The Great Atlantic & Pacific Tea Company

The Great Atlantic & Pacific Tea society For decades The Great Atlantic & Pacific Tea Comp whatever (A&P) had dominated the US food and grocery market. However, with its surface had come increasing arguerial inefficiencies and an inability to respond to demands of changing market. A very crucial phantasm was do in the 1950s when A&P failed to follow customers in their move to suburbs. The result, which plagued the superiormarket chain into the 1980s , was a large soma of small and inefficient stores serving declining urban neighbourhoods.In 1971, William J Kane took all over as chairman and CEO of A&P. This was a duration when social club sales had leveled off and profits were declining. In an effort to overcome this slide, Kane ordered the conversion of thousands of regular A&P units to WEO supermarkets, which were described as super duper discount stores. The average WEO store looked a great deal the same as an old A&P and was or so the same size (which was rather small and cramped by industry standards).The big difference among WEOs and companys conventional units was lower prices on 90% of the merchandise and a decline in the variety of production offered from an average of items (SKUs) to as few as 8000. Chairman Kane summed up the companys philosophy regarding this move as a Tonnage recovery Program, which emphasized sight business. He hope to attract many digiter customers by employing low prices, unfortunately the food cost began to skyrocket about the same time as WEO was instituted . The pressure caused by the price cuts was too much for the company to bear during this period.Therefore, prices were increased and the resulting market response was influential in causing further declension of the food giant. In 1973, the retail chain lost its number one market position to Safeway. Jonathan Scott took over Kanes position in 1975 recognizing that the retail chain had far too many deteriorating stores in declining urban neighbourhoods. Scot t embarked on an ambitious program to close more than 1200 unprofitable locations. Unfortunately, hindsight revealed that was also needed was an entire withdrawal method from certain geographic areas to achieve fficiencies of operations. In an effort market position, Scott responded by introducing the ill-fated Price & vanity advertising program. This advertising campaign focused on telling A&P employees and customers that the company had made a rebound and was concentrating on delivering quality products in attractive stores at low prices. It was a nerve stooling campaign. Modern Stores with pleasing wide aisles served as a backdrop to the ads. The Price & Pride fight was quite successful in luring customers back to A&P.Unfortunately , shoppers expectation were built on the attractive scenes shown in advertisements, and many were disappointed when they returned because most stores had not really been dramatically changed . As a consequence, customers again left wing in subst antial numbers to shop at competing stores. During the mid 1970s , an ambitious program was undertaken to build many naked as a jaybird and modern A&P stores and to remodel others. Regrettably , action fell behind(predicate) plans. For example, in 1977 when 70 new stores were planned only 46 were opened due to an inability to manage the program.Remodeling also fell far behind schedule. The Price and Pride program was finally abandoned in Jan 1978. Even before this occurred, Scott began to look in earnest for new ways to get the slow paltry giant moving heading in the right direction again. Once result was that a new promotional theme was adopted You will do better at A&P. on with this , three major steps were taken. First , action prices were instituted to pass manufacturers specials directly on to customers in the form of lower prices. Second , Generic products were offered in many stores.These plainly labeled packages were placed in scrimping cases . located in special parts of the store. The result was that for some products customers could choose between national brand, A&P private labels and generics. Third, trading stamps were instituted in many areas. Although some of these measures may have been helpful in slowing the retail chains decline , they certainly were not sufficient as a long run turnaround solution. In 1979, the diminishing giant fell to the 3rd position in the supermarket industry and showed signs of serious problems .During that year , the Tengelman group , which owns a large supermarket chain in Germany at the time was able to acquire controlling interests in A&P for an attractive price. James Wood was brought in to replace Scott . One of the first moves of James Wood was to stop closing stores . Instead , a number of units were converted in to confident(p) Store which were limited assortment unit stocking thousands of essential products far less(prenominal) than the 12000 products found in a general supermarket. The stores were als o no frill in design.Goods were kept in their cartons , as opposed to being placed on attractive sheleves , and shoppers had to purchase their own paper bags. The idiom was on offering bare bone services for low prices. However , perhaps because shoppers could not implement all of their shopping needs at Plus Stores, and because prices were not really drastically lower than their competitors , the Plus Stores proved unsuccessful as A&P entered the 1980s. 1. Does it gather upm that A&P has tended to favour any particular model or models of buyer behavior? What appears to be the degree of success that has resulted? . Evaluate the relevance of understanding consumer behaviour knowledge to developing a marketing plan for A&P .. 3. What excess information about customers would you as a CEO like to have before designing much(prenominal) a plan ? How might such information be acquired ? 4. Trace the development of A&P operations from 1979 to present based on library research. 5. Disc uss major concepts from Day 1 seminar discussions you see apparent in this case. 6. What is your personal opinion was the one major flaw in the way A&P went about its effort? Support your argument with reasons.