Marketing Assignment: Woolworths Segmentation and Environment Analysis

This report provides a comprehensive analysis of Woolworths' marketing strategies, focusing on market segmentation, consumer perception, and the impact of external environmental factors. The report begins by examining the purpose of market segmentation and positioning, followed by a detailed exploration of the demographic, geographic, and behavioral bases of segmentation as applied by Woolworths. It then delves into the importance of shaping consumer perceptions and the influence of external marketing environment factors, including political, economic, social, and technological aspects. The analysis further investigates how social factors influence consumer perception and the role of technology in marketing. The report also highlights the reasons consumers choose products with effective labeling. The report concludes with a discussion of how Woolworths has effectively used various marketing strategies to reach its target audience and generate higher revenue. The report is based on the assignment brief that required an application-based assessment of marketing concepts and real-life marketing problems.

Running head: MARKETING
Marketing
Name of student
Name of University
Author note

1
MARKETING
Table of Contents
Question 1.................................................................................................................................3
Purpose of segmentation and positioning..........................................................................3
Selected bases of segmentation............................................................................................4
Demographic segmentation base........................................................................................5
Geographic segmentation base............................................................................................6
Behavioural segmentation base...........................................................................................7
Question 2.................................................................................................................................9
Importance of shaping consumers perceptions.................................................................9
External marketing environment factors impacting business.........................................9
Social factors influencing consumer perception..............................................................10
Technological factors influencing consumer perception................................................11
Reasons for which the consumers choose the products with labelling..........................13
Effective use of labelling in real life marketing...............................................................13

2
MARKETING
Question 1
Purpose of segmentation and positioning
The purpose of segmentation and positioning is mainly to enhance the marketing
efficiency considering the business organisation named Woolworths in Australia. The
segmentation and positioning are considered as critical aspects that constitute a framework
required to ensure that the marketplace is divided into multiple segments with different set of
buyers with varied needs and preferences. The market segmentation and positioning would
also allow the business organisations to determine the characteristics of market and at the
same time, position the products and services properly in the marketplace for easily
accessibility by the customers1. This could not only help in the acqusitions of new clients but
would also help in retaining the existing clients, furthermore, generate higher revenue in
business and attain the desired level of profit and competitive advantage in business.
The segmentation would allow the organisation to understand the size of market,
purchasing behaviours and consuming patterns of each of the segments regarded in the
targeted market while it would also be easy for the business communicate with the different
segments quite conveniently2. Moreover, on the other hand, the segments must be
differentiated from the others and the products would also be made available based on the
different needs of different market segments and thus allow the company to target the clients
in each of these segments quite easily and effectively too.
1 McDaniel, Carl, and Roger Gates. Marketing research. Singapore, 2013.
2 Lei, Ningrong, and Seung Ki Moon. "A Decision Support System for market-driven product
positioning and design." Decision Support Systems 69 (2015): 82-91.

3
MARKETING
Selected bases of segmentation
The segmentation of market is based on the various assumptions made on behalf of
the needs and preferences of the customers in different market segments, which could help in
implementing the right marketing strategies while at the same time, tailor the strategies
accordingly for meeting the customers’ demands and expectations. The marketers are
responsible for segmenting the market and at the same time, allow for targeting different
kinds of segments present in the marketplace3. The bases of segmentation are the
demographic segmentation, geographic segmentation and behavioural segmentation are
critical for categorising the marketplace into different market segments, thereby, ensure
targeting the market segments consisting of customers with different demographical features
and also the socio-economic factors and various features of the products too. It is based on
various demographic features including the age, gender, educational level, income, etc. The
geographic segmentation is another base of segmentation, which could allow the company to
categorise the market into geographical units including the national segment, regional
segment and even based on other locations while the psychographic segmentation is based on
the various aspects that must be focused on by the company so as to keep the consumers
motivate and encouraged towards making purchases along with creating positive perceptions
and behaviours to match up to the lifestyles of customers4. Furthermore, influence their
buying behaviours largely too. Thus, information about the customers and what drives their
3 Pyo, Sungsoo. "Integrating tourist market segmentation, targeting, and positioning using
association rules." Information Technology & Tourism 15, no. 3 (2015): 253-281.
4 Mihailović121, Branko, and Vesna Popović122. "The role of segmentation and positioning
in the development of modern tourist market in Serbia." MODERN MANAGEMENT TOOLS
AND ECONOMY OF TOURISM SECTOR IN PRESENT ERA (2017): 550.

