Asda Marketing Plan

AbstractThe following report considers the honest position of ASDA, noting the international purlieu in which it operates and its merchandising plan.The report finds that ASDAs focus on low scathes has whateverwhat disengaged it with ethics, with the business more than than(prenominal) focused on selling volume, as opposed to selling sustainable products. However, tending(p) changes in the external environment, and the rise in the discount sellers, ASDA has now been faced with higher(prenominal) opposition. To combat this, the report suggests that ASDA looks to change its outline to focus more on a sustainable supply-chain, potenti altogethery one which is focused on UK pabulum and products. While this may lead to higher prices from the retailer, it could improve its image when it comes to sustainable diet retailing, and so pattern higher prices to consumers, especially if the admittance of local products develops an emotional attachment for nodes.IntroductionThe following assignment impart consider ASDA, considering the external environment in which the business operates as easy as its ethical consideration, ascertain whether the current dodging should be maintained or whether a change is take aimed, with the assignment then reservation recommendations.Company OverviewASDA is a UK-based mart retailers owned by U.S. listed Wal-Mart Stores Inc. ASDA has been part of the UKs Big 4 retailers in the UK grocery sector, also compromising of Tesco, Morrisons and Sainsburys, save it recently expired from 3rd from 2nd place on the list, being overtaken by Sainsburys after disappointing gross revenue. The latest report from Kantar Worldpanel (2016) formats ASDAs merchandise share at 15.3%, behind that of Sainsburys after suffering a 4.7% fall in sales, compared with a 0.7% fall in Sainsburys, and a 1.6% rise in sales at Tesco. To many UK consumers, ASDA has substantial on the guts of price competitor, with the retailer being heavily foc used on being the UKs best value super securities industry. Due of its focus on price, ASDA in the past could wipe out been seen to ignore ethical consideration, with some of the top places seen with premium retailers such(prenominal)(prenominal) as Marks & Spencer, who use their premium price to disclose consider the quality/ ethics behind their supply chain.Market EnvironmentHowever, it is this strategy which has been a downfall for the retailer, especially when put against competition from the expanding discounters, namely Lidl and Aldi (Ruddick, 2014). These retailers begin aggressively expanded into the UK market on the back of offering low prices to consumers, with their focus on prime-match, similar of merchandising conducted by ASDA against the other Big 41. Given this, Aldi tweakd to record sales growth of 10% over the same period, beating all competition and increasing its market share to 6.2%. At the same time, Aldi also announced that it looks to take its store sedu ce from 450 to 1,000 by 2022 Lidl also announced plans to open 40-50 radical stores in the UK each year, noted by Gale (2016). This move in the market has been supported from a new business model and changing consumer habits. Discounters have benefitted from economies of scale, minify the scale of choice to offer just one option in turn allowing them to amplification sales of that product and reduce the production costs. At the same time, these discounters have also expanded on a no-frills approach to stores, moving away from the Superstore concept which became popular with Tesco and ASDA. This comes at a time when consumers have also looked to move away from superstores, preferring little-and-often shops to better reckon. There also seems to a reduction in customer loyalty as consumers look for the best value.Marketing Situational AnalysisBuilding on the above, a SWOT analysis is shown below StrengthsUK wide presence with 525 stores.Still the UKs 3rd largest grocery retailer potential to increase share.WeaknessesRecent marketing seems to have placed it in the discount category when it comes to grocery stores potentially restricting sales of some of its higher-value items. OpportunitiesRecent improvement in UK economic fundamentals coupled with rising wages may increase consumer disposable income.Fall in ?GBP has put some spotlight on UK food/ products to escape price rises.ThreatsCompetition remains the biggest holy terror to ASDA, especially with discounters such as Lidl/ Aldi quickly expanding their store network, as well as expanding their marketing activities, with a focus on value.Ultimately, the analysis is suggesting that the main weakness in marketing lies within this move focus solely on the price. This has come under pressure condition new entrants into the market, with the