This paper explores the marketing strategy of Woolworths through the 4Ps method showing its strategy to strive in the ever changing global market. The paper also shows the negative impact that the lack of political factor has provided and recommends to a better position.
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Running head: MARKETING AND MANAGEMENT Marketing and Management Name of the Student: Name of the University: Author Note:
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1MARKETING AND MANAGEMENT Executive Summary: The external environmental analysis of Woolworths shows the factors that directly make an impact in the marketing and management of the macro as well as micro environment of the company. This paper also explores the marketing strategy of Woolworths through the 4Ps method showing its strategy to strive in the ever changing global market. The paper also shows the negative impact that the lack of political factor has provided and recommends to a better position.
2MARKETING AND MANAGEMENT Table of Contents 1. Introduction:................................................................................................................................3 2. Marketing Environment of Woolworths:.....................................................................................3 2.1 Macro Environment:..............................................................................................................3 2.2 Micro Environment:...............................................................................................................3 3. The Four Ps of Woolworths:........................................................................................................3 3.1 Product:..................................................................................................................................3 3.2 Price:......................................................................................................................................3 3.3 Place:......................................................................................................................................3 3.4 Promotion:.............................................................................................................................3 4. Recommendation:........................................................................................................................3 5. Conclusion:..................................................................................................................................3 References:......................................................................................................................................4
3MARKETING AND MANAGEMENT 1.Introduction: Australia has its very own largest supermarket in the name of Woolworths. It has overall of 995 stores across the country with staff members counting up to 115,000 to support offices and also to provide services and convenience to its customers (MBA Skool-Study.Learn.Share., 2019). The pride of Woolworths lies in the fact that it works very closely with the Australian farmers and growers to ensure the customer with the best products. It is Australia’s Fresh Food People since it provides fresh fruits and meats to the customers. Being an innovative retailerin Australia, Woolworths knows its customers very well and are always looking simple yet new ways to keep their customers engaged in shopping through their App which can be easily accessed from anywhere, be it from home or in a journey on the way to their home through a train. They have accessibility that straight away delivers fresh products from its shelf to the customer’s kitchen. The current status of the competition in the grocery industry of Australia is gigantic. The external environment of the Woolworths can be categorised into two parts which are macro environment and micro environment. The micro environment consists of the factors that have a directinfluenceontheperformanceoftheorganisationthroughsuppliers,customers, competitors, intermediaries and also the public. On the other hand, the macro environment analysis can be gained through a simple PESTEL analysis (Knox 2015). It is important to analyse the Marketing mix strategy of Woolworths too to have a proper notion of its position in the market. The strategies that Woolworths have taken for its Price, Place, Promotion and Product will help to determine it.
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4MARKETING AND MANAGEMENT 2. Marketing Environment of Woolworths: 2.1 Macro Environment: In order to analyze the market for its macro environment, a tool called PESTEL analysis is used. It stands for Political, Economic, Social, Technological, Environmental and Legal factors that impacts the macro environment of the Woolworths company of Australia. oPolitical Factors: Woolworths is exposed to different types of political environment as well as political system risks, therefore before investing in a certain market, Woolworths should analyze the political stability and the vitality of the food retailing industry in the economy of the country (Arliet al., 2013). It should also analyze the level of corruption in the sector as well as the risk of the military invasion. Along with it, the tax rates and incentives plus the pricing regulations should also be looked after carefully. oEconomic Factors: inflation rate, interest rate, savings rate, economic cycle and more are some of the macro environment factors that determine the aggregate investment and demand in an economy (Kennedy 2016). Woolworths should also use the economic factors such as inflation and growth rate to forecast the growth route of the company. Woolworths should carefully gather the analysis of government intervention in the market, the labor cost and productivity in the economy and more that is related to the economic factor of Woolworths Limited. oSocial Factors: society’s culture, shared beliefs and attitude make a vital impact on the marketersinWoolworthsLimitedaswellasthecultureinsidetheorganization. Therefore, Woolworths should always analyze the demographics and the level of skilled population; they should keep track of the power structure of the society in which they live along with the education standard in the Woolworths industry. All the social factors
5MARKETING AND MANAGEMENT mentioned above along with gender roles, entrepreneurship spirit, leisure interests and more should be kept a good track of by the Woolworths for efficient running of the business. oTechnological Factors: nowadays when majority of the business depends upon the technology then it becomes necessary to analyze the technological factors that has an inevitable impact on the company, like Woolworths needs to know the recent and updated technological developments; its impact on the structure of the cost in food retail sector and also the rate of the technological dissemination. oEnvironmental Factors: the environmental standards of a place where a company aspires to establish itself, should be evaluated properly in order to operate in the markets. Some common environmental factors like weather, the climate change, the laws guarding the environmental pollution, the steps taken to regulate Air and water pollution in the retail sector and more should be kept in mind by Woolworths and other companies to function smoothly. oLegal Factors:legal factors are of utmost importance before setting any kind of business in the country. Woolworths Limited have also considered such aspects and considered the discrimination law, employment law, intellectual property law, health and safety law and more before settling down in a place and run the market. All these must be followed to avoid a competitive edge. 2.2 Micro Environment: Micro environment analysis includes the analysis that directly impacts the organizational performance and to analyze such environment a tool named Porter’s Five Forces is used. This tool is used to examine the on going situation and the performance of the company. Porter’s Five
6MARKETING AND MANAGEMENT Forces assesses five areas of the market that directly effects the company, here Woolworths; these five areas are: Buyers and their bargaining powers: the retail trade of Australia has consumers who have a wide variety of services and products from where they can select anyone they like to(Fern Fort University, 2019). The arrival of new supermarkets in the areas have stirred the competition between Woolworths and others that gives the consumer more advantage of having the power to bargain. Suppliers and their Bargaining Power: just like the buyers, suppliers’ power of bargaining has also increased in an alarming rate due to the increment in the competition of the retail trade. Whenever there is a shortage of supply during irrelevant season, this bargaining power deliberately increases (Khan 2014). Woolworths has the willingness to adopt an effective supply chain management so that they reach customer satisfaction. The constant Threat of a New Entry: seeing the profit one can gain from the retail industry, many new firms have started showing a desire to enter the industry, however they can not since the larger companies are already seen to dominate the markets. Therefore, for a large company like Woolworths, this threat is not yet big enough to worry about. Yet companies like Aldi have entered the retail market and became a close rival of Woolworths which has brought its profit level to a significantly lower level. TheproblemofRivalryamongtheExistingFirms:nowadays,therivalsof Woolworths have increased which includes companies like Aldi, Cole market, Asda and more. These companies aim for high market share just like Woolworths which has visually affected the profitability of the company.
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7MARKETING AND MANAGEMENT Threat of a substitute: substitute products are always handy and they come t a cheap price which is preferred by the maximum population (Eagleet al., 2013). To thrive in this condition, Woolworths is trying to apply differentiation strategy to accept the diversification and has offered more variety of products to select from in order to win over the trust of the customers. This strategy has the capability of increasing the sales of the company. 3. The Four Ps of Woolworths: The marketing mix that Woolworths follows is that of the 4Ps, which are Product, Price, Place and lastly Promotion. 3.1 Product: Woolworths provide wide range of products as a part of their marketing mix strategy so that the customer does not stay dissatisfied. Providing products ranging from shampoos to groceries are a part of their marketing mix to keep the customers engaged (Manzaneque 2014). In order to spread more products wise, they have started to sell magazines and stationary items as well. A standard quality is maintained by them, which is judged by Woolworths experts. The diversified product that Woolworths are selling have helped in all the round needs of the customers. 3.2 Price: Woolworths has their own pricing strategy for the survival in the market. Its aim is to maintain prices that are similar to the product or slightly higher, in the market. The prices assigned by them are kept in a competitive mode in the market once they the customers learn about the offers that it gives for the various premium brands in the food chain. At Tasmania
8MARKETING AND MANAGEMENT stores, a reward is given to the frequent shopper club that offers a certain amount of money for a particle number of points gathered, like one can get 20$ for every 2000 points that they collected (King and Thobela 2014). The store even provides the customers with shopping card of Woolworths that has a specialty of track purchasing automatically and it also offers applicable fuel discounts hence barring the need for retaining paper receipts. 3.3 Place: The Four Ps point of Place is the distribution strategy of an organization. The strategy that Woolworths follow for this is as follows: Woolworths currently have operations around in 1000 stores in Australia(Dos Santos, Svensson and Padin 2013). Among these thousand stores more than 950 are supermarkets and the others are various types of convenience stores(Dos Santos, Svensson and Padin 2013). There are some stores that operate as Safeway in Victoria, Melbourne. Operating through online platforms is also an option for them, which is now much easier considering the fact it recently developed a mobile app for its own purchases. Woolworths havetheirprivatelabelbrandslikeWoolworthSelect,WoolworthsFresh,Woolworth Homebrand, and Woolworths Gold. The trading of Countdown goes on in New Zealand and the retail chains with the similar name of the brand are also located in countries like Austria, Mexico, the UK and Germany(Dos Santos, Svensson and Padin 2013). It must also be noticed that it a continent like South Africa which is situated so far away from Woolworths homeland, this company runs stores like Marks N Spencer, indicating the success in their distribution strategy. They have a wide distribution network all around the world and its outlets are spread across various regions.
