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Background Information

Discuss about the Case Study for Marketing Audit of Coles Supermarket Australia.

Background Information

Marketing has been identified as an essential task for the success of a business entity. Marketing audit is conducted to observe and analyse the marketing strategy of an organisation and identify the problems faced by the company to develop strategic changes in the current policy. The paper has been developed to conduct a marketing audit of Coles which is a 102 year old company and a market leader in the Australian retail industry (Coles Supermarket, 2016). Coles has been identified to control 31% of the Australian retail market that made it the subject of marketing audit study. According to the company report, it is a $22 billion company with revenue of $31 billion in the year 2015 (Coles Supermarket, 2016). Hence, the giant hold in the market with more than 100,000 employees makes it the choice for the research.

The primary aim of the study is to identify the current marketing strategy of Coles and analyse it according to the present market scenario (Baker, 2010). The report has been developed to observe the problems faced by the Coles regarding its marketing strategy and develop proper solution for the company to grow its business in Australia.

The marketing audit will be conducted by analysing the external environmental factors, internal environmental factors, SWOT analysis and Opportunity analysis of Coles in the Australian market. Furthermore, the current marketing strategy will be studied to compare and analyse the result of these strategies in the current business environment (LaPlaca, 2010). Along with that, several marketing theories will be used to present strategic changes that can be helpful for the company to overcome the marketing issues.

The paper will help to develop proper understanding of the marketing strategies that are used by the Cole’s management to carry on its marketing activities. It will provide a clear understanding of the marketing goals and objectives of the company and the current strategy used by the company (Matsunaga, 2010). Furthermore, the study will help to identify the problems faced by the Cole’s Management while carrying on its marketing activities in the current business scenario and develop new strategies that will be helpful for the company to have a better market positioning. The major limitation of the project is that it is mere an academic report and can be helpful for the company only when they apply the strategic change in the real world business.

Aim and Objective

Different marketing theories and analysis will be used to conduct the research on Coles marketing audit. Marketing analysis tools like marketing environment analysis, task environment analysis and SWOT analysis will be used to analyse the current market scenario for a retail business in Australia (Blythe, 2009). Furthermore, a strategic analysis model will be used to conduct the study on marketing strategy Vs strategic marketing.

It is important to conduct an external market analysis to observe the factors that impacts the business of Coles in the Australian market. The external market factors helps to identify the problems that are faced or going to be faced by Coles while operating in the Australian market. Hence, it can be seen that marketing environment analysis is an essential way of observing the market and the conditions that influence the business (Miśra, 2010). The macro-environmental factors that influence the business of Coles Supermarket are discussed herein below:

It can be seen through study that the population of Australia grows by around 2% every year and most of the people live in the urban areas inside or close to the city. The high density areas are mainly the major cities of Australia such as Sydney, Perth, Melbourne and others. The population of Australia includes people belonging from different backgrounds and cultural groups. Hence, it is important for the marketers to understand the population density in the areas they choose for doing businesses (Castaldo, Grosso and Premazzi, 2010). Coles must have its supermarkets in the urban cities or areas close to the cities to attract more customers. Furthermore, it is important for the company to note that most of the population of Australia consist of young customers. Hence, the products and services offered by the customers must match up with the choice of the youth customers. Along with that, being a retailer supermarket, the company must focus on targeting customers aged between 15 and 65 years to occupy and attract most customers (Banham, 2010).

It can be seen that the economy of Australia is one of the developed economic nation. Currently, the fluctuation in the international financial market has impacted the economic condition of Australia. The purchasing power of the Australian people has declined from the earlier stage due to the financial crisis and increased rate of unemployment (Jain, 2010). It can be seen that people have become concerned about saving money and consumers have shifted to private labels to reduce their expenses. The decline in the Australian economic condition has benefited the private labels that are capable of providing the products at lower price. It further has increased the level of competition in the Australian market. Hence, it is important for Coles Supermarket to offer a competitive price of products that can be affordable by the customers in the current economic scenario (Mullin, 2006). A proper pricing will help the Coles to fight the local sellers and gain a competitive advantage in the market.

