“Comparative analysis of Marketing Communications strategies and mix for the supermarkets in the UK”

1.0 Introduction: This report is a ‘comparative analysis of the marketing communications strategies and mix for the supermarkets in the UK’. The report will take three supermarkets into consideration namely, Tesco, Asda and Sainsbury’s. 2.0 Market Overview: The grocery market of the UK was accounted for £133.3bn for the calendar year 2007, where groceries account for 12.8% of household spending. Supermarkets have a sales area of about 3000 sq ft to 25000 sq ft where they sell a broad range of groceries and also non-food items. The UK supermarkets are accounted for about a £97.9bn in size (IGD Research 2007). Tesco was the largest grocery retailing company in year 2007 with a market share of 32.5% of the grocery market (Snapshots, 2008), whereas, Asda had 15.6% and Sainsbury’s had 16.8% as seen below in figure 2.0 and table 2.0 (Snapshots, 2008). However July 2008 showed a few alterations in the previous market share figures (Figure 2.1), where Tesco, yet leading, lost 1.2% of its market share to 31.1% and Asda overtook Sainsbury’s by gaining a 1.3% to 16.9% making it the second largest grocery retailer in the UK. This has left Sainsbury’s behind as it lost its market share by 0.9% to 15.9% (Thompson, 2008). Figure 2.0
Market Share:July 2008

Others , 35.90%

Tesco , 31.30%

Tesco Asda Sainsburys Others

Sainsburys, 15.90%

Asda , 16.90%

2

2009). it is one of the key methods used by supermarkets to be competitive in the grocery retail industry.    b) Sales Promotion:  UK supermarkets use this promotional tool. Tsai and Chiang. Since the supermarkets considered in this report are Tesco. Here the message transfer is not by the freewill of the audience as the advertisements appear while the audience is watching the television or listening to the radio. They use mediums such as newspapers and magazines which are “traditional forms of advertising media” and exist as “pull-type” in nature.3. point 3 . direct marketing. 1998) is used by supermarkets to communicate with mass audiences with the help of several forms of media.  Especially UK supermarkets. Asda and Sainsbury’s. Marketing communications plays an important role as “a management process through which an organisation engages with its various audiences” (Fill. sales promotion.0 Literature Review: Supermarkets are entities that strive to achieve their targeted markets and certainly want to take the lead in terms of achieving the largest market share. prizes/contests. as the message is transferred by consumers’ “free-will”. as their goal is to influence the target audience to buy their products. 3. concentrate towards “value increasing” and “value adding promotions”. 2005.term techniques to induce customer awareness”. personal selling. The strategic reason that supermarkets use this promotional tool is to build “product image and stimulate direct purchase” (Park. as the nature of this form being “push-type”. Since the internet and mobile communications have emerged as a new medium for advertising. Shenoy and Salvendy. However this management process involves one of the 4 P’s of the marketing mix that is Promotion. The former involves coupons and price discounts by enlarge and the latter involves “premiums. Supermarkets are using this medium as “it enables a bi-directional and individual connection to audiences”. 2005. this section will show a review on the literature of the marketing communications mix and strategies used by the supermarket industry to fight the competitive battle. This form allows them to engage with their audience by involving them at a high-level. p8). namely – advertising.1 The Marketing Communications Mix: The Supermarket Industry a) Advertising:   This non-personal tool of promotion (Rowley. p7). Whereas the concentration of engagement with use of forms like Television (TV) and radio is lower compare to newspapers and magazines. public relations and sponsorship (Fill. which consists of “diverse short. 2008).  It is a strong tool in engaging the customer to make “impulse purchases” in the “short-term retailing market” (Hsu. The marketing communications mix involves six main promotional tools.

2008). brand image and customer loyalty (Hsu. 2009). d) Personal Selling :  This is a tool in marketing communications that is rarely used by supermarkets. direct response advertising.of purchase display. develop. catalogue marketing. such as magazines. 1996)  They get involved in activities such as sponsorship (Fill. face-to-face with customers (Hsu. The reason for personalisation is because it allows targeting “each group separately with tailored messages”.  Since this is a tool that involves sales personnel who “communicate with customers in the target market”. 2007. e) Public Relations and Sponsorship:  This promotional tool is used by supermarkets to “determine. Activities concerned about improving the environment.the internet and email. Howell and Lancaster. as this tool is more personal in nature compare to advertising and sales promotion. encourage and sustain relations” with their target audience (Kitchen. Tsai and Chiang. 2008). “direct mail. which does show a hint of this promotional tool. (Gilbert and Jackaria. p22) which are inclined towards the well fare of the community. the way of transactions between companies and customers is changing (Ozuem. p593)  They can develop new and retain existing customers. 2007). 2009).  The medium used to communicate is through “third-party media. is becoming the preferred method in direct marketing. This characteristic further allows this tool to reach a mass audience similar to that by using television (Roche. there may be an incidence of a customer asking the present staff for a product on a shelf. the format of supermarkets has been “self-service retailing” (Alexander. electronic media.  Supermarkets use several methods to engage with their target market.  However. and electronic media” (Jobber.  However research shows that since “post-war Britain”. However. demonstration and loyalty cards”. This involves a two-way communication. such as. mobile marketing. 2005. 2005). c) Direct Marketing:  This promotional tool is used by supermarkets to build and “retain customers by contacting them without the use of an intermediary” (Jobber. 2002)  Their strategy in using this tool is to “encourage repeat purchases and reinforce brand image”. funding charitable institutions help improve the companies’ good will. newspapers or news programmes” 4 . where they commute sales of a product. Tsai and Chiang.

70% Out of 30 Respondents Tesco Asda Companies Sainsbury's  Tesco’s advertising was more appealing as 50% ((Fig 4. This is important in the case of 5 . According to Kitchen (1996). However it is known from the previous section that Supermarkets use the marketing communications mix and strategies as one of the methods to compete. than of Asda and Sainsbury’s where most of them viewed them on television. Asda and Sainsbury’s form a large part of the UK supermarket industry.Tesco. 4. They are entities which are fighting the competitive battle in order to gain a competitive advantage over one another and are striving to achieve the largest market share. the researcher’s viewing of the entity’s advertisements on TV supports their response. This is because their advertisements concentrate on products which are mostly targeted to the youth for example. This section will consider commenting on the marketing communications mix. This in turn compliments towards supporting other promotional tools used by the company. strategies and tactics used by the three supermarkets based on primary research in order to check if their communications mix and strategies tally with that of ones shown in the literature review.a) of the respondents who were in between the age group of 15 – 23.a Preference of Advertisements 50% 45% 40% 35% 30% 25% 20% 15% 10% 5% 0% 50% 33. Apart from the questionnaire handed to the respondents.0 Discussion and Analysis The three supermarkets of the UK .33% 16. a) Advertising: Fig 4. They take enough time to convey the message which grasps the attention of the viewer and persuades him/her to watch the complete advertisement. firms use this communications tool as it allows for product publicity. the latest music and game releases.

 However apart from price-cuts. The researcher observed that Tesco offered more promotions where food and non-food items were concerned than Sainsbury’s and Asda. c) Direct Marketing: 6 . for example their prices. it was noticed that all the three are competing very closely towards offering promotions on homogeneous products especially through price discounts. In the case of Asda.a).TV advertisements as firstly they appear unexpectedly and secondly they are swift due the constraint of time.  Where as Sainsbury’s is a member of a loyalty programme-“Nectar”.  Where as Sainsbury’s appealed to 33. the loyalty card programme also plays an important role. drink and mothers of toddlers.  This shows that by using mostly push form of media (Television) Tesco and Sainsbury’s have been more successful to engage its audience. This is evident as after viewing the advertisements personally the researcher found that the supermarket focuses more on advertisements that concentrate on offers related to food.  However Asda’s advertisements appealed to only 5 respondents that are 16. which shows a strategic approach in strengthening the brand image and always relating the name ClubCard with Tesco. This point is further supported by the respondents’ views where 15 out of 30 felt that Tesco promotions were preferred over the other two supermarkets. the supermarket does not offer a loyalty card programme. This is probably true as the supermarket focuses on advertisements which compare Asda with other supermarkets. used by many retailers. This does convey that Asda is cheaper. for example there is a wide range of chocolates which are promoted for half price compare to Sainsbury’s and Asda. They are mostly shorter than Tesco’s but are specific in conveying promotions. from ages 29 – 62 found the advertisements more appealing than Tesco and Asda. where Tesco was chosen by 20 out of 30 respondents. than Asda. However apart from the promotions on branded and own-labelled alcohol where Asda promotes it for the cheapest compare to Tesco and Sainsbury’s it was noticed that this was not the case where other products are concerned.70% (Fig 4.33% of the respondents of which the older people that is. that is food and non-food items. This may be the case as whenever the researcher purchased at Tesco he was always asked for his “Tesco Club-Card” for the points. b) Sales Promotion:  In the course of the researcher’s observation of the three supermarkets. This shows a lack of individual identity of the loyalty programme which is one of the ways in promoting Sainsbury’s brand image. but however due to the consistency of such advertisements the audience might often ignore the message.

