Food Lion and Marketing Strategy
For Store 2692
Jonathan Campagna
September 16, 2009
Marketing 100
Food Lion, LLC is a subsidiary of Brussels-based
Delhaize Group and is one of the largest supermarket
companies in the United States. Operating more than
1300 stores, either directly or through affiliated entities,
under the names of Food Lion, Harveys, Bottom Dollar,
Bloom, and Reid’s, Food Lion, LLC is headquartered in
Salisbury, North Carolina. The company started in 1957 as Food Town, in Salisbury, NC, and
changed its name to Food Lion in 1983 after being acquired by the Delhaize Group. It has stores
in eleven Southeast and Mid-Atlantic states and had estimated sales of 18.2 billion dollars in
2007, a 5.1% increase over 2006. In Hinesville, Food Lion has been in the area since the mid-80s
and recently opened a new store, located on highway 196 due west, in September of 2008 (the
older store is on General Screven Way and was refitted in early 2008). Originally based on the
concept of “extra low prices” and lacking amenities, such as bakeries and delis, Food Lion is
now focused on the needs of the customer and community involvement. New and refitted
stores have deli, bakery, meat and seafood departments, and expanded produce. With
expanded services and store departments, Food Lion has introduced several marketing
strategies to guide in its effort to base operations in the marketing concept and to follow its
motto: “Good Neighbors. Great Prices.” Segmentation and store clustering, building strong
employees, community involvement and customer connection, and competitive pricing on
private and manufacturer brands are the bases of Food Lion’s marketing strategy and can all be
seen in Food Lion 2692, Georgia Highway 196, Hinesville.
Food Lion’s marketing strategy begins with segmentation and store clustering. Their
goal is to be the shopper’s “neighborhood store”, therefore, the demographics and
psychographics of every market that Food Lion is either in or entering are carefully studied to
determine how best to satisfy the needs of the area’s customers. The philosophy used to be
“one size fits all” in terms of operating stores to serve customers, according to Rick Anicetti,
CEO of Food Lion, LLC. Basically, every store was the same in floor layout, size, pricing strategy,
and weekly circular. Through market research, Food Lion now segments the markets into eight
groups: Dinks (dual
income, no kids) with
Dollars, Comfortably
Carpooling, Country
Living, Getting By,
Babies and Bills,
Wealthy Elites, Golden
Years, and Savvy
Singles.
Using the patterns and percentages of the most apparent segment profiles, stores are
placed into one of seven clusters with names such as the “Affluent Bunch” and “Golden Country
and Family.” Then, each store is designed, stocked, and operated with the specific cluster in
mind. For example, the “Affluent Bunch” cluster offers an extended wine selection and an
expanded produce assortment than other clusters; whereas, the “Golden Country and Family”
cluster might have lower shelf heights
(so products are easier to reach) and a
different produce core to
accommodate older customers. “It’s
all about serving customers based on
their individual needs,” explains
Anicetti.
In Hinesville, Food Lion 2692 is
placed in the “Stretching Every Dollar”
cluster. This cluster represents all eight segments fairly equally, thus, the store offers
something for everyone. There is a well stocked wine selection for the “Wealthy Elites,” as well
as a considerable assortment of frozen vegetable packages for the “Comfortably Carpooling”
segment trying to feed the family.
According to Penny Newton, General
Sales Manager of Food Lion 2692, the
market area not only includes parts of
Hinesville and Liberty County, but Long
County, as well. This includes the town
of Ludowici and the Gum Branch
Community. The market area is also
comprised of numerous military
personnel with varying backgrounds and roots. The reach of the store covers a diverse market
and in an effort to satisfy the needs of the shoppers, Food Lion bases product-core, layout, and
promotional opportunities on this market. There is even emphasis placed on Hispanic goods in
the produce section and in a special “ethnic” section of the grocery aisles.
Building strong employees is another key to the marketing strategy of Food Lion. No
company can survive without the commitment of its employees to do their best to meet the
needs of the customer. According to their website (Foodlion.com), the Core Values of Food
Lion are:
Integrity – We consistently treat our associates, customers, and business
partners in a fair, honest, and straightforward manner.
