Mktg3000 Strategic Marketing Management : Assessment Answers
Internal resources assessment- Human Resources, Financial, Management and Operational capabilities that will support (or hinder) your marketing activities. Assess the internal resources (financial, human and operational) of the company and current or future strengths and weaknesses. Information must be current and accurate to ensure the final draft is feasible.
Overview of current (or previous) marketing mix strategies (4Ps) – consider everything from yellow pages activity; use of corporate logo on stationery and uniforms; internet activity; traditional marketing communications (TV, radio, etc.); product range; pricing; and distribution activities. Look for strengths and weaknesses.
External Environment analysis
This is the PESTEL analysis – includes a focussed discussion of the economic, legal, political, technological, social/cultural issues (trends) and natural environments associated with the company’s market environments. Consider shifts in market activity and identify possible current or future opportunities or threats.
A detailed customer analysis
Include target market segmentation (demographics, psychographics, and so forth). Look at the basis of transactions and exchanges with the firm. Who buys, where, when and how, what is bought, to what level, and reasons for purchase. Do purchases relate to discretionary spending or not? Identify any opportunities or threats such as changes in customer demographics, etc.
A detailed competitor analysis
Identify local, direct and indirect competition. Determine relative (or estimated) market share for your principal competitors. Identify the basis of competition. Develop a matrix where possible to compare the features and benefits of products/product lines between your selected entity and at least 3 primary (main) competitors. Again, identify any opportunities or threats such as changes in competitors, new competition, changes in market share, etc.
A SWOT analysis– briefly and concisely summarise the strengths and weaknesses from within the company and any opportunities and threats from the external environment, competitor and customer analyses. - Analysis of the organisations ethical & CSR programs
A product (or brand or company) lifecycle analysis (PLC).
A BCG matrix showing product position relative to competition. While the BCG matrix is usually for SBU portfolio analysis, in this case conduct an analysis of your company product(s) or brand(s).
An Ansoff analysis
A set of at least 3 principal marketing objectives (based on your strategic analysis of the enterprise’s position from the outcomes of the PLC, the BCG and the Ansoff analysis and considering the enterprise’s corporate mission and objectives (where these have been identified).
Develop a brand positioning strategy. Discuss whether you will develop a brand identity for an individual product or product portfolio or whether you will use family umbrella branding strategy. Develop a brand positioning map.
Develop a minimum of 4 strategies based on your objectives. Each strategy should identify a target market segment and a customised marketing mix for that segment.
Develop a framework of marketing metrics for your strategies – determine how you will measure success of your strategies and control the outcomes to ensure you reach your objectives.
Answer:
Introduction:
Kmart Australia Limited is an Australian departmental stores chain which provides grocery products at a discount price. The company is wholly owned by Wesfarmers and has about two hundred stores in Australia and a few stores in New Zealand. The head office of the organization is in Melbourne. Before acquisition by Wesfarmers, the organization was performing poorly. After the acquisition, the organization improved its performance. There are two main concepts of the current stores, namely, Kmart and Kmart Tyre and Auto Service. The Kmart concept consists of discount departmental stores which specialize in home entertainment goods, photography, sporting equipment, kitchenware and cosmetics. Other than that, the organization also has a chain of automobile service stores which specializes in the accessories pertaining to the automobiles such as car servicing, motor vehicle insurance, and other automobile parts. In the recent years, the organization has developed a distinguished place in the Australian retail market. In spite of the existence of duopoly in the Australian retail industry, several customers are attracted towards the store due to its unique concept and discount rates. In this regard, the present report will discuss the marketing plan of the company. The report will also examine the internal environment of the organization and how the organization can utilize its internal strengths and core competency in increasing its market share. At the end of the report, a marketing plan has been proposed which can increase the market share of the organization.
Internal Environment analysis
The first discount store of the organization opened in 1969 and it was pioneer organization in discount store concept. Currently, the company is recognized as one of the most profitable discount departmental store in Australia. The company employs approximately 30,000 employees working in the retail stores of the organization. The head office of the company has about 800 team members working in different stores. The vision of the organization is to provide grocery products to the customers at the lowest prices. The organization also strives to attain high amount sale, efficiency in operations and establishing a positive organization culture. The organization also implements sustainable development programs to support the need of the community and it also supports a number of charitable organizations to uplift the lives of community wherein it is operating. The company offers household products such as home entertainment, kitchenware, photography, sporting, cosmetics and automobile products. The company entered into the Australian market in 1960s and after only a few years became the number one discount retailer in the country. The reason was efficient marketing strategy of the organization. The company developed an aspirational model wherein they developed a cut-price, cool and hip community. It has used free advertising and the likes of Facebook, Twitter and hash tags to promote the organization’s products (Winston & Mintu-Wimsatt, 2013). It has developed a clear distinguishing strategy and used it to distinguish itself from is retailers.
