Marketing Strategy for Sainsbury’s
Established in central London in 1869, J Sainsbury is now the UK’s third largest retailer behind Tesco and an enlarged Asda following the latter’s acquisition of
Netto. Sainsbury’s sales were £22.3bn in 2011/12, through 1,012 outlets, divided between 572 supermarkets and 440 Local convenience stores.
At the beginning of 2014 Sainsbury’s has cut its full-year sales forecast after warning that customers are likely to “spend cautiously” in the first few months of
2014.
The supermarket giant had expected to see a sales rise of 1% to 1.5% in this financial year. But despite seeing record transactions in the run-up to Christmas, it now
expects growth of “just under 1%”. Although Sainsbury’s reported a 36th consecutive quarter of like-for-like sales growth, its shares fell 2%. In the 14 weeks to 4
January, the firm’s like-for-like sales, stripping out the effect of new stores, rose 0.2% excluding fuel.
Sainsbury’s said the seven days before Christmas were the firm’s “busiest ever” trading week, with more than 28 million transactions. It described the third-quarter
figures as a “good sales performance in a tough market”. Rival chains Waitrose and the Co-op also reported rises in sales over the Christmas period.
‘Tough and challenging’
Late last year, Sainsbury’s overtook Asda and moved into the number two spot for the largest supermarket in the UK, second to Tesco. Chief executive Justin King told
the BBC that trading conditions had been “tough and challenging” and there had been an expectation that the firm’s sales might have fallen. However, while October and
November had been difficult, the performance over Christmas had resulted in “a small amount of growth for the quarter, taken as a whole”. “We’ve beaten our
competition,” he added.
Sainsbury’s also reported healthy growth in sales of its own-brand Taste the Difference range, which saw a rise in sales of more than 10%. Other successful sectors
included Sainsbury’s convenience stores, which grew nearly 18%, and online shopping, which notched up more than 10% growth.
BBC business editor Robert Peston described the sales growth of 0.2% as “a bump in the road after an extraordinary 35 quarters of unbroken growth”, but “not one such
that [Mr] King is likely to feel desperately uncomfortable”.
Joseph Robinson, lead consultant at retail analysts Conlumino, said that Sainsbury’s “continues to outperform its main peers”. However, he said the low growth was
“reflective of a market where even the outperforming mainstream players are having to sprint just to standstill, amid growing threats at both ends of the value
spectrum”.
Late rush
At the same time, rival Waitrose reported strong sales in the run-up to Christmas. On a like-for-like measure, sales for the five-week period to Christmas Eve rose
3.1% compared with 2012. Waitrose said it was a record Christmas period, with a 4.1% rise in sales for the 12 days ending 31 December. Like other retailers, Waitrose
has reported a huge increase in online sales, which were up by more than a third compared with 2012. Waitrose managing director, Mark Price, said: “Every year
retailers say that Christmas is late, but with some justification in 2013, as customers phased their shopping in line with the mid-week fall of the main festivities.
“Succeeding and growing market share in this environment requires better customer understanding than ever. Through Sainsbury’s Nectar loyalty scheme Sainsbury’s have a
wealth of data about customers’ behaviour. They combine this with listening and engaging customers, across a broad range of channels, to create real insight.
Sainsbury’s believe their customer insight and understanding is best-in class. This is what informed their Live Well for Less campaign, which was launched in 2012.
While many in the market thought that the economic environment meant low prices would be the primary motivator in supermarket choice, Sainsbury’s marketing research
told them that customers were looking for real value: quality without compromise at good prices.
Sainsbury’s determined that customers were shopping more frequently and locally to reduce food waste and they pressed ahead with their convenience growth plans.
Sainsbury’s recognised that, more than ever, customers were looking for reasons to celebrate, and they helped them do so at the Royal Wedding, Halloween and Christmas,
driving market outperformance. Despite the economic pressure customer’s face, Sainsbury’s ensured that they were not compromising on their values; donations to Sport
Relief increased, and sales of fairly traded and higher animal welfare products continued to grow.
Investment in the supply chain ensures Sainsbury’s are frequently the quickest to market on key fresh lines, with some British vegetables going from field to store in
an industry-leading 48 hours. With Jersey Royal potatoes, for example, Sainsbury’s wash and pack them on the island to ensure they arrive in store as quickly as
possible.
Sainsbury’s focus on fresh food is closely related to their 20 by 20 commitment to double the amount of British food in store by 2020. This will help develop British
farming and protect livelihoods, while reducing food miles and delivering fresh, healthy, nutritious food to the table. Developing ever closer links with farmers is
key to Sainsbury’s continuing leadership in this area. For example, they are the largest retailer of British apples and pears, selling a third of all those bought in
the UK. Sainsbury’s are working to preserve traditional British varieties, as well as introducing new ones to the UK. This year their customers will see more British
food in their stores than ever before, from early season lamb through to chillies grown in northern England and blueberries from Scotland.
Sainsbury’s have also continued to expand and improve their fresh food service counters. They have trained 18,000 staff in their bakery college and six food colleges.
Their service, skills and expertise have resulted in sales from our counters growing faster than at any other retailer. We additionally, in June 2011 City & Guilds
formally accredited the high standards of training available at these colleges, which includes bakery, fishmonger, butchery and delicatessen skills – the largest
accreditation of its kind in the UK.
Assessment scenario (This Case Study provides the context of your assignment)
You are Head of Marketing at Sainsbury’s and have been tasked by the Board to produce a report as a starting point for discussion on the position Sainsbury’s should
adopt over the next three years.
Your assignment MUST be in report format ONLY and MUST include all sources of information in a ‘References’ section using Harvard APA Referencing. Students must use
tables/diagrams and bullet points wherever possible to present the key elements of a professional business report.
Students should refer to appropriate theory learned to demonstrate their knowledge and understanding and have read the set book. Not all subject areas will be covered
in lectures and seminars, students are expected to study independently and read/research extensively.
The word count is 1500 words.
Please note the weighting for each task and divide the word count up appropriately.
Assignment requirements
1. Conduct an external audit in which the company operates (PESTLE).
All sections should be completed and contain Harvard referenced evidence.
There must be a minimum of two factors in each section of your PESTLE.
Explain:
1. What is happening in the external environment?
2. Does it pose threats or opportunities to your company?
3. What impact do these factors have on your business strategy and corporate objectives? 20
2. From the PESTLE, conduct a SWOT analysis (10) on the organisation.
Students should analyse the information and be able to draw a conclusion from the SWOT analysis (10). 20
3. From the SWOT analysis, identify the four fundamental areas within which marketing objectives may be defined, and give four SMART marketing objectives which
the company could pursue in priority order. 20
4. Give two examples of the various types of marketing strategies that the company could adopt (6).
Then identify which type(s) of strategy the company will adopt and why you have chosen that strategy (4) 10
5. Marketing programmes – Draw up a series of 5 planned marketing actions (5) which you have identified from the marketing strategies.
Outline why you have chosen these actions (5). 10
6. Transferable skills: Business Report format, tables/diagrams labelled, spelling and grammar (10). APA Referencing (10) 20
Core text
Brassington, F . and Pettitt, S ., 2006, Principles of Marketing, FT/Prentice-Hall.
Marking Criteria
Assessment criteria and (LO’s) Distinction
(100-70%) Higher Credit
(69-60%) Credit
(59-50%) Pass
(49-40%) Fail
(<40%)
1. External audit
(Cognitive) Exemplary exploration and evaluation of information from an extensive range of sources. Locates & explores a wide range of information/ evidence.
Locates & organises an acceptable range of information/evidence Locates & organises an acceptable range of information/evidence Relies on inadequate range of poor
quality information
2. SWOT analysis
(Cognitive) Exceptional critical judgement in analysis, evaluation and reformatting of information and application of prior learning in different contexts Largely
consistent and critical judgement in analysis, evaluation and reformatting of
information and application of prior learning in different contexts Applies some aspects of prior learning in different contexts Limited application of prior
learning to new contexts Fails to apply learning to different contexts
3. Marketing objectives and four SMART marketing objectives
(Analytical) Exceptional critical judgement in analysis, evaluation and reformatting of information and application of prior learning in different contexts Applies
some aspects of prior learning in different
Contexts Applies some aspects of prior learning in different contexts Limited application of prior learning to new contexts Fails to apply learning to
different contexts
4. Marketing strategies then identify which type(s) of strategy and why you have chosen that strategy.
(Analytical) Exceptional critical judgement in analysis, evaluation and reformatting of information and application of prior learning in different contexts
Critical judgement in analysis, evaluation and reformatting of information and application of prior learning in different contexts Largely consistent and critical
judgement in analysis, and evaluation of information and application of prior learning in different contexts Applies some aspects of prior learning in different
contexts Fails to apply learning to different contexts
5. Marketing programmes
(Analytical)
Exceptional critical judgement in
analysis, evaluation and reformatting of information and application of prior learning in different contexts Largely consistent and critical judgement in analysis,
evaluation and reformatting of
information and application of prior learning in different contexts Applies some aspects of prior learning in different contexts Limited application of prior
learning to new contexts Fails to apply learning to different contexts
6. Business Report format, tables/diagrams labelled, spelling and grammar. Harvard Referencing.
(Transferable skills)) Excellent presentation and organisation of work with lucid communication in all contexts; exemplary referencing/citation. Presentation
and organisation of work appropriate to context and purpose, communication clear; referencing/citation consistent and accurate Satisfactory organisation &
presentation of work, com- munications mostly appropriate to the context/ purpose/referencing/ citation largely consistent Organisation and presentation of work
and communications adequate in most contexts, with some mistakes/irrelevancies errors in referencing/ citation Work is disorganised, poorly presented with poor/
inappropriate expression/ communication ; substantial errors in referencing/ citation, or none
[ ] Please tick this box to ensure you have read and understood the above criteria
Section C: Learning Outcomes (LO) to be assessed
• to be completed by academic from DMD, please add in more rows if necessary
LO LO Description Comment on LO attainment LO Achieved: Yes/No
A3 Evaluate the marketing environment and assess its relevance to an organisation
A4
Consider the role of marketing in manufacturing and service organisations
A5 To identify the development and application of marketing objectives and strategies
A6 The marketing planning process examining organisational resource capability
A7 The marketing audit purpose and importance to the organisation
A8 The different stages of planning market activity and the barriers to implementation
A9 The significance of the marketing mix (7P’s) to the organisation
A12 The importance and value of market research and its contribution to key decision making
B1 Understand the nature and context of the marketing function in an organisation
B2 Explain and evaluate contemporary issues in managing marketing and organisations. Identify the implications
C1 Ability to analyse, understand and propose solutions to business and marketing problems using appropriate principles and techniques.
D1 Embedding the importance of self-study and reliance. This involves cultivating and developing a responsibility within each student to take cognizance for their
own learning, initiative, effective time-management and self-discipline within the academic and professional environments.
ScholarMatic: Explanation & Answer
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