The next stage of the marketing audit is for you to consider the market for your organisation and evaluate the opportunities and threats that exist for your chosen organisation.
Please discuss the following:
1. Briefly describe the industry market for your organisation and evaluate current trends in:
c. Macro environment ( PESTLE factor)
2. Describe the nature of competition in your industry. Explain and analyse your organisation’s place in the market by comparing and contrasting its strengths and weaknesses to your main competitor.
3. Outline and examine the major market segments for your organisation and identify your primary and secondary target markets.
4. Discuss the level of involvement your primary segment is likely to have towards your organisation in terms of the decision making.
5. Taking into consideration the primary segment, their level of involvement and the competition, create a positioning map for the market place.
You need to select an Australian based organisation or you could select an International organisation but it needs to have a presence in Australia. (I.e. Apple is acceptable since you can purchase their products in Australia. Ensure that you review the Australian market and consumers.)
Given that companies usually have a wide product offering that may cater to different market segments, it is encouraged that you focus on 1 product / service to streamline your analysis.
Also, you need to select a B2C market so that you can profile your target markets effectively.
Overview of JB-Hi-Fi
Marketing management is the procedure of emerging approaches and planning for services or products, promotions, sales, advertising to reach a preferred segment of customer. The heart of every organization success lies in its strategies of marketing (Iacobucci, 2016). Marketing management shortened the functions and activities, which are included in the services and goods distribution. As per Philip Kotler, “Marketing management is the study, development, execution, and regulation of the programs created to bring anticipated relations with the target audience for the aim of attaining objectives of the organization.” Similarly, marketing management is the procedure through which a service or product is introduced and advertised to the potential target market (Zimmerman & Blythe, 2013). The intent of this report is to consider the market of JB-HI-FI Company and evaluate its present market opportunities and threats that have a major influence on its operations. The report will be comprised of a detailed analysis of the industry of which JB-HI-FI is a part along with its external environment analysis. It will also discuss the level of competition present within the industry. Besides this, it will discuss the market segment of the business in order to recognize its primary and secondary target markets.
JB-Hi-Fi is one of the known consumer goods retailers of the Australian market. The company majorly deals in Ultra HD Blu-rays, CDs, video games, DVDs, Blu-rays, mobile phones, Telstra services, electrical home appliances, and electronics/hardware. The head office of the company is in Melbourne and in 2007; it introduced its operations in New Zealand. Mr. John Barbuto founded JB-H-Fi in 1974. However, in 1983, the business was sold and in 1999 another nine stores were introduced in the market (JB-Hi-Fi, 2018a).
In order to evaluate the structure of a company and its corporate strategy within the industry it operates, the framework of Porter's five forces is utilized. This model, have used five forces which perform an essential part in shading the industry and market. These forces are utilized to evaluate the intensity of the competition and profitability of the market and industry (Magretta, 2012).
The threat of New Entrants
The threat of new entrant in the retailing industry is high because it brings new and innovative ways of performing a task, which increases the pressure on JB-Hi-Fi Limited by reducing the prices and offering a new value proposition to the consumers in the market. The company needs to handle all these challenges and generate effective barriers for the competitors in order to safeguard its competitive advantage (Fern Fort University, 2018d).
Bargaining power of Suppliers
The bargaining power of the suppliers in the retailing industry is low due to the presence of a number of suppliers who provide raw material to the companies. JB-H-Fi is the one who deals in different types of products and therefore it deals with diverse suppliers, which increase the negotiating power of the company (Fern Fort University, 2018d).
Bargaining Power of the Buyers
The bargaining power of the buyers in the retailing industry is high due to their demanding habits. The customers desire to buy superior products at lower prices. This increases the pressure on the profitability of JB-Hi-Fi Limited in the long-term.
Industry Market of JB-Hi-Fi
Threats of Substitute Products
The time a new service or product fulfill the similar need of the customers in diverse ways, the profitability of the industry suffers. For instance, Google Drive and Dropbox are the substitute products to the storage hardware drives. The substitute product threat is high in the industry as it provides a unique value proposition in the industry (Fern Fort University, 2018d).
Competition among existing players
The level of competition in the retailing industry is very intense. This competition affects the long-term profitability of JB-Hi-Fi as it is enforcing it to reduce the prices of services and products in the market.
The retailing of consumer goods sector has fought with hard retail situations in the last five years. Low disposable income growth and unstable sentiments of the customer because of uneven financial markets stemmed in deprived trading circumstances, as households scaled back their spending on goods that are included in the category of non-essential goods. Additionally, advancement in the technology has added to a decrease in the demand of retail for numerous customers good over the period, like video games, recorded music, and photographic equipment, stationery, books, and newspapers. Operators of the Subdivision are dealing with intense rivalry from the online retailers because customers are increasingly becoming comfortable with online shopping in the last five years (IBIS World, 2018a).
Political factors perform an essential part in defining the factors that influence the profitability of JB-Hi-Fi Limited in a market or country. JB-Hi-Fi Limited is functioning in different country’s retailing which uncovers it towards diverse kind of political risk. In order to attain success in this type of dynamic retailing industry in different nations, the company needs to expand the regular risks of the political environment (Fern Fort University, 2018c).
The economic factors like savings rate, foreign exchange rate, economic cycle, and interest rate define the aggregate investment and aggregate demand in an economy. Whereas, factors of microenvironment like competition norms influence the company’s competitive advantage. JB-Hi-Fi Limited can make use of economic factors of the country like inflation, growth rate, and economic indicators of the industry like Retailing industry consumer spending, growth rate, etc. in order to forecast the growth route of the sector as well as the company.
The culture of the society and means of performing task influence the organization’s culture in an environment. Attitudes and shared beliefs of the society perform an essential part in how vendors at JB-Hi-Fi Limited will comprehend the consumers of a target market and how they plan the message of marketing for the customers of retailing industry (Fern Fort University, 2018c).
Technology can quickly affect the competitive landscape and price structure of an industry in a short period. Therefore, it becomes very essential for continuously innovating, for the sake of not only increase profits and to be a leader in the market, but also to avert undesirability in the coming future. It is very important for JB-Hi-Fi Limited to continuously innovative products for customers in order to maintain a competitive advantage over its competitors.
Porter 5 Force Framework
In different nations, the legal institutions and framework are not strong enough to guard the company’s intellectual property rights. A business must prudently assess before arriving in such markets because it can result in the theft of secret of the business. Therefore, in order to successfully operate in different countries, JB-Hi-Fi Limited always go through the anti-trust law in the industry of retailing.
Diverse markets possess diverse standards and norms related to the environment, which can influence an organization's profitability in the industry. Even in a single nation, many states can possess different laws related to liability and the environment. JB-Hi-Fi Limited is very much focused towards the safety of the environment (Fern Fort University, 2018c).
Competitor analysis in strategic and marketing management is a valuation of the weaknesses and strengths of existing and potential rivals. This examination offers both a defensive as well as an offensive strategic framework to recognize opportunities and threats. Profiling syndicates all the pertinent competitor analysis sources into a single framework (Fleisher & Bensoussan, 2015).
JB-Hi-Fi deals with intense competition from numerous players in the market some of them are David Jones, Harvey Norman store, and Myer (Brown, 2008). In order to analyze the position of JB-Hi-Fi, the report will evaluate the strength and weaknesses of Myer in the Australian retailing industry.
Successful record of accomplishment in new product development and innovation
JB-Hi-Fi has extremely skilled labor force through effective learning and training programs.
JB-Hi-Fi Limited is not capable enough to cope up with the challenges from the new entrants in the market and due to this; it has lost a small part of its market share.
The company is investing the very low amount in the research and development in comparison to the fast developing players in the industry (Fern Fort University, 2018b).
Myer is known to offer a wide variety of products in the market (Fern fort University, 2018a)
The company offers a high level of consumer satisfaction as it is devoted towards the management of customer relationship with present customers as well as potential customers.
Company lacks in proper financial planning due to which it deals with different issues such as management of liquidity within the organization.
Myer lacks in forecasting the product demand in the market due to which it is missing huge opportunities in comparison to its competitors.
The marketing mix is the set of tactics or actions that are used by a company in order to market its product in the market. The marketing mix is comprised of 4Ps that are a product, price, place, and promotion (Richter, 2012).
JB-Hi-Fi Limited is known for marketing its services and products in the market in the traditional form, but it is equipped with advanced technology products such as home entertainments, Blu Ray Disc Players, CD player and different electronic goods that appeal the new generation (JB-Hi-Fi, 2018b).
