Professional Documents
Culture Documents
Assignmentclovis Repaired) by Emma
Assignmentclovis Repaired) by Emma
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CONTENTS PAGES
I- INTRODUCTION
1- Strategic marketing
a- Segmentation
b- Positioning
c- Targeting
2- Competitive advantage
V- CONCLUSION
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I. INTRODUCTION
The objective is of this assignment is to examine how Morrison uses different
achieve success in their business companies have to develop different methods and
used by different companies to cope with the competition and for this reason I have
So there are some questions that we need to ask if we are to better analyse a
advantage? And how does Morrison gain competitive advantage through strategic
upon the information collected from different books written on the topic and internet
resources. Moreover, different websites will provide information about Morrison. The
parts; firstly, I will start by the Morrison’s main areas of business. Secondly, I will talk
thirdly, I will show how Morrison gains competitive advantage through strategic
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II. MAIN AREAS OF BUSINESS
branded and own label products. The company, along with its subsidiaries, offers a
wide range of products, which include grocery, fish and meat, bakery items, alcoholic
spread right across the UK, providing the opportunity to give shoppers everywhere
the benefit of high quality products at low prices and a strong offer across all fresh
foods. So according to the Morrison’s annual report (2010), the good first half
performance was also built on the diversity of the company’s product offering,
Morrison offers a wide range of food and non-food uses has a wide selection of
shoppers something which larger chains such as Sainsbury and other have been
slow to appreciate.
Ever since the start of its business, Morrison Supermarkets has always been
because it believes that this is the key towards increased sales and maximization of
management group which helps in maintaining the delivery of quality services for all
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III. STRATEGIC MARKETING
competition, consumers, technology and market forces constantly redefine the way
continuously adjust and adapt their customer approach to meet changing needs and
expectations. In this case, Strategic marketing is the reflection and analysis of the
describes the way you are going to satisfy customer in your chosen markets.
It is why some authors like Philip Kotler (2001), Michael Porter (1985) think that the
essence of the marketing concept is the idea of placing customer needs at the centre
process of segmentation, targeting, and promotion (STP) this starts with trying to
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a. Segmentation:
According to the da-group web site (da-groupi, 2010) market segmentation can be
defined as the process of breaking down the total market for a product or service into
exist, and who are potentially favourable to buy the new product. It can be also
company to segment only the lines of needs, needs which can serve, from those
which cannot. The concept is to segment along only using variables that having
meaning in that context of the company and where the market is operating in, not to
just jump feet first and use the tried and trusted geo-demographics .
b. Targeting :
can be defined as the identification the way people want to view the product of the
market segments that are identified as being the most likely purchasers of a
opportunities firstly, it can be illusionary in terms of the way people want to view the
product (for example happy, aloof, silly, or moody).secondly market and product
appeals through manipulation of the marketing mix can be more delicately tuned to
the needs of the potential customer, and thirdly it helps each company to be
concentrated on the market segments which offer the greatest potential for the
After segmentation and market targeting, the next important step in developing an
organisation sets itself apart in the market and how its products and services are
perceived by the target market as a whole. According to Ries and Trout (1981), a
positioning result in the image you want to draw in the mind of your customers, the
picture you want him or her to visualize of you what you offer, in relation to the
market situation, and any competition you may have. Positioning is about the
communication of the overall value position such that it creates and maintains this
clearly to customers, thus creating a distinctive and ideally unique, place in the
market for the organisation. To be effective, the basic value proposition offered by an
clearly to that market. This aspect fits more closely with differentiation as a generic
strategic option and this in part helps to explain the proliferation of brands, products
and services.
PRODUCT PRICE
Premium Premium
fun Selective
Source: adapted by W Andrew, strategic marketing
Powerful Figure 1: positioning and its main elements
Executive
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This figure shows that the concept of positioning has two dimensions: firstly what the
involve deciding where the organisation wants to compete and how it sets about
service? In this case there are three major concepts which can be use such as:
Clarity (the positioning idea must be clear with regard to both the target market and
break through the ” noise” level of competing message, a consistent message and
image is necessary) and thirdly, comes the credibility the company have to make
goods products of better quality so that customers will fell in confidence and finally,
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1- Competitive advantage:
benefits and service that justifies higher prices. Competitive advantage grows out of
value a firm is able to create for its buyers that exceeds the firm’s cost of creating it.
So value is what buyers are willing to pay, and superior value stems from offering
lower prices than competitors for equivalent benefits or providing unique benefits that
more than offset a higher price. According to the two influential books, competitive
advantage (1985) and competitive strategy (180), written by Michael Porter, growth
that success comes from having a sustainable competitive advantage, which derives
from the value a company creates, in excess of its production cost, and passes on to
its customers. He underlined five competitive forces that could be adapted in order to
gain competitive advantage such as rivalry among existing firms, the threat of new
entrants, the threat of substitutes, and the bargaining power of both buyers and
suppliers.
Furthermore, inter-firm rivalry affects prices, advertising and sales budgets. So the
threat of entrant in the new market competitors in an industry limits the prices a
deterrent. The power of large buyers such as retail chains, and the possibility of
suppliers determine the cost raw materials. Successful firms are the one which
sustain their competitive advantage by making sure they retain their value, and it
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isn’t industry rivals, new entrants, or lower prices, or appropriated by powerful buyers
or suppliers. As we can see in this picture below source adapted from Porter M E
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Rivalry determinants
Entry barriers
Industry growth fixed or
Economies of scale
storage, cost value added
Proprietary product
differences brand identity Intermittent overcapacity
NEW
Switching costs ENTRANTS Product differences
Intensity or
rivalry
Threat of
Substitutes
Determinants of supplier power
Determinants of buyer
Differentiation of inputs power
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IV. HOW DOES MORRISON GAIN COMPETITIVE ADVANTAGE
THROUGH STRATEGIC MARKETING
According to the Financial Times (August 2009) Consumer trends have stabilised
compared to the prior year when behaviours changed to adapt to rising food inflation
fourth largest food retailer with almost 403 stores according to the Morrison’s annual
report (2010i).
Its business is mainly food and grocery, for Morrison, mostly of the fresh food that it
sells through its own manufacturing facilities and it tries to give to customers close
control over provenance and quality, and it also has more people preparing more
food in store than any other retailer. With competitive prices in the market Morrison
according to the Morrison’s annual report 2009, its vision is to be “the food specialist
for everyone” its strategy is developed around three distinct brand values: fresh,
value and service, having these three brand values gives us the flexibility to react to
a- Fresh: vertical integration in the supply chain, Morrison aims to offer more
freshly prepared food than any other retailer. That’s because it has more staff
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having their own factories, production facilities and distribution network. With
these facilities it can get food to their stores faster so that it’s always fresher.
b- Value: keeping costs low to ensure that its prices are competitive, great value
across their range. Value is the key to their vision and it is especially
freshness at a price people like. And their famous promotional offers always
save its customers money. It doesn’t just offer value on a few items; their
c- Service: ensuring the right product is always available, great selling and
service for its customers. By having its own distribution network, it can ensure
that the right products are always available for its customers. With its
commitment to great selling and service it aims to get it right for our
Morrison’s strategy will enable the business to continue sustainable, long term
growth. It builds on their strengths, and is in tune with its customers’ needs for
excellent value and their increasing focus on the provenance, quality and freshness
of the food they buy. In order to deliver its strategy, Morrison has previously outlined
the building blocks that need to be put in place, and their plans to do this were
analysis of Morrison reveals the supermarket retailing industry has become highly
competitive in the U.K and unlike other developed regions in the world, still shows
opportunities are available for only industrial players who are willing to provide high
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value for customers at competitive prices. From being a regional player, Morrison
where their food comes from. Health, quality and provenance remain important
factors in food choice. Although the market environment remains difficult for the
consumer, they claim to continue to provide value and a unique fresh offer with great
service.
clearly from a 'lifestyle perspective'. The whole of the U.K market has to be
considered because Morrison has a clear plan of embracing the whole market.
social class, income and other factors because a major super market chain will
be able to approach all types of customers. The U.K customers are divided into 6
lifestyle segments according to the bookrags web site, bookragsi, (2010) there is
cater to the needs of this segment in Northern England. However the company
will have problems with appealing to the traditionalists of the other parts of U.K
Secondly, the homebody (14% of the population): Is. Less preoccupied with
economic security than the traditionalist, the homebody needs to feel in touch
with the social environment. Morrison has successfully targeted this segment up
to now because of the homely environment it provides and however in the future
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the company will be finding it difficult to meet their requirements in the newly
expanded areas.
to his or her roots and childhood environment. Less preoccupied with economic
security than the traditionalist, the homebody needs to feel in touch with the social
the homely environment it provides and however in the future the company will be
Furthermore, the striver (15% of the population): Holds the attitudes, beliefs and
values that underlie the dynamics of social change. This segment has always been
Last but not least is the trendsetter (13% of the population): Favours non-
hierarchical social structures and enjoys spontaneity rather formal procedures. This
segment of customers fancies changes and are highly difficult to retain, according to
In the U.K supermarket industry there is very high competition and therefore
customers easily switch to a competitor if they are not satisfied with the service
Tesco, Asda, Sainsbury’s and Morrison. Morrison is going to improve its position to
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fourth by taking over Safeways. Amongst the other three competitors Tesco is in the
forefront followed by Asda (owned by U.S retail giant Wal-Mart). These two possess
great threats to Morrison due to their sizes, financial strengths and cost efficiencies.
Sainsbury’s possess lesser degree of threat due its current financial problems and
First of all, there is a threat of New Entrants due to the lucrative nature of the
U.K industry, the threat of new entrants is high. Large European players, especially
French and German, are contemplating entering the U.K market. Already German
super market chains such as Lidl have opened up retail stores in major British cities.
In addition, major North American super market chains might also enter in order to
weaken U.K players and thereby tackle potential threats in home markets, bookragsi,
2010.
individual groceries, off licence, specialist outlets and franchised store chains such
as Londis, Budgens, Cost-cutters, etc. At the moment, the threats are subdued.
However the concept of smaller franchised store chains are gathering in popularity
Morrison. Their bargaining power is very high due to the availability of several
alternatives. If the buyers are not satisfied, they will easily switch options and the
switching costs are very low. In addition, due to the hyped information awareness the
customers have full details about demand and actual market prices.
been not threatened by the bargaining power of suppliers greatly. This is partly due
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to its policy in house sourcing of major proportion of its products. However with its
market expansion, especially in terms geography has necessitated the search for
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V- CONCLUSION:
Since Morrison competes within the U.K industry and has not branched out
analysed so. The comprehensive analysis presented above provides the foundation
for the development of future strategies of Morrison. It should keep a regular eye on
consumer trends, and develop programmes where it could talk to customers about
their shopping trip and how they feel about grocery shopping in the broader context
of their personal circumstances. It should also make good use of market data to
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BIBLIOGRAPHY
BOOKS:
Jobber, D. principles and practice of marketing –sixth edition (2010). Mc- Graw-
Competitors, (1980). The free press edtion1980, a division of Simon and Schuler
Performance, (1985) the free press edtion1980, a division of Simon and Schuler
2010
2010)
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http://www.coursework4you.co.uk/essays-and-dissertations/marketing/segmentation-
October 2010)
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