Kroger Competitive Strategy

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Competitive Strategies Generally, prices and pricing strategies across the grocery industry tend to be fairly homogenous. Firms in the industry often cooperate with each other in terms of pricing in order to retain customers and keep the already low margins as manageable as possible. One of the most common priorities among competitors in the grocery industry is to achieve and maintain an image of everyday low prices. Considering the oligopolistic nature of the industry, it is expected that retailers will tend to monitor and react to the prices of their competitors, according to Sprott, Manning, and Miyazaki (2003), as often as monthly or even weekly. Due to the overwhelming amount of products sold within these retailers, competitors typically …show more content…
Take Kroger, for example. Kroger’s most important value is Customer First Innovation. The company has recently concentrated its marketing efforts on personalization through its digital app. The Kroger mobile app offers coupons and promotions based on the desires of each individual shopper. The giant retailer began its digital coupon offerings in 2009 and since has seen over 1 billion of its customers download the app (Hamstra, 2014). Another marketing effort prominent across the industry as a whole is customer loyalty programs, particularly related to gasoline perks. Retailers like Kroger, Giant Eagle, Winn Dixie, Costco, Publix – you name it, are all offering customer loyalty programs in which shoppers earn points for each dollar spent, redeemable for discounts on gasoline. Kroger customers, for example, get 10 cents off per gallon per every 100 fuel points …show more content…
For instance, several retailers have opened pharmacy operations and even wellness clinics within their stores. Kroger went from having 23 wellness clinics in its stores in 2008 to 89 in 2012 and has continued to develop this service offering ever since (Garry, 2012). This, in conjunction with product development, can significantly increase a firms’ competitive advantage in this industry. As defined by David (2013), product development is “seeking increased sales by improving present products or services or developing new ones.” Grocers are continuously innovating products and services to meet the always-changing needs of consumers. In 2007, the top 20 food retailers in the United States saw about a 75% success rate in new products launched, Kroger at the forefront with a remarkable launching of nearly 1,000 new products in 2013 (Illia, 2014). Another way firms are executing product development strategies is through the emergence of private-label brands. While such brands used to carry an associated image of low-cost, low-quality alternatives, “[today’s] perceptions [on] private label are overwhelmingly favorable” (“The State of Private Label Around the World,” 2014, p. 4). Studies have shown that 67% of consumers believe that they receive extremely good value for their money when purchasing private-label products (“The State of Private Label Around the World,” 2014, p. 4). With the social trend toward

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