dissertation
TRANSCRIPT
Acknowledgements
It is a pleasure to thank those who made this dissertation possible. First of all I would like to
thank my supervisor Dr Khalid Bichou, without his support and guidance from initial stages till
the end I couldn’t be able to develop an understanding of the subject.
I would also acknowledge my husband who supported me financially and mentally throughout
the dissertation. I am also indebted to my family and friends whose unwavering emotional and
moral support helped me to sail through this project. Above all I am most grateful to the
Almighty Allah for the divine intervention in this academic endeavor.
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Abstract
It is gradually growing need for world/ethnic food products in UK. In this research we will learn
that how Asda sustain its world/ethnic food department. What are its procurement operations for
this department, whether it is outsourcing globally or locally. Increasing competition among
supermarkets encourage them to keep their prices low than others. Supermarkets are dominating
over small retailers day by day. This research will examine the ethnic customers’ attitude and
their priorities towards ethnic food products shopping. We will evaluate that what are the reasons
that Asda’s world/ethnic food products are expensive than local ethnic retailers. We will observe
Asda’s ethnic customers by knowing their strategies for ethnic/world food shopping, whether
they prefer quality over low prices or not.
Key words; Asda’s procurement operations, world/ethnic food products, ethnic customers,
supermarkets vs. small retailers
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Table of Contents
Table of Contents
Acknowledgements..........................................................................................................................1
Abstract............................................................................................................................................2
Table of Contents.............................................................................................................................3
Chapter 1: Introduction....................................................................................................................6
1.1 Background of research.........................................................................................................6
1.2 Scope of the research.............................................................................................................8
1.3 Limitation of the research......................................................................................................9
1.4 Research objectives/purpose and Questions..........................................................................9
1.5 Contribution of study...........................................................................................................10
1.6 Research process and methodology.....................................................................................10
1.7 Research structure................................................................................................................10
1.8 Summary..............................................................................................................................11
Chapter 2. Literature review.........................................................................................................12
2.1 Evolution and characteristics of UK population..................................................................12
2.2 Immigrants...........................................................................................................................12
2.3 Importance of world food and ethnic consumer..................................................................13
2.3.1 Food industry affected by Economy crisis....................................................................13
2.3.2 World food demand and ethnic consumer.....................................................................13
2.3.3 Ethnic food....................................................................................................................14
2.3.4 Ethnic consumers and retailers......................................................................................14
2.4 Supermarkets vs. ethnic retailers.........................................................................................15
2.4.1 Risk and safety matters..................................................................................................16
2.5 Role of Supermarkets to promote Ethnic food; Asda..........................................................16
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2.5.1 Asda’s private label Portfolio........................................................................................17
2.5.2 Company’s Competitive Positioning.............................................................................18
2.5.3 Asda’ procurement activities.........................................................................................18
2.5.4 Asda Stores....................................................................................................................18
2.5.5 Asda Supply chain Management...................................................................................19
2.6 Below cost selling................................................................................................................20
2.7 Changes in food prices.........................................................................................................21
2.8 Operating margins for Asda and other grocery retailers......................................................21
2.9 Customized products............................................................................................................22
2.10 What is Procurement?........................................................................................................23
2.11 Outsourcing........................................................................................................................24
2.11.1 Outsourcing strategies.................................................................................................25
2.11.2 Outsourcing: Benefits and risks.................................................................................27
2.11.3 Outsourcing in retailing...............................................................................................28
2.12 Conclusion.........................................................................................................................29
Chapter 3: Research Methodology................................................................................................30
3.1 What is Research?................................................................................................................30
3.2 Purpose of research..............................................................................................................30
3.3 Research Design:..................................................................................................................31
3.3.1 Exploratory research:....................................................................................................31
3.3.2 Descriptive Research:....................................................................................................31
3.3.3 Analytical or explanatory research................................................................................31
3.3.4 Predictive research........................................................................................................32
3.4 Research sources:.................................................................................................................32
3.4.1 Primary Data collection.................................................................................................32
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3.4.2. Secondary Data Collection...........................................................................................32
3.5 Research Methods:...............................................................................................................33
3.5.1 Survey............................................................................................................................33
3.5.2 Personal Interviews:......................................................................................................34
3.5.3 Internet survey:.............................................................................................................35
3.6 Types of Data.......................................................................................................................35
3.6.1 Quantitative...................................................................................................................35
3.6.2 Qualitative.....................................................................................................................36
3.7 Design of Questionnaire.......................................................................................................36
3.8 Research Testing Methods:..................................................................................................37
Reliability:..............................................................................................................................37
Validity:..................................................................................................................................37
Generalisability:.....................................................................................................................38
Chapter 4: Results and Findings....................................................................................................38
4.1 Introduction:.........................................................................................................................38
4.2 An over view of literature review and Hypothesis:.............................................................39
4.2.1 Ethnic customers:..........................................................................................................40
4.3 Research questions:..............................................................................................................40
4.4 Targeted Population:............................................................................................................41
4.5 Presentation of acquired Data.............................................................................................41
4.6 Interpretation of Data:..........................................................................................................44
4.7 Result analysis:....................................................................................................................45
4.8 Hypotheses...........................................................................................................................46
4.8.1 Hypothesis 1..................................................................................................................46
4.8.2 Hypothesis 2.................................................................................................................47
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4.8.3 Hypothesis 3.................................................................................................................47
4.8.4 Hypothesis 4.................................................................................................................47
4.9 Limitations:..........................................................................................................................48
4.10 Discussion and comments..................................................................................................48
4.11 Conclusion:.......................................................................................................................49
Chapter 5: Conclusion...................................................................................................................49
5.1 Introduction..........................................................................................................................49
5.2 Summary:.............................................................................................................................50
5.3 Limitation of the research....................................................................................................51
5.4 Suggestions for the future research......................................................................................52
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Chapter 1: Introduction:
In this chapter we are going to have an overview of purpose of the research,
literature review, research methodology and analysis, we will also discuss that what are
the objectives which force us to do a research on this topic, what will the scope of this
research and how this research will contribute in future. Further we will talk about
structure of the research that how we are going to organize our chapters.
1.1 Background of research:
Growth in international trade, tourism, immigration and globalization encouraged the
creation of ethnic minority retail enterprises in UK (Jamal, 2003). There is also growing
competition among supermarkets these days. Many big supermarkets are dominating UK’s retail
market. Some of these supermarkets e.g. Asda, Sainsbury’s, Tesco, M&S are in leading
supermarkets. Because of high competition and increasing demand, many new branches of these
supermarkets are opening these days, which is fruitful and profitable for the companies but not
truly for the small traditional retailers. It has become universal phenomenon that supermarkets
are taking place of small retailers. (Goldman & Hino 2004).
In recent times as UK’s economy is recovering from recession, customers spending power has
been affected. Customers are spending much time at homes; supermarkets offered much more
cheap deals to attract customers (Euromonitor report, 2010) . This situation raised more
competition among supermarkets and there is a race in between them to offer cheaper products
than others
We will try to find out that how UK’s population is increasing along with world/ethnic food
demand, firstly world food is not only need of ethnic communities but also becoming popular
among natives, As ‘curry’ is one of the famous dish in UK now. Till 1970s ethnic communities
were unable to find their traditional food but gradually ethnic entrepreneur start introducing
ethnic food in retail shops (Jamal, 2004). With the passage of time supermarkets realized its
need and develop its World/ethnic food departments. Asda is one of those supermarkets which
have expanded their world/ethnic food department, especially in ethnic majority areas.
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Asda is one of the large supermarkets in UK. It is subsidiary of an American company known as
Wal-Mart.
We are going to investigate the procurement operations of Asda for its ethnic/world food
department. We are keen to know that how Asda manages its outsourcing for ethnic/world food
products. We will discover that how does Asda’s supply chain work to maintain speed and low
costs. Duke (2008) CEO of world’s biggest retailer Wal-Mart said that now we should move
forward by maintaining supply chain making it more responsible socially and environmentally.
They have developed a reporting structure to sustain their ethical programmes. Asda deals in
households, stationary, electronics and garments. It has slogan of ‘Always low prices’. It claims
that it is comparatively cheaper than other supermarkets. We are going to focus its ethnic/world
food department. It has wide range of ethnic/world food products but it seems that its
ethnic/world food products prices are slightly higher than small retailers, so what are the factors
which are affecting on this department and whether customers are still interested to buy Asda’s
ethnic/world food products. Increasing demand for world food can’t be overlooked. In UK,
growing population of immigrants is an indication that in coming future, world/ethnic food
demand will raise. This will also be highlighted that customers trends towards ethnic/world food
shopping. Supermarkets are already considering this fact and offering these products in wide
range. There is also increasing competition within supermarket, some of big supermarkets such
as; Asda, Tesco, Sainsbury’s and M&S, focus that they offer better quality products at
competitive prices. We also want to know that how company outsource for some of its products,
what are the strategies companies should make while outsourcing and how it can be profitable.
How Asda deals with its world/ethnic food department and comparison with other supermarkets,
we will also learn that need of customized products and outsourcing in coming chapter.
1.2 Scope of the research:
Outcome of this research may help to understand that how Asda manages its procurement
operations of ethnic/world food products. Asda is much cheaper than other supermarkets as it
claims so having slightly higher prices in its world/ethnic food products, does customers still
interested in buying these products. This research can point out that if customers do not buy
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their ethnic/world food products from Asda’s above department because of the high prices than
traditional retailers, what can be done to overcome these problems. When supermarkets open in
such area where other small traditional retailer already exist, supermarkets almost ruin the
businesses in that area, because customers prefer to do shopping under one roof, we will confirm
that is this statement true, that customers do not bother slightly higher prices while doing one
stop shopping. It also can be find out that whether customers prefer high quality over low prices.
Will able to know Asda’s supply chain activities.
Will get customers opinion about its Ethnic/world food department.
Can suggest how this department can be better after getting customers point of views.
1.3 Limitation of the research:
There are some limitations might occur while doing this research. As our topic is very
vast and time consuming so time limit can create limitations to cover this topic, provided by the
institute. Asda is a big company and gathering information about its procurement activities can
be difficult. There are many sources to collect required data of company e.g. books written on
company’ performance of procurement, company’s website, but there can be many hurdles in the
way of getting accurate information which we required. It can be difficult to access company’s
procurement strategies as this type of information any company keep in secret due to high
competition in market. Many companies do not show their suppliers information and mode of
outsourcing.
