Own Brand Strategy of the UK Retailer - Term Paper Example

Using A UK Retailer of Your Own Choice, Assess Their “Own Brand” Strategy Table of Contents Table of Contents 1 1.0 Introduction 2 2.0 Retail Branding 3 3.0 Strategy of Sainsbury’s 4 4.0 Relationship between Retail Service Delivery, and Consumer Needs and Expectations 7 5.0 Conclusion 11 6.0 References 12 1.0 Introduction Sainsbury’s is one of the chief supermarket chains in the UK which is placed in third position. The market share of Sainsbury’s in the year 2011 first quarter is estimated to be around 16.5 percent (Shannon, 2011). The market position of Sainsbury’s is quite strong in London as well as South East. The five major areas where Sainsbury’s has recognised growth were ‘great food at great prices’, ‘greater number of complimentary food chain’, ‘reaching maximum customers by means of extra channels’ and ‘increasing the space of supermarket’ along with ‘active property management’. These strategies have helped the retail store to sustain itself in the third position. Sainsbury’s possesses two formats of stores namely traditional super market stores and convenience stores (Li, 2008). The retail business strategy is different from the strategies of other businesses. In this paper, the brand strategy in retail sector has been discussed. The paper seeks to discuss about the brand strategy of Sainsbury’s. The brand strategy developed by the company in their retail business enables it to acquire more customer loyalty and this aspect has been highlighted in the paper. The importance of this strategy in fulfilling the need and expectation of customers has also been included in the paper. The paper also comprises of the relationship between services of the company and the need of customers. 2.0 Retail Branding The retail branding is considered as a well known concept in present scenario. The business in retail industry is growing rapidly and generating more chains of businesses. The branding of retailers is different from other product brands. The retail branding is generally ‘multi-sensory’ and it is developed by focusing on the knowledge of consumers. The brand image is adopted in different ways in this type of business. In the retail outlets there are various attributes that act as persuading factors for consumers such as quality of products, brands that are sold, services, appearance of store, the price level, behaviour as well as service of employees among others (Ailawadi & Keller, 2004). The business of retail industry is based on their adaptation towards the trends of society as well as taste of customers for new products. This adaptation generally influences more consumers. There is a chance of retail business to be eliminated from the society if it is incapable to fulfil the requirement of market. In this type of business, major focus is provided towards the customers as they are directly linked to the product of the stores (Mansoory & Mehra, 2010). 3.0 Strategy of Sainsbury’s The brand of Sainsbury’s was essentially developed with an intention to provide customers with healthy, fresh, secure and delicious foods. The company has focused towards various approaches before adopting strategies. Their main focus has been on quality, fair price, fresh food, innovative food and other product lines. Based on these aspects, the company developed its strategies to fulfil customers’ expectation (J-Sainsbury, 2010). The strategy of the company is principally based on the five areas and based on this strategy, brand image is developed. It also provides emphasis on the five selected strategies so as to enhance their business and retain customers (J-Sainsbury, 2010). In the first strategy of ‘great food at fair price’ the company has an intention to provide healthy, fresh, safe and tasty food and thus it has continued to make innovation in their product. These innovative products facilitate them to be a leader in delivering the quality products at fair prices (J Sainsbury Plc, 2011). The main focus in this strategy is to provide extreme importance on quality by keeping the price competitive. Sainsbury’s has never compromised on quality of food as well as non-food items. The strategy has enabled them to achieve awards in food retailing along with product quality. The food products are kept in all budgets so as to meet the need of all range of customers. The strategy that was developed by the company for customers was to buy the product from the product range of either ‘basics’ or ‘taste the difference’. It was leading the market with the strategy i.e. ‘Sainsbury’s so organic’ and was also benefitted from organic branded products (Sainsbury’s, n.d.). Sainsbury’s has developed the brand strategies by focussing on its label ranges. Sainsbury’s ‘Organics’ was the first label range of products. In this range, only the organic products were delivered to customers. ‘Taste the Difference’ was the next range through which the company was extremely successful in building brand image. This range enables them to make expansion in their business in both food and non-food items. The food values and standards are provided prior focus in this range. ‘Be Good to Yourself’ was the range which was introduced for cross category branding. Both ‘Taste the Difference’ and ‘Be Good to Yourself’ were considered as significant parts of the brand communication of Sainsbury’s in order to support the brand. The other strategies developed in their label range included ‘Well Being’, ‘Blue Parrot’ and ‘Standard Own Label’ (Insight, n.d.). The second strategy is to ‘accelerate the growth of complementary non-food as well as services’. The main purpose of this strategy is to assist customers with a wide shopping experience. Though food items have remained the major focus of the company, along with it, the non-food items have become a significant business. This strategy enables them to attract more customers in their non-food items beside food categories and assist in building their brand image. It has maintained quality, value as well as innovation in their non food categories. The brand TU was also a part of non food range, which was introduced mainly by understanding the