Coles' Pricing Strategy - Case Study Example

1.0 Executive Summary The report involves the definition of public relations and the choice made of an appropriate definition with which to give a clear overview of the function that our department does in the company. This choice will need convincing justification. This task lies on me as the Public Relations manager. There is further need to provide a statement giving an overview of the issue at hand facing the company, which is the reduction of prices by Coles Company of bread and milk. There will also be further review of the need for public relations and how it goes about even with other companies and Coles Company itself. A brief conclusion is included which serves more of recommendations to the company and important points to take note of. 2.0 Introduction Coles Company is a private organisation formed in the late 1960’s as a plant to sell bread, scones, biscuits and milk. Their bread has been the favourite of many customers due to its sweet unique taste and variety in the types of bread being sold. More over all aspects of the customer base has been incorporated in the product offered since eve with the bread, there are those for hotel use, household use, lightly flavoured bread and biscuits to cater to diabetics and the more recently wholesale production of the fruit bread to the whole community unlike previous times when it was manufactured for hotels and restaurants only (Taylor, 1969). Moreover, fact that it has existed since the late 1960’s has given it an advantage over other competitors with cases of loyalty displayed by the customers (Smith, 2011). The customer base also has a certain tendency of lack of adapting to change easily, which has helped the company a lot since with the entry of numerous competitors into the market, the customer base of Coles Company has not shifted a lot, with the Coles Company mainly held together with employee staff of the community (Wayland & Cole, 1997). This report is significant since it will affect the company in the long run in terms of developing a certain foreseeable future for the company with the adoption of the new pricing strategy. This report will further aim to strengthen the relationship with the stakeholders when they get to understand the impact of the new pricing strategy to the company and to them as well. The report will aid to reveal the need to enhance the presence of the stakeholders and the aspects of public relations that have helped the company and its stakeholders understand the ruling of the business (Taylor, 1969). Assumptions made in this report is that there the government will continue to support the activities of the company into the foreseeable future as it has dine from the birth of the company. Moreover it is hoped that the interest rates will fluctuate at a reasonable level into the half year of running of the company where the further impact of the new pricing strategy can be evaluated with the need to make changes considered in light of such evaluations (Wayland & Cole, 1997). 3.0 Definition of public relations and its implications “Public relations are the management function that establishes and maintains mutually beneficial relationships between an organisation and publics on whom its success or failure depends” (Broom, 2009, p.25). Public relation is all about the identification, maintenance, and enhancement of relationships between organisations and stakeholders (Dilenschneider, 2010). Both definitions relate to the aspect of relationships between the organisation and its stakeholders or publics but the aspect of making simple understanding is what this report should aim more to do. Of these two, the preferred definition goes to second. A simple explanation goes to the fact that it is much easier to understand and comprehend in line with giving a sound expression of what public relations is. This relays as true since public relations aims more at making sure that the relationship between an organisation and its stakeholders is sound since that is the foundation of the company (Dilenschneider, 2010). The organisation cannot exist or prosper without the stakeholders. Stakeholders include customers, competitors, employees, government, shareholders and community. It is hence necessary to identify factors that may alter this relationship and work on that. If negative factors are discovered then it is crucial for a company to take appropriate action. If positive factors are made aware, then the company will maintain what it was doing and improve on that in a bid to enhance good. Hence there is need for clear communication channels to enhance good flow of information between the parties involved. However, the nature and type of these relationships vary relations (Smith, 2011). Professional and personal natures of relationships normally exist within companies. For example, the fact that company makes goods available in exchange for money from the customers is more of a professional relationship but where the company offers to open a school for the community, this is more of a personal relationship where the company does not want anything in return but is working for the welfare of the community. But at the end of the day, irrespective of this kind of the relationship which exists between the company and the varied stakeholder, every single one of the relationships considered is based on the exchange of ideas, information, and feelings between participants (Sorge, 2005). 3.1 Various dimensions that exist within the stakeholder’s relationships and the company: Trust: This is where the trust dimension suggests that the relationship partners have confidence and willingness to be vulnerable. This also delves into the aspect of if the company does what it promises to do openness: This reflects the extent to which each party is willing to reveal its intentions to the other. It hence looks at whether the company is willing to share and reveal its plans with its stakeholders (Smith, 2011). Involvement: This reflects the extent to which each party is willing to include the other in its operations and activities. As such, it looks into whether the company is involved in the welfare of the community (Dilenschneider, 2010). Investment: This looks into the extent to which each party is willing to commit resources to the relationship. Such resources may involve time, money, or personnel. As such, the company is looked at with the capability to prepare and to allocate scarce resources to the welfare of the community (Dilenschneider, 2010). Commitment: This highlights the extent to which each party is committed to the relationship, and to the welfare of the other party. And hence a question beckons, ‘Is your organisation committed to the welfare of the community’ (Smith, 2011). 3.2 Statement about the issue in a public relations point of view As a public relations manager, there is need to build and maintain relationships with the stakeholders (Smith, 2011). Hence the need to critically look at the environment which our organisation operates to zone into the factors that will affect these relationships and come up with realistic factors that will help to respond any changes that will happen. As public relations core basis is communication, there is need for a sound communication process to be devised too that the correct message between the organisation and the stakeholders need to be disseminated, received and understood, hence the need for coordinated efforts to make sure this happens on a regular basis (Dilenschneider, 2010). Communication by our organisation to the stakeholders is done mainly with the aim to gain and retain acceptance from the stakeholders and change the attitude of the stakeholders. Communication in this situation will serve very crucial as there may be some concerns raised by several stakeholders. Essential communication in this respect is needed in light of the reduced prices of bread and milk as provided by the company which is of great concern to the company (Smith, 2011). Reduced prices to the customer means less money to consume unlike before, therefore will help to retail and attract more customers. This goes in line with the demand-supply concept that the lower the price, the higher the demand. However this does pose some questions rose by the consumer though it is not much of complains. “Why now?” is what some of them are asking (Gordon, 2002). The basic answer to this lies in the fact that the company has been facing extensive profits for a huge part of their operation and there would be need to show this to the customers (Engelson, 1995). Moreover, the company will soon celebrate its long term of outstanding service delivery in the industry. In addition, this idea originated from the staff of various departments of the company whose opinion was sought as a means to establish the way to dedicate the anniversary of the company and also get the community engaged in it in some way (Harding & Rovit, 2004). In terms of the supplier, this will mean increased deliveries to the market place so as to meet the demand. However there was noted delayed delivery to some Eastern parts of the locality which was caused by hoarding the bread due to influence by competitors, this was resolved by engaging in use of personal staff unlike the use of outsourced staff so that cases of misappropriate behaviour will be subject to legal action by Coles Company legal department as per the contracts signed to encourage loyalty ( Harding & Rovit, 2004). Coles Company has also benefitted from this lowered price level by increased customer base. Moreover, the company has a drastic rise in the revenue that they projected; this has been higher than expected, but slightly higher than the average revenue received by the company (Harding & Rovit, 2004). This has been confirmed by the Accounting and Finance Department during the interim financial reports taken up by that department. This move has also gone a long way to achieve the company’s objective which was the core vision of the Founder that aside from the aim of earning revenue, the company will also aim at capturing almost more than three quarters of the customer base. This was made in line with the company’s anniversary since its inception (Banco Central do Brasil, 2005). 3.4 What public relations do for an organisation? Through the public relations management, written material such as brochures, flyers, information leaflets, speeches and annual reports are created. Brochures, flyers and information leaflets will go in line with making the products of the organisation made known to the public (Engelson, 1995). The report in question was also subject to the public relations department which published it. However this would not have been possible without the interaction of other departments such as the Accounts and Finance Department which provided appropriate finances to support in the collection of appropriate information and resources to make the report come to reality. Further the department through its staffs, stage events such as fundraising dinners, educational displays and product launches. This is evident in the launch of the new fruit bread by the company (Mitchell, Coles, Golisano, & Knutson, 2003). Lobbying which involves getting politicians and other decision makers to support an organisation’s agenda, is another function of the public relations department (Pal & Weaver, 2003). In the product launch of the new line of bread with fruit and nut, the Chairman of the Agriculture society was the chief guest which aided a lot in the launch. Another function is that of media relations where the public relations management team holds media conferences and writes media releases. This can be cited when the fund raising dinner was made aware through a media conference made by the Research and Development manager (Mitchell, Coles, Golisano, & Knutson, 2003). A stakeholder refers to any individual or group that has an interest in an organisation but not necessarily financial. Stakeholders are groups that have a ‘stake’ or an interest in the firm, that is they bear a risk; groups that have a claim, a contract, ownership or right; or groups that have a relationship with the firm, affect or are affected by, influence or are influenced by the firm, Stakeholders among others include customers, employees, competitors, suppliers, government, community and the union (Sorge, 2005). 4.0 Conclusion The trick to being successful is to be prepared for anything that impact on the organization now and in future. Business environment keep on changing and failure to put in place strategic mechanism is putting the business at bring of collapse (Smith, 2011). Hence there is need to create a more flexible pricing strategy when the situations in the environment become demanding, putting into account the political, economic, social, technological and legal factors and their influence to the stakeholders of an organisation (Sorge, 2005). An organisation works as part of the big picture, that is the environment it operates in. hence as much as the company may want to engage in this pricing strategy, it will make use of it in the short run since costs faced by the company cannot stay constant or reduce with the time value of money also taken into account (Sorge, 2005). References Banco Central does Brasil, (2005).Inflation report. Rio de Janeiro: Banco Central does Brasil. Broom. G.M. (2009). Cutlip & Center’s Effective Public Relations (10th ed.). The United States: Pearson International Edition. Coles (2011). Coles cut the price of washing day. Retrieved from http://www.coles.com.au/About-Coles/Company/News.aspx. Dilenschneider, R. L. (2010).The AMA handbook of public relations. New York: AMACOM Division American Management Association. Gordon, M. (2002). Retail Pricing Strategies and Market Power. Melbourne: Melbourne University Press. Harding, D. & Rovit, S. (2004). Mastering the Merger: Four Critical Decisions That Make or Break the Deal. Harvard: Harvard Business Press. Pal, L. & Weaver, K. (2003). The Government Taketh Away: The Politics of Pain in the United States and Canada. Georgetown: Georgetown University Press. Mitchell, D., Coles, C., Golisano, B.T., & Knutson, R.B. (2003). The Ultimate Competitive Advantage: Secrets of Continually Developing a More Profitable Business Model. New York: Berrett-Koehler Publishers. Engelson, M. (1995). Pricing Strategy: An Interdisciplinary Approach. Indiana: Joint Management Strategy. Wayland, R.E. & Cole, P.M. (1997). Customer Connections: New Strategies for Growth (1st ed.). Harvard: Harvard Business Press. Dransfield, R. & Coles, M. (2001). Understanding Business\ Accounts Made Easy. United Kingdom: Nelson Thornes Ltd.. Sorge, A. (2005). The Global and the Local: Understanding the Dialectics of Business Systems (1st ed.). Oxford: OUP Oxford. Smith, T. J. (2011). Pricing Strategy: Setting Price Levels, Managing Price Discounts and Establishing Price Structures. London: South-Western College Pub. Taylor, B. (1969). Pricing strategy: Reconciling customer needs and company objectives. Staples P. Read More