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Acknowledgements

It is a pleasure to thank those who made this dissertation possible. First of all I would like to thank my
supervisor Dr Khalid Bichou, without his support and guidance from initial stages till the end I couldn’t
be able to develop an understanding of the subject.

I would also acknowledge my husband who supported me financially and mentally throughout the
dissertation. I am also indebted to my family and friends whose unwavering emotional and moral
support helped me to sail through this project. Above all I am most grateful to the Almighty Allah for
the divine intervention in this academic endeavor.

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Abstract

It is gradually growing need for world/ethnic food products in UK. In this research we will learn that
how Asda sustain its world/ethnic food department. What are its procurement operations for this
department, whether it is outsourcing globally or locally. Increasing competition among supermarkets
encourage them to keep their prices low than others. Supermarkets are dominating over small retailers
day by day. This research will examine the ethnic customers’ attitude and their priorities towards ethnic
food products shopping. We will evaluate that what are the reasons that Asda’s world/ethnic food
products are expensive than local ethnic retailers. We will observe Asda’s ethnic customers by knowing
their strategies for ethnic/world food shopping, whether they prefer quality over low prices or not.

Key words; Asda’s procurement operations, world/ethnic food products, ethnic customers, supermarkets
vs. small retailers

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Table of Contents

Table of Contents
Acknowledgements..........................................................................................................................1

Abstract............................................................................................................................................2

Table of Contents.............................................................................................................................3

Chapter 1: Introduction....................................................................................................................6

1.1 Background of research.........................................................................................................6

1.2 Scope of the research.............................................................................................................8

1.3 Limitation of the research......................................................................................................9

1.4 Research objectives/purpose and Questions..........................................................................9

1.5 Contribution of study...........................................................................................................10

1.6 Research process and methodology.....................................................................................10

1.7 Research structure................................................................................................................10

1.8 Summary..............................................................................................................................11

Chapter 2. Literature review.........................................................................................................12

2.1 Evolution and characteristics of UK population..................................................................12

2.2 Immigrants...........................................................................................................................12

2.3 Importance of world food and ethnic consumer..................................................................13

2.3.1 Food industry affected by Economy crisis....................................................................13

2.3.2 World food demand and ethnic consumer.....................................................................13

2.3.3 Ethnic food....................................................................................................................14

2.3.4 Ethnic consumers and retailers......................................................................................14

2.4 Supermarkets vs. ethnic retailers.........................................................................................15

2.4.1 Risk and safety matters..................................................................................................16

2.5 Role of Supermarkets to promote Ethnic food; Asda..........................................................16

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2.5.1 Asda’s private label Portfolio........................................................................................17

2.5.2 Company’s Competitive Positioning.............................................................................18

2.5.3 Asda’ procurement activities.........................................................................................18

2.5.4 Asda Stores....................................................................................................................18

2.5.5 Asda Supply chain Management...................................................................................19

2.6 Below cost selling................................................................................................................20

2.7 Changes in food prices.........................................................................................................21

2.8 Operating margins for Asda and other grocery retailers......................................................21

2.9 Customized products............................................................................................................22

2.10 What is Procurement?........................................................................................................23

2.11 Outsourcing........................................................................................................................24

2.11.1 Outsourcing strategies.................................................................................................25

2.11.2 Outsourcing: Benefits and risks.................................................................................27

2.11.3 Outsourcing in retailing...............................................................................................28

2.12 Conclusion.........................................................................................................................29

Chapter 3: Research Methodology................................................................................................30

3.1 What is Research?................................................................................................................30

3.2 Purpose of research..............................................................................................................30

3.3 Research Design:..................................................................................................................31

3.3.1 Exploratory research:....................................................................................................31

3.3.2 Descriptive Research:....................................................................................................31

3.3.3 Analytical or explanatory research................................................................................31

3.3.4 Predictive research........................................................................................................32

3.4 Research sources:.................................................................................................................32

3.4.1 Primary Data collection.................................................................................................32

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3.4.2. Secondary Data Collection...........................................................................................32

3.5 Research Methods:...............................................................................................................33

3.5.1 Survey............................................................................................................................33

3.5.2 Personal Interviews:......................................................................................................34

3.5.3 Internet survey:.............................................................................................................35

3.6 Types of Data.......................................................................................................................35

3.6.1 Quantitative...................................................................................................................35

3.6.2 Qualitative.....................................................................................................................36

3.7 Design of Questionnaire.......................................................................................................36

3.8 Research Testing Methods:..................................................................................................37

Reliability:..............................................................................................................................37

Validity:..................................................................................................................................37

Generalisability:.....................................................................................................................38

Chapter 4: Results and Findings....................................................................................................38

4.1 Introduction:.........................................................................................................................38

4.2 An over view of literature review and Hypothesis:.............................................................39

4.2.1 Ethnic customers:..........................................................................................................40

4.3 Research questions:..............................................................................................................40

4.4 Targeted Population:............................................................................................................41

4.5 Presentation of acquired Data.............................................................................................41

4.6 Interpretation of Data:..........................................................................................................44

4.7 Result analysis:....................................................................................................................45

4.8 Hypotheses...........................................................................................................................46

4.8.1 Hypothesis 1..................................................................................................................46

4.8.2 Hypothesis 2.................................................................................................................47

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4.8.3 Hypothesis 3.................................................................................................................47

4.8.4 Hypothesis 4.................................................................................................................47

4.9 Limitations:..........................................................................................................................48

4.10 Discussion and comments..................................................................................................48

4.11 Conclusion:.......................................................................................................................49

Chapter 5: Conclusion...................................................................................................................49

5.1 Introduction..........................................................................................................................49

5.2 Summary:.............................................................................................................................50

5.3 Limitation of the research....................................................................................................51

5.4 Suggestions for the future research......................................................................................52

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Chapter 1: Introduction:

In this chapter we are going to have an overview of purpose of the research, literature
review, research methodology and analysis, we will also discuss that what are the objectives
which force us to do a research on this topic, what will the scope of this research and how this
research will contribute in future. Further we will talk about structure of the research that how
we are going to organize our chapters.

1.1 Background of research:

Growth in international trade, tourism, immigration and globalization encouraged the creation of
ethnic minority retail enterprises in UK (Jamal, 2003). There is also growing competition among
supermarkets these days. Many big supermarkets are dominating UK’s retail market. Some of these
supermarkets e.g. Asda, Sainsbury’s, Tesco, M&S are in leading supermarkets. Because of high
competition and increasing demand, many new branches of these supermarkets are opening these days,
which is fruitful and profitable for the companies but not truly for the small traditional retailers. It has
become universal phenomenon that supermarkets are taking place of small retailers. (Goldman & Hino
2004).

In recent times as UK’s economy is recovering from recession, customers spending power has been
affected. Customers are spending much time at homes; supermarkets offered much more cheap deals to
attract customers (Euromonitor report, 2010) . This situation raised more competition among
supermarkets and there is a race in between them to offer cheaper products than others

We will try to find out that how UK’s population is increasing along with world/ethnic food demand,
firstly world food is not only need of ethnic communities but also becoming popular among natives, As
‘curry’ is one of the famous dish in UK now. Till 1970s ethnic communities were unable to find their
traditional food but gradually ethnic entrepreneur start introducing ethnic food in retail shops (Jamal,
2004). With the passage of time supermarkets realized its need and develop its World/ethnic food
departments. Asda is one of those supermarkets which have expanded their world/ethnic food
department, especially in ethnic majority areas.

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Asda is one of the large supermarkets in UK. It is subsidiary of an American company known as Wal-
Mart.

We are going to investigate the procurement operations of Asda for its ethnic/world food
department. We are keen to know that how Asda manages its outsourcing for ethnic/world food
products. We will discover that how does Asda’s supply chain work to maintain speed and low costs.
Duke (2008) CEO of world’s biggest retailer Wal-Mart said that now we should move forward by
maintaining supply chain making it more responsible socially and environmentally. They have
developed a reporting structure to sustain their ethical programmes. Asda deals in households,
stationary, electronics and garments. It has slogan of ‘Always low prices’. It claims that it is
comparatively cheaper than other supermarkets. We are going to focus its ethnic/world food department.
It has wide range of ethnic/world food products but it seems that its ethnic/world food products prices
are slightly higher than small retailers, so what are the factors which are affecting on this department and
whether customers are still interested to buy Asda’s ethnic/world food products. Increasing demand for
world food can’t be overlooked. In UK, growing population of immigrants is an indication that in
coming future, world/ethnic food demand will raise. This will also be highlighted that customers trends
towards ethnic/world food shopping. Supermarkets are already considering this fact and offering these
products in wide range. There is also increasing competition within supermarket, some of big
supermarkets such as; Asda, Tesco, Sainsbury’s and M&S, focus that they offer better quality products
at competitive prices. We also want to know that how company outsource for some of its products, what
are the strategies companies should make while outsourcing and how it can be profitable.

How Asda deals with its world/ethnic food department and comparison with other supermarkets, we will
also learn that need of customized products and outsourcing in coming chapter.

1.2 Scope of the research:

Outcome of this research may help to understand that how Asda manages its procurement operations
of ethnic/world food products. Asda is much cheaper than other supermarkets as it claims so having
slightly higher prices in its world/ethnic food products, does customers still interested in buying these
products. This research can point out that if customers do not buy their ethnic/world food products from
Asda’s above department because of the high prices than traditional retailers, what can be done to

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overcome these problems. When supermarkets open in such area where other small traditional retailer
already exist, supermarkets almost ruin the businesses in that area, because customers prefer to do
shopping under one roof, we will confirm that is this statement true, that customers do not bother
slightly higher prices while doing one stop shopping. It also can be find out that whether customers
prefer high quality over low prices.

 Will able to know Asda’s supply chain activities.


 Will get customers opinion about its Ethnic/world food department.
 Can suggest how this department can be better after getting customers point of views.

1.3 Limitation of the research:

There are some limitations might occur while doing this research. As our topic is very vast and
time consuming so time limit can create limitations to cover this topic, provided by the institute. Asda is
a big company and gathering information about its procurement activities can be difficult. There are
many sources to collect required data of company e.g. books written on company’ performance of
procurement, company’s website, but there can be many hurdles in the way of getting accurate
information which we required. It can be difficult to access company’s procurement strategies as this
type of information any company keep in secret due to high competition in market. Many companies do
not show their suppliers information and mode of outsourcing.

