Feasibility Study - Assignment Sample

Feasibility Study
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Executive Summary
Corporations are now making extensive use of ecommerce platform by means of globalization
and technological advent for extending their products to consumer markets. The current scope of
analysis deals with Coles Supermarkets private label branded products that the Company is
extending to wider areas in Australia. The products segmentation, market size, diffusion, target
market, consumer behaviour has been analysed extensively to arrive at marketing mix
consideration for the product. The analysis provides a conclusive marketing mix analysis that the
Company can adopt for its markets such that it is able to achieve success relative to its products.
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Table of Contents
Executive Summary.........................................................................................................................2
1.0 Introduction...........................................................................................................................4
1.1 Company Background............................................................................................................4
2.0 Segmentation, Market size assessment and Diffusion...............................................................6
2.0 Target Market, Consumer Behaviour.................................................................................10
4.0 Competitive Analysis...............................................................................................................12
5.0 Marketing Mix Recommendations..........................................................................................13
6.0 Conclusion...............................................................................................................................17
7.0 Reference Lists........................................................................................................................18
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1.0 Introduction
Globalization has expanded opportunities for corporations to market their products to larger
areas (Kotler & Armstrong, 2010). Technology has further provided impetus to corporations to
extend their products to markets where physical existence of the corporation is not present.
Feasibility study has been included in this analysis to understand a product’s target market,
segmentation and consumer behaviour regarding the product (Hollensen, 2010). For the purpose
of analysis Coles Supermarket Pty Ltd has been selected and product category selected is private
label branded products of the Company.
1.1 Company Background
Coles Supermarket Pty Ltd operates in Australia and is a retail supermarket consumer chain that
has its headquarters located at Melbourne. The Company’s parent company is Wesfarmers. The
Company was established in the year 1914 and carters to over 801 locations. John Durkan is the
current Managing Director of the Company (Nenycz-Thiel & Romaniuk, 2012). The Company is
highly profitable with over 100,000 employees. The Company sells and distributes various well-
known brands present in Australia. Recently the company has expanded its operations by
integrating Coles Online, which is the Company’s online shopping portal. Along with
distributing products of other companies, the company has started manufacturing private label
branded products as well.
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Figure 1: Coles Private Label Brand Products
The company manufactures various essential products in its private label brand including
products of daily use. Coles have earned high brand loyalty amongst its customers for providing
fresh produce to them. Hence, the Company easily markets and has generated large market share
in its private label branded products (Malhotra & Peterson, 2014). In the current discussion
ecommerce market for Coles private label branded products will be analysed. The scope of this
current analysis deals with deeper and detailed consumer, market and industry analysis of the
several private label branded products of Coles in Australia.
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2.0 Segmentation, Market size assessment and Diffusion
Coles is primarily an Australian branded that has been extending its retail product categories to
consumers. Analysis of consumer trends of the Company reflects high brand loyalty existing for
its products along with private label brand (Armstrong et al., 2015). A deeper analysis of
segmentation, market size assessment and diffusion will allow detailed understanding related to
the same.
Demographic Segmentation: Australian retail has witnessed a rapid growth in the last century
with adoption of ecommerce ways of doing businesses. Both genders male and female, from age
group 24 years to 65 years forms the consumer segment for private label branded products for
Coles. An income standard that has been targeted through this category includes mostly all
income classes including middle and upper income groups (Jobber & Ellis-Chadwick, 2012).
However the scope of the current analysis deals with quality products that are catered by the
company at appropriate prices.
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Figure 2: Growth in Grocery Retail E-Commerce Business
The above market growth of annual spending of USD$4,500, reveals that the market size has
grown overall in Australia to include more customers. Immigration has further added to such
annual spending (Trevena et al., 2015). Amongst total retail online sales that takes place, it has
been seen that Coles private label branded products occupies almost 33.2% share. Meaning that
Coles private label branded products has high rates of diffusion compared to other private label
branded products.
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Figure 3: Market Share of Retailers in Australia
Geographic Segmentation: According to scope of analysis that has been undertaken here it can
be understood that Coles catering to Australian markets have been analysed. Geographic areas
that Coles caters to are various cities including suburbs of Australia (Dibb, 2010). Therefore, the
Company’s market size can be compared to the entire retail customers present in Australia.
Moreover it can be understood from market share that the Company has a high rate of market
diffusion.
Psychographic Segmentation: Coles private label branded products are purchased by customers
who are highly aware regarding quality of the products along with appropriate price range.
