SPAR Company in Oman: Marketing Strategy

Executive Summary

The report describes a marketing strategy developed to help SPAR Oman grow in the local market and address current threats to its competitiveness. The environmental analysis revealed that the company has a distinctive position in the market and a positive brand image that appeal to niche customers, yet fails to compete on product prices. Thus, it is suggested for SPAR to increase innovativeness and focus on the digitalization of services because e-commerce is one of the most significant retail trends nowadays.

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The main identified marketing objective is to increase sales rate through greater customer attraction and maximization of such values like quality and convenience for them. It is recommended to promote and analyze responses to new services by using online sources, which can increase the cost-efficiency of the proposed strategy.

Introduction

The license for SPAR in Oman is given in 2014 to Khimji Ramdas, one of the leading business conglomerates in the country. With access to SPAR’s vast knowledge and assets obtained from the brand’s experience across the globe, Khimji Ramdas became able to provide quality service and products to local consumers and capture new revenue streams. With twenty-four stores open in 2017, the total retail sales of SPAR Oman equated 27,342 million euros (SPAR International, n.d.a).

The main contributing factor to the excellent sales rate was the retailer’s commitment to such core values of the brand as freshness and quality. Along with this, Omani customers are attracted by goods developed by various European and Asian producers that cannot be purchased in other stores (Bureau 2015). Nevertheless, in order to foster further growth, it is essential to understand the retailer’s strengths, weaknesses, and overall characteristics and use this knowledge to develop an effective marketing plan. The present report will aim to do that by formulating a set of marketing plan objectives for SPAR Oman based on the market analysis findings.

Current Market Analysis

Porter’s Five Forces Analysis

Such elements of Porter’s model as substitutes, suppliers, buyers, and potential entrants drive the rivalry among existing companies in the market (Indiatsy et al. 2014). However, SPAR Oman seems to have good control over these forces and, as a result, its competitive position is strong. Firstly, the threat of substitutes is managed through the offering of European and Asian foods, such as energy drinks and coconut water, that other stores do not sell (Bureau 2015).

The main advantage generated through product uniqueness is that many consumers may be willing to pay higher prices to purchase some of the hard-to-get products. Secondly, the bargaining power of suppliers is rather moderate in the retail market because the goods supplied to grocery stores are not very differentiated in general and companies may switch from one supplier to another without significant losses, yet SPAR manages to gain even greater control over this force by building partnerships with many suppliers across the globe.

It is devoted to the development of supplier loyalty and generating values for them, including technological and informational support (SPAR International, n.d.b). Thus, suppliers’ businesses become more dependent on SPAR, which decreases the risk of loss and change.

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When speaking of the bargaining power of buyers, it is high in the retail market. Customers’ demands and interests are ever-changing, and this factor emphasizes the necessity to offer innovative services and products. SPAR’s uniqueness of products and the provision of relevant goods, such as organic foods, serve to control the bargaining power of buyers, expand the customer base, and develop their loyalty.

Additionally, the threat of new entrants is mainly controlled by SPAR through its strong equity, positive brand image, extensive experience, and competence in supply chain and distribution activities. However, new e-commerce businesses may appear in response to the growing trend for online shopping (Mkansi, Eresia-Eke & Emmanuel-Ebekake 2018) and, since online space is associated with fewer capital costs, they may pose threat to SPAR over time.

The level of competition in the Omani grocery retail market is intense, with a large number of small and big businesses present. One of SPAR’s largest competitors is LuLu Hypermarket. It is a highly popular department store, offering a wide range of products, including garments, technologies, cosmetics, and grocery. Similarly to SPAR, it enjoys a high level of control over distribution activities that allow the firm to save on supply chain and storage (Mahfod et al. 2017). Compared to SPAR, LuLu implements a cost leadership strategy while also paying significant attention to quality, which makes the store attractive for consumers from highly diverse backgrounds (Mahfod et al. 2017). Notably, low pricing is a primary focus of LuLu’s promotional campaigns.

SWOT Analysis

Strengths

  • Brand equity,
  • Loyal suppliers,
  • Khimji Ramdas’ excellence in distribution activities,
  • Appealing core values,
  • Product uniqueness.

Weaknesses

  • Relatively high prices.
  • A comparatively limited number of items in the product portfolio.

Opportunities

  • Growing e-commerce trends (Mkansi, Eresia-Eke & Emmanuel-Ebekake 2018),
  • Growing health and environmental consciousness of consumers (Wiese, Zielke & Toporowski 2015).

Threats

  • High level of rivalry and competitors’ innovation.

Market Segmentation

SPAR’s products are mainly oriented towards adult consumers (age 18-50), with and without families. While some goods offered by the retailer meet the needs of a highly diverse population, a significant part of them falls under the category of niche products (for instance, organic foods). Weinstein (2013) states that customers in this category pay a premium to the company that satisfies their interests. Therefore, SPAR’s customers are primarily those individuals who have an above-the-average level of income. Additionally, it is valid to say that besides quality, innovativeness, and exclusiveness of products, SPAR’s customers value convenience because a lot of them access the stores from the local neighborhoods where they reside..

Marketing Plan Objectives

Specific

SPAR will aim to increase the rate of sales by focusing on innovation and quality of services and products (for instance, e-shopping and product delivery) as part of the marketing strategy. This will help to attract more diverse customer groups with both niche and general purchasing interests.

