Marketing Management Report: Woolworths' Organic Product Strategy

This report offers a comprehensive marketing analysis of Woolworths, a major Australian retailer, focusing on its strategic positioning in the market. It begins with an introduction and an overview of the industry, assessing current market trends and evaluating Woolworths' performance using key financial metrics. The report then delves into a PESTEL analysis to understand the macro-environmental factors influencing the company's operations, followed by a competitive analysis comparing Woolworths' strengths and weaknesses against its main competitors like ALDI, Wesfarmers, and Coles. The report identifies major market segments, specifies primary and secondary target markets, and discusses consumer involvement levels in decision-making. Furthermore, it constructs a positioning map to visualize Woolworths' place in the marketplace considering its primary target segment and the competitive environment. The report concludes with a summary of findings and recommendations for Woolworths' marketing strategies, supported by references to relevant academic and industry sources.

Running head: MARKETING MANAGEMENT
Marketing Management

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Table of Contents
Introduction...........................................................................................................................................3
Industry market and evaluate current trends of Woolworths.................................................................3
Describe the nature of competition in your industry. Explain and analyse your organisation’s place in
the market by comparing and contrasting its strengths and weaknesses to your main competitor.........7
Outline and examine the major market segments for your organisation and identify your primary and
secondary target markets.......................................................................................................................9
Discuss the level of involvement your primary segment is likely to have towards your organisation in
terms of the decision making...............................................................................................................12
Taking into consideration the primary segment, their level of involvement and the competition, create
a positioning map for the marketplace.................................................................................................12
Conclusion...........................................................................................................................................13
References...........................................................................................................................................15

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Introduction
This report presents a business plan for Woolworth’s retail limited. It discusses target market
and target audience for introducing organic product and services. It also presents the industry
market for Woolworths limited and examines current trends effectively. It also discusses the
PESTEL analysis for evaluating the situation of Australian country. It also depicts
competitor’s analysis as it helps to understand the position of competitors for obtaining a
favourable result. It also discusses the primary and secondary market for delivering organic
products and services in Australia.
Industry market and evaluate current trends of Woolworths
The evaluation industry market is supportive for gaining the understanding of the market. It
will be effective for introducing targeted product and services in the marketplace. In this,
three factors are considered by the organization like growth, profitability, and macro
environment.
Growth
The growth of organization demonstrates fluctuation of the firm with respect to the financial
condition. The following table shows gross margin, operating margin, and EBIT margin that
is considered to evaluate the financial situation of the firm (Sutton-Brady, Kamvounias, and
Taylor, 2015).
(Sources: Woolworths Ltd (WOW), 2018).

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From the above chart, it is analysed that the gross margin of the firm is enhanced by 4% as
compared to the last record.
Profitability
The profitability could be supportive for evaluating actual flows of cash within the firm.
The following table demonstrates the profitability of firm:
(Sources: Woolworths Ltd (WOW), 2018).
Macro Environment (PESTEL factor)
The PESTEL analysis is effective to evaluate the situation of the country. PESTEL is a
strategic technique to evaluate the macro environment of the Woolworths retail company in
Australia. PESTEL considers different factors like political, economic, social, technical,
environmental, and legal that could influence macro environment of Woolworths Limited in
Australia (Lawley, Birch, and Craig, 2016).
Political Factor
The political factor plays an imperative role in identifying the elements that could influence
the profitability of Woolworths limited, Australia. Woolworths limited deals in Food &
Staples trade at international level. For successfully delivery of foods products and services,
the organization identified the political factor that could influence the business process. These
political factors are the stability of politics, and the significance of organic product and

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services in Australia. It will also support the organization to develop an association between
free markets and control system (Bayne, Schepis, and Purchase, 2017). In Australia, there are
different factors that could impact on business performance such as foreign trade policy, tax
policy, overseas market, labour law, and trade restriction. It will directly impact on the
growth of business. Hence, it could be stated that this country could be beneficial for
investing in the food industry (Balmer, Abratt, and Kleyn, 2016).
Economic Factors that Impact Woolworths Limited
The economic factor could direct impact on the performance of business like an economic
cycle, foreign exchange rate, interest rate, and saving rate. It will also be supportive to
identify the aggregate investment and demand of the economy. The economy of the country
could direct impact on getting competitive benefits. The lower inflation rates enable the
organization to invest in the food industry and obtain higher benefits from it. The lower
interest rate could offer the opportunity to organization for introducing their goods and
services in Australia (Zarkada-Fraser and Fraser, 2015). There are certain economic factors
that could also influence the business named government intervention, lower level of the
regulation act, disposal incomes, and growth rates. It will support Woolworths Limited to
obtain the competitive benefits in Australia. The skill of an employee could also impact on
the income level of economy. The income could be an important factor in taking an effective
buying decision. It is also analysed that the education level of consumers could also influence
the productivity of organization as well as employees (Armstrong, Adam, Denize and Kotler,
2014).
Social Factors that Impact Woolworths Limited
The social culture demonstrates interest, attitude, and belief of the population. The
organization should understand needs and beliefs of consumers towards products and services
for effectively producing products and services and obtain a positive outcome. The attitudes

