Competitive Analysis: Dan Murphy’s, Australia

This document provides a competitive analysis of Dan Murphy’s, the largest liquor chain store in Australia, focusing on their digital marketing communication strategy. It discusses their reach, act, convert, and engage strategies to attract and retain customers. The analysis highlights the importance of personalized content, informative website, and social media marketing in building a long-term relationship with customers.

Running head: E-COMMERCE & MARKETING
Competitive analysis: Dan Murphy’s, Australia
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1E-COMMERCE & MARKETING
Introduction and background
Dan Murphy’s is one of the largest liquor chain stores in Australia. It is owned by the
Woolworths Group. The company stores the widest range of liquors at the best and lowest
market prices. It specializes in the most exclusive range of wines. Each of the Dan Murphy’s
stores carries more than 3500 products that include all types of spirits, beers and wines, while the
online store carries more than 5000 products. (Woolworthsgroup.com.au 2019). Dan Murphy’s
also sells wines and other types of liquors directly imported from around the globe.
Dan Murphy’s was established in 1952 by Dan Murphy at 290 Chapel Street, Prahran,
Melbourne, which was less than a kilometer away from the liquor store owned by his father, Ted
Murphy. Dan sold his company to Woolworths in 1998 and since then Woolworths has expanded
the number of stores across the country to a massive number to become the top liquor seller in
the country. The core business of Dan Murphy’s include importing exclusive wines from
overseas, purchasing in bulk and selling those at the lowest price possible. Other than more than
200 stores across the country, it also has online store. The online store of Dan Murphy’s is
responsible for almost 50% of the alcohol sales in Australia via online channels
(insidefmcg.com.au 2017). The company has a wide variety of craft and imported beers too with
the product range of 6000 different products, which is more than any bottle shops in Australia.
The Dan Murphy’s Celler was opened in 2016 by Woolworths, located in the original Dan
Murphy’s store in Prahran. It sells boutique and premium liquor products, such as, vintage, rare
and hard-to-source domestic as well as international wines (Danmurphys.com.au 2018). Dan
Murphy’s also offer Lowest Liquor Price Guarantee, which promises to beat the advertised price
of any competitor, provide the store of the competitor is located within 10 kilometers form any
Dan Murphy’s store. Along with that, it has launched customer rewards programs in 2014 and
earned more than 1.7 million members as of October 2016 (Danmurphys.com.au 2018). Dan
Murphy’s has been able to form an oligopoly in the liquor market of Australia which creates
barriers for the smaller retailers.
Customer service par excellence is the main business motto of Dan Murphy’s and it holds
for both the physical and online store. The online store offers more product varieties at the
lowest price possible in the market. It also helps in increasing the convenience of the customers

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by offering three types of deliveries, such as, on demand delivery, which is metro delivery within
less than 2 hours; self pick up from any Dan Murphy’s store within 30 minutes of online
ordering; and direct shopping at the stores (Danmurphys.com.au 2019).
The target markets of Dan Murphy’s include adults aged more than 18 across the country
irrespective of their gender, economic and social background. By offering liquors at the lowest
market prices, Dan Murphy’s has targeted professionals of all income groups. Moreover, people
who have a luxury lifestyle, and are price insensitive for high quality liquors. The revenue of this
liquor store grew in a massive way in the past few years and it became a part of $8 billion liquor
business of Woolworths, which also includes the BWS chain (Evans 2016). It has earned $4.3
billion in 2016 which accounts for 30% of the total alcohol sales (Insidefmcg.com.au 2017).
Key Partners
Woolworths
Key Activities
Sale of liquor
Value
Propositions
Lowest price
guarantee
Providing
imported, rare
and exclusive
domestic and
international
wine and other
types of liquor
Customer
Relationships
Providing
suggestions to
the customers
based on
purchase history
Customer
Segments
Age: 18 and
above
Economic
background: All
income groups
Social
background:
high society
people, upper-
middle class
people, with
preference for
high quality
liquor
Key Resources
Efficient man
power, for
managing price
comparison
each morning,
marketing
activities,
capital for
importing rare
and exclusive
wines
Channels
More than 220
stores across
Australia
Online store
Supply source
for imported
products

