This gives rise to particular gaps between the consumer and the producer, namely: space, time, Information, ownership and value, all of which can be closed by retailers (Can’t & Van Harden, 2010). The space gap is the actual physical distance between the manufacturer and consumer (Can’t & Van Harden, 2010). One way in which Woolworth successfully bridges this gap is by means of store numbers and locations. Unlike most other retailers, who typically approach production houses, such as Nestle or Albany, to buy their products and re-sell them, Woolworth is a brand of producer in itself. If consumers seek out their goods and services then no middleman is required; the company caters for easy customer access. However, as a producer of goods (not a retailer), Woolworth transports their retail products from their production/ striation warehouses, via road (trucking), to bridge the existing geographical gap.
The second gap Is the time gap. This comprises of seasonal and/or perishable goods which are not consistently available and require measures such as Importing or freezing so that consumers may have access to them (Can’t & Van Harden, 2010). Woolworth imports, freezes and refrigerates as means of closing the time gap because they offer a significant amount of perishable and/or seasonal goods, such as fruit, vegetables, seafood, meats and cheeses.
For example, avocado pears are only available here in the first nine months of the year and therefore had to be imported from Spain to meet consumers’ demand for it (Anon, Taste Online, 2010) Woolworth abides by the relevant guidelines to ensure that when their local or imported produce is in transit or at their outlets, the cold storage is correct. They do so to prevent decay, prevent loss of firmness and shape, to retain taste, and so on, so that there Is no barrier between their consumers and the products that they want. The third gap Is the Information gap.
Typically, consumers are unaware of the utility, theatres, prices and so on, of current and new products. If there were no advertisements and marketing done, consumers would have to literally stumble upon Any business enterprise would do poorly if this remains unresolved. Thus, the gap is the ignorance of consumers and the bridging is done by marketers (Can’t & Van Harden, 2012). Woolworth regularly endeavors to inform their customers and the general public about products and services on offer, which is achieved through advertising.
They do so via newspaper, magazine and pamphlet (print), as well as via television and the internet (media). Apart from the creative, enticing, concise and informative ads, Woolworth goes a step further. On the majority of their products itself, if not all of them, they include what I perceive as relevant information. Take a bottle of their Acacia Honey, for example. As a consumer, I became aware of this offering by means of a newspaper advert, however, adverts, by nature of them, do not give detailed information.
On the bottle itself there’s clear indication of the product being strictly vegetarian (a common query with vegans); there’s indication that the product is ‘badger friendly (for consumers who need to know whether the manufacturing of the product tallies with their ethics or belief systems); there is a piece of product information which informs the consumer that, should the honey crystallize, it is not a cause for concern or indicative of spoilt honey; there are a serving suggestions, as well as a food for thought’ section.
All of this is done above and beyond the typical information that legislation requires on products. Thus, they bridge the information gap in two ways. The forth gap between consumer and producer is the ownership gap. If a consumer desires to own a house, he has to pay or it and wait for the title deed to be in his name (Can’t & Van Harden, 2010). The interim and any pending actions between a consumer’s actual state and desired state, in terms of purchasing, are what form the ownership gap. Woolworth offers products at their outlets and caters for means of paying for it.
There are clearly designated paying terminals in every store, which are equipped with cash registers, card machines and adequately skilled staff. This facilitates the exchange that the consumer wants to make; handing over their money in return for ownership of products. The ownership is displayed through till receipts or proof of card purchases, which Woolworth gives to the customer. To further facilitate exchange and bridge the ownership gap, they also offer financial services and assistance, whereby should consumers require cash loans to make purchases; they can provide them with the loan.
The retailer also has a system in place which allows customers to technically ‘purchase’ products without paying upfront and this is done by means of store cards and accounts. Whilst there is a delay in actual ownership, this is one more way of closing the gap. The fifth gap is the value gap. As stated by Can’t and Van Harden (2010), a seller and a buyer must decide on an acceptable rate of exchange, and should the buyer agree on a set price, it means that the buyer attaches the same value on the product as the seller does. Price vs.. Quality is one of the salient considerations which go into the purchasing of goods and services and the onus is on the retailer to convince the consumer. As touched on under the information gap, Woolworth takes great care to produce effective marketing. If their advertisements are studied, it is often apparent that the product which is being marketed is worth he price. The retailer’s marketing team churn out creative, tasteful, relevant and concisely informative advertisements.
