CONTENTS

INTRODUCTION......................................................................................................................3

ORGANZIATION BACKGROUND.........................................................................................3

UNDERSTANDING 8PS OF MARKETING MIX.................................................................4

1. PRODUCT: (HOME BRAND PRODUCTS FOR DIFFERENT CATEGORIES)...........5

2. PRICE.................................................................................................................................7

3. PLACE...............................................................................................................................7
INTRODUCTION:

The present report deals with understanding the marketing strategy by using
marketing mix. This is nothing but developing an understanding of the different factors which
can be controlled by an organization that determine and drive customers to purchase
products. Marketing strategy generally means matching the activities of organization in order
meet the requirements of market that is characterised by change. However the main aim of
marketing is to provide the best price at better price than the competitors but the management
of marketing is basically a discipline that incorporates practical application of marketing
orientation along with techniques and methods on the resources and activities of an
organization. The marketing management incorporates the vision and direction of achieving
organizational goals while providing a better product (Varadarajan, 2015).

Marketing mix plays an important role in implementing a successful marketing

management strategy. This marketing mix must represent the customers desires as well as
ways to achieve the organizational goals. Marketing mix can be defined in simple terms as a
collection of factors that are under the control of an organization, which can be manipulated
in order to influence the decision of customers to purchase the products delivered. There are
about 8 of these individual factors that were identified in marketing mix that has a significant
influence on customers decision. These factors need to be used in order to maintain a
balance between consumers and organizational goals (Carpenter, 1987). These 8 factors
combined known as 8Ps of marketing management.

ORGANZIATION BACKGROUND:

The organization that is studied in this report is Woolworths supermarket which is

largest super market chain in Australia founded in 1924. This organization has its speciality in
selling grocery items and at present has over 1000 stores that comprises of 968 supermarkets
and 19 convenience stores.

Woolworths supermarket along with Coles Supermarket forms duopoly over the
Australian supermarket business account for a combined percentage of 80. There is an
upward trend in profitability in its operation but last year it recorded a total loss of about $
1.235 Billion which was due to its exit from hardware stores and underperforming ventures
like Big W stores (Chung, 2016).

Woolworths supermarket has its major operations through departmental stores and
specializes in selling of groceries. It has also other ventures like selling magazine, hotels,
operating pubs etc

The main focus would be on the departmental store in this report where its current
marketing strategies are evaluated with respect to the products they offer. Woolworth acts as a
single platform supply to many products like clothing, beauty products, food and other
products. Apart from acting as a platform to sell products it also manufactures and sells
products with its own logo. In this report we are going to consider both self-manufactured
and other companies products and analyse the methods adopted by Woolworth in order to
market them properly and increase the sales ("Woolworths Supermarket - Buy Groceries
Online", 2017).

Some of the brands that are manufactured and sold by Woolworth are

WOOLWORTH PRODUCTS DESCRIPTION

Woolworths Homebrand Every day household products that are packaged using
white and red colours

Woolworth Select Products include food, shampoo, potato chips etc which
are quality assured

Woolworth Gold Provides a range of products that satisfies their strict

criteria and rules

Woolworth Fresh All Products under the name Emilys kitchen, Fresh soups
and Meals

Macro Market Offers family targeted products like gluten free diets along
with organic and vegetarian foods. Along with products
that are certified organic are encouraged that supports
biodiversity.

Woolworth supermarket target market includes both males and females corresponding
to different income range. The higher income class is targeted by providing healthy options
regarding their food products that have higher price range. Basically it operates in three areas
Australia, New Zealand and South Africa. It targets upper-income customers that generate
about 80% of customer base in LSM (Living Standard Measure) 8- 10 (Woolworths Holding
report, 2015).

