Tops Markets MKT 561 - Emerging Media Group Presentation Assignment - PDF document

Tops Markets MKT 561 - Emerging Media Group Presentation Assignment Amanda DeRoo, Eric Scafetta, Kevin Huggins, Stephanie Rathbun

Situational Analysis Marketing Problem TOPS has a problem. The days of the thriving neighborhood market are coming to an end. Smaller, community-based grocery stores like TOPS are being pushed out by larger chains like Wegmans and Trader Joe’s, hypermarkets like Walmart and Target, and online retailers like Amazon. Mobile and digital are changing the way that consumers are shopping for groceries, and TOPS has failed to adapt. Larger hypermarkets are able to leverage their pre-existing customer base and offer them the convenience of the all-in-one shopping experience by adding grocery to their stores. The larger grocery chains are modernizing stores to offer a more premium shopping experience. The TOPS brand in comparison looks dated and out-of-touch with today’s grocery consumer. TOPS’ History TOPS’ origins can be traced back to the early 1920s when Italian immigrant Ferrante Castellani opened his first grocery store, Great Bear Market, in Niagara Falls, NY. Ferrante’s sons, Armand and Alfred, eventually took over the business and opened two more stores. In the 1950s Armand joined up with Thomas Buscaglia, owner of the T.A. Buscaglia Equipment Company, to form Niagara Frontier Services. Seeing an opportunity to capitalize on the growth of the modern day supermarket, the two men partnered with a group of independent grocery store owners and in 1962 opened their own 25,000 square-foot supermarket in Niagara Falls. They dreamed of creating the best possible shopping experience, so they decided upon the name TOPS, which in the 1960s was slang for “the best”. Over the 1970s and 1980s, under the leadership of Armand Castellani and Savino Nanula, the brand thrived. The company expanded into the Rochester area, and by the end of the 1980s the first Pennsylvania location opened.

In 1991 TOPS was acquired by Ahold, a major international food retail conglomerate based in the Netherlands. In 2001, TOPS formed an alliance with Giant Food stores, a fellow Ahold company, based in Carlisle, PA. That structure remained in place until 2007 when Ahold announced that they would sell TOPS Markets to Morgan Stanley Private Equity. In the fall of 2007, then president and CEO Frank Curci, led the deal that returned TOPS Markets back to local operation. In 2010, TOPS acquired The Penn Traffic Company, a deal which resulted in TOPS bring 64 new stores into its family. In July 2012, TOPS announced its purchase of 21 Grand Union Family Markets stores. In November 2013, six members of TOPS' executive team, led by now Chairman and CEO Frank Curci, purchased the company from Morgan Stanley Private Equity, returning TOPS back to complete local ownership. Currently, TOPS is headquartered in Williamsville, NY, operates 173 full-service supermarkets, and employees over 15,000. History of the Market Unlike a generation ago, today’s grocery market needs to cater to the sharp rise in demand for healthier, organic, food options. The priority has shifted from convenient, microwavable, processed meals to fresh, nutritious, premade meals that can take the place of a home cooked dinner for busy parents. As larger retailers like Walmart and Target drive down prices, more consumers have access to healthier foods that were once out of their reach financially. This is driving up demand for these foods in the market. Another trend occurring in the market is the rise in specialty and premium shopping experiences. Wegmans is a great example. Wegmans stores have a high-end, modern aesthetic and include several specialty shops within the store—serving premade meals, desserts, gourmet coffee, and more. The most significant and disruptive change in the grocery market however, is the rise of digital, mobile, and most importantly, online shopping. More and more shoppers are

incorporating technology into their grocery shopping—from online shopping lists, digital coupons, and in-store promotions, to click-to-collect and total online shopping and delivery. Product Consumer The grocery industry and its consumers are evolving. Today’s grocery buyer wants a premium shopping experience, in a modern, up-scale store. They want healthier options, and the convenience of pre-made meals. They also want to leverage technology to make shopping easier—taking advantage of online shopping lists, digital coupons, click-to-collect, and more. As more options available, consumers are basing their shopping decisions less on brand loyalty and more on price. They place less importance on supporting their neighborhood market and more on saving time and money. Marketing Objectives In order to survive in today’s crowded and evolving grocery market, TOPS needs to retain is current loyal customer base by protecting its image as a friendly neighborhood grocer, while at the same time gain new market share by investing heavily in the emerging digital and mobile platforms that their competitors are using. The first step in achieving these goals is to build brand awareness within the communities that have TOPS stores. This should serve as a reminder of what current customers love about TOPS—their commitment to their customers, the friendly and inviting shopping experience, and the convenience of local shopping. It should also serve as a way to differentiate TOPS from the large, impersonal, national grocery chains. Next TOPS needs to make a major investment digital and mobile platforms. This will help gain back lost market share from online retailers and show TOPS customers the dedication to innovation that was so crucial to the growth of the company. TOPS needs

to offer the same conveniences that their competition does—online shopping, home delivery, mobile coupons, digital shopping lists—in order to survive. One:One For Tops to be truly successful in the area of relationship marketing, it is crucial to gain a thorough understanding of our consumers needs, in order to time our messaging correctly for greater relevance. We should begin by monitoring our consumers purchasing habits, trends in the marketplace, and what consumers are already saying about our brand. This will help us gain the ability to make the proper recommendations, and foster a personal relationship with our customers that will be mutually beneficial going forward. One:One Data Acquisition Methods Purchasing habits To make more relevant improvements to personal shopping recommendations, we need to have an understanding of what may interest each consumer. The first method we could utilize to acquire this data would be to track past purchases. Many other retailers are actively utilizing this method. To do this effectively we could begin collecting and analyzing purchase data attached to the consumer’s credit card, as well as their Tops Bonus Card. The ability to identify purchase cues and historical buying data will improve our ability to make individualized recommendations in the future(Ex. Target Case Study.) Trends in the marketplace Aside from looking at buying data, we also want to garner the ability to predict what our customers may need and want from their brand. Tops could look at popular diets, or heavily shared food related articles in each area, and by each demographic, to gain knowledge of what customers may be looking for in the short-term future. According to the Food Marketing Institute, today’s grocery shopper wants to know what their store stands for. Corporate social responsibility will play a huge role in influencing the behavior of today’s consumer. Topics like animal welfare, food waste, food safety and storage, and sustainability all heavily influence purchasing decisions. A long-term strategy that takes this new mindset into consideration should be implemented by the Tops brand.