They pay attention to detail and aesthetics, done by retailers are generally effective, and, in my opinion, if their turnover and popularity are anything to go by, they are definitely successfully bridging the value gap as well. [Question 2 – The Marketing Activities Carried Out By Woolworth] Marketing activities are those activities used to transfer the market offering to the buyer and fall into three categories, namely: primary, auxiliary and exchange (Can’t & Van Harden, 2010). The primary marketing activity is transport and the purpose of it is to deliver the product to the consumer safely and timorously (Can’t & Van Harden, 2010).
Any means of appropriate transport can be used e. G. Road, sea, air freight and rail. Woolworth largely uses road transport where the shuttling of goods between production houses, distribution centers and retail outlets are done with a fleet of trucks. Whilst the company aims for speedy and safe delivery, extenuating circumstances at times may delay transportation. The type of vehicles used ensures the safety of the goods. Woolworth’ employs the use of advanced trucks which are quipped to cater for the secure storing of goods, as well insulation and refrigeration of them where necessary.
In 2010, Woolworth became the first South African retailer to adopt the covering refrigeration systems in their vehicles (Haring, Media Club South Africa, 2010). This system allows for more effective temperature control which a variety of Woolworth’ goods require. The retailer also uses sea freight to conduct the primary marketing activity. This is for the fresh produce that is imported from overseas locations. The next marketing activity is referred to as auxiliary and comprises of the following: rouging & supplying of information, standardization & grading, storage, financing and risk-taking (Can’t & Van Harden, 2010).
Sourcing and supplying of information pertains to the seller knowing who and where potential customers are and, thereafter, conveying the relevant information to potential buyers through advertising or personal selling (Can’t & Van Harden, 2012). Woolworth has carried out extensive marketing research in order to assimilate their target market and potential customers. This has been done through quantitative and qualitative data collection, surveys, the studying of market trends and consumer behaviors, identifying demands and unexploited markets, testing prototypes and so on.
This task is carried out by the marketing management employed by Woolworth. A broad category of their consumers are considered to be upper and middle class individuals who seek out quality goods and services. Once the foundation is laid and objectives are defined, marketing management go on to supply potential consumers with the information that they want them to know. This is done via marketing activities such as commercials, campaigns and printed media. The second factor under auxiliary activities is standardization and grading.
This refers to the classifications of retail products to assist consumers in distinguishing between the ever-increasing numbers of differentiated products (Can’t & Van Harden, 2010). Woolworth has such a large and vast range of products and services on offer, that it wouldn’t be conducive to discuss each one. However, examples will further illustrate the practice and necessity is present to indicate to the customer about the quality and attributes of the eggs, the customer will be clueless and dissatisfied.
Thus Woolworth uses grading guidelines to indicate the standard, quality and type of the different eggs to the customer, e. G. Grade 1, Grade 2, Jumbo, Extra-Large, Organic and such. This gives the control back to the customer whereby he/she makes an informed, willing decision. Other examples of items that are graded at Woolworth include wines, certain fruit and vegetable, meat, poultry and condiments. The majority of their edible products is of organic standards and indicated accordingly.
The third auxiliary factor is the storage of goods and the closing of the time gap (Can’t & Van Harden, 2012). As discussed under the time gap in the prior question, certain produce requires the appropriate storage so as to ensure consumers get a regular, fresh supply of goods. Woolworth uses large warehouses to simultaneously store and preserve their products for various periods of time. These warehouses are constructed or sought with the most stringent guidelines in place pertaining to features, insulation, durability and efficiency.
The online Food and Beverage Reporter (2007) discussed one of Woolworth’ storage and distribution centers; at the time, the 78 000 sq meter building was the largest retail distribution centre in South Africa and the storage area was one of the largest insulated structures in Africa (Bread, Food and Beverage Reporter Online, 2007). As the years have gone by the magnitude and effectiveness of storage carried out by Woolworth has increased to facilitate the huge numbers of goods which go in and out of their warehouses. Thereafter is the aspect and activity of financing.
