WM Morrison Supermarket Plc is the fourth largest chain of supermarkets in the United Kingdom, headquartered in Bradford, West Yorkshire, England. It was founded by William Morrison in 1899. It began as an egg and butter stall in Rawson Market, Bradford, England. Until 2004, Morrisons store locations were primarily focused in the north of England, but with the takeover of Safeway in that year, the company now has 475stores across the UK.The majority of its business is food and grocery – the weekly shop. Morrisons source and process a large range of food items intheir own manufacturing facilities, giving them close control over the source and quality. In addition,they have more people preparing food in store than any other supermarket.
Morrisons stocks thousands of lines which are sold as their “Own Brand” goods:
M Savers: An economy brand which sells items ranging from Food and Drink, to toiletries, etc.
M Kitchen: A range which comprises fresh Sauces, Soups and Ready Meals to cater for many different types of customer.
M Kitchen: Fresh Ideas
M Kitchen: Bistro
M Kitchen: Takeaway
NuMe: A healthy eating range which consists of 315 new chilled, frozen and ambient products.
WM Morrison: A high end range which sells Food and Drink amongst other products at higher prices.
It currently has in its employ over 132,000 staff. Each week over 11milion people in the UK shop at Morrisons. Morrisons offer competitive price and hundreds of special offers each week.
Task 1 (Research):
Our vision is to be ‘Different and Better than Ever’. ‘Different and Better than Ever’ captures the key initiatives that will help reinforce what makes our Company different from others, and to seize the opportunities that will ensure we continue our growth and great results (www.morissons.co.uk)
Morrisons is different because:
they have a closer relationship with the farmers compared to other food retailers. They also have unique manufacturing and packing facilities, that gives them a better insight onhow the food that they sell has been produced. In future they intend to broaden the range of food they make themselves to reinforce this difference;
compared to other food retailers, Morrisons believe more food is prepared every day in their stores as they realise their customers value food that is really fresh.
Morrisons customers like to be serves by food specialists, as a result of this they have in-house craft skills and employ more butchers, bakers and fishmongers than any other supermarket.
Morrisons “difference” means building on these advantages
Morrisons “Better Than Ever”
Being ‘better than ever’ is about improving the way they do business. Morrisons does this putting the customers first and doing more things that matter for their customers which go beyond making great food but which also encompasses good service and efficiency. It also means seizing opportunities to grow the business profitably through new formats, channels and categories, to meet more of their existing customers’ needs and to reach new customers
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A sustainable strategy
Their strategy is to deliver sustainable long term growth, building on their traditional strengths of fresh food, quality, value and service, backed by their unique vertical integration capability, whilst reflecting their customers’ needs and the changes that are taking place in the market.
External factors influencing marketing in Morrison’s
There are a number of external factors that influences marketing across board:
Economical factors such as local council rates, rates of inflation, recession and level of employment has had an impact on Morrisons. However with the economy slowly turning around and stabilizing, growth and expansion becomes easier.
Political regulation is the most important influence on the regulation of any business. Government policies and laws have either good or adverse effects on the supermarkets. Minimum wage and the number of working hours of potential staff have affected the company. Controls on marketing strategies can also hold the company back.
The UK is now a melting pot of different cultures. Supermarkets now have to cater to the pallet of various people. There is an increase in the demand for Indian, Chinese and other foreign food. Most Morrisons stores have a “World Foods” section and their takeaway menu carried dishes such as Chicken Tikka Masala and Spicy Schezwan Chicken.
Morrisons has also taken advantage of the innovations in technology. Online shopping which has seen a boom in recent years is also being invested in by Morrisons. Beside this they also have a YouTube channel and an app for android phones which allows customers be kept up to date with offers and make smart lists.
Marketing to achieve business objectives
The UK grocery market remains in a tough economic climate. Whilst we continue to progress, we recognise the challenges of the marketplace as consumers face financial pressure through government cuts and the recent VAT increase.We keep a regular eye on consumer trends, have programmes where we talk to our customers and also make good use of market data. This allows us to improve our business and deliver the needs of consumers.
