Background “Cub Foods” is the company which started the business in 1968. Cub foods begins with an idea to redefine grocery retail in the Midwest – Consumers United for Buying… Cub Foods currently operates 108 stores in Minnesota, Wisconsin, Illinois & Iowa, with 56 of those stores located in the Minneapolis/St. Paul metro area. Cub Foods has served the customers more comfortable by providing the best grocery value to customers. Cub views consumers as the driving force behind the business goals and strategies. Cub continues to offer the premier value for consumers’ dollars.
All of the business units and operations teams consistently work to identify and support business initiatives that are environmentally-friendly, ranging from promoting customer involvement in the company’s recycling programs to further reduce energy usage in stores and offices. Cub Foods also cares about the environment. The stores have been involved in plastic bag recycling since 2004. More than 1 million lbs. of plastic bags are recycled through this program each year. Cub has joined forces with the U. S. Environmental Protection Agency’s Green Chill Advanced Refrigeration Partnership.
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This program promotes green technologies, strategies and practices that protect the ozone layer and reduce greenhouse gases. By signing the Green Chill Partnership pledge, Cub Foods has expanded its environmental stewardship efforts by using only non-ozone-depleting refrigerants in all refrigerated cases, reducing the store’s carbon footprint. Key Issues The objectives or goals of company; ?Cub foods want to become the famous grocery shop which gives the full benefits for their customers. ?Shopping cart at Cub has the large size which the customers will be comfortable and convenient to carry things. Customers can find almost everything they need under one roof. ?Cub foods have the merchandises between 35000-49000 items in the store. ?Even though the store is huge but there are many sign points to lead you to each section. It will save your time to purchase things. ?The Cub Foods store is different from the other conventional store such as they are using the less cost on advertising but rely on mouth to mouth advertising. The problems of the company are facing; ?Cub foods cannot sell almost everything in the lowest price such as meats. ?Even the Store is cheaper than others but it located more far than others too.
SWOT Analysis Strengths: ?Cub foods has been a leader in shaking up the food industry and forcing many conventional supermarkets to lower prices, increasing services and in some case go out of business. ?They sell the products in low price and the discounts are very high which is 30 % off. ?Cub foods has the products between 35000 to 49000 items so the consumers can find every merchandise under one roof. It can be fulfilled the customer’s need. ?Cub foods has a simple approach to grocery retailing: low prices, made possible by rigidly controlled costs and high-volume sales. Weaknesses: Even though, Cub has a simple approach which sells products in low prices but they have some of the product cannot be sold in the lowest price such as meat. ?The location which is very far so some shoppers must drive more than 50 miles to visit Cub foods. Opportunities: ?Cub can save money from advertising which is 25 percent less than other chains. The new customer can know their store by using word of mouth advertising. ?Cub foods sell lots of products so they can get more attraction from the customer. ?The store has the wider shopping carts which are intended to suggest buying expansion from consumers.
Threats: ?The stores are too large so the services may not cover every customer. Analysis 1. List at least five marketing tactics Cub Foods employs in its stores to increase the probability of purchase? Cup Foods implements a behavioral strategy, including consumer promotions, and Affective strategy to encourage consumers to buy in higher volume and to do stockpiling as well as impulse buying. Cognitive strategy gives customers the possibility to find what they want so that products are not left into the shelf because of lack of information. Behavioral strategy
Sampling: Cup foods have tables of samples that encourage consumers to try new products. This increases the probability of purchasing those products. Price deals: Discounts are designed to attract customers’ attention and ultimately get consumers to buy the product. Placement of products: Entry aisle with special promotions leads to higher profit impulse foods. Departments with essentials come last so that the probability of impulse buying is higher as the budget hasn’t been used jet. Affective strategy Horn-of-plenty feeling: Whole store exudes a seductive, horn-of-plenty feeling that typically makes customers to buy in high volume.
This means that the probability to purchase more products increases. Cognitive strategy Locating the preferred goods: Cup Foods is distributing maps to its customers. This means that the exact product customer wants can be located and bought from the huge store. 2. What accounts for Cub’s success in generating such large sales per customer and per store? Cup Foods has successfully implemented a clever marketing strategy to influence overt consumer behavior. They have cleverly combined affective, cognitive and behavioral strategies to create a grocery retailer with high volume of sales that is shaking up the food industry.
Behavioral and Cognitive strategy The main reason for Cup Foods success is its image as a low cost grocery retailer with high volume of sales. They doesn’t advertise that much, but instead have created a cognitive strategy to affect how consumers think about the stores and rely mainly on worth of mouth advertising. Cup Foods goal is to position a company in consumers mind as a low cost grocery retailer, and they do that as a sub goal of consumer promotions. And how they do that more effective is that they place the special promotions right into the entry aisle, called a “power alley” by some.
All these promotions right on the entrance, as well as other consumer promotions through out the store, encourage consumers to categorize Cup Food as a low cost store. The knowledge of Cup Foods vast selection and low prices makes people come to the store even from faraway to stockpile, promotions are increasing the probability of purchases and the affective strategy makes them buy in high quantity. Affective strategy Cup Foods stores are huge, ceiling joists and girders are exposed, aisles are wide, shopping cards are wider than usual, and selection is extensive and packaged in clean stores that are twice as big as most warehouses.
This shop creates a customer a horn-of-plenty feeling that translates in consumers mind as tremendous savings going on as well. This all encourages overt behavior called expansive buying in a form of stockpiling and impulse buying. 3. Given Cub’s lower prices, quality merchandise, excellent location, and superior assortment, offer reasons why many consumers in its trading areas refuse to shop there? Not all the customers belong to the target group of Cup Foods. It’s less likely to see for example single student buying huge amounts of food and even travel far to do so.
Not all the people have a car, and they probably prefer small quantity of purchases from the store nearby. Not all the people care for low prices and definitely not all want to buy their food from the huge store as they might value their time more than they value their many and big stores take more time to go through than small ones. There are also people who prefer more personal service, so they might boycott large stores to keep small stores in business. Group Opinion/conclusion; Conclusion:
Cub Foods currently operates 108 stores in Minnesota, Wisconsin, Illinois & Iowa, with 56 of those stores located in the Minneapolis/St. Paul metro area. Cub Foods has served the customers more comfortable by providing the best grocery value to the customers. It also cares about the environment. The stores have been involved in plastic bag recycling since 2004. This store is different from most supermarkets. Cub foods has the large store and they provide wider shopping carts than usual so it will be comfortable for their customers when they buy things and they can find almost everything they need under one roof.
Cub has a simple approach which is low price but it cannot use in every products such as meat. The store becomes very famous by word-of-mouth so they can save up their money than most conventional stores. Opinion: In our group opinion, we think that Cub Foods use only simple approach which is low prices but they can achieve the customer’s need and value-conscious. The stores have several products so most of the customers want to come because they can find almost every merchandises under one roof. Some shoppers live very far from stores but they still want to come to Cub Foods.
Cub has a smart marketing. They have the large store, wider shopping carts and large parking. These things are the external factors that can attract their customers. But we think if they have more branches in every part of USA, it would be great for the customers to get more benefits and the advertising will be less important. References ?http://cub. com/home. do ?http://en. wikipedia. org/wiki/Cub_Foods ?http://www. cubfoods. com/content/Cub/aboutus. jsp ?Peter and Olsen, Consumer Behavior and Marketing Strategy (7th edition)