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Basics of

Retail
ASSIGNMENT #A617
Marketing

ASHWIN LAWANGHARE
1646
Thompson-Smith’s Brands

Thompson-Smith
Tommy’s Tommy’s Clothing
Supermarkets

Smith’s Shoes T+S Gas Smith and Chips


Thompson-Smith’s Store strength

• A major chunk of their


revenue is dominated by the
Supermarkets and Fish &
Chips stores
Supermarkets Clothing Shoes Fish&Chips Fuel • Clothing stores contribute
very little as compared to
their other brands
Q1:
Supermarket
Strategy
Super Market Strategy

• In a nutshell – Tommy is trying to reposition its massive


supermarket setup from a mid range, low priced one to a
full-service and high quality one.
• I would like to Evaluate their strategy based on:
• Their current situation – Comp scan
• Simon Sinek’s “Why, How and What” model
• The top Australian Retailer is AlDI and has a total of
12,000 stores world wide and around 530 stores in
Australia alone. ALDI is a no frills, cost leadership based
retailer with focus on Value.
• Considering ALDI’s reach and dominance in the
supermarket section, it would be a good idea for Tommy’s
Supermarket to differentiate their stores by adding
smaller yet value oriented elements.
• Introducing Private labels is also a smart strategy as it
will increase their profit margins and supplier relations.
• Using Simon Sinek’s “Why, How and What” Positioning
evaluation strategy, I have outlined the following:
• Why: Why does the organization exist? What is
the company’s purpose?
• How: How is the company’s offering different
from others? What is unique about it?
• What: What does a company or a product do?
• Why – The Vision: To become Australia’s third largest
retailer
• How – Differentiation from the leader in terms of
positioning, Fresh food section, Growing private labels
• What – The company specializes in super market retail
with 500 stores across Australia and aims to reach to a
wider spectrum of audiences

• Points that Tommy’s Supermarkets need to take into


consideration:
• They have to ensure that the do not lose
connect with the current shoppers as they
might start perceiving the store as high quality
and consider alternatives
• To ensure this, the brand must bring this
change gradually and keep its communication
Q2:
Online
Clothes line
Strategy
Online Clothes Strategy

• In a nutshell – Tommy’s clothes is trying to go multi


channel by opening a e-tailing venture
• I would like to Evaluate their strategy based on:
• Their current situation – Domain strength
• Core advantages and disadvantages of e-tailing
• Venturing into online retailing is a smart move but the
promotional tactics used for the same needs to be
changed.
• Since they will now have an online customer
facing brand touch point, apart from bill boards,
they should also advertise on google AdWords,
Facebook and Instagram using specific
targeting methods based on the specific
regions they want to target
• As Highlighted in the diagram on the left – Using a
warehouse to home strategy would suite them better as
they can use the same warehousing facilities that they
use for their current stores in turn reducing costs.
• By going online they would be able to:
• Gather Customer intelligence – this will enable
them to use online marketing tools to target
new customers and website analysis tools to
gain insight into their customers’ needs.
• They can integrate this data to enhance the
potential of their offline stores and have a dual
cohesive approach(Online + physical) enabling
them to grow their clothes brand
• Expanded reach which can increase demand
• They can also expect a couple of hiccups such as:
• Dealing with return and hiring new staff for the
same
• Additional warehousing costs
• Having customer trust as they are not well
established in the market as of now
• Considering all the pointers above, with time and domain
intelligence they can exceed the potential of their clothing
line through e-tailing
Q3:
Smith’s
Shoes strategy
Smith’s Shoe Strategy

• In a nutshell – They are trying to Franchise half of their


existing shoe outlets and open 100 new ones.
• I would like to Evaluate their strategy based on:
• Paul O Collin’s strategy of franchising feasibility
check
• Advantages and disadvantages of franchising
• As per Paul O Collin’s a business is feasible for a
franchise model if it has:
• A long term Market
• a business that addresses a mass market and
is not bound geographically
• a business that has high gross margins
• a business not affected by regulatory issues
and legislation that would pose challenges for
franchisees
• a business which has surplus capital and
access to credit
• Using the franchise model, Smith's shoes can reduce risk
and rapidly enhance market share.
• But they have to be careful and ensure implementation of
the following pointers:
• Established norms and procedural practices
ensuring the quality of each store
• Ability to introduce changes and updates to all
franchises parallelly
• Strict guidelines and parameters for monitoring
and evaluation
• Presence of quality control staff for audits on
regular intervals
• These points do have additional costs linked to them but
if taken care of, can help the franchisees to maintain an
effective standard in turn increasing profitability and
brand equity.
Q4:
Smith & Chips
Smith & Chips Strategy

