Semester / Year: Semester 1, 2023

Faculty / Dept: Management and Marketing

Subject Code: MKTG30006

Subject Name: Retailing

Writing Time: 3 days (72 hours)

Open Book Status: Yes

Number of Pages (including this page): 5

Instructions to Students:
This examination contributes 50% to the final subject mark. This
examination paper includes 2 sections.

Section 1: Contains two (2) comprehensive, long response questions. You are required to
answer all two (2) questions. This section accounts for 50 marks.

Section 2: Contains two (2) questions in response to the case study. You are required to
answer all two (2) questions. This section accounts for 50 marks.

This is an open-book exam.

Examination responses should be submitted by uploading a Word or PDF document to the Exam
link on the LMS.

Students are not required to conduct additional research in response to the exam questions. All
the required resources are contained within the exam and the available subject materials (e.g.,
seminar slides and recordings, subject readings, and additional resources available on the subject
LMS). Additional research will not be awarded marks.

Referencing is not required for this exam.

Exams will be subject to a Turnitin screening to ensure that students respond independently. If you
quote verbatim, make sure you use quotation marks and identify the source (any citation systems
are acceptable). You do not need to use citations for lecture slides – but avoid copying extensive
amounts of verbatim text.
1
 SECTION 1 Contains TWO (2) questions. You are required to answer both questions.
Question 1 is worth TWENTY-FIVE (25) marks in total.
Question 2 is worth TWENTY-FIVE (25) marks in total.
This section accounts for FIFTY (50) marks in total.
Word Limit for Section 1: 1000 words
Note: Diagrams and tables are exempt from the word limit

1. Coles Repositioning Strategies

Watch the following Coles Australia YouTube TV commercial clips from before (2018) and after
(2020) the recent Coles brand re-positioning:

2018: Before Coles brand re-positioning:

• https://youtu.be/h-7ZlBtv_l0
• https://tinyurl.com/yn4zmrk7

2020: After Coles brand re-positioning:

• https://youtu.be/RFcumVtvfmo

[Note: these clips are also available to be viewed as Lecture Capture Recordings and as YouTube
links on the subject LMS page in the EXAM Module]

(a) Draw on these TV commercials to identify and profile the Coles target customer segment/s
before and after the brand relaunch. Give 2-3 examples from these commercials to support
your response. [10 marks]

Broadly, Coles are attempting to target parents who shop at the supermarket for the family,
more closely however, they are specifically targeting middle to older aged mums, who are
socially conscious and want to get more value out of the everyday grocery shopping
experience. Whether this be through better value for money when getting dinner
ingredients, as the lowered prices of RSPCA approved chicken in the 'Good Things Great
Value' commercial offers, or supporting the charitable causes in which the brand supports
in the 'Good things are happening at Coles' commercial. Coles are aiming at consumers
who have a disposition for philanthropic and empathic behaviour, especially to causes
which are close to them, but who also value savings on everyday items.
 
Following the brand relaunch, Coles have diversified their targeting goals to reach a wider
set of segments in the 'Value the Australian way' commercial, using familiar, but special
moments in Australian lives to resonate with a broader audience from many walks of life.
While the focus is still on young families, who lead busy lifestyles such as going on camping
trips, and being entrenched members of their community, with involvement in sports
teams and other activities, there is also an emphasis on targeting an older demographic of
retirees and the younger generation as well. All these segments comprise of consumers

2
 who have a strong affinity for the 'little things' in life, whether this be through connection
or experiences with food.

(b) Use a 2 x 2 Perceptual Positioning Map to illustrate the re-positioning of the Coles brand
and identify the new/repositioned Positioning Statement and Value Proposition for Coles.
Give 2-3 examples from the commercials to support your response. [10 marks]

Through the brand relaunch, Coles uses strong visual cues in the commercial to enhance
the perception of quality, communicating functional benefits, with fresh high-quality meals
seen, and symbolic benefits using affective emotional scenes to resonate with the target
audience. This culminates to position the brand in the minds and hearts of customers, to
be there for the special Australians moments in which we share with others, such as the
family breakfasts or dinners, or activities with friends. The value proposition Coles is using
is how the 'little things' for young families, as well as people of a younger and older
demographic can be made so special when accompanied with great food for great value.
The commercial uses this narrative with emotional appeals to transmit this value
proposition.

(c) Analyse why Coles re-positioned their brand in the Australian market. [5 marks]

Coles re-positioned themselves in the Australian market to create a unique point of

differentiation between themselves and their competitors, which wasn’t purely based upon
price. Due to the highly competitive and price-driven nature of the supermarket industry,
Coles needed build a stronger brand image to sustain a long-term competitive advantage by
positioning their brand with rational and emotional attributes.