1.4 Research objectives/purpose and Questions:

Objectives of this research are to get knowledge about strategies, activities and operations of
purchasing ethnic/world food products by Asda. We also tend to know customers point of views that
whether they like to buy ethnic/world food products from Asda , to evaluate that whether customers
have knowledge that Asda’s above department is slightly expensive than other small retailers. We are
going to search about customized products that how companies manage customized products
departments, as customized products designed and manufactured for special customers to fulfill their
needs, so ethnic/world food products also come under customized products because ethnic groups are in
minority in UK. Asda sells toys, food, household, clothes, electronics etc, customers always give priority
to shopping from one place, and it saves their money and time both. So our purpose of this research is
also gather information about ethnic customers trends that whether they buy their traditional food from
their small ethnic retailer or Asda, can they get all products they want to get? By collecting all these
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information we will be able to know about customers preferences that whether they buy quality of food
or low prices. This matter will also be considered that Asda’s suppliers are based here in the UK or it
approaches origin country for ethnic /world food products. We will underpin the reasons if customers
buy higher prices ethnic/world food products from Asda. This research will cover Asda’s ethnic/world
food purchasing strategies and will also give information about customers’ ethnic/world food strategies.

So based on above objectives we are interested to get answers for following questions:

 How Asda perform its procurement operations for ethnic/world food products; Global vs. Local
outsourcing.
 What strategies can be followed by Asda to keep its ethnic/world food products prices’ low?
 What hurdles can be faced by Asda if it outsources ethnic products from their country of origin?

1.5 Contribution of study:

This study will provide beneficial information to Asda’s world/ethnic food department. This
study of research can contribute to give very constructive suggestions to Asda’s supply chain and can be
successful to get their attention towards different manners of outsourcing. It also can help to students
those who are interested in Asda’s supply chain. This study will show the interests of customers which
can help Asda to improve its department.

1.6 Research process and methodology:

The research methodology will be designed after reviewing literature and making hypothesis. It
will be decided that what type of research suits to our hypothesis, and what methods can be used to
collect required data. After getting information about the topic it will analyze that whether secondary
data is available to support our hypothesis or we need to collect primary data. After that methods of
research will be applied. Research process will support our research objectives. We will make sure
during the designing of the questions and collecting data that our research is valid and collected data is
reliable and we can generalize our research.

1.7 Research structure:

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You should keep some important points while you structure your research, which is; that you
should plan your structure in understandable manners that help reader to go through whole research
thoroughly.

Structure of our research will be as follows:

Chapter 2 which will be the literature review, in this chapter we will get relevant details about ethnic
minority population in UK, and its characteristic. We will learn that how ethnic minority groups
contribute in UK’s economy. Further we will discuss demand for world food. Company which we have
chosen is Asda, so we will gather all significant information about Asda, its supply chain and its
world/ethnic food products department. We will also discuss customized products and outsourcing, to
create better perspective for reader to understand our topic easily.

Chapter 3 will be research methodology, methods which we will be use in research will be described,
that how we will collect data, and which type of data and what sources we will approach.

Chapter4This chapter will present the results and findings. We will interpret and analyze our collected
data. And will adopt such methods which will make results of our gathered data, more clear.

Chapter 5 Conclusion will be presented in this chapter. We will discuss limitations which we may face
in research. We will also present our recommendations for further research or suggestions to make up
loopholes which we may find during research.

1.8 Summary:

We have designed our research that will help us to identify some significant answers related to
our topic. On the whole we will discover that how one company’s supply chain activities influence its
sales. There will be some knowledge about UK’s ethnic minority population and their choices for
traditional food shopping. How supermarkets survive higher competition by applying different strategies
in their supply chain to attract customers and to sustain competitive advantage in the market. We will

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also discuss small ethnic retailers, whether they successful to attract customers by offering lower prices
compare to supermarkets better quality and slightly higher prices. We expect that all information we will
get, would be reliable, valid and we can generalize them.

Chapter 2. Literature review

2.1 Evolution and characteristics of UK population


In this section we will learn about the changes in UK population and also will find out the
reasons behind the increasing population.
UK’s population is reaching 60.7 million, grew by nearly 5%, between 1995 and 2007 (Euromonitor
report, 2010). This growth is not just because of its inhabitants there are some other issues involved in it,
which we will learn as we go forward in this section.
2.2 Immigrants:
As United Kingdom is being a great attraction for third world countries and large number of
people are coming from those countries every year. People come in UK for different reasons i.e. visit,
business, for settlement and to study. A study which was basically based on consumer lifestyles in UK
shows that the main factor of growth in population is immigration, which is raised as 154,000
immigrants in 2007 compared to 64,000 in 1995 (Euromonitor report, 2010). The most recent growth in
immigrant is after EU (European Union) issue. In 2004 a number of immigrants were added from
Eastern European countries. These immigrants were tended to get better work opportunities than their
home country. Asylum seekers are also having a great part in raising the population, according to the
government data that in 2007 almost 164,635 people were granted British citizenship, one-third were
from Africa, of these new citizens, while more than one-fifth was Asians.
A large number of young people come from other countries to UK for higher education. By the Higher
Education Statistics Agency’s figures show that students from non-European Union countries raised as
7% in 2005 to 2007 and their population reached nearly 240,000. However most of them are Chinese
and Indians.
On the other hand birth rate is lower than the death rate of inhabitant.
According to the above mentioned study it shows that the decline in death rate is because of great
efficiency and introducing new manners of keeping good health, creating awareness about healthy diet

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by National Health Services and latest inventions for treatments of deadly diseases. All these factors
play an immense part to live a long life. And the reasons behind the decline in birth rate are many; one
of those reasons is inflation. People can’t afford large families and due to growing expenses of food,
housing and taxation, female are more attractive towards work than before, so they are not encouraged
by this situation to have more babies to leave them behind at home.
So it shows that the UK is having people with background of different cultures, religions, taste and
nationalities.

2.3 Importance of world food and ethnic consumer


Before going in detail of importance of world food and ethnic consumer we have to take a look over the
food industry and trends.
2.3.1 Food industry affected by Economy crisis:
As the UK economy is struggling, the foodservice market also has been miserable. In 2009 a
number of outlets closed down as their operators were struggling to pay up the bills and other
expenditures. Reports show that during 2007 and 2008 UK consumers faced major increase in the
prices of food, utilities and petrol. As credit crunch had a great impact not only on the UK but whole
world suffered in any way. The cost of basic foodstuffs increased rapidly, in international market the
prices of wheat, meat, corn, soya and dairy products have gone up very quickly. As a result, basic food
costs e.g. cheese, bread, eggs, milk and cooking oil have risen extensively. Because of high prices
supermarkets attract their customers by offering them deals and discount offers.

2.3.2 World food demand and ethnic consumer


With the growing population of world, demand for food is also raising higher. .According to the
Japan International Research Center for Agricultural Sciences (JIRCAS), between 1995 and 2020, every
year 70 million people will be added in the world population (Koyama, 2000).
It is necessary to project future food demand for many reasons, but the very important reason is to
assess the abilities to produce the food and trends of food demand, as it has been changing from period
to period and it modifies the pattern of world food trade, e.g. the demand of four largely defined food
categories -livestock, bulk, horticulture and other processed food in trade has been increasing for two
decades. These changes and demands are accelerating so these changes are very important for any

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researcher who is willing to analyze policies relating to trade. It will help to find the best producer and
run the business according to the demand.
In the UK, data from the Office of national statistics shows a rise in the population is 0.6 percent higher
than the last year, and the basic reasons for growing population in UK are fewer deaths and more births
to women from overseas, immigration rate is high, many people come from different countries enter UK
every year(Clifford, 2010). So now and in near future demand for the world food will increase, and for
supermarkets these growing ethnic population figures need to be considered. ASDA is already
concentrating on its world food department and expanding its department according to the demand,
better than its competitors.

2.3.3 Ethnic food


Ethnic food means foods which have cultural uniqueness, related to a particular religion, race,
nation or tradition. (Dwyer & Bermudez, 2003). Ethnic foods distinguish consumers religiously,
socioeconomically and regionally. In different parts of the world climate is different and inhabitant of
each particular area have special needs in their diet according to that climate, so these needs developed
different methods of food preparation. This trend is coming from centuries and even people move to
other regions they have that specific taste which keeps them to stick to that traditional food. “Ethnic
food represents traditions and cultures. Individuals in different ethnic groups have different ways of
categorizing foods, which are sometimes at
variance with medical views of foods as sources of nutrients that are based on physiological and
biochemical characteristics” ( Dwyer & Bermudez, 2003).

2.3.4 Ethnic consumers and retailers:

UK is having multicultural community; it means it is a big market for the ethnic retailers and
supermarkets. “ In a number of Western countries, worldwide immigration patterns of recent decades
have led to the creation of large ethnic subcultures”(Reardon et al., 1997). In the UK immigrants
especially from South Asia have their strong cultural identity and they are firmly rooted to their
background and this led to an ethnic minority business network. Not only immigrants from south Asia
but from other parts of world e.g. African immigrants also have a great impact of their cultural
background and they also have their small retailers for food, garments and other stuff. According to an

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estimate business enterprises owned by ethnic minority contributes £5bn in UK economy per year
(Jamal, 2002). A study by Jamal (2002) explains that demand for ethnic products has been growing
since 1970s. this growth is because of growing population of ethnic minority in the UK. These minority
ethnic groups includes Indians, Bangladeshis, Pakistanis, Chinese and Caribbean. There are some other
minority groups e.g. eastern European, jews,Turkish, Irish and many more. “During the early1970s, the
survival of most of the ethnic retail enterprises in the UK was based on the patronage behavior of ethnic
minority consumers who utilised their services” (Iyer and Shaprio, 1999)
Above mentioned authors describe this situation that the passage of time and as preferences and taste of
ethnic groups was developing, more and more ethnic retailers were encouraged. Now the big
supermarkets are also targeting for these ethnic minority groups by having food, garments and other
stuff, e.g. Asda, Tesco, Marks and Spencer, Iceland. Ethnic entrepreneurs are targeting mainstream
consumers as well as ethnic community while some of the mainstream mass marketing retailers are
ignoring the ethnic minority customers and they have been criticized for doing this (Jamal and
Chapman, 2000). By going through some articles it seems that marketing of some of big companies
totally ignored ethnic minorities, in their campaigns and advertisements they paid no attention that they
should also have bear in mind that the minorities spending can have a big contribution every year.
Mainstream retailers were missing the chance to get benefit of £10bn every year which ethnic
minorities spend every year (Jamal, 2003). But now it’s different from past times, people from ethnic
communities can find their spices, food, vegetables and meat from big supermarkets.

