Evaluating Market Planning and Product Development Strategies

Introduction

The corresponding study essay would be concentrating upon the research and delineation of relevant information through which the analysis and evaluation of certain utilised marketing approaches of a particular business organisation could be performed. To this effect, the selection of the UK based supermarket retailer of ASDA Stores Ltd would be selected. The organisational approaches and strategies currently applied by ASDA to effectively undertake market planning in the context of entering new market horizons as well as the development of new services/ products would be assessed from a critical perspective. Furthermore, the essay would also develop the compilation of a series of different recommendations through which the existing marketing approaches employed by the company under consideration in the essay, could, purportedly, be improved as far as the effectiveness of application could be concerned, potentially benefiting from marketing dissertation help.

Defining aspects of corporate market penetration strategies

Doole and Lowe (2008) have observed that market penetration or entering of previously unutilised markets could be constituted through a host of different strategies. However, the common denominator amongst all of these strategies is the objective of encouraging the growth of sales within the existing or potential customer base within the targeted new market segment. This primarily involves the strategy of focusing on any existing product/service at the current market scenario so that increment of probable market share in the intended market segment could materialise. In terms of the market penetration strategies employed by ASDA to enter into new market segments, both at the domestic and overseas domains, the organisational growth objectives of the company under consideration, become the core constituents for the process of determination of effective strategies.

ASDA market penetration strategic approaches

Ellis-Chadwick, Doherty and Anastasakis (2007) have specified that ASDA generally adopts the strategy of market penetration and development of new market space through the lowering of prices in combination with the preferable strategies of product and service promotions so as to push the sales volumes which the company could have achieved at previous financial years at the intended marketing destinations. The existing customer preferences and orientations regarding the product and service offerings of the UK based retailer under consideration are two significant factors which outline the subsequent strategic approaches applied by ASDA. The research of Graham (2008) has elaborated this from a sequential perspective in terms of outlining the different components of such marketing strategies concerning price modulation by ASDA. These could be acknowledged as offering of various discounts on stated prices, competitive pricing and apparently customer friendly deals. Furthermore, Seyfang (2008) has affirmed that other frequented strategic approaches utilised by ASDA for penetration of new market destinations have been consistent application of promotional campaigns in favour of the brand identity and image of ASDA products/services and the offering of existing products with modified, upgraded and in some cases, in completely new formats and packages so as to achieve intended growth of sales while obtaining market leverage through preventing any overhead costs. The current competitive consumer markets require aggressive marketing strategies which could benefit the existing competitive leverage of any business institution such as ASDA.

Cost leadership perspective

Bentham (2018) has opined that the factor of cost leadership has been essential in defining the strategic methods employed by ASDA for the purpose of market penetration. According to Chakraborty (2018), this involves a correlation between the low price based cost leadership and lowering of cost prices of the offered products and services. However, this factor is extremely variable since any price stability could be contingent upon the existing and dominant purchase parity conditions at the general demographic levels of the targeted customer bases of ASDA. In this context, ASDA primarily utilises, as per the research observations of Michalakeas et al (2015), the method of integration of the product or service brand settings with the basis on which the clarified differentiation of such products or services could be developed. Filimonau and Gherbin (2017) have argued that such an approach could definitely assist ASDA to expand existing customer bases even under conditions where market saturation could affect the sales increment potentials. However, Wang and Gutierrez (2018) have been of the opinion that such strategies could not indefinitely assist ASDA in the process of market penetration when the associated costs could exponentially rise as the targeted markets could reach the points of saturation. The problem could occur with low sales returns for companies such as ASDA and this could prompt the review and change institution in the existing market penetration approaches by the retailer under consideration.

Marketing objectives

Kanakaratne, Bray and Robson (2020) have observed that the primary marketing objective of ASDA has been to provide incrementally qualitative services to the customers at reasonable costs. This involves the efforts of increment of the customer base through betterment of services, addition of greater qualitative and brand valued products and services in the entire range of product and service offerings and the development of distribution channels which could be of greater significance in terms of extending the reach of such products to customers. Thus, it is of greater necessity to ASDA to develop greater control over the cost management and product pricing strategies. According to Fuller (2018), the factor of advanced technology application could be considered to be of vital significance in this context since the application of such technical novelties such as IT assisted marketing campaign and customer profile development processes as well as social media based marketing and sales propagation and positive brand value perception development of ASDA could assist the company in terms of greater benefits obtainment without having to incur additional costs. These could assist in enhancement of customer satisfaction as well especially if such technical means could be employed at the checkouts of the ASDA sales outlets (González, 2017).