Internal Resources Assessment
The reason that Kmart has established itself as a leading business organization is due to the efficient use of its internal resources and using them in an efficient manner to develop its strategic marketing plan. The human resource, financial management and operational capabilities are the major resources of a business organization. They are the strengths of organization and can be used competitive advantage of the organization. Kmart is backed by Woolworths; therefore, it has huge financial backing. In the recent years, the concept and the marketing plan of the organization has been and the marketing plan of the organization has been altered which required extensive amount of money (Ryan, 2014). The company used its financial resources to develop a marketing plan which transformed its business structure and increased its profitability. The company also has a significant number of employees who provide efficient services to the customers. The employees are also provide training so that they can manage the store in a more efficient manner and provide high quality of service to the customers. Kmart is a retail organization and a part of the service industry. The main operations of such companies are procurement, inventory management and retailing. The organization undertakes several efforts to assure that operations are conducted accurately.
Overview of Current Marketing Mix Strategies
Recently, the company has transformed its business model as well as its marketing strategy to expand its market share. In the recent marketing strategy, the company wants to send a unified message that it is a discount retail store. Other than that, with the help of social media, it has also tried to develop a community to build customer loyalty. It is also using social media, Facebook, Twitter and hash tags to attract the customers. The target market of the organization is families in the middle-income group (Ulph, 2011). This target customer base of the organization is driven by discounts, concession and price relaxations. The primary buyers in this customer group are woman or mothers who are driven by the demands of their children. Therefore, in order to attract this customer base, the organization has created a special section for the kids. It has also reduced the product range and removed unprofitable products from its product line. It has also established low cost sourcing relationships with the manufacturers in China, India and Bangladesh. As a result, the organization has become capable of offering discounts all throughout the year. The current marketing mix of the organization can be defined as:
Product: The Company only offers a limited range of basic products and has removed non-profitable products from its product line.
Price: It has adopted a low-pricing model. The organization offers products at cheapest prices with appropriate quality.
Promotion: It uses social media extensively for the promotion of the products (Reid & Bojanic, 2009).
Place: The Company has opened several stores at different locations all throughout Australia.
External Environment Analysis
The external business environment such as political environment, economic environment, social and technological has an impact over the operations and profitability of an organization.
Political Factors: Australia has a stable political environment. In the recent years, the government has established a large number of laws to increase the competition in the retail industry. It is due to the presence of duopoly in the market. These policies of the government can prove favorable to other companies in the retail sector.
Economic Factors: The economy of the country is developed and stable. The purchasing power of the customers is high; however, people are also driven by discounts and low prices. Therefore, the economic conditions of the country are suitable for the business (Zimmerman & Blythe, 2013).
Social Factors: Several social factors influence the business in the retail industry. The major buyers in the retail industry are women and they are influenced by the choices of their children. Other than that, advertisement, popularity of the product in the market segment also influences the demand of the products. Women customers are also attracted towards discounts and low prices.
Technological Factors: The technology and the infrastructure of a place also influence the operations of the organization. The infrastructure in the country is appropriate; however, the transportation mediums are not efficient in the country due to its geography and physical structure (Cant, Strydom, Jooste, & Plessis, 2009).
Legal Factors: The Company should abide by several laws related to employment, consumer rights and environment.
Environmental Factors: It is important that the organization assure that its operations do not harm the environment in any manner.
Detailed Customer Analysis
The primary target of the customers is the middle- income and low-income group families. The target customer group of the organization can be differentiated according to the demographic and the psychographic segmentation. As per the demographic segmentation, the middle to low income group families is the primary customers of the organization. In the families, men are mostly busy and the household shopping is done by women. It is the tendency of women to buy the products at low prices and discount stores. Other than that, they are attracted by loud advertisements. Women also give high importance to the choice of their children. Therefore, Kmart also gives high importance to its children in its advertising and marketing strategy (Richter, 2012). In order to distinguish itself from other competitors, the organization has reduced its product portfolio and offers only limited number of products to its customers. The customers buy the products during the renovation of their home or when they require some household product.
The target market of the organization can also be differentiated according to the psychographic segmentation. According to this segmentation, the target market is the people who are driven by the discounts. The single population who arrives in cities also requires household products at low prices. They are short of budget; therefore, they try to attain the services at low cost (50MINUTES.Com, 2015). It can be critiqued that the customers of the organization who are attracted towards discounts are also secondary customers of the organization.
Detailed Competitor Analysis
Kmart is a part of retail industry which has a very high level of competition. In Australia, the retail industry is dominated by two major companies, namely, Wesfarmers and Woolworths. These two organizations have the majority of market share in the retail industry. Other than that, a few foreign retailers such as Aldi have also entered the Australian retail market. Aldi has captured a significant amount of market share in the country as it offers discounts and very low price products. In the present, the level of competition in the industry is very high. Due to the extensive competition, the major companies of the industry are engaging in price wars. In the retail industry, the primary basis of competition is the price (Codita, 2011). The companies do not manufacture any products and cannot control the quality of the products. Therefore, the only criterion of competition is the price and the product display. Other than that, the organization also faces competition from indirect competitors which includes small companies or local retail stores. The organization has developed a distinguished image and market share for itself with its product portfolio and unique marketing strategy. The organization has developed a community of customers who are attached to the organization and remains loyal to the company (Fifield, 2012). It also provides unique product line in which in-demand products of the company are presented to the group of customers.
|
Company name |
Features of the product line |
|
Kmart |
Corporate image, low-cost model, use of social media, marketing |
|
Aldi |
Discount retailer, marketing strategy |
|
Wesfarmers |
Brand image, supply chain |
|
Coles |
Brand image, procurement and logistics |
With the above analysis, it can be identified that in the present, the organization can face a number of threats due to the immense competition in the industry. All the major competitors of the organization have adopted a low pricing model; therefore, the organization can lose its competitive advantage with the time. Other than that, several foreign retailers have entered the market of organization. It is due to the fact that the retail industry is a lucrative market. It will increase the competition in the industry and will further reduce the prices of the products. Eventually, it will impact on the profitability of the organization. It can be critiqued that the organization needs to develop another competitive advantage to fight the competition in the market.
SWOT Analysis
The SWOT analysis is the most popular tool which examines the internal environment of an organization. The SWOT is an acronym for strengths, weaknesses, opportunities and threats. In the present section, SWOT analysis is conducted for the business organization.
|
Strength · The unique product line of the organization which is different from its competitors · The low cost model of the organization · Creating a sense of community among the loyal customers · Financial strength
|
Weakness · Lack of competitive advantage · Relatively small size in comparison to its competitors · Low brand awareness |
|
Opportunity
· Foreign market in other countries · Increasing market penetration in the local marker of the country
|
Threat
· Foreign retailers (Shanker, Carpenter, Hamilton, 2012) · Declining profit margins in the country
|
Company Lifecycle Analysis (PLC)
The BCG matrix is important tool in the long-term strategic planning of the organization which provides business opportunities to the organization and assist them in deciding where to invest or focus future strategies.
Ansoff Analysis
Ansoff Matrix is a strategic planning tool which provides help in devising strategy for the future growth of the organization. There are four growth alternative strategies, namely, market penetration, market development, product development and diversification. In the market penetration, the organization tries to expand its market share in the existing market. The company increases its sales in the existing market by price decrease, increasing the promotion and distribution, acquiring rival and refining the existing products (Ferrell & Hartline, 2013). On the other hand, in market development, the organization tries to expand into new market by using its existing products or services. In the product development strategy, a company tries to create new products or services and use them to achieve market growth. In the diversification strategy, the organization tries to increase its market share by introducing new offerings in new markets.
Figure: Ansoff’s Matrix
(Source: Mindtools, 2017)
In the present, the company can choose the growth strategy of market penetration. The company has about 200 stores in Australia and a few stores in New Zealand. The organization can increase the number of stores in the country and should introduce new stores in small towns. It will drive the sales of the organization as well as increase the brand awareness of the organization.
Marketing Objectives
It has been analyzed in the above section that the organization needs to design a new marketing campaign which can increase its market share in the existing market. The marketing objectives of the organizations have been defined as:
- The organization should be able to increase its market share by 20%.
- The organization should be able to increase brand awareness in the Australian market
- The organization should also abide by its mission and provide customers with low cost products
Brand Positioning Strategy
The brand positioning strategy refers to the strategy in which the organization develops an image and positions itself in the market. In the present, it has been identified that the organization does not incorporate men in its marketing strategy. The advertising and marketing campaign of the organization focuses on the female customers and the children (Doole & Lowe, 2008). It is proposed that company will also target the single people in its marketing strategy. The brand positioning map of the organization is shown in the graph below:
Figure: Brand Positioning Map of Kmart
(Source: Author)
The company will develop a branding strategy for the product portfolio of the organization. The company will try to outreach to the market of the ingle people and young people who have recently moved to the cities. They require large number of household products at cheap cost. The company can target these customers.
