An origination establishes with the aim of providing services to the community and fulfills their requirements. Arli et al. (2013) depicts that retail industry is one of the most leading industries that intends to provide goods and services for meeting the daily requirement of the common people and attain profitability. In this business report, the company that is taken into consideration is Woolworths and one of its services is the delivery of the ordered products to the customer's home. Woolworths is a grocery supermarket chain in Australia also known as Woolworths Limited. Their annual revenue was $55,047 million in the year 2015 excluding the petrol services and $53,708 million in the previous year and has 139 and 137 dividends per share in both of the years respectively (Woolworths Online 2016). The concerned origination handles 28 million customers currently and intends to increase the number by providing the best services while retaining the existing customers (Woolworths Online 2016).
This business report emphasizes on the current marketing situation along with the market segments, product, competition, and distribution. In addition to that, the market analysis is done using the SWOT analysis, which is followed by the objectives with goals set by the concerned organization to define the sales volume, market share and profit. Furthermore, the business report focuses on the Marketing strategies adopted by Woolworths that comprises of the detailed analysis of Product, Place, Price, Promotion, which is correlated with their marketing strategies and analysis. The communication objectives, communication channels and communication mix will also be discussed to define the promotional aspect of their free home delivery services.
Armstrong et al. (2014) depicts that the primary objective of Woolworth is to improve aspects of the shopping experience of people by providing quality products at an affordable cost. Kotler et al. (2013) demonstrates that this organization places the customer at the start and before taking any marketing strategies to implement. They are also successful in inaugurating 20 supermarkets and 13 liquor stores in the year 2013 (Woolworths Online 2016). There are three strategies on which the Woolworth is focused on:
The service Woolworth provides to their customers helps them to attain millions of profit every year and this revenue is gained with the contribution made by 190,000-plus employees in Australia (Woolworths Online 2016). They also provide some options in their product categories in order to fulfill the daily requirement of the community. These products are- Fresh and organic fruits and vegetables, fresh salads and herbs, bakery products, meat items, dairy products, spreads and breakfast items, drinks, freezers and much more in the countries of New Zealand and Australia (Nairn and Berthon 2015). The market segmentation can be further classified into three more categories- Geographical market segmentation, Demographical market segmentation and Psychographic market segmentation.
Cross et al. (2015) states that being the grocery supermarket chain in Australia, Woolworth primarily sells their products and offer their services in Australian cities such as in Sidney, Melbourne, Kakaduas for targeting the customers. They intend to offer a broad range of products to target all their customers like food materials, clothing and even electronics goods. However, the services of free home delivery can be applicable for all kind of products and hence can be initialized in every place Woolworth intends to open their stores (Silan et al. 2014). Woolworth has expanded their geographical boundary in suburban areas so that the people can visit their stores often and the free home delivery services can be provided to their house, which will be easy to reach from a centric location.
Sharma and Lambert (2013) depicts that demographic segmentation emphasizes on the offering of products and services based on their income level and their standard of living. The services considered in this free home delivery services which are provided to everyone irrespective of their income status. However, Mitchell and Boustani (2015) criticizes that according to their existing services this free home services can be obtained only on Wednesday if the purchase is higher than $150, which is too demanding to be fulfilled. Loveridge and Mok (2012) on the other hand, affirm that the low-income group can never take the facility of these services as they cannot purchase items worth $150.
Weinstein (2015) also describes that psychographic market segmentation divides the market into segments relying on the personality traits, values, attitudes, interests and lifestyles of consumers. Woolworth focuses on the brand value strategy and provides their services to their loyal customers. However, Gunter and Furnham (2014) mentions that highly qualified people, who have a strong economic background can avail products worth of $150 for getting the free home delivery services but the concerned organization can take initiative for applying this services for the entire week so that the high-income group can get the service every time they shop with Woolworths.
