MKT 550 Global Marketing: Coles' Strategy for Entering German Market

This case study outlines a marketing mix strategy for Wesfarmers' subsidiary, Coles, to establish a market presence in Germany. It details the company's objectives, target market, and positioning strategy, focusing on urban areas and middle to upper-income consumers. The strategy emphasizes the 4Ps: product (offering diverse products and services), price (using a low-pricing strategy), place (establishing retail stores in urban areas via joint ventures), and promotion (utilizing advertising, sales promotions, personal selling, publicity, and public relations). The plan also addresses implementation and control measures, including business environment analysis, market surveys, competitor analysis, sourcing local manufacturers and distributors, recruitment, training, and a communication plan. The study concludes with an economic evaluation and total market calculation, highlighting the importance of continuous monitoring and adaptation to ensure the success of Coles in the German market. Desklib provides students with access to similar solved assignments and past papers.

Thanuja Gamaethige (Student ID No. 11625275) 1
MKT 550 – GLOBAL MARKETING
Assessment – 03
Marketing Mix
Student Name - Thanuja Isuru Gamaethige
Student No.- 11625275

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Contents
Executive summary.....................................................................................................................................4
1.0 Introduction...................................................................................................................................4
1.1 Overview of Wesfarmers Coles..........................................................................................................5
1.2 The entry point into German.............................................................................................................5
1.3 The Marketing Objectives..................................................................................................................5
1.4Target Market.....................................................................................................................................6
1.5 Positioning strategy...........................................................................................................................6
2.0 Marketing Mix...............................................................................................................................7
2.1 Product Strategy............................................................................................................................7
2.1.1 Product features/attributes........................................................................................................9
2.1.2 Product quality...........................................................................................................................9
2.1.3 Product design and style.............................................................................................................9
2.1.4 Packaging..................................................................................................................................10
2.1.5 Labeling.....................................................................................................................................10
2.1.6 Branding...................................................................................................................................10
2.1.6 Product lifecycle.......................................................................................................................10
2.2 Pricing Strategy............................................................................................................................11
2.3 Place strategy..............................................................................................................................12

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2.3.1 Place of Retailers......................................................................................................................12
2.3.2 Distribution channels................................................................................................................12
2.3.3 Intensity of Distribution............................................................................................................13
2.4 Communication Promotional Mix....................................................................................................13
2.4.1 Advertising................................................................................................................................14
2.4.2 Sales promotion........................................................................................................................14
2.4.3Personal selling..........................................................................................................................14
2.4.4 Publicity....................................................................................................................................15
2.4.5 Public Relations.........................................................................................................................15
People....................................................................................................................................................15
2.5.1 Recruitment..................................................................................................................................15
2.5.1 Training.........................................................................................................................................15
2.5.1 Occupational health and safety laws............................................................................................15
3.0 Economic Evaluation........................................................................................................................16
1. Need identification..........................................................................................................................16
2. Information search..........................................................................................................................16
3. Alternative evaluation.....................................................................................................................16
4. Purchase decision...........................................................................................................................16
5. Post-purchase behavior..................................................................................................................17
5.0 Total Market Calculation.................................................................................................................18

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6.0 Implementation and Control...........................................................................................................19
6.1.1 Business Environment Analysis.....................................................................................................21
6.1.2 Market Survey..............................................................................................................................22
6.1.3 Research Analysis.........................................................................................................................23
6.1.4 Sourcing local manufacturers.......................................................................................................23
6.1.5 Production sampling.....................................................................................................................23
6.1.6 Analyzing the sample result..........................................................................................................23
6.1.7 Market Analysis............................................................................................................................24
6.1.8 Competitors Analysis....................................................................................................................24
6.1.9 Sourcing effective local distributors..............................................................................................24
6.1.10 Recruitment...............................................................................................................................24
6.1.11 Training.......................................................................................................................................25
6.2 Communication Plan........................................................................................................................25
6.2.1 Event sponsor planning................................................................................................................26
6.2.2 Social media creating....................................................................................................................26
6.2.3 Sale promotion planning...............................................................................................................26
6.2.4 Cost analysis.................................................................................................................................27
6.2.5 Estimate Price...............................................................................................................................27
6.2.6 Product launch..............................................................................................................................27
6.2.7 Feedbacks.....................................................................................................................................27