1.4 Research objectives/purpose and Questions:
Objectives of this research are to get knowledge about strategies, activities and operations
of purchasing ethnic/world food products by Asda. We also tend to know customers point of
views that whether they like to buy ethnic/world food products from Asda , to evaluate that
whether customers have knowledge that Asda’s above department is slightly expensive than
other small retailers. We are going to search about customized products that how companies
manage customized products departments, as customized products designed and manufactured
for special customers to fulfill their needs, so ethnic/world food products also come under
customized products because ethnic groups are in minority in UK. Asda sells toys, food,
household, clothes, electronics etc, customers always give priority to shopping from one place,
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and it saves their money and time both. So our purpose of this research is also gather information
about ethnic customers trends that whether they buy their traditional food from their small ethnic
retailer or Asda, can they get all products they want to get? By collecting all these information
we will be able to know about customers preferences that whether they buy quality of food or
low prices. This matter will also be considered that Asda’s suppliers are based here in the UK or
it approaches origin country for ethnic /world food products. We will underpin the reasons if
customers buy higher prices ethnic/world food products from Asda. This research will cover
Asda’s ethnic/world food purchasing strategies and will also give information about customers’
ethnic/world food strategies.
So based on above objectives we are interested to get answers for following questions:
How Asda perform its procurement operations for ethnic/world food products; Global vs.
Local outsourcing.
What strategies can be followed by Asda to keep its ethnic/world food products prices’
low?
What hurdles can be faced by Asda if it outsources ethnic products from their country of
origin?
1.5 Contribution of study:
This study will provide beneficial information to Asda’s world/ethnic food department.
This study of research can contribute to give very constructive suggestions to Asda’s supply
chain and can be successful to get their attention towards different manners of outsourcing. It
also can help to students those who are interested in Asda’s supply chain. This study will show
the interests of customers which can help Asda to improve its department.
1.6 Research process and methodology:
The research methodology will be designed after reviewing literature and making
hypothesis. It will be decided that what type of research suits to our hypothesis, and what
methods can be used to collect required data. After getting information about the topic it will
analyze that whether secondary data is available to support our hypothesis or we need to collect
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primary data. After that methods of research will be applied. Research process will support our
research objectives. We will make sure during the designing of the questions and collecting data
that our research is valid and collected data is reliable and we can generalize our research.
1.7 Research structure:
You should keep some important points while you structure your research, which is; that
you should plan your structure in understandable manners that help reader to go through whole
research thoroughly.
Structure of our research will be as follows:
Chapter 2 which will be the literature review, in this chapter we will get relevant details about
ethnic minority population in UK, and its characteristic. We will learn that how ethnic minority
groups contribute in UK’s economy. Further we will discuss demand for world food. Company
which we have chosen is Asda, so we will gather all significant information about Asda, its
supply chain and its world/ethnic food products department. We will also discuss customized
products and outsourcing, to create better perspective for reader to understand our topic easily.
Chapter 3 will be research methodology, methods which we will be use in research will be
described, that how we will collect data, and which type of data and what sources we will
approach.
Chapter4This chapter will present the results and findings. We will interpret and analyze our
collected data. And will adopt such methods which will make results of our gathered data, more
clear.
Chapter 5 Conclusion will be presented in this chapter. We will discuss limitations which we
may face in research. We will also present our recommendations for further research or
suggestions to make up loopholes which we may find during research.
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1.8 Summary:
We have designed our research that will help us to identify some significant answers
related to our topic. On the whole we will discover that how one company’s supply chain
activities influence its sales. There will be some knowledge about UK’s ethnic minority
population and their choices for traditional food shopping. How supermarkets survive higher
competition by applying different strategies in their supply chain to attract customers and to
sustain competitive advantage in the market. We will also discuss small ethnic retailers, whether
they successful to attract customers by offering lower prices compare to supermarkets better
quality and slightly higher prices. We expect that all information we will get, would be reliable,
valid and we can generalize them.
Chapter 2. Literature review
2.1 Evolution and characteristics of UK population
In this section we will learn about the changes in UK population and also will find out the
reasons behind the increasing population.
UK’s population is reaching 60.7 million, grew by nearly 5%, between 1995 and 2007
(Euromonitor report, 2010). This growth is not just because of its inhabitants there are some
other issues involved in it, which we will learn as we go forward in this section.
2.2 Immigrants:
As United Kingdom is being a great attraction for third world countries and large
number of people are coming from those countries every year. People come in UK for different
reasons i.e. visit, business, for settlement and to study. A study which was basically based on
consumer lifestyles in UK shows that the main factor of growth in population is immigration,
which is raised as 154,000 immigrants in 2007 compared to 64,000 in 1995 (Euromonitor
report, 2010). The most recent growth in immigrant is after EU (European Union) issue. In 2004
a number of immigrants were added from Eastern European countries. These immigrants were
tended to get better work opportunities than their home country. Asylum seekers are also having
a great part in raising the population, according to the government data that in 2007 almost
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164,635 people were granted British citizenship, one-third were from Africa, of these new
citizens, while more than one-fifth was Asians.
A large number of young people come from other countries to UK for higher education. By the
Higher Education Statistics Agency’s figures show that students from non-European Union
countries raised as 7% in 2005 to 2007 and their population reached nearly 240,000. However
most of them are Chinese and Indians.
On the other hand birth rate is lower than the death rate of inhabitant.
According to the above mentioned study it shows that the decline in death rate is because of
great efficiency and introducing new manners of keeping good health, creating awareness about
healthy diet by National Health Services and latest inventions for treatments of deadly diseases.
All these factors play an immense part to live a long life. And the reasons behind the decline in
birth rate are many; one of those reasons is inflation. People can’t afford large families and due
to growing expenses of food, housing and taxation, female are more attractive towards work than
before, so they are not encouraged by this situation to have more babies to leave them behind at
home.
So it shows that the UK is having people with background of different cultures, religions, taste
and nationalities.
2.3 Importance of world food and ethnic consumer
Before going in detail of importance of world food and ethnic consumer we have to take a look
over the food industry and trends.
2.3.1 Food industry affected by Economy crisis:
As the UK economy is struggling, the foodservice market also has been miserable. In
2009 a number of outlets closed down as their operators were struggling to pay up the bills and
other expenditures. Reports show that during 2007 and 2008 UK consumers faced major
increase in the prices of food, utilities and petrol. As credit crunch had a great impact not only
on the UK but whole world suffered in any way. The cost of basic foodstuffs increased rapidly,
in international market the prices of wheat, meat, corn, soya and dairy products have gone up
very quickly. As a result, basic food costs e.g. cheese, bread, eggs, milk and cooking oil have
risen extensively. Because of high prices supermarkets attract their customers by offering them
deals and discount offers.
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2.3.2 World food demand and ethnic consumer
With the growing population of world, demand for food is also raising higher. .According
to the Japan International Research Center for Agricultural Sciences (JIRCAS), between 1995
and 2020, every year 70 million people will be added in the world population (Koyama, 2000).
It is necessary to project future food demand for many reasons, but the very important reason is
to assess the abilities to produce the food and trends of food demand, as it has been changing
from period to period and it modifies the pattern of world food trade, e.g. the demand of four
largely defined food categories -livestock, bulk, horticulture and other processed food in trade
has been increasing for two decades. These changes and demands are accelerating so these
changes are very important for any researcher who is willing to analyze policies relating to trade.
It will help to find the best producer and run the business according to the demand.
In the UK, data from the Office of national statistics shows a rise in the population is 0.6
percent higher than the last year, and the basic reasons for growing population in UK are fewer
deaths and more births to women from overseas, immigration rate is high, many people come
from different countries enter UK every year(Clifford, 2010). So now and in near future demand
for the world food will increase, and for supermarkets these growing ethnic population figures
need to be considered. ASDA is already concentrating on its world food department and
expanding its department according to the demand, better than its competitors.
2.3.3 Ethnic food
Ethnic food means foods which have cultural uniqueness, related to a particular religion,
race, nation or tradition. (Dwyer & Bermudez, 2003). Ethnic foods distinguish consumers
religiously, socioeconomically and regionally. In different parts of the world climate is different
and inhabitant of each particular area have special needs in their diet according to that climate, so
these needs developed different methods of food preparation. This trend is coming from
centuries and even people move to other regions they have that specific taste which keeps them
to stick to that traditional food. “Ethnic food represents traditions and cultures. Individuals in
different ethnic groups have different ways of categorizing foods, which are sometimes at
variance with medical views of foods as sources of nutrients that are based on physiological and
biochemical characteristics” ( Dwyer & Bermudez, 2003).
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2.3.4 Ethnic consumers and retailers:
UK is having multicultural community; it means it is a big market for the ethnic retailers
and supermarkets. “ In a number of Western countries, worldwide immigration patterns of recent
decades have led to the creation of large ethnic subcultures”(Reardon et al., 1997). In the UK
immigrants especially from South Asia have their strong cultural identity and they are firmly
rooted to their background and this led to an ethnic minority business network. Not only
immigrants from south Asia but from other parts of world e.g. African immigrants also have a
great impact of their cultural background and they also have their small retailers for food,
garments and other stuff. According to an estimate business enterprises owned by ethnic
minority contributes £5bn in UK economy per year (Jamal, 2002). A study by Jamal (2002)
explains that demand for ethnic products has been growing since 1970s. this growth is because of
growing population of ethnic minority in the UK. These minority ethnic groups includes Indians,
Bangladeshis, Pakistanis, Chinese and Caribbean. There are some other minority groups e.g.
eastern European, jews,Turkish, Irish and many more. “During the early1970s, the survival of
most of the ethnic retail enterprises in the UK was based on the patronage behavior of ethnic
minority consumers who utilised their services” (Iyer and Shaprio, 1999)
Above mentioned authors describe this situation that the passage of time and as preferences and
taste of ethnic groups was developing, more and more ethnic retailers were encouraged. Now
the big supermarkets are also targeting for these ethnic minority groups by having food,
garments and other stuff, e.g. Asda, Tesco, Marks and Spencer, Iceland. Ethnic entrepreneurs
are targeting mainstream consumers as well as ethnic community while some of the mainstream
mass marketing retailers are ignoring the ethnic minority customers and they have been
criticized for doing this (Jamal and Chapman, 2000). By going through some articles it seems
that marketing of some of big companies totally ignored ethnic minorities, in their campaigns
and advertisements they paid no attention that they should also have bear in mind that the
minorities spending can have a big contribution every year. Mainstream retailers were missing
the chance to get benefit of £10bn every year which ethnic minorities spend every year (Jamal,
2003). But now it’s different from past times, people from ethnic communities can find their
spices, food, vegetables and meat from big supermarkets.
