Metcash Marketing Management: Strategic Analysis & Recommendations

This report provides a comprehensive analysis of Metcash, an Australian wholesale company, focusing on its marketing management strategies. It identifies key issues such as competition, changing market dynamics, and the role of collaborators. The report utilizes the 5C analysis to assess Metcash's position and environment, examining the company, customers, competitors, collaborators, and climate. It explores how Metcash gathers market intelligence to understand customer needs and competitive threats. Furthermore, the report segments the market into local retailers, customers, national retailers, and restaurants/cafes, outlining value propositions and positioning statements for each. The analysis culminates in a suggested marketing management strategy aimed at enhancing Metcash's competitive edge and achieving sustainable success in the Australian market. Desklib provides a range of similar solved assignments and past papers to aid students in their studies.

Running head: MARKETING MANAGEMENT
MARKETING MANAGEMENT
Name of the Student
Name of the University
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Executive Summary
The given report will be discussing the different aspects with respect to the operational
management of the Australian wholesale company Metcash. The company has been in operation
since a long time and needs to revise its strategy in order to be able to achieve success in the
given domain. The report has divided the different components under different issues. Each issue
has been discussed in relevance with theoretical as well as practical examples. The suggested
Marketing Management strategy has been provided at the end followed by a conclusion which
summarizes the report.

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Table of Contents
Introduction......................................................................................................................................3
Issue 1..............................................................................................................................................3
Issue 2..............................................................................................................................................5
Issue 3..............................................................................................................................................7
Issue 4..............................................................................................................................................9
Segment number 1: Local retailers..............................................................................................9
Segment number 2: Customers..................................................................................................10
Segment number 3: National retailers.......................................................................................11
Segment number 4: Restaurants and Cafes...............................................................................11
Issue 5............................................................................................................................................12
Conclusion.....................................................................................................................................15
References......................................................................................................................................16

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Introduction
The Australian Retail segment is captured by a large number of competitors, each of
them aiming to gain their market share. However, there exists cut throat competition and several
companies fail to make their operations successful. The given report will be discussing the
different aspects of the chosen company Metcash which is an Australian wholesale company.
The report will discuss the issues systematically and will provide recommendations for the same.
Issue 1
The Metcash is a leading Australian company involved in the retail as well as the
wholesale sector. The business is involved in a leading wholesale distribution and marketing
context and incurred a sales of more than $14 billion in 2017 (Metcash | Australia’s leading
wholesale distribution and marketing company. 2018). The retail company has been in the
industry for a long period of time and is 4th in succession after Woolworths, Coles and ALDI.
The company has a strategic approach towards the activities and for this purpose, it ensures that
all its activities are vital to the concept of sustainability and that the company maximizes its
offerings. The company aims to promote local communities by providing merchandising,
operational and other related marketing support across their various pillars like food and liquor.
The company provides the following offerings and products .The Company has divided its
operations into the major pillars like that of:
Food

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In the food category the company provides and supports the network of more than 1600
independently owned stores. The retailers in the chain mix knowledge and
convenience with the prices being competitive in nature. The stores in their
community provide the best products from various local producers and thus
supporting the local economy.
Liquor
In the Liquor category, the company is the largest supplier to the different independent
retailers and is the second largest broad range of liquor provider in Australia. The organization
supports more than 2500 stores and provides the independent sales of brands like Celebrations,
The Bottle-O, Duncan’s and Big Bargain.
Hardware
The company is the largest independent hardware group operating in Australia which
provides true leadership in the trade market. The company promotes leading hardware brands
Mitre 10 and Home Timber along with companies Thrifty-Link Hardware, True Value hardware
and supplies to more than 1100 stores nationwide.
The Purpose of the Organization
The primary purpose of the company is to give rise to successful independents.
Vision
The vision is to provide the retailer assistance so that they have the best offerings in town and
through this they are able to provide the best services to the consumers. They tend to provide a
distinctive and unique service to independent Retailers and the customers as well through the