2.4 Supermarkets vs. ethnic retailers:


Multi-stop shopping in small stores is much more time consuming and costly than the one-stop
shopping in any big supermarket (Betancourt & Gautschi, 1990). There are higher opportunities for
consumers to save their time and money in one way to do shopping in supermarkets as they can find
different type and variety of products under one roof. If we see it other than conventional shopping we
can have an experience to look at many other ethnic products also. There can be income lag because of
geographical differences, for example supermarkets are accessible even to low income customers, but
the issue is that their use is unequal (Goldman & Hino 2004). Ethnic consumers keep shopping from
their traditional retailers even their supermarket is reachable. Many reasons can behind this attitude of
customers, e.g. price difference or less variety etc. Goldman et al. (2002) also point out some reasons

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that customers have deep and old association with their traditional ethnic shop keepers who will greet
their customers and they have social attraction between them if the shopkeeper is from the same ethnic
community. In high income customer’s area supermarkets are successful because those customers buy in
big quantities and spend more money compare to low income customers which buy regularly and in
little quantity. Ethnicity does not matter when freshness of food and meat comes, customers always
prefer fresh food and meat and there should be authenticity of handling it especially meat that should by
killed in ritual ways (especially for Muslims and Jewish community), so they buy it even it is slightly
expensive (Jamal, 2005).
2.4.1 Risk and safety matters:
In 2000, Parliament set up an independent food safety watchdog known as The Food Standards
Agency (FSA). The aim to setting this agency up to make sure that the food industry is practicing good
and following the food law. The issue was raise by some of local authorities that they were facing
problems to communicate with the traditional retailers regarding some food safety issues. According to
the (FSA) Food standard Agency there were 7233 consumer complaints regarding hygiene of food
premises in 2001 (Rudder, 2004).

2.5 Role of Supermarkets to promote Ethnic food; Asda


Research on grocery market in the UK shows that it is dominant by some of big supermarkets,
ASDA is one of them. As UK is multicultural country, with many different ethnic groups, supermarkets
know the growing need of world food so most of the supermarkets are concentrating on their world food
departments with wide range of products availability to fulfill the customer needs and obtain the
maximum level of customer satisfaction.

ASDA is one of the leading supermarkets in Britain; it was started as a dairy collective which was based
in Yorkshire. ASDA retails food, toys, clothing and general merchandising. Products include finance
and travel agency services, insurance, a home buying and selling service, telecommunication and
insurance services in the North East. Petrol sales, private label pharmaceuticals and in-store pharmacies
are also offered by the company. Asda’s CEO is Andy Bond. It is second largest supermarket in UK
after Tesco. George and Asda living standalone chains are also run by the store. In 1999 it has become

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subsidiary of world’s largest retail American company Wal-Mart. ASDA claims that it is British lowest
price supermarket. At the end of 2008, ASDA expanded its internet grocery retailing. As its competitor
Tesco was getting much profit from its internet grocery retailing facility Asda followed the same trend
and made a big difference in its profit which company was having before. As recession hit businesses,
battle is started to compete with lower prices between retailers to attract more and more customers and
to survive in the market. According to the growing demand of world food ASDA introduced its first
world food store in London and also occupies a big department of World/Asian food in its each store.
Many retailers purchase their World/Asian food products by outsourcing both locally and globally.

ASDA is well aware of the needs of customers, and by knowing the upcoming demand it takes decisions
before its competitors for example ASDA George has launched a range of Asian clothes, for the very
first time in the UK’s supermarkets. ASDA not only introduced authentic ethnic clothes range baring in
mind customers demand but also it kept its image of having low prices. Now, it’s not just Asian
customers are attracted to the new introduced clothes, it also captured the attention of other
communities.

Another bold and unique step which is taken by ASDA is having Halal meat butchers in the stores,
which attracted a number of Muslim customers. People are happy to find whole range of products under
one roof and ASDA is successful to get attention of Asian community.

2.5.1 Asda’s private label Portfolio:

Summary 2 Asda Stores Ltd: Private Label Portfolio

Private Label
Sector(s) Notes
Brand

Grocery, stationery, home wares and


Smart price  pharmacy

Lowest price range

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Summary 2 Asda Stores Ltd: Private Label Portfolio

Private Label
Sector(s) Notes
Brand

Asda  Grocery and general merchandise Standard price range


Premium positioned
Extra Special  Grocery
range
Organic  Grocery Organic range
Grocery
Good for you! 
Healthier range
More For
Clothing and home wares Child-focused products
Kids 
Figure 2.1 Source: Euromonitor International from company reports, trade press

We can divide Asda’s private label portfolio into three ranges of prices: premium, budget and standard.
If we compare Asda with other supermarkets, it has a somewhat narrow portfolio of private label
products.

2.5.2 Company’s Competitive Positioning:

In retail ranking of 2009, Asda moved up from its position to second place, and its value share
was over 6%. The major reason of its progress was its share in hypermarkets, with company’s leading
position with 35% value share. Asda has its “lower price” impact on its customers, and its wide range of
product offering is also attractive to consumers, its offerings include clothing, groceries, electrical
goods, home furnishing, books and flowers etc. the company is having its ‘why pay more?’ slogan to
promote more sales and to retain its impact on customers. Asda’ internet retailing policy is making its
position more strong in the market as its low delivery fees marketing campaign (Euromonitor, 2010).

Summary 3 Asda Stores Ltd: Competitive Position 2009


Channel Value share Rank
Hypermarkets  35.4% 1
Supermarkets  0.0% 12

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Summary 3 Asda Stores Ltd: Competitive Position 2009
Channel Value share Rank
Discounters  0.1% 4
Variety Stores  7.6% 3
Internet Retailing  4.6% 3
Mass merchandisers   100.0% 1
Figure 2.2 Source: Euromonitor International from trade press, company reports, trade interviews

2.5.3 Asda’ procurement activities:

Asda is having plans to retracting on China manufacturing, because raging inflation in China is
forcing company to pull back its manufacturing operation. Andy Bond, CEO of Asda, told local sources
that it is significant that we move our manufacturing operations from China and we are looking to
outsource some low-cost countries such as Vietnam. Bond said, "In common with other retailers we are
always looking to where we source from, and Vietnam is one of the countries we are looking to." (Jerrel
Yun, Singapore Published: Sep 05, 2008 Procurement Asia). Asda has an approved list of its main
contractor and designers. Its main suppliers are Lain, HBG Construction, Carillion and Pearce Retail;
these contractors are working for more than five years with the company. These partners are agreed on
profit margins, overhead costs and preliminary packaged, for all projects. These are all big contractors
but subcontractors work is tendered.

2.5.4 Asda Stores:

There are 374 stores situated throughout Wales, England and Scotland. Asda works with over
2,800 suppliers. They employ 150,000 colleagues and claims that their employees are the friendliest in
the industry.

Asda’s world food Department:

Asda has a bigger department for its world/ethnic food products, compare to its competitors.

2.5.5 Asda Supply chain Management:

As supply chain is fundamental part of any business, but especially for supermarkets. (Account
watch Asda, 2008) In this section Asda’s supply chain director, Andy Ellis will explain that how does
Asda’s supply chain works and what are the goals to achieve by its effective supply chain. He describes

19
that effective supply chain is very significant not only for the firms but also for the customers as they
can’t get fresh, up-to-date products. So it’s essential that businesses give importance to their supply
chain in a new better way, and develop new and innovative ideas to bring high quality and affordability
to products which they offer their customers.

2.5.5.1 A customer-centric approach:

Andy Ellis, Asda’s supply chain director says that “For Asda, supply chain not only improves
our business, by driving top line, reducing costs and improving margins, but it also saves resources and
means that we can pass all of these savings back to our customers”(British Retail consortium, 2008)

Furthermore, he describes that they attempt to take a customer-centric approach; so they can understand
customers problem and priorities so they can adopt supply chain in a way to reach customers needs. So
how they make it possible by adopting technologies and supply chain processes in a way that help them
to capitalize on growth even delivering value to their consumers? He explained it that it is followed by
their distribution strategy, so cost effective and fast supply chain adapts sudden changes in demand very
quickly and gives us tangible results, and he says that they are very sure that right results can be
delivered to the consumers.

However, he admits that in some cases the speed is too slow of getting stocks from their suppliers. The
route selection decisions are very important, so they understand that need options on technologies, by
making right decision with the help of technologies they can get competitive advantages.

2.5.5.2 Significance of Innovation in supply chain:

For any business to be successful, it needs innovation in supply chain. Asda has many
distribution channels to make sure that every single of products must be available on right time in right
store. Supply chain director of Asda Andy Ellis say that they encourage their depots through multi-tier
system, to act as suppliers. When they get products order from regional distribution centers, which
merge the purchase order at import centre by the system. After that they pick the order and send it to the
depots, which is the final pick before sending products to the store. This way is not only enable flow
network in more effective manners, it also make less inventory in regional DCs (distribution centers). In
this way they hold bulk stock centrally and distribute it on need basis. They also have their unique idea

20
that they order stocked and stockless products from suppliers on same purchasing order. In this way
supplier will be able to send fast moving products with slow moving products on same truck e.g.
Weetabix which is fast moving and slow moving product such as specialist organic cereal bar. By
adopting this strategy it is not only flexible it also allows suppliers to fill up their trucks. It will reduce
the vehicles on the road dramatically.

2.5.5.3 Accuracy and visibility:

Technology changes very fast, so there is need to keep company up-to-date by adopting new
changes. Advancement in technology enabled retailers to track their deliveries. Asda has global
transportation system (GTS) which can track their each and every vehicle with deliveries on the road, so
stores can get up-to-date reports at any time. Asda also operates product tracking systems, including
voice activated technology and radio frequency. By using these systems throughout the supply chain,
Asda obtain excellent level of visibility and accuracy of products.

2.6 Below cost selling:

Below cost selling mean when any product is being sold for less than its input cost by retailer. It
is for the consumer’s benefit, but below cost selling can create competition.

Below-cost selling by Asda and other grocery retails:

It is confirmed by UK’s ten grocery retailers that they are engaged in below cost-selling, these stores
are; Asda, Aldi, Lidl, Netto, Morrisons, Somerfield, CGL, Sainsbury’s, Waitrose and Tesco. (Account
watch Asda, 2008)

There are mainly two or three product groups can be related with below-cost sales, for most grocery
retailers. There are two main product groups across all ten stores which are sold below cost, are tinned
packet goods and alcohol. The other product groups include books, DVDs, CDs health and beauty
products and non-alcoholic beverages. It has been observed that branded products take shorter period
being sold in comparison with own-label products.

Reasons for below-cost selling:

Retailers told different reasons for selling products below cost.

21
 To maintain their position in competitive market.
 To attract customers on certain times of the year e.g. Easter, Christmas
 For seasonal products such as vegetables and fruits, when they have these products more than
stock.
 When they launches some new product.

2.7 Changes in food prices:

Mainly Influences on grocery prices because of competition between grocery retailers. Other
reasons for differences in prices can be role of tax in food prices, planning system and different property
markets. In the UK food prices increased compared with other EU countries. (Scotland on Sunday, 3
June 2007)

2.8 Operating margins for Asda and other grocery retailers:

In Account watch Asda (2008), it shows that the large grocery retailers including Asda earn
higher operating margins compare to independent retailers, in 2007 large grocery retailers’ operating
margin was 3.6 to 4.5 per cent higher than average margin earned by the 50 independent grocery
retailers which was 2.9 per cent.

5
2000/01
4 2001/02
2002/03
2003/04
3 2004/05
2005/06
2 2006/07

0
ASDA Morrisonos M&S Sainsbury's Tesco Waitrose

Figure 2.3 Source: Accounting watch Asda.UK Grocery Retailers, Operating Margins, 2000 to 2007

22
Purchasing costs for Asda and other grocery retailers:

According to Account watch Asda, (2008) the analysis of cost advantage for large stores e.g. Asda,
Sainsbury’s and M&S compared with other retailers is the terms of purchasing goods from suppliers.

It indicates that:

 The large grocery retailers and wholesalers have a major advantage in purchasing terms than the
other small retailers
 Among large retailers, Tesco has a considerable advantage in purchasing conditions.
 After Tesco, some of the other large retailers i.e. Asda, Morrison’s and Sainsbury’s, who also
have significant purchasing terms advantages.
 Remaining large retailers pay higher prices than above mentioned stores but pay almost same
prices as each other.
Some other additional information about company and its competitors e.g. Supermarkets
company shares by value 2005 to 2009, supermarket brand shares by outlet 2006-2009 and
Brand share by selling Space 2006-2009 can be learned by following charts:

Supermarkets Company Shares by Value 2005-2009


% retail value rsp excl sales tax 2005 2006 2007 2008 2009
Tesco Plc  39.5 39.3 39.4 40.2 39.5
Wm Morrison Supermarkets
19.0 19.5 20.0 20.9 23.3
Plc 
Waitrose Ltd  6.9 7.4 8.1 8.5 8.7
J Sainsbury Plc  6.6 6.7 6.9 6.9 8.0
Somerfield Ltd  - 8.1 8.1 8.0 6.5
Iceland Frozen Foods Ltd  2.9 2.9 3.7 4.1 4.8
Co-operative Group, The  2.6 2.6 2.7 2.9 4.0
Midlands Co-operative Society  0.9 0.9 1.0 1.0 1.0
Farmfoods Ltd  1.0 1.0 0.9 0.9 1.0
The Midcounties Co-operative  0.7 0.8 0.9 0.9 1.0
Musgrave Group Plc  0.4 0.4 0.2 0.2 0.2
Asda Stores Ltd  - - - - 0.0
Kwik Save Group Plc  - 1.2 - - -
Somerfield Plc  10.0 - - - -

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Supermarkets Company Shares by Value 2005-2009
% retail value rsp excl sales tax 2005 2006 2007 2008 2009
Others  9.5 9.3 8.1 5.3 2.1
100. 100. 100.
Total  100.0 100.0
0 0 0
Figure 2.4 Source: Official statistics, trade associations, trade press, company research, trade interviews,
Euromonitor International estimates

Supermarkets Brand Shares by Outlets 2006-2009


sites/outlets Company 2006 2007 2008 2009
Iceland  Iceland Frozen Foods Ltd 674.0 663.0 723.0 794.0
Co-op  Co-operative Group, The 455.0 500.0 542.0 778.0
Somerfield  Somerfield Ltd 748.0 750.0 755.0 605.0
Tesco Superstore  Tesco Plc 435.0 435.0 446.0 451.0
Wm Morrison Supermarkets
Morrisons  330.0 337.0 346.0 384.0
Plc
Farmfoods  Farmfoods Ltd 303.0 303.0 304.0 307.0
Waitrose  Waitrose Ltd 173.0 183.0 187.0 201.0
Tesco Metro  Tesco Plc 162.0 164.0 172.0 177.0
Sainsbury's
J Sainsbury Plc 148.0 153.0 159.0 172.0
Supermarkets 
Midlands Co-op  Midlands Co-operative Society 141.0 150.0 159.0 164.0
Midcounties Co-op  The Midcounties Co-operative 120.0 130.0 138.0 144.0
Budgens  Musgrave Group Plc 88.0 51.0 50.0 45.0
Asda  Asda Stores Ltd - - - 4.0
Kwik Save  Kwik Save Group Plc 170.0 - - -
Kwik Save  Somerfield Plc - - - -
Somerfield  Somerfield Plc - - - -
Wm Morrison Supermarkets
Safeway  - - - -
Plc
Others  Others 504.0 452.0 400.0 235.0
4,271. 4,381.
Total  Total 4,451.0 4,461.0
0 0
Figure 2.5 Source: Trade associations, trade press, company research, trade interviews, Euromonitor
International estimates

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Supermarkets Brand Shares by Selling Space 2006-2009
surface area '000 sq m Company 2006 2007 2008 2009
1,224. 1,244.
Tesco Superstore  Tesco Plc 1,236.7 1,245.4
1 0
Wm Morrison Supermarkets
Morrisons  817.0 829.7 851.9 948.4
Plc
Somerfield  Somerfield Ltd 551.2 555.0 558.7 447.7
Co-op  Co-operative Group, The 249.4 277.0 300.3 441.0
Waitrose  Waitrose Ltd 285.5 322.2 349.2 376.4
Iceland  Iceland Frozen Foods Ltd 306.6 301.6 332.9 372.6
Sainsbury's
J Sainsbury Plc 241.8 248.0 266.4 288.1
Supermarkets 
Tesco Metro  Tesco Plc 177.7 176.8 186.1 192.0
Farmfoods  Farmfoods Ltd 128.8 128.8 129.2 130.5
Midlands Co-op  Midlands Co-operative Society 80.1 85.0 91.1 95.0
Midcounties Co-op  The Midcounties Co-operative 69.1 74.6 78.2 81.6
Budgens  Musgrave Group Plc 28.7 17.2 16.9 15.3
Asda  Asda Stores Ltd - - - 10.6
Kwik Save  Kwik Save Group Plc 125.6 - - -
Kwik Save  Somerfield Plc - - - -
Somerfield  Somerfield Plc - - - -
Wm Morrison Supermarkets
Safeway  - - - -
Plc
Others  Others 940.8 838.8 699.5 506.9
5,078. 5,104.
Total  Total 5,239.1 5,151.4
8 4
Figure 2.6 Source: Trade associations, trade press, company research, trade interviews, Euromonitor
International estimates

2.9 Customized products:

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The definition of customized product is a unique product which is designed and manufactured
for special customers to fulfill their needs. In recent years, demand for the custom products has been
increased. It has become a trend. Customized products give a sense of uniqueness to the customer. It is
Managers responsibility to understand that why customers demand for customized products. In this
modern era customers want to be looked different by having personalized products. Intense competition
in the market, fast changes in technology and low prices for standard products derived industries to a
new revolution. According to this revolution customer service and customized products are very
important. Customized products are capturing the huge attraction from customers. Now a day’s
customer’s demands are low prices, good quality and customized products which should be exact to
their expectations. Most famous customized products are mobile phone, cars, garments etc. in computer
industry DELL was the first company who introduced customized computers for the very first time. We
can say that any products which are not mass produced and for the little number of customers are
customized products.. Peppers et al. (1999) say that if company is unable to identify its customers, that
company cannot differentiate and address each customer’s needs. Here are four key stages which can be
used by any company to build a relationship with the customers;

Figure 2.7. Source internet.

The very first step is to classify the customers and identify their needs by understanding their behavior.
For launching any product successfully company should keep in mind the trends of that time and collect
information about the customers as much as possible. The second stage is to distinguish their customers;
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it would be helpful to recognize the most valuable customers. The third stage is very important to make
a good association with the customers by interacting with them. Customized behavior of the company is
very significant as well as marketing program for effective relationship. There should be a good
connection between manufacturer, supplier and customer for successful customized product supply.

2.10 What is Procurement?

“Procurement is the purchase of goods and services from an external agency.”

When any organization defines their aims and objectives, they decide what is needed. They take a look
at public sector policy, legislation and then of course market condition. They work out that how the
procurement will be done. Procurement includes all purchasing decisions such as marginal benefits,
delivery and handling and price fluctuations. There are two categories for procurement, one is called
direct and the other is indirect, first category is production related and other is non production related
procurement. Direct procurement comes under manufacture settings, which directly affects the
production functions of manufacturing companies. When company decides what they have needed they
gather the information about suppliers which can satisfy the requirements. After identifying the suitable
supplier they can either ways contact the suppliers, by advertising the quotation or proposal or
contacting direct to the suppliers. Then company collect the samples of products, check the quality, and
all considerable trials and undertaken for example warranty, installation and maintenance. After this
they evaluate all of the tenders and company award the contract to those suppliers which fulfill the set
criteria. During this process company negotiate on price, availability and delivery schedules. Now it is
company’s responsibility to monitor the supplier’s performance regularly, and after set contracted time
period companies renew the contract or by considering other suppliers company may be advertise again.

2.11 Outsourcing:

Outsourcing meant to be the specific sources of purchasing goods or services which are external to
the organization. Organizations adopt outsourcing when they find it better, cheaper and faster way of
completing the purpose by an outside firm. There are many definitions for outsourcing e.g.

 “Paying other firms to perform all or part of the work” (Structural Cybernetics, c. 1996).

