...Business, University of Windsor Title of case: Superior Supermarkets. “Everyday Low Pricing” Key person and his / her position in the organization: James Ellis Senior V.P at Hall Consolidated and President of Superior Markets Key issue or decision that must be made: Should Superior Supermarkets implement the everyday low pricing strategy? If so, should this strategy be adopted across-the-board for all products or just certain categories? Basic facts of the case: Superior Markets is a division of Hall Consolidated, a privately owned wholesale and retail food distributor. Hall Consolidated was formed in 1959 and initially included a number of wholesale food operations and produce companies. The Superior Supermaket chain was acquired in 1975. Superior operates conventional supermarkets in trade areas that serve small cities and towns in the South Central United States. Centralia is the primary trade area in Scott County, which is located in central Missouri. Four grocery chain stores accounted for 85% of all food sales in Centralia in 2002. Three of the chains – Harrison’s, Grand American, and Missouri Mart – operated one store in Centralia, and Superior Supermakets operated three. Sales in the three Superior stores were divided as follows: grocery (50%), fresh meat, poultry and seafood (20%), produce (18%), seasonal and general merchandise (7%), bakery and deli (5%). Company officials believed that Superior stores offered a more limited variety of merchandise...
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...Superior Supermarkets (SS) is a division of Hall Consolidated, a privately owned wholesale and retail food distributor. Hall distributes food and related products to some 150 company-owned supermarket units and about 1,100 independent grocery stores in the U.S. through 12 wholesale distribution centers. Superior is the smallest of the three supermarket chains owned by Hall, with sales of $192.2 million in 2002. Sales of three Centralia stores were $14,326,700 in 2002. Randall Johnson, the District Manager for the Centralia stores, has recommended that they implement everyday low pricing (ELP) since Superior’s prices are higher than the competition at a time of growing price consciousness, and that the price differential could cause them to lose market share. Problem Statement Superior Supermarkets (SS) must decide whether o not to pursue an everyday low pricing (ELP) strategy at its three Centralia MO locations. Analysis Three viable alternatives have been found. Alternative #1 is to do nothing. Do not adopt ELP and keep the current promotional budget. If market share continues to decline, at the growth rate of -0.53% or greater, this alternative would be deemed unsuccessful. Conversely, if market share remains stagnant or improves, this strategy would prove to be prudent. Alternative #2 is to implement a ‘limited ELP’ model. By marginally increasing the amount of loss leaders, the model could attract price-conscious customers at the margin. Under this model, the advertising...
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...Superior Supermarkets Memo Memorandum To: James Ellis, President of Superior Supermarkets CC: Randall Johnson, District III Manager of Superior Supermarkets From: Matthew Clemente RE: Potential Everyday Low Pricing Strategy Date: April 9, 2010 The challenge presented to the President of Superior Supermarkets James Ellis and his district manager Randall Johnson is whether or not to implement an everyday low pricing strategy to the Superior Supermarkets stores in Centralia, MO. Superior Supermarkets’ current pricing strategy is a high-end branding strategy, giving them the highest prices in Centralia. With their declining market share the past seven years (they currently have 23% market share in 2002, down from 31% just three years ago; see Exhibit 2) Superior Supermarkets looks to increase their rising revenues from the past three years (Exhibit 4), regain their past successful market share and maintain their already successful contribution margin. To accomplish these three goals, there are several alternatives that Superior Supermarkets could employ to help them retake the market in Centralia. The three locations of Superior Supermarkets in Centralia certainly give them precedence in location, but their market share should certainly be higher with the various options of location they give their customers. However, customers in Centralia are certainly price-sensitive and a new pricing strategy must certainly be considered to give Superior Supermarkets the...
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...Superior Supermarkets Everyday Low Pricing In: Business and Management Superior Supermarkets Everyday Low Pricing Superior Supermarkets (SS) is a division of Hall Consolidated, a privately owned wholesale and retail food distributor. Hall distributes food and related products to some 150 company-owned supermarket units and about 1,100 independent grocery stores in the U.S. through 12 wholesale distribution centers. Superior is the smallest of the three supermarket chains owned by Hall, with sales of $192.2 million in 2002. Sales of three Centralia stores were $14,326,700 in 2002. Randall Johnson, the District Manager for the Centralia stores, has recommended that they implement everyday low pricing (ELP) since Superior’s prices are higher than the competition at a time of growing price consciousness, and that the price differential could cause them to lose market share. Problem Statement Superior Supermarkets (SS) must decide whether o not to pursue an everyday low pricing (ELP) strategy at its three Centralia MO locations. Analysis Three viable alternatives have been found. Alternative #1 is to do nothing. Do not adopt ELP and keep the current promotional budget. If market share continues to decline, at the growth rate of -0.53% or greater, this alternative would be deemed unsuccessful. Conversely, if market share remains stagnant or improves, this strategy would prove to be prudent. Alternative #2 is to implement a ‘limited ELP’ model. By marginally increasing the...
