Marketing Strategy of Woolworths: Segmentation, Targeting, Positioning

This report provides a comprehensive analysis of Woolworths' marketing strategy, a global leader in the retail chain industry. The paper is divided into three key parts: segmentation, targeting, and positioning. The segmentation section explores demographic, psychographic, behavioral, and geographic segmentation strategies, outlining their advantages and disadvantages. The report then delves into Woolworths' targeting approach, identifying their primary target market. Finally, it examines the company's brand positioning using a perceptual map. The analysis highlights how Woolworths leverages these strategies to gain a competitive advantage in the retail market. The report emphasizes the importance of understanding customer behavior and adapting marketing strategies to meet diverse consumer needs, contributing to the company's ongoing success.

Running head: MARKETING STRATEGY
Marketing Strategy
Name of the Student
Name of the University
Author Note

1MARKETING STRATEGY
Abstract
The following paper focuses on providing a brief overview about the marketing strategy of
Woolworths. They are one of the global leaders in the retail chain industry. This position has
been achieved by continuous development and employing certain strategies enabling them to
gain the competitive advantage. The paper is divided into three parts. These three parts are
segmentation, targeting and positioning. All of them are very crucial when a company’s market
strategy has to be determined. The various kinds of segmentation have been discussed here with
the factors that affect in a large way. The target market of the chosen organization has been
described here as well. The brand positioning of the company has been explained with the
perceptual map in the third part.

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Contents
Abstract............................................................................................................................................1
Part A: Segmentation.......................................................................................................................4
Demographic market segmentation.............................................................................................5
Gender......................................................................................................................................5
Age group................................................................................................................................5
Income.....................................................................................................................................5
Marital status...........................................................................................................................6
Occupation...............................................................................................................................6
Advantages..............................................................................................................................6
Disadvantages..........................................................................................................................6
Psychographic market segmentation...........................................................................................7
Advantages..............................................................................................................................7
Disadvantages..........................................................................................................................8
Behavioral market segmentation.................................................................................................8
Advantages..............................................................................................................................8
Disadvantages..........................................................................................................................8
Geographic market segmentation................................................................................................9
Advantages..............................................................................................................................9

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Disadvantages..........................................................................................................................9
Part B: Targeting............................................................................................................................10
Part C: Positioning.........................................................................................................................13
References......................................................................................................................................16

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Part A: Segmentation
Market segmentation is one of the most important things in fixing the marketing
strategies (Wedel & Kamakura, 2012). The organizations have to divide their customers into
different segments so that they can be able to trace the customer behavior and thus manage to
manipulate their customers to buy their products and gain the competitive advantage over their
rivals in the industry. These are the ways in which the organizations can be able to attain their
success. The need for assessing the behavior of the customers, their likes and dislikes is immense
(Wedel & Kamakura, 2012). The organizations and the marketing team has to analyze some of
the important matters in regards to making the customer segmentation so that they can be able to
assess which things are best suitable for which segment of customers, both from the point of
views of quality and price (Jahanshani et al., 2014).
The chosen organization for this assignment is one of the leaders in the global retail chain
industry, Woolworths Limited ("Woolworths Limited", 2017). The need for consumer or
customer segmentation is huge and this is done by almost any organization thriving for success.
 Customer segmentation is done by the organizations so that they can divide their
customer base into smaller groups with similar kinds of choices, tastes, demands and
preferences (Hjort et al., 2013).
 The market segment is a smaller market within the larger customer base that comprises of
similar minded customers.
 The market segments are totally different from each other in their nature.
 A particular market segment is such a setting where the customers think and behave on
the same lines (Cross, Belich & Rudelius, 2015).

