Marketing Mix: An Analysis of Sainsburys and Aldi - Case Study Example

Section/# Marketing Mix: An Analysis of Sainsbury’s and Aldi Introduction: The current level of competition that exists throughout the given market is unprecedented; especially with respect to the way competition was exhibited only a few decades past. As a function of this new dynamic, it is essentially important firms to recognize the fact that they have an obligation to consider the best practices and approaches that their competitors are utilizing as a function of mitigating these, improving upon them, and ultimately increasing their competitiveness within a given market. With this in mind, the following report and analysis will be predicated upon a review and discussion of the way in which Sainsbury represents marketing communications best practices and and approach to the marketing mix. Furthermore, the analyst will seek to leverage such an understanding based upon the position of a marketing contributor/stakeholder within Aldi; seeking to employ some of Sainsbury’s best practices into Aldi’s in the hopes of gaining further market share and effectively competing within the markets in question. Accordingly, it is the hope of this particular author that the analysis which will be provided will not only be useful in terms of defining the underpinning successful strategies that Sainsbury’s employees; but that it will also be beneficial in helping stakeholders within Aldi to more effectively hone their message as a means of engaging in better and more virile levels of competition with the likes of Sainsbury and others. Historical Overview and Relevance of Sainsbury’s Practices to the Current Market: Sainsbury’s is an especially interesting case to analyze with respect to the marketing mix and approach that it provides to its customers. The underlying reason for this is contingent upon the fact that even though this particular firm has been a dominant player within the United Kingdom for many years, experienced extreme difficulty during the 1990s and lost a great deal of market share during this particular period of time. As a result of this, Sainsbury’s determined the most effective means of maintaining relevance within the market was to place a marketing strategy that was contingent upon valuing the consumer that it did have in seeking to retain; prior to making any further efforts with respect to gaining new customers (McDougal, 2013). This was of course predicated upon the understanding that gaining new customers based upon price or product alone was not essentially important in terms of overall success. Rather, it was sitting a level of respect and mutual trust and admiration between the consumer and the brand was an essential complement of this strategy; as Sainsbury’s realized that without such a relationship the continued legitimacy and longevity of the firm was in dire question. As a direct result of this, Sainsbury’s was one of the first firms within the market to promote rewards cards and loyalty programs as a function of engaging consumer habit and seeking to more effectively market to consumers that would potentially repeat their experience within the future. Moreover, analysts have indicated that these loyalty programs and rewards cards were an effective tool with respect to Sainsbury’s being an industry leader in being able to individually market given consumer goods to their customers. Essentially, even though these reward cards and loyalty programs decreased the overall profit margins on a given product or good that the firm might be able to achieve, they provided integral levels of marketing information with respect to what individual consumers regularly bought and how they might be expected to behave in the future. As such, the underlying strength of this program far outweigh the weaknesses that have thus far been indicated. Likewise, in much the same way that an individual might be encouraged what one particular film on their net flicks queue as the result of the fact that they watched a similar film, Sainsbury’s utilize a similar approach with a loyalty program and reward card as a function of encouraging consumers to try new and similar products; thereby expanding the consumer experience and increasing the potential for repeat sales as well as new sale the firm might otherwise hope to experience. Sainsbury’s Slogan: Since the middle of 2011, Sainsbury’s has maintained the following slogan: “live well for less”. Although this particular slogan might seem somewhat simplistic, there is a great deal of complexity that it belies. For instance, many other stores seek to engage the consumer base upon low prices alone. However, Sainsbury’s, within this particular slogan, is not only advertising lower prices and an easier economic Outlook for the individual consumer, they are also equating this with the fact that the experience of shopping at Sainsbury’s will inevitably lead to a better quality of life and “wellness”. Naturally, the connotative and denoted meanings of wellness expand merely exponentially. Regardless, this particular approach has been successful with respect to not only encouraging buying behavior based upon economic benefit but also based upon an immeasurable “good” that can be accomplished by this particular level of consumer interaction. Noticeably absent from Sainsbury’s slogan is the underlying marketing approach that they have sought to leverage so very much over the past several years. Namely, the firm has placed a primary emphasis upon seeking to increase customer loyalty and representing Sainsbury’s as a firm that is uniquely interested in the satisfaction and development of relations between itself and its consumers. Nevertheless, the elements of well-being, and “wellness” in general, is a fundamental aspects of the way in which this relationship can doubtless be fostered in the future. Types of Media Sainsbury’s Utilises to Spread its Message: As a function of the different types of media Sainsbury’s utilizes to spread its message, it must be understood that these are diverse and encompasses nearly every aspect of visual and print media. Due to the size and profitability of this particular firm, they are able to purchase a significant amount of advertising media; in the form of television advertising, newspaper/magazine as, radio space, and a recent explosion in the utilization of social media as a marketing tool. All but the last of these approaches is not surprising with regard to a firm that has established a degree of success and credibility within the consumer market. However, Sainsbury’s