About the organization
This report gives the description of Wesfarmers Ltd in brief including the history, purpose, businesses, and values statement of company. At the same time, it identifies and discusses the 5Cs of Wesfarmers. Along with this, it analyzes that how the Wesfarmers Ltd gets information about its 5Cs. Eventually, it provides recommendation with justification for STP and marketing mix strategies for Wesfarmers to lead its growth.
Wesfarmers Limited is an Australia based multinational retail company. It was founded in Australia in 1914. It is headquartered at Perth in Australia. The current managing director of company is Richard Goyder (Wesfarmers, 2017). The company does its business in different sector such as supermarket, liquor, hotels and convenience store, home improvements, departmental stores, energy and fertilizers, industry and safety products, coal, office supplies, and others. This is biggest listed company having more than 530000 shareholders in private sector of Australia. Apart from this, it has more than 220000 employees over its all business units and branches across the world (Wesfarmers, 2017). It belongs to the retail industry and adopts the market oriented strategies for marketing. The Wesfarmers provides goods and services according to the needs and preference of the customers. This increases the revenue and market share of the Wesfarmers. It has become retail giant based on market orientation approach of marketing (Wesfarmers, 2017). It earned 65.98 billion AUD in 2016. That indicates that how market oriented it is. The values of the organization help it in its brand position and promotion. Integrity, Openness, Boldness and Accountability are the values of company underpin its effectiveness. Wesfarmers aims to provide satisfactory return to its shareholders (Wesfarmers, 2017). The brand name of the Wesfarmers provides good support in its marketing as people shows their interest in the company.
“Create values and satisfy needs and desires of consumers by delivering quality products” (Wesfarmers, 2017)
Company:
The strengths of the Wesfarmers are that it uses market oriented approach and focuses on the development of community. Large number of talented workforce and online shopping facility are also the strength of Company. However, it has presence at less geographical areas. It always scrutinized while any critical decision is being taken (Boha ALA, 2016). It is well famous and reputed brand therefore it has the opportunity to expand its branches outside the Australia. Loyalty of the customers and employees to Wesfarmers is also opportunity before it to improve its profitability and to take competitive advantage in market. It faces competition from number of local and international brands such as Woolworths, Myer, and Best & Less. At the same time, decline in economic condition may affect the profitability and market share of the company.
Customers:
The Wesfarmers Ltd targets both business customers and ultimate consumers of the goods. It has large range of the goods and services for B2C unit. The large range of the products and services from numbers of competitors are there already available in the market (Boha ALA, 2016). This causes confusion in the mind of customer that leads complex buying behavior towards Wesfarmers and other brands (Solomon, 2014). However, the Wesfarmers is well established brand that helps the consumers in differentiating the brands and makes ease their buying process.
Mission statement of Wesfarmers
Collaborators:
There are more than 15000 suppliers and distributors of the Wesfarmers across the world. Sundrop Tomatoes, Murray Goulburn, Norco, and others are increased its sales in the Australia (Wesfarmers, 2017). At the same time, Cole is the largest partner of Wesfarmers agreed to do business together.
Competitors:
There are various competitors in Australia offering similar products and services pose the challenges before Wesfarmers Ltd. Woolworths, Best and Less, and Myer are the biggest competitors of Wesfarmers (Boha ALA, 2016). It aims to be competitive in the market operating business in different fields. It is good established brand have great impact on the market and environment that in turn put obstruction before new entrants. There is huge competition already in the market. Therefore, it can be said that threat of new entrants is lower.
Context:
There are various external factors which may affect the performance of Wesfarmers. These factors include political, economical, socio-cultural, technological, legal, and environmental factors. The central and state governments impose restriction and regulation on the mining business and make different law in that concern such as carbon law, wastage management and others. This affects the mining business of Wesfarmers. Apart from this, the service sector is the fastest growing sector in division of the finance and insurance (EZ, 2011). It is contributing about 70% of the total GDP of Australia. Therefore, it is favorable to the insurance division of Wesfarmers Ltd. The living standard of the families in Australia is higher and they are interested in buying the necessary items once per week. Along with this, most of the families show their interest in one stop shopping. This is significantly favorable to the Supermarket and Departmental Store division of the Wesfarmers Ltd. Furthermore, Australia is known as one of the most country in terms of mining due to utilization of advanced technology, equipments, environmental protection, and mineral processing. Wesfarmers Ltd has the divisions of coal mining, energy, chemical, fertilizers, and industrial goods that are engender the efficient and effective development of Wesfarmers Ltd (EZ, 211). The legal system is very restrictive including labor law, health and safety law, natural resources law, and other laws. These laws affect the businesses of Australia. Apart from this, Wesfarmers Ltd has to consider the environmental factors such as ecological actors, natural resources, pollution, carbon emission and others for ensuring the healthy and protected environment.