9MARKETING AND MANAGEMENT 3.4 Promotion: Promotion or the advertisement of any company is an important aspect of the business. Similarly, for the Woolworth’s advertisement and promotion is of extreme importance, which they have been constantly innovating and re-innovating (Londhe 2014). There are various Loyalty Schemes that Woolworths offer to customers that also include discounts in petrol pumps. A campaign called Fresh Food People was launched in the year 1987 that continued till the year of 2012(Woolworthsgroup.com.au, 2019). For efficient promotion of their business, online medias, newsletters and magazines are put to well use. The option of easy accessibility and availability is the reason that Woolworths have got some loyal customers, which is why they offer some exclusive deals and offers for the customers and the shoppers including the giving away of gift cards that makes the customers stay loyal to them. The promotion done for the Woolworths via the online media is very extensive, which includes the existence of online stores along with discounts to attract a large mass of customers (Helm and Gritsch 2014). In order to earn profit in the retail market as well as other convenience stores, Woolworths have their own extensive promotional channel which helps the company to reach their desired target segment and have a constant maintenance of profit. It must be kept in mind that Woolworths is a brand in service marketing, therefore it allows the analysis of 7Ps of marketing mix strategy. Woolworths currently have People of 2000 employees and are intending to increase it to 1600 more. They have excellent sales worker who assist for its success to a great extent. The bond between the employees is healthy, competent and they bond well with the customers. Everybody is ensured to contribute equally and zero harm to employees and environment policy is implemented. Woolworths have a customer friendly Process that solely focuses on the satisfaction of the customer (Mashhadi and Ijaz-Ur-
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10MARKETING AND MANAGEMENT Rehman 2012). The supermarket follows the Process of speed in billing through technologies or software and it is important to have efficient support staff. The feedback from customers is taken seriously by them and put to use in an innovative way. Finally analyzing the Physical Evidence, it can be found that Woolworths have stores that are clean and eye-catching.The navigation through the stores is made easy by the customer friendly employees; topping that they offer products that attract customer in large masses. Even the website of Woolworths is made attractive yet easy to operate; the retail stores convey the physical evidence of the presence of Woolworths as friendly and clean as it claims (Zeriti 2014). All the above facts analyses the Marketing mix of Woolworths and the data are appropriate to rely upon. 4. Recommendation: Woolworths with all its strength and strategies have continued to withstand the evolving market pressure and still stand straight as one of the top retailers in the country. However it is recommended that Woolworths should frame its strategy in such a way that it stays consistent with the political conditions of the area they are situated in, or are planning to invest in. they must have proper notion of the political aspect of the place that is prevalent across the country. Once they do that, their aim should then focus on the adaptation of the fair price policy which is a good strategy to gain customers. Woolworths must have detailed information on the Trade and Tariff regulations that are related to the food retailing sector for the smooth running of their business far and wide so that they can extend their business to far grounds than it already is. In order to do so, the company should also have favorable trading partners with whom they can share their trust and business
11MARKETING AND MANAGEMENT keeping all the political factors in consistence. These recommendations would bring more profitability level to the company than it already has. 5. Conclusion: It can be concluded that the marketing analysis carried on upon Woolworths has assessed important strategies that was undertaken by the company to improve its overall performance. The overall analysis of the marketing mix and environmental strategies of the company has indicated that Woolworths is dedicated to attainment of growth in its marketing and management system. This higher level of growth that Woolworths desires for can be attained through strong commitment towards the employees and the customers. The analysis of the macro environment of the Woolworths has revealed the condition faced by retail industry of Australia and how the political factors like governmental influences, change in social pattern, even the ever changing trends that customers follow along with the adverse economic conditions have somehow implemented a negative impact on the business of the company. However the marketing mix strategy of the Woolworths are seen in the bright side; the 4Ps have indicated the dedication with which Woolworths have run the sector far and wide keeping in mind the convenience of not only the customers, who are the biggest asset for their business, yet also the interests of the employees have been taken into account. There are potential possibilities and opportunities for the company to attain higher growth in the market which Woolworths seems to be striving for.
