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Sainsbury's was founded in 1869 by John James Sainsbury and his wife Mary Ann Sainsbury. The name came from the surname John James. Today the company has grown to become one of the largest supermarkets in UK and operates about 1,000 stores, including 440 convenience stores and has a labor force of about 150,000 persons.
The company`s business strategies and objectives are based on their strong values and cultures. Their main objective include providing great food, compelling general merchandise and clothing, developing complementary channels and services, developing new business and finally growing space and creating property values. From these objectives and strategies we will later see how the company has segmented its market.
According to Turban et al. (2002), "Customer service is 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 .Sainsbury puts its customers at the heart of everything they do. Massive investments have been done in the stores, labor force as well as their distribution channels to ensure the customers receive the best customer service there is.
Sainsbury operations are mainly based in the UK, the main office being based in London. Its positioning in the UK gives it a competitive advantage compared to other retail supermarkets. Today the supermarket has over 785 stores in the UK, this only does not increase its market share but improves on its customer service since there is convenience. Apart from having man store across the UK, Sainsbury's stores are mainly located close to bus stops as well as near malls.
Sainsbury differential advantage arises from one of its marketing strategies, which are product differentiations. Barney & Hesterley (2006) argues that, "product differentiation is ultimately an expression of the creativity of individuals and groups within the firms. Differentiation involves creating something that is seen to be unique by other firms in the industry. Differentiation can be achieved through brand image, changing product design and features, improving customer service and expanding the company's network. From Sainsbury point of view, the retail store has successfully differentiated its products as well as the services. The company`s network is massive, having covered major towns in the UK. Also the each customer base has its own products with different features, from example, the youth have an entertainment joint, and the young kids have toys stores.
The main marketing strategies employed by Sainsbury are market segmentation. Market segmentation refers to the division of a market into unique groups of buyers who require separate products. Market segmentation can also be referred as to the division of a market into smaller markets having buyers with the same characteristics which a company will be able to meet its needs successfully hence satisfying them. Markets can be segmented in terms of geographic, demographic, psychographic and behavioral variables.
From the research done, 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 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.
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 television. The company uses various marketing mix to attract this segment. Marketing mix also known as the 4p`s refers to the combination of product, price, promotion and place.
Sainsbury ensures that its products are of high quality for example, the case of its 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 from the family members. Also I analyzed their website and found it to be very informative. There are various icons for the various products that are offered at the stores. There is an icon for toys, entertainment for the teenagers as well as food stores. Also their products are of high quality having been made 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 pocket friendly. The company has been involved in price awareness campaigns where it educated the customers on various price changes as well as any discounts for new products.
Sainsbury ensures that the products of this target group are easily available and the costumers can are able to get them at their convenience. This has been evident in the expansion programs where many stores have been opened and these stores are mainly located to bus stops as well as residential areas.
In trying to make the customers aware of these 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 of high amounts, amounting to millions of pounds.
Marketing segmentation can sometimes be very expensive for a company. This is because the company has to come up with various marketing strategies that meet the standards or need for every segment of the market. For example , products for the kids have to be promoted using different tactics, for the teenagers also promotion has to be done using another mode. Also we have seen that Sainsbury issues vouchers worth millions of pounds to the customer, at times when the company has not made profits, customers may not be given the coupons hence making the customers loose morale.
Sainsbury still has a wide range of opportunities .The Company should consider going international and opening stores in various continents.