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2.4 Supermarkets vs. ethnic retailers:
Multi-stop shopping in small stores is much more time consuming and costly than the
one-stop shopping in any big supermarket (Betancourt & Gautschi, 1990). There are higher
opportunities for consumers to save their time and money in one way to do shopping in
supermarkets as they can find different type and variety of products under one roof. If we see it
other than conventional shopping we can have an experience to look at many other ethnic
products also. There can be income lag because of geographical differences, for example
supermarkets are accessible even to low income customers, but the issue is that their use is
unequal (Goldman & Hino 2004). Ethnic consumers keep shopping from their traditional
retailers even their supermarket is reachable. Many reasons can behind this attitude of customers,
e.g. price difference or less variety etc. Goldman et al. (2002) also point out some reasons that
customers have deep and old association with their traditional ethnic shop keepers who will greet
their customers and they have social attraction between them if the shopkeeper is from the same
ethnic community. In high income customer’s area supermarkets are successful because those
customers buy in big quantities and spend more money compare to low income customers which
buy regularly and in little quantity. Ethnicity does not matter when freshness of food and meat
comes, customers always prefer fresh food and meat and there should be authenticity of handling
it especially meat that should by killed in ritual ways (especially for Muslims and Jewish
community), so they buy it even it is slightly expensive (Jamal, 2005).
2.4.1 Risk and safety matters:
In 2000, Parliament set up an independent food safety watchdog known as The Food
Standards Agency (FSA). The aim to setting this agency up to make sure that the food industry is
practicing good and following the food law. The issue was raise by some of local authorities that
they were facing problems to communicate with the traditional retailers regarding some food
safety issues. According to the (FSA) Food standard Agency there were 7233 consumer
complaints regarding hygiene of food premises in 2001 (Rudder, 2004).
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2.5 Role of Supermarkets to promote Ethnic food; Asda
Research on grocery market in the UK shows that it is dominant by some of big
supermarkets, ASDA is one of them. As UK is multicultural country, with many different ethnic
groups, supermarkets know the growing need of world food so most of the supermarkets are
concentrating on their world food departments with wide range of products availability to fulfill
the customer needs and obtain the maximum level of customer satisfaction.
ASDA is one of the leading supermarkets in Britain; it was started as a dairy collective which
was based in Yorkshire. ASDA retails food, toys, clothing and general merchandising. Products
include finance and travel agency services, insurance, a home buying and selling service,
telecommunication and insurance services in the North East. Petrol sales, private label
pharmaceuticals and in-store pharmacies are also offered by the company. Asda’s CEO is Andy
Bond. It is second largest supermarket in UK after Tesco. George and Asda living standalone
chains are also run by the store. In 1999 it has become subsidiary of world’s largest retail
American company Wal-Mart. ASDA claims that it is British lowest price supermarket. At the
end of 2008, ASDA expanded its internet grocery retailing. As its competitor Tesco was getting
much profit from its internet grocery retailing facility Asda followed the same trend and made a
big difference in its profit which company was having before. As recession hit businesses, battle
is started to compete with lower prices between retailers to attract more and more customers and
to survive in the market. According to the growing demand of world food ASDA introduced its
first world food store in London and also occupies a big department of World/Asian food in its
each store. Many retailers purchase their World/Asian food products by outsourcing both locally
and globally.
ASDA is well aware of the needs of customers, and by knowing the upcoming demand it takes
decisions before its competitors for example ASDA George has launched a range of Asian
clothes, for the very first time in the UK’s supermarkets. ASDA not only introduced authentic
ethnic clothes range baring in mind customers demand but also it kept its image of having low
prices. Now, it’s not just Asian customers are attracted to the new introduced clothes, it also
captured the attention of other communities.
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Another bold and unique step which is taken by ASDA is having Halal meat butchers in the
stores, which attracted a number of Muslim customers. People are happy to find whole range of
products under one roof and ASDA is successful to get attention of Asian community.
2.5.1 Asda’s private label Portfolio:
Summary 2 Asda Stores Ltd: Private Label Portfolio
Private Label
BrandSector(s) Notes
Smart price
Grocery, stationery, home wares and
pharmacy
Lowest price range
Asda Grocery and general merchandise Standard price range
Extra Special GroceryPremium positioned
range
Organic Grocery Organic range
Good for you! Grocery
Healthier range
More For
Kids Clothing and home wares Child-focused products
Figure 2.1 Source: Euromonitor International from company reports, trade press
We can divide Asda’s private label portfolio into three ranges of prices: premium, budget and
standard. If we compare Asda with other supermarkets, it has a somewhat narrow portfolio of
private label products.
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2.5.2 Company’s Competitive Positioning:
In retail ranking of 2009, Asda moved up from its position to second place, and its value
share was over 6%. The major reason of its progress was its share in hypermarkets, with
company’s leading position with 35% value share. Asda has its “lower price” impact on its
customers, and its wide range of product offering is also attractive to consumers, its offerings
include clothing, groceries, electrical goods, home furnishing, books and flowers etc. the
company is having its ‘why pay more?’ slogan to promote more sales and to retain its impact on
customers. Asda’ internet retailing policy is making its position more strong in the market as its
low delivery fees marketing campaign (Euromonitor, 2010).
Summary 3 Asda Stores Ltd: Competitive Position 2009
Channel Value share Rank
Hypermarkets 35.4% 1
Supermarkets 0.0% 12
Discounters 0.1% 4
Variety Stores 7.6% 3
Internet Retailing 4.6% 3
Mass merchandisers 100.0% 1
Figure 2.2 Source: Euromonitor International from trade press, company reports, trade interviews
2.5.3 Asda’ procurement activities:
Asda is having plans to retracting on China manufacturing, because raging inflation in
China is forcing company to pull back its manufacturing operation. Andy Bond, CEO of Asda,
told local sources that it is significant that we move our manufacturing operations from China
and we are looking to outsource some low-cost countries such as Vietnam. Bond said, "In
common with other retailers we are always looking to where we source from, and Vietnam is one
of the countries we are looking to." (Jerrel Yun, Singapore Published: Sep 05, 2008 Procurement
Asia). Asda has an approved list of its main contractor and designers. Its main suppliers are Lain,
HBG Construction, Carillion and Pearce Retail; these contractors are working for more than five
years with the company. These partners are agreed on profit margins, overhead costs and
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preliminary packaged, for all projects. These are all big contractors but subcontractors work is
tendered.
2.5.4 Asda Stores:
There are 374 stores situated throughout Wales, England and Scotland. Asda works with
over 2,800 suppliers. They employ 150,000 colleagues and claims that their employees are the
friendliest in the industry.
Asda’s world food Department:
Asda has a bigger department for its world/ethnic food products, compare to its competitors.
2.5.5 Asda Supply chain Management:
As supply chain is fundamental part of any business, but especially for supermarkets.
(Account watch Asda, 2008) In this section Asda’s supply chain director, Andy Ellis will
explain that how does Asda’s supply chain works and what are the goals to achieve by its
effective supply chain. He describes that effective supply chain is very significant not only for
the firms but also for the customers as they can’t get fresh, up-to-date products. So it’s essential
that businesses give importance to their supply chain in a new better way, and develop new and
innovative ideas to bring high quality and affordability to products which they offer their
customers.
2.5.5.1 A customer-centric approach:
Andy Ellis, Asda’s supply chain director says that “For Asda, supply chain not only
improves our business, by driving top line, reducing costs and improving margins, but it also
saves resources and means that we can pass all of these savings back to our customers”(British
Retail consortium, 2008)
Furthermore, he describes that they attempt to take a customer-centric approach; so they can
understand customers problem and priorities so they can adopt supply chain in a way to reach
customers needs. So how they make it possible by adopting technologies and supply chain
processes in a way that help them to capitalize on growth even delivering value to their
consumers? He explained it that it is followed by their distribution strategy, so cost effective and
20
fast supply chain adapts sudden changes in demand very quickly and gives us tangible results,
and he says that they are very sure that right results can be delivered to the consumers.
However, he admits that in some cases the speed is too slow of getting stocks from their
suppliers. The route selection decisions are very important, so they understand that need options
on technologies, by making right decision with the help of technologies they can get competitive
advantages.
2.5.5.2 Significance of Innovation in supply chain:
For any business to be successful, it needs innovation in supply chain. Asda has many
distribution channels to make sure that every single of products must be available on right time
in right store. Supply chain director of Asda Andy Ellis say that they encourage their depots
through multi-tier system, to act as suppliers. When they get products order from regional
distribution centers, which merge the purchase order at import centre by the system. After that
they pick the order and send it to the depots, which is the final pick before sending products to
the store. This way is not only enable flow network in more effective manners, it also make less
inventory in regional DCs (distribution centers). In this way they hold bulk stock centrally and
distribute it on need basis. They also have their unique idea that they order stocked and stockless
products from suppliers on same purchasing order. In this way supplier will be able to send fast
moving products with slow moving products on same truck e.g. Weetabix which is fast moving
and slow moving product such as specialist organic cereal bar. By adopting this strategy it is not
only flexible it also allows suppliers to fill up their trucks. It will reduce the vehicles on the road
dramatically.
2.5.5.3 Accuracy and visibility:
Technology changes very fast, so there is need to keep company up-to-date by adopting
new changes. Advancement in technology enabled retailers to track their deliveries. Asda has
global transportation system (GTS) which can track their each and every vehicle with deliveries
on the road, so stores can get up-to-date reports at any time. Asda also operates product tracking
21
systems, including voice activated technology and radio frequency. By using these systems
throughout the supply chain, Asda obtain excellent level of visibility and accuracy of products.
2.6 Below cost selling:
Below cost selling mean when any product is being sold for less than its input cost by
retailer. It is for the consumer’s benefit, but below cost selling can create competition.
