Marketing Management for Coles Supermarket in Hong Kong Market

The report analyses the international marketing strategy of Coles Supermarket while expanding their business in Hong Kong market. It includes market analysis, organizational analysis, competitor analysis, macro environment analysis, and Porter's five forces model.

Running head: MARKETING MANAGEMENT
Marketing Management
Name of the Student
Name of the University
Author note

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Table of Contents
Executive Summary...................................................................................................................3
1. Introduction............................................................................................................................4
2. Market Analysis.....................................................................................................................4
2.1 Size of Market and Growth Rates....................................................................................5
2.2 Population........................................................................................................................6
2.3 Market Barriers and Market Drivers................................................................................6
3. Organizational Analysis.........................................................................................................8
3.1 Customer Audit and Buyer Behaviour.............................................................................9
3.2 4P’s...................................................................................................................................9
3.3 Competitor Analysis.........................................................................................................9
3.4 Competitor Advantage of your Product.........................................................................10
3.5 Positioning Map of Competitors....................................................................................11
4. Macro environment..............................................................................................................11
PESTEL Analysis.....................................................................................................................11
4.1 Porter five forces model.................................................................................................12
4.2 Value Chain....................................................................................................................13
4.3 BCG Matrix....................................................................................................................14
5. SWOT Analysis...................................................................................................................14
6. Conclusion............................................................................................................................15
7. References............................................................................................................................16
Appendix..................................................................................................................................19

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Appendice 1.........................................................................................................................19
Appendice 2.........................................................................................................................19

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Executive Summary
The report has helped in analysis of the international marketing strategy of Coles supermarket
while expanding their business in Hong Kong market. Furthermore, the different kinds of
analysis are required to be done which has helped the company in gaining competitive
advantage in the entire market. This has been seen that the internal and external
environmental analysis has helped the company in managing the differences effectively and
solve the same in such a manner in which this has helped Coles in gaining a strong market
share effectively.

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1. Introduction
The report helps in the analysis of the critical evaluation of the international
marketing opportunities along with the marketing analysis of the company in an effective
manner. The size of the market and the rate of growth is required to be analysed in an
effective manner which helps in discussing about the market barriers and market drivers of
the respective company.
The company which will be analysed in the report is Coles Supermarket which is
based in Australia and the company will be expanded in Hong Kong which is in Asia. The
marketing mix along with the competitor analysis of the company is required to be done in an
effective manner wherein the strengths and opportunities of the company is required to be
done in an appropriate manner to gain competitive advantage.
The positioning map along with situational analysis of the company is required to be
done along with various other theories and approaches such as Porter’s Five Forces and
SWOT along with Value Chain analysis which will be effective in nature to gain competitive
advantage.
2. Market Analysis
Market analysis is essential in nature as this helps in studying the attractiveness along
with dynamics of the special market with the special industry. The global environmental
analysis is required to be done in order to understand and analyse the different kinds of global
environmental analysis effectively. The global market analysis is required to be done for
Coles Supermarket which will help in managing the entry of the supermarket into the other
international markets in an effective manner (Al-Dmour et al., 2016).
The main aim of the Coles Supermarket in order to expand their market in Hong
Kong is to provide the different customers in the market with best quality products, values

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along with services. The circle for the success of Coles is such that wherein this has been able
to help Coles in moving forward in direction of their mission which is to serve their
customers with appropriate quality products and services and gain more competitive
advantage in the entire market (Ortega et al. 2015).
Figure 1: Circle for Success of Coles
(Source: )
2.1 Size of Market and Growth Rates
The market size of Coles Supermarket has raised from 0.8% points to 12.1% in the
entire Hong Kong market and this will help Coles in gaining competitive advantage.
Furthermore, in the year 2017, this has been analysed and seen that there is huge rise of about
28.8% of the entire market share in Hong Kong market and this will assist Coles in gaining
huge market share in comparison to the other competitors. For Coles, there will be moderate
growth in the entire Hong Kong market as the growth of the supermarket in Hong Kong is
less in nature.

