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Woolworths Group: Marketing Tactics and Implementation

Summary of Situational Analysis

The generation of new ideas and marketing strategies must be based on a well-conducted and information-based analysis of the current situation. Woolworths Group as a food and grocery retail leader in Australia and New Zealand provides its customers with high-quality products and maintains a stable competitive position in the market. The SWOT analysis allowed for detecting such strengths:

  • Leading position in the Australian grocery retail market;
  • Flexible promotion and pricing strategies;
  • Putting customer needs first.

At the same time, some internal weaknesses require improvements for a more enhanced market presence. They include:

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  • The incomplete status of the currently implemented marketing strategy;
  • Insufficient differentiation between the approaches to high-income and low-income consumer targeting;
  • Prioritization of advantageous population groups as a primary target market.

In terms of the identified external threats, Woolworths faces such issues:

  • Economic crisis;
  • Growing competition;
  • Organic food trending.

Finally, there are several opportunities that the company might use for the improvement of its current position and planning its marketing strategy. The opportunities based on the external factors include:

  • Personalization of in-store experiences;
  • Better segmentation strategies;
  • Improvement of online shopping opportunities;
  • Product diversification;
  • Expanding geographically.

As the official marketing strategy statement of the company demonstrates, the company is currently aiming at “lower prices, more compelling offers, and greater innovation” (Woolworths Food Group’s plan to get customers to put us first, 2021, para. 2). Thus, the recommended marketing tactics should be aligned with the company’s priorities and incorporate the identified internal and external influential factors. A problematic central issue that the company solves is a weak segmentation strategy that limits the opportunities for sustainable competitive advantage and maintained market presence with an increased number of customers.

Marketing Objectives

Woolworths’s first marketing objective is to maintain the existing customers across the different age, geographical, and income target groups of the population. According to the SMART approach to objective generation, goals should be specific, measurable, attainable, realistic, and time-based (Chaffey & Ellis-Chadwick, 2019). The objective of maintaining the existing customers of Woolworths are as follows:

  • S – Ensure that 90 percent of current customers remain loyal to the brand and continue purchasing groceries at Woolworths.
  • M – Customer satisfaction rate might be applied as a measure for estimation of their retention. Surveys might be a valuable measurement tool for this purpose.
  • A – Given the advancement of informational technologies and the generation of online services for Woolworths customers, the quality of services and the retention rate data might be collected through digital means.
  • R – The objective is based on the current dominant position of the company, which allows for assuming that goal achievement is realistic.
  • T – The results of the implemented interventions for achieving the goal might be evaluated after six months since the launching of the marketing program.

The second objective is to attract new customers to the company. In particular, the characteristics of this objective include:

  • S – Ensure that the number of new customers increases by 20% by the end of the year.
  • M – The number of newly acquired customers might be measured with the help of digitally implemented surveys and questionnaires and the analysis of the clients’ purchasing history.
  • A – The goal is attainable given the availability of resources to attract new clients by means of price differentiation, promotion, online campaigns, and segmentation.
  • R – Although there is tension due to the increased competition in the grocery and retail food market, increasing the number of new customers is realistic due to the strong brand name and positive company reputation.
  • T – One year would be a rational period to achieve the planned results.

Target Markets

In order to achieve the objectives of maintaining the existing customers by ensuring their loyalty to the brand and attracting new clients, a well-defined target market should be identified. In particular, given the current characteristics of the company, where the weakness is the failure to implement sensible segmentation strategies to expand the target market beyond the high-income population and the threat is a growing competition, several target markets should be prioritized. Firstly, since the company now concentrates on high-quality premium product provision for the high-income class of customers, it is valid to target this audience as the population for maintaining the existing customers (Woolworths Food Group’s plan to get customers to put us first, 2021). In such a manner, the company will be able to continue serving the customers with the opportunity to purchase premium products for higher prices by increasing the level of quality and ensuring personalization of the shopping experience for such customers.

Another target market that Woolworth should consider to ensure its stable competitive position in the business is the middle-class consumers. By attracting this population, the company will be able to penetrate the market and increase the level of market presence by occupying more segments of the target population (Yoseph & Heikkila, 2018). To succeed at its “customer first strategy,” the company should prioritize the interests of the middle-class population by diversifying its pricing strategies and offering tactics (Kasanagottu & Bhattacharya, 2018, p. 298). Since the majority of the population constitute the middle class and are willing to have more accessible purchasing opportunities due to the burden of economic crises, the company will benefit from targeting more economically diverse populations. Therefore, by targeting high-income and middle-class markets, the company will pursue two marketing objectives, namely, retaining existing customers and attracting new ones.

Key Marketing Tactics

As the results of Ansoff’s matric application demonstrates, the Woolworths company might benefit from the market penetration strategies. By enhancing the promotion of existing products in existing markets, Woolworths will be able to adjust its marketing strategies toward the requirements of the economic environment, customer requirements, and the opportunities provided by the business sector (Yin, 2016). Indeed, the identified objectives allow for building a strong connection with a variety of customers, which will enhance their loyalty to the brand and accumulate strengths for continuous competitive advantage.

To maintain the existing customers, Woolworths should enhance its personalization efforts through online marketing and ensure customer satisfaction with their purchasing experience. The marketing tactics, for that matter, include the actions that would help meet these objectives. In particular, the organization should promote the utilization of the mobile application of the store among loyal consumers. Since the company already has a well-developed digital basis for applications, the resources are available to ensure that the usage of the application is popularized (Govender, 2017). Twitter, Facebook, and other social media platforms might be used to provide a connection with the consumers. These platforms might be used for several purposes, including the dissemination of promotional messages and collection of data on the quality of services and level of satisfaction. The results of the surveys should be timely analyzed and appropriate adjustments in the operations should be made to ensure that customers’ complaints are taken into consideration. Similarly, the improved online promotion strategy and the overall enhanced online presence of the brand might be achieved by investing into the creative department and digital advertising (Govender, 2017). The company should effectively communicate its values of customer needs prioritization to its target markets via messaging and information updates.

Another pivotal issue is the personalization of offers, which is a powerful tactic for maintaining the existing consumers. More advanced personalized offers should be generated on the basis of the analysis of the purchasing behavior data collected from applications and discount accounts. The personalization might include pricing differentiation and product availability for individuals based on their preferences. Moreover, such tactics will help build brand loyalty through the cultivation of a sense of unity and reliability.

As for the objective of attracting new consumers, the company should engage in competition on pricing with other entities in the retail business in the region. Firstly, market segmentation interventions should be applied to differentiate the characteristics of high-income and middle-class consumers. Important factors in this regard are socio-economic status, household income, and cultural characteristics. Based on these data, the company should develop a more flexible pricing strategy to ensure reduced prices to make its shops available to more customers. Sales and discount promotions should be initiated to attract individuals from the middle-class. Exporting and international market entrance might be effective tactics for reaching new customers given the different regions’ varying socio-economic conditions. The company might consider entering a profitable geographical region to ensure its competitive advantage on the international level. Overall, the suggested marketing tactics might serve as the basis for building a sustainable competitive advantage by occupying more customers by means of digitalization, personalization, and segmentation.

References

Chaffey, D., & Ellis-Chadwick, F. (2019). Digital marketing. Pearson UK.

Govender, S. (2017). How social media can be used to engage and interact with consumers in the retail industry: An analysis on Woolworths’ online strategies [Doctoral dissertation, The Independent Institute of Education]. Web.

Kasanagottu, S., & Bhattacharya, S. (2018). A review of Metro, Target, & Woolworths global business strategy. International Journal of Mechanical Engineering and Technology, 9(7), 293–302.

Woolworths Food Group’s plan to get customers to put us first. (2021). Woolworths. Web.

Yin, N. (2016). Application of AHP-Ansoff matrix analysis in business diversification: The case of Evergrande Group. In MATEC Web of Conferences (Vol. 44, p. 01006). EDP Sciences.

Yoseph, F., & Heikkila, M. (2018). Segmenting retail customers with an enhanced RFM and a hybrid regression/clustering method. In 2018 International Conference on Machine Learning and Data Engineering (pp. 108-116). IEEE.

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