Waitrose: SWOT Analysis Essay
Waitrose is operating as a grocery retailer in the UK market. ‘Retailing is an activity of enormous economic significance to most developed nations. In Britain, 2. 5 million people are employed in retailing, comprising 10. 5 percent of all employees (National Statistics, 2001a) [… ] In spite of its scale and importance, the retailing industry was not initially at the forefront in embracing the marketing concept. Manufactures of fast-moving consumer goods were playing this part.
It is only in the last two decades that many retailers have taken an enlightened and proactive approach towards their management activities. In the competitive environment of the retail industry it has become increasingly important to know all tricks of the trade. Competition has intensified yet Waitrose always opts to play fair and provide quality products. Undifferentiated marketing – Sometimes referred to as mass marketing the firm may decide to aim its resources at the entire market with one particular product.
Coca Colas original marketing strategy was based on this form. One product aimed at the mass market in the hope that a sufficient amount of buyers would be attracted; although there are now changes in their product line to cater for growing dietary and caffeine free
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This applies to market coverage strategy whereby a company ignores differences within a market and attempts to appeal to the whole market with a single basic product line and marketing strategy. Undifferentiated marketing relies on mass distribution and mass advertising, aiming to give the product a superior image in the minds of consumers. It is cost effective because there is only one product line to be produced, inventoried, distributed, and advertised. Also the absence of segmented market research lowers the costs of consumer research and product management.
Also read AT&T SWOT analysis
See also concentrated marketing differentiated marketing; mass market. Concentrated Marketing: This is where an organisation concentrates its marketing effort on one particular segment. The firm will develop a product that caters for the needs of that particular group. For example Rolls Royce cars aim its vehicles at the premium segment, same as Harrods within the UK. Concentrated marketing is when the message is aimed at just one small market. Advantages: Small firms can concentrate their marketing, allows a specific mix to be developed.
Disadvantages: Ignores other areas of the market, can cause problems in future as may make it more difficult for company to expand. Some companies, particularly smaller companies, identify a comparatively small segment of the market on which to concentrate their marketing effort. By selecting a niche in the market for themselves, they hope to avoid head on competition with larger and more powerful rivals. A classic example of a successful product in a small market is the hand-made Morgan sports car (UK), the demand for which keeps the company’s order books filled.
Rolls Royce, though a much larger company, has been equally successful in catering to a small but affluent segment of the international market. Niche marketing, as concentrated segmentation is sometimes called, is currently very popular. It is no guarantee of a safe haven, however, since mass marketers will only ignore niches as long as they see no way to compete in them profitably and as long as they are not threatened by them. Should an opportunity or a threat be detected, however, the market power of the mass marketer would prove very uncomfortable for the richer. Read also “Waitrose aims and objectives”
Waitrose’s differentiation strategy and its competitive industry were analysed. The selection of the location can be identified as one of the most influential decisions in the life of a store. Various methods are described in order to help identify the most suitable location. Factors influencing the selection of the Waitrose in Kingston are identified. Own brands are important products because they give retailers high level of control of these products and generally have a higher profit margin. The merits and problems of online shopping are explained and it is regarded as too early to evaluate Waitrose’s performance in this segment.
Waitrose retains central control over most aspects of retail marketing to ensure an equal level of quality and service throughout its stores. Most customers will quickly feel comfortable upon entering the store and find what they are looking for. Waitrose wants to create a uniform store image. The benefits of this would be increased brand loyalty when people want to re-live the Waitrose shopping experience and don’t want to compromise buying in another store. Furthermore, this way Waitrose will remain in control of margins and profits.
Whilst it would be good to involve partners at store level, this would reduce control significantly. Local store managers are only in control of a few factors such as human resource management and merchandising. And, on the other hand, the store managers will function to achieve given targets, report to head office and handle changes at site level. It can also be argued that senior management have a higher degree of expertise and experience which could result in synergy effects. This goes especially for the management of the supply chain logistics.
In fact, most orders will reach the Headquarters electronically and would not even need manual input. It makes more sense for the chain to buy its supplies centrally and on behalf of all its branches in order to achieve economies of scale. Marketing Mix: There are many factors that encourage Waitrose to vary its product mix, promotional offers pricing from store to store as place (location) is also very important to Waitrose. . Price: Although Waitrose tries to operate a uniform national price list (all products sold at identical prices) it does admit to some price flexing to keep in line with its competitors.
