Reed Supermarkets: a New Wave of Competitors

reed Super securities industrys. Spring 2013Meredith Collins faces the problem of choosing the most appropriate marketing schema for Reed Supermarkets to implement so that the phoner increases its market sh be in the Columbus, OH market from 14% in 2010 to a lay of 16% in 2011. This goal should be accomplished in spite of the bleak competitive challenges posed by the rising prominence of dollar and limited selection stores in the food for thought retailing industry.SWOT AnalysisInternal Strengths Reeds quality image and exceptionally attentive customer service panoptic range offeringsAttractive stores, long hours, and elegant service? case displays.Internal WeaknessesMany consumers perceive Reeds prices are highCapital exp residueiture policy freezing 3. No consensus within commission on what scheme to implement for market assign growth.External OpportunitiesThe new consumer is more than savvy, health and cost? consciousGrowth of buck private label merchandise 3. Columbuss economic environment is more favorable than states and nations economic environmentsExternal Threats Dollar and Limited Selection Stores increasing market portion out / Aldis projected new storesEconomic downturn . Significant dwindling of customer loyalty.Reeds heed is currently assessing the fol beginninging alternatives to increase its market share in the Columbus marketContinue its current dollar special campaignTerminate the dollar special campaign and implement an everyday belittled pricing modelConvey the value created to consumers by reinforcing the range and quality of offeringsIncrease low priced specials, hit the roof private label brands, and introduce double couponing.In addition, I would also consider the following alternative project an offer to buy some of Galaxys troubling Columbus stores.In evaluating the aforementioned alternatives, Reeds management will have to take into account that, in tramp to meet the targeted market share of 16% in 2011, they will ha ve to increase their sales volume by $94 million, which represents a 14% increase compared to 2010 (see appendix). The present dollar special campaign was an attempt from Reeds to smorgasbord consumers perception that they have higher prices. Some Reeds managers are confident that in another six months they will be able to change this perception while, at the same time, they reinforce customer loyalty.However, some executives believe also that the campaign detracted from Reeds quality image as it seemed to be too close to the offering of dollar stores which could damage Reeds image by dint of association. The scope of this campaign (250 out of 50,000 items) does not seem sufficient to generate the additional sales required. otherwise executives suggest implementing an everyday low pricing model in order to tackle, in a more aggressive fashion, the high? priced image that Reed carries. This would likely require a complete switch of the companys positioning from a high? nd store to a medium, more value? rivet positioning. Reeds image, as a quality and customer service oriented, could be extremely dishonored by such a switch. Additionally, it would be expected that other discount stores would be reacting aggressively to this strategy. another(prenominal) option is to reinforce Reeds current positioning as a high? end store by emphasizing the range and quality of its offerings. Such strategy appeals to the more affluent households, which are more keen on premium private labels and organic produce.This customer segment has been the backbone of Reeds growth in the past 20 years, and the company wants to be ready to satisfy its upscale tastes as the economy recovers. Operations Director Jane Wu offered yet another alternative increase low? priced specials, fatten out private label brands, and introduce double couponing. The new consumer that emerged from the 2007? 2009 recession is more savvy and cost? conscious, which is demo by the increasing share of wallet captured by dollar and limited selection stores.By acknowledging this new ingenuousness and resorting to the strategy suggested by Director Wu, the company can potentially attract new customers and appeal to both(prenominal) fill? in trippers and full grocery runners. This seems to be a sound strategy in order for the company to capture, in the short? term, the $94 million additional sales required to meet the target market share. It is unclear, however, if this strategy could hurt the quality image recognized to Reeds supermarkets and as a result drive high? nd customers away. On the other hand, during difficult economic times, such as the downturn of 2008? 2011, consumers tend to opt for value. Finally, we should not discard the introduction of new stores as a arduous alternative for increasing sales. The company has consistently expanded the chain in the past, with the new stores accomplishing similar results to alive ones. Reeds management has made it clear that it does not wish to have capital expenditures in form of new stores in 2011.But, a struggling Galaxy chain in the Columbus market could represent an interesting opportunity for Reed to acquire some of its stores at a discounted price, and this way confrontation the sales volume required for the 16% market share. Given the resistance from Reeds management to resort to additional capital expenditure, my recommendation is that the company implements the alternative suggested by Director Wu, i. e. increase low? priced specials, expand private label brands, and introduce double couponing. For the