As far as the retail industry of Australia is considered, it has been analyzed that there are almost 140,000 retailers in this business but only few of them are leading the industry with the strategic moves. Some of the market leaders of retail industry of Australia are Woolworths, Coles, ALDI, SPAR etc. competition is this industry is very fierce for the market leaders as there is no major difference in their market share (“Woolworths Supermarket – Buy Groceries Online”, 2017).
Above figure suggests that Woolworth is the company that acquires 36.3% of the total market share of the retail industry in Australia on the other hand the biggest competitor of the company that is Coles is just 3.1% behind in the race of market share. Woolworth is the company that deals with range of products. The first store of the company was opened at Sydney in the year 1924. The company has used the strategies of mergers and acquisition to expand its business at this level (“Supermarket weep:
Woolies’ share continues to fall and Coles and Aldi split the proceeds”, 2017). The Woolworth Ltd. is the company that deals with many brands such as Big W, Dick Smith, BWS, Tandy, Woolworth supermarket etc. from all these businesses of the company, the supermarket business is most successful and major source of income for Woolworths Ltd. As far as the number of stores is considered, it owns around 3200 stores across Australia and New Zealand. The international presence of the company is in India in collaboration with the Indian firm called TATA as joint venture.
Mission statement of the company suggests that it wants to be the customer’s 1st preference in terms of grocery and daily essential products.
As far as the values of the company is considered, there are following values that company follows:
Quality and style- Deliver the best
Value- A simple and fair deal
Service- We always think customer
Innovation- Discover the difference
Integrity- Doing what you say you will do
Energy- Be passionate and deliver
Sustainability- Build for the better future
Issue 2: Analysis 5 C’s of the Woolworth
Company: SWOT analysis
It helps in determining the major strength and weakness of the company as well as the opportunities and threats available for the company.
Strengths:
Financial strength: The most important and the major strength of the company are its financial capabilities. As discussed that the company has highest market share percentage in the industry thus earns very high profit and revenue (Fulop, 1988). Around 25% of the company’s whole profit comes from the food and retail stores of the firm.
Better supply chain management: The Company owns great supply chain and distribution network. The capability of the firm to integrate its resources and capabilities in in bound and it bund logistic helps in developing a great network of distributors that supports the company’s sales.
Brand image: Woolworth is considered as the most trusted brand. The reason being that, it is the most older brand of its times and thus people are experiencing its services from many years.
Weakness:
High operating cost: As the company operates in much business and has large market share thus it needs to invest more in all kinds of activities related to the business. This suggests that the operating cost of the company is very high as the operations are conducted at very high scale (Dibb, Simkin, Pride and Ferrell, 2005).
Opportunities:
Growth opportunities in the heath food sector: The Company has a great opportunity to release the products that are healthy as well as tasty (Jobber and Ellis-Chadwick, 2012). This is because most of the customers these days are very much heath conscious and want to intake healthy diet.
Business expansion: The Company also has the opportunity to expand its business in other foreign countries. This helps the company to compete with some of the foreign players like Aldi and also helps in developing the brand image of the organization along with large customer’s base.
Threats:
Uncertainty in economy of Australia: As Australia is facing slow economic growth, thus it is a threat for the businesses in Australia. Woolworth also has the threat from this uncertainty as these results in low purchasing power of the people in Australia.
Foreign small retailer brands: There are many such brands that are established in Australia based at foreign countries. One of the brands is Aldi. This brand is a very big threat for the company as it is acquiring the market share as well as the customer’s base of Australia by attracting the customers.
Customer:
As far as the customers are concerned, this point discusses about the customers type of the company. The following figure suggests the share of customers who shops from the Woolworth stores:
The figure suggests that 43% of the customers want to shop from the stores of Woolworths. The company has released the 3 year strategy to be customer oriented firm. This is because the company wants to target almost every group or segment of customers. As Australia is the country with developed become so the purchasing power of the people in the country is very high. This helps the companies like Woolworth to target the upper class people. The main target for Woolworth is upper middle class people as well as the working class.
The economy of Australia also supports the company to target those high class and high income people as they can easily be attracted for the high price products Woolworth is selling. It is very much contrasting with the positioning of the firm as the firm has positioned itself as the brand that is a low cost brand with convenience shopping experiences (Cravens and Piercy, 2006). This contrasting strategy helps the company to be related with all groups of people.
