Guidelines

Send a digital version of the assignment in word or pdf to davide.rigoni@vub.be

before the 28th of April.

Important (!): Name of the word or pdf file: "Marketing WPO2 group (Enter group
number)" (e.g. Marketing WPO2 group 3)

Design:
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> Interline 1
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Frontpage:
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> Name + role number of the group members
> Field of study
> Task number

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 Marketing: Assignment 2
BSc Business Economics -- 2019-2020

Article 1: Tesco becomes first supermarket to directly price match with Aldi
Link: https://www.marketingweek.com/tesco-price-match-aldi/

Tesco will hope that by price-matching with the discounter on both own-brand and branded products it
can curb Aldi’s growth and win back customers.

Tesco will start price matching its products with hundreds of items from Aldi as it looks to curb the
growth of the German supermarket.

The initiative will include both branded and own-label goods such as Tesco whole cucumbers and
Warburtons Toastie sliced white bread. Prices of products will be checked twice a week, with those
included in the campaign marked out with a distinctive red ‘Aldi Price Match’ bubble on the shelf edge
and called out online.

Tesco says the move will offer “Tesco products at Aldi prices for simple, great value”.

Tesco’s chief customer officer Alessandra Bellini adds: “Our customers tell us they want the most
competitive prices on the things they buy regularly. This new campaign will help time-poor and budget
savvy customers get Tesco products at Aldi prices on products that matter to them.”

The campaign comes after Tesco spent the past 18 months investing in the price and quality of its own-
brand goods as it looks to offer a clearer value proposition at various price points. Thousands of lines
have been overhauled, including its Exclusively at Tesco brands.

While Tesco remains the biggest supermarket in the UK, with a market share of 27.2% according to
Kantar, that has fallen from a high of above 30% as the German retailers Aldi and Lidl have attracted
shoppers. Aldi now has a 7.9% share of the UK grocery market, while Lidl is on 5.8%.

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The big four supermarkets have cut prices on frequently purchased product lines to ensure their pricing
is in line with the discounters. However, they have also relied on their broader offerings – such as petrol
stations, a wider product choice and additional services such as The National Lottery or clothing – to
draw customers who want the convenience of doing a shop in one place.

Tesco has also looked to boost loyalty by offering lower prices on some products to members of its
Clubcard loyalty scheme and introduced a subscription service that offers 10% off two shops worth up
to £400 as a means to dissuade shoppers from switching supermarkets.

Aldi, however, has dismissed this latest move from Tesco and prompted concerns over a renewed price
war in the supermarket sector. A spokesperson says: “Our promise to our customers is they will always
pay the lowest prices on every product we sell.”

Price-matching schemes were widely available at the main supermarkets – including Tesco, Sainsbury’s
and Morrisons – as a way to curb the rise of the discounters in the mid-2010s. Tesco previously offered a
price guarantee on branded goods but discontinued the strategy in 2018, while Sainsbury’s price-
matched against Asda but ended the scheme in 2016 to focus on “offering lower prices”.

Morrisons was the only one of the big four to price match against the discounters, but this was only
available to members of its ‘Match & More’ loyalty scheme. All three schemes offered customers points
if cheaper prices were found elsewhere. Tesco does not appear to be offering this service this time
round, instead using the campaign to drive confidence in the competitiveness of its pricing.

Questions Article 1

1) Positioning
a. What is the basic competitive strategy that Aldi adheres to? Explain.
b. What is the value proposition, and the overall positioning of Tesco, relative to Aldi?
Explain.
2) Pricing
a. Which forms of price adjustment policy do they currently already apply at TESCO (as can
be inferred from the case text)? Explain.
b. Do you think that the decision to match the prices of Aldi can have an impact on the
profitability of the supermarket industry? If yes/no, why?
c. Of what retailer price policy (Ch. 13) do Tesco and respectively Aldi make use? Explain.
3) Growth strategies
a. Use the Ansoff’s Product Market Expansion grid to analyze the decision of Tesco to
match the prices of Aldi (i.e., in what quadrant of Ansoff would you categorize their
action?). Explain.
b. Be creative and think about potential examples on how Tesco could alternatively grow
via the other three Ansoff matrix growth strategies. Explain.
4) Product
a. What type of consumer products do you expect to find in Tesco? Explain.
b. What type of buying behavior is typically associated with this kind of product? Explain.
c. What are marketing considerations (in terms of price, place, promotion) for this
particular type of consumer goods? Explain.

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Article 2: What brands are doing to be more inclusive for people with disabilities
Link: https://www.marketingweek.com/how-brands-are-being-more-inclusive-for-people-with-
disabilities/

From Asos’s wheelchair-friendly jumpsuit to Starbucks opening its first sign language store, brands are
making moves to cater for people beyond the mainstream and unlock the potential of the ‘Purple
Pound’.

It is thought that the collective spending power of disabled people – known as the Purple Pound – is
worth £249bn to the UK economy. And yet many brands and retailers still don’t seem to know how to
accommodate the needs of disabled consumers.

Whether down to poorly designed stores, lack of staff training or simply not offering products and
clothes that are disabled-friendly or, in many cases, clothes that are so far from mainstream fashion
trends, retailers are excluding one in five people in the UK who has a disability or impairment – and in
doing so missing out on a potentially substantial profit.

But there are signs that these deep-rooted prejudices around disability are, finally, beginning to loosen.

The fashion industry might be quick when it comes to trends, but it has been slow to represent people
of different sizes, ethnicities and abilities.

Parents passionately told us that disabilities don’t define their children, so the adaptations shouldn’t
define their clothes.

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Rebecca Garner, M&S

2018, however, saw the likes of Marks & Spencer (M&S), Tommy Hilfiger, River Island and Asos all move
in a more inclusive direction – from changes in advertising campaigns to innovative clothing lines.

M&S and Tommy Hilfiger both launched adaptive clothing ranges designed for adults and children with
physical and mental disabilities, showing that retailers at both ends of the fashion spectrum are
beginning to realize there is a wide audience waiting to be catered for.

Key for both brands was involving the disabled community at the beginning, from the initial design stage
right the way through to marketing the ranges.

Tommy Hilfiger’s range includes clothes with one-handed zips, extended openings, adjustable waists
and magnetic closures – all of which maintain the style of the brand.

Similarly, M&S’s Easy Dressing kidswear range was conceived, designed and developed with its
customers over a two-year period, starting with a survey of 300 parents, and designed to be as close to
the main kidswear range as possible.

“Parents passionately told us that disabilities don’t define their children, so the adaptations shouldn’t
define their clothes, it’s why all the products are inclusively designed and modelled closely on our main
collection,” explains Rebecca Garner, M&S’s kidswear designer.

“Offering great value was a key consideration throughout the development, so our Easy Dressing
products are priced in line with the rest of our kidswear range. One thing we’re very proud of on this
range is the imagery we’ve used online, it was absolutely vital for us that the range was inclusively
modelled.”

When actress and disability campaigner Samantha Renke, who starred in Maltesers’ award-winning
‘Look on the Light Side’ campaign, was approached by bag brand Mia Tiu on Instagram around six

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months ago, she began her mission to change the way retailers think about designing and selling
products to people with disabilities.

From the outside, Mia Tui’s Samantha bag, which launched towards the end of 2018, looks like any
other bag available on the high street: it is colourful, stylish and practical. But its practicality extends
much further than most.

Brands need to sit down with [disabled] people and say right, tell me what you need and want.

Samantha Renke, actress and disability campaigner

Initially designed for busy mums to clip on to the back of buggies, Mia Tui soon realised it could do the
same job for people in wheelchairs. However, Renke says it felt “a bit like an afterthought” to broaden
their market, and so she offered “constructive feedback”, as well as reaching out to people with a range
of disabilities on social media, to tweak the design to make it more inclusive.

This included changing the inside of the bag colour to bright blue for visually impaired people, and
making sure the clasp wasn’t magnetic so it could be used by people with pacemakers.

