Marketing Strategy Report: The Kogan Online Store Analysis

This report provides a comprehensive analysis of the Kogan online store's marketing strategy. It begins with an executive summary and introduction, outlining the company's background and its position as a leading Australian online retailer. The report delves into the environmental factors affecting Kogan through a SWOT analysis, examining its strengths, weaknesses, opportunities, and threats. It then explores Kogan's product strategy, detailing its range of offerings and market leadership in various product categories. The report further examines the company's segmentation, targeting, and positioning (STP) strategy, including demographic, behavioral, psychographic, and geographic segmentation approaches. It also analyzes Kogan's pricing, distribution, and promotions strategies, including penetration pricing and its approach to distribution channels and promotional activities. The report also covers management control and measurement systems, problem identification, and offers conclusions and recommendations for the company's continued success in the competitive e-commerce landscape. Finally, a project timeline and references are included.

The Kogan Online Store Marketing Strategy 0
Title: The Kogan Online Store Marketing Strategy
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The Kogan Online Store Marketing Strategy 1
Executive Summary
This project summarizes the introduction of largest leading online store of Australia-Kogan
online retail store and provides background of the company. The different tools and techniques
adopted by the company for assessing the environmental factors include-SWOT Analysis,
product strategy have been given. The Segmentation, Targeting and Positioning strategy along
with different measures and control have been identified. A brief overview on pricing strategy,
distributions and promotions strategy has been given. This is followed by conclusion and
recommendations.

The Kogan Online Store Marketing Strategy 2
Contents
Introduction......................................................................................................................................3
SWOT Analysis...............................................................................................................................3
Product Strategy...............................................................................................................................5
Segmentation and Positioning Strategy...........................................................................................7
Pricing Strategy...............................................................................................................................8
Distribution Strategy........................................................................................................................9
Promotions Strategy.......................................................................................................................10
Management Control and Measurement Systems.........................................................................10
Problem Identification and Solutions....................................................................................................10
Conclusion.....................................................................................................................................12
Recommendations..........................................................................................................................12
Project Timeline.............................................................................................................................13
References......................................................................................................................................14

The Kogan Online Store Marketing Strategy 3
Introduction
Kogan.com is a group of retail and service store, including Kogan Mobile, Kogan travel,
Kogan Insurance, Kogan Health and others. This company was established through Russian
Kogan in the year 2006. The Kogan.com is a brand which is known for price leadership through
the digitalization of products and services. The company has presently 8 million subscribers and
the company has a strong focus on making the demand products and services. The company
makes every effort to make the products and services accessible and affordable to the customers.
According to the Wall Street Journal, the worth of Kogan is speculated around 400 million
dollars. The Kogan online retail store has been segmented according to the SWOT analysis and
its pricing, product and distribution strategy has been provided with different measures on
control. International marketing theories concept with relevance to pricing strategy, distribution
and promotional strategy has been explained. The SWOT analysis with respect to international
Michael Porter Five forces model has been given.
SWOT Analysis
Kogan.com utilizes different selection tools for analysis of macro environments. The
following tools have been enumerated for market selection.
SWOT analysis stands for Strengths, Weaknesses, opportunities and Threat
Strengths-
 The company’s strengths are into highly skilled workforce and trained sales people and
huge resources are deployed into training and development (Varadarajan, 2015).

The Kogan Online Store Marketing Strategy 4
 Kogan.com has been operating in a number of countries and has been impacted through a
number of political factors, but has been able to diversify its business. This is its major
strength. The company is exposed to different political risks. Kogan.com has created a
reliable network of distribution system.
 Economic Factors-The macro factors like inflation rate, interest rate and savings rate are
taken into account in determining the aggregate demand and investments made in the
economy. Kogan.com takes into account the different types of economic system and
government intervention in retailing.
Weaknesses-
 The manner of doing things has an impact on the culture and this is due to the existing
social attitudes and beliefs. Kogan.com must comprehend the population skill and
demographic level.
 The power structure of society and classes must be determined. Different cultures
existing in the society must be given relevance while launching the online retail store into
markets (Mandal, 2017).
Opportunities-
 Technology is growing at a fast pace. Over the past 2 decades, the technological industry
has undergone many changes. The Taxi industry is being dominated by Uber cabs.
 The Kogan.com needs to be involved with the technological analysis of competitors. An
analysis must be performed to find out the impact of technology on a different range of
products.
Threats-