In terms of products, Woolworth has their key products in every field and targets every small need of the communities. These products are health drink and food, meats, seafood, eggs, bakery, meat, fashion apparels and electronic gadgets (Woolworths Online 2016). They have many varieties of products under one category like in Diary and fridge products they have full Cream milk, skimmed milk, Flavored milk, Natural and flavored yogurt, cream and sour crème and others (Woolworths Online 2016). The product manager should know that the delivery service varies with the kind of products they have purchased. For instance, Arli et al. (2013) portrays that the dairy products have to be delivered on the same day otherwise; the customers have to compromise with the quality, which may affect their brand reputation.
Coles Group, ALDI are some completive brand for Woolworth and regarding home delivery services they provide free home delivery to everyone irrespective of their purchase. Keith (2012) illustrates that Coles Group provides delivery services depending on location, time of day and length of delivery and provide everyday free home delivery on purchase of $100. They also introduce Flexi free delivery services in order to attract more customers. On the other hand, O’Leary (2014, June) states that ALDI presently has no delivery services and hence Woolworth's major competitor is Coles Group rather than ALDI.
Woolworths delivers the products ordered by their customers through the best distribution strategy. Bilgin (2015) depicts that the distribution department first sorts out the orders by their location and then distribute the products and carriages in the destined places. Through their home delivery services, they make sure that the food is not damaged by excessive heat or cold and the quality of the products have to be maintained. Luqmani et al. (2015) also portrays that they have different carriages van depending on the materials that is carried by the distributor. Moreover, Woolworths have to provide this service to their online customers every time they place an order.
In order to analyze the attractiveness and the dynamics of a business market analysis is done. The strength, weakness, opportunity and threats are analyzed regarding the entire business or a particular product. In this session, the SWOT analysis of the Woolworth's home delivery service will be analyzed.
Analysis of the factor
· The premium customers can utilize this additional facility in a week for better experience.
· Free home delivery services help to gain customer loyalty.
· The products value is affordable for every individual however to get the offer of free home delivery; some cannot afford the purchase of $150
· In conventional shopping approach, people cannot order items and home delivery services 24X7.
· The delivery services are only available on Wednesday and individual to have to wait for the entire week to get this facility
· This results in the reduction of love income group for attaining this facility
· The delivery service can be applied throughout the whole week.
· This facility can be introduced in the lower range also so that everyone can use the services.
· The secured delivery system can be introduced for delivering the products for the online users.
· The tremendous competitor of Woolworths is Coles Group and its distribution marketing strategy like, free delivery on $100 above purchase which is available every day; guaranteed free delivery on purchase with Coles MasterCard, delay messages (Bull et al. 2016).
· Rising cost of raw material will impact profit margins overall and may affect the increase in price for free home delivery
· The maintenance cost of delivery vans is also increasing.
Table 1: SWOT analysis of delivery system of Woolworth
(Source: Bull et al. 2016)
Woolworth deals with their customers enhance their business approach by following four different strategies- extending leadership in business, to maximize shareholder value, building new growth businesses and innovate for enabling sustainable business for a new era of growth (Woolworths Online 2016). Ellram et al. (2013) depicts that retailing never stands still and in accordance with the delivery system, Woolworth can make appropriate changes in delivery service for attracting maximum strategies. Goebel et al. (2012) illustrates that numerous parcels each day failed to arrive on time due to some problem like natural calamities or other problems like flat tires and traffic jams. Thus, with an effective leadership strategy, Woolworths can implement informative, proactive communication and clear, accurate tracking of the products so that customer can predetermine their products and plan their work accordingly (Subramanian et al. 2014).
Moreover, good levels of communication during the distribution of problems, renewing of inventories for delivering products whenever customer orders will depict the stakeholder value of Woolworth. Fernie and Sparks (2014) mentions that implementation of modern technology is necessary for enhancing the existing business procedure. Woolworth has to improve their delivery system for better customer retention and to facilitates their online services as all the delivery of products are home deliveries in this case. Guaranteed one-day delivery, customized delivery date according to the convenience of the customer, can enable long lasting business for Woolworths and also helps in financial growth.
