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| Tuesday, 6 January 2004 |
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Lanka's Supermarket industry set for explosive growth by Prasanna Perera, Marketing and Management Consultant, Chartered Marketer, CIM, UK The supermarket industry in Sri Lanka is set for explosive growth, given the western lifestyles of Sri Lankans, where convenience is a key benefit sought. Cargills Food City, Kings Supercity, Sentra, Keells Super, EH Super Pola, Sunup are some of the supermarket chains that have expanded operations. In addition there are other operators such as park n' Shop, Arpico Super Centres and Crystal. The Sathosa chain is also set for growth in the coming months, with the new management in place. Hence, what we are witnessing is a dramatic growth in the modern trade, which is taking centre stage over the traditional trade. (Kade's or boutiques) From a marketing standpoint, the key question is whether any supermarket chain is attempting to "position" their brand uniquely, in order to achieve a differential benefit. Lower prices and consumer promotions alone cannot differentiate a supermarket chain. A serious attempt must be made to differentiate, in ways which are meaningful to customers. This is the challenge to all those in charge of Marketing supermarkets in Sri Lanka. How are the supermarket chains positioned at present? Cargills Food City which has the largest outlet network, advertises based on the theme "gedera yana gaman". But does this communicate anything unique? Have unique attributes been communicated adequately? Keells Super having positioned themselves as a premium chain, have now lost this position and does not seem to have a clear cut position in the market. EH Super Pola promises a novel Pola, but does the customer perceive it accordingly? What is unique about a "super pola"? Has this been communicated? Kings Super City is a new entrant and their strategy seems to be lowest prices, as in the case of Sentra. Therefore, the million dollar question is whether any supermarket chain is attempting to carve out a competitive niche, by positioning themselves clearly in the mind of the target customer. Are all the chains carrying out me-too strategies and hence, losing out on marketing opportunities? How should supermarkets position themselves? (Brand Positioning) The starting point is to determine what is required by customers. Is it value for money, lowest prices, comfortable environment to shop, convenience, a wide array of merchandise and excellent service. Whatever basis of positioning selected must be considered as beneficial by customers and unique. (me-too positioning is of marginal value). Let us examine some possible brand positioning strategies. Positioning by competitor This is possibly a strategy for a market leader or for a strong challenger. The idea is to deposition the competitor. The classic example is Avis "We are No. 2, we try harder", with reference to Hertz the market leader. Benefit Positioning Identification of an unique benefit and communicating it to customers. For example the lowest prices in town, (it must be the lowest!!) free home delivery, unique sales promotions (not the usual 10% off or buy 3 and get 1 free), a unique shopping ambience and experience (distinctly different). Positioning by product class/category This is probably the most potent strategy in order to achieve a sustainable brand position. Cannot a supermarket be positioned as something different? For example as a superstore, family leisure centre etc., The word "Supermarket" is the problem. All are supermarkets but how many are unique! Consider star class hotels. If the word hotel is used, it immediately brings up an artificial environment, which is different to home. Hence the Shangri-La Hotel positions itself has Singapore's other Botanical Garden, competing in a different product category. Positioning by attribute (Feature) If this strategy is to be successful, the attribute selected must be unique. Possibilities include valet parking, the largest floor area, value added services, extraordinary promotional offers and outstanding customer service. Positioning by user This is positioning based on the target customer (shopper). For example, the store for busy executives, convenience seeking housewives, newly married persons and families. For this strategy to work out, the target customer base must be unique and well identified/understood. Lessons that can be learnt from overseas operators The Tesco Chain positions itself as a food store. Food is its forte and core business. Carrefour positioning is as a hyper-market (Large supermarket or even department store), offering good value for money. "Seven-eleven" positions itself as a "corner store", offering a selected range of essential merchandise. Cold Storage positioning is as "cold chain" and purchases are only on cash. Take the bookstores such as W. H. Smith, Border's, Kinokuniya. W. H. Smith is positioned based on value for money, Border's for a shopping experience and Kinokuniya for being the largest bookstore in Asia. A key learning in positioning is to have a strategic focus. Do not try to be everything to everybody, but something to somebody. Supermarket chains in Sri Lanka have opportunities to focus on such as food, convenience goods (merchandise), fresh/natural food and beverage, pharmaceutical and gift items, There are several examples outside the supermarket industry as well. Cabdury's have kept their focus on chocolates, Kellogg's on cornflakes and cereals, Gillette on shaving and male grooming and Kraft on cheese. It is very difficult, if not impossible to position something successfully if it is not clear whose minds you are trying to influence. The way ahead Supermarket chains in Sri Lanka would do well to invest in strategic marketing, as a source of sustainable competitive advantage. Strategic thinking is important rather than the typical short-term quick fix. Brand building is essential and must be treated as important. As a part of this brand building exercise positioning is critical in order to compete successfully in a challenging industry, both now and in the future. "Positioning has got nothing to do with a physical product. It has to do with the mind of the prospect". |
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