Discuss about theb Marketing strategy development for Wesfarmers Limited.
Wesfarmers Limited is an Australian conglomerate which operates in the retail industry, chemicals and fertilizers manufacturing, coal mining, and manufacturing of Industrial and safety products. Founded in the year 1914 as the Westralian Farmers Co?operative Limited, the organization is headquartered in Perth, Western Australia. The organization became the largest company operating in Australia in terms of their total revenue buy overtaking both Woolworths and BHP Billiton. The primary objective of the entity is to provide a satisfactory return to all its shareholders. The organization practices a strict financial discipline and with the exceptional Management by able leaders they are able to manage the diverse portfolio effectively and are progressing in a profitable manner in every sector that they operate in (Chaney, 2017).
Wesfarmers limited has developed a framework that is made up of the core values of the company and their strategies to create value for the organization. All of these Strategies and values are directed towards the achievement of the primary objective of Wesfarmers Limited of providing a satisfactory return to all the shareholders. The Wesfarmers Way Framework of the organization can be explained through the image below.
(Wesfarmers Limited, 2018)
The business organizations of Wesfarmers Limited are primarily divided into two major segments. The retail segment of the company constitutes one division and the rest of the operations are a part of the other division of Wesfarmers Limited (Jones, 2017). The organization also provides the detailed information of all the investors and shareholders on the company website. All the major shareholders of Wesfarmers Limited are included in the table below.
The core values of the Wesfarmers Way Framework the organization believes and thrives on or that of integrity, openness, accountability and boldness. Integrity is of high importance to all the members of the organization and the ensure that all their feelings are carried out in an ethical manner at all times. The organization promote a culture of openness and honesty and ensure that all the reports, feedback and ideas provided by the members of the organizations and even the customers or external stakeholders a shared and communicated transparently and honestly. The organization also provides its leaders and all the members the opportunity to accept their mistakes and learn from them without being too harsh. This ensures that the trust in the organization is maintained and the members can openly communicate across the organization. Accountability is highly valued in Wesfarmers and the roles and responsibilities are assigned by significantly delegating the responsibilities and the decision making power to all members of the organization. Because of this, each employee is accountable for their performance and for the performance of the team which helps in protecting and enhancing the reputation of the company (Scott, 2018).
The 5 Cs of marketing provide the organizations with the strategic tools to carry out the situation analysis.
The 5 Cs of marketing strategy for an organization include an analysis of its customers, company, competitors, collaborators and the context.
Customers: Wesfarmers Limited operates in a number of industries including the retail industry, chemicals and fertilizers manufacturing, coal mining, and manufacturing of Industrial and safety products. There are a number of customers that the organization serves today various businesses and all these customers are central to the operations and activities carried out by the organization. The organization carries out a regular assessment of their market size, projected growth and preferences of the customers which continuous to change over time. Wesfarmers also carries out the analysis of the entire purchase decision making process adopted by the customers and how the customers perceive the brand image of the organization (Corporation, 2012).
Company: Wesfarmers Limited is an Australian conglomerate operating in a number of industries and running various product lines. The organization has the primary mission of delivering value and maximum returns to all their shareholders and has diversified interests in the retail, manufacturing and marketing industry. The internal strength and weaknesses and the external opportunities and threats of Wesfarmers Limited are included in the table below.
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Strengths |
· More than 100 years old organization and brand legacy. · Emphasis of the organization on delivering quality products and maintaining high performance. · Huge variety of products and services offered through varied brands allowing the customers to make a choice from. · Wesfarmers gives a lot of importance to delivering with convenience and providing high quality customer service. |
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Weakness |
· Being a market leader, under continuous scrutiny for their actions and decisions. · The geographical presence of the company is limited to Australia only (Lehtinen, 2017). |
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Opportunities |
· They can expand the footprint outside Australia and New Zealand to the developing Nations. · Wesfarmers can run initiatives for enhancing the loyalty of the customers and employees toward the company. |
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Threats |
· Intensified competition between various organizations competing for the same customer segments. · The business is dependent on the economic conditions of the country. |
Competitors: There are a number of competitors and organizations operating in the same market as Wesfarmers Limited. Some of the major competitors of the organization are Myer, Woolworths Group, HS Home and Best & Less (Walsh, 2013).
Collaborators: The individuals and organizations that have shared interest in the growth and development of the company called its collaborators. The collaborators of Wesfarmers Limited are there suppliers, distributors, and the external stakeholders of the company.
Context: The context of the organization is the climate of the external environment that influences the overall working of the company. The political, economic, social and technological, environmental and legal factors majorly constitute the macro environment of Wesfarmers Limited. Each of these factors that contribute towards the growth and development of the company and impact their operations are included here.
The primary objective of Wesfarmers Limited is to provide a satisfactory return to its shareholders. The organization does this by continuously acquiring the organizations in the market and diversifying its portfolio while growing in an efficient manner and expanding their opportunities and operations. The organization needs all the relevant and valuable information in order to carry out the decision making and judgement. For this we need to first determined the information that is relevant to them and all that they need to know in order to make the decisions. Following this, the organization needs to actively seek out the information from various primary and secondary sources. Like all the organizations, Wesfarmers limited has also develop an effective routine for gathering the information that the required for making strategic decisions. The three basic steps that we follow for the decision making include gathering the information, taking a decision and implementing it. Accurate and timely information collected by the organization is essential for the decision making and a success in this stage translates into effective performance and growth of the company. The decision makers in Wesfarmers Limited continuously keep a watch on the market conditions and go through the reports and the data published by various Government and non-government sources regarding the economic and financial performance of the country as well as their competitors (Furrer, 2006). The organization also maintains an open communication throughout the company where the employees and even the customers can provide feedback and suggestions for the improvement and these are considered seriously by the company
Wesfarmers Limited believes in maintaining and environment of honesty and openness all across and therefore open communication is maintained across all levels of management for all the divisions of the company. The organization also carries out the internal analysis regularly by studying the internal strengths and weaknesses and analyzing the external opportunities and threats that come their way. The analysis of the financial performance of the company is carried out through the various analysis tools like the cost benefit analysis, calculation of financial ratios and studying the financial projections of the company with the help of the annual performance and the reports published by them. The marketing division of Wesfarmers Limited also carries out market research regularly in order to identify the preferences of the current and the potential customers and to analyze in the presence of their competitors along with their strengths and weaknesses. The market research also allows the company to find out the current situation of the market and carry out strategic planning which help the managers in fulfilling the mission of the company and working towards their strategic vision (FDIC, 2015).
While Wesfarmers primarily operates as a retail organisation, there are numerous other businesses and divisions of the company. The excursion into diverse businesses and industries subjects the organisation to various legal regulations which the need to comply with. This makes the external environment of the organisation complex and challenging to manage. There are numerous regulations, laws and government policies that the organisation has to abide by. The corporate governance policies of Wesfarmers Limited provide all the relevant information regarding the charters and the group policies followed by them. The roles and responsibilities of the board and the management of the company are shared by Wesfarmers Limited in their annual report. Along with this they also provide the information regarding the structure and composition of the board, their investor engagement activities, policies governing the ethical and responsible behaviour by the organisation, the anti bribery policy adopted by them and the detailed information regarding the political donations received by them. Wesfarmers limited also works towards ensuring that the human rights are protected for all their employees and they do not indulge in human trafficking or slavery through any of their businesses or supply chains. The organisation understand its Responsibility in safeguarding the people and engaging ethically in sustainable business practices.
The marketing strategy for an organization is developed by practicing the segmentation, targeting and positioning of the company. Segmentation is defined as the division of the broad consumer base of the organization into smaller segments of potential customers having similar attributes and shared characteristics. For Wesfarmers Limited, it is suggested that the organization focuses on the people who are shopping for grocery, automotive parts, home and lifestyle products, liquor and the industrial and safety products. Fizzy organization provides all of these opening through the diversified portfolio, they can target the customer looking for these solutions. Wesfarmers cannot classify their customers on the basis of the demographic characteristics like gender, age or profession (FBA, 2012). Therefore, in order to differentiate themselves from the competitors and the other organizations offering similar products in the market Wesfarmers Limited needs to focus on the service provisioning and offer additional features and convenience to the Shoppers like loyalty points and special offers to keep them loyal to the brand and to the organization.
The shoppers these days look for convenience while shopping and the larger variety and choices offered to them, greater is the chance of them revisiting the store and shopping with them. Therefore, Wesfarmers should continue to diversify their product portfolio and offer different varieties of same product along with additional discounts and services. Wesfarmers has position themselves in the market through various different brands. An example in the Retail Industry is a diversified business of Wesfarmers which stores like Target, Officeworks, Kmart and Coles is targeting a different customer segment. This helps the individual brand of Wesfarmers limited to retain their position in the market and also allows your organization to serve customers coming from all segments. It is suggested that the organization continues to promote and market these brands separately and maintains the USB of the company that requires a range of retail stores and offers them to the customers with the large variety of products and added convenience (Isoherranen, 2012).
In order to fulfill the mission of Wesfarmers Limited of providing satisfactory return to all their shareholders, it is suggested that the organization create a distinct value proposition for themselves. Wesfarmers Limited should focus on the quality of service provisioning and the products offered by them so that the customers continue to revisit them and are loyal to the organization. The positioning of the brand can be done by emphasizing on the quality and excellent service provided by the organization (Gompert, et al., 2008).
Marketing mix comprises of the four Ps of marketing covering the product, price, place and promotion which communicates the entire marketing strategy of an organization. The section elaborates the marketing mix that needs to be adopted by Wesfarmers Limited in order to fulfill the long term vision of providing satisfactory return to their stakeholders and to achieve the marketing strategy developed for them in the previous section. It is suggested that Wesfarmers Limited develops a marketing strategy that is focusing on delivering quality products to the customers and adding to the convenience by improving the service provisioning of the company. The marketing mix that the organization should adopt for this is included here:
Product: The product portfolio of Wesfarmers Limited is extremely diversified and it is a leading brand in the market operating in numerous different industries and sectors. All the subsidiaries of the group work in tandem with the primary mission of delivering satisfactory value to the shareholders of the company.
Price: Wesfarmers Limited faces out of competition from numerous big brands all over Australia in each of the divisions in which they operate. The company should attempt to maintain the position in the market by offering prices that are similar to the competitors to ensure that they stay competitive and are able to challenge the existing and the upcoming players while retaining their customer base. The organization can also offer value discounts to the customers purchasing in high volumes from them and run special promotional offers on specific days that have low footfall in the stores to attract more customers and keep them engage. The reward program run by the organization can be further enhanced by providing vouchers to the customers for every purchase and the shopping card of the company can help in easily tracking the purchases made by the customers. Wesfarmers Limited can also offer fuel discounts to their customers when making purchase through their loyalty cards and digitizing the entire system of maintenance and tracking of the points of the customers can reduce the hassle of retaining the receipts of paper making it more convenient for the organization as well as for the customers. Wesfarmers Limited is a customer centric organization and all its operations revolve around ensuring that the customers are delivered best possible products at optimum prices and the best service at the store and when performing business with the company (Mayo, 2016).
Place: Wesfarmers Limited has well established distribution channels all over Australia and New Zealand and is providing employment to more than 220,000 employees. They also operate through the online platform and have ventured into the domain of e-commerce for the increasing the convenient for the customers. The different labels of the organization allow them to serve a wide range of customers as per their needs and requirements.
Promotion: The promotional activities of Wesfarmers Limited should continue with the district brand names as each of the divisions of the company targets a different set of customers. Wesfarmers limited has been clear about the strategic goals and the company is recommended to continue with these practices. They can make use of various electronic and non-electronic modes of marketing including television advertisement, social media marketing, print ads in newspapers, magazines, public display board, hoardings and other promotional methods (Samli, 2015).
People: Wesfarmers Limited is providing employment to more than 220,000 employees all over Australia and New Zealand. Of these people, approximately 68 per cent are employed on a permanent basis and 32 per cent are employed on a casual basis. The voluntary turnover rate across the Group was reported to be 18 per cent.