Diversity and Embracing Differences – We seek, value, and respect
diversity in our associates, customers, and business partners. We also embrace
differences in order to improve ourselves. Innovation takes place when different
ideas, perceptions, and ways of processing information collide.
Learning and Development – We foster an environment where
continuous learning is encouraged and expected at all levels, and a strong
commitment to self-improvement exists.
A strong Work Ethic – We are passionate about our work and doing what
is right to get the job done.
How Food Lion sees these four values all mention the associates of the company first.
By encouraging and supporting all their employees to embrace the core values, Food Lion
ensures that the shoppers feel respected and comfortable during their time in the store.
Furthermore, this helps Food Lion ensures the future of the company. Of the culture that exists
in the company, Anicetti says, “It is an organization whose people are beginning to see that they
really own the future of this company. That’s not to imply that the cashier is going to a pricing
decision or a bagger is going to make a real estate decision, but people clearly can begin to see
that they can own what they do in their role every day. We’ve come to call that their ‘fraction
of the action.’ And it is the sum total of those fractions that makes Food Lion more able to
respond to the marketplace today.” Examples of Food Lion furthering the values, says Newton,
are the CBTs (computer based training), which are constantly updated to educate and reinforce
associates on procedures and safety practices, and the spontaneous employee huddles, that
are held to recognize an associate’s outstanding effort, as a quick morale booster, or to discuss
short-term strategy for , perhaps, a big holiday weekend. Demeeka Haynes, Assistant Sales
Manager, stated, “The transfer of knowledge from the department heads to their associates”
and “working as a team” contribute to stronger employees and satisfied shoppers.
The backbone of Food Lions marketing strategy is community involvement and
customer connection. For Food Lion, interaction with the customer takes place on a personal
level inside the store and with a sense of benevolence outside the store. “Welcoming”
shoppers “to your neighborhood Food Lion” and to each department is emphasized daily in the
store, says Newton, and this is reinforced through customer surveys on the internet and via
telephone. Associates are also encouraged to remember customers by noticing the color of
their eyes or to engage in formal introductions, as to learn their names. In an effort to become
the market’s “neighborhood store,” Food Lion feels that every associate and manager should
provide a sense of comfort and give the store an inviting quality. Furthermore, “customer
connection” also
includes actions,
not just words.
Keeping the
store physically
comfortable and inviting is just as much a “customer connection” as “welcoming” a shopper.
This means keeping aisles cleared and the bathrooms neat and clean. Everything the shopper
sees, hears, and feels involves “connection.” “It is about the total shopping experience,”
explains Newton.
Outside the store, Food Lion works diligently on projects to benefit the community. The
Children’s Miracle Network, Easter Seals, American Red Cross, and Feeding America (formally
America’s Second Harvest Network) are all organization that Food Lion works with to better the
community. Education is also a primary focus, through such programs as “Family Math Night,”
“Roaring to Read,” and “Box Tops for Education at Food Lion.” The store will even conduct a
tour of the store for interested schools with an emphasis on food safety. Though thousands of
dollars are collected through customer donations for Easter Seals and The Children’s Miracle
Network at Food Lion 2692, “hunger and education are the main focus for our involvement,”
says Newton. “Hundreds of pounds of perishable goods are donated to Manna House (the local
food bank) each week and canned goods are collected during the holidays.” In addition, food
boxes are available for the public to purchase and donate to the needy at Christmas. Newton
also said the store has information packets ready for the local schools to encourage
participation in the educational programs. She also explained that she will be, specifically,
contacting Long County schools to promote the programs. “This is an opportunity to benefit
store and the community.”
The second half of Food Lion’s motto is “Great Prices.” To accomplish this, Food Lion
uses a loyal shopper’s card (MVP card) and has established several money saving private
brands. The MVP card gives the customer a discount on selected items of five to fifteen
percent plus a register coupon based on the shopping habits of the customer. Some of the
discounted products are listed in the weekly circular; many aren’t seen until the shopper
browses the aisles. All are highlighted with a special MVP tag or a “Bonus Buy” sign. The
circular is available in The Coastal Courier, the
local newspaper, and The Pennysaver, a mailed
sales paper. For customers that are in areas
that do not have access to either, Food Lion
mails the circular. The weekly sales are also
available on the Food Lion Web site and are e-
mailed to customers. MVP card records are
used for this purpose.
