4Ps OF MARKETING (Sainsbury)

Product Sainsburys high end positioning can be seen in the packaging of its products that try to convey high quality by associating the products with a geographic location. Their advert tag line, Making life taste better further conveys this. Price By originally positioning itself at the high end of the market, Sainsburys tried to leverage a price premium. Sainsburys did not receive the predicted customer response. Sainsburys subsequent lowering of prices seems to oppose the high quality positioning of its products. Place Sainsburys has not advertised its website extensively. Sainsburys locations are usually high end and porsh Promotion Promotion is defined as communication to build and maintain relationships by informing and persuading (Pride & Ferrell, 2003). Sainsburys current promotion, Active Kids, promises to donate sporting equipment and coaching to primary and secondary schools in exchange for vouchers collected by customers. This promotion is trying to take advantage of the current consciousness surrounding childhood obesity and positioning Sainsburys as a socially responsible retailer. Relationship marketing is best defined as the maximization of longterm gain for both the consumer and the producer (Rossiter and Percy, 1998). Information about Sainsburys customers is gathered through analysis of Nectar reward card purchases. This information is used to tailor what Sainsbury's offers in terms of goods and services to the appropriate market segment. The Nectar card scheme uses cross company collaboration. The card is positioned as delivering extra value for money as points are exchanged for gifts or products. Sainsburys uses Jamie Olivers celebrity endorsement in its current television adverts. Of Jamie Oliver, a Sainsburys representative stated, He takes the mystery out of cooking, fires people up with enthusiasm and confidence in the kitchen and appeals to everyone

regardless of age or ability. He really is the ideal partner for Sainsbury's (Guardian Unlimited). 4Ps OF MARKETING (big bazar) "Marketing" is the promotion of products, especially advertising and branding. Marketing practice tends to be seen as a creative industry, which includes advertising, distribution and selling. Marketing mix is a deciding factor in formulating marketing techniques for the success of a particular brand, commodity or company. The components of marketing mix are: Product Price Promotion Place PRODUCT: Big Bazaar offers the maximum variety for each category of product. The product is the same in every store in the city but the brand options are more in Big Bazaar. Also, the quantity for each product is not limited to large packs only. The commodities sold by the retail chain also includes its own products which get a ready distribution network. The own products of Big Bazaar include My World fashion magazine which is not available anywhere else. So costs are low for such products. PRICE: Price is the critical point in a competitive industry. Big Bazaar works on a low cost model. It considers its discounted price as its USP. There is an average discount of 7-8% on all items in respect to their MRP. Prices of products are low because it is able to secure stock directly from the manufacturer. There are huge synergies in terms of bulk purchasing, central warehousing and transportation. These all factors help the retailer to keep low prices.

PLACE: Place means the location of the business. Big Bazaar has always worked on low-cost locations. It targets semi-urban population with its

placement. Its strategy is to find a cheap location and it never goes for hot spots in the city. It relied on promotional activities to make up for unattractive locations. Another strategy used by Big Bazaar to overcome location disadvantage is use of internet. It has launched a merchandise retailing website www.futurebazaar.com which targets high-end customers ready to use credit cards. The promotion of this website is done through advertisement on Google. The website is put as sponsored link. PROMOTION: Big Bazaar has huge promotion budgets. The biggest idea behind all advertisements is to make people do bulk shopping. There are 2 types of promotional strategies of big bazaar. One is the holistic advertisement which promotes the brand and creates awareness among people. It is not targeted at promoting each store but only creates an image of Big Bazaar as low-cost shopping option. The store has advertised through TV, road shows and also started reality showtyped promotional campaign The Big Bazaar Challenge. Promotions like Sabse Sasta Din are a very successful strategy to get footfall. In this products across categories such as apparels, furniture, electronics, utensils and food products at the lowest possible prices, coupled with attractive promotional schemes. Some of the most attractive offers being a 20-litre branded microwave oven with grill for Rs 2,499, jeans and trousers for Rs 199 and HCL laptops for Rs 22,990. Other type of promotion is the particular store oriented promotion which includes speaking on the loudspeaker in nearby blocks. Leaflets are given in local newspaper. There are promotional efforts even inside the store. Buy 2 Get 1 Free type of promotions are very common. Original prices are cut down and new prices are shown, of which customer takes quick notice. There are loyalty schemes which reward regular clients. Promotion is also done through co-branded credit cards with ICICI bank.

SWOT ANALYSIS OF BIG BAZAR

Strengths: High brand equity enjoyed by Big Bazaar State of the art infrastructure A vast variety of stuff available under one roof Everyday low prices, which attract customers Maximum percent of footfalls converted in sales Huge investment capacity Biggest value retail chain in India It offers a family shopping experience, where entire family can visit together. Available facilities such as online booking and delivery of goods Weakness: Unable to meet store opening targets on time Falling revenue per sq ft General perception: Low price = Low quality Overcrowded during offers Long lines at billing counters which are time consuming Limited only to value offering low price products. A no of branded products are still missing from Big Bazaars line of products. E.g. Jockey, Van heusen. Opportunity: A lot of scope in Indian organized retail as it stands at approximately 4%. Increasing mall culture in India. More people these days prefer to visit big stores where they can find large variety under one roof Threats: Competition from other value retail chains such as Shoprite, Reliance (Fresh and trends), Hypercity and D mart. Unorganized retail also appears to be a threat to Big Bazaars business. A large population still prefers to visit local convenient stores for daily purchases Changing Government policies International players looking to foray India

SWOT ANALYSIS OF SAINSBURYS STRENGTHS: Sainsbury's has had thirteen straight quarters of growth showing real turnaround in its business (Rigby and Braithwaite 2008). Even for 2007 it has shown an increase of 7% in turnover and a huge 450% increase in profit after tax (Annual Report 2007). It has an extremely experienced leadership team with Justin King, its Chief Executive receiving great praise for his work in Sainsbury's (timesonline.co.uk 2008 [online]). Sainsbury's seems to be very well placed on green and environmental issues due to its various recent initiatives, like buying fair-trade bananas (economist.com 2008 [online]). Furthermore its help in closing down gangmaster (Taylor 2008) has had a positive effect on the public in general. It has a positive consumer brand and it's liked by both green activists and consumers. It is one supermarket chain that has a clear celebrity endorsing products, leading to increased sales. "With Jamie Oliver, it has been simple for Sainsbury's to see uplifts in sales of specific ingredients that have been featured in ad campaigns. Apparently the supermarket had to order nine tons the equivalent of two years' supply of nutmeg to meet demand when it appeared in one of Oliver's hundred-plus ads" (Dickinson 2008).

WEAKNESSES The takeover bid by the Qataris Private equity firm in 2007 (Arnold and Politi 2008) can have some implications as people are gravitating towards British companies and the prospect of Sainsbury's being governed by a foreign firm can lead to consumers switching loyalties. Unlike Tesco's expansion plan (economist.com [online] 2008), Sainsbury's is not present in markets other than the UK. This can lead to trouble especially if there is some problem within food retailing in the UK or if there needs to be a source of extra growth.

OPPORTUNITIES Sainsbury's alternative business presents a great opportunity for future growth. Its investments in property (Killgren 2008b) and a goal of 40 million profit through its bank seem like a good strategy to pursue Online sales are a great opportunity as well, since online margins are higher and investments are not huge.

THREATS There needs to be continuous heavy investment in environmental and green issues without immediate benefits. The problem lies in maintaining a balance e.g. Bio-fuel is an important tool to curb global emissions and its use affects Sainsbury's supply chain directly, so Sainsbury's should support it. However, a spurt in biofuels has made corn dearer (independent.co.uk [online] 2008) affecting its prices within the UK and making Sainsbury's consumers bear the brunt. Sainsbury's operations are subject to a broad spectrum of regulatory requirements particularly in relation to planning,

competition and environmental issues, employment, pensions and tax laws and in terms of

PESTLE ANALYSIS OF BIG BAZAR:

Political and Legal Factors: A stable government at the centre will facilitate speedy economic recovery and create an encouraging investment climate Problems of getting subsidy from Octrai and on different taxes like land, water taxes Problems of taking over properties and real estate Economical: India, one of the fastest growing economies(6-6.5% GDP growth rate) Retail Industry to grow to 800 billion by 2020 Increase in the percentage contribution of the service sector to GDP Increase in the investment on IT with focus on cost minimization Socio-Cultural Factors: Increase in Nuclear families People prefer to shop in local stores with the reasonable prices Increase in working womens proposition Life style changes Shift in Product and service preferences Increase in Young population Technological: Technological development for fast billing and the service

 Better applications of information technology in the modern retail industry, like in supply chain management, store management, point of sale and customer relationship management

PESTEL analysis of Sainsbury:

Political factors The political factors in the United Kingdom have a great influence on the performance of Sainsbury. Currently in UK, the government debts and the consumer debts are very high. This impacts the customer attitudes and therefore business conditions experience great pressure. Sainsbury has to not only operate in these market conditions but also has to develop their business continually. Although the political factors are not favorable, Sainsbury has been able to sustain a steady growth due to its long heritage of offering great product quality at competitive prices. Economic factors Economic factors play a vital role in any industry. These factors affect demand, costs, prices and profitability. In the light of the economic slowdown, growing unemployment and inflation in food prices are the 2 important elements of economic factor that will affect Sainsbury significantly. As a result of rampant unemployment and high prices of food products, the demand for Sainsbury's products will decrease which in turn will decrease the production of food products. This will further increase the food prices and unemployment just like a viscous circle effect. Sainsbury should contemplate on expansion into new emerging markets and therefore globalization of Sainsbury's operations will enable it to well-manage the risks associated with the economic slowdown. Social factors In today's market, the customers tend to prefer one-stop shopping. This means that they prefer to have all the products available under one roof. Sainsbury by introducing non-food products have largely benefited from this strategy. In addition other social factors such as increasing female workforce, longevity in the population, etc. has resulted in a decline domestic meal making. Therefore there is a growing demand pattern of a certain types of products. One of the marketing themes of Sainsbury being Cook and Save' promotes easy to cook products thereby allowing the customers to make their household budgets

stretch further. Technological factors The technological advancements have a positive impact on the business operations. There is a significant growth potential in the online or web based operations of the business. Online operations enable the organisation to expand their capacity in areas of growing demands. Sainsbury's online food delivery service is increasingly expanding. As per their annual report for 2009, continuous improvement in the services offered online has resulted in increase of sales by 25% year after year. This online service is now available to 88% of the United Kingdom households. Environmental factors There has been a great pressure on the organisations and management to act in a socially responsible manner to keep the environment safe. Organisations impact the environment in both direct and direct ways. Sainsbury has taken an initiative in this area by championing in their Reduce, Reuse, Recycle' approach that effectively manages waste, packaging and recycling. They are also working to reduce their operation carbon footprints. Legislative factors The government legislation and policies have a direct impact on the performance of the organisation. For example the legislation that introduced a new tax on advertising highly processed and fatty foods. Sainsbury adapted to this new tax by modifying its products and also complied to the legislative requirements.

regulations over the group's products and services.