Strategic Marketing for Wesfarmers to Penetrate into the UK Market

This report evaluates the entry mode for Wesfarmers to penetrate into the UK market using PESTLE analysis, market-entry modes, market segmentation, and targeting strategies. It suggests that joint venture is the most appropriate market-entry mode for Wesfarmers. The report also recommends undifferentiated marketing strategy and demographic and behavioral segmentation for Wesfarmers to target the UK market.

Running head: STRATEGIC MARKETING
Strategic Marketing

STRATEGIC MARKETING 2
Executive summary
The main aim of this research is to evaluate the entry mode for Wesfarmers to penetrate into the
UK. This report defines the PESTLE analysis that contains different factors to assess the
condition of the UK such as political, economic, social, technological, legal and environmental.
It is also addressed that different entry mode strategy could be used by Wesfarmers to penetrate
into the UK nation such as joint venture, licensing and strategic alliance method. In the
investment method, the joint venture is a suitable entry mode for the company to invest in
foreign. It is also demonstrated that Wesfarmers will target the 21-25 and 26-30 years of people
and can use the undifferentiating marketing strategy. Moreover, it is exhibited that porters
generic strategic will be used to assess the competitive position of the retail industry. There are
different strategies for assessing the competitive position like cost leadership, differentiation,
cost focus, and differentiation focus.

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Table of Contents
Executive summary.........................................................................................................................2
Introduction......................................................................................................................................4
Political factor..............................................................................................................................4
Economical Factor.......................................................................................................................5
Social factor.................................................................................................................................6
Technical Factor...........................................................................................................................7
Legal factor..................................................................................................................................7
Environmental factor....................................................................................................................8
Modes of market-entry....................................................................................................................8
Licensing method.........................................................................................................................8
Joint venture.................................................................................................................................8
Strategic alliance..........................................................................................................................9
Concepts of market segmentation and targeting............................................................................10
Targeting strategy......................................................................................................................10
Market segmentation..................................................................................................................11
Porter’s generic strategy................................................................................................................11
Conclusion.....................................................................................................................................14
References......................................................................................................................................16

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Introduction
The main purpose of this report is to make a plan for launching new product and services of
Wesfarmers in the UK. This report discusses the PESTLE analysis method to evaluate the
external situation of UK. It also demonstrates three modes of market-entry like Export, strategic
alliance, and Licensing. These modes could be imperative to effectively enter in the market and
make a reliable decision. It also discusses the marketing segmentation that could supports to
segment the market to deliver goods and services. In last, it also discusses Porter’s generic
strategy that could be imperative for obtaining a higher outcome.
PESTEL of UK
PESTLE analysis is used to evaluate the external factors that may influence Wesfarmers at the
time of launching their products and services in the UK. It consists of many factors like political,
social, economic, technical, legal, and environmental factor (Ang, et. al., 2015). These are
discussed as below:
Political factor
The political factor could be an important factor that may affect business growth in limited time
and cost. In the current era, it is also analyzed that UK government support the new business due
to improving their existing situation. Further, the current political party gives more priority to the
health of UK people hence government makes flexible rules and regulation in oppose to the retail
organization. It could facilitate the firm to start their business and get higher benefits. Moreover,
there is no issue of seasonal products and services hence organization would be capable to get
benefits in each season and obtain higher benefits (Laufs and Schwens, 2014). It is also
evaluated that Wesfarmers could make their unique image in the UK market by introducing their
products and services.

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Economical Factor
The economic factor could also influence the performance of the organization. From the analysis
of the current situation, it is addressed that the economic growth has been increased that could
increase possibilities of getting higher competitive benefits. The annual growth is increased by
higher rate after 2009 that could be imperative to make distinguish image in the marketplace.
The interest rate and the exchange rate are reasonable in the UK that could be more important for
the retail organization to obtain a positive response (Andreu, Claver, and Quer, 2017).
(Sources: Burton and Cross, 2015).
(Sources: Surdu, Mellahi, and Glaister, 2018).

