Marketing Management Report: Woolworths' Farmer's Own Milk Brand

This report provides a comprehensive marketing analysis of Farmer's Own Milk, a brand owned by Woolworths. It begins with an introduction to the brand and its background, followed by a category analysis that examines the levels of competition, category size and growth, and channel analysis. The report then delves into macro-environmental factors using a PEST analysis and assesses industry attractiveness with Porter's five forces. A competitive analysis, including a product features matrix and competitive analysis matrix, is presented, alongside a SWOT analysis to evaluate the brand's strengths, weaknesses, opportunities, and threats. The report concludes with a summary of findings and recommendations for enhancing the marketing strategies of Farmer's Own Milk within the Australian dairy market.

Running Head: Marketing Management
Farmers’ Own Milk
Marketing Management

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Table of Contents
Section 1: Introduction....................................................................................................................2
Company Overview.........................................................................................................................2
Section 2 Category Analysis............................................................................................................3
Levels of competition...................................................................................................................3
Category Size and Growth...........................................................................................................5
Channel Analysis.............................................................................................................................7
Macro-Environmental Analysis...................................................................................................8
PEST Analysis..........................................................................................................................8
Industry Attractiveness analysis...................................................................................................9
Porter’s five forces...................................................................................................................9
Section 3: Competitive Analysis.....................................................................................................9
Product Features Matrix.............................................................................................................10
Competitive Analysis Matrix.....................................................................................................10
SWOT Analysis.........................................................................................................................10
Conclusion.....................................................................................................................................11
References......................................................................................................................................12
Appendices....................................................................................................................................15
1. Appendix 1: Product Features Matrix.................................................................................15
2. Appendix 2: Competitive Analysis Matrix.........................................................................15

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Section 1: Introduction
Marketing plan is an inclusive paper document which include all strategies related to promotion
and marketing which will be implied by the management for the coming year. It also describes
the marketing objectives of an organization which requires to be attained in the set time frame.
Under this report, marketing plan will be discussed in relevance with a well-known milk brand of
Australia i.e. Farmer’s Own Milk. Farmers' Own' comes from a group of innovative Aussie dairy
farmers that have come together with Woolworths to provide this great tasting quality Milk to
Australians. Marketing plan of this organization includes various aspects vision, mission and
objectives of the organization which needs to be attained in a set time period. Further, marketing
plan for Farmer’s Own Milk will move towards evaluation of situational analysis. Situational
analysis includes determination of internal and external factors of the organization which are
compared to the same sort of factors of dynamic and competitive business environment. Apart
from this, this report will also focus over several aspects in relation with Farmer’s own milk
brand which is owned by Woolworths Ltd. This milk brand is a part of fast moving consumer
goods’ category of Australian grocery market and Woolworths Ltd. is a parent company for the
milk brand which is exclusively sold through their supermarkets, retail stores, etc. Further,
various aspects of the marketing plan will also be covered in this report with regards to the
Farmer’s Own Milk in order to enhance the demand as well as to attain competitive advantage in
the target demographics.
Company Overview
Farmers’ Own Milk is an initiative of dairy farmers of Australia for producing fresh milk and
distributing them with the help of Woolworths Ltd. This initiative was started in 2013 with the
Australian Farmers who belongs to the Manning Valley in NSW. Initially, this brand was
launched in the market with just eight local stores in Manning valley and 12 stores in Sydney
NSW. While Australians were facing challenges to get the fresh and pure milk and related
products, Framer’s Own Milk brand fulfils their needs at that challenging time. In that
challenging time period, Farmer’s Own Milk turned out to be a good news story for the whole
Australia. In relation to distribute fresh milk to the target demographics, company has developed
direct relationship with the farmers. In order to protect farmer’s interest and for the sustainable