Wesfarmers is very large company of Australia. Every company needs information for effective decision. Therefore, Wesfarmers do market research for collecting the right and reliable information from the market concerned to the research problem. Market research is the actual research in market by the organization to collect the information about their stakeholders. The market research is the research of market that provides the information about the current trends in market. Apart from this, this updates the management with the market that helps them in sustaining the organization in tough competitive market (Babin and Zikmund, 2015). Furthermore, market research may be primary research and secondary research. Primary research is conducted through survey, interview, focus group, case study analysis, projected technique, brain storming and others for collecting the actual information for first time. On the other hand, secondary research is the research in which secondary data is researched for collecting the basic information (Kottler et al, 2015). Wesfarmers Limited uses both primary and secondary market research for collecting the information. It uses survey in the market for getting the actual information and also collecting the customer’s feedbacks for better improvement its products and services.
Issue 1: 5 Cs of Wesfarmers
With the help of market research, Wesfarmers Ltd comes to know about the needs and preference, taste, and buying pattern of the customers. The collected data helps it in satisfying the customers by providing them with products and services of their interest. Wesfarmers Ltd uses consumer or market oriented approach that is why its uses market research rather than market intelligence for finding the actual information about the needs and desires of customers. It helps Wesfarmers in attaining its purpose of satisfying the customers by providing them with quality products of their desires and preference.
Along with this, the market research helps in finding which company is selling most in the market. This indicates the most competitors of the company in market (Foxall, 2014). The Woolworths Ltd is the biggest competitor of the Wesfarmers Ltd. Woolworths Limited is dealing in the similar products and services in Australia that poses potential threats to Wesfarmers. Apart from this, the market research provides information about external factors that can affect the business of Wesfarmers such as political, legal, social, technological, and economical factors. Furthermore, Wesfarmers uses to identify that how its business are growing by the taking the feedback from customers. What its suppliers, distributors, and partners are doing for its success, the information about these is collected by market research.
Segmentation:
Segmentation is the segregation of the total market into small segments or parts to best meet the needs and desires of customers. Segmentation can be based on the demographical, psychological, behavioral and geographical factors. Demographical factors are age, gender, occupation, education, income, family size and others. Psychological factors include living standard, beliefs, attitudes and perception (Baker, 2014). At the same time, behavioral factors are benefits, loyalty, and usage rate. It segment the market based on the geographical factors, age, occupation, and profession. However, it has the opportunity for segmentation of its potential market based on income, living standard, beliefs, and other behavioral factors (Loyalty, and usage rate) for improving its market share and profitability.
Targeting:
Targeting is the process in which the marketer assesses and selects one or more market segments for better marketing. There are different two targeting strategies include undifferentiated marketing, and differentiated marketing (Kotler et al, 2015). Here, Wesfarmers Ltd uses differentiated targeting strategy and focuses more on Australia. Therefore, it has the opportunity to expand its market in more outside the Australia. It can market its product lines in abroad market for more profitability and market share. Apart from this, it targets middle and higher or premium households where it can expand its target to the lower and middle class households also (Wesfarmers, 2017). This is because people in Australia are tending to live higher life style that is good to the Wesfarmers. It should provide the goods and service as per the needs and preference of customers to create more effective values for them. This will increase the brand image of the company in world and increase the profitability and market share of company.
Positioning:
Issue 2: Information collection about 5Cs
The positioning of Wesfarmers is effective as it has good brands reputation in market. However, it should more try to focus on its positioning to launch its products and services in new target markets. Positioning may be through quality, price, functions, benefits, endorsement and attributions (Foxall, 2014). Wesfarmers should adopt positioning by price and quality for attracting more and more customers.
Product:
Product is that thing used to satisfy the needs and desires of customer in market. Wesfarmers Ltd deals in industrial and retail products. The retail lines include businesses such as Coal, departmental stores, supermarket, office supplies and others (Wesfarmers, 2017). There are different product development strategies such product diversification and differentiation, product extension and contractions (Armstrong et al, 2014). Wesfarmers can use product differentiation for achieving competitive advantage. This is because numbers of competitors are already operating in the market with similar products and services. The differentiation will help Wesfarmers in sustaining the business in competitive market.
