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This paper reports on the performance of Waitrose supermarket which is established to study and analyze all its resource for planning the three years marketing plan. The report is divided into two parts which inform how to achieve the company aim. The first part focuses on the current situations by using many various of theories such as SWOT analysis, competitor analysis etc. The second one mentions about the marketing plan in three years which includes marketing strategies for achieving the company goal. Marketing strategy is specific, measurable , relate to a specific time period and focus on affecting target market behavior by using the Brooksbank marketing planning as a guideline.
Now, Waitrose supermarket is one of the UK's leading food. Firstly it opened in 1955 and owned by the John Lewis Partnership , operates 185 branches throughout England, Scotland and Wales , offering the good quality, the best value and the impressive customer service. Its locations range from high streets to edge of town sites and vary in size from just 7,000 square feet to approximately 56,000 feet. (Waitrose company history,2010).
The gross sales in 2010 was £2.4 million (+11.3%) , Profit before tax £110.5 million, (+28.0%) because of opening the new branches, reformats and re--concepts and strengthen balance sheet. Waitrose positions itself in the premium-mass market with a diversity range of quality and fresh goods. ( John Lewis Partnership Reports , 2010)
Brooksbank (1990) concludes that marketing philosophy involves a firm aiming to provide customer satisfaction at a profit. When customers buy Waitrose organics or any its products , The customers can be assured that the products not only taste fantastic but have been responsibly sourced.
Waitrose intend to merge the convenience of supermarket with the know-how of its service and shop management, and also provide customers a Price Commitment to create the customer's confidence that they always get the good product and service value for money when shopping at Waitrose.
Current situation analysis
The fourth step is to evaluate Waitrose in deeply detail , internal and external resources , competitor and market overview. This evaluated information will be brought to plan the three years Waitrose marketing plan.
Figure 1: UK Grocer Market Performance 2010
According IGD UK grocery market performance show the current situation of the supermarket industry is developing through a process that involves high levels of segmentation and differentiation. According to Doyle (2006), a market segment can create or separate a product or service offers to customer for each segment by providing the better solutions that match the customer needs. Targeting segmentation is very useful because the company can enhance the profit in the same market segment such as it helps company in targeting business communication to the potential customer or buyer in the same market segment by specifically deliver a clear message in products and services and so on. Each player in the market tries to make its own efforts in order to meet different people's needs and appeal to determined segments.
As the analyzed information before, the players in the grocery industry try to show a high segmentation of the market and each player has different targets and point to different people. Waitrose's target is to meet the needs of the middle class that is looking for high quality product and top service.
The Waitrose main competitor in the same segments are M&S and Sainsbury. Waitrose is able to gain market share from Sainsbury by offering better quality at the same prices. For M&S ,is the top quality retailer , Waitrose can get M&S customer by highlighting the outstanding of its own brand such as the original , the freshness and the quality of the products. it is necessary for Waitrose to get the M&S customers.
Figure 2 : Waitrose position comparing with the lead competitor
Food Retailing - UK - November 2010 - Retailer Competitive Analysis
Figure 3 : Leading UK food retailers' market shares, 2009
According to Mintel UK food retailing (2010) revealed that in 2009/10, Waitrose has a profit grew 25% to £268 million, with operating margins strengthened considerably, reaching the highest level for well over a decade which is around 3.4% of market share in the market. Despite increasing the profit, the market share is lessen from 2007/2008. Seeing that it still targets the upper-midmarket with offering a high quality food and quite high price, it made consumers consider much more than the previous year during and after the recession. Due to this threats , Waitrose try to develop its offer to customer by re-launching its own-brand products with greater emphasis on value , beginning to do price-matching Tesco on leading-brand products , Investing in advertising and the ongoing development of premium ranges have also contributed to growing like-for-like sales through the recession and into 2010/11. With its efforts , Waitrose increase a market share while bad weather.
Brassington and Pettitt ( 2006 ) argues that business is able to use the SWOT analysis to structure audit information. It is comprised of Strengths , Weaknesses , Threats , and Opportunities. The SWOT analysis is a tool for identifying the company 's internal and external factors that have an impact on business. Evaluating strengths, weaknesses, opportunities and threats helps business to define the favorable and t unfavorable points that have to be taken into consideration to achieve objectives.
