Marketing- Pick and Pay free essay sample

They try keeping the use of preservatives to a minimum and provided a detailed online catalogue of in season fresh produce for every month of the year. Rather than having to put fresh produce on the shelf that isn’t up to standard. PnP chooses instead to only stock what is available to them. If the cheaper, outdoor grown avocados are not available due to seasonal limitations, they will stock the more pricy, greenhouse grown ones for example. Information gap- Each product sold on the shelf has a detailed breakdown of the nutritional value and allergens in the product. Pick and Pay provides qualified. PnP also provides educated and qualified pharmacists, and nurses at their medical dispensaries. This allows the customer to be sure of their purchase, the product, its relevant uses and any dangers associated with the product. Ownership gap- The ownership gap is bridged through customers being able to pay via EFT if they have used the online store and the goods are delivered directly to the consumer’s doorstep. We will write a custom essay sample on Marketing- Pick and Pay or any similar topic specifically for you Do Not WasteYour Time HIRE WRITER Only 13.90 / page Customers can do their shopping and select their various products. Once this is complete, the customer is required to pay for the goods. The till prints out a receipt, proving that the transaction took place, and identifying exactly what products changed owners. Pick and Pay makes shopping easier for the consumer as the consumer has the option to pay with cash or card facilities that are all available at the till point and no arrangement need to be made in advance with regards to the customers preferred method of payment. Value gap- This is the distinction between the relative values of a product in the eyes of the retailer verses the relative value of the same product in the eyes of the consumer. If both parties don’t come to an agreement on the value of a product, a sale will not take place. PnP would in some cases, drop their price, thus losing out on profitability, to be on par with their competitors. The sale will then become entirely dependent on which of the competitors close the 5 marketing gaps best. Question 2 Transport- This is entirely about efficiency and effectivity when it comes to getting the product to the consumers as fresh as possible and quickly as possible. Pick and Pay has various depots around the country and have a main distributions center in Longmeadow, Gauteng. Sourcing and supplying of information- Pick and Pay have been the game for many years and have acquired information on the different social classes that make use of their stores. They do market research to identify how to cater for each class with necessity good being priced accordingly to suit the poorer population but still pride themselves in quality. Sourcing and supplying of information is an ongoing procedure because trends change as we are in an ever changing society. The customers are really well informed about product as the staff for example at the dispensary are qualified and can answer all the consumer questions. There is a head of each section example the butchery, fresh produce, tinned foods and the bakery that the customers can raise their questions to if the customer feels the advertising isn’t informative enough. There will always be a professional at hand. Standardization and grading- This is ensuring that product standards are consistent. Grading the products make the customers aware of the type of good they are purchasing. It avoids the disappointment of paying the same for a pumpkin and when one gets home your neighbour was just at Pick and Pay and got a pumpkin double the size of yours at the same price. It avoids the customer feeling they have not got value for their money. To rectify these types of problems there is a grading system for quality and size. Apples for example are graded, lamb, wines and eggs. So for a superior quality lamb, wine, apple or egg one will pay more. Storage- Limiting stocks at the stores that set the products free to the consumer for final consumption is the best way to keep produce fresh as possible and keep the shelf life longer. The new distribution center makes it possible for stores to keep less stock yet have the same accessibility as if the produce was stored on the premises. The distribution center contains far more advanced fridgeration systems to prolong the life of the stock too. Financing- this is the attempt to keep cost as low as possible intern rewarding the customer with the lower prices to competitors. Pick and pay has a head above the rest in this department as they make use of a bulk buying principle. Their trading stock is essentially costing less than competitors therefore they can use the same mark-up percentage but have cheaper prices. The distribution center keep transport costs down and Pick and pay don’t outsource the delivery of product to stores they do it themselves. Risk Taking- This is also a characteristic of an entrepreneur we see that Pick and Pay have taken various initiatives in the community by sponsoring many events and making CSI one of their main aims to help the people of South Africa to a better quality of life. Millions are invested in these initiatives every year by Pick