Houzit is a homeware franchise in Brisbane. They specialise in bathroom fittings, bedroom fittings, mirrors and decorative items. They currently have 15 stores spread across greater Brisbane area with all stores being managed and coordinated from their head office in MiltonYou have recently been appointed as the marketing manager and must now review the organisation and devise marketing strategies that will move Houzit towards its strategic goals. The CEO has also asked you to consider some marketing opportunities that may assist Houzit in reaching its goals and provide him with brief summary evaluating two alternatives including the benefits and risks associated with each option and making a recommendation for the opportunity most likely to produce results.
You have the following information about Houzit:
Houzit is close to entering its fifth year of operation; offering a wide range of home-ware items on easy-to-manage payment terms and supplies a three year guarantee on every item sold.
The typical target customers have the following characteristics:
sophisticated people who are house proud
shoppers who will drive to an easy-to-access store
customers who require payment plans to spread their commitment over an extended period
renovators and new home builders
Houzit Pty Ltd is a renowned homeware retailer operating a chain of stores in Brisbane. The company is famous for fitting bedroom products, bathroom fittings, mirrors, and decorative materials. Houzit is a large growing company in Brisbane with over 15 stores in the area and employs over 150 staff members. The analysis of each aspect of Houzit company is as provided below.
1.2 Direction and Organizational Overview
Houzit vision and mission reveal the strategic plan of the company. Strategic direction acts as a roadmap which leads the firm achieve its strategic goals. The vision of the company also provides direction for employees to achieve the set goals. Setting strategic direction involves finding a target direction and committing to getting there. As a national renown retail brand, this company has a cutting edge in providing its customers with unique, quality and secured payment system. Consequently, the company is focused on expanding their stores from 15 to around 100 stores by 2020. Therefore, it is critical to incorporate the strategies of marketing with the goals of the organizations for greater performance. Moreover, companies maintain their competitive advantage through clear market vision which ensures market sustainability in the market(William G. Zikmund, 2010).
1.3 Organizational objectives
The success of a company is geared on measurable objectives formulated by the company(Philip T. Kotler, 2014). Houzit seeks to increase its sales by $5million to 20million per year for the next three years. The company is also prepared to boost their customer loyalty list by 5,000 in the same period. This will enable the company to command a significant portion of the homewares markets segment confidently. Moreover, increased customer loyalty will boost brand recognition in Brisbane to at least 1 in 3 of the brand in a random survey to be taken in the next 18 months.
1.3.1 Current size, capabilities, and resources of the organization
The company being in operation for the past five years have accumulated the following resources and size and capabilities;
Capabilities: Each of the company’s stores can generate the following sales breakup
Bathroom fittings: 30%
Bedrooms fittings: 35%
Mirrors and decorative items: 20%
Lighting fixtures: 15%
Employees: 15-20 fulltime staffs and casual workers
The current size each store is 1000-1500 M2
1.3.2 Gap Between the Objectives and Capabilities
The company vision is to grow their business and enjoy a significant market share of the homewares market in Brisbane. However, the company has a challenge due to fewer employees working in the firm. Thus, there exists a disconnect in the objectives of the firm and their current capabilities. Moreover, there is a concern in the legislation regarding the operations of the business in the expansion of the business which needs to be addressed. This leads to a gap in the objectives.
Houzit is strategically placed to adopt joint ventures and franchise as marketing opportunities.
Houzit can use this marketing strategy to avail the homeware products at affordable prices to the target groups in various segments(Sally Dibb, 2013). The company products have an already established market share. Therefore franchise will help pool more customers to brand recognition. The company will also benefit from communicating and sharing ideas with the prospective franchisee networks. In addition to that, franchising will enable the company to increase their current demand for meeting the growing sales opportunities in the new markets in Brisbane(Terence A. Shimp, 2012). The advantage is that their business will grow, but on the other hand, the unstable political condition, the legislation proposed by the governing authorities and sufficient monetary fund will be a great difficulty to overcome.
2.2 Joint venture
Target market signifies the market segments that are more preferable and favorable for the sale of their manufactured products. They can target persons with local stores selling decorative home products as well as big contractors and renovators(Chitty, 2017). The risk that may be involved in the diverse organizational culture and unequal share of profit which may cause conflicts between the partner associations
3.1 Use of an improved Marketing Mix Strategy
This strategy is composed of Price, Products, Promotion, and Place. The organization concerned with this needs to avail premium quality of products at an affordable cost to attract a large number of customers. They can also provide promotional services through the media or social media(Terence A. Shimp, 2012).
In product development, one needs to consider quality, features, design, packaging, customer service, and any other after-sales service while place includes the business location, distributors, and the ability to use the internet in selling products to consumers directly. Price, on the other hand, is concerned with considerations such as discounting, price setting, as well as credit and cash purchases and lastly promotion, involves consumer persuasion through direct marketing, advertising, personal selling, and sales promotion
3.2 Alignment with the Organizational Goals
The company should use mix strategies to ensure that many locals will purchase their products to improve their brand loyalty. Using promotional strategies will increase awareness and thus meet the goal of increasing 10,000 customers to 15,000.
3.3 Use of Value Chain Analysis
This depends on factors such as a firm’s infrastructure, level of technology, procurement, and Human Resource management. According to the given case study, the firm is increasingly expanding thus the HR should welcome the diversified employees to obtain the objectives. Modern technology should be used for customized products(Kamthe and Verma, 2013).
A value chain involves activities including designing, production, marketing, and distribution since Houzit specializes in bathroom and bedroom fittings, mirrors and decorative items. There is a need to know the raw materials used and the additional values to deliver the best to the customers (Bessant et al., 2012).
3.4 Marketing Performance Metrics
Website visit, customer acquisition cost, referral rate, average lead close rate are some marketing performance metrics used by the organization. Total expenditure on marketing is evaluated to fulfill the organizational objectives. Referral rate is improved if customers are satisfied with the homeware. Regular checks are required so that more products can be designed. Through this, brands increase their competitive intelligence. Return on investment and Return on marketing investment are some of the metrics used.
4.0 Tactics for Strategy Implementation
4.1 Scheduling for marketing activities
Houzit is an integrated company with robust networks amongst the subdivision and products lines. To ensure that it gains a competitive market position, the company concentrates more efforts to meet their organizational objectives. Therefore, management ought to monitor and evaluate the status of its marketing objectives.
Costing: Houzit may require huge initial capital investments to implement its marketing strategies. For example, to invest it requires approximately $2000-$3000 per month in digital marketing. Key performance index (KPI) focus on the areas that Houzit company can further increase its performance (Sampson and Spring, 2012). Marketing activities, management, and other strategic functions could improve its achievements through repeated analysis of their goals and objectives at all levels.
Capabilities and Resources
5.0 Legal and Ethical Requirements
The company ought to obey the current legislation as provided under the Australian government. The legislation for fair trade and competition in the business environment seeks to safeguard the interest of all the industry players regarding fair business practices Competition and Consumer Act 2010 (Berthon et al., 2012). The competition and consumer Act also sets out consumer’s rights and responsibilities that the business must consider in advertising and promotion regarding the marketing strategies. Houzit observes the Australian Consumer Law (ACL), which guarantees the rights of consumers during purchasing. They should also follow the sustainability issue by using all the eco-friendly products so that the sustainability of the environment can be maintained.
Moreover, the company ought to encourage environmental conservation through emphasizes on recycling of raw materials. Consequently, the accepted code of marketing practices should be followed by providing accurate details on the homewares products to the potential customers. The code of practice also demonstrates that the location address has to be revealed in the bills and no deceptive authorizations by other people shall be tolerated by the customers.
5.1 Relation with the Organizational Resources and Capabilities
The discussion on the performance metrics and the legislation ensures that the company promotes good ethical standards in the market. Houzit should, therefore, follow the ethical guideline for expanding their business and operate their business not only for satisfying their customer’s demands but also for the growth of their company in Brisbane(Hamister, 2012). Houzit should also adhere to routine checks of their customers’ feedback on their customer services. Cases of ethical considerations and breach of contracts should be punishable with penalties for compensation to whichever affected party. Moreover, Houzit should take initiatives for providing training to their employees so that they can work efficiently for achieving the targeted goals and objectives of the organization.
This report points out that Houzit company has vast opportunities to gain a larger market share in Brisbane. It is, therefore, encouraging to the management to devise more strategies as identified such as joint venture, franchising and other that could improve the brand of Houzit homewares. Some of the challenges facing Houzit company is their competitors who could gain a strong market position. However, effective implementation of organizational objectives could help the organization to remain competitive in the market.
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