Marketing strategy for Bigstore

Question: You are required to write an individual marketing plan (@ 3,000) based on the simulated company. This marketing plan should follow the formal marketing plan structure. Answer: Marketing strategy for Bigstore Bigstore is UK based retailer that operates in the food and beverage industry. Over the last three years, the revenue collected by the organization has been increasing steadily: approximately 216 million pounds were generated in the final year as compared to 175.9 million pounds generated three years back (Bjelic, 2011). The gross profit of the organization as also skyrocketed in the last three years: from 29.1 million pounds to 35.8 million pounds. This success has to lead the management to re-design their business objectives: Bigstore now aims to be the largest supermarket in the United Kingdom that stocks food and beverages. In this report, a detailed market strategy has been provided that would support the mission of the organization. The situational analysis of BigStore has been discussed, along with the market objectives of Bigstore and the strategic actions that would be useful in the fulfilling the said objectives. Last but not the least, mechanisms for the control and the implementation of the marketing strategies has been discussed. 1. Strategic marketing process Presently, the management of Big makes the store aim to become the largest supermarket in the UK market regarding the total revenue generated from the sales operations. The income figures currently available to the marketing team indicate that in the past three years the sales revenue generated by the organization has been steadily increasing (Guo, Ling and Gao, 2015). Besides this, the gross income of the retail organization has also risen by an approximate amount of 6.7 million pounds in the said fiscal period. A review of the food and beverage market of United Kingdom indicates that the said market is worth of 2.2 billion. The products that earn the maximum revenue from this market come under one of the following four categories: fresh foods, beverages, kitchen cupboard items and frozen food items (Guo, Ling and Gao, 2015). Among these four types of food items, almost 60 percent of the total revenue is generated from the sale of the fresh and frozen food items. Besides this, the market is growing in each fiscal period at an average rate of 7.5 percent. The market survey also indicates that at present there are five big players in the market, each of which holds approximately 10 percent of the market share. The other half of the market is served by a large number of small retail chains and standalone shops that provide services to specific localities (Feriozzi, 2015). The management the organization is of the opinion that increasing the number of sales and the market share would be the primary target of the Big store at this point. The marketing strategy plan that has been provided in this report has thus been devised in the following objectives: To promote the sales figures of Bigstore To increase the profit percentage of Bigstore and To improve the percentage of the market share that the organization currently holds. 2. Situational Analysis 2.1 The market analysis As mentioned in the section above, five large companies currently hold almost fifty percent of the total market share (Karanja, Sma and Thuo, 2014) The present values of the market shares held by these organizations have been provided on the following table: Table 1: The market shares of the primary players Retail chain Market share Big store 10 % Drinkit 10 % Focus 10 % Green world 10 % Value shop 10 % Others 50 % Figure 1: The market share of the key players of the UK food and beverage market The market researches made by the representatives of Big store indicate that at present the food and beverage market is worth 2.2 billion pounds and the market is increasing steadily at rate of 15 percent per year. However there exists an intense competition in the market, a fact that is indicated by the same profit, sales and customer values of the above mentioned organizations. 2.2 The SWOT analysis of the Bigstore In this section of the report, we provide insight into to the strength and the weakness of the organization, the opportunities present in the market that Bigstore can take advantage of and the factors that have the potential of threatening the presence of Bigstore in the market (Ketenchyev, 2014). The Strengths of the Bigstore Brand value: Bigstore offers several products to their customers at low prices and is entirely focused on the services that they can provide to the target customer. Customer loyalty: Bigstore ensures customer loyalty by the introduction of club cards using which the clients can avail special offers, rewards, etc. The retail chain deals with a broad range of food products: the availability of a large variety of products under a single roof draws the attention of the target customers (Krstic and Becic, 2011). The steady increase in the revenue being generated by the sales team indicates that the competency of the operational departments of the organization. The utilization of sustainable technologies used the group has improved the brand value of the organization. The Weaknesses of the Bigstore In the recent past, Bigstore had experienced high employee turnover which has affected the operational activities of the organization to a large extent. At present, most of the employees working the organization are new, thus the productivity of the organization is not at the optimal state. The