This report discusses the value proposition concepts followed by Coles, importance of value proposition in financial success, value delivery process of Coles, and recommendations for improvement.
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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 aim of this report is to discuss about the value proposition concepts followed by Coles. This report discussed about the importance of value proposition in attaining the financial success. Moreover, the value delivery process of Coles is also discussed and compared with the same of Woolworths. It is identified that Coles is well ahead of Woolworths in terms delivering exact value to their target customers. This report concluded that there are few limitations in the existing value proposition concepts Coles and based on these limitations, a few recommended steps are discussed here.
2MARKETING AND MANAGEMENT Table of Contents Introduction......................................................................................................................................3 Customer value............................................................................................................................3 Value proposition.........................................................................................................................3 Importance of value proposition in financial success......................................................................4 Value proposition of Coles..............................................................................................................4 Value delivery of another chosen supermarket...........................................................................5 Identification of a target customer segment.....................................................................................5 Review of the value proposition of Coles........................................................................................5 Recommendations............................................................................................................................6 Conclusion.......................................................................................................................................6 Reference.........................................................................................................................................8
3MARKETING AND MANAGEMENT Introduction Value proposition is important for the contemporary business organizations to stay relevant in the market due to the reason that effective and proper delivering of value to the customers will ensure better customer retention and loyalty. However, the determination of the value proposition is difficult and complex process due to the reason that different customer segments are having different sets of expectations from the brand and it is difficult to meet their expectations by having standardized value. Moreover, it should also be noted that value proposition should also be properly communicated to the targeted customers in order to have their awareness (Bocken et al., 2013). The design of the value proposition should be made in accordance to the values seek by the target customer segments to have the maximum utility and outcome. The more will be the fulfillment of the expectations of the target customers, the more will be the business opportunity for the entities along with long term viability. Coles is the leading supermarket chain in the Australian region with having the market leadership status. Currently they are offering wide array of products ranging from groceries to fashion lines. Hence, they are also catering to the wider customer segments with different sets of requirements and expectations. It is proven from their market leadership status that their value proposition is at par to the expectations of the target customers but it is important to determine the extent to which their existing value proposition will be effective in the long term also (Baldassarre et al., 2017). The purpose of this report is to critically analyze the concept of value proposition from the perspective of Coles. This report will discuss about the concepts of the value proposition and customer value. In addition, the important of this concept in financial stability of the firm will also be discussed. The value delivering process of Coles and the extent to which they are meeting the expectations of the target customers. The communication process being followed by Coles in delivering the value proposition will also be identified in this report. Customer value The definition of customer value states about the benefits that are gained by the customers from consuming a product or availing a service. However, the customer value is based on the payment being done by the customers to availing the particular service or product. Hence, the more will be the benefits of the product or service over the price being paid by the customers, the more will be the customer value. It should also be noted that customer value is also determined by the quality apart from price (Payne & Frow, 2014). The quality of the product or service should be at par to the desired level of the customers in order to gain positive customer value. It can be concluded that uniformity is evident in defining the concept of customer value as there are no evidence of different views identified. The gross benefits for the customers from the product or services are their value. Value proposition Value proposition refers to the portfolio of products or services along with the added benefits that are being offered to the customers. These are the reasons of attracting the customers towards availing a certain offering along with retaining them. Hence, value proposition is the motivating factors for the customers in their purchase decisions. However, the definition of value
