Marketing Strategy Report: An Analysis of Coles Supermarket's Approach

This report provides a comprehensive analysis of the marketing strategy employed by Coles Supermarket, one of Australia's leading retail chains. It begins with an introduction and an overview of Coles' operations, including its product offerings and target market. The report then delves into an industry analysis, examining market trends and the competitive landscape, followed by a PESTLE analysis to assess the external factors influencing the retail sector. A key component is the competitor analysis, which evaluates Coles' position relative to its rivals, particularly Woolworths. The report also explores market segmentation, identifying key consumer groups based on geographic, demographic, psychographic, and behavioral factors. Finally, the report discusses Coles' primary and secondary target markets, level of involvement, decision-making processes, and perceptual map, concluding with a summary of the findings and recommendations for future strategies. The report draws on various sources, including company reports and industry publications, to provide a well-rounded perspective on Coles' marketing approach.

Running Head: Marketing Strategy 1
Marketing Strategy

Marketing Strategy 2

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Table of Contents
Introduction......................................................................................................................................3
Industry Analysis and Market Trends..............................................................................................4
PESTLE...........................................................................................................................................5
Competitors Analysis.......................................................................................................................6
Segmentation analysis.....................................................................................................................7
Major market segments................................................................................................................7
Primary and secondary markets...................................................................................................8
Level of Involvement and Decision making....................................................................................8
Perceptual Map................................................................................................................................8
Conclusion.......................................................................................................................................8
References........................................................................................................................................9

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Introduction
The present report is explores the market for Coles, second largest retail organization. It
examines the primary market of the organization and the nature of competition in the industry. It
examines the role of consumer behavior in the purchase decision making of the companies.
Company
Coles Supermarket is an Australian retail market and consumer service chain. The company
has headquarters in Melbourne and the parent company of the organization is Wesfarmers.
Coles was founded in 1914 in Collingwood, Melbourne. It has more than 100,000 employees
and considered as the second largest supermarket chain in Australia. The biggest rival of the
company is Woolworths, along with which it holds 80% of the net supermarket share of the
country (Coles, 2017).
Product/Service
Coles is operational in a number of sectors in the retail industry. It sells groceries and household
consumables in different supermarkets in Australia and New Zealand. The company also sells
liquor through the retail stores. It also sells petrol and other petroleum products through its retail
stores. Coles also provide financial services to the customers and there are several hotels, which
operate under the same name (IBIS, 2017).
Coles is a retail organization, which sells retail products at its stores. It also has an online
store through which the customers can buy product from online mediums. It also provides

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online home delivery services. Coles also has seven private label brands which the company
is planning to consolidate into the major brand (Khan, 2011). In addition to it, the company
also has a private clothing brand. Coles provide a mid-price product range, which means that
the product is designed to match the branded products of the organization. In the category of
gourmet foods, the company can be considered as the producer of high quality food and is
considered as the provider of high quality products at expensive rates.
Consumer
Cole’s supermarket is spread all across Australia and New Zealand. The retail stores of the
company are spread all across the country. However, for this report, the target market of Box hill
community is taken. It is a primary suburb of Melbourne, Australia situated in the East of the
major business district of Melbourne. It is known as City of Whitehorse and the local
government is also recognized with the same name. The estimated resident population of the area
is 8,926 people and the usual resident population is 8,446 (id Community, 2017). Box Hill is
popular for its multicultural diversity with a significant population of Chinese born as well as
Indians. According to the recent statistics, aboriginal and Torres Strait Islander are 16 in number,
and the Australian citizens are 6,353 in number (id Community, 2017). The population with
permanent or temporary employment is 3,921 in number and there are approximately 180
overseas visitors in the country (id Community, 2017). The characteristics and the preference of
Chinese origin customers are different which are needed to be addressed in the retail stores of the
company (IBIS, 2017).

