Marketing Strategies of Sainsbury's: A Business Project

Desklib provides past papers and solved assignments for students. This project analyzes Sainsbury's marketing strategies.

MARKETING EXTENDED BUSINESS PROJECT
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Table of Contents
Introduction................................................................................................................. 3
Poster presentation.....................................................................................................4
Individual written assignment......................................................................................6
Recommendations.................................................................................................... 13
Conclusion................................................................................................................ 14
Reference List...........................................................................................................15
Appendix................................................................................................................... 17
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Introduction
This business management provides the knowledge on the marketing sector. This
study deals with the investigation on the business sector of a particular type and
looks in the detail of the business and the marketing of the different sectors of the
company. This project mainly explores the different sectors and researches the
different types of the business that the sector does, namely the groceries and the
fast food that Sainsbury (sainsburys.co.uk, 2019) deals with. The project explores
how the organisation has positioned itself in the market with a competitive
advantage.
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Poster presentation
Introduction
This deals with the Sainsbury, the organisation, which deals with the groceries and
has positioned itself in the market in such a place where it can outperform the
competitors. It comes in the second largest chain of the supermarkets. John James
Sainsbury founded this in 1869 with only a shop.
Identify the chosen business sector
Sainsbury is situated in the United Kingdom and stands second in the chain of the
largest supermarkets. It has 16.9% shares in the supermarket sector (Picard, 2017).
Sainsbury is a Public Limited Company and deals in the retailing business. Starting
from the groceries Sainsbury deals in the fast food sector also where they supply the
snacks.
The major competitors in this field that act as main challenges to the Sainsbury are
Agro, Morrison, Tesco, Aldi and Waitrose. They throw challenges to the Sainsbury
by supplying the products that Sainsbury supply too. However, with the application of
the unique methods Sainsbury has been able to outperform the market.
Sainsbury uses the Porter’s Five Forces to understand the competitive attitude of the
others. When the company can understand the forces that can affect the profitability
then it can use the use the right strategies (Arshed and Pancholi, 2016).
Supplier Power – The power of the supplier is of low risk. Sainsbury can get highly
impacted in a positive manner when the suppliers are less and demand is high then
the suppliers can increase the price, and supply the products to gain high profit.
Bargaining power of consumer – This means how much price the consumer can
bring the price down. This is of high risk to the company as the power of consumers
determines the company’s sustainability.
Rivalries – Rivalries like Asda, Tesco and Morrison can come up with same product
and with low price. This is highly risky and can pose a threat to the company. This
poses competitive rivalry to the company.
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Threats of new entrants – There are new entrants in the existing market who stand
as threats to the company. Sainsbury has come up with the Nectar Loyalty card,
which would help to reduce the risk of new entrants a little.
Threats of substitutes – There are some risk factors again, which involves the
threat of the substitute products from the other competitors. Sainsbury needs to
make unique product and need to keep in knowledge what the challenge givers are
doing.
Market size of Sainsbury
Until March 2018, Sainsbury had 1423 stores, which were grocery stores and it
stands as the second largest supermarket chain. This also comes under the big four
grocery retailers in the UK, which includes Tesco, Morrison and Asda. The
organisational structure of the Sainsbury consists of the Sainsbury Supermarket,
Sainsbury Argos and Sainsbury Bank.
The few main challenges that Sainsbury was facing that its profit was falling and it
was facing competition from the predators. However, it managed to stand up in that
situation by merging with Tesco and Asda, which helped it from drowning. Its
strategies of Porter’s Five Forces also helped it to recover the issues and turn
around.
Conclusion
The Sainsbury has been following a strict management rule to maintain a successful
business and to outperform in the market. It is developing its business and is trying
enlarging itself cafe, banks, online services and many more.
(Refer to Appendix)
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Individual written assignment
Introduction
This report is about determining the factors that leads to the development of the
Sainsbury and the challenges that it has been exposed to since its inception. It has
been trying to hit all the challenges and this report makes an enunciation about the
concept that the company has been using and thriving upon to develop its business
and to stand at the highest position. The following task has been started with an
overview of the company and then along with the relevant facts that justify the
conditions of the company, whether prospering or declining. The study also deals
with the SWOT and the PESTLE of the Company to understand the company
position in the industry better.
