Growing Market Share While Staying True

NGA 2013 Saracen Consulting Company

Presented By: Ryan Dach, Jacob Luna, Lindsey Maresh, and Jarrod Taylor

The Question Posed…  Chief Super Market, Inc.

(Defiance, Ohio) a twelve store independent “….exists to delight customers with great food and experiences." The company would like the students to use their imagination to determine what the company should do to fulfill the mission and

grow market share

.

Chief Super Market Mission Statement: 

“To treat all parties involved in our business… fairly, honestly, and with respect for

their contribution to the

success of the company…”

Store Information

Store Type

Chief Supermarket Chief Supermarket Chief Supermarket Chief Supermarket Chief Supermarket

Location

Celina, OH Coldwater, OH Defiance, OH Bryan, OH Wauseon, OH Chief Supermarket Chief Supermarket Chief Supermarket Rays Market Rays Northland Paulding, OH Delphos, OH Napoleon, OH Lima, OH Lima, OH Rays Eastgate Lima, OH Rays Clocktower Plaza Lima, OH

Sq. Ft.

22,600 20,745 31,000 30,000 32,700 15,200 24,000 31,000 31,240 24,000 52,000 40,000

Grocery Industry Market Forces Location of Stores Demand Fluctuation Industry Competition Consumer Behaviors Consumer Disposable Income

Industry Rivalry – Existing Competition  Competition within the Industry:  CR 10 = 69% in 2010  Dominated by multiunit and Regional Supermarket chains  Within N.W. Ohio:  Stagnated population in area  Market Saturated with competition

Industry Rivalry - Stagnated Market   Negative to flat population growth in N.W. Ohio Stores located in Counties:   Bryan, OH: -3.9% Lima, and Delphos, OH: -2.0%  Defiance, OH:-1.2%  Celina and Coldwater, OH: -0.3%

Industry Rivalry - Saturated Market  Defiance, OH  Lima, OH

Industry Rivalry – New Competition  Threat of Substitutes:  Substitutes for Grocery stores are growing  More are carrying essential goods  Threat of New Entrants:  Corner Stores and Dollar General repositioning  Whole Foods type stores entering the area

Industry Force - Consumer Behavior   Consumers have increasing number of options Many stores trying to carry more convenience offerings to cater to consumers  Pharmacy  Banking  Gasoline  Oven-ready Prepared Foods

Bill and Marge (50+)      Spend an average of 40 minutes in store Very brand loyal Spend 50% of income on food Pick and choose products based on individual lifestyle Dominate food spending

Experienced Kyle and Hannah (35-50)      Spend an average of 40 minutes in store Value price over convenience Value product information Focused on feeding families Educated

Young Kyle and Hannah (20-35)      Spend an average of 43 minutes in store Only buy 41% of food at traditional store Need instant access and convenience Natural, organic and flavor mean a lot Prefer deals over brands

2 % BCG Matrix Relative Market Share 1

SWOT  Strengths  Sales Promotions/PR  Product Variety  High Quality fresh and prepared foods  Good In-store Customer Service

SWOT   Strengths  Sales Promotions/PR    Product Variety High Quality fresh and prepared foods Good In-store Customer Service Weaknesses  Low total value image    Perception of high price Perception of lack of vegetable variety Scarce Firm Resources compared to competitors

SWOT   Opportunities   Growth of “Small Format” stores Changing Shopper trends   Recession Mindset Repositioning stores as wellness and nutrition  Expansion of fresh food departments Threats   Increasing competition Rising Costs   More Rivalry Mature Industry

The Problem  Chief is not the first choice in most items.

 Not the first choice for most consumers.

 Bill and Marge (50 & Up) are the most frequent shoppers.

 Chiefs is not the first choice among Kyle and Hannah (20-50)

Solution  Not a “One Size Fits All” problem  This has become a question of marketing and the solution lies within the four Ps of marketing.

 We are offering solutions based on price, promotion, and product  In each of these sectors we have broke it down into tactics implemented in the short term, mid-term, and long term

Strategy and Tactics

Strategy Statement

Current Strategies  High Quality Food  Great Experience  Community Involvement

Strategy Statement

Strategy Statement Hometown Social Wholesome Fun Store of Experiences

Market Development Experience Short Term

Adult Beverage Tasting

Medium Term Long Term

Short Term

Adult Beverage Tasting

 Appeals to men and women  Beer Around the World  Held every other month  “Ladies Night” Wine Tasting  Estimate 30 participants

Market Development Experience Short Term

Adult Beverage Tasting

Medium Term

Cooking Events

Long Term

Medium Term

Cooking Events

  Annual BBQ Cook off  Chief is already well known for it’s quality meat.