27
 “…. Having an outside vendor provide a service that you usually perform in-house”. (Laabs, c.
1997).
 “The use of external suppliers as a source of finished products, components, or services.”
(anynonmous)

These definitions give us a hint to learn that what is outsourcing although they do not give us detail
meanings and methods of outsourcing. This is to be understood by its name that it is something which
gives chance to the companies to get finished products or services from external resource. It is not just
about the requiring help from outer resources but there are also many things to be considered in
regarding of finding the right and cheaper suppliers and finding new methods of securing the delivery
of finished goods, raw materials, services and components. Another description for outsourcing is “the
practice of handing over the planning, management and operation of certain functions to an independent
third party” (Neal, 1995). The concept of outsourcing refers to find some expertise to handle specific
business functions outside the organization. As cutting costs is common throughout the industries, so
management decides before outsourcing that which method will be beneficial whether “make or buy”.
Outsourcing is driven by three major changes that affected society and work, William Bridges describes
these changes in his book, Job Shift, as;

 IT: work is more dependent on computers; production of products by the help of IT has
strikingly changed the structure of work.
 Organizational change: organizational structure is changing by the time. New methods of
running the organizations successfully e.g. re-engineering, customization and organizational
changes are now more important.
 Communication: development in communication technology is shrinking the world day by day.
People are more aware of what is happening in the other part of world, more than ever, so work
can be done in any part of the world e.g. companies prefers to appoint their call centers in
cheaper labor countries.

So, as a result these three changes in organizations are fundamental motives for outsourcing.
Outsourcing for IT is more attractive by companies who are more likely to have contact with customers
e.g. banks, mobile phone companies, they prefer to move their call centers and data centers in low-paid
worker countries’ like India. Fast changes in technology is making firms more aggressive to compete

28
others, they are more interested to hire existing facilities to maintain their position in the market rather
than manufacturing. IBM outsourced its whole Human Resource department, to gain the
competitiveness, accountability, profitability and flexibility. There is more pressure of shareholders
which lead companies to outsourcing in manners of getting more profit and cutting the costs. The
outsourcing trend has been growing; these following figures show the increasing interests of companies
in outsourcing.

It came across by the research that the biggest clients by industry are the manufacturer, retail trade and
wholesalers.

Figure 2.8

2.11.1 Outsourcing strategies:

Outsourcing is become essential content for businesses. Firms are now more concerned about cost
reduction and efficiencies towards the customer service, by realizing this fact that they do not need to
manufacture or produce their own components or products, they are focusing on reliable and cost
effective external resources. Many successful firms are very careful about outsourcing strategies and

29
they outsource their core processes such as manufacturing, marketing, design and engineering.
Outsourcing strategies brings affective competitive advantage and enhance companies’ performance as
they can give more attention to their core processes. It is better solution to outsource the difficult
business process which can be expertise for some specific procedure, access to modern technology and
to improve service levels. There are multi dimensional strategies for outsourcing. Outsourcing will not
work unless it will be implemented in a right way:

 First of all mark down the company’s core competence and basic sources of profits, and analyze
that if you really need to outsource them.
 Find out the processes or functions within the firm that do not help company to stand out in the
market. These parts can be outsourced which do not offer a competitive advantage for the
business.
 Company has to evaluate the costs, in a sense that whether company can afford to make it or it
will be cheaper done by other company. Understanding of whole situation is very important for
the benefit of the company, so it is necessary to over look that why company need to outsource
some functions, to cut the costs, enhance company’s performance or to achieve the goals.
 Be careful while selecting an outsource partner because it will be the representative to your
company in the future.
 You have to monitor regularly when you have decided to outsource, it is better to check
performance of outsource partner to avoid any hassle in future.
 After deciding to outsource some processes for the company look out the ways of improvement.
 It is true that outsourcing is a trend to reduce costs and enhance performance for any company
but it does not mean that company should have to adopt it unless it is necessary.
(Kelley, 1995).

To manage the outsourcing is very crucial. There are some important things to be considered, at very
first it must be subjected to a cost-benefit analysis, then estimate that the contractor you are hiring is
eligible for doing better job in faster manners. Once company decided to outsource some function there
are some step to be taken:

 Inform your staff that some affected function is needed to be done by external.
 Make a request proposal

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 Encourage and invite external and internal bids.
 Assess the bids.

2.11.2 Outsourcing: Benefits and risks:

Major benefit of outsourcing for the organization is cutting the costs. As many companies
outsource for different departments, those companies who outsource their HR, such as pay roll
transactional HR work, handling with the critical situation e.g. employee fraud, when any modem
technology introduced in the market, staff requires training so organizations outsource for these types of
trainings, all companies have to comply with the current legislation so they outsource for guideline.
Technology is very important drive for outsourcing. Many processes outsourced because firms want to
fulfill the modern technology requirements, or they need quick access to the current technologies and
their staff to be trained, so these types of tasks can be handled easily by external resources which are
loaded with the expertise and skilled people. There is another benefit of outsourcing which is quality and
service improvement.

As outsourcing has many advantages and benefits to the organizations, it also has some risks and
limitations. Research shows that many organizations which are experiencing outsourcing, describes that
outsourcing is not much cost effective and free of problem as it was estimated. It has indicated by a
survey that half of the respondents found outsource activity more expensive to manage than originally
expected.(Albertson, 2000). There are some service risks involve in outsourcing e.g. it is very hard to
find flexible contractor, who can be changed with the preferences of the organizations. Furthermore it is
more likely that your dealer may enter the market as your competitor, when you hire some company to
manufacture your design it is possible that manufacturer copy your design and start making for his
company, there is live example of a U.S. manufacturer of bicycles known as Schwinn, who outsourced
Taiwanes firm, Giant manufacturing for its bicycle frames. A few years later, Taiwane firm ruined the
Schwinn’ business by entering the bicycle market. It is reported by a survey that 25% of respondents
expressed that outsourced caused the less personal relationship with employees and decrease in
customer service. (Lily, Gray & Virick, 2005). Outsourcing also effects on workers performance and
morale (Elmuti & Kathawala, 2000). On the whole if we overlook the performance of outsourcing, it has
some flaws and risks as far as some benefits. It is not beneficial for a company to outsource at extreme
levels because it allows outsider to learn about the company’s secrets and weak points which cannot be
31
favorable for the company and it reduces the value of any firm. However, even with these drawbacks
and risks, it is calculated that between 1% and 20% of outsourced Human Resource processes have been
brought back in-house (Gurchiek, 2005; Pollitt, 2004).

2.11.3 Outsourcing in retailing:

Before going in details of retail outsourcing we better have a look at outsourcing in


manufacturing industry. If we look back in the beginning of 20th century when Henry Ford was
producing T Ford model, everything was manufactured in a giant factory. By the passage of the time,
demand for the cars, customers requirements increased and development in the technology forced
manufacturer to think of ‘make or buy’ strategy. So manufacturers started to buy parts and raw material
from the expert suppliers. Outsourcing trend in manufacturing is more common compare to retailers.
According to Van Hoek (1999), outsourcing in European grocery supply chains is lesser than in other
industries. Retailers to some extent are limited to shipment and warehouse outsourcing. There are some
examples can be spotted where retailers are trying to outsourcing some processes but with the lack of
strategies. Although the suppliers to the retailers are operating globally, but the retailers are all
depending on these suppliers rather than considering global manufacturers. In the supermarkets they
deal in variety of products so they do not bother to contact to direct manufacturer for each product so
they buy from suppliers. Buying from suppliers is not a cheaper way, as there is somehow some
expenses are involve, for example products which comes through suppliers from manufacturer to
retailers, are value added products, as there is some services involves by suppliers. Retailers should
concentrate the ways of outsourcing which are more beneficial to them. For some products which are
more popular within the customers and many supermarkets are selling those products, create
competition among them, so it would be better to purchase from the manufacturer than the supplier to
keep prices low and to gain competitive advantage. Retailers should identify their core competencies
and spot those subsystems which can be outsourced. By applying strategic outsourcing retailers can
boost their income, paying attention to those functions which give that retailer uniqueness in the market
should be operated within the organization. Research by BRC (British Retail Consortium) and Pinsent
Masons 2007 shows that outsourcing is successfully embraced by the retail sector. Data shows that 88%
of companies which are outsourcing confirmed that it has been successful. The findings of survey show
that 70% of respondents agreed that the most popular functions which have been outsourced are
warehousing and IT, and remaining 30% which are not outsourcing are more likely to consider it in near

32
future. Director General of the British Retail Consortium, Kevin Hawkins says that “outsourcing can
make retailers more competitive, but it is more than just saving money. It requires serious effort and
retailers must be clear from the outset about their aims and objectives.” Some of the respondents of the
survey showed their interest of of-shoring because it is cost saving but some of them are not agreed as
culture shift may be not suitable for them, as relationship would not fit. According to the research that
sufficient preparation is vital and company should be clear about what they want to get from
outsourcing. Outsourcing is favorable for the company in a sense of introducing its efficiencies. It is
indicated clearly by the survey that management boards should review that which operational processes
can be handled in-house, regularly. By doing so they can identify those functions which can be done by
third party.

In retailing industry outsourcing is vital to achieve benefits and to win customers trust and attract them
in a better way than the competitors.

2.12 Conclusion:

By going through all the related data and research reports, some points can be highlighted. In the
recent years when immigrant from different part of the world start entering the UK around 1970s, they
couldn’t get any of their traditional food product here. But with the passage of the time people from the
ethnic communities start realizing that it is necessary to have traditional retailers. In the beginning ethnic
retailers just have their own products, and conventional retailers did not bother to have products for
other communities. But now a days with the growing population of immigrants, not only small retailers
but supermarkets also representing the minority ethnic groups. Literature about ethnic foods by small
retailers and big supermarkets looks like that the minority ethnic consumer can now shop from
supermarkets for those traditional food product which he could only find at local ethnic retailer. Asda is
playing significant role in developing its department for world food, but it came across that although
Asda is cheaper than other supermarkets but its world food department is even expensive than the local
retailers, so question is that what are the factors behind this reason.

Asda is outsourcing for its world food from local supplier?

What are the Asda’s procurement strategies for world food products?

Is Asda popular or not within the ethnic groups?

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Do people like to buy their ethnic food from local ethnic retailer or from supermarket?

Slightly price difference does not matter when customer do one-stop shopping?

Does ethnic and world food require similar marketing and sales strategies to those for conventional
food?

Chapter 3: Research Methodology:

In this chapter we are going to describe that how we will collect the information regarding our
hypothesis. We will also study research methods, and about appropriate methods, resources and
types of data collection, which suits to this dissertation.

