Investigating the Impact of “Price” As a Positioning Factor in the UK Supermarket Industry: A Study of Tesco
Dissertation Topic: Price Positioning in the UK Supermarket Industry. Tesco is currently the market leader in the UK retail industry (and has been since 1995), since the launch of the Tesco Clubcard. It has been claimed that Tesco has created customer loyalty by introducing the Clubcard. However, it is possible that the Clubcard does not necessarily create loyalty; rather, it helps the company to understand and predict customer behaviour, and to an extent, influence customer behaviour through various price deals and offers.
It has been established that customer loyalty can certainly improve the probability that an organisation’s profits will increase. In the case of Tesco, loyalty has not actually been created although the company has established a way of predicting and influencing consumer behaviour (to an extent) through the loyalty card. Since customer satisfaction is one of the key ingredients that contributes towards customer loyalty, it can be said that at the moment, Waitrose, Aldi, and Lidl are at a better position to create customer loyalty, for whatever reasons.
Customers generally do not differentiate the companies based on the prices they offer, rather, they differentiate the products based on the perceived quality. The problem is that companies such as Tesco, Morrisons, and ASDA have similar price structures, and as such, pricing may not be the point of difference for the consumers. Tesco’s positioning on the basis of price (every little helps) may not help the company to gain a significant advantage over the competitors, although it may contribute to maintaining this advantage.
Based on the assumption that pricing is not the factor by which consumers differentiate companies, the following research objectives have been composed:
To analyse the extent to which pricing is a differentiating factor (as seen by the customer) that influences consumer buying behaviour in the supermarket industry
To identify whether price positioning (as seen by the customer) is a viable option for supermarkets
1 – Introduction
Statement of the Problem
2 – Research Methodology
The Research Philosophy
Position on Philosophy
Data Collection Techniques
Sampling and Population
Focus Group Interviews
Scope and Limitations
Gaining Access and Research Ethics
3 – Literature Review
Price Image Dimensions
Price as a Market Cue
Ego-involvement and Price
Price and Retail Patronage
Price Premiums and Brand Equity
Role of Price in Strategic Positioning
Expectation Theory in Consumer Behaviour
Henry Assael Model
4 – Discussion and Analysis
Qualitative Research Report and Analysis
Quantitative Research Report and Analysis
Discussion on the Findings
Is price a differentiator in the supermarket industry?
Is the low end price position viable for retailers?
I hope you enjoyed reading this post on the Impact of “Price” As a Positioning Factor and how it affects the UK Supermarket Industry. There are many other titles available in the marketing dissertation collection that should be of interest to marketing students and practitioners. There are many dissertation titles that relate to other aspects of marketing such as branding, corporate advertising, marketing strategy and consumerism to name a few. I would be grateful if you could share this post via Facebook and Twitter. Feel free to add your thoughts in the comments section. Thank you.
A Study on the Effectiveness of Social Media Marketing on Sales in Retail Industry: A case study of Tesco (2016)
Social Media Marketing is one of the major marketing tools for business firms in the current stream of technological advancement though the concept of social media marketing is not so much old in the comparison of other marketing approaches that are practiced by the business firms. Since the social marketing media is a comparatively newer approach for the marketers there are enough questions among the people who intend to use it.
One the major issues that the social media marketing raises is the effectiveness of this approach on the sales of a firm. This dissertation aimed to find out a reasonable answer to the issue and the objectives are set in the course of deducting a set of outcomes which can lead to achieving the aim of the dissertation . The dissertation is segmented in six different chapters each of which has its own benefits and merits. The first chapter is related with the background of choosing such an issue and the rationale that can make the issue so much of being in a discussion.
The second chapter is related with the prior research and findings which have a substantial amount of effect on from choosing the issue of research and conducting the research. The third chapter is on the research methodology discussion and the discussion on most applicable methods that can lead to the research to success. Afterwards, the chapter of results comes in where the results are discussed.
The final two chapters are about analysis and concluding the research. At this point, it is quite imperative to state that the research is based on the responses from a sample of 50 people residing in the UK. The sample is selected using a random sampling method. The results are calculated with the SPSS 16.0 version and Microsoft Excel. The approach used in the research is a deductive approach.
