The assignment focusses on SPAR supermarket, which operates within the Asian continent. The report touches on the supermarket’s objective of increasing sales revenues and customer satisfaction. Furthermore, the report identifies the strategies that SPAR supermarket will apply to achieve the objectives. The strategies include applying a marketing mix consisting of promotion, place, products and price.
SPAR supermarket operates in various countries within the Asian continent. The supermarket started more than 80 years ago and has employed more than 12,000 employees in the 40 stores around the globe. The supermarket has a reputation for providing great value products, which include fresh foods.
SPAR has the objective of increasing sales and customer satisfaction over the next three years. As a result, the supermarket has opened up stores and signed deals with Khimji Mart to rebrand and sell SPAR products. The move will boost the sales and customer satisfaction to the Oman customers.
The report aims at understanding the marketing activities undertaken by SPAR supermarket to increase customer satisfaction and sales revenues. Additionally, the report will give recommendations on the best market mix and approach to adopt when achieving the goals. Furthermore, the report should help SPAR supermarket reach the objectives of increasing both customer satisfaction and revenues.
I completed the task by undertaking deep research on SPAR supermarket from primary and secondary sources. The primary sources included visiting various SPAR outlets to identify the operations and marketing approaches. On the other hand, the secondary sources include previous researches and online sources.
Bargaining power of the suppliers
SPAR supermarkets realizes that the ability of the suppliers to increase the prices at will could result in a reduction of the margins. The supermarket has developed a strategy, which enables buying from many suppliers. The multi-sourcing of supplies from many suppliers allows SPAR supermarkets to compare prices and buy the resources that result in high margins (University, 2013).
SPAR supermarkets ensures that the customers have the least bargaining power by providing new products and increasing the market share (Anon., 2018). The supermarket has developed a reputation of developing new product combinations with discounts. The discounted products increase customer loyalty thus maintain a large market share.
SPAR supermarkets operates in the retail sector, which often experiences new players (Rebecca, 2018). The new entrants come with new products and technology which threatens SPAR supermarkets operations. Moreover, the new players reduce the market share enjoyed by the supermarket. Therefore, SPAR supermarkets responds to the threat by offering improved services such as fresh goods at affordable prices.
The retail industry experiences stiff competition due to a large number of players (Olsen, 2018). SPAR supermarkets faces the competition from other big industry players such as Walmart who have more resources to serve the customers better. The competition results in a reduction of the market size, which requires SPAR supermarkets to offer better services that meet customer expectations.
SPAR supermarkets faces the threat of substitution since other retailers sell similar products (Pasteur, 2018). Therefore, the customers end up choosing competitor products leaving SPAR supermarkets with few sales. The supermarket should respond by providing superior products that the competitors cannot match.
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PORTER ANALYSIS |
EXPLANATION |
|
Bargaining power of suppliers |
The supermarket has established multiple sourcing points to reduce the power of suppliers |
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Bargaining power of buyers |
The supermarket develops new product combinations to reduce the customer bargaining power. |
|
Threat of new entrants |
New players who introduce new technology |
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Threat of competitors |
Large well established retail outlets |
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Threat of substitutes |
Similar retailers of fresh products |
The customers who buy SPAR supermarkets products portray a liking for fresh products that sell at affordable prices. The customers heavily consume fresh foods such as vegetables and animal products. Therefore, the supermarket should adequately stock the products to prevent shortages. Furthermore, the customers like spending less, which calls for the supermarket to offer products at high-discounts (Mary, 2018).
The supermarket’s strength lies in the ability to satisfy customers with fresh products at affordable prices (Pasteur, 2018). The supermarket has opened several branches around the globe, which increase the revenues and customer reach. The high-revenues enable the supermarket to invest in new technology and employ experienced employees who increase the customer satisfaction.
The supermarket has not properly adopted new technology in delivering customer services (Pasteur, 2018). Therefore, the supermarket fails to meet customer expectations, which has resulted in losing market share to the competitors. Additionally, the supermarket has failed to engage in research and development, which has caused lagging behind in terms of new inventions.
The supermarket has the opportunity of exploiting the new arising market of fresh food shoppers (Sidorchuk, 2015). The current health trends require people to consume fresh foods. Therefore, more customers shop for fresh vegetables and animal products. Consequently, SPAR supermarkets has the opportunity of increasing the sales units and revenues.