According to Can’t and Van Harden (2010), there are a number of costs incurred in the transferring of products from seller to buyer, all of which are usually financed by financial institutions, and these costs must be kept minimal so as to ensure customers are offered viable retail prices. Woolworth has demonstrated its financial prowess by convening the cost variables of local & international suppliers, report social responsibility, high quality products and amazing advertising, and then still somehow stipulating reasonable retail prices.
I was unable to ascertain what the clear financial goings on were, regarding their bankers, portfolio managers, financial institution and such due to that info being typically unavailable to the general public. However, I do posit that what would matter more than the bank or financial institution employed is the sound financial sense of the individuals who control the fiscal operations at Woolworth. The last factor under auxiliary marketing activities is risk-taking.
There is a substantial amount of risk concerning the loss or damage of goods, these of which are extended to both the retailer and consumer and therefore necessitates the procurement of insurance (Can’t & Van Harden, 2010). Woolworth use both road and sea for transportation of their goods and should something untoward occur, such as the ship sinking or a truck catching on fire, the goods being carried will be damaged or lost entirely. Woolworth strategically pays monthly dividends towards insurance policies which in turn will refurbish them with the full amount, provided that those particular goods were covered by the policy.
Any retailer should ideally be proactive and/or have a contingency plan regarding the risk being carried. With regards to the consumer carrying any risk, depending on Woolworth retail policies it may or may not have a warranty. Then again, warranties such, not if the consumer meets in an accident or has a calamity at home whereby the product gets damaged in their personal capacity. The last of the three distinguished marketing activities is that of exchange. Exchange refers to the buying and selling process where ownership is transferred from person to the other (Can’t & Van Harden, 2010).
Woolworth’ purchasing department concerns itself with the buying activities whilst the marketing department deals with selling activities (Can’t & Van Harden, 2010). The buying and selling process occurs between Woolworth and their suppliers, as well as between Woolworth and their customers. The principle of exchange is the same but the actual activities differ, in the sense that the way the retailer deals with the supplier is in the form of a customer and when consumers are part of the exchange process, the roles are reversed and Woolworth cannot demand anything as such but simply welcome sales & assist where required.
Question 3 – Woolworth’ Marketing Orientation] The marketing orientation of a business strongly influences the marketing activities that it carries out (Can’t & Van Harden, 2010). There are four main competing orientations, namely: production, sales, marketing, and societal marketing – orientations (Can’t & Van Harden, 2010). Based on the knowledge that I have gathered on Woolworth and the four main orientations, I posit that Woolworth’ marketing orientation is a societal marketing one. In fact, as a consumer of theirs myself, their marketing activities and vivid focus on CEO-friendly and sustainable raciest all make much more sense now.
According to Can’t and Van Harden (2010), this orientation convenes the satisfaction of consumers’ needs, wants, and demands, the business’ endeavors to improve society well-being, as well as the company’s profit seeking activities. I perceive that this type of marketing orientation lends itself to those organizations who don’t merely comply with basic corporate social responsibility, but who firmly and genuinely believe in ethical business practices amongst other things. Woolworth feels very strongly about both; they visibly act on their passions and don’t Just forward lip-service.
The retailer launched a 5 year plan called The Good Business Journey which outlined the targets and commitments of the business specifically related to business development, community development and environmental sustainability (Anon, Woolworth Online, 2012). As per my own understanding, the marketing orientation that a business chooses to abide by serves as a guideline where the business’ marketing objectives are outlined and can be referred back to each time, so as to keep the business centric to its stipulated objectives and desired outcomes.
This displays similarities to business mission tenements, however, this orientation is meant to give external factors (pertaining to society and the environment) an equal value as the internal goings on of a business (consumer satisfaction, maximizing business profit, exploiting opportunities, etc. ). Can’t and Van Harden (2010) state that the organization should firstly determine the requirements of their target markets, then go on to deliver their services and wares in such a manner that the prosperity of both the consumers and society is improved.