asp Tuesday 11 November 2008.9bn http://academic.com/index. as loyalty cards are another source to store the customers address and buying behaviour.com/plc/about_us/tesco_story/# Tuesday 11 Nov. This promotional tool is used by all three supermarkets.  As mentioned earlier that direct marketing can play a role in transaction between customer and company by using the internet.mintel. 6:40 pm – UK supermarkets 92. 08. 12:12pm – Jack Cohen http://www.com/inside-asda/our-history.about-asda. However even in this case Asda and Sainsbury’s were overtaken by Tesco as 9 respondents used the supermarket’s website for shopping their grocery.  The results also showed that even though all the three supermarkets kept in contact with the respondents. d) Bibliography http://www. Where as 8 people said Asda does and only 5 people said Sainsbury’s does through the same. however 17 out of 30 respondents answered that Tesco keeps contact with them personally about new offers and other activities through email and post. Where as Asda used more email than post to keep in contact with the 8 respondents.com/sinatra/oxygen_academic/search_results/show&/display/i d=400492/display/id=400492/display/id=400782#hit1 Tuesday 4th November 2008.tescoplc. the same was in the case of Sainsbury’s for the 5 respondents. 3:00 pm http://www.igd. Tesco kept an appropriate balance between post and email.  The reason for Tesco’s strong after sales relationship with the customer clearly correlates to its “Club-Card”. 6:01 pm 7 . This shows that the supermarket is using traditional and modern forms of communicating with their audience. this is true as 17 out of 30 respondents have used the supermarkets’ websites and the remaining have not. where 3 used Asda’s and 5 used Sainsbury’s.asp?id=1&fid=1&sid=7&tid=26&cid=94 Wednesday 5th November 2008.

ebscohost. 23:54pm You are missing the point. 29 November 2008 Customer Experience or Communication? http://web. SCHULTZ. 12:40 pm Where Is the New Stuff? http://web.com/uk/nexis/auth/checkbrowser. 29 November 2008.y=0&btnG=Search&entqr=0& output=xml_no_dtd&sort=date:D:L:d1&client=bcgsite&ud=1&spell =1&oe=UTF-8&ie=UTF8&proxystylesheet=bcgsite&site=bcgsite&filter=0 – the multichannel imperative. 00:17hrs Ignoring the issue simply isn't an option any more http://web.http://search. 30.ebscohost. http://web. pg. 30 November 2008 FMCG needs direct marketing Richard Roche. Marketing.do? t=1227991486548&bhcp=1 Saturday.umi.com/ehost/pdf?vid=1&hid=17&sid=dc1e85f2fdec-44f7-b26a-f02af36f7139%40SRCSM1 Sunday.bcg.x=0&btnG.ebscohost. By DON E.ebscohost.com/pqdweb? index=4&did=921401301&SrchMode=1&sid=1&Fmt=3&VInst=PRO D&VType=PQD&RQT=309&VName=PQD&TS=1228342680&clientId =29708 Wednesday. 08.com/search? q=Tesco+UK+2008&btnG. 1 pgs http://proquest. 22:24 hrs 8 . 29 November 2008 Asda overtakes Sainsbury's to become No 2 online grocer BYLINE: James Thompson http://www. 3 December 2008. 2005.com/ehost/pdf?vid=1&hid=7&sid=d82c212a603a-4d7e-aa11-7b43c88f934a%40SRCSM2 Saturday. – Tuesday 12 November 2008.lexisnexis.com/ehost/pdf?vid=22&hid=9&sid=9250e34ad95a-42d6-99a1-26c990372807%40sessionmgr9 Sunday 30 Nov. London: Oct 12.com/ehost/pdf?vid=1&hid=15&sid=13d6717772c4-4647-8fcf-75383b90806a%40SRCSM2 Saturday.

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