Discuss about the Impact of International Marketing Research.
The study focuses on the figures and facts of the chosen organization in a particular sector along with the description of the industry. In the report, supermarket retail sector of Australia is chosen while the market analysis will be conducted on the organizational context of Coles Supermarkets Ltd in Australia. Coles Supermarket is a subsidiary of Wesfarmers conglomerate that serves the Aussies with quality products from many years ago. Coles is considered as one of the most trusted supermarket retail chain among the Australians. Coles is present in 770 locations in Australia. The company operates both in online and offline markets. Consistency, innovation and delivering values to the consumers of Australia are the main motto of the company towards the community. Apart from that, the study is focused on the current trends, profitability and growth of supermarket retail industry. However, the role of the primary target market towards the decision-making process of the company. On the other hand, positioning map will be created along with PESTEL analysis, segmenting, targeting, positioning, etc. It will help to describe the competition in the market as well as the steps of Coles that are taken to maintain a sustainable position in the market of Australia.
Trends of Industry
Australian grocery retail market is evolving very fast and there are many trends that are changing the nature of the market. The trends of the market are influenced by the shifting demographics of the consumer, retail convergence, and evolving online platforms. Many market research has showed that soon the supermarkets of Australia along with the other grocery retail markets. It is due to the excessive use of internet by the consumers the online stores are gaining more priority from the physical stores present in the market. However, the trends of the market are described into three categories of growth, profitability and external market analysis i.e. PESTEL analysis.
Grocery retail sector of Australia in the coming three years will change the patterns of the industry. The media fragmentation and the shifting consumer ethnicities and demographics are responsible for creation of the changing retail landscapes of the country in the year of 2017. They are different in many ways so that they can cope up with the changes in the environment. Internet penetration in Australia is responsible for changing the taste and preferences of the customers along with the challenging transitional phase from offline stores to online stores and finally to omni-channel. The digital transition of the market is responsible for creating challenges in the perspective of customer loyalty (Zeriti et al., 2014). It is seen that the supermarkets of Australia are ruled by Coles, Woolworths, Aldi, IGA and other supermarket retails. Coles has huge employee base that are responsible for creating values in the shopping experience of the Australian consumers by providing them quality products at affordable price.
The industry is profitable in nature and is dominated by many supermarket retail giants as well as grocery retail stores of the country itself. In the year of 2016, up to the month of September $29.8 billion was spent to Coles, $32.6 billion was spent to Woolworths group, $11.2 billion to Aldi, $8.8 billion to IGA and $7.3 billion to other supermarkets of Australia (Kumar et al., 2013). The supermarkets are profitable in nature. However, the market reaches a level of saturation as the supermarkets of Australia are very competitive in nature. The companies are earning huge profits from the consumers irrespective of the market saturation. They are developing new products as per the demands of the consumers in the market. The trend of the supermarket is predicted as $25543.3 million while it is adjusted as $25616.4 million. It is seen that the supermarket of Australia trend to grow by 1.8% by the year of 2016 (Kumar et al., 2013).
It can be said the supermarket industry in Australia is at saturated stage. Companies of supermarkets are competing with each other. The economic environment of Australia is favourable for the growth of the industry as the GDP of the country is growing annually by 2.5%. However, the macro environment of the industry is described in the light of PESTEL analysis. It will be mentioned in the appendix section. It will be explained by following the current trends of the market in the grocery retail sector of Australia (Koh & Wong, 2015).
Overall market segment
The market segments of the grocery retail market in Australia are categorized into two categories. They are primary segments and secondary segments. The primary and secondary target market will be described in terms of the nature and segmentation of the customers. Supermarkets are the place where everyday use goods are available. People can buy everything related to household purpose from the supermarkets. Australian supermarket is also occupied by German supermarkets such as Aldi. Segmentation of the market is done in order to focus on the needs and demands of the customers so that they can serve them better (Kurt & Hulland, 2013). Segmentation, targeting, positioning is also used in formulating segment specific marketing strategies while spreading awareness of the offers, discounts, new products, special attractions, etc. to the target customers. The customers are divided into two segments. It will be described in the three parts of segmentation. As supermarkets have every category of goods, hence the company can use many types of tactics in order to attract different target customers.
Demographic segmentation includes the age group of the people i.e. the primary target markets. The age group selected by Coles is in between 25 to 50 years of age. The primary target markets of Coles are focused in order to increase the sales of the company. Demographic segmentation is an important form of segmentation used by Coles to specify their categories of products. Apart from that, there are other patterns of segmentation such as geographic segmentation. Geographic segmentation of Coles includes different urban and semi urban areas of Australia. Different types of geographical division are targeted by Coles in order to increase the sales of their products. The demographic characteristics of people also include income group. The average income of the people in Australia is much higher than that of other countries. Hence, the consumers of Australia are capable enough to buy things from the supermarkets of the country. Coles ranked second in terms of the grocery retail industry. However, the company is trying to take the first position in the market. The psychographic segmentation is important because it attracts different types of attributes and habits of the people. The different kinds of user status of the customers are important in order to formulate marketing strategies for it. Apart from that, Coles also formulate products as per the user status of the consumers of Coles. The customer loyalty of the customers are important to Coles as they focused on the developing the shopping experience of the shoppers every year (Fifield, 2012). Besides this, the different strategies that are formulated for attracting more customers in the stores so that they can shop more from Coles than other supermarkets present within the area. The segmentation process is the first step of positioning and targeting their products in the target market. Hence, identification of primary segment is more important than that of other aspects of the strategic management aspects in the marketing department.