Method of Approach

People of Australia have become conscious about the environment and several laws and regulations have been introduced by the Australian government to safeguard the environment. It is important for the company to follow these environmental legislations to carry on its operations in the Australian market. The concept of CSR has played an essential role in saving the Coles Supermarket from these legal obligations. The company has implied different environmental sustainability approaches to meet the environmental regulations (Cadogan, 2009). It needs to reduce use of plastics and non-renewable energy to meet the rules and regulations of the Australian government. Along with that, it is important to note that the rules and regulations regarding the environment changes from time to time and therefore, Coles Supermarket must meet the changing laws to carry on its operations in the Australian market.

Australia is one of the developed countries and has all sorts of the developed technology to support the needs of Coles Supermarket. It can be seen that young generation population of Australia are internet savvy people who uses internet on a regular basis (Nwankwo and Aiyeku, 2012). Along with that, the growth of social media has turned the television and radio media of advertising an obsolete technique. Along with that, the increased concern about the environment enforces the company to use less energy that can be met by implementing new technology (Hawkins, Coney and Best, 2010). Hence, it is important for Coles Supermarket to implement new marketing techniques and introduce developed technology to meet the changing needs of the Australian market. Technology has become an essential factor for the success of a retail company in the current business scenario. Hence, technology can be ranked as number one necessity of the company to seek growth and success in the Australian market.

A significant change can be evident in the legal and political atmosphere of Australia that may impact the operations of Coles in the retail industry. The government of Australia developed ACCC (Australian Competition and Consumer Commission) that governs the retail industry. Furthermore, the ACCC has implemented new policies that increase the level of competition in the Australian retail industry (Hardy, 2008). The changes in the taxation policy and environmental regulations by the government also make it difficult for the company to carry on its operations with the current strategy (Ghosh and John, 2009). Along with that, the increase taxation also reduces the buying power of the customers that further impacts the revenue model of the company. Hence, there is a need of flexible marketing strategy that will be capable of meeting the changing political and legal factors of the Australian market.

Scope and Limitations of the report

Culture has been a major influencing factor that controls the buying habit of the consumers. Australian comprises of people belonging to different cultures and ethnic backgrounds. Hence, it can be said that the Australia has a mixed cultural population. With the change in the cultural belief of the people, the buying habits and taste of the consumers also changes (Dillon, Madden and Firtle, 2010). Hence, culture can be identified as a crucial factor that must be considered while planning the marketing strategy of an organisation. It is important to note that the culture of Australia needs a fresh market for dairy, food and meet products (Panitz, 2008). Hence, Coles must emphasise on product diversification strategy that will help the company to offer a larger range of products that are in high demand in the Australian market. Furthermore, working in a multicultural market, diversification of product and competitive pricing is the key to success for Coles Supermarket.

Markets

The market for retail industry has been growing in Australia with the rise in population and change in taste of the people. With increase in the demand of the Australian people, an immense competition level can be identified in the Australian market. The high level of competition can be evident because of the free entry of new retailer companies in the Australian market (Cohen, 2006). Along with that, there are already a huge number of sellers in the market that exerts high competitive pressure over the Coles Supermarket. Furthermore, it can be seen that the falling financial market also impact the buying behaviour of the consumers that creates difficulty for the organisation.

Customers are the ultimate consumer of a product. They are the main revenue producer for a retail business. In case of Coles Supermarket, it can be seen that the buyers power is much high because of the availability of a huge number of rivals in the market. There are many small grocery stores that offer local brands at a lower price (Easton, 2008). Hence, the rate of competition increases with the increase in number of sellers in the market. Furthermore, a financial downturn in the market reduces the buying power of the customers that further impacts the business of Coles Supermarket. The company needs to offer better prices and high quality products to attract more customer traffic.

