Australian Supermarket Industry Analysis

This assignment delves into the complexities of the Australian supermarket industry. Students are tasked with analyzing key aspects such as competitive dynamics between major players like Woolworths and Coles, examining prevalent marketing strategies including price promotions and integrated marketing communications, and evaluating the industry's commitment to sustainability initiatives.

MARKETING
AND SALES
MANAGEMENT
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TABLE OF CONTENTS
1. Executive Summary.....................................................................................................................4
2. Introduction..................................................................................................................................4
3. Environmental Analysis...............................................................................................................4
a. Marketing/Industry Analysis...................................................................................................4
b. Competitive Analysis...............................................................................................................5
c. Customer Analysis...................................................................................................................6
4. Objectives and Goals...................................................................................................................7
5. Marketing Mix Strategies............................................................................................................9
6. Sales Strategies..........................................................................................................................10
7. Conclusion.................................................................................................................................12
References......................................................................................................................................13
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1. EXECUTIVE SUMMARY
Marketing can be defined as the process in which different types of tools and techniques
are selected by businesses to create awareness among people in the market. In the today’s
competitive world, marketing has become essential for long growth and success of organizations.
It can be expressed that effective sales and marketing strategies help companies to increase the
volume of sales and profitability. In addition to this, it also supports in enhancing the market
share and customer base.
Woolworths is considered as one of the leading and most renowned chain of
supermarkets in the country. Furthermore, the company is operating in the retail supermarket
industry of Australia which is highly competitive. The key competitor of Woolworths includes
Coles, Metcash Ltd, and Wesfarmers Limited. The demand of customers in the industry is
shifting towards private labelled products in the industry. The objective of Woolworths is to
expand its existing volume of sales and profitability. In addition to this, the company has also
developed different types of sustainable goals to ensure long-term growth and success.
2. INTRODUCTION
In the modern era, selection of appropriate tools and techniques of marketing is crucial
for the success of an enterprise. Furthermore, the use of marketing and sales tactics assists in
enhancing the overall visibility of brand in the marketplace (Percy 2014). Companies are also
able to improve areas such as brand recognition, awareness and the overall degree of customer
loyalty. The use of marketing can help organizations to gain a competitive advantage over other
market players.
The present research reflects the overall environmental analysis of Woolworths
supermarket. The retail chain was founded in the year 1924, and it is considered as a market
leader in supermarket industry of Australia (Percy 2014). The objective and goals of Woolworths
are mentioned in this study. On the other side of this, the marketing mix and sales strategy
employed by the selected organization is also highlighted in this report.
3. ENVIRONMENTAL ANALYSIS
a. Marketing/Industry Analysis
In today’s corporate era, the importance of good marketing/industry analysis cannot be
neglected. Companies operating at small, medium and large scale are required to carry out
effective analysis of the market or industry in which they carry out their business operations.
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Analysis of marketing environment at frequent interval is essential for long term sustainability of
a business enterprise (Greenland et al. 2016). On the other hand, marketing analysis also
supports in identifying the changing demand of customers and gaps in the market. An effective
analysis of industry or market supports in the getting economic overview and identify the
opportunities of growth in the market.
At present, the grocery and supermarket industry of Australia is highly competitive and
the annual revenue growth of the industry is 4.2%. The current value of Australian supermarket
industry is $105.3 billion and it is expected that in the year 2016 to 2017, the industry will grow
with the rate of 3.3% (IBIS World 2017).
The key reason behind such adequate growth rate can be termed as the effective strategies
which have been employed by the businesses operating in the industry. These strategies have
helped companies to create more demand among people in the market and attract them to by the
products and services offered.
Over the past few years, there has been a significant rise in the demand for private label
products ranges in the entire industry. The result of this is that the organizations have been able
to find better and more potential opportunities in terms of growth and development (Jaafar et al.