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(Sources: Hennart, and Slangen, 2015).
From the above chart, it is also analyzed Wesfarmers could obtain positive responses from
introducing their goods and services in the UK market. It could also be essential for obtaining
higher competitive benefits. Moreover, it is also evaluated that the economic situation is
favorable that supports to obtain a positive result.
Social factor
The organization could evaluate social factor for evaluating the current situation of the country
before launching their goods and services in a particular place. The UK has a multicultural based
country that could be imperative for the organization to influence a huge number of consumers
with respect to the products and services of the organization. The UK follows a Modern culture
that could be essential as an organization delivers healthy products and services to their
consumers (Hennart, Sheng, and Pimenta, 2015). This country has believed in the media that
could be effective for influencing a huge number of consumers in the least time and cost. It
would lead to operating the business process. In addition, it is also evaluated that the positive
image of the brand could be imperative for successfully launching products and services and

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make reliable outcome. Thus, it is evaluated that Wesfarmers could get reliable outcome by
launching their products and services in Australia (Schellenberg, Harker, and Jafari, 2018).
Technical Factor
Technology is an imperative factor for the accomplishment of the organizational goal. There are
certain factors that could be imperative for the attainment of specified aim and objectives. In the
UK, people are more believing in innovative technique that leads the organization to use social
media and directly communicate with their potential consumers. This feature could also motivate
the organization to converse with consumers and change their buying behavior. In addition, it is
also evaluated that research and development tool could be imperative for getting higher success
(Schwens, et. al., 2018). This country believes in the research and development hence the
organization could entail any innovative feature in their products services for influencing a huge
amount of the consumers. Moreover, it is also evaluated that Wesfarmers could be capable to
launch their products and services in the UK as there are higher possibilities of getting positive
responses (Oliveira, et. al., 2018).
Legal factor
The legal factor could also be analyzed by the organization to make a reliable decision in the
context of the organization. Before launching products and services, the organization could
concentrate on certain policies named health policy, compensation, safety, and working hours.
These policies could be imperative for accomplishing organizational target in the least time and
cost. The organization could gain their understanding about such policies as it would be
imperative for making a positive image of the firm among employees. It would lead to retain
employees in the long term that could be essential for getting higher competitive benefits in the
least time and cost (De Villa, Rajwani, and Lawton, 2015). In addition, it is evaluated that the

STRATEGIC MARKETING 8
organization should also remember that the working hour could be appropriate as it would
directly influence the productivity of the employees as well as the organization.
Environmental factor
The environmental factor could be an imperative part of human life. Hence, the organization
always remembers that they never harm to the environment. There are certain factors that could
be important in environmental like Natural Hazards, Water Quality, Pollution, and Air (Ouma,
and Oloko, 2015). Wesfarmers previously ensures that their goods and services never indirect
impact on the environment. Then, the organization would be capable to successfully launch their
goods and services in the UK and obtain higher competitive benefits (Anderson, and Sutherland,
2015).
Modes of market-entry
There are different kinds of modes that could be used by organization at the time of entering the
market like Licensing, joint venture and strategic alliance. The organization could consider any
methods and enter in the market and sustain their position in the marketplace (Ho, Shi, and Siu,
2015). These are discussed as below:
Licensing method
This method is another method that aids organization to enter in the new market and obtain a
reliable result. There are many methods that could be considered as a type of Licensing named
franchising, management contract, and turkey operation. It is evaluated that the organization
could consider one of them and makes the reliable decision for selling their goods and services
(Bertozzi, Ali, and Gul, 2017).
Joint venture

