Preview

Superior Supermarkets

Good Essays
Open Document
Open Document
875 Words
Grammar
Grammar
Plagiarism
Plagiarism
Writing
Writing
Score
Score
Superior Supermarkets
Case Brief: Superior Supermarkets

Short Brief: Superior Supermarkets
MKT 5023
The University of Texas San Antonio I. Major Issue
The major issue presented in the Superior Supermarkets case study is: Should Superior Supermarkets adopt an “Everyday Low Price” pricing strategy? II. Alternative Courses
Maintain Current Pricing Strategy i. Advantages 1. No New Training or Advertising Adjustments Needed 2. Maintains Current Profit Margins (High Margin) 3. Avoids a Possible Pricing War with Competitors ii. Disadvantages 1. Potential Loss in Market Share to Lower Priced Competitors 2. Does Not Address Issue of Stagnating Sales 3. Shoppers are Becoming More Price Conscious iii. Quantitative Notes: 1. Current Sales and Market Share trends indicate stagnation and decline.
Adopt an “Everyday Low Price” Strategy For All Products/Stores i. Advantages 1. Makes Superior More Price Competitive in the Market 2. Could Potentially Reduce Operating Costs 3. Demand Could Become More Predictable 4. Eliminates Need for Temporary/Varied Price Reductions ii. Disadvantages 1. Reduces Gross Margin Percentage/Profit Margins 2. May Start a Price War with Competitors 3. Could Be Confused as a Reduction in Quality of Products 4. Requires Additional Advertising to Get The Word Out iii. Quantitative Notes 1. Reducing Prices by 10% will require an increase in sales of around 47% and a 12% gain of market share to maintain the current level of contribution margin. 2. Reducing Prices by 7% will require an increase in sales of around 27% and a 7% gain of market share to maintain the current level of contribution margin.
Adopt an “Everyday Low Price” Strategy for Specific

You May Also Find These Documents Helpful

  • Satisfactory Essays

    If an increase in the price of a good leads to an increase in total revenue, then:…

    • 416 Words
    • 2 Pages
    Satisfactory Essays
  • Good Essays

    Capsim Situational

    • 514 Words
    • 3 Pages

    In the other rounds, I tried to reduce the price on the low-end segment products to see if I can sell a lot more of them, thereby increasing my volume and also my profits. The…

    • 514 Words
    • 3 Pages
    Good Essays
  • Satisfactory Essays

    Swing vs Steady

    • 620 Words
    • 3 Pages

    Change in Profit for 40% increase in sales= (Sales change in units- Break-even sales change) * New contribution Margin =(2000-1250)*6 =750*6 =$ 4500…

    • 620 Words
    • 3 Pages
    Satisfactory Essays
  • Better Essays

    To Build or Buy

    • 1804 Words
    • 8 Pages

    Secondly, the price of the products will be lowered in anticipation of the large economies of scale that the firm will be able to enjoy. Due to the high levels of projected sales due to the variety of the products of the firm, the focus will be on the ability of the firm to be able to offer lower prices to the customers. The effects of the economic crisis for instance…

    • 1804 Words
    • 8 Pages
    Better Essays
  • Satisfactory Essays

    Eco 507 Midterm

    • 795 Words
    • 4 Pages

    To increase the sales volume only by 9.2% you would have to reduce the price.…

    • 795 Words
    • 4 Pages
    Satisfactory Essays
  • Good Essays

    Hi-Value Supermarkets have multiple key strengths with their current position in the Centralia market, and they must be considered when determining their next moves to attack this current problem. Having three locations within the Centralia area is a huge benefit with covering multiple geographic sectors. Especially when there is no other competing supermarket chain with that many stores in the area. The fact that they have had a strong market share from 1995 to 2002 with an estimated 23% share of the market in 2002 is also very important. Hi-Value is in the position where all they need to do is at the very least sustain their current positions and any increase in market share is just a bonus. Being the oldest supermarket in the Centralia area is a key strength because it makes them a well known and identifiable…

    • 1373 Words
    • 4 Pages
    Good Essays
  • Satisfactory Essays

    To reduce sales costs will be the hardest of all since this will not be an over night success sotry, but since sales costs are about 45 percent there has be a reduction in sales demonstrations, price of the “average” or the cash cow products, and…

    • 506 Words
    • 3 Pages
    Satisfactory Essays
  • Good Essays

    Hi-Value Supermarkets

    • 335 Words
    • 2 Pages

    > It was the number 1 or number 2 ranked supermarket chain in each of its trade markets.(This is measured by their market share)…

    • 335 Words
    • 2 Pages
    Good Essays
  • Good Essays

    BUSS3 notes

    • 7318 Words
    • 30 Pages

    A business that reduces its costs can benefit in two ways; keeping prices the same therefore having a higher profit margin, or reducing the selling price to attract more customers. E.g.…

    • 7318 Words
    • 30 Pages
    Good Essays
  • Good Essays

    Study Guide

    • 1347 Words
    • 6 Pages

    QUESTION 7: What % increase in unit sales is necessary to achieve the same level of total contribution?…

    • 1347 Words
    • 6 Pages
    Good Essays
  • Powerful Essays

    Superior Supermarkets

    • 1711 Words
    • 7 Pages

    Superior Supermarkets (SS) must decide whether or not to pursue an everyday low pricing (ELP) strategy at its three Centralia MO locations.…

    • 1711 Words
    • 7 Pages
    Powerful Essays
  • Satisfactory Essays

    homework 1 MGT 105

    • 290 Words
    • 2 Pages

    4) Personally I would cut the prices by 5% instead of the 10%, keeping with the same material and employees. I would still be making a profit putting out quality product. With that I would try to find other ways to save the company the other 5% so that we wouldn’t jeopardize the product we put out for customers.…

    • 290 Words
    • 2 Pages
    Satisfactory Essays
  • Satisfactory Essays

    In 1992 3M had evolved into a highly diversified global company whose $14 billion sales were generated by a portfolio of thousands of products managed by the company’s 47 divisions and sold through its organizations in 57 countries worldwide.…

    • 406 Words
    • 2 Pages
    Satisfactory Essays
  • Good Essays

    KEY ISSUE OR DECISION THAT MUST BE MADE: Should Superior Supermarkets implement the everyday low pricing strategy? If so, should this strategy be adopted across-the-board for all products or just certain categories?…

    • 1835 Words
    • 12 Pages
    Good Essays
  • Satisfactory Essays

    2.) No guarantee that customers will stay especially if they can find something new from competitor.…

    • 667 Words
    • 4 Pages
    Satisfactory Essays

Related Topics