Sainsbury Marketing Mix

INTRODUCTION OF COMPANY J Sainsburys is the third largest securities manufacturing seller in the UK. The troupe was leading grocery seller in UK from the late 1980 to 1995. The friendship opened their first store in 1869. Sainsburys has 504 super trades and 319 convenience stores in UK. Companys turnover is over ? 17. 4 billion and profit of ? 289 ane million million. Asda and Tesco has overtaken Sainsburys recently. Sainsburys commercialize sh ar stepwise decr simple mindednessd to just over 16%. Sainsburys egression has shortly f whollyen d profess. In terms of local sourcing, Sainsburys is higher than modern(prenominal) competitors.Sainsburys yields fruits like milk, pre-packed cheese, fresh lamb etc to the customer. Sainsburys is only intellectual nourishment retailer to enter in global light speed index. Sainsburys manage over 4000 resultions. Company has been positioned at a cut down place FTSE4 and Dow Jones Index. Sainsburys main responsibility is to st and best sustenance and health, take on relationship with community, to provide good betoken of work and save environment. The main mark of Sainsburys is to make evolution in both sales and customers. Sainsburys continuously growing like-for-like sales by 3. %, increase the harvest slog, improving service and operational saving. Sainsburys place represents quality and value for money and customer service. Companys imperfection lay down is so organic link up to nutrition. The beau monde objective is to provide high crop in low fair impairment and provide good service to nation like give information to choose product. The subsidiaries of Sainsburys ar Sainsburys Bank Ltd Sainsburys Super grocery store place Ltd and Sainsburys Convenience Stores Ltd. (Source www. sainsburys. co. uk)The supermarket drawstring operates three main store formats regular Sainsburys stores ( principal(prenominal) Mission), Sainsburys Local and Sainsburys Central (convenience stores and smaller supermarkets in urban locations Mixed Mission) and Sainsburys primary(prenominal) Plus (hypermarket) stores. Unlike Tesco (Tesco Extra) and Asda (Asda Wal-Mart Supercentre), Sainsburys does not employ a separate home run for its hypermarkets, having phased verboten the Savacentre fascia several grades ago. At the end of its 2008/09 financial year Sainsburys store portfolio was as follows. Format Number Area (ft? Area (m? ) fortune of space Supermarkets 502 15,974,000 1,484,000 95. 6% Convenience stores 290 729,000 67,700 4. 4% Total 792 16,703,000 1,551,700 100. 0% integral MARKET SHARE The total market sh atomic number 18 of Sainsburys is 16. 5%. Their market sh ar has grown over last year and in current period they are serving over 18. 5 million customers each week.TRENDS AND ISSUES PREVALENT IN RETAIL INDUSTRY The recent trends that are prevalent in retail indus submit are as to a disgrace place i. Fashion of cr eat uping ones own brand These days it has begin a fashion to hold own brand predict by retail companies on packing of products. The companies are doing so beca utilization on enjoin to increase consumer loyalty. Major retail giants Tesco, Sainsburys use their brand name on the products in dictate to promote their brand name and crystalise consumer loyalty as considerably. Eg Sainsburys is sell organic food under the name of Sainsburys So Fresh. The trends of own brand name is increase. i. Availability of all continental and regional type of food at any period of date Earlier the foods of winter were not procur qualified in summer. hardly in a flash due to improved storage systems and young trends of eating off seasonal foods as wellspring, the consumers evict bring in grapes in winter as well. Now any body domiciliate eat off seasonal food at any point of time. iii. want for convenience food The increased competitive earthly concern has do both males and females to work in order to straighten out their livings. Nobody has any time to cook food. As both partners are busy in their jobs, so they dont get much time to cook food.But the recent retail trend is of eating cereals and cooked food. The consumers throw emerge eat the get to fuse food at any point of time without regular(a) cooking it. iv. to a greater extent attraction towards subtractioned items The consumers, these days prefer the discounted products. Discounted products are in trend like a shotadays. The recent trend is that more(prenominal)(prenominal)(prenominal) the discount, the more the customers. The sales in addition get increased by providing more discounts. v. Direct selling It is a type of retailing in which consumers are exposed to goods &038 services through with(predicate) a non-personal medium.They provide order &038 barter for the products by mail or telephone. vi. Online technology The technology has made it easier for retailers to sell products online. The consumers stinkpot order and pur chase the products online. The company can deliver products to consumers on a single click. Online sales are a great source of income to retailers as well. Issues in Retail industry Following are the main issues that are prevalent in retail industry i. Rising health awareness amongst public. The UK government is dissemination awareness conclusion to healthier and fresh food in UK.The customers are told to not to eat sweeteners. The government is making people aware about use of organic food and low fill in food. Thus the consumers comport started shifting towards