‘M’ brand growth
People have been switching to cheaper products from mainstream brands, with supermarkets’ premium own label sales up 2.8%.Consumers are however increasingly cautious as the recession squeezes their finances. Morrisons M brand has more variety catering to the pocket and taste or everyone. We are in a good position to perform well in a recession with a range that offers value for money whilst maintaining choice and quality.
Home cooking and lifestyle trends
Healthy eating is important to consumers. Likewise, we have seen a trend towards more people cooking special meals at home. This trend is growing, thus, Morrisons continue to develop offers to help customers get the most from home cooking, offering fresh quality food at a great value.
Role of marketing in not-for-profit business
Marketing is important for all types of organisations. It is equally as important for non-profit organizations to establish a well-defined marketing program to make people aware of their niche. While most non-profits are not selling products, they are selling their organization’s mission, their ideas, their programs, and their services. In a world where everyone is inundated with information, a strong image is the key to community awareness. Developing and maintaining a visible and credible identity through marketing will increase local support for your organization.
Elements of the marketing process in Morrison’s
The marketing process of Morrison’s deals with all the following elements.
Product selection remains around variety, quality and size of the product. In order to launch new own-brand products, what packaging and labelling information would best entice customers. Morrisons promise of being close to the source of its products and having unique manufacturing and packing facilities ensure only the freshest and best quality food is sold by them.
How much are consumers in a target market willing to pay for a particular product? What kind of price range is needed for that geographic area? Like all the other supermarkets, Morrisons strive to sell its product at competitive prices. Morrisons M Saver products are cheaper compared to other supermarkets value range
In order to achieve a successful advertising campaign, the company needs to know which would be the best media format for reaching the target market.What image should advertising try to create about the company? In a recent turn of events Morrisons is said to be abandoning the use of celebrities in its ads. This will definitely have an impact on their sales, but whether it’s increased sales or not is yet to be seen.
Where would the customer prefer to shop from? Morrisons has a website but not an online store. They are however soon to be launching their online store which is built on their acquisition of Kiddicare and their investment in Fresh Direct. Their competitors such as Tesco and Sainsbury all offer an online outlet. So Morrisons need to step up.Store layout, signs and display formats all influence consumer cognition.
The positioning of Morrison’s in the current market
Morrisons ranks fourth in the supermarket chain. It comes in behind J Sainsbury Plc and controls 12.6% of the market. Sainsbury’s has a market share of 16% with 537 superstores and 335 convenience stores. Sainsbury’s was known to focus on quality rather price but the recession has seen it making its prices more competitive. It has an online business, a strong non-food range and also runs a bank.
Asda Group Ltd is part of the US retail giant Walmart. Its business focus is on hypermarkets and stores in rural areas. Asda specialises in bulk selling at low prices. Asda has a strong non-food range. Its market share is currently 17%.
Tesco, isthe UK’s largest and most successful supermarket chain, it controls animmense31% of the market. Tesco operates 2,500 stores in the UK with a range of shopping formats including Tesco Extra, Tesco Superstore, Tesco Metro, Tesco Homeplus, One Stop and Tesco Express. It cannot expand further in the UK by acquisition due to Competition Commission rules on monopolies. (www.Tesco.com)
How are products distributed at Morrison’s
Morrison’s has built its reputation around a ‘no-frills’ store layout called Market Street. The theme of its stores is based on 20th century street settings in the north of England positioned around the edge of a store, with standard aisles in the middle. Morrisons unique strength is in the preparation of quality fresh food through its market street concept. They hire craft skilled people to fill the positions of butcher, baker and fishmonger.Petrol stations have been increasingly installed. Despite all this Morrisons’ market is limited because Morrisons has no convenience stores
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Pricing at Morrison’s
There is a range of products and prices at Morrisons. About 80% of its revenue comes from the sale of food and groceries, with the remaining 20% coming from petrol.Products include green grocery, fish and meat, bakery items, dairy based products, garden furniture, tools and recipes.Products are sold under both Morrisons own brand label as well as mainstream brands.Food ranges include the basic Morrisons Value, Morrisons Organic, Kids Smart, Food Fusions, Eat Smart, Free From (foods for wheat, gluten or dairy-free diets), and its Premium food range branded “The Best”.Currently Morrisons has a limited range of non-food products (essential clothing DVD’s, CD’s and console games. They are however, in the process of launching a further 500non-food products to complement its food range.Sales of the value range has seen growth of up to 50% in the last year, while sales of the premium range are up by 5%.
