Woolworths has selected Bangladesh to expand its business due to high customer base. The company, before entering into the market of Bangladesh, has conducted a thorough analysis of the market and address the issues that a retail company can face in that market. The customers, as well as managers of the existing retail companies in Bangladesh, are interviewed to gather information about the market response. Three different types of strategies are evaluated to enter into the market, which includes direct exporting, partnering and purchasing a company. Buying a company will be the most suitable mode of entry into the new market for the firm. The target market selected for the company is middle and high-income group falls between the age of 15 and 55. Multi-segmented marketing will be used for the chosen target market. The flexibility positioning strategy would be the appropriate positioning strategy for Woolworths because it enables the firm to manufacture products with new features that help to obtain competitive advantages in the foreign market.
Marketing Mix
Woolworths will use different marketing strategies to market its products in the new market. It is considered as one of the leading retailers in Australia and offers a variety of products to the customers. It will target the middle and high-income group people, along with the people comes under the age of 15 and 55. Hence, it will use different marketing mixes for each target market.
Product Strategy
PLC
Product Life Cycle is an essential part of marketing that explains the various stages through which a product moves (Pulker, Scott & Pollard, 2018). Four phases in the product life cycle which includes introduction, growth, maturity along with decline. It is seen that Woolworths product is in the growth stage in PLC currently. At the growth stage, the firm sets a product line and improves its product quality. The maturity stage shows innovation in the product and sales are at a peak to maximize profitability. Decline stage represents the fall of demand for the product in a market. However, Woolworths will introduce its goods in the target market and establish the brand. It means the company is in the introduction stage as it capturing the market of Bangladesh.
Branding
Branding strategy is the action plan that will be used by the organization for differentiating its products from the competitors in the foreign market (Makhitha, 2016). Brand positioning strategy will be used by the organization to position its brand in the minds of the target audiences. The company will position the brand on product qualities such as quality, design and size. Moreover, the firm will position the brand on beliefs and values by engaging consumers on an emotional level.
Packaging
It is the other important strategy that will be used by Woolworths for marketing the products in the new target market (Kienzler & Kowalkowski, 2017). Packaging will be used to motivate the target customers to buy the product. Woolworths will use this strategy to transmit information to the consumers about the product. The company will use numerous types of packaging products like cartons, bottles, containers, boxes, cans and bags. The most important use of packaging strategy is the protection of the products from environmental factors. It will assist the company in attracting many consumers in the new market.
Labelling
Labelling is crucial for the company to promote the product. The organization will use the labelling strategy for the recognition of the products and also give detailed information about the products. It helps the target customers to make buying decisions easily and quickly. Labelling communicate the way of handling or using the product to the consumers, and it means written information on the packages of the products (Davcik & Sharma, 2015).
Quality
It refers to the perception of the degree to which the products meet the expectations of the consumers (Cant, Wiid & Sephapo, 2016). Woolworths will improve the quality of the product to satisfy the target consumers. It is analyzed that if there is an absence of quality, then the company will not satisfy the customers. By improving product quality, Woolworths will fit its products as per the desires and expectations of the customers in the target marketplace.
Product Mix
It denotes to the total amount of product lines that a firm offer to its clients (Kireev et al., 2016). It consists of four components such as width, length, depth and consistency. Width means the enterprise needs to offer the quantity of product lines. The product mix of Woolworths is more than four products wide. The length is known to the total sum of products in the mix that means Woolworths has 6 production lines and 12 goods each for product lines and thus, the length will be 72 (Sultan, Wong & Sigala, 2018). Depth means the number of products within the product line. For instance, Woolworths has the number of products under the clothing product line. Consistency means the close connection of the products with each other.
Segments
Product segments refer to the strategy in which the business pull its product to appeal to the different market (Hollender, Zapkau & Schwens, 2017). It will help the company to work with the dynamic attributes of the products. Woolworths will make minor variations in some of the products and market the same to the target consumer group. Product segments will enable the organization to meet the necessities of the target crowds in the new market.
Augmented services
It is the strategy in which the company adds value to the product without paying any premium (Kotabe & Kothari, 2016). Woolworths will offer discount coupons for purchasing the product to market its goods in the new market. The augmented product refers to the non-physical part of the product.
Pricing Strategy
Penetration pricing strategy will be used by the company for attracting target customers to a different brand or product by offering a low price on the product. The primary motive behind this strategy is to attract buyers to try a new product and develop market share with a hope of retaining the new clients (Mahmood, 2018). Woolworths will advertise a buy one get one free campaign for attracting the clients to the retail store. Penetration pricing strategy will also help the company in gaining competitive advantage by selling products at a low cost.
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Factors
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Justification
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Average income
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Maximum people are in the category of income and the buyers are seen to be more price sensitive and thus, the average income should be considered.
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GDP
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GDP refer to total market value of the offered goods and service but the firm and thus, it is import to include while considering pricing strategies.
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Tax
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It can exploit the price sensitivity of the buyers and can promote the sales in particular geographic locations.
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Currency exchange rate
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Reduce supply in the market place and boost currency value
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Average Competitors Price
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Select strategic price for the products
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Cost:
– Production
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Control the production process
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– Distribution
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Average distribution cost
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– Labor
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Determine overhead costs
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– Material
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Put control on the usage of materials
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– Marketing
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Enhance demand and improve competition
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-Insurance
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Improve bottom-line
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– Travelling
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Target the budget travel and control fluctuation of capital
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– Shipping
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Increase the price of the product
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– Inventory
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Manage the inventory and increase the running costs
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– Advertising
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Connect with number of consumers and improve customer loyalty
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Place
Channels
Marketing or distribution channels are the ways through which products are obtained by the consumer from the producer (Sv?tlík, 2017). Woolworths will use social media channels and business to consumer channel along with intermediaries for selling its products to the target group. The middlemen will help the firm to reach to the consumers and distribute the products over the large area. The place is considered as one of the critical parts of the marketing mix.
