Marketing Strategies Of IGA Supermarkets: A Critical Analysis

The History of IGA Australian Supermarket Group

Discuss About The Marketing Strategies By Iga Supermarkets.

The modern corporate world has been characterized by a shift from traditional marketing strategies to new media strategies with advancements in technology. Many companies and businesses have therefore engaged in developing their marketing strategies to enhance their efficiency in creating their brand awareness as well in improving customer engagements. Marketing plays a significant role in business development, and every management of a company or business is focused on ensuring that their marketing strategies are effective in enhancing business growth (Belch et al., 2014). The success of a company goes beyond having a good product in the market or even having a good product brand to having a well-thought marketing strategy that will make the brand or product successful in the market. Among the many marketing strategies, most companies in the recent past have ventured into the development of integrated marketing communication strategies which has been very useful in promoting the company brands or products across social media channels where the companies can communicate their brand stories to their target audience (Šeri? et al., 2014). This report, therefore, seeks to provide a case study of IGA – Australian Supermarket by critically analyzing the company’s social media marketing strategies. The report will, therefore, include an overview of the company, the company brand; the social media marketing strategies employed and also provide a recommendation to its social media marketing strategies.

Independent Groceries of Australia is an Australian chain supermarket which was established in the year 1988. The company operates as a franchise has existing individual stores which are independently owned, but it is owned by Metcash. The company has its headquarters at Canning Vale in Western Australia however is has other subsidiary companies in different regions globally (Parker, 2014). The company offers a range of products which have been tailored to meet consumer needs. The company has various stores in different regions in Australia which are owned by families or individuals however there the main distributor or they operate under Metcash.

The company operates in the retail industry and works with subsidiary companies which exist in three different retail formats. The company has a Supa IGA format in which these stores focus on stocking a full range of products. IGA retail format includes all the company medium sized supermarkets and stores while the last retail composition of the group refers to the smaller convenience stores. The company has over 5000 stores in the retail market or industry in over 30 countries or globally, however, in Australia there are over 1400 stores. The retail sector is characterized by the existence of many parties with single business units to multinational companies competing and providing similar goods and services (Ashley & Tuten, 2015). Differentiation of the products and services is very common in the industry and plays a vital role in increasing competition within the companies in the industry. The company main competitors in the retail sector include; Woolworths, Coles and Aldi retail supermarkets.

Industry Market within which the Company Operates

The company is involved in the selling of a diverse range of products which have been tailored to meet the customer demands and can satisfy their needs. In other words, the company products are designed and made into what the customers want. The products sold by the company are placed under different brands and include groceries and general products. The leading company top brands include IGA Brands which have been trusted in many shoppers’ homes as a staple and are made to meet customer expectations and value. The company also has a range of food brands in which they specialize in selling food products designed and built with high-quality products (Hollensen & Raman, 2014). The company also has value time brand or products which offer their customers exceptional value by helping them save up to 40 percent over the national brand. There is also top care brand of products which include both health and beauty a product which are made of quality ingredients and provide the customers with great value and also helps them save their money. These brand or products are sold in the different stores based on what the customers in the region want.

The company has been offering its goods and serves through diversified customer range in different regions globally. However, the company feels that its customer product touch and especially in Australia has not been the best or is reasonably done and therefore the company is targeting to increase its target market by providing a bit to the grocery stores in Australia (Chaffey, 2016). The company has been targeting both groceries and general product markets in globally, however, it is shifting its focus to the groceries market as a there targeted market by enhancing service provision to grocery customers through the provision of high-quality products of relatively low prices to the customers and tailored to meet their demands or expectations.

The company current market segment are the supermarkets business where due to the current trend of people moving from urban areas to suburban areas the company strategized to move towards the customers and offer their services by establishing nearby supermarkets. However, the leading current target market group is the independent grocery stores in Australia which they aim to improve customer soul touch.

Social media in the recent past has experienced great revolution due to technological advancements and is shifting from becoming an entertainment or a social platform to a very significant marketing tool. This evolution has therefore transformed the marketing strategies of many companies, businesses, and organizations as it has changed the relationship between these companies and companies with their unique customers. Improvement in technology has led to the development and adoption of integrated marketing communication strategies by most businesses (Dahnil et al., 2014). Therefore many corporate or business marketing budgets have been channeled towards the advancements in industry and consumer promotions, branding, public relations as well as advertising. This has brought a significant shift from the traditional media or marketing and advertising to the modern forms of media advertising and marketing.

Products Sold by IGA Company

The development and adoption of integrated marketing communication strategies provide the business or company with an opportunity to promote their products and brands across several social media channels when the companies can communicate their brand stories to their targeted audience. It is also cost-effective as consumers are in a position to interact with the brand across many social channels and more importantly is the fact that the company can review its performance as a whole as opposed to the current segment performance analysis (Hollebeek et al., 2014). Lastly, it creates a competitive advantage to the company and therefore leads to increased sales and profits or revenue.

