UK grocery market

UK grocery trade co-operative Foods mart Segmentation and shop locatingGrocery grocery store OverviewMarket StructureThe henhouseerative GroupThe Co-operative FoodsSegmentationMarket SegmentationConsumer Market SegmentationTarget selling batting cages Target Market dirt inhabituMarketing Mix (4Ps)cooperatives Brand Positioning henhouses Brand Strategy44445556666778910Executive SummaryThe cooperative meeting is in UK mart for over 150 years and operates across the food, travel, funeral, pharmacy and banking and damages vault of heavens. It has 4.5 million members and more or less 5,300 retail outlets.This report provides an analysis and evaluation of the system take by hencoop in give to cigargontte the consumers and mart. It also explores the trademark positioning of Co-Op in the grocery retail trade in accordance with the consumer demands.In order to do this analysis food mart place partitioning framework is used to separate the target market into groups and b y belongings the Co-Ops good and fairtrade principles in mind. Brand positioning strategies adopted by the Co-Op food were identified by using the marketing liquefy framework (4Ps).It is found that Co-Op is having discriminating pressure from its rival Tesco and Sainsburys who ar growing rapidly into the thingmajig retailing. Although Co-Ops profits ar gone up as compargond to new years provided there is still inhabit for improvement.1.0 Grocery Market Overview1.1 Market StructureThe UK grocery market is mainly dominated by the big intravenous feedings who have acquired almost 64% of the market share and of which Tesco is holding the 30% of the market share (Mintel 2009) and it also shows the oligopolistic spirit of the market. The grocery market players have divided their customers into two groups primary shoppers and top-up shoppers , and correspond to Mintel (2009) the primary shopping is dominated by big fours (Tesco, Sainsburys, Asda and Morrisons) plus Waitrose w ho are sharing 80% of the market share.The UK is through its worst ever recessional which has also affected the grocery retailers and lead to change their strategies. According to restorative (2009) the hard discount dodging was adopted by most retailers in last two years which was quite successful. Another strategy adopted by the supermarket retailers is to diversify their chains in rural areas in manakin of convenience stores in order to targets hoi polloi who have a slim access to supermarkets (Mintel 2009).1.2 The Co-Operative GroupThis is UK base co-operative established in 1863 and it is quite modify organization which mainly operates through its two divisions trading and financial services. The Co-Operative group is well cognise for its ethical nature and fair trade principles which reflects at bottom its organisation and contraryiates it from its competitors.The Co-operative Group operates across the food, travel, funeral, pharmacy and banking and insurance sector s. It has 4.5 million members and around 5,300 retail outlets1.3 The Co-Operative FoodsThe Co-OP food operated in UK through its 2223 food stores which squirt be found in two formats convenience stores and small/ intermediate sized supermarkets (Data monitor 2008) The Co-Op food lies on the 5th bottom in grocery retail market with 8% shares, thanks to its fusion with Somerfield in July 2008 (Mintel 2008). The Co-Op used to be the UKs largest grocery retailer in 1960s and through Somerfield acquisition it will be able discover this position again in neighbourhood market.According to the Telegraph (2009) shit Marks, chief executive of the Co-op said thatthe move from the big four UK retailers Tesco, Asda, Sainsburysand Morrisons- to a big five including the Co-op will further get on competition for UK consumers.The Co-Op targets its consumers through its ethical and fare trade set out which is the main emphasis of the Co-Op group as verbalize above. The recognize strategy adopted by Co-Op is be topical anesthetic be local but in recent years they are having intense competition from Tesco and Sainsburys who are extended their business in convenience sector and grow rapidly.2.0 SegmentationAccording to Jobber (2004) the ways in which individuals and organisations with like char dallyeristics were put together that have signifi stopt implications for the determination of market strategy is called market segmentation.2.1 Market SegmentationEach buyer can act as a potential separate market due to its peculiar demands and needs (Kotler 2005). It depends on companies to either follow this approach or not, companies can practise no segmentation (mass marketing), complete segmentation (micromarketing) or nearlything in between (niche marketing) according to Kotler (2005)The Co-Op food is following the micromarketing approach instead mass marketing which has its own drawbacks. Kotler (2005) says that the micromarketing is a way of tailoring products to equip individuals according to their taste and needs. by means of these criteria (Co-Op) it is targeting the local market by keeping them in snug locations and addressing the key ethical issues. Although with the merger with Somerfield in July 2008 (Mintel 2008) they got almost medium sized super market in their camp but the main focus is still the c-store format.2.2 Consumer Market Segmentation As Kotler (2005) stated that there is no single way to segment a consumer market. A marketer has to try different segmentation variable either whole or in combinations. These segments can be divided into four groups* behavioral Segmentation* Psychographic Segmentation* Geographic Segmentation* Demographic SegmentationThe Co-Op is mainly targeting the behavioural and psychographic consumer segments. Through psychographic approach it is targeting the consumer on the basis of their companionable class, lifestyle as well as their personality through its ethical and thoroughgoing food prod ucts. On the other hand through behavioural segmentation it is targeting peoples loyalty, their usage rate and attitude towards its product site.3.0 Target MarketingChoosing a specific segment to serve in