How can Sainsburys Develop an Effective Marketing Plan to Position themselves in the UK Supermarket - Research Paper Example

 Table of Contents Table of Contents 2 Research Article Critique 3 Summary 3 Critique 3 Conclusion 7 Research Strategy 8 Research Methods 9 Quantitative Research 10 Qualitative Research 10 Mixed Method 11 Data Collection and Analytical Tools/Techniques 11 Questionnaire Survey 12 Focus Group Interview 12 Analysis, Results and Conclusions 13 Analysis and Results 13 Findings & Analysis for Research Question 1 13 Findings & Analysis for Research Question 2 14 Findings & Analysis for Research Question 3 16 Conclusion 19 Reflexivity 20 References 21 Research Article Critique Summary The author in the article reviewed the concepts of positioning strategy (Brooksban, 1994). There was proper explanation about the importance of an efficient positioning strategy. The author first outlined the broad components of a proper positioning strategy and then explained them. To site the example of a successful positioning strategy, the author used a case study approach to evaluate the positioning strategy of a company which was planning to launch a new product into a new market segment. The company used exploratory study and then successive primary and secondary market research methods such as questionnaire survey, focus interviews and library research. The article further discussed how the company implemented its positioning strategy through a proper marketing mix decision. However, the author’s research did not throw any light on the result of the company’s marketing plan. The article lacks an analysis of the applied marketing plan by the company. Critique According to the author, the concept of positioning a firm’s market and services is still unfamiliar to many marketing managers. Through his article, the author tried to describe the essential components of positioning strategy ingredients and explained them in detail (Karadeniz, 2009). These components of the positioning strategy formed the basis of the article. The author also explained the connecting link between a proper positioning strategy, company’s internal analysis (SWOT) and marketing mix (Porter, 1996). In order to examine how this theory can be transformed into application, the author used a case study approach and model based approach. The marketing models used in this study were positioning strategy, marketing mix and swot analysis. There has been little description about the marketing tools in terms to their meaning, their individual application in the marketing field. However, theory of positioning strategy has been explained in detail. The author has successfully explained the theory of positioning strategy by breaking down into three major components namely customer target, competitor target and competitive advantage. The author suggested that the first step in defining positioning strategy is to select a target market segment (Hanson, 1972). The target market can be understood with the help of a thorough SWOT analysis of the company and also a dedicated market analysis of the competitor. To examine the relevance of the application, the author used an organizational case study. The author explained how a small computer software supplying company used these principles to complete their work successfully. Not much of literature review is being done which is evident from very few references from authors and previously published literature. This shows that not much of research on this theory has been done The author threw some useful insights on how to select a target customer. According to the author, selecting the right customer segment is one of the crucial facts in the marketing process. Segmentation involves dividing a largest market into smaller subsets by using criteria such as geographies, demographics and psychographics (Kotler, 1980). According to the author there are four key requirements for effective segmentation; Homogeneity within segments Heterogeneity between segments Target ability via marketing mix. Viability in commercial terms The author thrusts on the fact that in case of target market selection, the route to success can be achieved by focusing on the organization’s limited resources onto a small group of consumers whose needs can be easily met by the firm in an effective way (Cavanagh and Clifford, 1986; Chaganti and Chaganti, 1983). While selecting target competitor, the author suggests that satisfying customer needs should always be evaluated in terms of what competitors are offering and how the company can offer something extra (Brooksbank, 1990). The competitor should be evaluated relative to the company’s strengths and weaknesses. While the author has stated that successful companies tend to avoid head-on competition by offering the customers something extra, the author has failed to provide any relevant examples to support his statement. The author also did not highlight any relevant method or strategy to select and filter competitors. The author explains that competitive advantage is essential to distinguish firm’s offerings from those of its competitors (Hooley and Saunders, 1993). Uniqueness of a product or services minimizes the chances to switching to other brands. While creating a competitive advantage the essential factors that should be kept in mind are that the offering should always be based on providing value to the customer, and not only price. Secondly, the offering must be sustainable. Here also the author failed to give relevant examples supporting his statements. The company which the author used for his case study approach was Task Systems (UK) Ltd. the case study highlighted the positioning strategies used by the company. The company comprised of seven marketing managers and was into the business of supplying