Reed’s Position in the Columbus Market
Reed is the leading supermarket retailer in Ohio state. Unlike many competitors, it offers a wide range of merchandise, including premium and imported products. According to Quelch and Carlson (2011), Reed has a 14% market share in Columbus and is the dominant supermarket in the region.
There are four ways supermarkets may distinguish themselves – prices, distance, product range, and service (Cakici & Tekeli, 2022). Prices in Reed are not high, but there are stores with lower prices, like German Aldi. The distance is the critical advantage of Reed because it has 25 stores in Columbus, remarkably higher than other retailers. There is an excellent range of products, including premium food like lobsters and crabs. Service is also advantageous, with free cookies on weekends and distinctive uniforms.
How a Supermarket Generates Revenue
Reed generally earns revenue because of its high positioning among Columbus’s supermarkets. This positioning was achieved by the inclusion of various higher-end prepared foods, whereas in other stores, there is often only a standardized range of choices. The rapid growth in the number of shops contributed to the city’s dominance, making Reed a recognizable place among the population. Thirdly, Reed continuously promoted campaigns with cost-effective advertisements.
The Impact of Dollar Stores and Aldi on the Market
Dollar stores and Aldi offer better prices on standard products than Reed. The strategy of dollar stores is to sell packaged food, housewares, clothing, and other merchandise at lower prices. Aldi uses another strategy and sells almost exclusively private-label products significantly cheaper than brand names.
Nevertheless, many customers have negative perceptions of these stores because they may associate them with poverty and impaired quality of products. At the same time, Reed offers a wide range of premium goods and excellent services, which dollar stores and Aldi cannot provide.
Potential Strategies for Collins in the 2011 Plan
- The first strategy is to increase Reed’s presence on social media. Scholars emphasize the utility of mobile service marketing mechanisms in the retail industry because they allow the dissemination of special offers and attract new customers by publishing some non-commercial texts (Viera et al., 2022).
- The second optimal way is redesigning the dollar-special campaign to make it less resemble dollar stores’ activity. For example, Reed’s decision-makers can remove provocatively bright colors to make the store atmosphere more inviting.
- Thirdly, to make the store atmosphere more special and premium, managers can install quotes from philosophers and writers on the store’s walls. Fourth, it is worth exploring the value of the grocery delivery option, as this can be a substantial comparative advantage.
The Future of the Dollar Specials Campaign for Collins
There seem to be some significant drawbacks in the dollar particular campaign that damage the retailer’s reputation. There is nothing terrible about this campaign because it attracts customers to return. However, considering this situation, it seems that competitors extensively use dollar specials.
At the same time, this campaign may result in a trade-off because it creates the image of a cheap but bad-quality place. The decision to continue this campaign may result in financial loss because many upper-middle-class customers might be reluctant to visit stores that look like dollar stores.
Collins’s Action Plan for Reed in 2011
In 2011, Reed should preserve its identity as the leading high-end supermarket in Columbus. Therefore, it should expand its scope by going online and redesigning the appearance of different discount offers. By acknowledging its high profile, Reeds’ management should provide top-quality service in stores that are pleasant to visit.
Therefore, management should hire a social media marketing team to create accounts on the most popular social media. In addition, redesigning discount campaigns means creating an appearance that corresponds to the high-profile type of place.
References
Cakici, A. C., & Tekeli, S. (2022). The mediating effect of consumers’ price level perception and emotions towards supermarkets. European Journal of Management and Business Economics, 31(1), 57-76. Web.
Quelch, J. A. & Carlson, C. (2011). Reed supermarkets: A new wave of competitors. Harvard Business School, 4296, 1-12. Web.
Vieira, V. A., Severo de Almeida, M. I., Gabler, C. B., Limongi, R., Costa, M., & Pires da Costa, M. (2022). Optimising digital marketing and social media strategy: From push to pull to performance. Journal of Marketing Management, 38(7-8), 709-739. Web.