UK grocery market

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‘‘Co-Operative Food’s Market Segmentation and Brand Positioning”

Grocery Market Overview

Market Structure

The Co-Operative Group The Co-operative Foods

Segmentation

Market Segmentation Consumer Market Segmentation

Target Marketing

Co-Op’s Target Market

Brand Positioning

Marketing Mix (4P’s) Co-Op’s Brand Positioning Co-Op’s Brand Strategy 4 4 4 4 5 5 5 6 6 6 6 7 7 8 9 10

Executive Summary

The Co-Operative group is in UK market for over 150 years and operates across the food, travel, funeral, pharmacy and banking and insurance sectors. It has 4.5 million members and around 5,300 retail outlets. This report provides an analysis and evaluation of the strategy adopted by Co-Op in order to target the consumers and market. It also explores the brand positioning of Co-Op in the grocery retail market in accordance with the consumer demands. In order to do this analysis market segmentation framework is used to separate the target market into groups and by keeping the Co-Op’s ethical and fairtrade principles in mind. Brand positioning strategies adopted by the Co-Op food were identified by using the marketing mix framework (4P’s). It is found that Co-Op is having intense pressure from its rival Tesco and Sainsbury’s who are growing rapidly into the convenience retailing. Although Co-Op’s profits are gone up as compared to recent years but there is still room for improvement.

1.0 Grocery Market Overview

1.1 Market Structure

The UK grocery market is mainly dominated by the big fours 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 nature of the market. The grocery market players have divided their customers into two groups: primary shoppers and top-up shoppers , and according to Mintel (2009) the primary shopping is dominated by big fours (Tesco, Sainsbury’s, Asda and Morrisons) plus Waitrose who are sharing 80% of the market share. The UK is through its worst ever recession which has also affected the grocery retailers and lead to change their strategies. According to Keynote (2009) the ‘hard discount’ strategy 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 form of convenience stores in order to targets people who have a little access to supermarkets (Mintel 2009).

1.2 The Co-Operative Group

This is UK base co-operative established in 1863 and it is quite diversified organization which mainly operates through its two divisions: trading and financial services. The Co-Operative group is well known for its ethical nature and fair trade principles which reflects within its organisation and differentiates it from its competitors. The Co-operative Group operates across the food, travel, funeral, pharmacy and banking and insurance sectors. It has 4.5 million members and around 5,300 retail outlets

1.3 The Co-Operative Foods

The Co-OP food operated in UK through its 2223 food stores which can be found in two formats: convenience stores and small/ medium sized supermarkets (Data monitor 2008) The Co-Op food lies on the 5th place in grocery retail market with 8% shares,

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