Strategies to Achieve the Marketing Objectives
The marketing objectives of the organization focus on expanding the marketing share of the organization in the Australian market. In this regard, following strategies will be undertaken to achieve the marketing objectives of the organization.
- Target market of Unmarried Youth: A large number of young people travel to cities for education and job. The company can target this market to achieve its objectives. The organization can manufacture low cost products to increase the appeal to these customers. The price of these products will be kept low. While targeting this market, the company should assure that the organization open its stores in major cities and towns (Hill, 2012). In promotional strategies, the organization should use the theme wherein the young people are using the products of the organization.
- Target Market of Men: Today, men have also become conscious for their beauty and healthcare products. The organization should focus on developing the products especially for the men target market. It should also adopt its promotional strategies according to the new target market. In its advertising and marketing campaign, the organization should focus on designing the marketing campaign so that the male customers are also attracted towards the organization.
- Women Customers: The organization already focuses on the women customers and has developed a unique marketing mix for the organization. However, the Kmart does not specialized on the beauty products and the wearable accessories which are in huge demand in this market segment. The organization should focus on the wearable accessories and design their marketing mix accordingly. It will uplift the standard of the organization.
- Target Market of Women Customers: In order to establish a clear strategy and build a clear image in the mind of the customers, the organization should focus on building a unique promotional strategy. It should focus on developing a separate subsection for the women customers and offer beauty products and accessories to them (Haimowitz, 2011). It can also provide other personal hygiene and similar products which will create a specific image for the organization.
- Use of Online Promotional techniques: In the present, the company is using social media promotional techniques to increase the market share of the organization. However, the organization can also use other techniques such as newsletter and email marketing to connect with its regular clients. It will increase the customer loyalty. Moreover, these promotional techniques are also cost-effective.
- Framework for Marketing Metrics: It is important to implement an evaluation technique to examine the success of the organization’s strategies and control the outcomes of the marketing strategies. The company will examine the impact of these strategies after two months. The performance of these strategies will be examined by conducting a survey with the marketing mangers after two months. Other than that, the organization will also evaluate these strategies by obtaining market intelligence and examining the impact of these strategies on the market performance.
Conclusion:
Kmart is one of the leading retail business organization which deals with the household and grocery products. The organization has established a significant amount of market share by adopting a cheap cost model and using social media promotional techniques. However, the organization should focus on expanding the market share by using diversified marketing strategies. In the present report, it has been highlighted that the organization should focus on new target markets such as market of unmarried youth and men. It will assist the organization in increasing its profitability.
Reference:
50MINUTES.Com. (2015). The Marketing Mix: Master the 4 Ps of marketing. 50 Minutes.
Cant, M.C., Strydom, J.W., Jooste, C.J., & Plessis, P.J. (2009). Marketing Management. Juta and Company Ltd.
Codita, R. (2011). Contingency Factors of Marketing-Mix Standardization: German Consumer Goods Companies in Central and Eastern Europe. Springer Science & Business Media.
Doole, I., & Lowe, R. (2008). International Marketing Strategy: Analysis, Development and Implementation. Cengage Learning EMEA.
Ferrell, O.C., & Hartline, M. (2013). Marketing Strategy, Text and Cases. Cengage Learning.
Fifield, P. (2012). Marketing Strategy. Routledge.
Haimowitz, I.J. (2011). Healthcare Relationship Marketing: Strategy, Design and Measurement. Gower Publishing, Ltd.
Hill, M.E. (2012). Marketing Strategy: The Thinking Involved. SAGE.
Kmart Australia. (2017). About Us. Retrieved 15 September 2017 from https://www.kmart.com.au/
Mind Tools. (2017). The Ansoff Matrix. Retrieved 15 September 2017 from https://www.mindtools.com/pages/article/newTMC_90.htm
Reid, R., & Bojanic, D.C. (2009). Hospitality Marketing Management. John Wiley and Sons.
Richter, T. (2012). International Marketing Mix Management: Theoretical Framework, Contingency Factors and Empirical Findings from World-Markets. Logos Verlag Berlin GmbH.
Ryan, D. (2014). Understanding Digital Marketing: Marketing Strategies for Engaging the Digital Generation. Kogan Page Publishers.
Shanker, V., Carpenter, G.S., Hamilton, B.A. (2012). Handbook of Marketing Strategy. Edward Elgar Publishing.
Ulph, C. (2011). Marketing Strategies Used by Intel to Create a Sustainable Market Position. GRIN Verlag.
Winston, W., & Mintu-Wimsatt, A.T. (2013). Environmental Marketing: Strategies, Practice, Theory, and Research. Routledge.
Zimmerman, A., & Blythe, J. (2013). Business to Business Marketing Management: A Global Perspective. Routledge.
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