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HI5004 Marketing Strategies Paper Editing Services
Marketing management enables an organisation in the efficient and effective sale and distribution channels of the company. It helps in various aspects of business like sales distribution, advertisement, developing marketing strategies and tactics. According to Kotler & Keller (2012), marketing management of an organisation refers to science and art of adding value to achieve predetermined profits of the organisation. In recent times, most of the large companies divide its business into Strategic Business Units (SBU) for proper allocation of resources and funds. It also enables top management to take a strategic decision making regarding a particular SBU like Divestment, downsizing, planning new business etc. without affecting other SBU’s. For a better understanding of marketing management in a business environment, an example of Woolworths Limited has been taken.
Brief description of organisation
Organisation under consideration in this report is Woolworths limited. Woolworths limited is the second largest company in terms of revenue in Australia. The company works in retail industry market with other business like liquor, hotels, petrol, general merchandise etc. Woolworths limited is also included in top 100 companies list of Australian company i.e. ASX- 100. ASX-100 is a list of top 100 large and mid-size companies of Australia ranked according to market capitalisation. Some of the other large companies in the retail sector are Blackmores Limited, Coca-Cola Amatil Limited, Graincorp Limited, Wesfarmers Limited, Aldi stores etc.
As per Integrated report (2016), vision of the company is to become a leading retail company in southern hemisphere and mission of the company is to become first choice of the customers in their area of operation. The company has done significant work in achieving these missions and visions due to which there has been an increase in adjusted profit before tax by 14.7% in 2016 as compared to 2015. The company is focused on customers as a marketing management tool to increase sales and grow in retail industry market.
As per a report of Hodgson (2015), Australian retail market is has become very competitive in recent 10 years. Consumers have become more sophisticated and demanding in their choices due to rise in online shopping. It can be concluded from their report that Australian retail market is highly competitive and likely to grow at a significant rate in near future.
5 C’s of marketing
As per the views of Winn (2012), these five factors i.e. company, customer, competitors, collaboration and climate enables an organisation to understand the business environment in which it is working and take marketing decisions for success and growth. These are important which help in making a brief understanding about the complex task of marketing has to be made. There are five key areas which are taken into decision making while analysing various key factors. These key areas or 5 C’s of marketing are discussed below:
5 C’s of Marketing management
In the present case of Woolworths limited analysis has been made on various marketing parameters while discussing the above mentioned 5 C’s marketing theories. It gives standard guidelines for analysing various business decisions. Accordingly, future plans are to be formulated while taking into consideration past case studies and to forecast strategies for ahead. A detailed discussion of above mentioned 5 C’s of marketing in the context of Woolworths are discussed below:
In this area tries to determine what are the demands of customers in the business environment and make strategic plans to fulfil these demands. It helps in determining whether or not the organisation is able to fulfil the needs and wants of customers. Objective of this factor can be fulfilled with the help of researchers on marketing segments like trend analysis, frequency of purchase, determining purchases pattern. In Australia, major of customers in retail sectors are inclined toward online shopping. To increase online business platform, the company is finding opportunities in area of digital business channels and advance technology.
In this area, company determine its business environment, their products, their speciality which makes them different, strengths and weakness of organisation. The best way for an organisation to evaluate its strength and weakness is SWOT analysis. Swot analysis of Woolworths has been done as below-
1. Level of operation.
2. Second largest company in Australia in terms of revenue.
Dependence of Australian economy on China.
1. Expansion and introduction of a new range of new customers.
2. Shorter critical path for design and production.
1. Negative perception of consumers on price of products.
2. Competitive companies like Coca-Cola Amatil Limited, Graincorp Limited and Wesfarmers Limited.
In this area, company determines the outside sources which company can use for a better operational performance like distributors and suppliers. The company is very dependent upon timely and efficient working of these outside resources.
It is evident from an evaluation of business environment in Australia that it is a highly competitive market and there are various companies in retail industry. Currently, Woolworths is in competition with other retail market giants like Blackmores Limited, Coca-Cola Amatil Limited, Graincorp Limited, Aldi stores and Wesfarmers Limited. All these companies are included in ASX-100 list which shows that these companies have sufficient resources for giving tough competition to Woolworths limited. The retail industry is a growing industry with many business opportunities. These opportunities will attract new entrants and it will increase competition level for Woolworths Ltd.
There are various other factors which are affecting working of company in business environment which are discussed as follows-
Technological-newly developed technology has resulted in Woolworths Ltd to take sufficient measures to stay updated. These measure includes setting online platform, increasing IT security etc. which has resulted in increased cost to the company.
