Marketing Management Case Study Solutions for MBA Students

 

Assignment Details:-

• Number of Words: 4000

 

FORMATIVE ASSESSMENT 1

 

OUTSTANDING PERFORMANCE IN EXTRAORDINARY TIMES – PRESS RELEASE

 

The Group reported an outstanding performance in a year which fell almost entirely within the Covid-19 National State of Disaster. The Group delivered market-leading sales growth of 10.0% in core food and groceries in South Africa, underpinned by sustained improvements across the Group’s customer offer.

Group earnings were impacted by trading restrictions on non-essential goods and services for parts of the year, which resulted in an estimated R4 billion in lost sales, and R200 million in additional costs related to the Group’s operational response to the Covid-19 pandemic.

Despite the impact of lost sales as a result of trading restrictions, Group earnings, on a comparable basis and excluding once-off costs, were down only 6.1% year-on-year. This is an outstanding performance in unprecedented circumstances, demonstrating the underlying strength of the Group.

Gross profit increased 4.7% to R18.4 billion, with the gross profit margin rising to 19.8% of turnover. The Group offset the impact of Covid-19 trading restrictions by delivering efficiency gains and cost savings across its supply chain – while providing greater value for customers.

Project Future, launched a year ago to drive modernisation and efficiency, enabled the Group to invest in lower prices, better value and improved service for customers. The Group delivered R600 million of cost savings in the first year of Project Future and is on track to deliver the target of R1 billion over two years.

Commenting on the result, CEO Richard Brasher said:
“I am very proud of this performance. Our market-leading sales growth in a difficult environment shows how we have kept our focus on our customers in the most challenging of times.

“Once the impact of once-off costs is taken into account, our earnings performance was exceptional despite all the
challenges and disruption of this extraordinary year.

“Customers are having a really difficult time. We responded by launching Project Future to modernise our ways of working and reduce our costs, so we can give more back to customers at lower prices. I am pleased that, as a result, we kept our price inflation below CPI food for another year. Both Pick n Pay and Boxer have focused on great value promotions on the items that are most important to our customers, and they responded very well.

“Many parts of our business have performed exceptionally well over the past year. Boxer is cementing its position as the premier food and grocery discounter in Africa. Our great value clothing business outperformed the market. The benefits of our Smart Shopper loyalty programme were embraced by more customers

“Our online business responded extremely well to cater for customers in the lockdown, doubling scheduled deliveries and click n collect orders. I want to thank our franchisees in particular for their extraordinary response during Covid-19, typified by how they expanded their click n collect services for customers in very difficult times.

“We are now going to integrate our various online channels by launching PicknPay.com. Customers will in future be able to shop seamlessly with Pick n Pay anytime, anywhere and in whichever way they choose.

“This is my last set of results before I retire. It has been a real privilege to lead the Group for the past eight years. My
legacy is to leave the business stronger than I found it – equipped to win in the years to come. I want to thank the
Chairman, the Ackerman family and the Board for their unstinting support.

“Most of all I want to thank my thousands of colleagues for walking every step of the way with me.”

“My very best wishes to Pieter Boone, who takes over from me today. He is an exceptional retailer and well-positioned to take the company into the future with confidence.”

 

Answer ALL the questions in this section.

Question 1 (25 Marks)

Pick n Pay Group reported an outstanding performance in unprecedented circumstances. In the context of the article, critically discuss with Pieter Boone the marketing strategies that Pick n Pay adopted to realise these results.

 

Question 2 (25 Marks)

In your discussion (from question 1), report to Pieter Boone the environment in which Pick n Pay operates, (Further research is encouraged).

 

Question 3 (25 Marks)

Pieter Boone is not sure about Pick n Pay “Project Future”, use this discussion as an opportunity to elaborate to Pieter the possible marketing implications of the project launched a year ago to drive modernisation and efficiency, enabled the Group to invest in lower prices, better value, and improved service for customers.

 

Question 4 (25 Marks)

“My very best wishes to Pieter Boone, who takes over from me today. He is an exceptional retailer and well-positioned to take the company into the future with confidence.” In the context of this statement, examine how Pieter can take the company into the future.

 

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