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6.2.8 Annual report...............................................................................................................................28
6.3 Monitoring of Action Plan................................................................................................................28

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Executive summary
The marketing mix strategy has been created for Wesfarmers’ subsidiary company Coles
to establish and secure market share in Germany. It will also inform employees of what their
roles in the growth of the company are. Although Wesfarmers has been in operations in Australia
for many years, it has the potential for growth in the European market. The Germany population
provides a good number of potential customers and the urban population being the target market.
Coles will use different market mix strategies focusing on the 4Ps to establish themselves in the
market. Exploring different opportunities through research and learning the market environment.
The company through its slogan ‘serving the people better’ will deliver value to its established
customer in the German market. With joint venture, the company will increase win over new
customers and retain them.
1.0 Introduction
Globalization provides a wider market platform for companies’ products and services.
Global marketing refers to redefining marketing strategies of a business entity to adapt to the
different market environment in various countries. Global marketing refers to taking the
commercial advantage of a country by establishing global operational differences (Peng, 2016).
Companies analyses the global opportunities and similarities to meet the meet their global
objectives. Wesfarmers’ subsidiary Coles Company has targeted the German market. The
company has recognized the need to identify its target market and the potential segments of the
market in Germany to reach its objectives in the international market entry. This is a developed
international marketing plan for Cole in the German market.

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1.1 Overview of Wesfarmers Coles
Based in Perth Australia, Wesfarmers is one of the biggest companies founded in 1914 as
a co-operative entity producing merchandises and services. It produces various products such as
chemical, safety products, fertilizers, and retail shops. According to Vidovich and Currie, (2012),
it is one of the biggest private employers in Australia with over 220,000 employees. It has been
listed in Australian Securities Exchange in the year 1984 and has some subsidiaries such as
Coles attached to it. Coles has been analyzed, and its strength in being in the market has shown
its potential in growth. Germany with the fourth largest GDP in the world with 80 million
potential customers provides a good market base for Coles. The dispute among the stakeholders
of Coles and lack of experience in the European market are some of the major challenges for the
company.
1.2 The entry point into German
With the stiff competition, the Wesfarmers will make entry through a joint venture with
Kaiser’s supermarkets. Owned by the Tanglemann group, Wesfarmers can bring in new expertise
in doing business and expand. It will also provide resources such as human capital and
technology.
1.3 The Marketing Objectives
• Increase sales by 10% in the next two years
• Grow market share of 8% by the end of year 5
• 2% market share in the next 12 months
• Improve customer relation with 20% by the end of 12 months
• Target new customers and increase customer base with at least 5% by the end of year 1

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• Increase profits with 10% in the next five years
• Build brand awareness by 40% in the next two years
1.4Target Market
Coles’ main stores will open in the urban regions targeting the countries growing urban
population. The primary target customers are people living in urban areas who can afford to shop
at the retail stores. The middle and upper-income category of people in Germany will be the
secondary target customers. These categories of people tend to visit retail stores on a daily basis
for their needs. Individual members of a family have different needs, hence visits to the stores
(Biddle, 2017).
With the opening of retail stores in the urban areas, Franchising will be used to target
them. Direct exporting will be used to target the customers from the middle and upper class in
the society. The company will conduct all the requirements on its own and does not include the
involvement of other management or organization at the entry level.
The company will also enter the market using joint partnerships. The joint ventures will
enable partnerships with other companies in the country. This will enable the store to offer a
variety of products. The variety of products will help attract different groups of people with
different interests and needs to the stores. For example urban housewives and professional
women.
1.5 Positioning strategy
A positioning strategy will enable Wesfarmers’ Coles to deliver more value to the target
market. It will enable Coles to establish a stronger market position against competitors through
effective communication and customer retention probability. With the position statement

