Marketing Plan: Sainsburys - Case Study Example

? Marketing Plan: Sainsbury’s BY YOU YOUR SCHOOL INFO HERE HERE TABLE OF CONTENTS 0 Introduction............................................................................................................... 2.0 The marketing plan.................................................................................................... 2.1 The current situation...................................................................................... 2.2 Where do we want to be?............................................................................... 3.0 How are we going to get there?.................................................................................. 4.0 Implementation........................................................................................................... 5.0 Ethical issues............................................................................................................... 6.0 Possible problems........................................................................................................ References Appendix Marketing Plan: Sainsbury’s 1.0 Introduction J Sainsbury Plc is a supermarket chain in the United Kingdom currently maintaining a 15 percent market share (Thompson 2010). Sainsbury competes with major supermarkets such as Tesco, Morrison’s and Asda. Tesco, the company’s main competitor holding 28 percent of market share in the UK for this industry, has maintained its leadership position through innovation in product and service delivery as well as global brand loyalty. Sainsbury offers traditional products in the food category and has recently diversified to include clothing styles that are exclusive to the supermarket. Sainsbury is recognised not only for its high quality products, but for its emphasis on corporate social responsibility which provides the company with a positive brand reputation. However, Sainsbury’s is unable to outperform its main competition, which is attributable to lack of effective promotion. This marketing plan focuses on building revenues through marketing of the company’s new clothing line, branded under the name Tu. The Tu line targets young adult female consumers, providing lightweight and contemporary clothing with a fashion-forward design and motif. The company had, until recently, believed that the Tu line was a “stand alone brand” (Sainsbury 2011, p.3). However, the Tu clothing line cannot support revenue growth for the supermarket chain without creating a brand personality and developing a more effective promotional campaign. 2.0 The marketing plan This section highlights the rebranding strategy necessary to achieve brand recognition and brand preference in the young female target market and relevant audits of the current situation faced by the Tu clothing line. 2.1 Current situation Currently, the Tu clothing line provides Sainsbury with ?680 million in sales revenues (Reid 2013). This is insignificant considering the costs of distribution, manufacture and importation of materials utilised for production. Sainsbury is attempting to compete with such companies as Marks & Spencer and Zara which produce similar fashion merchandise under a fast fashion model. These competing organisations have well-established brands and consumer loyalty for providing relevant and modern fashion styles, making it difficult for the company to lure consumers to the Tu brand. Additionally, the Tu brand boasts 60 percent of its current sales volumes stemming from impulse shoppers, meaning that consumers are not actively seeking to shop for clothing at Sainsbury’s market, instead purchasing whilst shopping in the supermarket for food products. Sainsbury’s corporate leadership recognises this shortcoming and points out that consumers have “tight budgets” and the business must “create outfits that catch attention” (The Guardian 2012, p.2). Sainsbury is also redeveloping the in-store experience to enhance the clothing shopping experience, adding fitting rooms and floor models that emulate the fashion floors of department stores. However, this has not boosted sales revenues or managed to attract non-impulse buyer markets. The company lays accusation also at the tight budgets of consumers in a recessionary environment as another reason why the clothing is not performing to business expectations. Underwear and leggings are the most significant seller as consumers reject higher priced merchandise, such as ?55 riding boots and leather handbags starting at ?35. Therefore, pricing must be a consideration in the rebranding process. Price promotions are the most used promotional activities and is the primary method by which consumers base their quality perceptions (Dawes 2004). Sainsbury is not utilising pricing as a competitive marketing tool which could contribute to the lack of consumer interest to seek Sainsbury as a fashion outlet. Fashion is a difficult industry in which to compete effectively as there is a significant volume of psychological and emotional attachment to clothing products. When a fashion retailer has assisted a consumer in changing their appearance, they evolve emotionally and become attached to the brand (Tungate 