discounters of Lidl/ Aldi coming into the market with business models which mean they earth-closet potentially undercut ASDA on prices. This is the main threat to the business, with ASDA still seeing a fall in sales, even with the recent buoyancy in UK retail sales. However, thither are potential opportunities for ASDA to diversify, expanding its marketing to cover issues within sustainability and UK produce improving the ethics when it comes to food sourcing, and issues such as food security and locality2.ObjectivesIn the past, ASDAS fair games have been focused on customer value, however given an expanding discount sector, the retailer is now under more pricing pressure to maintain customers. With this, there is the expectation that the retailer may need to diversify, essentially look to seduce more customers back to its stores. The objective for ASDA is to tempt customers back into its store or tempt new customers back. Given continued expansion of Lidl/ Aldi, it could be expected that the new strategy go away need to focus more on attracting new customers, be it from retailers such as Sainsburys.Strategy & SegmentationTo support its strat egy, ASDA will look to segment the market into assorted consumers, based on demographics, location, income etc. Given marketing campaigns undertaken by the business, it would appear that ASDA has segmented the market looking to appeal to those families of lower incomes. Its focus on being the cheapest is indicative of its primary target market. Because of this, the business has become somewhat specialised on this business model, a focus on low-cost, which in turn could blockade quality. It has positioned itself in the low-cost end of the market, however given new entrants and intensified competition, is now finding it voiceless to compete and develop with new competition (Peter, 2011)3. The business model helped ASDA over the years of recession given constrained consumer income, however as economic conditions have improved, consumers have essentially traded-up. This has provided support to other retailers such as Sainsburys, and Waitrose which position themselves at the higher end of the market.With this, ASDA may feel that its business is currently positioned to narrow, targeting a consumer base which is shrinking which competition is increasing. There are two ways in which the retailer can broaden its consumer base, either by changes to marketing which will target a new market, or by differentiating the product to appeal to a broader base of consumers, noted in Armstrong et al (2012)4.Tactics & ActionGiven the above, the main tactic for ASDA s to re-position itself in the market, remove this constant focus on price and look to focus more on ethical issues such as sustainability, which in turn may suggest quality. To do this, the retailer has a number of actionsASDA will move to focus on local putting its focus on render more UK produce in-stores, having dedicated aisles in superstores to local producers. The benefit here will not provided be from higher sales of these goods, put also of the positive PR which could arise through support local farmers, and local communities. This is essentially classed as differentiation the retailer will be introducing new products to do so. ASDA will also look to introduce convenience aisles into superstores. This will be seen as segmentation,5 looking to attract a new set of customers to its stores who may have previously left as they prefer to do little-and-often shops. This can be marketed by ASDA to target these specific customers.BudgetThis section will now discuss the budget for such a change in strategy. The main costs to the business will be seen as the marketing. For instance, when it comes to the convenience aisle, it could be noted that the infrastructure is already there the stores will simply have to shuffle around stock to create the new aisle. When it comes to introducing the new products, the costs may be more down to developing the local links, with the suppliers themselves bearing the costs associated with producing the goods. Rather than a major financial cost, the introducti on of more local products may be more time consuming for ASDA, given that they will need to ensure that the new products are in-keeping with the goals of the business, both in terms of pricing and quality (Ferrell, 2012)6.Marketing will be done through all traditional channels given the mass-market appeal of ASDA and the fierce competition within the UK grocery sector. While this would involve a higher cost than say digital marketing opportunities, it would be hoped that print advertisements and TV commercial will draw more attention, and so inform more customers. However, digital marketing could also be used, especially when it comes