Below-cost selling by Asda and other grocery retails:
It is confirmed by UK’s ten grocery retailers that they are engaged in below cost-selling, these
stores are; Asda, Aldi, Lidl, Netto, Morrisons, Somerfield, CGL, Sainsbury’s, Waitrose and
Tesco. (Account watch Asda, 2008)
There are mainly two or three product groups can be related with below-cost sales, for most
grocery retailers. There are two main product groups across all ten stores which are sold below
cost, are tinned packet goods and alcohol. The other product groups include books, DVDs, CDs
health and beauty products and non-alcoholic beverages. It has been observed that branded
products take shorter period being sold in comparison with own-label products.
Reasons for below-cost selling:
Retailers told different reasons for selling products below cost.
To maintain their position in competitive market.
To attract customers on certain times of the year e.g. Easter, Christmas
For seasonal products such as vegetables and fruits, when they have these products more
than stock.
When they launches some new product.
2.7 Changes in food prices:
Mainly Influences on grocery prices because of competition between grocery retailers.
Other reasons for differences in prices can be role of tax in food prices, planning system and
different property markets. In the UK food prices increased compared with other EU countries.
(Scotland on Sunday, 3 June 2007)
22
2.8 Operating margins for Asda and other grocery retailers:
In Account watch Asda (2008), it shows that the large grocery retailers including Asda
earn higher operating margins compare to independent retailers, in 2007 large grocery retailers’
operating margin was 3.6 to 4.5 per cent higher than average margin earned by the 50
independent grocery retailers which was 2.9 per cent.
ASDA Morrisonos M&S Sainsbury's Tesco Waitrose0
1
2
3
4
5
6
7
2000/012001/022002/032003/042004/052005/062006/07
Figure 2.3 Source: Accounting watch Asda.UK Grocery Retailers, Operating Margins, 2000 to
2007
Purchasing costs for Asda and other grocery retailers:
According to Account watch Asda, (2008) the analysis of cost advantage for large stores e.g.
Asda, Sainsbury’s and M&S compared with other retailers is the terms of purchasing goods from
suppliers.
It indicates that:
The large grocery retailers and wholesalers have a major advantage in purchasing terms
than the other small retailers
Among large retailers, Tesco has a considerable advantage in purchasing conditions.
23
After Tesco, some of the other large retailers i.e. Asda, Morrison’s and Sainsbury’s, who
also have significant purchasing terms advantages.
Remaining large retailers pay higher prices than above mentioned stores but pay almost
same prices as each other.
Some other additional information about company and its competitors e.g. Supermarkets
company shares by value 2005 to 2009, supermarket brand shares by outlet 2006-2009
and Brand share by selling Space 2006-2009 can be learned by following charts:
Supermarkets Company Shares by Value 2005-2009
% retail value rsp excl sales tax 2005 2006 2007 2008 2009
Tesco Plc 39.5 39.3 39.4 40.2 39.5
Wm Morrison Supermarkets
Plc 19.0 19.5 20.0 20.9 23.3
Waitrose Ltd 6.9 7.4 8.1 8.5 8.7
J Sainsbury Plc 6.6 6.7 6.9 6.9 8.0
Somerfield Ltd - 8.1 8.1 8.0 6.5
Iceland Frozen Foods Ltd 2.9 2.9 3.7 4.1 4.8
Co-operative Group, The 2.6 2.6 2.7 2.9 4.0
Midlands Co-operative Society 0.9 0.9 1.0 1.0 1.0
Farmfoods Ltd 1.0 1.0 0.9 0.9 1.0
The Midcounties Co-operative 0.7 0.8 0.9 0.9 1.0
Musgrave Group Plc 0.4 0.4 0.2 0.2 0.2
Asda Stores Ltd - - - - 0.0
Kwik Save Group Plc - 1.2 - - -
Somerfield Plc 10.0 - - - -
Others 9.5 9.3 8.1 5.3 2.1
Total 100.0 100.0 100.0 100.0 100.0
Figure 2.4 Source: Official statistics, trade associations, trade press, company research, trade
interviews, Euromonitor International estimates
24
Supermarkets Brand Shares by Outlets 2006-2009
sites/outlets Company 2006 2007 2008 2009
Iceland Iceland Frozen Foods Ltd 674.0 663.0 723.0 794.0
Co-op Co-operative Group, The 455.0 500.0 542.0 778.0
Somerfield Somerfield Ltd 748.0 750.0 755.0 605.0
Tesco Superstore Tesco Plc 435.0 435.0 446.0 451.0
Morrisons Wm Morrison Supermarkets
Plc330.0 337.0 346.0 384.0
Farmfoods Farmfoods Ltd 303.0 303.0 304.0 307.0
Waitrose Waitrose Ltd 173.0 183.0 187.0 201.0
Tesco Metro Tesco Plc 162.0 164.0 172.0 177.0
Sainsbury's
Supermarkets J Sainsbury Plc 148.0 153.0 159.0 172.0
Midlands Co-op Midlands Co-operative Society 141.0 150.0 159.0 164.0
Midcounties Co-op The Midcounties Co-operative 120.0 130.0 138.0 144.0
Budgens Musgrave Group Plc 88.0 51.0 50.0 45.0
Asda Asda Stores Ltd - - - 4.0
Kwik Save Kwik Save Group Plc 170.0 - - -
Kwik Save Somerfield Plc - - - -
Somerfield Somerfield Plc - - - -
Safeway Wm Morrison Supermarkets
Plc- - - -
Others Others 504.0 452.0 400.0 235.0
Total Total 4,451.04,271.
04,381.0 4,461.0
Figure 2.5 Source: Trade associations, trade press, company research, trade interviews,
Euromonitor International estimates
25
Supermarkets Brand Shares by Selling Space 2006-2009
surface area '000 sq m Company 2006 2007 2008 2009
Tesco Superstore Tesco Plc 1,236.71,224.
11,244.0 1,245.4
Morrisons Wm Morrison Supermarkets
Plc817.0 829.7 851.9 948.4
Somerfield Somerfield Ltd 551.2 555.0 558.7 447.7
Co-op Co-operative Group, The 249.4 277.0 300.3 441.0
Waitrose Waitrose Ltd 285.5 322.2 349.2 376.4
Iceland Iceland Frozen Foods Ltd 306.6 301.6 332.9 372.6
Sainsbury's
Supermarkets J Sainsbury Plc 241.8 248.0 266.4 288.1
Tesco Metro Tesco Plc 177.7 176.8 186.1 192.0
Farmfoods Farmfoods Ltd 128.8 128.8 129.2 130.5
Midlands Co-op Midlands Co-operative Society 80.1 85.0 91.1 95.0
Midcounties Co-op The Midcounties Co-operative 69.1 74.6 78.2 81.6
Budgens Musgrave Group Plc 28.7 17.2 16.9 15.3
Asda Asda Stores Ltd - - - 10.6
Kwik Save Kwik Save Group Plc 125.6 - - -
Kwik Save Somerfield Plc - - - -
Somerfield Somerfield Plc - - - -
Safeway Wm Morrison Supermarkets
Plc- - - -
Others Others 940.8 838.8 699.5 506.9
Total Total 5,239.15,078.
85,104.4 5,151.4
Figure 2.6 Source: Trade associations, trade press, company research, trade interviews,
Euromonitor International estimates
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2.9 Customized products:
The definition of customized product is a unique product which is designed and
manufactured for special customers to fulfill their needs. In recent years, demand for the custom
products has been increased. It has become a trend. Customized products give a sense of
uniqueness to the customer. It is Managers responsibility to understand that why customers
demand for customized products. In this modern era customers want to be looked different by
having personalized products. Intense competition in the market, fast changes in technology and
low prices for standard products derived industries to a new revolution. According to this
revolution customer service and customized products are very important. Customized products
are capturing the huge attraction from customers. Now a day’s customer’s demands are low
prices, good quality and customized products which should be exact to their expectations. Most
famous customized products are mobile phone, cars, garments etc. in computer industry DELL
was the first company who introduced customized computers for the very first time. We can say
that any products which are not mass produced and for the little number of customers are
customized products.. Peppers et al. (1999) say that if company is unable to identify its
customers, that company cannot differentiate and address each customer’s needs. Here are four
key stages which can be used by any company to build a relationship with the customers;
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Figure 2.7. Source internet.
The very first step is to classify the customers and identify their needs by understanding their
behavior. For launching any product successfully company should keep in mind the trends of
that time and collect information about the customers as much as possible. The second stage is to
distinguish their customers; it would be helpful to recognize the most valuable customers. The
third stage is very important to make a good association with the customers by interacting with
them. Customized behavior of the company is very significant as well as marketing program for
effective relationship. There should be a good connection between manufacturer, supplier and
customer for successful customized product supply.
2.10 What is Procurement?
“Procurement is the purchase of goods and services from an external agency.”
When any organization defines their aims and objectives, they decide what is needed. They take
a look at public sector policy, legislation and then of course market condition. They work out
that how the procurement will be done. Procurement includes all purchasing decisions such as
marginal benefits, delivery and handling and price fluctuations. There are two categories for
procurement, one is called direct and the other is indirect, first category is production related and
other is non production related procurement. Direct procurement comes under manufacture
settings, which directly affects the production functions of manufacturing companies. When
company decides what they have needed they gather the information about suppliers which can
satisfy the requirements. After identifying the suitable supplier they can either ways contact the
suppliers, by advertising the quotation or proposal or contacting direct to the suppliers. Then
company collect the samples of products, check the quality, and all considerable trials and
undertaken for example warranty, installation and maintenance. After this they evaluate all of the
tenders and company award the contract to those suppliers which fulfill the set criteria. During
this process company negotiate on price, availability and delivery schedules. Now it is
company’s responsibility to monitor the supplier’s performance regularly, and after set
contracted time period companies renew the contract or by considering other suppliers company
may be advertise again.
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2.11 Outsourcing:
Outsourcing meant to be the specific sources of purchasing goods or services which are
external to the organization. Organizations adopt outsourcing when they find it better, cheaper
and faster way of completing the purpose by an outside firm. There are many definitions for
outsourcing e.g.
“Paying other firms to perform all or part of the work” (Structural Cybernetics, c. 1996).
“…. Having an outside vendor provide a service that you usually perform in-house”.
(Laabs, c. 1997).
“The use of external suppliers as a source of finished products, components, or services.”