customers’ interest (J-Sainsbury Plc, 2009). The third strategy relates to the ‘reaching the brand to more customers by means of additional channel’. This has been performed by opening new stores as well as performing online operations. This strategy was developed to increase the volume of customers by means of home delivery services. The non-food items were offered through online terminals in order to provide customers with more branded products of Sainsbury’s as well as other non-food branded products. The convenience was regarded as a vital part of the strategy of the company. The convenience store facilitates the company to expand its presence in market and become successful in its operations (J-Sainsbury Plc, 2009). The fourth strategy is ‘expansion of market space’ and it was performed by improving the existing stores for providing better food and developed spaces for non-food items. The new stores facilitate to generate sustainable communities for the need of quality retail provision (J Sainsbury Plc, 2011). This strategy is developed depending on the choice and need of communities and designing was done exactly according to their requirements. The more attractive stores they deliver, the more will be the customer retention, unending association and it would provide communities with social, economical and environmental benefits. The expansion is focused on the mix of organic growth as well as acquisition, and by means of supermarket along with convenience stores (J Sainsbury Plc, 2011). The fifth strategy relates to ‘active property management’ which provided operational flexibility and scope to utilize probable development opportunities that maximised the value (J Sainsbury Plc, 2011). The above stated strategies developed by Sainsbury’s help them to increase their brand image. The entire strategies that have been developed were essentially focused on quality and standard of the products. Beside these five strategies, there are several other strategies that have been developed by the company in order to build their brand image. They developed the strategy towards the environment by dealing with the waste of food. The packaging of the branded products is also reduced with an intention to maintain the quality of food. The organic apples and potatoes are also wrapped with Gm-free materials. This strategy is adopted to reduce energy from the sites of the company. It was the first company that acted to deal with the issues related to environment in the past ten years (Sainsbury’s, n.d.). The above mentioned strategies enable the company to acquire the award of “Supermarket of the Year” by the Retail Industry Awards. The commitment of the company is to be customer oriented by focusing on quality and service allows them to achieve such recognition in retail market (J-Sainsbury, 2010). 4.0 Relationship between Retail Service Delivery, and Consumer Needs and Expectations There is a great relation between retail service delivery and customer needs along with expectations because both these aspects are related to each other. In retail industry, quality service to the customers and on time delivery facilitates a company in fulfilling their need. The customers have high expectations from the supermarket of Sainsbury’s and they know that the company has the capacity to fulfil their need. As a result, this generates high expectation in the mind of the customers about the products as well as services that the company delivers. The company is also continuously focusing on improving its service delivery to the customers as it helps in building trust and also fulfil the expectations of the customers. From the mentioned strategies, it has been observed that both these aspects are highly related and have a great role in retail business. There are several facts provided below which will mention about the relation between the two aspects of the company. Sainsbury’s offers excellent service facilities to customers. The home delivery services offered by the company for highly valued customers were considered as great benefits for them. The customers are beneficial from such services as the services are offered within a small period of time (Sainsbury’s, n.d.). The online service facility that is provided to the customers enables the company to gain huge revenue from their sales. It becomes easy access for customers to get either food items or non food items within a small period of time. The customers are benefited from their service delivery and enhanced improvement in the process is expected. The continuous improvement in their delivery process enhances the operational growth of the company (J-Sainsbury, 2008). Sainsbury’s considers that quality of foods and services along with affordable price are significant factors for their customers. The company conducts segmentation of market and performs market research by means of Reward Card data. The customer groups of Sainsbury’s are of three types such as quality oriented customers along with customers who are family oriented. The other customer group include price based customers (Insight, n.d.). The different product ranges were developed by the company by concerning about the customers’ needs and wants. The ranges were targeted to different segments of customers. ‘Organic’, ‘Taste the Difference’, ‘Be Good to Yourself’ and ‘Regional Italian’ ranges were targeted to those customers who were ‘quality’ oriented. ‘Blue Parrot’ was introduced to ‘Family’ oriented customers. ‘Economy’ was introduced to ‘price’ oriented customers. The customers were highly benefited from the company due to their excellent concept of service that is being rendered (Insight, n.d.). The various ranges of products facilitate each level of the customers with broad range of appeal of food products. The customers are highly benefited from the healthy foods of Sainsbury’s as it contains wide variety of nutritious items. The company introduced ‘Wheel of Health’ system in 2005 that made customers aware regarding the incorporation of salts, fats, saturated fat, sugars and calories in food products. The main purpose of the company is to provide customers with adequate benefits as much as possible. They