Globalization has expanded opportunities for corporations to market their products to larger areas (Kotler & Armstrong, 2010). Technology has further provided impetus to corporations to extend their products to markets where physical existence of the corporation is not present. Feasibility study has been included in this analysis to understand a product’s target market, segmentation and consumer behaviour regarding the product (Hollensen, 2010). For the purpose of analysis Coles Supermarket Pty Ltd has been selected and product category selected is private label branded products of the Company.
Coles Supermarket Pty Ltd operates in Australia and is a retail supermarket consumer chain that has its headquarters located at Melbourne. The Company’s parent company is Wesfarmers. The Company was established in the year 1914 and carters to over 801 locations. John Durkan is the current Managing Director of the Company (Nenycz-Thiel & Romaniuk, 2012). The Company is highly profitable with over 100,000 employees. The Company sells and distributes various well-known brands present in Australia. Recently the company has expanded its operations by integrating Coles Online, which is the Company’s online shopping portal. Along with distributing products of other companies, the company has started manufacturing private label branded products as well.
The company manufactures various essential products in its private label brand including products of daily use. Coles have earned high brand loyalty amongst its customers for providing fresh produce to them. Hence, the Company easily markets and has generated large market share in its private label branded products (Malhotra & Peterson, 2014). In the current discussion ecommerce market for Coles private label branded products will be analysed. The scope of this current analysis deals with deeper and detailed consumer, market and industry analysis of the several private label branded products of Coles in Australia.
Coles is primarily an Australian branded that has been extending its retail product categories to consumers. Analysis of consumer trends of the Company reflects high brand loyalty existing for its products along with private label brand (Armstrong et al., 2015). A deeper analysis of segmentation, market size assessment and diffusion will allow detailed understanding related to the same.
Demographic Segmentation: Australian retail has witnessed a rapid growth in the last century with adoption of ecommerce ways of doing businesses. Both genders male and female, from age group 24 years to 65 years forms the consumer segment for private label branded products for Coles. An income standard that has been targeted through this category includes mostly all income classes including middle and upper income groups (Jobber & Ellis-Chadwick, 2012). However the scope of the current analysis deals with quality products that are catered by the company at appropriate prices.
The above market growth of annual spending of USD$4,500, reveals that the market size has grown overall in Australia to include more customers. Immigration has further added to such annual spending (Trevena et al., 2015). Amongst total retail online sales that takes place, it has been seen that Coles private label branded products occupies almost 33.2% share. Meaning that Coles private label branded products has high rates of diffusion compared to other private label branded products.
Geographic Segmentation: According to scope of analysis that has been undertaken here it can be understood that Coles catering to Australian markets have been analysed. Geographic areas that Coles caters to are various cities including suburbs of Australia (Dibb, 2010). Therefore, the Company’s market size can be compared to the entire retail customers present in Australia. Moreover it can be understood from market share that the Company has a high rate of market diffusion.
Psychographic Segmentation: Coles private label branded products are purchased by customers who are highly aware regarding quality of the products along with appropriate price range.
Behavioral Segmentation: Consumers who prefers convenience in purchasing products online are the behavioral group that Coles will cater to. The below analysis mentions the various products that the consumers prefers to purchase online. Coles Australia’s product strategy will aim at accompanying these products in their range of products such that they are able to attract large number of customers.
In order to understand product likeliness it becomes essential to analyse target market for the organization. Then understanding target market’s consumer behaviour will allow developing greater insights into product strategy, pricing and promotion or distribution strategy as well (Needle, 2010). Market Segmentation of the products conducted for Coles private label brands allows ascertaining target market consumers for the ecommerce business well. It can be understood that target market that the Company will aim at is from age group 24 years to 64 years. Mostly female will form the target group while designing promotional strategies, as it has been ascertained that women do most shopping for groceries of the family. Occupation of the target consumer group includes mostly those engaged in white collar jobs. Consumers who do not have much time to visit a grocer’s store to purchase items of daily needs will constitute the major target customer group. The consumer will possess smart phone from where they will easily be able to place order, with an inclination to make purchases through e-businesses. Retail purchasers through ecommerce platform are on a gradual rise and are set to increase further (Solomon, Russell-Bennett & Previte, 2012). Hence, the Company’s strategies will be dedicated at all such customers residing in Australia, who wants to make valued purchases through mobile phones or apps. Mostly Australian customers, who have a brand inclination towards Coles and high regards for high quality products and affordable price range, will be targeted.
Consumer behaviour for retail class of consumers can be said to be mostly need based. A customer in this target market category once faced with need to make purchase regarding a particular product category will search for information online and then make purchase related to the product (Horta & Camanho, 2014). There are various factors that will influence customer choice towards Coles private label branded products. They mostly include societal factors, economic (income) related factors, family and friends groups, personal and psychological factors. Coles product and pricing as well as promotional strategies will have to aim at influencing all these factors such that consumer need regarding products gets finally transformed into choices of products from Coles Supermarkets.
