关于超市的市场研究报告

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ReportonMorrisons

Introduction

Morrisonsisoneofthecountry’slargestsupermarketchains,offeringarangeofgoodsinexcessof20,000differentlines,includingbothbrandedandownlabelproducts.ItisalsooneofthefastestgrowingretailersintherecentdecadeinUK.Agroupofpeoplewereassumedasaconsultantteamtoanalysisitscurrentbusinessperformanceandstrategythroughobservation.ThisreportprovidesanalysisbyusingproductlifecycleandSWOTforMorrisonscurrentbusinesspositioninginthemarket.Inaddition,furtherdevelopmentrecommendationswillbeprovidedbasedonMarketMixanalysisfromtheperspectivesofproduct,price,promotionandplace.

Methodologyandprojectprocess

Theproperevaluationofcurrentbusinessenvironment,activitiesandcustomerbehavioursrequiresstronglysupportivefrombothqualitativeandquantitativedata,whichwillbecollectedmainlybyconductingtheinductiveresearchinwhichtocollectdataanddeveloptheoryasaresultofdataanalysis(MarkSaunders,2003,pp85).Therearedifferentresearchstrategies,forinstance,experiment,survey,casestudy,groundedtheory,ethnography,actionresearchassoon(MarkSaunders,2003,pp91).

Theauthorwilladoptethnographystudyingasdominatedstrategyforprimarydatacollectionwhichisfirmlyrootedintheinductiveapproach.Anethnographicapproachimpliesintenseresearcherinvolvementintheday-to-dayrunningofanorganization,inorderfortheresearchertobeabletounderstanditfromaninsider’spointofview.(AlanBryman,2003,pp315)Thisdealsinsomedetailwithparticipantobservationandstructuredobservation,theresearchmethodsthatdominatesethnography(MarkSaunders,2003,pp93).Participantobservationisqualitativeandderivesfromtheworkofsocialanthropologyearlierinthetwentiethcentury.Itsemphasisisondiscoveringthemeaningsthatpeopleattachtotheiractions.Bycontrast,structuredobservationisquantitativeandismoreconcernedwiththefrequencyofthoseactions.(MarkSaunders,2003,pp221).Authorinterviewssomeofstaffsformoreinternalinformationaswell.

Secondarydataincludesbothrawdataandpublishedsummarieswhichcouldbebothquantitativeandqualitativeandusedinbothdescriptiveandexplanatoryresearch(MarkSaunders,2003,pp188-189).Threemaintypesofsecondarydataincludingdocumentary,multiplesourceandsurveywillbeadoptedbyauthorthroughorganizationalrecords,Internetandorganisation’ssurveys.

Businessenvironmentanalysis(lifecycle)

Productlifecycleanalysiscouldprovideaclearunderstandingofcurrentbusinesspositionforbothcompaniesandeventhewholeindustry.Inaddition,itcouldalsodirecttheblueprintoffuturedevelopmenttrend.Asitshowsinthefirstcurve,productdemandisthoughttomovethroughfourstages.Whentheproductisfirstintroduced,salesandgrowtharelow.Productdemandthengrowsrapidly,butsalesleveloff,andtheindustryentersamaturityphase(DavidBesanko,DavidDranove,MarkShanley,1998,pp95).Eventually,demanddeclinesasothersuperiorproductsortechnologiessupplantit.

ItissuggestedthatthecurrentpositionofsupermarketindustryinUKhasalreadyenteredthethirdstage–maturitystagebecause:

FewerstrongerplayerssurviveinUKsupermarketindustry,onlyfour:ASDA(Wal-Mart),Tesco,Sainsbury,Morrisons.

(1).AsdawasacquiredbytheUScorporationWal-MartinJune1999.SincebeingacquiredbyWal-Mart,AsdahasbecometheUK’sthirdlargestgroceryretailer,asmeasuredbyreportedturnover(.uk)

(2).InMarch2004,MorrisonscompletedthetakeoverofSafewayandbecamethefourthlargestgroceryretailerintheUK(afterAsda,Sainsbury’s,Tesco,)(

www.morrisons.co.uk

)

Salesleveloffbuttheprofitdecreasesgradually.