(anynonmous)
These definitions give us a hint to learn that what is outsourcing although they do not give us
detail meanings and methods of outsourcing. This is to be understood by its name that it is
something which gives chance to the companies to get finished products or services from
external resource. It is not just about the requiring help from outer resources but there are also
many things to be considered in regarding of finding the right and cheaper suppliers and finding
new methods of securing the delivery of finished goods, raw materials, services and
components. Another description for outsourcing is “the practice of handing over the planning,
management and operation of certain functions to an independent third party” (Neal, 1995). The
concept of outsourcing refers to find some expertise to handle specific business functions outside
the organization. As cutting costs is common throughout the industries, so management decides
before outsourcing that which method will be beneficial whether “make or buy”. Outsourcing is
driven by three major changes that affected society and work, William Bridges describes these
changes in his book, Job Shift, as;
IT: work is more dependent on computers; production of products by the help of IT has
strikingly changed the structure of work.
Organizational change: organizational structure is changing by the time. New methods of
running the organizations successfully e.g. re-engineering, customization and
organizational changes are now more important.
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Communication: development in communication technology is shrinking the world day
by day. People are more aware of what is happening in the other part of world, more than
ever, so work can be done in any part of the world e.g. companies prefers to appoint their
call centers in cheaper labor countries.
So, as a result these three changes in organizations are fundamental motives for outsourcing.
Outsourcing for IT is more attractive by companies who are more likely to have contact with
customers e.g. banks, mobile phone companies, they prefer to move their call centers and data
centers in low-paid worker countries’ like India. Fast changes in technology is making firms
more aggressive to compete others, they are more interested to hire existing facilities to maintain
their position in the market rather than manufacturing. IBM outsourced its whole Human
Resource department, to gain the competitiveness, accountability, profitability and flexibility.
There is more pressure of shareholders which lead companies to outsourcing in manners of
getting more profit and cutting the costs. The outsourcing trend has been growing; these
following figures show the increasing interests of companies in outsourcing.
It came across by the research that the biggest clients by industry are the manufacturer, retail
trade and wholesalers.
Figure 2.8
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2.11.1 Outsourcing strategies:
Outsourcing is become essential content for businesses. Firms are now more concerned about
cost reduction and efficiencies towards the customer service, by realizing this fact that they do
not need to manufacture or produce their own components or products, they are focusing on
reliable and cost effective external resources. Many successful firms are very careful about
outsourcing strategies and they outsource their core processes such as manufacturing, marketing,
design and engineering. Outsourcing strategies brings affective competitive advantage and
enhance companies’ performance as they can give more attention to their core processes. It is
better solution to outsource the difficult business process which can be expertise for some
specific procedure, access to modern technology and to improve service levels. There are multi
dimensional strategies for outsourcing. Outsourcing will not work unless it will be implemented
in a right way:
First of all mark down the company’s core competence and basic sources of profits, and
analyze that if you really need to outsource them.
Find out the processes or functions within the firm that do not help company to stand out
in the market. These parts can be outsourced which do not offer a competitive advantage
for the business.
Company has to evaluate the costs, in a sense that whether company can afford to make it
or it will be cheaper done by other company. Understanding of whole situation is very
important for the benefit of the company, so it is necessary to over look that why
company need to outsource some functions, to cut the costs, enhance company’s
performance or to achieve the goals.
Be careful while selecting an outsource partner because it will be the representative to
your company in the future.
You have to monitor regularly when you have decided to outsource, it is better to check
performance of outsource partner to avoid any hassle in future.
After deciding to outsource some processes for the company look out the ways of
improvement.
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It is true that outsourcing is a trend to reduce costs and enhance performance for any
company but it does not mean that company should have to adopt it unless it is necessary.
(Kelley, 1995).
To manage the outsourcing is very crucial. There are some important things to be considered, at
very first it must be subjected to a cost-benefit analysis, then estimate that the contractor you are
hiring is eligible for doing better job in faster manners. Once company decided to outsource
some function there are some step to be taken:
Inform your staff that some affected function is needed to be done by external.
Make a request proposal
Encourage and invite external and internal bids.
Assess the bids.
2.11.2 Outsourcing: Benefits and risks:
Major benefit of outsourcing for the organization is cutting the costs. As many companies
outsource for different departments, those companies who outsource their HR, such as pay roll
transactional HR work, handling with the critical situation e.g. employee fraud, when any
modem technology introduced in the market, staff requires training so organizations outsource
for these types of trainings, all companies have to comply with the current legislation so they
outsource for guideline. Technology is very important drive for outsourcing. Many processes
outsourced because firms want to fulfill the modern technology requirements, or they need quick
access to the current technologies and their staff to be trained, so these types of tasks can be
handled easily by external resources which are loaded with the expertise and skilled people.
There is another benefit of outsourcing which is quality and service improvement.
As outsourcing has many advantages and benefits to the organizations, it also has some risks and
limitations. Research shows that many organizations which are experiencing outsourcing,
describes that outsourcing is not much cost effective and free of problem as it was estimated. It
has indicated by a survey that half of the respondents found outsource activity more expensive to
manage than originally expected.(Albertson, 2000). There are some service risks involve in
outsourcing e.g. it is very hard to find flexible contractor, who can be changed with the
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preferences of the organizations. Furthermore it is more likely that your dealer may enter the
market as your competitor, when you hire some company to manufacture your design it is
possible that manufacturer copy your design and start making for his company, there is live
example of a U.S. manufacturer of bicycles known as Schwinn, who outsourced Taiwanes firm,
Giant manufacturing for its bicycle frames. A few years later, Taiwane firm ruined the Schwinn’
business by entering the bicycle market. It is reported by a survey that 25% of respondents
expressed that outsourced caused the less personal relationship with employees and decrease in
customer service. (Lily, Gray & Virick, 2005). Outsourcing also effects on workers performance
and morale (Elmuti & Kathawala, 2000). On the whole if we overlook the performance of
outsourcing, it has some flaws and risks as far as some benefits. It is not beneficial for a
company to outsource at extreme levels because it allows outsider to learn about the company’s
secrets and weak points which cannot be favorable for the company and it reduces the value of
any firm. However, even with these drawbacks and risks, it is calculated that between 1% and
20% of outsourced Human Resource processes have been brought back in-house (Gurchiek,
2005; Pollitt, 2004).
2.11.3 Outsourcing in retailing:
Before going in details of retail outsourcing we better have a look at outsourcing in
manufacturing industry. If we look back in the beginning of 20th century when Henry Ford was
producing T Ford model, everything was manufactured in a giant factory. By the passage of the
time, demand for the cars, customers requirements increased and development in the technology
forced manufacturer to think of ‘make or buy’ strategy. So manufacturers started to buy parts and
raw material from the expert suppliers. Outsourcing trend in manufacturing is more common
compare to retailers. According to Van Hoek (1999), outsourcing in European grocery supply
chains is lesser than in other industries. Retailers to some extent are limited to shipment and
warehouse outsourcing. There are some examples can be spotted where retailers are trying to
outsourcing some processes but with the lack of strategies. Although the suppliers to the retailers
are operating globally, but the retailers are all depending on these suppliers rather than
considering global manufacturers. In the supermarkets they deal in variety of products so they do
not bother to contact to direct manufacturer for each product so they buy from suppliers. Buying
from suppliers is not a cheaper way, as there is somehow some expenses are involve, for
33
example products which comes through suppliers from manufacturer to retailers, are value added
products, as there is some services involves by suppliers. Retailers should concentrate the ways
of outsourcing which are more beneficial to them. For some products which are more popular
within the customers and many supermarkets are selling those products, create competition
among them, so it would be better to purchase from the manufacturer than the supplier to keep
prices low and to gain competitive advantage. Retailers should identify their core competencies
and spot those subsystems which can be outsourced. By applying strategic outsourcing retailers
can boost their income, paying attention to those functions which give that retailer uniqueness in
the market should be operated within the organization. Research by BRC (British Retail
Consortium) and Pinsent Masons 2007 shows that outsourcing is successfully embraced by the
retail sector. Data shows that 88% of companies which are outsourcing confirmed that it has
been successful. The findings of survey show that 70% of respondents agreed that the most
popular functions which have been outsourced are warehousing and IT, and remaining 30%
which are not outsourcing are more likely to consider it in near future. Director General of the
British Retail Consortium, Kevin Hawkins says that “outsourcing can make retailers more
competitive, but it is more than just saving money. It requires serious effort and retailers must be
clear from the outset about their aims and objectives.” Some of the respondents of the survey
showed their interest of of-shoring because it is cost saving but some of them are not agreed as
culture shift may be not suitable for them, as relationship would not fit. According to the
research that sufficient preparation is vital and company should be clear about what they want to
get from outsourcing. Outsourcing is favorable for the company in a sense of introducing its
efficiencies. It is indicated clearly by the survey that management boards should review that
which operational processes can be handled in-house, regularly. By doing so they can identify
those functions which can be done by third party.
In retailing industry outsourcing is vital to achieve benefits and to win customers trust and attract
them in a better way than the competitors.
2.12 Conclusion:
By going through all the related data and research reports, some points can be
highlighted. In the recent years when immigrant from different part of the world start entering
the UK around 1970s, they couldn’t get any of their traditional food product here. But with the
34
passage of the time people from the ethnic communities start realizing that it is necessary to have
traditional retailers. In the beginning ethnic retailers just have their own products, and
conventional retailers did not bother to have products for other communities. But now a days
with the growing population of immigrants, not only small retailers but supermarkets also
representing the minority ethnic groups. Literature about ethnic foods by small retailers and big
supermarkets looks like that the minority ethnic consumer can now shop from supermarkets for
those traditional food product which he could only find at local ethnic retailer. Asda is playing
significant role in developing its department for world food, but it came across that although
Asda is cheaper than other supermarkets but its world food department is even expensive than
the local retailers, so question is that what are the factors behind this reason.
Asda is outsourcing for its world food from local supplier?
What are the Asda’s procurement strategies for world food products?
Is Asda popular or not within the ethnic groups?
Do people like to buy their ethnic food from local ethnic retailer or from supermarket?
Slightly price difference does not matter when customer do one-stop shopping?
Does ethnic and world food require similar marketing and sales strategies to those for
conventional food?
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Chapter 3: Research Methodology:
In this chapter we are going to describe that how we will collect the information regarding
our hypothesis. We will also study research methods, and about appropriate methods,
resources and types of data collection, which suits to this dissertation.
3.1 What is Research?
Kothari (2008) defines research as a systematic and scientific search for significant
information on a particular topic. He describes research as an art of scientific investigation.
We can get more knowledge about the meaning of research by this definition, “Research is a
systematic and objective analysis and recording of controlled observations that may leave to
development of generalizations, principles or theories result in prediction and possibly
ultimate control of events” (Best, 2006).
