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Alternatives Facing Superior. The First Case Study

This will shore up some of the company's weaknesses such as its lack of competitive advantage in anything other than convenience. If the company develops other competitive advantages, it can again receive the benefit of the doubt with respect to pricing if it simply brings its prices in line with the competition. The fourth option assumes that consumers are not truly price sensitive and that the recent declines in sales are due to other reasons. While the easiest to implement, this option has opportunity costs, in particular if the perception of Superior continues to be as a player whose greatest asset is convenience.

6. The preferred alternative is the third option. This is essentially a re-envisioning of Superior stores from a mediocre store happy to be #2 to a store that wants to be the best on all levels. The stores are conveniently located, which is going to bring in customers inherently. However, most customers also shop at other stores which means that it is mainly the convenience that they shop at Superior at all. Superior needs to attract customers with other elements of its offering.

The consumer comments indicate that in general grocery store consumers want it all. They want attractive stores, low...

They may pay more for a better meat counter but are uncomfortable paying more for basic groceries and dairy. Therefore, Superior should try to meet all of the needs of customers. They already receive high marks for the in-store experience, but they need to upgrade selection and prices. The small stores do not inherently mean a lack of selection. If the company focuses on efficient merchandising, it can give consumers the products they want while carrying a lower number of SKUs.
Prices should be brought in line with those of the competitors. This can be communicated to the market as 'everyday low pricing', in particular placing emphasis on everyday low loss leaders, such as milk, bread, eggs and cheese. The idea is more to change the perception of the customers than to actually undercut the competition. Undercutting on the best ten or twenty items will go a long way to establishing a perception of everyday low prices. Combined with improvements in merchandising, the meat counter and the bakery, Superior will not only give customers a reason to come to the store but will also give them a reason to do more of their shopping there. The objective is to become #1, not merely hang on to an established position.

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