Woolworths Australia: A Comprehensive Analysis of the Largest Supermarket Chain

This report provides an overview of Woolworths Australia, including its products and services, customer segments, promotional strategies, and competition. It also discusses the challenges faced by the company and offers recommendations for improvement.

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BUSINESS STUDIES
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Subject: Marketing
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Woolworths Australia
Introduction
Woolworths supermarket is a chain of grocery stores in Australia owned by the
Woolworths Group. Founded in 1924, this store accounts for nearly 80 percent of the Australian
market alongside Coles (Keith, 2012). This report discusses the Woolworths supermarkets in
Australia, describing the products and services offered, their customer segments, promotional
strategies, their networking processes, customer treatment as well as competition. The data in
this research is derived from online sources from which findings and recommendations are also
derived. Findings of this report are that Woolworths uses social media and celebrities in
promoting its products and strives for convenience while shopping. The report recommends
continuous motivation of employees to enhance customer satisfaction and experience while
shopping at Woolworths.
Overview of the Business (1)
Woolworths majorly sells groceries, including packaged meals, fruits, meat, and
vegetables. However, they also sell DVDs, magazines and stationery items, baby supplies and
pets, household commodities as well as health and beauty products. This research will specialize
in Woolworths’ main business component, groceries. Across Australia, Woolworths operates
995 stores comprised of and 19 convenient stores and 976 supermarkets, making it Australia’s
largest supermarket chain (Arli et al., 2013). The mission of Woolworths is to provide valuable
and best quality products and services to its customers at all times and in a convenient manner.
The supermarket chain is built on a passion for retail, hard work, attention to detail, and ensuring
safety for all its clients.
Market Segmentation (2)
This refers to the process by which the business market is divided into subgroups of
consumers who share similar characteristics. Woolworths serves the whole of Australia in
general as it has numerous stores all over the country. Division of existing and potential clients is
thus not a feasible strategy for the entity as it aims to attract as many consumers as possible for
all its products, but a pricing strategy may segment consumers in that premium brands have
higher prices than other products. Some customers may prefer products at lower prices than the

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premium brands. However, Woolworths ensures that its customers have access to high-quality
grocery products by working with and partnering with various suppliers and growers across the
country. The corporation is able to source more than 95 percent of fresh vegetables and fruits as
well as meat from Australian farmers and growers. Additionally, the company strives to provide
convenient shopping to its products’ consumers by enabling them to purchase from anywhere
using the Woolworths Supermarket App and offering delivery services (Keith, 2012).
Identification of Customer Needs (3)
Woolworths determine what their clients’ needs are by prioritizing them. They focus on
creating a great retail team who listens to customers, suppliers as well as team members. Across
all the brands of Woolworths, there is a program known as the Voice of the Customer which
ensures that their complaints, needs and wants are heard and the retail team can concentrate on
enhancing their shopping experience. Woolworths IT team tries to keep up with the discussions
online about its products and services as people are likely to post their hopes, disappointments,
and experiences in various social media platforms.
Woolworths’ Promotional Strategies (4)
An example of a promotional strategy used by Woolworths is the use of offers and deals
for shoppers, which include vouchers, for instance, the frequent shopper transactions that provide
$20 for every 2000 points attained in the Tasmania stores. Woolworths also gives gift cards and
provides fuel (petrol pump) discounts using their card which automatically tracks purchases thus
eliminating the need to maintain paper receipts. Additional promotion strategies used by
Woolworths include use of newsletters and magazines. The media is another tool used for
promotional by providing discounts and benefits to online shoppers as well and enhancing their
image by spreading a positive brand image of their commodities and services through advertising
messages. The slogan Fresh Food People is a promotional campaign launched in 1987 and ran all
the way through 2012 (Arli et al., 2013).
(5)
The company ensures that its promotional strategies are up to date by changing and
acquiring new methods of promotion depending on the varying tastes and preferences of its
clients. It creates brand awareness and visibility hoardings, billboards, radio, and leaflets in

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addition to newsletters and magazines. It also has an active twitter account, Facebook website
and a YouTube channel that helps to attract new consumers. Depending on the needs of its
customers, Woolworths has used celebrities as well to promote its premium label commodities.
For example in the first half of 2013, introduction of product Aussie Animal Trading Cards
attracted a large market of children leading to a generation of 1.8 billion in sales (Arli et al.,
2013). In 2015, posted A$ 42.132 billion in revenues with a target client base of upper-middle
class and the working people in Australia. In other words, its promotional methodologies change
depending on customers’ needs to ensure that the company still makes profits.
Issues Faced by Woolworths
(6)
Woolworths offers a range of products which are likely to meet its customers’ needs. It
provides all kinds of groceries ensuring that the client has a variety to choose from. This ensures
that all customers have their specific needs met as they can purchase the exact kind of groceries
they require. Also, they can choose whether to buy the more expensive premium products or
those that are cheaper, whose price is at par with other businesses’ (Keith, 2012).
(7)
Woolworths is a well-known chain of stores in Australia making the marketing of its
products relatively easier in comparison to smaller stores. Nonetheless, regardless of all its
success, Woolworths has been faced by challenges such as lowering in value of the Australian
dollar, issues with taxation and increasing costs of leases, and some quality concerns that slow
the customer cycle. As a result of competition, Woolworths has faced slow market growth.
Another negative aspect that impacts the company is lack of employee motivation which affects
the quality of services offered to clients. Newer entrants in the market such as ALDI who charge
lower prices for their products have lowered the scorecard for Woolworths as customer
satisfaction is largely driven by the value for money. Supermarket clients also value customer
service, the freshness of products, store layout, deals as well as the quality of products that are
private-labeled (Arli et al., 2013). Customer service is adversely affected by unmotivated staff
who lack morale. These struggles have also affected the value of its shares, for instance in 2018,
the S&P Global Ratings agency downgraded Woolworths’ rating from AA (strong capacity to