A change in the customer’s behaviour can be evident due to the presence of cross cultural population in the Australian market. People have turned towards fashionable products and demand high quality of services from a well reputed company. Along with that, it can be seen that the number of young population and old people are rising at a higher rate that makes it important for the company to offer such products that can be bought by the customers of these segment (Cohen, 2011). Hence, the marketing management of Coles Supermarket must consider the factors of change in the buying behaviour of the customers and divide the entire customers into segments to make the marketing activities effective and appropriate.

Preview of Material

The current Australian supermarket sector is heating up quite dramatically in the recent time as new supermarket giants such as Woolworths and Aldi have shared the market with Coles Supermarket stores.  The retail grocery and food chain industry have been shifted to the internet platform. For instance, Wal-Mart, ShopWings, Grocery Butler and other online retail store businesses have come into the frame. By offering quality products, free home delivery and affordable price range, online competitors have shared the business market with the supermarket giants such as Coles Supermarkets (Dolan, 2015). Recent upmarket food retail stores have promoted significant market competition towards Coles’ business status.

Intermediaries have played significant roles in the current market environment of Coles Supermarket. The dynamic operations of the intermediaries have controlled the pricing, quality, consumer’s sentiment and food packaging of Coles. Understandably, Coles Supermarket’s multi-channel supply has been maintained by the intermediaries such as suppliers, marketers and product distributors. Categorised investors and market partners have created significant strength to the business structure of Coles. Sustainable supply chain management is another vital contribution of the organisational intermediaries (Peter, Olson and Peter, 2010). In this way, Coles Supermarket can identify the consumer sentiment on individual products to create more advertisement. In addition to that, intermediaries of the firm can act as transmitters of customer’s demand by offering most demanding products on a regular basis.

The brand suppliers of Coles Supermarket have to be selected through third-party auditing system ensuring the product quality and price bargaining. According to the requirement of Coles, the vendors must provide highest food quality and innovation technique in food processing so that the brand identity of Coles can be protected. The standard of suppliers has been verified on time to time so that customer’s trust on the brand will remain constant. Also, the organisation has promoted agriculture at the highest level so that fresh and healthy vegetables and meat products can be supplied directly from the farms (Coles, 2008). The RSPCA approved suppliers have given significant customer satisfaction to Coles Supermarket.

Coles Supermarket has made a significant investment to advertise the products, items and services to grow the business all around Australia and New Zealand. In order to enhance public relations, Coles Supermarket has hired efficient marketing firms and facilitators to identify innovative marketing ideas to promote Corporate Social Responsibility towards the society (Doherty and Ellis-Chadwick, 2006). Through the identification of the requirement of the employees and consumers, marketing firms have promoted product availability and product costs towards the customers. Also, the logistic managers and research and development team of Coles have been contributed to the success of business growth. In the case of offers and sales promotions, facilitators of Coles have produced innovative business concepts to bring more investors and customers. Meanwhile, the marketing firms have been identified as the backbone of the sales performance of Coles Supermarket. Hence, it is the responsibility of the facilitators and marketing firms to promote the retailers of the brand so that the identified target demographics’ trust can be restored. Furthermore, scheduled and appropriate sales promotions have benefited the retail business of Coles Supermarkets.

Marketing Environment

In the case of micro-environmental analysis, certain marketing groups and retail brands have worked with Coles showing potential business interest to Coles (Buttle, 2006). Some brands such as Officeworks, Harris Technology, and Target Corporation are attached to the business structure of Coles Supermarkets. Such brands have different sort of businesses such as office supplies network, online businesses and departmental chain stores. Coles Supermarket’s other brands have successfully managed the corporate customers by their efficient services.

