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The Role Of Marketing And Information Systems Management In Asda Stores Ltd
Asda is a UK retail chain headquartered in Leeds, West Yorkshire. The company now occupies the second position (after Tesco) in the UK retail market starting 1999 after it became a subsidiary of the American retail giant, Wal-Mart. Like other retail giants in the UK, Asda sells a variety of merchandise ranging from electronics, clothing, toys, groceries, and even financial services. Currently, the company occupies about 17 percent of the local market share courtesy of its price-based marketing mix – it prides itself as “Britain’s Lowest Priced Supermarket, 14 Years Running” (Asda, 2012).
This report has three core aims to fulfil: to analyse the role of marketing operations on Asda, examine how the company develops its markets, and investigate how information systems management helps the company to achieve its objectives. The company was chosen because of its low-price marketing strategy and above all because of the author’s immense passion for analysis the success behind large retail businesses.
Role of Marketing Operations on Asda
According to Patterson (2007) marketing operations occupy a phenomenal place in the success of an organisation. Marketing operations roles spans the four marketing mix Ps (product, price, place, and promotion) as well as complex organisational tasks such as corporate and business level strategic planning. Usually, an organisation’s marketing operations fall either within strategic marketing or marketing management – as Figure 1 below shows, strategic marketing entails broad strategic decisions occurring at both corporate and business levels while marketing management entails specific strategic decisions touching on individual products (Bearden, Ingram, & LaForge, 2011).
Figure 1: Typical Roles of Marketing in an Organisation
Source: Bearden et al, 2011: p.55.
Similarly, Asda market operations impact its operations along the corporate and business levels of strategy development and execution. This is in tandem with Fernie and Sparks (2009) postulations that marketing operations help an organisation to develop new products, select target market and to develop a responsive marketing mix. Specifically, the company has succeeded in developing product marketing plans and executing them courtesy of its marketing operations. Critical marketing operations such as strategic planning, budget management, production management and asset management has been responsible for the successful development of market-oriented products that end up boosting the company’s overall sales (Finne & Sivonen, 2009). Arguably, this is made possible by the fact that part of marketing operations of the company entails generating demand through data management, dialog management, campaign management, and lead management as well as measurement of product performance through responsive reporting and analytics.
Marketing operations at Asda help the company to develop its marketing philosophy of being the lowest priced supermarket in the UK. Marketing, as a function within the broad spectrum of organisational operations is responsible for the monitoring of cost of operations, long term organisational goals, competitors pricing tactics, consumers’ purchasing power, and prevailing economic conditions. It is paramount for a price-conscious company like Asda to constantly monitor critical price determination indicators all the time so as to easily identify opportunities and weaknesses of the existing marketing philosophy. According to Finne and Sivonen (2009), a company’s marketing philosophy should be constantly reviewed to make it reflective of the prevailing market conditions.
In addition, the company utilises its marketing operations in executing its marketing philosophy. For instance, when rolling out new products in existing and new markets, Asda has to closely liaise with “innovators” so as to hasten consumer adaptation and reduce costs associated with distribution and promotion (Farnie & Sparks, 2009). It is arguable that the company cannot execute its price-leadership philosophy when rolling out new products or when venturing into new market segments without first creating consumer confidence through aggressive promotional drives such as celebrity endorsement or direct selling.
Asda utilises marketing operations to shake-off competition from three of its major rivals (Tesco, Sainsbury, and Morrison) as well as from smaller market operators such as Neto and Waitrose. Competition among the four leading retailers in the UK can be described as fairly subtle as there is very little product differentiation and consumers are driven by loyalty more than prices (Deloitte, 2010). However, competition from smaller retailers who have a close link with consumers makes it hard for large retailers to make meaningful impact on new markets especially when they are not flexible enough to compromise on their marketing philosophy (Pellegrini & Reddy, 1989). In what can be argued to be an impact of responsive marketing operations, Asda has succeeded in adjusting its price-based marketing philosophy in the last 14 years – low-end and price-conscious consumers as well as retail market researchers in the UK consider it a relatively cheap outlet for majority of common household merchandise (Li, 2008).
How Asda Develops its Markets
Markets are not developed in a one-off exercise. Most organisations spend years learning and developing their markets before making meaningful investments. Nevertheless, a common way of developing markets involves the same process organisations go through when developing and executing strategic decisions. As Figure 2 below shows, this involves five stages of studying the target market, identifying potential threats and opportunities in the target market, formulating measurable and achievable objectives, developing clear and flexible strategies, and executing such strategies as per the set objectives (Farnie & Sparks, 2009). This process should however be flexible as to allow marketers to go back to a prior stage as may be determined by the unpredictable market trends such as financial meltdowns or government policy.
Figure 2: A Typical Method of Developing Markets
Source: Bearden et al, 2011: p.53
Asda pursues a multi-faceted approach when developing its markets. This multi-faceted approach involves an aggressive promotional mix that incorporates price-leadership strategy, sponsorship, celebrity endorsement, and popular advertisements. Arguably, this multi-faceted marketing mix is executed within the pillars of the five-step market development procedure. Firstly, prevailing market conditions are reviewed, threats and opportunities are identified, objectives are set, strategies are developed then the actual marketing mix is rolled out (Bearden et al, 2001). Sponsorships include the English football competition where the company has sponsored major teams such as Sheffield Wednesday Football Club during the 1900s, Accrington Stanley during 1998-1999 season, and Trenmere Rovers. Other sponsorship includes the Kwik cricket tournament for kids (Asda, 2012).
On the other hand, celebrity endorsement includes the popular “Asda Price” advert campaigns that involve celebrities such as Sharon Osbourne, Michael Owen, Julie Walters and many others. This adverts involves customers (celebrities) tapping their pockets twice to reveal a chinking sound of knocking coins that the low prices offered at Asda has left in their pockets. These adverts have been repeated with changes beginning 1977 and consumers have come to associate them with Asda (Sweney, 2009). Overall, these adverts convey the picture of a pocket friendly supermarket that utilises consumer purchasing power as the major benchmark in setting product prices.
Perhaps the most popular way Asda creates its market is the way it carries out core corporate and business level functions. The company believes in being a good business to its stakeholders and therefore pursues a semi-lean, semi-agile model whose core tenets are energy management, environmental conservation, good people management, and sustainable selling. These core values are achieved through the “Sustainability 360” programm.............
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