Study of Mission Statement as a Marketing Strategy:

An Analysis of Amazon.com and Wal-Mart Mission Statement

BUS 5112 - Marketing Management

Analysis of Pricing and Sales Promotion

as Part of THE SM STORE’s
Marketing Strategy

Assume that you are a sales consultant for a local product or service. Prepare an analysis for
the company and address the following:

1. Provide a brief background of the company and mention the major markets.

2. What are the striking benefits, as mentioned in the study for marketing these products or
services to consumers?

3. Briefly describe the company's marketing strategy model.

4. What other product-pricing strategies, if any, would you recommend to maximize profit in
the short and long-term?

Submit a 2-3 page analysis, (independent of the title page and reference page) double-spaced
in Times New Roman font which is no greater than 12-points in size. Paper and all citations
should be in APA format.

Dr. Frank Billingsley

Professor
 Abstract

This analysis will focus on the pricing and sales promotion of The SM Store as part of its overall

marketing strategy. The paper will enumerate the benefits of marketing The SM Store’s services, its

company’s marketing strategy model, and product pricing strategies proposal from the author, which

will maximize the organization’s profit from short- and long-term perspectives.

Introduction

Prof. Philip Kotler of the North-Western University defines marketing strategy as the primary

approach the business unit will take to achieve its goals, including complex decisions (strategies) on

the most critical markets, market positioning and mix, and marketing budget allocation. These are the

same foundation that built the marketing strategy of the number one retail store in the Philippines-The

SM Store.

SM Store is a Filipino multinational retail firm that operates a chain of inexpensive department

stores and grocery stores familiar to millions of Filipinos and households. Henry Sy, Sr., launched the

corporation on January 15, 1960. At first, he called his company Shoemart and focused on importing

enormous shoes from the United States. His company grew to the point that he could open a department

store. SM Department Store Inc. was the name of his second company.

SM Investments Corporation's board of directors announced the reform of the firm in 2006.

The restructuring resulted in two new companies: SM Retail Inc. and SM Land Inc. SM Retail is in

charge of the SM Supermarket, SM Hypermarket, and SM Department Store retail businesses (now

The SM Store).

Over the last decade, SM Store has undergone substantial transformations, including

acquiring many digital components to focus and expand its e-commerce and service delivery

operations. In 2020, SM Store opened two new stores, one in Butuan and the other in Zamboanga. As

a result, in 2020, the total gross selling area of all 66 department stores was 816,958 square meters.
 Despite the epidemic, SM Store had revenue of PHP296.8 billion as of February 26, 2021,

which is higher than the average for enterprises in the same industry in the Philippines, making it the

country's largest retailer.

Marketing Mix

The marketing mix measurements is the actions and metrics required to achieve marketing

objectives. Marketing objectives are possible by employing marketing factors such as product,

pricing, location, and promotion (Isoraite, 2016).

Below is the breakdown of The SM Store’s marketing mix:

Product

SM Store's core product is its retail service. They feature a large selection of men's, women's,

and children's apparel, as well as cosmetics and household items. Stationary, technology equipment,

snacks, toys, tools, and delightful Philippine souvenirs are also available.

Bill payment, tickets, remittance, currency exchange, complimentary gift wrapping, garment

adjustments, home delivery, Click & Collect, and, most recently, Call to Deliver are just some of the

services available at the SM Store.

They entice customers by offering simple and effective services such as sales tools and

employees trained to assist customers in locating the products they require. In addition, shoppers love

convenience, which SM Store achieves by stocking its stores with various goods and services. SM

Store, of course, lives true to its slogan, "We've Got It All for You."

Pricing Strategy

SM Store can provide almost any product a customer desires, and while people from all walks

of life use their services, most of their customers are lower-middle-class shoppers. Their key benefit is

that it allows customers to get things that will improve their lives without paying exorbitant prices.

The launched of the SM Bonus brand, which is 15% to 30% less expensive than top national

brands, marked the aggressive pricing strategy of SM Store.

 Their goal is to clearly show how affordable their items are to acquire an extensive customer

base. This strategy complements cost leadership, which is their core business plan which means that

the company operates at a low cost and offers low prices. As a result, SM Store remains a competitive

store, as their high sales volume allows them to profit.

Promotion

The promotion plan of SM Store includes elements such as public relations, advertisements,

and sales promotions. The company advertises in newspapers, brochures, and websites, uses sales

promotions in special offers and discounts and uses personal selling to persuade customers to try new

products or package deals.

SM Store also employs the services of well-known country showbiz personalities to endorse

its shopping centres to increase consumer confidence in the quality of the items and services they

offer. Ms Kris Aquino, daughter of former Philippine President Corazon Aquino, is one of SM Store's

most recognizable endorsers.

It employs press releases to keep its investors, current and potential consumers informed

about business policies, plans, and strategies. They will also occasionally support charity activities

that will help them attract clients and grow their brand, such as the SM Foundation, which offers

college scholarships to worthy students.

The company uses a variety of websites to promote its brand and products. The organization

appears to use a behavioural targeting approach in which it gives ad servers depending on the viewer's

or potential customer's profile, cookies, or IP addresses. SM Store also uses re-marketing extensively,

allowing ad servers to send adverts to users after engaging with a website and viewing specific

products.

Place

In addition to the existing strategically chosen location of SM physical store, it also adopted a

"clicks-to-bricks" strategy to get a piece of the growing e-commerce market. Online businesses that

open physical storefronts use the "clicks-to-bricks" method to increase brand visibility and consumer

engagement. Buyers can go online to select things from any mall tenant and pick up their orders later
at an SM shopping mall, which helps the company's brick-and-mortar operations. SM's decision to go

with a "clicks-and-bricks" strategy comes at a time when e-commerce players are putting much

pressure on shopping malls and retailers all over the world.

SM also employs an intensive distribution strategy or intensive distribution channel within

their marketing mix. This model enables them to offer the same range of products in shops and online,

with the same roles and duties applied across both platforms. In addition, the distribution part of SM

Store serves to attract clients by making shopping convenient in terms of location. Indeed, The SM

Store is not just a store but a destination.

The SM Store’s Marketing Strategy Model

According to (Principles of marketing, 2010), a multisegmented marketing strategy can

enable a corporation to adjust to demographic and other market shifts, including economic downturns.

Generally, The SM Store’s marketing strategy is based on the following principles:

1. Segmentation targeting and positioning- The fundamental focus of The SM Store

strategic marketing is segmentation, targeting, and positioning. Targeting is choosing

certain groups found as a result of segmentation to market products, whereas

segmentation is associated with dividing the population into groups based on specific

traits. The term "positioning" refers to the process of selecting the marketing mix that is

most suited to the target client segment. The SM Store employs mono-segment

positioning, and as a result, The SM Store marketing management targets a single

consumer segment that places a higher emphasis on product price than other features.

2. 4P's of Marketing- The nature of the retail firm, its strategic aims, and the industry

scenario are all factors in the SM Store's marketing mix or 4P. The 4P's of marketing

allows implementing marketing tactics that meet local, regional, and international retail

sector conditions. The inspiration for the marketing mix is from the SM Store's cost

leadership generic plan for competitive strategy and the company's intensive expansion
 initiatives. In addition, the 4Ps is the ultimate driving factor of the company's strategic

decisions as one of the world's largest retailers. This marketing mix is part of The SM

Store's global expansion strategy.

3. Unique Selling Proposition - The SM Store combines an extensive range of items and

services at affordable prices, fast delivery via its delivery network, and excellent

customer service.

Product-Pricing Proposal Strategies for Profit Maximization

The majority of retail shoppers are price-conscious. The term "price sensitivity" describes

how different price points influence customer purchasing behaviour. As a result, knowing the price

sensitivity level for products in their portfolio allows merchants to assess the percentage of sales

gained or lost at specific price points. Sustainable price sensitivity management entails setting prices

that fulfil consumer expectations and yield the required level of income.

This paper recommends a promotional pricing method for The SM Store to boost its short-

term profit goal and price-bundling for long term revenue target.

Brands use promotional pricing to attract prospects and customers by temporarily lowering

the price of a product or service. A brand artificially raises the worth of a product or service by

creating a sense of scarcity by decreasing the price for a limited period. Customer acquisition is

plausible by promotional pricing, which encourages budget-conscious buyers to buy. It has the

potential to boost revenue, strengthen consumer loyalty, and improve short-term cash flow.

Bundling is a marketing tactic in which organizations combine related products or services

into a single package. The sum of the individual prices of the products sold separately is usually less

than the bundled price. Although each item in the bundle is theoretically sold at a lower price, a

bundle pricing strategy can boost average revenue per customer. The reason for this is because

bundled products have a higher perceived value than single products. Once customers get the hang of

The SM Store's price bundle offer, it will become a habit, resulting in long-term profitability.
 Conclusion

A strategy is an approach that aligns with the company's desired outcome. According to the

company's aims, short and long-term strategies are developed. The goals describe what a corporation

intends to accomplish in a specific environment and time frame, while the strategy explains how to

get there. Every company, such as The SM Store, must devise a unique strategy for accomplishing its

objectives.

This paper proves that The SM Store's management and marketing strategy lowered its

production and delivery costs. As a result, the business develops strengths that provide a competitive

advantage in one or more areas. The SM Store first focused its operations on one or more test

segments, expanding to a larger active region.

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