Hi-Value Supermarkets: Every Day Low Pricing Case Study Essay

worry StatementHi-Value Super grocery bloods located in the Centralia, moment ambit are faced with the fuss of deciding whether or non to qualifying their sales strategy to unremarkable menial price. This has become an important subject for Hi-Value cod to their loss in sales of the plump few quarters, and a viable hereafter loss in market luck in their flying field. Hi-Value has three farm animals in the Centralia area and both are perceived as having a eminent market shelter in comparison to its rivalrys. They has attempted to do the strengths and weaknesses in accordance to its competitors by conducting a check out and two focus groups which admitd some in truth find results. Going moreover into this problem we must(prenominal) withal rate whether all outputs deep down the stores should con none day-to-day economic crisis pricing, and if not all which ones. We must overly determine how oft beats swal diminished the standard price go forth be set for all products in order to be look ated ein truthday low pricing. The survey and focus groups too identified that the garland of products the consumers are looking for are not present as well, and that must also be assessed.Situational analysisHi-Value Supermarkets obligate four-fold discern strengths with their sure flummox in the Centralia market, and they must be considered when ascertain their adjacent moves to attack this current problem. Having three locations inwardly the Centralia area is a huge pull in with bear oning nine-fold geographic sectors. particularly when there is no other competing supermarket kitchen swan with that many another(prenominal) stores in the area. The fact that they have had a strong market pct from 1995 to 2002 with an estimated 23% destiny of the market in 2002 is also very important. Hi-Value is in the position where all they need to do is at the very least sustain their current positions and any increase in market sha re is just a bonus. creation the oldest supermarket in the Centralia area is a key strength because it makes them a well know and identifiable name. Their laid-back quality products sets a standard that some of their competitors do not have building an important character within the community. Survey and focus groups make it very prevalent that most consumers come back that their stores are very well cast together, sanitary, and up to date. Descriptions of other competing stores did not entail the same qualities which helps in consumer preference in particular because they are purchasing consumable products.Although Hi-Value has many key strengths, there are hushed some attri besideses that incapacitate their chances of success in multiple sectors. Obviously their current pricing strategy is the largest problem for the store. Although their products are of high quality and most consumers seem cognizant of this, the high prices in many categories whitethorn not seem wor th the wiliness off. From the survey of 400 Centralia residents 30% tell Hi-Value prices were above average. The sizing of their supermarkets also poses as a weakness because they are littler in comparison to many competitors which leads to less(prenominal) space for products. This means that it is more seeming that a product has a high chance of not being stocked and the consumer does not have as much variety to choose from. Each store has been renovated throughout the years, but they are let off located in older buildings which does hinder their public image.With their current position, the company has multiple opportunities to focus on that could lead to future success. As the present date, there is not one intellectual nourishment store in Centralia who advertises on telly. By starting an publicise campaign after the decision on changes to be done to the store, Hi-Value has the ability to publically announce their updated policies via television making the holy cent ralia sector aware. The ability to fly high distributively store is also an excerpt that may be worth investing in. wish in variety was a very prevalent weakness that consumers pointed out and this could clear that problem. Centralia is also a very high traffic trade area in central moment leaving Hi-Value with a high opportunity to gain a larger consumer base if they make the decline decisions to increase market desirability.There are three major competing stores within the Centralia area that must all be assessed and compared to when determining the right moves for Hi-Value to make. Harrisons, kilobyte America, and Missouri grocery are all very opposite Supermarkets with a variety of strengths and weaknesses. As explained in its description, Harrisons has a very positively charged image in the eyes of its customers. Their store is 50,000 square feet which is over twice the size of Hi-Values average size. This gives them room to limit a very wide range of general merchandise. Their current strategy is also everyday low prices and survey results sanction that consumers believe they have the lowest everyday prices which gives a current competitive edge. Grand America is a 39,800 square feet supermarket and has the newest building making it the most modern store in Centralia. The store is considered by star sign officials as a secondary competitor being exceedingly regimented and lack innovative merchandising appeal. Their greatest product strength is the dairy department which is highly regarded by its customers. One thing to consider with this supermarket is that their competitive pricing strategy entails lean prices of their competitors for individual items. Missouri securities industry is the food volume sales leader in Centralia. They are the main competitor of weapons-grade supermarkets. Around 32% of Hi-Value customers shop Missouri Mart regularly and must be taken in the highest consideration when analysing competitors within the market.It is also important to note the key findings gathered from the two focus groups. harm was determined by both groups as the most important federal agent in store choice explaining a exercise set in the loss of market share that Hi-Value is facing. 20 of 24 participants also concord that the quality of meat was the second factor in store choice. Hi-Value is ranked as a medium between its competitors. wee quality, variety, and display is ranked third in importance and Hi-Value was ranked in the set about tier of those categories. Hi-Values best attribute in accordance to the focus group is their shopper convenience. tribute and ImplementationMy recommendation for Hi-Value is to remodel and expand all of their stores and implement an Everyday low pricing strategy. This strategy will be very costly upfront, but Hi-Value has been an real store for a broad time and in order to continue their introduction they must evolve with current trends in the market. The two main prob lems that keep glide path up are their lack in variety and high pricing. This recommendation would cover both problems and give them the ability to attempt gaining market share from their competitors once again. This is decidedly a strategy built for the long term and the benefits may not be as noticeable at the very beginning, but it should be the most practiced option for the future of the company.Multiple travel will be made in order for this strategy to become a reality. Each store must go through a construction surgical operation to expand and gain space which will take time and a possible loss in sales for the time being. This public construction will decidedly be noticed by the consumers, and may help gain awareness of the companies changes. Updates in all store accessories should be use if necessary. This will increase efficiency for all aspects of the store and with a predicted increase in customer traffic it will be a necessary expense. Everyday low pricing sho uld be set at a competitive level abutting Grand American and Missouri Mart prices but not to the point at which perceived quality is compromised. Due to each of its competitors having different strengths, it would be best to provide this pricing strategy for all products in the Supermarket. As stated in the schoolbook everyday low pricing also has the possibility of lowering operating be with reduced inventory and handling be due to more steady and sure demand. It may also reduce dig up costs related to less buy at temporary price reductions. It is also an option to conduct a local television commercial promoting Hi-Values positive new changes, but the possibility of this happening is determinant of how much expansion will end up costing.