JB-Hi-Fi Limited vends its services and products in the market at affordable prices in order to confirm that it is capable to attract a maximum number of customers. Being one of the famous stores in the Australian market, it makes use of psychological pricing strategy in order to attract the customers. To recall the customers, the company provide reward points and loyalty card benefits such that they can use the benefits of those points in the future (Data Group, 2018).
JB-Hi-Fi major deals in two nations that are New Zealand and Australia. It believes that growing the business operations is the efficiency of marketing. According to the company New Zealand, the market is said to be the most promising markets because there is low competition in the market in terms of product pricing. This offers them the chance to attract potential and new market and enhance their operations of the business (IBIS World, 2018b).
Promotion in the new market of the organization needs funding that allows them to increase market visibility. JB-Hi-Fi is majorly dependent on the traditional media in order to advertise its products and services because it is said to be the operative manner of promoting business. As at most of the locations the stores of JB-Hi-Fi Limited are located at the central area of the market due to which company uses the strategy of newspaper advertising. Besides this, the company also make use of transit advertisement in order to advertise its services and products to gain higher disclosure in the market.
Growth and Profitability in the Australian retail industry
From the above analysis, it has been identified that JB-Hi-Fi Limited is positioned as one of the leading brand retailers, by offering a variety of branded products in the market at discounted rates. JB Hi-Fi mainly functions its stores from the stand-alone destination sites and shopping center locations (JB-Hi-Fi Limited, 2018).
Market segmentation is said to be the act of distributing a comprehensive business or consumer market, generally comprising of potential and existing consumers, into sub-groups of consumers depending on certain kind of shared characteristics. The market segmentation is of four types that are demographic segmentation, psychological segmentation, behavioral segmentation, geographic segmentation (McDonald, 2012). JB-Hi-Fi makes use of demographic segmentation, behavioral segmentation, and geographic segmentation.
Demographic segmentation – Demographic segmentation is the simplest kind of market segmentation strategy used by the business. JB-Hi-Fi targets its market based on age and income of the customers (Thought Works, 2018).
Behavioral Segmentation – Behavioural segmentation divide the market depending on their usage, decision-making, and behavior pattern. Under this segmentation, it majorly targets retail customers and wholesale customers.
Geographic Segmentation – Geographic segmentation divides the market based on the geographic because of the needs of the customer change according to the geographical area. JB-Hi-Fi Limited target its market based on geographic segmentation. The company majorly deals in New Zealand and Australia market and it makes use of different strategies for both the markets (Thought Works, 2018).
The target market is said to be the end customer to whom a business desires to vend its services and products in the market. Target marketing includes breaking down the whole population into different segments and planning strategies of marketing accordingly for every segment in order to increase the share in the market (Mirgani, 2017).
JB-Hi-Fi Limited has segmented its market into divisions that are home retail consumers and wholesale customers. Retail customers buy home consumer products and tools in both the markets i.e. New Zealand and Australia. The wholesale consumers majorly focus on huge commercial projects, bulk buying by businesses and comprehensive business fit-outs. Wholesale division majorly vends the products to corporate consumers at wholesale prices (Christian, 2017).
The primary segment that is Retail consumers of JB-Hi-Fi Limited is the major priority of the company because they are due to which company offer diversified products at affordable prices. At the time of planning the strategies of the company its first look at this primary segment and then execute its plans. The company advertises its products and services in order to attract retail customers such that the market share of the company increases in comparison to its rivals. Considering the price component, company charge discounted rates from the customers as major customer segment of JB-Hi-Fi belongs to a middle class.
Source [(By Author, 2018)]
The above report has performed a detailed analysis of the market management strategies used by JB-Hi-Fi Limited in order to attract the target market and increase its market share. It has evaluated different aspects of market management such as growth and profitability of the JB-Hi-Fi Limited. It has also analyzed the macros environmental factors influencing the performance of the company in the market. From the analysis, it has been identified that JB-Hi-Fi Limited is dealing with huge competition from its rivals present in the Australian market such as Myer. In order to deal with this company is majorly focusing on new product development strategy and attract new customer market. Besides this, it has been examined the target and segmentation strategy of the company. The company is making use of demographic and geographic segmentation in order to target its customers. The primary and secondary target market of JB-Hi-Fi Limited is Retail consumers and Wholesale consumers. In the decision-making process company majorly frame policies according to the retail consumer segment such that it can meet the demand and increase its customer loyalty. Moreover, the company has successfully created its brand image and position in the Australian and New Zealand market, which is offering its increase productivity.
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