specialized hardware and software computer equipments to retail outlets. The software was made by the marketing managers themselves. During the early 1980’s the company experienced huge growth by supplying specialized computer software which was developed by them. A video film’ lending library’ service was provided to the retailers. However, as the market became saturated, the sales eventually went down, and the company felt the need to launch a new product in order to prosper again. The author highlighted on the core strengths which was assessed by the company. The company recognized the needs of the retailers and knew the selling strategy. It had a good reputation in the market and had a large client base. The computer programming skills of the company marketing managers were excellent. The major weakness of the company was its limited resource. To find out the new opportunities in the retail sector, the company went for an exploratory research. This led to the concept of providing efficiency boosting, labour-saving news delivery computer system to its retail newsagents. A fully fledged market research was done which included mailed questionnaire survey to news agents, personal interview with experts and newsagents and existing news computer suppliers, and secondary research in the business environment department. After the collection and analysis of the data from the market research, the company was able to divide the US market into three major segments. The first segment was large multiples having ten or more shops. This segment mainly catered to the corporate executives and middle aged professionals. This segment catered to 35% of the market. The second segment was large independents having one to ten shops. Their major customer profile was young, innovative and profit oriented entrepreneurs. This segment captured 50% of the market share. The third category was traditional independents having only one shop. Their customer profile basically consisted of traditional, risk averse and survival oriented shopkeepers. This segment catered to only 20 percent of the market and was in a declining phase. The first segment has shown rapid growth, mainly due to acquisition. The article threw lights on the positioning strategy followed by the market research. The company decided to focus on the traditional segment, in spite of the weaknesses that the segment was facing. In terms of size, the chosen segment was biggest and also less competitive. There was an untapped potential because of the increasing number of business going down. The company felt that there was an immediate need for computerization and they could connect with the target customers with a businesslike approach. Since the company did not have appropriate resources for catering to segment one and two, it was decided that the company would go for segment three by offering user friendly and basic function system. They also planned to provide value added services like insurance. The article also highlighted the marketing mix strategy used by the company (Collier, 1991). The software was backed with modern programming languages with multiple add-ons, easing the process of operation. Insurance policy provided value added service. The price was set high to reflect quality, but was provided with easy payment schemes (Lhotáková and Olšanová, 2013). The promotion was mostly through video and personnel selling. The newsagents acted as local sales agents or distributors. In the concluding remarks, the author has given some insightful remarks. The author summarized the paper with a six point checklist which says that though the principles and models used in the above case study worked for the company, there is no hard core rule to a successful positioning strategy. Every research should take into consideration of a comprehensive situation analysis of the company, its competitors and the market. Conclusion A critical review of the author’s work in the above research paper identified a few improvement opportunities. There was a lack of proper explanation of marketing mix. While presenting the literature review, the author could highlight some examples where the elements of marketing mix have been successfully used. There was not much of study on how to target competitors and how to gain a competitive advantage. While explaining about the case study, the article did not explain properly the research methods and the research design. Though the research result was thorough and informative, how the analysis was done was not clear. There was also no information about the success or failure of the marketing plan which was implemented in the case study. The author’s own contribution was limited to the explanation of the theoretical models and the strategies. Further, the case study has only considered a small scale company with limited resources. The author failed to explain that in cases of companies with bigger resources and a bigger target market segment, the marketing plan become more complex, comprising of various marketing mix strategies and a more comprehensive research methodology. Research Strategy A research starts when we have a defined a problem and we need proper information to solve the problem. A research Strategy can be defined as a plan of action which gives proper direction to the research and enables us to conduct the research in a systematic and efficient way. Research strategy is selected after reviewing numerous external factors. The research strategy should be formulated in such a way that no difficulty arises during data collection from the chosen sample and also while transforming the data into meaningful information. Moreover, a research strategy also ensures that the information is presented in an unbiased and accurate manner. A research strategy can be classified into