Evaluating Sainsbury's Marketing Strategy: SOSTAC Model and Analysis

This report provides a comprehensive marketing analysis of Sainsbury's, a major UK supermarket chain. It begins with an introduction to marketing principles and the application of the SOSTAC model to Sainsbury's potential expansion into the Indonesian market. The report details the SOSTAC framework, including situation analysis (macro-environment, PEST analysis), objectives, strategy (Porter's five forces, Ansoff matrix), tactics (place, product, and price tactics), action, and control. Furthermore, the report evaluates the effectiveness of Sainsbury's current marketing strategies using the 3Ps of marketing (Product, Price, and Place) within the UK market. The analysis incorporates relevant marketing theories and models to assess Sainsbury's performance, identify strengths and weaknesses, and propose strategic recommendations. The report concludes with a discussion of the cultural factors influencing Sainsbury's operations in Indonesia, using Hofstede's cultural dimensions theory.

Principles and Practice
Of Marketing

Table of Contents
INTRODUCTION...........................................................................................................................1
Task 1...............................................................................................................................................1
SOSTAC model of marketing.....................................................................................................1
TASK 2............................................................................................................................................1
Evaluation of effectiveness of Sainsbury's current SOSTAC strategy.......................................1
TASK 3 ...........................................................................................................................................2
Current Marketing Strategy that can be implemented in International Market .........................2
CONCLUSION................................................................................................................................4
REFERENCES ...............................................................................................................................6

