Marketing plan

Marketing plan based on the case analysis

Executive Summary

The executive summary clearly communicates the critical elements of the marketing plan so that it reads as a stand-alone document. The length of the executive summary is sufficient to cover the critical information, but no more than two pages long.

Introduction

Supermarkets have gained immense value from consumers in comparison to other retail formats.  Supermarkets in Spanish market are popular as they play an important role in distribution of food products, green groceries and merchandise.

They have increased their hold in recent years due to their streamlined operations, supply, customer service and more importantly proximity with the neighborhood areas.

The purpose of the marketing plan is to present an analysis of the micro and macro environment for the case company, Disba S.A, a leading supermarket chain and to identify and select a target market and positioning strategy.

The latter part of the plan includes proposed changes to the existing marketing mix of Disba S.A that are in line with the selected target and positioning strategy. Thus, the plan analyze Disba S.

A situation according to the case brief and analysis of external marketing environments that are and likely to affect the supermarket chain operating in Spain.

Company Analysis

The company in the case is a Spanish based supermarket chain, Disba S.A One of the leading supermarket chains which has grown to open its 130 stores along with acquisition of 39 stores and addition of new 21 stores. It is operating in highly competitive retail industry.

The company headquarter is situated in Barcelona. The strategy of the company focuses on growth through acquisition. The supermarket chain covers Albacete, Cartegena, Castellón and Balearic islands.

The supermarket chain intends to cover the Spain’s Mediterranean coast with its stores. The two major product categories of Disba S.A include food products like milk, fruits and vegetables and meat and non-food products which comprises of health and beauty products, clothes and kitchenware items.

The sales have increase by 12 percent due to increase in the marketing efforts. The Magi Pujol (CEO) has a comprehensive knowledge and the existing competition and identification of direct and indirect competitors and also has awareness about their customers.

Part A: Analysis of Disba S.A environment

Macro-environmental analysis

From the case, the most relevant macro-environmental factors are recognized to be which have a direct implication for growth, revenue and success of the case company.

These factors are: Political: The political unstable and uncertain climate of Spain since December 2015 poses hindrance to growth and challenges for supermarket sales. Also, the change in government regulations and policies regulations has led to diverse regulations which pose a negative impact business development growth of the retail business.

There is also increasing regulatory framework for environmental concerns which affect the business priorities and cost of business operations.

Economic: The economy of Spain has a slow recovery and it grew at 2.7 percent in 2018 and estimated to grow at 2.2 percent in 2019 (IMF, 2018). According to Trading Economics (2019), the quarterly economic growth was around 0.6 percent in 2018 and 2019 (Ist quarter) which highlight a dull GDP growth rate.

The economic downturns, consumer spending, disposable income and unemployment are other factors affecting the supermarket business. The political situation has impact on the economic condition of supermarket which can put pressure on sales and supply chain difficulties.

There is an increase in personal disposable incomes (the per capita disposable income of Spain households in increased by 2.69 percent in 2016) and is stable but there is a down pressure due to high inequality in the society and there high unemployment rate (17.2 percent in 2017) in the labour market of Spain (Santander, 2019).

These can pose a negative impact on the consumer spending behavior to impact the supermarkets retail business. The decrease in unemployment rate and further increase in disposable income can be driving factors for the growth of supermarket chains in Spain.

On the other side, the increase in government investment to make aavailable the core infrastructure towards a supportive business environment can be positive for Disba S.A to penetrate Spain markets.

Social: The social environment is sound and culturally rich. This demands the retail players to gain an understanding of the societal norms and culture to develop better strategies to serve the Spanish customers.

The increase in population, and the rapid urbanization would create the need for resources like food which is positive for the sales growth of the supermarket chain.

However, the income inequality can pose a hindrance in business development but can be balanced by the rise in disposable income. Moreover, the changing mind-set towards health can be positive for Disba S.A product sales.

Technological: The technological environment is developed in the domain of mobile and communication technology and access to latest technology which are positive for retail chains.

The technologies for automations of retail operations, logistic tracking and supply chain management, payment processes pose a positive impact in terms of cost reduction, increasing supply chain efficiency and logistics efficiency and in reaching the target customer in cost effective way.

However, the technological changes require the business to investments in new technologies and training workforce to develop technical competence and cope with the dynamic environment.

Legal: The Spanish legal system is evolving with new and more stringent laws towards employment, wages and environmental issues. There is a high need for the business to follow industry specific regulations as non-compliance leads to high regulatory burden, lower the business the profitability and pose difficulties to trade.

Environmental: There has been high consumer and government attention given to the environmental concerns.  The retail business needs consideration towards carbon footprints, energy and water conservation practices and waste management.

Micro-environmental analysis:

Suppliers: The suppliers have a low to moderate power thus; have a low to moderate control on the success of giant supermarket chain. There are many suppliers which decrease their influence on the price bargain with big supermarket chains.

Customers: They (ideal customers) have the most direct impact on the supermarket business. For Disba S.A to operate successful in Spain there is continuous need to attract the customers that are most profitable to the business.

Thus, an effective marketing campaign to develop customer base and generate stream of revenue from different targeted customer segments.

The competition: The competition in the marketplace from similar products affects the retail business decision and strategy in market competition.

The high competition among the existing players and also with the new entrants poses influence on the price thus, develops pricing pressure. It will also have implication for Disba S.A to pursue a product differentiation.

Competitor Analysis:

The competition is strong in the Spanish retail marketplace. The competitors are new player that are emerging strong and also high and direct competition from the already established players in Spain.

