Marketing Management for Woolworths Group

This report examines the environmental factors of Woolworths, one of the leading retail organizations in Australia. It includes a SWOT analysis, PEST analysis, and Woolworths' market research on 5Cs. The report also discusses Woolworths' cost leadership strategy and marketing mix (7Ps).

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MARKETING MANAGEMENT
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Table of Contents
Introduction................................................................................................................................2
Discussion..................................................................................................................................2
Overview of Woolworths Group............................................................................................2
Analysis of 5Cs for Woolworths Group.................................................................................5
Woolworths’ Market Research on 5C’s.................................................................................9
Woolworths’ Cost Leadership Strategy...............................................................................10
Woolworths’ Marketing Mix (7Ps)......................................................................................12
Conclusion................................................................................................................................15
References................................................................................................................................16

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Introduction
The marketing and management decisions of an organization are influenced by
several factors surrounding the organization. A detailed investigation of these factors must be
effectively implemented in order to recognize the opportunities, challenges and threats which
can further influence the marketing environment of the organization. Several marketers
implement marketing metrics in order to assess and further evaluate the marketing
performance of a brand (Armstrong et al. 2014). However, these metrics are utilized in order
to aid guidance towards marketing decisions and assist marketers to understand the
performance level of the marketplace and against competitors. Furthermore, marketers
embrace the responsibility for all marketing financial decision making procedures that results
in creating new opportunities and investments following to the evaluation of performance
management. The report will examine the environmental factors of Woolworths, one of the
leading retail organizations in Australia whose fundamental purpose is to understand the
marketing environment factors that would affect the business either in a positive or negative
way. However, with the occurrence of recent shifts in the macro environment, it is essentially
significant that businesses like Woolworths have the competence to influence other
businesses. Furthermore, businesses have to undergo several strategically implied approaches
to handle the significant factors surrounding the macro environment. The progress of advance
technologies and digital shopping implies that consumers in recent times have access to wide
range of products across the world (Woolworths.com.au 2018). In order to sustain its
position, Woolworths have been introducing several approaches in its marketing management
approaches.
Discussion
Overview of Woolworths Group

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Woolworths Group formerly recognized as the Woolworths Limited is an Australian
based organization engaged in retail operations. The company mainly operates through the
Australian Food and Petrol, Endeavour Drinks Group and Hotel sector. The Australian Food
and Petrol sector is engaged in the procurement of food as well as petroleum products for
resale to consumers in Australia. The company established in 1971 has been associated with
an ‘exclusive’ credit union whereby the employees of Woolworths Group of companies along
with their immediate families are eligible to join and use the company’s services
(Woolworths.com.au 2018). Woolworths is dependent on over 115,000 team members in
stores, distribution enterprises and further aids offices in order to offer their customers with
better quality services, ranges as well as value and convenience. The company further takes
pride on functioning in integration with Australian agricultural sectors in order to ascertain
the accessibility of supreme goods to their customer base (Woolworthsgroup.com.au 2018).
Mission-
 Woolworths’ fundamental purpose is to position themselves at the core of the
community and attain a valuable recognition as the most desired retail company for
customers catering all ages.
 The company further aims to assist the members of the Woolworth family to attain
economic security as well as the welfare by offering a range of appropriate,
competitively priced savings, loan along with other financial services
(Woolworthsgroup.com.au 2018).
 Other significant objectives of Woolworths are to enhance stock revenues and
optimize network competence while guaranteeing that their purchasers are offered with
over 800 stores established on the hubs of Australia. Furthermore, the company has
aided a large amount in the process of its supply chain management and impact the
significant areas of the organization.

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Vision-
 The Company wants to perceive as a favoured provider of financial services for all its
employees and to their immediate families.
 Woolworths’ fundamental objective is to perform in a more efficient manner in order
to drive social development whereby factors related to poverty and economic
deficiency encourages certain environmental damage which as a consequence creates
an increased level of poverty. Furthermore, in order to enhance the level of poverty,
the company requires creating expansion to the current schemes of the Woolworths
Trust and further relating the transformational objectives to encourage organizational
growth and progress (Lewis and Huber 2015).

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Analysis of 5Cs for Woolworths Group
Swot Analysis
Strengths Weaknesses
 Brand recognition in Australia
 Wide range of retail super markets and
dominating market share
 Successful amalgamation of digital as
well as offline sales network
 Immense commitment towards
environmental sustainability
 Effective CSR initiatives
 Lack of global recognition
Losing competitive advantage to the competitive
ground
 Late entrance into the domain of online or
digital retail business
Opportunities Threats
 Potential growth of retail sector in 2015
 Improved opportunities to attain the
position in the industry
 Social media networking as an effective
tool for engaging customers (Lewis and
Huber 2015)
 Slow development of online retail sector
in Australia
 Discount strategy with Coles
Strengths
 Brand recognition in Australia- Woolworths being founded in 1924 has been
recognized as one of the largest supermarket or grocery chain retail in Australia and
has well established branding whereby the company has been affectionately been
called as ‘Woolies’ especially among the youths of Australia (Thornton et al 2013).
 Wide range of retail super markets and dominating market share- As per certain
reports, Woolworths has attained considerable recognition among the Australians with
over 900 supermarkets and with around 1,95,000 employees along with more than 30
newly introduced supermarkets in 2014 (Richards et al 2013).
 Successful amalgamation of digital as well as offline sales network- Certain
reports has revealed Woolworths effective expansion of its ‘Click and Collect’
services to over 200 outlets on order to improve its online competences. Furthermore,

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with a considerable rate of over $1 billion worth sales, the online buy has revealed an
elevated growth of more than 40% over FY 14 (Juan Ding et al 2014).
 Immense commitment towards environmental sustainability- Woolworths
purposes to obtain a competitive border over the other rival companies and drive the
worth of stakeholders, develop the its market value and reduce the operative
expenditures.
 Effective CSR initiatives- The employees’ credit union executes and maintains an
effective CSR program which further intends to integrate the social liability and daily
operations. It is executed via academic scholarships, investments in rural areas (Lewis
and Huber 2015).
Weaknesses
 Lack of global recognition- Woolworths has a negligible global existence in
comparison to its competitors like Coles, Walmart and Aldi (Sealey 2013).
 Losing competitive advantage to the competitive ground- The brand in recent
times has been unable to uphold its competitive advantageous position in the retail
sector
 Late entrance into the domain of online or digital retail business-Woolworths in
comparison to its competitor have reportedly entered into the domain of digital
business late further resulting in competition of reasonable price range and gather an
increased rate of customers (Grimmer 2017).
Opportunities
 Potential growth of retail sector in 2015- Following to the recession in 2010, the
Australian retail sector has been showing indications of improvement in 2015.
However, the guidelines stated by Reserve Bank of Australia have been considered as

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efficient in sustaining the position of the Australian retail sector whereby the food
retailing sector has elevated by 0.2% in February (Fidelman 2013).
 Improved opportunities to attain the position in the industry- The declined sales
in FY14 have been attributed to unsatisfactory and unconstructive endorsements.
Improved promotional strategies via marketing and commercials, offers and
sponsorships are required in order to attain Woolworths’ position in the market
(Moriarty et al 20140.
 Social media networking as an effective tool for engaging customers- With the
advancements of social media marketing, Woolworths would be getting enormous
opportunities to associate with its dedicated customer base and to reach out to other
brands specifically outside Australia (Lewis and Huber 2015).
Threats
 Slow development of online retail sector in Australia- The declined rate of
emergence into the online Australian retail industry has posed severe threats to
Woolworths.
 Discount strategy with Coles- Coles one the greatest competitor of Woolworths has
successful introduced discount offers to gather a greater target population which is
further a considerable threat to the company (Le Roux and Maree 2016).
Woolworths recognize that commitment and loyalty and consider this as a
fundamental foundation of their consumers’ satisfaction level. The company targets
customers who encourage healthy life preferences and willingness towards nourishing food
and beverages (Woolworths.com.au 2018).
According to reports, a strategic collaboration of BP with Woolworths has been
anticipated to bring productivity whereby the contract incorporates BP attaining, rebranding

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as well as operating the company’s over 500 petroleum sites and the additional 16 plants at
present under construction pertaining regions of Australia for a total contemplation of US
$1.45 billion (Lewis and Huber 2015). The amalgamation of BP’s global awareness and
knowledge in the sector of fuel and convenience offers with the association of Woolworths,
supreme food products and trust initiatives is regarded as an effective prospective vision for
its consumers and is further anticipated to form additional significance for BP.
Coles, the leading retail supermarket organization in Australia has been recognized as
one of the biggest threat and rival to Woolworths and is the rise of reduced price of the
supermarkets such as Aldi along with the potential entry of several other leading global
competitors such as the German retailer (Richards et al 2013). Certain reports reveal a
declined rate of Woolworths in comparison to companies such as Common Wealth Bank
which comprise a sustainable rating and a price target that has risen from $20 to $25 in 2016
(Financial Review 2018).
(Financial Review 2018)
PEST Analysis

