Marketing Strategy of Harvey Norman: A Comprehensive Analysis

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MARKETING
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Executive summary
This report throws light on the marketing strategy of Harvey Norman. The report consists of the
brief discussion of the company, internal and external analysis, customers and competitor
analysis. Further, the report continues with the marketing research conducted by the company.
Marketing strategies have also assessed using segmentation along with the marketing tactics
using 7P's of marketing mix.
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Table of Contents
Executive summary.........................................................................................................................2
Introduction......................................................................................................................................5
Issue 1..............................................................................................................................................6
Issue 2..............................................................................................................................................7
Issue 3............................................................................................................................................10
Issue 4............................................................................................................................................12
Issue 5............................................................................................................................................14
Conclusion.....................................................................................................................................16
References......................................................................................................................................17
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Introduction
Harvey Norman is an Australia-based company that operates in the form of a franchise.
Marketing strategy is significant for every company irrespective of their size or type. Marketing
strategy is a crucial part of a marketing plan that implies the activities conducted for the purpose
of searching for current and potential customers. Marketing strategy is usually designed either
before the commencement of the business or the introduction of a new product or service in new
or existing markets. The most critical tools utilized with an aim of marketing plan are comprised
of SWOT analysis and PESTLE analysis. Such analysis helps in the identification of internal and
external factors that can have a significant impact on business operations. Harvey Norman
requires collecting relevant market information by conducting market research and analyzing the
internal and external environment. This research further helps in identifying the potential market
segments for targeting the audience.
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Issue 1
A multinational Australian company, Harvey Norman was founded in 1982 by Gerry Harvey and
Ian Norman. It is a public company engaged in the retailing industry of computers, bedding,
communications, electrical products, and furniture. The company operates in more than 194
areas of Australia and 86 countries overseas and listed as Harvey Norman Holdings Limited on
Australia Stock Exchange. The mission statement of the company depicts as “to be recognized
as the leading company of the world in delivering the retail services in the industry of consumer
goods, to develop an inspiring work-place and to earn superior returns for the company's
shareholders". The vision of the company can be defined as to become the most preferred
company in the retailing sector all over the world (Harveynorman, 2019). The company uses the
slogan “Go Harvey, Go Harvey, Go Harvey Norman” which is well-known to the major
audience of Australia and overseas.
It is identified that Harvey Norman uses the marketing orientation of market orientation where
the customers are the chief components of the marketing strategy. In Harvey Norman, the
marketing strategy is designed after the market research regarding customer needs and wants.
The company conducts market research in order to determine the target customer market. The
company deals in the trading of products such as computers, kitchen appliances, furniture, Home
Theatre, phones and accessories, tablets, GPS, laundry appliances, Blu-ray, TV and bedding
products. The company offers a wide variety of products that make it one of the leading
companies in Australia dealing with retail products and services. In the marketing strategy of
Harvey Norman, brand plays a significant role in different ways. For the company, a brand
image can be seen as the promise to the customers during the implementation of marketing
strategy. Brand helps the company in differentiating its products and services from that of the
competitor companies in the market.
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Issue 2
SWOT Analysis of Harvey Norman
The strengths of Harvey Norman involve successful product innovation, consistent product
quality due to the automation of activities, and collaboration with reliable suppliers of raw
materials. The company also possesses a strong distribution network and successfully undertakes
new projects that help in generating adequate returns on capital expenditure. Contrary to this,
weaknesses such as low investment in the area of research and development, low profitability
ratio, and a higher level of missed opportunities hamper the success of the company (Mbaskool,
2018). The company also deals with the high inventory days, improper financial planning along
with the unsuccessful attempts in the integration of different work culture.
Ample opportunities exist for Harvey Norman in the form of new markets and technologies.
The emergence of new technology can lead to the adoption of differentiated pricing strategy in
new markets all over the world. The core competencies of the company imply the capability of
entering into other similar products such as oil drilling machines (Madsen, 2016). Recovery of
the economic downturn in Australia, the introduction of new taxation policy, lower rates of
transportation and recent environmental policies may provide opportunities to the company that
should not be ignored.
The key threats of Harvey Norman include the increased competition in the market, irregular
supply of innovative products, and changes in the purchasing behavior of customers. Negative
impact can be faced by the company in the international markets due to the enhancement in
isolationism trend in the economy of America and similar countries (GÜREL, 2017). Adoption
of new technologies by the competitor firms may be harmful to the company in relation to the
long-term future. There are specific products offered by Harvey Norman that may have to deal
with the new environmental regulations.
Customers of Harvey Norman
The company mainly targets the customers of offline and online channels. The key customers of
Harvey Norman are the people of 15-40 years of ages who are not only tech-savvy but also
utilize electrical appliances majorly in their daily life. These customers belong to the urban areas
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of Australia and overseas who utilize electronic devices at home, schools, colleges, and
workplace. There are some changes realized by the company in the consumer buying behavior.
Nowadays, the customers highly prefer the money value they would pay for purchasing the
products. They prefer to acquire electronic products at reasonable prices having high quality.
Even after the increasing online trend, major customers prefer to purchase the electronic
appliances and devices through the store directly after checking it manually that highly affects
the online business of Harvey Norman.
Suppliers and Distributors of Harvey Norman
The company offers the products and services through online and physical stores. The online
stores involve the direct selling and distribution of products or services to the customers. Due to
this reason, the company does not require suppliers as a direct transaction takes place. The
suppliers of Harvey Norman are mainly of the brands named Samsung, Breville, Google,
Electrolux, Fitbit, Lenovo, Canon, Panasonic, Michael Kors, Sharp, Laser, Tamron, and Sony
and so on (Nair, et. al., 2015). The key partners or collaborators of the company comprised of the
employees, suppliers, and online businessmen. Other than this, Hisense, Quantify, and celebrity
of Rockpool Neil Perry can also be considered as the collaborators that help in the promotion.
Competitors for Harvey Norman
The main competitors of Harvey Norman in Australia are IKEA, Ashley Home store, and JB Hi-
Fi. IKEA is a Swedish private company considered the largest furniture retailer in the world in
the last few years. However, there are other competitors that can be proved a threat to the
company. These competitor firms are Scale, Flemings, IGA, Action, BI-LO, Safeway, Bed Bath
& Beyond, and Fantastic Mattress and so on. These companies are developing effective
strategies for becoming a strong competition in the market. The potential of these companies
cannot be questioned as per their progress every year in terms of revenue and market share
(Listra, 2015). The company can also have to deal with the new companies entering into the
retailing industry. Therefore, it becomes significant for Harvey Norman to enhance its
competitiveness with the invention of innovative products or services and marketing strategy.
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PESTEL Analysis of Harvey Norman
Harvey Norman operates in a business environment that is highly dynamic where certain factors
affect the company significantly. These factors are in relation to political, economic, social,
technological, environmental and legal. The political factors for the company are comprised of
Anti-trust laws of retailing, political stability of countries where the company operates, pricing
regulations, tax rates, and mandatory employee benefits. However, corruption level, intellectual
property protection, wage laws, product labeling regulations and the risk of military invasion are
also significant political factors that affect Harvey Norman (Timofeeva, 2016). The company
largely influences the country's economic system, financial market efficiency, labor costs, and
the growth rate of the economy, inflation rate, and workforce skill level.
Apart from this, the economic factors of Harvey Norman include the unemployment rate,
government intervention, business cycle stage, economical education level, and interest rates
prevailing in the countries where the company is operating or planning to operate. Attitude
towards environment and health, social culture of gender roles and social conventions, the class
structure of people, educational level of people and leisure interests are significant that impacts
the company to the large extent. The company is required considering the social spirit and nature
towards entrepreneurship as there are some markets where entrepreneurship is promoted and
encouraged on a social basis (Gupta, 2013). The significant technological factors for the
company can be defined as new technological developments in the industry of retailing, costs of
technological implementation, and effects on product offerings, value chain structure and cost
structure of Harvey Norman.