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4MARKETING AND MANAGEMENT proposition is having different perspectives involving financial, aesthetic and utility based expectations of the customers. This is due to the reason that expectations of the customers are different and they seek different value propositions from the same offerings. Hence, certain products can offer value proposition by means of financial benefits such as offering competitive pricing (Sengupta, Bamel & Singh, 2015). This will motivate the target customers to avail the product even with quality issues. Another form of value proposition is in terms of aesthetic value. There are products, which are purely offering aesthetic values to the customers and the target customers are only expecting the same. Lastly, value proposition can be offered in terms of utility for the customers also. It can be concluded that the advantages gained by the customers from availing a product are different for different sets of customers and thus the definition of value proposition is also different. Importance of value proposition in financial success One of the major benefits that can be gained by the business entities from their effective value proposition is proper customer management. This is due to the reason that designing of the value proposition in accordance to the taste and preference pattern of the customers will help to meet the expectations and demands of them. Hence, the ideal fulfillment of the customer expectations will help to retain the customers in the long term. The more will be the customer retention rate, the more will be probability of financial success for the organization (London, Pogue & Spinuzzi, 2015). It should also be noted that customer retention will also results in generation of positive word of mouth, which will further increase the business revenue and financial capability. In the current business scenario, gaining business sustainability is one of the major considerations for the contemporary entities and financial sustainability can be gained through the concepts of value proposition. This is due to the reason that proper determination of the customer expectations and demands and offering them through the value propositions will help the organizations to attract the target customers. Thus, it can be concluded that the concept of value proposition can help the business in gaining more sustainability and financial success (Frow et al., 2014). Value proposition of Coles As discussed in the earlier section, Coles is one of the leading supermarkets in Australia and they are catering to different customer segments. In accordance to the different needs and expectations of the customers, the process of delivering value to the customers is also diverse. Oneofthemajorwaysofdeliveringvalueforthecustomersisincreasingcustomer conveniences. This is due to the reason that currently customers are seeking conveniences in shopping process. Coles has initiated self checkout process for their offline customers where the customers are not have to wait in queue for payment rather they can walk away by paying through automated systems (Bachrach et al., 2015). Another major convenience being offered by Coles is in terms of the online marketplace. Retail customers always prefer to have the opportunity of shopping without getting out to the supermarket. In this case, the online service of Coles is enabling the customers to shop from their conveniences and at any point of time. Moreover, in the case of online shopping, the goods are getting delivered to the doorstep of the customers. Hence, it can be concluded that values are being delivered by Coles in terms of the customer conveniences (Tantalo & Priem, 2016).
5MARKETING AND MANAGEMENT The next variable for value delivery process of Coles is pricing. Contrary to their major competitor Woolworths, Coles is following premium pricing strategy in the market. Thus, in terms of value proposition for their customers, the quality of the goods being sold is being given the major concentration. The customers of Coles are having the preferences for premium and quality products, which are being served by Coles. Hence, the desired quality of the customers is being met and delivering the exact value proposition for them. Value proposition for Coles also includes wide array of products and deeper assortments. This is enabling the customers to have more options to choose from and value in terms of diversity is delivered. Even though the pricing is high in Coles compared to their competitors, but their quality of products ensure the best value for money for the customers, which can also be considered as their key value proposition. The store elements and ambience of Coles can also be termed as their value proposition. This is due to the reason that stores of Coles are located in different strategic locations across Australia. This is ensuring that their target audiences are always the stores within their desired distance (Payne, Frow & Eggert, 2017). On the other hand, the store ambience, cleanliness and service delivery process of the staffs are also offering value for money service to the customers. This is also adding to their value proposition and way of delivering it to the customers. Value delivery of another chosen supermarket Woolworths is another leading supermarket chain that is frequently used. Even though they and Coles are operating in same market segment but their value delivering process is different. For instance Woolworths is providing value in terms of cost leadership. Target customer for them those seeking maximum value for money services. The target customers of Woolworths are more focused towards achieving the price competitiveness and thus the cost leadership strategy is meeting their expectations. However, on the other hand, the target customers of Woolworths are also expecting the wider varieties of products in the same lower priced manner (Sheehan & Bruni-Bossio, 2015). Currently, the product assortment and variety for Woolworths is narrow. This denotes that this value seeking by the target customers of Woolworths is not getting delivered. They are also delivering value in terms of customer conveniences by offering online services. Identification of a target customer segment One of the major and most potential target customer segments for Coles is the age group between 30 and 45 including both males and females. This group includes the professionals and earning members, which are having the purchasing power for availing the products of Coles. Moreover, this age group majorly prefers supermarkets for convenience and availability of different products under one roof. From the perspective of Coles, this target segment is expecting minimum time consumption in the service delivery process along with wide varieties of products. The automated service delivery process of Coles is helping the customers to avoid the queue. In addition, different online payment gateways are offered by Coles, which are also offering conveniences to the customers. On the other hand, the wide variety of products available in the stores of Coles is also meeting the expectations of the customers regarding the availability of different products under one roof. It should also be noted that this age group is majorly consisting of earning members and thus they prefer quality over price. This expectation of the target customers is also being met by the premium products of Coles. However, in this case, Woolworths is not being able to deliver the same to their customers due to the reason that they are leveraging more on price over quality and product variety.