This would require the business to further multi-task more than a regular business loud, whereby they have to effectively integrate their efforts towards two different entities. Whilst a tedious task, Woolworth left no stone unturned to meet this energy saving, water conservation, recyclable materials, sustainable fishing, social development, and support towards wildlife (Anon, Woolworth Online, 2010).
The company found many innovative ways to mesh their consumer service and social service, such as: introducing ‘Every Paw Print Counts’ products which, when bought, a financial contribution is made to wildlife funds; sourcing their fruit and vegetable reduces for retail from struggling farmers or start-up businesses and subsequently helping them to develop; by providing customers with reliable shopping bags which are made from recycled materials; implementing development programs for their staff which allows workers to either acquire or further develop their skills and abilities, which leads to better pay for workers and loyal, committed employees for Woolworth, so on and so forth (Anon, Woolworth Online, 2010).
Whilst the retailer juggles numerous social and environmental endeavors, they do not lose focus on their clientele. They continue to pay undivided attention to their consumer market at large as well as to groups under their segmentation model. At regular intervals the business rolls out new clothing ranges, improved existing ranges, variable meal options, more innovative homeward and general goods, target-specific advertisements, benefits such as loyalty cards, competitions, fashion vouchers, amongst many other things. This, along with their successful sales figures is indicative of the fact that they have not lost their bottom-line focus of what the business was created for, biz. To earn a profit.
Woolworth Good Business Journey was et with great enthusiasm and support because a substantial portion of their target market is sophisticated, educated and concerned about sustainable business practices and depreciation of both society and the earth. A visible balance exists between their consumers’ needs and wants, their consumers’ long-term interests, society long-term interests and Woolworth’ long-term financial goals (Can’t & Van Harden, 2010). The manner in which the company supplies information to consumers, as well as the information content, always conveys Woolworth’ messages from their Good Business Journey plan, hence, the marketing orientation of the many strongly influences its marketing activities. Question 4 – Woolworth’ Emphasis On Relationship Marketing] Relationship marketing places its main focus on the maintenance of long-term relationships between the organization and all its stakeholders (Can’t & Van Harden, 2010). Woolworth places a great deal of value on all of its business relationships and subsequently achieves synergy when all the game-players convene to produce positive work. The company deals with their stakeholders in a sincere manner and contributes in various ways to the betterment of each. Woolworth stated that one of their strategic objectives was to build strong, profitable customer relations and one means of doing so was the launch of their Warders Loyalty Program which gave consumers something back for their loyalty and business (Anon, Fast Moving Online). With over 3. Million customers, Woolworth works with a segmentation model which they use to understand and meet customers’ needs (Anon, Woolworth Holdings). They also constantly monitor customer satisfaction levels and opt to get valuable customer insight via feedback facilities such as a consumer help desk, help-lines impiously and typically provide customers with the relevant information or assistance. This is all done to build better ongoing relations with their consumers and to retain their business. Regarding potential customers, Woolworth looks to them as the future of their sales and strive to seek them out and bring them on board with the brand.
Various methods are used to see if there are any opportunities to exploit in the market environment, where a potential market exists and is not being catered for or perhaps dissatisfied consumers who are looking for better retail experiences. In terms of suppliers, Woolworth seeks raw materials both locally and internationally, providing revenue income and an improved reputation for those suppliers. They have selected access to Marks & Spence’s intellectual property regarding production and process technologies, which Woolworth willingly shares with their suppliers (Planting, Biz Community Online, 2008). Woolworth’ investments in its suppliers, a number of which are start-ups or struggling, has visibly helped their growth and development.
For example, Chubby Chick, a fresh-chicken supplier that began supplying the Woolworth store in Photoreceptor in 1995, grew on to be a lion-rand business in its own right (Planting, Biz Community Online, 2008). Woolworth’ assistance to suppliers are extended to helping women in poor communities or struggling farmers so that they can earn an income or transform their small businesses into units capable of supplying significant numbers of goods to Woolworth (Planting, Biz Community, 2008). At the time the article on Biz Community was written, the number of small business initiatives that were being helped by the retailer is said to have stood at approximately 50. Woolworth also visibly extends its courtesies, assistance and care to its employees.
