BUS201 Consumer & Channel Relations: Woolworths CRM Strategy Report

This report analyzes Woolworths' target market, marketing strategy, and channel strategy, focusing on potential CRM tools to enhance consumer relationships. The analysis includes a review of Woolworths' product, pricing, placement, and promotion strategies, as well as an examination of its channel strategy. The report highlights the company's strong consumer base and brand equity but suggests that Woolworths should adopt more modern CRM tools, such as social media platforms and cloud-based retail management solutions like NetSuite and Lightspeed, to improve marketing communication and consumer engagement. These recommendations aim to help Woolworths better understand consumer needs, foster stronger consumer-company relationships, and ultimately enhance consumer loyalty and expand its consumer base.

Running head: CONSUMER AND CHANNEL RELATIONS
Consumer and Channel Relations
Name of the Student
Name of the University
Author Note

1CONSUMER AND CHANNEL RELATIONS
Executive summary
The purpose of this report is to research several potential CRM tools which can be used by
Woolworths in further developing their strategy regarding customer relationships. In this report,
the target market, as well as current marketing strategy of the Woolworth company, will be
analyzed. Moreover, analysis of the channel strategy of the mentioned company will also be
performed in this report. Finally, recommendations for further development of their strategy
associated with consumer relationship will be provided in this report.

2CONSUMER AND CHANNEL RELATIONS
Table of Contents
Introduction:....................................................................................................................................3
Discussion........................................................................................................................................3
Analysis of the target market, current marketing strategy and channel strategy of Woolworths3
Product.....................................................................................................................................4
Price.........................................................................................................................................5
Place.........................................................................................................................................5
Promotion................................................................................................................................6
Analysis of channel strategy....................................................................................................6
Conclusion.......................................................................................................................................7
Recommendation.............................................................................................................................7

3CONSUMER AND CHANNEL RELATIONS
Introduction:
The Woolworths Group is a highly recognized retail organization located in Australia.
The mentioned company is the second largest company after Wesfarmers by revenue. In spite of
the fact that the mentioned company is the largest takeaway liquor retailer and gaming and poker
machine operator in Australia, the chief operation of Woolworths includes supermarkets under
the brand Woolworths in Australia and Countdown brand in New Zealand (Armstrong et al.
2014). The current target consumer of the company is residents of Australia and New Zealand. In
this report, the target market, as well as current marketing strategy of the Woolworth company,
will be analyzed. Moreover, analysis of the channel strategy of the mentioned company will also
be performed in this report. Finally, recommendations for further development of their strategy
associated with consumer relationship will be provided in this report.
Discussion
Analysis of the target market, current marketing strategy and channel strategy of
Woolworths
As mentioned earlier, the target industry of the company includes the retail industry of
Australia and New Zealand. The current target consumers of the company are higher middle
class and high-income earners in Australia and New Zealand. However, considering the fact that
the black middle-class consumers have shown significant economic growth in the past 5 years,
they can be considered to be another group of potential consumers for the company. The
consumer base, as well as the consumer loyalty of the company, is huge due to the high quality
of the product as well as services provided by the company to its consumers. Woolworths work

4CONSUMER AND CHANNEL RELATIONS
closely with Australian farmers and growers to ensure the quality of their product.
Approximately, 96 percent of the fruits and vegetable and 100 percent of meat directly get
supplied from the farmers and growers of Australia (Mehta et al. 2017).
The term marketing strategy refers to the ways by which an organization gain competitive
advantages and enhance its sales in the market where it is operating the business. When it comes
to marketing its products as well as services, the primary competitors of Woolworths is Coles
since the due dominates more than 80 percent of the Australian Retail industry (Keith 2012).
Aldi, another retail brand of Australia is considered to be a potential threat for the duopoly due to
its cost-cutting strategies. In order to understand the current marketing strategy of Woolworths
Limited, 4P marketing mix of the Company has been conducted below:
Product
All types of grocery items that include vegetables, meats as well as packaged products
are sold by the company. In order to gain a competitive advantage over its competitors, the
company offers a huge number of choices in each of the local production, branded products and
international cuisines. Unlike its major competitors, the products sold by Woolworths reach the
hands of the consumers only after being tested and approved by Woolworth's experts. Moreover,
the products sold by the company are highly diversified. Along with groceries, consumers are
able to avail bags, furniture, jewelry, housewares and even clothing under the same roof. This
‘all-product-under-one-roof' strategy of the company can be considered as a major marketing
strategy to attract consumers. According to the Veblenian Social-Phycological theory,
consumers with less power over their environment prefer utilitarian products over hedonic
products (Lewis and Huber 2015). This theory is followed by Woolworth since the management
of the company majorly invest in retain utilitarian products as discussed above.

5CONSUMER AND CHANNEL RELATIONS
Price
Considering the fact that the consumer base of the company comprises of both premium
product consumers as well as consumers who prefer lower prices, Woolworths keeps it price
range slightly higher or similar to its competitors depending on whether the products are
premium or not. The Pavlovian Theory, the habit of consumers can be manipulated or changed
by reinforcing brand elements related to the positive experience of the consumers (Dwivedi and
Merrilees 2012). This theory is implemented by the Woolworths Supermarket chain while
implementing price range for elite, upper-middle class and middle-class consumers. The hedonic
products sold by the company are ranked higher than its competitors. The main feature projected
by the company when it comes to its luxurious or hedonic products is the premium quality of the
products. When it comes to consumers who prefer lower priced utilitarian products the company
has implemented reward programs like 20 dollars vouchers for every 2000 points gathered. This
strategy of the company is an example of the Marshallian economics theory. According to the
mentioned theory, if a product’s price is lower, the sales of that product will be higher.
Place
Out of approximately 1000 stores in Australia, more than 960 stores of Woolworths are
supermarkets and the remaining ones are convenience stores. Woolworths has recently started
online marketing in Australia (Lovelock and Patterson 2015). Apart from that, the company
trades in New Zealand as Countdown. In order to offer the consumers a clear classification of
quality, type and price of its products, Woolworth have differentiated its products under 4 private
level brands namely, Woolworth Home brand, Woolworth Select, Woolworth's gold,
Woolworths Fresh.

