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Retail Marketing: A Case Study of 7-ELEVEN

A Case Study of 7-ELEVEN

Introduction

Drake-Bridges et al. (2011) suggested that retail mix is the process that allows marketers in executing and formulating their marketing strategy for continuous growth in future. Retail mix provides the wide range of key decision to the marketers that enable them in satisfying their consumer by fulfilling needs and demands.

This study goes to explain the retail mix of an organisation named 7-Eleven. This study also tries to represent the sustainable strategy of 7-Eleven and discuss the challenges for continuous growth.

Company Overview

The company is the world largest convenience retailer. 7-Eleven runs more than 53000 stores in all over the world. The owner of the company is Wither and Barlow families. It has the licence on operating the business worldwide as well as able to open franchise business. Apart from that CEO of the company Mr Joseph De Pinto said that 7-Eeven provides fresh and high quality product to the consumer with variety of choice in reasonable price. Moreover, the company provides facility of friendly shopping environment and speedy transection to the customers.

Figure 1: Official Logo of 7-Eleven

(Source: 7eleven.com, 2014)

Task 1: Analysis the elements of retail mix of 7-Eleven

1.1 Merchandise Range and Assortment

Management of merchandise is the process of attaining success and attracting more customer for purchasing products. Chen (2012) acknowledged that majority of people demands to visit those types of stores where they get products which they demands. For example, Tesco, Aldi, Lidl and much more companies provides wide range of services including food and non-food to the customer and attain the large market share in UK retail sector. However, 7-Eleven provides lots of products with different categories and maintain high quality in their products (Dharni and Chawla, 2012). Following are the products categories of 7-Eleven that shown in the given diagrams

 
   

Figure 2: Different Product and Service of 7-Eleven

(Source: Djordjic, 2011, pp- 69)

7-Elvene provides high quality products in low cost that attract the price sensitive customers. As we known that United Kingdom is economically weak country, low cost products allows 7-Eleven in developing a string market position (Franchise.7-eleven.com, 2014). Apart from that, string brand value and franchise facility make 7-Eleven easy in developing business in retail market of UK.

However, 7-Eleven sold the merchandise based on customer demands and needs. Moreover, wide range of services and products helps in fulfilling the customer’s demands and needs in UK retail market to 7-Eleven. Apart from that, the above mentioned product categories of 7-Eeven contains more than 233 products sub-categories in same brand name (7eleven.com.au, 2014). It indicates that. 7-Eleven achieve their goals and objectives of merchandise range and assortment and ensure in meeting consumer preference and satisfaction.

Williams et al. (2011) opined that in order to success in business, organisation has to fulfil requirement of their customers. 7- Eleven has to aligned and developed strategy that fulfil their consumer’s preference and it is able to bring huge success for the company. As the company provides variety of products of their consumer they have to improve the quality in their product. Apart from that, company involved market segmentation techniques in their marketing strategy, it allows them in providing products based on consumer’s needs and demands. However, it is their competitive advantage and brings the opportunities for future success of the company.   

1.2 Retail Communications

Communication with the customer and promotional activities plays the major role in bringing success for the organisation. Drake-Bridges et al. (2011) opined that in order to develop business successfully and creating a good brand image, organisation has to promote their business via including several promotional paid and non-paid promotional strategies such as sales promotions, advertising, friendly atmosphere of stores, online selling or purchasing facilities, publicity of products through loyalty programme, word of mouth sales, etc.

7-Eleven focuses in developing brand image through communicating with the customer by providing high quality service and products in low price (Hartmann and Nair, 2010). This table shows the retail communication methods of 7-Eleven in the retail market in UK –

