Company and Industry Overview
Discuss About The Marketing Management Target In Australia.
Marketing management is the process to evaluate, plan, implement and to control different programs which are designed to bring the desired exchanges with the targeted customers for the objective of mutual and personal benefits. This process includes different marketing and strategic aspects which assist an organization to improve its business operations and enhance brand image among a large population (Goworek and McGoldrick, 2015). The major objective of this report is to include different marketing aspects for the chosen organization i.e. Target Australia.
Target Australia is one of the most popular retailers in Australia that is using the logo of Target Corporation. This report is focused on different aspects of marketing management in context of Target Australia. It includes the discussion about different internal and external factors which can impact the growth and success of business. These factors are analyzed by using 5Cs framework of marketing. Moreover, it includes the marketing research process that can be used to gain the information about 5Cs components. At the end, report discusses marketing strategies and tactics for the company by using 4 Ps of marketing mix. These strategies will assist the organization to establish a strong brand image and attain more competitive advantage in Australian retail industry.
Target Australia is mid-priced departmental store that is owned and operated by Wesfarmers Ltd. Australia. Currently, the chosen company is operating its business by establishing more than 300 stores and it is headquartered in North Geelong, Victoria. Target Australia is operating its business in Australian retail sector. As of 2017, the total revenues of retail industry were $20 billion that indicates the increase in the past figures. The organization offers a wide range of products and services like toys, cosmetics, consumer electronics, electrical equipment etc.
(Source: Target Australia, 2017)
To operate its business in Australia, Target Australia has taken the right to use the logo from Target Corporation United States, but it is owned by Wesfarmers Ltd. It was established in 1926 by George Lindsay and Alex McKenzie (Target Australia., 2017).
Currently, it is operating 183 retail stores and 125 county stores all over Australia. It is offering its services by targeting the middle level market and emphasizing on the quality and value. With a significant growth and revenues, the company is enjoying a good market position in the industry. Target Australia is running its business operations with the mission to make quality, fashion, style more affordable for the whole family. It is a popular retailer that offers the best value and quality of products. In addition to this, it supports different communities and fulfills its duties and responsibilities towards its staff, suppliers and customers. The company changes its slogan time-to-time considering its marketing campaigns and promotional activities (Target, 2017). According to its current marketing strategy, the slogan is “Higher Quality, Lower Prices”.
C’s for Target Australia
For its products and services, Target Australia adopts societal and marketing orientations because it emphasizes on the needs and preferences of customers and adopts a low cost model for providing the products with excellent quality at reasonable prices. Under its strategic actions, the online store of company has played a crucial role in approaching a large customer base. The organization is able to offer the low cost benefits to its targeted audiences due to its prices. Branding plays an important role in the Target’s marketing strategy because it assists the organization in increasing its customer base and develops brand loyalty towards its products and retail services (West, Ford and Ibrahim, 2015). Developing a brand for the company is assisting both the customers and employees to create a win-win situation.
The 5C framework is an environmental analysis on the basis of five key areas which are applicable to the marketing decisions of company. It covers micro-environmental, internal and macro-environmental factors (Hakala, 2015). These 5Cs are company, collaborators, customers, competitors and context. 5Cs for Target Australia is given below:
- Target Australia has a strong brand image in Australian retail sector.
- It offers a wide range of products like consumer electronics, home appliances, toys, cosmetics, clothing etc.
- Low cost model of Target Australia is its biggest strength.
- It has developed good relationships with its customers and it provides them a better shopping experience.
As a leading retailer, Target Australia owns various significant resources which assist the organization to operate its business smoothly. The company owns both tangible and intangible resources like retail outlets, skilled workforce, leaders, staff, environment at stores and brand image of the organization, corporate culture, and excellent guest services. These are the major resources that support the operations of Target Australia.
- The company faces intense competition from other leading retailers in Australia like Woolworths and Coles.
- Hiring more employees will cause higher training costs to the organization.
- The company has limited brand presence in the global retail market (Target, 2017).
- Low cost model can stable its revenue growth as compared to its competing brands.
- Target Australia has opportunities to expand its business in international markets.
- It can enhance its brand image through brand awareness programs.
- It can use the product development strategy to compete with the rivals.
- It is facing fierce competition from leading retailers like Woolworths, Coles and David Jones (Low, 2016).
- There is an increase in the number of e-retailers.
- The changes in taxation policy and increased tax rates threatened the business of Target.
Target Australia is targeting its customers on the basis of demographic and psychographic variables of market segmentation. It is attracting the customers based on their income level, age and their interest. Considering them, it is attracting the people from middle income group and age group of 20 to 50 years old people (Payne, Frow and Eggert, 2017). In addition to this, it considers that customers are showing that they are very conscious about product quality, environmental and health concerns. The company is making efforts to satisfy the customers via unique products and great value.
