This paper analyzes Woolworth Supermarkets Ltd to internal and external environment. The paper also analyzes the marketing environment of the company while at the same time considering the competitive environment of the company. Woolworth Supermarkets is the largest retail supermarket chain in Australia. The company has more than 900 stores in Australia. The supermarket mainly sells grocery with its main items being fresh vegetable. Woolworth has more than 100,000 employees and its revenue for the year 2015 amounted to A$42.132 billion (Knox& Knox, 2015). The company’s strategic marketing and product positioning has been very integral to the success of Woolworth. It has been able to build a strong brand name over the years while building a reputation as the cheapest retail supermarket in the market. This paper analyzes the market environment of the company and the SWOT analysis to determine the internal and external factors that affect operations of the business.
The online retail business is increasing in popularity and additional investment will pay handsomely for Woolworth.
There is huge potential for Woolworth to become global by investing in developing countries where this industry is unexploited.
The company has an opportunity to use social media to increase customer base at a very low cost
The marketing mix analysis for Woolworth’s supermarkets will analyze the 4Ps of marketing as they apply in this company. The marketing mix will also analyze the marketing strategies and tactics used by Woolworth to become competitive in the market.
Product
Woolworths is the market leader in the Australian supermarket retail industry. The company provides a wide variety of products in its stores as well as in its online selling platform. Some of the products found in Woolworths stores include vegetables, fruits, meat, packaged food and all tires of fresh farm produce. Woolworths also offers consumers’ furniture, jewelry, men, and women clothing, stationary items, consumer electronics items and magazines (Zarrella& Zarrella, 2011). The company ensures that it stocks a wide variety of brands in each an every product category so as to ensure that consumers get everything they need at the stores. The company ensures that all its stores are adequately supplied with all the items that are required in order to avoid shortage.
Price
The supermarket offers a wide variety of premium brands and t has positioned itself as the supermarket of choice for one stop shopping as well as in terms of quality of goods and services offered. Therefore, the company tries to balance its prices with those of its competitors while at the same time selling products at a slightly higher price so as to safeguard its market position. The supermarket also sets prices depending on the market segment being served. The Supermarket has a reward program for customers for stores in Tasmania (Zentes,Morschett& Schramm2011). The program offers customers $20 per every 2000 points earned.
Place
Woolworths operates many stores which are distributed in all regions of Australia. The supermarket`s wide market presence helps it to easily distribute products in its portfolio as well as reach the final consumer. The supply chain design of Woolworths is made up the manufacturer/producer , the retailer which us the company itself and finally the final consumer. The short length of the supply chain helps in reducing costs as well as increasing convenience for all parties. The Supermarket also operates online stores where consumers can buy products online after which they are delivered to them.
Promotion
Promotion is a very important aspect in marketing especially in a competitive industry like the retail industry. Woolworths offers various loyalty schemes to encourage consumers to continue shopping in the retail chain and to attract new customer(Zentes, Morschett& Schramm , 2011). Some of the loyalty bonuses enjoyed by customer include discounts on petrol and other consumer goods offered by the retailer. Online marketing is also popular with Woolworths. The company advertises in its website, online magazines and other popular websites which enjoy huge internet followership. The company also uses its online stores to publicize its brand and advertise specific products. Social media marketing is also used by Woolworths to advertise its products. The company has both Facebook and Twitter accounts which have any followers. The use of social media marketing offers Woolworths an opportunity to save on advertising cost and to reach more customers.
The company should review its prices to make them more competitive in the market. Woolworths sells its products at a price that is slightly higher than that of competitor despite the fact that the quality and manufacturer is the same. The Supermarket should therefore use the competitive advantage of low cost and economies of scale to lower its prices since its market share is being eaten up by retailers such as Aldi`s. By setting the prices of the products at a low and reasonable price,the company will attract a huge customer base and increase its presence both locally and abroad.
Woolworths should expand its product portfolio to offer children`s toys, Men`s and Women`s footwear and sports equipment and accessories. Increasing the number of products offered under the Woolworths stores will help to increase revenue for the company(Zentes, Morschett & Schramm-Klein, 2011). The company should also introduce within most of its stores restaurants which will help to deliver more efficient services to customers. The restaurant chain in all Woolworths outlets will provide customers with a chance to enjoy meals and drinks within the premises as they shop. The restaurant will offer the company a competitive advantage over rivals since the customers will see it as a more convenient shopping store than competitors. This will in turn increase revenues and profits for Woolworths.
Woolworths should be able to offer loyal customers more discounts and better deals. This is because, there is huge competition in this industry from players such as Coles which have come up with a lot of programs to increase customer loyalty, retain and attract new customers. These programs include smart cards and special shopping discounts for loyal customers.
The retailer should integrate backwards to venture into other markets which will help to supplement the revenue from the retail business. Woolworths should invest in agriculture to produce products which are stocked in its stores. This will help the company to control its supply chain and at the same time reduce cost of supplies. Backward integration will also help the company to grow in all aspects of business. The quality of materials is also expected to be higher when the company integrates backwards (Tybout, Calder,& Kellogg, 2010). This is because the company will be able to able to control the quality of inputs in agricultural product(Pride, 2011). Woolworths will be able to supply itself with high quality fresh vegetables and fruits for sale in its retail outlets.
The retailer should expand in other regions apart from Australia. By doing this, Woolworths will be able to benefit from its already popular brand name and spread risk further. This strategy is very good for the long term given that the local market share of the retailer is reducing and hence it would be prudent to invest in other countries which have more potential (Sudhakar,2012). By globalizing, Woolworths will be able to utilize the opportunities and the potential that it has to become a major force in global retail industry. This strategy will increase the revenue base of the company by a huge margin and the profits of the company will increase in the long run.
Woolworths should continue pursuing its expansion strategy. The retailer should pursue its expansion in the local market by opening many more branches. This will help the retailer to reach more customers and to become more competitive in the market (Knox & Knox, 2015). By opening more retail outlets, the consumers will get all the items that they require without having to travel for long distances to look for the products. This will help to fulfill customer needs while at the same time fulfilling the objectives of the organization of achieving higher revenues for the company.
Woolworths should focus on its online retail business. This is because online retail is becoming a threat to conventional retail stores since online retail offers consumers convenience and better prices. Given the rate at which online retailing is becoming popular in Australia and other parts of the world, it is becoming fundamental for Woolworths to be successful in online retail business. By focusing its resources on marketing the online retail business, Woolworths will be able to gain a significant share of the market and therefore become more competitive.
Conclusion
Woolworths has very many strengths and opportunities that it can utilize to gain an advantage in the retail market and also to grow and expand. The opportunities that the company has include investing in developing countries where the market is not fully exploited. The weaknesses of Woolworths are that it has no global or regional presence and this makes it less competitive. The retailer also faces a serious threat from competitors such as Coles and Adls. In order to remain competitive in the market, Woolworths need to undertake various strategies such as increasing its product portfolio and integrating backwards.
References
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Knox, M., & Knox, M. (2015). Supermarket monsters: The price of Coles and Woolworths’ dominance. Collingwood: Schwartz Publishing Pty, Limited.
Tybout, A. M., Calder, B. J., & J.L. Kellogg Graduate School of Management. (2010). Kellogg on marketing. Hoboken, N.J: Wiley.
Pride, W. M. (2011). Marketing principles. South Melbourne, Vic: Cengage Learning.
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Zentes, J., Morschett, D., & Schramm-Klein, H. (2011). Strategic retail management: Text and international cases. Wiesbaden: Gabler.
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