MKTG30006 Management and Marketing

Q 1.

(a)

The TV commercials shown in the video reflect that Coles targeted different customer segments
before 2018 and after 2020 when it re-positioned the brand. The customer segments are
identified and defined separately before and after the brand relaunch.

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Target market before the relaunch

Before the relaunch, the target market was segmented based on psychographic and behavioural
segmentation.

Psychographic

Attitudes and values- Customers who value and stick to the brands that are engaged in
noticeable social responsibilities and contributing to society. For example, the partnership of
Coles with Red Kite and giving over $27 million in the past 5 years have pulled the attention of
customers toward Coles’ support to Young cancer patients and their families.

Behavioural

Usage behaviour- The customers who are moderate and heavy users of the products based on
their process of production without harm to society, the planet, or animals. For example, Coles
has targeted customers who prefer RSPCA-approved farm-based chicken, which reflects that the
product is raised within animal welfare standards.

Benefit-sought- Those who prefer products with great value and high quality. For example,
Coles provides $1 of saving on a large pack of RSPCA-approved Chicken thighs.

Customer Profile

Demographics Psychographic:

Female Ethical Buyers focused on social marketing

40 years Seeks brands engaged in CSR activities

Seeks discounts

Behavioural

Great Value, High quality

Does research before buying food items
Buys products within Animal-Welfare stand

Target market after the relaunch

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After re-positioning the brand, Coles has segmented its target market based on a combination of
all four segmentations including demographic, geographic, psychographic, and behavioural. The
main target customer segment of Coles now are all men, women, kids of all ages and gender,
low, middle, and high-income groups, working, non-working, students, professionals, business
people, people across all the regions cities, and towns in Australia having access to Coles
supermarkets, live life to the fullest, enjoy with family and friends, live the life Australian way,
are aspirers, and explorers. For example, the video after relaunch demonstrates a range of diverse
Australians enjoying Coles’ products and living their lives the Australian way. It reflects that
Coles has not segregated its customer segment and focused on the entire Australian community.

Customer Profile

Psychographic
Demographic
Enjoys food with family & Behavioural
Male (42 years) friends
Buys food which gives a
Shares food during different feeling of the
camping, sports Australian way of eating
Geographic
An explorer and aspirer Buys diverse food for
Southwest look forward to new food different tastes
Arizona style
Cooks with family

(b)

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Coles has relaunched itself as a brand that celebrates the Australian lifestyle centred around food
and meeting family and friends. The new brand re-positioning statement of Coles is “Value the
Australian way”. In this context, the value proposition of Coles is to feed Australians in an
Australian way through its products with a focus on the diverse culture of Australia and reach
them this way. It is evidenced in the video which shows a group of old ladies enjoying fruit at the
beach, two teams of students sharing the food on the playing ground, friends and family
members gathering and enjoying the barbequed food in the garden, families enjoying food during
camping, and friends sharing food with their friends from a different cultural background. It
reflects the value proposition of Coles to focus on feeding the people the Australian way.

(c) Positioning is related to differentiating the offerings from those of the competitors so that it
becomes more attractive to the target market (Week 7 Lecture). Since Coles is a local food
brand in Australia, it wanted to position itself in the minds of customers as a unique brand
connected to the Australian way compared to its competitor brands like Woolworth and Aldi
(Figure 1).

Figure 1 Perceptual positioning map of Coles (Self-created by author)

Thus, Coles repositioned the brand based on differentiation as it intended to feed people the
Australian way.

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2.

(a) Building the profile of new food offer through the media by David Jones (DJ) months before
opening its first food hall in Sydney was a strategic move because DJ’s strategic objective was to
pursue a focus strategy to attain an advanced knowledge of needs and preferences of the
customers about food and then deciding on differentiation or cost-leadership strategy after
opening the food hall actually. DJ deliberately created this pre-launch media hype to get
customers' attention and gain their feedback on what they think about the new food offer to make
relative changes after opening the food hall and using the most suitable generic strategy.

(b) Ansoff matrix effectively understands the type of growth strategies companies implement,
like market penetration, market development, merchandise development, and diversification
(Week 5, Topic 2).

Market Penetration Market Development

Merchandise development Diversification

Figure 2 Ansoff's Matrix (Self-created by author)

Drawing on Ansoff’s intensive growth matrix (Figure 2), it can be analyzed that DJ is pursuing a
merchandise development strategy in revolutionizing its food offers because it is investing in
introducing new food offers and developing a new product range by introducing fresh food and
restaurant-quality take-home food-based standalone upmarket food halls in the existing markets
of Sydney and Melbourne.

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(c) The customer trends that are driving DJ’s interest and investment in premium eat-in and take-
home food retail are the inclination towards healthy and fresh eating habits that give them a
home-like taste, and changing food concerns. For example, Starbucks implemented a
merchandise development strategy based on changing consumer trends and introduced new
beverages like CDs (Week 5, Topic 2). Similarly, Amazon's competitive trend like multi-
channel retailing has also driven DJ to invest in this strategy.

(d) The SWOT analysis has caused DJ abruptly close its Melbourne-based food hall offerings. A
SWOT analysis tool is effective in providing insight into the current position and embark future
strategies to improve consistency in the business and attain success (Week 4, Topic 2). The
company’s internal analysis including customers and the competitive landscape is helpful for DJ
to identify possible changes to be introduced.