• In a nutshell – They are trying to redesign their stores to


make them more kid and customer friendly with installing
advanced facilities
• I would like to Evaluate their strategy based on:
• Fast food restaurant differentiation strategies
• Smith & Chips has decided to go for a Experience and
Environment based differentiation approach.
• This will enable them reinforce the brand with
every interaction, not just communication.
• Moreover, they will be able to target the
Children birthday party market and pull a huge
chunk of the market share as the arcade
section is a big and highly sought after addition
to restaurants
• Increased traffic space and drive through will
again cater to different sets of customers thus
enhancing sales
Q5:
Loyalty Programs
T+S Gas/Fuel Strategy

• In a nutshell – they are trying to enhance purchase rate


by giving incentives to the customers that shop at their
stores
• I would like to Evaluate their strategy based on:
• Consumer behavior related to Gas stations
• Advantages of implementing loyalty programs
• Loyalty programs would enable the customers to:
• Increase petrol stations brand loyalty and
differentiate it from its direct and indirect
competitors.
• Drive the petrol station to customers’ “top-of-
mind” and drive incremental transactions and
sales among loyal customers.
• Increase market share and sales per
transaction.
• Capture transaction data for use in future
marketing efforts and
• Engage high-value, profitable, loyal customers

Hence, Loyalty programs seem to be a great strategy for


Q6:
Other Strategies
Alternate strategy for T+S Gas Station

• T+S Gas Stations: They current strategy of loyalty


programs only takes into consideration current existing
customers of the Thompson and smith customer base as
it is concerned with building loyalty points through store
purchases.
• I Would focus on the parameters provided in the
adjacent figure to:
• To increase reach towards newer customers
and provide a tangible quality benefit to my
customers
• Enhance overall quality perception of T+S gas
stations
• Have elongated and lasting Customer retention
• They should also focus on maintaining a steady price for
gas and offer additional benefits on cash payment (Store
goods or freebies)
2017 Customer loyalty survey for petrol pumps
• Offer discounts on bulk purchases for freight vehicles.

My focus would be to enhance long term perceived quality


and core competency of the gas stations by a holistic 360
degree approach that actually matters to the every
Alternate strategy for Supermarkets
• Tommy’s supermarkets: Though I agree with the supermarket
differentiation strategy for a more premium positioning after
evaluating Australia’s top super market brand Aldi, I would like to
add more strategies to enhance market share.
• Go Digital: The physical store location, as well as being a steward
of the community, have been downgraded. Ecommerce works well
in tandem with retail outlets, but a physical presence is no longer a
requirement as companies like Amazon, Fresh Direct, and
PeaPod have proven.
• Focus on specialty products: Natural, organic, and specialty
items have exploded in popularity and now command more shelf
space. For example, the Cheese category was once limited to pre-
wrapped slices. Anything more required a trip to a Wine and
Cheese shop or to a specialty retailer. Now traditional grocers like
Kroger (Murray’s Cheese Bar) and Wegman’s offer expansive
varieties of cheeses from all
• Service Integration: Retailers, focusing on their stores’ perimeter,
continue to expand their services in the areas of floral, deli,
prepared foods, and in-store bakeries. Some stores are fulfilling
custom orders with even richer services such as butchers, kosher
specialty counters, and local farmers available in their Produce
department.
Ansoff
Strategy Matrix
Analysis
Ansoff strategy matrix with respect to Thompson -Smith
• My understanding of the Ansoff Matrix - The four strategies of the
Ansoff Matrix areas follows:
• Market Penetration: It focuses on increasing sales of
existing products to an existing market.
• Product Development: It focuses on introducing new
products to an existing market.
• Market Development: It strategy focuses on entering a
new market using existing products.
• Diversification: It focuses on entering a new market
with the introduction of new products.
• Based on my understanding and the data provided it is evident
that they are trying to:
• Attract new customers: For instance, going online for
their clothing line, and revitalization by experience
focus in their Smith and Chips store
• Enhance market share: Franchisee model adoption for
Ansoff Matrix their shoes brand
• Expand geographically: Opening supermarkets in more
prominent and accessible locations
Thompson-Smith is trying to expand in the regional market with
existing products that are already known to the target market,
hence Market Development is the strategy taken by Thompson and
Conclusion
Conclusion

• Based on the total evaluation of Thompson-Smith, I


understood that they are targeting new areas of your
existing market. i.e., trying to sell more of the same things
to different people. This is because:

• They are targeting different geographical markets at


home.
• This can be facilitated by conducting a PESTEL
Analysis or use the CAGE Distance
Framework to identify opportunities and
threats in this different market.
• They are using different sales channels, such as online
medium for their clothing brand.
• Repositioning their supermarket brand to reach out to a
more affluent demographic

These is a clear indication of strengthening one’s position in


current market by Market Development