What is the importance of marketing strategies in the retailing business? Supermarket Giant of UK: Sainsbury

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What is the importance of marketing strategies in the retailing business? Supermarket Giant of UK: Sainsbury



Strategic marketing seeks to comprehend the present and upcoming customers’ needs, identify new niche markets, locate potential market segments, evaluate the strength and interest of these markets, directing the organisation to follow those opportunities and organise a planned strategy to accomplish the core goals. The work entitled “What is the importance of marketing strategies in the retailing business? Supermarket Giant of UK: Sainsbury” addresses the large image of the retail industry of UK and the importance of marketing for the industry. It focuses on the various strategies that are presented by marketing gurus and how they can be implemented for the betterment of a business. It develops a conceptual model of the choice of points of sales from the customer’s perspective allowing better management of these establishments while primarily focusing on the third largest retailer market in UK, Sainsbury Plc.

Keywords: Marketing, Image, Marketing Strategies, Management in Retail Stores, Sainsbury.

Chapter One: Introduction


Science of designing the supply of a product is based on analysis of consumer expectations (consumer marketing), and taking into account the capabilities of the company as well as the constraints of the environment (demographic, competitive, legal, cultural) in which it operates. Marketing is an aid to the decision, it can set the combination (mix) optimal product characteristics, can meet these consumer expectations of the most profitable possible. Finally, it helps control performance against the original objectives. The mission of marketing as a discipline management organization is to build a customer base and to ensure long-term, sustained loyalty by asking day to day and therefore very short-term actions needed to strengthening its satisfaction (Baumol, Panzer and Willing, 1982). By placing the customer at the centre of his thinking, marketing has gradually evolved into a relational approach with CRM (Customer relationship management) is intended to ensure the protection and improvement over time. The evolution of marketing is commonly attributed to two phenomena. One is the proliferation of products that meet the same utility and the other is a change in the consumer’s choice more unstable, more individual in its behaviour. The role of marketing cannot be understood by inserting this discipline in a dynamic environment, by observing its evolution in parallel with that of the environment.

Strategic marketing works when organizations grow in competition with their competitors. Strategic marketing is thinking what to do after analyzing the market, i.e. perform a SWOT or PESTEL use the method to achieve a diagnosis on the global market and the company in question. Therefore, strategic marketing is necessary for the company to stay alive in the current competitive market, as well as in a high-flying position in the future (Wernerfelt, 1984).

In this aspect, even the greatest sector of market, the retailing industry, needs to carefully examine its marketing strategies. Sainsbury Supermarkets Ltd is the UK’s third top leading retail chain industry. Being one of the major and longest foods retailing chain, the first Sainsbury store was opened in 1869. An approximate amount o 16 million customers weekly are served by the retail giant, Sainsbury, in the 455 supermarkets and 301 stores across the United Kingdom. With a total of 148,000 employees dedicated to deliver “Great Food at Fair Prices”, the retailer has enjoyed healthy growth the past few years (J Sainsbury’s plc corporate website, 2009a). Along with food retailing, Sainsbury also provides services in the insurance, banking and electronic sector. Marketing is to plan, with sufficient assurance of success in the upcoming time of a business. It is established on creating different types of strategies to meet the demands of the market. Strategies for marketers serve as a guide to position the product as well as to perform specific tasks in the various aspects of the marketing mix (price, promotion, place, and product). This direction in marketing strategies is divided into three phases: defining strategic objectives, its planning and then implementation.

1.2. Purpose of the Study

Marketing is not a battle between products and services – it is a battle of perceptions. To win, one must become a leader in a category. Why are they leaders perceived as the best? Because the public believes that the best product or service always ends ahead of its competitors. To become a leader it is important to initiate a new category in which one can be first. Sometimes the simplest ideas are the easiest to establish in the minds of consumers, however it is the arena where most of the fighting brands lose or win. Marketing tools identify the brand in the mind of the client or potential client. One of the major competitors of Sainsbury is Tesco Plc, which is currently boasting a market share of about 30.9 %. Despite the wave of the current economic recession that hit almost every business industry, Sainsbury has been considerable successful in increasing its sales. However, although the company has grown, there has been a decline in the profit market shares in company in recent months. According to a report by Desmond and Stone (2007) a total of 11 million pounds of spending was taken from Sainsbury and given to its competitors in the twelve weeks to November. The fundamental aspect of this study is to focus on the importance of marketing strategies while primarily focusing on the retailing giant in UK, Sainsbury.

  • Desired Outcomes

This paper aims to understand the importance of marketing strategies for retail business. Therefore by the end of this research, it is desired to establish a written piece of work that will present a detailed analysis of the importance of marketing strategies while focusing on the retailing giant of UK i.e. Sainsbury.

  • Aim

The aim of this paper is to understand the importance of marketing strategies in the retailing business while focusing primarily on the strategies of marketing of Sainsbury.

  • Research Objectives

This research will focus on attaining the following objectives:

  • To develop an understanding of the marketing strategies
  • To focus on the importance of marketing strategies in retailing business
  • To examine the various types of marketing strategies used by the retailing companies
  • To evaluate the marketing strategies of Sainsbury
    • Research Questions

The research questions include:

  • What are marketing strategies?
  • What is the importance of marketing strategies in retailing industry?
  • What are the various types and features of the marketing industry?
  • What are the strategies of marketing of Sainsbury?

Chapter Two: Literature Review

2.1. Introduction

A marketing strategy is recommended when launching a new product or expanding local, regional or international. It can also be very useful for companies seeking concrete information on their industry, competitors and opportunities. The marketing strategy is a plan of coordinated actions implemented over the medium to long term by a company to achieve its business objectives and marketing. The marketing strategy is a component of business strategy. Depending on the case, the marketing strategy is captured in the overall level of business or applies only to a product or product family. It is thus possible for a company to combine multiple activity varied marketing strategies according to its areas of activity. The marketing strategy is developed from the analysis of the strengths and weaknesses of the company’s marketing and study environment (Learned, Christensen, Andrews and Guth, 1969). Marketing plan must be able to determine the consumer needs to provide a product or service that meets those needs, effectively communicate the characteristics of the product or service, to provide a distribution network to serve customers and allow the company to make a profit. The purpose of the marketing strategy is to communicate with possible customers to pursue them of the superiority of a service or a product. Its aim is to apply a strategy to make importance. The marketing strategy is established on three main facets that are called “3 Cs” as Company or business, competitor and customer (Williams, 1992).

The strategies of marketing, also called the strategic marketing and business strategies are based on actions performed to accomplish a particular objective related to marketing. Some marketing objectives examples are to attract more customers, increases the sales volume, to produce new and unique products, products’ display and better coverage, and so on. The design marketing strategies is main functions of marketing companies (Bhide, 1986). To design and organise the strategies, it is essential to analyze initially the target people so that later, established on this analysis, it is so simple to design strategies that pay attention on the consumers’ needs. Though, when designing marketing strategies, competition is a more considering factors for companies, as well as many other factors like capability and investment are also very important.

2.2. The Concept of Marketing

Any activity or benefit that one party can offer to another that is essentially intangible and that does not result in anything related to property, is called marketing. Marketing is the specialty that deals with the processes that seek to satisfy the consumer needs, without this is essential for the transfer of goods to the client. As one can see, in the marketing of services seeks to satisfy the needs of customers through activities in which there is no physical good exchange or, failing that, the exchange of physical goods is incidental to the transaction itself. Thus, one can speak of services hairdressing, marketing consulting, education, personnel carriers, postal, car care, etc. In all these examples it is an activity for which the purchaser has obtained a benefit without having had the transfer of physical goods, and therefore pays paying the seller. However, there are other activities in which one can see the trading of goods and however, they are considered equally within the rubric of services. So, a restaurant is a food service, but it clients receive tangible goods (food). Furthermore, the people attending a dentist in many cases receive a new denture (one hairpiece), without necessarily discussing the self service category to dental care. This confusion is due to the fact that in reality there is no clear dividing line between marketing entirely of goods and services, but there is continuity between both types of activities. Everything is marketing services (Gustafsson, Johnson and Roos, 2005).

Some marketing experts believe that there is no difference between the marketing of goods and the service because, they say: “No one needs a good”. This position is based on the concept of marketing, whereby companies not selling goods or services that meet needs but for cars but nobody needs they transport cars. Similarly, no one needs cosmetics, but feel beautiful. For that reason, the car dealer is actually competing directly with the transportation services provider, and seller of cosmetics racing salon. By Therefore, anyone who sells a product would actually provide a benefit (the the product gives service to the user). This would lead to the conclusion that the marketing of goods does not exist. And everything is marketing services. What do they think (Voss and Voss, 2000)?