different types which are explained below. A survey research involves gathering of information from a sample of people through their response to particular questions. The popularity of survey research can be attributed to its efficiency, versatility and generalized ease. However there are some errors in survey research. Lack of a proper sampling frame can lead to an inadequate coverage of sampling frame. Because of the random sampling there can be sample error. Non response to specific questions can also lead to distortion of the survey (Check and Schutt, 2012). Action research, also known as participatory research is a co-operative enquiry, community based study and action learning. To put in simple terms, action research is learning by doing. In this case a group of people recognize a problem and try to solve that problem and then check for the results. If not successful, they try again. In short this is trial and error (O’Brien, 1998). Ethnography is a kind of inductive research. It is derived from the field of anthropology. The main purpose of ethnographic research is to interpret the social surroundings inhabited by the research subjects. The major limitations of this theory are that it is an extended research and is very time consuming. The research process needs to be responsive to changer and flexible since new patterns will evolve during the period of observation. This kind of research strategy is not very dominant in business. Experimentation strategy is one of the classical forms of research which involves defining a theoretical hypothesis, selecting samples from a known population, allocation of those samples to distinct experimental situations, introducing a pre-defined change to few of the selected variables, measuring a small group of variables and controlling the other variables. Grounded theory is also a form of inductive approach. In grounded theory, the data collection can start without any particular formation of theoretical framework. From the data that is generated through a series of observation, a theory is formed. Through these data, predictions are framed which during further course of observation, accepted or rejected. These are a constant reference to the data for the formulation and development of theory because of which the theory has been named as grounded theory (Hussy and Hussy, 1997). Case study is an empirical research in which a contemporary phenomenon is focused. Complex social phenomenon can be studied under case study research. There are many variables of interest and sources of evidences are multiple. The collection and analysis of the target data is guided by theoretical propositions. The major shortcomings of this king of research strategy are that it cannot be scientifically generalized. The purpose of case studies is to support the theoretical propositions, but not to the population. Another drawback is that the choice of formulae and the time limits are decided by the investigators and it takes too long and often the documents are unreadable. The objective of the research is to find out the existing players and evaluate market trend. The study also aims to find out the preferences and needs of the customers while shopping in a supermarket. For this particular study, survey method will be the most suitable approach. The sample population will be large and diverse and there will large number of variables under consideration. Thus, a survey method will suffice most the requirements and can be used in this research study. Research Methods In general there are two types of research methods which are followed by most of the researchers all over the world. These are quantitative and qualitative research methods. Quantitative Research Quantitative research can be explained as a systematic examination of a topic with the help of mathematical and computational techniques. The main objective of a quantitative research study is systematic formulation and application of theories models and hypotheses related to the topic of research. It involves collection and analysis of precise numerical data and converting those data into meaningful information. Some of the most recognized methods of quantitative research include structured interviews, clinical trials, questionnaire survey, and recording & observation of events. Quantitative research takes into account huge amount of statistical data (Baxter and Jack, 2008). This study will make use of questionnaire survey as the quantitative data collection method (Alby, 2012). The advantage of using quantitative research is that it helps the researchers in measuring the data and establishes a relationship between independent and dependent variable which can be studies thoroughly. However, there are some disadvantages of quantitative research. Quantitative research needs large samples to carry on a study which increases the overall cost of the research. However, with larger sample size, there is an increase in the accuracy of the outcome. Qualitative Research Qualitative methodology is the process by which data is analyzed on the basis of quality (Boeree, 2012). Qualitative analysis does not take into account any form of statistical calculations, rather it tries to gain in-depth views from the respondents about the area of study (Regentsprep, 2012). Apart from this, qualitative research also involves developing greater insights into the phenomenon to answer the research questions. It clearly explains that in quantitative research, the researchers examine the situation without changing the natural process. Qualitative methodology includes investigating about the ‘why’ and ‘how’ aspects of decision making. The sample size required for qualitative research is comparatively less than what is required in quantitative research. This research is mostly directed towards