Shani and Chalasani (2013) illustrates that the importance of marketing strategy relies on the achieving a sustainable competitive advantage for increasing sales. This section deals with the marketing strategies of Woolworth, which supports the market analysis, objectives and goals of the company to enhance their delivery/distribution services. This section also illustrates the marketing mix in order to promote the product and services, which plays a crucial for gaining the reputation of the entire business process.
Marketing Mix Strategies
Analysis of the strategies
The delivery service of Woolworth covers all the products they manufacture. The products are pocket-friendly and target all income groups. However, the delivery services vary on the product type like freezer van have to be used in order to deliver eggs or daily products and extra care have to be take in case of brittle materials.
The delivery system varies depending on location and time of day. Woolworth has inaugurated 3000 stores combined in Australia and New Zealand (Woolworths Online 2016). Moreover, they have targeted the crowded areas so that the locals can visit the stores while on their way and the distribution team faces ease in delivering the products.
Woolworth maintains low cost strategy for medium cost consumers. However, their delivery services are costly for these customers and even the premium customer who can afford this facility only once in a week. The price of the delivery system also ranges in the price value of between $4 and $14 if not purchased items worth of $150 (Woolworths Online 2016).
The promotional strategy of Woolworth relies on the practical approaches that attract customers. Woolworths provide free delivery on the first acquisition of orders so that they can use their services next time.
· The communication objectives- In accordance with the delivery services for the ordered products which comprises of the new innovative facility in the delivery of products that is to introduce a contest where the winner will bet the free home delivery of their products for the day (Mazar et al. 2016). Moreover, providing additional information about the delivery services through online media or by offering them the policy that if the delivery of the product is late, the cost of the delivery will be reimbursed or not taken from the customer.
· Communication channels- Verhoef et al. (2015) illustrates that communication channel is the way to which the new facilities will be provide to users. Face-to-face communication, broadcast media, electronic gadgets and pamphlets are some of the distribution channels that are used by Woolworth (Rosenbloom 2012). New promotional news related to delivery can be provided through e-mails, text messages or banners and pamphlets so that the users can get aware of the facilities.
· Communication mix- Product research and development, merchandising and distribution processes and the pricing strategy defines the communication mix that helps the concerned organization to attain maximum profitability (Verhoef et al. 2015). Publishing attractive advertisements in newspapers and hoardings and providing a discount on the delivery amount will be beneficial for the organization for providing delivery services to the customers (Melis et al. 2015). Woolworth uses the mass media to provide knowledge about their delivery facility.
Table 2: Market analysis of Woolworth’s home delivery services
(Source: Rosenbloom 2012)
This business report is about the analysis of an existing or hypothetical goods or services of an organization and then provides the overall conclusion of their influence. Woolworth is the organization that is selected for this assignment and the services that are selected is the home delivery of the goods that customers purchased. According to the existing system, Woolworth gives the facility of delivery of the products by receiving some worth that ranges from $4-$14 and provides free home delivery to that customer, who purchased well above $150. It is concluded from the entire discussion that this existing facility is a huge threat for the organization as it will only targets the premium user or the high-income families as they can purchase goods of that cost. In addition to that, the current marketing strategy of Woolworth is depicted along with its market segments, product and competition and distribution channels. Through the SWOT analysis it is found that gaining trust and better engagement of the premium customers and online customers will be enhanced; however, the high cost of getting free home delivery will disappoints some low income group customers. The opportunity relies on the step taken for diminishing the cost of the limit after which the concerned facility will be offered and introducing the delivery service throughout the entire week. Lastly, the threat is that the competitors like Coles Group who provides the same services at low costs. The marketing strategies of 4P were also illustrated for obtaining the knowledge of the communication objectives, communication channels and the communication mix.
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