to advertisements through social media, and targeted banner ads which can be used online.ControlControl remains an important consideration, both in terms of ensuring a level of consistency in the marketing message as well as also monitoring the return on enthronement (hereafter ROI). When it comes to consistency, while marketing could change to reflec t changes in the marketplace, the business must look to maintain its fondness message. For instance, while the focus on new marketing campaigns may be on local produce, the warmness message remains with the slogan Save Money, Live Better. Too much of change may lead to current customers becoming detached with the business and its values.Control will also come with ROI. Essentially, all businesses need to ensure that their marketing spend is generating business. New, digital marketing allows businesses to track this, with businesses able to use likewisels such as Google Analytics to view web traffic etc. (Chaffey, 2012)7. Traditional marketing may be harder to manage in terms of ROI, given that it is harder to distinguish how a certain poster/ TV commercial may have driven demand. However, if ASDA move forward with a unified campaign, so changing all marketing to reflect a single message, then the business can understand the potential ROI of the campaign.Recommendation/ completio nTo conclude, ASDA has in the past focused its marketing plan on price, looking to drive consumption through low prices. This is itself would not be considered ethical consumerism, given that some of the lower prices products could be viewed as a damage to the environment. However, this strategy has now placed ASDA into a market segment which is seeing more competition, at a time when the size of the market may be slowing, given improving economics in the UK8. To combat this, ASDA has an opportunity to diversify its product range into a more premium space be it the expansion of their Extra Special range, or through the introduction of more local products and brands (Perreault, 2010)9. The focus on UK produce could provide ASDA with a Unique Selling Point which could allow the business to justify higher pricing, noted in Fifield (2012)10. This may also improve the organisations ethical position as it suggests that ASDA is considering sustainability in its wider supply-chain given tha t more food is local, opposed to international, reducing the distance of the supply chain, potentially being seen as more environmentally friendly. However, at the same time, the retailer must be wary that any change to its pricing may impact on its core customers. In the end, this may further impact on market share, however this is seen as a potential risk of an opportunity. The recommendation for ASDA is that is moves forward with a change in marketing, highlighting developments in both local sourcing as well as convenience. However, ASDA must look to train this movement, and potentially monitor the opportunity. This could be done through monitoring sales of, as well as monitoring footfall into stores.ReferencesArmstrong, G., Kotler, P., Harker, M., & Brennan, R. (2012). Marketing an introduction. Pearson Prentice-Hall, London.Chaffey, D., & Ellis-Chadwick, F. (2012). Digital marketing, London, Pearson Higher Ed.Ferrell, O. C., & Hartline, M. (2012). Marketing strategy, text and cases, London, Nelson Education.Ferrell, O. C., & Fraedrich, J. (2015). Business ethics honorable decision making & cases, London, Nelson Education.Fifield, P. (2012). Marketing strategy, London, Routledge.Gale. (2016) Online. How long will Aldi and Lidls onslaught last?, Available at http//www.managementtoday.co.uk/long-will-aldi-lidls-onslaught-last/future-business/article/1386497, Accessed 17.12.2016.Kantar Worldpanel. (2016) Online. UK Grocery Market Share, Available at http//www.kantarworldpanel.com/global/grocery-market-share/great-britain, Accessed 17.12.2016.Perreault, W. D. (2010). Essentials of marketing A marketing strategy planning approach, London, Pearson.Perreault Jr, W., Cannon, J., & McCarthy, E. J. (2013). Basic marketing, London, McGraw-Hill Higher Education.Peter, J. P., & Donnelly, J. H. (2011). Marketing management knowledge and skills text, analysis, cases, plans, London, Pearson.Ruddick, G. (2014) Online. It may already be too late for Tesco and Sainsburys, t he rise of Aldi and Lidl looks unstoppable, Available at http//www.telegraph.co.uk/finance/newsbysector/retailandconsumer/10974773/It-may-already-be-too-late-for-Tesco-and-Sainsburys-the-rise-of-Aldi-and-Lidl-looks-unstoppable.html, Accessed 19.12.2016.Wood, S., & McCarthy, D. (2014). The UK food retail race for spaceand market saturation A contemporary review. The International Review of Retail, Distribution and Consumer Research, 24(2), 121-144.