Target markets

Newing, Clarke and Clarke (2015) have determined that ASDA is currently targeting every unit of the domestic market of UK and this involves all of the different segments which comprise of the UK society in general. However, Souza-Monteiro and Hooker (2017) have outlined that the majority of the customers of ASDA are women who could be categorised in the 20 to 30 years of age groups. The rationale behind such a majority of customers could be comprehended as that ASDA is mostly a retailer edible product and these women purchase their daily amenities for personal and family based consumption. This particular purchase objective based characteristic is also observable in the second specific customer group of ASDA. This group has been identified by Armstrong et al (2018) as comparatively older male purchasers who also have to select the products offered by ASDA for personal and family based consumption as well. Thus, the diversity of customer groups could be comprehended from such observations and this is an attestation of the considerably extensive marketing campaign range of ASDA which could find resonance amongst customers of diverse age and gender groups.

Market penetration on the basis of growth strategy

Nenycz-Thiel and Romaniuk (2019) have highlighted that penetration of new market segments by ASDA is integral to the application of intensive primary growth strategy of the company. This, in turn, is demonstrative of the ability of the organisation to effectively differentiate the product offerings from market competitors for the purpose of development of cost leadership. According to Bogomolova, Szabo and Kennedy (2017), the marketing strategic instrument which ASDA applies most effectively is the combination of genetic strategy based product differentiation and cost management through competitive pricing of the offered edible products.

Barratt (2016) has opined that the initial period of growth involves the concerted utilisation of growth strategy by ASDA for achievement of success in the domestic markets of UK. The brand recognition and value derived from the success in the domestic products could then be put to utilisation as the bedrock of marketing campaigns to develop access into new and greater lucrative market segments throughout the EU and abroad. This could be comprehended as a cyclic process through which market penetration based success could be utilised by ASDA to further fuel the brand value of the company so as to utilise it as a tool during product and service propagation to new market segments at competitive pricing. Such strategies are oriented towards the realisation of further potential of growth in the incremental consumer markets which ASDA is currently working on to access.

Market development and consolidation

González (2017) has argued that ASDA promotional campaigns are mostly demonstrative of various celebrity endorsement based marketing methods to persuade new customers so that market leadership could be obtained. ASDA invests considerable resources in the research and development as well as marketing of new and improved products so as to continuously expand the product horizon to capture greater market share. In this context, the necessity of market consolidation becomes absolute from the perspective of competitive leverage obtainment. Lombart et al (2018) have researched that this is performed by ASDA through the process of expansion of distribution networks and channels through which various segments of newly accessed markets could be brought into the product propagation process. This process is integral to the expansion of the organisational value chain to support corporate growth of the company.

To this effect, Vallandingham et al (2018) have specified the significance of cost minimisation strategy to maintain additional investments in the existing product and service propositions by the company. Cost minimisation is essential for ASDA since this entails the development of the ability through which new consumer markets could be accessed. From a procedural perspective, the intensive growth management strategies of ASDA could be categorised into 4 different segments such as the development of distribution channels which could be of greater effectiveness, formulation of new market segments through introduction of variations in pricing strategies, development of new dimensions to existing products and extension of marketing campaigns into new market horizons (especially in the Asian and African countries where the corporate footprint of ASDA has so far been not comparable to that of the UK domestic markets).