fresh and healthier food. ii. Low available income Due to recession, the disposable income of people moderate fall. This has effected the spending capacity of people. Now people have decreased their demoraliseing ability. iii. Recession gave rise to unemployment and inflation which prompt the market directly or indirectly. iv. Consumers have perception that recession is gigantic term so they are spending less and saving more.The consumers deal that due to recession they are unable to save more and are having only expenses. COMPETITORS In the supermarket agate line Sainsburys main competitors are Tesco, Asda and Safe steering. In retail banking the main competition comes from Tesco Financial Services, M &038 S Financial Services, the conventional high street banks, Egg, Halifax and Abbey National mortgages. PRODUCTS The major products of Sainsburys are as follows Supermarket/ grocery store goods Retail banking services Retail property development services In Sainsburys, a large store typically stocks a bend 50,000 lines of which round 20% are own- mark off goods. These own-brand lines include Basics mainly food, toiletries and stationery. Taste the loss (TTD) around 1100 gift food lines i. e. processed foods much(prenominal)(prenominal) as reach made meals and premium bakery lines. Freefrom It was launched in February 2010, it has over 75 product lines. These products are suita ble for those allergic to dairy products. Sainsburys Organic (SO Organic) Around vitamin D lines of food / drink in which is not derived from food stuffs treated with fertilizer or pesticides. Different by Design a smaller range of premium non-food lines, including flowers. Kids these lines are for children. Be Good To Your egotism (BGTY) products with reduced calorific and/or fat content. All BGTY packaging was relaunched in January 2010. Fair Trade Over 100 fair trade products. All bananas sold at Sainsburys are now fair trade. Super Naturals A range of ready meals with estimable ingredients. TU own brand clothing range. TU Home a range of home products, such as lighting, rugs, and kitchen products. PORTERS FIVE FORCE ANALYSIS 1. Competitive rivalry The retail market is extremely competitive with a very crowded market.More companies are trying to get into non food vault of heavens which leads to increase in competition. 2. Barriers for adit in food category Firstly, organised retail is amongst the most sophisticated sectors within the UK and needs a lot of investment. Secondly, retail is excessively at an advanced stage within the UK and most of the western world. 3. Threats of Substitutes The threat of substitutes in the food category is a low one because consumers view it as a necessity, especially in the developed world and increasingly in the acclivitous markets. The only major threat of substitute is an internal industry threat whereby one supermarket can lap up the business of other(a) supermarkets. 4. Buyer business leader Buyer power is high due to the charge of so many an(prenominal) competitors selling the same products. As the thrift goes raise towards recession, consumers needs are likely to be given more weight, increasing their power considerably. 5. Supplier power Supplier power is usually more complicated as it is difficult to categorise it. Supplier power of smaller suppliers impart not be considerable because of their sales volumes on dependence on these supermarkets. PEST ANALYSIS Political factors Increasing globalization, presents a dispute as well as an opportunity to Sainsburys. Sainsburys can enter the markets of emerging companies through joint ventures or partnerships to explore these new markets, although it does not have any plans on the horizon to do so. The ongoing investigation of scathe fixing amongst the big four retailers within the UK can have most negative impact to the industry in general and Sainsburys in particular. In the UK, the Government is to decrease the rate of corporation tax from 30% to 28%, which will save big companies like Sainsburys real sums of money (HM exchequer 2008). Economic factors The rapidly increasing global food crisis has increased food worths all over the world, which will result in rising buying appeals for Sainsburys. The credit crunch might decrease the purchasing power of consumers and though they will still buy the essentials the y whitethorn be more cautious. Social factors Nowadays there seems to be more strain on fresh, easy style cooking. This serves an opportunity for Sainsburys to encourage new recipes and unfussy eating. There has been a huge emphasis by the government to promote healthy eating, in general due to the increasing level of obesity within the UK. This has lead to many consumers to shift towards healthier food. This presents an opportunity to Sainsburys to stock up with more healthy food or create healthier foods at a cheaper equipment casualty than other manufacturers so as to benefit from this new trend.Technological The lucre phenomenon seems to be ever growing within western countries. One of the downsides of supermarket obtain is the queuing system customers often find themselves in at the checkout. RFID (Radio Frequency credit Device) technology can be used for significant benefits to the supply chain of Sainsburys. If adopted, this technology will lead to less inventory f or the supermarket unshakables leading to a leaner, more profitable organisation. SWOT ANALYSIS StrengthsWeakness some implications as people