Marketing Strategies Used by Waitrose and ASDA in the UK - Essay Example

?Running head: MARKETING STRATEGIES USED BY WAITROSE AND ASDA IN UK Marketing Strategies Used By Waitrose and ASDA in UK Insert Insert Title Insert Instructor’s Name 4 April 2011 Marketing Strategies Used By Waitrose and ASDA in UK Marketing strategies are plans made and aimed at fulfilling market needs and achieving marketing objectives. Hence, for a firm to attain a competitive advantage in the market, it has to initiate a well-developed marketing strategy. According to Heinemann (2005, pp 89), “a marketing strategy is a set of management decisions which identify which customers will be targeted and what value propositions will be made to them.” Therefore, a good marketing strategy should incorporate value in it such that, the market strategy choice should be of value to customers by being able to solve and fulfill the desired need of a customer via the product being marketed. The product should as well better the lives on the customers, who should always desire to come back for more; this keeps a business at a competitive advantage since it is capable of sustaining its customers. A marketing strategy should also be consistent such that, the marketing message remains the same. In this case, consumers will be certain of the product being sold. Hence, one should choose a certain appropriate market for his business and the marketing channels. In addition, a market for a business should be targeted such that, it is directed to the right customers. Normally, proper communication using right words attracts customers more; hence, an effective marketing strategy must be communicative (Hoos, 2010). Marketing strategies are inclusive of three forces, namely, competition, customer, and corporation. According to Jain, “a good marketing strategy should include a clear market definition, a good match between corporate strengths and the needs of the market and a superior performance, relative to the competition in the key success factors of the business” (Jain n.d, pp 23). A good matching of the customer and corporation’s needs and objectives is important since it leads to a long relationship; however, competition must have an objective, for instance, the level of competition, which entails whether competition involves an entire market or a in a certain segment. Secondly, how to compete entails the means by which competition will take place, for instance, a product may be introduced to serve a specific customer’s need. Thirdly, when to compete involves a waiting for a certain time to penetrate into the market (Jain, n.d, pp 24). Therefore, according to Analoui (2003, pp 241), an effective marketing strategy should prioritize demands and wants of customers, identify a market for the business, select a marketing mix and drive the firm in to a competitive advantage. Marketing strategies used by Waitrose and ASDA in United Kingdom and how they identify their customers Waitrose was founded by Wallace Waite, Arthur Rose, and David Taylor, when the self-service for product was introduced in 1951. However, it operates as a grocery retailer in the United Kingdom, and it is aimed at providing the convenience as supermarkets do, in terms of services and products that are of quality, value, and fresh and in variety. Waitrose mainly deals with food and drinks and targets the upper market, providing variety of their fresh and quality products. However, Waitrose faces competition from related firms like the Tesco; this is due to Waitrose’s high prices, while consumer are capable of buying groceries in any place as long as the prices are friendly and the groceries are fresh. However, one of the strategy Waitrose has adapted in order to attract and sustain customers is product differentiation and delivering product of high quality (Addidas 2003, pp 5). According to Chadwick et al, (2007 pp 14), Waitrose acquired 40% in LMS e-commerce grocery business to expand its online service. Due to technology, the online service was effective and able to serve customers anywhere in terms of home delivery of groceries in the United Kingdom. In addition, in 1998, Waitrose grocery had come up with an office based system, waitrose@work, which aimed at targeting specific markets. According to Yousept (2004 pp 11), online supermarkets has also extended to groceries hence being referred to as grocerification; thus, with internet at hand, there are many opportunities to sell products and services online. This is evident in the Waitrose grocery retails. This strategy aimed at being at a competitive advantage to be able to compete with other grocery firms. According to Venner (n.d), Waitrose has always focused on quality strategy, whereby they ensured that consumers get the best product in terms of quality regardless of the price of the commodity. Venner adds that, it is until September 2010 that the firm decided to engage in the price war. This is due to the current inflation in the country that has resulted to consumers watching on their budget, thus opting to spend less at all times. Therefore, Waitrose has decided to consider its prices as much as it emphasizes on quality, therefore, it has started considering the pricing strategy. Price normally determines the customer’s decision on whether to buy an item or not. Many firms have become familiar with the current situation and hence lowering their prices so as to attract customers. ASDA supermarket stores are based in Britain and deal with merchandise, food, toys, and clothes; it is however an abbreviation of Asquith and Dairies. The company is however a subsidiary of Wal-mart, which is the largest retailer in America. Asad’s marketing strategy is mostly based on price such that, it offers low prices for its products. According to Veener (n.d), Asda introduced the 10% cheaper to attract consumers and be at a competitive advantage. However, this move was challenged by other firms such as Tesco, which introduced its ‘daily dozen price campaign.’ According to Chadwick et al, (2007 pp 10), in the 1990s, the ASDA company was almost losing its market share, but in 2000, the company launched ASDA@home, which is an online service that aimed at selling some certain goods. The company has since then focused on increasing the online shopping service in the United Kingdom. The author adds that, the company has emphasized on the online service to an extent of multiplying on the delivery slots, in order to satisfy customers’ needs. The strategy also incorporates a wide range of products such as household and domestic appliances, food, beauty products, and heath. ASDA has always focused on saving client’s funds while shopping, thus this strategy works in attracting more customers. According to Jackson (2003 pp 113), with the emergence of the low price strategy in the 1990s, advertisements by the company on how it was easier to save money having shopped at the Asda supermarkets was a way of attracting more shoppers. The ASDA marketing plan is to provide cheap goods and services that are affordable to the public. It is also focused on reducing the costs of products and also recycling its waste products. They also aim at effective packaging of products and encouraging voluntary services (Shrestha, 2009 pp 4). ASDA identifies its customers’ needs such as the desire for cheap prices due to inflation thus reducing on their spending. The supermarket grants their wishes by making sure that prices are friendly and affordable, hence attracting customers. However, this strategy may create price wars among competitors like the Waitrose, as they try to subsidize on their prices so that they can fit in the competitive market. For market strategies to be effective, they must match the organization’s internal and external environment. It is however evident that these two firms use different strategies to attract customers. For the case of Waitrose, which deals mainly with groceries, it made sure that their products were outstanding in order to catch the customer’s eye. Therefore, it has for a long time adopted the product strategy whereby according to Ferrell (2008, pp 219), involves creating a difference in a firm’s product. This is evident since Waitrose retails make sure that their products are of quality compared to other stores. The advantage of quality in a product is that, most customers want to purchase something that is worth; hence, some customers disregard the price and prefer quality of a product however expensive it might be. Nevertheless, it is evident that the ASDA stores prefer to minimize their prices to attract more customers. Therefore, the first strategy the company has adopted is the pricing strategy, which according to Ferrell (2008 pp 238), the way in which the customers of the targeted market perceive a price of a commodity is very important since it results to their decision of purchasing that product or not. The ASDA store has made sure that its customers save while shopping; therefore, the store has resulted to advertising on how well one can save when shopping in their stores. This is a strategy aimed at attracting customers. However, this move has created price wars in the market, with Waitrose groceries having to reduce on their prices to maintain their market share. Due to inflation in the united kingdom, the customers are willing to part with less cash while shopping, hence going for the low price products in any stores that have relatively friendly prices for their product. Therefore, since Waitrose is mainly focused on the quality of products than the price, it has had to lower its prices to be able to compete with other supermarkets such as Tesco, and ASDA. The two stores, are an example of how firms react to competition; as for the Waitrose stores they would compromise quality for competition so as to be able to defend their market share and sustain their customers since the inflation in the United Kingdom is causing cautiousness on citizens when spending. However, ASDA continues to lure customers with its low prices and offers, and in addition, it is diverse in its marketing, since it sells everything a person requires in the household and for his/her daily needs. These range from toys, clothes, household appliances, cosmetics and kitchen appliances. Nevertheless, the ASDA stores are a threat to the Waitrose stores that are limited to only few products such as groceries, drinks, flowers, and beddings and are keen on the quality of their products other than their affordability. Indeed, ASDA stores focus more on what the consumers want and if the targeted customers can afford to purchase their products. ASDA can be said to set their price strategy depending on the customer’s affordability. The wide variety of goods and services it offers under one roof is an advantage for the business since customers would prefer a place where all their needs are catered for in that particular