Communication Methods Operations process examples
Impersonal Communication Sales Promotions: In order to promote the sales, 7_Eleven provides various discounts in their stores weekly. The company provides several discounts in their products in Saturday in every week. Apart from that, gives special discounts in every festivals such as Christmas Day. Moreover, 7-Eleven allows the people in purchasing products not only in stores but also from own websites. Use PayPal system for payment of online purchased products that allows in building trust of consumers. On the other hand, 7-Eleven provides loyalty card scheme in every purchase to their loyal consumer (Hino, 2014). It is also provides benefits in increasing customer. Advertising: In the local newspaper, 7-Eleven provides about their different products with discount offer. Company mainly consists direct advertise techniques for promoting their products. In local Cable TV channel like virgin cable TV service give advertise about products and service with several discount price (Keller, 2010). It is also helps in attaining consumer’s concentration in their products. 
Personal Communication In the website of 7_Eleven, email newsletter is available for sign up of the customer. It provides several benefits to the consumer in getting information about products and services such as new products, weekly discount price, and extra discounts in online purchase of products, etc. 
Unpaid communication Publicity: Management of 7-Eeven said that the marketing staffs of company provides handbill about their stores information in each region and several discount of products. Word of Mouth: Favourable services of 7-Eleven allows the company in advertising their products through word of mouth. Potential customer of the company convince their relatives and motivate them in purchasing products from 7-Eleven stores.

Table 1: Communication process of 7-Eleven

1.3 Store Layout, Design and Visual Merchandise

CEO of the company said that stores of 7-Eleven are designed in order to meet objectives such as influencing the behaviours of consumer and establishing good brand image. Using the designing concept of main branch of 7-Eleven in Australia, the stores in UK designed. The layout of the stores contains wide range of merchandise with various representative patterns (Kerr and May, 2011). In UK, the size of the stores of 7-Eleven is medium and the company management more than 500 line of products. The inventory products of the company is more than 1000 products line. Main objectives of the business is to serve people high quality products in low costs. Store manager of 7-Eleven in UK said that products are displayed in a logical manner in their stores (Larsen and Korneliussen, 2012). However, customer care executive always announced bout different offers of products. In display boards always displayed about the new arrival products and entire environment was friendly. Staffs of the stores helps consumer in identifying products to customers. This design process allows in getting better attention of consumers.

Figure 3: Store Layout of 7-Eleven

(Source: White, 2010, pp- 171)

1.4 Customer Service and Facilities Service

Pennemann (2013) argued that customer and facilities service is the set of activities that provides incredible shopping experience to consumers. In order to provide excellent customer services, 7-Eleven includes several key service processes in their stores in UK including Check-in and check out services, Smartphones application, store design, shop floor, website, etc.

Services Operation Process
Check-In and Check-out 7-Eleven installed automatic scanning technology in their stores door. It automatically scanned the entire body of coming consumer if they carry any fire products with them (Pongjit, 2011). Main advantage of this technology is customer own self scanned their bags without any talk with the gate keeper and it save the time of that is most valuable in these days of busy schedule. 
Smartphone Application Majority of people uses smartphone in these days. Technical department of the company launches application for smartphone that allows customer in browsing current offers, new products, nearest stores, search function of products, etc (Schramm-Klein, 2013).
Website Designer of website of 7-Elven make the site in order to help the consumer. Sign up in newsletter in website customer can get information about 7-Eleven.
Store Design Stores are design simply and logical manner. Each products are presented well with related pricing and discount offer (Williams et al. 2011).

Table 2: Summarized of Customer service of 7-Eleven

1.5 Formats and Locations

Sewell (2014) claimed that format of stores such as variety of merchandise, incredible service, low pricing, high quality, etc. allows the company in motivating customers. Quality of products and affordable price by the retailers helps in increasing the value of consumers. Offers and loyalty card are the key service of 7-Eleven. It gains competitive advantage for the company. Emerging consumer trends such as new innovative hotdog with delicious taste helps in increasing customers to 7-Eleven. 

1.6 Pricing Strategy and Tactics

Srimanee and Routray (2012) considered that pricing is the main attraction in retail sector in terms of gaining consumers. Low pricing strategy is the major trends of appealing consumer. However, in order to minimize competition and achieving higher success, 7-Eleven involved competitor based pricing strategy. It not only helped in improving their revenue but also helped in developing the business with higher customer base (White, 2010). 7-Eleven provides lower price services for their different products.

Apart from that, in order to achieve higher customer value, 7-Eleven uses market segmentation strategy. The company segment their market into three different way including geographically, demographically and sociologically. Market segmentation allows the company in providing specific products to their consumer based on choice. Market segmentation strategy helps in understanding about the choice and demands on a particular region and providing products as per demands of consumers.   

