Reed Supermarkets
Reed Supermarkets: A New Wave of Competitors
*Exhibits discussed in the following report refer to the exhibits in the Reed Supermarkets Case Study.
Question #1: After careful deliberation and analysis of the Reed Supermarkets case, the marketing team has concluded that Mr. Jack Morrissey’s goal of attaining a market sales share of 16% as being achievable. It is important to note that market sales share is calculated in terms of dollar sales (revenue) generated as opposed to the quantity (amount) of items sold, with respect to the entire market. Reed currently has a market sales share of 14% in Columbus with 25 stores in the surrounding area. Ultimately, the team has elected to attain the additional 2% of market sales share by focusing on top line growth measures. Mr. Morrissey has advised the group that there will be no new capital expenditures for the upcoming two fiscal years and for that reason the marketing team has devised a plan that will convey the value of Reed Supermarkets to its respective consumers through a series of small adjustments in marketing and product offerings. This will translate to more customer traffic and thus, more sales. The demographics in Columbus, Ohio are strong from the perspective of a business. Population growth is at a rate of 11%, which is above the national rate of 9%. Unemployment is at a rate of 8.5%, which is below the national rate of 9.8% and finally the median income of Columbus is right around $52,000. While this encouraging data demonstrates that the demand is there, it will not be enough on its own to meet our goal for the 2011 fiscal year. The problem that must be addressed is that the typical Reed shopper has a median income “12% higher than the area household average.” While Reed has branded itself as being a high quality supermarket, it is losing too many customers with its high prices. A survey of 250 Columbus non-customers (Exhibit 5) cited that the most important reason for not shopping at
*Exhibits discussed in the following report refer to the exhibits in the Reed Supermarkets Case Study.
Question #1: After careful deliberation and analysis of the Reed Supermarkets case, the marketing team has concluded that Mr. Jack Morrissey’s goal of attaining a market sales share of 16% as being achievable. It is important to note that market sales share is calculated in terms of dollar sales (revenue) generated as opposed to the quantity (amount) of items sold, with respect to the entire market. Reed currently has a market sales share of 14% in Columbus with 25 stores in the surrounding area. Ultimately, the team has elected to attain the additional 2% of market sales share by focusing on top line growth measures. Mr. Morrissey has advised the group that there will be no new capital expenditures for the upcoming two fiscal years and for that reason the marketing team has devised a plan that will convey the value of Reed Supermarkets to its respective consumers through a series of small adjustments in marketing and product offerings. This will translate to more customer traffic and thus, more sales. The demographics in Columbus, Ohio are strong from the perspective of a business. Population growth is at a rate of 11%, which is above the national rate of 9%. Unemployment is at a rate of 8.5%, which is below the national rate of 9.8% and finally the median income of Columbus is right around $52,000. While this encouraging data demonstrates that the demand is there, it will not be enough on its own to meet our goal for the 2011 fiscal year. The problem that must be addressed is that the typical Reed shopper has a median income “12% higher than the area household average.” While Reed has branded itself as being a high quality supermarket, it is losing too many customers with its high prices. A survey of 250 Columbus non-customers (Exhibit 5) cited that the most important reason for not shopping at