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Safeways' marketing strategy



Safeway Inc. (NYSE: SWY), a Fortune 500 company, is North America's second largest supermarket chain, with over 1800 stores located throughout the central and western United States and Canada. It also operates some stores in the Mid-Atlantic region of the Eastern Seaboard. The company is headquartered in Pleasanton, California.



The company's most notable private label brands from the past are Lucerne and Empress. Today, Safeway Select is the company's signature private label that offers an upscale range of products, a sub-label Primo Taglio is used for deli products and Lucerne still used as a dairy line. In 2006, Safeway introduced an organically grown and processed line of products named "O Organics".



Under the new (as of 2006) company branding structure, the Safeway Select has become a label used for only specific luxury items, while a more standard Safeway label (using the Ribbon Leaf logo) for more general-usage and standard items.


Lifestyle branding

On April 18, 2005, Safeway began a 100 million dollar brand re-positioning campaign labeled "Ingredients for life".


This was done in an attempt to differentiate itself from its competitors, and to increase brand involvement. Steve Burd described it as "branding the shopping experience". The launch included a redesigned logo, the slogan "Ingredients for life" and a four-panel "life" icon" to be used throughout stores and advertising.



Many stores are being converted to "lifestyle format" stores. In addition to the "inviting decor with warm ambiance and subdued lighting," the move required heavy redesign of store layout, new employee uniforms, sushi and olive bars, and the addition of in-store Starbucks kiosks (with cupholders on grocery carts).



The change also involved differentiating the company from competitors with promotions based on the company's extensive loyalty card database. At the end of 2004 there were 142 "Lifestyle format" stores in the United States and Canada, with plans to open or remodel another 300 stores with this type of theme the following year. "Lifestyle format" stores have seen significantly higher average weekly sales than their other stores.


Safeway fuel

Safeway has recently added Safeway fuel stations to some stores, along with a club card discount. Stores are required to monitor gas prices of competitors and lower theirs accordingly. Most participating Safeway stores sell fuel to consumers for less than their purchase price, but raise the price of select products to make up for the loss. Stores offer a six, seven, 10 or 11 cent discount on purchases over $50, encouraging consumers to buy more products with an already-increased price. Products typically not included range from alcohol, tobacco, pharmaceuticals, lottery tickets, and those purchased with gift cards.


Safeway ATM Network

The Safeway ATM Network is operated in Colorado and Wyoming. There are typically two machines located near the front of each store. Cirrus, Plus, Star, Nyce, Co-Op and most credit unions are on the network. The network was started in late 1998 in Denver and was expanded to Wyoming.



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