Internal Market Factors

It can be seen that the analysis of the internal factors presents the strength and weaknesses of the firm’s marketing strategies. The strengths and weaknesses of Coles Supermarket are presented herein below:

  • Coles Supermarket hold a proud history in Australia therefore their command is of lion’s share on liquor and domestic food market.
  • Coles provides quality and impressive service on delivery and online ordering.
  • Cole’s offers various pricing strategies along with different promotional offers and numerous price cuts.
  • It offers different brands that mainly cater the tastes and preferences of the buyers.
  • The organization has been quite successful with its unmatched branding and advertising in the Australian retail sector. In 2008 it introduced the TV sponsorship for the summer Olympics (Macdonald, 2012). This initiative was basically framed for the buyers who are price conscious.
  • One of the most important aspects of Coles Supermarket as their most prolific strength is the enormously successful promotional campaigns. “Apples for students” has been the most successful promotional campaign of Coles Supermarket.
  • Coles Supermarket has suffered due to negative publicity surrounded by the hard line conciliation with the suppliers in Australia. Therefore it has slightly hurt the sentiments of the public. It may also hurt the investors of the organization.
  • Coles faces huge competition from huge retail companies like Woolworths. Coles mostly functions on lower margins.

The analysis of the external market factors helps to observe the opportunities and threats for the firm’s marketing activities. The opportunities and threats of Coles Supermarket are presented herein below:

  • Coles Supermarket has the opportunity to have greater control on the supply chain network for harvesting and generating quality profit from various sources.
  • Coles Supermarket has the opportunity to expand geographically which may enable the organization to reach various new places all around the world.
  • Marketing along with sponsorship can help Coles Supermarket to boost their business.
  • With huge competition in the retail and supermarket chain the prices of the food tumbling at a rapid rate to low margins.
  • It has been analyzed that the consumers are getting confused due the various general brands because of the lack in distinctive communication.
  • For convenience, a quality number of buyers can significantly select smaller and independent retailers like the butchers and the green grocers.
  • The liquor and food market of Australia is continuously evolving due to the huge level of competition. Various competitors of the highest level are entering the Australian market with different model and ideas of marketing and business.
  • Coles Supermarket faces huge competition in terms of marketing from ALDI, IGA, and Costco etc.

The major strength of Coles Supermarket is its Supply Chain system that acts as a core competency of the firm. The company follows the Just-In-Time strategy to minimise the cost of inventory management and spends the saved money on development of technology, employee training and enhanced marketing activities. Furthermore, it can be seen that the enhances quality of Cole’s services and customer care activities provides the company with an competitive advantage that increases the demands and needs of the customers (Bradley, 2011). It further increases the loyalty of the customers that provides the company with opportunity to grow its businesses.

The product diversification provides the company with an opportunity to grow its businesses. it can be seen that Coles Supermarket offers products ranging from A to Z that acts as a strength of the company. Furthermore, the 102 years old reputation of the company also acts as strength of the company. But, the company has its stores in the limited region of the entire Australian market (Oldroyd, 2014). Hence, Coles Supermarket can grow its business by expanding its operations in the new region of Australia. Furthermore, it can be seen that the company needs more sponsors to finance it business that will help it to mitigate the risk of expansion. The sponsorship will also help the company to minimise the operations of marketing and reduces the cost of expansion. Hence, the Coles Supermarket has a good opportunity to grow its business with the help of new sponsors and business partners.

Business Mission

Coles Supermarket has apparently worked out the business mission based on social public and outstanding customer services. By identifying the efficient market for products and services, the mission of the organisation is to support social people and customers providing quality and healthy food products at an affordable price range (Batra, 2009). Also, the company has aimed to improve the performance to create a global brand identity within the retail food chain business industry. By valuing the customers and employees, the organisation has committed to business diversification and public relation development. In other words, growth in a staggered pattern in business is the primary business mission of the firm.

Coles Supermarket has determined some long-term and short-term marketing goals and objectives to be met within the corporate environment as discussed herein.

Short-term Goals and Objectives: As far as the short-term goals are concerned, the marketing department has aimed to increase the customer base and traffic (Simmonds, 2012). Also, creating the brand identity within the market is another significant short-term marketing objective of Coles Marketing team.

