Assignment Question

Pick a product or brand of your own choosing that is sold in your geographical
area. From an examination of any marketing materials (advertising, packaging,
website, for example) and reflecting the 4P’s of marketing, construct a value
proposition for it.

Pick n Pay Brand. Value Proposition.

Pick n Pay brand is one of the major retail outlets in South Africa consisting of a
chain of stores ranging from clothing, supermarkets, liquor and convenience stores
nationwide. Pick n’ Pay was established in 1967 in Cape Town as a family business.
It started with 4 small stores and the following year it was listed on the Johannesburg
stock exchange, since then the brand has shown tremendous growth with more than
1600 stores and more than 85000 employees. The brand is also found in about 7
African countries and promising to open more retail outlets in the future.

What is Pick n Pay’s unique selling point and the reason behind it’s success?

Pick n Pay continues to utilise modern methods of advertising their brand and
products to reach their targeted customers. The brand prides itself as a family business
and being customer centric. Their tag line is “Inspired By You” the customer. The
company believes what set’s them apart from their competitors is their focus on the
customer meaning they take their time in understanding the needs of the customer and
be in a position to meet and satisfy those needs. They also believe in providing their
customers with different range of stores from convenience quick buy stores to
hypermarkets where customers can shop for everything under one roof. Lastly they
pride themselves in having the best trained employees who are accorded regular
training to be able to deal and handle customer complaints and compliments and to be
able to provide a positive shopping experience to the customers.
Competitors

Pick n Pay’s competitors are:

1. Shoprite Holdings Ltd

2. Massmart
3. The Spar group Ltd

4. USave

5. Woolworths

The above competitors also offer similar products to Pick n Pay. Below we are going
to look at what set’s Pick n Pay marketing mix apart as the leading retailer in South
Africa from the rest of the competitors.

Advertising

In 2007, Pick n Pay spent more than R110milion rand (equivalent to 7million US
dollar on today’s exchange rate). The company claims the brand re-positioning was
inspired and driven by the customer as is their tag-line ‘Inspired by You’. The revamp
was done in it’s entirety which included, packaging, re-branding, new logo and
launching online stores as well as appointing new management to selected stores.

Over the years Pick n Pay has consistently advertised on the national television
coming up with interesting advertisement focusing on their target market which is
families, offering specials, discounts and competitions. The other platforms that Pick
n Pay utilise include radio, print media, events advertising, as well as on social media.

Pick n Pay invests heavily on print media where they advertise on the weekly
community newspapers which is distributed for free to all households. Their
advertisement is full of specials and discounts that entice the household decision
maker to make a decision on opting to buy from Pick n Pay. Some of the promotions
include cutting out a copy of the advert and bring it to any Pick n Pay retail out to
qualify for the discount. This is also a way of gauging the effectiveness of their
promotion campaign.
1. Price

Pick n Pay prices have remained relatively low over the years. Since it prides itself as
a family store, it has avoided pricing itself out of the range and reach of it’s targeted
market. According to the business insider 2019 in the past year Pick n Pay prices fell
by 0.3% - compared to the competitors price hikes of 0.4% on average at Shoprite
Group of companies. The business insider went on to explain further that the price
cuts also attributed to an increase in Pick n Pay’s earnings which could be 13% to
23% higher - compared to Shoprite, which posted a half-year headline earnings
decline of 24% and Woolworths earnings were down to 9%.

The group continues to offer major discounts and promotions that cushion customers
on selected products. I have personally offer the years consistently been a Pick n Pay
customer and on occasions buying from the Shoprite Group especially when I was
running my own catering business. They were certain products I found cheaper than
from Shoprite than Pick n Pay. I guess when you run your own business you see and
learn a lot and vice versa, yes they were cheaper products in Pick n Pay than Shoprite.

Value Based Pricing Strategy

As indicated above, I can surmise that Pick n Pay uses a value based pricing strategy
where the customer’s perception of the product value is considered of paramount
importance to protect the company’s reputation. This is evidenced by the reduction in
their prices for their products.

Competitive Pricing Strategy

Pick n Pay also uses the competitive pricing strategy as seen by their prices which are
similar to that of it’s competitors except for selected products. Over and above setting
the prices in the same range of the competition they still do in store promotions and
discounted coupons to maintain their customer base.

1. Psychological Pricing

A lot of retailers have used this method since time immemorial. I used to question
myself as to why that is the case. Setting up a price without rounding off to the nearest
whole number has a psychological effect and a great feeling that as a consumer I
would rather pay for a product which cost $2.95 than actually paying $3.00. I would
rather have some change than no change at all. Most of Pick n Pay products contain
psychological prices.

2. Product

Pick n Pay brand values the importance of it’s market and as a result ensures that the
product delivered is fresh and of high quality. Most of the it’s product have
manufacturing and expiry dates on them and in so doing reassuring the customer that
they are buying fresh and good quality products. Over the years, Pick n Pay has
consistently maintained it’s product and brand visibility in the communities through
it’s advertising and distribution channels. According to the Supermarket & Retailer
website, the meat section and fresh fruit and vegetables consist of the majority of
products purchased at Pick n Pay stores hence the need to focus more on the freshness
of the product and continue to understand and fulfill customer’s needs. The company
also offers coupons and discounts on their in store selected products.

3. Place

Pick n Pay stores are strategically located nationwide and within reach of the
customers. The retail outlet is found in every shopping mall, some are at selected
shopping centers, at convenience stores in the communities, at gas stations as well as
at selected highways. The distribution channels also plays an integral part in ensuring
that the stores are located within reach and ensuring that the deliveries are done on
time to maintain the freshness of the products. The company has it’s own fleet of
delivery trucks that constantly deliver the goods on time making certain that the stores
always have products on the shelves.

4. Promotion

Pick n pay values it’s customers and they do so by providing value for money on their
products through promotions such as discounts, coupons and in-store specials. The
company’s promotions have been consistent throughout the years. They have
maintained a strong presence on television, radio and print media and have since
joined social media platforms. It has taken advantage of advertising in community
newspapers which are delivered for free in every city and towns. They entice the
customers by asking them to bring a cut out copy of the special in-order to qualify for
the discount. This is also a way of keeping track and measuring the effectiveness of
the advert in the community newspapers. Over and above the mentioned promotions,
Pick and Pay also sponsors events either alone or with partners and the famous one
being the Pick n Pay Cape Town cycle tour held every year and attended by cyclists
worldwide.

References:

Marsland L, 2007 November 12, Fresh new look for iconic Pick n Pay brand
retrieved from, https://www.bizcommunity.com/Article/196/423/19612.html

Marketing Mix - Price, 2013-2009 retrieved from https://marketingmix.co.uk/price/

Pick n Pay’s price cuts are paying off: retrieved from,
https://www.businessinsider.co.za/pick-n-pay-prices-hurt-shoprite-checkers-2019-4

Pick n Pay intensifies focus on fresh with new three-tiered offering, retrieved from;
https://www.supermarket.co.za/news-article.asp?ID=7606&CatTags=19-Marketing%
20and%20Promotions

Pick n Pay,AGE, African Growing Enterprises, retrieved from,

https://www.ide.go.jp/English/Data/Africa_file/Company/southafrica06.html

Pick n Pay, advertising & marketing assignments, retrieved from

https://www.adbrands.net/za/picknpay_za.htm

This is Pick n Pay, Integrated annual report 2018, retrieved from

http://picknpayinvestor.co.za/financials/annual-reports/2018/pdf/home/this-is-pick-n-
pay.pdf