incessant focus upon advertising its products and engaging with the consumer base upon social media provides a fundamental linchpin of the strategy that has thus far been defined (Crane, 2008). In essence, the marketing mix and communication strategy that Sainsbury’s is so uniquely interested in is contingent, as already specified, on the ability to engage with the individual consumer and increase the overall level of loyalty that they might exhibit future. Also, as previously discussed, this particular marketing communication strategy is predicated upon the understanding that a loyal customer, and one that believes they are valued, is one that is most likely to return the process of consumer interaction at a given Sainsbury’s location. As a means of accomplishing the marketing communication strategy, social media allows for Sainsbury’s to devote a significant amount of time and individualized attention to the way in which it engages with its consumers. In essence, as many firms have realized, social media allows a given company or firm to engage with its consumers nearly incessantly (Mirrazavi & Beringer, 2007). By means of comparison and contrast, a firm that only engages with its consumers during store interactions, or during the process of purchasing a given item or service, is at a distinct disadvantage with respect to seeking to make its presence known and felt within the life of the consumer. Yet, beyond merely bombarding the customer with incessant marketing campaigns, Sainsbury’s has sought to differentiate its marketing strategy with respect to social media. By encouraging consumers to follow them on Facebook or Twitter, Sainsbury’s is able to actively scan posts that reference its name or unique products that are only available at Sainsbury’s (Kölbel, 2014). In such a way, targeted and unique messages can then be sent out to the individual customer that in turn encourages them that the firm is not only interested in selling more products that is also interested in their experience and appreciate their business. Although it is true that Sainsbury’s is not the first to reflect an active and involved social media networking strategy, it has done so to a particularly effective level; thereby encouraging others that seek to perform well within a similar market to also consider the positive ramifications that such an active social media participatory marketing medication strategy could have upon the bottom line that their business might experience as well (Everett, 2014). Image Projected to the Customer: The image projected to the consumer is one by which Sainsbury’s is reflected into dynamic ways. First of these is with regard to the fact that it is represented as a multinational retailer; capable of providing for the needs of its consumers based on litany of different products and services that it makes available. Secondly, and peculiarly, the firm is represented based upon an image of direct involvement and consumer relations with clients. Whereas these two projected images might seem as somewhat disproportional utilized as a means of continuing to encourage consumers with respect to the quality of their offerings and the high level of service and post sale engagement that this particular retailer offers; at least compared to others. How Well is This Working?: Additionally, the information that has thus far been represented is indicative of the unique approach that Sainsbury’s takes to marketing strategy and communication with its consumers. However, the analysis has not delve into whether or not this particular approach is identifiably successful as an underpinning marketing strategy or whether or not it merely defines Sainsbury’s as compared to the competition. A quarter by quarter financial analysis indicates that there is a direct correlation between the approach that Sainsbury’s has taken since the middle of 2011 and the overall level of profitability that the firm has been able to project. Although it is true that this correlation does not necessarily equate to causation, the extraordinarily difficult period of time for retailers that has been experienced in the wake of the 2007/2008 financial meltdown indicates that this particular approach that has thus far been discussed is an integral component to the way in which Sainsbury’s has been able to maintain its relevance and continue to integrate with consumers that it considers as its consumer base (McAdams, 2013). Recommendations for the Marketing Communication Strategiy that Aldi Should Pursue: In light of the information that has been presented, it is clear and apparent that Aldi must reinvent its marketing communication strategy as a function of staying relevant within the current time frame. Essentially, Aldi is a low cost leader that seeks to provide its products to the consumer at absolute rock bottom prices. Because of this, services that individual might otherwise back, either as a function of the store areas, or as a function of the overall number of action that the store is expected to generate, all demonstrably lower as compared to standard or others like it (GASPARRO, 2013). With this in mind, it should further be robust advertising as a function of rating the messages that they hope to get across to their consumers. As was indicated with respect to the case of Sainsbury’s, the firm utilizes television advertising, print advertising, radio advertising, and social media integration and advertising as a means of accomplishing a marketing communication strategy and imprint of what the firm stands for within the mind of the consumer (Herron, 2014). With the exception of the last marketing education strategy that has been indicated above, each and every one of these approaches is exorbitantly expensive. Not surprisingly, even though such strategies can be extremely effective in providing a definitive marketing communication strategy to the consumer market, the expense involved in promoting them is something that Aldi cannot allow; due in part to the way in which its business strategy constrains its marketing budget and outreach. Likewise, mimicking the high level of engagement with the consumer, especially “in store” – is also something Aldi is incapable of doing (Zhu, 2014). The underlying reason behind this is contingent upon the fact that Aldi seeks to cut costs by hiring a bare number of employees; namely only enough to effectively operate the store without placing an undue focus on consumer engagement and in-store assistance. With the high cost of traditional forms of advertising and Aldi’s aversion to expend money on glitzy advertisements, increasing customer loyalty and giving a “face” to the brand via a successful social media marketing approach could be instrumental in providing Aldi with a newfound level of profitability within an increasingly complex market space. With relatively little investment, the relationship with the consumer, that is so often absent in the store, could be fostered on the back end of the sales relationship; i.e. after the sale has been made and as a means of encouraging repeat sales in the future. A more individualized focus could be made in order to represented individual regions of Aldi social media and individual store managers being responsible for engaging with consumers. Such an approach would reduce the “facelessness” of the entire process and give Aldi an advantage over those that are effectively utilizing social media as a means of engaging with their consumers – such as Sainsbury’s and others (Allison, 2014). Yet, regardless of these constraints, there is an aspect of Sainsbury’s approach that Aldi could necessarily benefit from. This is with respect to its social media outreach programs and the degree and extent to which repeat consumer behavior could be fostered for a relatively low price. Even though the social media engagement, a la Sainsbury’s, would cost money, the overall level of investment that would be required to promote Aldi via this avenue would pale in comparison to the overall amount of investment that would be required to engage in the more costly communications strategies that Sainsbury’s has promoted (HEVESI & EWING, 2014). Another essential marketing communication strategy that Aldi could promote, both within the in-store experience, within the limited advertising, and within social media advertising, is with respect to the way in which the firm could redefine its position of low-cost leadership. Essentially, Aldi has been very shy with respect to its focus on cost savings and the overall number of employees that are utilized and/or the overall number of products available to the consumer. However, instead of shying away from this as being akin to a weakness, Aldi should recognize the fact that consumers, at least the ones within their target market, are specifically interested in the fact that the firm utilizes this particular level of engagement (Sloat & Fuhrmans, 2014). Accordingly, instead of seeing these practices as a negative that must be diminished or otherwise hidden from the consumer, the firm should actively take credit for this industry-leading approach and indicate that all of this is being done so that the consumer can stand to gain a benefit and reap the rewards of reduced cost at the register (Paton, 2008). Finally, the investigation is taking place. It has been indicated that the rewards and consumer loyalty program that was instituted by Sainsbury’s was ultimately beneficial, and positive for profitability. With this in mind, Aldi should encourage a similar program to the established and offered to its consumers. Naturally, there was the fear that such a program would necessarily increase the bottom line profit of the firm to such a level at their business no longer profit. However, after an examination and discussion of the way in which Sainsbury’s instituted such a reward program, it is clear and apparent that even though the profit margin on an individual good might drop, the aggregate benefit, especially in terms of the marketing potential that could be directed towards individual consumers, is commensurately more important (Beioley, 2014). Likewise, the program would also encourage customers to repeat the experience; rather than always seeking out a new store; justifying their behavior with the understanding that even if Aldi is not the low cost leader with respect to a given item they might be shopping for, the innate value of their rewards membership and the ability to earn points off their next purchase, or to save money on their existing purchase, is an incentive that cannot be ignored for the furtherance of business and the development of a sound and productive marketing communication strategy (Page, 2013). Conclusion: From the information presented above, the analyst can clearly denote the fact that Sainsbury’s and Aldi both have best practices that lead them to be relevant within the current marketplace. However, as Aldi is struggling to gain further market share and define a greater degree of success within emerging markets, it must look to industry leaders as a means of determining new approaches that might assist it in engaging with the consumer to a more full and complete manner. Within such an understanding, Aldi faces serious threats that are mainly contingent upon the fact that it continues to allow an anemic level of funding for marketing; something that could potentially doom the profitability and visibility that the firm is able to engage in the future. With this in mind, the best practices that industry leaders, such as Sainsbury’s, denote indicate that Aldi should pursue a strategy that is contingent upon engaging with their consumers; utilizing whatever means they have at their disposal to accomplish this. The relative lack of emphasis that the firm has placed on this determinant thus far creates a profound opportunity to change the culture and dynamics of the firm; as well as to potentially satisfy the intrinsic needs of repeat consumers and provide a second round of profitable growth for the firm. Whereas it is understood that such a “silver bullet” approach is not guaranteed, the strategy for communications that has been denoted within this particular brief is one that does not portend a great deal of threat for the firm; as most of these strategies can be accomplished for a relatively small level of initial investment; absent of the need to engage in an exorbitantly expensive marketing campaign. As such, it is the strong recommendation of this analyst that the considerations that have been indicated be studied at greater depth and, if found to be appropriate, should be employed at once. Bibliography Allison, R 2014, Sainsburys invests in technology to help sheep farmers beat worms, Farmers Weekly, 161, 29, p. 39, Academic Search Complete, EBSCOhost, viewed 28 August 2014. Beioley, K 2014, TLT and King & Wood SJB win spots on Sainsburys panel review, Lawyer (Online Edition), p. 4, Academic Search Complete, EBSCOhost, viewed 28 August 2014. CRANE, T 2008, SAINSBURY ON THINKING ABOUT AN OBJECT, Crítica, 40, 120, pp. 85-95, Academic Search Complete, EBSCOhost, viewed 28 August 2014. 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