Superior Supermarkets

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Superior Supermarkets (SS) must decide whether or not to pursue an everyday low pricing (ELP) strategy at its three Centralia MO locations.
Strategic Issues & Marketing Mix
Pricing: Current prices are reflective of a high-end branding strategy. SS everyday (non-promotional) prices are approximately 10% higher than Harrison (Hr) and about 7 percent higher than Grand American (GA) and Missouri Mart (MM). Subsequently, higher prices have become a competitive concern due to their declining market share in Centralia. The negative growth rate, based on 1995 to 2002 figures from Figure 2, is -0.53%.
Product line: SS are supermarket stores. The stores’ products may be divided into 5 categories: 1) grocery (including
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Customer: The median age of the Centralia population was 35 years; the median household income was $36,000; and 80% of residents had a high school education or more.
Expectations/Minimal Threshold to purchase: Reasonable prices, convenience, quality produce/meat, overall variety of foods (taken from Exhibit 6); products must be consistently available and reasonable customer service is expected.
Market size= 41000 residents or 13,500 households (US Consensus 2000).
Competition: Main competitors with market share (%) and growth rates, respectively, include:

GA -13%, -6.36%, MM -27%, 0.97%, Hr -22%, 11.82%, and other stores -15%, -3.50%. The four main stores (SS, GA, MM, Hr) accounted for 85% of all food sales in Centralia.
Size: GA has 1 store 39,800sq. ft, Hr has 1 store 50,000sq. ft, MM has 1 store 120,000sq. ft. There are a total of 148 supermarkets operating in Centralia.
Strategy: MM is the food sales volume leader of Centralia and offers more general merchandise, accounting for 60% of its floor space. Hr captures the business of most of the middle- and upper-income groups in Centralia with annual incomes in excess of $40,000. The store focuses on ELP and is considered clean, orderly, attractive and well-managed. GA is considered the most modern store in Centralia and has the finest fixtures and décor –its wide aisles make it relatively easy to shop.
Competitor’s strengths: Increased floor space, attractive

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