The major competitors of Disba S.A in Barcelona are Caprabo and Valvi and competitors are small Catalonian supermarket chains.

Caprabo is a direct competitor as it has sales equivalent to Disba S.A. The competitor strength is its market knowledge and experience due to which the marketing efforts and high prices result in high sales.

It has good market coverage with its 50 supermarkets offering wider assortments and choice to its customers. The target market is Barcelona.

Valvi is another direct competitor from Gerona. The competitor prices are around three percent higher and offer more product categories in breadth and depth thus, officer a high selection and choice of merchandise to its customers. This competitor also targets Barcelona marketplace.

The Catalonian supermarket chains having 5 to 10 stores are indirect competitors that may increase their investments, customer database and marketing efforts to emerge as strong players. They also targets Barcelona marketplace.

Customer Analysis:

SWOT Analysis

Based on the previous analyses, the internal and external factors that affect the marketing decisions and strategies and the market position of Disba S.A are presented in below table.

Internal Factors
StrengthsWeaknesses
Strong recognition in Spain

Wide assortment of products from food items to health products to household products

High number of stores

Low prices availability for their products

Control over processing and distribution operations for meat, fruits and produce

Strong and effective logistics operations and system

 

Narrow focus (only on Mediterranean coast area)

Pressure on retail operations because of low price competition

Less product differentiation

Increase in overhead expenditure

External factors
OpportunitiesThreats
To develop a strong presence in e-commerce market

Strengthen its marketing capabilities

Eco –friendly practices

Use of new and emerging technologies to strengthen supply chain functions

 

Diverse government regulation and frequent change in government polices due to political  uncertainty

Economic downturns

High competition from established as well as new players

Stringent environmental laws

Environment and regulatory/ legal burden on retail business operation and activities

 

Target market and Positioning strategy:

The target market for Disba S.A can be identified based on the demographic features, geographical, psychographic and behavioural features.

Under the demographics, Disba S.A can target their customers based on their age, gender, income and occupation. Disba S.A can target the quality and heath conscious buyer and responsible buyers from multi-income segments from middle to high income groups.

The supermarket change can target buyer in the bread age group of 25 years to 75 years of age. These includes solo buyers, casual shoppers, working women, business professionals, young as well as old couples, and senior citizens as they all pay attention to environmental activism in Spain and for responsible business practices  other than quality  and price aspects.

Considering gender, the female’s buyers as young professional, as kid’s mother, as wife and homemakers needs to be more targeted as they are important decision makers for the choice of food, kitchenware and wellness items and beauty products.

Thus, it is important to target female customers and ensure their customer satisfaction for their repeat visit and success of the business. Thus, the supermarket chain can target young adult to senior citizens which cover the customer that are either value or quality conscious.

Under the geographic, the key region to target cancan be urban areas in and around Barcelona thus, closer to Disba S.A headquarters and warehouse.

Under the psychographic, Disba S.A can target buyer with and easy going personality while under the behavioural, the benefits sought feature can be considered for customer who seek variety and cost advantage can be targeted by the supermarket chain.

Disba S.A can make use of two different positioning strategies for its existing product categories to attract the target customer groups.

The symbolic positioning can be employed for this supermarket chain for its food and grocery product categories and clothing segment.

Here, the value and aspirations of its target customers can be focused to attract them positioning as a socially responsible supermarkets and promote the perception toward responsible buyers. This can also support Disba S.A in raising prices of products categories for eco-friendly products.

For health and beauty product categories, the experiential positioning can be employed which involves providing their customers with sensory simulation conditions to target its female customers.

Part B:  Proposed changes to the current marketing mix

The following are the proposed changes to the existing marketing mix of Disba S.A that are steady with the chosen target market and positioning strategy.

Product: This element of marketing mix strategy will require Disba S.A to take product decision to what product categories should be widen or needs to be added in the existing products portfolio to offer to different target customers groups to fulfill their needs to  achieve customer satisfaction.

Price: This is one of the most important elements as it signifies what the supermarket chain will receive (revenue) for selling products.

Place: This element requires Disba S.A to decide on the distribution channels, store locations and warehouse for an effective distribution and delivery of products to the customers. The supermarket location needs to consider the customer accessibility and logistics costs.

Promotion: This element deals with the method that can be used by Disba S.A to reach and communicate with the target market groups in particularly to inform the existing and potential customers about product offering and company capabilities to fulfill their needs and to influence their attitude and perception positively towards Disba S.A.

Here, the different tools used by Disba S.A will include online and offline methods.

References

Trading Economics. 2019. Spain GDP Growth Rate. [Online] Available at: https://tradingeconomics.com/spain/gdp-growth (Accessed 18 April 2019).

International Monetary Fund. (IMF). 2018. Spain: IMF Staff Concluding Statement of the 2018 Article IV Mission.[Online] Available at:  https://www.imf.org/en/News/Articles/2018/10/03/Spain-IMF-Staff-Concluding-Statement-of-the-2018-Article-IV-Mission (Accessed 18 April 2019).

Santander. (2019). Spain: Economic and political outline. [Online] Available at:   https://en.portal.santandertrade.com/analyse-markets/spain/economic-political-outline :  (Accessed 18 April 2019).

Trading Economics. 2019.  Spain Disposable Personal Income. [Online] Available at:   https://tradingeconomics.com/spain/disposable-personal-income (Accessed 18 April 2019).

 

 

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