Target Market of Woolworths

The Woolworths Group is a highly recognized retail organization located in Australia. The mentioned company is the second largest company after Wesfarmers by revenue. In spite of the fact that the mentioned company is the largest takeaway liquor retailer and gaming and poker machine operator in Australia, the chief operation of Woolworths includes supermarkets under the brand Woolworths in Australia and Countdown brand in New Zealand (Armstrong et al. 2014). The current target consumer of the company is residents of Australia and New Zealand. In this report, the target market, as well as current marketing strategy of the Woolworth company, will be analyzed. Moreover, analysis of the channel strategy of the mentioned company will also be performed in this report. Finally, recommendations for further development of their strategy associated with consumer relationship will be provided in this report.   

As mentioned earlier, the target industry of the company includes the retail industry of Australia and New Zealand. The current target consumers of the company are higher middle class and high-income earners in Australia and New Zealand. However, considering the fact that the black middle-class consumers have shown significant economic growth in the past 5 years, they can be considered to be another group of potential consumers for the company. The consumer base, as well as the consumer loyalty of the company, is huge due to the high quality of the product as well as services provided by the company to its consumers. Woolworths work closely with Australian farmers and growers to ensure the quality of their product. Approximately, 96 percent of the fruits and vegetable and 100 percent of meat directly get supplied from the farmers and growers of Australia (Mehta et al. 2017). 

The term marketing strategy refers to the ways by which an organization gain competitive advantages and enhance its sales in the market where it is operating the business. When it comes to marketing its products as well as services, the primary competitors of Woolworths is Coles since the due dominates more than 80 percent of the Australian Retail industry (Keith 2012). Aldi, another retail brand of Australia is considered to be a potential threat for the duopoly due to its cost-cutting strategies. In order to understand the current marketing strategy of Woolworths Limited, 4P marketing mix of the Company has been conducted below:

All types of grocery items that include vegetables, meats as well as packaged products are sold by the company. In order to gain a competitive advantage over its competitors, the company offers a huge number of choices in each of the local production, branded products and international cuisines. Unlike its major competitors, the products sold by Woolworths reach the hands of the consumers only after being tested and approved by Woolworth’s experts. Moreover, the products sold by the company are highly diversified. Along with groceries, consumers are able to avail bags, furniture, jewelry, housewares and even clothing under the same roof. This ‘all-product-under-one-roof’ strategy of the company can be considered as a major marketing strategy to attract consumers.  According to the Veblenian Social-Phycological theory, consumers with less power over their environment prefer utilitarian products over hedonic products (Lewis and Huber 2015). This theory is followed by Woolworth since the management of the company majorly invest in retain utilitarian products as discussed above.

Marketing Strategy of Woolworths

Considering the fact that the consumer base of the company comprises of both premium product consumers as well as consumers who prefer lower prices, Woolworths keeps it price range slightly higher or similar to its competitors depending on whether the products are premium or not. The Pavlovian Theory, the habit of consumers can be manipulated or changed by reinforcing brand elements related to the positive experience of the consumers (Dwivedi and Merrilees 2012). This theory is implemented by the Woolworths Supermarket chain while implementing price range for elite, upper-middle class and middle-class consumers. The hedonic products sold by the company are ranked higher than its competitors. The main feature projected by the company when it comes to its luxurious or hedonic products is the premium quality of the products. When it comes to consumers who prefer lower priced utilitarian products the company has implemented reward programs like 20 dollars vouchers for every 2000 points gathered. This strategy of the company is an example of the Marshallian economics theory. According to the mentioned theory, if a product’s price is lower, the sales of that product will be higher. 

Out of approximately 1000 stores in Australia, more than 960 stores of Woolworths are supermarkets and the remaining ones are convenience stores.  Woolworths has recently started online marketing in Australia (Lovelock and Patterson 2015). Apart from that, the company trades in New Zealand as Countdown. In order to offer the consumers a clear classification of quality, type and price of its products, Woolworth have differentiated its products under 4 private level brands namely, Woolworth Home brand, Woolworth Select, Woolworth’s gold, Woolworths Fresh.

When it comes to promotion, the mentioned company follows three major consumer behavior theories namely, the Psychoanalytic Theory, Pavlovian Theory and Veblenian Social-Psychological Model (Khodakarami and Chan 2014). According to the psychoanalytic theory, Consumers respond to symbolic concerns as much as they respond to those of economics and function. In order to capture the emotional concerns of the consumers, in 2013 Woolworths had introduced Aussie Animal Trading cards as a promotional tactic focusing on the children which in turn had attracted a large market of the children (Long et al. 2013). By promoting petrol and grocery discounts to a great extent, the company attracted a huge range of utilitarian product preferring consumers. This can be considered as an example of the Social-Psychological Model theory. When it comes to promotion of the premium products of the company, the company implemented the strategy of celebrity endorsement. All this has implemented a highly positive impact on the overall revenue of the company. According to researchers, in the year 2017, Woolworths has recorded a sale of 3.6 billion. Apart from that, recently the company is promoting its business through online social media platforms. 

Channel Strategy of Woolworths

The channel strategy followed by the mentioned organization chiefly involves researching the consumers through retail stores located in different parts of Australia and New Zealand. However, has been discussed earlier, the company has also started online marketing in order to capture a greater amount of consumers. In this era of online marketing and swift delivery, this approach is highly beneficial for the company. The aim of the Woolworths Limited Company is to digitally transform stores, enhancing connectivity to enable employees as well as consumers to engage differently and build their digital channels with increasing focus on mobile commerce (Khodakarami and Chan 2014).

Conclusion 

From the above discussion, it can be concluded that being one of the most reputed retail organization in Australia, the Woolworths Limited Organization have vast consumer base as well as brand equity. The chief reason behind this the effective marketing strategies of the company. However, being one of the oldest companies in Australia, a majority of strategies currently followed by the company are traditional. Hence in order to further enhance its consumer base, the management of Woolworths limited must follow the bellow mentioned recommendations.    

With the changing landscape of retail businesses, it is important for Woolworths to implement Consumer Relationship Management tools in order to maintain effective marketing communication with both the existing consumers as well as the potential consumers. Social media platforms can be considered as one of the most effective CRM tools implemented by a broad range of organizations. Woolworth can promote its products as well as services through popular social media platforms like Facebook, LinkedIn and Twitter. Considering the fact that a majority of retail consumers are present on social media platforms, the company will be able to directly communicate with its consumers (Lovelock and Patterson 2015). This will be beneficial for the company in two ways. Firstly, the management of Woolworths will be able to understand the specific requirements of the consumers. This, in turn, will help the company to modify its products and services in order to enhance its consumer loyalty as well as the consumer base. Secondly, direct communication with the consumers will develop an effective consumer-company relationship.

Apart from that, Woolworths can also implement cloud-based multi-channel retail management solution like NetSuite. The mentioned software includes POS, e-commerce and other managerial functionalities.  With the help of this software, Woolworths will be able to manage its back-office jobs for selling product on both offline and online channel. Not only that, the smart application has the ability to understand the software and hardware requirements, complexities of a retail model. It also allows the retailer to focus on the specific requirements of the consumers (Mehta et al. 2017). Another CRM tool that can be implemented by Woolworths is the Lightspeed application. The solution will enable the company to manage inventory and consumers, process transactions as well as an in-depth view of their store’s analytics.   

Reference List

Armstrong, G., Adam, S., Denize, S. and Kotler, P., 2014. Principles of marketing. Pearson Australia.

Dwivedi, A. and Merrilees, B., 2012. The impact of brand extensions on parent brand relationship equity. Journal of Brand Management, 19(5), pp.377-390.

Keith, S., 2012. Coles, Woolworths and the local. Locale: The Australasian-Pacific Journal of Regional Food Studies, 2, pp.47-81.

Khodakarami, F. and Chan, Y.E., 2014. Exploring the role of customer relationship management (CRM) systems in customer knowledge creation. Information & Management, 51(1), pp.27-42.

Lewis, T. and Huber, A., 2015. A revolution in an eggcup? Supermarket wars, celebrity chefs and ethical consumption. Food, Culture & Society, 18(2), pp.289-307.

Long, C.S., Khalafinezhad, R., Ismail, W.K.W. and Rasid, S.Z.A., 2013. Impact of CRM factors on customer satisfaction and loyalty. Asian Social Science, 9(10), p.247.

Lovelock, C. and Patterson, P., 2015. Services marketing. Pearson Australia.

Mehta, K., Phillips, C., Ward, P., Coveney, J., Handsley, E. and Carter, P., 2017. Marketing foods to children through product packaging: prolific, unhealthy and misleading. Public Health Nutrition, 15(9), pp.1763-1770.