Houzit Homewares Marketing Strategy Case Study

This case study discusses the marketing strategy of Houzit Homewares, a popular homeware retailer in Brisbane. It covers their organizational overview, objectives, opportunities, recommendations, tactics for strategy implementation, legal and ethical requirements, and more.

HOUZIT HOMEWARES MARKETING STRATEGY CASE STUDY
Table of Contents
Introduction................................................................................................................................1
1.1 Organizational overview:.....................................................................................................1
1.3 Organizational objectives.....................................................................................................2
1.3.1 Current size, capabilities, and resources of the organization........................................2
2.1 Franchising.......................................................................................................................3
2.2 Joint venture.....................................................................................................................3
3.1 Use of an improved Marketing Mix Strategy..................................................................3
3.2 Alignment with the Organizational Goals........................................................................4
3.3 Use of Value Chain Analysis...........................................................................................4
3.4 Marketing Performance Metrics......................................................................................4
4.0 Tactics For Strategy Implementation...................................................................................4
4.1 Scheduling for marketing activities.................................................................................4
5.0 Legal and Ethical Requirements..........................................................................................5
5.1 Relation with the Organizational Resources and Capabilities.............................................5
6.0 Conclusion............................................................................................................................6
References..................................................................................................................................6
Introduction
1.1 Organizational overview:
Houzit Pty Ltd is a renowned homeware retailer operating a chain of stores in Brisbane. The
company is famous for fitting bedroom products, bathroom fittings, mirrors, and decorative
materials. Houzit is a large growing company in Brisbane with over 15 stores in the area and
employs over 150 staff members. The analysis of each aspect of Houzit company is as
provided below.
1.2 Direction and Organizational Overview
Houzit vision and mission reveal the strategic plan of the company. Strategic direction acts as
a roadmap which leads the firm achieve its strategic goals. The vision of the company also
provides direction for employees to achieve the set goals. Setting strategic direction involves
finding a target direction and committing to getting there. As a national renown retail brand,
this company has a cutting edge in providing its customers with unique, quality and secured
payment system. Consequently, the company is focused on expanding their stores from 15 to
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around 100 stores by 2020. Therefore, it is critical to incorporate the strategies of marketing
with the goals of the organizations for greater performance. Moreover, companies maintain
their competitive advantage through clear market vision which ensures market sustainability
in the market(William G. Zikmund, 2010).
1.3 Organizational objectives
The success of a company is geared on measurable objectives formulated by the
company(Philip T. Kotler, 2014). Houzit seeks to increase its sales by $5million to 20million
per year for the next three years. The company is also prepared to boost their customer
loyalty list by 5,000 in the same period. This will enable the company to command a
significant portion of the homewares markets segment confidently. Moreover, increased
customer loyalty will boost brand recognition in Brisbane to at least 1 in 3 of the brand in a
random survey to be taken in the next 18 months.
1.3.1 Current size, capabilities, and resources of the organization
The company being in operation for the past five years have accumulated the following
resources and size and capabilities;
Capabilities: Each of the company’s stores can generate the following sales breakup
Bathroom fittings: 30%
Bedrooms fittings: 35%
Mirrors and decorative items: 20%
Lighting fixtures: 15%
Employees: 15-20 fulltime staffs and casual workers
The current size each store is 1000-1500 M2
1.3.2 Gap Between the Objectives and Capabilities
The company vision is to grow their business and enjoy a significant market share of the
homewares market in Brisbane. However, the company has a challenge due to fewer
employees working in the firm. Thus, there exists a disconnect in the objectives of the firm
and their current capabilities. Moreover, there is a concern in the legislation regarding the
operations of the business in the expansion of the business which needs to be addressed. This
leads to a gap in the objectives.
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2.0 Opportunities
Houzit is strategically placed to adopt joint ventures and franchise as marketing
opportunities.
2.1 Franchising
Houzit can use this marketing strategy to avail the homeware products at affordable prices to
the target groups in various segments(Sally Dibb, 2013). The company products have an
already established market share. Therefore franchise will help pool more customers to brand
recognition. The company will also benefit from communicating and sharing ideas with the
prospective franchisee networks. In addition to that, franchising will enable the company to
increase their current demand for meeting the growing sales opportunities in the new markets
in Brisbane(Terence A. Shimp, 2012). The advantage is that their business will grow, but on
the other hand, the unstable political condition, the legislation proposed by the governing
authorities and sufficient monetary fund will be a great difficulty to overcome.
2.2 Joint venture
Target market signifies the market segments that are more preferable and favorable for the
sale of their manufactured products. They can target persons with local stores selling
decorative home products as well as big contractors and renovators(Chitty, 2017). The risk
that may be involved in the diverse organizational culture and unequal share of profit which
may cause conflicts between the partner associations
3.0 Recommendation
3.1 Use of an improved Marketing Mix Strategy
This strategy is composed of Price, Products, Promotion, and Place. The organization
concerned with this needs to avail premium quality of products at an affordable cost to attract
a large number of customers. They can also provide promotional services through the media
or social media(Terence A. Shimp, 2012).
In product development, one needs to consider quality, features, design, packaging, customer
service, and any other after-sales service while place includes the business location,
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distributors, and the ability to use the internet in selling products to consumers directly. Price,
on the other hand, is concerned with considerations such as discounting, price setting, as well
as credit and cash purchases and lastly promotion, involves consumer persuasion through
direct marketing, advertising, personal selling, and sales promotion
3.2 Alignment with the Organizational Goals
The company should use mix strategies to ensure that many locals will purchase their
products to improve their brand loyalty. Using promotional strategies will increase awareness
and thus meet the goal of increasing 10,000 customers to 15,000.
