Download Pep stores case study - UCT Graduate School of Business

MBA research in top international publication
A UCT Graduate School of Business case study has been published in a leading
strategy textbook that is prescribed in more than 200 business schools in 20 countries.
The case study, titled ‘Pep Stores: Retailing to Low-Income Consumers’, has been
published in the 4th edition of Bob De Wit and Ron Meyer’s Strategy: Process, Content,
Context. MBA alumnus Catherine McPherson, now a digital strategist at Chemistry
Communications Group in London, conducted the research under the supervision of
GSB marketing professor Steve Burgess.
“We’re pleased to see McPherson’s research recognised in this way. The case study is
intended to stimulate classroom discussion about profitable opportunities in low-income
markets. It has evolved during three years of use in our MBA programmes,” said
Burgess.
The research focuses on the upward mobility of many South African low-income
consumers and its effects on Pep Stores marketing strategies. Mlenga Jere, a GSB
senior lecturer in marketing, developed the teaching notes as the case study evolved. “I
believe that many marketers face the same segmentation and positioning issues in fastchanging emerging markets. We find that class discussion quickly turns to important
financial and non-financial impacts of marketing strategy,” he said.
Earlier in this decade, Pep was losing customers as their living standards rose and they
increasingly viewed Pep as “cheap”. The changing market challenged Pep to stay
relevant to two market segments: the traditional consumer segment with low living
standards and a new consumer segment that has recently transited to middle living
standards.
According to Burgess, Pep Stores shows the importance of staying close to consumers.
“Pep conducted research and responded to it thoughtfully and strategically. Promoting
learning throughout their chain, they repositioned the brand and developed new format
retail outlets. As a result, Pep stayed relevant to its traditional consumer segment and
reconnected with the new consumer segment. Sales turnover and profitability increased
dramatically.”
Ends
Media interested in an interview or more information can contact Jane Notten or
Michael Morgan on 021 448 9465 or email [email protected].