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Promotion
When it comes to promotion, the mentioned company follows three major consumer
behavior theories namely, the Psychoanalytic Theory, Pavlovian Theory and Veblenian
Social-Psychological Model (Khodakarami and Chan 2014). According to the psychoanalytic
theory, Consumers respond to symbolic concerns as much as they respond to those of economics
and function. In order to capture the emotional concerns of the consumers, in 2013 Woolworths
had introduced Aussie Animal Trading cards as a promotional tactic focusing on the children
which in turn had attracted a large market of the children (Long et al. 2013). By promoting petrol
and grocery discounts to a great extent, the company attracted a huge range of utilitarian product
preferring consumers. This can be considered as an example of the Social-Psychological Model
theory. When it comes to promotion of the premium products of the company, the company
implemented the strategy of celebrity endorsement. All this has implemented a highly positive
impact on the overall revenue of the company. According to researchers, in the year 2017,
Woolworths has recorded a sale of 3.6 billion. Apart from that, recently the company is
promoting its business through online social media platforms.
Analysis of channel strategy
The channel strategy followed by the mentioned organization chiefly involves
researching the consumers through retail stores located in different parts of Australia and New
Zealand. However, has been discussed earlier, the company has also started online marketing in
order to capture a greater amount of consumers. In this era of online marketing and swift
delivery, this approach is highly beneficial for the company. The aim of the Woolworths Limited
Company is to digitally transform stores, enhancing connectivity to enable employees as well as

7CONSUMER AND CHANNEL RELATIONS
consumers to engage differently and build their digital channels with increasing focus on mobile
commerce (Khodakarami and Chan 2014).
Conclusion
From the above discussion, it can be concluded that being one of the most reputed retail
organization in Australia, the Woolworths Limited Organization have vast consumer base as well
as brand equity. The chief reason behind this the effective marketing strategies of the company.
However, being one of the oldest companies in Australia, a majority of strategies currently
followed by the company are traditional. Hence in order to further enhance its consumer base,
the management of Woolworths limited must follow the bellow mentioned recommendations.
Recommendation
With the changing landscape of retail businesses, it is important for Woolworths to
implement Consumer Relationship Management tools in order to maintain effective marketing
communication with both the existing consumers as well as the potential consumers. Social
media platforms can be considered as one of the most effective CRM tools implemented by a
broad range of organizations. Woolworth can promote its products as well as services through
popular social media platforms like Facebook, LinkedIn and Twitter. Considering the fact that a
majority of retail consumers are present on social media platforms, the company will be able to
directly communicate with its consumers (Lovelock and Patterson 2015). This will be beneficial
for the company in two ways. Firstly, the management of Woolworths will be able to understand
the specific requirements of the consumers. This, in turn, will help the company to modify its
products and services in order to enhance its consumer loyalty as well as the consumer base.

8CONSUMER AND CHANNEL RELATIONS
Secondly, direct communication with the consumers will develop an effective consumer-
company relationship.
Apart from that, Woolworths can also implement cloud-based multi-channel retail
management solution like NetSuite. The mentioned software includes POS, e-commerce and
other managerial functionalities. With the help of this software, Woolworths will be able to
manage its back-office jobs for selling product on both offline and online channel. Not only that,
the smart application has the ability to understand the software and hardware requirements,
complexities of a retail model. It also allows the retailer to focus on the specific requirements of
the consumers (Mehta et al. 2017). Another CRM tool that can be implemented by Woolworths
is the Lightspeed application. The solution will enable the company to manage inventory and
consumers, process transactions as well as an in-depth view of their store's analytics.

9CONSUMER AND CHANNEL RELATIONS
Reference List
Armstrong, G., Adam, S., Denize, S. and Kotler, P., 2014. Principles of marketing. Pearson
Australia.
Dwivedi, A. and Merrilees, B., 2012. The impact of brand extensions on parent brand
relationship equity. Journal of Brand Management, 19(5), pp.377-390.
Keith, S., 2012. Coles, Woolworths and the local. Locale: The Australasian-Pacific Journal of
Regional Food Studies, 2, pp.47-81.
Khodakarami, F. and Chan, Y.E., 2014. Exploring the role of customer relationship management
(CRM) systems in customer knowledge creation. Information & Management, 51(1), pp.27-42.
Lewis, T. and Huber, A., 2015. A revolution in an eggcup? Supermarket wars, celebrity chefs
and ethical consumption. Food, Culture & Society, 18(2), pp.289-307.
Long, C.S., Khalafinezhad, R., Ismail, W.K.W. and Rasid, S.Z.A., 2013. Impact of CRM factors
on customer satisfaction and loyalty. Asian Social Science, 9(10), p.247.
Lovelock, C. and Patterson, P., 2015. Services marketing. Pearson Australia.
Mehta, K., Phillips, C., Ward, P., Coveney, J., Handsley, E. and Carter, P., 2017. Marketing
foods to children through product packaging: prolific, unhealthy and misleading. Public Health
Nutrition, 15(9), pp.1763-1770.