Promotions at Morrison’s
In the past Morrisons has used celebrities in its advertising campaign. It was successful and through it Morrisons became well known. This year however, they have decided to change its advertising strategy. They have decided not to use celebrities but to plan their advertising campaign based on their business model. The new campaign shows children visiting farms and butchers and asking questions about the origins ofMorrisons’ fresh food. The advertisement shows school children on a trip to a farm, asking farmers and buyers questions about meat. The children are then seen in-store with a butcher, who explains how Morrisons is different to its main rivals. The advertisements are designed to show the ‘field to fork strategy’.
Explain and evaluate the different elements of segmenting markets
Market segmentation is an important marketing strategy. It ensures the marketing mix is correctly designed to satisfy the demands of the many different groups of customers.
When evaluating the product in the context of segmenting markets different sizes and models of the products should satisfy the various target customer groups. In order to launch new own label products, packaging and labelling information should at best serve consumers and attract them to purchase the product.
Morrison’s should set price of a new product according to the target area. They must know about the local cost of living as well as the price that people are willing to pay for certain labels.
In order to achieve a successful advertising campaign, the company needs to know which would be the best media format for reaching the target in this market. For example, neon sign boards would be ideal to target the younger generation. Conversely, standard newspaper advertising would target the older customer groups.
Morrison’s is not currently offering online shopping. Store layout, signs and display formats all influence consumer cognition. These must all persuade the different customer groups to buy a version of the product they sell.
Impact of technology on marketing activity
Technology has had a great impact on all markets. Online retailing has become increasingly popular with sites life Amazon and eBay. Many retailers are using their websites to educate the consumer on their products and services. More and more people are shopping online as the saving far outweigh shopping in store. With the advent of apps for mobiles this have become even easier. This would significantly change shopping in the future. Amazon has just launched a new grocery section so customers can buy books and food from the same outlet.
Explain how products are distributed
Morrisons has its own distribution chain from ‘field to fork’. They source their products from local farms which are directly transferred to their packing factory which allows the fresh products to be packaged in consumer-attractive packaging. From there it goes to the store via the distribution centre. This 4 level distribution strategy helps Morrisons provide the highest quality products at affordable prices.
Analyse the use of pricing strategies
The aforementioned 4 level distribution strategy allows Morrisons to keep prices low as they cut out any middle-man. They own most of their own farms keeping sourcing costs as low as possible. The ownership of the packing and distribution centre also contributes to the eradication of external costs. These factors give Morrisons the space to keep prices competitive. Morrisons also understand that one third of Morrisons customers have no disposable income left at the end of the month and so it has launched price promotions such as ‘Price Crunch’ to relieve the pressure on household budgets and initiatives such as ‘Morrisons Millions’ to help restore confidence.
Analyse the different methods of researching the market for a new range of ready meals
The Ready Meals in Morrison’s market research report includes:
Analysis of key supply-side and demand trends
Detailed segmentation of international and local products
Historic volumes and values, company and brand market shares
Five year forecasts of market trends and market growth
Robust and transparent market research methodology, conducted in-country
Propose a marketing mix for the ready meals
The UK ready meal market is worth £1 billion a year and is growing at five per cent a year. Ready meals are very popular with most household consists of both parents working and having little time preparing meals from scratch. Ready meals have showed growth in both volume and value terms. Ready meals sales have grown because private label products have become increasingly visible in the major supermarkets. Asda, in particular, launched a range of ready meals under its top-tier private label Extra Special range. Sainsbury’s have also launched a range of ready meals under their ‘Taste the Difference’ brand. According to industry experts, ready meals are generally viewed as a quick option by consumers, with the high-end ready meals being a special treat. Although there has been steady growth in ready meal sales, volume has remained the same because of healthy eating habits.
Complete the marketing mix plan
The marketing plan will be prepared for Morrisons new ‘M’ Kitchen ready meal range.
The product must be developed for both meat and vegetarian consumers. There could possibly be a set of products targeted at people with common allergies. The products would then cater for the majority of the population. For meat products, kosher and halal could be catered for to ensure all consumer groups are able to find a suitable product.
