Effectiveness Of UK Supermarkets

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17th May 2017 Marketing Reference this

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Brand management means control the brand and it also means managing the company in a proper way for creating, making and maintenance the brand guarantee. In this particular report, we take into consideration three retailer companies, Tesco, Sainsbury, and Mark and Spencer based in UK, and both companies have been listed in top 10 supermarkets. This report discusses their relative Brand Position, Image, and Effectiveness in relation to each other in analysis part. In this report we are focused on Tesco is more effective than other two retailers. We focused on their product quality, price range and also how they control their customer demand by providing the good quality product with fair price. We also recommended some important information that help to improve their position in supermarket.

Introduction:

Supermarkets started their operations between the end of the 19th century and the beginning of the 20th century. A Supermarket is a self service store where people can found a mixture of food, and non-food items such as household cleaners, pharmacy products, and pet supplies, household commodities etc. Supermarkets cover the needs of the customers for less wasting shopping-time and for good quality things in alternative prices [1] . The section of supermarket in United Kingdom is one of the most profitability sections of British Economy. This market is controlled by five big companies (Asda, Morrison, Safeway, Sainsbury’s and Tesco) and the companies try to expand in the global market. Also, they opened new routes from retails with the production of foods by themselves. [2] Top 10s retailers company of UK Supermarket, ASDA, Morrison’s, Marks and Spencer, Tesco, Waitrose, Sainsbury’s, SPAR, Iceland, Aldi.

Brand importance is determined by the total of income it generates for the company. In a competitor market world it is difficult to established a product with a brand name because .Now a days it is not easy to control customer demand with verities product and services. Brand Position is based on the explanation of company’s details, the uniqueness of company and the common points with the other companies and the reasons to purchase and use the brand’s products. In the retails, the brand position is contained on the uniqueness in the prices and the quality of products and services. Brand image is creating for the advertisements and for remember from customers. In the retails, the brand image is based on the phrases, which explain the reasons for using and the logo of the brand. Brand effectiveness is the one of the most factors to growth of companies. Companies improve their services by achieving goals. Branding is basically part of promotional strategy. It is costly but necessary for big companies. Tesco, Sainsbury’s and Mark $ Spencer both are competitive retail company in UK supermarkets. Those companies provide their product with a brand logo and slogan. Sainsbury’s intention is to deliver most eye-catching and trendy improvement goods to first and only customers. That is really helpful for creating a brand image to the consumer mind. When people think about Sainsbury’s; they will focus on excellence products with fair price. For example, fresh vegetable and fruit, quality of meat and their own basics items collection. Sainsbury’s used orange colour theme and their brand slogan is ‘Try something new today ‘which is really remarkable for catching the customer mind. Tesco reach to their customer satisfaction by recovering their staff service that relates to the slogan of Tesco “Everything little helps”. Also Tesco used red letters and blue line for the logo theme. Tesco created their brand image with low price and service compare to Sainsbury’s and Mark and Spencer. Mark & Spencer build their brand image with a nice campaign and also get a winning award in 2008. Their brand slogan is ” Your M & S ‘using a green colour theme for logo care with environment. Both companies are extremely successful in worldwide. They build their brand position to compare each other. Tesco, Sainsbury’s and Mark & Spencer build their brand positioning by the food excellence and a high added value store with service superiority Each company keep going to grow up as it well establish and their goals. There are become a successful in the global retailer, improve the position in the United Kingdom and their brand effectiveness prove to growth; improve their services by achieving goals.

Analysis:

Brand Image: Tesco created their brand image with low price and service (essay & paper for student, 2008). Compare to Sainsbury’s and Mark and Spencer that have higher price than Tesco. Tesco built their brand image by using strength, favourability and uniqueness of brand association (Keller, Kevin Lane, 1956) to improve the brand. Tesco reach to their customer satisfaction by improving their staff service that relate to the slogan of Tesco “Everything little help” (oppapers, 2008). Moreover, Tesco created the value for customer to earn their lifetime loyalty (Tescoplc, 2009), this means that Tesco will do everything to satisfy the customer need but emphasize in service, then, Tesco will get the brand loyalty from customer. In other way that Tesco built their brand image in Tesco clubcard whist Sainsbury’s do not any kind of loyalty card and Marks and Spencer has M&S credit card not club like Tesco, it can collect the point also bonus when spent every 10 pound. Clubcard of Tesco use to collect the point when the customers are shopping. Every 1 pound spent at Tesco, the customer will get 2 points (Tesco, 2010), clubcard can increase the customer to Tesco. This way can increase customer loyalty as well.