Target Australia is one of the retailers that work with its suppliers by developing a closed partnership. Suppliers play an important role in the business of this company. The organization considers its suppliers as its business partners who assist it in supplying the products to the marketplace. In addition to this, it is using them to increase its profits and revenues. Thus, it has established strong relationships with its collaborators so that it can provide great quality, great value and great style of products to its customers (Hakala, 2015).
Customers
As mentioned above, the chosen company is facing intense competition in Australian retail industry such as Woolworths, Coles, David Jones, K-mart, Wal-Mart etc. For this firm, the threat of new entrants is low as it needs higher capital investment to introduce a retail business. Moreover, higher operating expenses are decreasing the attractiveness of retail sector. Entry of foreign brand can affect the business growth of Target Australia (Knox, 2015).
In Australia, changes in the overtime rules and regulations are affecting the retail industry. Changes in the taxation policies may affect the business operations of Target Australia. The organization needs to develop good relationships with foreign nations. It may have effects of tariffs, trade restrictions and taxation (Rothaermel, 2015).
Australia is an emerged economy and living standard of its population is high. The economic state of this nation is favorable for Target’s growth. The products which are offered at its retail stores are proposed to sell to lower and middle levels of society.
The people in the country prefer to shop at Target’s outlets as it offers the products on more affordable prices. It is providing an excellent shopping experience that attracts customers towards this. It is making investments in the community programs as well.
In the country, technological environment has become very advanced and people are actively using social media sites. The company is using social media like Facebook, Instagram to interact with customers (Parker and Justine, 2016). Adoption of modern technology will assist the firm to enhance its customer base.
The above C’s framework shows different internal and external factors which can affect the growth of Target Australia in the country.
There are different techniques which are used by Target Australia to collect the information about its external and internal factors under 5C framework. The major techniques, used by this company are market research and market intelligence. Market research is an effort by the organization to collect the information about the customers or targeted market. Under the business strategy, it is an important component. Moreover, market intelligence is the data that is related to the markets of a company that is collected and evaluated specifically for the objective of accurate decision making to determine organizational strategy. Target Australia is using these techniques to analyze the external and internal environment of the company. The above 5 C’s analysis assists it in evaluating the market environment because it provides wide-spread information (Keller and Kotler, 2016). By using the market research technique, Target comes to know about its collaborators, competitors, customers and its environmental factors. Under this process, first the company makes efforts to understand the needs and demands of customers by arranging the questionnaires and surveys. Under this process, company has emphasized on its targeted audiences and organized a survey. It assists the company to understand the needs and preferences of customers towards retail products. Through this, it finds out that Australian people prefer to purchase the products on reasonable prices. To understand the rivalry, Target Australia is conducting market research on internet and social media so that it can know about the other firms in the sector (Weinstein and Pohlman, 2015). It can analyze their social media marketing strategies from their social media pages.
Collaborators
Moreover, it is enquiring the customers about other retail outlets, from where they are buying their grocery products currently. In addition to this, suppliers are also assisting the company to collect the data about the possible competitors. By reviewing the legal and government regulations, the company can assess the changes in the business environment of the country. It may confront the changes with the development in technology (Reyhle and Nicole, 2014). Under market intelligence, the company is considering the investor’s report and annual reports of other companies so that it can understand the factors which may impact the growth of organization. These factors may be legal, social, political and technological factors. Thus, the company can use the process of market intelligence and market research that gather, analyze and interpret the data about market, business environment and products which are to be offered in the Australian retail market. In addition to this, the company will be able to have the information about the past and possible customers for retail products (Kotlar and Armstrong, 2012). These processes support the Target Australia to evaluate the customers’ characteristics, spending habits and needs and preferences of targeted audiences.
From the above analysis, it can be stated that Target Australia is performing well with its current market strategies, but still there is a scope to adopt new and innovative strategies which can improve its performance in Australian retail sector. The marketing strategies are divided in the three parts i.e. choice of an appropriate target market, effective value proposition and an effective value proposition (Payne, Frow and Eggert, 2017). The company can develop its marketing strategies considering the below points:
As mentioned above, Target Australia is offering its products and services as trendy and discounted retailer among Australian customers. It offers the products with excellent quality, great value and an entertaining place to shop while saving the customers’ money with lower prices. As per a research, 20% of the customers of Target are loyal to the organization. In this group, females are more active than males (Price, 2016). This study indicates that most of the customers are enticed towards lower and discounted prices of Target Australia. The company targets its customers considering different characteristics like demographic, behavioral and psychographic. Under demographic characteristics, it will target the people on the basis of their income and age i.e. middle and lower income level people and 20 to 50 years old respectively (Lynn, 2011). Primarily, it will make focus on the females. From the past history of the company, it can be stated that 84% of the customers are females at Target. It is a mid-priced store so it is very important to focus on the lower income level people. For an organization, it is essential to select a target market so that it can offer them directly. Thus, the company plans to target the people who cannot afford the shopping at costly grocery stores. The company can enhance its market share by using its low-cost model and mid-priced strategy.