The Kogan Online Store Marketing Strategy 5
 In different countries, the legal institutions and framework must be robust enough to
protect the firm’s intellectual property rights.
 The Kogan.com needs to evaluate the different markets and provide the overall
competitive edge for entering into the new market places. This includes- Discrimination
law, consumer ecommerce and protection law, safety and health law and data protection
law (Phillips and Hallman, 2013).
The Threats can be summarized as follows-
a) Environmental Factors-Different countries markets have different
environmental standards that can have a lot of impetus on the organizational
profitability. The country states do have the different environmental laws and
liability clauses. For instance- Florida has the different clause which protects the
consumer during the environmental disaster. Whenever the company decides to
enter into the new markets, the firm must evaluate the requisite environmental
standards and consider following factors-climate change, weather, recycling and
laws regulating the pollution factors (Cravens, 1998).
The SWOT analysis will have an impetus on the competitive edge and shaping the
strategy in a different way.
Product Strategy
Kogan.com is a brand name which is known in the market for LED televisions and
LCDs. In year 2011, the Kogan online retail store conducted a survey amongst its customers,
whether the people are interested into 3D televisions. The company has also manufactured the

The Kogan Online Store Marketing Strategy 6
wide range of 3D televisions. Kogan.com is also known for selling the wide range of computer
products like laptop and notebooks. The Kogan online retail store is a market leader and provides
an extensive range of home appliances to the customers (Woodall, 2007). In March 2012, Kogan
online store began selling the customized iPad at discounted prices. The Kogan online retail store
provides the opportunity towards active partnership and showcases the millions of products to
Australian buyers. The company has presented more than 6 million email subscribers and more
than 1 million active subscribers. The company has partnered with selected brands and provides
marketing and online distribution enhancement capability (Slater, Hult and Olson, 2010).
The Kogan online retail store is involved with analysis of sales of different brands
comprises of measuring and assessing the total sales, distribution channel wise, customer wise
sales, etc. The company has its own sales target and different measures are identified in which
the sales for different categories of products are identified. The market share is utilized as the
base for measurement, comparison and correction of results. Market share is regarded as
proportion of the company’s sales out of total sales of industry. How the company is performing
with relevance to its competition. The Performance of the company is assessed with relevance to
its competitor’s base and market share. Another practice is to identify whether an organization
requires product management strategy or not? How a company operates and different segments
are operating across the different systems. If the implementation of any significant product or
service or changes in strategy requires different level of costs, then a lot of benefit can be derived
from the international management theories (Abdullah Saif, 2015). According to the statistics,
the larger is an enterprise project and bigger is the cost associated with it, the greater the
advantage derived through the Project Management Organization. The concept of product
strategy must be in relevance to the company’s supply chain management.

The Kogan Online Store Marketing Strategy 7
Segmentation and Positioning Strategy
Segmentation, Targeting and Positioning comprise of a 3 stage process where in the first
step is to determine the type of customers which exist in the market. Second step is to select the
customers which are known as Target Market and third is the implementation of a given segment
of optimizing the products or services. This is known as positioning and how do the
communication of products or services takes place and how to distinguish itself in the market
places (Rosenbloom, 2007).
Segmentation-Segmentation involves finding the different types of customers with
different needs. The Kogan.com needs to segment the market on four variables-
a) Demographic Segmentation-Demographic segmentation includes the personal statistics
like gender, income, location, family size and ethnicity. The Kogan.com needs to target
from younger age groups to adult people.
b) Behavioral Segmentation-There are few customers in the market which are brand loyal
and stick with the product, irrespective of the product is competing with the other product
in the market (Gheibi et al., 2018).
c) Psychographic Segmentation-Dividing the market based on the different personality
traits and interests and values of the customers.
d) Geographic Segmentation-Geographic segmentation is the strategy through which the
preferences of the target audiences are determined on the basis of location.
Targeting-Targeting one or more different is based on different variables. The targeting
must be based on the specific customer groups. The strengths and weaknesses of the company
must be determined and targeted accordingly. The Kogan.com needs to recognize the needs of its
customers in Chinese and Australian markets and position the brand.