ASDAdeclaredtocutpriceonbothfoodandnon-foodproductson04/04/2005().Onlyafteroneday,TESCObegantofightagainstpricewarandclaimedtolaunchbigreductiononitsprice.SainsburyandMorrisonplanedplentyofpromotionalstrategiesaswelltoreactsuchapricewar.Thus,basedonthestableconsumptioninUKprice-cuttingwilldecreaseitsprofitabilityasawhole.

Inordertoachievethefurtherdevelopmentinsupermarketindustry,itwillbeessentialtofindanother“innovationpoint”toinjectnewpowertobothcompaniesandindustry.Asthesecondcurveinchartshowsthatbasedontheinfrastructuresofoldindustry,newlifecyclemayexperienceashorttermofthefirststagefollowedbyrapidincreasingperiod.Theoverallindustriallevelwillgainfurtherimprovementaswell.

Theanalysisofcurrentstrategy

ThecurrentinstructivestrategiesofMorrisonsmainlyreflectedinfiveinterrelatedbutdifferentperspectivesincludingtargetingmarketstrategy,businessstructure,pricestrategy,promotionalstrategyanddevelopmentstrategy.

Targetingmarketstrategy:Onestopfoodretailerratherthanrepertoireshopping

Morrisonstargetsitsbusinessinto“onestop”foodretailerratherthanthestrategyof‘repertoireshopping’whichwasadoptedbyTesocandASDA.Althoughsomewhatover5percentofitsproductrangewasinnon-fooditems,thiswasseenastheoptimumlevelandtheproductsselectedwerethosehomeandleisureitemswhichshopperswouldwanttopickupwiththeirregularfoodshopping(suchasnewspapers,magazines,greetingscards,CDsandDVDs).EvenaftermergerwithSafewaythisstrategyhasbeentakenforwardaswell.(

.uk

)

Businessstructure:verticalintegrationwithfactoryinfrastructure

Thecompanywasuniqueamongthemultiplegroceryretailersinbeingverticallyintegratedthroughtheownershipofsomekeyfoodproductionfacilities.Itowneditsownabattoir,meat-packingplantandthreeproducepack-houses.Freshmeat,dairyproducts,fruitandvegetables—predominantlysoldasMorrisons’ownbrands—weresourcedfromin-housebusinesses.Morrisonssaidthatthesuccessofitsverticalintegrationstrategywasshownintherecognitionitconsistentlyreceivedforthequalityofitsown-labelfood.ThestrategyalsohelpedMorrisonsdevelopdirectrelationshipswiththeprimarysuppliers,includingmanyfarmers.

Pricestrategy:Uniqueprice,lowerpriceandsettingprice

Aclearbusinessstrategyisreflectedinthedeceptivelysimple‘lowpricesmanebestvalue’proposition(AndrewSethandGeoffreyRandall,1999,152).Inaddition,theone-pricepolicyoperatedsince1958wasthefoundationofMorrisons’brandandbusinessmode.Similarly,itwasMorrisons’policynottovarytherangeofproductsinastoreinresponsetolocalcompetitivecircumstances,asopposedtothedemographiccircumstancesofalocality.Moreover,Morrisonsconsideredthatitsetthemarketpricesinfreshfoods,asaresultofthevertically-integratedstructureofitsbusiness.Itmonitoredpricesagainstthoseofitscompetitorsonaweeklybasisacrosscross-sectionsofcategories.Decisionsonwhetherornottofollowpricecutselsewheredependedoncircumstances.Generally,Morrisonspricedgoodsonthebasisthatitsoveralloffergavecustomersgoodvalueformoney

Promotionalprogramme

Morrisonswasseenasa‘valueretailer’.Itcombinedlowbackgroundpricingon-shelf,atlevelscomparablewithmostcompetitors’products,withanextremelystrongpromotionalprogramme.Therewerealwaysover1,000offersin-storeatanyonetimethroughouttheproductrange.CustomerstoldMorrisonsthatitsstrongpromotionalpolicybroughtanexcitementandsenseoftheatretothestores.InMorrisons’view,thecombinationoflowbackgroundpricingandpromotionsbroughtoverallvalue-for-moneyshopping.Inaddition,ThevolumeofgoodsleavingMorrisons’storesunderitsownlabelamountedtosome55percentofthetotalbutMorrisonswasuniqueamongsupermarketsinnotofferingapremiumproductrange.

