The paper “ Sainsbury’ s External Environment Audit - Political, Economic, Social, Technological, Legal and Environmental Analysis" is an informative example of a case study on marketing. Sainsbury’ s have rich data as regards customers’ behaviour through the Nectar loyalty scheme. They combine this with listening and engaging customers, across a broad range of channels, to create real insight which creates an admirable opportunity to the company. The Live Well for Less campaign launched in 2012 offers a great opportunity to Sainsbury’ s market share expansion. Economic factorsOver the last three years, inflation has increased faster than wages, putting pressure on customers and affecting consumer confidence.
This economic environment presents a big threat to Sainsbury’ s sales growth. An increase in petrol prices to over £ 1.30 per litre changed customer behaviour making delivering profitable sales growth more challenging than ever. This is an economic threat indicating a further decline in food sales volumes. Social factorsSainsbury’ s recognised that more than ever, customers were looking for reasons to celebrate, and they helped them do so at the Royal Wedding, Halloween and Christmas, an opportunity that helped the company to drive market outperformance. More frequent shopping by consumers presents a real opportunity to Sainsbury’ s to press ahead with their convenience growth plans. Technological factorsSainsbury’ s marketing research told them that customers were looking for real value: quality without compromise at good prices, therefore, the research gives the company an opportunity to grow its market share. Investment in the supply chain ensures Sainsbury’ s are frequently the quickest to market on key fresh lines.
This is a marketing opportunity open to the company. Legal factorsIn 2011 City & Guilds formally accredited the high standards of training in their Bakery College and six food colleges offering them a cutting-edge opportunity as regards their staff. Sainsbury’ s marketing research told them that customers were looking for real value: quality without compromise at good prices, therefore, the research gives the company an opportunity to grow its market share. Environmental factorsThe good climate allowed farmers to produce fresh vegetables and potatoes.
This is a great business opportunity to ensure the company delivers fresh, healthy, nutritious food to the table. Sainsbury’ s determined that customers were shopping more frequently and locally to reduce food waste. The company had the opportunity to press ahead with its convenience growth plans. The PESTLE analysis postulates an upsetting impact on the business strategy as well as corporate objectives.
Sainsbury is required to focus on new ways of capturing and controlling a large market share through new initiatives such as the Live Well for Less promotion, which was initiated in 2012. Sainsbury’ s has to offer customers real value: quality with no compromise at good prices. The company has to push further on with their convenience growth plans and take part at the Royal Wedding, Halloween and Christmas, to drive market outperformance.
These strategies are, however, undertaken in a tough economic environment of high inflation and increased petrol prices. Swot Analysis SWOT Matrix Strengths Sainsbury’ s has been in operation for over 140 years. Over this period the company has maintained positive operations performance driven by increasing profits and earnings per share as well as dividend payout. Sainsbury’ s is, therefore, able to attract potential investors and grow its asset base. Sainsbury’ s wide area coverage by over 1,000 stores, including 440 convenience stores and a large employee staff of 150,000 employees offers strength in that the company is able to capture, maintain and serve adequately a big customer base. Weaknesses There is a probable dissatisfaction of customers due to unsatisfactory products value.
This may weaken Sainsbury’ s market penetration as well as the aptitude to increase and maintain a significant market share. From recent company statistics, fuel sales growth is not increasing. This may kill the fuel sales aptitude and hamper the company’ s desire to diversify its operations. Opportunities Sainsbury’ s participation in charity events and developing closer links with farmers enhance its cooperative social responsibility role thus win over customers’ confidence.
Therefore, the company is likely to boost its customer base. Sainsbury’ s upbeat market campaigns, convenience growth plans and investment in the supply chain not only offers a real opportunity to maintain the market share it has at the moment but also opens room for capturing a larger market share by spreading to vast areas. Threats There is reduced consumer confidence and purchasing power propagated by a harsh economic environment as a result of increasing inflation at a higher rate than wage increases and an increase in petrol prices to over £ 1.30 per litre.
Sainsbury’ s is faced by a likely reduction in sales volumes thus decrease in revenues. There is a significant shift toward cooking more meals from scratch. This threatens Sainsbury’ s business strategy as it's market niche is at risk. SWOT matrix is a graphical illustration of the SWOT structure. SWOT is an acronym that stands for Strengths-Weaknesses-Opportunities-Threats. The apparatus is used to analyze the competitive point of Sainsbury’ s. Strengths and weaknesses are internal company factors that they can control whereas opportunities and threats are external factors. These factors are away from the control of Sainsbury’ s.
(Foong; Brassington & Pettitt 2006) Marketing Objectives According to Riley (2012), marketing is at the heart of all business operations; Sainsbury’ s is no exception. Nearly every operational activity or objective can be reversely correlated to marketing. From the SWOT analysis Sainsbury’ s marketing objectives could be focused on: There is reduced consumer confidence and purchasing power propagated by a harsh economic environment as a result of increasing inflation at a higher rate than wage increases and an increase in petrol prices to over £ 1.30 per litre. Sainsbury’ s has to develop measures to endure this recent tough economic environment. In recent times Sainsbury’ s has maintained positive operations performance driven by increasing profits and earnings per share as well as dividend payout.
The company should aim to maintain and improve the positive operations performance. There is a significant shift in cooking more meals from scratch. This threatens Sainsbury’ s business strategy as it is market niche is at risk. The company, therefore, needs to initiate more than 3 new products into the business channel in 2013 and 2014 There is a probable dissatisfaction of customers due to unsatisfactory product value.
This may weaken Sainsbury’ s market penetration as well as the aptitude to increase and maintain a significant market share. The company is supposed to aim to attain at least a 95 per cent outstanding customer service score every month. Marketing Strategies Marketing entirely concerns letting individuals identify the product or service you tender, and win over them to pay money for or make use of it. The marketing strategy is formed on the whole by Sainsbury’ s company objectives. It embraces a description of Sainsbury’ s dealing, an explanation of Sainsbury’ s products or else services, an outline of Sainsbury’ s intended users or clients, along with a definition Sainsbury’ s company's task in connection to the business rivalry.
To put it in a different way, Sainsbury’ s marketing strategy is a review of Sainsbury’ s company's products as well as standing on the subject of competition. Marketing strategies are by and large feted on four Ps: pricing strategies, product strategies, promotional strategies, plus post strategies. Examples of marketing strategies include; networking, advertising and promotions, product design, personal selling and asking for referrals (Dibb et al 2000; Brassington & Pettitt 2006).