Global Marketing Report: Wayfair's Entry into the Australian Market

This report provides a comprehensive analysis of Wayfair's global marketing strategy, specifically focusing on its potential expansion into the Australian market. It begins with an executive summary and introduction to Wayfair, an American online retailer of home goods. The report proposes a foreign market expansion into Australia, supported by a brief economic analysis highlighting Australia's robust economic growth and favorable infrastructure. A cultural analysis compares Australia and the US using Hofstede's cultural dimensions, identifying key differences that could impact marketing plans. The report then analyzes the Australian market for Wayfair's product category, evaluates local and international competitors like Zanui and eBay, and estimates the potential market size. Governmental regulations and a preliminary marketing plan, including marketing objectives, a SWOT analysis, and a marketing mix, are also outlined. The report concludes that Wayfair can achieve significant market share in Australia by effectively utilizing its marketing mix, and the primary entry mode proposed is exporting.

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Executive summary
Global marketing is not just about marketing products universally. Global marketing includes
the comprehensive procedure of planning, producing, retaining and endorsing products of the
corporation in the international market. This report includes the global marketing of Wayfair.
The foreign market expansion is proposed for Wayfair by doing a brief economic analysis of
Australia along with the cultural analysis of Australia and the USA. The features of the
cultural analysis of both countries have been identified in the report. The market of Australia
has beenanalyzed for the product category. The report has also evaluated the local and
international competitors in the market of Australia. The market size of the company has
been also estimated in the Australian market. The government regulations applicable for the
company have been also identified in the report along with the preliminary marketing plan.
At the end, it can be concluded that Wayfair can attain mark able market share by making use
of the marketing mix.

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Contents
Executive summary....................................................................................................................1
Introduction................................................................................................................................3
Proposed foreign market expansion...........................................................................................3
A brief economic analysis to validate the country section and the entry mode.....................3
Cultural analysis of the proposed foreign country and comparison of the foreign country
with the home country on Hofstede’s cultural dimensions....................................................4
Identification of the features of the cultural differences which can impact on the elements
of the marketing plan in the foreign country..........................................................................6
Analysis of the foreign market for the product category........................................................6
Evaluation of the local and international competitors in the foreign market.........................6
Estimation of the market size in the foreign country for the company..................................7
Identification of the governmental regulations and policies which are related to
the market/industry.................................................................................................................7
Preliminary Marketing Plan in the Foreign Market...................................................................8
Marketing objectives..............................................................................................................8
SWOT analysis.......................................................................................................................8
Marketing mix........................................................................................................................9
Conclusion................................................................................................................................10
Bibliography.............................................................................................................................12

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Introduction
Wayfair is an American company specialized in selling home goods. Formerly Wayfair was
recognized as CSN stores. Wayfair was established in 2002 and has gained popularity in
selling home furnishings and décor items. The company Conine is headquartered at Boston,
Massachusetts. The company is having offices and warehouses throughout the US along with
Germany, Canada, UK, and Ireland. Wayfair sells its furniture all over the world and is well
known for the quality of the products. The company sells its merchandises completely online.
Wayfair is having no physical store. Wayfair started expanding its business to the
international markets in 2008. At that time the company was experiencing steady growth in
the US so decided to expand its operations into the UK and Canada. When it comes to the
actual sales, Wayfair ranks 3rd in the US followed by Amazon and QVC. Wayfair has
managed to grow quickly in a short span of life and is capable of meeting with all the
demands. The company is having almost 10,000 employees. Over the eight years, the
company has established more than 270 separate websites and each of which sells a precise
category of the home goods. The typical customers of the company are women between the
ages of 35 and 65 within an income level of $60,000 to $175,000.
Wayfair stated that the US home goods marketplace is anticipated to develop at $297 billion
by 2023 grounded on the Euromonitor global data. Wayfair is not just about another furniture
company but has reinvented the way individuals shop for their homes. The company
experiments with mixed reality in order to boost the product discovery experience. Wayfair is
paving in order to optimize final delivery at scale. The company is continuously making the
biggest business endeavor by innovating on a regular basis in order to form ultimate home
goods shopping experience.

