Cole supermarket is one of the leading Australian consumer service chain and retail company with its headquarters in Melbourne(Knox, 2015). The firm has dominated the retail market due to its strong marketing strategies.
The main aim of the supermarket is to offer customers with high quality and taste products at affordable prices.
The supermarket embraces proactive customer investment offer as it strengthens the customers’ base preventing new entrance by competitors.
According to Lee & Yang (2013), retail marketing is considered as a form of marketing which involves undertaking activities such as selling products to consumers through channels such as stores, malls and other fixed locations.
Currently, the retail industry plays an important role in today’s global economy because they enable the society meet its current needs satisfactorily according to their living standards, tastes and preference.
Coles supermarket has dominated in the market for many years and gained a strong competitive advantage over its competitors.
However, currently, the company faces competition both locally and globally with the Woolworths, ALDA and other companies presenting such threats. With the entrance of Woolworths into the market, Coles faced many challenges which resulted to many managerial problems.
As the business environment becomes more proactive, retail businesses face global economic challenges which compel them into evolving and changing with time to meet the customer changing requirements and demand that changes with time(Duong 2016).
Currently, online businesses are prospering with diverse alternatives offered for customers to choose from leading to stiff competition among retailers in the industry.
Emergence of new threats made it difficult for the Coles supermarket to undertake appropriate steps to continue being the leading retailer. Majorly, management problems emerged from competition threats the company experienced from emerging food suppliers.
Competition in the Australian grocery market is stiff making Coles supermarket operations unsuccessful.
. Issues with Suppliers
This is another managerial problem Coles supermarket faced.
The firm experienced delays in delivery of goods to its stores which led to unavailability or insufficient products in shelves. This reduced customer demand resulting to decreased customer satisfaction .In the long run, the firm lost its competitive advantage.
. Store Environment Factors
According to a research conducted by Mari & Poggesi (2013), the aspects of the store environment which include ambience, design and social factors have a strong influence on customer behaviors and perceptions. These factors are the determinants of the customer level of satisfaction.
According to Allameh et al.(2015), the store environment not only influences impulse buying but also patronage. Store environment is considered as the major determinant factor influencing customer demand, sales and satisfaction.
Environment factors are a major determinant of the level of customer satisfaction.
Customer satisfaction is commonly pursued by all types of business both locally and globally. The concept of customer satisfaction is becoming more complex and striking in the retail industry (Dwivedi & Merriless 2013).
The study has taken into consideration store environment factors: ambience, design and social to determine their influence on customer satisfaction.
Research studies reveal that customer satisfaction can be positively influenced by quality service, customer experience and expectation.
The implication is that provision of quality goods and services will result to improved customer satisfaction. This in turn leads to increased customer demand resulting to increased company sales and profitability.
Retailers should learn about the importance of various environment factors and implement as a way of attracting customers.
Customer experience is achieved when employees or workers treat their customers well. Improved customer experience and expectations positively influences customer satisfaction.
Customer satisfaction and loyalty is increasingly becoming an essential factor in the retail industry.
Coles supermarket, in the retail industry is striving to adopt various business practices with the aim of improving its customer satisfaction.
The factors of ambience such as: lighting, music, scent and temperature of the Cole supermarket greatly influenced customer satisfaction.
According to Mohan et al.(2013), store environment factors which include music, lighting, assortment and employees’ attitudes positively influenced customer satisfaction. On the other hand, factors such as scent, layout, interior design had no influence on customer satisfaction.
Music plays an essential role in marketing strategy of retailing stores as it is used to create a more pleasant atmosphere encouraging shoppers stay longer.
Customer’s mood and cognition is affected by music in shopping centers.
Lighting in retail stores helps to highlight merchandise as well as creating customer’s mood as an added dimension on the environment.
ii) Design Factors
Factors of design such as assortment, layout and interior design influence customer satisfaction by creating a memorable and distinctive image of store environment.