The retail market poses several threats to the supermarket such as a high number of new entrants (Gretzky, 2018). The entrants take up the market share by using new technology and supplying new products. Therefore, SPAR supermarkets could face a reduction in the number of customers due to the many players in the industry.
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SWOT ANALYSIS |
EXPLANATION |
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Strength |
Ability to satisfy customers with fresh products |
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Weaknesses |
Failure to adopt new technology |
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Opportunity |
Emerging markets for fresh products. |
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Threats |
High number of entrants. |
SPAR supermarkets has currently segmented the market according to the income earned (Cole-Ingait, 2018). The customer income levels rank from low, middle and high-income earners. The middle and high income earning customers have a higher concern for eating and staying healthy. Therefore, most of the customers in this group by the fresh foods from the supermarket.
However, the market has other segmentations that the supermarket could use to improve customer satisfaction and increase the sales revenues (Perks, 2017). The supermarket could use the ease of supermarket convenience approach to segment the market. The approach focusses on the customers who like shopping in supermarkets not far from the place of residences. The customers also like supermarkets with proper arrangement and facilities that allow quick and easy shopping. Therefore, SPAR supermarket should open up more stores for customers to shop. Additionally, the stores should ensure that the shelves accommodate adequate fresh food to meet the customer demand (Cole-Ingait, 2018).
SPAR supermarkets’ marketing goals include achieving better customer satisfaction and increasing the sales for the next three years. The supermarket will achieve the objectives by engaging in marketing activities such as media advertisements and posters. Furthermore, the supermarket intends to increase the sales and customer satisfaction by opening up new stores and increasing the capacity of the existing stores (Wasmuht, 2018).
SPAR supermarkets should consider a market mix that include price, promotion, products and place (Whalley, 2010). The price aspect will include selling fresh products at competitively low prices. The pricing will include giving discounts to the customers and offering more quantity produce at affordable prices. Furthermore, the pricing approach will include gathering market information on the prices charged by other sellers. The supermarket will sell at lower prices, which attract more customers and result in added sales. Additionally, the customers will buy products affordably leading to an overall satisfaction (Olsen, 2018).
SPAR supermarket should focus on a product range of fresh foods that include both farm and animal products. The combination will enable the supermarket to avail more products under the same roof (Mary, 2018). The supermarket should ensure that all the stores have adequate capacity of products to satisfy the customers. The suppliers will have to meet the product quality standards set by the supermarket management. The fresh food products will satisfy the customers and equally advance the goal of leading the market with fresh foods (Gretzky, 2018).
Furthermore the place market mix should include opening more regional and neighborhood stores to allow the customers to access the products quickly (University, 2013). The supermarket should target large markets such as Europe, Asia and also consider Africa with large untapped market. The opening of many retail outlets will assist the supermarket to satisfy more customers and increase the sales revenues.
Moreover, the promotion aspect will include engaging in marketing activities in social media and television (Mette, 2014). The social media adverts reach a huge market within a short time thus becoming the best marketing option. The promotion should focus on increasing customer awareness about the products offered at the supermarket.
The supermarket will evaluate the success of the project by checking various factors such as revenues, sales, market position and market share (University, 2013). The use of key performance indicators will assist in evaluating the success of the project. Additionally, the supermarket will appoint a team of internal and external experts to assist in the evaluation practice. The supermarket will evaluate using the finances by checking whether the profits have increased. The activities undertaken by supermarket aim at increasing the sale units and revenue. Therefore, the supermarket should check whether the profits have increased during the period. Additionally, the supermarket should compare the current period revenues to the previous year revenues to establish whether an incremental pattern exists (Pyle, 2018). The increased revenues show an increase in the number of customers visiting the supermarket to buy products.
Furthermore, the supermarket will check whether the sale units have increased over the period (Cole-Ingait, 2018). An increase sales shows the success of the marketing activities. SPAR supermarkets should record more sales after engaging in the marketing activities. Therefore, the evaluating team should check the previous year sales and compare to the current sales to establish an incremental pattern. The increase in sales identifies customer satisfaction which results in repeated buys.