3
2. A Revolutionised Brand
Australian department store David Jones has launched a major multichannel marketing campaign
to support its new, and eagerly anticipated food offering (2017). David Jones is promising to
revolutionise food shopping with a complete overhaul of their food offer. In addition to
relaunching the David Jones Food Halls, David Jones will also be opening standalone upmarket
food stores with both fresh food and restaurant-quality take home meals in Sydney and
Melbourne. David Jones have enlisted the famous Australian Chef Neil Perry to partner with them
to spearhead this venture into gourmet eat-in and take-home food.

a) David Jones started building the profile of their new food offer through the media months
before they actually opened the first relaunched food hall in Sydney. This was a strategic
move. Explain why this move is strategic and identify DJ’s objectives in deliberately creating
this pre-launch media hype. [5 marks]

David Jones strategically utilized key media to create a pre-launch hype to drive greater
awareness for the new retail stores as well as increase demand and anticipation. As David
Jones was entering into new territories with this food offering, it was crucial for the brand
to reach as many potential consumers in their target market as possible with their
marketing communications. The objectives of these communications were two-fold, firstly
to maximise the awareness of the launch to create immediate positive perceptions around
the new stores, and secondly to drive the demand and anticipation for this new offering to
create a buzz for when the stores launch.

b) Drawing on Ansoff’s 2 x 2 Intensive Growth Matrix, identify the type of growth strategy
being pursued by David Jones in this revolution of their food offer. Support/justify your
response. [8 marks]

As David Jones are entering into new product categories which are unrelated to their
existing lines, therefore they are employing a diversification strategy to capitalise on
unmet demand in new markets and increase their market potential through leveraging
their core capabilities. As David Jones, prior to this launch, has operated as a department
store selling a vast range of products, this new food offering pursues a horizontal
diversification strategy in entering the high-end supermarket and food store markets with
their new lines. David Jones is harnessing their existing customer base as well their strong
brand image achieve this strategy. Diversification strategies are inherently high risk, as
these objectives can reach too far outside a brands existing capabilities and tarnish their
brand equity as well as having serious financial implications. However, these strategies can
also garner equally high rewards if implemented correctly with the right mix, to the right
customers.

“The food strategy is part of David Jones’ move towards the premium market. This should help
insulate them from online rivals, such as Amazon,” says Nathan Cloutman (2017), an analyst at
IBISWorld, a market research company. The David Jones chief customer officer, Gary Williams
(2018) says: “We have completely revolutionised our food offering, so we needed a campaign that
would give customers a taste of our new brand ethos.

4
 c) Identify and briefly describe the customer and/or competitive trends driving David Jones’
interest and investment in premium eat-in and take-home food retail. [4 marks]

Consumers preferences are increasingly shifting towards convenient food options, in which
online native retailers such as Amazon and food delivery services have capitalized on.
However, a gap may exist in the premium food market where David Jones is attempting to
enter, as there may not be sufficient options available in meeting current consumer needs
in this space. As demands rise and competition intensifies as the market reaches maturity,
it is important that David Jones positions themselves firmly within this new market while it
is in its development/growth phase.

Chynna Santos reports in BroadSheet (4th March 2021): “David Jones is closing three Melbourne
Food Halls by May – including the one in Bourke Street Mall. The department-store giant
announced the closures as part of changes to streamline its food business across the country,
citing a steep decline in foot traffic in the Melbourne CBD”. “A recent review of our food business
has helped us identify a number of structural changes we need to make to ensure the ongoing
success and profitability of this offering,” David Jones CEO Scott Fyfe (2021) said in a statement.

d) Discuss the potential forces and implications that have caused David Jones abrupt closure
of Food Hall offerings across Australia by applying relevant retailing tools from the
situational analysis in your answer. [8 marks]

Macro-environmental factors

 Lingering concerns surrounding the COVID-19 pandemic has affected consumer behaviour
and preferred shopping experiences. This has led to decreased foot traffic in previously
high flow areas such as malls and shopping centres, as a large portion of consumers
continue to opt to shop online rather than in brick-and-mortar stores. Furthermore, the
economic instability following the pandemic has decreased consumer confidence and
spending across the board, therefore the demand for premium goods has been
significantly impacted. This has led to a decline in the size and profitability of the premium
food industry, as shocks to the market has caused prolonged effects on demand. They also
may have overestimated the initial market size and attractiveness when deciding to enter
this new markets, realizing there is insufficient growth potential to sustain profitability
going into the future.
 