The retailer includes the following to maintain good relationships with their staff: All buildings are designed with stringent health and safety regulations; 14 occupational health practitioners are there to provide free counseling to employees; full education and support pertaining to HIVE/AIDS; a wellness testing campaign providing employees with free HIVE/AIDS, diabetes, cholesterol and IBM tests; the company is both BEE compliant and supportive; various training and development programs are provided; and the company supports employees with disabilities (Woolworth Holdings Online, 2012). Woolworth also encourages employee feedback to rate their experiences working for the company.
A large amount of consideration, respect, support and professionalism towards their staff, inadvertently sets up the framework which could potentially attract key future employees. Apart from customers, employees and suppliers, Woolworth works closely with the government to assist in bettering the social and economic conditions. The first example of their endeavors is called Débutant, where the retailer Joins Engine, the Abs Foundation, Department of Basic Education, Dept. Of Water and Environmental Affairs, and the Dept. F Agriculture to assist South African schools in developing prematurely food gardens (Anon, We Can Change Online). The retailers’ second endeavor revolves around Orphaned and Vulnerable Children, where they work with the Dept. Of Health and Dept. F Social Development to offer support in uplifting children in impoverished conditions (Anon, We Can Change Online). There are other initiatives in which Woolworth can be seen in working with the government and that is once again indicative that this company groups, Woolworth has enlisted the support of many a successful and/or respected South African, as well as benefited from consumers’ predominantly positive word-of- mouth (Can’t & Van Harden, 2012). Over years the company have stated how they pride themselves in using what they describe as ‘real people’ in their advertisements, the kind of people who came from humble beginnings, worked hard, became successful and remained humble.
Examples include soccer player – Lucas Reader, model and entrepreneur – Shish Naiads and Lira, a famous South African music artist. The fact that many diverse celebrities choose to support or work for Woolworth demonstrates the benefits of having good relations with reference roofs. Regarding the reference group(s) who market Woolworth by word-of-mouth, I perceive that there are copious amounts of consumers who advocate Just how ‘amazing’ Woolies (as it’s fondly known) is. By ensuring their business is run with competence and wide-spread consideration, the retailer inadvertently creates positive word-of-mouth where not only current customers are retained but new ones are gained. [Question 5] [Q. 5. – A Brief Outline On Woolworth’ Micro & Market Environments] The micro environment refers to the internal variables within Woolworth which can be enthroned by management, such as the mission statement, skills, resources, abilities and marketing instruments (Can’t & Van Harden, 2010). The shaping of Woolworth’ mission statement is done by the company itself. They have freedom to draw it up as they deem fit. The statement indicates the company’s target market, objectives and the direction in which it is going, all of which without the business cannot be effective and continuous (Can’t & Van Harden, 2010). The onus is on the business to stay on track with the objectives which they themselves have drawn up as this is entirely in he control.
In accordance with the mission statement and objectives, an adequately sized target market must be chosen to ensure the longevity and growth of the company (Can’t & Van Harden, 2010). Woolworth has defined their target market at large after varied independent research and then went on to compartmentalizing their consumers into smaller groups. A broad view of their consumers would be the upper and middle class individuals and families who seek out high-quality goods and services. Woolworth’ management construct, influence and re-invent customer perceptions at their own discretion. Woolworth’ staff comprises of hundreds of employees, all of which report to their respective managers.
The relevant departments at the company set out their guidelines and protocol for employees. The company can decide on what skills are necessary, the numbers and distributions of employees, the type of employment contracts, disciplinary codes, behavior codes, so on and so forth. Should a weakness crop up in relation to staff, Woolworth can immediately strive to overcome it with their internal operations. Woolworth’ resources include their human, capital and natural resources, along with the entrepreneurship behind the company and the finances which are at their disposal. The onus is on the key management employees in various departments to efficiently and strategically make use of these resources.
