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Marketing Communications - Sainsburys

Critically analyse the effectiveness of the organisation's marketing communications. Recommend and justify how the organisation's use of marketing communications could be improved

The organisation I have chosen to analyse is J. Sainsbury plc. (Sainsbury's) This is because I believe that Sainsbury's is at a crucial stage in its history: Sainsbury's Supermarkets have experienced a period of dramatic decline, in which they have been overtaken by rivals Tesco and, more recently, in 2004, Wal-Mart-owned Asda. (Global Market Information Database, 2004) While it is rare for major brands to disappear completely from the UK high street, these competitors have gained share from Sainsbury's through their commitment to low prices, while Sainsbury's has focused on its Business Transformation Programme and promoting an image of quality rather than affordability.

Unfortunately for Sainsbury's, UK consumers have increasingly come to trust the communications, quality and assurance of Tesco and Asda at the same time as being attracted to their low prices. As a result, Sainsbury's is in danger of being unable to compete in the modern UK retail environment without committing itself to low prices, and thus has pursued a significant price cutting policy, which started in the summer of 2004.

Sainsbury's is attempting to respond forcefully to the challenges it faces, however competition in the UK market is becoming increasingly intense, and Sainsbury's faces a difficult struggle to regain the ground it has lost to rivals that continue to expand aggressively. I intend to analyse the marketing communication reasons behind Sainsbury's decline, including it's failure to convince customers to buy food on purely a quality basis, and also analyse the company's new strategies, with a view to predicting their current, and future, effectiveness.

Previous Marketing Strategies and their failings

The company has traditionally invested substantial resources in marketing through traditional channels. It has, for example, traditionally outspent Tesco when it comes to advertising through the broadcast media. Moreover, evidence shows that such communication channels have proved successful in terms of generating a fresher, more youthful image for its core UK supermarkets business, particularly through advertising fronted by TV chef, Jamie Oliver. However, the company has failed to capitalise on the knocking down of its old image, as an expensive, premium brand supermarket, and this is largely a result of the success of its rivals, with Tesco and Asda challenging Sainsbury's in terms of quality and assurance, but at lower prices, and some critics consider Sainsbury's media communications strategy as a significant factor in the company's current problems.

However, there has been wide acclaim for Sainsbury's advertising strategy: in 2002, the campaign, was widely recognised for its successful contribution to the bottom line, and Sainsbury's snagged a prestigious IPA Effectiveness Award that year for the campaign. The award recognised the 1bn of incremental revenues that were generated by the campaign and the remarkable return on investment of 27.25 for every 1 spent on advertising, and from 2000 to the present day, the Oliver campaign has provided incredibly effective advertising for Sainsbury's. However, the key failure of Sainsbury's media communications strategy has been cited by Ritson (2004) as being the company's remarkably outdated approach to brand building.

Failure to keep up with rivals

Twenty years ago, advertising on its own was sufficient brand strategy, however, in the interim years, marketers have learned that branding success stems from putting the brand at the centre of all aspects of the business, not just communications. Branding has moved on but Sainsbury's has stayed put, clearly failing to follow Buttereld's (1997) argument that marketing communications should now merely be a subset of marketing strategy. Unfortunately for Sainsbury's, its major rival, Tesco, is the world's leading example of 21st-century branding. Its apparently facile slogan 'Every little helps' communicates Tesco's total commitment to delivering this promise of total customer value through every dimension of its business.

This is partly due to Sainsbury's bureaucratic structure, which requires the lengthy process of campaign approval by its marketing and legal departments, and consequently, while Sainsbury's is very successful at gaining coverage in food titles, its rival tend to outperform it in general news pages every time, and claim that Sainsbury's doesn't quite understand how the media has moved on (Global Market Information Database, 2004) Again, this structure ignored the view that modern marketing departments will have to embrace the idea of strategic vertical integration - speaking with one voice from the CEO's office right down to the supermarket shelf. (Buttereld, 1997) However, the recent streamlining of the company, so that it no longer needs to rely on a group structure, and CEO Justin King's desire to take more direct control of the supermarket business's activity, offers Sainsbury's a significant opportunity to move towards a more flexible approach that enables it to be both more responsive to new market conditions and more proactive in influencing the market.