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The joint venture is an imperative method that aids the organization to start their business with
their partners with certain common objectives like market entry, risk and reward sharing,
technology sharing and joint product development, and compliant to the management regulations
(Brenes, Montoya, and Ciravegna, 2014). It would be imperative for the organization to get a
higher result.
Strategic alliance
It is another type of investment that supports to freely enter in business and obtain a higher
outcome. It permits the firm to make a legal contract between different organizations and reach
at the valid conclusion (Abdolshah, Moghimi, and Khatibi, 2018). This method supports to
obtain many ways that could be used by the firm named Global competition, economies of scale,
industry convergence, reduction of risk, and Association as a difference to the merger (Gould,
and Desjardins, 2015). This method assists the company to effectively launch their goods and
services in the marketplace.
Make a recommendation with justification as to the most appropriate one
The joint venture is a key investment entry mode that should be used by Wesfarmers to penetrate
into the UK nation. This strategy would be beneficial for the company in terms of getting the
taxes benefit, liability and growth strategy. Taxation is a key benefit for partners of joint venture
and partnerships (Wicker, et. al., 2015). Since, joint venture and partnership are not required to
file taxes as a business body. Along with this, partners are allowed to share their profits and
losses directly to their personal income tax return (D. Banker, Mashruwala, and Tripathy, 2014).
Wesfarmers can also report to partner for losses in terms of paying tax return and it could be
practiced for counterbalance the income increased from other sources.

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Another benefit of using this strategy is reducing liability. It is stated that the joint venture has
unlimited liabilities in terms of the company’s debts and obligations. The partnership is not a
separate legal entity as; it indicates that business creditor may practice an automobile, bank
account, automobile, and other personal resources when the assets of company do not cover the
obligation (Tansey, Spillane, and Meng, 2014). In addition, a personal creditor of a partner may
use the business resources as a compensation for personal debts of partner. Along with this,
partners are held accountable to negligent act of other partners (Bayraktar, et. al., 2017).
Growth is another reason for selecting the joint venture partnership. Through the resources of a
partner, Wesfarmers can supplement their own resources and gains their capacity without
making an investment in capital. For instance, Wesfarmers can co-operate their partners to win
the contracts that would be too large for the capacity of the individual. A joint venture strategy
can provide access to Wesfarmers to access the market of their partners and consumers without
using their own budget and resources to market entry tasks (Harding, 2017).
Concepts of market segmentation and targeting
Targeting strategy
Undifferentiated marketing strategy could be practiced by Wesfarmers in terms of avoiding the
social influencing factors. As per this strategy, Wesfarmers will produce only one segment of
product and target mass customers through a single marketing mix. In this marketing, a
corporation can involve the whole market and avoids the differences of the segment. It focuses
on the whole market through a single marketing strategy (Ho, Shi, and Siu, 2015). This
marketing strategy is used to persuade the buying decision of a high amount of customers. Under
this targeting approach, a corporation will emphasize on the high amount of media approaches

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such as radio, newspaper, and television (Parnell, 2016). The key intention of practicing this
strategy is to demonstrate the product in front of the bulk of customers.
Market segmentation
Wesfarmers’s supermarket can segregate its consumers according to a different basis for
persuading the buying behavior of customers towards their food products. It is described as given
below:
Demographic factor:
Wesfarmers should focus on providing the quality food to their prospective consumers. In such a
way, it can categorize consumers according to the level of income. Moreover, it can provide 30%
of discount to government workforces at each weekend. In such factor, a consumer can segregate
the customer on the basis of age like it can segment the 21-25 and 26-30 years of consumers.
This age-group of consumers would be selected because of influencing the both middle and
business group by providing the low price food products with quality according to the need of an
individual (Harding, 2017). It can also segregate the consumer according to the behavior,
expectation, and requirement of consumers as it would be effective for influencing the buying
behavior of consumers.
Behavioral Segmentation:
Wesfarmers’s supermarket can classify the consumer as per their behavior about the food
products like buying vegetables, meat, and fruits from the supermarket. Through this approach, a
corporation can emphasize on segmenting the loyal consumers however, there is a requirement to
provide the affordable rates of foods and discount to government workforces (Parnell, 2016).
Consequently, it could be beneficial for persuading the purchasing behavior of consumers.
Porter’s generic strategy