A Case Study of 7-ELEVEN
A Case Study of 7-ELEVEN

Task 2: Assessment of extent that sustain competitive advantage for 7-Eleven

7-Eleven not only provides food products to the consumer but also provides wide range of non-product services such as online bill payment, gas and oil service, ATM service, gaming service, etc. The company hire several strategies in order to capture the market share and enlarge their market in UK retail market sector. Franchise business brings lots of benefits for the company and it creates a tight partnership with the suppliers that was unique in the retail market of UK (Williams et al. 2011). Apart from that, the company launches own portal in UK and through the portal they provides up to date information about their stores such as festival offers, special discounts, loyal customers discounts, etc. It allows in reducing extra costs in advertising through other media such as journals, newspaper, cable TV, etc. It is also enhance the operational quality and provides benefit of online purchase of products. Most important method of adopting this strategy was high profit. Company has to pay huge amount of money for advertising their products and implementing website they reduce costs in advertising (Wood and Reynolds, 2012). In terms of identifying the outside partners with greater scale and expertise, the company evaluate several strategic functions such as e-procurement, distribution of products, direct advertising, etc.

Merchandise Range Store Format and Locations Customer Service Marketing Communication Pricing Strategy
In stores of 7-Eleven wide range of merchandise available that allows to customer in getting products in one place. There are several types of products that present in the stores of 7-Eleven such as food items like hotdog, fresh food, nutshells, etc. Beverage products of the company are cold, hot, fridge, etc. gaming magazine, software etc., are also present in the stores. Services of 7-Eleven is Oil and gas service Video rental service Photocopying and ticket sales Bills payment Payment for internet shopping Home delivery service of meal Automobile service and parts also available. Majority of stores are located in the populated place of UK such as Denmark, Norway, Sweden, etc. Apart from that, 7-Eleven established their stores in closely to the high street. Environment of stores are friendly. All products are designed in casual manner and in the display boards always showed the new items with discount price. Significant customer service provides by the company. Check-in system installed in the door step for automatic scanning by the customers. SAP technology installed that allows in providing up to date and quick information to consumers. More than 200 staffs works in one stores of 7-Eleven and they helps in identifying products that consumer demands (Williams et al. 2011). For direct marketing, company uses advertising strategy such as newspaper advertising, advertising through journals, magazines, cable service, etc. Develop website for online viewing of products and service via internet. Newsletter sign up facility was provided to customer in terms of getting information about new and discount products. E-logistic service involved by the company for home delivery of online purchased products. Low pricing strategy adopted by the company. It helps in reducing extra wastage costs and maintain the low price with high quality design products.

Table 3: Summarized of competitive advantage

Task 3: Evaluation of challenges for continued international growth

3.1 PEST Factor

Political Factor: Continuous change of government in UK provides potential challenges to 7-Eleven. Apart from that, local political party creates many difficulties for 7-Eleven’s business in UK.

Economical Factor: In order to export machinery and electronics products, 7-Eleven had to pay 60% of GDP. It creates complexity and low the profit margin of the company.

Socio Cultural Factor: According to the market review in 2013, total 64.1 million people lives in UK. Large amount of population gives the facilities in expanding business. However, CEO of the company said that UK is the ideal market for 7-Eleven due to its large population.

Technological Factor: Due to continuous change of technology, company has to maintain up to date technology. It may decrease their profitability.

3.2 Growth Objectives

  • To increase the market share up to 20% in the next upcoming 2 years.
  • To make the 7-Eleven convenience store world first that apply IT system.
  • To open more than 200 stores in other location in UK especially in different parts of London.

3.3 Growth Strategy

The company apply ibon e-commerce technology in their operation strategy. In order to regulate the inventories, uses EOS. Develop own stores as well as open many franchises stores. Established the stores in populated areas such as metropolitan areas like near university and college, office place, high street, railway station, etc. Focused on producing healthy and quality food with achieve price. Use low pricing strategy. Low pricing strategy allows the company in attracting those people who are basically price sensitive. As we known that UK is the low economical country, providing low price with higher quality products, achieve large customer base. Apart from that, company has to make international business campaign via online as well as offline. For online campaign social media is the better option for 7 –Eleven. International marketing campaign allows the organisation in gaining the marketing opportunities in large populated areas where people demands for more products (Drake-Bridges et al. 2011). It gain the profitability as well as attain large customer base. For example, 7-Eleven open their stores in China.  

