Discuss about the Coles Super Markets.
This paper talks about the Coles Supermarkets. The objective is to evaluate the depth analysis of the Coles Supermarkets. It enables to determine the marketing mix, marketing strategy, competitors and contemporary issues impact on Coles Supermarkets. Indeed, Coles Supermarkets is an Australian supermarket that founded in 1914 in Collingwood, Melbourne by G. J. Coles. It provides retail and consumer services. It has over 10000 employees that operate over 776 supermarkets by Australia. John Durkan is the CEO and managing director of it. Its slogan was “A little Better every day” that presents the motive of the organization. Further, G. J. Coles learned the retail business technique from his father from 1910 to 1913. G. J. Coles started Coles variety store in the Melbourne in 1914. It’s interested in food retailing in 1958. Coles started its branches in all Australian cities in 1973. (Graham, 2012). Moreover, the Western Australian organization Wesfarmers agreed to buy Coles at the cost $22 billion. It has planned for the restructuring of Coles that stated one of three planned department that would supermarkets convenience stores. Coles Supermarkets acquired National Australia Bank’s in Australia loyalty program FlyBuys. (Plunkett, 2015).
Evaluate the marketing mix: The marketing mix comprises of several key elements such as product, price, promotion, distribution, partnership, people, process and physical evidence. It is helpful to satisfy the potential customers and target market. These elements help the business to achieve the Coles employees requirement or needs. The Coles Supermarkets marketing mix is described below:
Product: It is the significant marketing mix elements that affected the Coles Supermarket. Coles Supermarkets product is its retail service. It attracts customers through providing convenient and effective service. It has many products or brand that a person could see in their daily life. It has many levels of private label brands such as Coles, Coles Smart Buy, Coles Organic, Coles Green Choice, Coles Finest, and Coles Simple Less; Mix clothing and Coles Simple gluten free. (Ferrell, et al 2014). Further, Coles will make more space for its supermarket shelves for new and creative brands around the consumer tastes. The retailer desires to pull away from a crowd of brand that requires discount and promotions to raise the sales. Furthermore, (Cox, 2011). Coles and International chef Heston Blumenthal has launched 15 new products with the name of the Heston for Coles that related to the meal, grocery, bakery and meat. Coles Classics Peanut Butter Ice Cream was awarded Gold by Dairy Industry Association of Australia (DIAA). It produced the new Coles mobile wallet that provides customers with easy access to their card transaction history and balance. It extends their financial services by adding life insurance products that include the Coles home insurance and Coles car insurance. (Graham, 2012).
Price: It is the significant factor that affected the buyer of any product or items. Coles Supermarkets use low price strategy to survive in Australian market. The aim of the pricing strategy is to attract large populations of customers. However, the high sales volume generates the Coles Supermarkets profitability in the market. (Booth, & Coveney, 2015). Further, a price of the grocery item is 15 percent low as compared to other Australian retail market. Slight rise in price is not seen easily that help to add profit of the Coles Supermarkets. Coles provides the volume discount in the wholesale price. It reduced price in discount offer in the market. Price should be flexible as per customer needs or demand. (Ferrell, et al 2014).
Promotion: Coles Supermarket is the framed of sales promotions, personal selling, advertisements and public relations. It advertises on website, newspaper and magazines. Coles pricing strategy helps to raise the sales of the organization. Its slogan “A little Better every day” pushes customer to take a buy decision quickly before they get expired. (Knox, 2015). The promotion strategy of the Cole’s Supermarkets helps to raise the organization caliber to attract customers to its brand and stores. Coles spend money to press releases to inform investors and customers about the programs, policies and strategies. (Gans, & King, 2004). Further, in the perspective of the marketing mix, promotion represents the several aspects of marketing communication that generate a positive customer response. The marketing communication decision involves promotional strategy, advertising, sales promotions and public relations. A research report said that store food and liquor sales growth at Coles would be 3.8 percent to 3.9 percent in three month end March. Cole’s decision to reduce everyday low pricing will be put the test because it reduces the credibility of it. (Knox, 2015).