In 2004, Tesco also has strong brand image online that the customer select from the well-known UK companies, online image that they found and feel of online shopping experience. From this survey Tesco got the highest score 598 while Sainsbury’s got 559 (bnet UK, 2004). Tesco was the most valuable brand on the high street retailer by following the sales of 32 billion pounds and gives its power in the supermarket and convenience store market. The Tesco brand was valued at 8.6 billion pounds, the second was Sainsbury, 4.9 billion pounds and third Marks and Spencer, 3.9 billion pounds (skynews, 2008). Tesco made the highest sale than Sainsbury’s and Marks and Spencer, these show the customer trust their brand and favourable in the product and service.

In these three brands that consist of Tesco, Sainsbury’s and Mark and Spencer, Tesco had the most powerful brand based on financial statement, brand growth and etc (Millward Brown Optimor, 2007). According to top 100 most powerful brands in year 2007 (Millward Brown Optimor, 2007) shown that brand value of Tesco was rank 32nd, 16,649 million dollars and Marks and Spencer was rank 68th 9,509 million dollars. There is no Sainsbury’s on the 100 ranking. For the retail rank, Marks and Spencer was highest growth brand values which is 192%. This shown Marks and Spencer produced differentiate on their product from the competitor. It can create the uniqueness on Marks and Spencer brand. In year 2008, Tesco also high value brand than Marks and Spencer at 23,208 and 11,600 million dollars (Millward Brown Optimor, 2008). In year 2009, Tesco was the only brand that stay on the rank at value 22,938 million dollars but compare to the previous year brand value decrease 1% (Millward Brown Optimor, 2009). From the ranking Tesco has the most value in these three brands, it is not only looking from the financial statement, brand growth and market share but can looking from the customer that why most of them buy product from Tesco more than the other two brand. Tesco offers low price with clubcard to motivate their customer come to buy product and good staff good service to keep customer loyalty. These things can build the brand image because customer trusts the brand.

Brand Position: According to the article of Simon Knox, the brand position consists of the brand reputation, the product & service, the product & customer portfolio and the network. In this part, we will compare the four factors of Tesco with the other two companies. The first factor of comparison is the reputation. First of all, the three brands are inside in the top 10 supermarket in the United Kingdom. Tesco has the reputation of the cheap retailer. The price is one of the most important factor to buy from one customer. As a result, the co-operative brands recognize it. But, Marks & Spencer has the reputation of the clear British appeal and the most trusted high street. Moreover, Sainsbury’s has the reputation of the low cost retailers. It is showed with the 500 lines, which are in the lowest prices in the market.

The sector factor of comparison is the products & services. According to one Tesco retail sector analyst, Tesco show high degree of flexibility in the price. As a result, customers prefer Tesco for their shopping. Also, he said the success came also by the large amount of stores. As a result, the customers can find one store near to their houses and jobs. Moreover, Tesco has a range of goods in their branches. As a result, the 90% of the total products and services are available in all the branches. But, the customers of the Marks & Spencer believe that the brand has easy return policy and good exchange strategy. It is snowed by the research, which is in the article of Steve Burt and the Jose Carralero- Encricas. Marks & Spencer is the first place of retailers about the easy return policy and exchange strategy. On the other hand, Sainsbury’s gives emphasis on the good quality <> products and services. As a result, the thirty percentage of the items are the <> products.

In this paragraph, we will compare the brands with the factor of the product & customer portfolio. According to previous analyst, Tesco tries to continue in the competition of retails. The way of following this strategy is the offers in the large amount of the products. But, Marks & Spencer gives emphasis on the high quality products and services. As a result, the customers are confident with the services and the products. In the previous research, the customers believe that the brand offers high level of customer service. Now, we will look the products & customer portfolio of Sainsbury’s. The brand has focus on the healthy food at fair price. As a result, there are a lot of products, which are especially in the kids. Also, the brand promotes the healthy eating in its customers with its products. Moreover, the retail tries to keep the prices in low cost. As a result, it continues the competitive environment of the supermarkets.

In the last paragraph, we will look the network of brands. Tesco has a lot of stores in United Kingdom and it has more stores in Central Europe, with contrast to Marks & Spencer. With the entrance of Tesco in the Central Europe, Tesco improve its network. Tesco developed one successful network with the local suppliers and the British suppliers with the company. Marks & Spencer is the first retail which started the operation abroad United Kingdom. As a result, it became one of the best world class retailers. According to the previous research, the customers believe that Marks & Spencer has a good stock of its high quality products. Sainsbury’s is only retail in this report, which does not have store outside of United Kingdom. The brand uses the alliances with the suppliers, which the suppliers are trained by the brand. Also, Sainsbury’s have the mechanism of the feedback channels. The customers are confident with the products, because there are labour standard for the products, which manufacture from the suppliers.

Brand Effectiveness: In this part to evaluate the brand effectiveness of three brands Names, there are Tesco, Sainsbury, and Mark and Spencer. In this report are focused on Tesco is more effective than other two retailers. Brand Effectiveness is an outcome of the activities of the brand that come from the brand position and the brand image as we discuss from the above. For the retailers, the effectiveness is showed in the community, the supplies, the customers, the staff and the local traders. During the economic turn down, Tesco still keep going to grow up as it well establish and their goals. There are become a successful in the global retailer, improve the position in the United Kingdom, trying to be strong in the non food section as in food section, developing in other service, and putting the community at the heart of what company does (Tesco, 2009).