Micro-market dynamics

 There continues to be an increased threat of online native retailers who operate with
lower overhead costs and therefore offer comparatively lower prices, as well as greater
and more convenient options. The digitalised retailing space has reduced shopper
immobility and information asymmetry (Week 4, slide 32), which has intensified the
competition of the food market, in which David Jones strong brand identity and offering
has not been able to counteract these threats. The loyalty of their customer base may

5
 have been overemphasised, with loyal customers instead manifesting latent loyalty, rather
than sustained loyalty which could be translated into brand preference for premium food
options.
 
 
Internal

 The core capabilities of David Jones, with relation to their management, operations, and
distribution, may not have been versatile enough to adapt to this diversification strategy.
The new product lines may have involved complexities in the implementation and delivery
beyond David Jones existing retailing capacities and were therefore not able to enter this
new market effectively. The store locations and channel coverage of the strategy
implementation also adversely impacted its success, as stores in high foot traffic areas did
not have long-term viability due to macro-environmental factors, but also possibly for
internal factors such as specific locational choices, store ambience and the team of
employees.

END OF SECTION

6
 SECTION 2 Contains TWO (2) questions. You are required to answer both questions.
Question 3 is worth THIRTY (30) marks in total.
Question 4 is worth TWENTY (20) marks in total.
This section accounts for FIFTY (50) marks in total.
These questions are based on the case study: ‘The Rise of Amazon’.
Word Limit for Section 2: 1000 words
Note: Diagrams and tables are exempt from the word limit

3. Amazon's successful e-commerce platform has been the key driver of its impressive growth
historically and has given it the financial backing to diversify its business. While the company's
astronomical growth was undoubtedly bolstered by the e-commerce boom, it has taken a number
of strategic decisions since its inception which has made it stand out amongst the crowd, and truly
cement itself as the leading global e-commerce giant.

a) How did Amazon diversify its business beyond e-commerce and become a global
conglomerate? [8 marks]

Amazon were able to leverage new revenue streams on a global scale through the
implementation and expansion of their flagship subscription service, as well as diversifying
their offerings far beyond their e-Commerce beginnings into new industries. While the
Amazon Prime subscription service is mainly used to supplement the e-Commerce platform,
they were able to add new capabilities to the service such as video-on-demand and music
streaming to increase their offering to appeal to a broader global market. Amazon were able
to leverage these services to create a highly adaptable offering to meet the differing needs of
consumers around the globe. Amazons’ entry into the healthcare industry has also proven to
be valuable source of growth to consolidate their global position. As Amazon diversifies their
strategies into new industries, they are able add greater efficiency, cost-savings, and
convenience than what is currently offered by the market incumbents, through their large-
scale operations and infrastructure. The acquisition of Whole Foods, to expand into brick-and-
mortar retail stores, provided Amazon the opportunity to use their existing resources and
assets, to expand their brand equity beyond the e-Commerce space.

b) What were some of the strategic decisions made by Amazon that helped it stand out
amongst its competitors and become a leading global e-commerce giant? How did their
market position contribute to their success? [12 marks]

Amazon quickly identified the growing importance on delivery times in the e-Commerce
industry, therefore they were able to invest heavily into providing the operations and
infrastructure to support their unique-selling-point of quicker and easier delivery options.
Through the creation of these network systems, Amazon were able to create a differentiated
service, and sustain a competitive advantage through greater control over their supply chain.
This focus on delivery times, with their wide product offering, positioned the brand
strategically to become the preferred retailer as e-Commerce business grew exponentially due
to the COVID-19 pandemic. Furthermore, their acquisitions of Whole Foods and PillPack,
strategically allowed Amazon to diversify into new industries, exploring new ways of product

7
 and service delivery to diverge from competitors. Using their existing Amazon Prime
subscription service, they were able to create unique omni-channel retail experience, through
integrating their products and service in physical stores and pharmacies, with the online
platforms to create a cohesive and connected system of purchasing. Amazon can leverage
their image and reputation when entering new industries and expanding globally, as they built
a strong brand equity through product and resource development.

c) With Andy Jassy set to replace Jeff Bezos as CEO, what are some of the ambitious plans
that Amazon has in store for the future, and what challenges does the company face in
realising these plans? Provide recommendations to mitigate these challenges. [10 marks]

Amazon’s expansion into India will be an important component for the companies continued
global growth. However, expansion into new global markets is inherently risky and can present
many challenged. Firstly, Amazon consider how they will adapt their product and service
offering to meet the different needs of the Indian market. Key partnerships with local
businesses can be influential in understanding the market and developing an effective
strategy, however this can also present risks, as with the on-going legal troubles Amazon are
experiencing. They must also understand the importance of maintaining their core strengths
and capabilities when entering the new market, specifically, being able to effectively provide
speedy delivery time of their products and services, with the proper infrastructure in place.
 