Distribution: It is the significant marketing mix factor that affected the Cole’s Supermarkets business direct or indirect. Coles uses the intensive distribution strategy that design channel. Its stores offer the same kinds of goods that apply to each store. Coles opened new stores to reach more customers. Coles marketing mix distribution strategy helps to attract customers through making shopping convenient in term of location. Cole’s has over 776 supermarkets that spread in Australian states. (Armstrong, et al 2014). Further, Coles sold their product or service to wholesale dealer and they sold their product to retail outlet and consumer get Cole’s product from the retail outlets as per their needs or demands. (Knox, 2015).
[Chart 1, (Source: Knox, 2015)]
Partnership: Coles partnership with flybuys helps to raise the brand image in the Australia. Flybuys has largest royalty program in Australia that attract new customers. A partnership helps to raise the sales of the Cole’s because it reduces the initial cost of the organization to establish the new branch in the market. (Cox, 2011). It raises the goodwill of the new market because both are working together to achieve their objectives or goals. Partnership with Coles and Myer grew by Australia growth and acquisitions. Both are listed in Australian stock exchange. Coles operated supermarket while Myer operated a chain of mid market department stores. Both mergers become a largest ever Australian Corporation. (Armstrong, et al 2014).
People: An employee’s requires an appropriate aptitude, skills and service knowledge in order to deliver a quality service to their customers. All 77000 Coles supermarket employees payment has been underpaid due to cosy deal between the national retail union and Coles Supermarket. Coles employees are significant and they overhauled by districutive and Allied Employees Association (SDA). Coles deduct 20 to 25 percent pay from employees. (Ferrell, et al 2014).
Process: It is the significant factor of the marketing mix that affected the Cole’s Supermarkets. This process of business entities provides breakdown to explain the structure of the Coles supermarket subsystem layer. The structure of the subsystem layer is overlaid with a sequence of four core process that show the life-cycle of the Coles Supermarket. Chart 2 shows the four Coles core process in a time that described subsystem layers. (Murray, Poole, & Jones, 2006). Further, Cole’s manufacturing process should be easy and consumer friend that attracts the new customer of it. A unique process of the Coles raises the goodwill of it that would be beneficial for the long-term stability of it. (Armstrong, et al 2014).
[Chart2: (Source: Thampapillai, et al 2015)]
Physical evidence: It is the significant factor in the current online marketing business because a lot of fraud occurs in the market. So, the customer wants physical evidence such as building, website and registration in government authorized the organization before buy product of it. Then, the customer can contact organization regarding any product issues. (Grant, et al 2012). It contains the factors that are incorporated into a service to make it measurable and tangible. Ambiance, layout and branding are the significant tools of physical evidence. It has over 776 supermarkets in Australia that attract new customer because they can contact in case of any emergency. Cole’s building attracts the new customers. (Graham, 2012). Moreover, the Western Australian organization Wesfarmers agreed to buy Coles at the cost $22 billion due to high physical assets of it. It has a lot of physical stores in Australia that raises the assets that has a high cost in Australia market. A short level competition is healthy for the Cole’s growth and development. (Ferrell, et al 2014).
Marketing strategies: These are the significant marketing strategies for the Coles that is described below:
Location of the store: Groceries product buyer people don’t prefer to go to a far away from stores. So, Coles store influenced on sales performance of the products. Coles decided to open each store in cities to attract new customer of it. Coles have planned to open branches in each city of the Australia that would be beneficial for the organization growth and development. (Lyons, 2007). People would prefer to buy products or services from nearest branch that would save the time and energy consumption of it. Coles should focus to appropriate location when they opened new branches in the market. (Murray, Poole, & Jones, 2006).