First of all, from the data research about food and grocery by IGD firm forecasted that Tesco Company will become the world’s 2nd largest retailer in 2012 because Tesco growth rate is growing up rapidly (Brand Republic, 2007). Moreover, Millward Brown Optimor shows Tesco brand value change 39% whereas Mark and Spencer change just 22% (MillwardBrownOptimar, 2008). TNS World panel said that Tesco have the highest percentage market share (30.7%) in United Kingdom as in the top 10 rank of grocery retailers in 2009, when compare with Sainsbury is (15.9%) in the third rank and Mark and Spencer is not in the top 10 rank (Adbrand, 2010). All this shows that prediction of IGD of Tesco, will be the second largest retailer in the world, will be possible as u can see from many company researcher show the result of Tesco that in field of growth rate, brand value, or market share. Therefore it means these are effectiveness of Tesco brand.

The advertising is one of the distribution channels that can measure brand effectiveness. The objective of do the advertising can stimulate boost up in revenues, testing in customer awareness, and build customer loyalty and relationship (Tutor2u, 2010). For instance TVC is one of the types of advertising. The Des O’Connor Tesco TVC advertising is show the campaign such as half price Decorations, 20% off Christmas cake, and the end of TVC pop up with the massage “Keep Christmas Special at Tesco” (Adbrand, 2010). This can show that before or during Christmas, Tesco can stimulate the customer when they are looking for Christmas gifts or other thing then this will be effective to sales revenue increase (Totur2u, 2010) because TVC presents what customer need and consider about price which is meet in economic turndown. Whereas M&S TVC focus on foods only as in TVC said “This is not just Christmas food, this is M&S Christmas food” (Adbrand, 2010). And Sainsbury TVC shows what is new receipt as their slogan “Trying something new today” (Adbrand, 2010). For both M&S and Sainsbury, they are concentrating only food for Christmas. This can be effective only food but not other products as Tesco which is attractive with promotion.

To conclude, the result of the activities of the brand that come from the brand positioning and brand image is brand effectiveness. In this case, we are evaluating in three brand retails by focus at Tesco and comparing with M&S and Sainsbury.

Conclusion:

Branding provides points of differentiation between reasonable contributions and allows for market positioning. Brand can build an image of the goods in customers’ mind that is related with superiority. In UK supermarket all the retailer shop are very famous, because of their brand superiority. Tesco, Sainsbury’s, and M & S are one of the top retailer shops not only in the UK as well as all over the world. This three company conducted their business individually and they are competitor each other. They are trying to reach the customer satisfaction by providing excellent food or non-food product and also the household products. They are giving extra facilities for their customer. For example, Mark and Spencer provide M & S credit card, Sainsbury’s supply a nectar card and Tesco giving extra loyalty to their customer by introducing clubcard. Everything is for customer satisfaction. In this report we analyse this three company’s performance and compare their brand image, position, and effectiveness.

The above finding shows that In UK supermarket Tesco is successful more than Sainsbury’s and Mark and Spencer. Sainsbury’s and Mark and Spencer can improve their position in supermarkets to provide better facilities and services. Tesco provide product and services by understanding customer demand. Customer can buy their regular product with low price from Tesco more than Sainsbury’s and Mark and Spencer. So majority of customers like Tesco for their regular shopping and fully satisfied.

Recommendations:

. Tesco build their brand image with low price and good service compare to Sainsbury’s and Mark and Spencer. So Mark and Spencer and Sainsbury’s must need to create their product with low price and maintains the quality and also need to improve their customer services.

. Tesco get the brand loyalty from customer. Tesco build a clubcard which made extra benefit for customer. Where as Sainsbury’s and Mark and Spencer do not have any kind of loyalty card. So they should create loyalty card for customer that give extra benefits.

. Sainsbury’s and Mark and Spencer should improve their online shopping systems that helpful for them to create a brand image and also a brand poison in supermarkets.

. Sainsbury’s and Mark and Spencer should improve their new product development process with a parent brand name compare to Tesco.

. Mark and Spencer and Sainsbury’s should use their aggressive sales force and efficient sales promotion.

. Sainsbury’s and Mark and Spencer Should increase their sales revenue by giving effective features compare to the Tesco.

. Sainsbury’s and Mark and Spencer should increase their branches that helpful for customer for regular shopping.

. Sainsbury’s and Mark and Spencer should provide product with own label and also maintain the price compare to the Tesco.

. Mark and Spencer and Sainsbury’s should maintain using strength, favourability and uniqueness of brand association to build brand image.

. Compare to the Tesco, Sainsbury’s and Mark and Spence should using a line extension and category extension to promote the new product with their parent brand name.

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