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Conventional Supermarkets Essay

Retail Branding Strategy

Retailer branding strategy can be defined as an approach planned by the organisation to achieve the organisation’s missions and goals. Retail branding strategies also facilitates in their competitive advantage in the industry. With strategies applied, companies can be viewed as a distinctive store as compared to other companies. There are various strategies that retail companies can adapt and one of the retailing strategies consists of seven factors; operating procedures, location, merchandising customer services, consumers, pricing, and promotion factors. (cite book)

Conventional Supermarket

An industry that we would also touch upon is conventional supermarket. Conventional supermarket is a departmentalized food store with a wide range of food and related products. The supermarkets are usually differentiated by their sizes e.g. a conventional supermarket is between 500 and 2000m2. (cite pdf)

Supermarket Strategy

Goods

Conventional supermarkets should have a basic retailing strategy that they can adapt globally. Firstly, what goods do conventional supermarkets want to offer? A conventional supermarket typically offers a wide range of products and assortment and their merchandises would include both private and generic labels. Private labels are also known as house brands in food retailing. House brands were introduced to promote brand loyalty and are usually priced at affordable prices as compared to other brands that the supermarket takes in.

Prices

Prices are generally competitive in conventional supermarkets due to high competition within many firms for the same consumer with homogeneous product offerings (Dolan and Simon, 1996; Kotler, 2003; Lucas et al., 1994) Competitive price is defined as price of a product is based on what other competitors are charging thus it is not relatively as low as the old-fashioned neighbourhood convenience stores that are also locally known as ‘Indian Mama Shops’.

Consumers

Secondly, a supermarket has to decide on the target consumers in order to proceed with the location of the supermarket. Since conventional supermarkets offer largely food and related household products, they aim mainly on families that come from middle to low income. In addition, it targets working or non-working adults that are aged above 30 years.

Location

Since conventional supermarkets target on families, these supermarkets are located in the neighbourhood area with large trading area. The supermarkets are situated in residential areas as it is highly accessible and gives convenience for consumers. Their location might also be influenced due to location of competitors as it would enhance their trading areas.

Operating procedures

The operating procedure of supermarkets starts with Supermarket Licence which is mandated by the Environmental Public Health Act. Every business owners has to comply with cleanliness and food safety guidelines to prevent any food-borne diseases. The basic operating procedures that supermarkets have to follow are Hazard Analysis and Critical Control point (HACCP) system, cleaning and sanitation programs, pest control programs, waste management, transportation of finished products and maintenance program (Agri-Food & Veterinary Authority of Singapore 2012).

Store Atmosphere & Customer Services

Conventional supermarkets have average store atmosphere whereby it is neither isolated nor too crowded. A good strategy that supermarkets do is categorizing the items for shoppers’ convenience in searching for goods. Customer services should be good as staffs play important role in assisting customers at the counters and shelves.

Promotion

Conventional supermarkets are one of the market players in the industry that invest highly in their promotions. Promotions include heavy use of newspaper, flyers and TV advertisements. These promotions have to be kept in line with the customers that supermarkets are targeting e.g. if the supermarket aims to attract younger customers, online promotions would be preferred.

Sheng Siong Supermarket

Sheng Siong is one of Singapore’s largest retailers with over S$578.4 million in revenue for year 2011. Sheng Siong supermarket provides customers with both “wet and dry” shopping experience and their merchandises include a wide assortment of seafood, meat and vegetables, processed, packaged and/or preserved food products as well as general merchandise such as toiletries and essential household products.

Sheng Siong Strategy

Sheng Siong has complied with most of the strategies stated in the above. Firstly, the supermarket offers wide variety of food products and general merchandise. They also provide both generic and house brands products. The Housebrands stated in the image below are owned by Sheng Siong supermarket.

(Sheng Siong 2012)

These house brands allow bigger savings for consumers as they are priced lower than other generic products. Prices at Sheng Siong are generally low but competitive as we are able to find same products at other supermarkets at the same price. Sheng Siong supermarkets are located strategically in the heartlands of Singapore. With 33 stores located in the North, South, East, West and Central parts of Singapore, it shows that Sheng Siong aims to targets on every family in Singapore regardless of income status or age.

Photo of Sheng Siong supermarket at Bedok Reservoir Road

Photo of Neighbourhood opposite Sheng Siong supermarket @ Bedok Reservoir Road In complying with the operational procedures that are set by government bodies e.g. National Environmental Agency, Singapore Civil Defence Force and AVA, Sheng Siong has acquired licenses, permits, approvals and certifications for the business operations in Singapore (Sheng Siong 2012). Sheng Siong is also strategically categorized their merchandise for shoppers’ ease of identifying and convenience. Sheng Siong also provides consumers with a unique ‘push-basket’ for customers to shop at ease.

Row 7 – Snacks/TidbitsWheeled basket

Customer service is not really emphasized in Sheng Siong’s values but the supermarket offers weighing services for customers and they have many staffs in the supermarket to assist customers. Lastly, Sheng Siong has come up with promotion strategy using flyers and newspapers. One of their current promotions is lucky draw and winners are announced on the Sheng Siong Show. Weighing Service Sheng Siong Lucky Draw promotion 2012 NTUC Fairprice Supermarket

One of the largest competitors of Sheng Siong is NTUC Fairprice. NTUC Fairprice is Singapore’s largest retailer with a network of over 230 outlets comprising FairPrice supermarkets, FairPrice Finest, FairPrice Xtra, FairPrice Xpress and Cheers convenience stores.

NTUC Fairprice Strategy

Fairprice supermarket offers a wide range of foods products and household merchandise as well. Similarly, they provide house brand which is named after the company’s name i.e. Fairprice. NTUC Fairprice supermarket has come up with a strategy of having discounts on their specific house brand in order to attract customers to patronize their private brands instead. The image below shows the differences of the prices between their generic and house brand products.

Also, Fairprice supermarket has also strategically located itself in the heartlands within walking distance from housing estates and competitors. They currently have over 90 stores of Fairprice supermarkets located across Singapore to cater to varied needs of consumers. This strategy is to gather more consumers as competitors would increase the trading area for Fairprice supermarket.

Fairprice supermarket located nearby Guardian and 7-11 convenience stores Fairprice supermarkets have also complied with the licenses and regulations of supermarket in Singapore. In fairprice, customer service is emphasized as a key value in order to serve customers better. They also provide self-service methods for the consumers to have a freedom in their goods’ choice. Their promotions are similar to Sheng Siong’s such as newspapers and flyers. Fairprice supermarket also offers festive promotions such as discounts in Christmas period.

Pros & Cons of Conventional Supermarkets

Conventional supermarkets serve both advantages and disadvantages to both retailer and customer. Firstly, supermarkets have the advantage of low cost of operations thus being able to sell goods at lower price. Due to low cost of purchasing products from suppliers, it enables customers to purchase products at discounted prices as compared to convenient stores which mark up prices of the products. Conventional supermarket definitely offers the freedom of selection to customers due to wide variety and ease of shopping.

They also have high degree of efficiency due to elimination of service such as packing. It is also an advantage to customers as the shelves are easily reached out and the size of the shopping experience is neither too big nor small e.g. convenient stores offers limited products and hypermarkets offer too wide of variety for customers who do daily shopping. However, there are downsides regarding conventional supermarkets.

References

Genessa M. Fratto, Michelle R. Jones, Nancy L. Cassill, (2006),”An investigation of competitive pricing among apparel retailers and brands”, Journal of Fashion Marketing and Management, Vol. 10 Iss: 4 pp. 387 – 404
Barry Berman and Joel R. Evans. 2012. Retail Management, A Strategic Approach. http://www.fairprice.com.sg

http://ageconsearch.umn.edu/bitstream/9407/1/sp07be06.pdf
http://singaporesupermarketrecipes.com/fairprice-ntuc-weekly-promotions-week-37/ (ntuc promo pic) http://www.sgsaleinfo.com/v2.0/tagsearch/Sheng%20Shiong/1 (sheng siong promo pic) http://www.guidemesingapore.com/industry-guides/retail/setting-up-a-retail-outlet-in-singapore http://www.ava.gov.sg/FoodSector/FoodTradersAndEst/LicOtherFoodProcessEst/ http://www.asiaone.com/News/The%2BStraits%2BTimes/Story/A1Story20080205-48245.html http://singaporesupermarketrecipes.com/category/shopping-guide/supermarkets/sheng-siong/ (supermarket)


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