6MARKETING AND MANAGEMENT Review of the value proposition of Coles The official website of Coles is being reviewed and it is identified that number of value proposition of Coles is being communicated through it. One of the major examples being identified is festive branding and communication of Coles. This is due to the reason that currently, the festive promotion of Easters is going on in the website of Coles. Recipes, food products and Easter special items are being promoted through it. Thus, in this case, the emotional proposition of the customers is being leveraged. It is also being identified that the facility of online shopping is also communicated with each of pages getting opened in their website. This is helping to create customer awareness about the fact that they can avail the service of online shopping and delivery of their selected items. One of the most unique features being identified in the website of Coles is the focus on price factor. It is seen that some of their items such as liquor are being offered with discounts and rebates. This is communicating that the target customers of Coles can avail the cost benefits along with having the best quality products. The membership policies and advantages to be gained from the subscription of the Coles exclusives are also communicated through their websites. The various advantages to be gained by the customers are also designed in terms of the conveniences of them. Thus, it can be concluded that this will be added value proposition for the Coles and these are also getting communicated through their websites. Moreover, the values to be gained by the customers from this policy are also communicated. Review of the website of Coles concluded that there are number of customer values being communicated through it. Some of these features are not getting communicated through their offline channels. Recommendations It is recommended that customer centricities should be initiated by Coles in terms of designing of value proposition for their target customers. This is due to the reason that the more will be the involvement of the customers, the more will be customer centric activities of Coles. In doing so, the feedback mechanism should be designed effectively and continuous process of feedback should be followed. This will help Coles to have the understanding about the change in the taste and preference pattern of the customers and they can modify their value proposition accordingly. It is expected that this will be more effective in attracting the customers and delivering them greater value. Newer mediums of retailing should also be introduced by Coles to get more sales points with the customers. It is identified in this report that professionals and earning members are the major customer segment for Coles and they are less time for shopping. In this case, it is recommended that Coles should initiate innovative mediums apart from online marketplace to cater this segment. For example, they can have electronic smart display in the public places such as bus stands. Customers and passerby can select the products from the electronic display and get it delivered in their doorstep. Thus, these electronic displays will act as the virtual stores for Coles. It will ensure more customer loyalty due to increased conveniences and fewer crowds in their offline stores. It is also recommended that pay on delivery option should be provided to the customers by Coles in their online marketplace. This is due to the reason that pay on delivery will help the customers who do not prefer online payment transactions. They can pay when taking the ordered products. Hence, this will add an extra value proposition for Coles in
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7MARKETING AND MANAGEMENT targeting their customers. Moreover, this will also add an extra payment option for the customers of Coles. Conclusion This report concludes that the current value proposition aspects of Coles are effective enough in catering to their target customers. It is identified that the concepts of value proposition are important to determine in order to have long term financial success and it is also applicable for Coles. The value delivery process of Coles is analyzed in this report and it is identified that they are well designed in accordance to the taste and preference pattern of the customers. The value delivery process of Coles and Woolworths is compared and it is identified that Woolworths is trailing in some areas such as product assortment and diversity. One potential target segment is also identified and the value delivery process of Coles is analyzed based on the expectations of this target segment. Based on a few limitations identified, recommended steps are discussed in this report.
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