Sainsburys and Tesco Selling Strategies - Report Example

Comparative analysis of integrated marketing communications mix strategy for Retailers: Sainsbury’s vs. Your Chosen Competitor (Word Count: 3,000) Table of Content Table of Content 2 1.1Integrated Marketing Communication: 4 2.1Market Review – Perfume Market of United Kingdom 5 3.1Literature Review 6 4.1Analysis 9 4.1Sainsbury 9 Slogan 9 Media Used 9 Marketing Campaign 10 Image Projected 10 Impact of Image 11 4.2Tesco 11 Slogan 11 Media Used 11 Marketing Campaign 12 Image Projected 12 Impact of Image 12 4.3Marketing Communication Strategies 12 5.1Conclusion 13 5.1Recommendations 14 6.1References 16 Intense competition and vast recognition at platforms of media has made the importance of Integrated Marketing Communication more significant. No organization whether local or international can sustain any flaws left in its marketing campaign. Companies must make sure they commit to their customer not only that could add value in their life but also proposition they could offer. Therefore organizations must make sure all their functions and departments work coherently in an integrated manner. Advertising campaigns must be used in a very sophisticated manner that ensures addressing the right audience at the right time and right place. This also includes retailers like super markets and convenience stores, where customers visit on daily basis. Tesco over the past few decades have ensured that their marketing & advertising campaigns are highly coherent with their services and customer demands. However for the past few years they have committed few mistakes for which they have to pay the price by losing the market share. However it is not too late for the market leader to reposition itself and revamp its marketing strategy. These issues must be addressed at all levels from store environment to advertising platforms that targets masses. This includes loyalty scheme revision along with proper planning of marketing campaign that challenges any competitor. 1.1 Integrated Marketing Communication: It is an easy concept which leans to integrate the various kinds of communication into one with the intention of increasing the efficiency of the messages to get delivered. The theory of Integrated Marketing Communication (IMC) tends to integrate the various tools that are being used by the firm for the promotion of their business or their product (Finne and Grönroos, 2009). This is done so as to form a harmony among the procedures of exploiting the tools and the various objectives. As promotion is an important aspect of the four Ps of the marketing, and has its own communication tools, the Integrated Marketing Communication is destined to gather various tools which are implemented by the firm to ensure that the delivered message to the targeted audience is efficient and is creating preferred outcomes. Furthermore, it has been also viewed that the tools which are under the promotional activity will be lean to effectual only if they are merged rather than detached. The efficiency of Integrated Marketing Communication depends on the intensity and the magnitude of integration which is executed among the tools of communication. There are various levels by which the tools of communication can be integrated like Internal, External, Horizontal and Vertical. Therefore, we may say that IMC uses various kinds of communication which is appropriate to potential consumer and consumer as well (Pitta, Weisgal and Lynagh, 2006). It can be explained in other words as IMC instigates with customers and turn back to explain the numerous techniques for communicating and motivating the customers. Integrated Marketing Communication can be defined from this perspective as the procedure by which the company is capable of managing the customer rapport in terms of trademark value. In short, Integrated Marketing Communication is facilitated by cross functional procedure by which beneficial relations can be made between the customers and other shareholders. This is completed by strategically managing and controlling the numerous messages which are propelled to them. Therefore, IMC is a planned procedure by which various kinds of communications are included in order to generate long term relations with shareholders to attain maximum sway of messages which are needed to get conveyed by the association (Holm, 2006). As a result of this approach companies can avoid duplications. IMC approach provides appropriate channel for delivering important messages to customers. The issue might arise here that what the basic reason is behind performing activities relating to IMC, or why is it necessary to build up an IMC. It has been viewed that there are various advantages for those companies which are affianced in such activities. 2.1 Market Review – Perfume Market of United Kingdom There are around 300 companies operating in the perfume market of UK as per the statistics of 2013 (IBIS, 2014). In 2011, perfume market of United Kingdom stood at £1.38 billion after a growth of 4.5%. However next year it observed a decline of 1.1% reaching £1.25 billion. However the growing fragrance market of UK is getting saturated with the passage of time (Companies&Market, 2014). As a result of this dissemination few companies have started to look for niche segments that could allow them to address their demands more particularly. However the forecasts are quite encouraging for the players of this industry as it is expected to incline at substantial rates. From 2013 onwards it was predicted that fragrance market of UK will increase at 1.1% on annual basis for the next 5 years. This means the revenue will reach up to £2.3 billion in 2018 which is good news as far as United Kingdom is concerned. Figure 1: Potential Growth of Perfume Market in the U.K. (£ billions) 3.1 Literature Review In the early 1990’s, the time when the world of business was entering into the mode of globalization, IMC as concept of marketing was recognized as international scale. Companies wanted logical approach to manage and attract the consumers. From then, the IMC is been in debate and many researchers and authors have presented their opinions, thoughts and concerns regarding it (Baidya and Maity, 2010). It was observed that during 1990’s, this topic was found very effective by academic researchers. Every single researcher was interested in IMC thus they analyze the efficiency of IMC and concluded their results. IMC is an essential tool for organizations to identify, analyze, control, implement and define the entire marketing aspects and actions. IMC helps the companies in staying competitive and in ensuring long term sustain abilities. IMC allows the