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Political factor- Woolworths has been significantly benefiting from the Closer Economic
Relations Trade Management between Australia and New Zealand. Furthermore, this trading
facilitates both the nations where the company has its business operations into a single
financial structure (Klettner, Clarke and Boersma 2014). The organization along with its both
international as well as domestic stakeholders has protected the political consistency of both
the nations.
Economic Factor- Woolworths have been operating its business operations in an
economically established scenario. Countries such as Australia has considerably improved
standard of living in comparison to the other nations. The government involvement in the
Australian open retail market influences Woolworths and its Food and Grocery Retailing
sector. As perv reports, GDP per capita at buying authority of Australia is positioned at the
10th rank based on the 2015 estimation by the global monetary fund (Byrne 2014).
Social Factor- Common ideologies, principles and beliefs of the Australians play a
significant role in the way Woolworths’ marketers will learn about the customers of the
Australian market and the way Woolworths have been designing the marketing information
for Food and Staples Retailing Industry customers (Chalmers et al. 2013). The achievements
of Woolworth as a leading retailing organization in Australia can be traced as a vital
macroeconomic environment.
Technological Factor- Woolworths has been known for harnessing improvements of
advanced communication technology to enhance the productivity level of their service and
satisfy their consumers (Trevena et al. 2014). The company further introduced the ‘self-
checkout’ machines that would facilitate the customers to scan, measure the goods weight,
and pay for their groceries via cash, credit or debit cards.
Woolworths’ Market Research on 5C’s

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The chief executive officer of Woolworths has reported that over 1000 employees
have been shifted directly to their business in order to bring enhancements to the level of
responsibility and further aid the company to support the store teams and customers.
Woolworths has effectively conducted surveys of over 2500 customers and revealed that
more than half of the respondents have expressed discontentment in comparison to the
customers of Coles (Knox 2015). Furthermore, these survey analyses have revealed that one
of the significant motivators of customer satisfaction for the retail buyers, store design and
the innovation associated with the products.
One of the recent entrants into the retail industry is Aldi whereby the significant
development strategy has been persistent to conquer the high rate income of Woolworths. It
has been reported that around A$16 billion Woolworths’ food production has seen an
increase of over A$470 million while the incomes has been decreased by around A$ 120
million in 2016 (Cant, Wiid and Sephapo 2016).
According to reports the market share of Coles and Woolworths have a total market
share of over 70% of the $80 billion grocery industry whereby the former company
comprises the vast share of market and whereas Woolworths have successfully succeeded the
growth with around 40% in comparison to Cole which comprises around 33% (Lewis and
Huber 2015). Woolworths have recently collaborated with Caltex following the joint
endeavour of Coles with Shell in 2009 (Juan Ding et al. 2014).
Woolworths’ Cost Leadership Strategy
Woolworths have implemented a cost leadership strategy which is recognised as an
incorporated set of activities outlined in order to produce or offer products and services at
reasonable costs, comparative to its competitors with the characteristics which are acceptable
to its consumer base (Richards et al 2013). The company in order to achieve optimized

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productivity at the lowest expenditure has further implemented the ‘expenditure reduction’ or
‘sale up’ strategy for several years which has been deliberated in order to decrease the cost
related to the process of delivery or production (Wardle and Chang 2015). Furthermore,
Woolworths have being successful in applying this regulation and further reduce their costs.
Woolworths has been effectively engaged in the cost conflict with Coles, which is recognized
as the second largest contributor in the food and grocery sector of Australia. One such
competitive strategy Coles have reduced their prices of milk in order to alter its insights as
not being caused competitive which further forced Woolworths to apply cost reduction
strategy to the similar levels (Financial Review 2018). Woolworths being one of the
significant market dominants in the Australian retail sector administers a broad network of
supermarkets that elevates its purchasing control further strengthening declined prices from
suppliers or the distributors (Lewis and Huber 2015). Furthermore the organisation in recent
times has been adopting a concentrated strategy in some of the critical areas of its operation.
These type of focus strategies have being significant in the company's 2014 operations such
as incorporating Sushi bars, MSA, red meat and fish that targeted a particular consumer base.
However, the organisation must take into its consideration several other cost
leadership initiatives in order to reduce their operating expenditure such as the ‘just-in-time’
strategic approach which has been implemented in administering their products into the
supply chain strategy in order to reduce the expenditure cost of wastage as well as storage by
creating as well as introducing goods and services at the retailer outlets during times of
requirement from the customers (Cant, Wiid and Sephapo 2016). Woolworths in order to
achieve such strategic approach in an efficient manner must focus on to attain a stock
replacement program in order to evaluate the number of products which are creating demand
within the dedicated customers of the company. Certain beneficial factors related to the cost
leadership strategy of this organisation have been identified which further focuses on the

