Global Marketing And International Strategies – A Case Study On Woolworths

Marketing Mix

Discuss about the Global Marketing and Various International Strategies.

According to Dos Santos et al. (2013), every organisation in today’s competitive business world tries to expand its business after earning the expected sales revenue as global marketing will help an organisation to cater the international customers for holding a best position in the global market. Woolworths, a famous supermarket chain in Australia intends to open outlets in Johannesburg in order to increase its customer base and market share. The target market of Woolworths is various locations in Johannesburg to capture minimum 31% of the market. Even the management of Woolworths has planned to enter the Johannesburg market in a process of joint venture with local companies. At initial stage, Woolworths opens only three supermarket outlet in Johanesberg and the business exerts plan to open more than seven supermarket by next two years (Woolworths.co.za., 2016). The positioning strategy of Woolworths has been developed only after analysing its competitor company Edgar’s market strategies. However, the positing strategies of Woolworths involve its creative and unique product and making a proper positioning statement. The marketers have make an appropriate competitor analysis and identifies own unique positioning strategies with innovative ideas.

There was an economic turmoil during the era of 2008 in the global economy; therefore, the business experts of Woolworths have planned to expand its business during 2010 in various location of Johannesburg, South Africa after a thorough consultation with the finance managers of the company. However, the retail sector was not affected because of the global economic downturn. The marketing mix strategy of Woolworths helps the company to know the constant changing purchasing behaviour of the customer. Igumbor et al. (2012) have mentioned that marketing mix reflects the actual desires of the customers of the targeted market in successful manner. The marketing mix strategy involves product place, price and promotion.

Figure 1: Marketing Mix

(Source: Wagiciengo & Belal, 2012)

Product	·         Woolworths is specialised in selling the groceries product such as fruit, vegetables, meat and packaged foods and other stationary products such as DVDs and magazines. ·         All offered grocery products of Woolworths are 100% fresh and it is the attracting part of this supermarket for capturing the target market in Johannesburg (Woolworths.co.za., 2016). ·         All the offered products of Woolworths maintain a world class standard as the main priority of the management is to provide the consumers the healthy groceries.
Place	·         Woolworth operates in various location of Johannesburg including Morningside shopping centre, Cresta shopping centre. ·         Woolworths Food is located in Rustenburg road. ·         Woolworths intends to open three more store in various location of Johannesburg for business expansion with a strict following of the global marketing strategy in appropriate manner. ·         The head office of Woolworths that is in New South Wales of Australia controls and handles every business operations of Woolworths in Johannesburg.
Price	·         The price of the products of Woolworths varies according to the availability. ·         Even the management provides seasonal sales on such fixed products, which attract the customers of Johannesburg (Woolworths.co.za., 2016). ·         However, the marketers have thoroughly analysed the pricing strategies of competitor companies in the retail industry of Johannesburg and tries to offer a bit low price for their products in order to attract both the new and existing customers.
Promotion	·         The marketers of Woolworths have used both the raditional and modern platform of promotion. ·         Woolworths provide advertisements of products seasonal sales and discounts on the magazines, local newspaper of Johannesburg. ·         Pereira & Ruysenaar (2012) have mentioned that the effectiveness of the social media platform cannot be neglected in today’s technological world. The management of Woolworths uses the social media platform such as Twitter, Facebook, Instagram, log and official online website of the company in order to aware the customers about the availability and features of every products. ·         The promotion process actually helps to attract the new generation of customers as mainly 80% young generation of Johannesburg access various social media (Woolworths.co.za., 2016).

Table 1: Marketing Mix

(Source: Triegaardt, 2014)

The marketing mix of Woolworths maximises the chances to achieve a continual and steady success in the business operation. Even marketing mix strategies help to provide the products according to the requirements and demand of the customers in particular marketplace. This above-mentioned 4Ps is effective to meet the established goals and objectives of Woolworths in Johannesburg.