This analysis is aimed at understanding the strengths, weaknesses, opportunities, and threats of social media as a marketing strategy for a company.it is essential for the management of every company to carry out a Swot analysis before adopting the various channels of social media marketing. However, it is also important to understand that strength of a strategy may be a platform for potential weakness, which every weakness may also represent inherent power (Habibi et al., 2014). On the other hand, every opportunity in SWOT analysis may also pose some potential threat whereas every threat may be used to analyze potential opportunities for the business.

Many businesses have adopted the use of social media as a marketing platform for their products and brands. The growth of social media as a marketing strategy has increased due to the increased number of social media users. Social media has become part and parcel of people’s lives with some people spending over 8 hours daily on various social platforms. The most common social media platforms include; the Facebook, Twitter, Instagram, Pin interest, LinkedIn, YouTube and the currently developed Snap chat platforms. Other companies have also embraced the use of viral marketing as well as the use of blogs and in-game advertising (Isaacs & Dixon, 2016). Not every business employs the use of these social media sites, but most business has adopted the use of various social media sites and for different purposes.

IGA Supermarkets in Australia have embraced the use of social media marketing as an effective marketing strategy. The most used social media channels by the company include Facebook, Twitter, Instagram, and YouTube. The company has employed the use of these social media sites for various activities ranging from making product advertisements, brand promotion, creating awareness and community chest programs as well as making official communications and interacting with their customers and answering questions regarding the company brands.

Current Target Market Segment for the Company

IGA Supermarket has developed a Facebook page as a social media marketing platform for the company products and brands. The Facebook page has over 270 000 followers, and the company posts receive likes and over 21 shares per post. The company has been using the platform to create awareness of the company charitable events in a move to invite more people to join hands with them in giving back to the community through the IGA Community chest Program (Parker, 2014). The program is aimed at mobilizing funds to aid in several community development programs. The Facebook page has also been used to promote the company top brands through promotional activities such as winning Easter gifts which are aimed at increasing company sales.

Figure 1: Charitable event advertised by the company on 12th of April, 2018 aimed at raising funds for Special Olympics in Australia.

Secondly the company has employed the use of Twitter social media platform to enhance its effectiveness of marketing and product campaign strategy. Its twitter handle is @igaAustralia and the company enjoys over 11 thousand followers. The company tweets attracts over 3900 likes. The twitter account for the company has been used to create awareness of the company brands and products. The account also provides constant updates of company events as well as creating awareness on company charitable events and programs. It is also provides an engagement opportunity for the company to interact with customers through replying to the company tweets.

Figire2: activity of the company through the company Twitter account.

The aim of the activity was to give a report of Vinnie Christmas Appeal where the company was able to raise $ 346 000.

The aim of the activity was to give a report of Vinnie Christmas Appeal where the company was able to raise $ 346 000.The development of Instagram social media platform has also transformed the marketing strategies of most businesses and IGA supermarkets have embraced the opportunity to use Instagram as a marketing tool for them. Instagram provides more tools for product advertisement as compared to other social media sites such as Facebook since it offers a platform where the company can demonstrate the use of specific products through videos. The company has therefore been able to attract over 3700 followers and has also been able to share over 250 posts. In these posts, the company has engaged in product promotion strategies where it creates videos of some of the top brands of the company and especially the groceries and the food products.

Social Media Usage by the Company

Lastly, the company has extensively employed the use of YouTube as one of the most fundamental social media channels for the marketing purposes. The company YouTube channel has over 600 subscribers and has been able to upload different videos which have attracted over 100 views per video. These streamlined videos of the company have been used for various reasons including creating awareness on the current shopping strategies in multiple stores and customer services initiatives (Luxton et al., 2015). The videos also demonstrate some cooking recipes to their customers and have attracted the most views and comments of appreciation from the customers. Lastly, the videos have also been used to showcase the various community chest programs that the companies have undertaken in giving back to the community including charitable events, fundraisings, and community bonding activities such as football matches. All these social media strategies have been employed by the company to enhance its effectiveness in service delivery by understanding their customer needs and delivering products which are tailored to meet those needs.

Based on the above social media usage by IGA company or group, it is essential to recognize that the company has done excellent work in developing and adopting the new marketing trends through social media platforms. The business strategy can be said to have partially helped the company to achieve its objectives and especially in creating more customer engagements and in their brand promotional activities. However, the use of social media platform cannot be exhausted, and therefore the company has been limited in exploiting the opportunities available (Šeri? et al., 2014). There are many social media platforms which have been developed however the company has not utilized them fully. With the growth and advancement of technology, product marketing applications have been developed such as snap chats which give a customer a soul touch with the products. Even the current utilization of the existing social media platforms the company has not adequately utilized them to enhance customer engagements. The company Twitter account has not been very active as compared to the company YouTube account. The Facebook account is active compared to the Instagram account. This has been reflected in the number of followers or comments received from their customers. There is, therefore, a great need to have active social media administrators to enhance the response and online interactions between the customers and the company.