4
MARKETING
purchasing behaviours must be focused on so as to maintain various patterns of responses,
thereby, ensure, addressing the needs and preferences of customers to make people
encouraged towards making purchases from the organisation.
Demographic segmentation base
Woolworths has enabled the demographic segmentation so as to determine the
characteristics of the market segment comprising of the customers including their age,
gender, income, education as well as their family size. The company needs to focus on the
demographic groups and even determine what aged individuals are basically targeted at first.
Woolworths, with the help of their marketing activities, has targeted the market segments
comprising of the customers aged between the ages of 20 to 50, which has helped in catering
the needs of every kinds of people, be it young individuals or even aged individuals5.
Moreover, the management of an online website should also help in making the products and
services easily available the website, furthermore, influence people to make purchases online
and easily get the products delivered at their doorsteps. The advertisements on televisions by
Woolworths have easily targeted the young individuals while at the same time, acquired the
attention of the women and older individuals to make purchases of grocery items and others
from the stores managed by Woolworths6. The social media campaigns managed by
5 DeSarbo, Wayne S., Simon J. Blanchard, and A. Selin Atalay. "A new spatial classification
methodology for simultaneous segmentation, targeting, and positioning (STP analysis) for
marketing research." In Review of marketing research, pp. 95-123. Routledge, 2017.
6 Liu, Hong Bo, Breda McCarthy, Tingzhen Chen, Shu Guo, and Xuguang Song. "The
Chinese wine market: a market segmentation study." Asia Pacific Journal of Marketing and
Logistics (2014).

5
MARKETING
Woolworths have also helped in targeting the demographic segment of customers who are
educated and generate good amount of income, which has made them often look into the
social networks for the purpose of searching for goods and services and purchase those
online. Moreover, the category of infant food products has also helped in targeting the
consumers aged between 6 to 17 years of age and also providing good nutritious food items
for the people aged above 50 years7. Thus, the power of purchasing of clients has represent
the rate of growth for a particular product or service by Woolworths, which ensured that the
product lines are adjustable to the demands in the market, as categorised with the help of
demographic segmentation base.
Geographic segmentation base
Base on the locations all over Australia, the company has also targeted the market
segments comprising of the customers, which has resolved differences in consumers’
behaviours and influenced their purchase too. Based on the national and regional aspects, the
different geographical units have been categorised by dividing the market, which also
ensured dealing with the complexities and at the same time, ensured adjusting with the
culture and language of the different places too. Not only Australia, but the company has also
operated outside the nation, which has helped in the management of global business, where
the product packaging has been done in such a manner that it suits the needs of people and
also the culture of the place such as in New Zealand8. Moreover, while segmenting the local
market into multiple segments within Australia, Woolworths made sure to cater the different
7 Floh, Arne, Alexander Zauner, Monika Koller, and Thomas Rusch. "Customer segmentation
using unobserved heterogeneity in the perceived-value–loyalty–intentions link." Journal of
Business Research 67, no. 5 (2014): 974-982.
8 Yinan, Cao, Wang Xinwei, and Zhou Yan. "Spatial positioning fuzzy C-means algorithm in
segmentation of range-gated image." 红红红红红红红 42, no. 10 (2013): 2682-2686.