As Marketing Services refer to all the factors of the marketing mix, which help the company to meet market demand for its products through service market research. Such services identified: both unmet needs by goods or services offered, such as new opportunities for goods and services to markets existing and new markets, distribution services with channel selection distribution for the good or service more conveniently reach the consuming public; Logistics Service comprising storage service and inventory control allow goods available for prompt delivery, and transport services. Demand is served, even through presale services that help the client identify correctly their needs, installation service asset acquired by the customer, and services Warranty and support that promote the proper functioning of the good. The extension service can be exercised through advertising sales promotion, the Merchandising, Public Relations and Sales Force (Athanassopoulos, Gounaris and Stathakopoulos, 2001).

2.3. Characteristics of Marketing Services

The services have a number of features that while not unique, are much more own that the marketing of these goods, they are (Ball, Coelho and Machas, 2004):

  • Intangibles
  • Inseparable
  • With the participation of customers
  • Perishables
  • Various

2.3.1. Intangible

This characteristic indicates that in most cases the sale of a service not involves a transfer of property. The client cannot then “touch” their  product but only know their results or benefits. When a customer receives service “Car care” in the street, all they are getting is the probability of not anything happen to their car while it is parked outside, and to terminate service their car will remain the same, it will not be added (and especially will not be removed) nothing.

2.3.2. Inseparables

Makes it very difficult to separate the service it provides people. Thus a medical service will depends on a lot of the doctor who teaches. Therefore, the quality of a clinic will depend largely on the professional quality of each of the doctors, nurseries. Who works in it? This is not the case of the sale of bread or tools whose quality depends more on who produced when manufacturing that of the person who sells or gives to the public.

2.3.4. Involvement with Customers

The quality of service is closely linked to the quality of clients participating in it. Thus, a haircut can be perceived as very good if the person has a hair silky and easy to style, while it will be seen negatively by the person having a difficult hair. Furthermore, other clients also have much importance in assessing the service. For example, the quality of a bar depends on the quality of the customers who frequent it. If this bar thugs or concur disreputable people or look bad, no matter if it is elegantly decorated or located in an expensive area: their quality is doubted by everyone.

2.3.5. Perishable

This characteristic means that, for the most part, the services are only provided upon same manufacture and cannot be stored or saved. For example, the person going to a salon for haircut haircuts may not “three times at the same time, to avoid having to return later. Services are therefore considered Perishable items because, like many food products, serve only if consumed immediately.

2.3.6. Miscellaneous

Given all the above features, a general feature of services is diversity. It is almost impossible to standardize a service: each activity service is unique and different from the others, because its outcome depends on a large combination of circumstances and actors: the service provider, the service receiver, other customers, the time of the service and especially the perception that customers have the same intangible results. In a service business, any movement or transfer of any property affects the Service. Therefore, it is always necessary to distinguish the service operation as a result of attached to an asset. The service can be something marketed as a commodity, or can be attached to tangible products. But the products are almost always combinations of the tangible and intangible, as Theodore Levitt. A product can be extended by the introduction an unexpected service. For example, an automobile can be expanded product when it annexed repair or unexpected maintenance free by the purchaser.

Customer service makes it that way, market share, once conceived and added the product, and the product mentioned is enlarged by the annexation of the service. The service customer is implementing all possible means to satisfy the consumer for something acquired, so it should offer:

  • Much satisfaction (operating explanations, all options of use) when possible on the basis of property acquired without early limitation of the duration of that function. Whatever the order expected, subject, that the fears are executed or without charge, provided or not in the sales contract.
  • Facilities so as many as possible for the customer to purchase the good offered. Thus, user satisfaction is the key element of the concept of service customer service both pre sale and posts the sale. Or even in the same service installation of a service. However, satisfaction consumer depends on a number of objective factors and subjective, intangibility as is characteristic of services.

2.4. The Evolution of Marketing Services

One difference between the most developed societies and less developed is the importance of services in the economy. Thus, the importance of services within the GNP increases as the Gross National Product same. However, these statistics seem to suffer from a problem analysis. In GNP effect of the wealthiest countries increased strongly for the inclusion of services within the national accounts. However, in reality, the existence of more services (more hairdressers) does not necessarily richer countries. Moreover, many of the services that exist in an organized richer countries, also give more discreet in the poorest countries (although no hairdressers established, that does not mean that people do not cut their hair). The same applies of lawyers (judges and advocates have always existed), doctors (profession ancient) and most professional services today. What is observes, is that their numbers and importance become larger in the more developed. Furthermore, the passage of a product to market one service is not given necessarily linearly, but can be by jumps. So in a poor society shows that people do wash their clothes by washerwomen specialized going from house to house (services), when companies grow, people can buy washing machines and wash clothes at home (good) and then, with the development economic growth is observed with apparel delicate laundries or difficult to wash (silks, men’s suits, leather, etc) (Hellier, Geursen, Carr and Rickard, 2003).

2.5. Marketing Strategies

There are two sides of marketing: strategic marketing and operational marketing. The marketing strategy is the element that defines and frames the lines of communication and marketing of the company, to take advantage of market opportunities. It traces objectives and paths then follow their marketing tactics (operational marketing) in order to achieve greater results with less investment and effort, defining the position of the company versus the market chosen as recipient of the communication actions and sale. The operational marketing is the implementation of the marketing strategy and plan through periodic variables of marketing mix: product, price, promotion and point of sale or distribution (Lei, David, Hitt and Bettis, 1996).

2.6. Marketing Mix

Traditionally, one of the most common marketing tools used by companies to accomplish its marketing objectives is the “Marketing Mix”. Acquiring a supportive standard in the minds of the customers and establishing the service or product striking to the focus audience involves cautious formulation of the marketing mix. Getting the correct mixture of the product, promotion, price, and distribution is essential in marketing. It is a group of aspects called the 4 Ps or mixture (or mix) marketing. The aim of the marketing mix is to define an image for the service or product that will match with how the company wishes the service or product to be visualized in minds of people. According to Wernerfelt, (1995) marketing mix is the set of marketing approaches that the company applies to follow its marketing goals in the target market (Rust, Moorman and Dickson, 2002).

2.6.1. Product

The product of any company is the good or services which markets and sells to customers. From a marketing point of view the product has three dimensions: concrete, a functional and psychological.

The concrete dimension – what is really the product or service, its objective characteristics – is easy to describe and understand, quantify and use. The functional dimension of the product or service is what the buyer wants to do what it does. These are all features to fulfil the demands of customers: the product itself, the services, etc. Remember that the recognised uses and important users are not constant what the makers of the product have considered. This can assist to observe the approaches of promotion and distribution, even the structure of the product. The psychological measurement of the service or product is the mental representation (image) of what people consider of it. For few products (e.g. luxury) image aspects have an important weight. This aspect, just essential if not more than any other, is much more complicated to describe and develop (Lado, Agustine, Boyd and Wright, 1992).

2.6.2. Price

Price is basically the value we place on money products when marketing and selling them to customers. The price (for the customer) can be observed as the sum of margins, costs, and the seller or other taxes as the amount a consumer is eager to give for this product; psychological price, it is the maximum acceptance price. Demand is normally elastic: modifying the number of purchases contrasted to the price development. If the price enhances, demand declines and vice versa. As a result, various pricing strategies are probable, like skimming strategy, which observes to sell fewer products, but more costly, and so to produce additional income. The price can also be observed in a qualitative approach (variable or fixed), dynamically (political balance) or relational (retention strategy).

2.6.3. Place or distribution

Distribution or place is another element of the marketing mix. It is a system through which services and goods are transferred from the manufacturer to the last consumer. The distribution or place is the assortment of the sale’s places or points where they sell our products to customers, and to ascertain how the products will be delivered to such particular places or retail outlets. Distribution decisions are divided into six parts:

  • Do they use a direct or indirect distribution? (e.g. “direct” consumer, “indirect” via a wholesaler).
  • Distribution channel or multiple?
  • The multiple channels combine with each other (A and B, A and B).
  • Types of intermediaries.
  • Number of intermediaries at every position
  • What companies are intermediaries, to avoid any conflict in the same channel (e.g. infighting between local distributors)?

2.6.4. Strategies for Product, Price and Promotion:

The strategies that chiefly concentrate on the elements called the 3 P’s of marketing mixture. These elements are product, price and promotion and their strategies include (Wernerfelt, 1989):

  1. Intensive Growth Strategies:

They comprise “cultivating” the current firm in markets in an intensive manner. They are suitable in circumstances where opportunities for “product-market” not yet exist completely and comprise the subsequent major strategies:

Penetration strategy: Concentrate on more aggressive marketing approach of existing products (as instance, by providing expedient price in relation to competition and advertising activities, sales related employees and sales promotion quite forceful). Generally, this nature of strategy generates revenue and more profits because i) convince existing consumers to employ more of the product, ii) appeals them from the rivalry and iii) convinces them to become undecided prospects.

 StrategDevelopment Market: The development strategyofa company’s businessconsists ofall the meansput in place bythecompany wishingto gaina marketshare. A development strategy is based oneffective businessstrategic positioningwinner.Strategic positioningis theterm usedinmarketingto definewho they are,what evokesin the mind ofa customerorprospect.

