Sustainability Marketing In Food Industry Essay

Question:

Discuss about the Sustainability Marketing In Food Industry.

Answer:

Introduction

The main aim of this task is to evaluate and analyze the strengths and opportunities of the market. The report outlines the business activities and operations of the Coles. It is one of the biggest supply chain and retail supermarket company in Australia. A marketing audit is done by the firm to accomplish the long-term mission and vision of the firm. Furthermore, the report explains the SWOT analysis and pestle analysis of the company. Additionally, it describes segmentation, targeting and positioning strategy of Coles. The firm is a strong player in supermarket and retail industry. It depicts that how target market plays a significant role to make effective and dynamic decisions in the competitive market.

Description about organization and industry

Coles is an Australian supermarket, consumer and retail service chain. It’s headquarter is located in Melbourne Australia. The organization was founded in 1914 by George Coles. There are approx 100,000 employees employed in the organization. The company also provides online shopping services. In today’s modern world, the firm is increasing and maximizing its revenue and profit. The company has grown large to be one of the biggest supermarket chains in Australia. In November 2007, it was acquired by Wesfarmers. The mission of the firm is to become the best retailer in the global market and to satisfy the needs and requirements of customers. In addition, the main aim of the company is to increase sales and revenue by maintaining trust among the customers in the world. The vision of the firm is to develop and build an innovative business that provides high-quality products which deliver value to customers in the competitive market. Coles maintains effective and dynamic core values such as teamwork, Customer focus, innovation and personal responsibility. By maintaining effective core values, the company has been able to resolve and handle the solutions to their problems and issues. Along with this, the organization uses effective and attractive promotional and advertisement strategies and policies to increase and enhance the sales and customers in the international market (Coles, 2016).

Market for Coles and evaluate current trends

Growth

In Australia, sales of food and beverage products are increasing day by day. The organization is becoming a global leader in supermarket and retail industry. The sale of the company has increased 1.8% on the prior corresponding period.

Sales growth of Coles

(Source: Rickard, 2016)

Share of the $89.8 billion at supermarkets in 12 months to September 2016

(Source: Roy Morgan, 2016)

Profitability

Coles earnings have dropped for the first time since it was obtained by Wesfarmers nine years ago. Coles observed a 13.5 % fall in full-year profit to $ 1.61 billion, with comparable liquor and food sales growth slowing down by one percent and revenue flat. In this way, the profit margin was decreased at that time (Lee, 2009).

Macro environment (PESTLE factors)

A macro environment is a situation that exists in the economy as a whole, rather than in a region and particular sector. Macro environment factors cannot be controlled and managed by the firm (Baldwin, 2011). Pestle analysis is done to evaluate and analyze the strengths and weaknesses of the competitors. The pestle factors have been discussed below.

Political: The political factors play a significant role in evaluating and determining the factors that can impact Cole’s long-term profitability and revenue in a certain market or country. Thus, various types of political factors affect success and growth of the firm. The political factors include government regulations, rules, standards, level of corruption and bureaucracy and interference in food and staples retailing industry by government. Along with this, product labeling and other requirements in staples and food retailing also affect the growth of the firm. The firm needs to focus on these factors to gain long-term profitability and returns (Spaargaren, Oosterveer & Loeber, 2013).

Economic: These factors also affect the long-term sustainability and progress of the firm. The economic factors include savings rate, interest rate, inflation rate, and exchange rate. In Australia, customers do not spend a lot of money to buy the grocery products and services. Along with this, bargaining power of suppliers and unemployment rate also affect the mission and vision of the firm.

Socio-cultural: These factors play a vital role in the organization. The socio-cultural factors include customs, culture, values, and belief. Since 2011 the company is trying to address and resolve the issue of food insecurity. Furthermore, the firm helps to improve cancer care for youngster and children. In this way, the organization focuses on the socio-cultural factors to gain the competitive advantages in the global market (Allaway, Huddleston, Whipple & Ellinger, 2011).

Technological: The firm is increasing the use of the internet to provide various products and services to the customers. Apart from this, less payment facilities and self-check out facilities are being provided by the organization. It uses cloud infrastructure and innovative technologies to attract and retain more consumers in the competitive market.

Legal: There are several laws and regulations also have a direct impact on the efficiency and performance of the firm. The legal factors include discrimination law, copyright, intellectual property law and antitrust law. Therefore, the firm focuses on these factors to stand out against the competitors.

Environmental: Coles uses sustainable products and eco-friendly supermarkets to increase the number of customers in the global market. Additionally, different market norms and environmental standards also affect the profitability and returns of an organization. The firm also focuses on the weather, environmental pollution and climate change (Baker, 2012).

Major market segments

The market plays a significant role in the organization to increase and maximize the sales of the company. It also helps to accomplish the goals and objectives of the firm (Grewal, Ailawadi, Gauri, Hall, Kopalle & Robertson, 2011). The major market segments of Coles have been discussed below.

Segmentation

The firm divides its products on the basis of demographic, psychographic, geographic, lifestyle and behavior of people. The firm focuses on retail and departmental stores to earn more revenue and returns. Along with this, the company also monitors and evaluates the needs, requirements, desires, and choices of the consumers to gain competitive benefits in the market (Teller, Kotzab, & Grant, 2012).

