Marketing Plan For Woolworths’ Home Furnishing Products Launch

About Woolworths Food Group

Question:

Discuss about the case study of Marketing Performance for How Marketers Drive Profitable Growth.

Marketing is based on thinking about the business in terms of customer needs and their satisfaction. According to Twarowska and KÄ…kol (2013), an effective marketing plan ensures the growth of the product portfolio. In this report, the researcher will present a marketing plan detailing approaches and the marketing mix to accomplish chosen organizational marketing objectives. This marketing pan will starts from the determination of the marketing strategies, evaluating available marketing opportunities, estimated risks and returns after addressing strength and opportunities within the organization’s projected capabilities and resources. 

Woolworths – the company has been chosen for this assignment whose marketing plan is all set to introduce. The company is looking for to start the section of new Home Furnishing products. For the successful launch of these new avenues of their existing product portfolio, Woolworths needs to make marketing strategies, plan the tactics of the marketing to implement an effective marketing plan.

Woolworths Food Group is known for one of the biggest retail grocery companies in Australia. Today, the company is looking for to extend their market opportunities for sustaining the position among consumers of Australia. By the introduction of new home furnishing products through the lower price strategies, Woolworths is all set to plan to provide an improved hassle-free shopping experience. Woolworths has been generated revenue 42.13 billion AUD in 2015, however, the company is concerned about the fact that the European Supermarket chain is on the up and up  (Woolworths Online 2016). The saturated market shares of Woolworth indicate that there is a huge need of the extension of the product portfolio for the competitive edge of the company. According to Roy Morgan’s Supermarket Currency report, Woolworths maintain the largest slice of the pie in terms of the market share, holding 39 percent of the total market share. However, the company has already sensed a stiff competition from the German-based Company Aldi, and other Australian companies like IGA, Coles and many others. This is the right time to improvise the company’s ranges of product delivery to achieve the maximum customer satisfaction of the target consumers.

Available marketing opportunities:

Woolworths is already a renowned retail supermarket organization in Australia. Therefore the product promotion costs may not be high; however, the company needs to aware of the new product offerings to their existing as well as the target consumers. By exploring the home furnishing section within their portfolio, the company needs to assess the available marketing opportunities.

Cost: This may be considered positive that cost of the Home Furnishing sections will be low because less effort would be given for new product launch, because the company is already one of the favorite supermarket brands across the Australia.

Demand: Recently, people of Australia have shown a lot of interest and demand for unique and stylish home furnishing products, matching with their lifestyle. It is indeed encouraging that rising discretionary incomes of Australian people has improved the average lifestyle and thus the demand of the home furnishing has been increased. Market researchers estimates the annualized growth of 2.3 percent in the home furnishing retail business over the next five years, has increased the market opportunities of Woolworths.

Marketing Opportunities for the Home Furnishing Products

Competitors: Entering into the retail home furnishing business, there is a huge opportunity to flourish their new ranges of offering because of the least number of competitors. Most of the retail supermarkets are not selling the home furnishing products at their stores such as Coles, IGA, Aldi and many others. However, Myer is the largest departmental store of Australia and has been synonymous with style and fashion for over 100 years. Generating net sales of over $3.1 billion in FY2013 and having the footprint of 67 stores in the prime retail locations across Australia, this company would be the biggest competitors of Woolworths (Woolworths Online 2016). Apart from Myer, there are many online home furnishing companies which are very popular among customers such as Living Styles, Grays Online, Mydeal.com.au and many others who provides goods at the competitive low prices. In this way, this can be said that there are huge opportunities for Woolworths to expand their product portfolio introducing new ranges of product into their online and offline stores across the nation.

Risks: At the initial stage, the operational costs will definitely be high but less amount of risk are associated with these new ranges of product delivery at their stores because the brand is already established in the market. Therefore, there is lesser efforts would be given for product promotion.  However, the company needs to improve and expand their warehouse management system. Risks from competitive pressure are comparatively low in Australian market for the range of home furnishing. However, concentrating ranges of home furnishing products starting from the furnishing items for bathroom, bedroom, dining, to kitchen, other home decors need to take time to offer, but the limited product selling would be good option and less risky for the company.

Returns: High return can be expected because of the leading position of the company in the retail market. Furthermore, a large section of consumers are willing to invest on their home furnishing products which increases the market expectations among the manufacturers as well. The industry has sustained strong growth over the past five years, primarily encouraged by upbeat sentiments of consumers and growth in real household disposable income. The ongoing trends of product selling through the internet forecast growth of 7.9 percent in 2016-17 bringing revenue up to $169.1 million. Moreover, the trend towards city living has also supported demand for home furnishing products such as curtains, shades, blinds, floor coverings, furniture and decorative accessories as well. Thus a huge return is expected by Woolworths along with shareholders of the company.

Strengths: There are several strengths can be identified after analyzing the projected capabilities and resources of Woolworths:

Firstly, the company has financial capabilities to lunch the new ranges of products in their retail portfolio section. Being one of the biggest retailers, Woolworths has effectively managed 21.7 percent growth in their sales figure generating $15 billion in the last quarter of 2015 (Woolworths Online 2016). Launching new section of business, therefore, would not be a matter of concern for Woolworths due to financial resources.

Competitive Landscape

Secondly, a strong brand name and efficient operations in the market of Australia is another proposed strength of the company. With capturing large section of the market, the company has the competitive advantages. With quality brand and trusted retailing is the biggest strength of the company.

Thirdly, the company has a huge human resource capital that is currently associated with the company. Therefore, scarce human capital would not be happened in the long term of their new business.

Fourthly, a widely regarded strong, down-to-earth   and family oriented company with sound ethical value and a hardworking, responsible culture increases their operational capabilities in the future.

Opportunities: Firstly, improving city living and average income has been increasing day by day in Australia. It increases the demand of home décor or furnishing products in the retail market.

Secondly, there is a huge opportunity to extend this new furnishing business in order to having less number of competitors in the market.

Thirdly, there is a trend of selling retail products through the online exposure in Australia. Thus, selling home furnishing products by the Woolworth’s online service is a great opportunity for the company to market their new offerings among woollies.

The growing intensity of retail competition due to the emergence of new competitors, formats and technologies as well as the shifts in customer needs has been forcing retailers to devote more attention to long-term strategic planning (Burt, Johansson and Dawson 2016). To introduce new business in their product offerings, Woolworths needs to exploit different strategies to increase their existing resources. There are many marketing strategies are there to increase the growth of the business of Woolworths by expanding resources.

Sell more to existing customers- This only be possible if Woolworths work harder to build relationships and absorb more sales staff

Attract new customers by initializing more investment in promotion and advertising

Channel of existing sales expansion- By the development of the online sales channel, Woolworths can expand their resources.

Strategy of new product introduction: Introducing new product to attract new target audiences at the market place is very common strategy.

Introducing new technology or use better equipments to increase capacity of the company is another strategy for resource expansion

Joint forces/ Strategic alliance: A merger or acquisition combines the best of two companies is another option for expanding the customer base, increasing intellectual capital and delivers operational efficiencies.

In this marketing plan, Woolworths has been chosen to offer new products to increase their market shares in the retail industry of Australia. This selection is quite justifiable because the company has already gained the market reputation by selling retail food products into the market since many years. In this context, entering into the new product line is a refreshing option for consumers who can buy food items with the necessary home furnishing items as well. The product promotional costs will also be less because product will be lunched at the stores of Woolworths as well.

This strategy is also aligned with the organization’s strategic direction of the company. Woolworths Food Group has outlined their three-year strategy to win the trust of its consumers and provides new options to increase consumer spend in order to sell home furnishing products along with food items. This strategic direction also indicates to sell the new ranges of products at the lower price and improves the shopping experience of consumers (Jeanpert et al. 2016). By introducing home furnishing products, therefore, the company does not only increase their market share but also achieve the shareholder’s confidence by getting more returns in the long run.

Assessment of Risks and Returns

Marketing performance of the company needs to be assessed for analyzing the growth of the business. There are various methods used to evaluate marketing key performance indicators or metrics (Meredith 2016). After installing the new products into the market by Woolworths, the company needs to assess their marketing performance incorporating significant metric which are as follows:

Metrics 1: Brand Lift

Brand lift is the metric that generally applied to advertising, but this can just as easily apply to content marketing campaigns as well. The market researcher normally records or identifies a positive shift in terms of consumer perception and awareness (Vargas-Hernández and Jimenez 2016). This metrics will typically assess the performance of Woolworths in the perspectives of awareness (of the brand, offerings or product), attitudes (consumer opinion related to value, appeal, and quality), recall (remembering ability), favorability (proposed recommendations), and intent (likelihood to purchase). Therefore, Woolworths will records or monitors some of the qualitative records such as repeat visits of the customers at the stores or frequent visits at Woolworth’s online sites and many others.

Metrics 2: Return on Investment

Return on investment: By the introduction of the home furnishing business at their ranges of portfolio, Woolworths needs to review the “return of investment” which is one way of considering revenue in relation to invested capital. The method of evaluating performance of and responses to, the ranges of material of Woolworths from simple calculations measuring return on investment, to comparing with the number of visits to a website or at the stores would be the ultimate measurement metrics of the marketing metrics of the company (McDonald 2013).

Metrics 3: Consumer visiting rate:

Consumer visiting rate or exit rate is another significant marketing performance metrics for the retail business like Woolworths. These metrics can give the company a sense of whether target consumers are happy with the service or product offerings which is effectively records the visiting consumers among their stores in Australia or contents viewing metrics into one page of the company’s site (Burt, Johansson and Dawson 2016). If the visiting rate of consumer has a high exit rate, then it would indicate that Woolworths needs to improve or offer better home furnishing products at the online as well as off-line selling.

In this way, Woolworths will develop a marketing performance review strategy for the company, considering marketing metrics to review of organizational performance.

The launch of a new retail product or ranges of products may seem like its occurring at a single point of time, but the product launch is a far reaching effects. A poor launch may decrease the sales rate or make confused or upset consumers and negative ROI. On the contrary, a perfect product launch could mean more sales, a better bottom line or happy consumers.

The following are the important marketing tactics to implement each marketing strategy in terms of various perspectives:

Scheduling: It refers an overall process of arranging, controlling and optimizing work and workloads in a specified time. The production managers of Woolworths have decided to launch the new ranges of home furnishing products next within 3 months. This launch schedule is quite rational because the company requires some time to improve the warehouse management system for storage of home furnishing items along with the retail food products (Hawkes 2013). Furthermore, Woolworths needs to aware the entire sales team professional across all stores of the company in Australia so that they can prioritize tasks accordingly. For instance, the on-shelf availability of the home furnishing products such as curtains, floor tiles, designer furniture and other home décor items and many others so that the company could satisfy each customer’s demand. In this context, the weekly schedule will be check with the various teams involved so that the company manages expectations; however, it is important to keep the lines of communication open among all parties within the chosen organization. On the other hand, scheduling strategy for advertising is another important consideration shall be planned for. There are three types of scheduling patterns:

Strengths and Capabilities of Woolworths

“Continuity”: Promoting throughout the year evenly

“Flighting”: Advertise only during some months of the year

“Pulsing”: This is a mix of both flighting and continuity, where the company have base amount of activity and increase activities of media during some period.

In this case, the company is planning to implement flighting options for selling home furnishing products both at their stores and through online.

Costing: In this marketing plan, the management of Woolworths needs to fix the cost for promotional and distribution effectively. The planning for upfront capital needs to be utilized effectively. Here the company will plan for competitive pricing strategy because consumers may find many choices and are generally willing to shop around to achieve the best price (Thompson et al. 2013). In this case, the pricing strategy shall incorporate outstanding customer service to stand above the competitions.

Accountabilities:  Assigned duties will be segregated as per the job responsibilities. Woolworths is planning to employ a senior interior designer for guiding the affordable outsourcing the ideas of stylish living for the major city people of Australia (Hollensen 2015). Historically, professional interior design or home décor business was an expensive affair. However, hiring designer just became affordable who needs to take care to make the entire process standardized and transparent. Furthermore, a lot people shall be incorporated in the new section of their business for deliver better customer services. In this case, the sales and distribution departments must deliver their accountabilities for competitive performances.

Person’s responsibilities:

Sales professionals: Responsibilities shall be taken are as follows:

• To monitor high customer care standards
• To identify the current requirements of customers
• Indentifies the opportunities of the business by determining projection and evaluating their position in the industry, reaching and analyzing the sales options
• Relationship maintenance with clients by providing support, information, and guidance, reaching and recommending profit and improvement of service

Sales managers: Responsibilities shall be taken are as follows:

• Prepare monthly report by collecting, evaluating and totaling information”
• Maintain standards of quality service by establishing and enforcing standards of Woolworths
• Contribute in team management by providing efforts by accomplishing related results as required

Warehouse Coordinator:

• Distribute home furnishing goods from warehouse to all stores across the nation
• Maintain effective communication with the manufacturers of new product goods
• Sharing effective networks communication across store managers of Woolworths
• Product distribution after clearing taxations with ethical considerations such as maintaining confidentiality, strong corporate governance and so on.

A strategically sound marketing plan is required for making the new proposal of home furnishing a successful one. Incorporating all marketing tactics and strategies to increase resources, Woolworths will identify the strategic action steps to turn such strategies into a reality in the marketing plan (Meredith 2016). The following are the proposed tactics of strategic marketing mix for the new plan of Woolworths:

Table 1: Strategic Marketing Mix

(Source: Created by author)

Product:

Woolworth’s group is all set to introduce their new product line –Home Furnishing products. The company will sell diverse segments of home furnishing products such as Bed Linen, Living Room, Cushions and Cushion covers, Curtains, Bath Linen, Towels, Items of flooring, Table covers, Kitchen linen aprons and Furnishing Combos and so on.  This broad product lines would intend for diverse uses and having different characteristics. The wide ranges of product will surely fulfill the demands of stylish home furnishing lifestyle of Australian consumers. In the strategic product mix, the sales professionals of Woolworths have been targeted these wide ranges of products for city living people across the nation (Festa. et al. 2016). At the introductory stage, Woolworths will give the interior guidance or advices to their customers to make their choices easier. This service will be included as the company’s after sales service. Here the changing product tends must be take care by the store managers and sales executives so that on-shelf availability are maintained at all stores of Woolworths.

Place:

Woolworths will sell their products at the stores situated in major cities of Australia. A sectional department has been designed within all stores of Woolworths, where all items of home furnishing will be displayed. The company has been selected the target market of all city locations across Australia where people are keen to invest lifestyle products. In this section of the marketing mix, the company will consider an effective channel management for distributing their new home furnishing products from warehouse to stores maintaining the “Just-in-time approach” for the seamless operations.

Diagram 2: Place Mix

(Source: Created by author)

Price:

A competitive pricing strategy will be followed in order to sale new products. Though the company may face major competitions from the largest departmental store, Myer, the company will sell their home furnishing products at the least prices during the introductory phase. There is a plan to offer “buy to get 1 free” for curtains, best lines products ranges for generating more customer responses. This strategy would be apt for selling ranges of home furnishing products at the end of period. On the other hand, the company will give special discount for selected items but of course for within a particular duration. This strategy will be beneficial if the company would offer special discounts at the seasonal basis. However, the company will deliver their goods at the reasonable prices considering the brand status of Woolworths among their consumers.

Promotion:

New product must be promoted to generate awareness among the target customers (Vemanna and Rao 2016). In this context, the company has planned to promote their products through social media sites such as Google+, Facebook and many others. This direct marketing approach is suitable due to less operational costs are associated with the company. Another unique promotional strategy – “Point of Sale and end cap marketing” will be used during the introductory phase of the marketing. This method is all about selling products and promoting items in store)s (Bauer et al. 2016). This is suitable promotional option for convenience and impulse. The concerned items of home furnishing products will be placed near the checkout in Woolworths stores and may often purchased by consumer on impulse as they wait to check out. Moreover the company is planned a back-end plan for making this lunch a successful one. Skilled sales people make survey calls to their customers to gather information that can be later be used for marketing by asking questions relating to the way the customers feel about the services and products purchased (Korhonen 2016). This strategy is quite apt because the purpose of promoting products serves dual objectives- firstly the company understands the consumers demand and their thinking process and secondly, the company will also striving to provide the best ranges of products at the stores of Woolworths.

This marketing plan contains a rationale with the smart objectives of the company for launching these ranges of products. As mentioned above, the company is looking for to achieve SMART objectives that are as follows:

Specific	Lunching home furnishing products with the existing product lines
Measurable	Profitability will be ascertained by recording sales
Achievable	The company will get highest returns after the completion of 3 years strategy
Realistic	The company will get 15 percent hike in their sales in the growth phase of this product lifecycle
Time scaled	This marketing plan will be scaled for the period of 3 months

Table 1: SMART objectives of Woolworths

(Source: Created by author)

As the above mentioned marketing plan proposed, this can be said that the plan contains proper justification in terms of objectives and information that supports the choice of strategies and tactics. As far as the strategy is concerned, the new product line has been introduced. It would be easier for the company to increase their market share because the company is already holding the maximum market share in the retail business and Woolworths is also a known face to the people of Australia. Furthermore, the company is financially stable. It would be affordable for the company if the new home furnishing segments may take time at the initial stage of their life cycle. Therefore, the anticipated profit will be achieved within 3 years is quite justifiable. On the other hand, flighting strategies for the promotion of the home furnishing products of Woolworths is also rationale because there is no need to promote products for the duration of the entire year. The reason is that the company has the brand reputation amongst consumers. Furthermore, the company has the enough workforces, financial strength, and the effective operational strategies that will make the entire marketing plan a successful one.

Woolworth’s group is currently holding the leading position and large shareholders are associated with the company’s growth in the retail industry of Australia. The company is listed in the ASX and this marketing plan must deliver huge returns to their associated stakeholders. The company will improvise their product delivery maintaining the cordial relationship of consumers, shareholders, employees of the company (Burt, Johansson and Dawson 2016). With the launching of the new product line, the company will collect the feedbacks from their existing customers about the new offerings of the company. Collecting this response from the stakeholders, the company will improve their ranges of products delivery. For instance, the out of shelf availability is a major concern for consumers. Therefore, a seamless product delivery system must be maintained for getting the best favorable responses from the customers. On the other hand, there is a huge requirement of delivering high quality services from the sales professionals. Therefore, the company should be introduced an extra incentive schemes for encouraging their existing consumers. In this way, Woolworths will make a successful marketing plan for the lunch of new product line in their existing product portfolio.

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