Food Lion has six private brands: Food
Lion brand, Healthy Accents, Home 360, On The
Go Bistro, Nature’s Place, and Smart Option. All
of these brands are designed to offer quality and value at affordable prices. There are
characteristics to each brand that offer certain value to the customer. For example, Home 360
is a line of house wares and other functional products, such as envelopes. Smart Options is a
line of economical everyday items from milk to plastic utensils. On The Go Bistro consists of
microwavable pre-made meal solutions, made in a factory built by Food Lion, LLC just for this
brand. On a more special side, Food Lion
established Nature’s Place, an organic brand of
products, and Taste Inspirations, a collection of
gourmet and specialty foods. These brands were
established to meet the varying needs of the
customer in pricing and use. Also, the availability
of each brand changes from store to store, depending on the cluster of the store.
For Food Lion 2692, the weekly circular is the only form of advertising used (television
and radio was used to promote the grand opening of store 2692). In other markets, television,
radio, and billboards are utilized to reach
customers. This is mostly in larger markets
which account for seventy-seven percent of
sales. On measured media, $19.3 million was
spent in 2008 for all of Food Lion’s stores. The amount spent in the greater Hinesville market
was unavailable, according to Newton. A new campaign initiative has been started by Food
Lion under the name “Great Price Hunters.” The tag line says, “You don’t have to hunt for great
prices.” Ken Mills, vice president of marketing, said, “Food Lion has a long history of delivering
competitive prices and great convenience to our customers. In the midst of a tough economy
and various retailers focusing on price messaging, we want to remind our customers that they
do not have to hunt from store to store for great prices.” The campaign is designed to reinforce
a “unique price position and neighborhood convenience,” explains Mills. Thus, Food Lion is
attempting to focus on pricing strategy in order to attract customers, but is still maintaining the
“neighborhood store” concept.
For the local market, “perceived value” is the most important thing to Newton. Many
times, shoppers assume that Wal-Mart and the commissary (Fort Stewart) have lower prices
than Food Lion. However, according to Newton, this is not always true. With MVP savings,
total food bills at Food Lion are very competitive. That is why “product placement of sale
items” in the store and merchandising are stressed. “The sale items are put on the ends of the
aisles and signs are placed throughout the store to give the customer a sense of value,” explains
Newton. Furthermore, “Don’t forget, ‘Customer Connection.” And not sure of what the future
holds for sales, with the ever-changing customer base at the fort and available space for lease
in adjacent stores, Food Lion 2692 must maintain a customer oriented attitude. Though when
asked if Food Lion was number one in its position in the market, Newton exclaimed, “No, nor do
we want to be”; this referring to Food Lions commitment to the community, as well as, sales.
On the other hand, this is what Food Lion 2692 should be using to increase sales. There
is no reason why everyone in the market shouldn’t know what Food Lion does for the
community. Being more aggressive in public relations and creating publicity are a must. Press
releases every time a food drive is started and calling The Coastal Courier for photo
opportunities when “Certificates of Appreciation” are presented should become standard
practice. Furthermore, open sponsorship of local events and area school sports also provide
excellent chances to gain positive favor in the eyes of current and potential customers. Have
Bradwell Institute’s cheerleading squad hold a car wash to raise money in the parking lot of
store 2692 or invite Long County schools to use the front walk to hold a bake sale. Finally, Use
Food Lion store 2692 as a community information center. Put a large bulletin board in the front
foyer for notices of neighborhood gatherings and meetings. Even let customers and employees
post pictures of their “Loved Ones” (pets, children, deployed spouses, ect.) and “New Arrivals”
(just born children). Hold hurricane awareness seminars and disaster readiness workshops.
Anicetti sums it up: “By positioning ourselves conveniently in neighborhoods, we found that the
combination of price, the kind of customer experience we’re trying to create,…and the smaller
nature of our footprint, well as density of our footprint in any particular market, is really going
to be something that carries the day”.