Competitors
Value proposition is an obvious statement which explains how the products of company fulfills the needs of customers, enhances their situation and provides specific benefits. This statement tells the customers that why should they buy the products of this particular company. Target Australia should develop an effective value proposition for its products and services (Pantano, 2014). It should be emphasized on providing an exceptional value to targeted audiences. The value proposition of Target Australia should include creative thinking, leadership via products and services and promise to save the customers’ money so that they can live better life. The company surpasses its value by developing effective relationships with its suppliers and customers. The value proposition of the company should show its lower-priced strategy (Osterwalder, et al, 2014). It can use more effective slogan i.e. “Expect More, Pay Less”. This attractive value proposition will assist the company to grab the attention of a large population.
Positioning statement of a company expresses how its products can meet the needs of customers. Each and every organization uses an effective positioning statement so that it can develop positive perception of customers towards its products and services. Target Australia should position itself as a discounted and quality retailer. It can use a positioning statement that indicates that company can save their money on grocery products. It can make their life better and easier. In the Australian market, Target Australia should position itself as an iconic retailer that is dedicated to make the quality, style and fashion reasonable for the entire family (Kipley & Jewe, 2015).
Considering the above marketing aspects, the company can develop its marketing strategies and tactics which can improve its future performance in retail industry.
Target Australia offers daily essentials to the Australian customers which have continuous demand in consumer market like:
- Household items and consumer electronics
- Furniture
- Toys
- Fitness and sports items
- Entertainment products
- School and office supplies
As major customer segment of the company covers female group, so now it should develop its product range by including women products such as footwear, jewelry, food products, accessories, beauty care products etc. It should motivate the customers to buy the products for all family members from one shop. In addition to this, the company should provide the excellent quality products and use attractive packaging so that it can attract more customers (Davari and Strutton, 2014).
Current pricing strategy of Target Australia is very good and effective so it has a strong position in Australian retail industry. Now, the company should provide the combo packs and discounted offers so that people can save money on their shopping. Moreover, it should arrange sale on some of its product range in the festive season. In the country, percentage of middle income level is higher than others so organization should continue to use its low cost model with the excellent product quality (Khan, 2014). In addition to this, the company should give the option to do the payment through letter of credit that will be profitable for both company and its targeted customers. In this process, Target Australia can earn the interest on late payment from customers.
Political factors
Currently, Target Australia is serving the Australian customers only, now it should expand its business operations to other nations. It should develop an extensive distribution network so that it can approach more customers. Along with the urban areas, the company should offer its products to the rural areas also. It can open more grocery and retail stores in the Australia and other countries. Moreover, it should provide the products online and encourage the suppliers in an effective manner so it can reduce the delivery time and shipping costs of products. To enhance its brand image, the company can establish the strategic partnership with already established retailers in the country like David Jones, K-Mart etc. This improved place strategy will help Target Australia to attain more competitive edge over its competing brands (Huang and Sarigöllü, 2014).
Promotion is one of the most important parts of the company’s marketing strategies and tactics. It is a marketing strategy that includes different processes like sales promotion, personal selling, public relations and advertising. By using this strategy, Target Australia will be able to communicate its brand message to the targeted audiences. Under its promotional strategy, the company should use both online and offline modes of advertising.
In addition to this, it should collaborate with different e-retailers such as Flipkart, Amazon.com, eBay etc. Under offline media, it can give the advertisement in newspaper, magazine etc. Moreover, it can contact with its regular customers through direct text messages and e-mails. The promotional campaign should be attractive that can communicate the schemes and saving deals to its customers. It should provide the weekly circulars in Australian states (Hackley and Hackley, 2017). Thus, the company should think smartly while making investment in promotional and advertising processes.
In this way, Target Australia should adopt the above-mentioned marketing strategies so that it can stay competitive in Australian retail industry.
Conclusion
In today’s competitive business environment, each and every organization focuses on its marketing strategies and tactics when it brings its new products to the market place. In Australia, Target is operating its business processes with a strong position in the country. The above report includes the marketing management process of Target Australia. From the above report, it can be concluded that company is operating its business in favorable environment by using effective marketing strategies and tactics. The company is able to attain a significant competitive advantage in the retail industry. Thus, Target Australia has taken different strategic actions to stay competitive in Australian retail sector.
Economic factors
References
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