time they allocate for shopping. Therefore, ASDA is at a competitive advantage in terms of its market share and business wise. However, the Waitrose stores are also meeting their customer’s demands through, online selling and free deliveries of online sales. The after sale service in terms of free delivery is a strategy that many busy customers would prefer, since they have no time to shop. Hence, they prefer a service that would deliver goods to their doorstep. In addition, according to Flouris (2006, pp 24), the cost leadership strategy is effective in a competitive market. This occurs when a firm is able to offer quality products but at a lower price compared to its competitors. However, these low prices should be able to generate profits and returns for the business and not losses. Nevertheless, this strategy gives buyers the freedom of negotiating the prices of commodities to a preferred price by both the buyer and the seller. If this strategy is effective, it leads to dominance of a firm in the market over its competing rivals. This is the case in Waitrose, which offers high quality goods. In addition, the ASDA stores offer quality goods at an affordable price. Secondly, the product differentiation strategy is important in a business because of the uniqueness in a product or service. It could be a unique product that is not offered by any other firm or an outstanding service that outweighs other services in competing firms. In addition, the differentiation strategy is usually effective when the preferences of consumers are diverse (Flouris, 2006 pp 26). The uniqueness in quality of products of Waitrose stores has led to its success. In addition, the effectiveness of shopping for everything under-one- roof in the ASDA stores is also a successful strategy. Promotions can also facilitate sales; when firms offer discounts on products for a particular time, their main aim is to attract customers. Advertising is also used as a strategy in business; this can be through the television, radio, or internet. The common mode of advertising for Waitrose and ASDA stores is online. This is evident in their websites, where they provide online sales and at the same time, advertise on their new arrivals and prices of their products. Due to the competitive market today, an effective strategy should be in a position to outweigh competition by enhancing sales in a product or service every day. In addition, according to Kurtz (2009, pp 390), marketing channels play an important role in marketing strategies. According to Kurtz, “a marketing channel is an organized system of marketing institution and enhances the physical flow and ownership of goods and services from the producer to the consumers” (Kurtz 2009 pp 390). First, they usually facilitate the exchange process through reducing the number of marketplaces that sales are made. Secondly, they also facilitate sorting and they set expectations for products in that they enhance standardized payments that yield to effective transactions. Thirdly, they facilitate search in business; this means that both buyers and sellers search for particular issues and products, with the seller searching for what a buyer needs and the buyer searching for that particular good that will satisfy his/her needs. Therefore, a seller does all he can to provide the customer with that particular commodity at an affordable price. The seller may also include quality of the product to determine the necessary price. Therefore, a marketing channel brings the buyer and the seller together to complete the exchange in a market. In addition, there are a number of channels that businesspersons use - direct selling involves direct transfer of a good or service from the seller to the consumer/ purchaser. Direct selling is evident in the Waitrose and the ASDA stores in that, they both perform online selling which can be viewed as a direct sale. Another common channel can be through the producer, to wholesaler to retailer, and finally to the consumer (Kurtz, 2009 pp 391). According to Grant (1991, pp 191), the rate at which resources depreciate and the speed at which other competitors imitate the firm’s current strategy determines the firm’s capability to maintain its competitive advantage. However, according to Jay (1991 pp 105), a firm’s resource should be valuable so as to neutralize threats in the market; it should also be rare and non-imitable to avoid rival firms from adopting it. Conclusion Businesses needs to attract and sustain their customers, therefore a business must choose carefully its market strategy to ensure effectiveness in the operating market. A good market strategy must be able to drive the business to a competitive advantage so as to ensure survival in the competitive market. Profits in any business are a determinant of how often and wide customers contribute towards the business. If the profits are high, then it simply means that the business is attracting many customers and probably sustaining the initial customers. To have a successful business, a business must incorporate marketing strategies in its operations. A business owner must set a marketing strategy plan to set the relevant measures in implementing an effective marketing strategy that will lead a business to achieving a competitive advantage. Reference List Addidas. 2003. Guide for Trainee Graduate Retail Managers and Middle-Level Managers. (Online). 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