As Woolworths intends to open new supermarkets in various location of Johannesburg, therefore, the marketers and business experts employ effective and potential strategies to capture the market. Atkins & Maroun (2015) have stated that the market entry strategies of an organisation should be made on cutting down the basic operation cost and expectation of low return of sales revenue than expectation. However, Woolworths is a famous supermarket retail chain in Australia, which expands its business in various location of South Africa including Johannesburg, Tanzania, Uganda and Nigeria. The product strategies of Woolworths in Johannesburg include improved products than the existing products in the market offered by the competitor companies such as Tesco, Walmart, Macro Wholefoods Ltd. and Aldi. Even Woolworths have concentrated on the niche market just after its entrance in the retail industry of Johannesburg. Battersby & Peyton (2014) have mentioned that the process of innovation during the entry of a company in a completely new marketplace should be incremental or radial. Woolworths develops various new channels to distribute the products in various location of Johannesburg’s Woolworths supermarket. All the products of Woolworths are offered to the consumers according to their demands and criteria.

Product Strategy

Sanchez Rodrigues & Potter (2013) have suggested that pricing strategy plays an important role for an organisation, which is making its move in other countries for business expansion. As Woolworths appeared in the retail supermarket industry of Australia, when there is already the other supermarket chains such as Aldi, Walmart and Tesco have enjoyed a stable position in the marketplace.

Factors	Justification
Average income	R781,032 – R96,088
GDP	GDP growth of Woolworth in Johannesburg is calculated at 2.0% in the last year.
Tax	Woolworths tax and interest rates increase by 54.32% in this continuing year because of its excellent performance in the retail industry of Johannesburg (Woolworths.co.za., 2016).
Currency exchange rate	Currency exchange rates vary as it operates through the partnerships of franchises.
Average competitor price	The average competitor price is 15% lower than the other existing competitor companies are.
Product cost	It has been reduced by 12% in this present year.
Distribution cost	Distribution cost remain same like the previous year
Labour cost	Labour cost has been increased by 17.32%.
Material cost	Raw material cost has also been developed by 31% because of the price hike of the source of raw materials in the retail industry of Johannesburg.
Marketing cost	Marketing cost has been improved by 21% in this current year because the management of Woolworths have planned new way of channels of marketing fr attracting the new generation of customers in Johannesburg.

Table 2: Pricing strategy

(Source: Börzel & Thauer, 2013)

At the initial stage of market entrance in Johannesburg, Woolworths keeps the price of its offered products low than the products of other competitor companies in order to steal the consumers of those companies and can earn minimum level of sales revenue of its expectation. The management of Woolworths have employed modern technologies in order to reduce the cost productivity and operation process. The business experts of Woolworths have developed a completely new pricing strategy to enter the retail market of Johannesburg, such as promoting and launching products on online platform (Woolworths.co.za., 2016).

Figure 2: Pricing strategy

(Source: Chinomona & Dubihlela, 2014)

As opined by Nhamo & Swart (2012), the psychology of the consumer determines the purchasing power and preferences of the customer. Therefore, the management of Woolworths keeps the price of its products after a thorough market research of the buying behaviour and preferences of the targeted consumers. Wolworths have maintained the factors such as market penetration, skimming and relationship bundling.

Nattrass & Seekings (2012) have referred that place is significant for expanding any kind of business in various location across the world. The selection of appropriate channel design mix can be considered as challenging process for Woolworths as it is new in the retail industry of Johannesburg. The marketing goals and market segments of every company usually vary from the other (Rudansky-Kloppers, 2014). Woolworths employs the social media platforms as an effective medium of distribution and marketing channels. Even the business experts of Woolworths manage these channels with resolving conflicts in between the organisation employees and management, evaluating employee performance and the existing products. Preferred intensity of distribution involves not only the goal of an organisation with increasing the existing value of the entire business targets. Even it involves the distinctive competencies, willingness and ability to take risks during the critical challenges encountered by the company. Woolworths has selected the location of its supermarket in a popular and crowded place in order to attract a large number of targeted customers.