Price:
Price is also an important element of the market mix which is today become the base strategy for fighting the competition in market. Price is the monetary value of products and services. The price may be of various types such as premium price, above price, below price, on going price, affordable price, penetration price, and lower price (Chernev, 2014). Wesfarmers should use lower pricing strategy to be competitive in the market. Numbers of competitors are there in market provides similar kinds of price. Therefore, lower pricing strategy will help the Wesfarmers to win over the large market, as customers are price sensitive as well.
Place:
Place is the point of sales where from customers can shop the products or services of Wesfarmers. There are direct and indirect distribution system for delivery of goods and services to customers. In direct distribution system, there is direct link between customers and company. Therefore, it uses direct distribution system for delivery of goods to the customers. Wesfarmers Ltd has its own stores for the retailing its products and services. But, today people are showing their interest in ecommerce and online shopping. Therefore, Wesfarmers should focus on the online shopping and ecommerce stores and should try to ensure the effective operation of online shopping stores.
Promotion:
Promotion is the communication to the customers about products and services of company and company itself. This is necessary for making the customers aware about the products and services. The company already uses advertisement, public relation, sales promotion, and online marketing. However, it can communicate with customers through email, website, and social media as well. It should use internet marketing that provides cost advantage to the company and large market share (Strauss, 2016). It is because, today everyone is internet savvy. The reduced cost of promotion will help in minimizing the cost and selling the products at lower price for achieving the competitive advantages.
Conclusion:
From the above report, it can be concluded that Wesfarmers Ltd is the largest private sector company in Australia with large range products and services. The report has found the 5 Cs of Wesfarmers effectively, which are customers, collaborators, competitors, company, and context. Furthermore, Wesfarmers Ltd uses market research for identifying its 5C’s. The report has effectively recommended and justified the marketing mix, and segmentation, targeting and positioning strategies.
References:
Wesfarmers (2017) Who we are? [Online]. Available at: https://www.wesfarmers.com.au/who-we-are/who-we-are (Accessed: 30 May 2017).
Wesfarmers (2017) Who we are? Wesfarmers way [Online]. Available at: https://www.wesfarmers.com.au/who-we-are/the-wesfarmers-way (Accessed: 30 May 2017).
Wesfarmers (2017) Our businesses [Online]. Available at: https://www.wesfarmers.com.au/our-businesses/our-businesses (Accessed: 30 May 2017).
Wesfarmers (2017) Our Impact [Online]. Available at: https://www.wesfarmers.com.au/our-impact/our-impact (Accessed: 30 May 2017).
Wesfarmers (2017) Wesfarmers [Online]. Available at: https://www.wesfarmers.com.au/ (Accessed: 30 May 2017).
Boha ALA (2016) Wesfarmers strategic management [Online]. Available at: https://bohatala.com/wesfarmers-strategic-management-project-report/ (Accessed: 30 May 2017).
Wesfarmers (2012) PRESENTATION TO BE GIVEN AT STRATEGY BRIEFING DAY – SYDNEY [Online]. Available at: https://www.wesfarmers.com.au/docs/default-source/results-presentations/2012/2012-strategy-briefing-day-presentation.pdf?sfvrsn=2 (Accessed: 30 May 2017).
EZ (2011) Wesfarmers case study [Online]. Available at: https://www.essayzone.com/essays/university/business_studies/wesfarmers-case-study-1167 (Accessed: 30 May 2017).
Baker, M. J. (2014) Marketing strategy and management. UK: Palgrave Macmillan.
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Strauss, J. (2016). E-marketing. UK: Routledge.
Foxall, G. (2014). Strategic Marketing Management (RLE Marketing) (Vol. 3). UK: Routledge.
Babin, B. J., & Zikmund, W. G. (2015) Exploring marketing research. USA: Cengage Learning.
Armstrong, G., Adam, S., Denize, S., & Kotler, P. (2014) Principles of marketing. AU: Pearson Australia.
Chernev, A. (2014) Strategic marketing management. USA: Cerebellum Press.
Solomon, M. R. (2014) Consumer behavior: Buying, having, and being (Vol. 10). UK: Prentice Hall.
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