organizations to influence the consumers effectively and economically to build and sustain deep relation with the consumers to move towards competitive edge (Lau, 2009). In other words, it is an approach that allows the organizations to recognize all marketing related strategic problems, describe the proper plan and adopt the effectual marketing guidelines combination to enhance the economical returns and financial outcomes. The concept of IMC can be understood by the following example: Figure 1: Standard Multimedia Communication Model From the above multimedia communication model, it could be stated that if the above communication mode is used by any organization, that organization has to focus individually onto each activity. The organization will have to define budgets individually for its marketing campaigns to raise the market shares, brand identification and to attract customers (Croucher et al., 2010). After the allocation of resources and financial budgeting activities; full concentration resources and time will be required for every activity which will surely lead an organization in losing its control as the marketers who are focusing TV adverts will have less or no communication with other marketers who are engaged in other marketing activities. Moreover, there is no assurance that effort of individual marketing are on the same way to attain single marketing objective. Additionally, it is very hard for the organizations to analyze and understand every activity’s performance as it will take more cost, efforts and time (Fam, 2001). On the other hand, if the same organization uses Integrated Marketing Approach and Model for the similar activity, the model would be; Figure 2: Integrated Multimedia Communication Model By looking at the above model of integrated multimedia communication, it can be stated that an organization can amalgamate the entire activities among each other. The marketing campaign of TV will direct the newspapers campaign, magazine marketing and the rest (Zvobgo and Melewar, 2011). It could have given the organization additional control and spotting whether or not the integration and combination of the entire activities are creating positive outcomes or not. The organization can create one marketing team for this action to carry out the overall activities and drive to their edges in order to meet the expectations of the company. Furthermore, using the IMC model could also have driven the organization in saving both cost & time, as instead of increasing every single individual, the organization can develop and train the departmental manager that could assist the whole department (Cornelissen and Thorpe, 2001). Evaluating the outcomes and results could also be convenient for the organization as it is rather handy to manage the group activities more willingly than dealing them individually. After analyzing the effects of above example, it could be stated that rather than standard marketing approach, the integrated marketing communication is more effectual and result oriented for the organizations. 4.1 Analysis 4.1 Sainsbury Slogan The slogan of Sainsbury’s is ‘Live Well for Less’. It has recently been introduced by their new marketing director in requisition to their new three year plan (Halliwell, 2011). There is a price war going on for many decades between the supermarket retailers of U.K. Each player no matter having higher market share or less is trying to attract new customer and retain the existing one on the basis of price. Sainsbury’s also offers the same proposition to its customer that they can enjoy a higher standard of living at low consumption of money by becoming their customer. Media Used Sainsbury’s has been utilizing every single medium available, not only to promote its name and services but also deliver those services. However there is difference in terms of emphasis over each medium therefore outdoor marketing seems to be the core aspect of promotion (Croft, 2014). Billboards, signboards and vehicle advertising are the aspects which Sainsbury’s widely focus. After outdoor advertising, digital media i.e. television is the most effectively adopted medium. Retailer also sponsored a cooking show program on one of the local channels C4. In terms of print media Sainsbury’s has been targeting several magazines that is but more importantly it also issue its own however it is a digital monthly magazine. Various sports and food related magazines are effectively used by the retailer in order to make its brand recall stronger. Marketing Campaign There are several marketing campaigns each retailer has launch among them the most effective conducted by Sainsbury’s is Nectar. It’s a loyalty programme that has 11.5 million active card users. Using these cards Sainsbury’s can reward its customers with points, promotions and rewards anywhere in store or online shopping (May, 2014). Brand Match is also very effective tool that compares prices with the retailers having more market share than Sainsbury’s i.e. Tesco and ASDA. Almost 250 million coupons have been issued by the retailer under Brand Match campaign that allow customer make cashing the savings or utilize the difference in next visit. Image Projected The image proposed by Sainsbury’s to its retailers is a retailer that itself grow various vegetable, breed poultry, design fashion apparel and prepare packaged items under highest international standard. They reflect their care for everyone including the special ones and that why they proudly sponsored London Paralympics 2012, as a part of their corporate social responsibility (Anderson, 2013). Impact of Image The impact of sponsoring London Paralympics 2012 was phenomenal and as result management has also decided to go with Rio Paralympics 2016 (Anderson, 2013). It helped in making the staff as well as customer engaged in different activities that retailer launch for special kids of U.K. As a result customer association was increased and many people started imaging Sainsbury’s more positively. 