Pick'npay Case

Berisford Le Kay Question 4 and 5

I have visited three Pick 'n Pay stores in order to establish their location, which market they serve and the type of product they sell.

During my observation I have established the following:

Pick 'n Pay family stores are retail stores which sell different types of products, including food products, clothes, cleaning products, household items and also offer a banking service. These stores were all located in large shopping centers, obviously to benefit from the huge number of customer 'traffic".

Advice for Pick 'n Pay on market penetration:

Market penetration is a business growth strategy employed by increasing the number of sales of current market segments without changing the product. Most companies invest in new outlets, improve their advertising, prices, services, menu selection and store design In order to encourage their customers to visit the store more often, or stay longer.

During my visit to the three Pick 'n Pay shops, I have noticed in each of the shops only one small isle was allocated to hardware.

This observation led me to visit some of the hardware stores in the nearby vicinity. I noticed that a vast numbers of customers visit these hardware stores because of the huge variety of hardware items these hardware stores offer.

It would thus be beneficial if Pick 'n pay could expand its selection of hardware and in doing so, increase its sales by attracting its current customers. Customers would stay longer and spend more time as they will have the convenience of buying their hardware goods at the same shop as where they buy their food and clothes.

Advice Pick 'n Pay on market development:

Market development is a business growth strategy employed by identifying and developing new market segments for current products of the firm.

During my visit to the Pick 'n Pay shops, I have identified one item (Nescafé Classic coffee).

The retail price of the coffee, R 44.95 for a 200g glass pot, suggests that this product is earmarked for the middle to high earning customer. I have found that the product was not being offered in smaller packaging.

Should the same product being offered in smaller packaging, for example 100g packets, and at a lower price, it would attract customers from the low income market. This would be a new market for the product.