2016). Nowadays, businesses operating in the supermarket and grocery industry of Australia are
also focusing on developing and offering private labelled products. The rationale behind this is
that these products can offer better margins and thus, contributes a lot to enhancing the volume
of profits (Taylor 2016).
b. Competitive Analysis
Fierce competition is the term which can be used for the supermarket and grocery
industry of Australia (Hingley, Lindgreen & Grant 2015). Over the past few years, Coles and
Woolworths were the dominating players in the industry. However, entry of Aldi and Lidl in the
market has adversely affected the overall market share of Coles and Woolworths. The growth
rate of the industry has attracted new players to enter the market and attain the desired volume of
sales (Blakeman 2014). At present, the entry of discounted retailers such as Costco and Aldi has
resulted in influencing the overall shopping trends in the country to a great extent. The other
players in market include Metcash Ltd, Wesfarmers Limited, Kaufland and Amazon grocery
division (Retail World 2017). It has been analysed that the overall volume of sales, profits and
customer base has been affected by the intense competition within the industry.
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On the contrary of this, it can be critically argue that Aldi with its discounted pricing
strategy has emerged as the biggest threat for all the organizations in the supermarket retail
industry. The company is expanding its business operations and activities very rapidly, and this
has become the issue for companies such as Coles and Woolworths (Fels 2015). Apart from this,
the price competition within the industry is also expected to increase because of the aggressive
discounted pricing strategy which has been adopted by brands such as Lidl and Kaufland. The
result of this is that Woolworths is not forced to operate with a low price strategy to maintain its
existing market share in the industry.
The competitive analysis of supermarket and grocery industry of Australia reflects that
the duopoly of Coles and Woolworths is affecting adversely because of the increasing
competition and entry of new market players (Leigh & Triggs 2016). Aldi’s business strategy
emphasizes on factors such as low price, bigger stores, and fresh foods are supporting the brand
to attract more and more customers (Sutton-Brady, Kamvounias & Taylor 2015). It can be
expressed that the existing market players are now facing issues regarding attracting new
customers and retaining the old ones..
c. Customer Analysis
The bargaining power of buyers in Australia supermarket retail industry is very high, and
this has affected the overall prices of businesses operating in the same. The rationale behind high
bargaining power is that the customers in the industry are available with a lot of options to
choose from (Price 2016). The supermarket retail stores operating in the country are facing
issues and challenges in terms of carrying out negotiation with all its customers (Wardle &
Chang 2015). The demand of private labelled brands among customers in the industry has been
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increased to a great extent. The result of this is that companies are forced to operate with a more
diversified range of private labelled products. On the other side of this, customers in the
Australia supermarket and grocery industry are now more interested in buying products at low
prices, and they also prefer to shop from bigger retail stores. The brands operating in the industry
have been forced to carry out changes in their overall pricing and product strategy to meet the
demand of customers (Schultz, Patti & Kitchen 2013). Aggressive promotion, strong branding,
and low price are the key factors which influence the overall decision making of customers in
Australia supermarket and grocery industry.
The mentioned above graph represents the products and service segmentation of
Australia supermarket and grocery industry. It has been analysed that dry and packaged foods are
the most demanded by the customers. Apart from this, milk, dairy products, fresh fruits,
vegetables, toiletries, health products, cigarettes, beverages, bread and bakery products are also
demanded by customers in the industry.
4. OBJECTIVES AND GOALS
The development of business objectives and goals are essential as they provide clear
guidelines and directions to companies. Furthermore, short and long term goals help in directing
efforts of employees and staff members (Sutton-Brady, Kamvounias & Taylor 2015).
Challenging goals motivate workers and encourage them to give their best towards success of the
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enterprise. However, it can be critically argued that organization should emphasize on the
formulating goals which are clear, realistic and measureable.
The development of business objectives and goals are essential as they provide clear
guidelines and directions to companies. Furthermore, short and long-term goals help in directing
efforts of employees and staff members (Vernuccio & Ceccotti 2015). Challenging goals
motivate workers and encourage them to give their best towards the success of the enterprise.
