Case Recap Superior Supermarkets was acquired by Hall Consolidated in 1975. It is a privately owned wholesale and retail food distributor. Superior Supermarkets is the smallest supermarket chain of Hall Consolidated and is located in Centralia, having a yearly sale of $192.2 million. The median size of the Superior Supermarket is 20.73 square feet which is considered small as compared to other supermarkets. But still it is ranked as number 1 or number 2 brands in its area (Kerin & Peterson, 2010). Problem Identification Randall Jhonson the head manager of District III and Superior Supermarkets has asked James Ellis who is the president of Superior Markets to re-evaluate everyday low pricing for the three stores in Centralia. Randall has also reviewed the market analysis of the company and figured out that Superior’s prices are relatively higher as to other supermarkets in the region and has also considered the price consciousness of the shoppers. He also emphasized the store sales which were rating below budgeted level in the very first quarter of the year. It is a very keen issue being raised by Randall as due to this problem Superior can lose the market share in its region. SWOT Analysis Superior Supermarkets are currently holding a well known market share and is the second largest supermarket in Centralia. It consists of three main stores; one is situated at North Fair View, the other at West Main Street and the third one is located at South Prospect. Superior Supermarkets have a number of strengths such as; Superior is carrying high quality merchandise as compared to its major competitors. It is providing an efficient advertising exposure to its consumers in terms of television, radio spots, newspapers and circulars. In the year 2002 it has a high rate of gross profit margin i.e. 28.8 percent where as the average profit margin of other stores is 26.4 percent. Superior is preferred to be the best supermarket for shopping convenience and is considered a good neighborhood store. Centralia shoppers appreciate the quality of appearance, cleanliness, friendly environment and excellent service provided by the Superior supermarkets. On the other hand, Superior also has some weaknesses. Its greatest weakness is the lack of strong consumer image. In addition, it’s pricing strategy is causing a huge problem for the company as Superior prices are being considered as “above average” by the shoppers. Although it is providing a very good advertising campaign but its current advertising expenditures are $127,500 which is equivalent to 89 percent of its sales where as its competitors are using only 1 percent of their sales on advertisement. The biggest opportunity for Superior store is increasing their market share by implementing everyday low pricing strategy. The company is facing some threats. Its biggest threat is its competitors named Harrison’s, Missouri Mart and Grand American. Harrison is highly appreciated by the customers and is a winner in quality, pricing, variety and convenience. Another threat for is their own positioning statement that is “Superior Supermarkets = Superior Value” this statement is confusing the customers as it is not fulfilling their perceptions which are related to the high prices of grocery meat and produce (Kerin & Peterson, 2010). Identifying the Root Problem Components If the current scenario of the Superior Super Markets is considered the biggest issue right now is it’s above average pricing strategy and the other issue is the