3.1 What is Research?


Kothari (2008) defines research as a systematic and scientific search for significant information
on a particular topic. He describes research as an art of scientific investigation. We can get more
knowledge about the meaning of research by this definition, “Research is a systematic and objective
analysis and recording of controlled observations that may leave to development of generalizations,
principles or theories result in prediction and possibly ultimate control of events” (Best, 2006).

3.2 Purpose of research:

34
The purpose of our research is to gather implicit information about the company’s procurement
department, to discover the factors behind prices differences of World/Asian foods between the
company and small retailers. It is very exciting topic for the author to get know how about the ethnic
minority groups strategies of shopping for their traditional foods. There is also a curiosity about the
company’s specific department’s slightly higher prices in comparison with other small retailer; even
it’s having a slogan of ‘lower prices’.

3.3 Research Design:


Research design is a specific framework which shows us that how we can identify the problem to
present as a research report. It is a plan or a structure for a study that can be used as a guide in
gathering and analyzing data. We design our Research in a way that we collect required information
as much as we can. There are different types of research design described below and we also will
discuss the research design which we have selected.

3.3.1 Exploratory research:


Welman & Kruger (1999) defines that exploratory research’s approach is to locate a problem to
be tested. This type of research is helpful when researchers are unable to get an idea of the problems,
they can get during a study. By exploratory research, researchers develop concepts more clearly, pin
down main concerns, develop prepared definitions and make their final research better (Cooper &
Schindler, 1998). It is a process of gathering, understanding and analyzing information. There are
different ways of collecting information by using exploratory research.

3.3.2 Descriptive Research:


Descriptive research refers to the sort of research design, questions and data analysis, which will
be related to a given topic. (Jonassen, 2004). It also called Statistical Research. This type of research
is basically designed to describe the characteristics of targeted individuals in an accurate and
systematic way. The main purpose of descriptive research is to describe the characteristics and data
about what is being done. This kind of research is highly accurate. Researchers conduct this type of
research when they want to get accurate knowledge about the situation, it does not get the reasons
behind the situation. We have selected this type of research to solve our hypotheses; this design of
research will help us to gather required knowledge.

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3.3.3 Analytical or explanatory research
This type of research is continuation of descriptive research. In this research, researcher analyses
and describes that how and why something is happening. There are different types of analytical
research such as philosophical, historical, reviews and research synthesis.

3.3.4 Predictive research


This type of research goes further by forecasting. It consists of prediction e.g. will this bonus
scheme motivate the employee? Predictive research presents answers to ‘why’, ‘how’ and where,
and also predict future results of current situation.

3.4 Research sources:


3.4.1 Primary Data collection:

We are going to gather information by using primary data collection method. As we could not
find any appropriate secondary data about our hypothesis. Primary data collection means that you
have to collect all required information by yourself by using methods such as surveys and
interviews. This type of data is unique as no one has studied it before.

Here are some advantages and disadvantages of collecting primary data;

Advantages:

 You find data what you required for your research.


 Researcher have greater control over how the information is collected, primary data
collection allows researcher to focus on specific issues, e.g. time frame that how long it will
take to complete the project, location of research.

Disadvantages:

 Usually it’s time consuming.


 Primary data collection is costly compare to secondary data collection.

There are many ways to collect primary data, some of them are:

Interviews, Observation, Case studies and Questionnaire.


We are going to use survey method for our research and will design a questionnaire.

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3.4.2. Secondary Data Collection:

Secondary data is the data which was collected by someone for some other purpose and available
from other sources. This type of data is easy to obtain and a cheaper way to get information. It is a
quicker way to gather required information than the primary data. We can get secondary data from
the company websites, archives, books and other sources. We have tried to get some secondary data
about company’s procurement operations but we have been failed to obtain such data. So we are
relying only on primary data.

3.5 Research Methods:


There are different types of research methods e.g. survey, case study, experiment, cross sectional
etc. the research method which we are going to use is survey.

3.5.1 Survey:

What is survey?
Enanoria (2009) describes survey as a systematic method for collecting information from a
sample of specific individuals for the reason of explaining the features of population. By using this
method you can collect information by asking people questions. Information can be gathered by
having interviews, asking people to fill the questionnaire etc. we are going to conduct a survey for
our research problem, so here are different kinds of survey and steps which are considerable during
the survey, described below in detail:
There are some steps to keep in mind while you conduct a survey:

Establish your goals:


In this first step you should know that what you want to learn. Your goals should be clear if your
goals are vague your results will be unclear. The area you are going to explore you have to know
how about that area to some extent. You should be specific about your objectives, so you can get
usable answers. We established our goal that we have to collect data regarding our hypotheses which

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are knowledge about procurement strategies of Asda, how they perform their procurement
operations for ethnic/world food products.

Selecting sample:
You should know that to whom you are going to have an interview. First step is to know that
what kind of people to interview. This group of people often called as target population. In some
cases target population is obvious, e.g. an employee attitude survey, but if you are going to ask about
the success of a product, target group may be less obvious. So target population should be
representative. You can lose the opportunity to meet your goals if you do not interview the right kind
of population. After choosing right people now it’s time to decide that how many people you need to
interview. Sample size bases on some factors e.g. what budget you have, available time, and how
much you have to precise. So bearing in mind all these aims we have targeted population which is
Asda’s ethnic customers. Customers those who came from different backgrounds, civilization and
culture.

Avoiding a Biased Sample:


By avoiding biased sample will save you from biased results. You should contact those people
who are illegible for those questions, e.g. if you are surveying about a product which is for young
people you should not ask elderly people about that product, or you do not have to ask about anti
wrinkle cream to teenagers.
Here are data collection methods which are selected by author for research, and each method has
some advantages and disadvantages.

3.5.2 Personal Interviews:


When you interview someone face to face it calls face to face interview. These type of interview
can take place anywhere e.g. at home, in park, at a shopping mall, in college and so on. We have
decided to design a questionnaire and go to Asda, approach customers directly and tell them about
questionnaire and research and ask them to fill the questionnaire.

Advantages:
a. In face to face interview, gives a chance to interviewee to feel and see a product.
b. You can find people outside that specific outlet you want to ask about, to customer easily rather
than you call people randomly.

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c. Face to face interviews can be tolerated if longer, people can find it easy at home, sitting and
chatting.

Disadvantage:

a. This method is costly. When you travel to each person to take an interview, it costs you time and
money both.
b. Sometimes you go to shopping mall to interview people, people living around that specific
geographical area, can be influenced to a typical kind of that area and cannot be taken as a
representative group. But we have selected Asda which is situated within ethnic majority population.

3.5.3 Internet survey:


Advantages:
a. In this category we can include email survey, web page survey and computer direct

Interviews. We have chosen e-mailing survey.

Advantages:
b. These methods are very economical and fast. An e-mail survey can gather thousands of
responses within a day.
c. You can get more accurate answers by computer direct surveys
d. There is no cost involved at all.
e. You can send/show photographs of products.

Disadvantages:

a. This method is not universal as so many people do not have access to the internet.
b. People set their email addresses that if they get unknown email, will automatically go to
the junk mail.
c. Sometimes people do not have much time to fill questionnaire so they delete such emails.
d. People can easily quit the web page during the survey, if questionnaire is too long.
e. You do not know whether one respondent answered you once or many times with different
identification.

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3.6 Types of Data
There are two main ways of approaching a research topic qualitative and quantitative and we are
going to use both of the methods for our research.

3.6.1 Quantitative
This method concentrates on counting or measuring and analyzing statistical data and applying
numerical tests. This method involves the numbers to assess information. Your research should be
well structured and controlled under scientific research design. Most popular form of Quantitative
data collection comes in surveys. By conducting surveys you can capture information through
questionnaire, online survey, telephonic and mail surveys.

3.6.2 Qualitative
Qualitative data includes different information that is not numerical in nature. Those information
which cannot be measured statistical, e.g. you can gather information by interviewing someone but
you cannot measure an interview in numbers. There are some major categories of qualitative data

3.7 Design of Questionnaire:

Questionnaire is designed in a simple manners, we have been very careful while making the
questions. We made sure that there should not be any jargons used. Questionnaire is easy to understand
and questions are multiple choice. We did not make a lengthy questionnaire by keeping in mind that if it
will be lengthy there is possibility that we would not get good response from customers. Customers do
not bother themselves to fill long questionnaire while shopping.

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Name: ____________________
Date__________

Ethnic origin: (Please specify the country).

African______________ Asian_______________ European______________

Other_______________

Sex: Female Male

Please tick the appropriate box

Q. 1 Do you shop your ethnic/traditional or world food products from Asda?

Yes No

Q.2 If yes what are the reasons to buy your ethnic/traditional or world food products from
Asda?

Variety of food products quality of food products

Authenticity of food products

Q.3 If No then from where do you like to buy your ethnic/traditional or world food products?

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Traditional small retailer other supermarket

Q.4 Do you find price differences between Asda and ethnic/traditional or world retailer while
shopping for ethnic/traditional or world food products?

Yes No Slightly different

Q.5 Do you think ethnic and world food require similar marketing and sales strategies to those for
conventional food e.g. TV ads.

Yes No Don’t know

3.8 Research Testing Methods:


Here are some methods to assess the credibility of research findings

Reliability:
You should be careful that data you have collected is reliable. Joppe (2000) defines reliability
that a perfect representation of the total population, and if there will be a need to reproduce by using
same methodology, then the research implement should be considered to be reliable. Sometimes data
may be reliable but the sources, by which you got the data, are not reliable. We designed our
questions for ethnic minority group and will be asked to those customers who are purely belongs to
some ethnic minority group and we expect that if research is conducted again in same circumstances
with ethnic minority groups, results will be the same. Reliability also refers that how much
measuring device is dependable.

Validity:
Validity of research questions is vital; it has been planned that data which we are expecting must
be valid. Validity refers to a study measures or also can observe what it claims to measure or
examine. There is an observation that because of number of reasons, generally questionnaires are
lack validity. Answers given by participants can be a lie. It has been disputed quantitative data is not
much valid than the qualitative data. But we tried to design neutral questions in questionnaire.
Questions are not forcing or making up participants minds to get required answer. Validity simply

42
means assumptions, decisions and conclusions are meaningful and appropriate, made on the basis of
test scores.

Generalisability:
Before discussing that how our research can be generalized we will look at the meaning of
generalizability. It means that a representative group should represent the whole population. There
are three main points should keep in mind to generalize your research which are; sample, time and
size.

