Woolworths Supermarket: Challenges and Marketing Strategies

This article evaluates the challenges faced by Woolworths Supermarket in Australia and its marketing strategies. It discusses issues such as supply chain challenges, competition, customer service, and marketing strategies. The article suggests recommendations for improvement such as establishing support systems for farmers, expanding to interior areas, and keeping up with technological advancements.

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Running head: MKTG100: Capturing and Creating Customer Value
MKTG100: Capturing and Creating Customer Value
Institution
Name

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MKTG100: Capturing and Creating Customer Value
Introduction
Woolworths is an Australian supermarket chain that deals with groceries such as fruits,
vegetables, meat and food which is packaged. It is the Australian’s best supermarket enterprise
that was established in the year 1924 where it has several branches across Australia (Bailey,
2016). This supermarket works closely with growers and farmers in order to make a supply of
products efficient to consumers. The customers can access the products through online means,
where they can shop at their homes through the internet, or can find them at fixed locations. This
piece of work will identify and evaluate the relevant issues that are in the environments of this
supermarket chain. It will also have an evaluation of the company in terms of its segmentation,
the target of the market and the positioning strategies. In addition, the marketing strategy of this
company will be evaluated and recommendations made regarding the improvement of this
company.
A senior worker in the Woolworth supermarket chain said that there has been a challenge
in the supply of groceries by farmers (Sutton-Brady, Kamvounias and Taylor, 2015). The
farmers have got no new farming innovations, which has made their products not to grow and
adapt to changes easily. In addition, the entire country has been faced by inflation, a factor that
made the price for agricultural productivity to go higher, whereas the farmers have no sufficient
capital to cope up with this rise. Therefore the supermarket chain has experienced low product
supply for its customers. The senior worker adds that the meat supply has changed from red meat
supply to white meat supply. Jie, Parton, and Chan (2015) argue that the price of red meat has
risen so high hence has made many customers to forego it for the white meat. This condition is

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MKTG100: Capturing and Creating Customer Value
expected to continue for the next one and half years, which will make the company experience
substantial losses.
There is another challenge in this company where other companies in the country, as well
as international companies, have come in the market. This has posed a lot of competition for this
company (Taylor, 2018). There has been a price cut off by other companies in order to attract
more customers, an aspect which has made this company to lower the price too. Lowering the
prices has made the company to realize fewer profits than before hence making the competition
too tough for them. The competitive companies include Aldi and German retailer Lidl.
Additionally, customers are tending to sway away from Woolworth supermarkets due to
taring. Taring is a situation where the weight of packaged products is measured including the
weight of the containers (Pride and Ferrell, 2004). This means that the weight of the containers is
charged in the price of the whole product, where the weight of the product is measured less the
weight of the container. Most customers complain that they should be told to be having their own
containers in which they will be packaged their products. The company, however, does not think
that this is possible because if an alternative of offering the products with free containers is
taken, then great losses will be experienced. Additionally, the single-use of plastic bags is not
allowed by the environmental conservation sector in the country. This issue of plastic bags is the
one that has led to the almost-closure of the Aldi Company (Pride and Ferrell, 2004). Therefore,
Woolworth would not dare to get involved in the plastic bags.
The Woolworth supermarkets chain specializes its products in groceries. However, it also
offers other products such as wine, clothing, fat, flour, and other basic-need products. It focuses
on providing these products to its customers, who are most of the time consumers of farm-

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MKTG100: Capturing and Creating Customer Value
products such as fruits, vegetables and meat (Devin and Richards, 2018). It organizes for
campaigns and advertisements which help in increasing their customer population. Promotions
are also part of Woolworth supermarkets, where prices are reduced at certain seasons in order to
free customers from the normal prices, at the same time allowing for more customers who shop
in their premises due to the offers (Wu et al, 2015).
New strategies of reaching customers has been developed where customers can shop by
use of websites, apps that are linked in mobile phones, use of virtual stores as well as the
development of new methods of customer product delivery (Sultan, Wong and Sigala, 2018).
This is an essential factor which is very significant in this company because one of their mission
is to ensure customer service delivery which is efficient, convenient and reliable at all time. They
also conduct research to get to know what customers need and feel about their services and
products (Wu et al, 2015). There is also a customer care service where customers can call any
time to address any issue, enquire or give feedback on their operations. This links the company
closely with the customers hence enhancing customer sustainability and satisfaction at the same
time. The feedback they get can be used to improve their products and services. Lamb, Hair,
McDaniel, Summers, and Gardiner (2013) believe that the small changes that are brought about
by the small feedback are the ones that have the potential to bring great and big improvements in
the company.
More than 995 stores are being operated by the Woolworths supermarkets across
Australia (Bailey, 2016). The stores are brought to the convenience and easy accessibility of
customers in every corner of the country. The customers do not travel to far places in search of
products and services offered by Woolworth supermarkets. In addition, a variety of products are

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MKTG100: Capturing and Creating Customer Value
offered under one roof, a factor that makes the customers to shop everything they need without
moving from one shop to another. This location of the supermarkets makes sure that there is a
target of the highest number of customers as possible, from every sphere of the country, making
the company to experience great profits.
Phillipov (2016) says that this company has seen its success in increasing their customers
through various ways such as advertising, campaigns, promotions and creating a talk-back forum
where they can give information concerning their interests, the products they like and the areas
they wish to be improved. Through developing online websites and mobile phone apps, the
company has seen its success in the creation and running of virtual stores. This has enabled
customers to increase because they do not need to move to physical premises to carry out their
shopping.
Despite the success that Woolworth supermarkets have realized, there is a need for
improvements in certain areas. Since these supermarkets rely so much on the products that
farmers produce, they should establish support systems such as financial schemes which support
the farmers in producing their products (Grimmer, 2018). This will include enabling customers
to have low-interest loans, access farm equipment and farm products such as pesticides,
fertilizers and other significant products that would boost their agricultural production.
Moreover, the supermarkets can establish their own farms, which they would run by their own in
order to make supply constant to the consumers. It is not all interior areas that have access to the
services of this company (Bailey, 2016). Therefore the few areas which are far from these
centers should be connected to them by establishing the supermarkets near them. This will cover
wider target customers.

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MKTG100: Capturing and Creating Customer Value
Conclusion
It is undeniable that Woolworth has been in the market for many years. They have
established themselves strongly since the year 1924. They have now explored greatly across the
Australian market. However, Solomon et al (2011) say that it is very easy for any business to fall
if proper strategies are not applied. This requires the company to maintain their service to its
customers with a high integrity, quality, and loyalty. The new technology is developing day after
day. Therefore the company needs to move with the change in technology in order to fit well in
the contemporary world of competition and survival.

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MKTG100: Capturing and Creating Customer Value
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MKTG100: Capturing and Creating Customer Value
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