The primary objective of store design is to implement the retailer’s strategy by meeting the requirements of the target market, thus establishing a sustainable competitive advantage.
Design in store environment involves both merchandise and physical location of products. It helps guide customers all through the store as well as enabling easy access in locating products.
Coles supermarket has a convenient layout structure which increases shopping efficiency of its customers leading to increased sales and profitability in the long-run.
iii) Social Factors
Social factors are related to human issues such as customers interaction with employees.
Customer relationship is an important factor which retailers should manage in order to ensure efficient customer satisfaction.
Customer market segment refers to a group of customers sharing a similar set of needs or wants. Age, family size and income among other factors influenced consumer satisfaction differently.
There is a relatively positive impact on high levels of income on consumer satisfaction. Individuals with higher income level are likely to satisfy their needs compared to low income earners.
Other research studies indicated that age impacts on customer loyalty and satisfaction while others argued that gender has no influence on the same.
Customer satisfaction can also be influenced by cultural differences.
Administrative Management Structure.
Coles supermarket should work on altering its administrative structure to ensure responsible people are appointed to manage various departments so that the company enhances customer satisfaction, relationship and experience.
Coles supermarket faces the challenge of prospering online businesses which gives consumers varied alternatives to choose from.
To address this issue, the firm should improve on its services structure and offer convenient services to the clients of their products using the reliable e-commerce systems to gain competitive advantage.
Enhancing Customer Satisfaction
Customer satisfaction is a key competitive tool enhancing customer satisfaction. Coles supermarket should adopt technologies which helps improve both services and quality of products enhancing customer satisfaction.
The firm should constantly produce quality goods or services and improve customer experience and satisfaction which could in turn increase competitive advantage.
This normally arises when suppliers do not deliver goods on time. To address this challenge, the firm should appoint executives to ensure that goods do not miss on shelves everyday. This helps increase the company’s competitive advantage over its competitors.
Also, the firm should regularly communicate with suppliers to evaluate their delivery performance.
Coles supermarket experiences fierce competition both locally and globally from its competitors such as Woolworths.
To address competition challenge, the firm should take appropriate steps and strategies to emerge the leading retailer in the market.
The firm should also improve its advertising and promotional strategies in order to venture new markets.
Another way to address the issue of competition is through product differentiation. This is where a company produces products unique products from those of competitors in both design and functionality.
Coles supermarket should continuously embrace on current technology and innovation in development and marketing of its products to gain competitive advantage.
SWOT analysis refers to an analysis tool used by a firm to evaluate its position in the competitive market in terms of strengths, weaknesses, opportunities and threats.
It helps a firm accomplish its set of goals or objectives and overcome obstacles to achieve desired results.
SWOT analysis is important in market segmentation, production and
This describes where or what an organization does best compared to competitors. Strengths of an organization include strong branding, customer loyalty, unique innovations.
One of the Coles strength is the use of a powerful and impressive online marketing module that gives the company an advantage over its competitors. It also offers an efficient delivery service to its clients.
Coles supermarket brand name has different generic styles intended to cater for specific needs or wants of a buyer.
The firm’s branding strategy is global wise making it one of the best giving it competitive advantage over its competitors.
Strong and generic branding strategy has helped to grow market for the company’s products.
The firm also employs advertising matched with promotional campaigns as a way of creating awareness and insight of its products.
It uses slogans of patriotic nature such as ‘Proudly Australian since 1914’ and others specifically framed for consumers.
The firm has conducted successful campaigns with companies like Apple computer and other prominent suppliers.
Another strength of the Coles supermarket is its pricing strategy.
Coles supermarket employs an attractive pricing strategy accompanied with price discounts. For instance, the price range of the Coles products are affordable to consumers of all income levels.
The company capitalizes on its cost leadership power to effectively make good pricing decisions and promotional offers to help market new products in the market.
This encompasses areas where an organization is performing poorly and needs to make improvement for it to remain competitive in the market. These include: higher turn over level, inadequate and inefficient supply chain and lack of capital among others.
