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5C analysis

Discuss about the Wesfarmers Limited Marketing Analysis and Operations.

Wesfarmers limited started its operations in 1914 under the name of Western Australian Farmers cooperation. From its simple beginning as a farmers marketing association, the company has grown over the decades to one of the Australia’s largest company (Wesfarmers, 2017). The head quarters of the company are located in Western Australia. The company has diversified business operations that cover home improvement; supermarkets, convenience stores, hotels, liquor, office supplies, department stores and industrial division (energy, chemical fertilisers, safety products and coal) (Wesfarmers, 2017).

Wesfarmers aims to offer stakeholders satisfactory returns by satisfying customer needs by offering professional service and competitive prices for goods and services as well as providing employees with a working environment that is fulfilling and safe, appreciating good performance and offering a platform for professional growth. In addition, the company contributes to growth of countries it operates in by carrying out its businesses efficiently and identifying expansion opportunities and protecting the environment and conducting business with honesty and integrity all the time (Wesfarmers, 2017).

It is evident from Wesfarmers objective, the company focuses all it resources in offering products services that are competitive, professional and that are sensitive to the requirements and expectations of the recipient communities and countries.

Wesfarmers being a company with diverse goods and services, it has its several brand names under it s umbrella. These are:

Coles – This retail outlet comprise of fresh food stores, liquor stores, gas     stations and     supermarkets. It has an online shopping portal for its customer in Australia and New    Zealand. 

Kmart – is a brand that specialises in retail of clothing, kids’ items and general merchandise. It also has a department specialising on automobile servicing.

Chemical, energy and fertilisers department – this department handles the manufacturing and distribution of specialty chemicals, energy and gas and fertilisers.

The strategy of diversification employed by Wesfarmers gives the company a competitive edge due to the capacity of tapping disposable income in all key consumer sectors.

According to Churchill and Iacobucci (2006) to create a reputable brand, an organisation has to invest in continually offering quality products and services and that is proven by time. Therefore, Wesfarmers has existed since 1914 giving a clear indication that it has only thrived due to continued customer support and trust.  This confidence is because of the company’s investment in making customer service convenient and the community development initiatives the company engages in (Biddle 2016).  In addition, the company also emphasizes quality as well as performance and this is evident in the company’s investment in workforce to make customer experience a remarkable one. According to (Wesfarmers, 2017) Wesfarmers has about 220000 employees making it one of the largest private sector employers. To add to the strengths of Wesfarmers, the company has an online sale platform that increases convenience for the customers who are busy at work. The wide range of products also gives the company an advantage, as the prices vary to suit all types of customers. The company offers discounts and special offers that result in customers flocking the shops.

Customer

The major weakness the company has is its low geographic presence. Being a conglomerate, has concentrated mostly in Australia narrowing the market experience. Being a leading company, Wesfarmers receives scrutiny for every critical decision made.

The company can increase its market share by opening expanding business to more countries. This is because retail business is thriving worldwide because it is the final link between the producer and the consumer (Dwivedi et al. 2012). Standardisation of products and services across all outlets and brands can be a very good venture for Wesfarmers. This will guarantee customers same level quality of product and service regardless of the brand or location of the shop.

The major threat the company faces competition with some specialised competitors offering products and services at the same or lower prices. There is also reduced demand and customer confidence due to downturn in economic levels.

The market segmentation of Wesfarmers broadly targets customers of all ages from middle and high-income families. This segment of customers prefer convenience shopping because they don’t have time to move around different shops looking for goods and services. Therefore, Wesfarmers brands favour this category of shoppers. The online shopping services offered by the company also make many to prefer the company as they shop at the convenience of their homes or offices and have the merchandise delivered at the doorstep.

The company has over 15,000 suppliers who feed the stores with products and raw materials used for the success of business (Wesfarmers, 2017). For any business to remain relevant in business and offer efficient services to customers, a healthy relationship with all stakeholders (suppliers, distributors and community) is of essence, Says Armstrong, Kotler, Harker and Brennan (2012). Wesfarmers strives to keep a mutual relationship with supplier to ensure supplies are of highest quality. Since Wesfarmers is a retailer, there is no need for distributors. This is because the company sells it merchandise directly to the end line customers

The direct and main competitors for Wesfarmers include, Woolworths limited, Best and Less, Myers, hs Home and other businesses that deal with similar products. The indirect competitors of the business are other enterprises that compete for the same disposable income of the customers the company targets.

According to Wesfarmers limited (2017) the company’s profits dropped by 3.6% and operating cash flow by 11.2% in year 2016 due to drop in value of Australian dollar. However, the financial outlook of the company is not all bad as it maintained a strong credit rating during the financial year. The Australian government enacted a law seeking to bar established businesses from engaging in activities that discourage competition Richards, et al. (2012) and thus Wesfarmers has to come up with strategies to beat competition that will arise from new start-ups.