A variation of prices between stores can be in response to the size of the store, position of a store, regional incomes, and customer preferences, which can all have major affects. To illustrate the picture, a Waitrose store situated in the centre of London may have higher prices compared to a Waitrose store out of town in Surrey. This can be due to the high operating costs of trading within the city centre. Transport costs can also have an affect on prices especially to stores situated in London, as they will now experience the cost of the congestion charge, resulting in an increase in the cost of delivering stock.
Also stores may face higher costs because they are remotely located. Yet stores that have a local monopoly, because no alternative shop is located within reasonable travelling distance, Waitrose may decide to exploit this by setting high prices. On the other hand, fierce competition will see low prices to attract the consumer who would have a choice in this case. Regional incomes and customer preferences can also have an effect on prices as certain areas may have lower incomes so prices of certain products may have to be decreased to meet the wealth of certain areas.
All these factors have to be considered when Waitrose prices it products. Overall prices within Waitrose tend not to vary as most stores are situated in the south of England so incomes and operating costs are fairly similar. Product: Product mix may differ from area to area because of varying consumer tastes. For example, the Canary Wharf store is tailored to meet the needs of its affluent customer base as they offer designer breads, a sushi bar, a wine bar, a steak and oyster bar, and an exclusive wine cellar offering vintage wines.
Product mix may also vary in relation to what Waitrose’s competitors are doing, as Waitrose may feel they have to supply certain products just to keep up to date and in competition with it’s competitors. Additionally, Waitrose’s product mix may vary due to the size of the store and the space allocation of products. Waitrose may choose to supply certain products in certain areas as they are good sellers and so the bigger store the more they may sell. Sales data is a good way of identifying where certain products should be situated between branches and a process of achieving sales data is by the use of electronic data interchange (EDI).
Varying the product mix is part of an efficient consumer response system (ECR). By focusing on the efficiency of the supply system and thereby reducing cost enables Waitrose to offer products tailored to a region. A major advantage of own brands is their extremely short maturity process. Since own brands are commonly exact imitates of branded manufacturer’s products. They benefit from this, by being immediately familiar with the customer. Most popular own brand products are those that show little difference to branded products, so-called inferior goods, where there is little room for differentiation.
Retailers have the advantage of tracking market needs fast and react to the change in social life style (take away, healthy eating, alternatives food, exotic, ethnic foods) that encourage expanding in new own brand categories. ‘The retailers have often been quicker than the major branded producers to respond to consumers tastes, as it tends to be easier and quicker to alter lower volume, private label products specifications than higher volume manufacturer branded products. Ranked List of respondents Preference 2002 Promotion: Promotional offers may differ from store to store for numerous reasons.
Promotional offers may be carried out within certain stores to help grow specific lines which do not sell well, in hope of increasing sales, and matching sales targets of other stores, while encouraging shoppers to increase their spend within the store. Another reason for promotional offers to contrast between stores is so that they can compete against their local competitors offers in aim of keeping and gaining (counter competitor activity). A new store may also have promotional offers running at different times to other stores a means of winning customers, and increasing awareness of the new store.
Different levels of store traffic can also have an effect on promotional offers, as stores with low traffic may carry out promotional offers in an attempt to increase the number of people visiting the store. An alternative motive for the variation in promotional offers between stores can be to stimulate customers switching to own brand products, as certain stores may have low own brand sales. Place (location): Waitrose is located mainly in the south east of the UK with stores only as far north as Newark. The typical Waitrose Store is located in town centres next to other major shopping facilities.
The average Selling Space of a Waitrose Store is under 1500 sq meter, which is fairly small. However newly opened stores tend to be of at least 2000 sq meters and preferably 2500 sq metres. With the introduction of its ‘food & home’ store format, Waitrose has also started to build in out of town locations, however, this account for only a very small share. Waitrose has also been affected by the change in shopping patterns. Changes in opening and closing hours have been a direct result of a change in lifestyles and work practices thereby influencing when people can shop.
Not only is Thursday night now a late night but also Friday, as people are now shopping as close to the weekend as possible. Indeed, Friday is now becoming the most popular day for regular grocery shopping as 19. 6% (TGI data) of adults shop on this day. Also Sunday opening has now become common practice. A year ago Waitrose in Kingston did not open on a Sunday but due to this consumer demand they now open on Sundays whilst also opening earlier and closing later on Thursday, Friday and Saturday nights.