Retail grocery industry in Australia - Essay Example

There are a few publicly listed supermarket based chains, global operators and wholesaler managed chains that operate in the industry and offer grocery foods in varied retail formats. These assorted retailers contend with more than 30,000 specialty food offering businesses including shopfronts and multiple franchise based operators (Australian Government Department of Agriculture, 2013). The prime objective of this study is to analyse the retail grocery industry in Australia in keeping with micro and macro-economic factors.

Market Structure–Production Sector Nature of Production Nature of production in any industry bears a major impact on the overall cost of the produced offerings owing to the fact that it entails crucial constituents such as value addition components, stock control and production operations. In terms of stages of production, it is determined that a number of goods pass through diverse stages of production. Mainly, there are three production stages categorised under primary, secondary and tertiary.

Primary: This stage entails the extraction of different raw materials from the soil. In relation to grocery retail industry, the primary offerings include food as well as non-food items that are prepared from the scratch with the aid of procuring different raw materials (Bized, 2012). Secondary: This stage entails converting raw materials into other related offerings. With regard to grocery retail industry in Australia, the organisations focus on providing high quality processed products through the use of required materials (Bized, 2012).

Tertiary: This particular stage involves services provided to the business and consumers. This phase is mainly identified as a part of service industry. The Australian grocery retail industry emphasizes efficient handling of variable costs arising from providing quality services by generating greater footfall in the stores by enhanced consumer footfall. It also focuses on ensuring economies of scale along with rendering in-store services (Bized, 2012; Australian Government Department of Agriculture, 2013).

Factors Differentiating the Market Australian grocery retail market can be differentiated through three major factors that include price differentiation, product differentiation and market segmentation. The marketers operating in the grocery retail market in Australia aim to differentiate their offering by targeting high quality assorted products for their identified target markets. Price Differentiation: Price discrimination or differentiation is referred as the quality of an exporter to fix the price in terms of market scenario.

This behaviour notifies the exporter to exchange the rate by changing the price of its products. In certain terms, it can be said that price discrimination is the theory of changing prices for different consumers. In Australian grocery retail market perspective, price discrimination plays a vital role. Price differentiation is essentially divided into three parts that include first-degree price discrimination, second-degree price discrimination and third-degree price discrimination. In Australian grocery retail market, the price discrimination is very much important for the strategies adopted by the suppliers