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A Case Study Of Waitrose Uk Marketing Essay

1805 words (7 pages) Essay in Marketing

5/12/16 Marketing Reference this

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There is no dominant theory of brand equity or accepted definition of the word ‘brand’.1 Our science is in what Thomas Kuhn (1970) called a ‘pre-paradigm’ phase. In other words: it is in a state in which many key words have no universal definition because there is no dominant theory. In what follows, we will be adding to the clutter with some definitions of our own. They are not especially original. It would be tedious to review the many different ways in which the word ‘brand’ is used. ‘To brand’ was to burn with a hot iron, whether for marking or for cauterising. By 1587 it was already being used in a modern sense – i.e., ‘to mark indelibly, as proof of ownership, a sign of quality’ – and by 1602 it was being used in a way which implies a bit of cognitive psychology: ‘to impress indelibly on one’s memory.’ Branding took off as an activity when manufacturing got into full swing in the 19th century. It was a simple way to indicate origins and promise quality. Pinker (1999) suggests that language has a universal basic structure. There are ‘naming’ words and ‘doing’ words. People organise their sense of reality by tagging bits of experience with ‘names’; and by describing what the ‘names’ might or do get up to. Its clear that branding was intended, whether consciously or not, to exploit this natural tendency. Manufacturers who were confident that proof of origin would help to create sales, knew that branding would help – both as a guarantee and as an aid to memory. Those who were less confident knew that one way to generate sales, was to counterfeit well-known brands.

With this as the background, let’s jump to the present and elaborate on the cognitive aspects of what a brand is: a brand is a set of hooks the mind uses to organise its experience of a commercial offering. Why a ‘set of hooks’ and not just a hook? Because contemporary cognitive psychologists suggest that brand memories do not have specific locations (Ward, 2002); and that the simple network concept of how brand experience gets stored – i.e., as a node with tentacles – is not just simple, it’s simplistic. Memory and experience are more dynamic than that. The feelings and images that attach to a brand are widely dispersed across the brain. This means that there are multiple entry points for brand evocation. Call out the name ‘Coca-Cola’, present someone with a picture of a Coke bottle, or walk past a McDonald’s – every time that happens, tracks light up in the brain which evoke the brand ‘Coke’. Each time, the tracks vary as a function of previous encounters and the entry point, whether name, bottle, or smell of McDonald’s, etc. Some tracks get reinforced and others get dampened. The point: brands can be evoked in many ways and each time what lights up and what gets laid down will be modified, even if only slightly. Understanding that brand memory and experience are dynamic does not affect our core definition of brand as a set of ‘hooks’. But it does have implications for how we model the formation of brand experience through communication and use – because it means that the decision about which ‘hook’ to

evoke when designing brand communication, is not trivial.

If the cognitive character of ‘brand’ is dynamically stored experience, then it’s important to have a view about the sources of brand experiences. There are mainly three experiences that come from use of the brand. This ranges from standing in a queue at a bank (say, HSBC), to driving in a car (e.g., Toyota), to eating a chocolate bar or pouring laundry detergent into a washing machine. These interactions involve what I call transactional touchpoints (Type I). Experiences that come from exposure to brand communications created by marketers; e.g., TV advertising, mobile phone communications, public relations, and so on. Marketers do this to influence our brand memories and experiences. In saying this I’m not assuming that exposures have to be explicitly noticed for brand activation to take place. All it requires is that tracks are laid down in the brain, whether they pass through focal consciousness or not. These interactions involve what I call marketing touch-points (Type II). Experiences that come from exposures to the brand that are not under the marketer’s control. Unmanufactured

word-of-mouth is the most obvious of these. Another would be un-manufactured news. These kinds of interaction are incidental touch-points (Type III).

We don’t have to be too philosophical about how to classify every conceivable brand interaction. Some interactions are fuzzy. For example, back in the 1980’s, Levi’s jeans had a problem with the way discount retailers were treating the brand in store. People would walk into stores and turn the Levi’s stack upside down. By the end of the day, the Levi’s were an unsightly mess. I categorise this as a Type III interaction – i.e., it is incidental – because it does not involve a conscious effort on the part of the brand marketer. Nor does it involve use or consumption on the part of the shopper, even though it is a very direct confrontation with the brand. Levi’s responded by no longer supplying to those stores, and by opening stores of its own. By taking control of the visual merchandising they replaced damaging Type III interactions with brand-building Type II interactions.

