add to increase
the supply of products into different markets. It is necessary to make investments in stores and
also online platform can be focussed to increase the sales of the business to gain attention of
more and more customers (Melis et.al. 2015).
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In addition to the above tactics, effective technology is needed to be used for managing
operation, reducing cost, supply of products, maintaining effective communication with the
stakeholders through the effective use of platform of social media, direct mail, etc.
Actions: Such actions are being required to invest highly in the implementation of the
technology and handling the procedures of digital marketing. It is needed for Morrisons to take
help of IT professionals that would handle the proper implementation of software and also
management of operations of the business. This includes experts would regularly manage the
website, online shopping cart and social media to update latest products and offers of the
Morrisons.
It must be important for the customers to take regular feedbacks from the customers regarding
the products satisfaction and necessary actions are needed to be taken to improvise the
satisfaction of the customers. Moreover, there are some of the risks that can be faced in terms of
expanding to Mexico in terms of political policies, economic conditions, buying behaviour of the
customers, etc (Zook, and Smith, 2016). In addition proper research is needed to be taken for
enhancing the level of satisfaction of the customers.
Control: This is concerned with Morrisons to adopt different control methods for measuring and
managing the performances of the business. For this, it is necessary for management to compare
the standard performance with the actual performances to assess the changes in sales and
revenues that is observed by the business. In addition, satisfaction, reviews, feedbacks and
comments of the customers would judge the current satisfaction of the customers with the
products. Feedbacks must be valued more on the physical stores of Morrisons that would help to
measure the overall performance of the business (Toms, 2015).
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Figure 1: SOSTAC model
(Source: binaryic.com, 2019)
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Task 2
An evaluation needs to be undertaken of the effectiveness of the retailer’s current SOSTAC
strategy currently used in the UK
The current strategy of using the SOSTAC strategy is effective for identifying the overall
effectiveness. This will help in achieving the goals and objectives related to taking effective
tactics. Strategies of SOSTAC will help in effective application of achieving the strategies
segmentation, targeting and positioning. Morrisons mainly aims at opening the stores in parts of
Mexico and mainly increasing the online sales. Marketing is needed to be practices through the
online platforms and application of certain tactics would help in gaining the key competitive
advantage.
For the strategy of segmentation, it is needed for Morrisons to focus on the target market for
attracting the current market and also the market in which business wants to expand. The above
segmentation is based on geographical and behavioural segmentation for gaining the attention of
the customers. Mainly the strategy of Morrisons is based on offering the product range that meets
with the choice and lifestyles of the customers (Hassan and Craft, 2012). Products are being
offered with the value of money and also matching with the satisfaction of the customers.
In addition, it can be evaluated from the targeting strategy that main focus must be made
towards middle and high sections of the society. Research is needed to be focussed on meeting
the target market and emphasis on developing the behaviour of the customers. This will overall
help in increasing the profitability and sales and revenues of the business.
Another decision making of Morrisons is based on maintaining the key position in the current
market and also in the country in which it want to expand. For this, pricing decisions is effective
as Morrisons would be offering reasonable cost with faster delivery of products and offering
latest discounts. It might be case where Morrisons in order to lead in Mexico will operate on the
low profit margins (Andaleeb, 2016.). For this, it is essential for the Morrisons to be prepared for
the risk and strengthen its current position for maintaining the key brand advantage.
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