The aim of using the social media platforms as a marketing tool for the company is to increase the desire for the customers to consume more of the company products and even provide more referrals to potential customers. It should provide excellent excitement and facilitate the purchase of company product or increase the brand awareness as well as increase customer engagements. However, this strategy has not been fully utilized and can be said not to have adequately helped the company to achieve its objectives. It creates the need for more developments and adoption of social media platforms most trending regarding users as this will help the company penetrate more markets and reach many customers in Australia.

Social Media SWOT Analysis

The retail industry in Australia is very competitive with both small and multinational companies competing for the same space. In most case, the small business can have more customer experience compared to the multinational companies. The small and middle-sized companies have more understanding of the customer needs however they are challenged regarding resource endowment. The IGA Supermarkets main competitors in the retail industry include the Woolworth, Coles and the Aldi companies. The companies have employed the use of social media marketing strategies aimed at increasing competition by giving the companies a competitive advantage in the industry (Belch et al., 2014). The table below shows a comparison of two leading competitors with the IGA supermarkets regarding social media marketing. The comparison is based on the four most used social media platforms by the company and provides an analysis of how capable the platforms have been to company marketing strategy. Effectiveness will be measured by the number of followers in each platform.

From the above social media marketing data for the three companies, we can conclude that the IGA Supermarkets have not utilized their social media platforms to create more customer engagements. The company competitors have a competitive advantage regarding social media usage in marketing and improving customer engagements.

Based on the above analysis, IGA Company has not fully utilized their social media platforms for marketing. Based on the number of followers the company marketing strategy needs to be reviewed by enhancing more customer engagements by having an online administrator employed to interact with the clients or potential customers. The company target group should also be evaluated and be centered on the young and middle-aged groups since they form part of the most significant group of social media users.

The company target segment includes the independent groceries owners. However, the product consumers segment is comprised of the young and middle-aged populations, and these social media marketing strategies should be aimed and targeted to these groups or market segments.

The current social media usage statistics show that social media platforms are mainly used by the young generations and the middle-aged groups.  Shopping strategies have changed, and most of them are being done online and even the ordering of the products. Therefore, the company social media strategy should be developed based on the needs of these two groups in the society. The company should, therefore, consider implementing product campaign and promotion strategies which are targeted to the young and middle-aged groups.

Conclusion

This report on social media strategies employed or utilized by IGA Supermarkets found that the company has not entirely used the current social media opportunities and therefore the approach has not been effective in achieving company objectives to the maximum. In line with these findings as well as the social media SWOT analysis, it is recommended that the company should review its current social media strategy by improving on their market target and focusing on the generation Y as well as the middle-aged groups as they form the most significant percentage of social media users.

References

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Belch, G. E., Belch, M. A., Kerr, G. F., & Powell, I. (2014). Advertising: An integrated marketing communication perspective. McGraw-Hill Education.

Chaffey, D. (2016). Global social media research summary 2016. Smart Insights: Social Media Marketing.

Dahnil, M. I., Marzuki, K. M., Langgat, J., & Fabeil, N. F. (2014). Factors influencing SMEs adoption of social media marketing. Procedia-social and behavioral sciences, 148, 119-126.

Habibi, M. R., Laroche, M., & Richard, M. O. (2014). The roles of brand community and community engagement in building brand trust on social media. Computers in Human Behavior, 37, 152-161.

Hollebeek, L. D., Glynn, M. S., & Brodie, R. J. (2014). Consumer brand engagement in social media: Conceptualization, scale development and validation. Journal of interactive marketing, 28(2), 149-165.

Hollensen, S., & Raman, A. (2014). Social Media Marketing. Marketing Canada-Journal.

Isaacs, B., & Dixon, J. (2016). ‘Making it Local’: The Rural Consumer, the Supermarket and Competing Pedagogical Authority. Food Pedagogies, 149.

Luxton, S., Reid, M., & Mavondo, F. (2015). Integrated marketing communication capability and brand performance. Journal of Advertising, 44(1), 37-46.

Parker, C. (2014). The food label as governance space: free-range eggs and the fallacy of consumer choice.

Šeri?, M., Gil-Saura, I., & Ruiz-Molina, M. E. (2014). How can integrated marketing communications and advanced technology influence the creation of customer-based brand equity? Evidence from the hospitality industry. International Journal of Hospitality Management, 39, 144-156.

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