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Brand loyalty not price cutting

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The Mall Group, Thailand’s second largest retail chain, will complete a product regrouping of all of its divisions next year, shifting from a price-cutting strategy to a focus on increasing sales from loyal customers, says media reports.

This is due to the sharp sales increases that took place following earlier reorganisations of its supermarket, electrical appliance and cosmetics units under the Home Fresh Mart, Power Mall and Beauty Hall brands respectively.

As its senior vice president, marketing, Chamnarn Maythaprechakul, said the company had combined its kitchenware, home decoration and bedding divisions into one product category under the brand ”The Living”. It has also merged its stationery, books and gifts into another category named ”Be Trend”.

A similar approach would be applied to all men’s apparel and in the sport division by the end of this year, he said.

“Since we changed our supermarket to Home Fresh Mart and turned cosmetics into Beauty Hall, our customers have been remembering the brand character of each product department and have more loyalty to them,” Chamnarn said.

”The move will help us go away from the price-cutting strategy in the ‘red ocean’ to a ‘blue ocean’ because both the products and services and atmosphere that customers experience at The Living and Be Trend zones will be absolutely different from our offerings in the past,” he said.

The approach derives from the bestselling book Blue Ocean Strategy, which encourages businesses to venture into new areas where competition is not as heavy as in the ”red ocean”.

With the new strategy, apart from grouping products into the same zone, the company would develop a new logo for each category and increase the merchandise mix to serve a wider range of customers.

The number of exclusive products available at the three department stores would increase to 20 per cent, up from 10 per cent of total merchandise.

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