A Marketing Plan for Sainsbury - Essay Example

Sainsbury Introduction A marketing plan is an integral part of the overall business. A marketing plan can be described as the blueprint outlining theoverall marketing efforts of an organization. The study has been conducted to develop a probable marketing plan for Sainsbury, one of the leading food retailers of UK for the next three years. In order to prepare the marketing plan the existing marketing strategy of the company and peripheral business environment have been analyzed by using strategic and marketing concepts like PESTEL analysis, SWOT analysis and marketing mix has been used (Kolb, 2008, p. 92). Company Profile Sainsbury’s was founded in 1869. Today it has over 1,000 stores, including 440 convenience stores, and employs around 150,000 employees. Sainsbury plc had revenues for the full year 2012 of 22.29bn. This was 5.65% above the prior years results. Background of the Study Sainsbury is one of the top food retailers in the UK. From the data above it can be easily understood that the company is growing leaps and bounds. However in the last couple of years just like most of the companies, Sainsbury also had to combat the economic downturn. A part from the financial aspect, Sainsbury also needs to adapt to the changing consumer behaviour. The study looks to deliver a probable marketing plan for the company keeping economic volatility in mind. Environmental Analysis PESTEL Analysis PEST stands for political, economic, social and technological. All these factors are treated as the external of macro environmental factors. Such factors cannot be controlled by the company. However, these factors tend to have a direct on the business strategy of the companies (Kotler, 2001, p. 25). Political factors The political factors of UK are likely to have significant effect on the performance of Sainsbury. Presently the government’s debts and the consumer debts are quite high. This has affected the buying behaviour of the consumers. Therefore the company not only has to operate in such tricky market conditions, but also has to develop business gradually. Economic factors Economic factors affect the businesses highly as these factors influence the cost, demand, profitability and price. During the present economic slowdown the unemployment rate and inflation in food prices are two factors to look out for. Due to the dual affect of inflation and high unemployment rate, the demand for Sainsbury products may decrease. This may slow down the production of food products creating a viscous circle. Therefore the company should look to focus on expansion into new growing markets to manage the risks related to the slowdown of the economy. Social factors Today the customers mostly prefer one-stop solution; i.e. the customers look for all the products under one roof. Therefore by introducing new products, Sainsbury can take advantage of such behaviour. Also increasing number of female work force has lead to a decline in the domestic meal making. Therefore the company should be able to use the ‘Cook and Save theme to generate more revenue. Technological factors Technological advanced usually bring positive effect on the business. One such positive effect has been the considerable amount of growth in the online operations of the company. This has helped the company to expand ability in the areas of growth and demand. As per the annual report of the company, online sales have made a healthy contribution to the overall company sales. The online services are available to over 80% of the households in the UK. Environmental factors To due to recent environmental concerns in the form of global warming there has been a huge amount of pressure on the companies both from the government as well as the environmental activists to act as a socially responsible business unit. Sainsbury’s Reduce, Reuse, Recycle approach seeks to reduce waste and encourages recycling. This approach also helps in the reduction of carbon footprint (Chattopadhyay, 2009. P. 370). Legislative factors The government legal policies direct influences the activities of an organization. Say, the introduction of a new tax on advertising of high fat foods. Sainsbury adapted to new tax by modifying the products. SWOT Analysis SWOT stands for Strength, Weakness, Opportunity and Threat. Among these strength and weakness are internal factors; whereas opportunity and threat are external factors. Usually an organization tries to use the strengths to minimize the weaknesses and capitalize of the opportunities to minimize the threats. Here one thing needs to be mentioned that threat and weaknesses can only be minimized; but can never be eliminated. This is applicable to all the firms irrespective of the size and the time in business (Brown, 2009, p. 209). Strengths Sainsbury stands out amongst the crowd as a stand out brand. The good will of the company has been built over 100 years. This helps the company to enjoy several benefits like high brand awareness, customer loyalty and belief. The company has been able to develop a sense of reliability and trust among the customers. The distribution system of the company is very efficient. Due to the huge number of outlets, customer can locate the stores very quickly, as there is always a Sainsbury store nearby. Sainsbury has also been known as an eco friendly company. Sainsbury’s Reduce, Reuse, Recycle approach seeks to reduce waste and encourages recycling. This approach also helps in the reduction of carbon footprint. Weakness Sainsbury is a very famous brand, but only in UK. The company is yet penetrating the international market. Service is something the company has to work on. There are no self checkout counters in most of the Sainsbury stores. Opportunities Globalization has presented a lot opportunity for Sainsbury to enter the international market. Many countries are providing FDI in retail also. Sainsbury can enter non food markets to increase the customer base. Non Food products are quite appealing to grocery supermarkets. This is because such products provide higher profit margins. Sainsbury should capitalize on reaching to customers through online medium and increasing sales. Threats The present volatile market scenario is the biggest threat to the company. Add to that the company only operates in the Great Britain. But due to the open global economy there are very little barriers to entry. This may lead to entry of new players in the market leading to increased competition and even price war. SWOT Matrix Strengths High Brand awareness Strong Goodwill Strong distribution Network Environmental friendly image Weakness Lack of self service Operates locally only Opportunities Increase in business through the online medium Opportunity to go international Entering the non food market Threats Present economic downturn Threat of new entry Possibility of price war Marketing Objectives Based on the SWOT analysis it can be stated that the Sainsbury should focus on global expansion, entering non-food market segment, increasing business through the web based operations and cope up with the economic down turn. Therefore the probable objectives could be: To enter international retail market. To enter non food market segment. To formulate a product and price strategy to gain competitive advantage Avoiding the possibility of price war. Marketing Strategy Differentiation Differentiation is used by companies to establish unique identity in the market. One of the best ways to achieve differentiation is through product based approach. In this approach the company can introduce new products or varieties of the same product to cater to different market segments. It is suggested that the company should come up with new products to target new market segments. Also the existing products should be positioned in such a way so that they can be differentiated from the offerings of the competitors (De, 2011, p.229). Diversification Diversification is a strategy adopted by companies to achieve growth. It can be either concentric or conglomerate diversification. When a company starts produce products that are not closely related to the existing product line, it is called conglomerate diversification. When the diversification happens in the other form it is called concentric diversification. For the company conglomerate diversification is suggested in the form of retailing of non-food products. Marketing Action Plan Sainsbury should have certain marketing actions to execute the strategy appropriately. One of the key elements of the plan has to promotion. As the company may plan to enter the non-food market the company should focus on targeting the existing customers through customer loyalty programs. Also the company should focus on the self service aspect. If the company diversifies, there may be an increase in the number of foot falls. So, the company should ensure the existence of self checkout counters to ensure smooth service. Also the company may look to find out franchisees to enter the international market. This may reduce the risk of entry to certain extent. Conclusion Through the quality offerings over the years Sainsbury has been able to achieve high degree of brand equity. The company is also regarded upon one of the most environment friendly brands. But one of the major problems of the company has been lack of global presence. As the global economy gets more uncertain the company most certainly has to explore the global market to gain competitive advantage. Also the company should enter the non-food market to target a whole new market segment. Works cited 1. Kotler, P. 2001. Marketing Management. Prentice Hall of India Pvt. Ltd: India. 2. De, B. 2011. Strategic Management. Matrix Educare: India. 3. Chattopadhyay. A. 2009. Marketing Management. Matrix Educare Pvt. Ltd: India. 4. Brown, L. 2009. Marketing and Distribution Research. Ronald Press Company: US. 5. Kolb, B. 2008. Marketing Research: A Practical Approach. Sage: UK. Read More