Developmentstrategy:fromregionaltonationalcompetitor

BeforemergingwithSafeway,Morrisonscouldberegardedasasub-scaleregionalrivalinrelationtothefourmembersofthestrategicgroup(Tesco,Sainsbury,ASDAandSafeway).Morrisonshadpursuedastrategyoforganicexpansionthroughincrementalstoreacquisition,butthiswouldnotallowittoachievenationalscopewithintheforeseeablefuture.Inordertodeveloptonationalcompetitor,MorrisonssuccessfullymergedSafewayin2004andthereafteritcouldachievescaleadvantagesrelatingtoprocurementandnationaladvertisingandsoon.Now,Morrisonshadalreadydemonstrateditscapacitytooperateoutsideitsoriginalheartland,havingopenedstoresintheNorth-East,Wales,theSouth-EastandEastAnglia.

SWOTanalysisforcurrentbusinessperformance

ASWOTanalysisisastructuredapproachtoevaluatingthestrategicpositionofabusinessbyidentifyingitsstrengths,weaknesses,opportunitiesandthreats(DavidJobber,1998,37).ThefuturedevelopmentplanandtacticscouldbeformulatedthereafteraccordingtoSWOTanalysis.

Strength:

Northbasedcustomerandhighermarketshare(15.6%)aftermerging

MorrisonsishighlyregionalwithastrongpresenceintheNorthernEnglandandacrossYorkshireandtheMidlands,butonlymarginalpresenceintheSouthwhereSafewayrepresentsakeypointofentry.However,MorrisonshasthemostofgainfromacquiringSafewayin2004whichdrivesMorrisonsachievingthenationalscalewith15.6%marketshareinUKretailingindustry.HighermarketingshareandstrongNorthernbasedcustomersmakeMorrisonsstrongcompetitivenessinretailingindustry.

Priceandpromotionbasedonintegrationstrategy

Lowerpriceandmuti-promotioanlpoliciesaretwoofthemostsignificantissuestoattractmorecustomers.Becauseoftheintegrationbusinessstructurewithsupplier,Morrisonscouldprovidelowerpricesformostoffoodsandevennon-fooditemsespeciallyonKVI(knownvalueitem)withanextremelystrongpromotionalprogrammerunningforfour-weekperiods.Frequentlyover1,000specialoffershavegaingreatcustomerloyaltyandsatisfactions.

Locationintowncentre:moreconvenient

Convenientisantherun-beatableadvantagesforMorrisonsregardingtoitslocationstrategycomparewithTescoandASDA.Theaverage40,000sqspacesmakesMorrisonspossiblelocatedinthetowncenterwheremaydelivermoreconveniencetocustomers.Inaddition,twohoursfreeparkingpolicyprovidesthesenseofattractivenessandflexibilitytocustomersaswell.

Own-brand,moreoptions

ThecomparativehigherpercentagesofMorrisonsownbrandedfoods(55%)areaadvancedadvantagestogainhighervalueofbrandimaginations().Inaddition,Morrisonsoffersmoreoptionswithsimilarorsamefoods.Forexample,Morrisonshad74productsinitschilledpizzarange,whilstAsda’sofferhadfallentoaround46;Morrisonshadacannedmeatofferingof122products,whilstAsdaofferedabout51;Morrisonsoffered113cannedfruits,againstAsda’s87.

