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Waitrose: Swot Analysis

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Waitrose is operating as a grocery retailer in the UK market. 'Retailing is an activity of enormous economic significance to most developed nations. In Britain, 2.5 million people are employed in retailing, comprising 10.5 percent of all employees (National Statistics, 2001a) [...] In spite of its scale and importance, the retailing industry was not initially at the forefront in embracing the marketing concept. Manufactures of fast-moving consumer goods were playing this part. It is only in the last two decades that many retailers have taken an enlightened and proactive approach towards their management activities. In the competitive environment of the retail industry it has become increasingly important to know all tricks of the trade. Competition has intensified yet Waitrose always opts to play fair and provide quality products. Undifferentiated marketing - Sometimes referred to as mass marketing the firm may decide to aim its resources at the entire market with one particular product. Coca Colas original marketing strategy was based on this form. One product aimed at the mass market in the hope that a sufficient amount of buyers would be attracted; although there are now changes in their product line to cater for growing dietary and caffeine free needs of consumers. Undifferentiated marketing assumes everyone is the same and aims a particular product at everyone. Advantages: easy to plan, doesn't miss anyone. Disadvantages: can be wasteful, ignores segmentation, can lead to disappointing sales. This applies to market coverage strategy whereby a company ignores differences within a market and attempts to appeal to the whole market with a single basic product line and marketing strategy. Undifferentiated marketing relies on mass distribution and mass advertising, aiming to give the product a superior image in the minds of consumers. It is cost effective because there is only one product line to be produced, inventoried, distributed, and advertised. Also the absence of segmented market research lowers the costs of consumer research and product management. ...read more.


Search: the identification of geographical areas that may have potential for new outlets. (market selection) 2. Viability: finding the best sites available within the given areas and forecasting the store turnover that may be derived from these (area analysis) 3. Mirco: examination of all the detailed features of a specific site that are relevant to potential store performance. Retailers have various options as far as the techniques that can be used to evaluate potential locations: 1. Experience: Experience can only be gained through practices and longer learning. The first impression of a possible site will certainly be evaluated through experience or 'gut feel', comparison with other cases. Experience can help imagining the changes that might occur and transform a location's future value. It is not scientific, yet used and certainly cheap. 2. Checklists: Having been developed 40 years ago this method is quite traditional and unspectacular. Each retailer's checklist tends to be different and there is no standard procedure for this method. Factors important to a retailer will be listed and ticked should the location fulfil the demands. Essentially the checklist is the confirmation of certain conditions that are desirable for a retailer to be present. 3. Mapping techniques look at trade area density, competition levels and drive time bands. 4. Geographic information systems provide information relating to a particular location. There are four main systems; ACORN, which classifies residential neighbourhoods, CACI, which provides data on road types and congestion levels, MOSAIC, which classifies residential neighbourhoods, and, 'Shopping Centre Planners' that identify competition in a particular area. 5. The analogue method is based on actual historical sales performances. It would look at other stores with common features, quantify the key features of these stores, and 'extrapolate from these analogue stores to estimate the likely turnover and profitability of a store at the proposed location. 6. Multiple regression analysis suggests that 'there are seven main factors relevant to location decisions: (I) ...read more.


Indeed Waitrose has a good reputation for stocking quality products but this has led to a perception of being quite expensive ("honestly priced"). Waitrose has concentrated on the food and drinks market, choosing not to diversify as much as the big four retailers. Their market share cannot really be improved dramatically unless they build more stores all over the UK. It can be argued that the key to Waitrose's continued success will be expansion of their current markets. Major competitors include Tesco, Sainsbury's and especially Marks and Spencer who also target the upper market. Consumers will generally buy their groceries at the most convenient place with the lowest price, and since the products they buy are identical in every chain they don't mind which shop they buy their goods from. Whereas retail chains competing primarily on price are trying to establish switching cost by the introduction of reward/ loyalty schemes/ cards, Waitrose tries to build up brand loyalty by offering differentiated, high quality products. Although Waitrose has an account card in place it is not advertised very much does not include monetary benefits to the extent others do. Instead the account card will enable customers to receive "Foods Illustrated" or to receive tickets for concerts at reduced prices, which indicate its upmarket target market. They are not renowned for reaching really broad target audiences unlike Tesco for example. Waitrose focuses on in-town stores, offering a wide range of food products and attracting the upper socioeconomic groups. These target audiences can be linked with those associated with John Lewis. Waitrose is undertaking a range of activities to maintain their green image (e.g. Bag For Life, Environmental Report, Fairtrade Bananas). A wide range of social programmes are sponsored. Waitrose actively promotes its commitment to providing British products and offers products through partnerships with farms and dairies. Being part of the John Lewis Partnership means that profits generated are paid back to all employees. The whole partnership proactively operates as environmentally friendly, honest, fair and ethical as possible. ...read more.

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