Targeting

The target group includes middle class and premium Australian households that help to maximize the outputs and returns. In targeting strategy, the company focuses on the size and nature of the segment and group. In addition, the organization differentiates its products from competitor’s products to attain long-term success. Coles produces heterogeneous products and services to stay in the competitive market (Ham, 2016).

Positioning

It refers to occupying a certain and specific place in the minds of the target customers in the market. It is the last phase of the STP process. By using this strategy, the company has been able to make a good position in the minds of consumers. Integrated marketing communications form an essential part of the positioning that helps to identify and measure the choices and needs of the customers. By using STP strategy, Coles has been able to provide products and services to the customers at reasonable prices and it also helps to satisfy the requirements and desires of the customers.

Primary and secondary target market

The company divides its market into different segments or groups with distinct wants, desires, and requirements. The customers buy and use the products and services provided in Coles only for daily use. Thus, customers compare the quality of the products provided by Coles, because those are for daily consumption and these products are easy to find substitute goods. Online business has been started and developed by the organization during recent years. It helps to attract and retain a lot of customers in the global market (Armstrong, Adam, Denize & Kotler, 2014). The primary market includes middle class and premium class people who purchase the products on daily basis. The secondary market includes women and retail stores who purchase the products for daily use and consumption. In today’s era, the firm is trying to attract more people to attain desired output and results. Moreover, the secondary market includes teenagers and young adults. In this market, the demands of food and beverage products are less in comparison to primary market segment (Keith, 2012).

Level of involvement of primary segment in terms of the decision making

Consumers are considered the primary market of the company that helps to maximize the profitability. None of the company can increase its sales and profit without effective involvement of primary market. After the various researchers, it has been evaluated that consumers help to make an effective and unique decision (Jung & Yoon, 2012). They play a significant role to make decision-making process. There are different levels of involvement a primary market can have in the decision-making process and different elements which influence that involvement have been discussed below.

  • Low involvement: These types of decisions are considered habitual and routine decisions and consumers buy the products on a regular basis. They do not have the option to do any research and survey. For example, consumers buy groceries, household items, and detergents products all the time because they already know what they want to buy. So they do not take much time to make effective decisions.
  • Medium involvement: These types of decisions are considered simple decisions that are taken by the consumers in the stores. The consumers compare prices of the products from competitors to buy good quality of products.
  • High involvement: These types of decisions and involvement take a lot of time and it requires more research. A consumer is going to spend more money on a product, thus more involvement is shown by the consumer while making effective decisions. The consumer buying behavior affect the decision-making Sometimes, the consumers are not able to buy the products due to high prices. It also affects the buying behavior of the consumers.

Now it is assumed that low involvement, medium involvement, and high involvement have been shown in Coles because it is supermarket chain in Australia. It provides retail and consumer products and services to the customers in the global market. The company uses segmentation, targeting and positioning strategy to make effective decisions. After deciding on segmentation and targeting, Coles will make effective and dynamic decisions regarding its positioning of products and services. The firm positions its products and services on the basis of special attributes and prices of the food and beverage products. Upper-class people are considered the primary target customers of the company. Therefore, the primary target market has a higher level of involvement in organizational decision-making process (Davila, Epstein & Shelton, 2012).

Competition and SWOT analysis

There is high and immense competition exists in the Australian market. Thus, several challenges and issues are faced by the company while conducting business activities and operations at international level. Woolworths is the main important competitor of the firm which can influence the trading activities of the company (Arup, Beaton-Wells & Paul-Taylor, 2017). The other competitors include ALDI, Costco, and IGA. Cole’s group is one of the biggest food retailers with more than 740 supermarkets run under the Coles and Bi-Lo banners and convenience stores.

Comparison and contrast between Coles and Woolworths

Various analysis is done by the firm to evaluate and identify the strengths and weaknesses of the comptitors. Woolworths is the main competitor of the firm. A comparison between Woolworths and Coles has been discussed below (Davis, Lockwood, Pantelidis & Alcott, 2013).

Strengths: Coles uses attractive and unique pricing and marketing strategies to attract and retain more customers in the market. Along with this, promotional and advertisement campaigns are done by the company to increase revenue and returns. Impressive online order and delivery/ pickup services are being provided by Coles.

While Woolworth is a market leader in Australia retail industry. However, the firm set high prices for the products and services. It uses effective leadership styles to manage and controls employees. It does not use effective promotional campaigns and advertisement strategies (Kew, & Stredwick, 2017).

Weaknesses: Coles operates on lower margins as compared to Woolworths. It is the biggest weakness of the firm. Negative publicity is another weakness of the organization. The immense and high competition also affects the growth and progress of the firm.

On the other hand, Woolworths is affected by the external environment, thus the firm has not been able to maintain effective position in the market. Along with this, the organization keeps high prices for its products therefore, it influences the goodwill of the company.