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production of the overall expenditure by curbing the wastage and storage and also by
increasing the profit margin of the company's sales. It is important to note that the long
distance factor persisting between the outlets and the distributors have been causing
complexities as the suppliers of Woolworths are located around Australia.
Woolworths’ Marketing Mix (7Ps)
Products
Woolworths have attained immense recognition in the Australian retail sector for its
contribution to several types of food and grocery items as a part of their marketing mix. The
company has also initiated selling books, DVDs and other stationery items along with the
packaged products. Within each of its category the company offers a wide array of
preferences associated with its brand recognition local production as well as global cuisine
interests (Pettigrew et al. 2015). As a result Woolworths is successfully achieving high level
of customer satisfaction in terms of preferences. The series of goods and services produced
by the company tested with utmost efficiency and approved by the company exports in order
to sustain its value and quality level. The diversified array of products have facilitated the

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company to Cater the overall desires and demands of the customers buy further creating the
one stop store for their loyal and dedicated customer base.
Price
The leading Australian retail company has been effectively performing in order to
sustain similar increased costs that in the retail market. The company offers the consumers
segment buy preferring reduced as well as supreme prices. Woolworths have introduced the
frequent shopper club which is regarded as a reward initiative at Tasmania outlets that further
offers $20 discount vouchers for every collection of 2000 credits (Taylor 2013).
Place
The organisation currently operates over 1000 stores in Australia whereby more than
900 are identified as supermarkets and the others as convenience stores. Some of the outlets
corporate by the company are known as the safety stores in Victoria where they operate
through digital platform and simultaneously have developed mobile application for the
digitally inclined customer base. Woolworth Select, Woolworths Gold, Woolworths Fresh are
some of the private label brands which the company owns (Woolworths.com.au 2018).
However the retail supply chains using the brand recognition of Woolworths are located in
Mexico, United Kingdom, Germany and Austria with a wide distribution network.
Promotion
Promotional or endorsement strategies have always obtained a significant position in
the marketing strategy of Woolworths. The company in recent times have been implementing
online social media and magazines as well as newsletters for successful advertising and also
which is easily accessible to its loyal customers (Pettigrew et al. 2015). In addition to this the
organisation successfully offers innovative discount deals for the buyers and also distributes

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gift cards. Such promotional activities are taken place in the social media in order to gather
and increased rate of customer to attend the target segment and further earn revenues in the
retail market sector.
People
The company at present is operating with a workforce of over 2000 employees and
aims to elevate it by over 1500. The employee base of the company is regarded as when
expertise and has been known to contribute equally. Woolworths have been receiving
considerable recognition for its initiative to effective collaboration of employees with its
customers (Woolworths.com.au 2018). The company has been effectively following policy
regulation which guarantees no harm or damage to the employees as well as the environment
in which it operates.
Process
Woolworths comprises intensively customer friendly procedures and further
concentrates on utmost customer satisfaction. It also guarantees rapid procedures through the
advanced billing technology software as well as efficient support. The company further
encourages feedback procedures from its customers in order to bring innovation to the
process and make it more customers friendly.
Physical Evidence
Woolworths is well known all over the world for its sparkling, attractive stores which
facilitates customers to easily navigate through each category of goods they provide. The
official website and hoardings are created in an attractive manner in order to gather wide
range of young customers (Cant, Wiid and Sephapo 2016). Furthermore the company's

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financial and sales reports are published online in order to increase its brand awareness across
the globe.
Conclusion
A critical strategic analysis has been conducted in order to assess the significant
strategies and approaches that Woolworths have implemented in order to achieve improved
level of enterprise growth and progress in its business operation. However, such a progress is
primarily being underpinned by its well-established dedication and trust towards its
employees as well as customer base. The evaluations of the macro and micro level
environmental factors have as undergone by the retail sector of Australia have all influenced
the approaches and growth of the company both in productive and unconstructive manner.
Woolworths must aim at applying innovative strategies which must be regarded as the
fundamental marketing strategy of the company. The company must taken into account the
shifting trends and choices of the consumers revealing enthusiasm which can further be
concentrated through considering the strategy of increased enterprise progress level.

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