 Sample should be enough to represent the whole population.


 Time can change behaviors so quickly.
 Size of samples should satisfy the statistics.

We have tried to take representative group of population, as we had to target the ethnic minority
population and those who also are customers of Asda. So we chose Asda which is situated in ethnic
minority area, we visited the store and ask customers to fill the questionnaire. We expect that our sample
size will represent the ethnic minority, so we can generalize our research.

43
Chapter 4: Results and Findings:

4.1 Introduction:
This chapter will present the details of our findings about our hypothesis. We conducted a survey
to get knowledge about ethnic/traditional food shopping by ethnic minority groups that shop from Asda.
Results will be provided in this chapter which will show that whether our findings support our
hypothesis or diverge from it. Collected data will be calculated by Microsoft Excel. Limitations which
are faced by the author will also be discussed later in this chapter.

4.2 An over view of literature review and Hypothesis:


The main trigger for this research was to know about the Asda’s Procurement operations
regarding its Ethnic/World food department. We would like to revise some of company’s details. Asda
is one of the Britain’s leading supermarkets which retail food, toys, clothing and general merchandising.
We were investigating its Ethnic/World food procurement strategies, so we had to get knowledge about
the customers which were main cause for Asda to develop such a department in the store. People from
different backgrounds and ethnicity have a big portion in UK’s population, and supermarkets are well
aware of this growing market, especially in those areas which are representing majority of ethnic
population. According to the growing demand of world food ASDA introduced its first world food store
in London and also occupies a big department of World/Asian food in its each store. Its world/ethnic
food departments in its stores are bigger than its competitors, especially in ethnic minority areas. By

44
investigating about Asda’s ethnic/World food department it seemed that it has higher prices than smaller
retailer, so author was tend to know that why this difference was even though Asda is much cheaper
than other supermarkets as it claims of being cheaper. Asda is one of the some leading supermarkets
(Tesco, Sainsbury’s, Morrison’s) who are selling below cost Account watch Asda, (2008) explains that
Asda is getting advantage by below-cost selling, as it encourages customers to enjoy its special offers on
seasonal events e.g. Christmas, Easter.

Asda is comparatively cheaper from other supermarkets as it claims. Asda has taken many successful
steps for the very first time, i.e. introducing Halal meat (ritually slaughtered for Muslims) butchers
counter in Asda. It is very famous among Muslim customers as they find it authentic and according to
health and safety rules.

We tried to get information of Asda’s ethnic/World food procurement operations by different sources,
e.g. Asda’s website, articles about the supermarket, and books but couldn’t find any appropriate data
regarding our research title. Although we could get some material about Asda’s supply chain, but it was
more about its activities which make its supply chain process fast and cost effective, we have been
unable to find any material specifically about Ethnic/world food was available.

4.2.1 Ethnic customers:


There are many traditional retail shops for these types of customers. Supermarkets like Asda are,
by understanding the needs of ethnic customers, expanding their ethnic/world products departments.
Asda George introduced a new Asian fashion range in their stores which is highly welcomed by Asian
customers. It seems that Asda is now realizing of this growing market in UK. This research will show
that from where ethnic customers like to shop and why?

4.3 Research questions:


Our main research questions were as follows:

Our hypotheses were all about procurement operations of Asda for its ethnic/world food products. By
reviewing the literature we were unable to find any data regarding Asda’s procurement strategies

What are Asda’s procurement strategies for world food products?

45
What are the main challenges for ASDA in world food’s procurement?

Is outsourcing for world food products from local suppliers a better option than overseas outsourcing?

What are the criteria for supplier selection in world food retailing?

To gather information for these main hypotheses we required data which can be only collected by
making some hypothesis which can make a base to reach the main hypothesis, which are followings;

Is Asda popular or not within the ethnic groups?

Do people like to buy their ethnic food from local ethnic retailer or from supermarket?

Slightly price difference does not matter when customer do one-stop shopping?

Does ethnic and world food require similar marketing and sales strategies to those for conventional
food?

4.4 Targeted Population:


Our target population was Asda’s ethnic minority customers. We wanted to know that whether
these customers like to do shopping for their ethnic/traditional food from Asda or from somewhere else
e.g. small retailer or other supermarkets, and what are the reasons behind both cases. These customers
were from different part of the world. Customers with different race, religion and traditions, were asked
to fill the questionnaire.

These customers were from different ethnicity, countries are mentioned below:

Ethnic background Country Number of participants

Ghana 1

Nigeria 4

Somalia 2
Africa
Mauritius 1

South Africa 1

Eritrea 1

Seychelles 1

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Morocco 1

Philippine 1

China 1

Oman 1

Pakistan 10
Asia India 7

Sri-Lanka 4

Bangladesh 2

Dominica 1

Carribean 1
North America

Poland 1

UK 3
Europe

Figure 4.1 Source by Author

4.5 Presentation of acquired Data


All questions were simply designed so customers can understand easily.

in first question, we asked customers that whether they shop their ethnic/traditional or world food from
asda or not. The response we got for this Q was that 61.91% customers said yes and 38.09% said no. this
data show that most of the people buy their ethnic/traditonal or world food from Asda.

38%

Yes
62% No

Figure 4.2 Ethnic/World foods shopping from Asda by ethnic consumers

47
In second question was linked with above Q that if customers do their ethnic/traditional or world food
shopping from Asda, what are the reasons for their shopping, there were three options, first option was
that do they find variety of food products in Asda’s World/Ethnic food department? Second option was
that quality of food products is the reason and third option was about authenticity of products which
attract customers. So with all these options figure 4.2 will show the findings:

12%

27%

Variety of food products


Quality of food products
Authenticity of food products

62%

Figure 4.3 Reasons for buy ethnic/world food products from Asda.

By analysing this question we have come to know that most of the people prefer quality of the products.

Third question was also refered to the Q1, if people do not shop their ethnic/world food products from
Asda then what are the other sources. There are many small retailers which are representing their
specific ethnicity and also many other supermarkets sell Ethnic/World food products. So question was
designed to know about other sources. Chart will present the findings.

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19%

Traditional small
retailers
Other super market

81%

Figure 4.4 Shopping for Ethnic/World food products

This figure shows that the ratio of buying ethnic/world food products from traditional small retailer is
much more than the other supermarkets.

Question four was about customers who buy their ethnic/world food from Asda and who do not, do they
find any price differences or not? Most of the customers said that they find price difference. Almost all
customers who buy their ethnic/world food products from Asda said that they find it expensive even
then they buy from Asda, and we can conclude the reasons as we go through by Q2. People prefer
quality of food rather than price. It suggests that small retailers offer low prices compare to Asda for
their ethnic/world food products but they do not have better quality so mostly customers ignore price
difference and buy better quality.

36%

52% Yes
No
Slightly different

12%

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Figure 4.5 Prices difference between Asda and Ethnic Retailers.

Fifth question was about ethnic/world food marketing, we asked customers that do they think that
ethnic/world food need marketing and sales strategies like conventional food, most of the answers were
‘yes’. It seems that people would like publicity for their ethnic food. By reviewing articles related to
ethnic and convetional food marketing(mentioned in literature review) that ethnic people feel alienated
when they don’t see marketing for any of their products. This factor can not be neglected that
ethnic/world food also need marketing.

26%

Yes
57% No
Don’t know
17%

Figure 4.6 marketing and sales strategies for ethnic/World food

4.6 Interpretation of Data:


We have presented the Data which was collected from Asda’s ethnic customers. Percentage we
got from this question shows that most of ethnic consumers do shop for their ethnic/world food products
from Asda. Over 60% said yes, so we have got the answer that whether Asda’s above mentioned
department is popular among ethnic customers or not. In second question we evaluate results that people
prefer quality of food so price does not matter when it’s the question of quality. Customers who said that
they don’t buy from Asda were most likely to buy from traditional small retailers rather than other
supermarkets. It confirms that Asda’s customers who do not buy their ethnic food products from it, most
of them do not go to other supermarkets, it also suggest that may be they find other supermarkets more
expensive from Asda so they desire to go to the small traditional retailer. Last question was asked to the
customers, whether they want that their ethnic food products should be marketed or not, answers were
encouraging towards marketing.

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4.7 Result analysis:
We targeted 100 Asda’s customers in which 46 customers who responded and in total response
was 46%. We approached 23 customers by e-mail and 77 customers face to face interview. The survey
interview was conducted in Asda superstore which is situated in Ethnic population majority area. In
survey questionnaire we had five multiple choice questions.

Results show that Asda is much successful to attract customers towards its world/ethnic food
department. We also can assume that Asda is offering better quality with high prices, than small
traditional retailers who may be offer low quality and prices. It has been seen by analysing female
responses that they are most likely to buy from Asda than male customers. Customers always would like
to buy from place they can save time and money, where they can find variety of products with high
quality. statistics show that most of customers are well aware of higher prices in Asda’s ethnic/world
food department but even then they are buying, one of the factors we got from results, is quality of food,
but other factors can also be involved e.g. saving of time. Consumers like to do one-stop shopping. This
can also be a factor of buying comparitively high prices for ethnic/world food, e.g. customers come for
shopping for other stuff from Asda and they find it convinient that they also buy their ethnic or world
food products from the store. We surveyed with random ethnic customers but it has been observerd that
mostly customer were from South Asia, it can indicate that South Asian customers are showing more
interest in Asda’s ethnic/world food department than other continents, but we cant ignore the interest
that they showed in small traditional stores also. It can be possible that they like to buy ethnic/world
food from Asda, but they can not find much variety of products in the store so they shop rest of their
ethnic/world food products from small retailers, answers for our second questions can point out this
factor that customers can not find variety of food in the store. It is encouraging for Asda that most of the
ethnic/world food customers are interested in buying their traditional food products from it, results also
show that the ethnic customers who shop from other sources are most of them who buy from ethnic
small retailers but not from other supermarkets. It is a plus point for Asda that remaining customers do
not find competitor supermarkets any cheaper. Asda can improve its sales and get its ethnic customers
back by introducing more variety and keeping its prices lower than small retailers, it needs to
concentrate on its supply chain activities, to get cheaper supplier. Data we have collected shows that
customers are well aware of price differences. Customers can easily switch to other supermarket if they
find price differences.

