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[Solved] Reed Supermarkets Case Study Solution – Case Introduction, Problem Statement, and Proposed Solutions

Reed Supermarkets Case Study Solution: Case Introduction

Reed Supermarkets Case Study Solution, Reed Supermarket

Reed Supermarkets Case Study Solution can be analyzed from the perspective of Competitive strategy, pricing strategy, and analysis of competitive advantage. This Classic Case from HBR is originally termed Reed Supermarkets: A New Wave of Competitors. Reed Supermarkets is a chain of high-end grocery stores in several states in the Midwest. Meredith Collins, who is the vice president of marketing, goes to stores in Columbus, Ohio. This is a key area with the biggest market and the biggest effect on revenue growth. She is worried that dollar stores and other stores with limited selections but very low prices will give her more competition.

Reed’s market research shows that because of the bad economy, customers are becoming less loyal and are willing to shop at more than one store to find the best deals. Collins has to decide if he wants to change the current marketing and positioning plan to try to get a bigger share of the market and meet the company’s tough goals. She can either stop competing on price and focus on quality, or she can sell more private-label brands and compete on price more aggressively. She can also keep the business in the same place and attract customers who want a good shopping experience.

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Reed Supermarket: Company Background

Reed Supermarkets, one of the largest grocery store chains in the Midwest, was started by Williams H. Reed in Kalamazoo, Michigan, back in 1939. The chain is well-liked by customers thanks to its convenient locations, long hours, high-quality products (with an emphasis on organics), and exceptional service. In 2010, more than 20,000 people were employed at its two regional distribution centers, which house a total of 192 stores.

Reed Supermarkets Case Study Solution: Problem Statement

The organization is currently facing a wide variety of challenges, all of which need to be addressed as quickly as possible. Reed Supermarkets is currently dealing with intense competition and a decrease in its market share within the central region of Columbus, Ohio, which is located in the United States.

Increasing Competition

The company is up against significant competition from both established and emerging market firms. This competition comes in the form of smaller regional chains, warehouse-club outlets, and three primary independent competitors. Each of these competitors employs a unique strategy to attract customers, as follows: Top Val offers low prices, Galaxy offers quality that is in the middle of the range, and Delfina offers quality that is at the top of the range.

Lack of Definitive Valuation

As a consequence of this, Reed Supermarkets faces a significant obstacle when attempting to establish a market valuation that is justifiable in comparison to that of other grocery retailers. In light of the fact that the company’s operating margin is currently 2.1%, it is of the utmost importance that it implements strategies that are capable of bringing it on par with its rivals. The organization will face difficulties in carrying out the expansion plan. Reed Supermarkets has, throughout its history, been hampered in its efforts to expand due to the adoption of business practices that were less than optimal.

Elevated Pricing with Competition

The elevated pricing of the company in comparison to its competitors, as widely perceived by the vast majority of customers, is the primary concern that has been brought to light by the investigation into the matter at hand. Reeds Supermarkets is in a competitive position within the Columbus market, which presents a number of challenges.

Lack of a definitive strategy

Despite efforts to directly compete with other companies, Reed Supermarkets has not yet developed an investment strategy that can effectively track the expansion of the number of its stores within the region and across the country. This is despite the fact that the company has already implemented the strategy. Therefore, the task at hand is to increase Reeds’ market share despite the constraints of having limited resources and previously ineffective strategies. This is the challenge that lies ahead.

Reed Supermarkets Case Study Solution: Analysis of Current Position in Columbus Market

Reed Supermarkets is a highly competitive participant in the Columbus market. The company operates a network of more than twenty retail stores, each of which yields annual sales exceeding twenty million dollars. The product and its quality are commonly acknowledged as the benchmark in the industry.

Competition and marketing strategy are prevalent in the Columbus market, where Reed’s market share is dispersed across various tiers. The store is designed to encourage customers to exceed their initial time and budget expectations, from the point of arrival in the parking lot to the moment of checkout, with the primary objective of inducing the purchase of items beyond their needs.

The market position of Reed Supermarkets is notably influenced by demographic factors, given that the firm distinguishes itself from its industry peers through various means. As previously mentioned, Reed College prioritizes quality.

The company endeavored to sustain its premium market position by expanding its product portfolio to include fresher and higher margin sections, floriated sections, and a variety of specialty offerings. This strategy was implemented to uphold the company’s enduring reputation in the Midwestern region. This action was undertaken to ensure the enduring preservation of its reputation. Without diminishing the significance of the prolonged working hours demanded in contrast to those of its competitors.

Facilitating a self-paced shopping experience for customers, thereby mitigating concerns related to potential missed opportunities for discounts or substandard product quality. Upon entering a retail establishment, one may avail oneself of the remarkably diligent customer service that is offered by this particular organization.

Competitive pricing is a crucial factor in stimulating demand for one’s products or services. Having an inherent comprehension of the appropriate product positioning and pricing strategy is imperative for companies. Efficient supply chain management enables retailers to transfer cost savings to their customers, particularly when intermediaries are eliminated from the process.

Promotions can serve as a means for businesses to increase demand and establish credibility with their customers, particularly with regard to their return policies and warranties. The establishment and maintenance of brand equity have emerged as a crucial objective for enterprises across various industries and scales. The primary objective, however, is to identify a potent and unique visual representation that accurately embodies the essence of the locale.

In order to gain a deeper understanding of this subject matter, it is imperative to possess prior knowledge of the concept of place branding.

Simon Anholt (2010) provides a significant definition of place branding, wherein it is described as the process of discussing and implementing measures to improve the brand image of a particular location. Additionally, it is regarded as a strategic approach to establishing the popularity of a place (p. 7).

The utilization of place branding can yield advantages by facilitating the development of a strong competitive identity, thereby enabling a notable presence in pertinent markets. This outcome is a result of the aforementioned action. The overall impact of a location is determined by its ambiance, product offerings, visitor experience, and individual perception.

Reed Supermarkets has demonstrated exceptional performance by consistently maintaining its leading position in the market for several years. In the contemporary economy, it is imperative for businesses to establish a place branding presence in order to remain competitive.

The geographical dispersion of physical retail outlets is a crucial element for the efficacy of a marketing plan.

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Reed Supermarkets Case Study Solution: How Serious Are the threats posed by Dollar Stores and Aldi?

Customers are willing to visit various stores multiple times in order to obtain the most favorable price. Reed’s is confronted with a noteworthy obstacle, notwithstanding the minor proportion of market share held by Dollar Stores and Aldi.

Aldi’s ability to offer lower prices than Reed Supermarkets is attributed to its sale of private label products, despite the comparatively restricted range of products available. In contrast, dollar stores commonly offer a diverse range of established brands at significantly discounted prices.

Reed faces a formidable challenge in competing with Aldi and Dollar General due to the direct impact of this situation on its pricing strategy. The significance of price outweighs the convenience factor for devoted customers of a supermarket.

Reed has effectively maintained its brand reputation by upholding the pricing and quality standards of its merchandise, as previously deliberated. Furthermore, the enduring loyalty of Reed’s clientele in the face of new market entrants has presented a potential avenue for the company’s growth and expansion.

According to a recent publication in the Journal of Marketing by Narayanan Janakiraman (2019), an assistant professor at The University of Texas at Arlington, it is advisable for marketers of premium products to maintain high prices, as a significant number of consumers tend to associate high price with superior quality (para.13). Consequently, the brand exerts a strong attraction on them, leading to a low probability of modifying their current behaviors.

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Reed Supermarkets Case Study Solution: Should Collins Continue the Dollar Special Campaign?

If the speculation is accurate, the implementation of the dollar special promotion was aimed at increasing footfall, given the influx of rival businesses in the market, resulting in Reed Supermarkets lagging behind. The objective of Collins was to reposition Reed Supermarkets as a brand that is mindful of product quality and cost-effectiveness in the consumer market through the implementation of the dollar special campaign.

Collins aimed to alter the perception that Reed Supermarkets solely served high-end clientele. Reed Supermarkets offer patrons the chance to realize substantial savings on around 250 distinct products on a weekly basis, as compared to their standard retail prices. The promotional campaign is emphasized across various media platforms, including online, print, and broadcast advertisements by Reed. Insufficient duration of the marketing campaign may lead customers to perceive the company’s prices as comparatively higher than those of its competitors.

The potential solution to this issue could involve extending the duration of the campaign. Thus, the campaign would have the capacity to maintain the company’s esteemed reputation throughout its entirety. Furthermore, implementing a price reduction strategy could potentially enhance and sustain customer allegiance.

This can be achieved by perpetuating the dollar specials initiative, which has the potential to substantially decrease prices and entice a larger customer base to the organization (Gbadamosi, 2013). Thus, reducing prices could potentially enhance the organization’s profitability.

However, the primary drawback of this approach is that it creates a complex situation for Reed’s within the Columbus market. As a component of this marketing campaign, the prices of specific products have been reduced by a maximum of 44%. Consequently, Reed’s is refraining from augmenting the sales of commodities that possess elevated profit margins as a means of compensating for the deficit.

Furthermore, the moniker “dollar specials” may lead to potential confusion with the appellation of their chief competitor, “dollar store.” There is a possibility that Muddy Reed is being represented in some manner within this context. Furthermore, it is recommended that the dollar special campaign be terminated as it fails to enhance the premium image of Reed Supermarkets in the eyes of its clientele and may potentially compromise the company’s existing reputation as a top-tier food retail establishment.

Reed Supermarkets Case Study Solution: Conclusion

In summary, Reeds Supermarkets has encountered considerable obstacles, particularly in the realm of strategic management. Despite exhibiting robust performance in other markets, the company’s market share expansion in Columbus has been comparatively sluggish. The increase in competitive threats, primarily emanating from retail outlets like Aldi and Dollar General, is the main contributing factor.

The company has strived to achieve a competitive edge over its competitors through the provision of niche products, the development of proprietary brands, and the implementation of comprehensive promotional initiatives.

However, none of the previously mentioned remedies have demonstrated significant efficacy for the issue at hand.

To achieve the objective of venturing into novel markets, it will be necessary to reevaluate the pricing framework of the enterprise. In addition, the implementation of loyalty programs and incentivization strategies for its clientele will also hold significant sway in facilitating this undertaking.

There exists a singular recommendation that has the potential to enhance operational efficiency, foster expansion, and facilitate the problem-solving capabilities of the organization. The decision that is to be made must be rational and supported by valid reasoning in order to effectively address these concerns.

The implementation of progress monitoring by Red Supermarkets is deemed the most efficacious approach as it enables the company to ascertain its market share and evaluate the efficacy of its strategies

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