Discuss about the Service Marketing of Woolworths Limited.
According to Kotler et al. (2015), the success of any business depends on the formulation of proper marketing strategy and the implementation of them as well. The marketing mix is a very important aspect in the marketing strategy which includes the 4- Ps of marketing i.e. Product, Price, Place and Promotion. Service Marketing Mix is a little extension of the marketing mix. Service Marketing Mix refers to the 7-Ps of marketing. It includes the 4-Ps of the marketing mix and three additional Ps i.e. People, Process and Physical Evidence. Service marketing mix strategies refer to the strategies regarding the service provided by the businesses (Lovelock and Patterson 2015).
This report is about the evaluation of the service marketing strategies of the Australian retail company, Woolworths Limited. This is the second largest company in Australia by revenue earned. The company was situated in the year of 1924. The company is headquartered at New South Wales, Australia. Woolworths has various types of business operations which include retail supermarkets, liquor, hotels, etc. (www.woolworthslimited.com.au 2016).
The primary aim of the study is to explain the service marketing strategies of Woolworths Limited. The first part of the study evaluates the service marketing mix’s 7-Ps about the business of the company. The analysis leads to the recognition of the areas which needs improvement. Based on the above part, certain recommendations have been suggested to create a better service. At last, a conclusion has been drawn based on the total study.
As Woolworths is the second largest retail company in Australia by its revenue nature, it must include the supermarket segmentation in the country. The marketing mix of Woolworths Company has been considered the establishment for a new appearance of development and opportunity. It refers to a set of action which the company is using for the promotion of its brand or product services in the market. There is a 7 P’s concept in marketing mix which describes the total strategic growth of the company such as price, product, place, promotion, people, process and physical evidence. These concepts represent the whole strategic system of the company in an appropriate way of service marketing. (Huang and Sarigöllü 2014).
Price can define as the value of any product which depends on the cost of production and target segmentation of the company. To enhance the market value of a product and to find the exact position of the product in the market the price strategy must use. It is also helpful in differentiation of the product. Woolworths compares its products price with the other company to provide better resources to the customers. There is a technique of the company that if the price of the goods is more in the market, the company reduces the supply of the product. On the other hand, if the price of the product is less, the company increases the supply of that product. It so happens because of competition in the market segmentation. It is the first basic strategy of a marketing mix with which the company can measure the performance to itself in the market (Mintz and Currim 2013).
The product can define as the goods and services produced by the company for sale in the market. To get development in Woolworths, the company’s product must be genuine and satisfy the needs of the people. Woolworths is producing different types of product in the market such as clothing, food, homeware and Woolworth’s financial services. All its products are different in nature. In clothing material, Woolworths produces men, women and also children wear, kids wear and footwear. The company is also creating beauty products for girls. In the sense of homeware, Woolworths is creating accessories and home furnishing products which include kitchen, bathroom and also furniture product for home furnishing. Whereas, in financial service of Woolworths it has three offers variety benefits cards in the company the financial service also provides two types of loan that is revolving and fixed term loan for the personal use. The company maintains the low productivity cost in the market (Al-Debi and Ashraf 2014).
The place can define as an exact selling point in the market. A good place considers a good marketing strategy. Location determination is a vital aspect in the market to sell products as per people availability. The company wants to be aware with the consumer and produces goods as per consumer availability. Some customers also pay money as a premium for the certain product location in the market. If the company is not build up in a certain place, the product of the company cannot be sold in great quantity. For this, in the marketing mix of Woolworths Company the place as a 7 P’s is very much needed (Roach and Jiratchot 2015).
Promotion is one of the main ingredients of marketing mix strategy of Woolworths. It helps to make the best performance of the company in the market. The company makes promotions for its products in the market it might be via advertisement, PR, sales promotion, social media and other promotional tools. Through these promotions, the company gets more customers for its products. If there is perfect competition, the company must follow the guideline to promote their business in the market. The company makes these promotions get the actual customers who have the interest to buy its products (Gordon 2012).
People are the main ingredient of the company In the 7 P’s marketing mix of Woolworths because if people are not interested in buying the product, the company may suffer from losses. It is necessary to have certain customers to purchase the product of the company. If people buy more products, it will be beneficial for the company and if not, the company will not grow up consistently. The company is entirely dependable on people because it produces goods for the customers (Aghaie and Vahedi 2014).
Process refers to the product and service delivered by the company. It means the company delivers the products by a different process. Today is the era of online shopping and this method is applied to the Woolworths Company also. If people order the products online, the company delivered the products through a different online process. If customers want the product at various places, the company must have a different guideline to deliver the product to the customers. Some customers may have a different delivery requirement about the product, so the company has different process for that customer (Huang and Sarigöllü 2014).
Physical evidence must be available in the service marketing mix of Woolworths. The company has some physical evidence in its products. When customers buy some products from the company, there must be some evidence which means the company gives a physical proof to the customers like a hard bill or any digital PDF proof. According to Khan 2014, physical evidence is a major marketing mix of the Woolworths because the products are not tangible in nature and for the creation of better relation with the customers the company sales some tangible goods also. Physical evidence may be used as discrimination in the service marketing mix of Woolworths (Khan 2014).