2008). Fashion is often utilised by consumers to openly express their social status and personality, therefore consumption is highly linked to social factors (Kim, Forsythe, Gu and Moon 2002). Sainsbury is not effectively utilising psychographics, or lifestyle marketing, to create a desirable consumer affiliation with the brand and is not properly exploiting opportunities to bring social influence into the promotional mix. Not being able to successfully create important psychological and sociological attachment to the brand is a limitation of the current sales strategy for Tu which is also contributing to lower-than-expected sales volumes. For consumers who are obsessed with fashion consumption, it is akin to a drug (Tungate 2008). The domain of psychology teaches the business world that consumers often make comparisons to others in their social environment and find personal enrichment and emotional fulfilment when they believe they are superior to others (Garcia, Tor and Gonzalez 2006). Therefore, Sainsbury’s maintains ample opportunities to assist consumers in improving their lifestyle and social status by appealing to these rather universal consumer emotional characteristics. 2.2 Where do we want to be? Sainsbury’s requires a 25 percent increase in sales in order to offset the high costs of a fast fashion, in-store replenishment and design model. Accomplishing this objective would take the current sales of ?680 million to ?850 million. Tu is currently available in 400 of the 600 stores that Sainsbury’s operates (The Guardian 2012). This provides ample opportunities for expanding distribution and in-store replenishment across the entire United Kingdom and, coupled with effective promotions, the 25 percent increase is feasible and realistic by expanding availability of the product. By December 2014, Tu can be providing nearly ?1 billion in revenues. The company does not require new product development in order to gain consumer attention and brand preference, as the existing styles as shown by Figure 1 are parallel to major fashion companies such as Zara; contemporary and hip. Figure 1 illustrates the aspirational models used to promote the Tu brand, however this is not effectively accomplished through lifestyle marketing and promotion, thus Sainsbury’s is missing out on ample opportunities to appeal to an aspirational peer network. The current replenishment model has a six week lead time, making the company able to actively compete with Zara and other fast fashion competitive models. Consequently, the Tu clothing line is able to provide new and exclusive fashions under the current business model and does not require a redevelopment of relevant fashion merchandise. Figure 1: Design Styles of the Tu Clothing Line Source: Reid, S. (2013). Sainsbury’s in relaunch of Tu clothing brand, The Scotsman. [online] Available at: http://www.scotsman.com/business/retail/sainsbury-s-in-relaunch-of-tu-clothing-brand-1-2968877 (accessed 18 November 2013). 3.0 How are we going to get there? The concept of consumers utilising fashion merchandise to build a unique identity and express their social superiority is known as status consumption (O’Cass and McEwen 2004). When consumers believe that a brand is able to improve their lifestyle and expand on their social status in society, they are more likely to build long-lasting brand attachments. The Tu clothing line requires a premium brand positioning, a segment categorised below luxury brands (Hameide 2011). Premium brands are also considered aspirational brands. Sainsbury’s requires positioning on exclusivity and premium clothing with a secondary emphasis on pricing promotion in order to gain consumer attention and build preference for the brand. Heavier investment in advertising utilising aspirational models that are relevant to consumers seeking identity through fashion consumption will be necessary to make the brand appear exclusive and first-class. Consumers have many competitive options for clothing consumption in similar, contemporary and edgy styles, such as Zara and Marks & Spencer. Therefore, the switching costs to consumers for brand defection are very low and there are ample competitive fashion merchandise at the same price structure of the Tu line. Future activities must focus on building psycho-social brand connections between Tu and the consumer in order to improve word of mouth and incentivise consumers to make recurring repurchases. Under the current marketing model for Tu, there is heavy emphasis on the product and its quality rather than taking advantage of lifestyle marketing to gain this brand connection. To achieve a 25 percent growth rate in sales revenues for the Tu clothing line, the company needs to establish a brand personality, human traits and characteristics that are credited to the brand. Sophistication, excitement and sincerity should be associated with the clothing brand as part of brand personality which will be necessary considering that consumers believe fashion consumption not only justifies their own personality, but improves their way of life. Sainsbury has been linking the Tu line to the Sainsbury’s name, which reminds consumers that they are buying fashion in a grocery