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Proposed foreign market expansion
A brief economic analysis to validate the country section and the entry mode
The Australia trade is recording a robust growth from several years. The trade liberalization
of Australia has boosted the real GDP. As a result, the real income of Australian households
has lifted by $8400. The economy grew at a rate of 3.8% in 2018 which is above average.
The increasing rate of GDP weighted to Australia’s growth. It is favorable for companies like
Wayfair to invest in Australia as infrastructure investment is strong in the country. The
housing investment is strong and has peaked the retail trade1.
The economic freedom notch of Australia is 80.9 which make it the fifth freest in 2019 index.
The government supports the structural changes going on in the country through the trade tax
cuts, alterations in the labor market and arbitration of further free trade agreements. Australia
is having a strong free-market democracy which has been promoted from the effective
system. The government is also facilitating vibrant tactical development. The skilled
workforce is available to the companies trading in Australia which remains an attractive and
lively destination for investment2.
The entry mode proposed to Wayfair to enter into Australia is exporting. The exporting is
mainly the easiest way to arrive into the external market. The exporting is all about the sale of
products and services in the foreign country and the products are sourced from the home
nation. This mode of entry is suitable for Wayfair as it will avoid the expense of establishing
operations in Australia. Wayfair is required to go through the contractual agreement with the
local distributor of the host country.
1 Rexhepi, Gadaf, Abdylmenaf Bexheti, Sadudin Ibraimi, and Selma Kurtishi-Kastrati. "The importance
of intellectual capital in the selection of global marketing strategies: evidence from family businesses
in Macedonia." International Journal of Transitions and Innovation Systems 6, no. 2 (2018): 108-117.
2 Kasemsap, Kijpokin. "The roles of social media marketing and brand management in global
marketing." In Social Media Marketing: Breakthroughs in Research and Practice, pp. 425-453. IGI
Global, 2018.

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Cultural analysis of the proposed foreign country and comparison of the foreign
country with the home country on Hofstede’s cultural dimensions
The culture is the profounder level of basic notion and assistances which are shared by the
people of the company. These are the inner values and benefits generally held by individuals.
The comparison of Australia with the US on the basis of Hofstede’s cultural dimensions is
mentioned below:
Power distance: The power distance is the range in which less influential members of the
organization within the nation anticipate that power is distributed unequally. The US is
having lower power distance ranking which is 40. It reflects greater quality between
government, society, organization, and families. It shows that the accommodating
interactions across all power label which create a suitable cultural environment. On the other
side, the power distance in Australia is comparatively low with the index of 36 associated
with the domain average of 55. It indicates to the better parity between social levels
comprising organizations, government, and families3.
Vagueness avoidance: The vagueness avoidance transacts with society’s lenience with
indecision and obscurity. It represents how uncomfortable or comfortable members of the
organization feel in unstructured situations. The UK is having an informal business attitude
and the members pay more attention to the essence than the form of the business. Therefore,
the business objective can be attained in a relaxed business environment. Comparatively,
Australians do not like indecision and companies like constancy for the associates. The
county has even attained a score of 27 on the scale of indecision avoidance. The Australians
struggle for consensus, follow several rubrics and incline to have more strain and
nervousness.
3 Al‐Khatib, Jamal A., Mohammed I. Al‐Habib, Naima Bogari, and Najah Salamah. "The ethical profile
of global marketing negotiators." Business Ethics: A European Review 25, no. 2 (2016): 172-186.

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Individualism: The individualism states to the extent to which persons are united groups. The
individualism index for the US is 91. The US is having two types of individualism, high
individualism, and low individualism. High individualism donates to more involvement
within the organization whereas low individualism is defined as low interaction and
dependence. There is a high level of independence in Australia. The individualism index for
Australia is 90 which are 2nd highest after the US. The individuality is strengthened in the
routine lives of the Australians and is undertaken while conducting business.
Masculinity: The masculinity is all about the range to which values are dominated in the
society. The gender roles are clearly distinct as per the masculinity where men are supposed
to be hard whereas women are expected to be tender and shyer. The US is having a large
gender difference and society is more of male-oriented. The males are considered a
significant part of the society and the females are more competitive. On the other side, almost
58% population in Australia is male oriented which represents that women are still not
deliberated to be equal to men in the several fields4.
Long term orientation: This dimension emphases on the degree society holds or do not holds
long term dedication to out-dated, frontward thinking values. The US ranks lower in the long
term orientation which reflects that the society is having cultural traditional as per the rules
and guidelines. On the other hand, the long term alignment in Australia is at 30% which is
quite low. It also reflects that the Australian community is more likely to lean towards short
term alignment than the long term.
4 Ratten, Vanessa. "Gender entrepreneurship and global marketing." Journal of Global Marketing 30,
no. 3 (2017): 114-121.