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Industry Analysis and Market Trends
All across the globe, there has been a significant shift in the business operations of retail
companies, which are also observed in the Australian companies. In a global perspective, several
changes have been realized such as customer attraction towards the specialty stores and
expectations of more personal retail experience. The customers are looking for retail stores with
personality and expectations of retail experience (Brady, Cravens, Maister, Peter, Thompson, &
Walker, 2007). The brick and mortar retail stores are becoming less fashionable for the
customers and they are attracted towards online retail stores. As a result, several retail
organizations are consolidating their stores, real estate, and employees to enhance their overall
profitability. The success of the organization relies on its internationals reach, use of different
retail platforms, accessibility and the speed of operations (Brei, Vieira & Matos, 2014).
Another significant trend of the retail industry is the thriving e-commerce sector. With time, the
number of people going to the physical stores is becoming less and as a result of which the
number of physical stores has also declined. In the present times, it is important that the retailers
use multi-channels to thrive and enter into foreign markets.
Figure: Growth in Retail Industry
(Source: Web Alive, 2017)

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PESTLE Analysis
The PESTLE analysis as conducted in the appendix shows that the retail industry is influenced
by a number of external factors. The political conditions of Australia are quite stable which is
beneficial for the retail companies. Moreover, the government has developed regulations to
reduce the duopoly of Woolworths and Wesfarmers in the retail industry. The economic growth
of the country also affects the performance of the organization. If the economy is growing at a
fast pace, the company will benefit from the high sales. In another case, there will be a higher
unemployment rate of the country and the overall sales will be declined. The retail industry is
also influenced by the political stability of the country. It includes the foreign investors and the
trading partners of the location. The political conditions in Australia are stable which is ideal for
the retail companies such as Coles (Rowsell, 2016).
Economic profile of Australia
Australia is a vibrant economy and has abundance of natural resources and a well-functioning
legal system. It is an open economy and skilled workforce is available in the country. The tax
rate in the country is 45% and the flat corporate tax is 30%. The regulatory environment of
Australia is transparent and the labor market is supported by the employment code (Heritage,
2017).
The financial performance is also influenced by these factors as it results in reduces sales. The
financial growth of the company is stable. Although a recession hit the Australian economy in
2008, the retail industry has remained stabilized. The retail shopping experience should be in-

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line with the affordability of the customers (Chernev, 2007). The location is also significant in
the choice of the customers.
The shopping experience of the customers should be supported by the use of technology and
efficient management of inventory. A service oriented architecture should be designed which
supports the supply of different items in the retail outlets. The retail sector should identify the
upcoming changes in technology and adapt accordingly. Self-service check out is another option
which can enhance the consumer experience with the technology (Cravens & Piercy, 2013).
Regarding legal requirements, food licensing is a requirement in the retail industry and new retail
outlets require permission from the country’s regulations. Coles has been participating in
recycling activities, sourcing the food from ethnically sound practices and becoming a socially
responsible business enterprise (Treadwell, 2017).
Competitors Analysis
In the recent times, several small-scale and foreign companies (Aldi) have surfaced in the retail
industry. It has increased the competition and several big players are facing the impact of the
entry of these small players. In the last few years, the market share of Coles has increased for
better. Woolworth profits have declined over the years, especially, because of its unprofitable
business. There are also several issues with the branding, advertising, and promotional
techniques of the organization. Both the major players of the industry, Woolworths and
Wesfarmers have adopted strategies related to price deflation, cost reduction, and reducing the
overall cost to the organization.

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The recent trend shows that there are highly competitive market conditions and the consumers to
remain attracted towards low-cost retailers. The companies are also focusing on increasing the
supply chain productivity by reducing the overall cost to the organization. Woolworths is
reducing its expenditure on different business activities such as marketing and property
acquisition and procurement. Wesfarmers is also conducting similar measures to cut the
operational cost to the organization (The Conversation, 2017). The profit margins are
significantly low in the retail industry; therefore, such kind of competition can further decline
them.
Segmentation Analysis
Major market segments
The market segmentation is a crucial part in the development of the marketing strategy of an
organization. It is important to define different market segments and develop the marketing
strategy accordingly. The segmentation of the market is beneficial to identify the needs and
the preferences of the target market and design an appropriate marketing strategy. In this
regard, the market segmentation of the consumer market of Coles has been conducted
(Lehmann & Winer, 2008). The company has a major retail store in Box Hill where the
majority is Mandarin community. The target market of the companies can be categorized on
the basis of several different factors such as geographic, demographic, psychographic and
behavioral segmentation. As per geographic factors, the market can be differentiated
according to address, location, climate, and region. On the basis of demographic factors, the

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customer market can be divided as per the gender, age, wages and career. The psychographic
segmentation divided the customer target market according to the attitude, value, religion,
and the lifestyle of the customers. As per the behavioral segmentation, the market segment of
the organization is divided as per the attitude, value and the degree of loyalty of the
customers.
Different market segments of the community are:
Educated Professionals: In the recent years, the number of educated professionals has
increased in Box Hill. It is due to the increased importance of education for occupation.
These educated professionals rely on supermarket shopping, as they want to shop different
household products from a dingle store. The number of people in Box Hill with Bachelor or
high degree is 3,593, which is about 50% of the total population of the community. There has
been a sudden increase of 15% from the next census (City of Whitehorse, 2017).
Ethnicity: As per the 2011 statistics, the largest community of the Non-English speakers is
Mandarin speakers. The population ratio of these people is about 9,934 whereas the
Cantonese community has the population of 6,272 in Box hill (id Community, 2017).
Therefore, the retail stores in this community should provide the product as per the choice
and preference of this community.
Household Income: The household income is another major factor in dividing the population.
As per the Australian Consensus of Population 2011, the population can be divided into four
groups, namely, lowest group, medium group, medium highest group, and highest group. The

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lowest group has a proportion of 22%, medium lowest has the proportion of 20%, medium
highest has the proportion of 27% and the highest group has a proportion of 29% of total
population (id Community, 2017). The statistics shows that the people of Box hills are
prosperous and can buy costly or luxurious products (id Community, 2017).
Primary and secondary markets
The target markets refer to breaking the markets in different segments, which can be used to
concentrate the marketing efforts of the organization. In target market, the organization triers
to identify the markets whose needs are closely align with the product or the service offering
of the organization. It can be used to increase the sales and increasing the success of the
business. The target marketing increases the efficiency and the productivity of the
organization. The target marketing enhances the marketing efforts of the organization. The
company can strategize and focus its marketing efforts, which include promotion, pricing,
and distribution of the products. The primary target market of the organization has been
identified as:
Working professionals (18-30 years, both male and female): The working professionals are
the main target market of the organization. These are the educated, working professionals in
which the household has more than one earning member. The number of working women in
these households are high in number. These people have little time and want to shop from a
single shop to save time. They are also attracted towards discounts and concessions. Coles is
a discount retailer. The core competency of the organization is offering products at a low
cost. Nevertheless, the quality of the product is maintained (Mooradian, Matzler & Ring,

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2014). Therefore, it is a primary market of the organization. The company has adopted
several strategies such as using coupons, loyalty bonuses, and discounts to attract these
customers.
Mandarin Community (Women: age group: 18-45): The Mandarin community is the Chinese
ethnic community, which have their own specific taste, needs, and preferences. The oriental
food, oriental clothing, and household needs are quite different from the Australian choice
and preference. The company serves and offers consumer products as per the choice of this
ethnic community.
Level of Involvement and Decision making
These consumers are important in the functioning and the sales of the organization. The
level of involvement of these communities is high. Therefore, the decision-making of the
organization is dependent upon the characteristics and the preference of the primary and the
secondary consumer segments. They have a significant role in the decision masking of the
organization. The decision making of the organization is dependent upon the characteristics of
the primary and the secondary market. The company sells the products according to the choice of
the consumers.
The degree of consumer involvement is dependent upon the degree of relevance to the
customers. A consumer makes a decision after several deliberations. There are some consumer
decisions, which require high degree of involvement from the consumers. In such cases,
consumers make lots of queries before taking the final decision. It is high involvement purchase