The Great Atlantic & Pacific Tea Company

The bang-up Atlantic & Pacific Tea Company For decades The Great Atlantic & Pacific Tea Company (A&P) had dominated the US forage and grocery commercialize. However, with its size had come increasing knowrial inefficiencies and an inability to do to demands of changing foodstuff. A very crucial error was make in the 1950s when A&P failed to follow customers in their move to suburbs. The terminus, which plagued the super commercialise range of mountains into the 1980s , was a large number of small and inefficient stores service declining urban neighbourhoods.In 1971, William J Kane took over as chairman and CEO of A&P. This was a time when company 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 frequently the alike as an old A&P and was closely the same size (which was rat her small and cramped by industry standards).The bombastic difference between WEOs and companys conventional units was set out prices on 90% of the merchandise and a reduction in the mixing 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 volume business. He hope to take up many former customers by employing low prices, unfortunately the diet 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 deterioration of the food lusus naturae. In 1973, the retail kitchen range lost its number one(a) 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. Scott embarked on an driven computer architectural plan to close more than 1200 unprofitable locations. Unfortunately, hindsight revealed that was also needed was an spot slight withdrawal from certain geographic areas to achieve fficiencies of operations. In an effort market position, Scott responded by introducing the ill-fated Price & Pride advertising program. This advertising advertise 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 spirit building campaign. Modern Stores with pleasing broad(a) aisles served as a backdrop to the ads. The Price & Pride Campaign was kind of 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 dra matically changed . As a consequence, customers again left in tangible numbers to shop at competing stores. During the mid 1970s , an ambitious program was undertaken to build many mod and modern A&P stores and to remodel others. Regrettably , action fell behind 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 moving 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. A wide with this , three study steps were taken. First , action prices were instituted to pass manufacturers superfluouss directly on to customers in the form of lower prices. Second , Generic products were offered in many stores.These simply labeled packages were displa ce in economy 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 whitethorn attain 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 third 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 pick up controlling interests in A&P for an attractive price. James woods was brought in to replace Scott . One of the first moves of James Wood was to tick off closing stores . Instead , a number of units were converted in to convinced(p) Store which were limited assortment unit stocking thousands of essential products far less than the 12000 produ cts found in a general supermarket. The stores were also no choker 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 emphasis was on offering bare bone services for low prices. However , perchance because shoppers could not fulfill all of their shopping needs at increase Stores, and because prices were not really drastically lower than their competitors , the Plus Stores proved hitless as A&P entered the 1980s. 1. Does it seem that A&P has tended to choose 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 companionship to developing a marketing plan for A&P .. 3. What additive 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 operat ions from 1979 to present based on library research. 5. Discuss 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.