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2.2 Population
The population in the Hong Kong country is 73.5 lakhs and the Coles can create a
unique position in the market of Hong Kong. In regards to the population, the Coles
supermarket can gain huge profit and market share in the country by targeting the different
individuals of different age groups who can be the buyers and this will increase the entire
profitability of the company effectively as well. Furthermore, Coles needs to analyze the
culture of Hong Kong which will assist them in focusing on preferences of the customers and
this will help in managing the sales of the company effectively as well.
2.3 Market Barriers and Market Drivers
Market Barriers
There are different market barriers which can be faced by Coles Supermarket while
expanding their market to the Hong Kong market. The different market barriers are as
follows:
 Tariff Barriers is the first issue which has to be faced by Coles Supermarket in which
this was seen that Coles can face and indicate various taxes and duties which are
being imposed on imports. Coles will find it difficult to promote the different products
as there are different tariff policies which restricts the international marketing
activities in a negative manner.
 Administrative Policies is the second issue which can be faced by Coles as it has been
seen both host and guest countries make the international marketing harder in nature.
There are different lengthy formalities in Hong Kong market along with in Australian
market which can create problems for Coles to expand their business.
 Political Instability is the other issue in which this has been seen that government in
Hong Kong have different philosophies and priorities for the international trades. The

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approach which is being used by Hong Kong government is restrictive and these
dominants the position of the international business operations as well.
 Place Constraints is the last barrier which is required to be analyzed in which this has
been seen that in Hong Kong, both export and import of the different products via sea
route is challenging and there are different risks such as segmenting the market in an
effective manner (Ellickson, 2016).
Market Drivers
There are different market drivers which is required to be analyzed by Coles while
entering into the Hong Kong market and this helps in maintaining the different kinds of
factors which has to be ascertained:
 Consideration of the local situation is the first driver which is required to be
ascertained by Coles in Hong Kong market as the culture of Australia and Hong Kong
is different from one another. In Hong Kong, the customers prefer the quality
products at lower prices unlike Australia and this can be a challenge for Coles (Choi,
2017).
 Financial Resources is the other factor which is required to be ascertained by Coles
in Hong Kong as the company with high equity capital are successful in abroad. The
reliable financial resources of Coles in Australian market will help them in being
successful in nature in the Hong Kong market.
 Personal Resources is the other factor which is required to be analyzed by Coles in
Hong Kong market. The personal resources include experienced and skilled staffs in
Hong Kong market can be difficult in nature to find such reliable staffs in the
respective market.

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3. Organizational Analysis
Coles Supermarket is Australian Supermarket which was founded in 1914 and the
company is operating in more than 800 locations. The number of employees working in the
organization includes 100000 and the key people of the company is John Durkan who is
managing director of Coles (Coles.com.au, 2018).
The current strategies which are used by Coles is to bring back the unhappy customers
by improving the quality of products and gain competitive advantage. The expertise of the
company is to provide the customers with quality products at a cheap rate and the
management of the company is strong (Kasiri et al., 2017).
John Durkan and Curtis Stone manage the different activities of Coles effectively by
introducing different kinds of services and products which will be efficient to gain
competitive in nature. The market share of the company in Australia is huge and there has
been more than 0.2% increase in the same (Huhman, Kelly & Edgar, 2017). The performance
of the company has become effective and the profitability which has been gained by the
company has helped them in managing the activities efficiently.

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Figure 2: Performance and Profitability of Coles
(Source: Cameron et al., 2016)
3.1 Customer Audit and Buyer Behaviour
Refer to Appendice 2
3.2 4P’s
Product- Coles helps in offering fresh food and groceries to customers along with
financial services. There are different kinds of product segments such as general
merchandise, liquor and financial services. The company tries to sell fashionable clothes to
the different customers in the market (Noyan & Şimşek, 2014).
Price- Coles is the cost-leader and this helps in offering the customers with different
kinds of products with the best quality and at lower rates as well. This helps the customers to
gain the quality products at a lower price (Izogo & Ogba, 2015).
Place- The Coles has more than 2300 outlets and with the help of the same, the
company tries to reach to the different customers with the different products at different
central location. Coles has tried to create better store network which has helped them in
targeting different customers (Lien, Cao & Zhou, 2017).
Promotion- The advertising strategy helps the company in becoming more popular
and this helps the supermarket in highlighting the different kinds of offers to attract
customers (Orel & Kara 2014).
3.3 Competitor Analysis
There are different competitors of Coles Supermarket which are Tesco, Aldi and
Walmart.

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Competitors USP
Walmart Strengths- Offers the customers with similar
kind of products however the promotional
strategy is effective and better than Coles
Weaknesses- Walmart pricing strategy is
not effective and is high in nature
Tesco Strengths- The everyday low pricing
strategy helps the company in becoming
more competitive in nature in comparison to
other supermarkets (Hegner et al., 2017)
Weaknesses- The quality is compromised at
times which is being sold to the customers
3.4 Competitor Advantage of your Product
The main unique selling proposition of the company Coles Supermarket is to bring
the different middle-class products and services into the working-class homes and this helps
the company in gaining competitive advantage in comparison to the other competitors in the
market (Dhar, 2015).

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3.5 Positioning Map of Competitors
Figure 3: Positioning Map
(Source: Hamari, Hanner & Koivisto, 2017)
With the help of the positioning map, this can be analysed that the Coles is in the low
price and brand product range in which this helps the company in managing the different
kinds of the needs of the customers (Mardani et al., 2015). Furthermore, the Tesco and there
are other competitors like Coles in which this has been seen that Coles is performing in an
effective manner. The market opportunities which are being adopted by Coles is attract more
customers.
4. Macro environment
PESTEL Analysis
Political Factors – The government creates a direct impact on supermarket industry
in regards to the trading hours and there are different kinds of other political instabilities such

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as tariff barriers in Hong Kong market which can affect the entire market share of Coles
(Ferguson, Brown & Johnston 2017).
Economic Factors- There are different economical factors such as low spending in
the Hong Kong community and this has affected bargaining power of the suppliers in a
drastic manner.
Social Factors- There can be different social factors such as helping and improving
the overall society for the well being of the people in Hong Kong. The Coles company can
introduce themselves with different social organizations which will help in managing the
different activities effectively (Blut et al., 2015).
Technological Factors- The usage of cloud infrastructure helps in managing the
different customers in Hong Kong community. The self-checkout services in Hong Kong
help in managing the different kind of customers.
Environmental Factors- There are different kinds of environmental factors such as
usage of sustainable products and eco-friendly supermarkets in Hong Kong in keeping their
position.
Legal Factors- There can be different legal factors such as mandatory codes in Hong
Kong which is required to be followed effectively in Hong Kong to held their position firmly.
4.1 Porter five forces model
Threats of new entrants – Wherein the other new entrants bring innovation and this
puts pressure on Coles as they use lower pricing strategy effectively.
Bargaining Power of the Suppliers- Suppliers have a dominant position in the market
and this can be a threat for Coles as the suppliers are already with different other
supermarkets which are based in Hong Kong (Al-Dmour et al., 2016).

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Bargaining Power of Buyers- This is wherein the best offerings are received by
customers from other companies and this is affecting them in a negative manner.
Threats of substitute products and services- There can be different companies in
Hong Kong which provides similar kinds of products to customers and this can affect the
products provided by Coles.
Rivalry among Existing Competitors- The profitability can be affected for Coles as
there are different other sustainable differentiation in the company in an ineffective manner.
4.2 Value Chain
With the help of value chain analysis, this can help in managing the different kinds of
value chain in which this has been seen that the value chain is effective in nature and the
processes which are included in Coles supermarket value chain are the different transport
along with packaging of the goods and services in an effective manner.

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4.3 BCG Matrix
Key-
- COLES
- KMART
- Bunnings Warehouse
- Dalgety Plc
From the above, this can be analysed that Coles is the star helps in generating the large
amount of cash and there is strong relative market share of Coles in the market as well. The
growth rate of Coles is high and this has helped the company in gaining competitive
advantage.
5. SWOT Analysis
The SWOT analysis has helped the company Coles in analysing strengths,
weaknesses, opportunities and threats. The strengths of the company include the attractive

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pricing techniques which is being used to be immensely successful in nature. Furthermore,
there are different weaknesses such as the margin is lower in comparison to the other
competitors. There are different opportunities such as the geographic expansion can help in
boosting their business effectively. Lastly, the threats include intense competition has led to
decline in sales of Coles.
6. Conclusion
Therefore, this can be concluded that the international marketing is essential in nature
which has helped in managing the different kinds of factors such as macro and micro
environmental factors which has affected the entire market share of the company Coles in an
effective manner. Furthermore, with the help of value chain and SWOT analysis, this has
helped the company Coles in managing the differences and tried to improve their efficiency
in the market effectively.

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7. References
Al-Dmour, H., Al-Madani, S., Alansari, I., Tarhini, A., & Al-Dmour, R. H. (2016). Factors
affecting the effectiveness of cause-related marketing campaign: moderating effect of
sponsor-cause congruence. International Journal of Marketing Studies, 8(5), 114.
Blut, M., Chowdhry, N., Mittal, V., & Brock, C. (2015). E-service quality: A meta-analytic
review. Journal of Retailing, 91(4), 679-700.
Cameron, A. J., Charlton, E., Ngan, W. W., & Sacks, G. (2016). A systematic review of the
effectiveness of supermarket-based interventions involving product, promotion, or
place on the healthiness of consumer purchases. Current Nutrition Reports, 5(3), 129-
138.
Choi, Y.G., Choi, Y.G., Ok, C.M., Ok, C.M., Hyun, S.S. & Hyun, S.S., (2017). Relationships
between brand experiences, personality traits, prestige, relationship quality, and
loyalty: An empirical analysis of coffeehouse brands. International Journal of
Contemporary Hospitality Management, 29(4), pp.1185-1202.
Coles.com.au. (2018). Coles Supermarkets. [online] Available at: https://www.coles.com.au/
[Accessed 3 Aug. 2018].
Dhar, R.L., 2015. Service quality and the training of employees: The mediating role of
organizational commitment. Tourism Management, 46, pp.419-430.
Ellickson, P. B. (2016). 15 the evolution of the supermarket industry: from a&P to
Walmart1. Handbook on the Economics of Retailing and Distribution, 368.
Ferguson, J.L., Brown, B.P. & Johnston, W.J., (2017). Partitioned pricing, price fairness
perceptions, and the moderating effects of brand relationships in SME business
markets. Journal of Business Research, 72, pp.80-92.

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Hamari, J., Hanner, N., & Koivisto, J. (2017). Service quality explains why people use
freemium services but not if they go premium: An empirical study in free-to-play
games. International Journal of Information Management, 37(1), 1449-1459.
Hegner, S.M., Hegner, S.M., Fenko, A., Fenko, A., Teravest, A. & Teravest, A., (2017).
Using the theory of planned behaviour to understand brand love. Journal of Product
& Brand Management, 26(1), pp.26-41.
Huhman, M., Kelly, R. P., & Edgar, T. (2017). Social marketing as a framework for youth
physical activity initiatives: a 10-year retrospective on the legacy of CDC’s VERB
campaign. Current obesity reports, 6(2), 101-107.
Izogo, E. E., & Ogba, I. E. (2015). Service quality, customer satisfaction and loyalty in
automobile repair services sector. International Journal of Quality & Reliability
Management, 32(3), 250-269.
Kasiri, L. A., Cheng, K. T. G., Sambasivan, M., & Sidin, S. M. (2017). Integration of
standardization and customization: Impact on service quality, customer satisfaction,
and loyalty. Journal of Retailing and Consumer Services, 35, 91-97.
Lien, C. H., Cao, Y., & Zhou, X. (2017). Service quality, satisfaction, stickiness, and usage
intentions: an exploratory evaluation in the context of WeChat services. Computers in
Human Behavior, 68, 403-410.
Mardani, A., Jusoh, A., Zavadskas, E. K., Khalifah, Z., & Nor, K. M. (2015). Application of
multiple-criteria decision-making techniques and approaches to evaluating of service
quality: a systematic review of the literature. Journal of Business Economics and
Management, 16(5), 1034-1068.

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Noyan, F., & Şimşek, G. G. (2014). The antecedents of customer loyalty. Procedia-Social
and Behavioral Sciences, 109, 1220-1224.
Orel, F. D., & Kara, A. (2014). Supermarket self-checkout service quality, customer
satisfaction, and loyalty: Empirical evidence from an emerging market. Journal of
Retailing and Consumer Services, 21(2), 118-129.
Ortega, D. L., Wang, H. H., Wu, L., & Hong, S. J. (2015). Retail channel and consumer
demand for food quality in China. China Economic Review, 36, 359-366.

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Appendix
Appendice 1
SWOT analysis
Appendice 2
Customer Audit and Buying Behaviour
Customer Audit
Customer Audit
Type of Customer Information Information
Practices and Usage Tracking of brand and usage of the same
Habits Behaviour audit for similar kind of
behaviour
Segmentation Behaviour, attitudes and demographics
Pricing Sensitivity of pricing and the criteria for
pricing
Strengths
Attractive kind of pricing strategies
High level of online orders of the customers
Continuous kind of promotional campaigns
which are successful
Weaknesses
There is huge competition and in
comparsion to the same, there is lower
margins
Negative kind of publicity in the market
Opportunities
Geographic expansion to help Coles in
reaching global regions
Capture more market share by operating
at more competitive price level
Threats
Consumers are getting confused between
different brands which are generic in nature
Intense competition in market and this led
to depletion in pricing
SWO
T

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Marketing Mix Marketing mix optimization
Market Structure Emerging kind of competitors and
distribution along with competition
Buying Behavior
From the buyer
decision making
process, this can be
analysed that there are
different external
factors which is
required to be analysed
by the buyers while purchasing products from the respective supermarket. The purchase
amount along with the frequency of the product is required to be analysed before making
decisions for purchasing products and services.
Decision Making
Process
Buyer
Characteristics
Responses of the buyers
Choice of the product
Timing of the purchase
Frequency of the purchase
Purchase Amount
Marketing Stimuli
Product
Price
Place
Promotion
Other Stimuli
Economic
Political
Social
Technological