Company Overview
Operating in the name Sainsbury, the company deals with the groceries sectors and
it mainly keeps its head in enlarging the business. The company was established in
the year, 1869 and with a shop in the Drury Lane holding the hands of the founder
John James Sainsbury. In the year 1922, the company became the largest retailer of
the groceries. However, when Tesco overtook the company, Asda became the
second largest but Sainsbury could take back its position from its competitors and
again became second in the rank. According to the 2018 February report, the Qatar
Investment Authority holds 21.99% shares of the company (swotandpestle.com,
2017).
Currently, the Company decided to sponsor the British Paralympic association in the
year 2016. In its Vision for 2020, it reached its first milestone on 2011 when
Sainsbury opened its thousandth shop of self-service in Scotland. Their main aim is
to put positive impact on the economy, the market and the environment.
Significantly, they address the issues of the stakeholders, the business and the
colleagues. Their main competitors are Morrison, Tesco and Asda.
Competitive Advantage
Strength Weakness
 Sainsbury not only deals with the  The greatest weakness of the
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grocery retails but also deals with
retail banking which gives it the
strength to stand up and get
financial assistance from one
business when another business
is falling.
 Expansion moves from the small
retail shop into the largest retailer
in the grocery business in UK
along with a strong workforce to
manage the need of the
customers.
 The strategy of low cost on the
products gives the consumers the
best choice over others to buy
their products along with the
loyalty of the brand.
Sainsbury is its brand switching
for which it faces many problems.
Despite, the loyalty programs and
the promotions, Sainsbury finds
the situation challenging to hold
back the consumers.
 The low margins have been the
added disadvantage for the
Sainsbury (sainsburys.co.uk,
2019). In order to attract the
customers, the organisation cuts
down the costs and this stands as
the problem to sustain the
business.
 The retailer needs to understand
the cost of procurement, and the
shopping experience of the
different income segments of the
consumers. Unless they do so,
they cannot meet the need of the
different category of customers.
Opportunities Threat
 Innovative promotion gives it the
opportunity to attract the
customers and turn their mind
away from the competitors
(Picard, 2017).
 The Nectar Loyalty Card Scheme
is very important factor that helps
them to understand the shopping
style and the behaviour of the
consumers.
 Competition is the main threat to
the Sainsbury when they
sometimes fail to achieve their
target due to the competitors. The
failing profit demands for mergers
and this takes the position of the
company down.
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 The immense growth of the
villages has helped the catering of
the products.
Table1: SWOT Analysis of Sainsbury
(Source: created by the learner)
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Elements of PESTEL Analysis
Political The Brexit had had immense influence in the national
premises of the UK where it affected the trade by
closing the trade routes, the gateways and their
operations (Clarke et al., 2017). Therefore, the
organisations require formulating the strategies, which
shall resolve the negative influence. Apart from this,
Qatar is holding almost 21.99% stake in the company.
Any problem with UK would affect Sainsbury in a
negative manner.
Economic The pound sterling plunge due to Brexit, influenced the
Sainsbury’s market in negative manner (Desai and
Freeman, 2016). The complete inflation in the food price
also affected the company for an “uncertain” number
(ft.com, 2019). However, it could manage to come up of
the situation in a well managed way.
Social There is a sustainable business practice by the
Sainsbury. The consumers of the UK are very much
fond of the food and they shop regularly. This helps in
the mixing of the organisation with the society. The
health consciousness has demanded the development
of the organic food, which has increased the sale of
their materials (Goodman and Sage, 2016).
Technological The population is elderly and this has influence the
company to develop the time saving and labor saving
technologically advanced tools. They have started the
online order of the food and they have also started the
payment online (Allen et al., 2017). This technology is
called ‘Smart shop’. This saves the time and the labor.
This is effective for the retailer also.
