Sainsbury Marketing Programmes - Example

SAINSBURY PESTLE/SWOT ANALYSIS REPORT PESTLE SAINSBURY’S ANALYSIS Political Globalization, Baines, Fill & Page 2008 can be either a threat or an opportunity. This firm can enter the market and sell its products through partnership increasing its market share or can fail to venture the market as well There has been high tax fixation and fuel inflation 2011/12. This is a critical issue towards prosperity of the firm because of the increase in value cost for products. This is likely to shun customers away reducing market share and growth for the industry Economical 2011/2012 climate effect in UK led to inflation in food and non-food product. This is a threat to the business Desmond & Stone 2007 because the low supplies of food products are likely to come with price increment. This will lead to reduction of customers and profit returns. Customers are looking for discounts and good deals. This is an opportunity to offer good deals and promotion of non-food-products discounting the food products. The firm will increase food and non food merchandises hence increasing returns. The wages of the consumers remain unchanging with tightening economic levels. This is a threat to the business and customers are likely to change their loyalty to Sainsbury firm reducing the market share and market growth. The company needs to understand the squeezed wage needs for the customers and be careful as they increase the prices of products. They need to explore other modes of sourcing their food product cheaply to sell at a reduced price as compared to their competitors. Sociological Consumers in UK are celebrators e.g. royal wedding, Christmas and Halloween. In this function there is a lot of food stuff consumption. This is a company’s opportunity to make substantial sales. During this time, Brassington & Pettitt, 2006 the firm will be better placed to relatively raise the prices of the food stuff and accompany both food and non-food products with promotion depending on the occasion. This will increase market growth for the firm. Sainsbury participation in Sports Relief Donation is a fundamental opportunity to continue promoting its name and products. This will increase its market growth. Technological The presence of Sainsbury’s Nectar Loyalty Scheme is an added advantage to this firm. This will ensure it has a great opportunity to fresh food products conveyed to customers in time. The training infrastructures in place for the firm ensure the supermarket has only qualified and approved workers. This is an opportunity to intermingle all business technicalities to offer their customer the best. This will ensure the firm not only withholds its market share, but also continues to grow tremendously despite the hard economic times. Legal The company packs Jersey Royal potatoes. It has to obey with packaging and labeling legislation. The Sainsbury will remain being focused on the interests and financial strength and shares. It, therefore, Kotler & Keller 2008 needs to strictly abide by the risk measures and legal compliance. Excellent compliance to these laws will create more opportunity to increase sales without interference by law. On the other hand, lack of compliance will result to tint of the company’s name and is likely to lose customers leading to reduced market share. Environmental Geographically this supermarket is the largest retailer of British apples and pears and seller of fresh food stuff. It has to use this opportunity to make more sales (Brassington & Pettitt, 2006). The firms plans to built closer links with farmers Providing of both animal and plant food produce in the market from Scotland and Northern England. This is an opportunity for the company to make more sales since consumers love fresh, quality farm products. Weather challenges experienced 2011/12 leading to low food production is a threat to the business. The reduction in farm produce is likely to increase buying price of farm produce straining the farmers and hence reducing market growth and share of the business. Boston Matrix: Market Growth and Market Share Kotler & Keller 2008 Dogs/Shrinkers (Low Market Growth or Share) Taxation and fuel inflation with stagnating salaries for consumers Climate change affecting production of food products Bankers/Cash Cows (Low Market Growth/High Market Share) Social gathering like royal wedding, Christmas and Halloween. Only a UK based chain store Growers/Stars (High Market Share/High Market Growth) Largest retailer of British fresh product The presence of Sainsbury’s Nectar Loyalty Scheme Spread stores of over 1000 stores with over 400 accessible to majority City and Guild accredited college where it sources its employees Problem Children/Maybes/Question Marks (High Market Growth/Low Market Share) Sell of shares to achieve 6.6% dividend per share SWOT Analysis Strength: Good infrastructures: Sainsbury runs more than 1000 stores. Of these, 440 stores are accessible with ease. This is strength for the business because of its strong and spread coverage within UK. High market share: Sainsbury has achieved 29 quarters growth for like-like sale. It is also the strongest and successful seller of non-food and core food retailing. It has a room for