Bentham (2018) has highlighted two different factors which underscore the efforts of ASDA to expand into new market horizons which could be situated overseas to that of the UK or the EU. These are substantial resource commitment and review of the distribution methods and channels through which the new customer segments could be accessed. The factor of cultural sensitivity towards the ASDA offered edible products by the native populace of certain overseas countries also influence the determination of marketing campaign based strategies of the retailer. This requires ASDA to undertake proper market research to determine the effective knowledge management mechanisms through which culturally sensitive aspects of the marketing campaign could be managed. Barratt (2016) has defined this approach as the development of cultural intelligence which has assisted ASDA to gain effective acceptance in the consumer markets of culturally diversified perspectives. The success factor firmly depends upon the financial, operational and market management based data which could enable any organisation such as the ASDA to formulate effective market entry decisions. However, this requires special attention towards preventing any alienation of existing customers through overt emphasis on the new customer groups.

Product Development Strategy

Bogomolova, Szabo and Kennedy (2017) have emphasised on the product development methods of ASDA to be the fundamental elements of the market expansion strategies of the company with a firm orientation towards achievement of growth objectives. The product development process involves the dual methods of evolving of novel products completely anew and the modifications of existing ones in the current product line. The purpose is to accommodate the changing necessities and preferences of the customers to the most extensive measures as per the capability scenario of the company. The product development strategies are customary measures through which the growth opportunity based limitations could be managed in any saturated market space where the current product lines could not generate any extensive operational profit for ASDA. From a definitive perspective, the targeting of existing customers of ASDA with newly developed products could require comparatively lesser measure of resources and time. The reason is the existing brand recognition exposure to which the existing customers have been consistently associated with. ASDA could leverage the existing and established brand awareness on part of the existing customers to harness their loyalty towards the ASDA brand and this could positively influence purchase decisions of such customers in favour of the retailer.

Product development approaches

Product development mechanisms of ASDA generally utilise three primarily approaches. The initial one could be identified as launching of new products which could be closely associated with the existing product lines. The second one is has been the offering of new products and services which could find effective resonance with the purchase behaviours of identified customers segments. The third strategy could be outlined as modifications and addition of new products and services which could be applied to the existing product lines. This could be contemplated as reinventions of current products to suit the brand value perceptions of the existing customers of ASDA.

Recommendations to improve the marketing effort effectiveness of ASDA

Product based strategies

ASDA could enable the targeted and existing customers to access their preferred products or services at the most affordable prices through renewed emphasis on competitive pricing. In this context, the company would have to maintain an effective marketing and pricing posture in comparison to other retail sector operatives of similar products and services within the UK markets. This is of substantial importance since the majority of the sales based revenue for ASDA gets generated through the UK markets (domestic) and such pricing posture could assist the company further since 16% of the UK domestic retail market belongs to ASDA.

Obtaining valuable opinions and suggestions from the customers in the form of feedback loop implementation is another of the effective strategic options for ASDA which could be utilised for the purpose of increasing customer engagement in the brand category of the company. This could be as well extended to the product launching ceremonies where premier customers could be invited to participate as valued associates to the brand image identity of ASDA. Such strategies could enhance the customer loyalty perspective towards ASDA brand to certain extents.

Pricing based strategies

The pricing strategy would primarily have to be focused on the lowering of prices of products and services to the maximised sustainable extent. The primary competitors in the pricing mechanism based strategic marketing process for ASDA have been Sainsbury and Tesco. Discounts, rebates, special sales offers and specific conditional selling such as providing complementary and concessions based products to premium and long standing customers could be considered the particular strategic tools through which such strategies could be executed.

Promotion based strategies

ASDA has to utilise innovative and adaptive techniques for promoting the products and services offered in the new market segments. Some examples of such techniques could be contemplated as offering the customers 2 offerings for 2 pounds and one for 1.99 pounds. This could reinforce the monetary value based brand assumptions for the customers. Again, making the roll back tags absolutely visible for the visitors at the ASDA stores could be as well utilised for such purposes. Another technique could be utilised in the form of readjustment of the locations of products in the ASDA stores. This could entail placing of reduced price products at the front sections of the stores to capture the attention of the visitors with an immediate effect while they could be entering the store.

Conclusion

It could be observed at the conclusive stage that ASDA marketing strategies have so far been successful in terms of customer loyalty maintenance through competitive pricing strategies and through improvement of different product and service ranges with extensive product diversification elements. Emphasising upon the significance of customer service management is paramount in this hyper competitive market within the UK retail industry. Thus, application of innovative and transformational marketing strategies could service ASDA effectively in terms of retaining and expanding the business potential of the company into new market segments over the coming years.