Environmental They have developed a strategic sustainability plan.
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The company is also taking the initiative to reduce the
potential waste and to start the operational recycling.
This recycling process is signatory to Courtauld 2025,
which was launched in 2016, March and it aimed in
reducing the drink and the food wastage by almost 20
percent in UK and the intensity of the greenhouse by 20
% (Moore, 2016). They have also adopted plans to
reduce the carbon emission by 30 percent. It has also
taken initiatives to innovate usage of refrigerant gas in
the trucks and the optimized transportation. It has also
achieved water use reduction of 29 percent.
Legal The company abides by all the legal issues, they follow
the equality act, the employee act, and they maintain
the laws so that the company is not faced with any
severe legal issue (Wilson, 2016).
Table2: PESTEL Analysis
(Source: created by the learner)
Marketing Mix
This strategy is something, which helps to find the right product, at the right price and
at the right time. The marketing mix is very much associated with the service
strategy and it follows the 7 Ps of the marketing of the service. The 7 Ps is a
modified model of the service marketing. The Sainsbury uses this model to rectify its
process and the management style and for the purpose of the expansion.
Product – Sainsbury offers a large variety of products to its customers. It also
focuses on the innovative products and the new strategies to be applied on the
products to sell to the consumers. The company also develops the products and
apart from the existing products, they make a new range of products. They use
mainly two formations – local convenience and the supermarket. They offer the
organic food to match the health and taste of the consumers.
Price – The pricing strategy of the company is very important to attract the
consumers and to sell the products. The strategies include, skimming, penetration,
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cost-plus and the loss leader. The skimming of the price includes the strategy
where the company sets a price, which is relatively high as the initial price for the
service and the product at first, but then they lower the price (Simon and Fassnacht,
2019). This vision is a temporary one and a version of the price discrimination. After
this, the penetration of the pricing strategy comes, where the concept is taking
severe action to expand widely the share of total’s sales in the market (Duand Chen,
2017). This increase the sales volume and this further increases the business
allowing it to generate a good amount of the profit. The Sainsbury can get profitable
through this strategy as the profit percentage is increased. The penetration increases
the sales of the competitors.
Place – The place is very important, as the company needs to understand where it
should operate the business. It has close to 598 supermarkets and almost 715
convenience stores. The place becomes so important that they operate twenty-four
hours of the seven days. They advertise their products in the internet; they even take
their orders through the emails. There can be peer-to-peer interactions and the
products can be sold through the chain system. The Sainsbury takes the advantage
of the technology, they take the orders online, and this saves the time and the labor
because the population is old and they target them to get serve. This becomes
effective for the company as well the consumer. There are wholesaler businesses
and the multi-channel sources for the company.
Promotion – The Company adopts many promotional tricks like it enhances the
discounts, it gives the coupons, which offer the special sales, which eventually
attract the consumers to rush towards the product. There are many advertisements,
which show the special attractions of the products and the lowest prices of the
commodities. There are competitors, who can be outperformed, when the prices are
lowered. Sainsbury promotes its brand name immensely by using the database
packaging. They have also used the Nectar Loyalty Card (Burton et al., 2016).
Process – The process is mainly relevant to the service industry. The process,
which the retailers follow, the Sainsbury also follows the same process but they try to
make something innovative and environment friendly that helps to attract the
consumers as well the society. They have also made the shopping very much
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convenient with the just click and collect technological format. Sainsbury is initiating
the new stores and with new formats along with changed price and allocations.
People – There are employees, who need to be kept satisfied in order to provide the
best service to the consumers. The management is very strict about the rules of the
company and the laws that the company needs to follow. There are cultures of the
company, which the employees create under the leadership of the authority, which
creates a unity in the diversity. This helps the employees of the Sainsbury to do a
worldwide business satisfying all the needs of the consumers.
Physical Evidence – The Sainsbury uses the excellent strategies in order to market
the products and it uses the physical evidences. The quality of the layouts, the stores
and the shopping experiences add galore to the company (Green, 2018).
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