Table of Contents
What exactly is marketing? Sainsbury's in comparison to Tesco Sainsbury's and Product Offerings The SWOT and PESTLE Analysis Recommendations Conclusion Bibliography
Sainsbury's is among the most prominent grocery chains in the United Kingdom. However, this organization was once the best in existence. Tesco has recently surpassed Sainsbury's in popularity. The dominance and efficacy of these two organizations can be comprehended by studying marketing principles. It is also essential to comprehend how these supermarket chains utilize marketing principles to boost their market share. This study focuses on marketing principles and their application, but a substantial portion of it is devoted to a discussion of how Sainsbury’s attempts to raise revenue, notably in relation to the debut of a new health drink product.
What exactly is marketing?
Not only is knowledge of marketing essential, but so is knowledge of its development. In the past, marketing consisted solely of one-way streets, a legacy of the mass-marketing methods of the 20th century. "Marketing is the process of planning and executing the conception, pricing, promotion, and distribution of ideas, goods, and services to generate exchange and satisfy individual and organizational objectives," states one commentator (Hougaard & Bjerre, 2004. p.12). Historically, marketing was conducted purely from the merchant's standpoint. Little effort was put towards determining precisely what the customer required.
In the past, there were very few channels for customers to provide feedback to companies selling products and services. The revenue-driving salespeople were convinced that everything hinged on the presentation and, of course, marketing plans. The prevalent belief was, "The marketing mix of product, price, place, and promotion is what will conquer the consumer and establish market dominance." The only viable answer for the consumer is to buy or not to buy" (Hougaard & Bjerre, 2004, p.12). In a highly competitive world, however, there are other stores offering the same types of products, and it does not matter whether they are located a great distance away from the buyer because the items may be transported even when ordered online. Thus, customers in the twenty-first century have the opportunity to transfer providers and suppliers whenever they so want.
There are numerous reasons why businesses persistently refuse to change their marketing strategy to the changing times. Significantly improving one's business procedures necessitates a substantial financial commitment. As computers became an integral component of conducting business, many were left behind because they lacked the financial resources to make the necessary improvements. Secondly, changing something that they believe is working for them is very difficult. It could be true, but not in the long run. Lastly, it is well-known that deviating from the established path involves risk and quite likely costly errors. It is preferable to adhere to a tested method rather than incur losses.
However, the company's profitability remains the most crucial factor, making change unavoidable. The internal and external perspective of market dynamics is one of the most significant modifications to marketing theory that has occurred in recent years. For instance, the internal environment consists of variables that are closer to the organization and can be managed to some extent (Ennew & Waite, 2003). (2007, p.70). One application of this notion is the development of distinct product lines to serve distinct market segments. Another application is determining the type of distribution system that will be utilized to boost the business's efficiency.
A comprehension of the external environment, on the other hand, enables corporate leaders to comprehend the intricacy of the market, taking demographics and client preferences into account. In order to adapt the old method of providing a single product for everyone, the notion of segmentation was developed. Segmentation is also a method for dividing the market into groups with comparable desires, features, and demands (Weinstein, 2004, p.4). Segmentation is also the deliberate process of comprehending the target market in such a way that the business can meet the present and future demands of its customers.
Despite tremendous changes in the evolution of marketing techniques, it must be emphasized that the marketing fundamentals of product, price, distribution, and promotion remain significant. Adjustments made to all four criteria can result in an effective market mix, which can then be used to develop a matrix that enables the organization to reach a specific target market (Pride, Hughes, & Kapoor, p. 348). It can be claimed that a buyer can be convinced to purchase a product based on criteria other than the quality of the goods for sale.
It is also crucial to know that marketing is not limited to offering the greatest product and designing the most effective ads to attract potential clients. Even before a product is released, producers must have access to credible information that will assist them in creating consumer-satisfying products and services. This involves data management. According to proponents of a more scientific approach to marketing, corporations struggled to make decisions in the past due to a lack of data. But in the current context, an increasing number of organizations are having to overcome "information paralysis" since there is so much available data that it is impossible to decide what is relevant (Nemati & Barko, 2005, p.2). This clearly demonstrates the necessity to understand more about information technology and how it may improve marketing, particularly in terms of product delivery and awareness.
In the case of supermarkets, client loyalty presents an additional obstacle. It is tough to maintain client loyalty when things are readily available in so many locations. For example, no specialization is required in order to provide juice drinks. Even a small enterprise can stockpile supermarket supplies, making it an immediate rival. Relationship marketing techniques must be utilized in order to deal with a market with a fickle mindset. According to proponents of this concept, trust must be established, and customers must regard the firm as trustworthy in order to continue doing business with it.
Sainsbury's as opposed to Tesco
Tesco and Sainsbury's are two of the largest supermarket chains in the United Kingdom. Their success can be traced to their adoption of the marketing principles and methods described above. This requires a sharp emphasis on product, price, distribution, and marketing decisions. These two organizations also demonstrated a sophisticated awareness of product segmentation and the importance of giving customers with a number of options for the things they truly need and desire.
