Discuss about the Marketing Stategy of 7 Eleven Company.
The report covers the prospects of marketing and the ways by which the marketing elements can be used to gain success in the competing business market. The report analyses the internal as well as the external environment that affects the growth of an organisation. The purpose of the report is to analyse the factors that affect a business organisation and the possible responses that can help it to remain competitive. A SWOT analysis is conducted for analysing the internal factors that affect an organisation. The purpose of the SWOT analysis is to identify the strengths and opportunities that an organisation possesses. Apart from this, it also helps in identifying the threats and weaknesses (Bull et al., 2016). The value of SWOT analysis is that based on it, organisations can make rectifications in their work structure. For the purpose of the essay, 7-Eleven has been considered.
7-Eleven is a convenience store headquartered in Texas. The parent company, however, is located in Chiyoda, Tokyo. This company is a collaboration between the Americans and the Japanese for improving their line of business. The company was set up in 1927 and currently have over 56,000 stores in 18 countries. The company started by selling eggs, milk and bread form a house located in Dallas. Despite the fact that grocery stores were available, the selling of bread and milk in convenience stores can help customers avoid long distance travels. The concept became popular and currently, the company is one of the largest convenience stores in the world providing work to over 45,000 employees. The product line of the company includes beverages, prepared foods, gasoline and souvenirs. These daily use items provide the company with an advantage to attract the customers (7-eleven.com, 2018).
In order to gain a competitive advantage, it is important that companies conduct a thorough analysis of the external as well as the internal business environment. This helps the companies to understand the competitors and the possible threats that may receive while conducting a business. Based on the analysis strategies can be formed that can help an organisation to excel (Babin and Zikmund, 2015). In the case of 7-Eleven, the company need to conduct a similar analysis that can help the company to strive for more success in the business market. Hence, to conduct a proper analysis of the external factors it is important that the managers of 7-Eleven conduct a PESTEL analysis.
The PESTEL analysis normally consists of the factors such as political, economic, social, technology, environmental and legal. These factors are important as it helps an organisation to understand the environment in a proper manner particularly during the time of expansion or during the launch of new products (Besharov and Smith, 2014). The analysis of these factors for 7-Eleven is conducted to understand the manner in which the company can deal with the issue.
Political: The political factors consist of the political turmoil that marks the progress of a nation. In the USA, the political factor plays an important role in the success of an organisation. A good political relationship with the USA helps companies from foreign lands to achieve success in the country (Cavusgil et al., 2014). In the case of 7-Eleven, this factor does not pose a threat as the company collaborates with the Japanese company. The friendly ties between the political delegates of Japan and America help 7-Eleven to attain competitive advantage in the country.
Economic: The economic factor is always a huge threat to companies. This is because fluctuations in the economic condition may hamper the profitability of the organisations. A fall in the economic condition can dent the purchasing of the buyers. This can be a huge loss for the companies, as the prices of the products need to be dropped to continue its sales (Chaffey and Ellis-Chadwick, 2016). Despite supplying products that are required to meet daily requirements 7-Eleven may also be a victim of the economic instability. This is because customers may prefer to buy cheap products from local stores rather than provide expenses in an internationally reputed convenience store.
Social: The social factor normally denotes the customers and the potential target market of organisations. Every company need to analyse the social backgrounds of the people so that the type of products that need to be sold are determined. Apart from this, the social status of the people helps in determining the price of the products (Dibrell et al., 2015). 7-Eleven need to analyse the social status of the people and based on this they can price the products. Identifying a target market is needed and the prices can be determined by analysing the economic condition as well.
Technology: In the modern day, technology plays an important part in the strategic decisions of an organisation (Fan et al., 2015). It is necessary for every manager to equip the organisations with the latest technologies that are launched in the market. In the case of 7-Eleven, the latest technologies can be the availability of mobile applications and online shopping. This can help the organisation to gain more customers and increase their dominance in the market. However, it needs to be kept in mind that proper human resources exist in the company to undertake the proceedings of the technical developments.