explanatory approach and it is mostly concerned with interpretation of the environment and the society surrounding it. Employing a qualitative research helps in a deeper understanding of the target audience’s experience, this is the plus point of this research. Apart from this, since the focus is on small sample size, the research is comparatively less expensive. However, the biggest disadvantage of qualitative research is that the result of the study is entirely based on the perception of the target audience. Mixed Method A mixed method of research involves both qualitative and quantitative research methods (Creswell, 2003). It consists of closed ended measures as well as open ended observations. In this method, both qualitative and quantitative data are collected and a rationale is developed for integrating the data at different levels or stages of the research. The research studies about identifying the existing players in the UK supermarket and evaluate their market trend. The study also aims to find out the preferences and needs of the customers while shopping in a supermarket and design a marketing plan for the supermarket chain Sainsbury. In this study, qualitative method of research will be considered for fulfilling the objectives of the study. The rationale behind going with a mixed approach is that the study needs to take feedbacks or responses from both customers well as the marketing managers of the concerned company. The collection of data from the marketing managers will involve focus group interview, which is a qualitative approach. On the other hand, feedbacks from the customers to find out their preferences and needs will be recorded with the help of questionnaire survey. Data Collection and Analytical Tools/Techniques Data collection is basically obtaining useful information. The aim of data collection is to establish a factual basis for making useful decisions. Data collection is the next step of a research study after the research design (The Air University, 2012). Type of data to be collected depends of the research methodologies used. The data can be collected from qualitative and quantitative sources. Once the data is collected, it is analyzed through a range of statistical tools and techniques. Data collection forms a critical part of the research study because it helps gathering useful information regarding the hypothesis or the research problem (Deming, 1996). A precise and accurate data collection will not only minimize the error in analysis but also help the researcher in getting most accurate results. Data collection techniques can be of various types. Questionnaire Survey A questionnaire survey is a process by which the data is collected from the target audience in the form of questions. A questionnaire is an instrument for collecting data which comprises of a number of questions given to the respondents for recording their data. The questions are either closed ended, open ended or mixed, which depends upon the requirement of the research. A closed ended question is a questionnaire format where the choices of answers are limited for the respondents. These types of questions commonly come in form of multiple choice questions and can be in answer, checking or scaling format. On the other hand, open ended questions are designed to find out a full, clear and concise answer from the target audience’s own understanding, knowledge and feelings. Open ended questions tend to be less leading and more objective type. Focus Group Interview A focus group interview can be considered as a qualitative approach which uses feedbacks from the respondents for the collection and analysis of data. The target audience participating in a focus group interview is asked about their perceptions, beliefs, attitudes and opinions towards a particular product service or concept, or any other area of research. A focus group interview session generally involves a face to face interaction between the interviewee and the interviewer. The questions are generally open-ended which helps respondents to portray their thoughts freely and without any constrain. This process also helps the researcher in gathering a large amount of information. The data collection approach used for the study will be both qualitative and quantitative. The questionnaire survey will be used to find out the preferences and needs of the customers shopping at the local supermarket chains in UK. The questionnaire will consist of both open ended and closed ended questions. To find out the attitudes, preferences and the growing trends of the customers, variables will be used. Once the questionnaire is filled with the data, this data will be analyzed using various statistical techniques. Focus group interview will be used among the marketing managers of the organization to find out the strategic alternatives that can be used by the company to achieve their research objective. The present business environment is characterized by high turbulence in the external environment and growing demand of the consumers. The interview will revolve around the present business environment which is characterized by high turbulence in the external environment and growing demand of the consumers (Sosik, 2004). Focus group interview will provide the necessary information from the marketing managers which will help in grounding a base for the marketing plan for the company. Analysis, Results and Conclusions Analysis and Results The research studies about identifying the existing players in the UK supermarket and evaluate their market trend. The study also aims to find out the preferences and needs of the customers while shopping in a supermarket and design a marketing plan for the supermarket chain Sainsbury. To address this objective, the study has proposed three research questions which collectively