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...BACKGROUND COMPANY Superior supermarket is the one of division of Consolidated Hall. Consolidated Hall is a privately owned wholesale and retail food distributor. In year 1959, the Hall Consolidated was formed. In year 1970, the first retail grocery store chain was purchased. The superior supermarket chain was acquired in 1975.The Hall distributed food and related products to some 150 company owned supermarket units operating under three supermarket chain names through 12 wholesale distribution centers.By year 2002 also,1,100 independent store also supplied by Hall distribution in Unites States. In the year, the sales were $2.3 billion. In supermarket chain owned by Hall consolidated, Superior supermarket is the smallest compared to three supermarket chain in Hall consolidated. The superior gained with sales of 192.2 million in year 2002.In trade areas with small cities and towns in South Central Unites States, the superior served them conventionally. The median size is about 44,000 square feet in United States. So the superior is considered small because the areas of the superior supermarket just cover about 20,730 square feet. Even though the size is small, the superior was the number 1 or number 2 in ranking of supermarket chain in each of its trade measured by market share. The figure 1.1 below had shown the front view of superior supermarket. Figure 1.1: The view in front of Superior Supermarket. 2. OBJECTIVES ...
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...Case; Superior Supermarkets “Everyday Low Pricing” Company background; * Superior supermarkets is a division of Hall Consolidated, a privately owned wholesale and retail food distributor, Hall formed in 1959 and distributed food and related products to 150 company-owned supermarket units, operating under three supermarkets chain names through 12 wholesale distribution centers in US, its sales in 2002 were 2.3 billion *The three Superior supermarkets are located in Centralia-Missouri, Everyday Low Price Policy; A retailer charges a constant lower everyday price for merchandise with few, if any, price discounts, this practice differs from a “Hi-Lo” price policy, whereby a retailer charges higher prices on an everyday basis, but then runs frequent promotions. The Goal of the Superior Markets new approach “Everyday low price”; 1-Superior’s prices were higher than the competition 2-Superior could lose market share due to the price differential and accordingly losing its second position “Market challenger”. Everyday Low Pricing Implementation Considerations; *All of the Hall executives acknowledged that Superior Supermarkets were rightly perceived by shoppers as having the highest prices *Whether or not to adopt this pricing strategy across-the board for all products or just certain categories? *The pricing itself and how much it should be lower? As the studies showed that their market-basket prices were always 7-10% higher than other competitors ...
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...James Ellis, the senior vice president of Hall Consolidated and president of Hi-Value supermarkets, must decide whether to pursue an everyday low pricing (EDLP) strategy at its three Centralia MO locations. After much analysis, I believe that my recommendation would be for Superior stores (Hi-Value) to most definitely adopt this new method. First let’s look into some details about Hi-Value, and their competition: Product: The stores’ products are divided into 5 categories: 1) grocery (including diary); 2) fresh meat/poultry/seafood; 3) produce; 4) seasonal and general merchandise; and 5) bakery and deli. Price: more of a high-end branding strategy. Hi-Value everyday (non-promotional) prices are 10% higher than Harrison and 7 percent higher than Grand American and Missouri Mart. Higher prices have become a competitive concern due to their declining market share in Centralia. The negative growth rate, based on 1998 to 2005 figures from Figure 2, is -0.53%. Place: Three locations (North Fairview, West Main and South Prospect) give a competitive advantage. The VP of Operations even said “we offer greater convenience of shopping with our three stores and that is worth something (implying higher prices)”. Exhibit 6 shows that Hi-Value is ranked “most convenient” by 35%, Promotion: The 2005 advertising budget was 0.89% of sales revenue, or $127,500. Competitors spent an 1% of their sales revenue. If EDLP is adopted, Hi-Value should increase the advertising budget. One...
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...PROBLEM STATEMENT Superior Supermarkets (SS) must decide whether or not to pursue an everyday low pricing (ELP) strategy at its three Centralia MO locations. Strategic Issues & Marketing Mix Pricing: Current prices are reflective of a high-end branding strategy. SS everyday (non-promotional) prices are approximately 10% higher than Harrison (Hr) and about 7 percent higher than Grand American (GA) and Missouri Mart (MM). Subsequently, higher prices have become a competitive concern due to their declining market share in Centralia. The negative growth rate, based on 1995 to 2002 figures from Figure 2, is -0.53%. Product line: SS are supermarket stores. The stores’ products may be divided into 5 categories: 1) grocery (including diary); 2) fresh meat/poultry/seafood; 3) produce; 4) seasonal and general merchandise; and 5) bakery and deli. Promotion: The 2002 advertising budget was 0.89% of sales revenue, or $127,500. Competitors spent an estimated 1.0% of their sales revenue. If ELP is adopted, SS would increase the advertising budget (discussed later). Location: SS’s three locations (North Fairview, West Main and South Prospect) provide a competitive advantage. As cited by the VP of Operations: “we offer greater convenience of shopping with our three stores and that is worth something (implying higher prices)”. Further evidence is indicated in Exhibit 6 customer survey ranking “most convenient”: SS -35%, MM -25%, Hr -21%, and GA -18%. Goals & Objectives 1. Increase...