UNDERSTANDING 8PS OF MARKETING MIX:

The foundation concept in marketing is known as 4 Ps which focuses on product,

price, promotion and place factors of effective management plan. This was applicable when
organizations were selling tangible products. But in todays era organizations provide both
tangible and intangible products which created a demand for incorporating additional Ps in
the marketing mix concept and 8 Ps of marketing mix was developed incorporating physical
evidence, People Process and Performance to the already 4 Ps present. This approach of
marketing mix consisting of 8 Ps gained importance as more and more service organizations
found their importance in the modern world (Goi, 2009). A good understanding can be
developed regarding 8 Ps using the following figure
Source: www.Business-fundas.com

Applying this 8 Ps marketing mix to the present case study of Woolworths

supermarket provides insights into the marketing strategy applied at Woolworth supermarket.

1. PRODUCT: (HOME BRAND PRODUCTS FOR DIFFERENT CATEGORIES)

The marketing mix has its first factor known as PRODUCT which can be defined as
any product or service that satisfies the needs and wants of customers. It may be tangible of
intangible in nature. There are different products offered by Woolworth supermarket to their
customer which incorporates most products manufactured by other companies. Apart from
these mainstream products, Woolworth also provides products that are undertaken by it and
makes them available in its stores under its own brand name.

These own brands include products that correspond to day-to-day products and
provide diverse food options to its customer base. The products offer both healthy and
wholesome options and the comparative price is lower than its competitors with no
compromise to its quality and accessibility.

The Woolworth organization is trying to promote their products as an option to costly

products that project themselves as a healthy and wholesome option. The customer are
expected to try these home brands offered by Woolworth which provide the same healthy and
wholesome options but a relatively lower price along with easy access across its 968
supermarket and 19 convenient stores.

Source: www.woolworths.com.au/Shop/Discover/our-brands

The design of these products target the consumers need to have value for money for
the products that he desires and needs. Clearly these products offer themselves as an
alternative to the present costly brands supplied by Woolworth itself. Further, the quality is
controlled by Woolworths standards right from the first stage of manufacturing to the
delivery to customer. Each stage is processed using standardized criteria and norms. Any
deviation from satisfying the established criteria and norms is highly unlikely providing
customer with cost effective products under the brand name of Woolworth.

The home brands of Woolworth supermarket targets 8 categories known as Delicious

Nutritious, Farmers own milk, Free From, Gold, Home brand, Macro, Woolworths range and
the old Bunch. These categories are a result of innovative projects that provided opportunities
to expand the list of products offered under the brand name of Woolworth.

The 8 categories corresponding to Home labelled products (self-manufacturered) and

associated description with benefits to customers are given using the table

CATEGORY DESCRIPTION BENEFITS TO CUSTOMER

Delicious Nutritious provides nutritionally 6 balanced meals with 3 servings

balanced range of products consisting of calories under 450
that are quick, health and
delicious

Farmers own milk Provides milk that tastes great Provides quality milk
 which is made possible due to
coordination between
Woolworth and Farmers

Free From Offers products that are free Serves the customers that have
from Gluten, Dairy and food allergies or intolerance
Lactose that are delicious free
from alternatives

Gold Special products that are Provides a wide range of

either selected or produced by delicious food
incorporating best available
ingredients

Home brand Provides everyday household Includes dairy meat, snacks and
products at lowest prices treats

Macro Good food that is plain and Offers foods that are in
simple accordance with animal welfare
and sustainable farming

Woolworths range Provides healthier food range Offers Fresh snacks that are
rating favourable by customers

The Odd bunch Sells fruits and vegetables at
discounted price that are
funny shaped or with in
accordance with general
physical shape
Provides incredible value to
customers by offering these
products at cheaper price

2. PRICE: (LOW PRICE STRATEGY)

Price can be described as the money paid by the customer for products or services that
he acquired from the company. This pricing decision by the company is based on many
factors that are both internal and external. The internal factors correspond to objective of
marketing, strategy employed, costs and considerations. The external factors correspond to
nature of market along with the demand and competition (De Toni, Milan, Saciloto, &
Larentis, 2016).