Product Development Strategy: Comprises producing new and innovative products to appeal consumers of existing markets, as instance, producing a new and innovative product presentation that facilitates extra benefits to consumers.

  1. Integrative Growth Strategies:

It assists to exploit the strength that has given organizations in its particular industry to put into effect Control over their competitors, as well as suppliers and distributors. A company, in that sense, can reverse, frontward or horizontally.

Backward integration: Takes place when the organisation expands its control over its resources supply, for example, controlling their suppliers or leastwise major supplier.

Forward integration: Takes place when the organisation expands its control over its distribution system, as instance, when a multinational or larger firm owns a service station and stores network and controls it.

Horizontal integration: Takes place when the firm expands its control over its market challengers. As instance, when healthcare organisations negotiated arrangements with specialists for each doctor provides services in a specific speciality, but within the premises of their own organisation.

  1. Diversified Growth Strategies:

These strategies are appropriate when few opportunities are there for growth in the target market of company. In general, the horizontal diversification, and conglomerate diversification are main strategies (Bharadwaj, Varadarajan and Fahy, 1993).

Horizontal diversification strategies: They comprise adding new products to the company’s product line, which are not connected to existing products. They are developed to attract to members of the firm’s target markets. As instance, when McDonald’s introduced toys with the burger combo for children they added new products unconnected to core product lines, however that helps to appeal more successfully to a particular target audience as kids in this case.

Conglomerate diversification strategies: They comprise marketing and selling new items unconnected to existing product line, so that approach, appeal more new customers’ group.

Concentric diversification strategies: In this strategy, companies launch new products that have marketing or technological resemblances with existing major products and are developed to catch more new customers.

  1. StrategiesLeadership Market: 

Companies are used this strategy in order to dominate in the industry with better-quality products, efficiently competitive, or both. After achieving their market top leadership, companies have two main strategic choices for more growth and expand in the future:

Cooperative Strategy: Corporate strategy is to enhance the total size of market (for the similar firm and competitors) to locate new customers and applications of the product or service.

Competitive strategy: Competitive strategy is to accomplish more market share investing enough in the activities like promotions, personal selling, public relations, etc ) to appeal more new consumers to compete in the market.

  1. Challenge of Market Strategies:

Following are the strategies that organisations can pursue against leading the market. This strategy is divided into further three categories: (Williamson, 1975)

Frontage: This strategy is based on attack the whole marketing mix leader.

Attack on the sides: This strategy is to firmly concentrate on the leader’s weaknesses, as the price.

Referral strategies: Through this strategy companies deeply focus on the domains that are not fully controlled by the leader (generally the rivals do have a better product or service).

  1. Market Monitoring Strategies:

These strategies are generally used by competing organisations that are not taken interest directly or indirectly in challenging the leader. Such organisations seek to develop and sustain their market share strongly following the politics of marketing mix elements leader (Williamson, 1985).

  1. Niche Market Strategies:

Normally, smaller competitors are used this strategy. These competitors are specialized in facilitating market niches and big rivals frequently ignore or are uninformed of their existence. They offer very particular items and or specialized to fulfil the needs and demands of individuals, small groups or companies ) but all the same in their needs or demands.

  1. Market Strategy congregation:

This is also called the “mass market strategy”. This strategy is to: i) provide a sole product to the mass market, ii) invent a structure regarding prices and distribution system and iii) employ a single program aimed at promoting the market. This method is also known as “shotgun pellets or” because it seeks to reach a large target with one program.

  1. Strategy one segment:

Also called concentration strategy, the goal is to choose an open segment of the total market, therefore, is a marketing mix to reach that segment only. Such a strategy allows the company or organization to penetrate deep into the market segment of choice and acquire a reputation as a specialist or expert in that segment.

  1. Multi-segment strategy:

Consists of target markets identified as two or more groups of potential customers and create a marketing mix to reach each segment, which is why the company or organization produces a different version of the commodity for each segment, with prices differentiated systems and distribution programs tailored promotion for each segment.

2.6.5. Promotion

Promotion defines to the implementation of productive methods to pull interests of consumers and acquire their considerations to understand and focus to the products and to inspire consumer’s wishes with support and encourage the consideration of the last purchase. Sales promotion strategy could be established to assist these actions (Ghoshal, Mintzberg, Quinn, 1999):

  • Introduction of new products – to encourage the storage or trying
  • Attracting new customers – encouraging storage and try
  • Maintain competitiveness – by providing discounts or special prices
  • Reduce seasonality – by encouraging the consumption season
  • Increase the number of people who use their product


2.6.6. Strategies for Promotion

The strategies for Promotion include (Oliver, 1990):

  1. Market segmentation:

Market segmentation is dividing a market into different homogeneous groups of consumers. A company has a product and they want to market. To promote its products, company need to segment its market. In summary, a segment of the market consists of people with similar characteristics (their interests, needs, age, occupation, etc).

  • Market Extension: The set of actions that will be used at different times of the existence of a product to sustain sales and profits, rather than suffer the normal decline.
  • Multiple brands: consists in offering different brands in a given product category.
  • Brand extension: Is the use of a trademark in other products.

2.7. Retail industry

2.7.1. The new role of retail distribution

The restructuring in a global context is the phase latest period of half a century of changes produced in the commercial distribution sector in Europe, which comprises three main phases. The first phase occurred in the years after 1945, a period in which the priority for the sector distribution was rebuilding its physical and organizational structures. There strong U.S. influence on innovations in management, for example with the introduction of self in the food sector. Several U.S. companies, such as JC Penny, entered Europe. The city centre of much Northern Europe was rebuilt and trade was used as a catalyst for architectural recovery cities such as Coventry, Exeter, Cologne and Berlin West. Overall, consumers, after several years’ shortages, wanted more products and retailers provided additional commercial space to meet these needs, but the low income growth of citizens constituted a limitation for growth of retailers. However, in UK the situation was quite different, mainly as result of political circumstances that kept the structure of the retail sector at a subsistence level until late sixties. They began to take actions to promote self-promoted especially government-but still for much of this phase remained traditional structures standing. In fact, in the early seventies, traditional stores accounted for 71 100 food sales and 95 100 sales non-food (Baker and Sinkula, 1999).

The expansion of the ‘common market’ in Western Europe and the subsequent development of a European Union more integrated are the second phase (Winsted, 2000). In northern Europe, this phase occurred in the seventies, while in UK was delayed a few years since the first phase was not yet finished. Retail markets Europe began to consolidate, but at different times, and there was a substantial growth of a type different from before. The marketing accepted as a key activity for commercial distribution and retailers incorporated it into their activities. We designed different types of establishment’s commercial needs of consumers. As developed segmentation markets, explored a variety of new retail formats. For example, during the decade of seventies and early eighties was developed in various sectors supermarkets on one level in self, often located in suburbs or on the outskirts of cities, hypermarkets especially for products of all type and specialized superstores in food, DIY, toys, appliances, furniture, etc. Again, going to UK lagging behind the countries of northern Europe, and consolidated growth of hypermarkets and other large areas occurred later, in the mid the eighties. During this second phase, consumers wanted different products and better quality, rather simply more products. There was also a demand segment with different needs and constraints requiring new types of business environments.

The third phase, which is the period of exchange at present, is characterized by restructuring distribution, with the emergence of new roles and functions. The convergence of information technology and communication, the use of new materials and use of other technology applications such as radio frequency identification in the value chain have strengthened the position of the retail sector in the economy. Economies of scale retail companies, associated with global supplies and the presence of stores around the world, have led some retailers have become the largest companies in Europe. In 2004, Metro, Carrefour and Tesco were among the 20 largest companies in terms of market capitalization in Germany, France and the UK, respectively. The Retailers have become key elements of the composition of the European economies. Consumers want low prices and high quality of service, and quality is now considered broader than simply a tangible appearance of a product. Thus, Zara offers low prices and high quality service by selling fashionable clothes and innovative products in an attractive business while Mercadona offers its own version of the concept of always low prices, combining low prices with quality service, through comfort, high inventory availability, innovation in their own brands and efficient systems customer relationship. The major European retailers by volume Sales in 2003, Carrefour, Metro, Tesco, Rewe and Royal Ahold, listed in the top ten retailers the world. Wal-Mart and Costco, which are in the list, but are based outside of Europe, also have stores here. European retailers have expanded beyond Europe. Thus, in 2003, Carrefour had facilities in 31 countries and is supplied in over 55 countries, and Metro was present in 28 countries (Ryals, 2005).

Tesco, with stores in 13 countries, is less international operational level, but it is equally as their sources of supply. The large scale and international activity of these retailers have many consequences. The options available to consumers are changing and, therefore, the election processes holding consumers are also evolving. These changes are affecting the buying habits of the consumers. This is one of many potential examples of the more active role currently played by the retailers in the global economy. In establishing the new distinctive role of the distribution, the major companies have developed a specific European model of distribution and trade (Anderson, Fornell and Mazvancheryl, 2004). This model Emerging Europe is different from American. This is an international model, not national; for example, just compare Metro, Carrefour and Tesco with Kroger and Target. Central Europe’s openness to investment by part of Western European retailers constituted a stimulus for this international vision. Moreover, the European model is structured around a chain of integrated demand, not a chain supply. And its central element is innovation to the market, rejecting the stronger position imitation. This commercial distribution is often reflected in macroeconomic statistics. For example, in 2005 in the British economy expected that the value added generated by the sectors commercial is greater than that generated by the industry.

The difference between these two sectors has been declining since the early nineties, when the contribution to value added industry was almost double the trade. In the United Kingdom, the substantial increase in labour productivity in trade was reflected in a large increase in the value added, with a much smaller increase in the creation employment (Reynolds et al., 2005). This pattern is repeated in much of Europe, and although trade continues be a sector with a relatively productive low, the growth rate of the same has accelerated in recent years. When comparing commercial sectors United Kingdom, it is clear that in the UK the sector is more developed, although growth has been greater in UK in recent years. In UK, the contribution of trade to GNP has increased, reaching 10 per 100 in 2002. The trade gave employment to 2.7 million people in 2002, which shows the function social business activities have on the economy. At the qualitative level, the sector employs increasingly more educated workers and has a greater number of employees, and the percentage of temporary contracts compared to fixed is increasing (Rust and Oliver, 2000)

2.7.2. The determinants of changes in the retail sector

The reasons for structural adjustments in the current phase of major changes in the European retail sector can be understood as a process in which environmental changes are related to the responses of managers of retail companies. Given distribution is an activity which relates to the consumer goods and services, its operations taking place in local markets. As a result, many of the management decisions are a response to both the local buying habits of consumers and local culture in demand. In Europe, these local cultures are subject to considerable social, economic, political and technological. This dynamic environment requires local cultural responses from retailers, which for if successful, must adjust their operations as possible to the needs of consumers. These answers are based on the strategies of retailers, which run through the formats and formulas that creates the retailer. By creating these formats and formulas, the retailer builds relationships with other groups, such as suppliers, financial groups, consumers, and etcetera. In the current context of activity in Europe, the four elements of the retail sector (Hellofs and Jacobson, 1999):

-Cultures, strategies, formats and formulas, and relationships-are undergoing substantial changes as they interact. Changes in these attributes are responsible for the sector is evolving distribution the way it is making. In order to understand the factors causing the changes in the retail sector is useful to examine some key examples of changes in each of these four elements.

2.7.3. Culture

Changes in European consumer culture produced since 1989 have been considerable. The emergence of market economies in Central Europe led to widespread privatization of the sector commercial distribution in this part of Europe and the subsequent integration of these countries into the European Union. But one aspect that has perhaps even more important in terms of consumer culture has been a growing demand for products and services in the former communist countries. The steady increases purchasing power of the population after the initial periods of high inflation have meant that, from the mid-nineties, consumers want to have access to a wider range of value combinations in stores. By example, in the textile sector, different markets quickly emerged as clothes, work clothes, designer clothing, discount clothing, etc., similar to those who had developed more gradually, in Western Europe. Following the full integration of these countries into the European Community in May 2004, these habits will develop more quickly, leaving behind habits purchase more traditional. In many cases, retailers in the nineties are what have shaped consumer habits of Central European countries and those who have shaped these habits in the image of Europe West, rather than Americans. In much of Western Europe, habits trends show consumers apparently contradictory towards standardization and fragmentation, making it difficult to speak of a single European consumer. Fragmented demand is evident in many ways, the emergence increasingly smaller segments consumer with specific patterns of demand. Consumers have translated their ideas and interests in demands goods and services, in the sense that there are groups with different values, as environmentalists, vegetarians, sport addicts, and so on (Zimmer, 1994).

In addition to these groups, are established groups for longer depending on the age, the level education, income, and so on. Moreover, there is increasing fragmentation associated with ethnicity. In UK, the immigrant population already accounts 7 by 100 of the total population. Their demand for unusual foods in the Spanish diet is so great which, for example, 30 100 of the products sold goes to the immigrant population, and even in this market Halal meat is produced. Immigrants make their purchases especially discount stores, especially these days, although its favourite store is Sainsbury. Means specialized communication have encouraged this fragmentation. Fragmentation is even greater because to consumer demands vary in a temporal dimension: by time of day or day of the week. They can no longer consider the consumer as a single person, but must be seen as many “people” different.

In apparent contradiction to this fragmentation, Europeanization exists some aspects of consumer demand. Due to the widespread and faster access to information via satellite communications, the rapid spread of fashion, especially in clothing and music, have been generated European demand patterns. Travel through Europe especially for leisure and tourism, also have helped the spread of cultures, especially food, so that consumers in northern Europe are familiar with southern food, and vice versa. The availability of marks is evolving nature of the form in which it is making. In order to understand the factors causing the changes in the retail sector is useful to examine some key examples of changes in each of these four elements.

2.8. Importance of Retail Marketing

Since the eighties and most forcefully from the nineties has become part of the corporate language the terms of purchase marketing and marketing supply. Essentially, many companies have started to apply the logic of marketing, commonly associated with company-customer relationship, the area of procurement markets and hence the relations with suppliers.
evolution in order to understand clearly the key strategic purchasing function, and then the assertion of purchase marketing, it is useful to focus on some of the changes socio-economic context that over time have created new organizational paradigms in business. During the first phase (up around the fifties), companies tended to internalize the production stages upstream (vertical integration), often through the acquisition of companies providing.
In the sixties and seventies the evolution of production, characterized by increasing technological complexity, required increasing specialization that led the companies to resort to external providers with specific expertise in various areas. At this stage, the purchasing policy of the companies was directed to the selection of a number of suppliers, places the company in competition with the goal of determining purchase prices as low as possible.
Among the seventies and eighties, the changes of the competitive scenario forcing companies to operate on the basis of new concepts of quality and reliability, leading to the affirmation of the new models of just-in-time, whose aim is to ensure that the goods purchased arrive in the company at the very moment in which it is be used, and then inserted into the production process, avoiding unnecessary stops in stock. At this stage, firms tend to forge partnerships with their suppliers, with the goal to successfully respond to the new needs of the consumer markets (Wood, 2000).
Since the nineties, the significant increase in the cost of research and development, the need to reconcile innovation and flexibility, the increasing expectations of demanding consumers, have led companies to make even stronger relationship with its suppliers, to the sharing of risks and business opportunities of the client (comakership). Currently, the guidelines in relation to the prevailing corporate purchasing policies can be summarized as follows:

  • reducing the number of suppliers, which usually coincides with a greater integration;
  • tendency to the development of more accurate forecasts of future production needs (with the aim of reducing inventories);
  • Distinction between strategic supplies for which may be appropriate reports comakership, supplies and non-strategic, for which it may be appropriate global sourcing (ie the search for the most appropriate supplier on world markets), or outsourcing, or the search a leading provider and manager of a number of secondary supplies.

On the basis of these premises is clearer change made ​​by the purchasing function, whose role becomes increasingly important and strategic in a growing number of companies of all sizes. We have seen how the current market characteristics have led companies to strengthen integration with their primary suppliers, whose contribution becomes therefore essential for the achievement of the business objectives and the construction of the value chain. In this context, the purchasing manager no longer identifies its role in the search for the lowest price through competition among suppliers, and its goal today is rather to integrate strategic suppliers in the business system, operating in a logical long-term. The roles Caterer identifies therefore less and less with that of “buyer” and extends in a functional logic that takes into account the policies and strategies in technology, management and quality (Ang and Buttle, 2006).
This role, as we have seen renewed according to the new needs of the market and companies located in the logic of a valid purchase marketing support for its implementation. The purchase marketing (strategic sourcing) is based, as already mentioned, on the same principles of marketing aimed affirmation of goods and services on the market. Is a tool of efficiency allows companies to take advantage of all the opportunities offered by the market supply and arises from the need to create an intelligence in support of the procurement manager, which must take into account market increasingly large and apart under the pressure of globalization and rapid technological change. In marketing, purchasing remain valid steps summarized in the marketing cycle: analysis, planning, implementation, monitoring.
The analysis phase in the purchase marketing takes the form:

  • study of the environment, in terms of socio-economic, financial, technological (eg, assessment of the state of research and identification of areas of concentration technologies), socio-cultural;
  • study of the market, with particular attention to the scale of operations (production, import-export, consumption), with the aim to predict the price situation connected to the supply-demand relationship, in reference to the needs of the company;
  • Study of the product: classification of the product and its basic raw materials, semi-finished products, components, analysis of production processes. In summary, what does the market of what the company needs;
  • assessment of levels of quality: quality promise to the market, assessing the criteria of evaluation of suppliers;
  • Study of channels: characteristics, size, production capacity, trade and economic policies and programs of expansion and diversification of potential suppliers.