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IGA group of supermarkets (Coombes and Nicholson 2013).Through IGA stores the company
caters to the retail sector.
Issue 2
The 5C Analysis is a technique whereby a situation analysis is conducted using the five
key aspects of the business organization. This means that when an organization is being
analyzed, it becomes extremely important for it to do so with the help of situation analysis which
helps in examining how the internal as well as the external environmental factors have an impact
on the business and the environment in which it operates (Martelo Landroguez, Barroso Castro
and Cepeda-Carrión 2013). The 5C Analysis can be described as a crucial framework which is
popularly used in order to have a control over the internal as well as external environmental
factors. The integrated analysis covers the key areas of marketing and helps in identification of
the key areas of the business.
The Five C analysis of the Metcash has been given as follows:
Company: The company analysis is used to analyses the organization’s vision, strategies,
product line, technology, culture and the objectives of the company. This helps in the analysis of
the existing problems with the company`s operations. The company functions with the different
independent retailers and aims to provide them with adequate services which shall go a long way
in assisting them to become a leading firm in the sector. It believes that sound relationships with
the different suppliers is the key to the business success.
Customers- The different customers form a key part of the situational analysis. This involved
knowing the reason behind the market growth, size, buying patterns, and purchase size of the

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customers, their purchase frequency and other related aspects. The primary customers of the
business are the different retailers who form a chain with the company and provide it with the
different goods and services which are beneficial for the given organization. Through the IGA
supermarkets, the firm also sells the goods and services directly to the different customers
Competitors – The competition analysis helps in the critical understanding of the external
environment in which the firm operates and knowing where the competitors excel. The
competitor analysis can be done using the Porter`s Five Analysis.
 Threat of New Entrants- HIGH
 Bargaining Power of Suppliers-LOW
 Bargaining Power of Buyers-HIGH (Hair Jr and Lukas 2014)
 Threat from Substitute Products-HIGH
 Rivalry among the existing players. VERY HIGH
Collaborators: The collaborators of the business can be described as the external stakeholders
who tend to analyses the relationship of the business with the different parties like suppliers,
distributors, business partners and collaborators.
Climate: The climatic analysis can be undertaken using factors like Political, social,
technological and legal factors.
PEST Analysis:
The following factors affect the operations of the company:

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Political; The food and stable industry laws and legislations will have a huge impact on the
working of the industry. Furthermore, the structure of the government and political stability in
Australia may have an impact on its operations as well (Järvinen and Karjaluoto 2015).
Economical: The economic factors are the factors like the industry growth rate, efficiency of the
financial market in Australia, Inflation rate in the country, interest rate, Discretionary Income,
Labor Costs and the purchasing power of the different individuals.
Social: The social factors are the factors like the demographics of the individuals, leisure
interest, choices and the entrepreneurial initiatives which the society aims to take.
Technological- The recent developments in the technological industry especially done by the
competitors tends to have an impact on the business (Chernev 2018).
Environmental and Legal: These factors which are legal and environment factors comprise of
various laws and legislatives which the business needs to abide by.
Issue 3
The information about the given factors like the following are obtained in the given ways:
What customers want?
In order to understand what the customers want out of the business enterprise and what
kind of offerings it aims to provide to the customers, the company sees to it that they are
engaging in proper research analysis (McDonagh and Prothero 2014). This goes a long way in
analyzing whether the demands of the company have been changing or not. It also helps in the
analysis of the new products and ideas which can be generated considerably. The company uses
market intelligence technique in order to analyze the different needs of the customers.