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 The fluctuations in the market are ought to happen and a particular market segment
responds to this in the same way.
The basic customer segmentation can be done in some ways. This is done on the basis of
some important factors like the age, gender, income, marital status, occupation and some others.
There are generally three types of market segmentation (Müller & Haase, 2014). These are
psychographic segmentation, behaviouralistic segmentation and geographic segmentation. The
different factors in this segmentation need to be addressed (Rupp, Kern & Helmig, 2014).
Demographic market segmentation
Gender
The need for segmentation based on gender is very important since both men and women
have different choices and preferences. The organizations have different choices for men that
would surely not work for the women in the target market.
Age group
The customers must be segmented by the customers based on their age group so they
could find it comfortable to sale the products according to that particular age group only. The
marketing strategies for the organizations would surely be different for the kids, teenagers and
adults (Tifferet & Herstein, 2012).
Income
The marketers divide the customers according to their income as this is very important to
measure on how they could sale their customers and this has to be done strictly by maintaining
the pricing strategies properly by assuming the income of the customers. According to this basis,

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the customers can be divided into three segments and they are high income customers, mid
income customers and low income customers (Tifferet & Herstein, 2012).
Marital status
The marital status of the customers is a factor in determining the consumer segmentation.
This is because the travel agencies will surely not make the holiday packages at same price and
facilities for the bachelors and the married couples.
Occupation
The consumer market segmentation can be fixed on the basis of the occupation of the
customers since the products to be sold would vary from office goers to school and college
students and people involved in other professionals.
Advantages
 The demographics data can be achieved very easily from the government organizations or
websites.
 The various factors of the demographic data like the age, income, gender are quantitative
things and are adjustable to the needs of the company (Tifferet & Herstein, 2012).
 Demographic segmentation does not approach the extremely niche groups and therefore
have a great chance of targeting a huge population.
 The important data about the income and socio-economic status gives a huge opportunity
to the companies to assess the buying powers (Tifferet & Herstein, 2012).
Disadvantages
 The competitors can very easily understand the demographic information and
segmentation that the concerned company has targeted.

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 It has happened often times that targeting the wrong market segmentation groups has
turned to be a loss for the companies and wastage of money and resources as well as
time.
Psychographic market segmentation
It is a known fact that different people have different personality traits, attitudes and
personalities. The need for dividing the consumer base according to those traits and personalities
is of huge importance (Boone & Kurtz, 2013). There are many people who are careful about the
outside environment while others are not. Similarly, some people are very much health conscious
while others are not. The organizations must look after these things before making their products.
This kind of market segmentation has to be done based on their lifestyles, interests, moral values
and attitudes. The customers are always changing their preferences and the organizations have to
change their mindsets as well so as to cater to the needs of the customers. This kind of
segmentation is directly related with the human psychology and companies have to assess it
before presenting those products to the customers (Boone & Kurtz, 2013). The companies have
to understand the psychology of the customers better and thus they can be able to target and
approach them in a better way.
Advantages
 This helps the companies to catch the customers by studying his/her psychology.
 This is very important in case the companies desire to provide niche and customized
products to their customers (Boone & Kurtz, 2013).
 This helps to understand the customer behavior.

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Disadvantages
 It is a time consuming process.
 The psychology of the customers is different from each other so it is very difficult to
segment the market according to that only.
Behavioral market segmentation
Behavioral market segmentation is important market segmentation. This is done so that
the customers showing same kinds of choices and preferences can be assimilated together and
put under the same group (Ailawadi et al., 2014). This helps the organizations to promote their
variety of products in a similar manner and reach those customers in a shorter time. The
customers can be captured by depending on their needs. The people are being more brands
conscious so the companies have to be cautious about choosing their products. There are certain
parameters for this market segmentation. These are:- occasion oriented, usage oriented, loyalty
oriented and sought benefits (Ailawadi et al., 2014).
Advantages
 This process helps the companies to identify the customers similar in behavior and thus
makes it easier to target them.
 This process further helps to create a brand loyalty because the customers show an
affinity towards a particular brand.
Disadvantages
 Customer behavior cannot be predicted to be right all the time since the preferences of
the customers’ changes with time.

