Marketing: Conducting Industry Analysis Answers Assessment Answer

Answer:

Conducting industry analysis through Porter’s Five Forces Model

Power of suppliers: Suppliers of inputs that are labors, materials, energy, equipment and certification might be able to charge the prices that extract profits from their customers. It can be stated that the suppliers of Fort Convenience might have the strong market power, if they are concentrated. It can be seen that Fort Convenience is one of the small businesses but extremely popular among the customers, it is expected that the company might face strong challenge from its suppliers (Armstrong et al., 2012).

Power of buyers: It is one of the well known facts that in the retail and grocery industry, there is always strong competition. The buyers of Fort Convenience have more buying power and this is expected to increase in near future. Apart from that, it can be said that there are some websites that allow the users to compare price of the same product in different stores and this allow the customers to bargain, especially in small business (Cassar, Grosjean & Whitt, 2013).

Threat of new entrants: The threat of new entrants is high; as Fort Convenience is a small company and demand of these regular products are always high among the customers. As per the law, any company with specific license can easily take entry into this type of market and thus it can be stated that threat of new entry is high in this case. The products that Fort Convenience sells to the customers are of high importance and thus any company can compete with Fort Convenience (E. Dobbs, 2014).


Figure 1: Porter’s Five Forces Analysis

(Source: Fifield, 2012)

Threat of internal industry rivalry: Fifield, (2012) has stated that this might take place through price competition or by non-price competition. It can be stead that there are six factors that favor price competition are as follows. The structure of the market (if there are many sellers), no product differentiation (homogenous products), the nature of the sales process (secretive, large and lumpy) and utilization of capacity (if excess), the nature of the consumers or the buyers (motivated and capable buyers) are these factors. Coles Supermarkets, Thai Mart Australia, Woolworths are some of the leading grocery and retail stores in Australia and New Zealand and thus internal competition among is high. From the discussion, it can be easily stated that small companies face more challenges that the big ones and Fort Convenience fall under small company category (Gobble, 2012).

Threat of substitute goods: Market analysis states that threat of substitutes are high in case of Fort Convenience, as this small company faces challenges from some indirect competitors like other convenience stores, specialist grocery shops, market of the farmers and the shops of particular products like meat shop, milk shop, beer shop and so on.

Identifying effective marketing strategy that would be beneficial for Fort Convenience

Fort Convenience is privately owned shop and operated by 8 employees. However, it is important to mention that irrespective of the size of the business, the company is very popular among the customers and thus the management of the company wants to expand the business. They want to increase their sales by 20 percent each year for the next 5 years and thus they are required to adopt effective marketing strategies like market penetration and product development. Market penetration is effective because this is both a measure and a strategy. Fort Convenience is already one of the famous companies and through market penetration strategy it can take entry into Muslim market and Arabian people’s market. Apart from that, it can be stated that through market penetration strategy, Fort Convenience would be able to measure the percentage of the market that the products and services are able to capture (Hollensen, 2015).

Figure 2: Market Penetration

(Source: Jiang et al., 2015)

Initially, they are required to focus on price penetration, as this might grab attention of the new customers. The employees responsible for marketing are required to shed importance on promotions, as this attracts attention of large number of new as well as existing customers. Besides market penetration, Fort Convenience is required to focus on product development. In order to have more customers to the stores, more new products are required to make available in the stores. People now a day do not have huge time to shop and thus prefer to get all necessary things under one roof. This criterion of present day’s customers is required to keep in mind and this might help the company to gain strong market position (Jobber & Ellis-Chadwick, 2012).

Identifying the positioning strategy of the business

Fort Convenience is one of the small shops in New Zealand that operates its business with the help of 8 employees only. Irrespective of the size, the company is popular among the customers, as the customers of this shop highly prefer their services. It has been seem that the employees can easily reach the customers through their effective marketing strategy. Once the customers come to the store, the employees tell them about the products in details and help the customers largely. This help the customers feel valued and thus they prefer shopping from this company. In the large super markets, customers generally do not get this much attention and on the other hand to this situation, Fort Convenience has achieved attainable position due to their effective positioning strategy (Kotler et al., 2015).  

Identify what type of image the business targets to achieve

The employees of the company pay full attention to the customers and target to make the customers satisfied with both service and quality of the products. They do a thorough market research on the needs of the customers and based on that, they sell the products. Therefore, it can be stated that Fort Convenience would try to make their image as the seller of best quality goods in the market. Satisfaction of the customers matter to them the most and thus they interact with the customers in the shop properly to know their preferences and requirements. Fort Convenience want all the customers know and feel that they value the customers most, as they know that the customers are the key factor of success in business. Apart from that, they look after convenience of the customers as well and thus the customers can make payment through card besides cash (Lee et al., 2012).

