Marketing consequences of merging Sainsbury's and ASDA

Walmart proposes to sell ASDA to Sainsbury's, creating a UK retailing giant that would increase efficiencies--and possibly intensify the supermarket price wars.

Sainsbury's would manage the new entity, with Walmart as a shareholder and partner.

One marketing consequence is the ability for the combined company to pay less for goods and services purchased in larger volume. This will, in turn, reduce costs and therefore allow for lower prices--a key element in this competitive industry.

So far, Sainsbury's says it will slash prices by 10% and will not be closing any stores after the merger is complete. UK regulators may require the sale of some stores to rivals, which would be another marketing consequence of the deal. The marketing environment for all UK retailers could change as a result.

Finally, how will consumers react? Will the merger change consumer behaviour? We'll have to wait and see.