Marketing Communication Through the Integration of New Media and Traditional Media - Example

Marketing Plan for Woolworths Ltd Student’s Name Professor’s Name Course Title Date (Word Count: 4358) Marketing Plan for Woolworths Limited Executive Summary The following is a business plan for our company; Woolworths Ltd. Woolworths Ltd aims at achieving a competitive edge in the Australian retail industry through innovation. Through innovation, Woolworth shall be able to maximize profits and become a supermarket of choice among many consumers. The company shall implement its business level strategies by segmenting the overall market. The business would be very competitive in terms of service delivery, quality products, benchmarking and cost effectiveness. In order to perform better than its rivals, Woolworths would benchmark its services against those of the competition in the industry. The company would also consider robustness for its services. Robustness will provide Woolworths Ltd with core competency by making it hard for the rival firms to imitate. Also, Woolworths Ltd would strive to deliver quality products. To attract customers, the prices would be reduced at the rate of 3% from the normal price that the competitors are charging. Due to high price and poor services offered by competitors, there would be an advantage since the company would render services at a reduced cost but of high quality. The company would strive to manage costs in order to keep the price of products as low as possible. Market Segmentation Analysis While much of the world has been struggling as a result of the 2008-2009 global economic meltdown, Australia has been largely unaffected. In fact, the retail industry has continued to see consistent grow (Australian Bureau of Statistics, 2015). The consistent growth in Australian retail industry is a signal to investors like Woolworths that they can achieve success. Woolworths understand that in order to survive in the highly competitive retail business industry, it must divide the market into distinct segments and satisfy the varying needs of buyers in each segment. Thus, Woolworths shall use market segmentation to identify the specific needs of their consumers. By targeting specific groups of consumers, Woolworths Ltd will provide be able to provide market-responsive goods. This will, in turn, enable Woolworths Ltd to gain a competitive edge over its rivals. Market Description Woolworths aims at establishing operations in Adelaide and Melbourne cities. According to Mosler (2011, p.11), the city is regarded as one of densely populated cities in Australia, and therefore, it will provide a ready market for Woolworths’ business. Melbourne, on the other hand, is the second most populated in Australia, next to Sydney. The economy of the city has been growing steadily as a result of multinational corporations that have established operations there. The city hosts people of different nationalities, including American, Greek, British, Italian and Germans. In addition, Melbourne offers a multicultural environment that addresses the dynamic needs of diverse individuals. The city is considered as one of the best places in Australia for shopping, and therefore, Woolworths aims at establishing operations there (Montgomery, 2008, p.210-211). Market Prospects Woolworths Limited believes that if more efforts are put on the local market, there is a room for a better performance with time. The company would offer high quality products at a relatively low cost to its clients so that it can attract more in the business. By offering high quality product and services, Woolworths Ltd would best be able to meet and address the needs of its clients. Woolworths Ltd aims at hiring professional marketers, who will promote its products throughout Adelaide and Melbourne cities. Customer Segments The task of identifying customer’s needs and wants is quite challenging because different customers have various needs and wants. In this regard, Woolworths shall segregate the buyer’s market into different groups with related needs and wants. The process of separating the consumer market into various groups with comparable requirements is referred to as market segmentation. A study, which was done by Goyat (2011, p.2), stated that there is no single type of market segmentation that can be said to be effective. Woolworths Ltd has established that effective exploitation of any market segmentation can help the company achieve growth. In this regard, Woolworths Ltd would gain a competitive edge over other retailers in Melbourne and Adelaide by adopting ‘Single Target Market Approach’ which involves segmenting the market by selecting a standardized segment as the main target market. Woolworths Ltd will achieve a competitive edge over retailers in Adelaide and Melbourne by focusing on a homogenous target market referred to as’ super consumer’. According to researchers, this target group comprises of consumers aged between 15 - 61 years, who have distinctive characters such as internet savvy, ability to spend huge amounts of money on trendy products among others. In this regard, Woolworths Ltd will offer this group of consumers a twenty four- hour shopping and a wide variety of goods in order to meet their diverse needs. Value Positioning Woolworths understands that consumers are willing to spend money only to those goods and services that meet their needs. Therefore, the senior managers at Woolworths will not bear the view of producing profits as the sole reason of being in the business. The company will provide its clients with top quality products. Competitive Pricing Review Pricing strategies refers to the methods that Woolworths Ltd should apply in the determination of price to charge for its retail products (Klemperer, 1995, p. 517). According to Klemperer (1995, p. 517), business firms should sell their products based on such aspects as costs incurred to manufacture them, target sales revenue and the competition. Klemperer (1995, p. 517-518), in his studies, argued that many business enterprises make pricing decisions based on the cost of manufacturing as well as the competition. However, researchers argue that, where a healthy market exists, the price of the product depends on the value that customers’ derive from using that product. Previous researchers on retail outlets throughout the globe have stressed the importance of setting up a clear price mechanism. Conducting constant researches on pricing allows marketers to plan for production level, assess the market profitability, and to understand the market price variables as well as the relationship between price and consumption (Kanagal, nd, p.5-7). A research, which was done by Iacobucci (2014, p.167), indicated that product prices keep on fluctuating throughout the year due to various factors. Woolworths Ltd will determine the price of its products based on competitors’ prices. Woolworths Ltd shall consider the competitor’s prices in order to set prices which are attractive. Competition in the retail business is intense, and therefore, Woolworths need to manage its costs down. However, as the company builds its reputation, it expects to be able to charge comparable rates to other supermarkets by offering premium products. It is expected that the quality of the products will not be compromised with the reduced prices. Woolworths Limited will at all times try and keep with the economic trends of the day. This will make sure the consumers who are the main drivers of the business are not exploited by any means. Woolworths Limited will also communicate this with the customers to make sure they are aware of the existing prices. This will not only build their confidence in the company, but also create a long term relationship with them. As mentioned earlier, competition in the retail industry is intense, and therefore, marketers are forced to establish a competitive pricing strategy in order to stay afloat. Overpricing can make Woolworths to lose sales that would have been profitable at lower prices. On the other hand, under pricing can cause Woolworths not to realize profits. Therefore, appropriate pricing plays a critical role of enhancing sales and profits. In product pricing, knowledge is the key. In this regard, Woolworths will interact with people of various disciplines, including engineers, marketers and accountants when establishing a product pricing policy. Each of these professionals has valuable information that can assist in establishing product prices. The senior leadership team in an organization has the role of establishing a responsible pricing policy. However, this does not mean that the lower level managers should not play a part in making pricing decisions. Thus, Woolworths will depend on both the senior managers and front-line managers in establishing a competitive pricing policy. Promotional Plan After companies have developed the products, they must inform potential customers about the products, in order to cut a niche in the market. Thus, Woolworths Ltd will communicate with customers in Adelaide and Melbourne cities in order to achieve its marketing goals. Woolworths will use various ways to communicate with clients, including advertising, public relations, promotion, personal selling and point of sale displays. Advertising Recent research reveals that advertising is the most often used tools of promotion. According to Londre (2009, p.3), advertising is any paid, form of non- personal presentation and promotion of ideas and products by a well-known sponsor. Marketers use this means, in order to seize consumer’s attention. A promoter has to pay advertising agency experts in the field of advertising. Advertising is a mass communication which is aimed at persuading a large number of potential buyers. Woolworths Ltd will achieve numerous benefits by maintaining a strict contact with the clients. The following are the main objectives of advertising; information and persuasive advertising. Information advertising notifies the consumers about price changes and hence, enabling them to make informed purchase decisions. Persuasive advertising, on the other hand, involves creating selective demand for a given product. In the face of global competition, Woolworths Ltd may convince consumers to use their products. Woolworths Ltd may also conduct advertising with a view of reminding consumers that they require the product in future. Normally, advertising costs vary from one organization to another. For instance, the major supermarkets in Australia spend around 15 % of their income on advertising. The advertising budget for Woolworths Ltd will be around 7-10 % of sales. There are many competitors in the Australian retail industry, and therefore, Woolworths Ltd needs aggressive advertising to build awareness, and persuade enthusiasts to try their products. Woolworths Ltd will adopt the ‘same level as competitors approach’ while setting the advertising budget. Woolworths Ltd will, thus, examine the competitors’ activities before setting an advertising budget. However, this approach has several shortcomings, and Woolworths Ltd needs to be careful. For instance, it is not easy to gain correct information on rival firms’ spending. Also, there is no rationale to believe that competitors spent their advertising money wisely. Therefore, Woolworths Ltd shall determine the right advertising budget. Woolworths Ltd shall consider the following two factors when developing advertising strategy, that is, advertising media and advertising message. With respect