Woolworths employs a pricing strategy known as Everyday Low Price (EDLP) to

attract customers by offering them a range of products at low prices (Reglos, 2016). But
recently Woolworth had employed another strategy that targets the psychological
conditioning of the customers mind-set. For more than 20,000 products in its stores
Woolworths moved the pricing from cents to dollars which means that there will be no 99
cents but a full dollar. This is expected to ease the processing of identifying the prices and
also it defines the age old pricing strategy of placing .99 cents to price (Stiles, 2017).

This strategy plays with psychology of customers as having zeros at the far right
indicates a special discount. This strategy is also followed by Coles supermarket. This
approach to private labelled food (self-manufacture products) pricing along with low price
offering will target the customers and leads to increase in the total number of sales.

The psychological theory that is employed here by Woolworth is Anchoring in

which the products are previous x.99 cents and now the product prices is x+1.00 cents. The
customer believes that the price that is offered for a product is a better in every aspect.

3. PLACE: (RETAIL STORE MODEL)

The place or location where the services or products are delivered plays a major role
in the promotion along with price. This place generally depends upon distribution strategy
policy employed by organizations. The place determines the customer effort to buy the
products which when addressed can be used as a competitive advantage (Loomba, 1998).

Woolworth supermarket employs a delivery system that is based on store model

where customers comes to store selects a product and then buys it. This is traditional style of
delivery the products to customers. However, Woolworth also employs home delivery which
shifts the place of transactions to either customers home (in case of cash on delivery) or
through online mechanism (in case of online payment).

The main option is through 1000 stores that are present across Australia but the
conventional method of having products delivered through home delivery system is also
becoming popular as customer can choose the products through online website and place an
order using E-kart mechanism. Further, Woolworth also offers secure online payment which
is encouraging customers to buy the products online.

The positioning of these retail stores are in places where is accessible to most of the
customers as it positioned with respect to accessibility of customers. Woolworths offers
mobile application along with website that can be easily downloaded from play store and
used to order home delivery. This app usage was a successful in capturing customers attention
and driving them to use online means in order to complete their shopping (Weill, 2015).

4. PROMOTION: (using text, audio and video mediums)

Promotion is considered as the heart of marketing and comprises of advertising, sales

and people which help to deliver the product related information to potential customers. The
target market must be aware of the product and this awareness is created by using proper
promotional strategy (Graeff, 1995). The promotional strategy employed by Woolworths can
be depicted by using the following figure
Source: www.woolworthsgroup.com.au

Woolworth employs advertisement using different audio and video channels along
with effective use of social media and internet marketing options. Each channel helps in
targeting specific customer base which then helps to bring the promotional activities and sales
offers projected at dedicated customer base.

Apart from these, launch of various campaigns and demonstrations to customers are a
part of promotional strategy. Free giveaway samples are also incorporated in order take
products to customers and involve their feedback in their improvement. An efficient loyalty
program focuses on promoting products on dedicated customers and provides them an option
to recover their value by buying new products and reviewing them. This will create word-of-
mouth publicity (Thackeray, Neiger, & Hanson, 2007).

5. PEOPLE: (EFFICENT STAFF AND OTHER ASSOCIATES)

Woolworth employs efficient staffs that provide their services in management and
human resources. These human work forces include both skilled and unskilled people that
correspond to 115, 000 team members in its stores along with distribution centres who assist
in providing service and range along with value in a superior manner. Apart from employees
Woolworth also works with Australian growers and farmers in order to provide fresh fruits
and vegetables. Along with these strong human resources

Woolworth also incorporated the opinion of customers who can provide their input in
order to increase the efficiency and quality of products offered at Woolworth. This can be
done by using company website or through Smartphone App ("Woolworths Supermarkets -
Woolworths Group", 2017).

The on-going quality training for the employees plays a crucial role in the success of
organization. The training provided was in relevance with the environment of Woolworth.

6. PROCESSES: