Marketing Strategies at Sainsburys - Assignment Example

Question 1: External Audit (PASTEL Analysis) In conducting the external audit on the operational environment for Sainsbury, we focus on the Political, Environmental, Social, Technological, Legal and Economic factors. FACTORS ANALYTICAL RESULTS Political Sainsbury has had a favorable political environment in the global market characterized by peace, and quality diplomatic relationship with the other regional partners and clientele. This has been a boosting factor to Sainsbury’s performance and has enables Sainsbury to increase operational, whereby Sainsbury managed to open more chain stores and expanded diversification. Government policies have been favorable to Sainsbury in the area of business expansion. Sainsbury was able to quickly acquire permits for new product approval, such that the company had the flexibility to introduce new products. Environmental Sainsbury faced a dynamic environmental variation in the market, where the needs of the customers kept changing from one product or service to another. However, Sainsbury managed to retain its customers. Social Sainsbury managed to build a good relationship with the farmers owing to the possibility of making affiliations to fraternities. That was a motivating factor that enabled Sainsbury to identify strong target groups. Sainsbury was able to identify the important values that the communities attach to celebrations. This was another opening for new services that could facilitate the functions, such as Halloween, Christmas and Royal Weddings. Technological Technological advancements have supported the speed of service delivery and enabled Sainsbury to develop a good reputation. Legal Sainsbury did not face any legal challenge Economic Economic pressure was realized during the year, with inflation rates going up. This forced the management to increase product prices and hence customer confidence went down. Table1: PESTEL Analysis Recommendation: Sainsbury will have to observe the environmental shifts around its operation. There will be need for continuous monitoring and reporting of environmental situations to identify possible threats to mitigate. External audit is essential for pointing out the position of Sainsbury in relation to its core business strategies. Question 2: SWOT Analysis SWOT Analysis (Strength, Weakness, Opportunity and Threats) Strength Sainsbury has a reputable image in the United Kingdom, having a long history of good performance from 1969. Sainsbury has opened many chain stores, giving it a wide coverage of market. The growth of its dividend and share price in the market is an indicator of quality performance Weakness High cost of operation in management of all the chain stores Opportunity The flexibility to introduce new products is gives Sainsbury an opportunity for future business. Ability to identify specific customer needs such as celebrations, and offering unique services and products to them. High level of education and product knowledge among the sales staff increases the sales over the counters. Participation in community donations promotes the reputation of Sainsbury Nectar Loyalty scheme, captures the loyalty of customers across the chains. A good systematic study of customer behaviour to for future expansion Threats Economic challenge characterized by high inflation rate. This forces Sainsbury to increase prices at a risk of losing customer confidence. The inconsistency of customer needs and behaviours Table 2: SWOT Analysis Conclusion From the SWOT analysis, Sainsbury has more strengths and opportunities than the weaknesses and threats. The strategic objective however, focuses on the ways of overcoming the threats and weaknesses (Ferrel & Hartline 2010). The challenge that Sainsbury now has to live with is the inflation rate because it determined by uncontrollable global factors. The management will decide on cost reduction strategies in attempt to manage the effects of inflation. Perhaps the decision that Sainsbury will have to make is to maximize operation in the potential areas such as food distribution. Sainsbury may also consider increasing opportunities by studying the global market and introducing additional new products and services to serve the dynamic needs of the customers. So far, the management is satisfied by Sainsbury’s performance but still focuses on areas of improvement. The major area of improvement is in the marketing strategies, which enables the marketing department to identify and define the annual marketing strategies. The direction that the company takes towards marketing largely depends on the SWOT analysis. Question 3: Defining Marketing Objectives From the SWOT analysis, there are areas that directly relate to the marketing objectives. The opportunities and the strengths show factors that can promote the strategic planning of marketing. The areas under consideration are: The size of the organization Community participation Customer relations Product size The four areas require implementation of four SMART objectives for doing marketing in Specific, Measurable, Attainable, Realistic and Time-focused strategies. The SMART objective includes: Chain store Expansion Corporate Social Responsibility Consumer analysis Diversification Chain Store Expansion The number of chain stores that Sainsbury opens determines the size of market coverage and the level of awareness of the community about Sainsbury products. The company can therefore focus on the study of the customer needs and behaviours in the market and identify locations suitable for additional chain stores before considering opening them. Before establishing a chain store branch, the marketing team has to conduct an analysis of the potential clientele in the locality. The population ought to guarantee adequate market size that can sustain the company on a long term basis. Corporate Social Responsibility Sunbury ought to focus on ways of appreciating the community with the knowledge that the community is the origin of its clientele. As Sunbury participates in the community development initiatives, it is the best time for informing the community about its products and services. The company makes contribution to the community by participating in vital community activities such as cleaning the environment or planting trees. This creates an impression to the community that the company cares about them. It contributes to the strength of client loyalty to the company. Consumer Analysis Sunsbury emphasize on the already existing strategy of studying the needs and the behavioural attributes of the customers. This can then enable Sunsbury to identify the major products and services to concentrate on. The company conducts a process of collecting consumer opinions concerning the existing products to assist in the improvement of the quality of new products. Diversification Sunsbury has been dealing in many products depending on the needs of customers in the market. The market however is dynamic and the variations in prices can easily make customers shift focus to alternative products. The marketing department at Sunsbury will need to predict the future needs of customers before deciding on products to stock. At the same time, it is vital to introduce more new products depending on the contemporary needs of consumers. Question 4: Marketing Strategies Out of the marketing strategies, the company will consider to choose and probably adopt the consumer analysis and the diversification strategies. This is because in the past, they have born practical fruits. Diversification has enabled the company to stay strong in the market by selling the products when they are fast moving. It has reduced the company’s threat and risk of redundancy. As the company acquires more products, it increases the volumes of sales and increases the chances of survival for the company even amidst difficult economic times. Customer analysis enables Sunsbury to maximise its potential by selling the most relevant products to the consumers. It enables the company to concentrate its resources only on important value adding functions and reduces the amount of non performing products. The company intends to adopt the consumer study strategy because customer needs keep changing. Without this study, it will be impossible for the company to ascertain the relevance of products to customers (Fifield 2012). The company may risk restocking dormant products in the stores. Question 5: Marketing Programmes The actions that Sunsbury intends to take following the marketing strategies include involves the confirmation of the present stock, and the behaviour of consumers to the introduction of new products. The steps are listed in the figure below: Figure 1: Steps of Marketing Stock taking involves taking a check on the composition of products presently existing in the chain stores. It is the process that identifies the fast moving products and the dormant goods. It then proceeds to the second stage, mainly involving the cleanup of the shelves by disposing or selling at discounted rates to speed up their disposal. Branding involves advertisement of expected products in the market with easily identifiable labels. The next step is the sampling process where the company does promotion of the new product by providing samples to clients at no cost. From here, the marketing team can realize the response of clients towards the product (Handlechner 2008). From the client response, it will be possible to make the decision of whether to approve the new product or to decline the decision. Once the clients show positive response towards the product, the marketing team can then approve its introduction to the market. This process is generic; hence it applies to any new product that the company decides to introduce. References Ferrel, OD & Hartline, DM 2010, Marketing Strategy, Cengage Learning, Glendoria. Fifield, P 2012, Marketing Strategy, Routledge, London. Handlechner, M 2008, Marketing Strategy, GRIN Verlag, Munich. Read More