However, it can be critically argued that organization should emphasize on the formulating goals
which are clear, realistic and measurable.
The main and most important goal of Woolworth supermarket is to put its customers on
priority in all the business situations. In addition to this, the objective company is to offer a
diversified product range to all its customers at prices which competitive (Fels 2015).
Developing a strong team and culture which emphasize on generating high degree of customer
satisfaction is another important objective of Woolworths. The long-term objective of
Woolworths supermarket focuses on reducing the overall cost of operations and carrying out
improvements in its existing processes.
Developing a cohesive brand is also the key business objective of the selected
organization (Woolworths Group 2017). The company invests all its efforts and resources in the
accomplishment of these objectives. Furthermore, useful tools of monitoring are employed by
the brand to ensure that all efforts and resources are being invested in the right direction.
Refreshing stores and upgrading the product offering as per the changing needs and demand of
people in the market is another objective of Woolworths.
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Figure 1:The big Five Goals of Woolworths
On the contrary of this, it can be critically argued that the organization also emphasizes in
areas such as sustainability and it has developed some objectives regarding the same. For
example, the company’s objective is to adopt more sustainable practices linked with product
packaging. At the same time, reducing the carbon emissions, zero waste going to landfill,
sustainable sourcing of raw materials and reducing carbon footprints are the key sustainable
goals which are developed by Woolworths (Woolworths Group 2017).
5. MARKETING MIX STRATEGIES
Marketing mix can be defined a set of factors which are managed and taken care by
companies to influence the decision-making process of people in the market. The marketing mix
of businesses consists of four major factors which are products, price, place, and promotion.
These factors are affected by the change in competition, customer needs, and market trends. The
marketing mix of Woolworth is mentioned below as:
 Product - Woolworth is an Australia based supermarket retailer which offers a
diversified range of products and services. The core products offered by the company
include meat, fresh vegetables, fruits and packed products. The company also emphasize
on maintaining high and the best possible level of quality in all its products (Chapman et
al. 2014). The result of this is that the brand can acquire the high degree of satisfaction
among all its customers. The product range of Woolworth has been positioned in the
market as a healthy one, and this has helped in attracting more customers. Different types
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of quality measurement tools and techniques are employed by the supermarket to ensure
high quality of all products delivered.
 Price – At present, the pricing strategy adopted by Woolworth is higher as compared to
the price of other players in the market. However, the strategy of selling quality products
at slightly higher prices has helped the brand to acquire desired market share. The
company has also adopted a reward system for its employees (Ewing & Ramaseshan
2015). Here, different types of vouchers and offers are provided to the customers with an
objective to increase sales. On the contrary of this, it can be critically argued that the
entry of discounted supermarket stores such as Aldi and Lidl has forced Woolworths to
lower down its prices to maintain its existing market share.
 Place – The place can be defined as the location from the where products and services are
being delivered to the people in the market. It can be expressed that at present the
company is operating with more than the 950 stores in the Australia market. It indicates
the customers of Woolworth do not face any issues in buying the products because of the
availability of stores in different locations. In addition to this, the company also offers its
products and services to customers through online medium (Blakeman 2014).
Woolworths has developed its e-commerce website and mobile application which makes
it very convenient for people in the market to buy the products. The distribution networks
of the organization are wide and highly effective.
 Promotion – Woolworths is using both traditional and modern tools for carrying out
marketing and promotion of its products and services. Here, radio, television, and
newspaper are the key traditional tools which are employed by the brand. The main
objective of Woolworth behind using promotional tools is to create more and more
awareness among people in the market. On the other hand, it also aims at getting the
competitive advantage through its promotional strategies. Online tools such as email
social media and internet marketing are also used by the brand. The use of online
marketing tools helps in increasing sales and profits of Woolworths.
