Customer Value and Relationships in Woolworth Limited
Marketing is a fundamental process in any profit making organization since it ensures the growth and financial wellbeing in an organization (Raab, 2008, p. 123). A business firm sources more than 75% of its total revenues from the sales. Hence, it is vital to continue increasing the market to a firm’s product to enable organizational intensification and expansion. A market is made up of variables that include the products, customers, competitors, the organization and the legal body system (Malhotra, 2008, p. 92). Each of these variables influences the behaviour in the marketing efforts of a product. For an organization to attain larger market share, it ought to manage effectively all the variables that affect its products Market size (Godson, 2009, p. 67). For this discussion, we comprehensively confer on a decision to close some underperforming Woolworth outlets as featured in The Sidney Morning Herald newspaper dated July 26, 2016. The article in the SMH newspaper was entitled “Woolworths t carefully choreograph store closures,” authored by Catie Low.
Woolworths Limited is a multinational retail outlet enlisted in various stock markets worldwide and featured in various international business magazines and publications. Woolworths Limited operates in various business specialization and subsidiaries including supermarkets, groceries, home wares, clothes, foods, and beauty stores. Early 2016, Woolworths Limited outlined her interest to terminate operation of its 27 outlets that were performing poorly. However, this was not effect following Retail insider suggestions that it would pave ways for its competitors. The closure of 27 Woolworth outlets meant more than 500 employees would lose their jobs. This was speculated to not only affect the fired employees but also affect negatively the organization’s reputation to the public. According to Catie (2016), the poor performance of the Woolworths outlets was due to business closeness of the same organization’s brand.
For firm to gain a wider market size of its products, the business location is of high significance. Strategic location of a business is convenient for the accessibility and convenient of the customers (Smyth, 2015 p. 47). Like in the case of Woolworth’s stores, their concentration at one area appeared monotonous to the potential customers. Being situated in an area where there are many different business establishment operating in varied lines of business is a viable marketing strategy since it ensures complimentary shopping to the visiting customers. On the other hand, being located in an area where there many outlets offering similar products enable a business to be on its toes in boosting its services. A perfect competition market is essential for ensuring creativity and innovativeness to the business. However, being in an area where there are completely different business specialties ensures monopoly of a business.
Effective customer relationship marketing is very essential for the management welfare of the organization (Rosa & Viswanathan, 2007, p. 81). It does not only increase the market size of an organization’s products but also ensure good image of a business. Customer relationship marketing is the process through which a business constructs customer loyalty and brands its value to both its clients and the entire members of the public that have direct or indirect interest to the organization. For the Woolworth organization to flourish in its underperforming business outlets, it ought to deploy marketing strategies geared to enhancing customer relationship marketing. Customer relationship marketing is constructed through various marketing strategies that include the warranties, fair pricing, quality, business reputation, convenience, and product brand.
A business organization must resourcefully invest in customer relationship marketing to yield from for its strategies. Through fair pricing, Woolworth Limited would construct a sense of care to its customers. Since Woolworth is not a production-based organization, its fair pricing strategy would be perceived to more customer pockets concerns than inferiority of the products. Unlike in retail business, where you find fair pricing is perceived as customer care incentive, production based firms are mistaken by some people to be offering less quality products.
Warranties are marketing incentives that create trust of a given product to the customer. By offering a warranty, the business firm takes the responsibility of compensating a customer exactly the same product should it develop defects before the expiry f the warranty period (Smyth, 2015 p. 89). Through offering a warranty, business proves to their clients that they do not offer durable and quality products and services, but also concerned about the wellbeing of the customers assets. This increases the customer value as well promotes a firm’s reputation. Ease of accessibility and location of a business assists to boost business’s customer value and enhancement of its products market size (Robbins & Coulter, 2005, p. xx). To ensure great performance in the degrading Woolworth’s stores, the management team ought to employ marketing strategies that are inclined to constructing effective customer relationships. Good relationship for an organization and its competitors is a key to viable business environment for expansion (Buttle, 2004, p. 113). For an organization to attain effectively legal trustworthy from both the state and members of the public, it ought to compete perfectly with other firms that offer similar products.
In conclusion, effective marketing is the primary key to business wellbeing. The prime objective of any marketing effort is to construct and improve the market size of a business’s products and services. Hence, business organizations should be ready and willing to invest both technologically and financially in marketing in to expand in their operations. Large business enterprises enjoy high levels of economies of scale compared to small and medium business firms. The management in Woolworth business ought to be ready for intensive marketing consultation and investment to attain improved sales in their underperforming outlets. A good marketing strategy will be in hardy in cushioning them from the challenges that may ruin their business. Robust marketing of its products is what Woolworth requires and closing down of its outlets should come as the last option.
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Catie, L. (July 26, 2010). Woolworths to carefully choreograph store closures. Retrieved from https://www.smh.com.au/business/retail/woolworths-to-carefully-choreograph-store-closures-********-gqe1y5.html