Sainsbury’s was founded in 1869 by John James Sainsbury and his wife Mary Sainsbury. The name came from John James’s surname.
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Today the company has grown to become one of the largest supermarkets in UK operating about 1,000 stores, including 440 convenience stores with a labor force of about 150,000 people (J Sainsbury plc / Business strategy & objectives).
The companys business strategies and objectives are based on their strong values and cultures. Their main objectives include providing quality food, general merchandise and clothing, developing complementary channels and services, developing new business, and finally growing space as well as creating property values.
From these objectives and strategies, one will later observe and see how the company has segmented its market within the country.
Turban Efraim defined customer service in Sainsbury as “a series of activities designed to enhance the level of customer satisfaction, that is, the feeling that a product or service has met the customer expectation” (12).
Sainsbury puts its customers at the heart of everything they do. Massive investments have been done in the stores, labor force as well as into their distribution channels in order to ensure the customers receive the best customer service.
Sainsbury operations are mainly based in the UK, their main office being based in London. Its positioning in the UK gives it a competitive advantage compared to other retail supermarkets within the country.
Today the supermarket has over 785 stores in the UK, consequently, this does only increase its market share but also improves on its customer service because of convenience of the stores. Apart from having a number of stores across the UK, they are mainly located within an easy reach to bus stops as well as nearest malls.
Sainsbury differential advantage arises from one of its marketing strategies, which are product differentiations. Barney & Hesterley defined product differentiation as “the ultimate expression of the creativity of individuals and groups within the firms” (20).
Differentiation involves creating a product or service that enables a firm to stand out from other similar firms in the industry. Differentiation can be achieved through brand image, changing product design and features, improving customer service as well as expanding the company’s network.
From Sainsbury’s point of view, the retail store has successfully differentiated its products as well as the services. The companys network is massive, having covered major cities in the UK.
Also, each customer base has its own products with different features, for example, the youth have special malls for their entertainment, and the kids have toy shops.
The main marketing strategies employed by Sainsbury are market segmentation. Market segmentation can be explained as the division of a market into unique groups of buyers, who require separate products.
Market segmentation can also be referred to as the division of a market into smaller markets having buyers with the same characteristics, where a company will be able to meet its needs successfully hence satisfying its customers.
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Markets can be segmented in terms of geographic, demographic, psychographic and behavioral variables.
From the research conducted, Sainsbury has segmented its markets using almost all the variables. For example, the company has stores almost in every city of the UK; its markets have also been segmented using demographic variables.
Segmentation by demographic variables involves the segmentation by the use of demographic factors, such as age, sex family size, family life cycle, income, education, occupation, religion, race and nationality. Sainsbury has also been able to segment its markets according to psychographic variables.
Market segmentation has proved to be very valuable to Sainsbury. Many benefits have resulted from it segmenting these include the following among others; the company has been able to improve on its customer service standards hence increasing the sales volume and eventually profits, the company has also been able to concentrate its resources on the chosen segments as well being able to review developments and anticipate changes in the segments from competitive activities (Supply Chain Management Case Study Sainsbury s Supply Chain Strategies – College Essay – Arghavankayvani).
Sainsbury main customer target is the family unit especially the mother. My reasoning has been derived from the company’s website as well as the advertisements on the TV. The company uses a marketing mix to attract this segment. Marketing mix also known as the 4ps refers to the combination of product, price, promotion and place.
Sainsbury ensures that its products are of high quality, for example, in the food sector, the company has been involved in promoting healthy food eating. In trying to promote this product the company used one of the renowned chefs to be part of its advertising campaign.
The main target of its food products is the family especially the mother, who ensures healthy eating of the family members. Also I analyzed their website and found it to be very informative.
There are various pictures for the various products that are offered at the stores. Also their products are of high quality being produced using the top manufacturing skills.
The prices of the various products have been found to be pocket friendly. As compared to other stores in the UK, for example, Tesco and Asda, Sainsbury prices are quite cheap. The company has been involved in price awareness campaigns, where it educated the customers on various price changes as well as various discounts for new products.
Sainsbury ensures that the products of this target group are easily available, and the costumers are able to get them at their convenience, which has been evident in the expansion programs where many stores have been opened; these stores are mainly located next to bus stops or residential areas.
In trying to make the customers aware of its products, Sainsbury has been involved in many promotion activities, for example, the recent advertisement where they were promoting healthy eating. This advertisement involved the use of one of the top chefs.
The use vouchers or coupons are another marketing promotion strategy used by Sainsbury. The issue of vouchers and coupons to customers increases customer retention as well as increased sales. However, these vouchers at times can be costly up to millions of pounds.
Marketing segmentation can sometimes be very expensive for a company because the company has to come up with various marketing strategies that meet the standards or needs for every segment of the market.
For example, products for the kids have to be promoted using different tactics; for the teenagers promotion has to be done using another mode. We have also seen that Sainsbury vouchers which are worth millions of pounds, at times when the company does not make profits, may give the coupons to its customers.
Sainsbury still has a wide range of opportunities. The Company should consider going international and opening stores in various continents.
Barney, Jay, and William Hesterley. Strategic Management and Competitive Advantage Concepts. New Jersey: Pearson prentice Hall, 2006. Print.
Efraim, Turban. Electronic Commerce: A Managerial Perspective. New Jersey: Prentice Hall, 2002. Print.
“J Sainsbury plc / Business strategy & objectives.” J Sainsbury plc / Home. N.p., n.d. Web.
“Supply Chain Management Case Study Sainsbury s Supply Chain Strategies – College Essay – Arghavankayvani.” Free Term Papers, Research Papers, Essays, Book Notes | StudyMode.com. N.p., n.d. Web.