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Figure 4: Market Share of Private Label Brands
Source: The Australian
Behavioral Segmentation: Consumers who prefers convenience in purchasing products online
are the behavioral group that Coles will cater to. The below analysis mentions the various
products that the consumers prefers to purchase online. Coles Australia’s product strategy will
aim at accompanying these products in their range of products such that they are able to attract
large number of customers.
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Figure 5: Consumer Purchase Preference
2.0 Target Market, Consumer Behaviour
In order to understand product likeliness it becomes essential to analyse target market for the
organization. Then understanding target market’s consumer behaviour will allow developing
greater insights into product strategy, pricing and promotion or distribution strategy as well
(Needle, 2010). Market Segmentation of the products conducted for Coles private label brands
allows ascertaining target market consumers for the ecommerce business well. It can be
understood that target market that the Company will aim at is from age group 24 years to 64
years. Mostly female will form the target group while designing promotional strategies, as it has
been ascertained that women do most shopping for groceries of the family. Occupation of the
target consumer group includes mostly those engaged in white collar jobs. Consumers who do
not have much time to visit a grocer’s store to purchase items of daily needs will constitute the
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major target customer group. The consumer will possess smart phone from where they will
easily be able to place order, with an inclination to make purchases through e-businesses. Retail
purchasers through ecommerce platform are on a gradual rise and are set to increase further
(Solomon, Russell-Bennett & Previte, 2012). Hence, the Company’s strategies will be dedicated
at all such customers residing in Australia, who wants to make valued purchases through mobile
phones or apps. Mostly Australian customers, who have a brand inclination towards Coles and
high regards for high quality products and affordable price range, will be targeted.
Consumer behaviour for retail class of consumers can be said to be mostly need based. A
customer in this target market category once faced with need to make purchase regarding a
particular product category will search for information online and then make purchase related to
the product (Horta & Camanho, 2014). There are various factors that will influence customer
choice towards Coles private label branded products. They mostly include societal factors,
economic (income) related factors, family and friends groups, personal and psychological
factors. Coles product and pricing as well as promotional strategies will have to aim at
influencing all these factors such that consumer need regarding products gets finally
transformed into choices of products from Coles Supermarkets.
In order to cater to economic factors for consumer behaviour analysis, the Company needs to
attend to family income, personal income, expectation regarding future income, standard of
living and liquidity or consumer credit avail in the market. Analysing these economic factors of
the market will allow arriving at conclusive decisions regarding the consumer’s behaviour
attitudes. However, as Coles caters to retail products in the market, its private label branded
products are more competitively prices in comparison with others. Therefore, the Company can
easily extend competitiveness in regards to these factors.
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Personal factor analysis reveals that it is integral to understand consumer’s age, occupation, life
cycle stages and personal as well as self-concept. Within these personal factor analysis Coles can
extend the benefits of its organic products to health of consumers which will help it create a
niche within the market.
Psychological factor analysis reveals that private label brand products motivation, involvement
with the product, perception related to the products, learning, lifestyles and attitudes can
contribute to making product purchases. These dimension analysis reveals that consumers have
relatively less motivation and involvement towards purchasing private label branded products of
Coles; therefore efforts need to be made accordingly. Cultural and social factor analysis reveals
that culture, subculture, social groups, role and status determine product choices. Therefore,
private label branded products in case are able to motivate certain social groups will be able to
become leaders in the market.
4.0 Competitive Analysis
Australian retail sector is characterized by presence of large number of retailers. Along with
presence of large number of real store retailers there is present varied number of online retailers
as well (Burke, 2011). Competitive pressures within the industry are fierce and immense due to
presence of wide number of competitors and variety of products. Therefore, prevalence of
indirect and direct competitive pressures, Coles has to devise its competitive strategy and
position them accordingly such that it is able to attract sizable number of customers.
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The Company adopts a positioning strategy that is matched to extend its core competencies. As
earlier discussed, due to backward supply chain linking with Wesfarmers, the Company is able to
deliver freshly made produce (Zarantonello & Schmitt, 2010). The core positioning strategy for
the Company is to provide its customers with quality products at appropriate prices. The private
label branded products of the Company is aimed at creating greater customer loyalty towards the
Company. The Company provides its customers with a whole lot of range from various brands.
Its retail stores are aimed at providing its customers with unique experience with choices of
various product categories. With the expansion of its current private label branded product
category, it aims to extend its relationship that it already has with its customers to the next level.
However, there are multiple brand names within Australia that are manufacturing private label
branded products and catering to their customers through ecommerce modes (Jansson-Boyd,
2010). This has provided fierce amounts of competition to Coles, who aims at providing high
quality private label branded products to its customers.
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Figure 6: Perpetual Map
Designing and ascertaining competitive positioning for the Company will allow understanding
position of the Company in the market. The above mentioned perpetual map aims at providing a
detailed insight into understanding trust value of various companies as against the quality of
products delivered. Coles enjoys a high level of trusts in its various private label brands that it
manufactures. The mapping of Coles relative to present market competitors reflects that the
Company needs to conduct certain research in order to redesign its products, prices, promotional
strategies in a batter manner. It will allow the Company to become highly profitable and enjoy
high competitive share in the market as well. There are various other competitors who offer
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similar types of products as compared to Coles, therefore the sole focus of the Company need to
be oriented towards extending its product in a manner that allows creation of niche in the market.
5.0 Marketing Mix Recommendations
Marketing mix is identified to be a suitable appropriate strategy that companies adopt while
deciding on its products, price, distribution strategy and promotional techniques. Analysis of
target market, customer segmentation and perpetual map help reveal regarding Coles marketing
mix strategy that it needs to adopt (Hooley, Piercy & Nicoulaud, 2012). Analysing target market
feature and consumer behaviour patterns will further allow arriving at suitable marketing mix for
private label branded products of the Company. The Company has been suitable able to position
its private label branded products in the market, however it has not been able to gain substantial
share across all product categories though quality maintained for the product is premium in
nature (Luan & Sudhir, 2010). Below is recommended a suitable marketing mix strategy that has
been proposed for Coles to be adopted.
o Product: Coles Supermarkets have been manufacturing several private label branded
products in varied categories for its customers. While all the products represent fair deal
of quality value, they have not been able to establish themselves as premium or most
sought after product category in the market. Such challenges in the products arise mostly
due to its product packaging feature. Coles products be it grocery or freshly produced
fruits and vegetables or meat and fish or eggs, comes from Wesfarmers, its parent
Company. Due to backward integration in supply chain of the Company it is able to
provide highest possible quality products in the market to its consumers. However, it
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needs to position its products in a niche segment. In order to do so the Company needs to
accommodate environmental friendly packaging. Introducing environmental friendly
packaging that is biodegradable or easily recyclable will not only help attract more
customer attention but also cater to its CSR (Corporate Social Responsibility) objectives.
Catering to CSR objectives will help the Company make positive contribution to the
environment as well as to the society and community. Packaging products using
biodegradable material of attractive colors will further help attract customer attention and
easily enhance consumer likeliness towards its products. The Company can introduce
product segment especially in its ecommerce platform by having organic produce.
Increasing awareness regarding organic produce will help gain more attention of
consumers (Nenycz-Thiel, 2011). Increasing awareness regarding health and harmful
chemicals that are used in produce will easily allow customers to get diverted into
organic produce. This new endeavor will allow the Company to extend its brand
awareness especially in case of fresh produce.
o Price: The price at which Coles Supermarkets sells its products is competitive pricing. In
order to establish its brand identity in the market that Company had been making
extensive use of competitive pricing of its product. However if the Company decides on
to applying its product strategic recommendations to make environmental friendly
packaging and deliver organic fresh produce to its customers, then it can charge demand
pricing methods (Resnick et al., 2016). Post monitoring demand related to particular
products, the Company can easily charge consumers extra for the additional endeavor
they make to cater to consumers. This pricing strategy will allow consumers to view the
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products of the Company in a separate light moreover; it will allow the Company
establishes a distinguished brand identity in the market. Developing niche pricing
strategy for additional benefits given to consumers will allow the Company become
profitable and further expand on its existing private branded products.
o Place: Places of distribution ascertains competitive position for the brand. Coles
Supermarkets due to its predominant presence at various locations in Australian market
and ecommerce platforms mainly makes use of its own label to distribute its products.
However, this feature has allowed the brand to cater to limited number of customers, such
as catering to those who visit their stores or catering to those customers that visits their
websites (Solomon et al., 2014). In order to expand its market area or channels of
distributions, the Company in regards to its private label branded products need to make
tie-up with other companies. The Company with its existing brand value can sell its
products through other retailers present in the market. Moreover, the Company can make
tie-up with Amazon Australia in order to sell its products online. In this manner, the
company will be able to develop more number of customers, to whom he can offer other
benefits. This newly developed distribution channel for the Company will allow
developing its retail base further thus extending distribution area further.
o Promotions: Promotions and advertisement constitutes an integral factor for any retail
company due to the fierce nature of competition existing in the market. Coles
Supermarkets undertake several initiatives for promoting its market online as well as
through hoardings and other forms of traditional advertisements (Jansson-Boyd, 2010). In
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order to promote its private label brands in an exclusive manner, the Company has to
integrate several efforts including its ongoing pro motions. It needs to adopt especially
social media and other promotional methods of online advertisement. It needs to first
develop good contents for its private label branded products, then make promotions for
the same by means of SEO and SEM techniques. The Company can also advertise for its
products in Amazon and other websites where the Company decides to make tie-ups
with. Such extensive social media campaigning through Facebook, Instagram and Twitter
or other media will help the Company’s product generate awareness related to its
products (Huang & Sarigöllü, 2014). This will further allow the Company to gain
extensive position in the market.