 Attract new consumers Bi-monthly Cooking Classes   Engage community with fun classes Increase basket size and trial use

Market Development Experience Short Term

Adult Beverage Tasting

Medium Term

Cooking Events

Long Term

Contest Rewards

Long Term

Contest Rewards Cards

 Revamp the current loyalty program  Use for data collection to better serve customers  Can be used in cooperation with other tactics

Change Image for Young Kyle and Hannah Through Contests Short Term

“Plinko”

Medium Term Long Term

Short Term

“Plinko”

    New spin on a classic game Held once a quarter Customers gain one chip for every $100 spent  Eligible for an extra chip with use of loyalty card Prizes range from a free cookie to “Dinner for Two”

Market Development Contest Short Term

“Plinko”

Medium Term Long Term

“Supermarket Sweep”

Long Term

“Supermarket Sweep”

  Annual contest Contestants drawn on a raffle system  One entry for every $150 spent   Places 1 st -3 rd awarded with store credit Acts as a large draw for surrounding communities

Financials

Column1 Expected Gross Income Expenses

Inventory Products Promotions Event Supplies Site Rental

Adult Beverage Tasting Cooking Events "Plinko" "Supermarket Sweep" $960

$275.00 $200 $85 $0

$1,500

$0 $200 $200 $600

$2,000

$1,600 $200 $200 $0

$2500

$1,313 $300 $500 $0 Employee Time

Total Event Expense Net Income ROI

$95

$655.00 $305

47% $126 33% $0

$1,126.00 $2,000.00 $374 $0

0% $252

$2,364.50 $135.50

5.7%

Strategy Statement Hometown Social Wholesome Fun Differentiated Store of Experiences Convenient

Market Penetration Products Short Term

Meals-to-go

Medium Term Long Term

Market Penetration- Products

Meals-to-go

   “Take me home tonight” Meals prepared for pickup Made fresh

Market Penetration- Products Short Term

Meals-to-go

Medium Term Long Term

Tent Sales

Market Penetration- Products   Seasonal items Draw attention

Tent Sales

Market Development- Products Long Term Short Term

Student Discount Soup & Sandwich Bar

Medium Term

Market Development- Products

Student Discount

   Offered four times a year Statewide Increase college-age foot traffic

Market Development- Products

Soup & Sandwich Bar

   In store Hot & fresh Convenient meal

Market Development- Products Long Term Short Term

Student Discount Soup & Sandwich Bar

Medium Term

Dinner for Two

Market Development- Products   Meals prepared for couples Date night

Dinner for Two

Market Development- Products Long Term Short Term

Student Discount Soup & Sandwich Bar

Medium Term

Dinner for Two Online Shopping Food Truck

Market Development- Products

Online Shopping

     Ultimate convenience Busy lifestyles Parents with kids Not much competition in this area Implement within 12-18 months

Market Development- Products      Mobile hot spot Lunch for people on the go Moving billboard Gain exposure Implement within the next 2-3 years

Food Truck

Financials

Column1 Meals to go Tent sales Student Discount Soup bar Dinner for two Online shopping Food truck Expected Gross Income $12,480.00 Expenses $12,000.00 $518,400.00 $18,200.00 $65,000.00 $130,000.00 $36,000.00

COGS $7,280.00 $ 5,400.00 $461,376.00 $10,400.00 $46,800.00 $114,400.00 $ 22,500.00 Equipment Promotion $1,500.00 $ 3,000.00 $250.00 $ 750.00 $ $6,898.56 $2,000.00 $500.00 $ $1,200.00 $ $1,500.00 $60,000.00 $5,000.00 Employee Time $1,130.40

Event Profit ROI ROI -Program $3,819.60

37.58% 132% $ 1,695.60

$ 4,154.40

38.3% 76.2% $ 4,019.20 $ 1,130.40 $3,140.00

$46,106.24

9.76% 3754%

$6,169.60

43.97% 169%

$13,860.00

27% 319% $5,887.50

$ 8,212.50

6.74% 111% $6,280.00

$ 2,220.00

2.36% 3%

Conclusion

Questions?

Sam Houston State University  Located in Huntsville, Texas  Ag-IT Department  Over 1,000 Major Students  Degrees offered:  Ag-business  Animal Science  Horticulture  Ag-education