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Cost Structure
Supply of liquors
Marketing cost
Human resource cost
Revenue Streams
Sales in online and physical stores
Table 1: Business canvas model of Dan Murphy’s
Dan Murphy’s has been chosen as the competitor of our business as it operates as it is the
largest liquor chain store in Australia in terms of total sales and market share and has both
physical and online stores. There are other companies also who has market share but Dan
Murphy’s has been able to set a standard in the liquor market through cost leadership strategy.
Digital innovations have helped the companies to reduce the market barriers through the creation
of business models that have lower operating costs. Thus, competing in the online market is
easier than competing in the physical market.
Competitive analysis of Dan Murphy’s
RACE model by Dr. Dave Chaffey will be used to analyze the digital marketing
communication strategy of Dan Murphy’s. RACE is the abbreviation of Reach, Act, Convert and
Engage. This model is useful to assess the digital marketing of any organization for the products
or services and take appropriate measures to improve digital marketing to reach out to larger
audience effectively (Chaffey and Ellis-Chadwick 2019). Digital marketing refers to the
interactions with the audience by using digital mediums, such as, digital devices such as
smartphones, desktops, TVs, gaming devices etc, digital platforms like social media, digital
media such as emails, search engines and the social networks, digital data and digital
technologies (Morris 2019).

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Figure 1: RACE model for digital marketing communication
(Source: Chaffey and Ellis-Chadwick 2019)
1. Reach: Dan Murphy’s builds awareness about their products and business strategies
through the digital platforms and digital media, such as, social media, blogs, emails, search
engines. Dan Murphy, the founder of the business used to write stories as well as reviews about
the wines and this tradition is still being continued in the digital platforms. At present Dan
Murphy’s use various channels like owned, paid and earned media to reach out to a larger target
audience. By advertising in the social media, and other digital paid and integrated platforms like
online news sites, radio channels, television channels and using digital media like newsletters,
emails, pop-ups, the company reaches to its target market. It can be illustrated in the following
manner. In its own website, Dan Murphy’s has written about its products and their features and
also about their lowest price policy. Similarly, it has accounts and handles in Facebook, Youtube,
and Instagram and it puts up updates about their wine club and social events. This process is
followed for blogs, newsletters, and other online publications, and paid channels in radio and
television. In the search engines also, Dan Murphy’s releases its ads and this way, it reaches to
its audiences.
2. Act: In this stage, Dan Murphy’s focus on content marketing. This stage enables the
company to interact with the audience and persuade them. After selecting the digital platforms

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and digital media for publishing the ads, companies create the campaign contents to persuade the
audience. As in case of Dan Murphy’s, it creates contents appropriate for its target groups. In all
types of digital platforms, the posts that are made are carefully developed. The features of the
rare, exclusive and imported wines and other liquor products, detailed information and updates
about the social events hosted by the company, information about their wine club, loyalty
programs and lowest price guarantee program, and photos and news updates about their business
growth and customer reviews are posted in all the digital platforms and digital media
(Danmurphys.com.au 2019). As digital marketing is useful to reach out to a much larger
audience at less time and at a lower cost, thus, by creating contents, such as, blogs, photo
galleries, product information, company growth information, Dan Murphy’s initiate interactions
with the target market. At this stage, buyers make their decision based on the reviews, and
comparing with other competitors’ products.
3. Convert: This step entails conversion of the target customers into actual customers. In
other words, in this step, the conversion of purchasing intention to sale happens. Thus, the e-
commerce process, product, pricing and promotion strategies are important in this stage which
converts the leads to actual sales. The most competitive strategy taken by Dan Murphy’s is the
pricing of the products. Since the beginning, Dan Murphy’s focused on providing the best
quality, imported and exclusive wines and other liquor products at the lowest price. Thus,
regarding the product pricing, it is already following its core business strategy which is
communicated through digital marketing. In a television commercial in 2015, Dan Murphy’s
showed the inner working of the Price Change Team who works each morning to monitor,
review and beat the competitors’ price even before the stores open (Green 2015). This has given
confidence to the customers regarding the lowest price offers.
The content in the digital catalogue gives not only an idea about the products, but also
helps to create awareness and educate the customers about the wine producing regions as well as
the countries so that they can make well informed purchase decision and also create a strong
bond with the brands (Northwood 2016).
As customer excellence is in focus, Dan Murphy’s has chosen the personalization
approach in the digital marketing. It has created a personalized approach as that the customers
want an ongoing relationship with the online brands and that is possible with personalization.

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Using data automation technology, Dan Murphy’s sends automate emails with personalized
contents to the customers and the emails contain information about product suggestions based on
his purchase records. It has been found that this approach reduced the audience size by 72% but
the revenue has increased by 25% (Cooper 2018). The contents are written in a manner that
makes Dan Murphy’s a drink expert rather than just a retailer. There is a section ‘additional
content’ in the emails and website, such as, suggestions on food match, and customers are
making purchases after clicking on the content. 9% consumers are found to be making a
purchase after clicking on additional content (Cooper 2018). Moreover, interactions with the
customers are undertaken through phone, social media, other than face to face to get their
reviews and use them to improve the services.
4. Engage: This is the last stage in digital marketing process in which the companies take
strategies to build a long term relationship with the customers and make a loyal customer
database. Personalization approach taken by Dan Murphy’s is beneficial for creating a loyal
customer base. The personalized emails and the feedback collection process in the social media
and through other digital channels are meant to engage the customers in the product range and
business improvements of the company (Insidefmcg.com.au 2016). In the digital marketing
communication, it is essential to continue the interactions with the customers to build a long term
relationship. Hence, based on the past purchases, Dan Murphy’s creates a database of the
customers and provide suggestions for the next purchase. This has helped in increasing the sales
for Dan Murphy’s, along with increase in the repeat sales.
Summary, Key takeaways and Implications
From the above competitive analysis of digital marketing communication by Dan
Murphy’s, it can be said that it pays a substantial attention to the digital marketing campaigns
although it is a market leader for a long time. Dan Murphy’s has presented itself as not only a
liquor retailer but also an expert in this industry. It not only presents mere product range, but also
presents background information about the products, wine producing regions, suggestions on the
food choice etc. which helps the customers to be well informed and then make purchasing
decision. Personalized emails with personalized suggestions are also useful for creating a long
term relationship with the customers. However, it can be said that Dan Murphy’s should also

7E-COMMERCE & MARKETING
focus on social media marketing. It should be more proactive for collecting customers’ feedback
through social media and implement those in their business strategies.
The key takeaways from this analysis are that to attract the target market and create a
relationship with them, it is essential to create the promotional content in a manner which can
cater to the needs and wants of the consumers. Digital marketing is extremely useful as it helps
to reach out to a larger audience in a time and cost saving manner. Effective marketing mix
should be developed and by applying digital marketing communication techniques, such as,
using digital platforms and digital media, the product and price should be promoted. For online
liquor business, personalization approach is extremely beneficial. Through the contents, the
company should make the customers feel special. Thus, a personalized suggestion on food
choice that goes with a particular wine is useful to attract a customer and build a relationship
with him. Moreover, the website must be made informative. Only listing of products will not
convert the leads into sales. Thus, taking a cue from Dan Murphy’s, it can be said that the
website must be made in a manner so that it works as a window to the story of wine production
and its legacy. The customers should be educated and well informed about the features of the
products and the manufacturing so that they can develop awareness, which is beneficial while
making a purchase. Apart from that, for an online store, the convenience of the customers should
be paid attention also. That should be clearly mentioned in the website and e-commerce site.
Lastly, Dan Murphy’s operates on cost leadership strategy and hence, to compete with it, it is
essential for a new business to compete with a cost focus strategy. It should offer discounted
prices for bulk purchases along with varieties from the domestic market, and by applying digital
marketing channels, such as, social media, radio, television, emails, websites, search engines,
and blogs, the target audience must be reached and convinced for making a purchase from a new
store.

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