Product strategy for the selected business

Fort Convenience sells several daily products to the customers and recently they have started selling halal meat to their target Muslim customers. Through market analysis, Fort Convenience has found that no other company sells halal meat and there is a specific demographic that wants to eat halal meat only. With the gradual expansion of the business, the company has enlarged their list of selling products and at present, they are focused to sell halal meat to their valuable Muslims customers. Apart from that, they are planning to extend their number of available items to the customers, so that they get all their required products under one roof (Masoud & Hardaker, 2012).

After going through the products sold by Fort Convenience, it can be stated that they are the growth stage and aiming to reach maturity stage soon. The company is enjoying good sales and profits now and expecting to increase their sales by 20% every year for the coming future. Therefore, it can be easily stated that Fort Convenience is at growth stage. This is because of the fact that Fort Convenience can benefit from economies of scale in terms of production, the profit margins along with the overall amount of profit and these are soon to increase. This particular stage would help the company to invest more amount of money in the promotional activity in order to maximize the potential of this specific growth stage (McDonald, 2013).

If focus is shed on the company, it can be seen that Fort Convenience is one of the famous companies that sell daily goods to the customers like milk, bread, meat, beer, rice, sweets, snacks, biscuits, personal care and many more items. However, among all these daily necessary goods, the company focuses more on milk and the quality of milk in the shop is very high. Besides quality of milks, the shop sells different types of milk like chocolate milk, banana milk, strawberry milk and some other flavors as well.  Therefore, it can be stated that milk is one of their core products. Mostly, all the items of daily necessity are their actual products and halal meats for the Muslims are their augmented product (Park, Hong & Moon, 2012).

Branding helps any organization to become more popular among the customers and this is useful for referrals as well. Rothaermel (2015) has stated that branding promotes recognition successfully and brands help a company to set that apart from the existing competitors. Most importantly, it can be said that brand tells people about DNA of the business and brand provides motivation and direction for the staffs. Therefore, branding of the company is essential for Fort Convenience.

Promotional strategy for the selected business

It has already seen that Fort Convenience sells the necessity goods to the customers and they value the customers highly. In order to reach more number of customers, they publish news to the daily newspaper and the response is good in this case. However, it is required to mention that they distribute flyers to the customers and their delivery person delivers the flyers to the customers’ house letter box. This is one of the effective promotion strategies that the company has in order to reach large number of customers. Now it can be recommended that Fort Convenience must focus on online marketing, as people now a day prefer online marketing due to lack of time in their hand. Shani and Chalasani, (2013) have stated that online marketing lowers down the operation cost and this would be helpful for Fort Convenience.

Apart from that, the marketing and management team of this shop must be available in different social media sites, so that customers come to know a lot about the existence of the company along with their products and services. At the time of advertising, the company is required to make attractive offers for both the new and existing customers, as providing lucrative offers attract attention of the customers. Attractive promotions are required to make on monthly basis and on special occasions and this would seriously attract the attention of the customers in huge number. Customer services are one of the core services of this company and this is required to promote successfully. Since the company has planned to sell halal meat to their target Muslims customers, they must make proper promotion of this exclusive product in their shop. There is no other shop in this region that sell halal meats and thus this is undoubtedly an exclusive product from the company perspective (Stark, 2015).

Pricing strategy for the selected business

Prices of these daily used products must be set in such a way that all people can afford easily. Therefore, in this case, price adjustment is the best possible way to set the price of the products. It has already been mentioned that there are several websites that allow the customers to compare the price of the products. Therefore, if the prices of the products of Fort Convenience are high, no one would like to purchase from this shop. Apart from that, at the time of promoting new product, the company must adopt new product pricing to grab the attention of large number of customers. If their new target customers feel that the prices of the goods are affordable enough, they would definitely buy from Fort Convenience and would become loyal consumers (Wei et al., 2014).

Premium pricing is one of the pricing strategies that tend to set price higher than their competitors do. This is generally observed at the early stages of the product life cycle. Therefore, it can be stated that premium pricing is not at all appreciable in case of Fort Convenience. On the contrary to this pricing, pricing for market penetration is comparatively appropriate in case of Fort Convenience. Through this penetration pricing strategy, it targets to attract the buyers by offering lower prices on the daily goods and services. As the company has been planning for adopting market penetration strategy, in that case, this pricing strategy would be ideal. Westwood, (2013) has stated that economy pricing is used by a wide range of business taking into account generic food suppliers and discount retailers, economy pricing targets to attract the most price-conscious of the consumers. As the result of this pricing strategy, all the customers can easily purchase the goods they require without superfluities (Westwood, 2013).