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Market Intelligence can be defined as the gathering of relevant information with respect
to the company`s market (Foxall 2014). Metcash gathers this information and then utilizes the
given information in order to ensure that accurate decision making can be done to determine the
correct strategy and to ensure that there exists opportunity with respect to market penetration,
market opportunity and market development. The company Met Cash also makes use of
Business Intelligence facilities whereby it gains information about the kind of products which it
will be selling in the given market.
The Met Cash Company gathers this market data with respect to its customers using
methods like survey, interviews, monitoring the outlets of the competitors. The company also
purchases some data from various sources (Kotler 2015). The specialists are hired who go a long
way in assisting the organization to gather relevant data.
Tools such as the Google Consumer Survey is used to do so and to analyze the different
customer movements and trends. When a particular trend is identified, the company then ensures
that it is able to successfully cater to the given need.
Which competitors pose a threat?
To understand the competitor dynamics, the company conducts various external market
analysis like the Porters Five forces regularly in order to understand the role in the business
domain (McDaniel and Gates 2013). Furthermore, it conducts various outlet visits and other
techniques in order to see where the company is lagging and which areas the company needs to
cater to. Furthermore, it also takes in consumer feedback in order to understand the different
competitor’s requirements (Chaffey and Ellis-Chadwick 2016).

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How the context of business is changing, if at all?
The business analyzes the market trends in order to understand the changing phase of the
business. The business has changed considerably with the advent of technology and the
introduction of e-commerce domain. Earlier, Met Cash was a market leader in the given domain,
however as globalization increased the local suppliers are being used by different global
competitors which is leading to problems.
Furthermore, the customers these days prefer shopping online and shopping hassle free
and for this reason, the markets have been affected (Baker and Saren 2016).
What role collaborators play in the process?
The collaborators have a key role to play in the business domain. These collaborators
include the food retailers, liquor retailer and hardware retailers (Kiel 2014). These retailers assist
the business, Met Cash to conduct the business operations smoothly and assist them in achieving
sustainable success.
Issue 4
The given section will outline the different segments of the market which the company
aims to cater to and also outline the justification under each heading
Segment number 1: Local retailers
The company Metcash plans to increase its independent suppliers and retailer chain and
aims to expand it through the Australian Market (Pasquier and Villeneuve 2017). It knows that
customers and retailers these days like to stock products which have been produced organically

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and thus, it has targeted the given segment in order to ensure that it is able to capture the root of
the supply chain.
Value Proposition
The company aims to offer premium quality products with a large variety at unique prices to
these retailers in order to enable them to compete with the international and national competition
(Czinkota and Ronkainen 2013).
Positioning statement
The positioning statement of the company is as follows:
Metcash offers the local retailers with unique quality goods sourced directly from the suppliers
which helps them to increase their offerings and gain competitive edge.
Segment number 2: Customers
Along with the retailers the company also aims to make an offering to the different
customers through its IGA Market segment in order to increase its market share (Hartley and
Claycomb 2013). The company will be getting the products directly from its parent company and
thus it shall aim to reduce the costs and increase the profits earned by the company.
Value Proposition
The IGA Markets under the Metcash will be offering the consumers with cheaper
products which will be organic in nature and will be providing the customers with goods at
affordable prices (Gronroos 2016).
Positioning statement
The positioning statement of the company is as follows:

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Metcash and IGA Markets aims to offer a large variety of goods to the different consumers at
affordable prices.
Segment number 3: National retailers
The company understands that although it aims to sustain the international and national
competition, it is still a long way to go and for this purpose, the company aims to supply the
goods and products of the local suppliers to the national retailers as well. This shall enable them
to increase the wholesale share market (Wilson et al. 2016).
Value Proposition
The national supermarkets will be able to achieve good quality products from the local
suppliers which increases its edge.
Positioning statement
Metcash aims to offer organic and fresh products to the different retailers who want to save
costs and increase the choices.
Segment number 4: Restaurants and Cafes
It has been suggested that the company should try and cater to the need of the Restaurants
and Cafes as well (Stead and Stead 2013). As the country Australia, is primarily famous for the
cafes and restaurants, Metcash can take an effort to fulfill their needs and offers them goods and
raw materials. This is an explored section which the company can cater to.
Value proposition
As the restaurants are often in need of good quality products, Metcash will solve their
problem and offer them various ingredients needed at cheap prices (Ramaswamy and Mosher
2013).