Environmental: Environmental factors focus on maintaining sustainability in the community. It is the modern motto of every organisation to maintain a sustainable practice so that the environment of a community is not disrupted. Hence, sustainable development is one of the most important factors of an organisation that helps it to achieve success (Armstrong et al., 2015). The products sold by 7-Eleven are not considered to be harmful to the environment. This is mainly because the products are manufactured in a way that it encourages only one-time use. Apart from this, the laws related to the conservation of environment are strict in the USA and in Japan. Hence, the company avoids the use of plastics and other harmful chemicals for the manufacturing and selling of products.
Legal: The legal laws related to setting up an organisation and conducting business is strict in the United States. This is mainly because the country focuses on conducting business with other countries that have a good political relationship with them. Similarly, setting up a local business need to go through a lot of paperwork before being registered as a legal company (Fleischmann et al., 2014). This does not pose a threat to 7-Eleven as the company collaborates with Japan. However, violation of company and ethical laws are considered as a punishable offence in the country.
Figure: PESTEL framework
(Source: Ginter et al., 2018)
After the analysis of the external factors, the internal factors of the company can be analysed by conducting a SWOT analysis. The purpose of SWOT analysis is to identify the areas of strength, weakness opportunities and the threats that a company may have (Hamilton and Webster, 2015).
|
Strength · Convenient location · Brand equity · Diversity of income |
Weakness · High rental cost · High cost of staffs · Franchises |
|
Opportunity · Development of market · Co-branding locations · Increased product offerings |
Threat · Competitors · Availability of online shopping · Shoplifting |
Table 1: SWOT analysis
(Source: Created by author)
The SWOT analysis shows that the biggest strength of 7-Eleven is the fact that it has a convenient number of stores in various locations. The company has over 50,000 stores all across the globe in countries that can provide enough profit to the firm. The brand equity of the company is such that customers tend to favour the store owing to its stability of gaining revenue in every outlet. The brand equity helps in gaining customer loyalty and reduces the price sensitivity issue. Apart from this, due to the collaboration with Japan, the company have a diverse form of income. This provides a stability of income and the company can have proper financial results to every extent (Jackson and Ahuja, 2016).
However, the weakness also results from the strength of the company. Due to more stores being located all over the world, the cost of maintaining it is high. Similarly, the cost of the labour is also high, as the people have to work 24 hours a day for its success. Without proper income level, the company can fail to pay the employees. Another weakness is that since the company is located in different places, franchises are made that make it difficult to gain control.
It can be said that despite the weaknesses 7-Eleven have opportunities in developing the market continuously. Every year the company tries to innovate its product and services so that it can expand more in the business. The stores are normally set up in large areas that make it convenient for the company to store more products for future development. Hence, the innovated products can be stored and used in crises (Kline, 2016). Another opportunity of the company is that it covers a huge geographical area with its retail offerings and being partners with local firms. For example, entering into a partnership with a coffee chain can help the company to get more expansion in the market.
However, the biggest threat to the company comes from the competitors. Organisations like Exxon Mobil Corporation, Royal Dutch Shell and D&B Hoovers are some of the competitors of the company. The fact that these companies possess the facility to provide online shopping opportunities to customers provides a huge threat for 7-Eleven. Apart from this, shoplifting in the USA is quite popular. As mentioned earlier 7-Eleven covers a huge area of land and as a result, it becomes convenient for shoplifters to perform their deed.