Coles supermarket should work on strategies to address the issue of delivery delays and logistics
Coles supermarket operates on low margins compared to some of its competitors like Woolworths. With a reduced margin, a firm stands the risk of losing to competitors.
There is publicity issue which has brought great impact on negotiation between suppliers and the management leading to deterioration of the public sentiment towards the company
This refers to external environmental factors an organization can employ to achieve its competitive advantage.
The firm aims at seizing greater opportunities internationally with the intention of controlling supply chain to maximize sales and profit returns.
The firm has opened new stores on its company name to take advantage of the companies thus growing a strong market reputation.
This refers to external factors that are likely to harm business firms’ operations. These include high input costs and threats of new entry.
Coles supermarket is experiencing stiff competition from companies such as Woolworths, ALDI, IGA and Costco.This intensive competition has led to sharp decline of product prices to lower margins.
The Australian market for liquor and food is changing constantly with competitors entrance making the firm lose its competitive advantage in the industry.
Coles supermarket uses diverse and distinct generic brands to advertise its products. However, this confuses consumers when they do not get a clear and distinctive meaning of each generic brand.
Also, there is the possibility of buyers opting for small scale retailers and independents such as green grocers.
Coles supermarket faces stiff competition in the global market despite its dominance in the retail industry for several years.
The competition is mainly caused by delay in deliveries by suppliers, emergence of online stores which offers consumers with alternatives to choose from, threats from competitors such as Woolworths, technological and logistics among other challenges.
For instance, the emergence of Woolworths into the market caused competitive challenge resulting to various managerial problems.
Coles supermarket environment factors such as ambient, design and social factors affect customer satisfaction in one way or another. Customer satisfaction is a key element in many businesses today as a way of enhancing their business loyalty.
For a business to ensure customer satisfaction, it has to adopt strategies, practices and technologies aimed at improving service and quality of products enhancing customer satisfaction.
Customer satisfaction is positively influenced by improved quality of services, enhanced customer experience and expectation. All these enable a firm to gain competitive advantage in
As part of managerial decision, the firm should alter the administrative structure to ensure that responsible people are appointed to ensure that the company satisfies the needs and wants of its customers.
Also, the firm should work on improving its supply chain structure and logistics so as to ensure efficient and timely delivery of goods by suppliers.
The company should improve advertising strategies, improve on the company’s generic brand and pricing strategies as well as promotions to remain competitive in global market.
Coles supermarket should improve its product differentiation strategies with current technologies to enhance customer satisfaction and reduce threats of new entrance in the retail industry.
Allameh, S. M., Khazaei Pool, J., Jaberi, A., Salehzadeh, R., & Asadi, H. (2015). Factors influencing sport tourists’ revisit intentions: The role and effect of destination image, perceived quality, perceived value and satisfaction. Asia Pacific Journal of Marketing and Logistics, 27(2), 191-207.
Dwivedi, A., & Merrilees, B. (2013). Retail brand extensions: Unpacking the link between brand extension attitude and change in parent brand equity. Australasian Marketing Journal (AMJ), 21(2), 75-84.
Duong, Q. B. (2016). The influence of store environment on customer satisfaction across different customer demographic segmentations within Australian supermarkets.
Knox, M. (2015). Supermarket monsters: The price of Coles and Woolworths' dominance (Vol. 6).
Lee, H. J., & Yang, K. (2013). Interpersonal service quality, self-service technology (SST) service quality, and retail patronage. Journal of Retailing and Consumer Services, 20(1), 51-57
Mari, M., & Poggesi, S. (2013). Servicescape cues and customer behaviour: a systematic literature review and research agenda. The Service Industries Journal, 33(2), 171-199.
Mohan, G., Sivakumaran, B., & Sharma, P. (2013). Impact of store environment on impulse buying behaviour. European Journal of Marketing, 47(10), 1711-1732.