Main players
 Meredith Collins, VP of Marketing for Reed Supermarket
 Dollar stores are increasing competitorThe Dollar General (DG), , Family dollar, Aldi
poses threat due to its remarkable low price,
 Jack Morrissey, CEO of Reed Supermarket
 Other supermarkets like Wal-Mart, Costco
 Higher-end customers
 Food manufacturers—aldi, trader joe’s, sell mostly private label merchandise
Limited selection stores
a) The main problem or two key problems.
 Declining shares in the past in the Columbus, Ohio market—the fight for market share is
very intense due to large supermarkets, small regional chains, independents that include
lower priced TopVal, mid-range Galaxy (owned by Supervalu), and top-range Delfina,
three Whole Foods Market—Wal-Mart Supercenters, four Target Superstores, and one
regional chain, Five Warehouse outlets—three Costco and two Sam’s, low-end channels
like drug stores and gas stations (COMPETITORS)
 Unite States’ consumer price index is flat—customer are not loyal, they have become
savvy customers who shop at different stores for a best deal, Warehouse has attract
consumer bulk buying shoppers, the growth of private label foods, American consumers
has become health conscious—benefiting whole food stores, Trader Joe and others like
Reed,
 The perceive customer believe that Reed’s products are expensive—and price is
indeed higher, main problem pg 6
 Dollar special campaign might tarnish the image of Reed because it is too close to dollar
store offerings, it also lower margin but have a potential of increasing market share
b) Three (maximum) suggested solutions for either the main problem of for each of the key
problems
 Continue trying out the “special dollar” operation for a few more months, and make it a
permanent operation if it capture more customers for Reed
 Reposition Reed to continue having organic and high-end food products and also
incorporate the operating and pricing strategies that limited selection stores like Aldi’s
and Trader Joe’s operate on. This would be like how LAN Airlines added a low cost
business model to their airline. This might help them capture some more of the market
shares. This approach would capture the attention of customers who value quality over
price and customers who are price conscious, which in turn might create some loyal
customers. They might even pass the targeted 16% that the CEO Jack Morrissey has
set up, which in turn might give them at least a temporary competitive advantage.
(differentiate itself from the other supermarkets)
 The company can continue on carrying organic products but they can also emphasize on
the healthy aspect of the it, so they could meet the demands of the health conscious
Americans.
c) Pros and Cons for each of the solutions.
 The special dollar approach might confuse customers or tarnish Reed’s image and
possibly lower margin as Collins is worried about, but it will help it might increase market
share by creating a whole new customer base.
 High-end and Low-end operation would capture a new customer base, but might lose
some of its current high-end customers they might not properly understand the new
approach.

Focus on advertising to health conscious customers could help the company maintain
current and possible bring in new customers, but it could very expensive and limit the
company’s customer potentials.
d) Rationale for choosing one of the solutions, explain how this is the best solution.
 Reposition to have both low price and high quality high price products would be the best
solution because it would have a better chance of correcting the declining market share.
e) Link the case situation to the text (link it with a specific topic) and/or to a current news item.
For instance, if you were doing the WII case, the news item does not have to be about WII but
instead it should be about how some other firm is in similar situation as WII and what actions
they are taking!
 This case can be link to chapter five, product differentiation and environmental
opportunities. Reed already tries to differentiates its by offering long hours, attractive
stores, elegant creative service-case displays, and exceptionally attentive customer
service-offering free cookies to customer on the weekend, taking customers bags to their
cars without taking tips, high staffing to reduce checkout time. However, all these are
they can enhance these by having all these by offering more product variety for high-end
and low-end customers.