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Identification of the features of the cultural differences which can impact on the
elements of the marketing plan in the foreign country
People in the US are open in terms of putting down competitors and Australia has a strong
sense of fair play. Criticizing competition in Australia is regarded as bad form in the
business. The form of competition has a great role in the marketing plan of Wayfair. There is
a culture of delivering criticism freely in the US at the workplaces; it can cause awkwardness
in Australia. The Australians do not have a robust sense of face and do not appreciate
criticism at the workplaces. The differences in the cultural differences create problem in the
marketing plan of the Wayfair in Australia.
Analysis of the foreign market for the product category
The Australian market is having a diverse array of sectors from furniture to furnishings.
Furnishing companies are an important contributor to the Australian economy. The operators
in the online home furnishing industry retail a range of home textile and furnishing products
online. The home furnishing products in Australia are mainly sold in conjunction with other
housewares like furniture and decoration items. The growth in online furniture retailers has
assisted online home furnishing sales as customers are likely to purchase home furnishing
items on online platforms only. The concerned industry has also grown robustly in the last
five years because of the increased acceptance of online shopping among Australian
customers. The customers are even prepared to purchase online5. Online shopping will
support the growth of Wayfair in Australia. The Australian government offers an easy
platform for the marketing and campaigns of furnishing products. A cost-effective national
delivery solution is also offered to the retailers in order to support in their transition. The
furniture retailers in Australia have been assisted in being more effective and profitable
business which can better match the demand of the market.
5 Steenkamp, Jan-Benedict. "Global Marketing Mix Decisions: Global Integration, Not
Standardization." In Global Brand Strategy, pp. 75-109. Palgrave Macmillan, London, 2017.

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Evaluation of the local and international competitors in the foreign market
Australia is having a significant number of furnishing companies such as Zanui, eBay,
Freedom furniture, Amara and more. Zanui is an online marketplace which enables users to
purchase furniture, decoration items, rugs, bedcovers and more. The company has got
specialization in offering stylish and innovative products. It is even committed to the high-
quality products along with offering a wide product range in Australia. eBay offers great
offers to the customers in Australia. eBay sales products under various categories. The
company has dominated the online market in Australia and is identified as 5th most popular
website. Add on, Freedom is an identified furniture retailer in Australia with 65 stores across
Australia and New Zealand. The company makes use of the sound strategy for the challenges
taking place in the space6. Amara will also be identified as a competitor in the Australian
market. The company makes available growing product range from world-famous designers.
Amara was even rewarded in 2011 for the hard work as best online customer services. Amara
strives to ensure that the customers have an enjoyable shopping experience every time.
Estimation of the market size in the foreign country for the company
Wayfair can face stiff competition initially in Australia as there is a majority of brick and
mortar stores all over the nation. Wayfair has not planned to open any physical store in
Australia. The company will be focusing on the inventory light model would not fit. Initially,
the company will be having a small size of the market size in the Australian market. As soon
as the company establish itself in the Australian market can have almost 10% market share.
6 Beck, Joshua T., Kelly Chapman, and Robert W. Palmatier. "Understanding relationship marketing
and loyalty program effectiveness in global markets." Journal of International Marketing 23, no. 3
(2015): 1-21.

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Identification of the governmental regulations and policies which are related to
the market/industry
Wayfair is required to follow the government regulations and policies of the Australian
government concerning the furniture industry. The government initiatives ensure the
development of business growth for the highly skilled and innovative manufacturing industry.
Wayfair will be dealing online in the Australian market so it is required by the company to
encounter product safety necessities under the Australian Consumer Law (ACL). Being
manufacture, Wayfair has to obey with obligatory Australian safety standards. The
mandatory standards include the laws, consequences and significances for marketing
products which do not comply7.
The Australian Competition and consumer commission (ACCC) imposes obligatory product
safety and evidence values. It bans on the unsafe products acknowledged under the
opposition and consumer act 2010. Wayfair will be required to offer clear instructions for the
appropriate use and comprise warnings against the conceivable misuse. The company selling
products online will be required to use a good quality photo of the products and offer proper
instructions along with the usage.
Preliminary Marketing Plan in the Foreign Market
Marketing objectives
Wayfair focuses on the high-end market. It is the objective of the company to focus on the
households. The online penetration of the company is on the home business and aims to
grow. The company is likely to create an in-store feeling online with the new technology. The
market penetration plan of Wayfair considers having customer profiles which have some
visible differences. The geographic segment divides the market according to the geographical
7 Lasserre, Philippe. Global strategic management. Macmillan International Higher Education, 2017.