For achieving the aim different types of statistical tools are used which includes three measures of central tendency along with the standard deviation, correlation analysis, regression analysis and ANOVA. The central tendency measures give an image of somewhat agree category result and percentage analysis shows similar effects. The correlation analysis shows sometimes though a very little degree of relativity, a good amount of relativity remains among the variables. The regression analysis which is considered as the core of all analysis has shown results that helped to reject the null hypotheses except for the brand awareness variable. These results have led to some important insights that can be very helpful for both the company Tesco and for further research on the topic. This research contains some important discussion on one of the most talked issues of the current marketing world. The number of researches done on the issue seems to be meager in terms of the presence in the global village. Moreover, the insights and analysis that are done in the research dissertation can be helpful for firms that are newcomers in the market and desire to make a mark in the retail industry.
To critically evaluate if there is any relationship between the SMM process and sales of Tesco
To critically evaluate how SMM process helps to build up brand awareness of Tesco
To critically assess the relationship of SMM process and the brand loyalty of Tesco
To critically assess how SMM process helps Tesco to maintain a firm customer relationship
Marketing Dissertation – The Impact of Promotional Mix Elements on Consumers Purchasing Decisions – A Case Study of M&S
Marketing Dissertation Title: Impact of Promotional Mix Elements on Consumers Purchasing Decisions. The promotion mix is one of the major elements of 4ps of marketing and day by day companies seem to be giving a lot of emphasis on the promotion mix. The main objective of using the tools of promotion mix is to influence the consumer’s purchase decisions. Influencing the purchase decisions of consumers is not an easy task as there are many variables like emotional variables that turn into brand loyalty or brand attachment. The way a customer beholds at the product greatly depends on the promotional mix. At first, a potential consumer must know there is a product or service that can fulfill the needs of the consumer after consuming the product.
The potential consumers are approached with promotion mix as from making consumers aware of keeping track of each and every consumer is done with the help of elements of the promotion mix. Thus, the issue related to the promotion mix elements’ effectiveness on the consumer purchasing process is quite a burning question to be answered.
For this dissertation, the research issue is related to the effectiveness of the promotion mix on the consumer purchase decision as companies adopt promotion mix to influence the purchase decision of the consumers. The literature review has helped the researcher to identify the dependent and independent variables. The dependent variable is consumer purchasing decision. The independent variables are advertising, public relation, personal selling and sales promotion.
The way the research is designed and the results to a have a solution of the research problem identify the positivism as the research paradigm for this research work. This paper is conducted by deductive research approach. The research is a survey based case study and consumers of M&S are interviewed with predesigned questionnaire.
To critically find out the independent variables in the promotion mix of M&S
To critically investigate the variable in the promotion mix of M&S
To critically find out the relationship between the dependent variables and the independent variables
To find out a realistic set of recommendation on the findings of the research
Background of the Research
Rationale for the Study
Reasons behind the Issue
2: Literature Review
Consumer Purchase Decisions
The Breakdown of Promotional Mix
Types of Advertising and Advertising Media
Types of Public Relationship Management
Types of Sales Promotion
Types of Personal Selling
The Influence of Promotional Mix on Consumer Purchase Decisions
3: Research Methodology
Limitations of the Study
Future Scope for the Study
The Measures for Central Tendency Measures
Coefficient of Correlation
Reliability Test with Cronbach’s Alpha
5: Findings of the Analysis
6: Conclusions and Recommendations
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Since the beginning of time, men and women have always remained fashionable in one way or the other. From clothing made out of loin to cloaked attire, from gown and coats to the fascinating accessories of the 19th century, fashion has indeed been prevalent in every season from year to year hence renovating their way of dressing from time to time (Miller & Mills, 2012, 1471-1479). Brand Equity Fashion in the past, can be also contributed to the elite fantasies held by people, right up to the mid-1850s, when the first Paris based British professional fashion designer emerged. Initially, Paris was the only place that reined the fashion industry, however soon other names such as Milan and London caught up, introducing their own line of fashion niche. If the fashion industry remained stagnant then it would have already become unstylish and died. Subsequently, today there are endless designs and customer segments, prevalent within the fashion sector (Miller & Mills, 2012, 1471-1479).