satisfy the objective of the research study. This section of the study will throw light on the findings from the primary and secondary research and on the basis of the statistical techniques raw data will be analyzed and converted into meaningful information. The responses of demographic questions which was presented to the customers reflected that the in the primary survey of the consumers around 30% were male and 70% were female. Most of them belong to the age group 25-35 and some were of the age group 35-45. A total of 50 respondents participated in the survey. In order to get in-depth insights into the strategic aspects of the company’s marketing plan, ten marketing managers of the company were approached. They were asked about the current supermarket retailing scenario of the UK industry. The study will now address the research questions of the study and based on that conclusion will be drawn. Findings & Analysis for Research Question 1 The first research question was about the prevailing scenario of the supermarket retailing industry in the UK. In order to address this research question, the study has used questionnaire survey. The questionnaire survey was recorded from the marketing managers of the company, who are involved in making strategic decisions for the company. When asked about the present situation of the supermarket retailing industry in the UK, one of the managers responded that the UK supermarket industry is an established sector in the economy of the UK. During the past 30 years, this industry has grown in terms of market share, and has also expanded its business into various new segments. However, another respondent said that majority of the sales come from the food and groceries segment in these supermarkets. The respondents were also asked about how the present scenario of supermarket retailing industry can affect Sainsbury. A respondent replied to this issue that since groceries are the highest revenue earning sectors of the supermarket chain, the other departments, which are comparatively new, are somehow overlooked. However, this implies that there is a chance of gaining competitive advantage by utilizing these new, and comparatively less penetrated sections of a supermarket chain. Findings & Analysis for Research Question 2 The research second question was about the major players in this supermarket retailing segment and the market strategies these players were using to establish themselves in the market. Figure 1 – Major Supermarkets in UK Out of the total respondents in the focus group interview, 3 respondents said that Sainsbury was having the highest market share, which were shares by its closest competitor Morrison. This was opposed by 3 other respondents who said that Morrison was the biggest player in terms of market share. Apart from this, two respondents said was Tesco was the highest player while according to the rest two respondents, Asda was the highest player in the UK supermarket industry. The above findings suggest that, there is a little ambiguity among the marketing managers of the company in terms of the biggest players in the UK market. But from the analysis it is clear that Sainsbury and Morrison are among the two major players in the market. The executives were also asked about the probable marketing strategies these companies were following to gain a competitive advantage over their competitors in the UK. Three respondents said that advertising is the main strategy used by them. Other marketing strategies highlighted by the respondents were, sales promotions, discounts, competitive pricing. Figure 2 - Marketing strategies of competitors Apart from this, in the questionnaire survey, the customers of the supermarket chain were asked to name the brand of supermarket chain which they visited most frequently. Majority of the customers voted for Sainsbury and Morrison while a lesser number of customers opted for Asda. A large chunk of customers also said that there is not any one particular supermarket that they visited. Figure 3 - Supermarkets preferred by consumers 24% of the respondents said that they prefer Sainsbury as their first preference. Morrison was a close second with 20 % voting from the customers.14% customers said that they prefer Asda over others, while rest 42% customers said that their choice of supermarket retail dependent of the situation and their requirements. Thus from the above findings it is clear that though Sainsbury in one of the largest player in the Supermarket industry, the competition is intense. Also, smaller grocery markets take away a large chunk of the market share. It is clear from the analysis that brand loyalty in majority of customers is less and the competitors are constantly focusing on prudent marketing strategies to gain market share. Thus it can be said that the marketing strategies are very critical in determining how a company can gain competitive advantage over other in the prevailing market. Findings & Analysis for Research Question 3 The third question of the study was about the probable marketing plan or framework that Sainsbury’s can develop to effectively establish itself in the UK market. In this context, both Marketing managers and the customers were approached. The customers were asked about their frequency of purchase in the supermarket. Figure 4 - Customer frequency of purchase in supermarkets. Around 40% of the customers prefer shopping fortnightly. 28% of them shop once in weak while only around 10 % shop twice weekly. Around 22% of the customers shop once in a month. This means that majority of customers buy in large chunk of products while shopping in categories like groceries and food items. The customers were also asked about the factors which influenced their decision of choosing a supermarket. Figure 5 - Factors affecting choice of supermarket Around 30 % of customers voted for project quality, while 28 % customers said that they like to go to those supermarkets which have more number of departments. 