3.2 Purpose of research:
The purpose of our research is to gather implicit information about the company’s
procurement department, to discover the factors behind prices differences of World/Asian
foods between the company and small retailers. It is very exciting topic for the author to get
know how about the ethnic minority groups strategies of shopping for their traditional foods.
There is also a curiosity about the company’s specific department’s slightly higher prices in
comparison with other small retailer; even it’s having a slogan of ‘lower prices’.
3.3 Research Design:
Research design is a specific framework which shows us that how we can identify the
problem to present as a research report. It is a plan or a structure for a study that can be used
as a guide in gathering and analyzing data. We design our Research in a way that we collect
required information as much as we can. There are different types of research design
described below and we also will discuss the research design which we have selected.
3.3.1 Exploratory research:
Welman & Kruger (1999) defines that exploratory research’s approach is to locate a
problem to be tested. This type of research is helpful when researchers are unable to get an
36
idea of the problems, they can get during a study. By exploratory research, researchers
develop concepts more clearly, pin down main concerns, develop prepared definitions and
make their final research better (Cooper & Schindler, 1998). It is a process of gathering,
understanding and analyzing information. There are different ways of collecting information
by using exploratory research.
3.3.2 Descriptive Research:
Descriptive research refers to the sort of research design, questions and data analysis,
which will be related to a given topic. (Jonassen, 2004). It also called Statistical Research.
This type of research is basically designed to describe the characteristics of targeted
individuals in an accurate and systematic way. The main purpose of descriptive research is to
describe the characteristics and data about what is being done. This kind of research is highly
accurate. Researchers conduct this type of research when they want to get accurate
knowledge about the situation, it does not get the reasons behind the situation. We have
selected this type of research to solve our hypotheses; this design of research will help us to
gather required knowledge.
3.3.3 Analytical or explanatory research
This type of research is continuation of descriptive research. In this research, researcher
analyses and describes that how and why something is happening. There are different types
of analytical research such as philosophical, historical, reviews and research synthesis.
3.3.4 Predictive research
This type of research goes further by forecasting. It consists of prediction e.g. will this
bonus scheme motivate the employee? Predictive research presents answers to ‘why’, ‘how’
and where, and also predict future results of current situation.
3.4 Research sources:
3.4.1 Primary Data collection:
We are going to gather information by using primary data collection method. As we
could not find any appropriate secondary data about our hypothesis. Primary data collection
means that you have to collect all required information by yourself by using methods such as
surveys and interviews. This type of data is unique as no one has studied it before.
37
Here are some advantages and disadvantages of collecting primary data;
Advantages:
You find data what you required for your research.
Researcher have greater control over how the information is collected, primary data
collection allows researcher to focus on specific issues, e.g. time frame that how long
it will take to complete the project, location of research.
Disadvantages:
Usually it’s time consuming.
Primary data collection is costly compare to secondary data collection.
There are many ways to collect primary data, some of them are:
Interviews, Observation, Case studies and Questionnaire.
We are going to use survey method for our research and will design a questionnaire.
3.4.2. Secondary Data Collection:
Secondary data is the data which was collected by someone for some other purpose and
available from other sources. This type of data is easy to obtain and a cheaper way to get
information. It is a quicker way to gather required information than the primary data. We can
get secondary data from the company websites, archives, books and other sources. We have
tried to get some secondary data about company’s procurement operations but we have been
failed to obtain such data. So we are relying only on primary data.
3.5 Research Methods:
There are different types of research methods e.g. survey, case study, experiment, cross
sectional etc. the research method which we are going to use is survey.
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3.5.1 Survey:
What is survey?
Enanoria (2009) describes survey as a systematic method for collecting information from
a sample of specific individuals for the reason of explaining the features of population. By
using this method you can collect information by asking people questions. Information can
be gathered by having interviews, asking people to fill the questionnaire etc. we are going to
conduct a survey for our research problem, so here are different kinds of survey and steps
which are considerable during the survey, described below in detail:
There are some steps to keep in mind while you conduct a survey:
Establish your goals:
In this first step you should know that what you want to learn. Your goals should be clear
if your goals are vague your results will be unclear. The area you are going to explore you
have to know how about that area to some extent. You should be specific about your
objectives, so you can get usable answers. We established our goal that we have to collect
data regarding our hypotheses which are knowledge about procurement strategies of Asda,
how they perform their procurement operations for ethnic/world food products.
Selecting sample:
You should know that to whom you are going to have an interview. First step is to know
that what kind of people to interview. This group of people often called as target population.
In some cases target population is obvious, e.g. an employee attitude survey, but if you are
going to ask about the success of a product, target group may be less obvious. So target
population should be representative. You can lose the opportunity to meet your goals if you
do not interview the right kind of population. After choosing right people now it’s time to
decide that how many people you need to interview. Sample size bases on some factors e.g.
what budget you have, available time, and how much you have to precise. So bearing in mind
all these aims we have targeted population which is Asda’s ethnic customers. Customers
those who came from different backgrounds, civilization and culture.
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Avoiding a Biased Sample:
By avoiding biased sample will save you from biased results. You should contact those
people who are illegible for those questions, e.g. if you are surveying about a product which
is for young people you should not ask elderly people about that product, or you do not have
to ask about anti wrinkle cream to teenagers.
Here are data collection methods which are selected by author for research, and each method
has some advantages and disadvantages.
3.5.2 Personal Interviews:
When you interview someone face to face it calls face to face interview. These type of
interview can take place anywhere e.g. at home, in park, at a shopping mall, in college and so
on. We have decided to design a questionnaire and go to Asda, approach customers directly
and tell them about questionnaire and research and ask them to fill the questionnaire.
Advantages:
a. In face to face interview, gives a chance to interviewee to feel and see a product.
b. You can find people outside that specific outlet you want to ask about, to customer easily
rather than you call people randomly.
c. Face to face interviews can be tolerated if longer, people can find it easy at home, sitting
and chatting.
Disadvantage:
a. This method is costly. When you travel to each person to take an interview, it costs you
time and money both.
b. Sometimes you go to shopping mall to interview people, people living around that
specific geographical area, can be influenced to a typical kind of that area and cannot be
taken as a representative group. But we have selected Asda which is situated within ethnic
majority population.
3.5.3 Internet survey:
Advantages:
a. In this category we can include email survey, web page survey and computer direct
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Interviews. We have chosen e-mailing survey.
Advantages:
b. These methods are very economical and fast. An e-mail survey can gather thousands of
responses within a day.
c. You can get more accurate answers by computer direct surveys
d. There is no cost involved at all.
e. You can send/show photographs of products.
Disadvantages:
a. This method is not universal as so many people do not have access to the internet.
b. People set their email addresses that if they get unknown email, will automatically go to
the junk mail.
c. Sometimes people do not have much time to fill questionnaire so they delete such emails.
d. People can easily quit the web page during the survey, if questionnaire is too long.
e. You do not know whether one respondent answered you once or many times with
different identification.
3.6 Types of Data
There are two main ways of approaching a research topic qualitative and quantitative and
we are going to use both of the methods for our research.
3.6.1 Quantitative
This method concentrates on counting or measuring and analyzing statistical data and
applying numerical tests. This method involves the numbers to assess information. Your
research should be well structured and controlled under scientific research design. Most
popular form of Quantitative data collection comes in surveys. By conducting surveys you
can capture information through questionnaire, online survey, telephonic and mail surveys.
3.6.2 Qualitative
Qualitative data includes different information that is not numerical in nature. Those
information which cannot be measured statistical, e.g. you can gather information by
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interviewing someone but you cannot measure an interview in numbers. There are some
major categories of qualitative data
3.7 Design of Questionnaire:
Questionnaire is designed in a simple manners, we have been very careful while making
the questions. We made sure that there should not be any jargons used. Questionnaire is easy to
understand and questions are multiple choice. We did not make a lengthy questionnaire by
keeping in mind that if it will be lengthy there is possibility that we would not get good response
from customers. Customers do not bother themselves to fill long questionnaire while shopping.
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Name: ____________________
Date__________
Ethnic origin: (Please specify the country).
African______________ Asian_______________ European______________
Other_______________
Sex: Female Male
Please tick the appropriate box
Q. 1 Do you shop your ethnic/traditional or world food products from Asda?
Yes No
Q.2 If yes what are the reasons to buy your ethnic/traditional or world food products
from Asda?
Variety of food products quality of food products
Authenticity of food products
Q.3 If No then from where do you like to buy your ethnic/traditional or world food
products?
Traditional small retailer other supermarket
Q.4 Do you find price differences between Asda and ethnic/traditional or world
retailer while shopping for ethnic/traditional or world food products?
Yes No Slightly different
Q.5 Do you think ethnic and world food require similar marketing and sales strategies to
those for conventional food e.g. TV ads.
Yes No Don’t know
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3.8 Research Testing Methods:
Here are some methods to assess the credibility of research findings
Reliability:
You should be careful that data you have collected is reliable. Joppe (2000) defines
reliability that a perfect representation of the total population, and if there will be a need to
reproduce by using same methodology, then the research implement should be considered to
be reliable. Sometimes data may be reliable but the sources, by which you got the data, are
not reliable. We designed our questions for ethnic minority group and will be asked to those
customers who are purely belongs to some ethnic minority group and we expect that if
research is conducted again in same circumstances with ethnic minority groups, results will
be the same. Reliability also refers that how much measuring device is dependable.
Validity:
Validity of research questions is vital; it has been planned that data which we are
expecting must be valid. Validity refers to a study measures or also can observe what it
claims to measure or examine. There is an observation that because of number of reasons,
generally questionnaires are lack validity. Answers given by participants can be a lie. It has
been disputed quantitative data is not much valid than the qualitative data. But we tried to
design neutral questions in questionnaire. Questions are not forcing or making up participants
minds to get required answer. Validity simply means assumptions, decisions and conclusions
are meaningful and appropriate, made on the basis of test scores.
Generalisability:
Before discussing that how our research can be generalized we will look at the meaning
of generalizability. It means that a representative group should represent the whole
population. There are three main points should keep in mind to generalize your research
which are; sample, time and size.
Sample should be enough to represent the whole population.
Time can change behaviors so quickly.
Size of samples should satisfy the statistics.