In order to cater to economic factors for consumer behaviour analysis, the Company needs to attend to family income, personal income, expectation regarding future income, standard of living and liquidity or consumer credit avail in the market. Analysing these economic factors of the market will allow arriving at conclusive decisions regarding the consumer’s behaviour attitudes. However, as Coles caters to retail products in the market, its private label branded products are more competitively prices in comparison with others. Therefore, the Company can easily extend competitiveness in regards to these factors.
Personal factor analysis reveals that it is integral to understand consumer’s age, occupation, life cycle stages and personal as well as self-concept. Within these personal factor analysis Coles can extend the benefits of its organic products to health of consumers which will help it create a niche within the market.
Psychological factor analysis reveals that private label brand products motivation, involvement with the product, perception related to the products, learning, lifestyles and attitudes can contribute to making product purchases. These dimension analysis reveals that consumers have relatively less motivation and involvement towards purchasing private label branded products of Coles; therefore efforts need to be made accordingly. Cultural and social factor analysis reveals that culture, subculture, social groups, role and status determine product choices. Therefore, private label branded products in case are able to motivate certain social groups will be able to become leaders in the market.
Australian retail sector is characterized by presence of large number of retailers. Along with presence of large number of real store retailers there is present varied number of online retailers as well (Burke, 2011). Competitive pressures within the industry are fierce and immense due to presence of wide number of competitors and variety of products. Therefore, prevalence of indirect and direct competitive pressures, Coles has to devise its competitive strategy and position them accordingly such that it is able to attract sizable number of customers.
The Company adopts a positioning strategy that is matched to extend its core competencies. As earlier discussed, due to backward supply chain linking with Wesfarmers, the Company is able to deliver freshly made produce (Zarantonello & Schmitt, 2010). The core positioning strategy for the Company is to provide its customers with quality products at appropriate prices. The private label branded products of the Company is aimed at creating greater customer loyalty towards the Company. The Company provides its customers with a whole lot of range from various brands. Its retail stores are aimed at providing its customers with unique experience with choices of various product categories. With the expansion of its current private label branded product category, it aims to extend its relationship that it already has with its customers to the next level. However, there are multiple brand names within Australia that are manufacturing private label branded products and catering to their customers through ecommerce modes (Jansson-Boyd, 2010). This has provided fierce amounts of competition to Coles, who aims at providing high quality private label branded products to its customers.
Designing and ascertaining competitive positioning for the Company will allow understanding position of the Company in the market. The above mentioned perpetual map aims at providing a detailed insight into understanding trust value of various companies as against the quality of products delivered. Coles enjoys a high level of trusts in its various private label brands that it manufactures. The mapping of Coles relative to present market competitors reflects that the Company needs to conduct certain research in order to redesign its products, prices, promotional strategies in a batter manner. It will allow the Company to become highly profitable and enjoy high competitive share in the market as well. There are various other competitors who offer similar types of products as compared to Coles, therefore the sole focus of the Company need to be oriented towards extending its product in a manner that allows creation of niche in the market.
Marketing mix is identified to be a suitable appropriate strategy that companies adopt while deciding on its products, price, distribution strategy and promotional techniques. Analysis of target market, customer segmentation and perpetual map help reveal regarding Coles marketing mix strategy that it needs to adopt (Hooley, Piercy & Nicoulaud, 2012). Analysing target market feature and consumer behaviour patterns will further allow arriving at suitable marketing mix for private label branded products of the Company. The Company has been suitable able to position its private label branded products in the market, however it has not been able to gain substantial share across all product categories though quality maintained for the product is premium in nature (Luan & Sudhir, 2010). Below is recommended a suitable marketing mix strategy that has been proposed for Coles to be adopted.
The above recommendations related to marketing mix for the Company’s product will allow the Company develop brand value and brand identity in the market. It will help create brand awareness and also customer loyalty related to the same.
Conclusion
Coles Supermarkets constitutes a highly profitable brand with its consumer having high loyalty towards its private label branded products as well as other products. The Company develops a lot of strategies that can enhance performance of the private label brands further within the market. With expansion of Amazon Australia there is a tremendous amount of competitive forces that is faced by the organization. These several pressures can be overcome only with adoption of suitable competitive strategies such as providing customer with loyalty cards, other additional benefits such as free gifts and other home delivery options will allow the Company to further expand its brand. Moreover the scope of operation of the Company can be expanded through market penetration strategy that it can adopt to expand across multiple suburbs in Australia. Though the Company is highly profitable in Australia, yet it will be able gain substantial foothold in the market due to the recommended marketing mix. It will be able to compete with Amazon and other competitors in the market.
Reference Lists
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