Target market:
In order to identify a target market, it is necessary for managers to identify the segments that define a customer. These segments can be identified by conducting a proper market research and ensuring that the segments are identified based on the behaviour of the people (Hollensen, 2015). It is to be noted that the market segmentation needs to be based on the characteristics of the consumers and the location of the people in the society. Hence, it can be said that in case of 7-Eleven, the company need to target customers based on the characteristics and the responses they provide to the products of the company.
|
Geographic |
Demographic |
Behavioural |
Psychographic |
|
7-Eleven is located everywhere and it is important that the company choose a convenient location. In the US, the company needs to be located in residential area so that the people can gain easy access to the stores |
The company can target every people as the products sold can be used by people of all age and gender |
Customers that provide value to the products need to be targeted by the company. Therefore, the target market needs to be loyal so that the company can earn more profit |
The simple nature of the products sold by 7-Eleven can suit any lifestyle and personality. |
Table 2: Market segmentation
(Source: Created by author)
Thus, based on the analysis of the marketing segmentation, it can be said that 7-Eleven needs to target the customers that live in residential areas. The area covered by the company can be within a range of 30 metres from the place of the location of the store. The type of products that the company provides can be a firm favourite for the young generations and for people interested in cooking activities.
New product/service description:
Based on the SWOT analysis, it can be said that the major improvement of 7-Eleven needs to be in the form of providing online services to the customers. In the modern day, this is an important factor, as most people tend to prefer to shop online (Meyer and Peng, 2016). Customers prefer to sit at home and order for products. Hence, it is important for 7-Eleven to develop services that provide online shopping facilities and provisions to deliver products at home. The SWOT analysis provided the fact that the competitors of the company are well equipped in providing online shopping. Hence, this important development needs to be undertaken by 7-Eleven to elevate its competitiveness in the market. Based on this, 7-Eleven can analyse the marketing mix of the services provided.
Relevant marketing mix:
The relevant marketing mix of the company can be focused on the services that need to be provided by the company. The development of the new online shopping facility needs to be such that it can reach the target market. Hence, the elements of the marketing mix can be analysed separately to provide an idea of the implication of the new service.
Product: The product that needs to be delivered to the target market can be of any type. This can open up the chances of increasing the profitability and customers can choose from a wide range of products (Huang and Sarigöllü, 2014).
Price: 7-Eleven can provide discounts on the products purchased online. However, if any product needs to be delivered beyond the 30-meter area from the place of the store needs to be charged extra. This can be an effective profit-making strategy for the company.
Place: The place of the store needs to be located in the residential areas with services being provided to any area within the distance of 30 meters. The restriction can help 7-Eleven to focus on the target customers and provide the best quality service (Pati et al., 2018).
Promotion: The promotion of the development of the new service can be done via advertisements on a social network. This can help the customers get the link directly and visit the stores for ordering products online (Wild et al., 2014).
Physical evidence: The physical evidence can be a denting factor for 7-Eleven as the quality of milk and egg needs to be tasted by the customer before purchasing. This is important, as the people need to be certain about the quality provided by the store (Lim, 2018).
People: The target customers are the people that need to be focused on. The younger generation needs to be the prime target for the online service as the consumption of beverages does not need physical evidence as compared to the purchase of other consumable goods.
Process: The process used for delivering the goods need to effective. The motto for the company needs to deliver the goods within 24-48 hours depending upon the availability of the products. The company need to abstain from taking full payment in case of delay in delivery.
Conclusion
Hence, it can be concluded that to improve the products and services of an organisation, it is necessary that 7-Eleven elevate its strategies in a way that it can help in improving the stores. The introduction of online shopping application can help the company to reach out to the customers and meet their requirements. To eliminate the weakness of the company it is necessary that 7-Eleven employ more people to take care of the franchises. The type of payment provided to the employees needs to be based on the work done in a quality manner. Thus, these changes can help 7-Eleven grab the opportunities that are presented in front of them and become one of the most reputed stores in the world.
References
7-eleven.com, 2018. 7-Eleven | Your Go-To Convenience Store for Food, Drinks, Fuel & More. [Online] Available at: HYPERLINK “https://www.7-eleven.com/” https://www.7-eleven.com/ [Accessed 19 January 2018].
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