The price of the product will differ according to the specific product. Invariably, vegetarian products would be cheaper than poultry and poultry cheaper than red meat products. Deals could also be adapted according local criteria.
In addition to company focuses the situation of local conditions should govern promotional strategy. This will have a direct impact on sales as customers would be able to purchase what they want from their local store. Local suggestions could prove a useful researching tool to monitor what products are wanted by which customers at what time.
Morrisons must add more stores to its list. Another, solution which could solve the place problem is to offer customers a refund on the petrol from the customer’s postcode to the store. This can be governed by unique barcodes sent to each postcode which can be validated at the till through a postcode checker linked to an application like Google Maps. This would hone in potential customers who wouldn’t normally shop at Morrisons due to distance.
Determine target markets
The target market for the above ready meals is a mainly students and busy individuals. These groups of customers are usually inundated with work to cook meals from scratch. Morrisons can target student dorms and have a heavy presence in the city centres. Morrisons can target universities in induction weeks to promote healthier eating through their ready meals.
Analyse the macro and micro environmental factors influencing market planning
Macro environmental factors
Demography is the study of human populations in terms of size, density, location, age, sex, race, occupation, and other statistics. Morrison’s must consider all these factors. For example, kids cannot eat spicy food; some people will be diabetic or allergic to nuts etc.
The economic environment includes those factors that affect consumer’s purchasing power and spending patterns. The spending power of students would be less than city workers. Thus, meat could be marketed to one group while vegetarian to the other.
The natural environment involves natural resources that are needed as inputs by Morrison’s or which are affected by marketing activities. During the past two decades environmental concerns have steadily grown. However, Morrisons is sourcing products locally so they have overcome this factor.
The political environment includes laws, government agencies, and pressure groups that influence and limit various organizations and individuals in a given society. However, due to the healthy aspect that Morrisons will market these products on, the campaign will be compatible with current and future political trends.
Micro environmental factors
The company itself and the role it plays in the microenvironment is the first micro factor to be considered. Morrisons must ensure that all departments are work in synchronisation to maximise efficiency and quality. It is also important for Morrison’s to promote, sell, and distribute ready meals through suitable advertising. Morrisons must consider other food retailers who might be promoting their products in universities during induction periods.
Morrison’s must consider the customer’s purchasing power to remain realistically competitive. Prices should be set according to local market fluctuations.There should be a selection of meals to choose from so that a large range of consumers are able to benefit.
Every company is challenged with competitors. No single competitive strategy is best for all companies. Morrison’s must monitor the activities and performance of its competitors. Marks & Spencer are a viable competitor in the ready meal market, they are currently in the market, thus, Morrisons must work hard to achieve sufficient penetration.
Explain how factors relevant to the implementation of the plan have been considered
For the success of this marketing plan many factors have been considered. This plan requires a mail campaign and a heavy advertising presence in universities and the city. Customer details can be obtained through promotional stands at the universities and in the city. These customers can then be sent personalised promotional offers depending on dietary information captured at point of contact.
Morrisons has excellent customer service. They maintain a good relationship with their customers not only in store but through their various campaigns such as Lets Grow for schools, their farming programme and their support of various charities. It has a unique and focussed strategy to retain customers through sourcing the best products at affordable prices. Morrisons is predominantly a U.K supermarket and has not branched out on a global scale. This gives it the position to focus on local consumer needs which could facilitate customer acquisition.Morrisons traditional store layout and care for quality is surely attracting customers but its lack of online store is a hindering factor to growth.
Although Morrisons has a great customer focus they must look further than just customer services to entice new customers. Firstly, Morrisons has to conductextensive local market research which will enable it to target certain groups of customers. It should develop and promote a range of products according to that specific piece of market research. For example, in student areas they could market cheap deals and ready meals as this group are more inclined to cheap products. In more affluent areas where there are more families, fresh produce could be target marketed, as families tend to cook more meals.
Morrisons can also develop partnerships with businesses in other industries to offer promotions in conjunction with each other. Morrisons would then have a marketing presence in completely different outlets. This would spread brand awareness and compel customers to benefit from Morrisons.
Morrisons also needs to work on developing and launching its online stores. It is losing revenue by not having a website where people can shop online. If this persists it could means a loss of customers.
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