a market is called target marketing (Jobber 2004), also firms need to segment the market and target that segment in order to work effectively.3.1 Co-Ops Target MarketThe segmentation strategy is been adopted by the Co-Op Food in order to remain competitive in the market.The Co-Ops target market is given on a lower floor* Neighbourhood market* Ethical market* Fair trade market* Top-up shoppersThese above mentioned areas are the key segments targeted by the Co-Op, as it mainly operates in c-store format and it emphasis on providing fresh food products by targeting the local market and by keeping its ethical dilemma and fairtrade principles in mind. at that place is another important segment it targets is top-up shopping market, through this area Co-Op gets the opportunity to gain c ustomer and introduce them to their ethical principles.4.0 Brand Positioning4.1 Marketing Mix (4Ps)The marketing mix model which is also known as 4Ps is used as a tool by marketer in order to implement the market strategy. The 4Ps are* Product* monetary value* stake* PromotionProduct Co-Ops product offering is pretty simple, it has fairtrade products, thorough products and also simply range which targets almost all segments of the market on the basis of quality and ethics.According to Mintel (2009) the most of the supermarkets have the good-better- outstrip product range but Co-Op is so far concentrating on the better and best product range. Few of the key brand product offered by Co-Op are mentioned in table2.Price At Co-Op the bell is a big issue at Co-Op which can be judge at a convenience store but its their ethical stance which keeps the prices high up too. But in order to remain competitive Co-Op offers range of discounted products and through its loyalty cards it gives an opportunity to get points against spending which can be used for further shopping at store.Place This is the most important part of the strategy adopted by Co-Op through locating its stores at convenient and accessible places. As describe by Mintel (2009) the first criteria by C-store shopper is the location rather than price. Due to its convenient placement of stores Co-Op provides child friendly and time friendly purlieu right in the marrow of community for its customers who find out of town shopping time consuming and stressful.Promotion The current slogan by Co-Op is Good with food. Other initiatives include the Green dot scheme, high spot healthy products. Mainly Co-Op promote its brands through local piano tuner and TV and also by donating in local community projects4.2 Co-Ops brand positioningAccording to Mintel (2009) the key rule followed by the Co-Op is get into the market with bigger brand prospective which weve seen by the acquisition of Somerfield. Through th is merger, Co-Ops gone bigger but still theyve opted to remain in the heart of local community by acting as local convenience store. And this message is conveyed by the Somerfields brand message Britains favourite local grocer.4.3 Co-Ops Brand StrategyThe Co-operative Group has adopted strong brand strategy in order to sustain the market shares. As stated by Mintel (2009) its brands lie on the basis of* ethical credentials* environmental issues* local sourcing* Fairtrade.This is underlined by Mintels consumer research, with the Co-ops customers the most likely to buy locally sourced and Fairtrade items.In order to set out a responsible retailer Co-Op launched it Ethical Food policy which resulted because of good response from its 250,000 members. As result Co-op switched all of its reward meat products with RSPCA Freedom-food label (Mintel 2008). Simply value brand is also a replacement for every range and actually it is a Somerfield brand5.0 coatingAlthough Co-Op operates throu gh its large number of small stores by targeting different location and consumer groups but the average foot fall in some of stores is relatively less (Mintel 2008). As it is facing intense pressure from supermarkets in order keep the prices at a competitive level which is quite difficult as it is operating on such a large scale and operating cost are high.The main problem is that Co-Op is not seen as a shopping destination for majority of consumers and they serve it is as top-up store which nearby and available most of the time. A recent study by Mintel shows that only a significant percentage of people take ethical issues seriously while they shop. For them fairtrade and organic food are just another premium line on the shelf and the price factor restrict them from buying.Mintel (2009) shows an improvement in fairtrade sale but it seems organic products are struggling to keep up sales target during recession.It is outdoors that Co-Op is facing intense pressure from its rivals bu t it has improved a lot through merger and rebranding strategy. Its profits are record high as compared to last 10 years. More and more people are getting awareness of ethical approach adopted by Co-Op and it shows the significance of Co-operative food in the intense market environment.6.0 References* Data supervise (2008), Company Profile Co-operative Group Limited, June 2008, London Data Monitor.* Jobber, D. (2004), Principles and practice of marketing, quaternate Edition, Berkshire McGraw-Hill Education.* Hall, J. (2008), Co-op swoops on Somerfield in 1.56bn deal, Telegraph.co.uk, 16th July.* Kotler, C. (2005), Principles of marketing, 5th Edition, Essex Pearson Education Ltd.* pop (2009), Market review Food Catering, Jan 2009, 19th Edition, Keynote Publishing Ltd* Mintel (2008), Mintel market report- Food retailing, November 2008, London Mintel.* Mintel (2009), Mintel market report- Convenience retailing, September 2009, London Mintel.* Mintel (2009), Mintel market report- Food retailing, November 2009, London Mintel.http//academic.mintel.com/sinatra/oxygen_academic/search_results/show/display/id=395621/display/id=496165/display/id=496171atom2 accessed 10/12/09* Mintel (2009), Mintel market report- Food retailing, November 2009, London Mintel.http//academic.mintel.com/sinatra/oxygen_academic//display/id=395621/display/id=496166 accessed 05/12/2009