In today’s fast paced world of fashion, the success of global retailers depend a great deal on their ability to be able to put the right items in the right style or size in the hands of the consumers but at the right time. This may seem to be a simple concept but can at times be quite tedious to execute (Li, Li & Kambele, 2012, 1516-1522).
After meeting with Andrew Ramroop and hearing the success story, I have decided to follow his example and penetrate the international market with my newly established fashion clothing and accessory brand, called El Lujo.
SWOT analysis, a form of strategic planning, is ideal for volatile fashion industry. The SWOT analysis evaluates “strengths, weaknesses, opportunities and threats” involved with the set business objectives (Barney, 2008, 99-120). They consider both internal and external factors. The analysis then defines the favorable and unfavorable factors and their potential impact on the ultimate goal.
A SWOT analysis covers four areas of consideration. First, the “strengths” take into account the internal attributes that positively influence the business objective. The second area, “weaknesses”, identifies possible weak points within the control of the company which may result in a negative outcome (Barney, 2008, 99-120). The third category, “opportunities”, analyses the external conditions that favor the achievement of the final goal. Finally, there are the external “threats” that are beyond the control of the company to be assessed.
Some of the strengths of El Lujo include clearly manifested competence, adequate financial resources, the high competition, a good understanding of consumers, clearly articulated strategy, the use of economies of scale, its own unique technology, a reliable distribution network, high fashion R & D and etc.
Any unusual or unnecessary cost, lack of reputation in the high-end fashion market or lack of presence in a particular region are considered as weaknesses. The loss of certain aspects of competence, lack of access to finance, lack of analysis of information about consumers, the weakest market participants, lack of a clear strategy, inconsistencies in its implementation, high costs of production, obsolete technology, the loss of depth and flexibility of management, weak distribution network, weak positions in R & D etc. are all weaknesses that El Lujo may face.
Entering new market segments, expanding the range of luxury goods, complacent competitors, the reduction of trade barriers, enabling economic, political and social conditions, resource availability, etc. are the opportunities that El Lujo will be considering as opportunities for business profitability (Barney, 2008, 99-120).
Economy and the politics are the principle threat to a fashion brand. Political instability in the region of raw materials supply, trade embargoes, and financial crises result in limited consumption expenditures etc. are some of the threats to the accessibility of raw materials, distribution, exposure of brand and brand recognition, and consumer buying (Barney, 2008, 99-120).
Fashion orientation is considered as an important source of new market research related to the worldwide clothing industry. Consumer behaviour, lifestyle, and shopping purpose can affect activities throughout the fashion supply chain. However, the fashion industry is an increasingly global business with considerable variations in the cultural, social, and economic aspects of the participants (Cadogan, 2009, 119-130). Consequently, the practice of fashion marketing is not uniform at a national or international level, and differences are necessary to appeal to different subcultures. That’s why researchers and managers have been paying increasing attention to the effects of acculturation on fashion orientation. Most fashion designers allocate 20-30 percent of their expenditures to marketing efforts, partly funding customization of marketing campaigns to appeal to different subcultures(Li, Li & Kambele, 2012, 1516-1522).
Luxury fashion brands have become a powerful force in the world and have grown not only in numbers, but in terms of influence and visibility. They have, “moved from backstage to center stage in world market, and are exerting their power and influence in every aspect of international relations and policy making” (Cadogan, 2009, 119-130). Today, international fashion brands play a major role in reducing boundaries and creating international successful brands. Although very numerous, the international business sector is highly consolidated with the largest 20 international organisations accounting for 50% of revenues and sales (Gilbert, 2007, 25-26).
Fashion advertising studies have revealed that consumers have definite preferences for advertising. According to findings by Bowman, (2010); apparel styling affected evaluations of advertising appeals. Bowman, (2010) additionally observed that high self-monitoring subjects were willing to pay more for items if the item was publicized with a picture, and were all the more ready to buy an item if the image appeal was promoted. Low self-monitors responded all the more positively to item quality oriented advertisements and were willing to pay more for items if they were publicized with a quality orientation. Low self-monitors were additionally more eager to pay more if the item be promoted with a quality orientation, and all the more ready to buy an item if it had a quality claim.
