In order to provide a structure upon which a comprehensive marketing plan can be build, Sainsbury’s should adopt a SOSTAC model in order to help the development of a logical structure combined with the key elements of a plan. The current situation puts Sainsbury’s in the UK’s third-largest supermarket chain, with a market share of around 16% . with 823 stores, unveiled profits of ? 488m, up 28% on last year’s levels, with 15 consecutive quarters of sales growth, Given the current environment shows how the strength and broad appeal of the Sainsbury’s brand has improved substantially during the past four years.
Like-for-like sales growth, excluding fuel, of 4. 3 per cent over the summer quarter and 3. 9 per cent for the first half, Sainsbury’s is the most trusted ‘own-brand’ among supermarkets. Almost half of all shoppers placed ‘high’ trust in Sainsbury’s own products (47%) compared to 27% for Tesco, 17% for Asda and 15% for Morrison’s. Research carried out with 1,000 consumers in August 2008. After the advertising campaign – featuring Jamie Oliver offering family meals for less than ? 5 – Sainsbury’s became more popular with consumers than any other adverts the supermarket had ever done.
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Within the present financial crisis , Sainsbury’s was “stealing very successfully” from its upmarket rivals. About 30% of shoppers’ baskets were now items on promotion, compared with around 20-22% a year ago. Shoppers were becoming increasingly “savvy” and changing the way they cook and eat in response to the credit crunch. All the supermarkets have seen sales of organic and premium ranges slowing or grinding to a halt, while lower-priced and own-brand goods have proved more popular. Sales of heat-and-eat ready meals had gone into decline. Shoppers “are rading away from ready meals to buying fresh food to save money”. The exception was sales of heat-and-eat Chinese and Indian meals, which are “growing strongly, replacing takeaways”. Sainsbury’s managed to segment the market efficently using Nectar card database, coupled with purchase records which provides users with the power to understand customer buying patterns broken down by a multitude of geodemographic criteria. This helped Sainsbury’s to divide their customers in quality orientated 55%, famili orientated 20% and traditional orientated 25%.
Also if we look at the market share by region ,Sainsbury’s has 25% market share in london, 14% in east uk 10% in wales and west and only 6% in scotland. The objectives for 2008-2009 are ranging from delivering an ever-improving quality shopping experience for customers with great products at fair prices, to improving profit margin as for example Morrison’s , even though they relatively smaller in size of business, but they have much better profit margin and revenue per sq ft, with less number of stores.
Other objectives are to help people to eat healthy and to have a balanced diet, to be explicit about the products and how they are produced, , to increase the range of organic food , to offer free cooking courses and reaching more customers through additional channels by opening new convenience stores and developing the online home delivery operation. The most important market strategy is to be the market leader. The leader has the largest market share and usually leads the other firms in terms of price changes.
The best way of doing this is to continue their successful marketing platform expressed by the strap line “good food cost less at stansbury”. The first task is to define what the Sainsbury’s brand should stand for and make sure that as many staff as possible within Stainsbury understood this and what it mean for them and their job roles.. So the employees would reflect the company’s image. This will be done through a programme of workshops The second task is to increase the range and awereness of Sainsbury’s own-label brands.
They also need to take into account competition of private labels. The best strategy would be through innovation. Brand stretching will be a key factor in the rivalry with tesco. Next, Sainsbury’s should raise the corporate credibility through TV and newspapers. As regarding above the line, Sainsbury’s should protect their relationship with Jamie Oliver and extend his contract. As part of his contract, Jamie will appear in Sainsbury’s advertising, and work behind the scenes with Sainsbury’s food development team.
He remains enormously popular with our customers On below the line marketing tools , sales promotion will require a large budget in order to increase the market size. Inducing trial by new customers will be a main strategy on opening new stores. As most of the buying decisions are made in-store, point of purchase communications will focus on how to atract consumer’s attention both on exterior and interior. Sainsbury’s strategy on supermarkets, metro stores and express stores will be interdependent with consumer’s attitude.
The strategy is to find the most cost-effective and intrusive means of reaching the target audience ??? people who often pass over the stores. Personal selling strategy for 2009 will imply more impersonal communication tools through the internet. Sainsbury’s should develop their Nectar card to be more like Tesco’s card. In this way they will have a better view on customers database. Also a larger salesforce is included in the plan. Food is at the heart of Sainsbury’s brand .
On the 1st quarter of 2009 Sainsbury’s will renew their branding campaigns ‘Feed your family , the sub-brand Taste the difference’ and ‘Sainsbury’s SO organic’ and adapt to the market change Through TV ads, the company will present the principles that are at the core of the brand: to be ‘the best for food and health’, ‘sourcing with integrity’, to have ‘respect for our environment’, ‘making a positive difference to our community’ . which provide differentiation from major competitors and define company’s activities.
There will be 15sec explicit ads which will have Jamie Oliver as key person in persuading people to change their attitude about food in general. The adverts will emphasise Sainsbury’s as first own brand range to be free of artificial colours, flavours and hydrogenated fats. 5 sec ads toggled during sport games and within short commercial breaks will disclose sales promotions together with the present branding campaign or strap lines. Another step is to create an online store of non-food products. The new service will provide customers with the choice of a range of Sainsbury’s own-brand and branded non-food products.
This will compete with Tesco Direct and Argos . TU brand is now well established with Sainsbury’s customers, therefore the ‘basics’ and ‘Ttd’ sub brands will focus on a new in-house design following the same quality and value while tracking the latest developments in fashion and clothing technology. 10 % of budget will be allocated to branding whereas advertising will have 35%. Point of purchase communications will make a big difference in company’s relationship with customers. Physical presence, style and location all communicate.
After a research, the stores and supermarkets will adopt a new vision on social environment. Every location will get a new look depending of regional and cultural dimensions. The parking area will be segmented for casual shoppers, class a and b customers, merchandisers and catering companies. In the supermarkets, disabled people will have free personal assistants to help their shoppings. Besides the store design, ambiental music specific to each category of products, there will be point of sale advertising like video screen demonstrations with jamie oliver. n order to build traffic to the store and to products, in-store communication will enhance the effectiveness of sales promotions by promoting the campaign on the shop floor and on trolleys. There will be product promotions together with small samples distributed with magazines and newspapers. Discounts will be offered both in-store and online. Customers that buy organic food of 50or more will get 4% disscount and free shiping for orders over 50. for every new customer that you bring you get a number of nectar points .
Personal selling as an integral part of integrated marketing communications , will reinforce the effects of advertising and sales promotions by advancing customers to the conative phase. S will recruit more salesforce with interpersonal skills and train them for a in-store and street face-to-face communication. Also, S will make the nectar card more customer oriented in order to predict their next purchases and adopting a certain approach on delivering the message. Personal selling will be measured in both qualitative and quantitative terms.
Salespersons will have to fill reports regarding the interlocutors behaviour and product knowledge. Sales promotions will be controled by measuring the number of product samples distributed and by computing online sales of 75 or above. Pop will be monitored through video cameras placed strategically. The level of Awareness will be assesed via media coverage and by measuring the number of online visitors every week. The leader may or not be admired but other firms forfeit its dominance in the industry. (Kotler,2001 justin king . www. sainsbury’s. co. uk www. j-sainsbury. co. uk D. Persmatk IMC european edition