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Grocery Stores and Their Strategies

Consumer Target Strategy of Grocery Stores

This past week I visited three stores in the greater portland area that specifically target consumers who need groceries. These three stores were Market Basket in Biddeford, Sam’s Club in Scarborough and Shaw’s in Scarborough.

The first store I visited was Market Basket in Biddeford. Market Basket is a grocery chain that sells name brand products as well as its own Market Basket brand items such as bagels and bread. The company is centered in the New England region and has roughly 75 supermarkets. This centralized approach leads to lower overhead and ultimately allows Market Basket to offer lower prices than other supermarket chains. In turn they are targeting every day consumers who are looking for good prices. The Biddeford location also houses a cafe area where consumers can also buy drinks, sandwiches and other items to be enjoyed at the store. This approach of creating a quick but also healthy cafe as opposed to just the typical “ready to go meals” of other grocery stores differentiates Market Basket from it’s competitors.

Market Basket exhibits the 4 P’s in a few different ways. As far as product’s go the store is quite large enabling them to offer a large variety of items. They’re cafe provides another incentive to shop their over a competitor’s store. They’re price is far less than other competitors creating an environment for repeat shoppers to occur more often as they won’t be dependant on weekly sales to come back. They’re in a great place for their business model as well. Being centralized entirely in New England allows Market Basket to manage overhead well in all their stores. Promotion is done mainly within local paper’s that have an attached flyer of the weekly sales offerings. As a grocery store they are targeting local customers making this promotional approach perfect for their business model.

The second store I visited was Shaw’s in Scarborough. This supermarket has over 100 stores within the New England region. Unlike Market Basket the prices often appear higher than other supermarkets within the area. Shaw’s makes up for this however with offering larger sales within their weekly flyers. In turn Shaw’s appears to be targeting to different groups of customers who will be attracted to stop by depending on what items are featured within their weekly flyers as opposed to building up a large repeat customer base. Shaw’s also offers a pharmacy within their stores, something Market Basket does not have. Although they do offer this pharmacy service they do not offer a cafe instead going only with a “ready to go meals” approach.

Shaw’s exhibits the 4 P’s a little differently from that of Market Basket. They offer a little less product variety within their storefront due to the size difference between the specific stores I visited. As far as price goes Shaw’s is typically more expensive than that of Market Basket depending more heavily on weekly flyer sales to get customers in the door. Like Market Basket Shaw’s is also in a great place for their business model. Being centralized entirely in New England allows Shaw’s to manage overhead well in all their stores. Shaw’s also promotes in the same way as Market Basket by handing out weekly flyers within local newspapers.

The third store I visited was Sam’s Club. Sam’s Club is a wholesale club in which shoppers need a membership card in order to shop their. Unlike both Market Basket and Shaw’s it offers a wide array of goods and services other than food such as a pharmacy, cafe, gas station, tire warehouse, mechanic, eye care as well as a vast array of products from tv’s to books. The store is a national chain making it very different from the New England centered stores I visited prior to this. The store’s food focuses more on quantity so shopper’s buying food their typically either don’t mind buying more than one night’s worth of food or own a business in which large quantities of items are needed. Like Market Basket and Shaw’s they do still offer their own set of product’s known as “member’s mark” products. The store is quite large as it houses many items and appears more like a warehouse than a typical supermarket would.

Sam’s Club has 4 P’s that differ greatly from that of Market Basket and Shaw’s. They offer a lot of different products but not as much variation within them. They also offer services such as mechanic work that the other two stores I visited didn’t offer. The price is typically a lot better than other stores but you also more often than not have to buy in larger quantity than you would elsewhere. Sam’s Club is a national chain making it’s place position different from that of Market Basket and Shaw’s.Some products may travel a lot farther to get to the store making stock a more pressing issue to monitor. Lastly it’s promotion differs from that of the other stores I visited. They do offer flyers every so often but prices are more set with it being a wholesale club. They don’t offer too much advertising but still flourish through offering deals on memberships on websites such as Groupon.

The three stores I visited provided a look into how stores differentiate themselves from the competition. Market Basket targeting repeat customers looking for good prices while Shaw’s targeted toward weekly sales boosting their customer traffic. Sam’s Club being the outlier of the three being a one stop shop for it’s customer’s building a reputation of consistency and buying in bulk as opposed to smaller numbers of products.

Positioning Statement Market Basket:

To appeal to discount shoppers of any age (target), Market Basket (brand) is the one supermarket in the Greater Portland Area that benefits shoppers looking for consistently low prices (benefit) because of their low overhead (reason) they can offer a variety of products at these low prices.

Positioning Statement Shaw’s:

To appeal to shoppers looking for rotating deals at any age (target), Shaw’s (brand) is the one supermarket in the Greater Portland Area that benefits shoppers looking for quality weekly deals (benefit) because of their typically high prices (reason) they can offer better weekly sales than other competitors.

Positioning Statement Sam’s Club

To appeal to shoppers looking for larger quantities of items (target), Sam’s Club (brand) is the one store in the Greater Portland Area that benefits shoppers looking for good deals all the time on a wide variety of goods and services (benefit) because of their wholesale set up and membership fee (reason) they can offer quality prices on goods and services all the time.

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