Market research

Wesfarmers is at a social advantage, as Australian community prefer socially responsible companies (Wilson, et al. 2012). The company involves itself in community development initiatives as part of its corporate social responsibility (Wesfarmers, 2017). Considering that we are in a digital era, the company has adapted cashless payment systems and online shopping system that is favoured by many shoppers due to the convenience associated with the technological advancement. The organisation also is environmental friendly and has programs that promote environmental sustainability.

According to Jobber and Ellis-Chadwick (2012), market research is essential for any business whether a start-up or an established business. It gives vital information that aids in decision making regarding best strategies for a successful business. At Wesfarmers, market research takes place at various stages and in various forms. Surveys take place online portals for the online customers, at the shops by filing in anonymous questionnaires and by encouraging customers to make suggestions and deposit them at the suggestion box. This gives information on who the current customers are and what they like and what they want to be changed.

To get information regarding changes expected in the business operations, the organisation ensures representation in all institutions that relate to its business and participate in all business fairs of sectors linked to its operations. A good relationship with stakeholders also helps, as the management gets information about any new occurrence that may affect the business way in advance (Wesfarmers, 2017). This channel is very important especially for technological improvement. The suppliers brief the company of new development very early giving the company an advantage of adopting latest technology before competitors.

According to Cravens and Piercy (2006), marketing segmentation is the identification of a group of individuals who have similar characteristics that are useful in developing marketing strategies. Segmentation is important because it enables a company to customise goods and services to satisfy the needs of target customers better than the competitor (Cravens and Piercy 2006).  An analysis of Wesfarmers indicates that the company has untapped market that has high potential if proper planning is done especially for supermarkets and apparel stores.

 Teenagers and young adults of ages between 16 and 25 is category that has very high shopping potential if targeted well. According to Jain and Haley (2009), this group love well known brands and are always looking for bargains and discounts. This group mostly shop out of peer influence and the desire to stand out so impulse buying is synonymous with them. Wesfarmers can strategise to put up shops in areas concentrated with this class of shoppers. This locations is a near universities and colleges or residential areas and tap this readily available cash.

The grocery stores can also benefit from unexploited market by targeting low-income earners. This is viable because the low-income earners make the largest population of most economies Jobber and Ellis-Chadwick (2012) and groceries are a necessity. With affordable prices, this segment would comfortably choose to shop, hear. The company can open outlets in this areas and offer prices that are pocket friendly for the target customers. This in turn leads to a flow of customers hence getting increased profit due to high numbers of customers.

Goi (2009) defines marketing mix as set of marking tools used by firms when developing marketing objectives for the target segment.  The mix referred to as 4P (product, price, promotion and place). In order to reach out effectively to the proposed market segment, Wesfarmers need to consider the 4P marketing mix.

It is important for the company to research about the products that are favoured by these categories of people. According to Goi (2009) a product is the good or service that satisfies customers’ needs.

In order to attract the teenage and young adults to buy clothing and accessories at their stores, Wesfarmers Limited has to consider the style of the products on offer. This is because the products need to be age appropriate and acceptable to the target group (Armstrong Et.al 2012). The brand name is also very important as this category buy due to peer pressure and so is likely to buy brands that their friends vote. The packaging of the products should be appealing to this age group to encourage purchases. After-sale services and warranties on products encourage buying as the shoppers gain confident in the quality of the products.

For the lower class grocery shoppers, the company best gain confidence from them by offering products and service that they commonly seek in a grocery store. The products should be of good quality and packaged hygienically and attractively.

According to Goi (2009) price is the amount a customer is willing to pay for a product. This is the reason the cost of a commodity may vary from one shop to another and one location to another.

Wesfarmers can adopt a pricing strategy for teenager and young adults’ group apparel and accessories section by doing a research to find out how much this category is willing to spend on various product ranges.  When adopting prices it should put in mind different payment methods at the disposal of the targeted customer. In this case, young people love to flaunt with technology and thus introducing cashless and online shopping platform is rewarding to both parties (Hanson and Kalyanam 2007). This group love bargains. Therefore, price cuts and discounts appeals to them very much and should be a strategy to adopt when targeting them.

As for the grocery stores for lower-class citizens, product pricing should consider the market rates in these areas. Available payment options should be a consideration. Discounts and special offers appeal the most to people on tight budgets (Birnik and Bowman 2007). Therefore, Wesfarmers should consider discounting of products and special offers occasionally.


According to Armstrong Et.al (2012), promotion is defined as marketing communication. It incorporates advertising, public relations, sales promotion and direct marketing. It considers how to reach out, when to reach out, who to reach out and through what medium.