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We have tried to take representative group of population, as we had to target the ethnic minority
population and those who also are customers of Asda. So we chose Asda which is situated in
ethnic minority area, we visited the store and ask customers to fill the questionnaire. We expect
that our sample size will represent the ethnic minority, so we can generalize our research.
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Chapter 4: Results and Findings:
4.1 Introduction:
This chapter will present the details of our findings about our hypothesis. We conducted a
survey to get knowledge about ethnic/traditional food shopping by ethnic minority groups that
shop from Asda. Results will be provided in this chapter which will show that whether our
findings support our hypothesis or diverge from it. Collected data will be calculated by Microsoft
Excel. Limitations which are faced by the author will also be discussed later in this chapter.
4.2 An over view of literature review and Hypothesis:
The main trigger for this research was to know about the Asda’s Procurement operations
regarding its Ethnic/World food department. We would like to revise some of company’s details.
Asda is one of the Britain’s leading supermarkets which retail food, toys, clothing and general
merchandising. We were investigating its Ethnic/World food procurement strategies, so we had
to get knowledge about the customers which were main cause for Asda to develop such a
department in the store. People from different backgrounds and ethnicity have a big portion in
UK’s population, and supermarkets are well aware of this growing market, especially in those
areas which are representing majority of ethnic population. According to the growing demand of
world food ASDA introduced its first world food store in London and also occupies a big
department of World/Asian food in its each store. Its world/ethnic food departments in its stores
are bigger than its competitors, especially in ethnic minority areas. By investigating about Asda’s
ethnic/World food department it seemed that it has higher prices than smaller retailer, so author
was tend to know that why this difference was even though Asda is much cheaper than other
supermarkets as it claims of being cheaper. Asda is one of the some leading supermarkets
(Tesco, Sainsbury’s, Morrison’s) who are selling below cost Account watch Asda, (2008)
explains that Asda is getting advantage by below-cost selling, as it encourages customers to
enjoy its special offers on seasonal events e.g. Christmas, Easter.
Asda is comparatively cheaper from other supermarkets as it claims. Asda has taken many
successful steps for the very first time, i.e. introducing Halal meat (ritually slaughtered for
Muslims) butchers counter in Asda. It is very famous among Muslim customers as they find it
authentic and according to health and safety rules.
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We tried to get information of Asda’s ethnic/World food procurement operations by different
sources, e.g. Asda’s website, articles about the supermarket, and books but couldn’t find any
appropriate data regarding our research title. Although we could get some material about Asda’s
supply chain, but it was more about its activities which make its supply chain process fast and
cost effective, we have been unable to find any material specifically about Ethnic/world food
was available.
4.2.1 Ethnic customers:
There are many traditional retail shops for these types of customers. Supermarkets like
Asda are, by understanding the needs of ethnic customers, expanding their ethnic/world products
departments. Asda George introduced a new Asian fashion range in their stores which is highly
welcomed by Asian customers. It seems that Asda is now realizing of this growing market in
UK. This research will show that from where ethnic customers like to shop and why?
4.3 Research questions:
Our main research questions were as follows:
Our hypotheses were all about procurement operations of Asda for its ethnic/world food
products. By reviewing the literature we were unable to find any data regarding Asda’s
procurement strategies
What are Asda’s procurement strategies for world food products?
What are the main challenges for ASDA in world food’s procurement?
Is outsourcing for world food products from local suppliers a better option than overseas
outsourcing?
What are the criteria for supplier selection in world food retailing?
To gather information for these main hypotheses we required data which can be only collected
by making some hypothesis which can make a base to reach the main hypothesis, which are
followings;
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Is Asda popular or not within the ethnic groups?
Do people like to buy their ethnic food from local ethnic retailer or from supermarket?
Slightly price difference does not matter when customer do one-stop shopping?
Does ethnic and world food require similar marketing and sales strategies to those for
conventional food?
4.4 Targeted Population:
Our target population was Asda’s ethnic minority customers. We wanted to know that
whether these customers like to do shopping for their ethnic/traditional food from Asda or from
somewhere else e.g. small retailer or other supermarkets, and what are the reasons behind both
cases. These customers were from different part of the world. Customers with different race,
religion and traditions, were asked to fill the questionnaire.
These customers were from different ethnicity, countries are mentioned below:
Ethnic background Country Number of participants
Africa
Ghana 1
Nigeria 4
Somalia 2
Mauritius 1
South Africa 1
Eritrea 1
Seychelles 1
Morocco 1
Philippine 1
China 1
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Asia
Oman 1
Pakistan 10
India 7
Sri-Lanka 4
Bangladesh 2
North America
Dominica 1
Carribean 1
Europe
Poland 1
UK 3
Figure 4.1 Source by Author
4.5 Presentation of acquired Data
All questions were simply designed so customers can understand easily.
in first question, we asked customers that whether they shop their ethnic/traditional or world
food from asda or not. The response we got for this Q was that 61.91% customers said yes and
38.09% said no. this data show that most of the people buy their ethnic/traditonal or world food
from Asda.
61.91%
38.09%
YesNo
Figure 4.2 Ethnic/World foods shopping from Asda by ethnic consumers
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In second question was linked with above Q that if customers do their ethnic/traditional or world
food shopping from Asda, what are the reasons for their shopping, there were three options, first
option was that do they find variety of food products in Asda’s World/Ethnic food department?
Second option was that quality of food products is the reason and third option was about
authenticity of products which attract customers. So with all these options figure 4.2 will show
the findings:
26.92%
61.53%
11.53%
Variety of food productsQuality of food productsAuthenticity of food products
Figure 4.3 Reasons for buy ethnic/world food products from Asda.
By analysing this question we have come to know that most of the people prefer quality of the
products.
Third question was also refered to the Q1, if people do not shop their ethnic/world food products
from Asda then what are the other sources. There are many small retailers which are representing
their specific ethnicity and also many other supermarkets sell Ethnic/World food products. So
question was designed to know about other sources. Chart will present the findings.
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81.25%
18.75%
Traditional small re-tailersOther super market
Figure 4.4 Shopping for Ethnic/World food products
This figure shows that the ratio of buying ethnic/world food products from traditional small
retailer is much more than the other supermarkets.
Question four was about customers who buy their ethnic/world food from Asda and who do not,
do they find any price differences or not? Most of the customers said that they find price
difference. Almost all customers who buy their ethnic/world food products from Asda said that
they find it expensive even then they buy from Asda, and we can conclude the reasons as we go
through by Q2. People prefer quality of food rather than price. It suggests that small retailers
offer low prices compare to Asda for their ethnic/world food products but they do not have better
quality so mostly customers ignore price difference and buy better quality.
52.38%
11.90%
35.71%
YesNoSlightly different
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Figure 4.5 Prices difference between Asda and Ethnic Retailers.
Fifth question was about ethnic/world food marketing, we asked customers that do they think
that ethnic/world food need marketing and sales strategies like conventional food, most of the
answers were ‘yes’. It seems that people would like publicity for their ethnic food. By reviewing
articles related to ethnic and convetional food marketing(mentioned in literature review) that
ethnic people feel alienated when they don’t see marketing for any of their products. This factor
can not be neglected that ethnic/world food also need marketing.
57.14%
16.66%
26.19%
YesNoDon’t know
Figure 4.6 marketing and sales strategies for ethnic/World food
4.6 Interpretation of Data:
We have presented the Data which was collected from Asda’s ethnic customers.
Percentage we got from this question shows that most of ethnic consumers do shop for their
ethnic/world food products from Asda. Over 60% said yes, so we have got the answer that
whether Asda’s above mentioned department is popular among ethnic customers or not. In
second question we evaluate results that people prefer quality of food so price does not matter
when it’s the question of quality. Customers who said that they don’t buy from Asda were most
likely to buy from traditional small retailers rather than other supermarkets. It confirms that
Asda’s customers who do not buy their ethnic food products from it, most of them do not go to
other supermarkets, it also suggest that may be they find other supermarkets more expensive
from Asda so they desire to go to the small traditional retailer. Last question was asked to the
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customers, whether they want that their ethnic food products should be marketed or not, answers
were encouraging towards marketing.
4.7 Result analysis:
We targeted 100 Asda’s customers in which 46 customers who responded and in total
response was 46%. We approached 23 customers by e-mail and 77 customers face to face
interview. The survey interview was conducted in Asda superstore which is situated in Ethnic
population majority area. In survey questionnaire we had five multiple choice questions.
Results show that Asda is much successful to attract customers towards its world/ethnic food
department. We also can assume that Asda is offering better quality with high prices, than small
traditional retailers who may be offer low quality and prices. It has been seen by analysing
female responses that they are most likely to buy from Asda than male customers. Customers
always would like to buy from place they can save time and money, where they can find variety
of products with high quality. statistics show that most of customers are well aware of higher
prices in Asda’s ethnic/world food department but even then they are buying, one of the factors
we got from results, is quality of food, but other factors can also be involved e.g. saving of time.
Consumers like to do one-stop shopping. This can also be a factor of buying comparitively high
prices for ethnic/world food, e.g. customers come for shopping for other stuff from Asda and
they find it convinient that they also buy their ethnic or world food products from the store. We
surveyed with random ethnic customers but it has been observerd that mostly customer were
from South Asia, it can indicate that South Asian customers are showing more interest in Asda’s
ethnic/world food department than other continents, but we cant ignore the interest that they
showed in small traditional stores also. It can be possible that they like to buy ethnic/world food
from Asda, but they can not find much variety of products in the store so they shop rest of their
ethnic/world food products from small retailers, answers for our second questions can point out
this factor that customers can not find variety of food in the store. It is encouraging for Asda that
most of the ethnic/world food customers are interested in buying their traditional food products
from it, results also show that the ethnic customers who shop from other sources are most of
them who buy from ethnic small retailers but not from other supermarkets. It is a plus point for
Asda that remaining customers do not find competitor supermarkets any cheaper. Asda can
improve its sales and get its ethnic customers back by introducing more variety and keeping its
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prices lower than small retailers, it needs to concentrate on its supply chain activities, to get
cheaper supplier. Data we have collected shows that customers are well aware of price
differences. Customers can easily switch to other supermarket if they find price differences.