Weakness:

Insufficienteconomyofscaleandscope

ComparewithcompetitorsincludingTesco,SainsburyandADSA,Morrisonssufferslowerlevelofeconomyofscaleandscopeonbothpriceandproductsperspectivesasbefore2004itonlyhasaround120middlesizedshopsinUK.WhileASDA(Wal-Mart),Sainsbury’sandTescohas258,498and779separatelyinthesametimeinUK(www.j-sainsbury.co.uk).AlthoughMorrisonsmergeredSafeway,however,threeofitscompetitorsareallinternationalgiantsinretailingindustry.Wal-Martownsmorethan4000supermarketsallovertheworldwhileSainsburyhas185inUSAandTescofranchiseditsbrandinto10countriesinEuropeand79supermarketsinAsia.

NewentrancetosouthofEngland

AlthoughmergingwithSafewayleadsMorrionstonationalcompetitorinretailingindustry,however,itisstillanewcomertothemarketinsouthofEnglandwhereTesco,SainsburyandASDAhavealreadycapturedmostofmarketshare.ItwillbeverydifficulttobuildupcustomerloyaltyinsouthofEngland.

Insufficientoptions

Morrisonsisafoodretailerratherthanrepertoirewhichcouldprovidemostofcommoditiescustomersneededindailylife.Thus,theinsufficientproductsoptionsmayhavelessattractivenesstothosecustomerswhorequiresnotonlyfoodsbutalsonon-foodissues.Therefore,foodretailerstrategymaylosesomeof“onestopforall”customers.

Opportunities:

On-lineselling

Onlinesellinghasbecomemorepopularthaneverbeforewhichcoversmostofcommoditiesindailylifeexceptfoods.Therefore,thenewtrendofon-linepurchasingfoodsandrelatedproductswillbeanewinnovationpointforretailingindustry.Althoughitneedsthepre-investmentofsettingupon-linesellingsystemandpolicies,thepotentialmarketisstillattractiveforallretailingcompetitors.

Multi-functionalsupermarket

Supermarkethasbeenrecognizedasnotonlyplacestopurchasebutalsotokeeprelaxindifferentways.Thus,thefurtherdevelopmenttrendofsupermarkethasshownthestrongpreferencetomulti-functionalmarketwithvarioussortsofservices.Mottisonshasalreadytriedtointegraterestaurantintoitsstoresothattobringmoreconveniencetocustomers.However,itisfarfromenough.Itwillbemoreattractiveifshopping,amusementoreveneducationalissuescouldbeintegratedtosomeextent.

Diversitydevelopment

Diversificationisanothersignificantdevelopmenttrendofretailingindustrywhichcouldreflectedonnotonlytheperspectiveofincreasingquantityofproductsbutalsotheservicesforms.Forexample,retailingcompaniesnormallyhavethecharacteristicsofhighturnoverrateandprofitratewithhugeamountofsaving.Hence,itwillbepossibletoofferdiversifiedservicessuchasinsuranceservice,orotherformsoffinancialservices.

Threat:

Digestionproblems

AftermergingSafeway,“digestionproblems”isoneofthemostthreatfordevelopment.Thereweremanyoperationaldifferencesinthewaythetwocompanieswereorganisedandthecultureshadlittleincommon.ThetaskofintegrationwasdifficultandtheintroductionsomeweekspriortotakeoverofacompletelynewaccountingsystembythepreviousdirectorsandmanagementofSafewaymadethejobmuchmorecomplicated.

Insufficienttraininghadbeenundertakenandthesystemhadnotbeenthoroughlyprovenpriortoitsintroduction.Anyproblemsintheprocessesofintegrationmaycausepotentialweaknessbothfinanciallyandmanagerially.

Populationinsomelocation(Aberdeen)

ReductionofpopulationandchangeablepopulationstructureinsomeareasinUKwillthreatenthewholeconsumptionsasawholebecauseyouthshowsdifferentpurchasingpreferencescomparingwitholdpeople.Forinstance,Aberdeenpopulationhassufferedrecessionfor10yearssince1994accordingtogovernmentstatisticreportandlocalpeopleover45willbe48.15%until2016asawhole.Thus,thetotalconsumptionofretailingindustryinAberdeenareawillsufferthetrendofdecreaseinthelongrun.