The planning phase consists essentially in the definition of policies and strategies relating to the area of supply, necessarily consistent with the policies, development plans, and production plans of the company. At this stage that defines the criteria for classification of supplies (strategic or non-strategic) and the choices of possible forms of comakership. Product, price, communication channels are the levers of procurement mix. Do not underestimate the importance of communication in relation to the acquisition, which is essential both within the company in a cross-functional logic, and externally (to the markets of supply) to transfer the corporate image and inform the characteristics, needs and purchasing policies of the company. The realization is naturally operations, the definition of the agreements, the implementation of relations with suppliers and partners, although in some cases, as we have seen, the partnership includes involvement in all phases: analysis of opportunities, defining goals, development strategies, and production plans (Zou and Cavusgil, 2002).
Closing the cycle of purchase marketing provides, through the control phase, the verification that the actual results achieved by the operation and objectives defined at strategic levels of quality achieved, fair weather, real integration capabilities inside and outside the company.
It ‘so obvious that the application of purchase marketing effectively supports the operational activities of buyers, even considering that the share of goods and services purchased by companies outside influence today 50% to 80% of turnover. For this reason, companies are increasingly convinced that the efficiency of the procurement in a profound effect on both the creation of the margins on the preservation and development of corporate competitive advantages. Correspondingly increasing the expected return of the supplies against by the leaders, that considers strategic sourcing as a source of value for the company. This approach is closer to the logic of Supply Chain Management, which can be defined as a transversal process undertaken by several companies and functions in an integrated manner, and with greater efficiency and competitiveness. It is “a systematic and strategic coordination of the traditional business functions and tactics, first within the company, then on the various members of the supply chain, with the aim of improving the long-term performance of individual members and of entire supply chain from raw materials to the end customer (Rust, Lemon and Zeithaml, 2004).
Course, the use of appropriate information systems is the basis of a proper strategic management of the area, and to ensure adequate support to the planning and execution of processes, and to manage the flow of information between the various functions company and with external partners. Within the framework, evolving, it is also important to consider the innovations activity of supply of new technologies. There is talk of e-procurement in relation to all the technologies that, through the web, allowing to acquire products and services online. A phenomenon linked to supplies online is that of marketplaces, real virtual markets where buyers and suppliers come into contact. The e-hubs are defined when referring to a specific vertical industry or horizontal when referring to different industrial sectors. A fairly common method of buying on-line is represented by the so-called reverse auctions (reverse auctions), in which many suppliers offer their offerings to customers seeking to acquire, through a competition focused on different elements of the product / service sought by the potential customer.

2.9. Services Market Segmentation

The next step, after identifying the business environment, is to isolate on the market homogeneous areas, i.e., market segments in which the utility must act. The importance of market segmentation, born of the specific needs of customers, should be addressed through appropriate marketing a compound, to meet those needs. The segmentation varies depending on the type of service defined in light of some parameters, which differ from service to service. As an example, one can say that in business “car leasing”, group’s homogeneous consumers include: industrial, tourism companies, hotels, etc. As quoted used functions: executive transportation, recreation, transport of freight. As technological variable, if it is clear talk product that performs the service, which can be: a Sedan car, truck, carriage, etc. As segmentation, we could try to: small cars, medium and large, or duration of the lease, etc. In another example, one can consider the Advertising Agencies: as a group homogeneous consumer can imagine consumer products, products industrial and services. As specific needs, we can recall the measurement sample, catalogues and research as technological variable, are resources humans who serve those needs. Regarding segmentation can be accounts speak of small, medium and large (Zou and Cavusgil, 2002).

The purpose of defining and segmenting the market is not only to better understand and analyze business, but mainly to recognize the needs of each market, creating for responding conditions, obtaining a differentiation in relation to competitors and optimizing the competitive advantages. This action can be performed by following these steps:

  1. Identify homogeneous groups of customers or potential having the same needs to be satisfied with the services offered.
  2. Identify the possible use of the service to meet the needs latent customers / consumers.
  3. Identify service technology to be used to provide Use satisfaction.

2.10. Types of segmentation

The main types of segmentation are (Hellier, Geursen, Carr and Rickard, 2003):

2.10.1. Geographic Location

Segmentation based geographic location corresponds to the group of customers. The criteria defined geographical division of a country into smaller areas, such as regions

– North, northeast, east, west – central and south; departments; micro-regions; municipalities, cities, neighbourhoods, blocks and addresses.

2.10.2. Demographic Characteristics

Demographic segmentation can be done through the division of market groups according to demographic variables such as age, sex, size the family life cycle of the family, income, occupation, education, religion and nationality. Demographic segmentation is used as geographical as that satisfaction the wishes and needs of people, are closely linked to demographic variables. The service is usually conceived trying to satisfy consumer’s accordance with the age and the life cycle, and it is viable when people reaches have some purchasing power (income). But the greatest merit of the service is its adaptation to consumer type of occupation. The airlines, for example, found that over 50% of its customers – consumers are businessmen. Besides this, sex purchasers often also important, as so is the level of education, religion, race and nationality of the client itself.

2.10.3. Socio – Economic – Cultural

The classification socio – economic grouping allows potential consumers socioeconomic services in classes A, B, C, D and E. and are established from the possession of family comfort, weighted for the number of owned units. These goods are: TV, radio, bathroom in the house, car, maid, vacuuming, and washing machine. The regression equation possession of such property is established by correlation with family income and degree of education of the household head. In relation to the washer or vacuum, all variables possession, expressing the number of existing home appliances. Washers and vacuums, assume zero values ​​when not have and when the companies have one. The cultural feature is more difficult since some factors correlated consumption culture that are not easily measured, such as different reading habits, frequency of attendance at theatre, cinema, music and more.; production of culture (such as painting, sculpture, music, theatre, literature, etc.). It is known that the feature is independent of culture stratum socio – economic, as an individual can be level on the scale a socio – cultural and B on the economic ladder and back.

2.10.4. Psychographic characteristics

In psychographic segmentation, buyers are divided into different groups according to their lifestyle, personality, beliefs and attitudes. In accordance with the lifestyle, people are prone to a greater or lesser consumption of services. Some people emphasize the aspect of economy, the other ecological, other security, etc. It is necessary therefore to look carefully lifestyle, personality, beliefs and attitudes. Depending on each feature, psychographic, there is a tendency different to the consumption of services, since people are individual in their attitudes and beliefs and the scale of values ​​that guides their behaviour is different from the other. Therefore, the challenge is to find homogeneous grouping people depending on the lifestyle they lead, they have the personality, of the beliefs and attitudes they pursue.

2.11. Type of Service

There are consumers who are loyal to certain banks, insurance companies. Airlines, travel agencies, doctors, etc. This kind of grouping is made up conservative consumers, who do not like change. Clearly, that loyalty is not manifests for all types of services, so they can be loyal to a bank, worse have no preference for the insurance and so on. What the general consumer searches a service is a clear benefit, i.e. what the service can do for him. Identify consumer groups who are loyal to the brand and looking benefits is not an easy rate, as a rule is needed technical assistance research (Rust, Moorman and Dickson, 2002):

2.11.1. Consumer Behaviour

The segmentation supported in behaviour requires why research certain people buy, when, where, how they buy, etc. This involves understanding of some variables such as:

  • Attempt

One can distinguish buyers according to the time that they purchase develop a need for use of a service. The air traveller and in the hotel sector are given for example in business or plan recreation.

  • User Status

Many markets can be segmented by: non-users, ex-users, users potential, initial users and regular users.

  • Rate of Service Use

Depending on the frequency of use, a user may be classified into: eventual (Light), regular and frequent. The heavy users are those who used more often a particular type of service and as the name itself indicates, there are half-rate or regular use and the use of low rate or possible. Normally, the service market consists of few users regulars and many of little or eventual use.

2.11.2. Buyer Activity Sector

Such segmentation considers the occupation of buyers or users services. For a health clinic, there are segments which are by convention and those who are not, for there are hotels executives, sales agents and tourists, and so accordingly. Buyers can still classified, according to their geographic location: national and international tourists, inside patients, patients coastal nay can be grouped by purchasing power: large, medium and small. Marketing Mix There are groups of buyers who only buy the brand of service (only buy Retail Wong or Metro)? There are those who only buy when the price is reduced or there is a specific sales promotion.

There are even groups of customers / consumers in terms of the distribution channel (Ball, Coelho and Machas, 2004):

2.11.3. Exogenous

As we know, businesses are subject to the action of exogenous variables on the companies which fail to influence directly. But these environmental variables, acting on the various activities with less or more, are likely to represent opportunities or threats. These variables can originate from the most diverse sources.

2.11.4. The Economic Environment

Economic variables, act in ways that cause different impacts on Depending on the type of service. Generalizing the most, it is customary to say that an economic variable can be an opportunity or a threat, depending on the managerial capacity to treat it, within each scenario. The success or failure of a company depends on how the information is analyzed in each market segment. For this, it is useful in the effort to develop the analysis macroeconomic and sectoral.