lawsuits with the former employees of the organization have hampered the brand value of Bigstore to a large extent. Bigstore operates in the food and the beverage industry only and does not stock products belonging to other categories (Liu and Dukes, 2015). This should be considered as weakness, as the diversification of products has been found to have helped in increasing the sales revenue of retail organizations. The Opportunities of the Bigstore There is a high demand for retail organizations that operate in the food and beverage industry. A large section of the market is still is being served by small retailers and local shops: large retail organizations like Bigstore are capable of penetrating into this section of the market. The market research performed by the organization indicated that there exist certain sections in the market in which the rate of competition is much lower as compared to the other sections (Lueg, 2015). Strengths 1. Brand value 2. Customer loyalty 3. Availability of a wide range of products under a single roof draws the attention of the target customers 4. Competency of the operational departments of the organization 5. Utilization of sustainable technologies Weaknesses 1. High employee turnover 2. Most of the employees working the organization are new. 3. Lawsuits with the former employees 4. Lack of diversification of products Opportunities 1. There is a high demand in the market for retailers like Bigstore 2. Large section of the market is still is being served by small retailers and local shops 3. Less competition in certain sections in the market Threats 1. Economic meltdown of the United Kingdom 2. Fiercer competition in the market 3. Requirements and the choices of the customers change rapidly Table 2: SWOT analysis of Bigstore (Source: Lueg, 2015, pp-67) The Threats present in the market At present, the United Kingdom is going through an economic meltdown: needless to say the bad economy would affect the business of the organization to a large extent (Sheth, 2011). The competitor organizations are implementing specific strategies for improving their sales operations. Besides this, new competitors are also emerging in market (Matsumura and Matsushima, 2015). The cumulative effect of these factors has resulted in fiercer competition in the market. The requirements and the choices of the customer tend to change rapidly. 2.3 The competitor analysis of Bigstore In this section of the report we provide an analysis of the various competitors of Bigstore who are currently operating in the same market: At present Focus leads the market in selling product to the under-aged customers. They also sell products related to toddlers and babies (Sheng and Yang, 2014). Needless to say, the organization had focused their entire marketing strategy on providing services to the under aged customer base. Drinkit is the largest seller of alcoholic drinks in the UK market, with their sales strategies focused on providing services to the adult consumers (Rodic and Budimircevic, 2011). Green World is yet another primary competitor that generates huge revenue by selling products to the adult consumers (Saaskilahti, 2015). However, the organization has a strong presence in those markets in which there is a demand for green products. On the other hand, Valueshop holds a string hold among the pensioners and is well liked in those section of the market in which there is a demand for low priced products. Marketing Objectives The SMART objectives of the marketing strategy, which is being discussed in this project, have been provided in the following section: Specific: The sales revenue of the organization has to be improved. Measurable: The sales revenue is expected to increase by 10 percent each year. Attainable: At present, the market is growing at a rate of 15 percent per annum, thus 10 percent increases in sales revenue is achievable (Saaskilahti, 2015). Relevant: in order to increase the profit of the business, at this point in time, targeting 10 percent rise in the sales value is essential. Time related: The stipulated time period for achieving the targeted 10 percent increase in the sales revenue is 12 months. 4. Marketing Strategy Bistore will strive to increase its market penetration. The marketing strategy creates consumer awareness regarding the offered products that is described in the product strategy. It uses to develop the customer base as well as creates customer loyalty. The marketing strategy of Bigstore is based on the following strategies such as: Product Strategy Big store, the UK food and drink market consists of four categories of key products such as frozen food, fresh food, kitchen cupboard items and drinks. Big store prides that they are giving fresh ingredients in their food items. The qualities of the products are most important to attract the customers (Takayama and Takayama, 2015). The food ingredients used in the items and drinks should be healthy. The strategy for product frames the premise for executing an item guide and consequent item discharges. The item technique empowers the organization to concentrate on a particular target advertise and highlight set, rather than attempting to be everything to everybody. Big Store to make the item methodology has recognized the business sector issues that should be determined. This incorporates meeting the objective business sector, understanding the focused scene and recognizing how the association can separate itself. The item technique will change after some time as the association adapts more about business