Physical evidence: The different divisions of Wesfarmers limited offer variety of products. Coles Group the retail business which was acquired by Wesfarmers Limited in 2007. It is a national supermarket offering all the convenience store products, liquor and fuel and is currently operating more than 750 full service supermarkets, more than 800 liquor outlets, 92 hotels and about 630 convenience stores also offering fuel. The home improvement and office supplies division of Wesfarmers Limited runs by the name of Bunnings Warehouse. The home improvement and outdoor Living products are offered by the company under this brand all over Australia and New Zealand. Officeworks is another division which operates in the retail and supply of office products for institutions, households and educational organizations in Australia. The Departmental Store division of Wesfarmers Limited operates the two brands of Kmart and Target. Wesfarmers also offers industrial Products including chemicals, energy supplies and fertilizers. The industrial and safety equipments manufactured by the company are also delivered and supplied all over Australia (Joseph, 2013).
Process: The retail business of Wesfarmers Limited run under various different brand names that all target customers from different social and economic background for the increasing the reach of the company. It is recommended that the company should continue with this strategy and for the diversify the business portfolio by mergers and acquisitions which will allow them to serve even more customers and provide them with a greater convenience.
Conclusion
Wesfarmers Limited is an Australian conglomerate which operates in the retail industry, chemicals and fertilizers manufacturing, coal mining, and manufacturing of Industrial and safety products. This report includes the detailed marketing strategy recommended for Wesfarmers Limited by analyzing the current environment and operational practices and recommending them the optimum marketing strategy and tactics in order to further increase their profitability and reach in the market
References
Chaney, M., 2017. 2017 Annual Report: Delivering value today and tomorrow, Available at: https://www.wesfarmers.com.au/docs/default-source/default-document-library/2017-annual-report.pdf?sfvrsn=0
Corporation, D., 2012. Developing a Corporate Marketing Strategy, Available at: https://blog.demandmetric.com/wp-content/uploads/2012/04/marketing_strategy_plan_methodology.pdf
FBA, 2012. Strategic Analysis: Creating Competitive Advantages, Available at: https://fba.aiub.edu/Files/Uploads/MGT110042.pdf
FDIC, 2015. Developing a Marketing Plan, Available at: https://www.fdic.gov/about/diversity/sbrp/15.pdf
Furrer, O., 2006. Marketing strategies, Available at: https://www.researchgate.net/publication/230743793_Marketing_Strategies
Gompert, D., Davis, P., Johnson, S. & Long, D., 2008. Analysis Analysis and Strategies of Analysis: RAND Corporation, Available at: https://www.rand.org/content/dam/rand/pubs/monographs/2008/RAND_MG718.pdf
Isoherranen, V., 2012. Strategy analysis frameworks for strategy orientation and focus, Available at: https://jultika.oulu.fi/files/isbn9789514297885.pdf
Jones, D., 2017. Sustainability Report 2017:’ Wesfarmers has been committed to creating value for its shareholders, employees and communities for more than a century, Available at: https://sustainability.wesfarmers.com.au/media/2222/2017-wesfarmers-sustainability-full-report.pdf
Joseph, K., 2013. Effects of marketing strategies on entrepreneurial development, Available at: https://eprints.covenantuniversity.edu.ng/6595/1/EFFECTS%20OF%20MARKETING%20STRATEGIES%20ON%20ENTREPRENEURIAL%20DEVELOPMENT.pdf
Lehtinen, N., 2017. Strategic marketing analysis, Available at: https://www.theseus.fi/bitstream/handle/10024/136513/Lehtinen_Nina.pdf?sequence=1&isAllowed=y
Mayo, M., 2016. A Template For Marketing Strategy, Available at: https://www.ryerson.ca/~kjensen/marketing/templates.pdf
Samli, A., 2015. Retail Marketing Strategy Development. pp. 17-25, Available at: https://rd.springer.com/chapter/10.1057%2F9781137476340_3
Scott, R., 2018. 2018 Half-year Results Briefing Presentation, Available at: https://www.wesfarmers.com.au/docs/default-source/asx-announcements/2018-half-year-results-briefing-presentation.pdf?sfvrsn=0
Walsh, I., 2013. Business development and Marketing strategy in Early-?stage Technology Start-?up Businesses: The Importance of Understanding the Customer, Available at: https://researcharchive.vuw.ac.nz/xmlui/bitstream/handle/10063/3495/thesis.pdf?sequence=2
Wesfarmers Limited, 2018. The Wesfarmers Way: Wesfarmers’ primary objective is to provide a satisfactory return to shareholders. [Online]
Available at: https://www.wesfarmers.com.au/who-we-are/the-wesfarmers-wa
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