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...HiHi-Value Supermarkets: Everyday low pricing General Overview NOTE***I included not only information specifically designed for the slides but also extra information that I will speak about. The information in parenthesis is what I will verbally add to my part of the presentation so don't worry about putting in the actual case presentation PPT. SLIDE: The Meeting > In early April of 2006, several members of Hall Consolidated meet with the District Manager of 3 Superior stores in Centralia, Missouri. (The agenda of this meeting was to disuss the districts progress and to address any issues related to the 3 stores.) > The District Manager proposed EDLP for his 3 stores. (The DM thought this was appropriate because he noticed their prices were higher compared to their competitors in the Centralia area. He also realized that consumers were becoming much more price conscious. Sales were also below quota for the 1st quarter of 2006.) > The EDLP strategy had been briefly discussed in August of 2005. (Although, they discussed the EDLP stratgey prior to the quarter meeting in 2006, they continued on with their current strategy) SLIDE: The Company > Hi-Value Supermarkets is a privateloy owned wholesale and retail food distributor. (HVS is a division of Hall Consolidated) > It is the samllest of the 3 supermarket chains owned by Hall Consolidated. > It was the number 1 or number 2 ranked supermarket chain in each of its trade markets.(This is measured by...
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...bargaining power Strongest bargaining power with the local Suppliers -->>“Everyday Low Prices” pricing strategy Regional advantage (first and foremost advantage) Convenient transportation , manufacturing and trading center -->> Lower the cost High population density -->> High passenger flow Lower store density less competitors than that of Shanghai -->> Less intensive competition Regional dominance -->>Better defence against international retail giants The knowledge of customer preference, habit and supply base. Relationships Close relationship with local government -->> Protection Collaboration with SOEs -->> Protection and low-cost expansion What are the sources of Wumart's competitive advantage? Good understanding of consumers supermarket and convenient store -->>To meet consumers' need and gain market share in suburb -->>Avoid head-on competition with the strongest competitor Technology (Compare to other local retailer) POS system and MIS -->>Improve management Official website -->> Communication channel Positive corporate image -->>Brand reputation -->> Good relationship with customers Competitively superior resources Compare with other retailers, the bargain power, regional advantage, and multiple store formats are most competitively superior resources to Wumart. Strongest bargain power - as the local leader, its statue is difficult to be replaced and low price is most advantage of Wumart. Regional advantage Multiple store formats...
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...MBA 437: MARKETING CASE ANALYSIS Group 5: Case 5: Promotion Decisions MAKING LOYALTY PAY NAME STUDENT ID Nancy Kumari S11013306 Saher Buksh S01007626 Aditya Raniga S11052046 Table of Contents CASE BACKGROUND 2 NECTAR 2 Nectar Promotions: 3 SAINSBURY 4 Therefore the aim of this case analysis is to find out: 4 CUSTOMER REGISTRATION 5 TWO METHODS OF REDEEMING POINTS 5 COMPETITION IN THE UK GROCERY RETAIL INDUSTRY 6 COMPARISION WITH COMPETITORS 7 SITUATIONAL ANALYSIS 8 CONSUMER PERCEPTION OF NECTAR PROGRAM 8 SPONSOR PERCEPTION OF NECTAR PROGRAM 9 SHOULD SAINSBURY CONTINUE WITH NECTAR? 10 SHOULD SAINSBURY HAVE ITS OWN LOYALTY PROGRAM? 12 SHOULD SAINSBURY DISCONTINUE WITH THE CURRENT LOYALTY PROGRAM & DIVERT FUNDS TO NON-LOYALTY PROGRAMS 14 CUSTOMER LOYALTY PROGRAM IN FIJI 16 RECOMMENDATION 17 CONCLUSION 20 BIBLIOGRAPHY 21 CASE BACKGROUND NECTAR • The Nectar loyalty program is the largest loyalty program in Britain. • It was launched by Loyalty Management UK (LMUK and chaired by Air Miles co-founder Keith Mills). • Nectar opened for business in 2002. • With reference to various individual retail loyalty programs, Keith Mills,Gierkink, and further members of the LMUK team undertook the decision to search for an assembly of retailers who had their individual reward programs however were not content with their performance and could enhance their performance by combining with a multi partner loyalty scheme. ...