Poorly Coded Messages

Sainsbury's has also been forced to simplify the messages coded into its advertising strategies, especially its television advertising, after their Value to Shout About advertising campaign, fronted by comedian John Cleese, proved to be a flop with customers who, along with Sainsbury's staff, decoded the message contained in the commercial as being confusing and patronising to staff. (BBC News, 1999) Analysing this campaign using the communications process model based on Shannon and Weaver's (1949) model, it is clear that Sainsbury's was definitely attempting to promote itself as a low price, yet still high vale option, however the supermarket failed to appreciate that: In practice (firms should be) listening to customers as much as talking to them. (O'Sullivan, 2005)

Unfortunately for the firm, Sainsbury's has always positioned itself as synonymous with quality, but the downside has long been a perception among some consumers that it is also more expensive than its rivals, and previous campaigns failed to properly convey the message that Sainsbury's now offers as good value as Tesco amd other rivals. This failing was possibly due to a confused communications strategy: due to the formerly bureaucratic structure of Sainsbury's marketing departments, groups within the firm may have prevented the firm from releasing adverts portraying it as a low cost option, for fear that such a message would damage the chain's reputation for quality. As a result, the marketing communications failed to accurately convey either a message of low cost and high value, or one of high quality, and the chain suffered as a result.

Current Marketing

Following on from Sainsbury's recent streamlining and marketing reorganisation, the supermarket's current outdoor campaign aims purely to highlight its commitment to providing great value. It builds upon its heritage of selling top-quality products, with a simple yet effective message aimed straight at consumers' wallets. As a result, Sainsbury's recently made the decision to use large roadside posters to communicate its cost-effectiveness message, a tactic lauded as clever, unexpected and straightforward. It is unlikely to win many awards, but winning customers, through simple, well-understood communications, is now Sainsbury's biggest agenda. The 'strapline': '6000 lower prices since January 2004', should work well with a busy commuter audience, as the message is easy to grasp when on the move, unlike Sainsbury's previous messages. Even the recent TV work showing Jamie Oliver chatting to Sainsbury's managers about low prices requires a reasonably high level of attention from consumers, and takes some time to digest, time which many consumers are unwilling to offer to firms in the modern marketing world. (O'Sullivan, 2005)

Future Communications

Regarding the future of Sainsbury's marketing communications: the chain is in the middle of a strategy of focusing intensively on the revival of its UK supermarkets business during the 2004-2008 period, having streamlined its business and announced the introduction of a price cutting policy during the summer of 2004. Such activity was deemed necessary for the company to meet the challenges presented by the aggressive discounting strategies of the UK's two leading supermarket chains, Tesco and Asda, and the increased threat resulting from Morrison's takeover of Safeway in 2004. (Global Market Information Database, 2004)

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Conclusion

Unfortunately, it is too early to give conclusive analysis of the success of Sainsbury's new communications strategy and streamlined structure, thus it is also difficult to make recommendations on how to improve said communications. However, in my view Sainsbury's need to expand its range of communications disciplines in order to better exploit new developments in, for example, the Internet, which is now a powerful marketing communications tool. Currently, Sainsbury's above the line (O'Sullivan, 2005) communications are very visible, and are predicted to by highly effective (Global Market Information Database, 2004), however, below the line (O'Sullivan, 2005) communications appear to be almost non-existent. Thus I recommend that Sainsbury's develop an extensive 'below the line' communications strategy, using its stores, website and other assets to further reinforce a clear low cost, high value message, and thus ideally bring the company back on a par with Tesco and Asda.

References:

BBC News (5^th February, 1999) Sainsbury loses out in store wars. http://news.bbc.co.uk/1/hi/business/the_company_file/273012.stm

Buttereld, L. (1997) Strategy Development. In Buttereld, L. (ed.) (1997) Excellence in Advertising. Oxford, Institute of Practitioners in Advertising/Butterworth Heinemann pp. 65-90.

Global Market Information Database (2004) J Sainsbury Plc.

O'Sullivan, T. (2005) Unit 6: Marketing Communications. The Open University Business School.

Ritson, M. (2004) Where Tesco leads Sainsbury's fails to follow. Marketing (UK); 10/20/2004, p. 19.

Shannon, C. and Weaver, W. (1949) The Mathematical Theory of Communication. University of Illinois Press.

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