Woolworths: Strategic Marketing

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Outline

Introduction
Marketing Strategy
Customer targets
Marketing plan for the next 3-5- years
3 years projections
4 years projections
5 years projections
Conclusion

Introduction

Woolworths’ hardware/white goods require effective marketing strategy to sustain a strong market position and market share. Different types of strategies allow companies to select the best approach to marketing and management. If the planning process has been faithfully followed, the strategies are obvious. They have been gradually realized by the intense and open discussions of all the other components of the plan.

Marketing Strategy

The proposed marketing strategy for Woolworths’ hardware/white goods is cost leadership. Cost leaders must maintain an acceptable level of satisfaction of buyer needs. Cost leadership is often in conflict with differentiation i.e. to achieve differentiation adds cost thereby removing the potential cost leadership advantage. Low cost is where the business manages its cost base to ensure that it is the lowest cost producer — thereby either winning a greater volume of business through lower prices than competitors can sustain and continue to be profitable, or charging comparable prices and therefore achieving a higher level of profitability.

Customer targets

Woolworths’ hardware/white goods will be based its strategy on a differentiation criterion. This allows Woolworths’ hardware/white goods to shift its focus to brand image and price reduction measures. This strategy will help Woolworths’ hardware/white goods to maintained high-speed growth through continuous optimization of its product mix. Degree of differentiation is not large, and home repair service should represent a market where competitors can differentiate their products and that is why have less rivalry. Rivalry will be reduced where customers have high switching costs – i.e. there is a significant cost associated with the decision to receive products from an alternative competitor. The majority of customers are people from 18-45+ years old who value personal relations and comfort. The majority of customers belong to middle and upper social classes with stable income. The family status will not have a great impact on the target audience characteristics. Woolworths should propose to its customers’ competitive prices to ensure customer satisfaction. Woolworths can use parity pricing or going rate strategy. This strategy will help the company to attract buyers and create a core of loyal brand support. Nevertheless, penetrating pricing strategy can also be used at the initial stage of marketing campaign. It allows demonstrating product benefits for potential customers.

Marketing plan for the next 3-5- years

During the next 3 years, the company should expend its product line and add one new product. The product line refers to the total company or division offering in a related area, and is more than the sum of individual products. For Woolworths, new product lines are significant because they reflect the corporate image. They are important for distributor relationships, and have an impact on the consumer’s image and acceptance of a company⁵. Product planning requires considerable lead time for change, for the addition or deletion of products. It is not uncommon to spend two to four years in developing new products, and this requires advanced market intelligence.

During the next 4 years, t6he company should open new locations in Asia. The reasons for these strategies are

to counteract competitive activity and assure that loss will not occur because someone else introduces the product first;

to realize potential profitability;
to guard against shifts in consumer tastes;
to gain complementary relationships;
to gain an additional share of market;
to complete a product line;
to use common raw materials as well as production and marketing facilities.

In 5 years, the company should open 2 locations in Africa. This expansion is important for Woolworths, because marketing depends and relies on strategic initiatives and customers. It is possible to say that global expansion, a critical management activity, cannot logically be separated from assessment of opportunity. It brings a coordinated effort to the enterprise, adjusting and balancing its resources, and producing programs of logical action. Since marketing executives are faced with the necessity of utilizing scarce capabilities and resources in limited periods of time, allocation is a major problem. In Woolworths, effective allocation can only be achieved, however, through planned behavior.

Programmed innovation is an extremely important process that involves great amounts of resources and effort in promoting and accelerating economic change. At the other extreme, they can build a solid market position by accepting modest immediate returns and taking a longer period of time to cover their outlays, thus making it more difficult for new entries, as with a pricing policy of market penetration. Between these extremes, they may choose to be reimbursed for their original outlays while still holding a competitive advantage, and then use the advantage to increase volume and build a stronger market position. In particular, the emphasis on price that stems from past economic situations is, today, often misplaced.

Conclusion

These projections predict customer and competitor reactions; attempt to gauge acceptance for new products; and highlight economic, social, demographic, technological, psychological, and political changes, all of which are difficult tasks to perform -nor can they be performed with the degree of precision available in other more concrete situations. It is a major means of creating a differential advantage, albeit sometimes short-lived. In adjusting to change, and in attempting to meet the demands of the marketplace, it must be managed, and programmed innovation is becoming one of the foundations of business strategy.

Reference

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