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‘serving the people better,’ the company is focused on operational excellence, consumer
proposition, and innovation. In Germany, Coles’ statement is associated with the increased
variety and functionality of the different products. Using the low pricing strategy, the varieties of
products at a low price will attract a larger number of customers. Many consumers consider the
pricing of products. Convincing the customers that they are getting value for their money will
attract them to the stores.
2.0 Marketing Mix
According to Palmer (2011), strategy refers to the direction and organization take to meet
its long-term objectives using its resources in today’s business environment. Marketing mix
refers to the set of tactical tools in the marketing field used by companies to meet the demands
and needs of the target market. Marketing mix strategy is tools used by a firm to ensure that they
positively impact and influence their product demands in the market. To meet the customer
needs, organizations focus on understanding their customers and developing strategies to
improve their performance (O’Neill, 2018). To survive the competition, organizations come up
with different ways to market their services or products. We discuss the 4Ps of marketing mix
below used by companies to meet their objectives (Baker, 2012).
2.1 Product Strategy
Coles is a retail supermarket offering different products from various vendors. They are
in a service business. The main factor in the company’s survival and penetrating a new market is
in the product and services they offer. All the decisions to be made regarding the marketing mix

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has to do with the product. The products must meet the demands of the customers. It is therefore
important to determine the customers and their needs. With competitors such as EDEKA,
REWE, METRO and the large European retailers Aldi and Lidl, Coles supermarket has to make
their stores stand out. The competition is already stiff.
Customers purchases products and services based on the benefits they perceive the
product/service to offer. Offering products and services that satisfy the customer needs skills and
physical resource is key to its success. Coles supermarket being in the service business, the
customers are important. The customers either have a positive or negative effect on the results of
service (Hibić, & Poturak, 2016).
The levels are actual service, core service and augmented service. Coles retail shops are in
business because of the core service. The core service offers the solution to the problems that
customers face. The best solutions are usually a combination of different services, and
companies offer more. Actual products are the visible part of the service. These are things like
brand, quality, accessibility, facilities, and features. Without actual services, the core product is
pointless. Augmented services are the added value provided to the customers, and it
distinguishes the company from the competitors. For the retail business, after sales, credit and
customer service are some of the services that make a store distinguished from others. These
services are not necessary, but with the same products across the retail business, they are critical
in being competitive and gaining customers (Kasper, Helsdingen &Vries, 2012).
Figure 1: The structure of the services (Source: Marketing-Insider)

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The following factors influence the decision of consumers choosing a product
2.1.1 Product features/attributes
Defining the benefits the product or services to offer is important. These benefits are
communicated through attributes such as quality and features. Consumers purchase based on the
features that appeal to them (Oliveira, de, Silva, Lopes, & Helleno, 2016).
2.1.2 Product quality
There are two levels of quality of services to customers; the quality level, these include
the feature of the products that develop the positioning of the product in the target market.
Another level is the quality consistency. The consistency in delivering quality to the customers is
important as it helps in customer retention acquiring new customers are hard (Kotler, 2010).

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2.1.3 Product design and style
The sensational style attracts the attention of customers. It can attract the customer's
attention to your services or products. Good design of a product can contribute to its usefulness
to the customers.
2.1.4 Packaging
The packaging is also useful in the performance of a product or service. It can be very
expensive, but the right packaging can gain you a competitive advantage over your competitors.
2.1.5 Labeling
It is a promotional material that expresses the content of a product. It is important as it provides
consumers with the right information.
2.1.6 Branding
The brand identifies the services of the company and differentiates them from the
competitors. The brand includes the name, sign, design or term (Efanny, Haryanto, Jony,
Muhammad, Widyanto, & Adinugroho, 2018).
2.1.6 Product lifecycle
The product life cycle refers to the period the product or service is developed in a market. The
diagram below shows a summary of a product life cycle