growth. Sainsbury made like-for-like sales growth of 2.1%. It has had the biggest market share for more than 10 years giving it more potential to make significant sales. Well placed in regard to environmental issues and fresh product supply e.g. supply of apples and pears freshly from the farm, Jersey royal potatoes and fresh British vegetables. In addition, Desmond & Stone 2007 the ability to buy products from the farmers and relay them still fresh to their consumers excluding middle men ensures low selling prices of these products. Sainsbury has qualified staff from their accredited college by City and Guild. A leading certifying body in UK. The staff are, therefore, able to review the products frequently to only have the best brands on sale. Weaknesses: This firm is only in UK. This is likely to be a problem in case market growth is expected or if there some problem arising from food retailing in this nation. Opportunity: The fact that UK population like social events and tend to consume a lot of food stuffs and use other alternative products during this times offers an opportunity for future growth of the supermarket. To capture more customers, this firm need to continue with its charitable organisations and donations as it does with sports relief donations. Sainsbury’s Nectar Loyalty Scheme helps the firm understand the feeling and interest of its customer. The industry should, therefore, use this opportunity to invest on the willing of their consumers. Live Well Campaign showed that actually customers are not after low prices as such market forces thought but need to get excellent products for their money. This is an opportunity the business can invest on to hold the taste of its consumers. The strong board of directors have reviewed the shares and commits themselves to increase the shares dividend by 6.6.%. This is a fantastic opportunity for the firm to increase the number of their shareholders. Threats: The operation of Sainsbury are not only affected by environmental issues like bad weather,Baines, Fill & Page 2008 but also taxation, fuel inflation effects and employment. The unchanging consumers wages with increasing food prices can as well alter consumer preferences in shopping from this industry. Being a Public Limited Company, large companies holding shares with the firm can tap the firm in case of reduced market share. Tesco needs a lot of investment in the market share if it has to remain the leading supermarket sometimes with unforeseen and experienced returns being noticed. Sainsbury’s Fundamentals Brassington & Pettitt, 2006 The market share The market growth The profit level The customer’s satisfaction Coporate Objectives i. To investigate how the company can move overboard UK market within one year and the infrastructures that need to be in place. ii. To find out in more details whether the largest group of consumers is interested only on the quality of products rather than the quantity in regards to monetary value within three months. iii. To investigate the benefits accrued from the sale of non-food products and whether the profit accrued can cover the low gains gotten from food items without pressing the business within three months. iv. To find out whether the hard economic times are putting pressure on the market share of the firm within three months. Marketing strategies: Online sales and promotions Discounts Online sales and promotions is highly recommendable (Doyle 2002). This is because other like products sold online will only differ with low margin of prices while offering maximum profit as compared to over the counter sales. In addition, the firm is able to capture customers who may not really visit the stores. This is also another form of promoting the quality and services of the firm. Bidding of products is also possible online. Sainsbury Marketing Programmes i. Product protection is a key factor (Baines, Fill & Page 2008). Good and appealing packaging is encouraged. This will capture the desire of the customer and promote the business name. ii. The buying price (Baines, Fill & Page 2008) need to be considered to ensure the customers get the product at the lowest price possible without compromising the product quality and businesses profit. iii. The type, and quality of the product (Brassington & Pettitt, 2006) should always be the firm’s driving force to offer the best. iv. The company (Doyle 2002) should not get weary of reaching their offers and sales to customers through advertisements and promotions . v. The stores (Kotler & Keller 2008) should strategically hold the commodities that the customer at niche are highly interested on. In addition, the customer’s interest should be the overall gear for what the firm offers in every store. References Baines, P., Fill, C. & Page, K. (2008). Marketing:essentials of marketing. Oxford: Oxford University Press. Brassington, F. & Pettitt, S. (2006). Principles of marketing 4th ed. Prentice Hall Desmond J.& Stone M.A. (2007). Fundamentals of marketing. Routledge Doyle P.(2002). Marketing management and strategy. 3rd ed. Pearson Education Kotler P. & Keller P. (2008). Marketing Management.13th ed. Harlow: Prentice Hall Lynch R. (2003). Corporate strategy. 3rd ed. Harlow: Prentice hall Read More