store, something that does not appeal to exclusivity and premiumisation. Sainsbury maintains too heavy of a reliance on its own established supermarket identity which is cheapening the brand and likely serving as a deterrent for seeking Tu-branded merchandise in-store. Thus, in order to succeed in a 25 percent increase, nationwide, in Tu clothing sales, Sainsbury legitimately needs to create a stand-alone brand identity. All future activities toward achievement of the objectives must be in brand management. Competing fashion companies are able to easily replicate the fast fashion model and provide similar designs, thereby making it difficult for Sainsbury’s to differentiate its products. The only non-replicable aspect in an environment where competition attempts to emulate competitive products is the brand image which is virtually impossible to copy (Bennet and Rundle-Thiele 2004). Therefore, the Tu clothing line needs to work diligently to create important and lasting relationships with customers, rather than simply telling them what the company provides in terms of fashion merchandise. The major electronics company, Apple Inc., has managed to build considerable brand loyalty in diverse market segments by telling consumers what the company believes in, not how the company operates and the products it creates (Goodson 2011). As such, Sainsbury’s should be following the Apple model of promotion and relationship development utilising a variety of different promotional methods that support effective communications regarding social status endorsement, aspiration, social advancement and similar sets of values that are congruent to the current psycho-social state of desirable consumer segments. 4.0 Implementation The first step of implementation involves creating a solid and relevant brand personality to the existing consumer characteristics and principles that drive youth market fashion consumption. At the time of launch of the rebranding, the company will be recruiting youthful celebrity endorsers to sport the fashion merchandise and promote the Tu line. Those celebrities that share similar attitudes or values, along with aspirational physical characteristics, will bring more interest in the brand. Celebrity endorsements are highly effective strategies in consumer markets that utilise an attractiveness scale to judge product quality (Pornpitakpan 2003). Such recruitment requires a moderately higher investment in advertising, however it will segregate the brand from Sainsbury’s and establish the foundation of a legitimate brand personality. Television advertisements, billboards and in-store ads should be launched for a period of 12 weeks to establish brand recognition with important target segments. There is a growing trend of consumers utilising social media as a daily lifestyle tool, fuelled by the growth in smartphone sales and subscriptions nationwide. Tu requires a strong social media presence on major sites such as Facebook and Twitter which will provide the brand with opportunities to communicate with customers, express its values related to the Tu brand and also emphasise what makes the brand premium and exclusive. The company should recruit in-house talent in the marketing division to take ownership of communications in social media, updating product-related information and expressing up-to-date corporate values. Coupled with an interactive website that provides for virtual fashion will enhance the customer experience with the brand and build preference. Utilising a one-time expenditure to procure the necessary software for virtual fitting rooms, whereby consumers can choose their body type and weight as a model, will further improve relationships and word-of-mouth from satisfied customers interested in this type of online innovation. Sainsbury will be signing a contract with Fits.me, a technology provider offering virtual fitting room capabilities, a company holding statistics for significant return on investment for partner retailers (Fits.me 2013). Tu clothing is also not currently available online for purchase, which would solve the consumer problem of psychological concerns about buying clothing at the supermarket. This will inject better service and convenience into the business model to satisfy consumers and also allow the consumer to interact with representatives of Sainsbury’s supporting the brand. This will require investment into information technology support. The low cost pricing model for Tu clothing also requires price promotion. Heavily-advertised price sales promotions should be recurring in a market with limited budgets, promoted online, radio and through direct mail for customers who have signed up to receive digital sales reminders (email) or through the website. Exclusive price reductions for faithful customers with a purchasing history will emphasise the brand’s belief in exclusivity. The Sainsbury’s loyalty card should also be incorporated as a tool to offer exclusive discounts to customers that can be utilised online or in-store. When customers involved in a loyalty program witness that price discrimination is occurring (giving only exclusive discounts to loyal customers), it gives them a sense of personal ownership of the company and also satisfies their psychologically-driven desire for social superiority. This is an important conception for establishing brand preference. Guerrilla marketing can also be utilised as an important relationship development tool. Through recruitment of local models performing catwalk-style street performances, it will familiarise untargeted markets about the Tu line. Clever scripts and the ability of models and other business representatives to engage with consumers, as well as hand out inexpensive promotional merchandise, will further build brand recognition. This untargeted approach to promotion will enhance revenue production not only in the youth female market, but other niche markets that would find Tu clothing aspirational for lifestyle enhancement. Guerrilla marketing is also very low cost compared to other advertising mediums and can be carried out with minimal labour investment. 5.0 Ethical issues Companies such as Abercrombie & Fitch, a youth market fashion company, have received negative publicity about using vanity and narcissism in advertisement. Tu must be diligent in ensuring that models used in advertisement are not exploited in sexually explicit scenarios as a means of trying to build interest in the brand. 6.0 Possible problems Problems associated with implementation include high cost expenditures into technology procurement, celebrity recruitment and organisational restructuring to service the new customer relationship management model. Additionally, to service the online customer, a new distribution system must be developed which could further inject higher operational costs into the business model. Small-scale price increases on select fashion merchandise may be required to offset these costs which poses moderate risk to the business in relation to price sensitive buyers. Consumers may also experience cognitive dissonance when attempting to build a premium brand and also utilising price promotions and periodic discounting. The goal is not to cheapen the brand as Sainsbury’s has been performing by linking the brand to the supermarket name. Recurring market research should be conducted by marketing representatives to gain qualitative information about consumer sentiment toward the brand and the service model. This would be valuable information that provides real-time knowledge that can assist in making future adjustments to the service model. References Bennet, R., & Rundle-Thiele, S. (2004). Customer satisfaction should not be the only Goal, Journal of Service Marketing, 18(7), pp. 514–523. Dawes, J. (2004). Assessing the impact of a very successful price promotion on brand, category and competitor sales, Journal of Product and Brand Management, 13(5), pp.303-314. Fits.me. (2013). Five more retailers sign up for a Fits.me virtual fitting room to eliminate the online fit problem. [online] Available at: http://fits.me/five-more-retailers-sign-up-for-a-fits-me-virtual-fitting-room-to-eliminate-the-online-fit-problem/ (accessed 18 November 2013). Garcia, S.M., Tor, A. and Gonzalez, R. (2006). Ranks and rivals: a theory of competition, Personality and Social Psychology Bulletin, 32(7), pp.970-982. Goodson, S. (2011). Is brand loyalty the core to Apple’s success?, Forbes Magazine Online. [online] Available at: http://www.forbes.com/sites/marketshare/2011/11/27/is-brand-loyalty-the-core-to-apples-success-2/ (accessed 18 November 2013). Hameide, K.K. (2011). Fashion branding unravelled. Fairchild Books. Kim, J., Forsythe, S., Gu, O. and Moon, S.J. (2002). Cross cultural consumer values, needs and purchase behaviour, The Journal of Consumer Marketing, 19(6), pp.481-483. O’Cass, A. and McEwen, H. (2004). Exploring consumer status and conspicuous consumption, Journal of Consumer Behaviour, 4(1), pp.25-39. Pornpitakpan, C. (2003). Validation of the celebrity endorsers’ credibility scale, Journal of Marketing Management, 19, pp.179-195. Reid, S. (2013). Sainsbury’s in relaunch of Tu clothing brand, The Scotsman. [online] Available at: http://www.scotsman.com/business/retail/sainsbury-s-in-relaunch-of-tu-clothing-brand-1-2968877 (accessed 18 November 2013). Sainsbury. (2011). Sainsbury’s Journal – Here comes the summer. [online] Available at: http://www.veterans.jspensions.com/Sites/Sainsburys%20Veteran/library/files/The%20Journal%20May-June%202011.pdf (accessed 18 November 2013). The Guardian. (2012). Sainsbury’s Tu clothing range tries it hand at fast fashion. [online] Available at: http://www.theguardian.com/fashion/fashion-blog/2013/jun/24/sainsbury-tu-clothing-fast-fashion (accessed 19 November 2013). Thompson, A. (2010). Sainsbury plc and the UK food retail industry. [online] Available at: http://cws.cengage.co.uk/thompson5/students/sainscase.pdf (accessed 19 November 2013). Tungate, M. (2008). Fashion brands – branding style from Armani to Zara. London: Kogan Page. Appendix A: Lifestyle Conceptual Advertising for Tu Target Markets Source: Sanhueza, J. (2013). Kendall and Kylie Jenner announce clothing line. [online] Available at: http://tu.taconeras.net/2013/03/02/%c2%bfconocen-a-kendall-y-kylie-jenner/kendall-and-kylie-jenner-announce-clothing-line-600x600/ (accessed 17 November 2013). Read More