Where it differs from adaptive ranges like M&S and Tommy Hilfiger is that while it has been designed
with disabled people in mind, it is not just for disabled people.

“The little tweaks I’ve made would benefit [disabled] people greatly but if you didn’t point them out to
someone you would just think it’s a bag,” Renke says.

“This is what we want to show to retailers because I genuinely believe they get quite scared when they
think of disability, they think it’s going to be a niche market or they’re going to have to really change
their products. But actually you don’t have to.”

Renke says she would rather brands create products that can be used by both disabled and able-bodied
people, rather than separate ranges,

“Brands need to get away from this segregation,” Renke says. “If you were to take the word disability
and change it for any other minority group they would be outraged. [Disabled people] aren’t so different
and that’s what people need to get their head around. Brands need to sit down with people and say
right, tell me what you need and want.”

Asos is one brand that has managed to be inclusive without being exclusionary with the launch of its
wheelchair-friendly jumpsuit last year.

The online retailer worked with GB Paralympic hopeful Chloe Ball-Hopkins to create a “fashionable yet
practical” jumpsuit that could be worn by everyone, whether they are in a wheelchair or not.

Like Renke, Ball-Hopkins says “it’s about making fashion accessible”.

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This is something that River Island has been pushing over the last 12 months too with its pro-diversity
campaign, ‘Labels are for clothes’, which features models of different genders, sexualities, ethnicities,
religions, sizes and disabilities.

Marking its 30th anniversary, the retailer kick-started the campaign last February featuring six children
with conditions including Down’s syndrome, cerebral palsy and eyesight issues as the new faces of the
campaign.

In September, it launched the second part of the campaign, this time featuring adults including
wheelchair basketball star Jordan and plus-size model Lulu.

Then, in October, Superdry unveiled a disabled mannequin shop window on London’s Regent Street as
part of the brand’s partnership with Team UK for Prince Harry’s The Invictus Games.

The mannequins were dressed in specially designed kits for the team – something Superdry is planning
to do on a global level this year.

While there are no immediate plans to launch a consumer range, Superdry says it will continue to
review how best to serve its customers and reflect diversity within campaigns going forward.

“The kit we produced for Team UK was designed based on the individual needs of each competitor and
we’ve learnt a lot about creating clothes that cater for people with physical disabilities,” explains Ross
Burchell, Superdry’s global marketing manager.

“While we have no immediate plans to launch a range in the near future, we are constantly reviewing
how best to serve our consumers through the creation of great product.”

Beyond fashion

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There are interesting developments going on outside of the fashion world too. In October, Starbucks
opened its first sign language store in the US state of Washington where all employees are fluent in
American sign language.

Deaf employees wear an apron created by a deaf supplier with ‘Starbucks’ spelled out in American sign
language, while those who don’t have hearing impairments wear a pin that says ‘I sign’. Customers who
are new to sign language can also use digital notepads to communicate with staff.

That the store is open to people without hearing impairments too makes it an example of diversity and
inclusion done right, without it making people feel like they are being singled out for their disability –
something that brands need to pay careful attention to.

Meanwhile, Procter & Gamble’s Herbal Essences became the first mass hair care brand in North America
to introduce an inclusive bottle design for people with low to no vision.

Designed by the business’s special consultant for inclusive design, Sumaira Latif, who has been at P&G
for over 18 years and is blind herself, the newly enhanced bottle features tactile indentations that will
help differentiate the brand’s shampoos from its conditioners given they share the same bottle shape.

Latif says it was important to invent a universally recognizable tactile feature which would work for
people who haven’t had the opportunity to learn braille.

However, it is not a case of simply bringing a product to market. As Latif explains: “While the solution
might sound relatively simple, we process hundreds of bottles a minute, so changing a manufacturing
process is complicated when you’re dealing with those kinds of quantities”.

The challenges, of course, go beyond production and begin with how society views disability as a whole.