- Quite depends on its own label
- Waitrose always present itself only high price and quality
- Waitrose owns brand and farm
- Having a high quality foods
- Having a high quality service
- Wide range of product
- Strong brand equity
- Strong portfolio of organic food
- Store expansion plan
- Improvement of online shopping
- Launch of "Essential Waitrose"
- Decrease of the sales for
- Growth of competitors
- Loss of customer's confidence
- New entrants in this market
Figure 4 : SWOT Analysis for Waitrose
Strengths and weaknesses is in the Internal point. To analyze them about Waitrose affects its market and its growth.
Figure 5 : Waitrose brand Figure 6 : Product from Waitrose Farm
The strengths are represented by many aspects in the chart. Firstly ,Waitrose owns Brand and Farm. This represents Waitrose can control the high standard of quality and product cost because it owns farm. The key strategies focus on the quality in foods and services. As results of the offered quality, in year 1999 -2010, the firm has won many award as best UK retailer and multiple retailer of the year in many kinds of food such as Wine , Seafood etc. ( Waitrose company press and awards ,2010 ). Moreover Natural and organic foods trend are currently one of the fastest growing categories due to the rising health awareness among consumers. Hence, Waitrose's strong performance in organic foods this benefit from the health-conscious customer, thereby increasing its revenue base. (Totalhealth , 2010)
Conversely, the weaknesses are represented by different points. Waitrose's sales come from its own brand, it would be useful to convince customer due to the high quality which is stated that it is one of strength , but Waitrose always present itself only high quality and high price products which might be seen as a negative factor because it does not include the people lower from the middle-class. After the recession in UK , people think hard to purchase products or service slower than the past. Most of customers buy the stuff by considering the reasonable or bottom price in quality product. Due to this consumers behavior, Waitrose began to use price-matching Tesco which is the leading-brand products to adapt itself to compete with the lead competitor in the recession crisis.
Analyzing Waitrose from the external factor, Opportunities and Threats are very important to prepare the company plan in the future.
Figure 7 : Waitrose shopping online plus free delivery
The market opportunity occurs from external company. We always endeavor to find the opportunities for gaining the benefit. BBC Business News ( 2010 ) reported that The online sales grew by 18% in the July ,2010 compared with a year earlier , especially the retail online shopping. The average UK shopper spending for online retail shopping more than previous year due to many reasons such as promotions. It can be stated that Internet shopping is increasing the strong growth potential. Owing to John Lewis Partnership is strongly present in ecommerce, Waitrose's positioning is able to leverage the growth in retail internet sales.
For Threats , The current economic crisis is one of threats that leads to many problems. Normally people in the recession crisis always consider in purchasing and are likely to buy the cheaper products that offer the cheaper price than Waitrose. It made Waitrose loosing the loyal customers and giving the unexpected benefit to other retailers. Furthermore, the new entrant retailer which include in UK and overseas will increase the competition, decrease benefit , income and market share.
Marketing Mix Analysis
The classification of the four Ps of marketing was first introduced by McCarthy in 1960 , according to Doyle and Stern ( 2006) argues that marketing mix is the marketing decisions for implementing strategy and achieve its objective. Each mix, product ,price , place , promotion , should be blended together in order to generate the optimal response in the targeted market.
Figure 8 : Waitrose organic food
According to Kotler (1999), The basis of any business is a product or offering. Each retailer tries to differentiate the product or service to be outstanding and beyond competitor. For Waitrose is not possible to analyze each product due to the massive number of goods offered in the stores. However the distinguish point to make Waitrose different from competitor retailer is always offering high quality products and the best services to its customers. Moreover, the rising of consumption the Natural and organic foods trend benefits Waitrose. Waitrose position itself as a professional or leader in the quality food so it can gain this advantage.
Figure 9 : Waitrose uses "Price matching Tesco" campaign
As argued By Kotler (1999 ), price is different from the other mix. Price produces revenue but the other mixes create cost. Waitrose's aim is to offer product value for money rather than lessen price. The product value has shown as s good quality and the best service. Even though Waitrose targets the upper-midmarket with a high quality food offer but in this recession crisis made Waitrose change the price strategy to be "Price matching Tesco" for reassuring and retaining the customers not switch purchasing to the other retailer.
Figure 10 : Waitrose locates at the Eldon Square Shopping Centre in Newcastle
The importance of the place has been highlighted by Clarke and Rowley (1995) "You can be the best retailer in the world, but if you set up your shop in the wrong place, you'll never do much business. If you operate from the wrong properties, you start with your hands tied behind your back".
Waitrose's stores are all located in the most important areas of each town which has its customers target living a lot such as in a big city that people can be affordable. It is possible to get a benefit and gain more market share.
Figure 11 : Chefs Heston Blumenthal and Delia Smith in the New Waitrose campaign
As Kotler (1999) argued that Promotion covers all of those communication such as advertise, public relations , direct marketing and so on. It relate to the products and the customers by delivering the message from business to customers clearly. For this reason, different communication channels can reach the different target group. From observing , Waitrose using promotional tool that bases on newspapers and TV advertisements for reaching people through UK for promoting the campaign , promotion , discount , or special privilege to the customer. According to Mintel Oxygen that In 2010, Waitrose began to use celebrity endorsement by launching the new campaign with the famous celebrity , chefs Heston Blumenthal and Delia Smith to front a major advertising campaign for convincing the customer.
PART B: Marketing plan for the next three years.
Marketing Plan 2011 - 2013
Once the company knows the external and internal environment the marketing objective could be set appropriately to fit the marketing strategy for the marketing plan. Therefore, the objective of Waitrose would aim to
To increase the market share in the UK grocery retailer
Support and promote e-commerce
To increase gross sales
To increase the level of brand loyalty and retain a existing customer
To build a new customer
Strategic Objective Focus
As each company, also Waitrose's objectives are represented by growing and strengthening into the market.
The strategic marketing objective focus on
To grow in the market by gaining 0.3% of market share per year
To enlarge own brand production and introduce non food product
To support and promote on-line commerce in order to increase the number of sales at least 15% per year
The strategic financial objective focus on
To continue increasing the gross sales by 5 to 10% per year
To investment in new technologies for saving the energy efficiency
To find the new partnerships (e.g. Boots) in order to achieve higher profits in certain goods.
Selective Target Market
"Target marketing is the process of selecting one or more market segments and then developing a product and offer which is aimed specifically at those segments" (Adcock, 2001, p. 126)
Waitrose should continue to target the middleclass offering value for money and expand the new customer in the medium class for maintain market share in the financial crisis. It means offering high quality products and the best services with acceptable prices. This period, some product should be the attractive or lure price for persuading the customers to come to store for shopping the other products which brings the benefit to company. Moreover, Waitrose should consider about the demographic segmentation in order to meet its consumers' needs. This means evaluating social status, income , age and life style of its customers and being able to satisfy their needs offering the right products and services.
Defining COMPETITIVE ADVANTAGES
There are three main points that can be considered as Waitrose's strategic advantages:
Owning its own farm. The firm is able to control the product quality and producing cost which yield the high quality product and gain the big profit.
Own brand products. Other retailer has an own brand but when compare the product from Waitrose , it looks lower or have quality less than Waitrose due to the beand equity.
From many Wine and other food products awards, It can be describe that Waitrose is Specialising in wine and be a leader in the quality food and have a large range of product when compare with competitors.
Waitrose should maintain this advantages in order to attracting the existing customer still spend at Waitrose. If the firm can manage all advantage points , it will reach the marketing objective which bring many benefits such as gaining market share, increasing gross sales, having more money to invest for further expansions and weaken the competitors.
According to McDonald (1997), marketing strategies can be defined as the means by which the company achieves its marketing objectives. It is not only Waitrose is now in a good position to reach its future objectives but Its growth in the last years among the recession crisis is a positive result that should be brought to find the new relevant strategies.
Assembling Marketing Mix strategy
Marketing Mix , product, price, place, promotion, are concerned in order to producing the marketing strategy.
The strategies regarding the product and service that Waitrose should implement are several:
Figure 12 : Sample of Waitrose product
Waitrose should expand the product line of its own brand by researching and developing the market and the customer
Waitrose should matain the specialised retailer in producing wine and spirits while it should improve a further product specialisation in order to gain market share and increase incomes
Waitrose should continue in its strategy that does not involve a price war with the competitors, but the ability to give value for the money spent from the customers. Furthermore, using the "Price-matching Tesco" strategy in action should continue for adapting itself suitable for the recession crisis. When economic slow down , people are likely to save the money and spend less and possible to buy the cheaper product at the similar quality than the past. Using Price-matching Tesco , it does not make product lower quality ; Conversely , the customer think that they get the best quality in the reasonable price. This reason occurs from the customer linking the product quality and prices together. Customers' perceived value will remain high granting high level of loyalty.
Figure 13 : Waitrose campaign in 2008 Figure 14 : Waitrose campaign in 2010
Promotion will involve different ways to advertise brand ,products , and service.
In first analysis, In 2008 marketing campaign that emphasize the quality of the brand. "Everyone deserves quality food. Everyone deserves Waitrose" should become the way to improve brand's appeal (clickpress, 2008). It can create the consumer perceive that Waitrose is the quality food leader retailer. Furthermore, Mintel Oxygen reported that in 2010 , Waitrose emphasize the consumer awareness by using celebrity chefs Heston Blumenthal and Delia Smith to front a major advertising campaign for endorsing consumer that Waitrose is still be the quality food leader retailer in UK and no stopping developing the product. Waitrose advertisements will involve a combination of press, TV , and Internet. The majority of the advertisements should involve the press, in order to create a higher recall of the brand when the TV campaign will be launched after that it should be Internet for recall the consumer awareness in the same message. In addition, in stores promotions will take place all over the year in each store.
Broadcast Ads Media
Television : Product Tie In , Advertising campaign etc.
Internet : Waitrose webpage , Facebook , Twitter
Figure 15 : Waitrose Media Strategy
The plan is created for using the advertising in Television , Print Ads and Internet is 30 percent in the same message because we need to send the message to a lot of people as much as possible. Television is mass media which is an efficient media to reach mass people such as the Christmas promotion etc. The effect of advertising can create the customer recall and brand awareness. After running the advertising , we will use public relations for create brand preference such as dealing the special event , tie in product in TV show , sending news release etc. The third step, we will use Internet media for making consumers participating with brand. According to The Harris Interactive poll, found that 80 percent of adults go online, whether at home, work, or elsewhere. Those average spend 13 hours per week online. It is interesting to bring this result to create marketing activities to reach this target such as setting the Waitrose game for letting consumers participating with Waitrose by giving the discount or special. According to the Twistimage (2010) reported that Youtube is the second largest search engine which net users love to search. If the message will be sent via the web that people prefer to get in , It will reach massive target.
Media Flow Chart
Figure 16 : Waitrose Media flow chart in 2011 ( Media Timetable Checklist)
Marketing IMC for Waitrose
Revisit Brand Communication
Expand channel and maximum utilize business partner
Increase internal operation
For improve service quality
Internet & social media network
for each product brand
Selective Informative Media & PR
for MemberMain Idea: "The best quality and service in Price-Matching Tesco"
Figure 17 : Waitrose Integrated Marketing Communication chart
According to Kotler (1999) argued that if the firm use the appropriate mix of promotion tools for driving the customer purchase, it would be facilitated. Due to the growth of shopping online is increase and people spend time to use computer rather than other media , Waitrose should concern in this point and continue Internet campaign by dealing the special activities on Internet for persuading the customer participating with brand which can be recall and create awareness consistently.
The place decisions means to choose the distribution channels in which the company wants to operate. Kotler (1999) argued that the firm or any seller should decide how to make its goods available to the target market. The two choices are to sell the goods directly or to sell them through middlemen. Nowadays, Waitrose operates in supermarkets store and in the internet commerce. According to the SWOT Analysis the firm should increase its distribution in the country because in some areas the presence is definitely poor.
Design marketing organization
Baines, Fill and Page ( 2008) argues that Marketing is present in all aspects of an organization, since all departments have some role to play with respect to creating, delivering, and satisfying customers. Each division in the Waitrose Company will be determined job responsibility clearly and should work closely to marketing and sales division under the Managing Director and Accounting Director to implement the marketing plan under budget controlling. The tasks for each division will be given as mention below:
The customer service division: responsible for collecting customer data, recording the frequency of purchasing and organize special event to satisfy customers, market research in any campaign .
The human resource division: responsible for recruiting, training, and monitoring progress on employee's work , entertaining the customer or find the good benefit to customer.
The accounting division: responsible for planning and control the budget carefully in every department.
The delivery or store division: responsible for delivery products to customers correctly and quickly ,check and stock the product , apply label , send the product to its all branches.
Marketing division: responsible for determining marketing goals, planning market strategy, completing and controlling.
Sales division : trying to push the product to customer by inviting to try the product.
Production division: responsible for controlling the quality of the food, developing and offering new product line to target customers.
Research and Development : responsible for creating the new quality food and product to customer.
Implementation Marketing Control
Different ways to control the results of the developed strategies will be adopted during the year:
monthly evaluation of market share;
quarterly evaluation of sales volume and operating profit;
quarterly analysis of sales productivity;
developing of new marketing audit describing the new internal/external situation, finding new possibility for growth.
There is highly competition in the business world. The company should be aware and operate business carefully. The marketing plan is used to determine the process and marketing strategies are designed to be the tools to bring the company achieve the goal. The company needs not only to consider the development of strategy, but also to address issues that turn strategy into reality.
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