Applied Strategic Managment

Reed supermarkets: a new wave of competitors
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Appropriate marketing strategy for Reed Supermarkets, if implemented would see the market share increase from 14% in 2010 to the targeted 16% by the year 2014. This is despite the competition posed by the dollar and limited selection stores in the food industry. Meredith Collins is therefore facing the challenge of choosing the most appropriate strategy to implement towards the goal. Reeds Supermarkets’ SWOT analysis.
Strengths
With a 14.00% retailer positioning, it is evident that Reeds Supermarkets reputation is well built upon its recognized brand name. Other stores are less ranked by the retailer, with the closest being Delfina at 9.58%. (See Exhibit 1).
Consumer perception on quality, as indexed on the exhibit, shows a consistence in the positioning at the top rank, making Reeds Supermarkets best of quality relative to the other stores. (See Exhibit 3). Limited selection stores, typically offering a relatively small inventory of private and staple products, are caped at utmost 5% which the Reeds Supermarkets excels better by offering a wide variety. Thus the consumers will prefer a one stop shopping point for all their needs
By 2011, Reeds had maintained its position in food retailers’ market share at 14%. This kind of endorsement from the customers is a proof of the heavy presence in the market, maintaining a first position.
The stores are conveniently located in areas with a promising growth of the consumer’s population. Across the market share, Reed Supermarkets customers are somewhat older and affluent that typical customers in other markets.
Weaknesses
The strongest case against the Reed Supermarkets is the perception that the customers have on pricing of their products. Customers, rank the Reed as the highest priced of all the outlets despite offering high quality products. (See Exhibit 3). This results to the customers, who are usually driven by price, to shop less and look for more friendly outlets. In fact, other reasons rather than price seem to influence less on the choice for the shop. (See Exhibit 5)
The overall market of though attracts only a small portion. Profit margins for the food retailer are quite low. Profitability is mainly dependent on high volume sales and efficiency of operations.
The “Dollar Special” campaign launched in June 2010 is a point of tension in its profit margin. Conceptually, it is meant to battle the high priced perception where it would greatly reduce the price of the same products in their shelves at a very high discount. It was hoped that this would lure the customers and win their loyalty by comparing the prices in other stores in respect to the “Dollar Special”.
Compared to its competitors, the profit margin of between the range of 1.5% and 2.5% is relatively low. Room for error correction is quite small at such low profit margins. Thi...