3.4 Market Selection and Entry Method

In order to enter in the new market, 7-Eleven selected franchise strategy. It allows the company in expanding their market more than 90% in UK retail sector. However, it is a proven techniques that provides the opportunities to capitalize the earning. Franchising business were supporting to 7-Eleven in UK retail market. Moreover, franchise strategy for entering into new market will be better because if the company faces challenges in developing market share, they faces low troubles in terms of investment. According to the Dharni and Chawla (2012) point of view, franchise creates another source of income for the business 7-Eleven via royalty, possibility and franchise fees. For the operational process of 7-Eleve, franchisor provides uniformity for the productions. However, it brings the self-motivation for the workers within workplace of 7-Eleven in UK. Self-motivation brings the higher organisational culture that improve business profitability, working efficiency and monetary results.

3.5 Emerging Retailing Trends

7-Eleven introduce Smartphone application that provides benefits to consumer in browsing products, discount, offers, special offer in festivals, monsoon offers, etc. via mobile phone. However, the introduced application helps consumer in searching nearest location of 7-Eleven stores. In these days, total 64 billion people uses mobile phone. The new idea of smartphone application development creates the emerging trends for 7-Eleven. It provides lots of opportunities for searching the nearest location of 7-Eleven stores for both franchise business as well as their own business stores.

3.6 Competitive Context

Low pricing and high quality product is the competitive advantage of 7-Eleven in UK retail market. Majority of competitors of 7-Eleven like Tesco, Lidl, Aldi, etc. decrease product quality in order to serve people low cost products. However, maintaining quality in low cost allows 7-Eleven in achieving good brand image in retail sector. Wide range of products are the main competitive advantage of 7-Eleven. However, the company not only provides the food and beverage to consumer but also the company serves other lots of non-food products such as gaming books, gaming application, ATM service, online bill payment, etc.

Conclusion

Above study deals with explain the retail mix of marketing of 7-Eleven. From the above study it has been identified that 7-Eleven is able to fulfil the requirement of their consumer and maintain value by providing high quality product with lower price. It allows in moving the stores near populated place and also helps in opening their own stores. Macro environment of the company influences their competitive advantage. For sustaining the competitive advantage in UK retail market, 7-Eleven build customer loyalty and avoid the position of economic shift. Moreover, this study properly describes the retail marketing service of 7-Eleven with appropriate explanations along with examples. New emerging trends of 7-Eleven is the innovative idea that centralised the business.

Reference

Books

Pennemann, K. (2013). Retail internationalization in emerging countries. Wiesbaden: Gabler.

Schramm-Klein, H. (2013). European retail research. Wiesbaden: Springer Gabler.

Sewell, J. (2014). Marketing and Marketing Assessment (RLE Marketing). Hoboken: Taylor and Francis.

Journals

Chen, L. (2012). A knowledge marketing model: determinants of organisational resource-based capabilities on e-retail performance. IJBIS, 9(1), p.89.

Dharni, K. and Chawla, M. (2012). Antecedents of IT effectiveness in Indian retail sector. International Journal of Electronic Marketing and Retailing, 5(1), p.32.

Djordjic, M. (2011). Specificities of mystery shopping in retail financial services. Marketing, 42(1), pp.53-70.

Drake-Bridges, E., Strelzoff, A. and Sulbaran, T. (2011). Virtual Retail Simulations in Second Life. Marketing Education Review, 21(2), pp.125-138.

Hartmann, W. and Nair, H. (2010). Retail Competition and the Dynamics of Demand for Tied Goods. Marketing Science, 29(2), pp.366-386.

Hino, H. (2014). Shopping at different food retail formats. European Journal of Marketing, 48(3/4), pp.674-698.

Keller, K. (2010). Brand Equity Management in a Multichannel, Multimedia Retail Environment. Journal of Interactive Marketing, 24(2), pp.58-70.

Kerr, A. and May, D. (2011). An exploratory study looking at the relationship marketing techniques used in the music festival industry. Journal of Retail & Leisure Property, 9(5), pp.451-464.

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