are gravitating towards British companies and the prospect of Sainsburys being governed by a foreign truehearted can lead to consumers switching loyalties. Alternative business presents a great opportunity to Sainsbury for future growth. Online sales are a great opportunity as well, since online margins are higher and investments are not huge. Threats There needs to be continuous heavy investment in environmental and green issues without immediate benefits. Sainsburys operations are subject to a broad spectrum of regulatory requirements particularly in relation to planning, competition and environmental issues, employment, pensions and tax laws and in terms of regulations over the groups products and services WHERE DO WE command TO BE? Ansoff Matrix To portray alternative corporate growth strategies, Igor Ansoff presented a matrix that f ocused on the firms present and potential products and markets (customers). By considering ways to grow via quick products and new products, and in existing markets and new markets, there are four possible product-market combinations.Ansoffs matrix is shown below Ansoff Matrix real Products in the altogether Products Existing commercialises Market Penetration Product ripening New Markets Market Development variegation Ansoffs matrix provides four different growth strategies Market Penetration the firm seeks to achieve growth with existing products in their current market segments, pop the questioning to increase its market share. Market Development the firm seeks growth by branding its existing products to new market segments. Product Development the firms develops new products targeted to its existing market segments. Diversification the firm grows by diversifying into new businesses by developing new products for new markets. Selecting a Product -Market Growth schema The market penetration system is the least risky since it leverages many of the firms existing resources and capabilities. In a growing market, simply maintaining market share will result in growth, and there whitethorn exist opportunities to increase market share if competitors reach capacity limits. However, market penetration has limits, and once the market show upes saturation another system must be pursued if the firm is to continue to grow.Market development The development of new markets for the product may be a good schema if the firms core competencies are related more to the specific product than to its experience with a specific market segment. Because the firm is expanding into a new market, a market development strategy typically has more risk than a market penetration strategy. A product development strategy may be fascinate if the firms strengths are related to its specific customers rather than to the specific product itself. New product development carries more risk than simply attempting to increase market share.Diversification is the most risky of the four growth strategies since it requires both product and market development and may be outside the core competencies of the firm. Diversification may be a reasonable choice if the high risk is compensated by the chance of a high rate of return. Sainsburys has withal diversified into banking, financial services, petrol pumps etc. HOW DO WE GET on that point? merchandising OBJECTIVES To be consumers first choice for food delivering products of spectacular quality and great service at a competitive comprise through working faster, simpler and together.Positioning This bureau process by which marketers try to create an image or personal identity in the minds of their target market for its product, brand, or organization. Sainsburys has increased its clubby brand product portfolio. under food category, company fractures organic food under name Sainsburys SO or ganic range and it comprises of 450 products. (www. sainsburys. co. uk) Competitive advantage consort to its oral sex executive Justin King Fairtrade gives Sainsburys the edge over its competitors, as well as being an ethical way to trade.MARKETING MIX It is referred to as the set of controllable tools that the firm get goings to produce the response it wants in the target market, so it consists of everything the firm can do to influence the demand for its product (Kotler and Armstrong, 2004). The major function of marketing unify strategy of any company is the strategic communication of the organization with its customers (Proctor, 2000). selling Mix is also referred to as 4 Ps of trade. The classification of four Ps of marketing was first introduced and suggested by McCarthy (1960), and includes marketing strategies of product, value, placement and promotion.According to Borden (1964), the elements of the marketing mix includes product planning impairment branding distribu tion channels promotions product packaging advertisements services packaging handling and re-order, etc. The purpose of utilise a marketing mix is to target the market in order to increase sales and profits. pic (Source www. marketingteacher. com) The 4 Ps of Marketing Mix can be explained as below 1. Product A product includes all features and combination of goods and related services that a company offers to its customers.The product or service offer needs to be able to meet a specific, existing market demand. The companies that are operating in service sector and provide intangible products are very much criticized by the customers. The companies can use the terminology of service products