Marketing Plan for Masters Home Improvement Stores in Australia - Assignment Example

Marketing Plan for Masters Home Improvement Stores in Australia Introduction Master’s Home Improvement is big box retailers that was launched in the year 2011 and offers its Australian customer base a splendid retail experience which is a brand new concept for them. Each of the stores of this retailer has a stock of 35,000 different product categories that ranges from bathroom accessories to a complete outdoor furniture set. The staffs of Master’s Home Improvement have their expertise in specific departments and provide a very friendly service to their customers. The company was the first to launch an online store for its Australian customers and was the first Home Improvement and Hardware Store to take such an initiative. Marketing Environment Analysis – Micro Trends The micro environmental factors comprises of all the elements that are closely linked with the company and has a positive or negative effect on the business operations of the company and hence ultimately has an impact on building relationships with customers and creating value. The various micro environmental factors comprise of suppliers, marketing intermediaries, publics, competitors and customers (Gronross, 2007). Amongst the above stated factors two of which would create the major impact on the operations of Master’s Home Improvement is suppliers and competitors. The other factors can be easily managed by the company only when these two selected elements are effectively managed by the company. Trend One Suppliers play a very important part in retail business and in such home improvement business the availability of pre-packaged goods as it is offered by Master’s solely depends on the quality level maintained by the suppliers and even on time delivery from the suppliers so that the demand of the consumers are met without losing on any customer in such highly competitive market. Master’s also needs to develop very strong relationships with their suppliers and offer them good incentives so that they do not shift to their competitors as that would have a drastic impact on their business operations (Elliott & Percy, 2007). In a market where competition is high bargaining power of suppliers is high due to availability of more number of operations. Trend Two The Master’s brand is owned by WoolsWorth limited and has faced a second mover advantage as well as disadvantage in the retail business. The major competitors of the brand are Bunnings, Mitre 10, and Home Timber and Hardware. The competitors greatly has an impact on an organization such as if the competitors has set attractive prices with innovative product line then it can affect other players who has set higher prices as per the market demand. In the industry that Master’s operates there are well established players such as Bunnings which causes the company to constantly update its services so as to sustain in the market. Marketing Environment Analysis – Macro Trends The macro environmental factors comprise of the broader societal factors that has an impact on the organizational performance. These factors comprise of demographic, cultural, economic, technological, natural, social and political. As per the analysis of the external environment of the organization all of the factors have a certain impact on the performance of the organization. However the two most important factors that affect Master’s brand the most are economic and cultural factors (Keegan & Green, 2011). This is simply because these two factors are related to the target consumer market on which the entire operations of the company lies and certain turmoil in them can result into major losses for the company. Macro Trend One The economic factor comprises of the current economic conditions where the company operates that is in Australia which directly relates to the economic stability of consumer market of that region. Australian market in the present scenario has stable economic conditions that denote the purchasing power of the consumers is high towards such home improvement furniture’s and accessories which are not part of basic necessity (Kotler, Armstrong, Wong & Saunders, 2008). However if the economy of the country notices a slowdown then the disposable income of the customers would also be low and they would not spend on such items (Avenell, 2013). This would bring down the sales of the company and hence turn out to be a major factor that affects the business operations of Master’s Home Improvement. Macro Trend Two The present culture of the consumer market in Australia is inclined towards unique product ranges and more of customized products. This opportunity was exploited by Master’s brand where it offered pre packaged goods and the customers can customize the furniture’s as per their preference. These cultural factors are bound to notice some changes and are linked with the demands and wants of the consumers (Buttle, 2010). If the consumer demand of Australian market changes majorly because of the cultural issues then it would result into losses for the company. Any organization promotes its products as per the culture of the particular market as they drive the demand, if there is no such demand in the market then the business operations cannot be performed up to the mark of generating good profit margins and sustainable competitive advantage for future years (Lee, 2009). Marketing Mix – Evaluation and Critique Overview of Current Marketing Approach Master’s Home Improvement brand has been able to capture the second mover advantage in the Australian market by not making the same investment mistakes that Bunnings had done in its initial years as a market entrant (Hollenson, 2011). The brand aims at offering the best product at best price and having the best quality. The company focuses on solution selling rather than product selling (Wheeler, 2009). In order to be aligned with its goal the company analyzes the changing consumer taste and preference and thy offer pre-packaged goods so that the customers can buy exactly what they want. This kind of marketing approach that is undertaken by the company involves a huge amount of cost (Vemon, 2000). The major focus of the company was to create a brand in the home improvement products that can prove to be the market leader. Master’s offers a wide array of product range comprising of lighting, flooring, outdoor furniture, appliances, bathrooms, plumbing, power tools etc (Melewar, 2008). The company presently operates through 12 retail stores and has set plans to expand its market share by opening up 150 stores in the coming 5 years all over Australian market. Master’s brand offer best prices to its customers and even provides them with the necessary knowledge on how to use a particular product (Kotabe & Helson, 2007). As promotional techniques the company has changed its brand identity and applied some bright colors so that it can attract customers and even puts up hoardings and billboards across various regions in Australia (Bamossy & Hogg, 2010). The retail outlet is also well designed that is technologically advanced, efficient customer service, and proper signage to enhance the shopping experience of the customers at their retail stores (Armstrong & Kotler, 2005). Evaluation of Effectiveness The wide range of products that is provided by the company at an attractive price has been able to make the company outperform its competitors Bunnings securing very high profit margins (Hulsbosch, 2012). The other factor that has greatly contributed towards the success of the brand is its physical evidence (De Mooij, 2009). The company has taken effective measures to restructure its stores, brand identity and even incorporated some modern technology within the stores in the form of buzzers and signage so as to provide a friendly service where the customers would have a full knowledge on how to use the purchased product (Doyle & Stern, 2006). As per the theory proposed by John Kotter the seven elements or 7Ps of marketing mix needs to be well integrated so as to provide the maximum benefit to the company. Certain aspects such as product price and physical evidence has played a vital factor behind the growth of Master’s but the other factors have not proved to be so effective such as process, place and mainly promotion which has not been given so much of importance by the company (Kapferer, 2010). Current Approach Evaluation Product 35000 different product range Satisfactory as per the current demand of Australian consumer market Price Competitive Prices Moderate as there is a need to offer more price flexibility as per the competitive market Place Retail stores owned by the company. 15 stores across Australia Unsatisfactory as there should be more retail outlets or franchisee stores so as to reach to more number of customers in the Australian market Promotion Hoardings and billboards Very low as per the industry and requires incorporation of more promotional media Process Supplierswarehousesretail outletscustomers Middle agents are missing which can give the company more profit margins Physical Evidence Best customer service, well trained staff with required expertise and technologically advanced retail stores Highly satisfactory and results into better sales growth as per the other competitors. People Experts and knowledgeable. Focused more towards delivering better customer service. Satisfactory and provides a pleasant shopping experience to all its customers Marketing Mix – Redesign Product The product range of the brand is very limited and offers the same kinds of products as its competitors. Since the brand is known for its home improvement product line so the company can include some of the latest electronic gadgets in its product line (Deresky, 2005). The company already offers 35,000 products for the present scenario such electronic devices such as TVs, oven, home theatres can help the company to capture a completely different market segment. Physical Evidence The physical evidence of the products that is offered by Master’s brand has been able to set high standards. The retail stores are well advanced and the only aspect that can be incorporated in all of its stores is presence of cafeteria so that the customers feel comfortable while shopping at these retail stores (Withers, 2012). As per a new brand image the colour scheme of the logos of Master’s can also be changed to more of vibrant colors. Processes The company does not involve much of intermediaries and its operation process is very simple in which it procures raw materials from its suppliers, then assembles its and stores it in its warehouses and finally distributes to all its retail outlets (Cranfield School of Management, 2000). The company can form a contract with any third part logistics that would lower down its cost and even pair up with some retailers through which their products can be easily accessed by many more customers. People The people factor of the marketing mix is a very vital element as they are linked with the satisfaction level of the customers. Master’s brand possesses highly skilled staff and this advantage can be further enhanced by developing effective customer relationship program (Bruhn, 2003). The customers who purchases products from its stores can be contacted occasionally by personnel and can be send greeting by the company on some special occasions. Price Master’s brand has been able to offer the best of prices to its customers and this has resulted into a tough competition for all the other players in the industry. However the company can undertake some flexibility in its pricing strategy through which it can give more discounts and offers to its regular customers in order to develop brand loyalty amongst the customer base (Ulrich, 2008). The company in order to sustain its operations for a couple of years in the same market amongst the competitors can focus on cost plus pricing so as to offer competitive prices to its customers. Place The company has been able to open 15 retail outlets across Australia and so there is a need to open up more retail outlets so as to reach to more number of customers. The company can also form some franchisees so as to lower down its investment level and the risk factor. Master’s Home Improvement products can also be promoted in some big retail or supermarket chains so that consumer market gets more aware of the brand. Promotion The company needs to opt for other media platforms for promotion of its products. Social media such as Twitter, Facebook, Yahoo and LinkedIn would be very beneficial for Masters’s brand as it can attract its target market (Pelsmacker, Geuens & Bergh, 2010). The other platforms can be internet ad banners, and bulk messages and emails that can reach out to a large customer base at the least time possible (Percy, 2009). Recommendations Recommendation One The first recommendation that needs to be considered by the company is towards opening more of retail outlets either through partnership basis on a contract basis. The company can even form franchisees or display its products in some bigger retail chains along with some of their well trained staff who can give the customers a proper explanation for all their queries. The company can even expand its business in some international markets such as US so as to gain more market presence. Recommendation Two Promotion is the most important factor that is responsible for creating a space in the consumer’s mind in relation to the brand. The promotional approaches can be of various types and it depends on the company on how well it can integrate the different form of marketing communications. Master’s brand can be promoted using social media as it is the best cost saving approach for promotion that can be undertaken by a company. Social media forms the most promising media platform for any company and it reached to larger extent of customer at minimum time. Recommendation Three Customer’s forms one of the most important micro environmental elements that need to be taken care of by the company as it can cause a drastic impact on the business operations. The best approach for maintaining strong relationships with customers is to incorporate customer loyalty programs. This is achieved through occasional greetings, free customer service at any time in a day, special offers and discounts, and giving free gifts to those who are regular customers so as to strengthen brand loyalty. References Armstrong, G., & Kotler, P. (2005). Marketing: an introduction. New Jersey: Person. Bamossy , S., & Hogg , A. (2010). Consumer Behaviour. Harlow: FT Prentice Hall. Bruhn, M. (2003). Relationship Marketing: management of customer relations. UK: Prentice Hall. Buttle, F.(2010). Customer Relationship Management. UK: Elsevier Butterworth Heineman Cranfield School of Management. (2000). Marketing Management: A Relationship Marketing Perspective. USA: MacMillan. De Mooij, M. (2009). Global Marketing and Advertising: Understanding Cultural Paradoxes. London: Sage.  Deresky, H. (2005). International Management: managing across borders and cultures. London: Prentice Hall. Doyle, P., & Stern, P. (2006). Marketing Management and Strategy. England: Financial Times/Prentice Hall. Elliott, R., & Percy, L. (2007). Strategic Brand Management. New York: Oxford University press. Gronross, C. (2007). In search of a new logic for Marketing. UK: Wiley. Hollenson, S. (2011). Global Marketing. London: Pearson Kapferer, J.N. (2010). The New Strategic Brand Management. London: Kogan Page Keegan, W., & Green, M. (2011) .Global Marketing. New Jersey: Pearson. Kotabe, M., & Helson,K. (2007) . Global Marketing Management. Hoboken: John Wiley & Sons. Kotler,P., Armstrong,G. ,Wong,V., & Saunders ,J . (2008). Principles of Marketing. Harlow: Prentice Hall Lee, K. (2009). Global Marketing Management. Oxford: Oxford University Press. Melewar, T.C. (2008). Facet of corporate identity communication and reputation. London: Routledge. Pelsmacker, P., Geuens,M., & Bergh, J.(2010). Marketing Communication. Harlow: Prentice Hall. Percy, E. (2009). Strategic Advertising management. New York: Oxford University Press. Ulrich et al, (2008) .Product Design and Development. Singapore: McGraw-Hill. Vemon, S. (2000). Marketing Strategy: A Global Perspective. Fort Worth, Tex: London. Wheeler, A. (2009). Designing Brand Identity. New Jersey: John Wiley & Sons.  Withers, T. (2012). Woolworths Aims to Build $6.4 Billion Home-Improvement Unit, O’Brien Says. Retrieved from: http://www.bloomberg.com/news/2012-03-03/woolworths-aims-to-build-a-6-billion-home-improvement-unit-o-brien-says.html Avenell, P. (2013). Woolworths admits to massive Masters losses. Retrieved from: http://www.retailbiz.com.au/2013/07/19/article/Woolworths-admits-to-massive-Masters-losses/NVHLPWVYWC Hulsbosch. (2012). Building a master brand. 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