Collaborator:
Collaborators involve the distributors and the suppliers that help the company to develop its distribution network. Woolworth is the company that operates in retailor sector and thus does not producer its own products (Aaker, Kumar and Day, 2008). This suggests that company needs the help of mediators such as suppliers and distributors to distribute the products. There are two major functions in the distribution services of the company. The first one is logistic that involves the help of distributors and another is procurement in which the materials or the products are procured from the manufacturer by the help of suppliers. The produce of Woolworth directly goes from suppliers to the distribution center. At those centers the quality of the produce has been checked and certified. The company has the distribution experts and effective and strong relation with their suppliers.
Competitor:
The rivalry in the industry old supermarket of Australia is very high. This is the result of entrance of some retailers from foreign countries that are acquiring the market share. Another reason of high degree of rivalry is the undifferentiated products that have been offered to the customers (Malhotra, 2008). This is because the products that are sold in the supermarket are not very much different from each other and thus made the switching cost of the customers very low. This also affects the customer’s loyalty in negative way. As far as the immediate competitors of the company are considered, Coles is the company that competes closely with Woolworth. They both are the market leaders of the industry. Entry of Aldi has changed the scenario as the entry of this firm has declined the sales of Coles and Woolworth.
Context:
Political environment: Government affects the supermarket industry directly. This is because it sis the industry that serves the edible products to the people and any issues in the products can harm the customers. Australian competition and consumer commission (ACCC) is the regulatory authority is the one who is responsible for regulating the functioning of the supermarket industry. The government of Australia is quite stable and thus supports the companies like Woolworth to grow and enhance (Lovelock, 2011). The descent relation of Australia and New Zealand also support the Woolworth’s New Zealand business to conduct at stable situation.
Economic factors: The factors such as unemployment and recession affect the companies in the country a lot. These factors are the major factors of economy because they can affect the sales and the decline the revenues of the company. At the time of financial crisis, Woolworth has faced many loses in its revenue (Grönroos, 2007). This is because the crisis results in decline of purchasing power of the people and thus they were focusing on buying the products from the small retailers.
Social factors: Woolworth is the company that believes in sustainability and green lifestyle. The company has started its strategy of sustainability in order to support the society. Social and cultural changes also affect the supermarket industry and their offerings. Now days people are becoming more health conscious and thus it act as the opportunity for Woolworth to launch some of the healthy food products from the customers.
Technological factors: AS far as the technology is concerned, it has been analyzed that Woolworth is the company that is very much updated with the technological tools. The company uses almost the entire social media tool to communicate with the people. it is also the first retailer to subscribe Global Electronic Marketing and Merchandising Network.
Legal factors: As far as the retail industry is concerned, the basic legal framework for the industry involves recruitment laws, employee management policies and taxation policies. The quality of the food that has ben offered to the customers is also regulated by country’s government.
Issue 3: Market Research
As the Woolworth is the leading for in the industry, that does not mean that it need not to look for the changes in the market and need not to conduct market reproach. Market research is necessary to maintain that position for the companies that are on the top in the industry (Mehta, Phillips, Ward, Coveney, Handsley and Carter, 2012). Research is done in order to find out what the customers want, what is role of collaborators, what are the changes in the market etc.
In order to find out the needs of the customers, Woolworth conduct online surveys and interact with the people daily o social networking sites. The reviews of the customers on these sites help the company to know about their needs and requirements. Market is not only consists of customers but another major factor of market’s competitors that are also needs to be considered in order to conduct the research.
This is because the moves of the competitors help in framing the policies of the company accordingly (Grönroos, 1994). The biggest and the closest competitor of the company are Coles. Aldi is also the small retailer that has entry the market and proves to be a big competition for Woolworth as well as for Coles. As far as the context of the industry or the market is considered, it has been analyzed that the market is very much dynamic and the switching cost of the customers is very low. Any new offer by any of the company or the retailer can attract the customers and there is very less brand loyalty. Collaborators also play a great role in the process. Collaborators help the company to know about the condition of the availability and the cost of the materials requirement to produce the products.
Issue 4: Recommended strategy:
Choice of target market:
According to the market analysis, it has been analyzed that the target market for Woolworth should be the people who are heath conscious and wants to have healthy and tasty diet.
The above target market is recommended to the company because the company has already acquired a large customer’s base in almost all of the sectors. Thus, the introduction o healthy food in the store helps the company to even target the people who are away from all the fat diets and look for the products that are healthy to eat.