In order to inform young people of existence of an apparel and accessory shop of choice, it is important to choose the right medium to convey the message. Today, young people get most of their information electronically. Therefore, it would only be wise to use internet media advertising service, television and radios to reach out to these people (Armelini and Villanueva 2011). In addition, billboards can convey the same information. The message customised to the taste of the target customers’ appeal the most.

To market the grocery store television and radio channels as well as billboards can deliver the message effectively. The message directed to the target customers must have clear highlights on qualities that interest this group when shopping.

Place is the either the physical location of a business or the channel used to deliver goods and services to the market (Armstrong Et.al 2012).

When targeting young people to be customers of apparel and accessories, Wesfarmers should consider to strategically positioning their shop for accessibility by this target group (Jain and Haley 2009).  The shop could be conveniently located near institutions of higher learning.  These areas have a high concentration of young adults.

The grocery stores should also be located in area that is accessible to low income earners if the strategy is to work.

The fifth P to consider in marketing strategy planning is people.

Sriram, Chintagunta and Neelamegham (2006) describe people as human actors that take part in service delivery. For both outlets, the company must ensure that employees portray the right image. Employees of the company should be friendly and professional at work. They must have the capacity to handle business matters efficiently and knowledgeable about the business. It is the responsibility of the management to make sure that new members of staff get training on all company operations.

Conclusions

Wesfarmers is one of Australia’s largest companies. It has increased its portfolio of business over the years in diverse fields. It aims at giving returns to shareholders by satisfying the customers first. The main strength of this company is its diversified brands on offer and the trust it has gained in over a century of service. However, the company faces a challenge from competitors who offer similar products at lower prices. The company has the potential for expansion to other countries.

The drop in the value of the Australian dollar affected the company’s profitability during 2016 financial year. However, the company can strategise to explore new markets in groceries and apparel and accessory sections. This will increase market shares and eventually profitability. To achieve this employing marketing mix to make clear strategies for new market entrance is essential.

Armelini, G. and Villanueva, J. (2011). Adding social media to the marketing mix. IESE   insight, 9,29-36.

Armstrong, G. Kotler, P., Harker, M., and  Brennan, R. (2012). Marketing: an introduction. Pearson Prentice-Hall, London.

Biddle, I. (2016). The Wesfarmers/Woolworths duopoly war: The Bunnings vs. Masters    battle. Busidate, 24(3), 3.

Birnik, A. and Bowman, C. (2007). Marketing mix standardization in multinational corporations: a review of the evidence. International Journal of Management        Reviews, 9(4), 303-324.

Churchill, G. A. and Iacobucci, D. (2006). Marketing research: methodological foundations.         New York: Dryden Press.

Cravens, D. W. and Piercy, N. (2006). Strategic marketing (Vol. 7). New York: McGraw-Hill.

Dwivedi, A., Merrilees, B., Miller, D. and Herington, C. (2012). Brand, value and relationship      equities and loyalty-intentions in the Australian supermarket industry. Journal of            Retailing and Consumer Services, 19(5), 526-536.

Goi, C. L. (2009). A review of marketing mix: 4Ps or more?. International journal of marketing studies, 1(1), 2.

Hanson, W. and Kalyanam, K. (2007). Principles of Internet marketing. South-Western College Publishing.

Jain, S. C. and Haley, G. T. (2009). Marketing planning and strategy. Cincinnati South-Western Publishing Company 1985.

Jobber, D. and Ellis-Chadwick, F. (2012). Principles and practice of marketing (No. 7th). McGraw-Hill Higher Education.

McLachlan, R. (2013). Deep and Persistent Disadvantage in Australia-Productivity Commission Staff Working Paper.

Morgan, S. (2006). Blueprint for success [Profile of Richard Goyder, Managing Director and CEO of Wesfarmers.]. Management Today, (Oct 2006), 6.

Parasuraman, A. and Colby, C. L. (2007). Techno-ready marketing: How and why your customers adopt technology. The Free Press.

Richards, C., Lawrence, G., Loong, M. and Burch, D. (2012). A toothless chihuahua? The Australian Competition and Consumer Commission, neoliberalism and supermarket power in Australia. Rural Society, 21(3), 250-263.

Sriram, S., Chintagunta, P. K. and Neelamegham, R. (2006). Effects of brand preference, product attributes, and marketing mix variables in technology product markets.       Marketing Science, 25(5), 440-456.

Wesfarmers Limited (2017) Strategy Briefing Day 28 May 2014, www.wesfarmers.com.au/, retrieved on 21/01/2017

Wesfarmers limited (2017), 2016 Annual Report, www.wesfarmers.com.au/,retrieved on 21/01/2017

Wesfarmers limited (2017) www.wesfarmers.com.au/ retrieved on 21/01.2017

Wilson, A., Zeithaml, V. A., Bitner, M. J. and Gremler, D. D. (2012). Services marketing: Integrating customer focus across the firm. McGraw Hill.

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