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meet its financial obligations) to A + (strong capacity but susceptible to changing circumstances
and hostile economic environment).
Competition (8)
The main competition for Woolworths is Coles and Aldi supermarket, a relatively newer
German supermarket giant in Australia, compared to the other two. Aldi’s company policy is
centered towards cost minimization which has attracted a lot of Woolworths’ customers from the
segment that prefers lower prices for products. Woolworths and Coles supermarkets form a near
duopoly in Australian taking up a huge market share (Keith, 2012). Aldi, on the other hand,
offers the greatest value for money which has enabled it to serve a 10% market share in
Australia. The alternative products available to Woolworths’ customers are those offered by the
Coles supermarkets as well as Aldi. However, Aldi does not provide certain foodstuffs such as
sushi, roast chicken and freshly baked bread. Also, it does not offer loyalty programs such as fuel
discounts or play music which is a relaxation technique for customers to enhance shopping but
only focus on cost minimization.
Working at Woolworths (9)
If I was an employee at Woolworths, the customer would be my top most priority. I
would ensure that I offer excellent customer service, listening to their needs, requirements and
wants effectively. I would highlight to them the varieties of grocery choices offered at
Woolworths and accentuating their quality. I would also offer my recommendations where
appropriate depending on the client’s cost trepidations whereby I would commend purchasing
premium products to customers with no concerns with the charges and buying of lower-priced
commodities to those majorly concerned with the prices.
Customer Rights (10)
According to the Australian Consumer Law, customers have a right to refund or
exchange of products but there is no set time for returning the product (Keith, 2012). Conversely,
the time varies depending on the nature of the product, for instance, it would be wise to return
fruits and vegetables as soon as possible to avoid spoilage. Woolworths offers a refund for
clients who purchase faulty products or commodities they are not satisfied with as long as they
still have the receipt or any other clear evidence of purchase. By contacting the customer service

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team, the consumer needs for exchanges and returns are handles. Woolworths Group Return
Cards can also be used in all supermarkets and Big W but are not available to online buyers.
Products can also be returned if the consumer changes their mind except for prepaid vouchers.
Networking (11)
The most effective procedure that I would use to ensure referrals match client needs is
maintaining a highly active communication procedure with existing and potential customers.
Availing a customer service number that is always operative would help make sure that all
consumer concerns and complaints are dealt with as appropriate. Ensuring that the IT department
is always active online is a technique that can lead to the acquisition of new clients and enhance
word of mouth marketing from one person to another.
(12)
Digital Marketers Australia (DMA) and Digital Transformation Conference in London
are the two networking events that I would attend to ensure continued referrals for the
company’s products. The latter would give me inspirational ideas on the application of upcoming
technologies in the business while the former enables would allow me to interact with marketers
share ideas and learn new marketing ways. In the contemporary world, everyone is involved in
the media and digital technology somehow and therefore it would be a smart idea to get in touch
with consumers through these platforms.
(13)
Currently, Woolworths attempts to keep its customers satisfied by offering quality
products in a convenient manner. This is done by working with farmers and growers in Australia
to ensure a continued supply of fresh vegetables, fruits and meat for the clients. It also allows the
return of faulty products or products the consumer does not need any more (Keith, 2012). As a
leader in the company, I would recommend continuous employee motivation which ensures that
they are friendly to the customers and strive to offer the best services possible.
(14)

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If I was working in the company, I would share the report with the head of the customer
service who would ensure creation and development of programs that motivate and inspire
employees to do the best they can in their jobs.
Conclusion
In conclusion, it is evident that Woolworths is the largest supermarket chain in Australia
operating 995 stores all over the nation. It mainly sells groceries including vegetables, fruits,
meat, and packaged meals. It has an application that enables customers to shop from anywhere
leading to convenience. Woolworths’ competitors are Coles and Aldi supermarkets who offer
similar products to the company. Promotional strategies used by this corporation include
vouchers and discounts which increase its sales. However, it has experienced some challenges
related to lowering of the Australian dollar, quality issues and lack of morale by the staff. This
report recommends continued employee motivation as a way of enhancing customer interaction
and satisfaction.

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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, 16(1).
Keith, S., 2012. Coles, Woolworths and the local. Locale: The Australasian-Pacific Journal of
Regional Food Studies, 2, pp.47-81.