Marketing for ethnic/world is another issue which can be discussed; survey shows that mostly
ethnic consumers showed interest in ethnic/world food marketing. This is understandable that
ethnic community is in minority and their food products are not being consuming products as
much as conventional food products, even then there is a big market for these products and
supermarkets can boost their sales by marketing these products e.g. by TV ads. It has been
observed that most of the supermarkets such as Asda, Morrison’s, M & S, run their TV ads near
events, e.g. Christmas, Easter etc, for food deals they offer in stores, so why not they target
minority community events, at least for those ethnic groups which are in majority than others,
e.g. Eid festival for Muslims. By doing this supermarkets might be successful to get attention
from those ethnic customers who do not buy their ethnic/world food from these supermarkets
and also many inhabitants who want to try new food, can be attracted. It can be very helpful not
only to raise their sales but also can make new customers for world/ethnic food.
4.8 Hypotheses
4.8.1 Hypothesis 1
Our first hypothesis was that, Is Asda popular or not within the ethnic groups?
Q1 was related to this hypothesis, after collecting all acquired information it seems that Asda’s
Ethnic/world food department is popular among customers; chart 4.1 shows the response that
mostly people buy their ethnic/world food product from Asda, as 61.91% said yes and 38.09%
said no. Results show that people do like to buy their ethnic/world food products from Asda.
Reasons behind this trend can be multiple e.g. customers can get variety of ethnic/world food
products, not only their own traditional food products but also can find other world food
products, in comparison with small retailers, which mostly retail for specific region and you
can’t find different ethnic/world food products.
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4.8.2 Hypothesis 2
Do people like to buy their ethnic food from local ethnic retailer or from supermarket?
To get answer for this hypothesis Q1, Q2 and Q3 were designed. After analyzing answers it
looks that mostly people shop from supermarkets. There can be many reasons for this e.g.
customer may be prefer one stop shopping rather than going to different shops. People can find
variety of products. Quality of food products also matters; it seems that customers get these both
elements in supermarkets while shopping for their ethnic/world food products. Sometimes people
trust big supermarkets that their products will definitely be authentic, e.g. Asda halal butcher
counter is very famous among Muslim customers, as they trust that it is slaughtered in ritual
ways and in clean and safe environment.
4.8.3 Hypothesis 3
Slightly price difference does not matter when customer do one-stop shopping?
Q4 was related to this hypothesis and results show that even after knowing price difference
between Asda and small ethnic retailer, customers buy from Asda. Customers go for the quality
but not just for lower price, and they do not bother to go to other retail shop for their
ethnic/world food shopping. Figure 4.4 represents that most of customers found Asda expensive
than small traditional retailers but even then it doesn’t matter. It also can refer to that may be
customers are not satisfied with the quality of small retailers; it can be matter of freshness of
food or health and safety issues that’s why customers can be willing to buy slightly expensive
ethnic/world food products from Asda.
4.8.4 Hypothesis 4
Does ethnic and world food require similar marketing and sales strategies to those for
conventional food?
To get answer for this we designed Q4, 25% customers want marketing for their ethnic products.
It seems that people are well aware that don’t see any marketing of ethnic minority food products
on TV, radio etc. 11% customer respond that they don’t know and just 7% customers said that
they don’t think their ethnic food products need marketing or strategies for sale.
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4.9 Limitations:
There were some limitations while gathering information regarding hypothesis. We
approach Asda customers by e-mail and sent them questionnaire, but it was very disappointing
that we couldn’t get response we were expecting. We visited Asda store to reach customer face
to face, many customers refused to fill the questionnaire.
4.10 Discussion and comments:
Analysis of Asda’s ethnic/world food products department gave a good image. Customers
seem satisfied with above mentioned department, and they seem happy to do their ethnic/world
food shopping from Asda. This survey was conducted in Asda store and questionnaire was filled
by the customers those who were shopping at that time. The response we have got tells that more
than 50% customers prefer Asda’s ethnic/world food department and those who do not, there can
have many factors involve, customers may be like the quality and authenticity of ethnic/world
food products but because of price difference they do not buy and reach other small retailers and
supermarkets where they can have quality with lower prices. It can be alarming that if consumers
find high quality with low prices in other supermarkets they can easily be switched to other
supermarket. As 52.38% customers mentioned that they found price difference in Asda in
comparison with other small retailers. It seems that Asda is much popular among south Asian
customers. So it can concentrate on expanding it section for these countries’ food products.
In the end marketing and sales strategies for ethnic/world food products issue is also
considerable that 57.14% people would like to watch their ethnic food products ads, it may
create a more big market for ethnic food, people who always want to try new food, can attract
potential customers.
4.11 Conclusion:
By analyzing the collected data it seems that Asda need to have a second look to its
Ethnic/world food products, as findings show that it is popular among the customers and many
customers buy ethnic/world food products from Asda and rest of the customers who do not, they
can be attracted if prices are low. It seems that whether Asda has an expensive supplier or it is
purchasing these products from local suppliers. We have concluded that Asda can maintain its
ethnic/world food department by introducing new variety of ethnic products, managing prices a
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bit lower. If Asda is purchasing ethnic food products from local suppliers it should consider to
approach the country of origin or manufacturer, which will help to maintain its prices low.
Customers seem happy with its ethnic food products quality by analyzing the collected data,
which is encouraging for Asda.
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Chapter 5: Conclusion
5.1 Introduction
This chapter is going to describe conclusion including summary of research. We are also
going to discuss limitations which we have faced while conduction of this research and finally
suggestions for the future research.
5.2 Summary:
To gain answers to our research questions we have conducted survey. We were intended
to know about Asda’s supply chain activities, how it performs its procurement operations for its
world/ethnic food products. Other small retailers have comparatively low prices than Asda in
ethnic/world products. It is most probably that these traditional ethnic retailers purchase these
products from their country of origin. It also can be possible that they are having low quality in
comparison with Asda, or may be these retailers have a huge range of products while Asda have
just a small department for these products, so these small retailers purchase these products in big
quantity from wholesalers, that’s why they are able to keep prices low. Another factor is that
Asda deals in variety of world/ethnic food so it has some popular products for different
communities, on the shelves while traditional retailer may be representing just one community
and has wider product range than Asda. To know all these factors we conducted the research. We
were also keen about the ethnic food popularity; we have got the reasons why ethnic and world
food demand is growing rapidly. As ethnic/world food is getting popular among UK inhabitants
as well as it is in ethnic communities. Small traditional retailers are dealing with ethnic/world
food for long time, but now fast growing trend of supermarkets with high competition, effected
customers strategies for shopping as they prefer for one-stop shopping at the supermarkets rather
than going at different traditional small retailers, which consumes much time and money. Firstly
we reviewed the literature regarding to our topic, we collected relative data from internet, books,
journals and magazines. There were problems in getting secondary data which we will explain in
limitations section. We designed our survey according to our hypothesis. We followed primary
data collection method. This was being sure that questions which were asked to the customers
must be valid and reliable. The results of our survey show that the mostly people are buying their
ethnic/world food from Asda. This supports our hypothesis that whether Asda’s world/ethnic
food department is popular among the customers or not? Results show that customers do know
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about the price differences even then they buy their ethnic/world food products from Asda, it has
been shown by results that customers are happy by its good quality products and also they can
find variety of products and remaining customers who do not buy these products from Asda, can
be interested if they find low prices in compare with those small retailers or supermarkets, they
buy their ethnic/world food products. It also can point to this factor that customers may not much
satisfied with retailer’s quality so they prefer Asda over retailers. Asda should expand it world
food department especially in those areas where ethnic groups are in majority, by developing this
department Asda can be successful to attract more and more customers. When we were going
through the literature it seems that Asda’s 2009 performance was not very good, but it was also
described that it has been introducing innovative ideas in its supply chain, which can promote its
sales. We evaluate our results that customers want that their ethnic food products should be
marketed. It can be a good step towards promoting ethnic/world food, which ethnic and other
customers will be able to know about other communities’ food products, it also will increase
sales of these products.
5.3 Limitation of the research
We observed that these supermarkets are offering world/ethnic food with higher prices in
comparison with retailers so it was needed to get to know the facts behind selling these products
expensively. We chose Asda which has lower prices than other supermarkets in many products,
but it is expensive in its world/ethnic food products. So we wanted to investigate its purchasing
strategies for these products whether Asda outsourcing for these products globally or locally. It
was a very vast topic to cover which required more time we had and cost also. So we decided
that we should have look other reasons which can be accessed under our given time and
expenses. For these reasons we designed questionnaire which could tell us that may be Asda is
not popular within the consumers of ethnic/world food that’s why Asda has kept prices high to
cover its costs. There also could be the other reasons e.g. Asda is taking advantage of customers
one-stop shopping preferences, it does not matter for the customers to pay slightly higher while
they are saving their time on the other hand by doing all their shopping under one roof, so we
tried to get answers to this factor as well. Another reason could be that Asda know its customers
attitude that they prefer quality over low prices, so they might have better quality food than the
small retailers.
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When literature was being reviewed, it has been very hard to get any secondary data about
Asda’s procurement department; especially regarding its world/ethnic food purchasing activities
so it was disappointment for the author that there was no given data about Asda’s procurement of
ethnic/world food products.
We conducted face to face and email survey, it was bit disappointing that we couldn’t get much
responses up to satisfactory level. There can be many reasons for that, people do not have much
time to fill up the questionnaire, or they don’t bother to fill. Sometimes people have redirected
emails from unknown senders to junk mail folder due to some security reasons. So they never
know that they have been asked to fill some kind of survey.
5.4 Suggestions for the future research
After concluding and analyzing the data we feel that there is need to give some
suggestions for the future. This can be suggested by this research that if Asda keep its prices low
in ethnic/world food department, this can help to boost its sales. According to our results more
than 50% customers buy world/ethnic food from Asda, if it concentrates on its pricing strategies
in this department it can attract remaining customers also.
Because of short time and limited expenses we were bound to keep our research narrow. We
made a step towards a vast topic i.e. to gather knowledge about Asda’s purchasing activities and
performances for its world/ethnic food products, how it is outsourcing for these products, locally
or globally. As above mentioned limitations it was not possible to cover a huge subject, it can be
investigated in future to know the facts of outsourcing, because if it is outsourcing these products
from local suppliers, it is most probably the cause of its higher prices in this department, whether
purchasing these products from country of their origin can be cheaper. Based upon the results
and findings of the research, we have done already; future research can approach this vast topic,
and conclude the factors behind it and can come up with constructive suggestions for Asda.
Future researchers are allowed to work at other hypotheses which are made by author; it will be
highly encouraged to do further research on related topic which can lead us to optimum
satisfaction after knowing the facts.
60
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