Value proposition for the target market:
Value proposition can be defined as the degree of value the products will deliver to the customers. It is the extent to which the products solve the problem of the customers after having the experience of those products. As in the recommendation the concentration is on the healthy diet and food products thus the value proposition associate with these products are related to heath of the people. The products allow the customers to have a healthy diet along with taste. It attracts most of the people who are heath conscious such as the people who regularly visits gym and do exercise. The people like these have to take the social diet that has been offered by their gym instructor or dietitian. If the products are available at the same store then it will be easy for them to grab their required products under one roof.
Positioning statement for the target market:
The positioning statement that needs to make in order to position the products in the minds of the customers should be:
“Combination of freshness, heath and taste is here”
The above statement is used to position the product because the products that needs t be launched by the company are healthy products along with the taste. As Woolworths already have the positioning statement related to fresh products so adding the words such as health and taste may also attract the customers who are heath conscious and wants the food that is healthy, fresh and tasty as well.
Issue 5: Marketing tactics by 7P’s
Recommended marketing mix for Woolworth:
Products: the products that have been recommended to be launched are the healthy diet products such as diet cold drinks, low fat butter, low fat oil, healthy ready to made oats etc.
Price: The pricing strategy that should be taken into consideration is penetration pricing strategy. This is because the products range that has been recommended to be launched is very much new or the company and thus company need to penetrate into the market for new market segment.
Place: Place of marketing mix involves the location at which the products are available. These products would be available only at the same stores of Woolworth where it is already selling all other products but the company should launch the products at the stores which are near to the gyms or any fitness Centre. This is because these are the healthy products that cater the health conscious people.
Promotion: The promotional strategies that have been used to promote and market the products should be endorsement and advertising. Endorsement by any of the famous celebrity who is heath conscious and idol for healthy people and TV advertisements can help the company to make people area about the ,launching of new products. Distribution of the products samples at the gym can also help in promoting the products.
Process: Process involves all the activities that are conducted to deliver the products to the consumers. The delivery process of these healthy products should be such that fresh products are mg delivers to the customers. This is because healthy products are generally perishable and can get deteriorated with the quality if stayed for long. They should be kept in proper required temperature so that they cannot get rotten.
People: People involve the customers as well as the employees. The customers that are being targeted are health conscious customers. The company can also take advantage of involving a dietitian who can provide the customers with the diet chart.
Physical evidence: the physical evidence explains the ambience and the tangible this associated with the products. The packaging of the products should be attractive enough and the area where these products are kept should also be such that it provides an experience of a healthy ambience and feeling.
Conclusion:
This report concludes that assessing the market environment and conducting market audit is very necessary to know about the environmental factors and their impact on the company. Woolworth is the company that is the market leaders in its industry. The company has great supplier and distribution network. It has been recommended to the company that it should come up with the healthy products range so as the target the segment of the market that is yet not be targeted by the company
References:
Aaker, D.A., Kumar, V. and Day, G.S., 2008. Marketing research. John Wiley & Sons.
Cravens, D.W. and Piercy, N., 2006. Strategic marketing (Vol. 7). New York: McGraw-Hill.
Dibb, S., Simkin, L., Pride, W.M. and Ferrell, O.C., 2005. Marketing: Concepts and strategies (p. 850). Houghton Mifflin.
Fulop, C., 1988. The role of advertising in the retail marketing mix. International Journal of Advertising, 7(2), pp.99-117.
Grönroos, C., 1994. From marketing mix to relationship marketing: towards a paradigm shift in marketing. Management decision, 32(2), pp.4-20.
Grönroos, C., 2007. Service management and marketing: customer management in service competition. John Wiley & Sons.
Jobber, D. and Ellis-Chadwick, F., 2012. Principles and practice of marketing (No. 7th). McGraw-Hill Higher Education.
Lovelock, C., 2011. Services Marketing, 7/e. Pearson Education India.
Malhotra, N.K., 2008. Marketing research: An applied orientation, 5/e. Pearson Education India.
Mehta, K., Phillips, C., Ward, P., Coveney, J., Handsley, E. and Carter, P., 2012. Marketing foods to children through product packaging: prolific, unhealthy and misleading. Public health nutrition, 15(09), pp.1763-1770.
Supermarket weep: Woolies’ share continues to fall and Coles and Aldi split the proceeds. (2017). Roy Morgan. Retrieved 18 May 2017, from https://www.roymorgan.com/findings/7021-woolworths-coles-aldi-iga-supermarket-market-shares-australia-september-2016–201610241542
Woolworths Supermarket – Buy Groceries Online. (2017). Woolworths Online. Retrieved 18 May 2017, from https://www.woolworths.com.au/Shop/Discover/about-us
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