In addition to the challenges of increased competition, international organisations are facing a crisis of brand equity. Bowman, (2010) suggests that at the root of this crisis, is the extent to which international organisations lack brand representation and accountability to the consumers. In addition, critics argue that international organisations lack proper branding strategies to justify their products and services in terms of values.
Current environments with high levels of globalization have led to large enterprises manufacture their products in less developed countries to reduce their production costs, while firms in developing countries do in other developed countries to take the prestige of those markets (Barney, 2008, 99-120). From the demand side, consumers rely heavily on extrinsic signals, such as trademark, perceived quality or price in the when evaluating products. Under such scenarios, it is increasingly difficult to achieve sustainable competitive advantage by Porter. One of the attributes that have the potential to achieve sustainable competitive advantage, both domestically and internationally, is the country of origin or the country image of a product for (Barney, 2008, 99-120). Therefore, it is becoming of greater interest to countries to implement marketing strategies would achieve a position against other countries. Furthermore, include the strategic role played by brands to the great diversity of offerings undifferentiated, saturation in the media and the influence of new technologies information (Azuma & Fernie, 2003, 4). The increase marks the perceived usefulness and the desire to possess them, are indicators of safety for consumers and sources of origin, since activated signs of its origin among consumers when they come into contact with the same (Li, Li & Kambele, 2012, 1516-1522).
Li, Li & Kambele, (2012) suggests that luxury fashion brands like El Lujo have three strategies open to them: incremental change (which he suggests may be “too little too late”); global marketing, defined as the aggressive marketing of the organisation’s brand; and third, new branding strategy, that leverage change by working in collaboration with “markets, businesses, ideas and attitudes.” It is this third option that Li, Li & Kambele, (2012) consider potentially the most attractive route forward for international organisations.
To focus on the impact of a particular segment of the market, luxury fashion brands like El Lujo must use commodity branding and develop appropriate and develop the theme of Brand Equity or Brand Value. The strategic management of brands is to design and implement marketing activities and programs intended to create, measure, and manage brands to maximize value.
One of the key concepts of this process is called “brand equity”, defined as the value added which provides products and services. This value is reflected in how they think, feel and act consumers regard to the brand, or price, market share and profitability that creates the brand for company (Aaker & Joachimstaler, 2000, 347-356). For branding strategies to be successful and generate brand equity, consumers should be convinced that there are significant differences between brands of the same category products or services. This is the reason for the branding: promote the differentiation of a mark for its competitors and its products very similar (Aaker & Joachimstaler, 2000, 347-356).
To achieve high brand value it must achieve a series of attributes that are indicative of their strength. (a) “Differentiation” refers to a strong brand should be unique and distinguishable from other brands by consumers. (b) The “relevance” indicates the attractiveness of the brand: to what extent my brand communicates attributes important in satisfying the desires of my customers? (c) A strong brand should achieve “high estimates “, a high degree of appreciation, affection and respect that the brand receives. (d) The brand strength is associated with a “high knowledge” and level of familiarity and intimacy of consumers with the brand. Finally, a mark must be achieved through communication symbols and a (e) shows strong associations Identity positive light on what it means and what the brand promise to consumers (Aaker, & Joachimstaler, 2000, 347-356).
A strong brand is not just about trademark, logo or name. Branding is a procedure that relates to communication, company strategy and target market (Abell, 2008, 45-58). There are many elements attached to branding such as images, association, culture and stories. The elements of brands can be inspired by consumers and Internet users. Strong brand is exists among consumers, as it is hard for individuals to switch from one strong brand to another brand and abandon their original conventions. Due to the nature of strong cultural collectivism in China, the social context of brands becomes an important characteristic (Abell, 2008, 45-58).
Strong brand can help consumers by reducing the perceived risk in their purchase behavior. Perceived risk is about the acceptance of uncertainly and the complex result of purchasing product or service (Abell, 2008, 45-58). There are 6 dimensions included in perceive risk: “performance, financial, opportunity/time, safety, social and psychological risk” (Azuma & Fernie, 2003, 4). Strong brands can give consumers a promise of suitable value on the goods or services they offered. Through getting this promise consumers can make a stronger purchase decision on the strong branded products.