Long-term Goals and Objectives: Meanwhile, the long-term goals are more vital as those will contribute to set a sustainable place within the Australian domestic market. Coles Supermarket’s marketing expertise has targeted to increase the sales and revenue. Increasing sales figure is one of the primary long-run objectives for the retail food chain business of Coles Supermarket (Coles and Erdman, 2015). The core business structure of Coles has also aimed to improve its current business ratings and competitive advantage in the Australian market by providing efficient services to the target audience. Furthermore, the business marketing team of Coles Supermarket has endeavoured to enlarge the target market by positioning high-quality products at an affordable rate.

The strategic marketing of Coles Supermarkets has identified the most significant marketplaces in Australian so that the stores can feature a maximum number of target audience. In terms of Coles Supermarket’s value proposition, the second largest retail food chain business of Australia has promoted quality and healthy food products at an affordable pricing. Such business tactics of Coles have certified that every social class can utilise the products and services offered by Coles (Walker, 2006). Within the marketing planning, Coles Supermarket Group has identified suitable marketing concepts such as diversified products, promotion and campaign, product merchandising, affordable and competitive pricing and efficient sales channel to create the maximum sales and revenue in the market territory.

Strategic marketing of Coles Supermarket includes prime store locations and high-quality goods to get the maximum buyers for the products and services (Widener, Reid and Coles, 2010). The marketing promotions offer special in-store sales so that a maximum number of target customers can purchase products at a low price range. Such promotional sales have contributed the biggest revenue a day for Coles Supermarkets. Product merchandising is another essential strategic marketing concept as Coles Supermarket promotes its brands including groceries and fresh vegetables. Coles Supermarket Group’s extending sales channel includes retail and wholesale product selling (Cullwick, 2015). In the retail business, the food store offers conventional products to the customers. On the other hand, the organisation sells products to the restaurants and other merchandise. By adding value transitions in sales and promotions, the organisation has put up significant growth strategy for the business.

The identified recommended strategy has been presented in this section to produce further market moves and growth structure of Coles Supermarkets Group.

The business mission must be similar to the current strategy as Coles Supermarkets Group has developed efficient business growth model providing quality and healthy food products at a reasonable price range. Such commitments in the business mission will be appreciable for the business organisation as consumer’s confidence will be increased by this particular move (Wilson and Wilson, 2013). By improvising different marketing ideas and concepts, the organisation is willing to create significant public relation to enlarge the business market.

In future market perspective, Coles Supermarket’s management team must make some alteration in short-term and long-run goals and objective so that the robust growth of business can be secured. In short-term basis, online marketing ideas and sales strategy must be considered to tackle the new business rivals (Zou and Fu, 2011). As social public have spent so much time in the internet, digital marketing will be an effective option to improve the sales and revenue. In case of long-term objectives, there is no need to change the current marketing strategy as the existing strategy is seemed to be the most fitted option.

Coles Supermarket’s Value Proposition: The recommended strategic overview of Coles Supermarket must promote new training and career development programmes. In this way, the organisation can deliver outstanding service quality to the target demographics. As the organisation is one of the fastest growing food retail business chains, additional support must be given to the employees so that customer’s demand can be met in an efficient way.

Target Market: The marketing management of Coles Supermarket should introduce new development strategies such as new retails stores, merchandising and product development to access the largest portion of the Australian market. Invariably, selection of new target market and further market penetration can improve the sales and revenue of the organisation (Alon, 2003).

Market Positioning: Positioning is another most recommended strategy for Coles Supermarket’s business perspective. The positioning strategy must identify the business goals and objectives to develop integrated campaigns and core business messages through marketing. In Appendix 1, the core strategy of positioning has been presented that must include demand generation, events, public relation development, e-marketing, branding and employee and social outreach.