and Pay hoping the consumers will take note and the brand image remains a positive one. They take the age old saying of ‘’one needs to spend money to make money’’ and put it into practice in a more modern way. Question 3 Pick and Pay embraces the societal marketing orientation I feel. They aren’t entirely focused on only satisfying consumer needs, demands and preferences. They look at the bigger picture. They strike a balance between the consumer’s wants and needs, the consumer’s long-term interests in society, society’s long term goals and the organizations long term financial goals. They take into account environmental problems, shortage of resources, economic problems and neglected social services in South Africa and make that their problem in a sense and adapt their business practices accordingly. This diagram help one understand that they equally focus attention to these 3 different spheres. Consumers want satisfaction and feel they are getting value. Society and human welfare is being looked after with Pick and Pay supporting small businesses and helping them with basic business concepts. Wild life support programmes for endangered species. Workshops to educate the youth and the less fortunate and sponsoring of events like the Cape Argus cycling competition. THE FOLLOWING ARE THE FUNDAMENTAL PRINCIPLES OF PICK AND PAY AND THEY UNDERPIN THE CORE VALUES OF SOCIETAL MARKETING. The spirit that guides the Company and gives it its unique character is driven by the values and principles that inspired Raymond Ackerman to establish Pick n Pay in 1967. Those values and principles are considered sacrosanct and, despite changing times, new developments, improved technology and radical strategies, they remain consistent. Core principles The core principles that constitute Pick n Pays business activities include: * Maintaining abiding values, in spite of business practices changing with time. * Fostering respect for individuals, not as a strategic advantage, but because it is morally correct. Acknowledging the difference between timeless principles and daily business practices. * Sticking to values – even if this appears to put us at a competitive disadvantage. Sustainable business For over four decades we have built a truly sustainable business. The growth and success of Pick n Pay is attributable to two fundamental principles: * An unwavering belief in consu mer sovereignty * The application of the â€Å"four legs of the table† principle. These principles were put into practice at the foundation stages of the Company, and continue to be the cornerstone of the business The four legs of the table The â€Å"four legs of the table† principle follows a simple analogy: The business is essentially likened to a table supported by four legs, on top of which the consumer is positioned. Each leg is required to be equally strong so that the table may remain balanced and upright. The four legs comprise: * Administration * Merchandise * Promotion and social responsibility * People Each leg is equally important to the success and continued sustainability of the business. Each requires, and continues to receive, equal focus and management support. Building of sustainable communities Sustainability businesses have an important role to play in the building of sustainable communities – a responsibility Pick n Pay embraces wholeheartedly. It is not simply a philanthropic way of thinking; it is an act of enlightened self-interest. In our case, the more economic freedom that exists within South African society, the more scope there will be for growth in the retail market. It is no surprise that our view is the same as it was at our inception – big business must work together towards securing the economic security and social wellbeing of generations to come. Truly South African We are a truly South African company and have always operated in the best interest of our people and our communities. Pick n Pay behaves intrinsically according to our entrenched value system and we have little doubt that we have a positive impact on the lives of South Africans Question 4 I feel Pick and Pay has the right idea with regards to relationship marketing but to my view they fall short in a sense with the correct execution of relationship marketing. The blueprint is there but the practical application is still not up to standard. Relationship marketing places its main focus on the maintanance of long-term relationships between organization, government, public, suppliers employees and current and potential customers. They tick the boxes within all these departments but relationship marketing goes further than just trying to have long term relationships. It is about retention as repeat customers generate more income in the long term. Relationship marketing entails a wider view of the market itself and this is where I feel Pick and Pay miss the mark. Current and potential customers don’t feel different at all when they walk into the store. They are baited with schemes such as the smart shopper card system but this in effect is a profit maximization scheme rather than a relationship building tool. Relationship marketing simply starts with being greeted as one walks into a store. This will evoke a sense of belonging and having to keep loyalty to the particular store. Pick and Pay does not do this. It might seem impractical from a business perspective to have someone playing a roll as a host but this simple idea can in the long run generate more income. Good relationship marketing starts from the bottom up rather than a top down odel. It starts with the employees doing the simplest of tasks in-store realising they have an obligation to the customer with regards to service. This will create only a positive response from reference groups. The power of them can never be under estimated. I feel Pick and Pay know what to do to execute Relationship marketing but they are focusing on the Macro issues, government, suppliers. They can focus more resources towards the customer and employees. After all it is these two that pay ones overheads. Neither the government nor the suppliers. In concluding Pick and Pay probably just need to spread their resources more evenly between building a good relationships all round and by starting to focus more at the micro issues that are in-store and that they actually have the most control over. Question 5 5. 1) The Micro environment consists of the internal work environment and all the factors that the business have direct control over. The vision and mission statement is created in this environment. Pick and Pays resources are utilized in this environment. Strengths and weaknesses of a business occur in this environment. The Market environment consists of consumers, suppliers, competitors and intermediaries. Business’ don’t have total control over this environment but do a have a certain degree of influence. They can’t force customers to shop at their store but can direct all their effort towards attracting customers. Business’ have the option of which suppliers they would like to use and also to change suppliers if they feel they aren’t living up to their standards. Competitors can never be stopped but measures can be put into place to stay that one step ahead of them and ensure a competitive advantage in the market. Intermediaries are the business units that’s are usually outsourced for the transporting of stock. If one feels they aren’t delivering goods in a timeous fashion. It is you right as a business to voice your concerns or seek out other companies that are better suited to accommodate ones needs. 5. 2) The Macro environment is dynamic. Business need to be able to adapt to these changes. This environment contains opportunities and threats. The business has no control over this environment. Economic: This includes, price fluctuations in certain goods, taxation on mports and exports, global and national budgets, and how much the consumer is willing to spend. PnP imports products into South Africa, this is related to the international environment, but we are focusing on the laws once it arrives here. South Africa has put laws in place to tax certain products heavily, this is to prevent our local economy failing due to cheaper outsourcing to China and India. We can see this in P nPs Clothing chain. They have weighed the costs of producing locally, or buying from a local producer, and importing from china, and paying the import tax. In the case of PnP, they have chosen to go with Chinese products, as the economic state in South Africa is not so severe that the taxation would prevent from being able to turn a profit. Political: Laws and regulations both nationally and internationally change regarding the sale, stock and transporting of certain goods. Business either will adapt to these laws or discontinue them. Many business still risk not operating within these lines but it ultimately is breaking the law and they can be subjected to jail sentences or heavy fines. The pharmacy at Pick and Pay strictly has qualified pharmacists dispensing drug as this is a regulation by law that not anybody can do so. The liquor and cigarette trading is a very complicated area to deal with being a large store. They need to adhere to age one needs to be to purchase these items and certain times they may not be sold according to law. There are not only laws regarding product sales but also labour laws that Pick and Pay need to adapt with otherwise their staff can make use of trade unions and this will put the business in a bad light. Physical: This environment consists of the natural resources extracted from the earth. Pick and Pay relies heavy on these resources as it is the base product for all their goods and packaging. Even the land on which the physical building is located on is seen as a natural resource. International: This environment is largely based on imports and exports and communication software to make the conveying of message between stores easier. This may seem unnecessary but when one is dealing with up to 100 trade stores at a time communication mediums become very important. They assist in distributing of stock and also ordering of stock for the main distribution center. Technological: This is the most dynamic environment. Opportunities are endless in business as technology is always improving the way things are done. Pick and Pay have used the online shopping tool. This stops customers from having to physically go to a outlet. None of the other competitors have implemented this sort of system yet. It not only caters for the busy working class of today but also for the disabled and people who don’t have cars.