26% customers said that they prefer supermarkets with Sales/Discount offers while a small 16% of total customers said that they prefer to go to the nearest supermarket chain. Apart from the questionnaire, the marketing managers in the focus group interview were asked about the probable marketing strategies Sainsbury can follow to establish itself in the market. Figure 6 Marketing strategies for positioning Sainsbury Three managers Responded that the company would build up strong advertising, while two managers recommended that competitive pricing should help in gaining competitive advantage. However two of the managers emphasized on building dominance in the niche segments like kids sections and financial services which are comparatively new and their true potential have not been tapped yet. Thus, the above findings suggest that to gain a competitive advantage the company needs to establish an efficient marketing plan, so that it can establish itself in a strong position in the UK supermarket industry. Conclusion From the above analysis and customer survey it is clear that the present market trends in the supermarket industry are changing and to remain profitable and gain competitive advantage, the company should focus of an effective marketing plan. The company should follow a mixed approach to establish them in the market. By focusing on niche and comparatively new segments such as kids section and financial services, the company can gain a competitive advantage over its competitors. To increase both footfalls and acquire new customers, the company can engage in advertising of its new sections of the stores. Reflexivity My learning experience in this subject of research was thorough and fruitful. I had attended most of the lectures and seminars during the course. When I started my classes, it was a little difficult for me to grab the concepts because they were comparatively complex than my previous leanings. But later on I started to grasp the subject more easily and quickly, with the help of the lecture notes and the assignments. The assignments were interesting and application based. There were many group activities which involved field research and secondary research. This helps me a lot in understanding the advantages of practical learning as well as group dynamics. The seminars were very informative and helped me in gaining useful insights about the latest treads in market research and about the tools and techniques which are used by most of the organizations in the field of research. The lab sessions regarding the use of statistical tools was particularly useful in understanding the nitty-gritty’s of the research techniques and advantages of using such tools and techniques in research studies. To help me understand the subject, lecturers help me a lot and provided me with lot of information, even outside the classes. Talking to colleagues and discussing with them about the various topics and the current trends in the area of research helped me in gaining useful insights as many of my colleagues were working in various research companies. Last but not the least, my lecturers encouraged me to take up assignments on my won. For this I took two assignments related to my area of interest, and went for an extensive study which included primary and secondary research. The research report was submitted to the lectures and I got very good grades for that. Lastly, I can sum up by saying that my overall experience while learning about the subject of research was very abundant and rewarding. References Alby, F., 2012. Methods of collecting data: Interviews and questionnaires in practice. [pdf] Available at: [Accessed 17th April 2013]. Baxter, P., and Jack, S., 2008. Qualitative Case Study Methodology: Study Design and Implementation for Novice Researchers. The Qualitative Report, 13 (4), pp. 544-559. Boeree, C. G., 2012. Qualitative Methods. [online] Available at: http://webspace.ship.edu/cgboer/genpsyqualmeth.html [Accessed 17th April 2013]. Brooksban, 1994. The Anatomy of Marketing Positioning Strategy, Marketing Intelligence & Planning, 12(4), pp. 10-14. Brooksbank, R. W., 1990. This is Successful Marketing! 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[pdf] Available at < http://www.au.af.mil/au/awc/awcgate/navy/bpi_manual/mod7-datacoll.pdf> [Accessed 19th April 2013]. Appendix I – Questionnaire (For the Customers) Name: - Age: - Sex: - Male/Female (Tick above the option) Contact No (If any): - 1. How often you go to shop in the supermarket? a. Once a week b. Twice in a week c. One in 15 days d. Once in a month 2. Which factor is most important while choosing a supermarket? a. Range of products b. Location c. Discounts/Sales d. Quality of products 3. What are your preferences while shopping in a supermarket? a. Groceries b. Apparels c. Appliances d. Others 4. Which supermarket chain do you visit most frequently? a. Sainsbury b. Tesco PLC c. Asda d. Others Appendix II – Focus Group Interview Question (For Marketing Managers) 1. What is your opinion about the present situation of the supermarket retailing industry in the UK? 2. Which according to you are the biggest players in this market? 3. What, according to you are the marketing strategies of these competitors? 4. How these competitor strategies will help in integrating competitive advantage in the marketing plan? 5. How is the present scenario of supermarket retailing industry affecting Sainsbury? 6. How has Sainsbury positioned itself currently in the market? 7. What strategies should be included in the marketing plan of Sainsbury, to strengthen its positioning in the UK market? Read More