Kao Corporation
In the highly competitive & crowded market flooded with competitor’s where market shares are nearly remaining constant Reed must channelize all its strength to remain market leader. Rather than focus on its market leader position Reed tried to be a market follower by launching dollar campaign. In this crowded market, it makes sense for Reed not be a follower in overall grocery market but to be a leader in organic grocery & gourmet foods. Getting into a price war with market inchers’ like Dollar Stores can be only near term tactical approach but focusing on its core competency is essential to keep strategic positioning intact in the market.
Reed should focus to stay number one by expanding total market demand, protecting current market share & increasing market share. We are recommending below actions for Reed.
Expanding Market Share:
Focus on acquiring new customers: Focus on expanding market share of older people. Design specific neighborhood specific advertisement programs based on age group.
Target new market segment: Target young busy couples who nowadays rely on prepared meal sold in Grocery stores. Also target larger households who can help to generate volume.
Reach new customer geographies: Introduce Grocery Deliver for customers not living in nearby areas. It also will help us in acquiring new customers who are unwilling to drive beyond 3 miles average but wish to get better healthy food.
Protecting Market Share:
Proactive Marketing: Grocery stores have not focused on pre-packed grocery for dinner. Recent growth of companies like Blue Apron has clearly indicated that this market segment has a potential. Red can focus on this segment by having prepacked items with recipe instructions in store & leverage delivery services. This can also give Reed a highly competitive edge than third parties like Blue Apron for same kind of products.
Defensive Marketing: We acknowledge that Dollar Campaign hurts us but price is also equally important for customers. Rather than focusing only on price Reed should position its ad in such a way that it is has competitive price at par Delfina & Whole foods. Its advertisement should also focus on showcasing that they do carry a wide variety of gourmet & international foods like traders Joe. Reed should also plan to use Flank Defense strategy by offering select few items at cost every day to protect its high-priced items.
Increasing Market Share: Reed must do it’s best to increase market share from 14 % to 16 %.
Take away competitor’s share: The best bet is to target to take away