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Geographic market segmentation
This kind of market segmentation is done depending on segmenting the customer base
based on geographical borders (Hassan & Craft, 2012). This segmentation depends on the
countries, states, villages, cities and other urban areas, climatic conditions and population
density. It is very important because people living in the same region are often seen to have the
same needs. The companies could produce for the things that are best suited for the people of a
particular region (Hassan & Craft, 2012).
Advantages
 This helps to recognize people living in a same geographic region and having the similar
likes.
 The areas being densely populated can open the doors for a huge marketing opportunity.
 This helps the companies to invest in a particular geographic region earning them the
opportunity for brand loyalty (Romaniuk & Nenycz-Thiel, 2013).
Disadvantages
 This process is unable to show the likes and dislikes, behavior of the customers.
 A particular region goes through certain climatic changes very often and this leads them
to loss (Romaniuk & Nenycz-Thiel, 2013).
These are the ways in which the companies can target their customers based on these four
main sections. The companies have to continuously evaluate and assess the needs of the
customers for better results.

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Part B: Targeting
Targeting the audience is a crucial stage for marinating a marketing strategy that comes
after the segmentation of the target audience (Writz, 2012). The target audience has to be
convinced so that they will buy the products of the company. The customers do not get to test the
quality of the products before purchasing it. So, they have to rely entirely on the things that are
said to them. The companies should make sure that these advertisements are not fake. The target
market of a company is determined by the fact where the company wants to sell its products. The
target market of a company includes the set of customers who are targeted by the company
according to the buying power of the customers and the kinds of target segmentations. Every
company has their selected target markets in their business territory. They invest a lot of effort
including their money and resources to monitor their target market (Writz, 2012). It is very
obvious that the target consumers have to be influenced to buy their products and its pricing. The
pricing of the products is not meant for all the target consumers as all of them do not have the
same buying power.
The target market is very important to fix the marketing plan for the company. It has to
be kept to be in the focus of the marketing plan and strategy since it keeps the other factors like
the distribution of the product, pricing and promotion strategies. This is called as 4 P’s of
marketing (Gordon, 2012).
Keeping that in mind, the target market has to be decided upon in the light of
Woolworths limited ("Woolworths Limited", 2017). The target market of the company is mainly
the high earning people. Their premium products are mainly designed to cater to the needs of the
high society people. The standard of living of Australian people is higher than the average people
in other countries. Woolworths target to develop the environment and fulfill the needs and

11MARKETING STRATEGY
demands of the people regarding the environmental safety (Lundgren & McMakin, 2013). The
chief strategy of the organization is to increase the market share in the future. They sell their
products to different range of customers. They target all groups of people as per range. Their
belief is they should be able to sell their product to a widely ranged customer group so that they
can get the competitive edge (Barney, 2014).
Woolworths always try to approach their target market through customizing their
products in a mass volume. They have to build a good relationship with their customers so that
their customers stay loyal to their brand only. In the entire marketing scenario, this helps to give
them a huge advantage to create a reputed brand image (Aaker & Biel, 2013). These marketing
strategies help them to stay ahead of their competitors. The disposable income of the Australians
is fairly high so the primary target of Woolworths is the people with a good earning
("Woolworths Limited", 2017).
The secondary target market of Woolworths is the people who are weaker section in the
financial basis. Their secondary target market audience for Woolworths may be the people who
order their orders online. The target audience will take a long time to choose their products by
comparing the quality (Aaker & Biel, 2013). The products that are provided by Woolworths are
daily use basis. This is why they have to provide the best quality materials in it to improve their
reputation among their target audiences. They must produce their goods by analyzing their
customer profiles. These are based upon the demographic, geographic, psychographic and
behavioral approach to market segmentation. They must develop the goods according to the age,
gender, income and occupation of the customers. This will be helpful for them to fix their pricing
strategies since they cannot provide every product to very customer (Barney, 2014).