4.2 Tesco Slogan Slogan adopted by Tesco is ‘Every Little Helps’ (TESCO, 2014). According to them there is a certain philosophy working behind this slogan which works for following factors: Making sure customer get what they want by Ensuring prices that yield minimum of profits and maximum of customer value Improved level of service helping customer defer long queues and save their valuable time Training customers whom they call colleagues on continuous basis Media Used Mediums used by Tesco are more or less the same like its competitors including Sainsbury. However, the focus of Tesco over online mediums like video sharing websites and social media is more as compared to Sainsbury’s (CCA, 2014). Tesco was named best in the world for social customer care among various multinational companies. Tesco was also named the leading global brand among the Top Twitter brands ahead of companies like O2 and Vodafone UK by Socialbakers. Tesco pays so much emphasis over advertising and promotion that it owns an advertising agency. It targets different mediums like outdoor advertising and print media in order to promote its name. Marketing Campaign Tesco launched Club Card a loyalty scheme in 1995 which allowed gaining large market share and superseding its competitors (Wood, 2011). Every £1 allowed one point which was equivalent to one Penny. For almost two decades it has achieved great success for the company however Sainsbury’s loyalty programme named Nectar has been proving a more success lately. Image Projected Being the most valuable retail brand of UK, prized £7.2 billion holds a high brand image (Smithers, 2011). This positively perceived imaged has developed in decades and therefore few hick ups were not enough to distort its picture in the minds of customers even the most recent horsemeat scandal. Many corporate social responsibility activities are under way that include reducing food wastage, improving health by decreasing obesity rate and provide education opportunities to young. Impact of Image Being the largest retailer and more than 3,300 stores only in UK Tesco had been under various conspiracies and scandals that were projected on media. Due to this environment friendly activity management has managed to maintain a positive brand image in the mind of customers and still holds the title of market leader in UK retail industry (Pratley, 2013). 4.3 Marketing Communication Strategies There are certain aspects where Tesco can improve its communication strategy in order to have a more vibrant bound with customers. a. Customers complain that although Tesco claims to be a supermarket but their emphasis over grocery items is far less and focuses more on non-food items. This truly lapse in communication that management is committing in advertising (Wood, 2011). This can be one of the causes of decreasing market share and must be addressed by letting customer know who they are and what they offer and how it benefits their living. b. Unplanned and emotional communication and promise with customer became a dismal when Tesco offered its customers to pay back double the amount if their products are found higher priced then that of ASDA (Smithers, 2011). This strategy backfired and customers claimed hundreds of pounds. Management must hold accountable those planned and launched Price Check campaign in order to negate such shame in future. c. Club Card was a great success for the company but not anymore compared to Sainsbury’s, as they are offering a more lucrative loyalty scheme. Management must seek new ways of retaining customers profitably through an effective promotion strategy (Barford, 2014). d. Tesco altogether needs a repositioning from its stores to logo and price revision to wide product range especially in food items (Danny, 2014). This will require huge investment but it’s the need of time that management has to comply with since many aspects are too old to be kept awake in customers mind. 5.1 Conclusion Integrated Marketing Communication generates positive outcomes but conversely, it needs the companies to put huge attempt to attain the targets (Belch and Belch, n.d.). But, the fact is IMC facilitates the organizations to enjoy massive benefits if proper approach and strategy is adopted. IMC facilitates the organizations to create short term benefits and assists the companies in attracting and retaining the customers for long term. It facilitates the organizations in saving cost and in generating expected outcomes within minimum possible costs. Effective IMC allows the firms in wrapping the communication for consumers and helps in minimizing time, stress and efforts to companies. It helps the companies and marketers in building strong relation with consumers. By using IMC strategies, the organizations can deliver strong message easily to their potential customers (Shimp, 2010). Organizations can raise the awareness of their product or services easily by sharing the descriptions and carries on marketing activities. IMC engages ongoing marketing commotions with each other that are no doubt very productive for the organizations. The burden of marketers have been reduced by IMC and now marketers can focus on the result oriented activities rather than wasting time on less resulting activities. IMC is a combination of the entire communication and marketing activities (Belch, Belch and Belch, 1995). IMC assists the organizations to magnetize the potential customers and keep holding on customer’s portfolio for long term which facilitates the organization in managing and creating the competitive benefits in terms of boosted profit, increased market shares and increased sales. 5.1 Recommendations IMC has numerous positive aspects but, at the same time; have some barriers and problematic issues as well therefore it must be handled with care (Pickton and Broderick, 2001). The major issues of IMC include lack of planning, inexperienced management, lack of innovation in ideas, lack of time etc. Designing an appropriate IMC strategy that will be suitable for organizational structures for a company is also a difficult task. It is noted that conflicts between the team mates and the professional jealousy are also considered as the barrier of IMC. The internal communication system and the management of the company should be strong enough before implementing IMC approach. Especially in that particular firm which requires change management approach that leads an organization to spend more finances than expected initially (Fill and Yeshin, 2001). Analysis must be performed to check which promotional action fits into the existing IMC strategy which restricts the firms in the accomplishment of result oriented marketing action which can affect companies’ outcomes. Management must set after thorough analysis what message they want to send to their target audience which is not only propelling for them adding the right value but also integrated according to their core services (Holm, 2006). 6.1 References Anderson, G. (2013). Paralympics sponsorship continues to boost Sainsburys sales. [online] insidethegames.biz - Olympic, Paralympic and Commonwealth Games News. Available at: http://www.insidethegames.biz/paralympics/summer-paralympics/2012/1015860-paralympics-sponsorship-continues-to-boost-sainsbury-s-sales [Accessed 18 Aug. 2014]. Baidya, M. and Maity, B. 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