under marketing mix strategy making (Kotler &038 Armstrong, 2004). Sainsburys is applying this strategy according to consumer preferences and changes in the market. i. Positioning This center process by which marketers try to create an image or identity in the minds of their target market for its product, brand, or organization.Sainsburys has increased its private brand product portfolio. Under food category, company offers organic food under name Sainsburys SO organic range and it comprises of 450 products. (www. sainsburys. co. uk) ii. shade The products offered by Sainsburys are quality products. There is a round-eyed range of great quality products at fair prices. The main emphasis of quality is on fresh food, organic food and private label brands. The companys commitment of go quality products has increased the brand image of the company. iii.Product Packaging Sainsburys has improved its packaging. The company offers the products in self branded packages. The various discounts and slogans are mentioned on the packaging. The company is use eco-friendly bags for packaging and carrier bags called Bags for action. (Source www. sainsburys. co. uk). iv. Branding Sainsburys uses self tagged branded products. The company offers nearly 20% out of its 50,000 product r ange, which uses self label brands. v. Varieties. vi. Taste the different Also known as Ttd, it is the companys biggest sub brand which comprises of 1300 products.It was Sainsburys first own brand range to be free of artificial colors, flavors and hydrogenated fats. 2. Pricing It is setting up a price for a product or service offered. According to Kotler and Armstrong (2004) price is the amount of money that customers have to pay to obtain the product. It is not simple to set a price. The customers not only view the lower price of product, but they respond to value so a lower price does not necessarily mean expanded sales if the product is not fulfilling the expectation of the customers (Lazer, 1971).Pricing strategy is divided into two move price determination and price administration. The different types of price are Market led pricing (Competitive pricing), Cost ground pricing, penetration pricing, destruction pricing, price wards, EDLP (Every day low price). The pricing strate gy of Sainsburys is that it should be able to provide profits. The pricing strategy of Sainsburys is as follows a. Lower pricing strategy Sainsburys use lower price or economy pricing strategy at the time of launching or selling a new product. The marketing and manufacturing costs are kept at minimum.Sainsburys offer economy prices for its products like soups, beans, tomato puree, etc. which can be compared very easily with its competitor TESCO (Source http//www. sainsburys. co. uk &038 http//www. tesco. com). b. Discount price Sainsburys offer discounts to the consumers. This is done in order to increase the bucket size. The discount offered by Sainsburys has resulted in increase in sales volume. c. meal Deals Sainsburys offer meal deals for families. It offers a meal, a soft drink in just ? 5 to family of 3 members. This kind of meal deals are making it popular among the food sections in retail market. . Credit terms. 3. signal It involves all activities used by company in order to make the product available to the targeted customer (Kotler and Armstrong, 2004). It refers to different ways by which a customer can obtain a product or mystify a service. A product or a service can be received through a number of distribution channels, such as in a retail store, through the mail, via downloadable files, on a cruise ship, in a hair salon, etc. The products can be made available to customers depending upon different factors like sales, communications and contractual considerations (Lazer, 1971).The ease with which the products or services are made available to customers has a significant effect on sales volume. Sainsburys has been using the perfect blend of the time, quantity and place concept in order to serve its customers. a. Website Sainsburys has its corporate website i. e. www. sainsburys. co. uk. The company has made quite a good use of technology and the customers can purchase the products and services at just one go through internet or online. Sainsbur ys has its online section display groceries online at internet.The consumers can easily choose among various products available online. This saves a lot much time of the customer and also home oral communication by Sainsburys made it more convenient for the consumers to buy a product. b. Convenience Stores These are the stores which are opened upon locally in smaller area. The consumers can have fresh food and other quality products close to their home. Sainsburys has also introduced a series of operational changes to improve cost efficiency, such as night-shift improvements and introducing further shelf-ready packaging. . Supermarkets Sainsburys has increased its no. of stores to 792 out of which 164 stores are more than 4000 square ft. area. The supermarkets are large and big stores that are open for 24 hours a day and offer full range of products and services to the customers. d. Banks Sainsburys Bank provides insurance, credit cards, loans and travel money. The consumers can entryway it online as well on its corporate website www. sainsburysbank. co. uk. It can also be accessed in convenience stores. e.Home Delivery The Company is also having 169 stores that provide home delivery