Product: This is the service or product offered to the consumer. The service/product is assessed to see if it meets the wants and needs of the target market. The target market is defined through different characteristics, some of these are:
- Quality
- Service
- Brand
- Packaging
Price: Here we need to think about how much consumers are willing to pay for a product. A pricing strategy must be decided on to ensure sales are made and also that the business makes a profit. Some pricing strategies are:
- Premium Pricing
- Penetration Pricing
- Cost Plus Pricing
- Skimming Pricing
- Competitive Pricing
Place: This is mainly focused on location, location is important in ensuring the success of a business as if a business is located where its services are not needed there will be less chance of profit and success. Some things you may need to consider when locating you business may be:
- Target Market
- Main distribution Centre
- Company Warehouse
Promotion: This focuses on informing target groups about the organisation or product. This involves things such as:
- Advertising
- Selling
- Sales promotions
- Sponsorship
The table below shows the comparisons between Sainsbury’s and Netto and how they apply the Marketing Mix.
The underlying goals of marketing also known as the principles of marketing are to:
- Understand customer needs and trends.
- Keep ahead of the competition
- Communicate effectively and regularly with consumers
- Utilise where possible, new technology.
The tool used to achieve the principles of marketing is the Marketing Mix, also known as the 4 P’s; Product, Price, Place and Promotion. The effectiveness of the use of the marketing mix will be shown in the success of the organisation. The two businesses I chose to monitor the principles of are Sainsbury’s and Netto. I will also asses how well these principles are achieved. The Marketing concept focuses on the customer ensuring all the needs of the customer are put first as the customers are the most important part of all decisions made in a business.
Understand customer needs and trends
I think Netto understand the needs and trends of their customers but it does not appeal to a wide range of customers. Although Netto do succeed in understanding the needs of their target market by providing low cost products for a market with a low income. So Netto do succeed in reaching out to its target market but Sainsbury’s has gone further in understanding the needs of customers by aiming products of high and low cost to appeal to a wide market of customers as well as a wide variety of products which are regularly updated. Also Sainsbury’s has better service as they offer friendly customer service and provide customers with as much help as they wish whereas Netto do not have this high level of service to customers they offer a very basic service. Also Sainsbury’s offer good parking facilities for customers where Netto rarely have parking facilities at all and when they do they are not of the same high standards as Sainsbury’s.
Keep ahead of the competition
Netto aims to keep ahead of competitors through price which does have an impact on the success of Netto as if is known for its low prices. Sainsbury’s keep ahead of the competition through the quality and service they provide. This shows me that both the organisations succeed in keeping ahead of the competition as they are both successful organisations which aim to satisfy different desires.
Communicate effectively and regularly with consumers
Though both these organisations communicate with customers Sainsbury’s seem to have being more successful at communicating with consumers. They do this in many ways, many of there are through advertising; billboards, television advertisements, leaflets and other promotional methods are all a form of communication with customers, also the online website is another form of communication with customers are is regularly updated which keeps an interest in the business and keeps customers up to date with what is going on in the business. There is also face to face communication in store, Sainsbury’s have a higher level of employee customer relations which makes the business operate more effectively as customers are more satisfied with the level of care they are getting. This good customer service is part of what makes the organisation so successful. Where as Netto don’t have the same high levels of communication with customers which means that though Netto is a successful organisation it is not as successful as Sainsbury’s. Netto use advertising also as a form of communicating but they do not use as many different forms of advertising, Netto mainly use leaflets and their online website as a form of communication with customers though they are starting to use television too.
Utilise where possible, new technology
Netto haven’t yet taken full advantage of the use of technology, their online website is very basic and only shows promotional offers, it is not yet a place where customers can order online. Where as Sainsbury’s have taken full advantage of the technology available and made it possible for customers to order online and have products delivered to their homes. Also Sainsbury’s have self service checkouts meaning more staff are available to work around store where as in Netto there are very few staff available in store to help customers.
Overall I have found that Sainsbury’s is more marketing orientated and that the customer is indeed put at the centre of the business, which shows in the success of the business, whereas Netto focus more on the business rather than customers. Sainsbury’s is stronger at making customers feel more appreciated and taken care of through good customer service and also the manner in which their staff present themselves. Netto don’t focus on customer service, staff are not as friendly and eager to help and can occasionally be difficult to find for assistance. Also Sainsbury’s make a customer feel if they are not satisfied with a product or if there is something wrong they have the opportunity to come in store and discuss their issues but Netto does not present this image of customer care.
I believe Netto could improve on how they apply the principles of marketing to the way they run their business. When it comes to understanding customer needs and trends Netto have being a success as they have identified that there is a market of people with low incomes that need a less expensive place to shop than those who have a higher income level but this market of customers could be widened if they were to provide a wider range of products for a wider target audience. Also Netto could improve if they offered better parking facilities for customers, disabled customers for example need close access to the building so providing spaces for disables customers could be beneficial for the business.
When it comes to keeping ahead of the competition Netto have been a great success as their prices are low, this can be maintained by ensuring to monitor their competitors.
Netto could become more successful by communicating with customers better. This could be done by extending the forms of advertisement that Netto provide to the public. Also continuously updating the online website regularly could also improve communication as they are more aware of what is going on in the business. Also something that could have a big impact on the success of the business could be the customer service, the service and manner in which customers are managed could be the difference between loosing and gaining customers, so if Netto were to improve the way their staff present themselves and the level of care they give to customers Netto could become more successful.
Netto could improve their business by improving their use of technology. Making their online website a place that customers can order from and have home delivery may raise the level of business the company get. Another way they could take advantage of technology could be to add self service checkouts; this way there will be more staff available to assist customers around the store.