The company requires an evaluation of the environmental standards and legislation and other
conditions for assessing the effects of climate change, environmental pollution regulations,
recycling, weather, and waste management on the company. It should also be noted that
increasing awareness towards renewable energy and ecological products can offer opportunities
and threats to the company (Bonnici and Galea, 2015). Entering new or existing market requires
dealing with certain laws and regulations for the smooth functioning of the business. For Harvey
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Norman, laws and regulations related to discrimination, data protection, employment, antitrust,
copyright, and consumer protection are significant to be considered.
Issue 3
Marketing Research
In order to develop an effective marketing strategy, it is significant for Harvey Norman to
conduct proper market research. This research is crucial for gaining a deep understanding
regarding the needs and wants of the customers and markets and competitor analysis. For this
purpose, the company conducts the primary and secondary research using qualitative as well as
the quantitative methods. There are certain research methods available for the company to collect
information regarding market, customers, and competitors such as focus groups, interviews,
online resources, and surveys or questionnaires. Using marketing intelligence, the company
collects the relevant information from the business environment with the help of data sources or
procedures for decision-making (Sevilla and Kahn, 2014). The company uses competitive
information, market reports, and internal databases in order to obtain significant information.
The company becomes able to learn about the customers, competitors, and changing behavior of
the business environment. It becomes evident from the research that customer needs are
changing regularly that causes the changes in the business environment. Considering the recent
times, the customers are more attracted towards the innovative products or services that provide
a high level of convenience and quality as well. This fact is applicable to all the products such as
furniture, electronic appliances, bedding products, and laundry appliances. Mainly, the
companies engaged in the retailing of furniture and electronic devices pose a serious threat to the
company. Keeping this in mind, it can be said that IKEA is the major competitor for the
company (CAMERER and YOON, 2015).
The context of business involves political, economic, and legal aspects and so on. It can be seen
that new laws and regulations emerge in the business environment regarding customer
protection, business operations, employee protection, and the environment. The importance of
corporate social responsibility has been increased to a high level that compels the companies to
conduct economic activity being responsible towards the society and environment. The attitude
of people has changed towards environment and society. The business environment has become
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more environment and health conscious. Harvey Norman is aware of the significance of the
collaborators in making the marketing research successful. They help in gaining knowledge of
significant aspects of the business environment in a wider sense. The real-time information can
be depicted from them at any given time regarding the current and potential trends of the
business.
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Issue 4
Marketing strategies of Harvey Norman
The Harvey Norman is the major retailing store of Australia which is famous to provide the best
quality electronic product such as home appliances and other products related to computer. The
planned marketing strategy would help the university to run the business in the most effective
manner possible. Segmentation of the strategy is one of best marketing strategy that the company
can apply (Covin, et. al., 2015). It would help the company to run the business in specified
segment, section or group on the basis of various differences in the characteristics of the
company. The market of the Harvey Norman Company can be segmented into the following
marketing tactics as discussed below:
Demographic segmentation:
The Demographic segmentation helps the company to divide or specify the market into different
group as age, gender and their role in the society. It helps the company to target the audience
within the market and helps the company to design the strategies of the company more
effectively and appropriately. It would help the company to focus on the specified group in order
address their needs. Demographic division helps the company to understand the need of the
market according to perspective of the customer which helps the company to work beyond the
time and space and to gain the competitive advantage in the market.
Segmentation depending upon the behavior of the customers:
The Behavioral segmentation would help the company to specify the customer depending upon
their behavior towards a particular product of service which helps the company in the effective
decision making process (Bahadir, et. al., 2015). It helps the company to understand the attitude
of the customer and also the culture of the market.
Segmentation depending upon the Psychology of the customers:
The Segmentation depending upon the Psychology of the customers would help the company
specify the population of the customers depending upon their psychology as the name suggest. It
helps the company to analyses the living standard, activities and mindset of the people in
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