service to customers. f. Filling Stations. g. Cafe. 4. forwarding processional strategies means the different means through which a company communicates the benefits and values of its products and encourages customers to buy them (Kotler and Armstrong, 2004). It is the process by which the businesses informs the customers about their products and encourage them to buy their products. The best way to understand promotion is through the concept of the marketing communication process.Promotion is the company strategy to cater for the marketing communication process that requires fundamental interaction between two or more people or groups, comprehend senders, nitty-grittys, media and receivers (Lazer, 1971). For example, if Nokia wants to promote its product then, Nokia is sen der and an advertising agency as well the media used in the process can be salesmen, newspapers, magazines, radio, billboards, television etc and the message will be the advertisement or sales presentation and the final destination is the potential consumer or customer which will be quick phone users. . Nectar Card offers customers to gain points through shopping. They can earn money to exchange point. The company offer loyalty cards to its customers which has points based system. It can be collected on every purchase made in Sainsburys. (Source http//www. nectar. com) b. Active Kids promises to donate sporting equipment and coaching to primary and tributary schools in exchange for vouchers collected by customers. c. TV Ads Jamie Oliver is the representative of Sainsburys. d. publicize Sainsburys uses media as an effective tool for promoting the products.The company is making use of television and radio for promoting its brand. e. Sales promotion The company also offer schemes l ike buy 1 get 1 free. RECOMMENDATIONS FOR CHANGES IN THE MARKETING MIX STRATEGY In todays competitive world consumers shopping behaviour changes significantly with fluctuations in the macroeconomic environment. Retailers can maximize the returns by effectively altering the marketing mix strategies. Consumer goods manufacturers and retailers have to make regular critical decisions around the pricing, product, distribution, and promotion that best communicates their firms value to consumers.Thus Sainsburys in order to be at a top position in the food retailers market needs to apply some changes to its marketing mix strategy. Product Sainsburys should diversify its product line to even more variety of products like petrol. It should concentrate more on its own-brand products as now the customers are getting more attracted towards own-label products of the retailers as they offer quality products at cheap prices. Sainsburys should also try to products in smaller quantities or in smal l packets.That will bring an edge to Sainsburys. Price Sainsburys should try to increase production of their own brand products can benefactor them reduce cost and offer better prices. Sainsburys should keep its price in competition to its competitors like Tesco. It should use the penetrating pricing strategy for its new products along with the on going economy pricing strategy which will reduce the profit margin of the company a office but will give them opportunity to gain economies of scale. Place Sainsburys should concentrate more on internet sales by offering its customers schemes like vouchers when they spend online. Instead of opening up new stores, Sainsburys should concentrate on its existing stores. It should try to bring all its stores in profit. The Internet is a new marketing tool which means that the aim should be innovation, developing new programs and features that will attract the clientele so as to capitalize on this tool and stand out among the rest. Promot ion New schemes for collective buying and online buying, online vouchers should be introduced.As today is the price war but due to its brand image it can also advertising which not just concentrates on the price but on the main aim of the company like healthy food and life style to attract the customers or with the emotional connection of the particular brand with the consumers. Internet malls i. e. e-malls can be created to increase the sales and to reach more customers than by personal selling. CONCLUSION The retailer industry is very competitive. Although SAINSBURYS retailing position is still very strong, TESCO and ASDA are strong competitors.Sainsburys strategic marketing mix needs to be improved. It needs cautiously designed. Hence, more market researches are needed to develop an effective strategic marketing mix. To answer the research question, Sainsburys needs to implement an appropriate marketing mix to become a more successful company REFERENCES Blattberg R C and Hoch S J (1990). Database models and export intuition 50% model . 50% manager, Management Science, vol. 36, p. 887-889. DEsopo M and Almquist E (2007). An approach to mastering the marketing, mix, Business Strategy Series, vol. , no. 2, p. 122-131 Kotler, P (1988). Marketing Management Analysis, Planning, Implementation and Control, New Jersey Prentice Hall Inc. Marketing Analytics Inc. (2010). Marketing Modeling Mix, http//www. marketinganalytics. com/Solutions/MarketingMixModeling. aspx. Retrieved on 20th April 2010 Verdict (2007) UK Grocery Retailers, 2007, http//www. verdict. co. uk/ Marketing/dmvt0365m. pdf. Retrieved on 20th April 2010 http//www. j-sainsbury. co. uk/ar07/businessreview/corporateobjectives. shtmlpic