Holmes Institute HI5004 Marketing Strategy Report: Woolworths Analysis

This report provides a comprehensive analysis of Woolworths Limited's marketing strategy. It begins with an introduction to marketing management and then provides an overview of Woolworths, including its history, current position as a leading supermarket chain in Australia, and its famous slogan, "Australia Fresh Food People." The report then delves into the 5 C's of marketing (Customers, Company, Competitors, Collaborators, and Context), exploring each aspect in detail, including a SWOT analysis of Woolworths. It examines Woolworths' customer base, competitive landscape, and the environmental factors affecting the company. The report also discusses the collection of information, including primary and secondary data, and the methods Woolworths uses to understand customer preferences and market trends. Furthermore, the report analyzes the development of Woolworths' marketing strategy, including target market segmentation, value proposition, and marketing tactics such as new store establishments, customer offers, and pricing strategies. The report concludes by summarizing the key findings and insights into Woolworths' successful marketing approach within the dynamic retail environment. The assignment adheres to the guidelines set by Holmes Institute for the HI5004 Marketing Management course.

Running Head: MARKETING STRATEGY 0
MARKETING MANAGEMENT

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Table of Contents
Introduction................................................................................................................................2
About Woolworths.................................................................................................................2
5 C’s of Woolworth....................................................................................................................3
Collection of information...........................................................................................................5
Development of marketing strategy...........................................................................................7
Development of marketing tactics.............................................................................................8
Conclusion................................................................................................................................11
References................................................................................................................................12

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Introduction
Marketing management is the practice of choosing and targeting different markets and
building effective relationship with them in relation with various resources of the enterprise.
It is also known as a business discipline extended on practical applications of marketing
techniques and the management of organisation marketing resources and activities
(Beverland & Lindgreen, 2010). From last few years, importance of marketing management
is continuously increasing due to globalized economies and changing preference of customers
and demands.
Goi (2009) stated five concepts of marketing management discipline i.e. product
concept, selling concept, social marketing concept, marketing concept and product concept.
Considering all, an organisation can plan better understanding of their long-term objectives
with proper exploration of the business environment. To better understand different
approaches of marketing management, an example of Woolworths Limited has been
emphasized in order to gain necessary insights.
About Woolworths
Woolworths Limited is an Australian organisation and the leading supermarket chain
in Australian retail sector. Moreover, it is the second largest company in Australia
considering revenue. In 1924, the first store of Woolworths was opened and by the end of
1933, the organisation was successfully able to open up 23 stores across various states of
Australia (perishablepundit.com, 2018). Until now, Woolworths had done various expansions
and acquisition and this helps the brand to open up more than 995 stores across all over
Australia. The company business is built on integrity. There are on a mission to deliver the
best in value, convenience and quality to their customers. One of their most famous slogans is
“Australia Fresh Food People” (Jones, 2014). With their effective and efficient marketing
strategy, the profit of company jumps as the company posted a 12.5 per cent rise in profit for
the 2018 financial year.
Considering Woolworth marketing orientation, it can be distinctly observed that
various retail supermarkets have been grown in these recent years including Walmart, Coles
Group, LIDL and Tesco. However, recent marketing tactics of Woolworth helped the

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company to gain higher amount of profit as compared to last year with comparable sales
growth to 4.3%. For instance, one of the most outstanding moves adopted by Woolworths in
the first half of 2013 was the introduction of Aussie Animal Trading Cards, which was a
massive point of attraction for the children market.
The Australia retail sector also witnessed a positive growth as the sector registered a
growth rate of 5%, 3%, and 2.6% in New South Wales, Victoria, and South Australia,
respectively (Alcala, 2019). However, the expectations of the consumers also become more
diverse and demanding which needs to be acknowledged by Woolworth so as to reinforce
their marketing strategies to be competitive in the retail industry.
5 C’s of Woolworth
According to Camarinha-Matos et al (2009), there are five key aspects i.e. Customers,
company, competitors, collaboration and climate that helps an organisation to explore their
business environment more effectively for the purpose of success and growth. It is important
for Woolworth to understand complex variables of retail business environment in order to
take effective decisions. These five factors are explicitly stated below –
 Customers – Considering only the southern hemisphere, Woolworths consists of
around 15 million customers. The company target its product to every age group
considering variety and quality offered. One of the significant objectives of this aspect
is to analyse the marketing segments like customer trend, purchasing behaviour of
customers and changing scenario of retail sector. To serve the customer in more
explicit ways, the company is looking to adopt more digital strategy and captivated
the customers more proactively with enhancing customer loyalty.
 Company – Woolworth is a preeminent player in the Australian retail sector and with
various marketing campaigns and strategic tactics, the company is seeking constant
improvements. For understanding Woolworth business in more concentrated way,
SWOT analysis tool is being used described as below –