6
MARKETING
needs of people in different places such as in Adelaide, New South Wales, etc. in order to
make sure that a higher disposable income is imposed on the same. The extra values and
additional offers have been offered while making purchases, which could draw I more
potential clients and reach the desired level of profit quite competitively. The company has
already 180 stores in NZ and thus setting up in the locations outside Australia, could impact
the business globally and allow reaching new heights of success in the long term future9.
Behavioural segmentation base
The behavioural segmentation base has been managed by the company with the focus
more on influencing consumers’ behaviours and their purchasing patterns. The ads could be
endorsed by well-known celebrities for creating awareness among people, thereby, ensure
influencing them to make choices regarding the products and services. It is also true to
believe that Woolworths made sure to market the products via social media platforms and
through the online website representing the company’s efforts put toward sustainable
packaging and trying to bring in the healthiest and freshest products in the market. There
are ,any clients who prefer quality over the prices and in such cases, the company has
managed promotional activities in the form of advertisements and social media exposure so
as to draw in more clients, retain the existing ones and generate more profit in business10.
9 Canhoto, Ana Isabel, Moira Clark, and Paul Fennemore. "Emerging segmentation practices
in the age of the social customer." Journal of Strategic Marketing 21, no. 5 (2013): 413-428.
10 Malaval, Philippe, Christophe Bénaroya, and Jonathan Aflalo. "Market Segmentation and
Positioning." In Aerospace Marketing Management, pp. 123-156. Springer, Cham, 2014.

7
MARKETING
Considering the image presented above, Woolworths holds a good position within the
marketplace when compared with the rivalries within the retail supermarket industry of
Australia. In terms of quality, the company has fared well while on the other hand, it has
positioned itself in such a manner that people could get value for money products, which is a
great way to lure in more clients. Cole and Aldi though provide similar products but the
prices are quite high, which made the consumers slowly become inclined towards the brand
Woolworths and make repeated purchases consistently.
Question 2
Importance of shaping consumers perceptions
It has been found that the influence of consumers’ perception is very much important
and this has often been possible through word of mouth promotions and also with the help
advertisings and promotions made by the company to enrich the experience of customers,
thereby, create awareness among them. The perception of customers at Woolworths has been
highly influenced with the quality of products and services delivered by Woolworths and the

8
MARKETING
company has remained true to it. The good quality products and services could drive the
perception of consumers regarding the brand and at the same time, make them express their
views and opinions regarding the brand as well as understand whether the company has
managed to fulfil their demands and expectations or not11.
External marketing environment factors impacting business
The external environmental factors are basically the political environment of
Australia. Economic factors, Social factors, technological as well as the legal and
environmental factors that contribute to the impact of business functioning in Australia. The
political factors include the political stability in Australia, which is quite good at present and
has largely impacted the retail supermarket chain. This has helped Woolworths to create a
competitive position within the marketplace and even enabled the company to acquire a
strategic position through management of good trade relations and managing multiple
communities all across Australia and even in New Zealand. Due to this, the company has
acquire a huge customer base with more and more customers emerging as potential customers
nowadays12. There are economic factors as well such as economic stability and high standards
of living, which influencing the purchasing behaviours of people and thus Woolworths has
also marketed its products and services effectively in different targeted market segments. The
social factors include the recent trends in the marketplace, buying behaviours of consumer
and also the fascination towards healthier food items. The use of advanced technologies
11 Perreault, William D. Essentials of marketing. New York: Mc Graw Hill, 2018.
12 Venter, Peet, Alex Wright, and Sally Dibb. "Performing market segmentation: a
performative perspective." Journal of Marketing Management 31, no. 1-2 (2015): 62-83.