2.11.5. The Technological Environment

Basically, the technology causes competitive impact in two areas: in the area service performance, bringing to market advantages for their differentiation, and in the area of ​​economics of production, resulting advantages of economies of scale in reducing production costs. The technology, however, through their innovations, can represent either a threat to companies that do not get access to these differentiating technologies, as an opportunity that can represent a competitive advantage by Serbian differentiation and / or cost reduction.

2.11.6. The Environment Socio – Cultural

Society acts decisively on the adoption or rejection of certain services. In Japanese society, for example, where the sale of products and services is traditionally done by door to door system, the secret is in the sale convince the leader of each community to buy. Once this is obtained, the product or service offered, have wide acceptance in their communities. Clearly the social behaviour differs from the behaviour oriental Western, but on a smaller scale, the adopters of a new system, serve model both late adopters and those latecomers. The culture is established based on the reading habits, to the theatre and cinema, production of works written, spoken, painting, music, sculpture, etc.

2.11.7. The Public and Political Environment

The growth of government, communities in general and political power, have led many companies to review their strategic approaches, as harmless or services harmful, may now be banned by the action of the public authorities and politicians. In growing worldwide awareness of the strength of a people (the people united never be defeated) and the fundamental role to legislate and direct the destiny of a community or nation. This makes the service companies, especially those of public interest, running marketing increasingly integrated. Once the configuration of the service must go to meet the needs of community research is needed. Adaptation of service should be continues to meet changing consumer desires. The packaging itself must be such that it attracts an increasing number of users, meaning the packaging bank’s physical appearance, decoration and maintenance of aircraft, buses, cars, etc. The pricing policy should be formulated to cover costs and provide profit, but should not overlook the role of the company it serves. More than this is must provide services that give good customer warranty service performance acquired. To provide an extension of customer service acquired as a good, by the annexation of another unexpected. Serving the community should be a motto operational (Athanassopoulos, Gounaris and Stathakopoulos, 2001).

2.11.8. Strategic Management

Facing possible environmental changes that the company must adapt, developing strategies consistent with each challenge. If the economy indicates a declining inflation, it is necessary to take the opportunity segmenting the types of services to be offered on the basis of new expectations the socio-class life – economic and cultural. However, if the distribution of income is negatively altered or misdistribution is accentuating positive for more equitable distribution, there will be new opportunities for services. When there is poor distribution, increasing need for public services to supply the population lacking public services such as water and sewerage, transportation, food, etc is experienced. Meanwhile, when the income distribution improves, this increases the purchasing power of the middle class and there comes the opportunity for new entertainment services, domestic, public, health, banking, insurance, etc.

2.12. Consumer Behaviour Services

The consumption of services is closely linked to economic, social, political and especially behavioural. The increasing urbanization of the country, the loss of power purchasing, social stratification, the search for recreation, among other factors, begins to outline a new service consumer profile. The decision to purchase services is driven increasingly emerging needs improvement quality of life. For these reasons it is so important to identify which features our consumers are able to offer quality services and above all full satisfaction influences on purchase decisions (Anderson, Fornell and Mazvancheryl, 2004).

2.12.1. Services

There is a wide range of influences acting on the consumer, ranging from cultural, social, personal, even psychological, these variables will be described to below.

2.12.2. Cultural

The purchase of services is highly influenced by consumer culture. Culture consists of explicit and implicit models of acquired behaviour and transmitted by symbols, values, traditions and ideas. Every culture is functional, social, learned, arbitrary and cumulative and especially adaptive. The influence of subcultures has been great in the behaviour of consumer. The European subculture, the black and indigenous, introduced a series of habits food, looking for art (music, entertainment), customs, etc.

2.12.3. Social

The consumer reference groups, friends, colleagues, associations, clubs, etc., and family interfere in the decision to purchase an individual service. The influence of the intensity is varying. Another major factor, too, is aware of its social role and its status in the Community. For example, there are people who are highly influenced by the need to maintain appearance and consume domestic services, leisure, etc., in this function.

2.12.4. Staff

The factors age and stage of the consumer lifecycle are crucial for consumption of certain services. The lifestyle consumer personality, self-concept, and their activities also strongly influence economic utility consumption.

2.12.5. Psychological

It is necessary to identify, for example, what are the reasons that lead the individual to buy or reject certain services. The motivation leads individuals within their hierarchy of needs (Maslow listed the basic physiological needs for survival, such as hunger, thirst, Sleep, etc., security needs – physical or psychological needs for affection: status and esteem needs with the desires of prestige, status, reputation, esteem others and self-esteem and need for achievement by developing their potential) to search pursuing acquisitions that lead to meeting those needs. There are several basic desires that the individual is looking through the consumption of services, such as:

  • Search for food and beverages.
  • Finding comfort.
  • Search of physical and psychological security.
  • Search for status (need to feel superior). • Searching for family welfare.
  • Seeking social consideration.
  • Search for health and long life.
  • Searching for quality of life.

The perception refers to the processes by which the individual receives stimulus through of the different senses and interprets. Consumption: is a direct consequence of these interpretations, as each individual has their own image of the world derived from the summation own unique variables of the individual as its past history, its physical and social environment, personality, and physiological and psychological structure. Learning: All that man does, thinks and perceives is learned. Learn from eating, drinking, and talking to know their social role, values, beliefs and attitudes.

Presupposes boost learning, learning management. It is necessary to teach the consumer to make use of certain services, although not always helpful obvious. Beliefs and attitudes: Belief meets the values ​​on which the individual has conviction. Attitude is defined as the internal predisposition of an individual to assess particular object or aspect, a favourable or unfavourable, and that can lead to decide certain service consumption. The understanding of the beliefs and attitudes the consumer is fundamental to understanding their behaviour in certain situations (Ang and Buttle, 2006).

2.13. Concept image of a Point of Sale

The image is considered a mixture of positive and negative perceptions, which represent reality rather than individuals make the decision to purchase a product (in this case we see the point of sale as a product), would make the decision in Information how the customer will make the act of purchase. The image of the company as well as a selling point is a phenomenon of perceptions and experiences by the public; related communications and interactions between them and the company or the point of sale; behavior and trajectory of this or this. Sales points, influenced by the steady increase in competition, must ensure their merchants are current and represent an image that appeals to their target markets (Guo, Kumar and Jiraporn, 2004). The specific location and the atmosphere of the place (component holistic), can influence more than the product itself at the time of the purchase decision (Rust and Oliver, 2000). Indeed, the literature related to the analysis of point of sale environment indicates that the environment is one of the decisive factors to which the consumer uses to assess the image of a store. Therefore, the image of the point of sale is considered as the result of perceptions and attitudes in general, compared to the same (seen as a “product-shop” itself). The knowledge, beliefs, views, preferences, feelings, opinions, expectations, ideas, prejudices, is commonly used concepts, definitions of product image-store. However, from a marketing perspective and based on their conceptualization, the image of a point of sale must include in their definition the integrated overall concept of essential resources, while establishing its distinctive character with other outlets and will, much more effective, as it is five basic conditions: a) validity (the image is to be close to reality), b) credibility (never convey concepts to the market implausible receiver); c) simple (many images a selling point lead to confusion); d) attractive (can catch the attention), and e) distinctive (show differentiator relative to other outlets). It should be borne in mind that the image is not that the point of sale has, but is in the minds of customers or potential, and therefore, this situation leads to the possible existence of large differences between the images of thereof, which depend mainly on the sources of information to which customers have been exposed or used, and the existence of previous experiences.

2.14. Sainsbury Marketing Strategy

Sainsbury founded in 1896 as a local shop and over the period it became a national superstores’ chain. The company deals in selling food, home furniture and appliances, electronic products, toys for kids and sports related items with services like loans, savings accounts, and even insurance. Following a minor slip in the period of 90, Sainsbury determined commercial constancy back to the middle period of 2000 (J Sainsbury’s plc corporate website, 2009b). Sainsbury owes much of the strategy of financial recovery comprising marketing. The company categorises its consumer and department of marketing into three main parts. The marketing team of the company is strongly pain attention on enhancing brand awareness via lots of retail outlets through as website of Sainsbury (Telegraph Website, 2009) a combination of creativity and business talent. The company’s Media Company preserves a most positive reputation of the company with the help of electronic media as well as print media whereas the team concentrates on “customer experience improvement” following sales of Sainsbury’s clients. Gwyn Burr, marketing director of the company, said in 2010 that clear brand communications help as a foundation stone in the company’s marketing strategy. Clear brand communication caused to about 17% rise in 2009 earnings, appealing more than one million new clients in the same period (Creedy, 2009).

Sainsbury included some of the learning point in marketing that are adapting the in-store experience for every client, forming an atmosphere that stresses customer service and support with the help of marketing staffs. The company’s retailer program “coupons up” facilitates as its main magnetism, enabling clients to acquire benefit from savings bonds money to frequently purchased products (Sandler, 2009). 100 brand owners, since 2010, have contracted for the program, which supports the company claims of mutual loyalty between company and customer targeting customers with personalized offers. The promotional activities of the company comprise sponsorship of the “2012 London Paralympics Games” and the “Active Kids” that permits educational institutions and community organizations to exchange vouchers for sports teams and initiatives.



Chapter Three: Methodology

3.1. Introduction

This is a methodology section facilitate with the comprehensive details about theoretical framework of this study and the suitability for identifying the point of the study whereas talking about the design of research, researcher’s role, questions and sub questions answered in the study, method of data collection and analysis. This part also describes the phases to be pursued for the gathering of the industry and capital information of UK’s third leading supermarket chain, Sainsbury.

3.2. Research Methodology

The major task of any science is getting insight and selecting the most appropriate method that enables us to understand the actual fact is therefore important one. The issue appears in believing the erroneous skills or vice versa (Fetterman, 1988). Deductive and Inductive methods have both diverse objectives and perhaps summed up as theory analysis and theory development, respectively. Usually, inductive method is connected with qualitative way of research whereas the deductive method is frequently connected with quantitative way of research (Kothari, 1985).

Dawson (2002) describe qualitative approaches of study as “a collection of interpretive approaches, which look for describe, decode, interprets and otherwise come to terms with the meaning, not the incidence, of sure more or less naturally according term in the society world.” About all research will contain some numerical information that could usefully be quantified to guide responses, study questions and to complete main goals (Dawson, 2002). Quantitative information defines to all those information and can be a product of all study plans. This style is an easy approach to accumulate suitable information from an important numbers of samples.

Research in primary care can combine qualitative and quantitative mutually enriching. Ways to combine are multiples. Qualitative research may precede quantitative research generating hypotheses for generating and / or test items a quantitative questionnaire. Symmetric sorting, quantitative work can facilitate qualitative research identifying subjects participating in qualitative approach. Both researches can be used together towards a coordinated approach broader and richer (Guba and Lincoln, 1988).

The use of these two methods in the study could likely assist correct the biases inbuilt in each method, but the reality that quantitative approach is the most common applied is not unintentionally but from the development of the scientific method during the years. It is believed that logic that quantification enhanced the understanding about the world around us. Qualitative method of research is recognised to be descriptive, employing words and images, instead of numerical figures to convey the outcomes of the research study (Greene, 2002). Therefore, the secondary approach for research will be selected as the better approach to conduct this research study.


3.3. Data Collection Sources

The way or instrument of data collection is any resource that employs the research worker to access phenomena and obtain appropriate information. The instrument itself combines and observes all previous studies: sums up the contributing role of the framework to select data matching to the indicators and, thus, the concepts and variables will be employed, as well as create the design particularly for this research. Through appropriate erection of data collection instruments, the study will accomplish the necessary connection between theoretical concepts and realities.

3.4. Primary and secondary data

Raw data are those that the research worker extracted directly from real events, gathering them with their own instruments. Secondary data are records developed a contact also accompany practice, but have previously been selected and processed by other research workers. Both primary and secondary data are not fundamentally diverse sorts of information, but components of the same series (Johnson and Onwuegbuzie, 2004).

3.4.1. Secondary sources used in research

Information or data was gathered via handbooks, manuals, inventories, operational and financial data, archives determined in the company, and so on.


3.4. Analysis of Data

After the collection process of data, it will be thoroughly analysed based on the research questions as mentioned above and the basic aim of the research. For secondary research, vital points, outcomes, findings and conclusions of the studies and researches reviewed will be examined so as to present a better understanding and insight of the subject matter (Kumar, 2005). The reason behind is that the research’s nature is mostly investigative, and it is usually admitted that, for inductive and investigative research, qualitative way of research is best, because this method can lead us to building the hypothesis and explanations.

3.5. Ethical Issues

Gathering reliable and appropriate knowledge about the world is, definitely, a valuable target in itself. Though, it is not unavoidably the only or eventual goal in the average people’s lives Guba and Lincoln, 1989). Other objectives usually every day aspirations of human life comprise innumerable practices of daily life, or in general: personal happiness, security, harmony and peace, benefit from autonomy of action and of other different human privileges, and for some the personal deliverance of the soul. The knowledge collected by research, to accomplish any of these, can assist in certain occasions, but not always. It must be needless to indicate that in science one of the most damaging unlawful activities is distortion of data its outcomes. The most unpleasant damage is being led to the malefactor faultily a degree; the worst is that may be fantasy information will be employed in good faith to others that can cause to much fruitless work. Thus, it was made sure that the data or information employed in the study is suitable and reliable.



Chapter Four: Result and Discussion

The British supermarket chain J. Sainsbury closed the financial year 2005/2006 with a profit of 352 million pounds. The new management of Sainsbury has managed in recent years to expand market share, sales and distribution network. Through a three-year program started in 2004, Sainsbury has pointed to increased sales of 2.5 billion pounds to be achieved by the end of fiscal year 2007/8. The top management of the Group has paid increasing attention to the quality and innovation of products to meet the challenge competitive with competing chains of supermarkets. In 2006, were launched 3,000 new food lines? Sainsbury already selected as the best organic supermarket of the year, pointing to leadership food respectful of environmental criteria. Approximately 65% ​​of meat and dairy products sold in supermarkets group are organic, compared with a market average of 20 points lower. The management of Sainsbury, to catch up with the competition, assigns particular importance to growth in the non-food sector. Recently, the supermarket chain has signed exclusive with three major European designers Terence Conran and Orla Kiely for Orlando Hamilton the development of new product lines available. Sainsbury’s has launched its own brand “YOU” of casual fashion for men, women and children. The supermarkets sell many of the products Italian agricultural and food, pasta, wine and oil, with its own brand. The distribution network is in strong growth. Sainsbury after buying several supermarkets competing group from Morrison, also grows in the segment of “convenience store” through an agreement with the energy group Shell, for the management of outlets in service stations, and through the purchase of chains regional small supermarkets Bells, Jackson’s, JB Beaumont. Sainsbury is very active in the field volunteering and financially supporting several activities with a strong social / community local / environment / healthy lifestyles J. Sainsbury’s plc The supermarket chain J. Sainsbury’s has closed the financial year 2008/2009 with a net before tax of 466 million pounds. The management and ‘managed recently to expand market share, sales, distribution network and to implement a significant diversification of products offered.

Sainsbury’s and ‘established in the market, acquiring a strong and stable thanks to the MSGA (“Making Sainsbury’s Great Again”), three-year program started in 2004, for which they were invested £ 450 million aimed at implement are supply, infrastructure and the system logistics. The group has promoted initiatives based on current consumer demands, focusing on need ‘to manage the food expenditure in a more’ cautious, focusing on three themes adopted in the United Kingdom: Large Distribution 18th campaigns in the main market, “shop and save”, to provide consumers with competitive prices and promotional offers; “switch and save”, to highlight the quality ‘of branded products Sainsbury’s and their affordability compared to similar products branded “cook and save” with the which consumers receive assistance in organizing their budgets through initiatives as “Feed your Family for a Fiver” and “Love your Leftovers”. II management of Sainsbury’s, to catch up with the competition, is granting particular importance to the growth of products and services non-food. The group launched in 2004, the brand “YOU” for clothing and articles furniture, signing exclusive agreements with three leading European designers Terence Conran, Orlando Hamilton and Orla Kiely for the development of new lines of products. The brand and TU ‘ currently distributed in 290 stores. The garment sector and ‘the most’ established among non-food with more than 2 million pieces fair-trade sold in the last year and a 20% increase in the number of buyers. In the area furnishings were launched 2,000 new items for the home.

The distribution network and strong growth

Sainsbury’s after buying the competitor Morrison’s supermarkets also grows in the segment of “convenience store” through an agreement with the energy group Shell for management of retail outlets in service stations and through the acquisition of regional chains of small supermarkets as Bells, Jackson’s, JB Beaumont. Currently owns 16 convenience store, but it and ‘planned to open a further 50 by 2010.

The performance of the banking sector, whose services are focused on insurance policies, savings and credit cards, were positive, with profits of about £ 4 million. The group Sainsbury’s has put in place a number of initiatives with regard to the sustainability ‘company, focusing its range on the quality’ of the food on fair trade, environmental and social impact. Among the many initiatives include the construction of outlets to reduced emission of carbon dioxide, the use of farmland eco-friendly for the meat and fish, as well as’ charities and donations.

Historically, the market relationship between the amount supply of any product or service and the quantity demanded of it, mark the different strategies work in Marketing. When in the market there is a higher demand situation the available supply, the only important thing for success is just be and offer (would the situation of a geographical area determined, with a significant number of inhabitants and in which there were only one foot clinic). The service will be provided purchased or used immediately for some patients / clients needy and choice alternatives. In these circumstances, it All that matters is what the business might call “production”. But at the time when supply equals or exceeds demand, which is the natural tendency of the market, will only succeed those companies that are able to differentiate their offer on that of competition, based on a best fit to the needs actual customer. The important thing is market orientation. Any business, however small, is always in need of marketing activities and especially in those key moments, in which a misguided decision could harm seriously the future of the activity.

A special moment: Starting in activity

The time from scratch is one of the most critical for any company. In addition, the possible shortage of resources, their total ignorance that the public has of the query. The opening of the first query has a special meaning can even affect the way of life of its owner. Is an opportunity to become known and establish the activity with all the elements is available, obviously, in a framework of ethical behaviour and ethics? As will be seen later to study the communication strategy will be vital to ensure that the target audience aware of the existence of the new query, using any of the possible channels, including:

  • Identifier signboard outside.
  • Advertisements in newspapers or other local media.
  • Brochures presentation.

The purpose is in no case generate a sale indiscriminately. Not trying to sell to sell. The goal is not another to generate an exchange between buyer and seller and, obviously, with positive results for both. It all starts with the discovery of a need by the buyer satisfaction or remedy which constitutes the object of the process. This need to generate a desire to be remedied, which in once completed in the act of purchase. The businesses can define “need” as awareness of the lack of something or the discovery of a problem. Therefore, in terms of marketing, the need is or refer either to the solution of the problem or the substitution of lack, never the problem or lack in themselves. That is, the while there need not be aware of it. The next step is the existence of a desire, for which it must be a willingness to meet the need, but they will never be converted into action until the opportunity to attend it. If this occurs, the process will end when the demand is generated actual product or service. Understanding this process is of vital importance in Marketing, as the actions to be taken will differ depending what the “trigger” to start. The “awareness” is usually generated by the perception of illness or problem by the patient or family, as it is a process that causes pain, discomfort or visually perceptible changes, but sometimes they might need to prevention research, usually conducted by initiative of public or corporate (early detection programs, periodic reviews, etc.).

The “will to solve” need of personal communication elements, normally directed to the understanding the patient or the magnitude of the problem environment, not forgetting also needs to be aware that the solution is at their scope and within their means, both economic and physical.

Finally, the “opportunity” will depend more on strategy distribution media, it’s about being in the right place at the right time. Because no matter how great the desire to solve the problem that has a podiatric patient hardly come to us if our focus is away from it and can find other options much closer or more accessible.

Basically, marketing is not just a science that seeks minimize the risks inherent in any decision on future actions aimed at promoting products, services or ideas. To do this, experts advise following what is actually a logical and sequential process that begins with an analysis of the situation, continues with the development of a strategy and ends with a Plan Start Up. In summary, one can say that the Marketing consists of five or process steps:

  • Identification of Objectives. Before we start we must be clear what is to be achieved. They cannot start walking without clear where they want to go. These objectives should be concrete, identifiable and measurable, because otherwise they will never be certain they have been reached. No applies, for example, aim to put our query is “very” known valid expression should be expressed as a percentage of the population who knows.
  • Analytical Marketing. Phase in which all variables are investigated that may affect the process, both internal and external.

The question is where we are, how we are and what we find along the way.

  • Strategic Marketing. Depending on the conclusions drawn in the analytical phase is developed and designed a strategy or set coordinated actions to execute. This is the theoretical Plan achieve the objectives set.
  • Operational Marketing. It is time that the strategy designed is launching the implementation of planned activities.
  • Marketing Audit. It consists of a planned series of controls that let them know at all times if things go as were planned or not. This data will be obtained allow know if all is well, or if action is needed corrective to ensure the scope of the objectives set.

The image is considered a mixture of positive and negative perceptions, which represent reality rather than individuals make the decision to purchase a product (in this case we see the point of sale as a product), would make the decision in Information how the customer will make the act of purchase. The image of the company as well as a selling point is a phenomenon of perceptions and experiences by the public; related communications and interactions between them and the company or the point of sale; behavior and trajectory of this or this. Sales points, influenced by the steady increase in competition, must ensure their merchants are current and represent an image that appeals to the target markets of the business. The specific location and the atmosphere of the place (component holistic), can influence more than the product itself at the time of the purchase decision. Indeed, the literature related to the analysis of point of sale environment indicates that the environment is one of the decisive factors to which the consumer uses to assess the image of a store. Therefore, the image of the point of sale is considered as the result of perceptions and attitudes in general, compared to the same (seen as a “product-shop” itself). The knowledge, beliefs, views, preferences, feelings, opinions, expectations, ideas, prejudices, is commonly used concepts, definitions of product image-store. However, from a marketing perspective and based on their conceptualization, the image of a point of sale must include in their definition the integrated overall concept of essential resources, while establishing its distinctive character with other outlets and will, much more effective, as it is five basic conditions: a) validity (the image is to be close to reality), b) credibility (never convey concepts to the market implausible receiver); c) simple (many images a selling point lead to confusion); d) attractive (can catch the attention), and e) distinctive (show differentiator relative to other outlets). It should be borne in mind that the image is not that the point of sale has, but is in the minds of customers or potential, and therefore, this situation leads to the possible existence of large differences between the images of thereof, which depend mainly on the sources of information to which customers have been exposed or used, and the existence of previous experiences.

The image formation was described by (Hellofs and Jacobson, 1999) as a mental construct developed based on various printing, from a large amount of information. For the image of a point of sale, this “wealth of information” comes from several sources including, inter alia: promotional literature (brochures, posters, etc.), the opinion of others (family, friends, known), and the mass media (newspapers, television, books, movies, etc.). The marketing literature in general and product-particular store reveals three determinants in shaping the image of the point of sale in the absence of actual experience: 1) personal factors (psychological, socio-demographic), 2) Resource (product marketing, communication in general), and 3) The product offer-store (identity, resources / attractions, “full shop”). That is, from the analysis of the formation of the image of a product-store, it is clear that all received information plays a key role in its creation. In this sense, the formation of the image of a product-store is conditioned by these three broad factors in their confluence and interaction. The image of the point of sale, as we have seen, is an abstract construction formed from the reality of the environment, perceptions of the participants in the same elements of the customer experience, as well as the actions of the media information on public opinion. This confluence of issues is very important in purchasing decisions, generating expectations of customers, which contrasted with the actual image leads to determine the degree of satisfaction after they purchase it. Therefore, the image of the point of sale, such as we understand it, is key to customer satisfaction, this element of great importance, not only because the image should be assessed as a determining factor in profitability, but we must consumer aware that as a human being should feel satisfied and pleased with the image offers. In our country meet customer needs is not a slogan, not a word that gets boring so repeatedly, is and should be the centerpiece of the life of the organization, so that at all times the value customers perceive that guarantees satisfaction. Where this is will be competitive.



Chapter Five: Conclusion

Marketing today is also a further function or activity in the organization, management attitude in conducting business, which considers the customer as the center of attention for success, since its purpose is to satisfy the market. This implies transcending the mere sale, to achieving that ensures competitiveness remain and grow in the market. Thus, excellence is what prevails and the key to success is that companies will find their right target audience and satisfy fully and growing. “Marketing is the social process and management through which individuals and groups obtain what they need and want, creating, offering and exchanging products with value for others. Marketing management is the process of planning and executing the conception of the product, price, communication and distribution of ideas, goods and services (the four fundamental variables of the marketing process), to create exchanges that satisfy the objectives of each person, as the groups. In general, marketing is the process of synergistic lucrative activities designed to generate an exchange but is ambiguous because it is present only in profit entities, nonprofit entities also make Marketing. Whenever there is an exchange of ideas either, goods or services can mean there marketing activity.

In recent years, the numbers of European food retail has been good, despite the difficult political period lived. A period of great instability, full of surprises, IPCs and accusations that hardly punish the guilty, insecure population, lack of jobs, in short, the usual lack of light at the end of the tunnel. To further aggravate this situation, most recently has been drawing a severe economic crisis, which has already shown its strength, but many experts say worst is yet to come, and that the damage will be even greater. Was noticing the strong influences that this scenario may have on the turbulent companies in the market, and especially on the Sainsbury Supermarkets, this object study, who wished to define strategic actions which should be implemented by company, and structure them from a marketing plan aimed at ensuring survival. For this study reached the results for which are proposed, it was necessary a review of theory about the marketing plan. This was followed by the model proposed by (Baker and Sinkula, 1999); (Rust, Lemon and Zeithaml, 2004); (Ryals, 2005); (Voss and Voss, 2000); (Winsted, 2000); (Wood, 2000); (Zimmer, 1994) and others. In response to the first specific objective of evaluating strategic actions Sainsbury marketing and identify their position, stood out among the actions, the mix differentiated product offering today, such sessions specific products Gluten, exotic meat products for chefs, grocers processed variety of organic and even sections of ethnic products. They saw also, partnerships with suppliers in order to ensure superior product quality traded since its inception. It was stated then that the company also differentiates itself through its attendance. Work starting on its development and management center, which promotes periodically, technical training and integration, aiming count qualified and motivated employees to meet their clients. Other actions that stand out within the marketing mix offered by Sainsbury are valet services, and veterinary nutritionist who seeks each of their way to ensure the welfare of clients and the quality of products offered.





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