INTRODUCTION
Marketing refers to exchange of goods and services by satisfying the need of consumer
(marketing, 2019). Principles of marketing refers to activities which are involved in transfer of
goods from seller to consumer by advertisement, shipping and storing. To study this report
Sainsbury has been taken. Sainsbury is a largest supermarket whose headquarter is in United
Kingdom. The company was founded by John James Sainsbury in 1869. It deals with variety of
products like home products, luxury beauty products, foods products and so on (Smith, 2014).
The country where Sainsbury is not operating at present is Indonesia. SOSTAC model is very
popular model of marketing . This model focus on operation of Sainsbury in Indonesia. In this
report, detailed study of SOSTAC model will be done and will also study about current strategy
used by retailers.
Task 1
SOSTAC model of marketing
SOSTAC is one of the most popular model of marketing. It was developed in 1990s by
PR Smith. The model was developed to do planning for business in easy and quick manner.
SOSTAC stands for six fundamental aspects of marketing namely Situation, objective, strategy ,
tactics, action and control. To expand Sainsbury in Indonesia following model has been used to
explain the following:
Situation Analysis
For understanding a detailed marketing of Sainsbury in Indonesia various step are need to
be performed. The very first step is situation analysis. It refers to the method by which both
internal as well as external business environment is analysed. In order to study this properly first
will understand about macro environment.
Macro Environment: It refers to the external environment that influence the organisation
performance and plan of action and also effect decision making of an organisation. These factors
basically includes political and social conditions, technological change if any, legal and
environment factors (Shank and Lyberger, 2014). To study macro environment in details PEST
analysis is need to be done.
 Political factors: Though Indonesia is an independent country but the financial condition
is not stable and even a part of population is living under the poverty line. So it would be
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difficult for the company at beginning to have a start with. But if company change its
policies ion regular basis that it can hold a great position over there.
 Economical factors: This factors plays a great role as it affect cost, demand and price.
Indonesia is a developing country and government is taking step to increase GDP growth
of the country. So It would be very easy for Sainsbury to start its operation and earn great
revenue with time. As some part of population is below poverty line so Saibsbury will
keep the price of products economical so each group can take benefit.
 Social Factors: Indonesia's population is increasing steadily and people of there are
living a average life (Schmalstieg and Hollerer, 2016). Government too is looking after
the education facilities and also contributing some of the part of GDP on its education.
Operating business of Sainsbury will be beneficial to implement among educated people
as it would be a new concept for the people over there.
 Technological Factors: Transportation and communication system of Indonesia are very
good. There is good internal policies of government. Saibnsbury can easily start its
operation because of fair transportation facility like it has its own airports and water ways
by which can easily transfer the goods from on to another place. By advancement in
technology it can also start its online market which will create customer awareness and
brand image in competitive world.
Objectives: They are the plans which are formed to achieve desire results. Objective of every
company should be specific, realistic and achievable. In this context Sainsbury has also some of
the objectives. The very first objective is to operate its business successfully in Indonesia by
providing high quality of products at affordable price. This would help the company to attain
highest degree of customer satisfaction.
Strategy: It refers to plan or action in order to achieve a desired result. Strategies of Sainsbury is
discussed by using Porter's five force and Ansoff matrix.
Ansoff matrix help to understand about the firms present product and market. It provide
four different gorwth strategies
 Market penetration: In this firm tries to achieve growth with existing product from its
existing market.
 Market development: The firm look for growth by its existing product to new market.
 Product development: Here the company develops new market for its existing market.
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 Diversification: Here the firm diversify intio new business by developing the new
products.
Here Sainsbury will use strategy of Market development in Indonesia. As it has already its
various product so there is no need to focus on new product and only it want to expand its
operation in other country ( Rowley, 2016).
Porter's five force model will help the company to examine five competitive force that shape
every industry and also help to determine the strength and weakness of an organisation.
 Threat of new entrant: New entrant will always bring new innovation and put a
pressure over Sainsbury how can they tackle such situation. Sainsbury need to innovate
new product or services. As it will attract new customers and also help in retaining the
old one.
 Bargaining power of Supplier: All retail companies like Sainsbury used to purchase raw
material from suppliers. The impact of it lowers the profitability of retail sector.
Sainsbury can tackle it by maintaining proper relation with its suppliers. It can also
develop new product so at the time when price of product rise it can shift to another.
 Bargaining power of Buyers: They always want to pay minimum price for the service.
Sainsbury can tackle this situation by making a large customer base that will help them to
minimise the bargaining power as well as also provides opportunity to increase the sales.
 Threat of Substitute: When same service is provided by another company there is a
possibility of substitution. Sainsbury by understanding the need of customer can
overcome with this problem.
 Rivalry among existing competitor: If rivalry are intense they will decrease the overall
profitability of the industry. By cooperating with competitors Sainsbury can increase size
of market.
This five force model will help us to gain a complete picture of how Sainsbury can operate in
Indonesia properly (Armstrong and et.al., 2014).
Tactics: It refers to a plan to achieve specific end. This refers to a goal which can be achieved
within a short span and also includes plans, resources etc. Various tactics are as follows:
 Place tactics: It refers to a area where organisation want to sells its product. The tactics
normally arise when chosen area is not suitable for a product. In Sainsbury planning
should be done according how to distribute products and offers its service. For this first
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prime location is need to be decided where there are large reach of people. Compny can
also use different strategies to reach its customers like social media.
 Product Tactics: It refers to any product or service. Product tactics basically arise when
product is not according to customer satisfaction. It can ve easily understood by the
Boston Matrix (Robson, 2017) . It help the company to know which product is best for it
and also help them to capitalize on market share.
 Star refers to the product that has best market share and also generate more cash.
Groceries are the stars for Sainsbury as it deals with number of them.
 Cash cows are leaders in market and generate more cash than they consume. The
international food strategies are cash cow for Sainsbury as the business has a high market
share in this category.
 Dogs refers to the product has both low market share and low growth rate. Sainsbury
recently produced flavoured product but people now a days are health conscious and are
refraining use of such product.
 Question mark refers to product that consume lot of cash but brings little in return. The
confectionery market is growing over the year but not showing high return as expected.
Price Tactics: It is one of the most important topic to discuss. Price should be set accordingly,
not to high for customers to afford nor to low. Price tactics arise when competitor sells the
product at lower price. As Political stability of Indonesia is not so good. So price should be
decided according to the value of customer.
Action:
This are the goals which company desire to achieve. It refers to allocation of duties to
individual to achieve a desire result. In order to operate successfully in Indonesia company must
make some of the plan for improvement of their working (Baker, 2016). For attaining the goals
properly company can also hire some of the individual who are expertise in this field.
Control:
It refers to what extent the goals are achieved and what are the views of people in regards
to the implementation. This can be easily understood by Hofstede's cultural dimensions theory.
This topic will cover Hofstede of Indonesia in order to understand about culture of the same
whether it will suits Sainsbury or not.
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 Individualism vs collectivism: In individualism, the people will only have to look after
themselves and their family. While collectivism describe the society relationship is
extendd to families or group. Indonesia has a low score of 14 in this context which
means there is a high preference of social network.
 Masculinity vs Femininity: Indonesia score 46 in this context which is considered as
low masculinity which means in Indonesia visible success is more important than the
motivation
 Power Distance index: In deals with the fact that all individuals are not equal in society.
Indonesia score 78 which is high in this context as power is centralised, communication is
indirect and manager need to inform from time to time about what to do or what not.
Sainsbury must know about the culture of Indonesia in order to expand its operation
(Robertson, 2014). It have learn many new things and adapt the same in order to attain success.
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TASK 2
Evaluation of effectiveness of Sainsbury's current SOSTAC strategy
Sainsbury's is considered as the third largest chain of supermarket in United England. It is
headquartered in London, United Kingdom and was founded in 1869. Sainsbury's has spent a
huge time in the market of United Kingdom and thus knows how industry operates. It is very
important to establish that because it will help in understanding that whether Sainsbury's
SOSTAC strategy was effective or not. This part of report, will help in identifying that part. It
can be done with the help of 3P's of marketing, namely, Product, Price and Place.
Product: Sainsbury's provide variety of products to their customers. It involves more than
15000 brand of products ranging from groceries to meat, wines to pies. Sainsbury's takes pride in
stating that they are capable of selling 21 pies on Saturdays only. Other than food products, it
also provides various home cleaning tools as well like cleaning tools, floor cleaner, toilet paper,
etc. Sainsbury's manufacture their own brand of products as well as provide different range of
products of some other big brands like Dettol, Andrex, etc. It states that plates of Sainsbury's is
full along with many product ranges that they sell, which their competitor lacks (Luca, Hibbert
and McDonald, 2016). It also have unlimited support of their suppliers by providing efficient
facilities and products which will increase the brand image of the company.
The product of Sainsbury's is considered very effective in the market of United Kingdom
as they are ranked the third largest chain of supermarket in United Kingdom. It is only possible
because of range of products available at Sainsbury's and the quality supplied by then. This
strategy is considered very effective in the terms of Sainsbury's because of the company did not
limit themselves by providing only their own products but extended the profit margin by
supplying the products of other brands as well.
Price: Sainsbury's endorse that they believe in selling low cost products as compared to
their competitors in order to attract customers towards their products. They are able to sell
products at low prices by buying large bulk of products so that they are able to minimise their
cost and maximise their products, but, at the same time, they provide variety of food products,
which they cannot buy in bulk, or else, if the products will not be sold, then, it will result in huge
losses (Challagalla, Murtha and Jaworski, 2014). So, Sainsbury's has implemented an effective