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Strengths
 Market leader and second largest
company in Australia.
 The company achieved zero food
waste by 2015 searching for cost-
efficient technique in packaging
(woolworthsgroup.com, 2017).
 Impressive presence across the
industry by optimum utilization of
human resource and market
opportunities.
Weakness
 After the fall of Cole, the
government restriction on price hike
after negatively impact on company
growth.
 The Australian economy dependence
on China.
Opportunities
 Digital incline towards various
technology in retail chains such as
check AI, AR/VR and cloud
services.
 Using of multi-option retailing
strategy to fulfil changing
expectations of the customers.
Threats
 Consumer perception related to the
price of product.
 Competitor strategies of Wesfarmers
and Walmart.
 Government intervention as of
growing competition in the market.
 Collaborators – Collaborators help in connection various operations and activities of
the business in most efficient way. Long-term success of Woolworths depends on its
collaborators including its suppliers and distributors. The company depend upon these
collaborators for various resources and thus set a new bar in satisfaction of consumers
through their websites and effective online selling service.
 Competitors – There are various organizations functioning in the Australian retail
market and this makes the business environment more competitive. At present, the list
of their top competitors includes Coles Groups, Walmart, LIDL, Amazon and Costco
(Sullivan & Gouldson, 2017). All these organizations have adequate resources to give

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tough competition to Woolworth. Currently, in Australia, Woolworths includes 37.2
% market share followed by Coles having 30.3 per cent. There are various
opportunities available in the Australian retail market and with increase in
competition, Woolworth must have sufficient resources to deal with the increasing
level of competition.
 Context – Woolworth is also affected by various environmental factors such as
political, economic and technological. For instance, in technological setting, the
company need to enhance its various practices including cloud platforms, IT security,
and Auto check out facilities in order to save costs at various levels. However, the
company is already doing well in taking out these technical aspects as they have
installed “Scan&Go” technology from its Double Bay store in Sydney’s eastern
suburbs, allowing Woolworth's rewards members to scan and pay for items using an
app (Elmas, 2018).
Collection of information
Lane et al. (2010) stated that collection of relevant and accurate data is very
significant to conduct a survey in an effective way. Collection of necessary information is
important for research design, data gathering, processing and analysis. To carry out process
of research in an effective way, it is important for Woolworth to focus on both qualitative and
quantitative data. In retail sector, conducting research will help the brand to explore
purchasing pattern of consumer, demand for specific product as well as failure or success of
new product prior to launch.
The organisation can classify the data into two broad groups i.e. primary and secondary
data. Primary data is considered a personal source of data collection by an enterprise through
the help of surveys and direct interviews. On the other hand, secondary data is collected by
third party and for some other purpose (Heaton, 2008). This collection of data is intended
towards market research and market intelligence and Woolworth limited need to take out
survey to measure following five issues that were faced by the enterprise –

