Strategic Analysis of the UK Supermarket Sector MKTG3025 Assignment
Subject Code :MKTG3025University :AstonUniversityCountry :United Kingdom
Structure for High-Grade Coursework (2,500 Words)
1. Title Page
Title of the report
Your student ID and course details
Date of submission
2. Table of Contents
Clearly numbered sections and sub-sections
3. Introduction (200 words)
Supermarkets are an essential part of the UK retail landscape, shaping customer shopping habits and driving intense competition among major competitors such as Sainsburys Asda and Tesco. This report will analyses the UK supermarket sectors marketplace characteristics significant rivals, customer decision processes, and customer retention methods. Furthermore, it will investigate geopolitical issues, opportunities, threats and competitive advantages in sector. The report will begin with an overview of the supermarket industry, including prominent rivals. A PESTLE study will then be conducted to identify significant external variable, followed by an examination of supermarkets consumer profiles and purchase decision making processes. It will also cover customer retention methods and asses possibilities and risks in the industry using porters five forces model. The research will conclude with advice for new startups who want to develop a competitive edge in the market. The UK supermarket businesses is a key contributor to the economy, earning billions of pounds in sales and employing thousands of people . Aside from its economic significance, the industry is continually changing in response to digital change, environmental measures, and increasing customer tastes. Analysing these dynamics is critical to understanding how organisations might succeeds in such a competitive environment.
Briefly introduce the chosen UK market sector in this
Outline the key aims and objectives of the report
Explain the structure of the report
4. Sector Description & Competitor Analysis (400 words)
Define the chosen UK market sector
Provide an overview of the market size, growth trends, and importance in the UK economy
Identify at least 3-4 major competitors, discussing their market share, positioning, and strengths/weaknesses
Use market reports, industry sources, and competitor websites for accurate data
5. Macro Market Environment Analysis (PESTLE) (400 words)
Conduct a PESTLE analysis (focus on three most relevant factors)
Political: Government regulations, Brexit impact, taxation
Economic: Inflation, consumer spending trends, pricing strategies
Social: Changing consumer preferences, demographics, sustainability concerns
Technological: Innovation, e-commerce, digital marketing
Legal: Advertising regulations, health and safety laws
Environmental: Sustainability, carbon footprint concerns
Use industry reports and news sources to justify your analysis
6. Customer Identification (400 words)
The supermarket sector in the United Kingdom is one of the most competitive and fast changing markets catering to a broad base customer with varying needs and preferences. Supermarkets cater to the requirements of various customer types from the price conscious to quality seekers furthermore the customers base can be segmented based on demographic, psychographic and Behavorial factors.
Demographic characteristics
Supermarkets are appealing to customers with varying age and income levels. However most significant demographic segments include:
Age: The primary customers are between 25 and 65 years old and most are working parents emplyed adults and retirees. younger adults between 18 and 24 shop in supermarkets as well particularly convenience orientated supermarkets such as Tesco express and Sainsburys local.
Income level: customers of supermarkets range from low-income customers who prioritise affordability and promotions for example Lidl and Aldi. Middle- and high-income customers prioritise premium and organic offers for example Waitrose and Marks & Spencer.
Household structure: Families with children tend to favour supermarkets that allow bulk purchasing loyalty schemes and promotions. Whereas a single households and young professionals tend to buy smaller convenience orientated products.
Psychological profiling
Price conscious customers: the majority of supermarket customers are price conscious and seek
promotions discounts and loyalty rewards. Aldi and Lidl attract this clientele with low priced private label products.
Convenience shoppers: The consumer shoppers in urban areas have more frequently chosen hassle- free shopping experience. Most taking advantage of mini supermarket chains such as Tesco express or Sainsburys local. Furthermore, online grocery shopping has catered to the same segment better.
Heath conscious customers: An increasing awareness of nutrition and general health has led to customers seeking organic vegetarian or low calories products. To target this customer segment Waitrose and Marks & Spencer have expanded their organic and heath foods ranges.
Sustainability-Minded Consumers: Consumers are now more concerned about the environment and seek green packaging, sustainably sourced products, and minimizing food waste. Surprisingly, Iceland and Co-op are two companies that have been at the forefront of adopting sustainability.
Behavioural Determinants
Purchase Frequency: Repeat buyers: Most families visit supermarkets fortnightly or weekly to buy groceries in bulk.
Buyers by day: Many urban or working individuals have the habit of making small, frequent buys, especially from convenience food stores.
Brand loyalty: Most buyers are loyal to supermarkets because of loyalty programs (like Tesco Clubcard, Nectar Card, MyWaitrose), special offers for them, and belief in the brands.
Use of technology: Through online shopping, mobile applications, and self-checkout(s) becoming more prevalent, the way consumers shop has transformed. Retailers like Ocado and Tesco have adopted digital transformation initiatives to bring in convenience.
Define the typical customer base using demographics, psychographics, and behavioral data
Identify customer segments (age, income, lifestyle, buying behavior)
Use market research, surveys, and reports for supporting evidence
Compare customer preferences across different competitors
7. Customer Decision-Making & Retention Strategies (700 words)
7.1. Customer Decision-Making Process (350 words)
Apply a decision-making model (e.g., AIDA, Consumer Decision Process Model)
Explain key influences on purchasing behavior (price, brand loyalty, advertising, peer recommendations)
Discuss online vs ofline purchasing behavior (if relevant)
7.2. Customer Retention Strategies (350 words)
Analyze strategies used by competitors to attract and retain customers
Discuss:
Loyalty programs
Personalization and CRM (Customer Relationship Management)
Social media and influencer marketing
Pricing and promotions
Use real-world examples from industry leaders
8. Opportunities & Threats (400 words)
Conduct a Porters Five Forces analysis to assess market threats and opportunities
Discuss potential market growth areas (innovation, new customer segments, international expansion)
Identify challenges (competition, economic downturns, regulatory changes)
Provide data-driven insights from industry reports
9. Competitive Advantage & Recommendations (200 words)
Summarize the key findings from your analysis
Provide 3-4 strategic recommendations for a new entrant in the sector
Pricing strategy
Differentiation (branding, sustainability, innovation)
Marketing and customer acquisition strategy
Use of technology (e-commerce, AI, automation)
10. Conclusion (200 words)
Recap key insights from each section
Highlight the future of the sector
Reinforce the importance of strategic decision-making for businesses
11. Appendices (Optional)
Graphs, charts, or additional data supporting your analysis
How to Achieve a High Grade (70%+)
? Use Data & Evidence Support arguments with real-world examples, statistics, and industry insights
? Engage with Theory Apply business models (PESTLE, Porters Five Forces, Decision-Making Models)
? Critically Evaluate Don’t just describe; analyze trends, challenges, and business strategies
? Clear Structure & Professional Writing Use formal, concise language with clear section headings