The Kogan Online Store Marketing Strategy 8
Positioning-Positioning is a marketing strategy where brands try to place its product in
the mind of consumers and provides distinct benefits to it (Pathak, 2017). The Kogan.com is
operationally excellent firm that has been able to maintain the efficiency and therefore providing
reliable services to consumers at a lower cost. The Kogan.com has well positioned itself as the
customer intimate company which caters to the needs of specific customers. The operational
design of the manufacturing process allows the products to be moved at lower cost. Extensive
systems which predict the exact quantities of supplies needed (Widya Yudha, Tjahjono and
Kolios, 2018).
Pricing Strategy
Kogan.com is one of the leading Australian firms and has been re-defining the ways in
which business is conducted. The pricing strategy is a strategic framework which allows the
company to take the strategic pricing decisions to be taken in a more appropriate way. The
International pricing model focuses on how to build a competitive pricing in sustainable industry
and create profitable opportunities (Helm and Gritsch, 2014).
The concept of buyers-Buyer is very demanding. Buyers are always interested in purchasing the
offerings through paying the minimum price possible. Kogan.com is under a lot of pressure.
Higher the bargaining power of buyers and higher is the possibility of seeking discounts as well
as offers. Kogan.com needs to focus on creating a large customer base and emphasize on
streamlining the production and sales processes and emphasizing on pricing too. The innovation
of new products into the market and customers can seek discounts on new products (Nguyen,
2017).

The Kogan Online Store Marketing Strategy 9
Kogan.com has adopted the penetration pricing strategy through its innovation in products
system. The company has launched a wide range of products like TV, electronic gadgets, tablets
and other categories. The pricing of the products is expected to rise due to the production cycle
and shipping process.
Whenever a new product or service is launched into the market, there will be an effect on
the industry profitability. The threat of a substitute product is always considered high as it offers
the value proposition which is different from current offerings of industry. The Kogan.com needs
to be service oriented, not just being product oriented. The Kogan.com must understand the core
needs of customers and increase the switching costs of products and services (Eskandari et al.,
2015).
Distribution Strategy
New entrants can bring innovation and exert pressure on Kogan.com for reducing the cost
and provide value to customers. The company has been able to manage all the challenges
through the innovation of its products and services. New products will not only attract the new
customers but also provide the reasons to create economies of scale. The company spends money
on research and development and refines the standards regularly. This will discourage the new
firms into the industry (Zia and Kumar, 2016). Bargaining Power of Suppliers- The retailing
companies purchase the raw materials through various suppliers. This decreases the margin of
revenue earned by Kogan.com. The company has powerful suppliers which use the negotiating
powers for extracting the higher prices through the firms. This can be easily tackled through the
effective distribution strategy. The product designs must be experimented through different

The Kogan Online Store Marketing Strategy 10
materials. The development of dedicated suppliers and building third party manufacturers, which
exert less bargaining power when compared with other distribution strategy of other companies.
Promotions Strategy
Kogan.com operates in the competitive industry. When rivalry among the existing
players is intense, then this will decrease the prices. Kogan.com needs to tackle the rivalry
among the existing competitors through creating the sustainable differentiation through
promotions.
Kogan technologies sell all its products and services through ecommerce systems. The company
has undergone number of trial and error strategies. Online auction and promotions are other
online promotional strategies. The Kogan.com has been into selling the products and services
through ebay.com. The company has been actively involved with creating communities on social
networking sites and promoting the products and services. The company has launched a weekly
email service for its users through which the health related message is communicated to the
larger base of clients. This is how the company can tackle with the rivalry among the existing
competitors through effective promotions like advertisement, sales promotions and others
(Kushner, 2005).
Management Control and Measurement Systems
The main motive behind the management control and management systems evaluation is
to ensure whether a company is able to achieve the sales and profit margins and other goals
associated with the annual plan of the company. The management of the company needs to set
the quarterly or monthly goals. The Kogan.com management needs to monitor the performance

The Kogan Online Store Marketing Strategy 11
in a given target market. Management needs to determine the deviations in serious performances
and take the corrective action which can eliminate the gaps between performance and goals.
Managers need to utilize the different measures through which performance can be checked (Sun
and Ma, 2009).
Problem Identification and Solutions
1. Streamlining the culture with corporate strategy.
2. The company must enable high-performance within the organization.
3. Identification and development of methodology, best standards and providing oversight
to project staff.
The sales analysis, customer attitude tracking and marketing expense analysis must be in
relation with sales goals. The company sales may not reveal how well a company’s market share
is rising. The management plan created by the company needs to ensure whether the firm is not
overspending for achievement of its goals. Customer satisfaction is one of the key components of
evaluation and control. The market systems need to monitor the different levels of customer
needs and preferences and satisfaction as the company gets affected through sales and
management. Strategic control is another type of efficiency, control which weighs the long term
strengths and weaknesses. The Kogan.com needs to create an evaluation plan and measure the
marketing effectiveness. The marketing assessment incorporates feedback information like input
from the customers and creation of internal reports like adequacy and efficiency of marketing
information, strategies and integration processes (Forlani and Parthasarathy, 2003).
The marketing audit comprises of strategic control of raw materials. The periodic role is
to ensure the marketing plan must focus on the country’s strengths and these must be compatible