sector, and as it can choose to enter distinctive markets (Su, Wolfs and Masoum, 2014). The force of an item technique originates from what the association characterizes and what it needs to avoid. Pricing strategy Though food and drinks is an innovative item, therefore it should go for price penetration pricing (McDonald, 2011). The food products are getting novelty over their products and its qualities. The cost of manufacture, the transportation cost and the distribution cost is quite reasonable as compared to its competitors. The price of their food and drink should not be more than the competitors in the marketplace (Su, Wolfs and Masoum, 2014). If the cost of the products is high, then in order to earn profit, the price will be higher. The prices of the products are based on value price strategy i.e. the company prefers more to value to the customers expectations and their desires. Premium costing is a long-term technique that should be utilized by Big Store to underscore prevalent item advantages or quality administrations. The expectation is to build up and keep up a moderately high cost position that accompanies the message of top quality. With this technique, it will be simpler to keep up ordinarily a standard cost point amid presentation, development and early development phases of an item life cycle (Su, Wolfs and Masoum, 2014). Frequently, when items enter decay and the organization plans to dispatch another form or item, they are stamped to offer out remaining stock. Techniques, for example, cost-in addition to estimating and target return evaluating accentuate long haul benefit boost. Generally, the affiliation must set costs in view of the coveted level of benefits it would like to get after some time. If the objective of the company is 20 percent benefit over the life of an item, then Big Store need to estimate to what extent starting interest will last when higher costs at 30 to 40 percent edge can be achieved (Saaskilahti, 2015). There additionally is a need to consider that close to the end of the life cycle, the association might need to markdown remaining stock for practically zero benefit. Distribution strategy Bigstore targets the customers of age between 18-25 years for its frozen food items and drinks. The market has four primary sectors those are buying the products such as baby and toddeler, child, adult and adult as well as pensioner (Keegan and Green, 2011). The company targets the location for selling their products in the marketplace of UK. It major selling locations are the franchisee shops as well as new market developmental paces such as airports, business centers, colleges as well as universities, as well as supermarkets. The free samples of their products are distributed in the colleges and universities so that the customers become more attractive towards their products. Promotion Strategy Big store uses the promotion strategy to expand their products into the market by familiarizing the products to the customers. As the food store is new in the market, therefore their promotional strategy should be more attractive. The channel of promotion is TV ads, print media such as newspaper and magazine, billboard and poster, event management and online advertising (Takayama and Takayama, 2015). The goal for the Bigstore chains media trade is dependent on the age between 18-35 years to exploit the buying power with a twist toward the encoding that uses to distribute better to the younger audience. The objective of promotion strategy is to achieve current advertising campaign in order to increase the brand awareness of their food items. 5. Control and Implementation The purpose of Bigstores marketing plan is to give out as a direct for the store. The following are the regions that are required to manage in order to improve the performance of the company such as control over revenue and expenses on monthly as well as annually based on the planned as compared to the actual (Boudreax and Emerick, 2014). The control over the customer satisfaction is required in order to generate a repetitive business as well as referral activity. The implementations of the marketing strategies are used to identify the key marketing programs. The markets of UK are first researched to identify the targeted customers and distribution and promotion channel (De Chernatony, 2010) Then trade shows the participation campaign. After implementation of the strategies are based on the market of UK. The implementation of the marketing strategy of Big store requires the knowledge of targeted customers, the channel of distribution, its competitive market and working knowledge of effective marketing as well as communication tactics (Hollensen, 2011). The strategy is implemented by including the sales volume, adoption of the satisfaction metrics, and the goals for market preparation. Marketing plan for Bigstore Weekly Timeline Week 1 - 2 Week 3 - 6 Week 7- 9 Week 10 - 11 Week 12 - 14 Research the marketplace Develop contingency plans Identify the targeted markets Identify the communication channel Identify the risks in the market Implementation of the plan 6. Projected Profit Loss Statement The profit and loss statement of the marketing project under consideration is being provided in the following section of the report: Year-by-year profit and loss assumptions Year 1 Year 2 Year 3 Year 4 Year 5 Annual cumulative price (revenue) raise - 10.00% 10.00% 10.00% 10.00% Annual cumulative inflation (expense) raise - 2.00% 4.00% 6.00% 8.00% Interest rate on ending cash balance 0.50% 0.50% 0.50% 0.50% 0.50% Year 1 Year 2 Year 3 Year 4 Year 5 Revenue Revenue for gross $4,000,000 $4,400,000 $4,840,000 $5,324,000 $5,856,400 Total cost of the goods sold 468,700 478,074 497,197 527,029 569,191 Gross margin $3,531,300 $3,921,926 $4,342,803 $4,796,971 $5,287,209 Other income [source] $0 $0 $10,000 $0 $0 Income for interest $1,000 $0 $0 $0 $0 Total revenue $3,532,300 $3,921,926 $4,352,803 $4,796,971 $5,287,209 Operating expenses Sales and marketing $40,000 $40,800 $42,432 $44,978 $48,576 Payroll taxes 60,000 $61,200 $63,648 $67,467 $72,864 Reduction 40,000 40,800 41,600 42,400 43,200 Insurance 40,000 $40,800 $42,432 $44,978 $48,576 Maintenance 15,000 15,300 15,600 15,900 16,200 Utilities 30,000 $30,600 $31,824 $33,733 $36,432 Property taxes 15,000 $15,300 $15,912 $16,867 $18,216 managerial fees 18,000 $18,360 $19,094 $20,240 $21,859 Other 4,000 $4,080 $4,243 $4,498 $4,858 Total in service operating cost $262,000 $267,240 $276,786 $291,061 $310,782 Operating income $3,270,300 $3,654,686 $4,076,017 $4,505,910 $4,976,427 Interest expense on the long-term liability 3,590 2,866 2,106 1,308 470 Operating income before other items $3,266,710 $3,651,820 $4,073,912 $4,504,603 $4,975,958 Loss (gain) on transaction of property 0 0 1,000 0 0 Additional unusual expenses (income) 0 0 0 0 0 pay before taxes $3,266,710 $3,651,820 $4,074,912 $4,504,603 $4,975,958 Taxes on income 30% 980,013 1,095,546 1,222,474 1,351,381 1,492,787 7. Conclusion It is concluded that by recognizing a particular target market in the item system, the affiliation will be likewise barring different markets. This offers the organization to comprehend which some assistance with projecting fall outside the item technique and divert from key objectives. Techniques, for example, cost-in addition to estimating and target return evaluating accentuate long haul benefit boost. Generally, the affiliation must set costs in view of the coveted level of benefits it would like to get after some time. The goal for the Bigstore chains media buying is reliant on the aged between 18-35 years to exploit the buying power with a distort toward the programming that employs to bring better to the younger viewers. References Books Boudreax C. and Emerick (2014) The Most Powerful Brand On Earth: How to Transform Teams, Empower Employees, Integrate Partners and Mobilize Customers to Beat the Competition in Digital and Social Media, Prentice Hall De Chernatony, L. (2010) From Brand Vision to Brand Evaluation, Butterworth-Heinemann, Oxford. Hollensen, S. (2011) Global Marketing, 5th Edition, Prentice Hall Keegan, W.J Green, M. (2011) Global Marketing Management, 2nd Edit, Pearson, US McDonald, M, (2011), Marketing Plans: How to Prepare Them, How to Use Them, 7Ed, London, Butterworth-Heinemann Journals Bjelic, P. (2011). Marketing instruments of foreign trade promotion.Marketing, 42(4), pp.268-276. Choon-Gyu Lee, Jong-Jin Kim, and Myung-Hee Jung, (2014). A Study on the Strategy of Japan as an Advanced Country in International Grain Distribution Markets.journalofdistributionscience, 12(5), pp.71-80. Feriozzi, F. (2015). Career Concerns and Product Market Competition.Journal of Economics Management Strategy, p.n/a-n/a. Gasovic, M. (2011). Integrated marketing communications in sport organizations.Marketing, 42(3), pp.171-179. Guo, X., Ling, L. and Gao, Z. (2015). Optimal pricing strategy for hotels when online travel agencies use customer cash backs: A game-theoretic approach.Journal of Revenue and Pricing Management. Karanja, S., SMA, M. and Thuo, J. (2014). The Effect of Marketing Capabilities and Distribution Strategy on Performance of MSP Intermediary Organisations in Nairobi County, Kenya.BMS, 5(1), p.197. Ketenchyev, K. (2014). ADAPTEITION STRATEGY OF GEOGRAPHICAL DISTRIBUTION OF DRAGONFLIES.South of Russia: ecology, development, (1), p.82. Krstic, I. and Becic, S. (2011). Implementation of marketing strategy: Factor of competitive advantage.Marketing, 42(2), pp.118-126. Liu, L. and Dukes, A. (2015). Consumer Search with Limited Product Evaluation.Journal of Economics Management Strategy, p.n/a-n/a. Lueg, R. (2015). PRODUCT CUSTOMIZATION: A CASE STUDY ON CHOOSING THE RIGHT COSTING SYSTEM.International Journal of Business Strategy, 15(2), pp.63-68. Matsumura, T. and Matsushima, N. (2015). Should Firms Employ Personalized Pricing?.Journal of Economics Management Strategy, 24(4), pp.887-903. Rodic, J. and Budimircevic, K. (2011). Marketing research of consumer perception.Marketing, 42(2), pp.127-134. Sskilahti, P. (2015). Buying Decision Coordination and Monopoly Pricing of Network Goods.Journal of Economics Management Strategy, p.n/a-n/a. Sheng, S. and Yang, S. (2014). Distribution Network Planning Based on Multi-Island Group Strategy Genetic Algorithm.AMR, 960-961, pp.964-968. Sheth, J. (2011). The double helix of marketing: The complementary relationship between marketing history and marketing theory.Marketing Theory, 11(4), pp.503-505. Shimokawa, J. (2015). ChemInform Abstract: Divergent Strategy in Natural Product Total Synthesis.ChemInform, 46(5), p.no-no. Stosic, I. (2014). The role of marketing in corporate restructuring in crisis period.Marketing, 45(1), pp.41-49. Su, X., Wolfs, P. and Masoum, M. (2014). Comprehensive optimal photovoltaic inverter control strategy in unbalanced three-phase four-wire low voltage distribution networks.IET Generation, Transmission Distribution, 8(11), pp.1848-1859. Takayama, M. and Takayama, T. (2015). Reframing Product Position Rescues Strategy toward Product-market Shift.Journal of Business and Economics, 6(4), pp.789-798.