Reed Supermarkets
Reed Supermarkets Case Study
Problem
•
Reed Supermarkets has lost Market Share(From 15% to 14%)
•
Competition from other
supermarkets/ specialized stores is increasing Goal
•
Increase two percent Market Share (from 14% to 16 %)
•
Generate enough profits to keep the
shareholders happy
Problem Analysis
•
Increased Competition o Continuous expansion of dollar stores attracting 47 % of the high-income households to their shops. At the high end, the entry of whole foods market where only reed and Delfina competed earlier. Warehouse outlets attracting prosperous families with large homes that like to buy in bulk at a discount price.
o
o
•
Perception of High Prices o 55% of the consumers in Columbus believe that they can get a better price at other stores
Solutions
1. 2. 3. 4.
Maintain current market segment. Introduce new range of mid-price products. Go for a price war with low-end and dollar stores Launch separate low-end price stores to compete with dollar stores.
Maintain Current Market Segment
•
Strategy o o
Stop all dollar promotions as it effects the brand image of Reeds. Continue providing better customer experience.
•
Advantages o o
Reed’s can maintain its current brand equity.
Higher price will help in maintaining the perception of a high quality index.
•
Disadvantages o Unable to tap the mid-price and growing low-price market segment.
Introduce new range of mid-price products.
•
Strategy o Create a new range of products that are priced in between high range and low range.
•
Advantages o o
This strategy will help in targeting the mid-range customers.
Increase the customer base by targeting the dissatisfied customers of galaxy.
•
Disadvantages o Brand value will be mildly diluted.
Go for a price war with low-end and dollar stores
•
Strategy o o o
Increase the number of Dollar specials in the Reed stores. Increase the
Problem
•
Reed Supermarkets has lost Market Share(From 15% to 14%)
•
Competition from other
supermarkets/ specialized stores is increasing Goal
•
Increase two percent Market Share (from 14% to 16 %)
•
Generate enough profits to keep the
shareholders happy
Problem Analysis
•
Increased Competition o Continuous expansion of dollar stores attracting 47 % of the high-income households to their shops. At the high end, the entry of whole foods market where only reed and Delfina competed earlier. Warehouse outlets attracting prosperous families with large homes that like to buy in bulk at a discount price.
o
o
•
Perception of High Prices o 55% of the consumers in Columbus believe that they can get a better price at other stores
Solutions
1. 2. 3. 4.
Maintain current market segment. Introduce new range of mid-price products. Go for a price war with low-end and dollar stores Launch separate low-end price stores to compete with dollar stores.
Maintain Current Market Segment
•
Strategy o o
Stop all dollar promotions as it effects the brand image of Reeds. Continue providing better customer experience.
•
Advantages o o
Reed’s can maintain its current brand equity.
Higher price will help in maintaining the perception of a high quality index.
•
Disadvantages o Unable to tap the mid-price and growing low-price market segment.
Introduce new range of mid-price products.
•
Strategy o Create a new range of products that are priced in between high range and low range.
•
Advantages o o
This strategy will help in targeting the mid-range customers.
Increase the customer base by targeting the dissatisfied customers of galaxy.
•
Disadvantages o Brand value will be mildly diluted.
Go for a price war with low-end and dollar stores
•
Strategy o o o
Increase the number of Dollar specials in the Reed stores. Increase the