Renke explains: “If [disabled] people aren’t being employed, then how are they going to be part of a
team where they can say they’ve got an idea? It’s a vicious circle and it goes back to that. We need to be
going to university, getting employment, so we can be creative and contribute.

“It’s also to do with this stereotype that disabled people don’t have income to spend, that we’re all on
benefits or we don’t go out.”

As the Purple Pound proves, this stereotype is far from true. Brands that realize this will not only be
richer for it, they will be making millions of people’s lives easier and helping to make society a better,
less prejudiced place to live in.

Questions article 2

1. What is the marketing concept that companies like M&S or Tommy Hilfiger are implementing as
described in the article? Explain.
2. What are the 3 product levels of the new line of clothes for kids or adults with disabilities
launched by fashion companies such Tommy Hilfiger?
3. How large is the price elasticity in the fashion industry? Indicate how you make this estimate.
4. In what type of retailer do you expect to find clothes for people with disability? Explain.

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 5. Starbucks decided to open its first sign language store in the US.
a. Use the Ansoff’s Product Market Expansion grid to analyze the opening of the first
Starbucks’ sign language store in the US.
b. Currently, what is Starbucks’ distribution intensity? Will the new type of store have the
same distribution intensity? Explain.
c. Where would you situate the first Starbucks’ sign language store in the US in the BCG
growth-share matrix?
d. What type of retail organizational approach does Starbucks use, you think?
Explain and give advantages as well as disadvantages linked to this approach.

Article 3: French take control of Buro Market

Link: https://www.retaildetail.eu/en/news/general/french-take-control-buro-market

French distributor of office and school supplies Bureau Vallée has acquired its Belgian counterpart Buro
Market, as a new step in the company’s international expansion.

Double coverage

The French have bought Buro Market's six stores for an unspecified amount. Bureau Vallée was already
active in French-speaking Belgium with five of its own shops and a store named Papel'Art, and so they
are now doubling their coverage in Belgium. In five stores, the two banners will co-exist: although the
name Bureau Vallée will be used everywhere, customers will still find a corner named of Buro Market to
design their professional spaces.

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The latter is mainly active in the B2B market, as a supplier to companies such as copycenters and
printing companies, and it is precisely this focus that makes it an interesting addition for Bureau Vallée.
"We will also be able to use Buro Market's office design expertise and deploy it in our network of 330
stores in France and abroad," CEO Bruno Peyroles told French website LSA.

First renewed store in Brussels

The first store to be adapted to the Bureau Vallée concept opens in April in Brussels, with a range of
5000 references and various services, such as the repurchase of empty ink cartridges and the sale of
second-hand products.

Buro Market was founded in 1980 and has six points of sale that mainly serve as showrooms. The
company has an annual turnover of approximately 6.5 million euros. New owner Bureau Vallée has 330
stores, 270 of which are in France. The chain has been on an international expansion for several years,
with activities in Cameroon, Italy, Malta, Spain and Tunisia, among others. In the long term, Bureau
Vallée aims to achieve a turnover of at least 450 million euros in Europe.

Questions article 3

1. Of which growth strategy is the acquisition of the six Buro Market stores by Bureau Vallée an
example? Explain.
2. Does the acquisition of Buro Market alter the product mix of Bureau Vallée? Explain in all
dimensions of the product mix.
3. What brand development strategy is Bureau Vallée planning, linked to its acquisition of Buro
Market? Explain.
4. What is the price elasticity in the market in which Bureau Vallée operates? How did you reach
this estimate? Explain.
5. How has the distribution channel of Bureau Vallée been organized until now? Is there something
changing about the distribution channel after the decision to acquire Buro Market described in
the article? Explain.
6. Marketing communication strategy.
a. How would you develop the marketing communication strategy for launching this new
acquisition from Bureau Vallée?
b. Explain and link to the AIDA model.
c. Think of two possible promotional activities that “Bureau Vallée” can do to achieve this
goal and explain them.
d. Which media do you think Bureau Vallée should use to publicize their expansion in the
B2B market?

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