also help the less advantageous society by providing them with surplus products from their retail stores. The extra food items are donated to several charities by the company (Sainsbury’s, n.d.). The development of the stores is totally based on the customers located there and their perceptions. As a result, the customers are highly benefited and get attracted towards the stores and this result in long lasting relationship with the stores. The location around the store is provided with car parking and various other facilities that assist customers with great benefits. There are ample of facilities that are provided to the customers by the company. The main intention behind this policy is to attract new customers along with retaining the existing customers (Sainsbury’s, n.d.). The customers are highly attracted towards the non food items offered by the supermarket. The kitchen along with home products attracts the customers for the quality standard. The TU clothing related brand is liked by the customers of Sainsbury’s due to its various assortment of products. The customers were gradually fascinated towards the brand (J-Sainsbury Plc, 2009). By applying these strategies, around 19 million customers are served by Sainsbury’s and as a result, the company acquired huge market share. The high range of food products of around 30,000 with outstanding services and non-food items brought greater opportunities for customers. The online home delivery services, provided to the customers, had a positive repercussion among the consumers (J-Sainsbury, 2010). The food and non-food quality items of products and store location was generally set up by considering customers’ preferences. The company in order to build brand image and to retain customers towards their brand, developed several effective strategies. The improvement in their service was focused only towards the customers as they know that combination of good quality products with quality service will enhance their brand image in the eyes of the customers. The main purpose of the company is to attract more customers and retain them for a longer period of time with their efficient and standard quality services and products. The ethical and responsible trade was performed by the company to fulfil customers’ expectations. The several honours could be achieved by the company only because of its maintenance of loyal customers (J-Sainsbury, 2010). 5.0 Conclusion With reference to the above discussion, it is observed that the retail branding is generally a customer oriented approach. The retail business is highly related to the perception and preference of customers. Sainsbury’s in order to develop its brand strategies has become completely customer oriented and has adopted strategies accordingly. The major focus of the company was mostly on its quality products and services. This was the reason due to which it was able to acquire additional customers’ loyalty. From the paper, it has been observed that the company has developed strategies by focusing on five areas of their business. The improvement in these areas has helped the company to attract large number of customers. Thus, it can be stated that as retail business is a customer oriented approach, the company also provide major importance to its customers in building its brand strategies. The more improvement in their quality standard facilitates Sainsbury’s to achieve market share. Therefore, the company has attained huge success in building their brand image from the customer orientation approach. The company in order to maintain its sustainability of products as well as services in future should focus towards the customer-oriented approach. This may keep them to stay ahead of competitors. The competition in retail industry is rising at an alarming rate, thus Sainsbury’s must be prompt as well as smart in developing the strategies that are required. 6.0 References Ailawadi, K. L. & Keller, K. L., 2004. Retailers As Brands. Understanding Retail Branding: Conceptual Insights And Research Priorities. [Online] Available at: http://mba.tuck.dartmouth.edu/pages/faculty/kusum.ailawadi/research_articles/JRRetail%20Branding.pdf [Accessed May 30, 2011]. Insight, No Date. Sainsbury’s Approach and Brand Strategy. Sainsbury’s. [Online] Available at: http://www.insightreport.co.uk/gifs/pdf/report24/dfgew7648732trgyfgew/65.pdf [Accessed May 30, 2011]. J Sainsbury Plc, 2011. Our strategy. Investors. [Online] Available at: http://www.j-sainsbury.co.uk/index.asp?pageid=505 [Accessed May 30, 2011]. J-Sainsbury, 2010. Business Review. Tasty Salad. [Online] Available at: http://www.j-sainsbury.co.uk/files/reports/ar2010_report.pdf [Accessed May 30, 2011]. J-Sainsbury Plc, 2009. Accelerating the Growth of Complementary Non-Food Ranges and Services. Operating Review. [Online] Available at: http://www.j-sainsbury.co.uk/ar09/businessreview/operating4.shtml [Accessed May 30, 2011]. J-Sainsbury, 2008. Reaching More Customers through Additional Channels. Annual Reports and Financial Statement 2008. [Online] Available at: http://www.j-sainsbury.co.uk/ar08/flash/alternative/page11.shtml [Accessed May 30, 2011]. Li, E., 2008. Sainsbury’s. Supermarket Chains and Grocery Market in the UK. [Online] Available at: http://www.ceibs.edu/bmt/images/20100319/23714.pdf [Accessed May 30, 2011]. Mansoory, K. & Mehra, P., 2010. The Retail Industry Development. Retail Industry Development and Impact of Technology. [Online] Available at: http://www.soe.ucsc.edu/classes/ism158/Spring10/Projects/Retail%20Industry%20and%20Impact%20of%20Technology.pdf [Accessed May 30, 2011]. Sainsbury’s, No Date. Sustainable Communities. What Could Sainsbury’s Bring To Your Community? [Online] Available at: http://www.j-sainsbury.co.uk/files/pdf/property_brochure.pdf [Accessed May 30, 2011]. Sainsbury’s, No Date. Types of Jobs. Sainsbury’s Jobs. [Online] Available at: http://www.sainsburysjobs.net/ [Accessed May 30, 2011]. Shannon, S., 2011. Sainsbury Sales Slow More Than Anticipated on Fuel. Bloomberg. [Online] Available at: http://www.bloomberg.com/news/2011-03-23/sainsbury-sales-slow-more-than-anticipated-amid-fuel-cost-rise.html [Accessed May 30, 2011]. Read More