Product classification and services: Coles Supermarket product classification is divided into two parts such as consumer and business. Consumer includes shopping, specialty, unsought and convenience. Business includes raw materials, installations, MRO suppliers, business services, component parts and accessory equipment. (United Nations. Statistical Division, 2014) Product classification is necessary for the organization growth because it helps to satisfy the customer needs or demands. It is the significant way to promote the Coles product in the market because it has several dimensions that helps to survive in the market. (Kalyanam, & McIntyre, 2002).
[Chart 3, (Source: United Nations Statistical Division, 2014)]
Store atmosphere: It is developed by the design, layout and color of a store. Coles works on interior and exterior design to develop an appropriate store atmosphere. Cole’s atmosphere must prompt target customers to visit the store to buy the product or service. (Lyons, 2007). A narrow area store doesn’t prefer by the customer to spend time in stores to buy product or services. Color, smell and sound affect the mood of customers to stay with stores and buy the product or services. (Murray, Poole, & Jones, 2006).
Competitions: Coles has a lot of competition in Australia from the Woolworths and Aldi’s. Competition is the part of any business. It raises the product or service quality of the Coles. The ACCC report said the Coles was workable competitive. (Davis, 2006). Further, the Competition Policy Review report said that it is not unduly concentrated. Competition will work as long as there are opportunities and incentives for entry. Through regulation of planning, liquor licensing and trading hours the Coles is the surviving in the competitive market. Mayer is great competitor of the Coles because both are old companies that surviving in the market from the long-term that raise the competition to improve the quality of product or services. Coles has 10000 employees while Mayer has 14000 employees that handling the organization manufacturing, sales, promotion and technical department to make number one in the market. (Thampapillai, et al 2015).
Contemporary issues impact on the Coles Supermarkets: Coles Supermarket is the fast growing company in the retail and consumer services industry. But, it affected from several current issues that is described below:
Employee turnover issue: Lack of worker continuity and turnover is one of the main issues faced by the Coles Supermarkets. If the employee turnover is less than as compared to other competitor’s organization that would be negative for the organization growth and development. (Davis, 2006). Cole’s employees are untrained as per new or updated features in the production and technical department. So, they have to provide training to guide about the updated features in the production and technical department. (Murray, Poole, & Jones, 2006).
Auditing issue: It is another significant contemporary issue in the Coles that faces regular basis. The Coles business is engaged in competition with another organization that can create forcing a need to keep tight, price wars and other significant data. (Grant, et al 2012). Coles is facing inefficient or poor auditing plan that make difficulties for the organization. Coles existing auditing system outdated and provide inadequate audits required to stay with the competitive market. (Graham, 2012).
Economic challenges: A price war between Woolworths and potential sharp downturn in Australian economic are two threat of it. Wesfarmers that owns Coles supermarkets, bunnings and retailing brands target is reason for slight jump in the stocks share price. Coles makes up around 46 percent of Wesfarmers profit has look 27 straight quarters of same store sales growth, liquor sales growth and outstripping Woolworths food. Woolford said that Bunnings and Coles are main drivers of Wesfarmers share price. But, sale contributions was weak during the year. A down in Australian currency against US currency would raise the Coles cost of goods sold, a proportion of Wesfarmers non-food products are sourced from offshore. (Davis, 2006). Further, different country has different economic challenges that affected the Coles sales volume. Climate change, global health crises, economic exclusion in the Middle East, global imbalance and conflict & poverty are the major challenges in the economy that affected the Coles Supermarkets. (Grant, et al 2012).
Corporate social responsibility: Corporate social responsibility (CSR) is the contemporary issue that impact on the Coles Supermarkets. CSR activities such as corporate philanthropy, sourcing, cause related marketing introduced by the Coles organization in last several years. CSR activities impact on the Coles performance on corporate financial performance. CSR has a positive impact on the Coles, but the underlying processes that lead to such positive effects on it. (Thampapillai, et al 2014). Indeed, CSR is the form of corporate self-regulation into a business model. It impacts as driver of customer royalty and favorable consumer buying behavior. In the other words, CSR is the title of the mission that guide the organization to represents for its customers. CSR is an initiative to assess responsibility for the organization to effect on social and environmental changes. (Grant, et al 2012).
Social media interaction: It is a tool that allows people to share, create, exchange information, ideas, pictures and career interests in networks. Face to face interaction main source of interaction. Coles Supermarket has social media interaction that achieved in the organization. It is the significant part of the organization that impact on the Coles Supermarkets. It promoted their product or service through social media interaction and explain their product feature in the market. It is the significant way to promote the Coles product or services in the market to achieve their objective or goals. (Murray, Poole, & Jones, 2006).
Advance in technology: It is the significant factor that impacts the Coles Supermarkets. Coles’ tablet based technology instead of the directs the team member to the exact location of each item that is efficient route possible with the module, shelf, aisle and position. Coles launched a new online shopping technology system to support online shoppers that would be beneficial for the Coles growth and development. Coles said that its sales are growing more than 20 percent a year due to technology changes in the organization. The IBISWorld research said that the online grocery sector in Australia is small, but it is growing rapidly with 15.3 percent annual growth from last five years. (Graham, 2012).
Ethical concerns: Ethical concern helps the Coles to select between alternatives that should be evaluated as ethical or unethical. It is a code of behavior and view governed by a combination of personal, legal, moral and social standards of what is right and wrong. Coles Supermarket business runs in Australia market through government norms. (Davis, 2006). The Australian Competition and Consumer Commission (ACCC) are representations of the Coles behavior in the market. The ACCC case argues that the Coles managers were under pressure to additional money from suppliers. The Coles was accused of leveling to suppliers for late or short deliveries. Coles and Woolworths misused their market power by unfair penalties on suppliers, discriminating against them in favor of label brands and demanding payments. Coles become the first supermarket chain that announced it has ‘ethical and moral responsibility’ to join with the fair work ombudsman. (Thampapillai, et al 2014).
Environmental concerns: It is the significant contemporary issue that impact on the Coles Supermarkets. Coles is exploring and investing the significant environmental projects to reduce organization environmental impact. It is improving efficiencies in our supply chain, focusing on waste reduction and recycling. (Lyons, 2007). Coles evaluate organization emissions, energy use and waste that minimize the impact of our operations on the environment. Despite of expansion store, we have reduced our energy use since 2009. Environment affected the business model of the organization. Australian environment plays significant role in the market. (Grant, et al 2012).
Globalization: Cole’s business is surviving in Australia market that has a positive or negative impact on the globalization activities. It is the significant way to raise the Coles credibility in the market. Indeed, globalization is the process of abroad integration from interchanges of world views, ideas, products and other aspects of the culture. (Lyons, 2007). Worldwide retail and consumer service companies are started businesss in Australia market that affected the Cole’s business model and sales volume. Because of, they are providing high quality product or services with low prices that is negative for the Cole’s growth and development. So, the Coles should evaluate the pricing and quality process of manufacturing that helps to survive in the current competitive market. (Murray, Poole, & Jones, 2006).
Conclusion
On the basis of the above discussion, it can be concluded that clear marketing mix, marketing strategies, the competition level and current issues that impact the Coles as well as high ability to adopt the new approach in the Coles helps to survive in the current competitive market. It is growing fast due to its unique strategy to handle the customer of it. It is delivering the product or service to customers as per their demand or needs. Product, price, place, promotion, distribution, partnership, people, process and physical evidence are the significant tools of the marketing mix that affected Coles Supermarkets direct or indirect. Location, product classification & services and atmosphere are the marketing strategies of the Coles. Employee turnover issue, auditing, economic challenges, corporate social responsibility, social media interaction, advance in technology, Ethical concerns, environment concern and globalizations are the significant issue that impact the Coles Supermarkets.
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