Continue your exploration of Enhancing Sales Through Strategic Consumer Information with our related content.

Reference List

• Armstrong, G.M., Kotler, P., Harker, M.J. and Brennan, R., 2018. Marketing: an introduction. Pearson UK.
• Barratt, M., 2016. Exploring supply chain relationships and information exchange in UK grocery supply chains: some preliminary findings. In Developments in Logistics and Supply Chain Management (pp. 181-188). Palgrave Macmillan, London.
• Bentham, J., 2018. Business and Economics in the News–Sainsbury's and Asda-the decade's mega-merger. Teaching Business & Economics, 22(3), pp.11-12.
• Bogomolova, S., Szabo, M. and Kennedy, R., 2017. Retailers' and manufacturers' price-promotion decisions: Intuitive or evidence-based?. Journal of Business Research, 76, pp.189-200.
• Chakraborty, R., 2018. Marketing strategy and supply chain relations in grocery retailing (Doctoral dissertation, © Ratula Chakraborty).
• Doole, I. and Lowe, R., 2008. International marketing strategy: analysis, development and implementation. Cengage Learning EMEA.
• Ellis-Chadwick, F., Doherty, N.F. and Anastasakis, L., 2007. E-strategy in the UK retail grocery sector: a resource-based analysis. Managing Service Quality: An International Journal, 17(6), pp.702-727.
• Filimonau, V. and Gherbin, A., 2017. An exploratory study of food waste management practices in the UK grocery retail sector. Journal of cleaner production, 167, pp.1184-1194.
• Fuller, C.B., 2018. 3 RISING CONCENTRATION: THE UK GROCERY. Firms and Markets: Essays in Honour of Basil Yamey, 8, p.63.
• González, X., 2017. Chain heterogeneity and price-setting behavior: evidence from e-grocery retailers. Electronic Commerce Research and Applications, 26, pp.62-72.
• González, X., 2017. Chain heterogeneity and price-setting behavior: evidence from e-grocery retailers. Electronic Commerce Research and Applications, 26, pp.62-72.
• Graham, H., 2008. Marketing strategy and competitive positioning. Pearson Education India.
• Kanakaratne, M.D.S., Bray, J. and Robson, J., 2020. The influence of national culture and industry structure on grocery retail customer loyalty. Journal of Retailing and Consumer Services, 54, p.102013.
• Lombart, C., Labbé-Pinlon, B., Filser, M., Anteblian, B. and Louis, D., 2018. Regional product assortment and merchandising in grocery stores: Strategies and target customer segments. Journal of Retailing and Consumer Services, 42, pp.117-132.
• Michalakeas, D., Clearesta, E., Gomes, F., de Luiz-Garcia, R. and Schoof, W., 2015. ASDA’s fight for market share.
• Nenycz-Thiel, M. and Romaniuk, J., 2019. How far is too far? Investigating purchasing across packaged goods and services categories for retailer branded products. European Journal of Marketing, 53(1), pp.108-120.
• Newing, A., Clarke, G.P. and Clarke, M., 2015. Developing and applying a disaggregated retail location model with extended retail demand estimations. Geographical Analysis, 47(3), pp.219-239.
• Seyfang, G., 2008. Avoiding Asda? Exploring consumer motivations in local organic food networks. Local Environment, 13(3), pp.187-201.
• Souza-Monteiro, D. and Hooker, N., 2017. Comparing UK food retailers corporate social responsibility strategies. British Food Journal, 119(3), pp.658-675.
• Vallandingham, L.R., Yu, Q., Sharma, N., Strandhagen, J.W. and Strandhagen, J.O., 2018. Grocery retail supply chain planning and control: Impact of consumer trends and enabling technologies. IFAC-PapersOnLine, 51(11), pp.612-617.
• Wang, J.P.C. and Gutierrez, A., 2018, October. An In-Store Mobile App for Customer Engagement: Discovering Hedonic and Utilitarian Motivations in UK Grocery Retail. In European, Mediterranean, and Middle Eastern Conference on Information Systems (pp. 225-243). Springer, Cham.