Creating a strong brand can also drive shareholder value. The initial target of the boardroom is to create and sustain shareholder value, and get return from the competition process. One way to achieve this target is to build a brand with strong brand equity. Tim Ambler proposes: “Brand equity is the reputation assets that any successful business builds in the minds of customers and other stakeholders” (Azuma & Fernie, 2003, 4). It is also one of the reasons that capital in the market is higher than the value that set before. The future financial performance of a brand can be predicted according the strength of its brand equity.
Product: Marketing facets of products as per the details of their products or services, and how it identifies with the needs of consumers. The extent of a product mostly incorporates supporting components, for example, guarantees, warranties and product quality that is principally focused.
The wide range of fashion product by El Lujo is safe to use and are produced through natural resources that focuses the beauty of the customers. The fashion products are more focused and are taken into account through the advertisements and promotional strategies. The products of the body shop are more focused on the quality.
Price: This means the procedure of price fixing of product, together with discounts. The price does not require to be fiscal, yet it may be what is traded for goods or services, for example, time, attention, or energy.The price remains a fundamental component of the marketing mix given its impact on market share and profitability. Despite popular belief, fashion products do not cost more than conventional products, and are therefore addressed to a wide audience. It takes on average 500€ to 1000€ for the fashion products to be purchased by the customers, who love them. It is found that the economical premium brands are even less expensive than their conventional counterparts.
Placement: This involves to how the goods reach the consumers, for instance, position of retail or point of sale. The third P has additionally been called Place, which refers to the channel which is used to sell a product or service (e.g. retail versus online), which geographic area or market, segment (young generation, families, business, and so on.).
Promotion: The promotion activities consist of sales promotion, advertising and personal sales. Branding alludes to the different strategies for promotion of product, brand or organization. Distribution systems are turning out to be more diverse, they are no more restricted to traditional clothing store and accessory store, but reach out to all circuits: perfumery, beauty products, online stores, etc
Aaker, D. A., & Joachimstaler, E. (2000). Building strong brands. New York: Free Press. Aaker, J. (1997). Dimension of brand equity personality. Journal of Marketing Research, 34, 347-356
Abell, D. (2008). Strategic Market Planning: Problems and Analytical Approaches, London, Prentice-Hall, 45-58
Azuma N., Fernie J. (2003) Fashion in the globalized world and the role of virtual networks in intrinsic fashion design, Journal of Fashion Marketing and Management, Vol. 7. No. 4
Barney, James. (2008). Firm resources and sustained competitive advantage.” Journal of Management 17.3: 99-120
Bowman, D. (2010). Market response and marketing mix models: trends and research opportunities. Boston. 77-90
Cadogan, J. W. (2009). Marketing-mix strategies – distribution strategy and pricing strategy. Los Angeles U.S.A.: Sage. 119-130
Gilbert, D. (2007) “Retail Marketing Management and Brand Equity”, New York, Prentice Hall, pp.25-26
Ko, E., & Megehee, C. M. (2012). Fashion marketing of luxury brand equity: Recent research issues and contributions. Journal of Business Research, 65(10), 1395-1398.
Li, G., Li, G., & Kambele, Z. (2012). Luxury fashion brand equity and consumers in China: Perceived value, fashion lifestyle, and willingness to pay. Journal of Business Research, 65(10), 1516-1522.
Liu, F., Li, J., Mizerski, D., & Soh, H. (2012). Self-congruity, brand equity attitude, and brand loyalty: a study on luxury brands. European Journal of Marketing, 46(7/8), 922-937.
Miller, K. W., & Mills, M. K. (2012). Contributing clarity by examining brand equity and luxury in the fashion market. Journal of Business Research, 65(10), 1471-1479.
Moore, C. M., Doherty, A. M., & Doyle, S. A. (2010). Flagship stores as a market entry method: the perspective of luxury fashion retailing. European Journal of Marketing, 44(1/2), 139-161.