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Porter’s generic strategy is used for assessing the relative position of the company within its
industry and helps to understand whether the profitability of the company is above or below the
average of the industry. The key basis of average profitability in long-run is to get the sustainable
competitive benefits.
(Sources: Bayraktar, et. al., 2017).
Competitive Advantage
A competitive benefit could be attained by Wesfarmers over the rivalry via delivering the better
value to customers. The company can gain the value by declining the rates and gaining the
benefits and services to validate the higher rate. Moreover, cost leadership and differentiation is
used to gain competitive benefits at large extent whereas focus strategies focus on a narrow
market. Wesfarmers can focus on combination strategy as customers focus on multiple factors
like convenience, style, quality and price (Bayraktar, et. al., 2017).
Cost Leadership

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The cost-leadership could be a good alternative for Wesfarmers that are competent to constantly
decline the cost of performing the organization. Furthermore, keeping low overhead expenses
and negotiating positive acquisition expenses with suppliers is a key strategy to implement it.
Wesfarmers can implement the cost-leadership through different methods. In this way, it can
create higher profit margin by offering the industry average rates in spite of using low-cost basis
and pass the savings against customers and develops the market share (Hennart, Sheng, and
Pimenta, 2015).
Differentiation
A differentiation strategy could be beneficial for Wesfarmers as it does not have strong cost
benefits or does not prefer to focus on strengths in production or resale. The key purpose of using
this strategy is to identify the needs of customers, designs and builds the quality products and
services proceeds to match the markets and sell the solutions by stressing the diversity from
competing brands. There are different ways of using the differentiated approach such as product
quality, unique features, elite services and environmental accountabilities (Gould, and
Desjardins, 2015).
Cost Focus
The focus strategy is diverse as it is practiced while Wesfarmers will serve in a niche target
market. The cost focus strategy could be used to involve the low-cost operation and market
affordability in a niche market. Under the supermarket category, Wesfarmers can drive their
business from lower to middle-income purchasers by keeping a very low business. This could
enable the business to offer a low rate to most budget-conscious shoppers of grocery. Moreover,
the focus strategy can be used to focus on the specific customer, geographical area, and product
line and market niche (D. Banker, Mashruwala, and Tripathy, 2014). The idea is to facilitate a

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limited set of customers as compared to competitors who provide a higher category of products
to their customers. This focused strategy could be effective for Wesfarmers in terms of
penetrating into the UK nation. Wesfarmers can implement this strategy as it does not have
adequate resources to engage in UK marketing efforts. The focus could rely on differentiation or
cost strategy. It entails the emphasizing on cost leadership and differentiation on a small level.
The idea of using this strategy is to sustain in the particular market sector (Hennart, Sheng, and
Pimenta, 2015).
Differentiation Focus
A differentiated focus strategy could be beneficial for Wesfarmers in terms of bigger the market
and provides an effective solution to a smaller market segment. Wesfarmers depend on this
strategy while competing in against the larger retailers. In this strategy, Wesfarmers can endorse
the best choice of food products by hiring the proficient employees as a way to influence the
business from discount stores and general merchandise retailers. This strategy can enable the
Wesfarmers to develop strong loyalty because Wesfarmers will specifically focus on the needs of
a particular set of customers (D. Banker, Mashruwala, and Tripathy, 2014).
Conclusion
As per the above discussion, it can be concluded that Wesfarmers supermarket is a retail chain in
Australia that wants to expand their business into the UK. It can be summarised that PESTLE
analysis is used by the company for assessing the country’s situation. It can be also evaluated
that there are the different entry of modes that could be used by Wesfarmers in terms of
penetrating into the UK. These are export, licensing and investment method. It can be
summarised that Wesfarmers will use undifferentiating targeting strategy to target the customers.
Further, it would segment the customers on the basis of age such as 21-25 and 26-30 years of

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people. Moreover, Porter’s generic strategy is used to assess the competitive position of the
industry. There are different generic strategic such as cost leadership, focus strategy,
differentiation focus strategy and cost focus strategies.

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