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areas such as the city and region in Australia. The market will be divided as per the
demographic characteristics such as age, gender, ethnicity, and income8.
SWOT analysis
Strength
Distribution and reach: Wayfair has several numbers of channels in virtually every state
which is reinforced by a robust distribution network. It ensures that the products are easily
accessible to the great number of customers in an appropriate manner.
Dealer community: Wayfair has maintained a robust association with the traders who
provide the company with the good suppliers. The dealers also assist the company in
promoting products and training.
Automation: The automation of several stages of production has enabled the more effective
use of resources and dropping costs. It also permits for constancy in quality of the products
and offers the capability to scale up and scaling down production according to the demand in
the market.
Weakness
Research and development: Wayfair is spending more than the normal research and
development expenditure within the trade but it is less than the few established companies of
the industry. The rivalries have attained a substantial advantage due to the outcome of the
innovative results.
Low current ratio: The current ratio represents that organization’s capability to encounter
short term financial accountabilities, is less than the industry average. It can also mean that
the organization can have liquidity problems in the coming period.
8 Kotler, Philip, Suzan Burton, Kenneth Deans, Linen Brown, and Gary Armstrong. Marketing. Pearson
Higher Education AU, 2015.

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Opportunities
More expansion: The number of internet users is growing day by days all over the world. It
indicates sufficient opportunities for the Wayfair to enhance its presence online in order to
appeal to customers.
Transport industry: The transport industry is prospering from the last several years and
indicates growth latent in the coming years. It has significantly abridged the costs of
transportation and is useful for the company as it can lower the complete costs.
Threats
New entrants: There are several players who have arrived in the same industry and are
attaining market share by acquiring an prevailing company’s market share. It is a hazard to
the company as it can lose the customers to the new applicants.
Rise in the prices of fuels: The rise in the prices of the fuel has created a threat to the
company by increasing the input costs. Such costs have even enlarged as other industries
offer inputs for the company also agonized from enhanced fuel prices by alleging more.
Marketing mix
Wayfair is required to mature marketing mix strategies in order to attain desired results
within the market.
Product: The company retails products under five broad classes. Each category aids separate
product lines. All the products of the company are sold under the brand name of Wayfair Inc.
the business offers a lot of variety to the customers and the customers can pick the products
suitable for them. The products of the company are perceived to be of good quality than the

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rivalry companies. Wayfair sells products which are famous for the outdated design which is
also concrete for the customers to access9.
Price: The current pricing strategy followed by Wayfair is competitive based pricing. It is
because data on the contestants is easily accessible due to a large number of contestants
which exists within the trade. The company takes into consideration to setting prices for the
fewer products for which information is not accessible to the competitors. Wayfair charges a
superior price for the products sold online. It is because delivery costs are comprised of the
price of the products.
Place: Wayfair sells products by 2 marketing channels. In the first channel, the company sells
directly to the customers by its online website. The second channel is where products are sold
to the retailers and then these wholesalers sell products to the various retailers all over the
nation. Thereafter products are sold to the customers10. The company believes in offering an
omnichannel distribution system where online and offline stores are united to enable
customers easy access to the products.
Promotion: Wayfair makes use of several media channels in order to endorse the products.
The company uses old-style media which comprises an advertisement on radio and TV. It is
advantageous to reach to the wider audience and attract them. The online and social media
advertising is also used by the company which is beneficial and cheap because of the
enhanced usage of the internet.
9 De Mooij, Marieke. Global marketing and advertising: Understanding cultural paradoxes. SAGE
Publications Limited, 2018.
10 Ibeh, Kevin, David Crick, and Hamid Etemad. "International marketing knowledge and international
entrepreneurship in the contemporary multi speed global economy." International Marketing
Review 36, no. 1 (2019): 2-5.

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Conclusion
From the economic analysis of Australia, it can be evaluated that Wayfair can trade well and
can have significant market share over time. The entry mode proposed to Wayfair to enter
into Australia is exporting. It is mainly the calmest way to enter into the overseas market. As
per the Hofstede’s cultural dimensions, Wayfair can adopt the culture of Australia. The
company is going to face lots of competitors in the Australian economy, but the product
quality can help the company to attain a good market share.
The company will be required to follow the guidelines of Australian competition and
consumer commission (ACCC). The company will have some product category as in the US.
Wayfair will be charging a superior price for the products sold online. It is because
distribution costs are comprised of the price of the products.

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