QUESTION

 

Prepare a report on the marketing strategies of Loblaws using several concepts discussed in class and in our textbook. Please see the specific areas to be addressed further in this document.

AREAS TO BE ADDRESSED IN REPORT

1. Write a Value Proposition statement for Loblaws. Two sentences maximum please. (2)

2. Which of the five “Marketing Management Orientations” is best exemplified by Loblaws?

Provide three supporting arguments for your choice.

3. List and explain three tactics employed by Loblaws to foster customer loyalty

4. Describe Loblaws target customer in terms of four specific demographic variables. For each demographic characteristic that you state, provide one or two examples of how Loblaws’ marketing mix elements (4Ps) cater to that demographic. (8)

5. Do you believe that Loblaws stores would be successful in China? Discuss three macro- environmental forces to support your answer. (5)

6. Please refer to the following chart (from the chapter on Segmentation, Targeting and Positioning in your textbook) which summarizes possible Value Propositions. Which one of the five “winning value propositions” best fits Loblaws? Why? (2)

FORMAT REQUIREMENTS

Completed in Word using either Arial or Calibri font (font size 12). Use single line spacing please.

2. Please use sub-titles and white space to allow the reader to navigate through the report to find the answers to the 6 areas of focus as described in the preceding section of this document.

3. Please write in the third person and in complete sentence.

4. references must be included

5. 4 pages

 

 

ANSWER

 

MARKETING STRATGEY OF LOBLAW

Executive Summary

This report sheds light on marketing strategies of Loblaw Plc which is a renowned super market chain in Canada. They have applied different marketing methodologies to grow their business and attract customers by providing best services to them. This report highlights best value proposition factor of Loblaw as well as best marketing management orientation to sustain a successful business in Canada as well as in abroad. It has been observed in this report that strategic planning of marketing that has been gained by Loblow Plc has enabled it to gain attraction not only in Canada but also in outside countries such as China which lead them to promote their business to greater extent

Introduction

Marketing strategy refers to various methodologies and their application that has been taken by a firm or an organization to boost business growth. Loblaw is known for serving its product with famous brands like Joe Fresh Style and President’s Choice. This company has five different independent divisions across Canada which includes Market, Shoppers Drug Mart, a super store, a financial sector and a fashion brand store. This report highlights value proposition of Loblaw and the manner in which they apply this in marketing strategy. Tactics that has been taken up by this company to gain customer loyalty is discussed as well. This report is focused to explore more marketing strategy factors of Loblaw.

Value proposition statement for Loblaw

Loblaw’s value proposition statements which mainly focus on customer satisfaction are

• Best quality products are offered for ensuring well-being of the Canadians.
• The organization focus on rendering innovative products and supreme performance to have a leading position in business market.

Marketing Management Orientation of Loblaw

Loblaw has to design an effective marketing strategy in order to maintain a profitable relationship with their target customers. Baker and Saren (2016), opined that however, the purpose of making a significant marketing strategy, company has to evaluate different marketing management orientations and as chosen one of them that suits interest of their customers, company as well as society. In order to satisfy this purpose Loblaw has chosen and works on Societal Marketing which mostly exemplified the company. As per the views of Morgan et al. (2018), societal marketing refers to the open system where industries are responsible for addressing different issues regarding societal needs and wants.

Supporting Arguments

Following justifications has been provided in order to support the chosen Marketing Management orientation:

Better food choice

Applying the concept of societal marketing Loblaw understands the need of their customer and produces their services and products accordingly. They have done a broad research on health issues of Canadians and help them to make healthier food choices. Their nutrition experts are always available at the food stores in order to help the customers.

Prediction of future while notices present need

Loblaw’s fashion retail section has a broad perspective upon the needs of new generation fashion and whether the choices are stable for long time or not. They have introduced a wide range of clothing range that carry present style statements as well as suitable for meeting future style statements also. As opined by Felix, Rauschnabel & Hinsch (2017), success of this marketing strategy can be seen in present generation of Canada which is mostly style conscious.

Corporate Social Responsibility

Satisfaction of consumers is the main priority of Loblaw since they set up supermarket chain in Canada. Their vision is to provide product from safe and responsible source. Chandler and Lusch (2015), stated that therefore, it is their responsibility to uphold their values throughout their supply chain as well as promoting safe food by supporting suppliers of Canada. In this way Loblaw can maintain both customer satisfaction as well as companies’ profit.

Three tactics of Loblaw for employing Customer Loyalty

Three tactics that been used by Loblaw are as following

• Up-selling and Cross- selling:

Loblaw has taken the strategy of up-selling and cross-selling in order to retain customer loyalty. It can be seen that customers often attract more which they do not have and the store can than apply the up-selling process to attract customers to high end product. According to Cacciolatti and Lee (2016), cross selling refers to the situation when customers want same quality product but in new look or want to try another brand. Morgan et al. (2018), opined that this method can promote sales of another brand product may be at higher profit some time.  