Woolworths in present times has acquired much negative light, especially on the ethical grounds. From the issue of the Child labor and wage scandal to the quality of the food, Woolworth has lost much of their goodwill and impression, which has resulted in a downing of their net profit as well. Woolworths has faced a loss of 1.2 billion dollar in food, petrol and other quality products (ABC News 2016). Therefore, in present times, it has become important on the part of the organization to identify the key areas to make improvements not only to amend their relation with the customer but also as a corporate organization it is important to be subjected to a repeated change, to keep up with the expectations. Improvements must be from a holistic approach and not only to the problem areas (). The key areas useful as well as the strong points of the Corporation from where they can make a comeback in the business map. The followings are some of the areas:
One of Woolworths’ strongest points to retain their customer base has been their food and liquor products. Therefore, products might be a strong point to start their improvements with. Products serve to be the greatest and most important point in a business or precisely in order to improve a business. A good product counts to be one that is widely used as well as recommended as well to the friends by the customers (Baker and Saren 2016). Woolworths already has several facilities and entertainment options as marketing cards or value cards regarding their food and grocery items, and the customers has accepted them well (ABC News 2016). Therefore, on the part of the corporation, food products can be the strongest point to bring on the improvements.
Woolworths need to improve the availability of their products. Indeed the corporation has their own online retail store, but it will be helpful to improve the physical availability of their products especially petrol and beverages since they count to be the popular products of the organization (ABC News 2016). Especially for the online market, improvement in the prices are needed for the corporation has faced negative criticism in the prices and discrepancy between in store and online prices.
Price can be another important point to implement the improvements as well as to attract the customers towards them. Woolworths already has several discount options and a comparatively low price rate than average market value (Cameron 2015). However, improvement in the prices is needed for the negative impacts Woolworths presently has invited upon themselves. To eradicate or at least mild the wages issues and slavery issue from the customers as well as the people, it will be necessary for the corporation to create a strong base. Moreover, the online prices of same products are expensive when compared with the in store prices. However nominal the charges but counts to be a hefty amount when calculated together. This issue the company needs to resolve and improve the online prices as well (Wells 2013).
Woolworths had earlier taken up several PR and marketing strategies as well to increase their customer base. In present situation, there is a need to improve and revive the promotional strategies (Cameron 2015). Most importantly, in present times with the faltered business for the negative criticism of several issues, the company has received increasing business threats from Coles and Aldi. Nevertheless, the other two companies have also faced severe criticism for the child labor and slavery scandal (ABC News 2016). Since Woolworths is the worst sufferer they are in urgent need in present times to improve and restart their promotional strategies and tend to be more inclined towards serving the customers (Bryman and Bell 2015).
On the part of Woolworths, it is most important at this hour to improve the conduct and the treatment of the employees towards their customers. It is important in recent times that Woolworths receive as many customers as possible (Bryman and Bell 2015). Previously Woolworths had received negative criticism from the customers for the behavior and treatment of the employees in the stores itself and the arrogance of the higher authorities. In present times, such complaints and grievances must be avoided on the part of the authorities to improve their relationship with the customers whether old or new (ABC News 2016). At the same time improvements must be done while employing the people as well for attending the customers. Improvements are needed n the codes of conduct of the employees.
Processes are another key area that needs improvement in the conduct of Woolworths. Since the organization has already faced serious criticism regarding their ethical conduct and at the same time is facing loss in the marketing and revenue segment the processes must be renewed to prevent stagnation as well as criticism. At the same the transparency between the corporation and the suppliers must be improved (Flax, Bick and Abratt 2016). The organization has faced criticism from the part of the suppliers for sending them bills of wrong amount. The bills are dated 10 years back for which Woolworths cannot provide satisfactory reasons. Therefore, while making improvements the corporation must improve their communication and relation with the suppliers and the customers.
Based on the above analysis on service marketing strategies of Woolworths, it can be seen that there are certain areas which need to be improved. The suggestions and recommendations are given below:
The quality of some products is not good. Sometimes Woolworths has to face problems regarding the quality of the foods. There are some instances where the company has failed to provide fresh foods to the customers. For example, the bread issue which created a lot of chaos in the company. Hence, it is recommended that the company should take care of the foods they are supplying.
The price is another issue. Although the price of the products is fair, to attract more customers, Woolworths should include new discount offers as discounts are always a major tool to attract the customers. It will help to enhance the customer base of the company.
One of the major issues in Woolworths is the labor issue. There are instances where the company has used children as labor and also gave them a very low wage. By seeing the growing concern about the child labor in the world, this is a very crucial issue. Thus, it is recommended that the company should not use child labor as the work force.
There is a scope that the company can improve the promotional strategy to reach to more people. Hence, it is recommended the company can introduce more public relation strategies to increase the potential customer base.
Conclusion
Service marketing strategies are an integral part of business, rather the 7-Ps of service marketing mix can be called the seven pillars of marketing as the success of an organization mostly depends on these strategies. Proper implementation of marketing strategies leads to the maximization of profit by increasing the revenues. These strategies also help to increase the customer base and help the companies to reach to a maximum number of people. That’s why it is necessary to have effective marketing strategies for every organization.
After studying the service marketing strategies of Woolworths Limited, it can be recognized that the overall service marketing mix strategies of the company are very well-structured. This is one of the best supermarket chains in Australia. However, there are some problem areas in the marketing strategies which need to be addressed. But by the well-defined marketing strategies of the company, it is not a tough job for Woolworths to overcome those issues. Thus, it can be concluded that with the help of proper marketing strategies companies can quickly overcome the loopholes in their operation. And also effective service marketing strategies are the key to getting the organizational success.
References
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ABC News. (2016). Woolworths posts $1.2b loss; food, petrol sales slump. [online] Available at: https://www.abc.net.au/news/2016-08-25/woolworths-results/7783378 [Accessed 17 Sep. 2016].
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