6. SALES STRATEGIES
The sales strategies employed by Woolworths can be termed as quite effective as they
have helped the brand in acquiring adequate market share and revenue. The sales strategies of
business highlight the essential tools and techniques used by organizations with an objective to
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increase sales and profits (Biddle 2016). The selected organization aims at acquiring sustainable
competitive advantage and enhancement of sales with its marketing and sales strategy. Here, the
company has adopted different types of sales strategies to accomplish its objectives. For
example, Woolworths has adopted the strategy of the offering better value and quality products
to all its customers.
The result of this is that the company is able to acquire the higher degree of customer
satisfaction and increase its sales. Price reductions can be termed another sales strategy which
has been employed by the supermarket retailer. It can be expressed that Woolworths has carried
out approximately $125 Million decreases in its prices since the year 2016. The main motive
behind these reductions was to encourage more and more people to buy the products offered by
Woolworths. The selected business enterprise also focused on matching its online prices with the
prices of products and services displayed in the store. The benefit of this is that Woolworths was
able to create higher degree of satisfaction among all its customers and retain them for long run.
Offering discounts, special coupons, and other benefits is another sale strategy which has
been adopted by the company to enhance the volume of sales and profits (Belch et al. 2014). In
the present scenario, the competition among businesses operating in the retail supermarket
industry of Australia has become highly intense. It means that it is not easy for organizations to
attain the desired volume of sales and profits. The rationale behind this is that customers in the
industry are available with wide range of options and alternatives to choose from.
For the purpose of achieving business goals and objectives, nowadays businesses in the
supermarket and grocery industry focus on using different types of sales strategies. Introducing
new and innovative products at regular interval is also a sales strategy which has been adopted
by Woolworths (Arli et al. 2013). Here, the company emphasize more on carrying out intense
market research to identify the changing need and demand of customers in the industry.
In addition to this, the use of market research is also carried out with an objective to
identify the gap in the existing demand and supply of products/services. Based on the
information collected, Woolworths introduces new products and services in the market to
customer demands in the best possible manner. Sales strategy such as introducing new products
helps in enhancing the overall product portfolio of the brand and thus, supports in increasing the
volume of sales (Wardle 2015). On the other side of this, it can be critically argued that high
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emphasis on development and introduction of new products and services results in increasing the
overall operational cost of the selected business enterprise.
Boosting up repeat purchase and customer loyalty is also an important sales strategy
which has been employed by Woolworths. Here, the supermarket retailer focuses on addressing
the issues and problems faced by the customers and resolving them in the best possible manner.
This strategy helps the company to encourage customer loyalty and repeat purchase as the
customer perceives that the brand is concern about its clients.
Instead of focusing on limited marketing and promotional tools, Woolworths concentrate
more on using different tools and techniques of marketing. For example, advertisement of
products and services is carried out on media such as newspaper, television, and radio (You &
Barry 2016). In addition to this, online marketing through channels such as emails, social media,
and internet. These strategies help Woolworths to enhance its overall brand image, sales, and
profitability.
7. CONCLUSION
From the above-conducted research report, it can be concluded that sales and marketing
are essential for long-term growth and sustainability of businesses. The environment analysis
carried out of Woolworths highlights that the supermarket and grocery industry of Australia have
become highly competitive. There was a time when Woolworths and Coles had the duopoly in
the entire industry. However, it can be critically argued that the entry of discounted supermarkets
such as Aldi and Lidl has resulted in making the existing market more intense. The entry has also
forced Woolworths and other market players to reduce their prices to sustain in the market place.
The demand for private labelled products among customers has been increased to a great extent.
Furthermore, the businesses in the industry are also showing their interest in offering
private labelled products because of their high-profit margin. From the above carried out study, it
can be concluded that the Woolworths has developed different types of long and short-term
goals. In addition to this, the business is also making use of the effective sales strategies to
enhance its volume of sales and profitability. The company is offering products and services at
prices which are higher than the other market players. In addition to this, online and offline
channels of promotion are used by Woolworths.
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