• Providing Customer loyalty benefits:

Loblaw’s strategy is to retain their customer for longer time by providing extra advantages to the loyal customers. It also cost less for the store rather that acquiring a new customer. In this way customer will feel special and continue to buy products and services from the store. It can be seen that customers often attracted to new product knowing about them by commercials or advertising and they buy the product even if they have it already. So, the strategy of educating the customers about a product that already is in use and can be used in other ways too, can gain customer attention.

• Catering customers from all age group:

Loblaw mainly focuses on customers of all the sections. They produce product and services and maintain cost as per their customer’s position and need. They never think of cutting low value customers. As per the views of Tantalo and Priem (2016), this approach helps them to gain customer loyalty as well popularity for their services.

Demographic variables of Loblaw

Loblaw’s demographic variables that are used for categorize their target customers by various aspects are gender, location, socioeconomic measures, and group membership. These four variables can be evaluated in the following contexts.

Loblaw target their customers (People) by gender while making fashion related products. They follow more of teen fashion trends (13-19) in order to impress younger age group and more on corporate fashion while making apparels for middle age group (25-40).

Price matters while making fashion apparels. They maintain their price range (For teen agers it is ranging between 100-500 CAD and for middle age clothing it is 300-1000 CAD ) very efficiently that their products may never face low profitability .

Location of marketing plays a crucial role when it comes to sale any product which incorporates the value of choosing right place to make profit by the service. Loblaw targets to setting up their drug store at the place where popular hospitals and health sectors are situated. As per the views of Meynhardt, Chandler & Strathoff (2016), this will directly attract customer to choose their service. They also focus on the price of their drug store services so that people from any stage of earning can serve their need.

Loblaw always plan their products and services as per their customer’s social and economic condition of any particular place. They have set up their store and product prices accordingly in different places having different socioeconomic cultures and people.

Loblaw’s idea of group membership has a broad effect on the people of different place across Canada. They have developed different groups made of buyers and they review various product and prices there, which promote their sales and leave a good impact on their customers.

Application of these four different demographic variables helps Loblaw to sustain their good effect on customer as well as gain their trust.

Macro environmental forces of China

It can be measured by all success factors of Loblaw that their venture to set up stores in China will be successful. As opined by Töytäri and Rajala (2015), this Measurement lays with the Macro environmental forces that affect Loblaw.

Three factors for Macro environment	Impact
Political	Stable political support Revenue of 45.394 billion CAD
Economical	Inflation rate increased by 3% Revenue earned of 45.394 billion CAD
Technological	Improved mobile technologies

Table 1: Macro environmental factor

(Source: Inspired by Töytäri and Rajala, 2015, p.71)

Political

As a result of great political support in China Loblaw will be able to precede their business proceeding in that nation in an effective manner. Company has benefited from lower taxation policies throughout Canada. It results in high profit of the company. Investment sentiment in the services sectors of Loblaw can be improved by the policies of new government in China. Their good will for customers and huge customer support lead them to earn revenue of 45.394 billion CAD (Loblaw, 2019).

Economical

Volatile exchange rate in China will have an impact on Loblaw in long term. Growing inflation rate in China economy has abroad effect on Loblaw. The average inflation rate in China was 3 percent compared to last year, in the year of 2017 (Global NEWS, 2019). Linearization of trade policy of china will help to invest more on the regions that are not in their limit. Tantalo and Priem (2016), liquidity in financial market of china can help Loblaw to grow further. Their good will for customers and huge customer support lead them to earn revenue of 45.394 billion CAD (Loblaw, 2019).

Technological

Development of mobile technologies in China will help the customers to access their favorite shop and services at any time and from any place. They can develop their technological implementations of retail business to attract more customers from abroad. Skalen et al. (2015), latest technology is lowering production cost. In order to meet customer’s need as well as cost structure Loblaw need to restructure its supply chain.

Describing   best value proposition that suits Loblaw’s strategy

Loblaw being a supermarket chain always focuses on providing Best quality products for well-being of the Canadians. This is an important part of their values which help them to sustain in this industry as well as among the customers of Canada. Their business is always customer centric where needs of customer emphasized the most. This approach brings them success and influences them to set up relationship with China. Social and cultural surroundings of Loblaw attracts vendor beyond Canada to connect with them. Their marketing management orientation of Societal Marketing suits their value proposition.

Conclusion

This can be concluded that Loblaw, being a supermarket chain always maintain their purpose and values that can satisfy a customer by all means. Loblaw is a Canada based company which is a food distributor as well as provider of general merchandise, financial products and services and drugstore products. It also offers President’s choice financial services and Pc point’s loyalty program. By their goodwill and strategic planning of marketing they gain attraction not only in Canada but also in outside countries which lead them to promote their business to greater extent.  