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Marketing for ethnic/world is another issue which can be discussed; survey shows that mostly ethnic
consumers showed interest in ethnic/world food marketing. This is understandable that ethnic
community is in minority and their food products are not being consuming products as much as
conventional food products, even then there is a big market for these products and supermarkets can
boost their sales by marketing these products e.g. by TV ads. It has been observed that most of the
supermarkets such as Asda, Morrison’s, M & S, run their TV ads near events, e.g. Christmas, Easter etc,
for food deals they offer in stores, so why not they target minority community events, at least for those
ethnic groups which are in majority than others, e.g. Eid festival for Muslims. By doing this
supermarkets might be successful to get attention from those ethnic customers who do not buy their
ethnic/world food from these supermarkets and also many inhabitants who want to try new food, can be
attracted. It can be very helpful not only to raise their sales but also can make new customers for
world/ethnic food.

4.8 Hypotheses

4.8.1 Hypothesis 1
Our first hypothesis was that, Is Asda popular or not within the ethnic groups?

Q1 was related to this hypothesis, after collecting all acquired information it seems that Asda’s
Ethnic/world food department is popular among customers; chart 4.1 shows the response that mostly
people buy their ethnic/world food product from Asda, as 61.91% said yes and 38.09% said no. Results
show that people do like to buy their ethnic/world food products from Asda. Reasons behind this trend
can be multiple e.g. customers can get variety of ethnic/world food products, not only their own
traditional food products but also can find other world food products, in comparison with small retailers,
which mostly retail for specific region and you can’t find different ethnic/world food products.

4.8.2 Hypothesis 2
Do people like to buy their ethnic food from local ethnic retailer or from supermarket?

To get answer for this hypothesis Q1, Q2 and Q3 were designed. After analyzing answers it looks that
mostly people shop from supermarkets. There can be many reasons for this e.g. customer may be prefer

52
one stop shopping rather than going to different shops. People can find variety of products. Quality of
food products also matters; it seems that customers get these both elements in supermarkets while
shopping for their ethnic/world food products. Sometimes people trust big supermarkets that their
products will definitely be authentic, e.g. Asda halal butcher counter is very famous among Muslim
customers, as they trust that it is slaughtered in ritual ways and in clean and safe environment.

4.8.3 Hypothesis 3
Slightly price difference does not matter when customer do one-stop shopping?

Q4 was related to this hypothesis and results show that even after knowing price difference between
Asda and small ethnic retailer, customers buy from Asda. Customers go for the quality but not just for
lower price, and they do not bother to go to other retail shop for their ethnic/world food shopping. Figure
4.4 represents that most of customers found Asda expensive than small traditional retailers but even then
it doesn’t matter. It also can refer to that may be customers are not satisfied with the quality of small
retailers; it can be matter of freshness of food or health and safety issues that’s why customers can be
willing to buy slightly expensive ethnic/world food products from Asda.

4.8.4 Hypothesis 4
Does ethnic and world food require similar marketing and sales strategies to those for
conventional food?

To get answer for this we designed Q4, 25% customers want marketing for their ethnic products. It
seems that people are well aware that don’t see any marketing of ethnic minority food products on TV,
radio etc. 11% customer respond that they don’t know and just 7% customers said that they don’t think
their ethnic food products need marketing or strategies for sale.

4.9 Limitations:
There were some limitations while gathering information regarding hypothesis. We approach
Asda customers by e-mail and sent them questionnaire, but it was very disappointing that we couldn’t
get response we were expecting. We visited Asda store to reach customer face to face, many customers
refused to fill the questionnaire.

4.10 Discussion and comments:

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Analysis of Asda’s ethnic/world food products department gave a good image. Customers seem
satisfied with above mentioned department, and they seem happy to do their ethnic/world food shopping
from Asda. This survey was conducted in Asda store and questionnaire was filled by the customers
those who were shopping at that time. The response we have got tells that more than 50% customers
prefer Asda’s ethnic/world food department and those who do not, there can have many factors involve,
customers may be like the quality and authenticity of ethnic/world food products but because of price
difference they do not buy and reach other small retailers and supermarkets where they can have quality
with lower prices. It can be alarming that if consumers find high quality with low prices in other
supermarkets they can easily be switched to other supermarket. As 52.38% customers mentioned that
they found price difference in Asda in comparison with other small retailers. It seems that Asda is much
popular among south Asian customers. So it can concentrate on expanding it section for these countries’
food products.

In the end marketing and sales strategies for ethnic/world food products issue is also considerable that
57.14% people would like to watch their ethnic food products ads, it may create a more big market for
ethnic food, people who always want to try new food, can attract potential customers.

4.11 Conclusion:
By analyzing the collected data it seems that Asda need to have a second look to its Ethnic/world
food products, as findings show that it is popular among the customers and many customers buy
ethnic/world food products from Asda and rest of the customers who do not, they can be attracted if
prices are low. It seems that whether Asda has an expensive supplier or it is purchasing these products
from local suppliers. We have concluded that Asda can maintain its ethnic/world food department by
introducing new variety of ethnic products, managing prices a bit lower. If Asda is purchasing ethnic
food products from local suppliers it should consider to approach the country of origin or manufacturer,
which will help to maintain its prices low. Customers seem happy with its ethnic food products quality
by analyzing the collected data, which is encouraging for Asda.

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Chapter 5: Conclusion

5.1 Introduction
This chapter is going to describe conclusion including summary of research. We are also going
to discuss limitations which we have faced while conduction of this research and finally suggestions for
the future research.

5.2 Summary:
To gain answers to our research questions we have conducted survey. We were intended to
know about Asda’s supply chain activities, how it performs its procurement operations for its
world/ethnic food products. Other small retailers have comparatively low prices than Asda in
ethnic/world products. It is most probably that these traditional ethnic retailers purchase these products

55
from their country of origin. It also can be possible that they are having low quality in comparison with
Asda, or may be these retailers have a huge range of products while Asda have just a small department
for these products, so these small retailers purchase these products in big quantity from wholesalers,
that’s why they are able to keep prices low. Another factor is that Asda deals in variety of world/ethnic
food so it has some popular products for different communities, on the shelves while traditional retailer
may be representing just one community and has wider product range than Asda. To know all these
factors we conducted the research. We were also keen about the ethnic food popularity; we have got the
reasons why ethnic and world food demand is growing rapidly. As ethnic/world food is getting popular
among UK inhabitants as well as it is in ethnic communities. Small traditional retailers are dealing with
ethnic/world food for long time, but now fast growing trend of supermarkets with high competition,
effected customers strategies for shopping as they prefer for one-stop shopping at the supermarkets
rather than going at different traditional small retailers, which consumes much time and money. Firstly
we reviewed the literature regarding to our topic, we collected relative data from internet, books,
journals and magazines. There were problems in getting secondary data which we will explain in
limitations section. We designed our survey according to our hypothesis. We followed primary data
collection method. This was being sure that questions which were asked to the customers must be valid
and reliable. The results of our survey show that the mostly people are buying their ethnic/world food
from Asda. This supports our hypothesis that whether Asda’s world/ethnic food department is popular
among the customers or not? Results show that customers do know about the price differences even then
they buy their ethnic/world food products from Asda, it has been shown by results that customers are
happy by its good quality products and also they can find variety of products and remaining customers
who do not buy these products from Asda, can be interested if they find low prices in compare with
those small retailers or supermarkets, they buy their ethnic/world food products. It also can point to this
factor that customers may not much satisfied with retailer’s quality so they prefer Asda over retailers.
Asda should expand it world food department especially in those areas where ethnic groups are in
majority, by developing this department Asda can be successful to attract more and more customers.
When we were going through the literature it seems that Asda’s 2009 performance was not very good,
but it was also described that it has been introducing innovative ideas in its supply chain, which can
promote its sales. We evaluate our results that customers want that their ethnic food products should be
marketed. It can be a good step towards promoting ethnic/world food, which ethnic and other customers

56
will be able to know about other communities’ food products, it also will increase sales of these
products.

5.3 Limitation of the research


We observed that these supermarkets are offering world/ethnic food with higher prices in
comparison with retailers so it was needed to get to know the facts behind selling these products
expensively. We chose Asda which has lower prices than other supermarkets in many products, but it is
expensive in its world/ethnic food products. So we wanted to investigate its purchasing strategies for
these products whether Asda outsourcing for these products globally or locally. It was a very vast topic
to cover which required more time we had and cost also. So we decided that we should have look other
reasons which can be accessed under our given time and expenses. For these reasons we designed
questionnaire which could tell us that may be Asda is not popular within the consumers of ethnic/world
food that’s why Asda has kept prices high to cover its costs. There also could be the other reasons e.g.
Asda is taking advantage of customers one-stop shopping preferences, it does not matter for the
customers to pay slightly higher while they are saving their time on the other hand by doing all their
shopping under one roof, so we tried to get answers to this factor as well. Another reason could be that
Asda know its customers attitude that they prefer quality over low prices, so they might have better
quality food than the small retailers.

When literature was being reviewed, it has been very hard to get any secondary data about Asda’s
procurement department; especially regarding its world/ethnic food purchasing activities so it was
disappointment for the author that there was no given data about Asda’s procurement of ethnic/world
food products.

We conducted face to face and email survey, it was bit disappointing that we couldn’t get much
responses up to satisfactory level. There can be many reasons for that, people do not have much time to
fill up the questionnaire, or they don’t bother to fill. Sometimes people have redirected emails from
unknown senders to junk mail folder due to some security reasons. So they never know that they have
been asked to fill some kind of survey.

5.4 Suggestions for the future research


After concluding and analyzing the data we feel that there is need to give some suggestions for
the future. This can be suggested by this research that if Asda keep its prices low in ethnic/world food

57
department, this can help to boost its sales. According to our results more than 50% customers buy
world/ethnic food from Asda, if it concentrates on its pricing strategies in this department it can attract
remaining customers also.

Because of short time and limited expenses we were bound to keep our research narrow. We made a step
towards a vast topic i.e. to gather knowledge about Asda’s purchasing activities and performances for its
world/ethnic food products, how it is outsourcing for these products, locally or globally. As above
mentioned limitations it was not possible to cover a huge subject, it can be investigated in future to
know the facts of outsourcing, because if it is outsourcing these products from local suppliers, it is most
probably the cause of its higher prices in this department, whether purchasing these products from
country of their origin can be cheaper. Based upon the results and findings of the research, we have done
already; future research can approach this vast topic, and conclude the factors behind it and can come up
with constructive suggestions for Asda. Future researchers are allowed to work at other hypotheses
which are made by author; it will be highly encouraged to do further research on related topic which can
lead us to optimum satisfaction after knowing the facts.

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