The continued investment and extension of Amazons advertising sector presents challenges
with the use of AI and deep learning. Continued privacy concerns surrounding the use of AI
and big data collection suggests perceptions of this industry will become increasingly more
volatile. The broad range of Amazon products all tracking user information, such as Prime,
Alexa and the Halo, may offer the company usable information in optimizing the user
experience and retailing experience going forward, however will be a source of agitation with
its users in the future as well. Therefore, greater transparency with use if this data will be
paramount in alleviating societal concerns.

4. Over the years, Amazon has evolved from an online bookstore to an e-commerce giant and
finally into a global conglomerate with business interests spanning an array of industries. The
company has several ambitious plans which could see it go through yet another period of
transformation.

a) What considerations should Amazon make in developing plans for the next 3 years? How
would you see the marketing of these plans develop over this time? Based on your
assessment, recommend the approach you would take and explain the main reasons for
your choice (note: these retail strategies should include the relevant marketing mix
elements that will be adapted to the proposed strategic recommendations). [20 marks]

As Amazon move into the future, key develop strategies need to be implemented to
continue the company’s upward trajectory. With increasing shipping costs making the

8
Amazons e-commerce platform less financial efficient in making profits, they need to
continue to harvest online sales while investing in operations to reduce these costs, while
divesting in areas which are showing decline or are increasing in costs. Amazon need to
continue to diversify beyond the e-commerce platform for this reason, therefore one
strategy to be implemented will be to progress with investment into other retail channels,
such as brick-and-mortar stores for other goods and services, such as fashion and
technology. As customers still highly value personalised service and the physical retailing
experience, Amazon can harness their strong brand image, as well as their existing digital
eco-system and Prime subscription to create an optimized retailing experience which
spans through various channels. These physical stores must be situated in catchment areas
which reflects Amazon broader target markets, with atmospherics which are consistent
with their current online personality and visual aesthetic. The merchandise range use of AI
and machine learning to optimize stock levels and predict demand. Amazon will need to
continue to use cost leadership strategy through economies of scale, however, give more
niche offerings and personalized services to drive customers perceptions of value. The
merchandise range will use AI and machine learning to optimize stock levels and predict
demand. Through this market development, the marketing mix will utilize a range of
channels and strategies, such as pop-up stores and social media campaigns to drive
awareness and foot-traffic to the stores. This mix will target Amazons existing customer
base, but also attract new potential customers into the stores.
 
Secondly, Amazon need to continue to augment the value of their Prime subscription
service, as this is currently the main revenue driver. Through adding more services like
video-on-demand and music, Amazon can improve their competitive edge against big
players. Therefore, another market development strategy will be pursued, to capitalize on
the growing food delivery service market. Amazon has already found success entering the
food industry through the acquisition of Whole Foods; therefore, this strategy will allow
Amazon to utilizes their logistic proficiencies to effectively compete against the market
incumbents. Launching this strategy firstly in the US, where Amazon has the largest market
power and brand equity, then globally, key partnerships with large restaurant chains will
be key to attracting brand preferences from the existing competitors as Uber Eats and
Door Dash. As this is a highly competitive and price driven market, Amazon will need to
use a penetration strategy to target a low-end foothold then increase their market share
from there. An effective marketing strategy will be crucial in the preliminary stages of this
plan, therefore a mix of traditional channels, and digital channels will be used, as well as
promotional incentives.

9
 END OF SECTION
MKTG30006 RETAILING
EXAM CASE STUDY

The Rise of Amazon: How it became a global conglomerate and what its future may hold
[MarketLine Case Study]

Source/Author: MarketLine
Retrieved from: library.unimelb.edu.au > MarketLine Advantage
URL Link: https://advantage.marketline.com/Analysis/ViewasPDF/the -rise-of-amazon-
howit-became-a-global-conglomerate-and-what-its-future-may-hold-120894
Reference Code: MLCS0002-004
Publication Date: February 2021
Date Accessed: 21/04/2023

The Case Study is available on a separate downloadable document on the Canvas LMS.
Direct Link: HERE

10
END OF EXAMINATION PAPER

11