Pricing Strategy

Integrated Marketing Communication (IMC) plan involves the awareness of the customers to the brand loyalty of the particular organisation. Hamann (2012) has mentioned that integrated marketing communication helps to archive the established goals and objectives of an organisation in appropriate manner. Woolworths’ business experts and managers have used IMC as an important tool and vehicle for brand positioning in strategic manner with a potential integration of a particular mode of communication and marketing channels, which ensure a consistent, clear and transparent message for the maximum reach to the targeted and segmented consumers of Johannesburg in South Africa. With the help of appropriate promotional mix strategies, Woolworths have become most trusted and recognised retail brand in the retail industry of Johannesburg (Woolworths.co.za., 2016). Woolworths is efficient and capable enough to provide a world class shopping experience to its targeted and segmented consumers as it will help to retain the present saes revenue. It will also open up a perfect scope and possibility for earning more sales revenue at the end of the year by denoting and determining a stable and strong position in the market share.

According to Kruger & Fourie (2015), people involve the employees, targeted customers and the shareholders of an organisation. In the case of Woolworths in Johannesburg, the entire success of this supermarket lies on its retaining capability of its targeted customers. Woolworths enjoys more or less 80% happy customers in various location of Johannesburg, who prefer to shop only with Woolworths rather than other existing companies in Johannesburg. The management of Woolworths engage more than 10,256 inhabitants of Johannesburg as their efficient, potential and trustworthy employees of the organisation (Woolworths.co.za., 2016). Even the suppliers of Woolworths are enough supportive, which helps the business experts to make effective strategies according to the demand and criteria of the segmented and targeted customers as the suppliers of this company includes dairy producers, farmers and other associative, who contribute more than R600 billion into the company economy every year. The suppliers also speed up the delivery process as Woolworth also provide the facilities of doorstep delivery of daily products to its customers in certain fixed location from its outlets and supermarkets. The demand of the customers helps the business experts of Woolworths to come up with completely new, unique and innovative product to attract both the new and existing customers of Woolworths in Johannesburg. Hughes et al. (2015) have stated that customers are always hold the centre position of any kind of business as it has enough capability to determine the ultimate business future of an organisation and to retain a stable position in the particular marketplace where it operates its business in perfect manner.

Place Strategy

The entire process of economic evaluation differs with the transforming decision of the consumers for crave of completely new products in the market (Mortimer, 2014). As Woolworths have entered into the market of Johannesburg with innovative product, which is completely unknown in the retail industry of Johannesburg therefore, the customers cannot accept these products at initial stage. Rudansky-Kloppers, (2014) has reflected the fact that total market calculation is required before targeting and retaining the customer base of a particular country. As Woolworths has established its goal to achieve minimum 13% after its entrance into the retail market of Johannesburg, therefore, the economic evaluation of Woolworths involves an important process of a systematic and specific identification, valuation and measurements of the outcomes and inputs of the alternative business operation, functions and activities.

As opined by Hughes et al. (2015), the basic purpose of economic evaluation helps to identify the adequate course of business action, which is completely based upon the available evidence within the specific marketplace. Woolworths’ economic evaluation suggests the comparative analysis of various alternative courses of the existing business actions, which can be calculated both in term of consequences and costs of the business operation of this company. Woolworths target, those customers, who are adaptive enough with the changing demand of the retail industry, therefore the expected revenue of this company after the present annul year is minimum 14.235. However, the financial managers of Woolworths will decide effective strategies to increase the sales revenue by 30% at least at the end of next five years (Woolworths.co.za., 2016). Both the internal and external factors can determine the economic evaluation of Woolworths in Johannesburg. In order to reduce the operational cost of the business, the management of Woolworths sources the local suppliers and manufacturers.

References

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Woolworths.co.za. (2016). Woolworths Online Shopping | Buy Clothes, Food, Homeware, Gifts, Beauty & Fashion | Woolworths.co.za. Retrieved 30 September 2016, from https://www.woolworths.co.za/