Analysis of the Marketing Channels of Department Stores in Myer, Australia

This report analyzes the marketing channels of Myer, an Australian department store, and identifies its strengths, weaknesses, and opportunities. It also provides recommendations for the company's future channel strategy.

Running head: ANALYSIS OF MYERS MARKETING CHANNELS
Analysis of the Marketing Channels of Department Stores in
Myer, Australia
Name of the University:
Name of the Student:
Authors Note:

1ANALYSIS OF MYERS MARKETING CHANNELS
Table of Contents
1. Introduction..........................................................................................................................2
2. Business Background...........................................................................................................2
3. External Environment Analysis..........................................................................................3
4. Strength and Weaknesses of Channels...............................................................................7
5. Discussion and Recommendation.......................................................................................9
6. Conclusion...........................................................................................................................11
References...............................................................................................................................12

2ANALYSIS OF MYERS MARKETING CHANNELS
1. Introduction
Strategic analysis of Myer departmental stores results in the recognition of the major
opportunity along with threats along with analyzing the retail industry competitiveness.
Alterations within the macro-environmental factors can affect a company’s competitive
advantage or total levels of profitability within the retail industry (Aday and
Phelan2015).Certain environmental factors such as infrastructural quality, business cycle
stage, economic growth rate and efficiency of the local markets in which Myers operates its
business. Analysis of the marketing channels of the Australian department store is considered
within this paper (Azavedo and Walsh 2018). The objective of the paper is to analyze the
effectiveness and weaknesses of the marketing channels of the selected company Myer.
Moreover, the effect of competitive, economic, socio-cultural, environmental, technological
and legal factors on the channel managers of Myer will also be considered through
completion of this report. The report will also offer suitable recommendations for the future
channel strategy of Myers that can facilitate the company in maintaining a sustainable
position within the industry.
2. Business Background
Myer is positioned as a retail group and its business started in the year 1900. With the
growing years, the company has built a departmental store within Melbourne. Such
ownership has altered has changed with the growing years and opened new stores in more
than six Australian States (Bailey 2015). The major products those are offered by this
departmental store include men’s, women’s, children’s wear, beauty fragrance and cosmetics,
electrical goods, home wares, toys, handbags and accessories along with general
merchandise. Moreover, the new owners of the Myer Company encompass New Biedge, the
Myer family, the Myer management team and Richard Umbers is positioned as CEO of the

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company (Bailey 2016). The mission of the Myer is to offer consumers and community at
large with highest standard service along with making sure that they regularly offer exceeded
consumers shopping expectations. The marketing channel of Myers has vital participants that
effectively manage its Omni-channel supply chain. These participants are explained under:
 Retailers: Retailers of the Myer Company are the gatekeepers of the market and
members of the company’s sales distribution process (Durand 2018). They are
responsible for selling products to all its consumers and have increased its competitive
advantage. This aspect of the marketing channel has facilitated Myers in attaining
competitive advantage through its four regional distribution centers. Necessary
merchandise is delivered to the company’s stores that galvanize its suppliers towards
their target.
 Wholesalers: The wholesalers serve as intermediaries those purchase products from
the manufactures and resell them to the company’s retailers (Jie and Gengatharen
2018). Myer has developed four distribution centers along with four global hubs that
are supported by new warehouse management and inventory systems along with e-
commerce channels.
 Sales agents: The sales agents of Myers Company are the ones those pay their agents
on commission. These sales representatives work on commission relied on sales
volume so that they can sell them to the wholesalers.
3. External Environment Analysis
External business environment analysis of Myers can be evaluated through carrying out
PESTEL analysis that can evaluate direct impact of the environmental factors on the retailing
industry and the company (Lee and Leonas 2018). PESTEL analysis indicated that several
opportunities are available for Myers in strengthening its marketing channels. Such
opportunities include expanded global trade agreements, enhanced disposable income,

4ANALYSIS OF MYERS MARKETING CHANNELS
business automation and knowledge management system use. The operating challenges faced
by the company’s marketing channel can be explained through the factors of PESTEL
analysis those are elaborated below:
 Political: Political stability within the nation facilitates investors and suppliers to
conduct businesses that records increased return rate and decreased business failure
risks (Li, Kumar and Von Glinow 2015). Increased focus of government in enhancing
international trade offers exceptional opportunity to retailers in gaining large base of
suppliers and consumers internationally through e-retailing. Myer Company is likely
to face challenges on political level from new charges and taxes that might affect
consumer spending along with decreased its revenue. For instance, retail rights of the
company are at a problem because of its failed departmental store strategy. Another
example of political problem is Myer is also concerned with certain loopholes within
GST legislation and new industrial relations setup might adversely affect the
company’s performance. Another example of political issue faced by Myers is that
decreasing revenue of the company because of carbon tax and flood levy impacts
consumer spending.
 Economic: Australian dollar fluctuation along with weaknesses in the international
economy greatly impacts the sales growth of the retail sector (Loy-Wilson 2016).
Economic factors including elevated oil prices, decreasing GDP and low consumer
saving rate are likely to affect consumer spending patterns and confidence. For
instance, share price of Myer dropped as the company’s earnings outlook is reduced.
Another example of political factor impacting Myers is certain decrease in the rates of
inflation and unemployment positively impacts the success of Myer Company’ retail
business. An additional example of political factor impacting the company is

5ANALYSIS OF MYERS MARKETING CHANNELS
increasing purchasing power of consumers that can enhance producer consumption of
Myers products.
 Social: Increasing preferences of Australia consumers for the high-quality products is
anticipated to offer better opportunity for Myers Company to center on improving
consumer satisfaction in order to attain competitive advantages (Miller and Merrilees
2016). The population of the nation is observed to be culturally diverse because of
which the retail industry and marketing channel participants of Myers must manage
diversity. This should be maintained through the provision of a broad product range to
address expectation and needs of target consumers of Myers. The major target
audiences of Myer Company includes middle class group. More specifically, all its
department stores are focused on the demands and needs of fashionable women those
are its target audience segment.
An instance of social factor impacting Myers is that sustainable development and
green issues are highly appreciated by the Australian consumers. Another example is
that Australian society promotes gender equality base on which Myer includes
garments for fun shopping experience for both genders. One another example of
social factor impacting Myers is that all its departmental stores has a niche as well as
better value proposition as it clearly understood its consumers.
 Technological: Global competitiveness of the Australian retail industry is increasing
as a result of internet and e-retailing use. The new communication technologies
followed by the retail industry increases expansion within the new international
foreign markets. The mobile network, fiber optic along with satellite coverage has
resulted in connections with several activities that can improve its effectiveness
(Jaynes 2015). For instance, the company is dealing with lost consumer insight and to
deal with it is attempting to leverage its digital data capabilities that can facilitate in

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predicting emerging consumer needs. Another example of technological surrounding
affecting Myers considers that the federal government has implemented technological
policies that can facilitate inventors to safeguard and commercialize new entrepreneur
ideas of Myers Company. Another instance of technological factor considered by
Myers is introduction of PoS and CCTV systems in Myers to decrease inconvenience
risks in its departmental stores.
 Environmental: Australia is deemed to be a dry continent with fewer amounts of
human activities and water that can impact the marine surroundings. Selecting the
environment which is conductive for the target consumers serves as an increased
challenge for Myers retail stores. Changes in climate, public and private
environmental programs serve as the factors which impact the retail industry. For
instance, waste products recycling can facilitate Myers in enhancing business
sustainability within the global retail sector (Mullin 2018). Another example is
environmental standards such as waste management in retaining sector is considered
by Myers before market entry. One more example of environmental factor affecting
Myers is that Texas and Florida as distinct liability clauses for environmental
disasters.
 Legal: Taxation policies along with employee regulation are deemed to affect the
industry. Moreover, for instance, laws including compliance with health and safety
regulations, disclosure requirements along with consumer protection impact the retail
business of Myer are positively or negatively. Another example of legal factors
considered by Myers is at the time of opening new stores, the government approves
certain regulations in controlling illegal activities within the nation. Another instance
of legal factors affecting Myers considers anti-trust law within retailing industry and
al through the nation for sustaining in competitive marketplace.

