Question:
Identify and evaluate marketing opportunities of Woolworths?
Woolworths was established in 1924 in Sydney and today it has become the leading retailer of grocery and liquor in Australia (Woolworths.com.au, 2015). Over the last twenty five years Woolworths has been synonyms with fresh food. The company has been extensively focusing on offering wide range of fresh foods to its customers. The product range of the company includes fresh fruits, vegetables, dairy products, and meat and dairy products. Additionally, drinks, desserts, biscuit snacks, canned food, tobacco, cigarettes, magazines beauty and wellness products. The leading retailer of Australia has given first priority to its customers and focusing in improving the product range and service in order to satisfy their demands. It has been supporting the community through the managing partnership with the local farmers. This paper will focus on analyzing the existing marketing strategy and assist in identification of the marketing opportunities (Loudon, Stevens & Wrenn, 2005). In order to undertake this study, an appointment was fixed with the store manager of Woolworths in Sydney.
Objectives:
Woolworths have been focusing on extending its leadership in food and liquor. Another principle strategic priority of the company is to undertake activities for maximizing the value of shareholders. The company has been putting extensive emphasize on maintaining its past records of developing new business opportunities for sustainable growth. These are the major business objectives of Woolworths. The company has designed its strategies for achievement of the business growth planned by the management.
Existing Marketing Strategy and its Outcome:
The marketing strategy of Woolworths has considered the dynamic business environment and focused on adoption of a framework for meeting the changing customer demand. The business direction is entirely driven by the customers. The current marketing strategy includes giving top priority to the customers (Kotler, 2000). Presently, the company has identified that one of the important element of marketing element; place strategy needs to be changed for ensuring high level of the convenience to the customers. Woolworths has been offering websites, mobile apps, virtual stores and new delivery options to complement its stores. Promotional strategy is one of the important factors for retaining the customers (Wilson & Gilligan, 2005). In order earn customer loyalty; the company has focused on designing a public relation initiative through introduction of Everyday Rewards Program which offers wide range of exclusive offers as well as promotions (Woolworthslimited.com.au, 2015). In order to develop new strategies, Woolworths has been utilizing the customer feedback for making significant difference to the customers through meeting their growing expectation (Omar & Sawmong, 2007). In case of products, the company has been offering fresh foods which are sourced from the local farmers. The meat and poultry products are 100% fresh and the fruit and vegetables are 96% fresh (Woolworths Online, 2015). Additionally, the company has been offering better bag packing as well as large bags at the self service check outs, more half sized trolleys, an up to date store directory in every aisle and better seasonality information for fresh food. These are the major marketing strategies of Woolworths for product, place and promotion (Winer, 2000).
The outcomes of implementation of these strategies are reflected in the organizational performance. It has been found that the existing marketing strategy of Woolworths is effective and helps the organization in achieving most of its objectives. It has been reported that the in the last half of 2013, Woolworths has sales of 1.8 billion dollars. It must be noted that this is the strongest sales growth since 2011 (Businessreviewaustralia.com, 2015). The fastest growing retailer of Australia has been able to achieve the increase in business value through its effective marketing strategy. Doubling of the business growth can be significantly attributed to the effective marketing strategy such as loyalty program which has effectively helped in engaging the customers. Additionally, the product strategy which emphasized on offering wide range of fresh food helped in the attracting the health conscious Australian customers.
Marketing opportunities refer to the further scope for enhancing the business growth through designing an effective marketing strategy which will addressing the threats of changing the external business environment across the globe. Though Woolworths has been performing well over the years, it has been encountering significant threat from its competitors. It has been found that the Woolworths and Coles have been dominating the retail market of Australia for several years. Presently, the entrance of a German retailer, Aldi has been becoming a threat for the leading retailers of Australia. Aldi is a discount supermarket and its own labels are gaining significant popularity. It has been observed that in the post global financial crisis, the Australian consumers have been focusing on the value for money (Ramachandra, Chandrashekara & Shivakumar, 2010). A cultural shift is prominent in case of Australian consumers and they are growing tired of the conventional shopping experiences and increasingly accepting the bargain hunting. Hence, the competition in the retail market is intensifying rapidly (Mitchell, 2014). The customers prefer the low priced products of Aldi for saving. Additionally Aldi has been offering some exclusive products which will help in causing a sensation with the shoppers. For instance, according to the report of Nielson, Mamia range of nappies has been the most popular brand sold in the Australia. Additionally, the ski gear offered by Aldi has received significant popularity (MEHRA, 2015). It has been estimated that Aldi has the potential to snatch around $ 250 to $350 million from the sales of Woolworths. According to UBS, the sales of Aldi will reach $9.3 billion within 2019 as it is planning to open new shops in Western and South Australia (Mitchell, 2014).
Hence, Woolworths need to focus on the new market opportunities for competing with the rapidly growing German retailer. This section will focus on recommending three new marketing strategies for Woolworths.
Product Strategy:
Customers are focusing on purchasing fresh and high quality product at cheaper price. Additionally, the new products offered by the competitors have significantly attracted the customer base. Hence, it can be recommended that Australia needs to focus on the innovation for offering some exclusive products which can be easily afforded by the customers. For example, some innovative hobby and leisure products, innovative home appliances can be offered at Woolworths. Woolworths has significant potential for investing higher amount in research and development for supporting the innovation activities (Parry, 2005). Thus, new product development and innovation is essential for exploring the new markets of Australia and enhancing customer base of the company which will ultimately lead to the achievement of targeted growth of the company (Marshall & Johnston, 2010).
Pricing Strategy:
Price is a major concern for Woolworths as Aldi has been growing by offering huge discounts on its products. It has been found that the customers are focusing on the purchasing the inexpensive products with similar quality. Hence, Woolworths need to focus on adoption of competitive pricing strategy. First of all, it needs to control its cost through several cost cutting strategies (Businessreviewaustralia.com, 2015). Additionally, the company needs to reduce the profit margin for offering lower price of the products. Therefore, the reduced profit margin can be compensated with the aid of increased level of sales (Noyan & Simsek, 2011).
Promotional Strategy:
Promotional strategy helps the company in effective marketing communication. In order to compete with the market rivals, Woolworths need to enhance its promotional activities. (Dalrymple & Parsons, 2000) First of all, on a certain day of the week, the company can offer he discount on some specific products. Additionally, it can offer complementary items on a purchase of certain amount. Least selling products will be given as the complementary goods on a specific day (Loudon, Stevens & Wrenn, 2005). It will be significantly effective in attracting the customers who are value focused. Additionally, organizing in store events where the children and women can participate will be effective in spending more time within the shop and ultimately lead to enhanced sales (Kotler, 2000). Thus, the promotional strategy needs to be changed for exploring the market opportunities and enhancing sales.
Conclusion
This paper has focused on providing an insight to the development of new marketing strategy for Woolworths. It has been found that the company has been able to manage significant growth over the years. Woolworths has focused on its customers and their needs for satisfying those efficiently. The company has designed effective customer loyalty program for retaining its customer base. The wide product range contains fresh fruit and vegetables along with meat and poultry products which have helped in attracting the health conscious consumers. However, it must be noted that Aldi, a German retailer has been considered to be a major threat for the growth of Woolworths. Hence, it is important to change the marketing strategy of the company. Hence, the company needs focus on diversifying its product range through innovation. Additionally, the company needs to adopt competitive pricing for attracting more number of customers. Additionally, the company needs to adopt effective promotional strategy for ensuring sustainable growth in future through maintaining its position as market leader.
References
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Dalrymple, D., & Parsons, L. (2000). Basic marketing management. New York: Wiley.
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Marshall, G., & Johnston, M. (2010). Marketing management. Boston: McGraw-Hill Irwin.
MEHRA, P. (2015). Aldi’s private labels hurt Woolworths, Coles the most. TheAustralian. Retrieved 12 February 2015, from https://www.theaustralian.com.au/business/news/aldis-private-labels-hurt-woolworths-coles-the-most/story-e6frg906-1227193415702
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