to the advertising message, Woolworths Ltd must rate the messages on exclusiveness, believability and desirability. The message must state something interesting about supermarket chains. It must state something special that does not apply to every retail firm. Also, the message must be credible for customers to think about it, and react. Advertising media are the channels that convey the promoters’ message to the intended audience (Adzharuddin, 2012, p.2). It is a vehicle through which a marketer passes on his message to potential clients. Woolworths Ltd needs to advertise extensively in order to spur growth. The company will use E-mail marketing in order to reach a wider client base within the shortest time possible. With the advancement in information technology, most marketers across Australia have switched to E-mail communications. Therefore, Woolworths Ltd shall own a website that is branded with dark-rich colors, in order to attract prospective customers. The company also has adequate plans of utilizing the social media advertising tool. In the era of information technology, internet access in Australia has become less expensive. Marketers are taking this advantage to advertise their products electronically. Woolworths Ltd shall, therefore, advertise its products through the social media such as twitter and Facebook. Advertising through social media provides a firm with a competitive edge, due to its ability to influence consumers to purchase a product. Advertising using social media persuades the client from the time he is assessing the available brands to the period after using the products. Therefore, Woolworths Ltd shall embark on social media advertising in order to strengthen advocacy of existing clients, increase the likelihood of acquiring new clients, enhance the brand visibility and also, respond swiftly to clients’ complaints and feedback. Woolworths Ltd will also, make use of Television (TV) when advertising its products. Watching TV is a common leisure activity among Australians. According to recent surveys, most people in Australia spend as high as four to five hours of their leisure time, viewing TV. Television commercials normally create an impulse purchase whereby, consumers view the presentation, and then purchase the product instantaneously. TV usually describes, display and frequently demonstrates the brand, as well as, its features. In addition, TV has the ability to appeal both the eyes and ears simultaneously. Thus, TV will work well for Woolworths Ltd because it offers the greatest possibility for creative advertising. After developing an advertising strategy, the sales and marketing department of Woolworths Ltd shall proceed to determine the effectiveness of advertising. The management team at Woolworths Ltd can show the advert to the consumer before placing it, in order to get their opinions. This will enable them to know the attitudes of the buyers, and also, determine whether it meets the advertisement objectives. Marketers can determine the advertisement success prior to, during or after the promotion. Sales promotion Woolworths believes that sales promotion is the most effective tool of winning customers in the highly competitive retail industry. This is because it plays a crucial role of enabling marketers to attain their marketing objectives effectively compared to other promotional mix. Woolworths Ltd shall, therefore, spend a huge amount of money on sales promotion. The company hopes that clients will continue purchasing various products later without incentives. Woolworths aims at enhancing short term sales, as well as, increasing its market share in the long-run. In this regard, the company will use the following sales promotion techniques; promotional games, coupons, price of, patronage rewards, free draws, cash refunds and samples. The company will use free samples and coupons in order to cushion clients against the risk of trying new products. Woolworths Ltd shall allow consumers to taste different varieties of fruits prior to purchasing. This way, the company will be able to influence consumers’ purchasing behavior. Woolworths shall also create short term demand for its retail products by lowering their prices during holidays. However, not all the above techniques are cost effective, and therefore, Woolworths marketers will carry out an analysis in order to determine the techniques to use. The company will also combine different techniques in order to achieve its marketing objectives. Personal Selling Personal selling could be defined as the face to face contact between the marketer and prospective client (Cant & Heerden, 2005, p.36). Unlike other promotional approaches, this method is concerned with looking for potential purchasers, presenting the product, and obtaining an order from the client. This approach is ideal for Woolworths Ltd because it has the ability to command a much larger share of total sales revenue. The company will use salespersons from the home country. Salespersons from the host country are already familiar with the market, and hence an invaluable resource. Public Relations Woolworths understands that effective policies do not guarantee success if customers do not understand them. Woolworths intends to develop a positive image with stakeholders. Therefore, the company will conduct public relations in order to inform potential customers about its philosophies, policies and products. Woolworths’ employees will communicate with potential clients directly in order to create an understanding of their needs. Through face-to-face interaction, the employees will be able to impart knowledge and information regarding Woolworths’ products. The marketing team shall have excellent communication skills as well as persuasion skills in order