On the other hand, SPAR supermarkets should have a higher market position in the market (Sidorchuk, 2015). A high position in the market means the supermarket having more loyal customers compared to the competitors. The high position will enable the supermarket to develop new customers and retain the existing. The evaluation happens by collecting data from the customers on issues such as the best supermarket for fresh produce.
The evaluating team should also check for increases in the market share during the period (Perks, 2017). An increase in the market share includes having more customers and selling more products. Therefore, the evaluation can happen by checking the sales data. An incremental pattern shows the successful achievement of the set objectives. The supermarket should directly contact the customers to identify the top choice shopping supermarket for fresh produce (Rebecca, 2018). A vote by a large number shows that the supermarket has succeeded in meeting the set objectives.
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MARKETING MIX |
COST (000) $ |
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Promotion |
|
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Banner Ads |
1000 |
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Newspaper |
700 |
|
500 |
|
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Pricing |
|
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Offering discounts |
1000 |
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Offering product prizes |
750 |
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Place |
|
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Opening stores in international markets |
100 |
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Opening local retail stores |
300 |
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Merging with other stores |
100 |
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Researching new places to open stores |
100 |
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Products |
|
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Fresh vegetables |
200 |
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Fresh animal produce |
200 |
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Mobile applications for online marketing |
250 |
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Increasing shelves and stores capacity |
150 |
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TOTAL |
2850 |
Explanation
The various marketing mix methods require financial allocations to ensure successful implementation. The promotion mix includes activities such as banner Ads, newspaper and in store marketing that will consume 2200 dollars for printing and hiring designers to create eye-catching graphics. On the other hand, the pricing mix will consume finances for offering discounts on the selling price and giving prizes to the customers.
Furthermore, the place mix will require the funds for opening other stores to reach more customers. The stores will include local, international and merging with other supermarkets. The price mix will also involve the cost for researching the market feasibility of the area that the store intends to open.
Finally, the product mix will involve ensuring the supermarket has adequate stock for the customers. The costs involves buying additional fresh vegetables and animal produce to ensure the customers does not sell stale products. The other cost involves introducing mobile applications for customers to buy products conveniently. The other cost involves increasing the shelf capacity of the stores.
Conclusion
SPAR supermarket has the opportunity of increasing the sales revenues and customer satisfaction by applying a well-planned promotion mix. The opening of many retail stores that uniformly sell fresh produce will increase the sales revenues and customer satisfaction. Additionally, the supermarket will realize other benefits such as customer loyalty and a strong brand equity. Therefore, the supermarket should ensure the implementation of the market mix to realize the set market objectives.
References
Anon., 2018. Porter’s Five Forces. [Online]
Available at: www.mindtools.com
Cole-Ingait, P., 2018. The Socioeconomic Factors Affecting Small Businesses. [Online]
Available at: www.smallbusiness.chron.com
Gretzky, W., 2018. Strategic Planning And SWOT Analysis, s.l.: s.n.
Mary, 2018. Social Marketing and The 4 P’s, s.l.: Community Women’s Health Education Centre.
Mette, 2014. The Relationship Between Food Preferences and Food Choice: A Theoretical Discussion. International Journal of Business and Social Science, 5(7), pp. 145-157.
Olsen, E., 2018. Strategic Implementation. [Online]
Available at: https://www.onstrategyhq.com
Pasteur, L., 2018. Personal SWOT Analysis. [Online]
Available at: https://www.mindtools.com
Perks, R., 2017. Quality Control Systems and Customer Satisfaction. [Online]
Available at: acdemic.mintel.com
[Accessed 21 April 2018].
Pyle, S. O., 2018. 3 Digital Marketing Challenges for 2018 (And How to Overcome Them). [Online]
Available at: www.bizjournals.com
[Accessed 14 May 2018].
Rebecca, 2018. Extending CSR in SME’s Upstream Supply Chains: A Dynamic Capabilities Perspective. Taylor and Francis Journal, 24(10).
Sidorchuk, R., 2015. The Concept of “Value” in the Theory of Marketing. Asian Social Science, 11( 9), pp. 320-329.
University, L. P., 2013. Retail Store Management. s.l.: Excel Books Private Limited.
Wasmuht, T., 2018. SPAR Annual Report Final, Amsterdam: SPAR International.
Whalley, A., 2010. Strategic Marketing. s.l.: Andrew Whalley and Ventus Publishing ApS.
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