Other than that, both businesses embraced information technology. Instead of depending on traditional methods of manufacturing and transporting their products, both Sainsbury's and Tesco were eager to build online stores so that their consumers could order from the comfort of their homes and never have to spend many hours driving or walking to the supermarket.
It is evident that both organizations are excellent at utilizing information technology not just to market their products, but also to handle client data and other information required to track sales and other key business data. These corporations are thus outstanding instances of 21st-century businesses that have fully embraced the use of technology to achieve a competitive edge. This is a primary reason why Sainsbury's and Tesco are two of the largest grocery businesses in the United Kingdom.
Sainsbury's and Tesco are essentially identical in terms of their long-term viability and profit margins. There are differences, but there are significantly more commonalities. It makes it challenging for each business to keep consumer loyalty. Nonetheless, it is simple for them to endure losses during pricing wars. Because customers can simply switch to another supermarket if the cost of goods in one are higher than in another, the profit margins cannot be as high.
If Tesco chose to engage in a pricing war with Sainsbury’s, it would be problematic because Tesco has a wider reach than Sainsbury’s. Due to Tesco's strong market position, Sainsbury's is at a disadvantage. In other words, Tesco can employ a business model comparable to that of Walmart to further reduce prices. From the perspective of Sainsbury’s, this issue is exacerbated by the fact that customers may make online purchases and, consequently, Tesco products are readily available.
Tesco’s greater selection compared to Sainsbury’s is an additional obstacle to overcome. In addition, Tesco has diversified its product offerings and integrated them with its online grocery store. Consider, for example, that when a customer visits their official website, they are overwhelmed with offers for technological devices, reduced food items, home and garden equipment, as well as used vehicles and homes for sale.
In order for Sainsbury's to remain competitive, it is essential to carefully select the products sold. It must be superior than those found on the shelves of competitors. In addition, the business must be mindful of the prices. In order to connect with customers, Sainsbury’s must also examine the concepts of relationship marketing. As a result, customers will view Sainsbury’s as the superior option.
It is crucial for Sainsbury’s corporate leaders to realize that it is not enough to supply quality items; they must also select the appropriate price and marketing strategy so that consumers who are interested in a certain product are eager to do business with them.
Market segmentation is crucial. The same approach was taken by Tesco in supplying a vast array of products. The customer is informed that Tesco is not only in the business of selling food and electronics, but that the online store is a virtual one-stop shop for time- and money-conscious shoppers. Consider the fact that a customer can enter the Tesco website intending to purchase dog food, but also in need of a used car to present to his daughter as a thank-you gift for receiving a college degree. The link to a used automobile area maximizes the company's profit potential because site visitors are not only interested in purchasing a certain product, but also other goods and services.
The objective of this marketing mix is to enhance revenue by tapping into markets that the company was aware of but was unable to leverage with its previous business model. The same can be stated for those seeking a residence. There are undoubtedly other websites that advertise houses for sale, but very few can compete with Tesco in terms of their reach. Consider the fact that Tesco's website attracts hundreds of thousands of customers compared to other websites. Therefore, the degree of exposure cannot be compared.
The executives of Sainsbury's should examine their market segmentation and increase the variety of products available. It must optimize its website usage. In the case of online shopping, there is a need for greater creativity in terms of product options, price, marketing, and even product delivery to customers' doorsteps.
To strengthen its competitive advantage over rivals, Sainsbury's must reevaluate how it approaches the promotional component of its business. It is no longer prudent to rely just on print and television advertising. This is a consequence of the digital age. Historically, advertising content was given by television, radio, and print adverts. The issue, however, is that efficiency cannot be attained when the segmentation principle and the unique needs of each potential customer are considered. There is no generic product that can be tailored to their particular requirements.
If Sainsbury’s disregards this recommendation, it is probable that the corporation may spend a great deal of money on mass-media marketing tools such as television advertisements without being able to connect with its target demographic.
Sainsbury's and Product Selections
When it comes to Sainsbury's Taste the Difference product line, the use of segmentation is blatantly apparent. A review of this product line reveals that there are hundreds of various food items accessible to satisfy the discriminating tastes of consumers. In addition, a great deal of consideration was paid to the fact that customers have varying preferences about the amount of food that can be offered per meal.
As a result, the family is having a roast dinner. There is also a selection of goods for couples. There are slogans that read: delectable dinners for two. In addition, the corporation was aware that individuals who live alone, such as young professionals living in a condo or apartment, may not have the time to prepare their own meals from scratch. It is possible to save money by purchasing products for one individual. In addition, there are goods available that might serve as delicious weekday snacks.
These items are excellent examples of segmentation. This strategy can be applied to a variety of consumer types. If the company merely built a product line for families, there would be no way to break into the market of young professionals who do not have time to cook, and when they do prefer ready-to-eat meals, the serving size must be sufficient for one person.
The SWOT and PESTLE analyses
Studental is a new product that Sainsbury's is marketing. This is a good application of segmentation marketing because it tries to meet the demand for a health drink aimed at adolescents aged 16 to 19. This product's marketing claims that it is not only a health drink created from natural components, but also a drink that can assist strengthen gums.
Explaining the value of the new product offering.