PopulationTrendsinAberdeen

Resourcefrom

.uk

Competitorswithpricewar

ThefiercecompetitionofretailingindustrybringsheavypressureonMorrionsespeciallyjustaftermergingSafeway.SuchamergingcausesfinancialshortagestoMorrionsinsomedegreeswhichstressesMorrisonsalot,inaddition,pricewarderivedfromASDAonthefourthofAprilthisyeargaveastrongstriketoMorrisonsaswell.Moreover,TescoandSainsburyhavereactedsuchpricewarthroughpricecuttingsoon.Thus,itwillcostalotforMorrisonstofightbackinordertokeepingtheircustomersandmarketshare.

Recommendationsonfuturestrategy

AccordingtoSWOTanalysis,thestrategiesforfutureinstructivedevelopmentshouldbemainlyfocusedonmaintainingtheexistadvantages,overcomingcurrentshortagesandcapturingpotentialopportunities.Generallyspeaking,therearefouraspectsincludingkeepingdifferentiationonmarketingpositioning,providingmoreproductoptionswithhigherquality,conductingflexiblepricepolicyandtryingnewwayofselling.

Differentiationonmarketpositioning:Downmarket

Broaddifferentiation,whichseekstobeuniqueintermsofdimensionswidely,valuedbybuyers,andwhichisalsodifferentfromcompetitors(GerryJohnsonandKevanScholes,1998).Itissuggestedthattokeepthedifferentiationonmarketpositioningcouldprovidetheorientationoffuturedevelopmentinalongrun.Forexample,originally,SafewayistargetingatlittleupfrontmarketandWMMorrisonsatdownmarket.Aftermerging,Morrisonsneedstokeepitsdifferentiationonpositioningtodownmarket.

Moreproductswithhigherquality

Itisbelievedthatthecurrentstrategyon“foodretailer”issuitableforMorrisonsandshouldbeconductedwithoutanycompromise.Currently,Morrisonsprovidesmorethan20,000differentproductsandmanyfavouritetopbrandnamesthereisanextensiveitsownlabelrange.However,theextendingofscaleneedstoaccompanywithenlargementofscope.20,000optionsforaretailingjointwith15.6%marketshareisabsolutelyinsufficient.Inaddition,MorrisonsoughttoputmoreeffortonincreasingqualityoftheirproductsaswellasquantityaslowerpricewithhigherqualityisthemissionofMorrisonsasitannounced.

Onepriceonregionalbasedratherthannationalbased

Thecurrentpricestrategyisstablepriceforsameproductinallsupermarketswhichisonlysuitformiddlescaledregionalrival.However,itwillbeverycostlytokeeponepricepolicyinmorethan500supermarketsindifferentUKshiresfromhigherearningstandardsouth(London)tolowerstandardnorth(Aberdeen).Therefore,pricestrategyneedstobemoreflexibleandpricesettingshouldberegionalratherthannationalbased.

On-lineselling,aninnovationpointfornewproductlifecycle

AsexplainedinproductlifecycleandOpportunityanalysis,oldfashionedretailingstylehasleadedindustryenteringthethirdstage,annewinnovationpointneedstobebuildupbasedonexistinfrastructurewithtimelyfashionapproaches.Thus,foodson-linesellingisanappropriatenewblankareawithnofootfallofanyothercompetitors.

Marketingmixanalysisforfuturedevelopment

SWOTanalysisprovidesclearlystrategicpositionofcurrentbusinesswhilefuturestrategiesdirectexplicitorientationofdevelopment.DetailsonhowtoconducttheselateststrategieswillbeillustratedthroughMarketingMix(4P)investigation.

Product:foodandnon-food

Foodproducts:

ToenlargethepercentageofMorrisonsownlabelforhighvaluebrandimagination

Toprovidemoreoptionsonsameorsimilarproductsindeferentpricerangetoattractmorecustomerswithvariouspreference.

Toprovidemoredetailonnutritioncomponentsforeachfoodinordertodeliverthehealthyconceptiontocustomers.

Toprovidemore“Readytoeat”foodsfor“timelyconsuming”customerssuchasworkingpeople,youth.