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future growth of the company, management has decided to pay farmers good price for their milk.
This is the effective measure which motivates farmers to produce quality milk for a longer period
of time. Farmer’s Own Milk is an exclusive brand of Woolworths Ltd. and for distributing
quality milk to their target and potential customers, organization uses to pick up milk from their
farms directly and start processing. All this process is transparent and if any customer wants to
evaluate the procedure of making and processing of milk, he is free to evaluate every single step
without any restrictions. Since the launching of Farmer’s Own Milk, company has been awarded
with Gold medal at the 2014 Royal Melbourne Fine Food Awards, Bronze and silver medals in
the 2016 Royal Queensland Food and Wine Show, Gold and Silver at the 2016 DIIA - Dairy
Industry Association of Australia Show, Silver Medal in 2016 the Perth Royal Dairy Show and
Bronze and Silver in the 2016 Royal Queensland Food and Wine Show (Woolworths Group
Limited, 2018).
Section 2 Category Analysis
Levels of competition
Figure 1: Fresh Milk Producers in Australia and their ratings
(Source: Canstar Blue Pty. Ltd., 2018).

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Farmers’ Own Milk has several primary competitors in the Australian market. These are
FARMDALE by Aldi supermarkets, Dairy Farmers, Coles, etc. All the companies shown in the
above figure are engaged in producing milk from different sources such as from milk powder,
machinery, etc. Whereas several companies such as Farmer’s Own and Dairy Farmers are
engaged in producing fresh milk with the help of innovative Aussie farmers. In order to maintain
the acquired position in the target market, it is necessary for the management of Farmer’s Own to
adopt several defensive strategies. These defensive strategies could be enhancement in the
quality, reducing prices of the finished goods, etc. Apart from this, Farmer’s Own has attained
competitive advantage in the target market. In this relation, competitive analysis will be executed
which will help the organization to determine the strengths and weaknesses of its competitive
enterprises (Amatulli, Caputo & Guido, 2011). This will help the Farmer’s Own to develop and
adopt appropriate strategies in order to deal its competitors in an effective manner along with
gaining competitive advantage. With the help of this evaluation, Farmers’ Own would easily be
able to develop a strong and effective image in the competitive business environment. In the
words of Lehmann & Winner (1991) competitive analysis has mainly four stages which help the
organization to determine the level of competition and these stages are as follows:
 Assessing competitors’ current and future objectives: Determination of competitors’
objectives is necessary as it gives clue to the organization about their vision and mission.
Apart from this, analysing competitors’ objectives also helps to determine their adopted
strategies for gaining those objectives. This also helps the organization to analyse
appropriate position in the target market (Bikker, Shaffer & Spierdijk, 2012).
 Assessing competitors’ current strategies: Evaluation of competitors’ current strategies
for acquiring set goals and objectives helps the organization to determine the
opportunities and threats which will be originated form their actions (Miranda, et. al.,
1991).
 Assessing competitors’ resources: This helps the organization to estimate competitors’
efficiency. With this evaluation, organization will be able to determine future strategies
adopted by its competitors (Butler, et. al., 2012).

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 Predicting competitor’s future strategies: With the help of above evaluations, Farmers’
Own could predict its competitors’ future strategies through which they could be able to
modify their strategies in order to gain desired goals and objectives. Attaining
competitive advantage will also become an easy task for the Farmers’ Own in the target
market (Chen, Zhu & Zhou, 2015).
Category Size and Growth
(Source: Woolworths Group, 2018).

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(Source: Woolworths Group, 2018).
Above figures shows the financial position of the Woolworths Ltd. which is a parent company of
Farmers’ Own Milk brand. Company faced losses in 2015-16 but performance of Farmer’s Own
is constantly and rapidly increasing. This is the biggest loss; Woolworths had ever faced in last
20 years since they had listed themselves on the ASX.
While evaluating the market size and growth of the organization in the target demographics, it
was found in a survey stating that 42% Aussies does not care about the quality and other factors
while buying milk, they just focus over the prices of the milk before purchasing. However, rest
of the Aussies supported the Australian Dairy Farmers. In the annual report of Canstar Blue
targets to put aside the type of milk Aussies buy as well as how much they pay for it. But they
focus mainly on the ratings of brands across Australia based on their tastes, packaging design,
and value for money and overall customer satisfaction. The survey was conducted with 2000
consumers in this year in relation with their recent purchase of fresh milk (Waterman, et. al.,
2011). Amongst the 12 leading milk brands, Norco and Pura were ranked on the peak position as
they got five star rating in every aspect in 2017 but this year supermarket giant FARMDALE by
ALDI acquired the peak position and got give stars in every aspect. However, Dairy Farmers,

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Harvey Fresh and various other brands also got five star rating in the taste category whereas,
Farmers’ Own by Woolworths Ltd. received four start rating. This is good enough for the
organization because they are quite new to this industry as compared with the other milk
producers (Darnall, Henriques & Sadorsky, 2010).
Following are priorities set up by the management of the organization in order to gear up their
performance and to acquire the peak position in the target market:
 Farmers’ Own offers a great quality Permeate free Milk that is available in 3 Types,
Reduced-fat Homogenised milk, Full cream, and Full Cream Unhomogenised with the
cream on top. With the help of this, organization will be able to fulfil its target
demographics needs and has been able to develop an effective image in the dairy industry
(Dixon, et. al., 2013).
 Company needs to focus over every aspect because they have received four stars rating
every category. Improvisation in every category is necessary i.e. in terms of taste,
quality, packaging, customer satisfaction, etc.
 Apart from this, there are various strategies which have been adopted with the motive of
increasing customer reliability over organization and its products (Dobbs, 2014).
Factors which influenced organizational growth size in terms of total category level,
category segments and brand level:
 Demand for milk and its related products are increasing continuously with the increase in
population. In the last five years, overall milk industry has grown with a fancy growth
rate. Along with the overall growth, effective growth has also been noticed in terms of
Farmers’ Own since 2013; they have been able to acquire a large part of the market share
in the target market (Dulat, et. al., 2016).
 Industrial growth depends upon several macro environmental factors such as economic
conditions of country, purchasing power of target audience, inflation rate, political
environment, etc. Positive impact of these factors directly affects the growth of every
industry (Wagner, et. al., 2012).
 Competition level is another major factor which affects industry’s size, growth and value.
For surviving in the competitive and dynamic business environment, it is necessary for an

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organization to adopt certain unique and advanced measures to survive and develop a
distinctive image in the competitive business environment (Eberl, 2010).
 Apart from these factors, customer’s needs, demands, customer trend, strategies
implemented by the competitors, etc. are some of the other factors which directly impact
individual organizational as well as the whole industrial performance.
Channel Analysis
Channel analysis is an analysis under which various aspects related to the distribution of
products are discussed (Vining, 2011). These aspects are where and how the product will be sold
in the target market. Initial action taken under this analysis is evaluation of suitability of the
particular product or service to the target audience. Channel analysis could be executed in
following three ways:
 Selling through middleman i.e. wholesalers and retailers
 Selling directly to customers
 Selling through both above mediums
Amongst the above three methods of distribution channel analysis, every method have its distinct
advantage. . As Farmer’s Own Milk is a part of fast moving consumer goods’ market, thus,
selling directly to its target audience is the most suitable measure for the organization. Apart
from this approach, organization could also adopt another distribution strategy through which
milk will be sold through retail stores, supermarkets, etc. This approach is suitable for
manufacturing industries as it reduces complexities and huge costs for maintaining retail stores
and direct distribution costs (Ferrell, Gonzalez-Padron & Ferrell, 2010). This approach is
essential for Farmers’ Own milk brand because price factor plays crucial role in terms of
increasing the revenues as well as demand. However, being a part of Woolworths’ supermarkets,
approaching directly to the target audience will not be a difficult task for the organization
(García-Morales, Jiménez-Barrionuevo & Gutiérrez-Gutiérrez, 2012).

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Macro-Environmental Analysis
PEST Analysis
Political: Political factors have a huge impact over the milk industry. There are lot of rules,
regulations and standards built up by the government of Australia in regards to keeping livestock
and using them as an asset in the workplace. Regulations imposed in relevance with the food and
beverage sector, trade regulations, pricing regulations, product labelling etc. are some of the
factors which needs to be considered by the management of Farmers’ Own Milk before
developing their policies (Glebova, Sadyrtdinov & Rodnyansky, 2013).
Economic: Due to stable economic environment in Australia, economic factors such as inflation
rate, interest rate, buying power of consumers, etc. are also in favour for Farmers’ Own
operations. Economic factors such as GDP of Australia have been ranked above average and it is
also included in the list of developed countries and due to this, purchasing power of citizens of
this country is also high, thus, these are some factors which have positive impact over Farmers’
Own performance (Heijungs, Huppes & Guinée, 2010).
Socio-Cultural factors: Recent trends and the survey conducted by Canstar Blue says that, most
of the Aussies are concerned for the quality, taste, packaging and other such factors. Thus, it is
necessary for Farmers’ Own to adopt certain measures in order to improvise its milk in all
aspects in terms of gaining competitive advantage as well as for increasing the demand of their
milk in the marketplace (Lee, et. al., 2011).
Technological: Technological factors also have a significant impact over an organizational
performance. If Farmers’ Own will adopt appropriate and advanced technological measures,
productivity of the milk and quality of milk will be improved wisely. This will help the
organization to fulfil its target demographics demand which will ultimately enhance its
performance in the target market.
Industry Attractiveness analysis
Porter’s five forces
Threat of new entrants: New entrants come with new strategies, new and innovative ways of
extracting milk from livestock as well as they will also implement lower pricing strategy to

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acquire market share. In order to maintain its acquired position as well as to uplift its position in
the target market, it is necessary for Farmers’ Own to manage all these challenges and construct
effective and efficient barriers as defence (Patnaik, 2010).
Bargaining power of suppliers: Suppliers have a huge impact over organizational performance
and every manufacturing organization purchases raw materials from a number of suppliers. In
scenario of Farmers’ Own Milk brand, suppliers do not have much role because in extracting
milk, except machinery and talented employees’, nothing is required. While processing the milk,
not much things are required. Thus, this force have a weak impact over Farmers’ Own
performance (Peeters, et. al., 2013).
Bargaining power of buyers: Buyers plays crucial role in consumer goods market. Due to huge
selection and wide offerings from various companies engaged in the milk industry of Australia,
buyers’ purchasing power is huge. This will also affect organizational profitability and in order
to reduce the impact of this factor, Farmers’ Own needs to produce their milk as per consumers’
requirements (Mijovic, et. al., 2010).
Threat of Substitutes: Similar product when satisfy consumers’ same sort of needs leads to
suffer whole industrial profitability. There are not much substitutes are available for milk
because extraction of milk is only possible from livestock. Apart from this milk could also be
produced through using milk powders but it leads to high prices. Thus, this factor also does not
have much impact over organizational performance (Soni & Kodali, 2010).
Industry Rivalry: In Australian milk industry, 12 companies exist which are engaged in
producing milk. All are each other’s primary competitors, thus, they all are involved in adopting
several measures for enhancing their market image as compared with the competitor. Hence,
industry rivalry in Australian dairy industry is intense (Tuoriniemi, Cornelis & Hassellö, 2012).

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Section 3: Competitive Analysis
Product Features Matrix
Product ALDI
FARMDALE
(Green)
Farmers’
Own
(Orange)
Coles (Red)
Overall
satisfaction
***** **** ***
Taste, value for
money and
packaging
***** **** ****
(Appendix 1)
Competitive Analysis Matrix
Factors Farmers’ Own Coles ALDI
FARMDALE
Dairy Farmers
Product 5 4 5 4
Price 4 5 5 2
Place 3 4 5 2
Promotion 5 3 5 5
(Appendix 2)