Economical-Australian economy is an open economy with no restriction on foreign investment. Due to an open economy, Australian companies are in competition with domestic as well as global market. This can be a hindrance for growth of Woolworths Ltd.
Collection of Information
According to the views presented by Ut (2013), a collection of accurate and relevant data is very important to fulfil the objective of survey. Data collection is important for research design, sampling design, data gathering and Data processing & analysis. The company should focus on quantitative data as well as qualitative data for efficient and effective research process. Research process is important in field of the retail sector to determine customer purchasing pattern, demand for a particular product, success and failure of a new product before launching etc.
Data can be classified by organisation in two broad categories i.e. primary data and secondary data. Primary data are first-hand data collected by an organisation with the help of surveys and interviews. Secondary data are second-hand data that are already collected by someone else and organisation evaluate such data with the help of reports and previously conducted surveys (Zikmund et.al., 2013). Some of the methods of collection of data are survey, interviews, questionnaire, focus groups, reports etc.
Woolworths limited conducted some survey to evaluate following 4 problems which were faced by company-
1. What customers want?
2. Which competitors pose a threat?
3. How the context of business is changing, if at all?
4. What role collaborators play in the process?
Company evaluated following conclusions from the research conducted by them-
Customer preferences have been evaluated by the company by proving questionnaire to the customer in different areas of Australia. Woolworths concluded from the results that preference of the consumers can be divided by them according to age group, income earning capabilities, purchasing power, location of customer etc. company have done proper product segmentation according to the requirement of customers to provide customer satisfaction to predefined groups.
In this survey, customers were personally questioned by surveyors to determine which other supermarket chain possesses competitive threats to Woolworths. Biggest name that comes forward in this survey as a competitor to company is Aldi Supermarkets. Woolworths which declaring their three-year marketing strategy stated that they are implementing new pricing and value strategy to minimise Aldi’s impact on sales of the company.
Changing business environment
It was evaluated by the company with the help of survey that due to advancement of technology customers are more inclined toward online shopping. Woolworths is trying to take this as an opportunity to grow in online market. Implementation of click and collect is best example of advancement of technology in the company.
Developing Marketing strategy
According to Jhamb & Kiran (2010), in today’s changing business environment consumer preference, behaviour and issues in retail changes dynamically. Therefore marketing strategies of the company should change accordingly. Marketing strategies can be for new products launched and existing products. Due to globalisation, a company should change its marketing strategies according to other global retailers like Wal-Mart, Tesco, J.C Penney etc. Woolworths limited is changing its marketing strategies according to domestic as well as global changes in retail sectors.
One of the major factors that affect the marketing strategy of retailers is the choice of target market. Target market should be selected according to by understanding consumer preference and a variety of products offered by organisation. Woolworths has a wide range of products to be offered to its customers. Therefore organisation would have a wide target market. Information collected by organisation in the previous step regarding customer behaviour and demands can be used to develop companies marketing strategy.
Due to a wide range of customers, Woolworths adopted consumer segmentation as one of the marketing strategies. Company has divided the customers into different homogeneous groups on the basis of location, age group, income earning capacity and purchasing power of customers. This strategy has resulted in better operational performance and better reach to customers.
According to Rintamaki (2011), value propositions help organisation to develop a sense of speciality which makes it distinct from its customers. Value proposition refers to the value customer receives from the organisation, its services and its products. It can form a basis on which a customer can prefer a particular organisation instead of its competitors. Over the period of time Woolworths have developed value propositions in various aspects of business like online shopping, seasonal discounted offers, free home delivery, and attention to consumer satisfaction. One of the distinct features of Woolworths is click and collects which make it different from its competitors.
Woolworths has announced a three-year marketing strategies to capture over Australian retail market. Major importance is given to the customer satisfaction as managing director, Brad Banducci, stated: “We are placing the customer at the start of everything we do” (AFN Staff Writers, 2015). Some of key features of these strategies are mentioned below-
Pricing and range strategy-Woolworths limited stated that company will offer better quality products at reasonable prices. New strategy includes lower prices, better range and discounted offers for target customers to compete with other supermarkets especially Aldi supermarket.
Establishment of new stores-the main objective of this strategy is to establishment of new stores and modernisation of current stores in Australia. The company stated that it will redevelop around 80 stores per annum in near future. It also plans to open 20-30stores per annum in high population growth rate areas of Australia.
Technological Development-one of the best online features of the company is “click and collect”. In this customers can order their products online and instead of waiting for 3-4 days they can collect product from their nearest click and collect store. The company is planning to open 250 new Click and Collect stores making total stores to 1000.
New customer offers-Company is planning to invest in new customers offers which would be funded with reduction in indirect investments. These costs will be reduced by cutting non consumer facing roles in company by 400 jobs.
Staff performance review-Performance of in store employees will be evaluated with the help of ‘Customer first system’. This will improve both staff performance and customer satisfaction which will be helpful for financial performance and growth prospective of Woolworths.
From all the above plan it can be said that if company did a proper follow up on these plans than it company will gain customer loyalty and it can give tough competition to other supermarkets in retail industry.
Developing Marketing Tactics
Marketing tactic is a set of strategic methods with an objective to advertise organisations products and services with a motive of increasing customer satisfaction (Armstrong et.al, 2012). Concept of marketing has been continuously changing over the period of time and if organisation does not follow these strategies then it may find themselves behind their competitors. One of the best examples of this is evolution of concept of marketing mix which has evolved from 4P’s to 7P’s. Marketing mix can be defined as a promotional tactics and plans with the help of which company promote its products and services (Enache, 2011). 7P’s of marketing mix are evaluated in context of marketing strategies of Woolworths limited.
Price- It is an amount decided by company for its products and services offered by them. It includes cost of manufacturing, other indirect costs and profit margin desired to be earned by company. Woolworths limited have planned to decrease its prices of product by reducing cost of unproductive employees. This pricing strategy will attract customers toward the company.
Products- It includes items and services which are actually sold by the company. Woolworths in in retail industry hence it offers variety of products to their customers. Integrated report of company has stated that company will provide better quality of products to increase customer satisfaction. Quality of a product always plays very importance role for a customer to decide which company he will prefer.
Place-Goods and services offered by the company should be easily available to the customers. Woolworths limited have various stores in all over the Australia and around 750 clicks and collect stores for ease of customer shopping.
Promotion- These are various tools with the help of which organisation conveys information about the current and newly launched product and services. Woolworths limited has very extensive promotion policies that include advertisement, personal selling, PR management, sponsorship and social media.
People-In recent time, people management is proving to be very useful for success of the organisation as having skilled and qualified people in the organisation is very important. Woolworths have very effective recruitment and training policies which enable organisation to find best possible recruits.
Processes-All process in Woolworths is directed through online processing which helps the organisation in saving operational time. There are many threats which occur due to involvement of information technology in the company. Proper securities measures have been implemented by the company to mitigate these risks.
Physical evidence-Even if the consumer is paying for intangibles, there is always physical evidence present with the organisation. The company should document such evidence for a reasonable period of time and report such documents to top level management. Woolworths have an effective approach for documentation in an organisation which helps to maintain transparency with customers.
In this report, we have discussed marketing strategy of the company in a dynamic business environment. We have discussed environment of Woolworths limited in the retail industry of Australia. We have evaluated various reports and a statement issued by Woolworths limited like integrated report 2016, annual report 2016 and three-year marketing strategy issued by the company in 2015. Surveys have also been conducted by the company to evaluate issues faced by the company. From this report, we can conclude that retail industry in Australia is growing at a very effective rate and there is a scope of development for Woolworths limited.
AFN Staff Writers. 2015, “Woolworths announces new strategies to win over grocery shoppers”, Australian Food News.
Armstrong, G., Kotler, P., Harker, M. and Brennan, R., 2012. Marketing: an introduction, Pearson Prentice-Hall, London.
Enache, I.C., 2011. “Marketing higher education using the 7 Ps Framework”. Bulletin of the Transilvania University of Brasov. Economic Sciences. Series V, 4(1), p.23.
Hodgson, F. 2015, “Australian retail 2015: Welcome to the Hunger Games”, Ferrier Hodgson’s annual retail industry report.
Jhamb, D. & Kiran, R. 2010, “Retail Marketing Strategies: Need for a Relook with Changing Preferences of Consumers towards Retail Formats”, International Journal of Retail Management & Research, vol 2, issue 4.
Kotler, P & Keller, K.L. 2012, “Marketing Management”, Pearson Education, Inc. pp60-64.
Rintamaki, T. & Mitronen, L. 2011, “CUSTOMER VALUE PROPOSITIONS AND CO-CREATION OF SERVICE IN MULTI-CHANNEL RETAIL CONTEXTS”, University of Tampere Management School, pp. 1-14.
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Winn, M. 2012, “Situation Analysis Continued- The 5 C’s”, Business Strategy, Ecommerce Basics.
Woolworths Limited. 2016, “2016 Integrated report”.
Zikmund, W.G., Babin, B.J., Carr, J.C. and Griffin, M., 2013. Business research methods, Cengage Learning.