The above recommendations related to marketing mix for the Company’s product will allow the
Company develop brand value and brand identity in the market. It will help create brand
awareness and also customer loyalty related to the same.
6.0 Conclusion
Coles Supermarkets constitutes a highly profitable brand with its consumer having high loyalty
towards its private label branded products as well as other products. The Company develops a lot
of strategies that can enhance performance of the private label brands further within the market.
With expansion of Amazon Australia there is a tremendous amount of competitive forces that is
faced by the organization. These several pressures can be overcome only with adoption of
suitable competitive strategies such as providing customer with loyalty cards, other additional
benefits such as free gifts and other home delivery options will allow the Company to further
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expand its brand. Moreover the scope of operation of the Company can be expanded through
market penetration strategy that it can adopt to expand across multiple suburbs in Australia.
Though the Company is highly profitable in Australia, yet it will be able gain substantial
foothold in the market due to the recommended marketing mix. It will be able to compete with
Amazon and other competitors in the market.
7.0 Reference Lists
Armstrong, G., Kotler, P., Harker, M. and Brennan, R., 2015. Marketing: an introduction.
Pearson Education.
Burke, S.J., 2011. Competitive positioning strength: market measurement. Journal of Strategic
Marketing, 19(5), pp.421-428.
Dibb, S., 2010. Market Segmentation Success–Making it Happen!. Strategic Direction, 26(9).
Hollensen, S., 2010. Marketing management: A relationship approach. Pearson Education
Hooley, G., Piercy, N.F. and Nicoulaud, B., 2012. Marketing strategy and competitive
positioning. Prentice Hall/Financial Times.
Horta, I.M. and Camanho, A.S., 2014. Competitive positioning and performance assessment in
the construction industry. Expert Systems with Applications, 41(4), pp.974-983.
Huang, R. and Sarigöllü, E., 2014. How brand awareness relates to market outcome, brand
equity, and the marketing mix. In Fashion Branding and Consumer Behaviors (pp. 113-132).
Springer, New York, NY.
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Jansson-Boyd, C.V., 2010. Consumer psychology. New York, NY: Open University Press.
Jobber, D. and Ellis-Chadwick, F., 2012. Principles and practice of marketing (No. 7th).
McGraw-Hill Higher Education.
Kotler, P. and Armstrong, G., 2010. Principles of marketing. Pearson education.
Luan, Y.J. and Sudhir, K., 2010. Forecasting marketing-mix responsiveness for new
products. Journal of Marketing Research, 47(3), pp.444-457.
Malhotra, N.K. and Peterson, M., 2014. Basic marketing research. Pearson.
Needle, D., 2010. Business in context: An introduction to business and its environment. Cengage
Learning EMEA.
Nenycz-Thiel, M. and Romaniuk, J., 2012. Value-for-money perceptions of supermarket and
private labels. Australasian Marketing Journal (AMJ), 20(2), pp.171-177.
Nenycz-Thiel, M., 2011. Private labels in Australia: A case where retailer concentration does not
predicate private labels share. Journal of Brand Management, 18(8), pp.624-633.
Resnick, S.M., Cheng, R., Simpson, M. and Lourenço, F., 2016. Marketing in SMEs: a “4Ps”
self-branding model. International Journal of Entrepreneurial Behavior & Research, 22(1),
pp.155-174.
Solomon, M., Russell-Bennett, R. and Previte, J., 2012. Consumer behaviour. Pearson Higher
Education AU.
Solomon, M.R., Dahl, D.W., White, K., Zaichkowsky, J.L. and Polegato, R., 2014. Consumer
behavior: Buying, having, and being (Vol. 10). Pearson.
Trevena, H., Neal, B., Dunford, E., Haskelberg, H. and Wu, J.H., 2015. A comparison of the
sodium content of supermarket private-label and branded foods in Australia. Nutrients, 7(8),
pp.7027-7041.
Zarantonello, L. and Schmitt, B.H., 2010. Using the brand experience scale to profile consumers
and predict consumer behaviour. Journal of Brand Management, 17(7), pp.532-540.
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