channel of distinguishing the demand by considering the previous sales. This way they are able
to achieve the desired results with minimum costs.
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This method is considered effective as well as it helps Sainsbury's in creating an effective
channel and method, so, that they are able to maximise their profits and minimise their costs.
This element also helps them in capturing more market share because of new methods
implementation.
Place: The place where Sainsbury's has begun their operations is Drury Lane in Holborn,
London by John James Sainsbury and his wife Mary Ann. Currently, company have 605
supermarkets and 807 Convenience stores all over the world. Sainsbury's operates only in United
Kingdom right now and thus limiting the areas of expansion (Kumar, 2017). Here, the role that
can be performed by Sainsbury's is to make sure their operations effective enough so that they
can expand their profit margin and ladder up their ranking.
This element is not effective because the operations are taking place only in United
Kingdom and not in any other country, thus, limiting their chance of operations. Also,
Sainsbury's was ranked first in the chains of Supermarket in United Kingdom, but, was defeated
by the competitors like, Tesco and Asda. It does show the performance of Sainsbury's has
reduced as it become easy for its competitors to rank it down. Sainsbury's needs to level up their
performance to gain the market share back.
TASK 3
Current Marketing Strategy that can be implemented in International Market
Sainsbury's is a vast organisation and is planning to launch their chain of supermarkets in
Indonesia as well. Indonesia is an Asian Country known for its heritage and varied culture. It is
considered as a tourist place as number of tourists all over the world come and see the beauty of
country. Sainsbury's sees an opportunity in this market because of number of tourists will need to
buy the food material and people have people have become very choosy on what to eat and
whether its healthy or not (Child, 2015). So, it will give them a chance to expand and make their
name in all over the world. The current plan of Sainsbury's is to open only one convenience store
in Bali, and its success or failure would decide the future of Sainsbury's in Indonesia.
The three P's strategy that can be implemented by Sainsbury's here is:
Product: The products of Sainsbury's are standardised as company sells their other brand
products as well as their own range of products. The company will not be able to make changes
for any specific country because then would have to create a whole bunch of line of products for
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every new country they will work for (Enne, Watkins and Wright, 2014). This element will use
standardisation.
The Products which will be launched by Sainsbury's is to sell only renowned brand
products, which are well established in the market of Indonesia as it will give them an edge as
people will come there to buy standardised products. They are planning to launch their own line
of product after the brand has established themselves in the market of Bali, Indonesia. As
Government of Indonesia is planning to expand their operations which will give rise to
opportunities for Sainsbury's as well.
This will serve as an advantage to Sainbury's as they will be able to cultivate and make
their operations global known brand. It will help them in increasing their market share as well as
profit margin. But, there is a disadvantage as well as the company needs to first study everything
about the country they are planning to launch and there is a huge chance of failure as well.
Price: Country's buying power will able to make that decision, rather than Sainsbury's as
if in a low performing country company will put high prices than it will not be able to survive in
that country and if buying power of certain country is high, and they will launch products at low
price, the, people will consider the product cheap and will not buy the product. So, the company
needs to establish an effective price strategy according to the country. So, pricing plays a vital
role in establishment in new country (Convissar, 2015). This element uses adaptation.
The buying power of people of Indonesia's is weak and that's why they will not be able to
target the audience their with their current pricing policy. So, to establish themselves first they
need to provide various offers and discounts to people to attract them.
The advantage to the brand here is that they will able to capture major market share and
enhance a good position in the market of Indonesia. But, the disadvantage followed would be
that they will need to cut down their price which will lessen their profit share.
Place: The Place will always going to enjoy Adaptation as it states that company is going
to launch their store for the very first time in any other country. It will need Sainbury's lots of
support and resources to set up a whole new plan in this region. They need to study every
element of that country in order to grow and develop.
The place of launch is Bali, Indonesia. It is most visited place in Indonesia and serve as a
tourist place because of exotic beaches, many volcanic mountains and lush green land. The place
was selected because it is a tourist spot and tourists visiting the place wants to eat healthy and
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