to create awareness. The company will also select the most suitable tools and techniques for public relations. However, Woolworths shall rely on press release as the primary tool for publicity. Other tools and techniques that Woolworths shall use include short message services (sms), telephone, press conferences, internet releases among others. Through public relations, Woolworths shall achieve various benefits, including credibility and cost advantage. Distribution Plan According to Zigiaris (2000, p.3), distribution is the physical movement of products from the origin to destination. Thus, distribution management involves shipping, warehousing and inventory. In the past few years, the concept of physical distribution has emerged as a distinct, identifiable function of management (Gundlach et al, 2006, p.428). In order to execute its business level strategy, Woolworths Ltd shall perform a series of activities known as value chain (W eele, 2009,p.6) The retail industry is very competitive, and therefore, Woolworths shall analyze the activities that creates values for its clients as well as the costs involved in each activity(W eele, 2009,p.6). Afterwards, Woolworths shall compare the activities with other retailers in Adelaide and Melbourne. The company will achieve this through benchmarking, that is, studying the best practices of other retailers in order to come up with effective ways that creates value for clients. Therefore, Woolworths shall strive to handle distribution activities in a different way in order to achieve a competitive advantage. Woolworths’ value chain shall consist of various activities, including sales and marketing, distribution, operations and services, which are the main activities of the value chain (Browne & Nuttall, 2013, p. 12). Woolworths shall depend on supply chain management as the largest cost driver for its business. Management of inventories will be the major function of the organization (Browne & Nuttall, 2013, p.19). Due to its size, the company shall be actively involved in efficient in delivery. The company shall strive to curb high costs of transportation, which impacts on the company’s profitability. The company aims at managing its own fleet of about 4000 trucks. This way, it will evade the cost of contracting third party logistics companies. Woolworths shall strive to offer exceptional customer services, and therefore, it will hire greeters at entrances in all of their stores in Adelaide and Melbourne, who will usher clients in and around the stores. Finally, Woolworths will thrive on a word of mouth marketing strategy where shoppers themselves will be expected to do word of mouth marketing for the company. This is one area that Woolworths will focus on so as to become more competitive among rivals. The huge profits that the company will get shall be invested to building marketing teams that would help more customers get aware of their products and services. In addition, the human resource management strategy shall be revised in order to address employee complaints and labor laws infringement issues. Mode Selection Australia boasts the world’s ninth largest road network, which comprises of local roads, national highways and expressways. Therefore, road transport would be suitable for linking the Australian major cities. The following are the main benefits that Woolworths Ltd will gain by using this mode of transport; the company will be able to move goods faster from origin to destination. In case of air transport, much time is wasted purchasing a plane ticket. In addition, air transport is quite expensive. Much time is wasted in case of water transport. Therefore, Woolworths Ltd will use vehicles to move goods to their destinations. Labeling and Packaging Woolworths Ltd shall comply with the Australian Food Standards Act, which requires companies to provide clients with pertinent information regarding food products. Among the product details that should be provided includes name and address of manufacturer, country of origin, manufacturing date, net weight among others. In today’s business world, organizations are striving to achieve a competitive advantage through eco-friendly practices. Woolworths shall demonstrate responsible corporate behavior throughout the supply chain. For instance, the company will protect the environment by using packaging materials that are recyclable. Insurance Woolworths Ltd will enter into a legal contract with an insurance company in order to cover losses that may result from physical damage. The contract period will be longer than a year. Channels of distribution The sales would be channeled through; three major distributors and three wholesalers. They would be given target quotas to achieve on a monthly basis. Incentives would be given to high achievers. The company would also develop a website that will form a major distribution channel. Clients have become Web-Savvy over the past few years, and therefore, Woolworths Ltd shall take advantage of the internet. The website will also play a critical role of enabling clients place their orders, and also, pay for their products. This will reduce instances of carrying hard cash to purchase the goods. In the modern world, e commerce has gained momentum and more consumers throughout the globe have found it to be a safe and easier mode of making transactions. Therefore, Woolworths Ltd will try to coax customers to make use of e commerce while purchasing goods. On the Woolworths.com, customers will be able find a particular product online. In addition, they will be able to rate products, and this will enable Woolworths to develop products that meet customers’ needs. Woolworths Ltd intends to engage wholesalers and retailers to provide the business-to-business service. They will act as a link between the company and the consumers. Payment Methods and Terms The terms of trade are laid down in the contract of sale of goods (Weitzenböck, 2012, p. 2). The common law provides remedies for a seller who suffers loss due to defective goods. Woolworths Ltd will, therefore, enter into a binding contract in order to create legal obligations. Among the convenient trade terms that the company will be involved in include; Ex works and CIF Contracts. With regards to Ex works, the company will undertake to have the items available for collection by the consumer at the company’s premises. Therefore, Woolworths Ltd will not be responsible for delivering the goods unless otherwise agreed. Woolworths Ltd will enter into a cost, insurance, freight (CIF) contract whereby, it will agree to supply goods that meet the terms of sale The Company will charge extra costs, in order to account for the insurance and shipping he provides. Suppliers are involved in the production process, and therefore, they are important stakeholders of Woolworths Ltd. They provide raw materials ensuring that the company production process does not have interruptions. Thus, Woolworths supply chain will exclusively depend on suppliers. In order to remain competitive, Woolworths will uphold integrity in its supply chain management systems. The building of trust between the company and the major suppliers is crucial for financial success. The company will have a network of around 600 suppliers. Having strategic win-win alliances with suppliers and involving them in the initial design processes will make them be a part of Woolworths and enhances quality production. Woolworths will have a supplier portal aimed at providing the latest company’s news and information to suppliers. Application of the Internet in the supply chain management plays an important role in enhancing the bonds with the suppliers. Lastly, positive relationships with suppliers contribute to cost cutting. Past research on suppliers relationships shows that companies that relies largely on contractual trust incurs losses when suppliers fails to honor their promises. Thus, Woolworths Ltd shall lean on formal contracts in its management of supply chain. Purchasing decisions in a supermarket are characterized by a high level of uncertainty, and therefore, it is necessary that Woolworths Ltd enter into a binding contract that sets out all expectations. Woolworths Ltd expects payments for goods and services to be upon their receipt. However, Woolworths shall be cautious during the management of their cost of capital and cash flows. Thus, the company shall seek for longer payment terms that do not impact negatively on purchase price. Woolworths Ltd shall insist that suppliers guarantee the quality as well as delivery of goods. The company will make sure that suppliers respect the contract terms by including penalty clauses, that is, 11% reduction in the price if the goods do not meet the requirements. Woolworths Ltd will also terminate contracts with suppliers that supplies goods with serious flaws or deliver goods too late. Additionally, Woolworths shall specify liabilities for non-conformance. The company shall include clauses that allow it to reject substandard goods or delivers goods so late that they are no longer of value to Woolworths Ltd. Processing Orders According to Zigiaris (2000, p.3), customer’s orders plays a critical role of setting the supply chain management process in motion. Woolworths shall encourage customers to make orders through emails and telephone. Once received, the orders will go through the order processing system. The following departments will be involved in order processing: accounting, shipping and warehousing and sales. Although Woolworths Ltd will be a new company in the market when business operations are launched, it hopes to gain a competitive edge over other retailers in Adelaide and Melbourne by introducing quality goods that captures the hearts of consumers. Additionally, Woolworths Ltd will research on consumer needs in order to increase their satisfaction. Due to the use of the latest technology in the market, customers will be able to save money, the company will provide better customer service, reduce churn, and increase loyalty. Efficiency in carrying all the activities will be a time saver. The deployment of modern technology will ensure that there is no downtime whenever a customer is being attended to. As a result, there will a decrease in errors and increased sales. Managing and Controlling Inventory Once goods have been obtained, they must be stored in order to meet customer’s demands. In retail industry, managing and controlling inventory are core activities. Research shows that retail giants throughout the globe have excellent inventory management systems. Normally, an organization loses money through handling costs, excess storage, breakage, pilferage and inadequately controlled inventory. Woolworths Ltd shall at all times strive to maintain adequate level of inventory. The company will use software vendor Terra Technology in order to forecast spikes in consumer demand. In addition, the company will make use the point-of-sale data in order to lower forecast error rates. Due to reduction in errors, Woolworths Ltd will not need safety stock in the long run. Precise forecasts as well as the reductions in stock safety will help the company’s inventory to reduce significantly. Through the use of information technology, Woolworths Ltd will be able to project the amount of stock needed. Reference List Adzharuddin, N.A. 2012, Marketing communication through the integration of new media and traditional media: The insights. 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INNOREGIO project. pp.1-27. Read More