Measurable

A 30% increase in offline sales due to better customer attraction, as well as a 5% online revenue contribution, will be SPAR’s goal. Additionally, a 50% improvement in customer satisfaction rate will be achieved.

Attainable

Within the first quarter after the launch of the new marketing strategy, a 5-10% increase in offline sales and a 10-15% enhancement in customer satisfaction will be expected.

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Relevant

By communicating such values and innovation to potential and existing consumers, SPAR will develop greater awareness of the brand in Oman and foster customers’ trust. As a result, more people will come to the stores and will buy products there.

Time-Bound

The objectives will be attained by the end of the year after the marketing strategy is launched.

Recommendations

Products and Services

It was identified during the environmental analysis that e-commerce is one of the primary consumer trends. Thus, SPAR should bridge in-store and online services that would help to maximize the value of convenience and consequently increase customer satisfaction. Notably, the freshness of products will be a paramount value in online shopping at SPAR because food spoilage is one of the primary concerns among grocery shoppers worldwide (Mkansi, Eresia-Eke & Emmanuel-Ebikake 2018). Overall, the new service should allow customers to browse through available options online, then request in-store fulfillment and delivery and must also guarantee the highest possible quality of goods.

Place

SPAR may develop its own online shopping platform or collaborate with already existing online grocery platforms, such as Omgrocer. However, the former variant is preferable because it is associated with greater control over the quality and accuracy of order fulfillment. At the same time, consumers will be able to order delivery of products for any preferable time at different offline stores.

Price

Service prices should remain competitive but can be slightly above the industry average if an appropriate quality-price ratio is maintained. Additionally, extra values can be generated by offering online shoppers with discounts and free delivery on purchases above a certain sum (for instance, RO 30).

Promotion

Considering that mainly technologically savvy individuals that are active online will be interested in digitalized shopping experiences, social media platforms and other online sources will become the primary promotion tools. Through them, SPAR will actively engage in a meaningful dialogue with users, which will help raise their expectations and create additional value (Anurag & Duhan 2017).

However, what is more, important is that online platforms can be used for market research and the development of highly targeted offline and online promotion campaigns. For instance, sentiment analysis via Linguistic Inquiry and Word Count and Netvizz can be conducted to evaluate users’ feelings associated with particular SPAR’s services and products. Additionally, it is possible to conduct an online survey to identify the main motives that can drive the use of the new service. With this information in hand, SPAR will be able to develop promotional campaigns that will appeal to the most relevant consumer interests.

Evaluation and Control

Customer response and sale numbers will be the primary key performance indicators. The data related to them will be gathered before, during (each month), and after the implementation of the strategy. Surveys distributed via offline locations, SPAR’s website, Facebook, and other platforms will be used to collect information regarding consumer satisfaction. Additionally, sentiment analysis and evaluation of user messages on Facebook and Twitter will help reveal if the online grocery shopping service is perceived positively.

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Budget

E-commerce platform development USD 2,000+ Costs include web design, monthly hosting, setup, and maintenance (Jordan 2018)
Promotion through social media No extra costs (excluding employee/marketer payment) Organic social media marketing does not require any additional investments but requires time to build credibility (Schaffer 2013)
Advertising USD 1000-200.000 The price depends on the media. For instance, the average cost per click at Google Ads in Oman is USD 0.8, which means that the total annual advertising price may be significant (SolveMethod 2018).
Evaluation and control No extra costs The described evaluation tools may require minor investments (for survey development, print, distribution, etc.)

Reference List

Anurag, S & Duhan, P 2017, Managing public relations and brand image through social media, IGI Global, Hershey, PA.

Bureau 2015, ‘SPAR Oman plans to open 21 stores in Oman by the end of 2018’, Business Live ME. Web.

Indiatsy, CM, Mwangi, MS, Mandere, EN, Bichanga, JM & George, GE 2014, ‘The application of Porter’s Five Forces Model on organization performance: a case of Cooperative Bank of Kenya Ltd’, European Journal of Business and Management, vol. 6, no. 16, pp. 75-85.

Jordan, J 2018, ‘How much does an ecommerce website cost in 2018?’, Atlantic BT. Web.

Mahfod, J, Ismaeel, W, Al-Haddad, A & Upadhyaya, M 2017, ‘An exploratory study of cost leadership and differentiation strategy: the case of LuLu hypermarket’, International Journal of Civil Engineering and Technology, vol. 8, no. 10, pp. 1288–1297.

Mkansi, M, Eresia-Eke, C & Emmanuel-Ebikake, O 2018, ‘E-grocery challenges and remedies: global market leaders perspective’, Cogent Business & Management, vol. 5, no. 1, pp. 1-28.

Schaffer, N 2013, Maximize your social: a one-stop guide to building a social media strategy for marketing and business success, John Wiley & Sons, New York, NY.

SolveMethod 2018, ‘Average cost per click by country – Google AdWords CPC rate’. Web.

SPAR International n.d.a. SPAR Oman. Web.

SPAR International n.d.b. Suppliers. Web.

Weinstein, A 2013, Handbook of market segmentation: strategic targeting for business and technology firms, Routledge, New York.

Wiese, A, Zielke, S & Toporowski, W 2015, ‘Sustainability in retailing – research streams and emerging trends’, International Journal of Retail & Distribution Management, vol. 43, no. 4/5.

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StudyCorgi. (2021, January 19). SPAR Company in Oman: Marketing Strategy. Retrieved from https://studycorgi.com/spar-company-in-oman-marketing-strategy/

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