Cub Foods is a supermarket chain store which predominantly operates in the Minnesota, Wisconsin, and Illinois states. The company is a subsidiary of the Supervalu Inc., and currently has 83 fully operational stores. Founded in 1968, the name CUB is an acronym which means Consumers United for Buying. It is on record that Cub Foods is the first total discount food store in the United States, and it is on this platform the food chain has earned its name as one of the stores that offer quality foods at extremely low prices. This essay discusses the marketing tactics employed by the store to increase the probability of purchases, the reasons why Cub Foods generates large sales per customer (per store), and some of the reasons why consumers in its trading areas refuse to shop there.
- List at Least Five Marketing Tactics Cub Foods Employs in Stores to Increase the Probability of Purchases
Cub Foods employs a number of marketing tactics to attract new customers and to retain the already existing consumers. Since its inception, the supermarkets chain has prided itself in providing quality foods at low prices, and this has always been the driving mantra behind its marketing campaigns. The stores owned by Cub Foods offer deals which cannot be matched by competitors and this attracts consumers even from many miles away. Therefore, the lowly priced goods increase the probability of making a purchase.
According to Supervalu.Com, in the face of steep competition (from other supermarkets and other super warehouses which are coming up across the country), Cub Foods has resorted to the use of huge discounts, low prices and clever marketing to maximize sales. The strategic pricing has given Cub stores a competitive pricing edge, and the overall gross margins remain at 14 percent (which is six to eight points’ less than most conventional stores).
Another strategy which increases the probability of purchase is the variety of products offered within the stores. Generally, a Cub store stocks between 35,000 and 49,000 items, and this is double the selection offered by conventional stores. Each of the Cub stores also stocks staples, luxury, ethnic, and hard-to-find foods which leads to overwhelming displays. For example, a chain may stock 88 different kinds of hot dogs and dinner sausages, 12 brands of Mexican food, and tons of fresh meat and produce. Therefore, given such a wide variety of goods, consumers find it easy to make a purchase from any of the Cub Foods stores because they find everything under one roof.
Cub Foods also offers an aura of shopping from the moment the shopper walks into any of their stores. For example, the entry aisles, which have come to be known as power alleys, are lined with special deals, while the ceiling joists and the girders are exposed thus giving the shoppers a feeling of spaciousness. Psychologically, this triggers the idea that massive shopping is going on in the store and the shopper feels ready to spend his/her money there.
Apart from these shopping-friendly designs, the carts found within Cub stores are wider than the usual shopping carts, and this is something which triggers the idea of expensive buying within the shopper’s mind. The wide shopping carts which fit into the wide aisles channel shoppers toward high-profit impulse foods and this is also another strategy which increases the probability of purchase.
Lastly, the Cub stores provide high quality produce and meats in large quantities (twice or four times what other supermarkets provide), and this increases the probability of purchase because shoppers can purchase large quantities in one trip. The rationale behind this marketing strategy is that consumers can save the number of trips to the supermarket, and get a huge quantity of goods which surpasses what the conventional stores provide, and at low prices.
- What Accounts for Cub Foods Large Sales per Person and per Store
There are various reasons as to why Cub Foods generates large sales per person and per store. According to an article appearing in the Reuters.com, one of these reasons is because the goods stocked in their stores are lowly priced, and this encourages shoppers to purchase more products than they had budgeted for under the guise of making a saving on each of the products they purchase. As one of the shoppers admitted, she ended up spending $ 36 more than she had budgeted for because of the high discounts provided on some of the products. With Cub Foods shoppers can get huge discounts, and in some of the products they can get discounts of up to 30 percent. The discounts provide enough retail promotions and efficiently drive sales. Consequently, more purchases per person, and per store, are generated thus enhancing profitability.
It is also worth noting that the items stocked in the Cub Foods stores are strategically priced such that the consumers have a perception of value while maintaining good gross profits in the retail stores. The competitive pricing encourages the shoppers to spend more because of the perceived value that the products offer, and this is something which drives more sales per person and store.
Cub Foods also provides shopping carts which are larger than those found in the conventional supermarkets, and this creates an aura of high volume spending. This is complemented by the huge variety of products stocked within the stores, and this encourages the shoppers to do their entire shopping under one roof. As explained earlier, Cub Foods stores stock between 35,000 and 49,000 products and this makes it easy for the shoppers to make a lot of purchases within a store. When this is combined with the consumer-friendly layout which captures today’s busy consumers, the store is able to drive more purchases per consumer and per store thus generating the much needed profitability.
Moreover, the aisles in Cub stores are designed in such a manner that shoppers go through the highly profitable perimeter departments first. This is something which encourages impulse buying as the shoppers grab some non-essentials before their budgets on the essential items are depleted. As a result, the shoppers end up spending more per person and per store.
Cub Foods is fully aware that the consumers today are highly sophisticated and fragmented, and the real benefits come from chasing the consumers and making them to buy more per person and per store. This is the reason why Cub Foods constructs consumer-friendly stores, which result into better management of inventory and creates a layout which increases sales.
- Given Cubs Lower Prices, Quality Merchandise, Excellent Location and Superior Assortments, Offer Reasons Why Many Consumers in its Trading Areas Refuse to Shop There
Despite the lower prices, quality merchandise, excellent location, and superior assortment, some of the consumers in Cub Foods trading areas refuse to shop there due to a number of reasons. One of the reasons why consumers prefer travelling long distances to get to the nearest super warehouse stores instead of the small Cub stores is because they know they will get almost everything under one roof, and most of it is cheaper than the competing supermarkets. Therefore, consumers prefer the super warehouse stores where they can purchase all their shopping in one trip instead of making many trips to a supermarket.
Another thing which could be making some shoppers to avoid the Cub stores within their neighborhoods is because Cub Foods does not engage in aggressive advertising compared to their competitors. Cub heavily relies on word of mouth as its main means of advertising, and its advertising budgets are 25 percent less than those of competing chains. In an industry whereby the level of competition is a notch high, advertising cannot be ignored. The fact that Cub does not engage in aggressive advertising means that some of the consumers may not yet be convinced to make their shopping in Cub stores.
Although Cub Foods tries as much as possible to be cost efficient, the advertising budget is not enough to build customer awareness and traffic to the stores. Some of the affiliated retailers need to use aggressive marketing campaigns to create awareness about their existence, the products that they offer, and the reason why shoppers should spend time in their stores and not in any other store. At this stage, more efforts need to be dedicated to advertising in order to gain a competitive edge.
Works Cited
Peter, J. Paul and Jerry Corrie Olson. Consumer Behavior and Marketing Strategy. New York,
NY: MCGRAW-HILL Professional, 2008. Print.
Reuters.com. Minnesota Grocer Cub Foods Awarded First LEED Gold NC2.2 Building Certification in State. 22 June 2009. 3 July 2013
<http://www.reuters.com/article/2009/06/22/idUS113542+22-Jun-2009+BW20090622>. Web.
SuperValu. Merchandising and Marketing. 2013. 3 July 2013 <http://www.supervalu.com/sv
webapp/services/merchmarketing.jsp>. Web.