Let’s take another example: suppose a friend gives you a lift in her car – is this incidental or

transactional? I would argue that it’s transactional because it’s an example of use or consumption on your part, even if passive. And finally: What about a news story that has been substantially influenced by a company spokesperson – I think we have to consider this a mixed interaction. It is part marketing and part incidental.

1.2 Background of the study

In today’s highly competitive environments, improving consumers’ loyalty to brands permits marketers to maintain a comfortable and lasting position in the marketplace. The new millennium is not just a new beginning; it is a continuation of trends in human behavior that have been following cyclical patterns throughout our country’s history. Just because we have entered a new era does not mean we have to start from scratch when it comes to interpreting why certain consumers are loyal to certain brands, and what type of factors influence these allegiances.

Brand Loyalty is the consumer’s conscious or unconscious decision, expressed through intention or behavior, to repurchase a brand continually. It occurs because the consumer perceives that the brand offers the right product features, image, or level of quality at the right price. Consumer behavior is habitual because habits are safe and familiar. In order to create brand loyalty, advertisers must break consumer habits, help them acquire new habits, and reinforce those habits by reminding consumers of the value of their purchase and encourage them to continue purchasing those products in the future.

The image surrounding a company’s brand is the principal source of its competitive advantage and is therefore a valuable strategic asset. Unfortunately, many companies are not adept at disseminating a strong, clear message that not only distinguishes their brand from the competitors’, but distinguishes it in a memorable and positive manner. The challenge for all brands is to avoid the pitfalls of portraying a muddled or negative image, and instead, create a broad brand vision or identity that recognizes a brand as something greater than a set of attributes that can be imitated or surpassed. In fact, a company should view its brand to be not just a product or service, but as an overall brand image that defines a company’s philosophies. A brand needs more than identity; it needs a personality. Just like a person without attention-grabbing characteristics, a brand with no personality can easily be passed right over. A strong symbol or company logo can also help to generate brand loyalty by making it quickly identifiable.

From the design of a new product to the extension of a mature brand, effective marketing strategies depend on a thorough understanding of the motivation, learning, memory, and decision processes that influence what consumers buy Theories of consumer behavior have been repeatedly linked to managerial decisions involving development and launching of new products, segmentation, timing of market entry, and brand management. Subsequently, the issue of brand loyalty has been examined at great length. Branding is by far one of the most important factors influencing an item’s success or failure in the marketplace, and can have a dramatic impact on how the “company behind the brand” is perceived by the buying public. In other words, the brand is not just a representation of a company’s product; it is a symbol of the company itself, and that is where the core of brand loyalty lies.

Waitrose boss Mark Price is drawing up plans to transform the upmarket food chain into a consumer brand available in thousands of non-Waitrose shops in the UK and overseas. He believes the Waitrose label has the potential to be a big “fmcg” – fast moving consumer goods – name like Heinz or Kellogg’s, which he can sell to other retail businesses, rather than just direct to shoppers. He has similar ambitions for the Duchy Originals brand, founded in 1990 by the Prince of Wales. Waitrose signed a licensing deal with the struggling royal label last autumn, which gives the John Lewis-owned grocer the right to manufacture, distribute and sell all Duchy goods in the UK. Price said there would be more than 300 Duchy products by the end of the year and there was potential for many more. Last year Waitrose defied predictions it would be battered by the recession and emerged as the fastest-growing big grocer, chalking up a sales increase of more than 11% to in excess of £4.5bn, trouncing upmarket rival Marks & Spencer. “We expect to be the fastest growing again this year,” Price said.

Sales to overseas supermarkets are also to be ramped up. “Waitrose is seen as a really premium brand outside the UK,” said Price. The grocer has already more than doubled business-to-business overseas sales to more than £100m over the past two year, exporting to 25 countries including Thailand, the Bahamas, India and China. But Price said there was much more potential. The grocer is also keen to open more franchised outlets overseas, especially in the Middle East. Two stores in Dubai are chalking up 60% annual sales growth and franchises have been awarded for Bahrain, Oman and Abu Dhabi. Price said there would soon be 20-23 Middle East outlets.

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