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4. Strength and Weaknesses of Channels
The marketing channels of Myers Company has several strengths that has facilitated it
in attaining market sustainability and weaknesses those must be addressed through
implementation of effective channel-based strategies (Niu, Liu and Wang 2016). The
strengths of Myers marketing channel are explained under:
 Due to large size and continental reach of its marketing channel, Myers is capable to
enjoy increased economies of scale and low expenses of inputs from the suppliers. For
instance, the suppliers of the company include MAC positioned as the coveted
suppliers of the year. Another example of Myers strengths include consumer loyalty-
based programs induced by its marketing channel such Myer visa card, Myer Gift
Card and Myer One enhances frequency of consumer loyalty holders to shop within
the stores. An additional example of Myers strategic capability is its marketing
channels those are focused on maintaining an effective corporate social responsibility
through developing goodwill along with accepting effective initiatives that improve
well-being of community (Riemer et al.2014).
 The prime and strategic locations of Myers marketing channels facilitate the company
in attaining competitive edge. One example of its organizational strategic strength is
that the company follows multi-channel retailing that has offered the company with
benefit of enhanced consumer perception. In the era of online shopping finding best
price is simpler for consumers (Jie and Gengatharen 2018). For instance, the stores of
Myers are observed to be responsive to consume requirements that offer them easy
access to numerous channels for differentiating itself in the crowd. Taking shape,
Alex Perry, AESOP and Base Pty Ltd. serves as major suppliers those are passionate
and committed in offering innovative retail experiences for consumers of the
company that is another instance of its strength.

8ANALYSIS OF MYERS MARKETING CHANNELS
 Increased sales is another strength of Myers marketing channel as the multi-channel
strategy of the company is capable of attaining increased profit (Sternquist and
Goldsmith 2018). This is ensured through offering an increased engagement points for
consumers in taking a purchase decision that further increases the ease and
convenience of sales. Another instance of its strategic organizational strength is that
Estee Lauder is positioned the best Omni-channel supplier of the company. One more
example of strategic strengths of Myers is alternate service provisions of the company
that is intact in its supply chain process. One more instance is that Myers has fully
serviced supply chain network that has better warehouse management systems.
There are also certain weaknesses in the marketing channel of Myers Company that is
affecting its sustainable and profitable position within the nation. Such loopholes are
explained below that must be addressed in attaining competitive advantages.
 Myers Company is struggling to meet the consumer expectations on its Omni-channel
strategy. The company is observed to observe a strong increase in sales growth. There
is effective evidence that the department stores in Australia can transform and turn out
to be transpiration for the consumers (Topley 2015). For instance, the international
peers have responded to drastic disruption through leading within Omni-channel and
through re-inventing the in-store experience. Another example of challenge face by
Myers is that retail area prices are increasing that is resulting in adequate are used
within the showroom. One another instance of weaknesses faced by the company is
underdeveloped distribution channel.
 Another challenge that is faced by Myers in implementing effective marketing
channel strategies is that the company is losing sight of its target consumers. For
instance, the problem faced by the channel of Myers it attempted to serve as “all
things to all consumers” (Lee and Leonas 2018). Moreover, the organization decided

