Reed Supermarkets

Topics: Marketing, Brand, Brand equity Pages: 6 (563 words) Published: June 17, 2013
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 number of products that are offered at Dollar value. Maintain pricing equivalent or lower compared to Dollar stores.



Advantages
o o

Ability to tap the increasing low – price market segment. High probability of increasing the market share by at least 2%.



Disadvantages
o

The high end Brand image of Reeds will be lost.

Launch separate low-end price stores to compete with dollar stores •
Strategy
o

Launch a new range of express stores exclusively to compete with low end Dollar stores. Keep the cost low by providing minimal service and minimal staff.

o



Advantages
o
o o

The original Reed store can maintain its high end brand image. Ability to tap the increasing low – price market segment. High probability of increasing the market share by at least 2%.



Disadvantages
o
o

High investment is required to open new stores.
New marketing strategy is required to market such express stores.

Recommendation
Maintain Current Market Segment

Course of Action:

1. 2. 3. 4. 5.

Maintain current brand positioning by serving to high end customers with good and specialized quality of products Stop all Dollar promotions as it spoils the brand value Continue providing better customer experience by providing attentive staff, faster check out times and opening stores for longer hours. Continue providing clean and better lit layouts. Promote marketing of new organic foods and prepared foods through online, print and TV channels.

6.

Promote the message that healthy food adds to better quality of life and no compromise should be made on anyone’s health esp. for older affluent population.

Thank You

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