12MARKETING AND MANAGEMENT References: Arli, V., Dylke, S., Burgess, R., Campus, R. and Soldo, E., 2013. Woolworths Australia and Walmart US: Best practices in supply chain collaboration.Journal of Economics, Business & Accountancy Ventura (JEBAV),16(1). Dos Santos, M.A., Svensson, G. and Padin, C., 2013. Indicators of sustainable business practices:WoolworthsinSouthAfrica.SupplyChainManagement:AnInternational Journal,18(1), pp.104-108. Eagle, L., Dahl, S., Hill, S., Bird, S., Spotswood, F. and Tapp, A., 2013.Social marketing. Pearson Education. FernFortUniversity.(2019).WoolworthsLimitedPESTEL/PEST&Environment Analysis[Strategy].[online]Availableat: http://fernfortuniversity.com/term-papers/pestel/nyse4/4816-woolworths-limited.php[Accessed 6 Sep. 2019]. Helm, R. and Gritsch, S., 2014. Examining the influence of uncertainty on marketing mix strategyelementsinemergingbusinessto businessexport-markets.InternationalBusiness Review,23(2), pp.418-428. Kennedy, A.M., 2016. Macro-social marketing.Journal of Macromarketing,36(3), pp.354-365. Khan,M.T.,2014.Theconceptof'marketingmix'anditselements(aconceptualreview paper).International journal of information, business and management,6(2), p.95.
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13MARKETING AND MANAGEMENT King, L. and Thobela, S., 2014. Woolworths farming for the future.International Food and Agribusiness Management Review,17(1030-2016-83014), pp.161-166. Knox, M., 2015.Supermarket monsters: The price of Coles and Woolworths' dominance(Vol. 6). Black Inc.. Londhe, B.R., 2014. Marketing mix for next generation marketing.Procedia Economics and Finance,11, pp.335-340. Manzaneque Corona, E., 2014. Comparison of marketing policies applied by the same company in different countries and analysis of the reasons for the differences. Mashhadi,A.H.andIjaz-Ur-Rehman,Q.,2012.Impactofexternalenvironmentonthe performance of the fast food industry.International Journal of Management, Economics and Social Sciences (IJMESS),1(1), pp.19-25. MBA Skool-Study.Learn.Share. (2019).Woolworths Marketing Mix (4Ps) Strategy | MBA Skool- Study.Learn.Share..[online]Availableat: https://www.mbaskool.com/marketing-mix/services/17155-woolworths.html[Accessed6Sep. 2019]. Woolworthsgroup.com.au. (2019).Annual Reports - Woolworths Group. [online] Available at: https://www.woolworthsgroup.com.au/page/investors/our-performance/reports/Reports/ Annual_Reports [Accessed 6 Sep. 2019]. Zeriti,A., Robson, M.J., Spyropoulou,S.andLeonidou,C.N., 2014.Sustainableexport marketing strategy fit and performance.Journal of International Marketing,22(4), pp.44-66.