This website uses cookies to ensure you have the best experience. Learn more

Superior Supermarkets. “Everyday Low Pricing” Essay

1837 words - 8 pages

Marketing – Master of Management 78-614
Odette School of Business, University of Windsor

Title of case: Superior Supermarkets. “Everyday Low Pricing”

Key person and his / her position in the organization:
James Ellis Senior V.P at Hall Consolidated and President of Superior Markets

Key issue or decision that must be made: Should Superior Supermarkets implement the everyday low pricing strategy? If so, should this strategy be adopted across-the-board for all products or just certain categories?

Basic facts of the case:
Superior Markets is a division of Hall Consolidated, a privately owned wholesale and retail food distributor. Hall Consolidated was formed in 1959 and ...view middle of the document...

More than 30% of the interviewers considered Superior’s prices “above average.” In contrast some 20% of the respondents thought the prices at Missouri Mart and Grand America were below average. Harrison’s was thought to have the lowest everyday prices.
The four major aspects that determined store choice were Price, meat, Produce and Shopping convenience. Superior appears to be the winner on shopping convenience. Focus group participants from all parts of Centralia considered Superior to be a good neighborhood store. The “Superior Supermarkets = Superior Value” advertising was questioned given the perceived higher grocery, meat and produce prices.
In a second study involving personal interviews shoppers emphasized that lower prices and greater variety were needed. Appearance and cleanliness, friendliness, service and convenient to home or work were liked most by shoppers.
Alternatives:
James Ellis has several options and several decisions he would have to make in regards to the implementation of the Everyday Low Pricing strategy. If the strategy is implemented James Ellis will have to make decisions regarding some key issues:
A. Should we aim to be the lowest priced supermarket in the trade area?
B. Should everyday low pricing be used by all stores in the trade area?
C. Should the everyday low pricing strategy be adopted across-the-board
for all our products or just certain categories?
Your chosen alternative:
After reviewing the available consumer research and determining that Superior could lose market share in Centralia due to the price differential, I would suggest that James Ellis implement the everyday low pricing strategy. The pricing strategy should be implemented as part of a broader store positioning strategy and supported with advertising. It would also be advisable for Superior to conduct further market research and determine exactly how price knowledgeable their customers are and what product categories they are most price-conscious of. I believe that it would be most profitable if Superior limited the implementation of the everyday low pricing strategy to only merchandise that shoppers are most price conscious of. It is also important to recognize that Superior cannot “outprice” Harrison’s and it is therefore important that Superior consider it’s advantage in the shopping convenience category and determine the best price changers accordingly.

Justification for your choice:
According to Randall Johnson who proposed the everyday low pricing strategy the two main reasons this strategy should be implemented are as follows:
(1) Superior’s prices were higher than the competition at a time of growing price consciousness among Centralia shoppers.
(2) Superior could lose market share in Centralia due to the price
differential.
Sales in Centralia were already down 3% in the first quarter of 2003 compared with budgeted sales goals. This decline, following a slower than...

Other Papers Like Superior Supermarkets. “Everyday Low Pricing”

Tesco - in-Depth Analysis

4098 words - 17 pages , with the decline in shopper penetration for specialty food outlets such as bakeries, butcher shops, etc. and the shift of consumer food expenditure towards supermarkets, opportunity lies in providing a “one-stop-shop” for consumers (See Exhibit F). This provides ample opportunity for Tesco to go above and beyond the popularity of supermarkets by establishing superior hypermarket stores that offer competitive prices and higher quality products

Assignment 1

1265 words - 6 pages Assignment 1: Demand Estimation Becky Boom ECO 550 Demand Estimation for Low Calorie Frozen - Microwavable Food Using data from 26 supermarkets around the country for the month of April, the following regression equation was generated. Please note, standard errors are in parentheses for the demand for widgets. QD = -5200 - 42P + 20PX +5.2I +.20A +.25M

Service Marketting

1393 words - 6 pages innovators in retail management. In particular, an innovation which is believed to have proved successful, both in department stores and supermarkets, is Every Day Low Pricing (EDLP). Every day Low Pricing strategy is thought to differ from a Promotional Pricing strategy by not emphasizing price specials on individual goods but instead focusing consumer attention on good value on a regular basis (Lal, Rao 1997). "Ramstore" doesn't have EDLP, but they have

Business Decision Making

4173 words - 17 pages good of Wm Morrison Supermarkets? 8. Are you satisfied with the current pricing condition of this organization? 9. Do you agree with the company’s good publicity? 10. How do you feel about the company’s providing services? 11. What are the defects in marketing planning of Wm Morrison Supermarkets as you think? 12. Do you think that it’s a perfect Supermarket to provide your desired product and quality

Azalea Seafood Case

4306 words - 18 pages Success Factor There are several key success factors (Appendix C) although some are more successful than others are. Azalea having its product in over 1,100 supermarkets has given it adequate exposure. It needs to keep customers happy through its accurate filling of buyer orders. Its attractive pricing has and taste has been a profitable KSF. They have a competitive advantage against other competitors with their gumbo because it mostly all they

Whole Foods Company Case Analysis

1634 words - 7 pages than advertising and marketing of other supermarkets. The company must develop the image of ethical practices and superior quality combined. The fourth option for WFM is to cut the expenses that are not integral to the exceptional in-store experience, which may allow the company to reduce their prices. Another option can be implementing a program that convinces consumers to spend their limited funds at WFM rather than its low-priced competitors by

Crafton Ind

584 words - 3 pages buyers (not an everyday purchase item) and buyers are extremely price sensitive 4. Supplier Power - High - Highly concentrated industry, low availability of substitutes, switching costs are low, creditable threat of forward integration by manufactures 5. Threat of New Entrants - LOW, Industry growth rate is slow and in decline - Access to distribution networks hard ( 4 large manufactures have 75% of market shares) - Low

Aldi Case

3301 words - 14 pages tall food aisles found in other retailers (ALDI, 2013). ALDI stocks the most common household goods and groceries demanded by consumers, ultimately making ALDI the one stop shopping location where buyers can experience both convenience and low pricing. Thus ALDI’s value proposition is highly successful as it competes in a market where convenience and low pricing is of significant importance to everyday consumers. An important consideration

Marketing Mix

7288 words - 30 pages luxuries such as Cunard Cruises, Savoy Hotel rooms, and Concorde flights. Penetration Pricing. The price charged for products and services is set artificially low in order to gain market share. Once this is achieved, the price is increased. This approach was used by France Telecom and Sky TV. Economy Pricing. This is a no frills low price. The cost of marketing and manufacture are kept at a minimum. Supermarkets often have economy brands

Wal-Mart Goes South

664 words - 3 pages get low prices Wal-Mart can get from the suppliers, local supermarkets tried using “high and low” to attract more customers. It is a method of lowering prices of some products but not all products; they have also gone to the federal competition commission with complaints of Wal-Mart’s unfair pricing practices. Later on, Comerci – Wal-Mart’s main competitor, has formed a cooperation called Sinergia with two other struggling homegrown supermarket

Publix Case Study

2944 words - 12 pages Publix and their ability to attract and retain customers include an increasing shift towards a health conscious population, a rise in alternatives to supermarkets (i.e. supercenters, warehouse clubs, low-cost, and organic specialty food stores), and an increased preference for snacking over meals. As society becomes more aware of the negative side effects of pesticides, processed food, Genetically Modified Organisms (GMO) etc., consumers are

Related Essays

Superior Supermarkets Essay

1230 words - 5 pages Superior Supermarkets Memo Memorandum To: James Ellis, President of Superior Supermarkets CC: Randall Johnson, District III Manager of Superior Supermarkets From: Matthew Clemente RE: Potential Everyday Low Pricing Strategy Date: April 9, 2010 The challenge presented to the President of Superior Supermarkets James Ellis and his district manager Randall Johnson is whether or not to implement an everyday low pricing strategy

Pricing Strategy Essay

1748 words - 7 pages brands or products are sold at prices that exploit mutual dependence or balance pricing over product line. 2. The characteristics of the consumers, can also be classified into three groups. a. Some consumers have high search costs. Some consumers do not know exactly which firm sells the product they want and an effort to search for the product is made. b. Some consumers have a low reservation price for the product. Consumers do not have the

3 Kinds Of Supermarkets Essay

3463 words - 14 pages p value of price 0.754 that is quite high and also a factor and reason for the acceptance of our survey. As an outcome, Costco is competing the market in a superior way than other supermarkets and need little improvement in variety only. Future research: In the future we have lots of recommendations but because of limited space we’d like to describe some of them. As we know we took only 300 samples that are way less to judge the market, its

Costco Questions Essay

557 words - 3 pages . They also have profits at a very low gross profit margin. Gross profit margin equals Sales Revenue minus Cost of goods sold divided by Sales revenue. 5. Costco competes with supermarkets but mainly competes with Sam’s Club and BJ’s Warehouse in North America. There are over 1200 wholesale club stores in North America with Costco having a little more than a third of those stores. I believe competition from producers of substitute products is