In general it is characterized with low prices, tables of samples and high discounts. While the following marketing tactics were used by Cub Foods to increase probability of purchases:
1. Promotional – Price Deals: At the entry aisle, called a “power alley” is lined 2 stories high with specials, such as coffee bean $2 and half priced apple juice. 2. Physical evidence effect on cognitive: Ceiling joists and girders are exposed giving the feeling of spaciousness up there, it suggests there’s massive buying going on, translates in a shoppers mind that there’s tremendous savings going on. 3. Purchase Quantity: The shopping carts are wider than usual to encourage expansive buying, and that fit through the wide aisles to easily reach high profit impulse foods. 4. Purchase Location: Another tactic, that deli comes before fresh meat because Cub wants shopper to do the impulse buying before their budgets are depleted on essentials. 5. Packaged clean grocery was of low prices (by controlling the cost and high volume sales) and exceptionally high quality for products and meats. 6. Maps to guide shoppers, even without maps they would be lead by the arrangement of aisles.
What accounts for Cub’s success in generating such large sales per customer and per store?
1. They properly identify their segment of customers and focus on its segment which is a family of 4-5 individuals with adult ages 24 – 40 years. 2. Proper positioning as low cost leadership, vast selection & good quality. The customers can found everything they need under one roof and cheaper than its competitors. 3. Their customers buy in volume and spend 4 times the supermarket average per shopping trip. 4. Relies on the word of mouth cuts on ad budgets by 25% less than other chains. 5. Pricing: 6 points less than most conventional stores.
Given Cub’s lower prices, quality merchandise, excellent location and superior assortment, offer reasons why many consumers in its trading areas refuse to shop there.
1. The overwhelming displays could be confusing for some customers. 2. The misconception of low prices reflecting lower quality. 3. Could be of different targeted segment i.e. single that do not need volume purchases
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