Marketing Mix and Strategies of Woolworths

This report discusses the marketing mix of Woolworths using 8p’s of marketing. It also evaluates the overall marketing strategies, the contemporary issues and the competition that is present in the market. The report suggests strategies like cost leadership, innovation, and new stores and refurbishment to overcome the challenges faced by Woolworths.

MKT 501

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Contents
INTRODUCTION......................................................................................................................1
Marketing mix of Woolworths...................................................................................................1
Analysis of the contemporary issues faced by Woolworths......................................................3
Marketing strategies...............................................................................................................4
Recommendations..................................................................................................................5
CONCLUSION..........................................................................................................................6
REFERENCES...........................................................................................................................7

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INTRODUCTION
Marketing is an essential concept in the modern day business. There are various tools that
have been used by different organisations so as to improve their marketing program. Use of
tools such as marketing mix helps in improving the quality of marketing mix. Since the
competition has gone high hence organisations need to invest more in the concentrated and
personalised marketing. Marketing mix is done specifically for each product so as to achieve
maximum sales (Nenycz-Thiel, 2011). Woolworths is one of the biggest supermarkets in
Australia having its grocery chain in different parts of the country. It is having 1000 stores all
over Australia. In this 976 stores are supermarkets while 19 are convenience stores under the
same logo. They also have online shopping and home delivery system. They are highly
specialised in selling groceries. This report highlights the marketing mix of Woolworth using
8p’s of marketing. It also evaluates the overall marketing strategies, the contemporary issues
and the competition that is present in the market. In the last section of the report,
recommendations related to marketing of Woolworth.
Marketing mix of Woolworths
Australian supermarket industry is facing tough competition from various big and small
retailers (Sutton-Brady, Kamvounias & Taylor, 2015). With Coles giving biggest competition
to Woolworth’s business, it has become very essential for the company to redesign their
marketing campaign. Marketing mix is a marketing tool that is used by the firms to
communicate the marketing objective of the company to its target market. 8P’s of marketing
of Woolworths is as follows:
 Product: Being a super market, there are many products that are marketed by
Woolworths. They deal in selling of products such as DVD’s, house products, pet
items, baby items, magazines, beauty and health goods, stationary products. Along
with this the major thing in which Woolworth’s supermarkets deals with is a grocery.
They sell different type of grocery such as fruits, vegetables, packaged food, meat etc.
They have a name in grocery selling as most of their groceries are fresh. Their annual
report also shows that they are seeking maximum benefits from the sale of fresh food
items especially those are related to groceries (Keith, 2012). They also sells product
of different varieties so as to attract maximum possible customers towards their

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business. Their stores add food products as per the demand of the market. Company
should also think of increasing their product range according to the international
supermarket standards. They also sell liquor products that are of different taste and
different prices. Along with the fresh food items they also sell frozen food items
especially related to the meat and seafood.
 Prices: Woolworths is known for selling products at lowest of costs as compared to
most of their competitors in the industry. Their suppliers from different parts of the
world supplies them goods at lowest of costs. This helps them in managing their
prices at such levels. There are many local suppliers in the industry that are helping
them in fulfilling their demands (Williams, Memery, Megicks & Morrison, 2010).
They also have the concept of fixed prices where all their stores sell the products at
constant price which is uniform throughout the country. With the help of their strong
supply chain network, it is not difficult for Woolworths to do it. With the online
market leading in the prices, it could be a bigger challenge for Woolworths to
maintain its prices. Woolworth will have to increase their supplier base so as to
collect food items that are fresh and gets available at lowest of cost. They give
incentives and discounts on their products.
 Place: Woolworths has an excellent environment having large store size. The
ambiences of the stores are good and there is presence of high quality facilities at the
stores. They are operational with around 976 supermarkets along with nineteen
convenience stores. The convenience stores extend the reach of the company deeper
into the markets. The stores are attractive, clean and gives services in such a manner
that consumers can easily navigate through the stores easily. It is also providing
services through online sites or with the use of mobile apps (Smith, Lawrence &
Richards, 2010). Woolworths provides home delivery services to its online
consumers. Their online shopping options give people with wider accessibility and
options to the customers. In the future it will be the major area of competition.
 Promotion: Woolworths believes in maintaining the brand visibility for which they
have adopted several schemes. This company believes in innovative marketing. In
their traditional marketing approach they advertise their products with the help of
tools such as radio, newsletter, hoardings, magazines, billboards to create higher
brand awareness. With the help of apps they are creating social awareness. Adding to
their digital marketing campaign they have used platforms such as Twitter, Facebook,
Youtube so as to reach deeper into the market. They believe in positive marketing

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which helps them in creating their image in the niche market. From 1987 to 2012 they
carried their marketing program named Fresh Food People (Alexander, Doherty,
Carpenter & Moore, 2010). They have launched many brand loyalty schemes like
giving incentives in the form of subsidized petrol prices at their subsidiaries petrol
stations. The discounts depend on the purchase and hence it attracts people to do
higher purchase from their stores. Gift cards, shopping cards helps in promoting the
company.
 People: Woolworth has an excellent workforce that is capable of providing best of
services to its customers. They have hired the best of talents from different domain so
as to conduct their operations in a desired manner. They conduct regular training
programs so as to increase their skill set. Woolworths has an excellent training
program that aims for holistic development of workers (Juan Ding, Jie, Parton & J.
Matanda, 2014). At the top level of the firm they have a highly experienced team
capable of taking effective decisions while dealing with various situations. Their
workforce is of international standards which provide their customers with high
quality services.
 Process: Woolworths is known for providing best of services to its clients. They are
using excellent technologies in their sales. This has eased the work process with the
use of innovative technologies in their different work process. Woolworths is using
best of services with the help of high quality resources. With the launch of online
shopping facilities at Woolworths they have been able to improve their process.
Woolworth provide home delivery services which makes the whole process highly
consumer friendly (Alexander, Doherty, Carpenter & Moore, 2010). They have used
facilities like Apps so as to give their customers with real time and innovative buying
experience. At their stores it is very easier to find products.
 Physical evidence: The company is dealing in the products that are tangible and
provides finest of experience to the customers. Their products give the maximum
value to the customers for their money. They deliver what they promise and hence it
has been the biggest reason why they have highly loyal customers. The physical
evidence of the company is also seen through the quality of the product they deliver to
their clients. Company gives a proof and warranty related to the sale they make to the
clients (Mehta, Phillips, Ward, Coveney, Handsley & Carter, 2012). This assures the
people that they are making right purchase. It is creating a feeling of trust in the minds
of consumers which is necessary for building healthy relationship among the two.

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 Partnership: In their marketing, most important role is played by their partners.
Woolworths has made many partnerships with different suppliers from all across the
globe. They are helping them in enhancing the balance between demand and supply.
They also have many subsidiaries as partners which help them in conducting their
business process. Many small and big suppliers help them in fulfilling their demands
especially that are related to fresh food supply. They also have made partners in
innovation which will help the company in their sustainable growth (Murphy, 2011).
Transparency and accountability has been the prime criteria for their business
relationship. They seek opportunities to collaborate with their suppliers so as to have
mutual gains. Woolworths do not tolerate any misconduct in business relationship
under any circumstances. They have a clear accepted procedure for long lasting trade
partnership for reporting any issues.
Analysis of the contemporary issues faced by Woolworths
Woolworths is a large business organisation performing large numbers of operations in
various parts of Australia and world. This has created many kinds of challenges for the
Woolworths. Company needs to deal with all these contemporary issues so as to ensure their
growth in the market. Some of these issues are:
 Competition: This is the biggest challenge that is faced by the Woolworths. This is
because many small and big firms have emerged in the retail market. This has
narrowed down the opportunities that are available with the cited firm. The biggest
war is in terms of price as bigger firms have lowered down their rates to minimum
limits (Bailey, Price, Pyman & Parker, 2015). This has changed the ways in which
firms could gain profits. There are many small business units that are selling fresh
groceries at the local levels which are a serious challenge for the business of
Woolworths.
 Deflationary pressure: The inflation rate in Australia has been high and this has
generated pressure on Woolworths to lower down the prices. This is because inflation
has reduced the purchasing power of the consumers which has ultimately reduced the
sales growth of the products. This is the reason why their investors have faced stock
loss (Richards, Bjørkhaug, Lawrence & Hickman, 2013). This has only benefited in
the sale of daily commodities like products in fresh food categories. Red meat sale has
been highly affected by the inflation.

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 Regaining momentum in Australian food and liquor industry: The Company will have
to work hard for regaining and sustaining sales momentum in Australian food. Due to
various socio-economic challenges there is a slowdown in the growth of liquor
industry (Rasjidin, Kumar, Alam & Abosuliman, 2012). The company is facing
challenges in enlarging their liquor sales. Innovative offers with the help of multi-
channel networks are necessary.
 Political Instability: In a last decade Australia has faced a huge political instability
which has changed the growth in business. The change of prime ministers has
changed the policies in the country which has ultimately affected the business
process. The trade and imports have been seriously under pressure. The change of
taxation on trade and business operations has resulted in fluctuations of prices. This
political instability can be seen on the relationship with the suppliers (Atapattu &
Sedera, 2014). At the same time it has forced the company to make cost savings so as
to ensure higher revenues from their business. They also need to find the opportunities
that could restrict the effect of these possibilities.
 Economic challenges: With changing dynamics in the business and increasing number
of issues in the operations, the cited firm has to invest their money in the projects such
as new product development as well as for strengthening the pace of innovation. The
suppliers and the farmers are demanding for higher payments which could affect their
balance sheet (Inside FMCG, 2017). The import barriers and the increasing raw
material prices in the nation have forced the company to make changes in their
decision making process.
 Sustainability: With the increasing variation in weather patterns and climate change
the fresh food market is facing the challenges related to the sustainability. Since the
business of Woolworths is highly dependent on the business of fresh food hence there
is a need of making new plans for sustainability (Richards, Kjærnes & Vik, 2016).
Marketing strategies
The issues that are faced by Woolworths are making the business process more complex and
needs a series of strategies so as to overcome the challenges they are facing. In the current
business environment, marketing plays a very critical role and hence there must be selection
of strategies on the basis of the requirement that a firm has (Wardle & Chang, 2015). Some of
the strategies that could be used by Woolworths are:

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 Cost leadership: With the amount of resources that Woolworths has, they can easily
use this strategy. Since the fresh food industry is highly price sensitive hence it is
crucial that company manages its operations in such a manner that cost saving is at
priority (Dwivedi & Merrilees, 2013). More discounts could attract more number of
people towards the business. In the increasing inflation this strategy could help in
retaining the loyal consumers.
 Innovation: There are many innovative measures taken by the Woolworths but they
need to understand the market expectation from them. This will not only enlarge the
product range but will also increase the choices for the consumers. This is very
necessary in the highly competitive environment. Innovation also needs to be done in
the ways services are provided to the customers. More innovations are required in
their online service as it is crucial for gaining competitive advantage over the rivals.
Lower pricing, better ranging is the strategy that company wants to adopt from their
business operations. This will have direct effect on the targeted customers.
 New Stores and refurbishment: There is a need of opening new stores in other parts of
the country so as to increase the reach of the company among new market segments.
Apart from this they need to refurbish their stores. This refurbishment design must be
according to the preferences of the local consumers (Arli, Dylke, Burgess, Campus &
Soldo, 2013). They need to develop 30-35 stores per years so as to meet the gap in
demand and the target they want to achieve.
 New product development: Since the competition among the super market chain
shave gone to extensively higher levels hence it is crucial that company adds new set
of products into their catalogue. This development of new categories will help the
company in finding new target customers (Knox, 2015). For this they will have to
make partnership with new kinds of suppliers. For example their partnership with
Beak & Johnston will help them in adding products like ready-to-heat and ultra-fresh
ready to cook meal.
 Online: With increase in the online market, it has become crucial for the company to
find new strategies for their online business. This might attract the international online
retailers to come into the business. Presently they are the leaders in domestic online
retailing and any they would certainly want to maintain it. This will also include
taking use of technological mediums for sales and marketing. This will help them in
reaching to larger consumer base with limited efforts.

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 Performance enhancement: Woolworths believes on the quality of services they are
providing to its customers. This is highly dependent on the performance of the people
working at their stores. For performance evaluation they have created a new 8-metric
scorecard replacing the old 20 metric system placing customer metrics at the top of
the chart.
 Lean retail model: In order to face economic challenges they aim to adopt lean retail
model. This will include huge amount of cost reductions at various stages of retailing.
Alone in the financial year 2015-16, they did a cost reduction of around $500million.
This saved money was used in making investments in improving the aspects related to
customer experience. This includes investments in the process like better
convenience, improved access and services, lower prices, commitment to innovation
etc. This will also include better use of technology so as to make shopping easier and
enjoyable (Dos Santos, Svensson & Padin, 2013). They have diminished their non-
customer facing worker roles by 400 times.
Recommendations
As per the challenges that Woolworths is facing, it is essential that company finds an
effective strategies so as to overcome it. This company needs to thing about the
internationalisation in other parts of the world. This will not only help the company in
increasing their customer base but will also help the company in enhancing their supplier
base. More products could be added to their stores that will attract people from different
cultural backgrounds. For pricing they need to find new cost cut majors in the supply chain
and other process of product delivery. The pricing should also be done as per the market in
which they are operating. For this Woolworths needs to add more local suppliers to its pool.
Lean retail concept will help the firm in lowering their prices. In their promotions they should
focus on giving discount coupons or loyalty cards. This will attract more customers towards
the shop (Omarjee, 2017). They must also focus on doing maximum promotions through their
online channels or apps. Use of larger platforms of promotions like the social media sites
could be effective in managing response of the customers towards the brand. They could
share the details of their products through personalised marketing. In this regards the data
management strategies becomes highly important. Data management software will also help
in making of better decisions.
Along with this company should also focus on selling larger number of products through
online mediums. This is important as it reduces the overall operational expenses of

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Woolworths. They must put efforts for improving the operational processes by utilising
technology at every stage of retailing. Company should also train their employees for
providing best of shopping experiences to its customers. Consumer oriented training is
essential in this regards. The warranty cards along with quality improvement will help the
company in improving the physical evidence. They should also make new partnerships with
small and bigger firms which could help in growing their business in other parts of the world.
At the same time it would help in adding new variety of products at their stores.
CONCLUSION
From the above based report, it can be concluded that Woolworths being such a large
supermarket chain faces many types of marketing challenges. They utilise their marketing
mix in a very effective manner. Most of them provide a competitive advantage to the
company over their rivals. In marketing they are facing challenges related to political and
economic aspect of the country. Along with this they are also facing challenges related to
sustainability and increasing inflation. The slow growth of the liquor market is another
challenge for the Woolworths. For competing with these challenges they are using strategies
such as cost leadership, innovation, performance enhancement, new product development,
lean retail model. Apart from this they are also utilising online mediums for conducting their
business processes. They should focus on their supply chain management so as to bring
improvement in the business process. Use of technology at every level of retail process must
be adopted.

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