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 What consumer wants?
 Which rival pose a threat?
 How the context of business is changing, if it falls?
 What is the role of collaborators in this process?
As per the data recovery from the research conducted by Woolworths, it can be said that –
Preference of customers
In Australia, the management of Woolworth conducts research with the help of
questionnaire in different cities of Australia. They concluded by outlining three-year strategy
to win the trust of their customers and enhancing all aspects of their shopping experience.
The Woolworths Food strategy is focused on three key principles:
 Offer: Enhancing the core offer to ensure that customers put Woolworths first;
 Growth: Innovating to meet more of these customers’ requirements; and
 Efficiency: Building additional customer value by organizing for success and
implementing their Lean Retail model (woolworthsgroup.com, 2017).
Strongest competitor
In this survey, the customers are being asked by various assessors to identify the most
influential supermarket chain may influence Woolworth. Through this survey, the
management identifies that Aldi Supermarkets is the biggest name come forward, however,
with their three-year marketing strategy, the company is planning to minimize the impact of
Aldi considering the sales of the organisation.
Changing business context
The changing scenario of business context explores that customers are now more
inclined towards online shopping and thus Woolworth launches online super sale and also
followed a $1 billion investment in prices two years ago (Mitchell, 2019). Moreover, the
company is also following organic food supply chain and thus invest $30m in organic
supermarket concept.

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Development of marketing strategy
According to Verhoef et al. (2009), the retail environment is changing dynamically
with the changing customer expectations, behaviour and preferences. This requires the
company to modify its marketing strategy according to both before prior to the launch and
after the product launched. In addition, it is important for Woolworths to change its
marketing strategies with the globalization and due to coming up of various global retailers
such as Wal-Mart, Tesco and Aldi. The company is changing its marketing strategies as per
both domestic and global changes in the retail industry.
It is also founded that target market is one of the major factors that impact market
strategy of retailers. It is important for any organisation to select target market as per
understanding consumer preference and broad range of products offered by the enterprise.
Woolworth is offering wide range of products including their private label brands such as
Woolworths Homebrand, Woolworth Select and Woolworth Gold (Pulker et al, 2018). This
benefit the company to have a wide target market. In addition, the collected information by
the management previously can be used to analyse consumer demand and behaviour so as to
build up their marketing strategy effectively.
Woolworth has 14.6 million regular customers and thus the company is segmenting
its customer base in effective manner while developing marketing strategies. It is identified
that Woolworth has divided its customers into various homogenous groups based on age
group, income level, purchasing power and location. This strategy benefits the company to
reach to the customers in more effective way and thus also achieve better operational
performance.
Frow & Payne (2011) also defined value proposition to deliver to customers after post-
purchase making it unique to their customers considering their competitors. Throughout their
business life cycle, Woolworths have built up value proposition in various aspects of its
business such as seasonal discounted offer, online shopping, home delivery and customer
loyalty. One of their distinct strategies differ the company to its competitor includes clicking
and collects.
In addition, the company also trying to capture over retail market of Australia by
pronouncing three-year marketing strategies. The company is providing major benefits to

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their consumers and they also stated that their strategy has focused the customers as their
priority stakeholders. The key characteristics of their marketing tactics include –
 Establishment of new stores – As per the company statement, their strategy involved
embracing capital expenditure between existing stores and new stores renovations.
The company stated that they would refurbish more than 80 stores per annum for the
near future in comparison with their 23 stores in FY14 and 61 in FY15 (AFN, 2015).
It will be designed as per local consumer preference and will be prioritized in areas
where the company perceives the greatest potential for consumer growth.
 New customer offers – The Company seeking an opportunity to better serve to their
consumer in small format stores. They also seek to explore different ways by testing
and validating their ideas before making out big investment.
 Price and range strategy – As per their new pricing technique, the organisation will
offer superior quality products at reasonable prices. Their new strategy includes better
range, lower prices and discounted offers to compete in the industry, especially with
Wal-Mart and Aldi supermarket.
 Technological Development – The company strategy is also focused towards digital
strategy and technological development in extent with new refrigerant technology,
scan and go system and woollies investment. This will improve customer shopping
experience in the near future.
 Review of staff performance – The Company use ‘Customer first system’ to
measure the performance of its in-store staff. This will not only enhance performance
of staff but also raise customer satisfaction which will be beneficial in growth and
financial perspectives of Woolworths.
Development of marketing tactics
Marketing tactics are known to be the action and practices that make particular
strategies achievable and thus raise customer satisfaction (Morgan & Berthon, 2008).
Marketing approaches are evolving over period of time and it is important for organisation to
align their corporate goals with these marketing tactics in order to gain competitive edge in
the industry. For instance, one of the best practice is the changing concept of marketing mix
from 4Ps to 7P. Marketing mix is considered a strategy through which an organisation uses to

