Customer Marketing Report: Analysis of Woolworths and Coles Strategies

This report provides a comparative analysis of the customer marketing strategies employed by Woolworths and Coles, two leading supermarket chains in Australia. The introduction establishes the importance of marketing and customer retention in business success. The report examines Woolworths' focus on cost reduction, online shopping convenience, and petrol discounts, while also noting its struggle to form strong customer relationships. It highlights the increasing competition from Coles and other retailers. Coles' strategies, including its digital device, hiku, are also evaluated, alongside criticisms of their approach to suppliers. The report concludes that while both companies dominate the Australian market, their long-term success depends on addressing customer criticisms and adapting to evolving market dynamics. The report references several academic sources to support its analysis.

CUSTOMER MARKETING 1
Customer Marketing
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CUSTOMER MARKETING 2
Customer Marketing
Introduction
Marketing is an essential component of business management consisting of all the activities and
processes involved in thecreation, communication, delivery and exchange of valuable offerings
for partners, consumers and the society in general (Baker, M.J. and Saren, M. eds., 2016). It is
therefore a mutually beneficial activity among all the participants of the supply chain as it creates
employment opportunities and wealth leading to societal wellbeing.Customer marketing involves
all the activities carried out to retain the current customer base as opposed to attracting new ones.
Its main goal is to formulate strong bonds between the organization and their customers with the
aim of increasing sales. This is because the probability of selling to existing customers is way
higher than that of making sales to a prospective customer (Di Benedetto, C.A. and Kim, K.H.,
2016).
Woolworths
Customer loyalty to a certain organization is majorly influenced by the perceived value of their
money from the company and their relationship with the company which makes shopping more
convenient (Gummesson, E. and Gummesson, E., 2017). Woolworths’ strategy so far has been
reduced cost for their products which has created a large customer base. The group has also
increased the convenience of shopping in their supermarkets by making their goods available
online by use of the Woolworths Supermarket Application, as well as making free deliveries of
their groceries.In addition, petrol and grocery discounts have increased their customer base by
increasing the value of people’s money. However, they havenot been able to form very strong
relationships with their customers which has led to the rise of their competitors for example
Australian Supermarket Group. Woolworths’ largest competitor is Coles supermarkets with
whom they have secured a very large portion of the Australian market. Unfortunately, the group
seems to concentrate more on competing rather than satisfying their customers. This is a very
dangerous move marketing-wise because the customer feels unvalued and leaves as soon as there
is another good alternative.
Woolworths group work closely with the Australian farmers and growers to ensure that their
customers have access to the best products making it one of Australia’s largest food and liquor
retailer. It is important for an organization to have a close relationship with their suppliers but a
group as huge as Woolworths would find it cheap enough to grow their fruits and vegetables.
This would reduce their cost of operation even more in the long run and they would reap greater
profits.
Coles
Coles supermarket chain has had criticisms on battling dairy farmers and providing cheap milk.
This has damaged its reputation as one of the largest retail chains in Australia, probably pushing
away some of its customers and leading to the rise on the top of competitors like Aldi who offer
quality products at incredibly low prices. Coles supermarkets therefore have a long way to go as

CUSTOMER MARKETING 3
far as value addition on their products is concerned. If they invested in a dairy farm, however,
some of theseproblems would be solved especially in the long run.
Coles’ digital device, hiku has increased customers pleasure and experience in shopping as it
uses voice recognition enabling them to remember all the required items and automatically
addthem to an online shopping list. This is however not sufficient to retain their clients through
time and just like Woolworths they need to work on theretailer-client relationship (Elliot, G.,
2017).
Both Woolworths and Coles use mass marketing as their strategy of marketing with the aim of
reaching out to all people all over Australia. They, however, do not pay attention to criticism
from their customers on social media which could have very negative impact on their operations
in future.
Conclusion
Coles and Woolworths are still doing very well as they still cover about 80 percent of the
Australian market. The main reason for this is that they both have been in business for a really
long time. If they continue ignoring people’s criticisms on their products, however, their market
size will start to decrease gradually leading to thecontinued rise of other smaller markets such as
Aldi.
References
Elliot, G., 2017. (AUCM) Enterprise, Innovation & Market 4E Custom for Sydney University
Wiley E-Text. 4ed. Milton: Wiley.
Garlin, F., Hayek, J., Mariyani-Squire, E., & Spanjaard, D., 2017. Enterprise Innovation
and Markets. John Wiley & Sons Australia, Ltd.
Baker, M.J. and Saren, M. eds., 2016. Marketing theory: a student text. Sage.
Di Benedetto, C.A. and Kim, K.H., 2016. Customer equity and value management of global
brands: Bridging theory and practice from financial and marketing perspectives: Introduction to a
Journal of Business Research Special Section. Journal of Business Research, 69(9), pp.3721-
3724.
Gummesson, E. and Gummesson, E., 2017. From relationship marketing to total relationship
marketing and beyond. Journal of services marketing, 31(1), pp.16-19.
Hollebeek, L.D., Conduit, J. and Brodie, R.J., 2016. Strategic drivers, anticipated and
unanticipated outcomes of customer engagement.