References

Baker, M. J., & Saren, M. (Eds.). (2016). Marketing theory: a student text. California:Sage. Retrieved on 25 February 2019. Retrieved from https://books.google.co.in/books?hl=en&lr=&id=qhkFDAAAQBAJ&oi=fnd&pg=PP1&dq=journals+on+marketing+strategy&ots=iYvpRRGnEa&sig=Q4J3ZFDJYrKCCruptYcOKWzAdz8#v=onepage&q=journals%20on%20marketing%20strategy&f=false

Cacciolatti, L., & Lee, S. H. (2016). Revisiting the relationship between marketing capabilities and firm performance: The moderating role of market orientation, marketing strategy and organisational power. Journal of Business Research, 69(12), 5597-5610. Retrieved on 24 February 2019. Retrieved from https://westminsterresearch.westminster.ac.uk/download/fddf36196ed0f6475498f5ef2323bfa1341c0dd182f332f81570aea562920a67/258857/Cacciolatti-Lee_2016_JBR_manuscript.pdf

Chandler, J. D., & Lusch, R. F. (2015). Service systems: a broadened framework and research agenda on value propositions, engagement, and service experience. Journal of Service Research, 18(1), 6-22. Retrieved on 23 February 2019. Retrieved from https://www.researchgate.net/profile/Jennifer_Chandler_Phd/publication/270479371_Service_Systems_A_Broadened_Framework_and_Research_Agenda_on_Value_Propositions_Engagement_and_Service_Experience/links/586d7ff708ae8fce491b5d33/Service-Systems-A-Broadened-Framework-and-Research-Agenda-on-Value-Propositions-Engagement-and-Service-Experience.pdf

Felix, R., Rauschnabel, P. A., & Hinsch, C. (2017). Elements of strategic social media marketing: A holistic framework. Journal of Business Research, 70, 118-126. Retrieved on 20 February 2019. Retrieved from https://fardapaper.ir/mohavaha/uploads/2017/10/Elements-of-strategic-social-media-marketing.pdf

Global NEWS (2019). LOBLAW. Retrieved on 24/02/2019. Retrieved from https://globalnews.ca/tag/loblaw/

Loblaw Companies Limited (2019) Current Financial Report Retrieved on 25/02/2019. Retrieved from https://investors.loblaw.ca/English/investors/investor-snapshot/default.aspx

Meynhardt, T., Chandler, J. D., & Strathoff, P. (2016). Systemic principles of value co-creation: Synergetics of value and service ecosystems. Journal of Business Research, 69(8), 2981-2989. Retrieved on 21 February 2019. Retrieved from https://www1.unisg.ch/www/edis.nsf/SysLkpByIdentifier/4566/$FILE/dis4566.pdf#page=223

Morgan, N. A., Whitler, K. A., Feng, H., & Chari, S. (2018). Research in marketing strategy. Journal of the Academy of Marketing Science, 1-26. Retrieved on 20 February 2019. Retrieved from https://www.researchgate.net/profile/Kimberly_Whitler/publication/327107606_Research_in_Marketing_Strategy/links/5b798599a6fdcc5f8b54925d/Research-in-Marketing-Strategy.pdf

Skålén, P., Gummerus, J., von Koskull, C., & Magnusson, P. R. (2015). Exploring value propositions and service innovation: a service-dominant logic study. Journal of the Academy of Marketing Science, 43(2), 137-158. Retrieved on 27 February 2019. Retrieved from http://www.diva-portal.org/smash/get/diva2:713336/FULLTEXT01.pdf

Tantalo, C., & Priem, R. L. (2016). Value creation through stakeholder synergy. Strategic Management Journal, 37(2), 314-329. Retrieved on 28 February 2019. Retrieved from https://www.researchgate.net/profile/Richard_Priem2/publication/265690092_Value_Creation_Through_Stakeholder_Synergy/links/59d8c055aca272e60966bf7b/Value-Creation-Through-Stakeholder-Synergy.pdf

Töytäri, P., & Rajala, R. (2015). Value-based selling: An organizational capability perspective. Industrial Marketing Management, 45, 101-112. Retrieved on 22 February 2019. Retrieved from: https://mycourses.aalto.fi/pluginfile.php/788453/mod_resource/content/1/Value-based%20selling.pdf

Appendices

Appendix 1: Demographic factors

(Source: https://studiousguy.com/wp-content/uploads/2018/05/Demographic-Factors-Affecting-Marketing.jpg)

Appendix 2: Marketing Mix

(Source: https://i2.wp.com/marketingmix.co.uk/content/uploads/marketing-mix-7p.jpg?resize=640%2C640)

 

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