Primary segment of market and their decision-making
Primary market segment refers to the lady shoppers more than that of the male customers of the country. The primary target market is important for Coles as the values of the customers are important. The core organizational values of Coles are focusing on the customers first. It leads to delivering a good quality product to the consumers as well as excellent customer service. The focus of the company is to involve the customers of the company. The primary segments of the market i.e. the customers (Sheth & Sisodia, 2015). Companies who are involved in formulating sustainable strategies are involving their different kinds of stakeholders in their primary decision making processes. There are different kinds of stakeholders such as internal stakeholders and external stakeholders. Internal stakeholders include the people inside the company i.e. the CEO, CFO, and other senior professionals related with the company. External stakeholders of the company include government, customers, shareholders, etc. Involvement of external stakeholders is necessary in this context. The customers if they find that they are getting priority from the company, they will shop from Coles only (Lusch & Vargo, 2014). On the other hand, improved level of customer service helps in generating more customers through word of mouth promotion. Innovation and focus on customers are the two aspects that the company is putting emphasis. It can be said that Coles is following participative form of leadership by involvement of different types of stakeholders in their strategic decision making process of the company.
It is seen that most of the decisions of Coles are made in the favour of the customers. Employees of the companies are trained in a way so that they can deliver their best while serving the customers in order to maintain customer loyalty. Customers of the company are indirectly involved in the decision making process of the company. Employees of Coles are taking constant feedback from the customers regarding product development. They are trained in a way so that they can understand the latent needs of the customers. Customers and employees both are considered as an asset of the organization. Apart from that, there are different types of techniques used by Coles in their online platforms while engaging different types of customers. Online techniques are most common techniques that are used not only by different supermarkets of Australia but also used by all multinational companies of the world. Popularity of the company nowadays is depended on the online methods of improved engagement of people (Kumar et al., 2013). It is also considered as different kind of involvement of decision making process of the company.
As it is earlier discussed that, Coles is considered as the second most popular supermarkets of Australia in terms of popularity, size, market share and revenue, it is trying to occupy the first position in the supermarket industry of Australia. The company is increasing its sales by different techniques of innovation adopted by the strategic management department of the company. It is seen that Woolworths is considered as the number one supermarket retail chain in Australia in terms of revenue, employees, market share and size of the company. The strengths of Woolworths is its employee base (Leonidou et al., 2013). The huge employee base is responsible for creating a good opportunity for increasing the employment of the country. Coles on the other hand ranks second. The number of employees of Coles is less than that of Woolworths. The image of the brand and the reputation of the brand is important for both the companies. Apart from that, it can be said that there are two other companies that are ruling in different types of urban and suburban areas of the country. They also have a good market share and reputation in the market. The companies are German supermarket retail giant Aldi and IGA.
Apart from that, there are different types of competitions that the supermarkets are facing in order to achieve a good market share. The main competition is the price war. All the major supermarkets are developing constantly new products at a lower price. Cost leadership is followed by most of the companies (Armstrong et al., 2012). Apart from that they are following economies of scale. The big supermarket giants apply the process of cost leadership is penetrating new areas of Australia while obtaining economies of scale in their methods of production, distribution and marketing of goods.
Positioning map in marketing is the process of creating a diagrammatic representation that is used by the strategic management department and the marketers while capturing the different levels of perceptions of the customers regarding the different attributes of the brand. The customers in this study include the primary target markets. Another name of positioning map is known as perceptual map. It is used in order to position a company or a line of products in the market (Berthon et al., 2012).
In the report, a positioning map for Coles will be provided so that Coles can find its position in the market. The map will be formulated after taking feedback from the customers and the reputation of the company in the market. However, the determinants of the map are also formulated as per the feedback provided by the customers.
The report illustrates different aspects of Coles in terms of competition, segmenting, targeting, positioning and other aspects of marketing attributes. There are various types of facts and figures that are included in the report so that Coles can develop strategies regarding the different types of marketing strategies of the company. It is seen that the industry is competitive in nature with different kinds of technological advancements used by the companies in order to satisfy the needs of the customers. The report illustrates that the different kinds of retailers are in the matured phase as the trend of customers’ preference, increasing day by day while an increase in the expectations of the consumers as a whole. Improved facilities and excellent customer service are provided by all the companies. Coles must innovate new strategies in order to improve the base of the customers.
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