9
MARKETING
improved the ability of the organisation to market its products both offline and online, which
created better opportunities for local as well as global outreach to the customers worldwide13.
Social factors influencing consumer perception
The social factors represent the present trends within the nation and the demographics
of population, which has enabled the company to target different market segments quite
comprehensively. The consumers’ buying behaviours have changed from time to time and
this has made many of the consumers prefer organic or green products, which are
environment friendly and also could promote healthier lifestyle behaviours among them.
Thus, to cater their needs and preferences, the company has managed to implement various
sustainability management campaigns and programs while at the same time, kept up with the
trends in order to promote healthier lifestyle choices along with remaining committed
towards the production or organic or environment friendly products and services14. Due to
this, the marketing has also been aimed at making people by providing the green tag with the
products and services made available for the customers in the different market segments, Due
to this, the company has managed to adapt to the changes in the socio-cultural environment
while at the same time, remained aligned with the recent trends within the marketplace. It has
13 Cross, James C., Thomas J. Belich, and William Rudelius. "How marketing managers use
market segmentation: An exploratory study." In Proceedings of the 1990 Academy of
Marketing Science (AMS) Annual Conference, pp. 531-536. Springer, Cham, 2015.
14 Sun, Ying, Ping Guo, Zhengxiang Ma, Tianyu Li, and Shuping Dang. "UK-based external
business environment analysis of outdoor adventure clothing using the PESTEL tool and its
future outlook." In 2014 International Conference on Information Technology Systems and
Innovation (ICITSI), pp. 306-309. IEEE, 2014.

10
MARKETING
also helped in influencing the buying behaviours of clients, formed a potential customer base
and generate higher revenue in business, which is required for long term sustenance and to
attain competitive advantage as well15.
Technological factors influencing consumer perception
The advancement in technological aspects has also allowed Woolworths in Australia
to market its products and services effectively and resolve the barriers that might be faced
while reaching o more customers all over Australia and in New Zealand. For coping up with
the fast paced industrial transformation, the company has also remained committed towards
innovation perspectives and managed consistent improvement in the delivery of products and
services for meeting the expectations of customers16. The company also emphasized on the
quality improved with the use of advanced technologies. Not only this, but also the
incorporating of self-checkout machines across various stores managed by the company
helped in providing better convenience and at the same time, detected the operational flaws
and achieve greater efficiency in terms of cost incurred while managing the manufacturing
and production processes.
The monitoring and measurement of perceptions of consumers are based on the need
to collect both qualitative and quantitative data and information. Often the resources are
15 Khan, Usman Ali, Mohammd Noor Alam, and Shabbir Alam. "A critical analysis of
internal and external environment of Apple Inc." International Journal of Economics,
Commerce and Management 3, no. 6 (2015): 955-961.
16 Pan, Wei, Le Chen, and Wenting Zhan. "PESTEL analysis of construction productivity
enhancement strategies: A case study of three economies." Journal of Management in
Engineering 35, no. 1 (2019): 05018013.

11
MARKETING
assessed along with the assessment of consumer interviews and through survey
questionnaires delivered to the customers17. By understanding the consumer perception, it
would be much easier for the consumers to select the preferred brand and not loon into any
other brand, thus become loyal customers while at the same time, the company would be able
to look for better opportunities to enrich the experiences of consumers furthermore18.
Reasons for which the consumers choose the products with labelling
Woolworths, being a major company within the retail supermarket chain, so labelling
plays a major role in influencing the buying behaviours and consumer perceptions. One such
major reason why labelling influence consumer perception is the need to keep healthy.
Labelling of products could help in understanding the composition of the product purchased
by them while at the same time, check whether the food components would be healthy or not
for consumption. The labelling denotes the presence of vitamins and minerals, which are
required for a balanced diet and thus the labelling could make the customers ensure whether
the company has managed to keep those healthy or not and met the sustainable standards of
packaging and food product or not as well19. Another major reason is to remain safe and
healthy, which represents the fact that the labelling could provide warnings and important
17 Sammut‐Bonnici, Tanya, and David Galea. "PEST analysis." Wiley Encyclopedia of
management (2015): 1-1.
18 Eagle, Lynne, Stephen Dahl, Suzie Hill, Sara Bird, Fiona Spotswood, and Alan
Tapp. Social marketing. Pearson Education, 2013.
19 Bai, Yan, Zhong Yao, and Yi-Fan Dou. "Effect of social commerce factors on user
purchase behavior: An empirical investigation from renren. com." International Journal of
Information Management 35, no. 5 (2015): 538-550.