Opportunities: Geographic expansion helps to reach out the new and innovative regions globally. Marketing exercises and sponsorship help to boost and develop the business in the market. Apart from this, Coles maintain effective control on the supply chain and logistics management to gain long-term benefits in the competitive market (Smith & Raspin, 2011).

On the other hand, Woolworths provides good opportunities to grow and expand the business globally. It also provides multi-options to cope up with the changing needs and requirements of its customers. In addition, supply chain and logistics management of the firm is unique and dynamic.

Threats: Intense competition in the Australian supermarket affects the profitability and returns of the company. Furthermore, customers are getting confused between the different generic brands due to lack of proper communication. Therefore, they are not able to buy the products of Coles. Hence, it influences trading activities and operations of the firm.

Woolworths is the biggest supermarket chain in Australia. However, it is also affected by the marketing threats and challenges. There is high competition between Woolworths and Coles supermarket that have a direct impact on the productivity of the firm. The government intervention is another biggest factor affecting the growth and success of Woolworths (Dwivedi, Merrilees, Miller & Herington, 2012).

Positioning map

After considering the primary market, competition, and level of involvement of primary market, a positioning map is generated for Coles. By using this map, the firm attempts to show and explain the perception of its customers. The positioning map for Coles is described below.

Conclusion

On the above-mentioned study, it has been analyzed that Coles is the largest supermarket chain in Australia that delivers good quality of retail products and services to millions of Australians. In today’s era, the organization is making unique and dynamic financial position in the global world. Furthermore, the company is maintaining proper corporate social responsibility and sustainability in the environment. Various analytical tools, techniques, and methods have been used to evaluate and identify the external and internal environment for analyzing the performance and productivity of the firm in the Australian market. In addition, the primary and secondary market plays an integral role to maximize the returns of the company. SWOT analysis and pestle analysis have been explained in the report to analyze the strengths and weaknesses of the company.

Now it is recommended that the company should focus on the long term and short term marketing strategies to increase outputs and returns. The firm should enhance and improve their investment in the field of promotions and advertisements in order to make their vision and mission reach to the customers. Along with this, the organization should also focus their healthy products to satisfy the customers in the global market. In addition, the firm should set the reasonable and appropriate prices of products and services to attract more customers in the competitive market.

References

Allaway, A. W., Huddleston, P., Whipple, J., & Ellinger, A. E. (2011). Customer-based brand equity, equity drivers, and customer loyalty in the supermarket industry. Journal of Product & Brand Management, 20(3), 190-204.

Armstrong, G., Adam, S., Denize, S., & Kotler, P. (2014). Principles of marketing. Pearson Australia.

Arup, C., Beaton-Wells, C., & Paul-Taylor, J. (2017). Regulating supermarkets: The competition for space. UNSWLJ, 40, 1035.

Baker, J. (2012). The technology–organization–environment framework. In Information systems theory (pp. 231-245). Springer New York.

Baldwin, C. J. (Ed.). (2011). Sustainability in the food industry. John Wiley & Sons.

Coles.(2016). About Coles, viewed on 2nd January,<

Davila, T., Epstein, M., & Shelton, R. (2012). Making innovation work: How to manage it, measure it, and profit from it. FT press.

Davis, B., Lockwood, A., Pantelidis, I., & Alcott, P. (2013). Food and beverage management. Routledge.

Dwivedi, A., Merrilees, B., Miller, D., & Herington, C. (2012). Brand, value and relationship equities and loyalty-intentions in the Australian supermarket industry. Journal of Retailing and Consumer Services, 19(5), 526-536.

Grewal, D., Ailawadi, K. L., Gauri, D., Hall, K., Kopalle, P., & Robertson, J. R. (2011). Innovations in retail pricing and promotions. Journal of Retailing, 87, S43-S52.

Ham, A. (2016). Is your marketing material promoting your business, or trashing it?. Governance Directions, 68(5), 294.

Jung, H. S., & Yoon, H. H. (2012). Why do satisfied customers switch? Focus on the restaurant patron variety-seeking orientation and purchase decision involvement. International Journal of Hospitality Management, 31(3), 875-884.

Keith, S. (2012). Coles, Woolworths and the local. Locale: The Australasian-Pacific Journal of Regional Food Studies, 2, 47-81.

Kew, J., & Stredwick, J. (2017). Business environment: managing in a strategic context. Kogan Page Publishers.

Lee, J., (2009). The massive marketshare of Coles and Woolworths. Sydney Morning Herald, 31 August, 2009.

Rickard. P.(2016). Coles and woolies draw level, viewed on 2nd January 2018,

Roy Morgan. (2016). Supermarket weep: Woolies’ share continues to fall and Coles and Aldi split the proceeds, viewed on 2nd January,

Smith, B. D., & Raspin, P. (2011). Creating market insight: How firms create value from market understanding. John Wiley & Sons.

Spaargaren, G., Oosterveer, P., & Loeber, A. (Eds.). (2013). Food practices in transition: changing food consumption, retail and production in the age of reflexive modernity. Routledge.

Teller, C., Kotzab, H., & Grant, D. B. (2012). The relevance of shopper logistics for consumers of store-based retail formats. Journal of Retailing and Consumer Services, 19(1), 59-66.

How to cite this essay: