The document summarizes information about Reed's grocery store group including: - The group has 6 members and was established in 1939 in Kalamazoo, Michigan operating 192 retail stores. - In 2010, Reed's had $660 million in sales but lost market share in recent years falling to 14% currently. - A dollar special campaign is analyzed but found to lose Reed's money since discounted items are sold below cost. Continuing this campaign is not recommended. - Reed's objectives are outlined to regain market share without new stores by better understanding customers and implementing new marketing strategies promoting their higher quality products and brand position.

1. Group member:
 abida
 hasan
 iffat
 sANAM
 TASNIA &
 jibran

2. Established in 1939
Kalamazoo, Michigan, USA
192 retail stores
2 regional distribution centre
21000 employees

3. Features

4. Considered as market leader when it comes to product
quality & customer service
High End grocery store
Sales of $660 million in 2010 (exhibit 1),Current market
share 14% [2010]
Reeds average value per transaction was higher than
national supermarket average
Customers: older,affluent,had a smaller household size
than the typical consumer

7. Problem…
Lost market
share & Threat
to lose further

8. Objectives. . .Focus to grab 16% in 2011 without
expanding new location.
Understand customer feedack
Impact of Dollar special campaign
Prepare marketing strategy

9. Small market share : Aldi (1.62%) & Dollar (1.80%)
where as Reeds (14.00%)
Operating profit :Reed (2.1) and that of Aldi (1.5) while
dollar store (3+) is 8.5
different customer segment
Reeds quality index is very high compare to Aldi &
Dollar Store

10. Maintain current
Brand position
 serving high end
customer with high
quality product
 customer service ,
long hours, clean
store, convenient
location
 faster check out
Community service
(philanthoropy)
Special bucket
 thanks giving
 New product
testing
 Homeless/jobless:
x-mas bucket
 seasonal gifts
Customer loyalty
program
 weekly loyalty
member exclusive
discount
 bonus point at sign
up
Earn point on
purchase
 appreciation sales
 on line ordering
benefit [ free delivery]

11. Integreted market
campaign
 facebook
especially offer
chance to stay in the
front of customers
mind
 youtube still
attracts a younger
 smartphone apps
Improve product mix
 introduce more
private label
“healthy reed”
 increase organic
and prepared food
 expand line of
organic pet food
 product
specification
In store Reed Café
{try it B4 buy it]
 serve food that
was prepared using
items within the
store
 will feature a bar to
capitalized on
growth in alcohol
purchases

12. Should collin continue the dollar
special campaign??
Does’nt help to
improve Reeds high
price perception
not consistent with
brand equity and
loss on each discount
item.
Net operating
loss on each
discount item.
Decrease the net
operating profit.
NO!

13. The financial impact
Thus, because the dollar specials campaign, is losing morning for Reed’s
and isn’t driving sales of higher-margin items to compensate, it should be
discontinued.
base
price$2.70
 margin
22.7%
 COGS $2.09
selling items
at $1.50,
 Reed’s is
seeing a loss
of $0.59 for
each good
sold and a
gross margin
of -39.3%.
With a total
expense of
0.56, net profit
for the
discounted
products are -
1.15 and net
profit margin
is -76.7%.

14. Finacial impact of Dollars campaign

15. Goal
of
16%
Reeds
• Sales $660 million
2010
• 5% decrease from
2005-2010
• gross margin
22.7%, net 2.1%
• Aldi 1.5%
Reeds
• current market
share 14%
• total supermarket
sales area $4.7
• increase sales
$94.3 million= 2%
market share
• $3.8 million per
store
Reeds
• average revenue
increase 1-2%
year
• sales per store
increase 5800
customers
• $71000 per store
=25 store
• Net profit increase
of $1.9 million

16. •

17. THANKS!Any questions?