Distribution strategy for the business

Fort Convenience is situated in New Zealand and besides availability in offline stores, the company now planning to make their presence in online stores. With the gradual expansion of business in Fort Convenience, the company is required to increase the number of employees in the shop. On the other hand, at the time of online shopping, there must be some delivery boys who would deliver the products to the customers in the specified location. All the products are available in the shop and same option would be available for the customers in online mode. In this highly technological era, online facilities must be available to the consumers in such a way that the customers can order their required products through phone calls, official website of the company as well as through email. Since the company is in New Zealand, delivery option must be available within 10 kilometers of the retail shop. With the expansion of the business, the served area would be expanded (Wilson et al. 2012).

Reviewing, developing and monitoring strategies for a marketing plan

Objective of Fort Convenience is to increase their sell by 20% for the coming 5 years and at the same time increase their customer base by 20%. In order to fulfill these objectives, the company is required to adopt new and effective marketing plan, so that they can sell more quality products and more new customers come to this brand. In order to reach this target, the company must add online services, as this is the most effective way of getting the attention of online customers. Promoting online services through messages is one of the effective marketing strategies besides distributing flyers to them. Apart from that, it can be stated that promoting advertisement in social networks like Facebook can grab attention of several customers in less time and less money (Wilson et al. 2012). In this part, it can be stated that this is one of the effective business plan that would assist Fort Convenience to gain significant market share. However, it has been seen that there are several competitors in the market and it is expected that with the help of this marketing plan, the small business would be able to gain proper market share.

References

Armstrong, G., Kotler, P., Harker, M., & Brennan, R. (2012). Marketing: an introduction. Pearson Prentice-Hall, London.

Cassar, A., Grosjean, P., & Whitt, S. (2013). Legacies of violence: trust and market development. Journal of Economic Growth, 18(3), 285-318.

Dobbs, M. (2014). Guidelines for applying Porter's five forces framework: a set of industry analysis templates. Competitiveness Review, 24(1), 32-45.

Fifield, P. (2012). Marketing strategy. Routledge.

Gobble, M. M. (2012). Innovation and strategy. Research-Technology Management, 55(3), 63-67.

Hollensen, S. (2015). Marketing management: A relationship approach. Pearson Education.

Jiang, Y., Shang, J., Liu, Y., & May, J. (2015). Redesigning promotion strategy for e-commerce competitiveness through pricing and recommendation. International Journal of Production Economics, 167, 257-270.

Jobber, D., & Ellis-Chadwick, F. (2012). Principles and practice of marketing(No. 7th). McGraw-Hill Higher Education.

Kotler, P., Burton, S., Deans, K., Brown, L., & Armstrong, G. (2015).Marketing. Pearson Higher Education AU.

Lee, H., Kim, M. S., & Park, Y. (2012). An analytic network process approach to operationalization of five forces model. Applied Mathematical Modelling, 36(4), 1783-1795.

Masoud, N., & Hardaker, G. (2012). The impact of financial development on economic growth: Empirical analysis of emerging market countries. Studies in Economics and Finance, 29(3), 148-173.

McDonald, M. H. (2013). Ten barriers to marketing planning. Journal of Product & Brand Management.

Park, Y., Hong, P., & Moon, G. (2012). Implementation of product strategy with differentiated standards. International Journal of Technology Management, 57(1/2/3), 166-184.

Rothaermel, F. T. (2015). Strategic management. McGraw-Hill.

Shani, D., & Chalasani, S. (2013). Exploiting niches using relationship marketing. Journal of Services Marketing.

Stark, J. (2015). Product lifecycle management. In Product Lifecycle Management (pp. 1-29). Springer International Publishing.

Wei, Y. S., Samiee, S., & Lee, R. P. (2014). The influence of organic organizational cultures, market responsiveness, and product strategy on firm performance in an emerging market. Journal of the Academy of Marketing Science, 42(1), 49-70.

Westwood, J. (2013). How to write a marketing plan. Kogan Page Publishers.

Wilson, A., Zeithaml, V. A., Bitner, M. J., & Gremler, D. D. (2012). Services marketing: Integrating customer focus across the firm. McGraw Hill.

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