Dinesh K. Grocery Retail Pricing And Format Strategy
“ With the promising look of Kohl’s future of new outlet stores and on many other calculations I have indicated that Kohl’s has proved be more profitable, solvent and liquid than JCPenney. Kohl’s net profit margin puts them ahead of JCPenney by a landslide, although their gross profit percentage is relatively close, Kohl’s leading with 36.13% to compared to JCPenneys 36.05%. Meaning that Kohl’s makes .08% more money from selling their good/services with subtracting the cost it takes to produce the good/service. A high gross profit often
When you first walk through the doors of Shoprite, you notice the floral section. The selection of flowers, plants and bouquets is numerous and attractive to the eye. The departments of the store are thought out intensively. The produce section, the meat section, the juices and dairy products and the main course in the middle of the store, the grocery products such as junk foods and other packaged goods are put in the middle of the store. In “The Supermarket: Prime Real Estate” by Marion Nestle, the author describes grocery stores as: “You are supposed to feel daunted-bewildered by all the choices and forced to wander through the aisles in search of the items you came to buy” (pg 496).
In the article "Why gas stations may be the new grocery stores’, written by Maggie Sieger, individuals of different ages and living in different locations discuss their feelings toward convenience stores replacing grocery stores. One customer explains that instead of wasting mileage on his car by going to multiple places, he gets his gas and all the other things he needs in one stop. Sieger explains that millennials are now more likely to stop and buy items at a convenience store than any other age group. As a result, there is a business and cultural shift. Stores are responding to this shift by expanding their food options and focusing more on fresh fruits and vegetables.
One of the major Objectives of the research study (hypothesis, text book pg 20) is to determine whether or not Publix should continue heavily investing and maintaining a competitive ”business model of service and in store experience” or diversify their marketing development funds to include extensive promotional pricing strategies that will allow them to compete effectively in their market segment against Walmart, wholefoods, Aldi, and trader Joe’s, which compete very well on steeply discounted price points on the majority of specialized product line they carry, rather than emphasizing and leveraging “customer experience” as a competitive tool, such as Publix currently has in place to retain its loyal customer base and attract new customers.
Nestle Marion in her essay “The Supermarket: Prime Real Estate,” she develops a theory about how a supermarket itself is a strategic mastermind that uses psychological tactics to make people buy certain products. Certain products appeal to certain aspects to a human; this includes packaging, advertising, and placement within the supermarket. In order to develop such a plan, food corporations hire scientist that study human emotions to determine which products appeal most to their wants. Marion’s conclusion about supermarkets and their overall business strategies seem hard to believe but are easily accepted. Her detailed findings of the matter require more analysis to see if they produce any merit.
Most of the food sold in stores are brand indifferent, meaning that customers care about the product, not the brand name. Think of milk, eggs, meat. Nobody asks for a certain type of milk, they just want milk. Any large grocery store chain which does not have in-house product of basic food items is operating inefficiently. Compare Trader Joe's to other large grocery store chains such as Ralphs or Vons, they do not have any in-house products.
Aldi entered the Australian grocery market with its priority to cost leadership strategy and still is doing excellently well with their strategy till the present date. Aldi not only utilized the cost leadership strategy to enter the market but used it so that they can gain a competitive advantage in this highly concentrated Australian grocery industry. I believe Aldi should give continuity to its cost leadership strategy by selling its products in a lower price than the competitors because it is the most important aspect for the consumers shopping in Aldi. It is highly suggested that Aldi also begin to use the Porter's focus strategy to some extent as the Australian consumers are inclined heavily towards the locally produced fresh and organic
Being the cheapest option out of the three, makes its production costs fairly low. They are not involved in a niche market and they don’t have much customer loyalty compared to the other brands. Non-sustainable advantages for the
A relationship in a hurry will never end well. This idea comes true in the play Romeo and Juliet by William Shakespeare. The play is about two star-crossed lovers who take their lives. The play takes place in a city named Verona in Italy where two rival families have a massive feud that has been going on for years and years. Nobody knows why but they still hate each other, but these two lovers who meet are from these families their love is ended because of the feud and all of this happens in five days.
Product Since Australia is very similar to the U.S. UK and Canadian market, there are relatively little adaptions to make in order to meet the Australian consumers expectations. However, there are a few things that need to be taken into consideration before launching the products. The most obvious factor is the language. Apart from subtle differences in the spelling (colour vs. color), there are cultural differences when uses the language in order market a product. While in the U.S. consumers are used to hearing the decorated marketing language.
The CEO of Lidl, says in the interview that, “The feedback we got from customers in the U.S. was very clear. People have been compromised. They feel you can get quality, but it’s extremely expensive or you can get cheaper product, but the value reflects that. The other compromise is time: The amount of time it takes to do a grocery shop” (Springer,
The main objective of aldi is to grow its market all over the world. Thre main aim is to provide the customers high quality product with guarantee low
ALDI specializes on its own labeled products brand, creates high quality products with fair features, designs and packaging, ALDI also focuses on the variety of products that are mostly needed in each and every household, so ALDI does not only offer food but also offers electronic products, clothes, household goods, health and beauty products. By creating ALDI’s exclusive own brands, ALDI can minimize the costs on the products itself, therefore listing low prices for customers; Also ALDI is fortunate enough for its high purchasing power from suppliers, therefore ALDI can bargain the best prices so it can keep low costs and low prices; Another several ways ALDI is minimizing costs is for example: cart renting, as well as ALDI’s re-usable bags to reduce costs and insure low prices and saving for customers. ALDI took into consideration the importance of locating its stores in places convenient for people and also accessible, also taking into consideration public transportation links and parking spaces available, creating online channels for customers to locate their nearest ALDI store; Yet unlike other supermarket ALDI is not opened for 24H, ALDI’s opening hours are at the times where people are most likely to go shopping to minimize cost. As mentioned before prices aren’t something ALDI can compromise on and one of ALDI’s strategies is minimizing costs for competitive
In this era of globalization, the supermarket industry is one of the common investment sectors. It is also forming retail common categories of food products such as fresh and meats, poultry and seafood, fresh fruits and vegetables, canned and frozen foods as well as various dairy products. Investment in this industry can be profitable if succeed but bear in mind that risk still exists if monitoring process is not carried out. Therefore, Professor Michael E. Porter from Harvard Business School has introduced a tool for purposes of analysis potential industry which is the most profitable and potential. Porter stated that five forces are deciding an industry either beneficial at future or it will become a case study and commerce practice (Porter, M.E., 2008).
The price strategy which KFC is currently adopting is geographical pricing. It is because the menu prices is set differently in each country. For example, KFC Malaysia snack plate is priced at RM 5.95 while snack plate in Singapore is priced at SGD 6.40. Generally, they use market penetration pricing for new products. KFC sets their price slightly lower as compared to their competitors in order to entice customers away from their competitors.
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