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and beliefs of consumers could play a greater role in how marketers comprehend consumers
and how they plan the marketing message for delivering the foods. Moreover, certain social
components could affect the business performance like level of skills among population, class
structure, culture, nature of the society, attitude (career, health), and leisure interest (Santos,
Svensson, Padin, and Høgevold, 2015). Thus, it is analysed that Australians are health
conscious so Woolworths limited could be capable to get higher benefits in less time and
cost.
Technological Factors that Impact Woolworths Limited
The technical factors could also impact on the performance of business. The technique could
support an organization to gain awareness of their product and services at shorter time with
less cost. There are many technical factors that could impact on the business growth like
innovation and discoveries, advanced technology rate, and new techniques podiums. Further,
it is also addressed that Australian believes in advance techniques to consume any product
and services (Powell, 2016). Consequently, it could be imperative for Woolworths to gain
their productivity and efficiency. Moreover, Woolworths could invest in the organic foods in
Australia to get a higher return. In addition, it is also analysed that changes in the technology
could affect production level of the firm. It could also impact on the cost and value chain
structure of the firm. Hence, it can be said that technical factor could be an important for
obtaining success by new product and services (Rosenbaum-Elliott, Percy, and Pervan,
2015).
Environmental Factors that Impact Woolworths Limited
The environmental factor could also a direct impact on business growth. It is also analysed
that different regions have different environmental standards that could influence the
profitability of the firm. The country has made their environmental and liabilities laws as it
would influence the success and failure of business. There are certain factors that could be

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different from the country to country like weather, climate change, laws and regulating
environmental pollution, air and water pollution in food retailing industry, recycling, waste
management, and attitude ecological product and services (Rajabian Tabesh, Batt, and Butler,
2016). Hence, it is analysed that Australia could be the best place for introducing the new
organic product and obtain a favourable result.
Legal Factors that Impact Woolworths Limited
The legal factor could be imperative for getting a positive or negative result. Moreover, a
large number of institutions are failed to protect their intellectual property due to the
appropriate legal framework. Hence, PESTEL is used by Woolworths limited to evaluate
specified market condition before entering into the Australian market. Consequently, it would
support to eliminate the possibilities of failure in the specified marketplace. Woolworths
should consider certain legal factors such as Anti-trust law, discrimination law, Consumer
protection and e-commerce, Consumer protection, and e-commerce (Sutton-Brady, Taylor,
and Kamvounias, 2017). Other legal factors are Consumer protection and e-commerce, data
protection, consumer protection and e-commerce, employment law, and consumer protection.
Since, these factors could direct impact on the success of firm.
Describe the nature of competition in your industry. Explain and analyse your
organisation’s place in the market by comparing and contrasting its strengths and
weaknesses to your main competitor
Woolworths Supermarkets Competitors (ALDI, Wesfarmers and Coles
group)
Strength
 It is oldest and famous retail brand
in Australia
 Woolworths limited has a huge
Strength
 A higher level of international
presence
 It offers top quality products at the

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market share and a large number of
supermarkets
 A higher range of product and
services
 An effective amalgamation of brick
and motor, and online sales
distribution
 Strong commitment to atmosphere
and sustainability
 Effective corporate social
responsibility programs
 The market share of Woolworths is
36.8% that is highest as compared to
the competitors
reasonable prices to their consumers
 Maintain the low level of operating
cost
 Use digital marketing techniques
 The higher rate of success from the
online retail in Australia
 A strong image in the marketplace
Weaknesses
 The lower level of international
presence
 Late enter into the online channels
 Slow growth of online retail in
Australia
Weaknesses
 Low level of advertising as compared
to the Woolworths supermarkets
 Limited range of products and services
 The lower level of client satisfaction
 Less market share
Strength
As per the above table, it could be analysed that Woolworths supermarket is oldest and well-
recognised retail brand in Australia while its key competitors i.e. ALDI, Wesfarmers and
Coles group has a higher level of international presence. It is also assessed that Woolworths

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has a huge market share and a large number of supermarkets due to deliver a higher range of
product and services. In contrast to this, its competitors offer top quality products at the
reasonable prices to their consumers. It is also evaluated that Woolworths has maintained
effective amalgamation of brick and motor and online sales distribution whereas its
competitors have maintained the low level of operating cost (Bailey, 2016). Furthermore,
Woolworths has a strong commitment to atmosphere and sustainability along with it
organises effective corporate social responsibility programs. On the other hand, competitors
of Woolworths use digital marketing techniques to make their unique position in the retail
industry. It is also observed that the market share of Woolworths is 36.8% that is highest as
compared to the competitors. In opposed to this, its competitors have a higher rate of success
from the online retail in Australia and also have a strong image in the marketplace (Fernie,
and Sparks, 2014).
Weakness
Above table shows that Woolworths has a lower level of international presence. It has also
late entered into the online channel. In opposed to this, its competitors have a low level of
advertising as compared to the Woolworths supermarkets. Competitors of Woolworths also
offer a limited range of products and services. Woolworths has low growth of online retail in
Australia while its competitors provide a lower level of client satisfaction as it has a low
market share as compared to Woolworths (Ellis, and Waller, 2017).
Outline and examine the major market segments for your organisation and identify
your primary and secondary target markets
Market segmentation
The market segmentation could support Woolworths limited to classify their market and
introduce their product. There are different factors, which are considered by the organization
to classify their market such as buying behaviours, psychographic traits, geography, and

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demographics. The segmentation could support the organization to make marketing efforts in
the business process. Woolworths retail organization could offer quality product and services
to their selected consumers (Warland, 2017). Through this, an organization could categorize
their potential consumers on behalf of income, and interest level. Woolworths limited could
also provide a special discount on the weekend and special occasions as it would attract more
consumers and improve the sale of organization. Through this, Woolworths limited would
classify consumers on behalf of their age gender, and income. The consumers would focus on
the age group of 17 to 37 years of consumers to offer their product and services (AO Dos
Santos, Svensson, and Padin, 2014).
(Sources: Abratt, Higgs, and Nel, 2015).
Moreover, Woolworths limited could select this age group because this group of people
would give more preference to the health. The company would focus on both middle and
business class to deliver their services. Woolworths limited would also offer their service at
reasonable price and cost due to attracting both middle and higher class for long-term.
Woolworths limited would classify their consumers on behalf of their need for encouraging
consumer’s purchasing decision (Abratt, Higgs, and Nel, 2015).
Behavioural Segmentation
The organization could segment their consumers on behalf of their opinion towards the
organic product. This approach enables an organization to understand the behaviour of people
as it would be effective to satisfy consumers and retain them for long-term. The organization
would provide a discount on their products and services for getting a positive result. Through

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this approach, the organization would focus on categorizing consumers on behalf of price,
income, and interest. It would be significant to get favourable result regarding specified
organizational goal. The behavioural segment also supports Woolworths limited to separately
understand consumer and satisfy them in limited time and cost (Groeger, Moroko, and
Hollebeek, 2016). As a result, an organization could be capable to change the buying
behaviour of customers.
Geographic Segmentation
Woolworths limited could categorize their market on behalf international, national, and
regional basis to attract a huge number of consumers. Moreover, there are many factors that
could be considered by an organization like occupation, income, and business. It would
directly impact on the performance of organization (Devin and Richards, 2016).
Market size
The organization could focus on the larger market rather than the small market for getting
higher profitability in the least time. If the market is too small to generate a huge amount of
profit then Woolworths limited should determine the target market with specified product.
Consequently, Woolworths limited will be capable to obtain the positive result (Beneke,
Chamberlain, Chohan, and Neethling, 2015).
The market for Woolworths organic product and service
Woolworths limited would categorize their markets in two parts like the primary and
secondary market. It is discussed as below:
Primary market
The primary market is essential for an organization to obtain a higher amount of profit. It will
also assist an organization to influence the behaviour of employee. Woolworths limited will
focus on sports and health conscious people to offer their services in the marketplace. They
could direct impact on the sales and growth of company (Devin, and Richards, 2016).

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Secondary market
The secondary market is also essential to obtain long-term profit. It mainly focuses on the
future primary buyers. Thus, it is also analysed that Woolworths limited would focus on
people who could deliver the company’s services in the marketplace like a wholesaler,
retailer, and intermediate. It could support an organization to obtain the positive outcome
(Groeger, Moroko, and Hollebeek, 2016).
Discuss the level of involvement your primary segment is likely to have towards your
organisation in terms of the decision making
Primary Segment
Woolworths could target their consumers as per different elements such as behavioural,
psychographic, geographical, and demographics. On behalf of a geographic factor,
Woolworths limited will classify their consumers who come from the urban region of
Australia. The company will select both genders of people such as female and male.
Moreover, Woolworths limited would select 17-37 years of people to deliver their products
and services in Australia. Woolworth retail organization would focus on both medium and
upper-class consumers (Abratt, Higgs, and Nel, 2015). On the basis of a psychographic
factor, Woolworths retail would focus on consumers who prefer to take the quality products
and service rather than quantity.
Taking into consideration the primary segment, their level of involvement and the
competition, create a positioning map for the marketplace.
Perceptual map
The below perceptual map depicts the competitor’s position of Woolworth’s retail company: