Marketing Report analysing the marketing mix of three supermarket chains
...unched it Computers for Schools campaign and it is now in its 13th year and has raised £84 million since it began. Over 2003/2004 £7 million worth of equipment was given to schools, over 75,000 items such as digital cameras and 2,700 computers. It is the largest scheme of its kind in the UK and 86% of all primary and secondary schools now take part. Tesco aim to raise the total next year to £92 million. 3.1.4 Profit and Loss Last year Tesco made total profits of Tesco’s total sales last year were £33.6 million, with 80% of this total being in the UK, 11% in Europe and 8% in Asia. The marketing firm who run the Clubcard have had massive rises in profits and turnovers by the end of February 2004. turnover had increases by 59% from £18.2million to £28.9million 3.1.5 Products and Services Tesco’s product portfolio is very extensive. As well as their various food ranges, Tesco also sell clothes in a range called Value the same as the food range. The Value clothing range sells jeans for only £4 and other everyday clothing items at very low prices. Tesco’s product range also includes electrical products, insurance, credit cards, mobile phones and the supermarket offers services such as home delivery if customers order their shopping via the internet at Tesco.com and also Tesco telecoms and Tesco Personal Finance. The Tesco food ranges include the very basic Tesco value range, introduced in 1992, which offers customers food products at the lowest prices whilst still offering good quality. The typical cost of a basketful of Value products is now 35% cheaper than 10 years ago. The Organic range was first introduced in 1986 and now contains over 1,200 and aims to reduce the use of artificial chemicals and help improve animal welfare. Tesco also have their own fair trade range of products, which was introduced this year, to ensure a fair deal for those in third world countries. In 2003 the “Free from” range of products was introduced to provide over 120 everyday products that don’t contain wheat, gluten or milk to cater for customers with food allergies or intolerances. The Healthy Living Range now has 500 products with reduced fat, salt and sugar to help Tesco’s customers who are health conscience and Tesco now publish a monthly Healthy Living magazine to accompany this range. In 1994 Tesco introduced the Clubcard to reward customers by giving them points each time they spent money in Tesco and the points could eventually be redeemed to give money off their shopping. The Clubcard helped Tesco become the UK’s leading supermarket. 3.1.6 Distribution Tesco have 1878 stores in the UK and distribute their products through their stores and also through their website Tesco.com where customers can order their shopping and have it delivered to their door. 3.1.7 Pricing An average shop of over 100 products at Tesco costs £167.84 which is 0.4% less than Asda. Tesco recently took over as the lowest priced supermarket from Asda for the first time in seven years. Tesco has made an average of 2.7% in price cuts; this is a total of £130 million price cuts in recent years. 3.2 Asda 3.2.1 Historical Background Asda is one of the biggest companies in the UK and have been awarded one of the Top 10 Employers by the Sunday Times for three years running as they are a Equal Opportunity employer and do no discriminate on grounds of sex, age, race, religion or disability. They now employ 122,000 people. Asda was formed by a group of farmers who came from Yorkshire. It became part of Wal-Mart in 1999, when it was bought for £6.7 billion, and now has 265 stores in the UK and 19 depots. Asda has the second biggest market share of the three supermarkets at 17.7%. 3.2.2 Targeted Customers The customers Asda targets are different from Tesco as those who shop in Asda are “one-stop shoppers” who are buying in bulk and are looking for very low prices with good value at the same time in both food and the clothing range, George. Asda opens 24 hours a day in many towns which is convenient for customers who lead very busy lives and cannot always make the conventional opening times of many supermarkets. 3.2.3 Marketing Activities a Advertising Like Tesco Asda has used celebrities to promote their products the most recent being Julie Walters who features in their Christmas adverts but Asda have mostly stuck to a simple concept in their advertisements of showing customers others who have been satisfied by the company’s low prices and good value. Their catchphrase “That’s Asda Price” is very catchy and attracts the viewers attention when advertised on television and is popular with customers. b Public Relations Asda, like Tesco, support many different charities such as Tickled Pink the campaign which helps tackle Breast Cancer and is now in its 7th year of supporting the charity and raised £1million in 2002 as well as raising £1.2million for the BBC Children in Need Appeal in the same year. All in al in 2002 Asda colleagues raised over £6 million for charities. This was done through in store collections and people bag packing to help raise money for local committees such as local football teams. Asda also supports the Working with Local Schools scheme which was launched in 1999 and aims to educate young people about real life situations. 3.2.4 Profit and Losses Asda have cut prices by £0.5 billion in total and the sales growth in non-food items has risen by over 25% since Asda expanded their general merchandise range. In the year 2002 11,000 Asda colleagues received a payout of £14.5 million in shares. George, Asda’s clothing range, has seen sales exceeding £1 billion in recent years which is four times French Connection sales whose prices are much higher than Asda’s. No losses have been made to date. 3.2.5 Products and Services Asda’s range of products and services goes above and beyond their food ranges like Tesco’s. As well as offering customers five different food ranges Asda also own the second largest clothes retailer in the UK, George. Asda also sell electrical products such as toasters, kettles and irons at very low prices which consumers had never experienced before. As well as products Asda offer a number of services such as credit cards, store cards and insurance. 3.2.6 Distribution Asda distribute their products through their 265 stores and 19 depots in the UK with the help of 122,000 colleagues and are constantly striving to build new and develop new stores in the UK. 3.2.7 Pricing The same basketful of 100 products bought at Asda will cost 0.4% more at Tesco than it does at Asda, although on average Asda is the lowest priced supermarket. 3.3 Sainsbury’s 3.3.1 Historical Background Sainsbury’s was founded in 1869 by John James and Mary Ann Sainsbury’s and they opened the first store, a small dairy shop, at 173 Drury Lane, London. The company’s slogan is “making life taste better”. The supermarket is now Britain’s longest standing major food retailing chain and ranks third as the UK’s biggest supermarket. Sainsbury’s have the lowest market share of all three companies at 15.5%. 3.3.2 Targeted Customers Sainsbury’s serve over 11 million customers each week throughout their stores in the UK. The targeted customers are looking for good food at good quality prices. 3.3.3 Marketing Activities a Advertising Jamie Oliver has been the main face of Sainsbury’s advertising campaign now for some time and is paid £250,000 per year to be the face of the supermarket. Over the last two years Jamie Oliver has reportedly made £1.12 million from the adverts. The adverts are popular and do encourage c...