Market Opportunities: Marketing opportunity signifies the brand popularity and establishment in a particular market. As one of the fastest retail business, Coles Supermarket must analyse current market as well as marketing opportunities to add new set of buyers to the business. Meanwhile, significant market research will be effective to find out the specific and unique opportunities for Coles Supermarket’s business proposition.

Products

In marketing functions, the retail store business of Coles Supermarket must introduce new product lines so that different brand products can unanimously contributed to the total sales and revenue. For example, significant market research must be done to identify the highest selling groceries and farming products.  Through the identification of the most selling products, same types of new products can be manufactured to impress the buyer’s community. By applying product diversification market strategy, product selling can be increased as the purchaser’s will find more interest in trying the new products. Meanwhile, such product diversification can be initiated at the new market area so that the sales of similar products cannot decrease.

The product pricing is also significant for business growth and maximum selling perspective. In the strategic marketing functions, low pricing and high pricing of products should be promoted to attract the maximum target demographics (Alexis, 2012). Current prices of products should be proactively declared so that low pricing of most selling products can secure maximum revenue for the retail food chain business. On the other hand, by identifying the unique manufacturing and brand products, high rates must be quoted to impress the buyers. Therefore, power bargaining from the suppliers must be effectively managed so that the firm can deliver quality food products to the target audience at the minimum rate promoting competitive edge.

Currently, Coles Supermarket is known for its well organised distribution strategy. It has its stores located in major cities of Australian in the core region that has high density of population. But, the market for the Coles Supermarket has become saturated that intends the company to expand its operations and grow its distribution channels by introducing new stores that will be capable of attracting more customers. Coles can build new stores in the outskirt areas nearby the cities that are less costly and build large supermarkets with different other facilities. It will help the company to grow its market and target new segment of customers.

The marketing and communication strategy can be developed based on advertising media and significant communication channels. By identifying market research and corporate communication resources, the organisation should implement the best marketing concepts. In Appendix 2, a described process has been shown for further consideration (Alexander and Coles, 2011). In case of popular branding, public relations and digital marketing strategy must be taken into consideration to increase the market size of Coles Supermarkets. For advertising perspective, sales and business guarantee and websites should be promoted to encourage the buyers to visit the stores of Coles Supermarket. Finally, effective marketing agents and executives must be recruited so that innovative marketing concepts can be generated on a regular basis.

Using sales force is a technique of outsourcing the task of marketing or implementing a different marketing team for operating the marketing activities. In case of Coles Supermarket, it has a separate marketing team that task care of the demands and needs of the customers. Furthermore, the marketing team conducts research and apply changes in the marketing strategy according to the conditional changes in the market situation (Alfredsson, Månsson and Vikström, 2016). The company needs to implement new technologies in developing the efficiency and effectiveness of the sales force. It can outsource the digital marketing activities that can be cost effective and help the company to seek better results.

Conclusion

The bsuiness report has been successfully described to draw the current business positioning and strategic concepts of Coles Supermarkets Group in Australian retail food chain industry. Coles Supermarket is one of the largest reatil food store chain in the market. As a result, there are some major market competitors and issues attached to the business model of the organisation. By promoting business ethics and corporate social responsibilty, the retail chain business has cretaed its significant market identity. On the other hand, the organisation has efficiently utilsed the available business resources to provide the best products and services to the customers at an affordable prices. The busines environment of the organisation has got some major sides that have to be overcome by the management team of Coles Supermarket.

By identifying the vast size of the target market, the organisation has developed wholly owned subsidiary (WOS) to provide the best pricing. Also, the organisational stakeholders have effectively partivipated in busines events and public relation programmes to increase the business reputation. In the meantime, the report has identifed some strategic recommendations suitable for further business development of Coles Supermarkets. Therefore, efficient market positiong must be developed to grow the demand. At the same time, e-markeing is another essential part of the business in the recent time. Hence, online marketing and product selling must be highlighted to reach the maximum number of public. Regarding strategic recommendations, effective distribution channels and marketing communication system have been identified to be follwed in the business enviroment to imcrease the sales and market size.

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