3.3 Use of Value Chain Analysis
This depends on factors such as a firm’s infrastructure, level of technology, procurement, and
Human Resource management. According to the given case study, the firm is increasingly
expanding thus the HR should welcome the diversified employees to obtain the objectives.
Modern technology should be used for customized products(Kamthe and Verma, 2013).
A value chain involves activities including designing, production, marketing, and distribution
since Houzit specializes in bathroom and bedroom fittings, mirrors and decorative items.
There is a need to know the raw materials used and the additional values to deliver the best to
the customers (Bessant et al., 2012).
3.4 Marketing Performance Metrics
Website visit, customer acquisition cost, referral rate, average lead close rate are some
marketing performance metrics used by the organization. Total expenditure on marketing is
evaluated to fulfill the organizational objectives. Referral rate is improved if customers are
satisfied with the homeware. Regular checks are required so that more products can be
designed. Through this, brands increase their competitive intelligence. Return on investment
and Return on marketing investment are some of the metrics used.
4.0 Tactics for Strategy Implementation
4.1 Scheduling for marketing activities
Houzit is an integrated company with robust networks amongst the subdivision and products
lines. To ensure that it gains a competitive market position, the company concentrates more
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efforts to meet their organizational objectives. Therefore, management ought to monitor and
evaluate the status of its marketing objectives.
Costing: Houzit may require huge initial capital investments to implement its marketing
strategies. For example, to invest it requires approximately $2000-$3000 per month in digital
marketing. Key performance index (KPI) focus on the areas that Houzit company can further
increase its performance (Sampson and Spring, 2012). Marketing activities, management, and
other strategic functions could improve its achievements through repeated analysis of their
goals and objectives at all levels.
5.0 Legal and Ethical Requirements
The company ought to obey the current legislation as provided under the Australian
government. The legislation for fair trade and competition in the business environment seeks
to safeguard the interest of all the industry players regarding fair business practices
Competition and Consumer Act 2010 (Berthon et al., 2012). The competition and consumer
Act also sets out consumer’s rights and responsibilities that the business must consider in
advertising and promotion regarding the marketing strategies. Houzit observes the Australian
Consumer Law (ACL), which guarantees the rights of consumers during purchasing. They
should also follow the sustainability issue by using all the eco-friendly products so that the
sustainability of the environment can be maintained.
Moreover, the company ought to encourage environmental conservation through emphasizes
on recycling of raw materials. Consequently, the accepted code of marketing practices should
be followed by providing accurate details on the homewares products to the potential
customers. The code of practice also demonstrates that the location address has to be revealed
in the bills and no deceptive authorizations by other people shall be tolerated by the
customers.
5.1 Relation with the Organizational Resources and Capabilities
The discussion on the performance metrics and the legislation ensures that the company
promotes good ethical standards in the market. Houzit should, therefore, follow the ethical
guideline for expanding their business and operate their business not only for satisfying their
customer’s demands but also for the growth of their company in Brisbane(Hamister, 2012).
Houzit should also adhere to routine checks of their customers’ feedback on their customer
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services. Cases of ethical considerations and breach of contracts should be punishable with
penalties for compensation to whichever affected party. Moreover, Houzit should take
initiatives for providing training to their employees so that they can work efficiently for
achieving the targeted goals and objectives of the organization.
6.0 Conclusion
This report points out that Houzit company has vast opportunities to gain a larger market
share in Brisbane. It is, therefore, encouraging to the management to devise more strategies
as identified such as joint venture, franchising and other that could improve the brand of
Houzit homewares. Some of the challenges facing Houzit company is their competitors who
could gain a strong market position. However, effective implementation of organizational
objectives could help the organization to remain competitive in the market.
References
Berthon, P. R., Pitt, L. F., Plangger, K. & Shapiro, D. 2012. Marketing Meets Web 2.0,
Social Media, And Creative Consumers: Implications For International Marketing Strategy.
Business Horizons, 55, 261-271.
Bessant, J., Alexander, A., Tsekouras, G., Rush, H. & Lamming, R. 2012. Developing
Innovation Capability Through Learning Networks. Journal Of Economic Geography, 12,
1087-1112.
Chitty, J. D. 2017. Integrated Marketing Communications, Australia, Cengage Learning.
Hamister, J. W. 2012. Supply Chain Management Practices In Small Retailers. International
Journal Of Retail & Distribution Management, 40, 427-450.
Kamthe, M. & Verma, D. S. 2013. Product Life Cycle And Marketing Management
Strategies. International Journal Of Engineering Research And Technology.
Philip T. Kotler, G. A. 2014. Principles Of Marketing, Pearson
Sally Dibb, D. L. S. 2013. Marketing Essentials, Chicago, Pearson Education.
Sampson, S. E. & Spring, M. 2012. Customer Roles In Service Supply Chains And
Opportunities For Innovation. Journal Of Supply Chain Management, 48, 30-50.
Terence A. Shimp, J. C. A. 2012. Advertising Promotion And Other Aspects Of Integrated
Marketing Communications, Cengage Learning.
William G. Zikmund, B. J. B. 2010. Essential Of Marketing, Usa, South Western Cengage
Learning.
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