Strengths

 Robust local presence in Australia as a well-known department-store giant

 Located in high-valued locations
 Capability to invest in multichannel marketing campaigns

Weaknesses

 Old food business structure

 Less-aspirational customer experience
 Untapped premium food category segmentation

Opportunities

 Build a strong brand ethos

 Investment in premium eat-in and home-like restaurant meals food business
 Expansion in unexplored markets of Australia
 Target high-income level groups for premium products

Threats-

 Competition from brands like Amazon and other established food halls

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Thus, the SWOT analysis has caused DJ to establish its interest in making investments in
premium eat-in and home-like restaurant meals to provide a first-class eating experience to the
customers. After this situational analysis, David Jones can focus on the right segmentation
strategy to continue its major emphasis on quality and motivated experience.

Q 3.

(a)

It is explicit that Amazon has attained huge success in the e-commerce industry. Nevertheless,
some of its diversification strategies and revenue streams beyond e-commerce have helped it get
success in becoming a global conglomerate. Amazon diversified into subscription services like
Amazon Prime which fostered its growth. It also generates revenue from audiobooks, digital
videos, Amazon music, e-book, and non-AWS subscription services. Similarly, Amazon also
diversified its business by acquiring Whole Foods Market in 2017 into the physical retail sector
and established its presence as a brick-and-mortar store which is beyond its strong image as an e-
commerce giant. In doing so, Amazon has been able to add about 400 brick-and-mortar stores to
its e-commerce assets. Finally, the investment in the healthcare industry has given it an
advantage to become a global conglomerate. The acquisitions made by Amazon in the healthcare
companies like PillPack and rebranding it as PillPack, by Amazon Pharmacy has given it a
distinct image in customers’ minds. Thus, all these diversification strategies have made Amazon
a global conglomerate.

(b)

Amazon has a thriving e-commerce business which differentiates it from its competitors, Still,
Amazon has taken some strong and impactful strategic decisions that have further helped it stand
out and become a global e-commerce giant. The major strategic decision in the Amazon Prime
subscription service category was to speed up the studio production at Amazon and release a
range of crucially commended originals like The Man in the high castle, Bosch, and Sneaky Pete.
This strategic move helped Amazon to stand out against its competitors including Netflix in the
subscription service market (Case study p. 5). Further, investment in the online gaming market
is another strategic move that has driven Amazon's competitive advantage over its competitors in
the e-commerce industry like Microsoft and Google. Its differentiating incorporation of Twitch

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and Luna controller has given it the advantage to stand out uniquely and attain a larger market
share.

The strong market position of Amazon has also contributed to its overall growth and success.
The strong portfolio of Amazon Web Services (AWS) including Artificial Intelligence, data
management tools, and its distinct use in various countries reflects the contribution of Amazon’s
market position contributing to its success. For example, hospital networks, research labs, and
several pharmaceutical firms have been using AWS to research new treatments for COVID-19,
to take care of the patients, and reduce the effect of the disease in several ways (Case study, p.
9). The advantageous and significant market position of Amazon has also helped it attain a larger
market share in the online gaming industry which made it stand out against its rivals including
Sony, Xbox cloud gaming, and Google Stadia (Case Study, p. 10).

(c)

With Andy Jassy set to replace Jeff Bezos as CEO, some ambitious plans that Amazon has in
store for the future include improving the value of AWS as it has become a main driver of
growth for the organization. It is further evidenced by the growing demand for cloud computing
based on AWS. Companies consider that cloud computing is one of the dominant tools that can
improve the efficiency of their businesses. Thus, investing more in AWS to enhance the
efficiency gains of cloud computing is an ambitious plan of Amazon. However, Microsoft and
Google are close competitors that pose challenges for AWS. Another ambitious plan of Amazon
includes a huge investment in the online retail market of India. However, Amazon face
challenges in realizing this plan due to continuing disputes with Reliance Retail and the Future
Group.

Amazon should keep investing innovatively and uniquely in AWS and introduce new data
management tools and cloud computing tools to stand unique and ahead of its competitors. Next,
to set a strong presence in the Indian market, Amazon should invest in strategic partnerships with
effective local Indian players and expand its reach while also focusing on settling disputes with
Indian retailers to keep its image strong.

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Q 4.

The main consideration of Amazon for the next 3 years should be the effective marketing mix
that would help it deliver an aspirational and unique customer shopping experience. Thus,
Amazon is recommended to implement the following marketing mix in line with strategic
recommendations proposed to Amazon.

Product- Develop and introduce products based on cloud computing that are driven by consumer
and competitive trends like cloud computing, and investment in more subscription services with
attractive offers. Cloud gaming product has potential in the long-term and Amazon must invest
in more cloud gaming platforms to compete with Google and other competitors.

Place- Amazon is already known to invest in multichannel and Omni channel strategies. For the
next 3 years, Amazon should focus on gain excellence in its Omni-channel strategy which needs
a laser-like concentration on the creation of greater value and providing customers with a
combined range of online and offline stores to purchase from. Multiple different channels must
be merged in giving customers a superior experience and not only a division between online and
offline stores.

Price- Amazon is recommended to follow a price leadership strategy while offering products that
are competitive in nature and offer similar products for the best value. Since Amazon is already
offering some online products like Luna gaming and Amazon Prime subscription services at
comparatively lower rates than its rivals. It reflects that Amazon is a price leader which should
be continued to augment the traffic flow of customers and boost sales across all its services.

Promotion- For promotional activities, Amazon should focus on an impersonal marketing

strategy which is focused on advertising, and sales promotions on its e-commerce website. Some
major brands like Puma are an ideal example of paid and impersonal marketing strategy which
has helped them attain a larger market share in the UK (Week 7, Topic 3). The use of the most
famous and used products in advertising and promotion would be effective for Amazon to create
a strong brand image and make the best use of its existing strong market position.

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