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develop a product and service offerings for its consumers. In context of strategies and tactics
of Woolworths, these 7P’s of marketing mix are elaborated –
Price – At present, the company has positioned itself with offering high-quality premium
products and most of its prices of the products have been kept at par with the prices set up by
its competitor brands. It was identified that the company adopted a mixed pricing strategy
depends on products, related prices and market set up by their rivals and this strategy help the
company to continue to grow and earn in bounds and leaps. In future, Woolworth also
planned to decrease the prices of its products by decreasing its unproductive employee's cost.
This strategy will directly transfer cost benefit to the consumer.
Products – Being the largest leading retailer, the company offer wide range of product
portfolio including grocery items, international cuisine and local brands products. This fulfils
all needs of the customers and thus does not leave them dissatisfied. The company also pay
emphasis on the product quality to increase satisfaction of the customer. The company also
focuses on changing its product portfolio with the market trends. For instance, Australian
customers are now choosing to go for organic and demand for organic product has been
grown significantly. The lean retail model of Woolworth to drive three-year growth plans
also includes plans for their organic fruit and vegetable.
Place c. Few years back, the company also initiated their online shopping platform, which
allows shoppers to do in-app shopping through various integrated platforms. Moreover, in
South Africa, Woolworth runs stores such as Marks N Spencer. The company has outlets in
this region and an extensive distribution network.
Promotion – Woolworth always took out this aspect keenly. Woolworths' £20m marketing
strategy, with a goal to reposition the stores with a smarter strategy. The company maintained
extensive promotional policies including advertisement, sponsorship and social media. The
company also take out various long-term social awareness programme. For instance, the year
1987 Fresh Food People campaign was launched by Woolworth that was very successful and
it continued until the year 2012 (woolworthsgroup.com, 2018). The company also uses
loyalty schemes to maintain brand loyalty of its customers with offerings of Everyday
Rewards, shopping card that keeps track of its purchases and associated discounts. Every
time the regular customer shop from Woolworth, the company offers various gift cards as
part of their reward system.

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People – People is considered of the human resources of an organisation and the most
significant part of an enterprise as with this, the competitive advantage can be gained. No
other retail enterprise can imitate these resources, as a part of their corporate strategy and thus
this possesses strategic advantage to the company. At presents, Woolworths has more than 1,
15,000 employees and the company. To retain their top talent, the company adopt six major
practices including –
 Recruiting right people in first place.
 Enhance and assess the ability of the line managers to manage their employees
effectively.
 Creates constant feedback mechanism to make the objectives clear.
 Empower their employees towards career growth and development.
 Drives proactively talent mobility among the employees of Woolworth improves
productivity and improves the employee motivational level.
 Continuously focuses on retention strategies to make employees work for a longer
time period.
Processes – The Company have extremely customer friendly process focusing on customer
satisfaction. In any supermarket, process is being assessed relating to speedy bill services and
getting good bought offline as well online. The company embed all their systems with latest
information technology with implementation of proper security measures.
Physical Evidence – The ambience in Woolworth stores is quite pleasant allow customers
friendly environment with every category of products. The design of website of company is
also simple and attractive. Across Australia, the company is doing promotion through
billboards at various locations. In addition, to increase their brand awareness, the company
offers its bags with its logo and name in the shop. It can be said that the company follows an
effective approach for documentation in an enterprise benefit organisation to maintain
transparency with consumers.

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Conclusion
In the limelight of above discussion, it can be said that marketing environment of
Woolworth is very dynamic and complex. To attain competitive edge in the market, the
company need to adopt various disruptive technology in the market help the company to gain
better insights into customer expectations.
However, the company is tackling its competitors very well with their marketing
strategies that can be shown in their last year profit. In future, it is necessary for the company
to focus more on relevant trends in the market so as to ensure their sustainability.