The organization decides on how to Woolworth and its micro environment. The skills and abilities of current employees are to be combined with the resources and used to exploit opportunities or counteract threats (Can’t & Van Harden, 2010). Lastly, there are the marketing instruments, namely, product, price, place and promotion, all of which are within the micro environment and therefore controllable by management (Can’t & Van Harden, 010). Due to the fact that Woolworth tirelessly strives to meet the changing, varied and sophisticated needs, wants and demands of their customers after thorough research, they are able to decide on and offer products accordingly.
Their chosen offerings include groceries, pre-cooked meals, a range of desserts, meat products, homeward, baby products, clothing, shoes and make-up, amongst other things. When determining the prices of these products, Woolworth has to consider the products cost prices (inch. Shipping and handling fees), market value of the product, competitors prices, consumers’ willingness to pay stipulated amounts and the economic climate (Can’t & Van Harden, 2010). The Woolworth purchasing department has to keep such things in mind when purchasing the raw materials and production labor itself. Then the costing department at Woolworth will assimilate and convene the incurred costs, choose a method on how pricing will be calculated and finally determine the shelf/retail price which will be offered to their customers.
With respect to place or location, management has mainly taken their consumers into consideration when determining the number of stores needed and in which areas. Management has had to observe customers’ buying patterns, behaviors and references, and then decide upon store locations and how the products will be distributed (Can’t & Van Harden, 2010). Due to their customers being upper and middle class consumers, Woolworth chose to open their stores in shopping malls, urban areas, cities/cosmopolitans and even smaller units at specific garages. For example, the outlet at Gateway Theatre of Shopping is rather large and offers all the varieties of their goods and services.
The outlet in Mount Combined, which is relatively close in geographic distance, is much smaller and only offers a portion of their wares. However, both stores are well received by patrons and are regularly busy due to the many considerations that Woolworth took in when aiming to meet customer needs depending on place. Last in the marketing mix is the factor of promotion. This encapsulates all the marketing communication methods used by the retailer to convey product information (Can’t & Van Harden, 2010). Woolworth’ marketing manager takes the company’s objectives, media trends, cost factors and such into consideration, and then decide on what marketing activities will be most effective.
This retailer uses television media, print media and the internet to carry its racketing messages. The adverts are entirely in keeping with the intended audience. All of the aforementioned variables are strengths in themselves for Woolworth. I say this merely because they have the locus of control and depending on their attitude, each one can be exploited effectively to create a superlative business organization. On the contrary, there exists the market environment. The market environment is located Just outside the business, comprises of three variables, namely: consumers, competitors and suppliers, all of which may be influenced by the business but not be enthroned by it (Can’t & Van Harden, 2010).
Woolworth’ suppliers are both local and vegetables, seafood, cheeses, wines and fabrics. Whilst the retailer may be unable to exert control over the macro environment or its variables, it can make choices to either adapt to it or influence it. Woolworth is aware that the framework, trends and issues pertaining to suppliers are beyond their control but they still have freedom of choice with whom they want to engage in business with. As stated by Can’t and Van Harden (2010), suppliers have to meet the required quality, delivery, price and other activities for the retailer because the supply of raw materials has a direct influence on the profit of the business and the eventual retail product prices.
As mentioned earlier, Woolworth is highly involved in encouraging struggling or start-up suppliers along with established ones. This is indicative of their choices at play as well as how they wish to influence this variable of the market environment. The next variable is that of consumers. Their needs, purchasing power and behavior patterns are very important to a business and need to be monitored to pick up on any threats or opportunities (Can’t & Van Harden, 2010). Under this variable fall all the details or segmenting of the company’s consumers, such as the gender, age and race groups, their education levels, marital status and such. The retailer chose its consumer group(s) and has the ability to make alterations to it.
Woolworth’ marketing management team is in charge of analyzing the consumer market and sifting out any threats or opportunities before they act to overcome or exploit these. They will need to turn to contingency plans as well as think on their feet, yet again demonstrating how the organization has no locus of control except on their reactions and adaptations which come from within. Lastly, there is the variable of competitors. Since almost every business faces competition, which often determines product prices, a business needs to have a target market large enough for their continuation, as well as understand the many different needs of its consumers (Can’t & Van Harden, 2010). Woolworth has both a broad view and segmented understanding of its customers.