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...FOUNDATION TO BUSINESS STRATEGY ALDI ALDI is one of the world’s leading grocery retailers with more than 7,000 stores across 70 countries. The company originates from Germany, where it was founded in 1913 as one of the first retailers to offer self-service. Since opening its first store in 1913, ALDI has established itself as a reputable retailer operating in international markets including Germany, Australia, UK, and the U.S. What distinguishes ALDI from its competitors is its pricing strategy without reducing the quality of its products. In fact, in some cases ALDI’s products are 30% cheaper than those offered by its competitors. ALDI can do this because the business operates so efficiently. ALDI has operated in the UK since 1990, and now has over 500 stores in the UK and Ireland employing in excess of 20,000 people. ALDI’S POLICIES: ALDI does not have a clear defined Vision and mission statements, however it has clearly defined policies based on which it could create its competitive position in the market. ALDI’S Policies are based on ‘What if a grocery store challenged the typical retail business model?’ALDI’s business model enables to provide the customers the highest quality products at the lowest possible prices. This value stems from the numerous efficiencies and innovations instituted at every level of ALDI’S operation. The following are the cost saving strategies that ALDI adopts: * Customers bring their own bags or buy our reusable bags to save money ...
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...COMPANY PROFILE Tesco PLC REFERENCE CODE: 34972414-9A41-4048-A7B6-1B0017054743 PUBLICATION DATE: 7 Feb 2013 www.marketline.com COPYRIGHT MARKETLINE. THIS CONTENT IS A LICENSED PRODUCT AND IS NOT TO BE PHOTOCOPIED OR DISTRIBUTED. Tesco PLC TABLE OF CONTENTS TABLE OF CONTENTS Company Overview..............................................................................................3 Key Facts...............................................................................................................3 SWOT Analysis.....................................................................................................4 Tesco PLC © MarketLine Page 2 Tesco PLC Company Overview COMPANY OVERVIEW Tesco PLC (Tesco or ‘the company’) is a food and grocery retailer. The company primarily operates in Europe and Asia. It is headquartered in Hertfordshire, the UK, and employed 519,671 people, on an average, in FY2012. The company recorded revenues of £64,539 million (approximately $103,223.7 million) in the financial year ended February 2012 (FY2012), an increase of 6.8% over FY2011. The operating profit of Tesco was £3,985 million (approximately $6,373.6 million) in FY2012, an increase of 1.7% over FY2011. The net profit was £2,806 million (approximately $4,487.9 million) in FY2012, an increase of 5.7% over FY2011. KEY FACTS Head Office Tesco PLC Tesco House Delamare Road Cheshunt Hertfordshire EN8 9SL GBR 44 1992 632222 Phone Fax Web Address http://www...
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...development and the creation of a competitive advantage. Strategic thinking allows management ‘to more fully capture and analyse the relevant forces creating new market opportunities and business strategy requirements’ (Cravens, Piercy & Baldauf 2009, p.32). Woolworths has for many years been the dominant player in the Food and Staples Retailing Industry but since Wesfarmers’ takeover of Coles, Woolworths has had to be more on the defensive matching Coles in its low-cost pricing strategy on many product items (Sell on News 2011). Whilst Coles is trying to regain market share within its supermarket division, Woolworths is endeavouring to develop operational scope in the area of hardware, where Coles has held a monopoly situation (Sell on News 2011). In competing duopolies, the quality of the management team and their ability to provide future guidance to the organisation becomes the critical component that differentiates each firm’s performance (Sell on News 2011). Woolworths employs a cost leadership strategy within its supermarket division, it sells standardised products (but with a competitive level of differentiation) to allow them to target a broad customer...
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...one-stop shopping, lowest price, fresh products, self-served shopping in a hypermarket with free parking lots. In contrast to Wal-Mart’s internationalization strategy, Carrefour expands to foreign markets faster and more flexible than their counterpart. This study investigates the configuration in Asia, marketing service, product procurement, logistics management, digitalization and human resource management of Wal-Mart and Carrefour. The authors then propose strategic implications for global retailers to increase their management effectiveness and efficiency. Introduction Wal-Mart founded by Sam Walton adopted circumventing strategy by starting her operations in small towns and then expanding to bigger cities. She maintains lowest price everyday and promises customer satisfaction together with high quality suppliers’ cooperation and prompt delivery to grow continuously at marked rates. Public offering begun in 1970, Wal-Mart then extended operation around the States and further expanded across borders. She has branches in Canada, Mexico, Brazil, Argentina, Porto-Rico, UK, Germany, South Korea and Mainland China. Currently, she...
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