9ANALYSIS OF MYERS MARKETING CHANNELS
to stick to its old high-end consumers. For example this weakness of targeting the
consumers with attempting to appeal value-conscious and bargain oriented consumers
those shop-on-sale. One another example is inefficient roll cages that can ensure stock
replenishment of the PoS in efficient manner.
 Failing to reach the target market is another challenge faced by Myers marketing
channel. The strategy employed of using new release to offer a positive spillover for
the main brand is deemed to be quite old-fashioned. This relegates the brand in
lowering status than the means of image reinforcing (Lee and Leonas 2018). For
instance, there is very limited global presence of Myers and affected brand presence
globally. Another example of weakness is decreased an ineffective online presence
internationally. Another weakness of Myers business is lack of new product ranges in
apparel and footwear stores that is increasing competition for the company.
Location of Distribution
Channel of Myers
Product Sourcing Manufacturing of Products
China Direct outsourcing of fashion,
merchandise and home ware in
generating sales
Manufacturing of products in
Shanghai and Hong Kong
US Products are sourced directly
from the manufactures in US
Product distribution is managed
by its retailers and wholesalers
South Africa Outsources products through
global consumer products
sourcing company in the nation
In-house manufacturing that
regulates its product safety

10ANALYSIS OF MYERS MARKETING CHANNELS
5. Discussion and Recommendation
The marketing channel of Myers is focused on delivering value proposition to
consumers through the below mentioned four clear strategic priorities. For maintaining an
effective marketing channel for the consumers more than 500 separate new brand destinations
across store network is ensured (Azavedo and Walsh 2018). Myers have invested a lot in its
marketing channel to enhance consumer service through providing importance to flagships
along with premium stores that further resulted in above-average sales growth. Store
management in the marketing channel has facilitated the company in developing a program
of low cost, increased impact along with decided upgrades for all its departmental stores. To
maintain effectiveness of this channel, Myer has considered allocating hours to its team
members in the busiest trading period through attaining advantage of more flexible roistering
introduction (Azavedo and Walsh 2018). The company attained impressive performance
results through launching its eBay store. This encompasses more than 20,000 products that
further extend reach of its brand with increasing number of Australian online shoppers using
the store (Aday and Phelan 2015).
Figure 1: Organizational Capability in Marketing Channel of Myers
(Source: Jie and Gengatharen 2018)

11ANALYSIS OF MYERS MARKETING CHANNELS
Focused on challenges faced by Myers, certain recommendations are provided to the
company in enhancing its marketing channel for attaining increased market sustainability.
 Myer is recommended to leverage innovative technology in enhancing consumer
experience as digital transformation in its channel can ensure an increased seamless
and engaging consumer experience.
 Myer must focus on developing a more tactile and in-store experience through
enhancing three major streams of its channel like product, strategy and transformation
of Omni-channel. Increased availability of its products must be ensured and digital
data capabilities must be ensured for attaining increased insights regarding its target
consumers along with their desires.
 Another recommendation to increase performance of its marketing channel is focused
on implementing a series of initiatives encompassing closing underperforming stores
and decreasing space for the slow-growing categories. Myers is also recommended to
introduce new brands as per consumer desires along with improving its services and
online retailing.
6. Conclusion
The objective of the paper was to analyze the effectiveness and weaknesses of the
marketing channels of the selected company Myer. It was gathered from the paper that the
marketing channel of Myers has vital participants that effectively manages its Omni-channel
supply chain. Moreover, the target consumers served by the company is observed to be
culturally diverse because of which the retail industry and marketing channel participants of
Myers must manage diversity and their changing preferences. For its marketing channel to
attain competitive advantage certain effective recommendations are also provided in this
paper. Myers was recommended to increase performance of its marketing channel
considering closing underperforming stores and decreasing space for the slow-growing

12ANALYSIS OF MYERS MARKETING CHANNELS
categories. It is also recommended to leverage innovative technology in enhancing consumer
experience as digital transformation in its channel can ensure an increased seamless and
engaging consumer experience.

13ANALYSIS OF MYERS MARKETING CHANNELS
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