Marketing Essay Example

  • Category:
  • Document type:
  • Level:
  • Page:
  • Words:



Executive Summary

Woolworths Ltd Group is a company that operates in Australia having its first store established in 1924. The group runs retail shops, supermarkets, petrol stations, and Big W chains. It is the biggest supermarket chain in Australia. This report explores the market strategy used by the company in specific target markets through application of an elaborate promotional mix. The report explores important information about Woolworths including its history, operations and products. SWOT analysis and the means of collecting information from the market have been discussed. The report ends with development of a marketing strategy for the identified market segments.

Table of contents

Executive Summary 2

References 12


About the organization

Woolworths is the largest supermarket chain in Australia that overtook its traditional rival Coles in 2006. Woolworths operates 992 stores across Australia and relies on over one hundred thousand team members in distribution centers, in stores and support offices to offer customers with superior range, value, service and convenience (Keith, 2012). Woolworths undertakes to work closely with Australian farmers and growers to make sure the best products reach the target customers. Woolworths source 96% of all fresh vegetables and fruit and about 100% of fresh meat from framers as well as growers in Australia. This makes the company Australia’s Fresh Food People. Being one of the most innovative retailers within Australia, Woolworths are aware that customers are seeking for simple and new way to shop. It is possible for consumers to shop the comfort of their computers at their home and groceries can be delivered straight to their home. The company became a chain when the second store opened in Australia on 6th August 1927.


The food industry in Australia is a complex network. It entails the planning and organization of production processes, storage as well as marketing of food products. Environmental diversity and geographical location of Australia offers numerous advantages for the Australian food industry. Australia producers a broad range of materials hence leading to a readily available food. Consequently food can be exported to other countries. The food retail sector provides the field where consumers buy food processed items. Major food retailers in Australia include Woolworths, Coles and Aldi and other smaller retail outlets. Grocery stores and supermarkets make up the bulk of the sector registering 62%. The retail sector is the second big employer in Australian food industry. Woolworths is a well-known major player in this sector and it was established in 1924. Its retail margins have risen in the recent past. Missionstatement defines Woolworths targeting to be at the heart of the community as well as the best loved retailer for kids, family and home leisure.Value statement is engraved in the objective of the company in accomplishing its goals. The objective of the company is to improve stock turns as well as optimize efficiency while making sure that its customers find value for their money. Woolworths has outlined the strategy of winning the trust of its customers. The company targets to increase its market share through low price margins and enhancement of the shopping experience. The customer is at the center of everything. The overall customer experience has to improve while making sure prices are affordable. The company targets to offer better experience, superior freshness, an appealing range, focus on innovation and offering superior freshness to customers. Woolworths deals in a wide range of products from home products to petroleum products. Woolworths have transformed its brand advertising with several spots aimed at explaining why people shop there.


Woolworths’ SWOT analysis

SWOT analysis is the evaluation of the strengths and weaknesses of an organization by looking at its internal environment and external environment that comprises of the threats and opportunities.


Woolworths focuses on Australian liquor and food business hence enhancing the top-line of the company. The company has maintained a strong focus on Australian food and liquor business through the launch of new products, opening new outlets as well as introduction of marketing campaigns. In the supermarket business in Australia, Woolworths introduced several new products such as sweet crunch lettuce, sweet Salanato tomatoes, as well as ripe stone fruit. In the 2013 financial year Woolworths opened eleven meat serveries offering specialty fresh meat cuts together with specialist advice; and ninety one new bakeries in order to broaden the range in artisan sytle patisserie, premium cakes and breads. The company has introduced marketing campaigns for the purpose of enhancing its customer base. It launched price cuts on branded as well as own brand products.


The dependency on the Australian market is a weakness for Woolworths hence calling for geographical diversification into other countries. Woolworths depends largely on its domestic market of Australia for majority of its revenues. In the 2013 financial year, 92.1 percent of its total revenues were from the domestic market of Australia. Whereas the company has its presence in New Zealand, it only contributes for a meager part of its revenue about 7.9%. Depending on the Australian market can make the company’s operations and business susceptible to some of the country-specific trends. A geographical concentration leads to increase in the level of risk. Woolworths can be significantly affected by the cultural or political changes that happen owing to geographical concentration in Australia.


Enhancing focus on retail data as well as big data analytics can help Woolworths to strengthen its Australian supermarkets business. The company has concentrated on taking customers’ insights which can assist in strengthening its supermarkets business in Australia. For example, Woolworths acquired 50 percent stake in Quantium which is an Australian data-driven strategy business having capacity in big data and retail data analytics (Nenycz-Thiel, 2011). The company targets to enhance the customer analytics team size and use its capacity to deliver insights as well as better decisions in pricing, promotions and ranging. Strategic initiatives will strengthen Woolworths online retail presence as well as improve the customer base. Online retailing is not fully exploited and there is room for improvement. There are global market opportunities in India and potential changes in plastic bags can add extra money to the company’s revenues. There are more opportunities for acquisitive growth as well as diversification into other markets for Woolworths. There is plenty of outsourcing opportunities within South-East Asia.

One of the major threats is intensive competition in Australia and New Zealand. Woolworths faces high competition from traditional competitors like Aldi and Coles which is a subsidiary of Wesfarmers. Woolworths provides little differentiation as compared to Coles hence making it challenging to maintain a competitive advantage. Coles and Woolworths have confronted each other in price wars for quite a long time. There is increased pressure from foodstuffs. Australia has witnessed low customer confidence which has a negative impact on the retail business. Independent retailers pose great competition and opposition to Woolworths as a retail model.

Collaborators are important in helping Woolworths to meet its targets in the market. Collaborators help in gathering information about the market. Coles and Woolworths compete very fiercely in several sectors. Woolworths holds the dominant position within the local grocery market and has further interests in liquor retail as well as general merchandise through Dan Murphy’s, BWS, and Big W chains (Lovelock & Patterson, 2015).The company has to content with pressure from independent stores that are offering the same products as its outlets. New pricing and value strategy has been introduced by Woolworths for the purpose of neutralizing Coles and Aldi’s impact on the outlet’s sales. New entrants are from independent stores and the coming of Aldi in the Australian market has increased competition within Supermarkets. Australia is stable politically and many businesses enjoy doing their operations in Australia and Woolworths is one of them. Infringement of rights is one of the legal issues that Woolworths has to be careful about to avoid incessant law suits. Technology is at the center of everything as the digital era takes marketing by storm. Online shopping has become a revelation that many people have embraced. Online marketing is cheap and convenient for companies including Woolworths.


Collecting information about the needs of customers, threats posed by competitors, changing trends and the role of collaborators is crucial for the survival of Woolworths in the Australian market. Market intelligence plays a key role in collecting information through gathering information directly from the market from producers to the final end user of products.

Market research about emerging needs in the market is done through customer feedback and continuous market intelligence. Woolworths has a loyalty program that ensures that customers are rewarded for shopping with them. Collaborators play an important role by providing information about the market and the flow of products in the supply chain. Various players like retailers, wholesalers, sales people, producers and growers all bring information that assist in improving the operations of the company (Juan Din et al, 2014). Government sources about demographic changes, migration, size of the economy, amount of disposable income and household purchasing power plays in important role in shaping marketing strategy decisions for the company (Mitchell, Kristiansen, Bez & Monk, 2010). Secondary sources from print media and prospects play an important role in giving information about the market. Demographic changes show the characteristics of the population and the projected changes.


Developing a marketing strategy that covers the available market segment is crucial to Woolworths. The young and health-conscious people have to be addressed through the products that are stocked by the supermarket chains owned by Woolworths. Woolworths has a large market for youths as well as the health conscious population (Juan Din et al, 2014). Youths want convenience and have time to go to retail outlets and shop hence online shopping and home delivery becomes very important to this market segment.

Woolworths has shown intention to be an affordable retail outlet through provision of prices that are stepped down. This important to the population provided that many youths do not have well-paying jobs to afford high-end products that are very expensive (Hubbard, Rice & Galvin, 2014).  The customers are at the center of the marketing strategy of the company in that all decisions made have to evaluate the impact on the end user consumer. Fresh Food People resonates well with the health conscious clientele while the youth will be happy with the affordability message where price-cuts take the center stage. Many youths are not very economically empowered to afford high-end products (Lovelock & Patterson, 2015). Woolworths has to meet their needs at affordable cost that can be achieved by an average Australian youth.


Developing marketing tactics

Woolworths is a pioneer and also is among the oldest companies to launch the modern retail trade model. It is important to develop an elaborate marketing strategy to cover the youth market and the population that has became aware about health in what they consume. The old generation is concerned about convenience and accessibility. The marketing strategy mix will cover the 7Ps of marketing as discussed below.

The product to be sold to the target customers have to address the immediate needs of the specific customers. Low-switching costs within the industry make it very easy for customers to find another supplier to cater for their needs. Products have to address the needs of customers and in case of any defects they have to be addressed immediately. The product to be sold must satisfy the needs of the target group of customers (Nenycz-Thiel, 2011). The products have to make the lives of customers better and enable them to accomplish their daily personal targets.

The retail outlets have to be located where the youth and other target groups can easily access the location. The current generation looks for convenience and accessibility in almost everything. When stores are located at excluded places, it makes it hard for people to locate them or go shopping there. Home delivery is the best in order to increase convenience for a busy generation. The customers can shop online and have the products delivered at their door steps and in case of any defects the same sales people have to collect the product and replace it with a perfect one without inconveniencing the customers (Hubbard, Rice & Galvin, 2014).  It is important to keep the customers happy.

The price is what the customer pays in order to get the benefits of the product. This is very important element of the marketing mix. Adjusting the price has an implication in the whole marketing strategy (Williams et al, 2010). The middle-income earners are very sensitive to price and the strategy by Woolworths to apply price-cuts play an important part in increasing the market share of the company and edging out competitors.


Promotion is very crucial marketing since it enhances brand recognition as well as sales revenues. It comprises of public relations, advertising, sales promotion and sales organization. Advertising entails the communication methods that used in various media like print media, internet, radio and television (Armstrong et al, 2014). Woolworths has to take advantage of online advertising because many young people are on social media and can access the internet. Increased connectivity has increased the presence of young people on the web. The message about affordability of products and convenience has to be communicated to the youth people using the internet or social media effectively (Moriarty et al, 2014). It is important to start pages on facebook that talks about specific products and answer all questions pertaining to the product. The promotion will create awareness about the market niche that the company is addressing. The message will be strong and reach the target market with clarity about what Woolworths offers (Williams et al, 2010). The Fresh Food People slogan launched by the supermarket chain has to be championed in the entire country and beyond to increase sales.

Thorough market research will reveal viability of certain market and if there are enough people in the market for profitability purposes. The business targets to sell to people and without them there will be no business. The size of the youth market has to be determined and the products designated for such market determined. The employees of the company also make part of these people because they support in delivery of the company’s mission (Moriarty et al, 2014). It is crucial to hire competent people who will maintain high standards in delivery of services and products. Training and development is very vital for the workforce to improve service delivery.


This involves the processes and systems of the company that affect delivery of products or execution of services. The processes have to be elaborate in that lead-times are predictable and there is not time there is shortage in the market on over-supply. Customers have to know how soon they can get anything they are asking to be delivered at their home. The processes even packing, health standards, weight and measures have to conform to the rules and regulations without fail in order to inspire confidence and trust among the customers (Solomon, Russell-Bennett & Previte, 2012).

Physical evidence

Physical evidenced entails to how the business as well as its products is perceived at the marketplace. Apt branding is needed to associate Woolworth’s products with certain attractive qualities like affordable, convenience, healthy and environmentally friendly. The message about affordability of the retail products will play an important role in creating a niche that is customer friendly (Dwivedi et al, 2012). Any customer who wants to save some of his hard-earned cash has to shop at Woolworths where there are affordable products.

Every aspect of Woolworths Company exists with the focus of making the lives of customers easier, simpler and better. Customers are supposed to be at the heart of every decision that is made by the company. The business takes care of team members, customers, producers and manufacturers as well as any other persons who walk through their door.


Armstrong, G., Adam, S., Denize, S., & Kotler, P. (2014). Principles of marketing. Pearson Australia.

Dwivedi, A., Merrilees, B., Miller, D., & Herington, C. (2012). Brand, value and relationship equities and loyalty-intentions in the Australian supermarket industry. Journal of Retailing and Consumer Services19(5), 526-536.

Hubbard, G., Rice, J., & Galvin, P. (2014). Strategic management. Pearson Australia.

Juan Ding, M., Jie, F., A. Parton, K., & J. Matanda, M. (2014). Relationships between quality of information sharing and supply chain food quality in the Australian beef processing industry. The International Journal of Logistics Management25(1), 85-108.

Keith, S. (2012). Coles, Woolworths and the local. Locale: The Australasian-Pacific Journal of Regional Food Studies2, 47-81.

Lovelock, C., & Patterson, P. (2015). Services marketing. Pearson Australia.

Mitchell, A., Kristiansen, P., Bez, N., & Monk, A. (2010). Australian organic market report 2010.

Moriarty, S., Mitchell, N. D., Wells, W. D., Crawford, R., Brennan, L., & Spence-Stone, R. (2014). Advertising: Principles and practice. Pearson Australia.

Nenycz-Thiel, M. (2011). Private labels in Australia: A case where retailer concentration does not predicate private labels share. Journal of Brand Management18(8), 624-633.

Solomon, M., Russell-Bennett, R., & Previte, J. (2012). Consumer behaviour. Pearson Higher Education AU.

Williams, J., Memery, J., Megicks, P., & Morrison, M. (2010). Ethics and social responsibility in Australian grocery shopping. International Journal of Retail & Distribution Management38(4), 297-316.