Non-fooditems:

Toprovidemoresortsofcosmeticsonindividualcosmetickiosks

Toofferdifferentpharmaciesforhealthcaring

Toprovidedailycommoditiesonarrangeofcounters

Place:realplaceandonlinewebsite

Placeinreal:

Morrisons’currentstrategiesforlocationistobuildupsupermarketsintowncentresothattodeliverproductmoreconveniently.ThisstrategyisquitesuccessfulforsmalltomiddlesizedgroceryinthenorthofEnglandwhereMorrisonsbegan.However,furtherdevelopmentinsouthofEnglandneedstoadoptdifferentstrategiesbecause:

(1).Thecostofrentingfeeintowncentreismuchmoreexpensivethanthoseoutsidethetown

(2).Thespacelimitationintowncentresupermarketsrestrictsthenumberofon-shelfproductwhichinfluencesturnoverdirectly

(3).Theconceptionof“onestop”purchasinginlargecityismorewiderwhichrequiredmoreoptionsoncommodities.

Therefore,newsupermarketsinsouthofEnglandshouldbebuiltonthecitysidewithlargefreeparkingspaceinordertoachieveeconomyofscaleandscope.Onthecontrast,expansiononnorthofEnglandandScotlandneedtofocusoncitycentre.

Placeonnet:Website:

Onlinepurchasingpolicyneedstobesupportedbymulti-functionalofficialwebsite.Variouspaymentmethodsshouldbeacceptedsuchas:visacard,mastercardanddebitcard.Inaddition,onlineorderinganddoor-to-doordeliveringserviceshouldbeincludedonthebasisofcertainamountofpurchasing.Furthermore,individualdetailsonlineshouldbesecuredforthesafetyconsideration.

Price:moreflexibleinvariouslocation

Pricepolicyneedstoachievemoreflexibilityinordertoconstrainandreactlocalcompetitionandpricewarasawhole.

Differentiationonpriceshouldbesetupbasedonthevariousregionallivingstandards.Asawhole,priceonsameproductwillbehigherinsouthofEnglandthannorthofEnglandandScotland.

The“lowerthancost”pricesstrategycouldbeconductedonsomeKnowValueItemsinordertobuiltupimaginationsonhigher“pricevalue”.Suchastrategywillattractmorerationalcustomerswhoalwaysseeklowerpricebutwillincreasethebindingpurchasingbehavioursandre-purchasingbehaviourswhichwillcovertheloseon“lowerthancost”products.

Lowerpriceforonlinepurchasingneedstobeofferedtoencourageandchangecustomers’buyingbehaviours.

Promotion:products,serviceandsupplychain

Promotiononproducts:

Toprovidehigherqualityfoodswithoutpriceraising

ToadvertisemoreondifferentmediasinordertoattractmorecustomerssuchasMorrisonsadvertisingmagazine,Morrisonsadvertisingnewspaperand

www.morrisons.co.uk

andsoon.

Tooffermoreapproachesforsalespromotionandloyaltyenhancingsuchasclubcards,vouchersandsoon.

Promotiononservice:

Multi-functionalsupermarketsneedtosatisfydifferentrequirementforvariouscustomers.Forexample,itneedstoprovidesomeplacesforhavingmeals,alsochildrencaringplaceforshoppingparents.

Doortodoordeliveryfordisablesorspecialorderanddonationforcharitywillincreasethecustomerssatisfactionandsocialimaginations.

Informationmapinfrontofmainentrancemayguildtimeconsumingcustomerstowhatevertheyneedsdirectlyandmoreconveniently.

Promotiononsupplychainaftermerging:

TheoriginalSafewaysupplychainneedstobeintegratedintoMorrisonsintegrationbusinessstructuresothattokeepthecostadvantagesonitssupplychainservice.

Forthethirdpartysupplier,morecloseanddirectrelationshipwillenhancethebenefitforbothparties.Thepolicyofdirectdealingswithfarmers,growersandotherproducerswouldbeextendedfollowingamergerwithSafeway.

Conclusion