Preferred Intensity of Distribution
The selection of the level of intensity of distribution of products is affected by various aspects such as pricing policies, dimension of the target market and production capacity (Valos, Haji Habibi, Casidy, Driesener & Maplestone, 2016). Since the size of the target market is large, the company will use intensive distribution strategy for its products. The organization will use the intensive level of distribution because it enables the marketer to supply the products to all the target market.
Place of Retailers
Place includes operating hours, space and location of the stores. Woolworths will set 12 hours of operation in an offline store and 24 hours of operation in online stores for the customers. It will also select an area that can easily attract consumers.
Communication Promotional Mix
IMC
Integrated Marketing Communication is known as the integration of all promotion communication tool that increases the impact on consumers (Bailey & Alexander, 2019). With of help of IMC, the company will bring a range of diverse communication tools to convey the note to the target clients.
Woolworths use the promotional mix through various ways which include TV, internet, direct mail, radio, outdoor and press classified. Several kinds of communication tools will be used for promoting the brand as well as the products, which comprises advertising, sales promotion, public relations, personal selling, direct and digital marketing (Bogomolova, Szabo & Kennedy, 2017). Woolworths will use advertising tool to promote the adoption of products in the target market. Because advertising assists in creating as well as maintaining brand equity that increase competitive advantages.
People
Training
The personnel are an essential component of every organization. Woolworths will require several workforces for its stores in the new foreign market. As the company entered into a new market, it will provide effective training to the employees. Because the customers will face the workforces for purchasing a product and training will help the staffs to maintain quality of service. The personnel will be trained by visual aids, programs, teamwork and mentoring. Training will enhance the skills and knowledge of the workers to perform a particular task (Mani, Gunasekaran & Delgado, 2018).
Recruitment
It is the process of finding candidates, reviewing applicants and selecting effective personnel for the firm (Amendolagine, Presbitero, Rabellotti & Sanfilippo, 2019). Woolworths will recruit trained as well as skilled staffs for the retail stores in the market of Bangladesh. It will also employ candidates from the local areas of Bangladesh because they would have enough knowledge regarding the market behavior of the consumers. Moreover, the company will hire those employees who possess strong relationship management skills and communication skills.
Occupational health and safety laws
The primary law related to the occupational health and safety in Bangladesh is the Bangladesh Labor Act 2006 (Tasnim, Rahman, Rahman & Islam, 2016). The occupational health and safety laws are significant because it prevents injury along with illness in the workplace. Woolworths will abide by the act in order to promote the health and safety of the workers.
Economic Evaluation
The objective of Woolworths is to obtain a 10% market share in 5 years. Therefore, the calculation of the total market is provided below:
Bangladesh has a total people of 163.05 million. Woolworths will mark initial adopters and innovators in the first two centuries and then, target the initial majority in the next year. Therefore, the entire market in the first two years is 163.05 million times (2.5% + 13.5% = 16%). It means 26.08 million is the whole market for the first two years. Woolworths will achieve 10% market segment so that the total market will be 26.08 million * 10% = 2.608 million.
The expected revenue is $26.08 million that the company will receive after five years.
In the first year, the corporation will have a 5% market share is equal to $13.04 million. In the second year, the firm will have 8% market share is equal to $20.864 million. In the third year, the firm will have a 10% market share, which is $26.08 million.
Ways to reduce the cost that could be acquired in the start-up
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Costs
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Reduction/Monitoring Process
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– Production
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The cost will be reduced by decreasing the material cost and eliminating non-value added processes (Rahman & Samiha, 2019)
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– Distribution
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It will be reduced by increasing efficiency
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– Labor
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Minimize overtime and invest in efficient technology
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– Material
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Eliminate unnecessary products and leverage suppliers
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– Marketing
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Adopt a strategic approach and analyze data
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-Insurance
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Raise the deductibles and decrease risk
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– Travelling
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Tighten up the corporate travel policy
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– Shipping
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Use online shipping
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– Inventory
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Ignore minimum order quantity and implement JIT inventory system
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– Advertising
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Create a focused advertising program
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Implementation and control
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Activity
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Responsible
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July
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Aug
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Sep
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Oct
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Nov
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Dec
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Market research
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PESTLE
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Marketing team
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ü
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Market Survey
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Research Analysis
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ü
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Production Plan
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Sourcing local producers
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Production team
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ü
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ü
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Sourcing local dealers
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Production sampling
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Analyzing the sample outcome
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Production & Marketing team
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Marketing Plan
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Market Analysis
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Marketing team
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Competitors Analysis
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Distribution research
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Sourcing effective local distributors
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Marketing team
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Recruitment
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Local employment
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HR team
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Training
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Training program
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HR team
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ü
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ü
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ü
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Communication Plan
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Activity
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Responsible
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Jul
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Aug
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Sep
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Oct
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Nov
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Dec
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Promotion Plan
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Event sponsor scheduling
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Marketing department
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ü
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ü
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Social media creating
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Sale promotion planning
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Budgeting
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Costs Analysis
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Financial team
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Pricing
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Estimating Price
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Financial team
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Product Launch
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Launching the Product into the market
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Marketing manager
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Feedback
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Gathering feedback of customer satisfaction and sale
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Sales and marketing team
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Annual report
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Giving essential information for Annual report
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Product manager
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Monitoring of Action Plan
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Activity
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Measurement
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Responsible
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Activity completion date(s)
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Memo
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Market Research (PESTLE)
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Regulate macro-environmental opportunities that will benefit the company
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Marketing Team
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One year before release date
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Opportunities must be reliable with company objectives
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Market survey
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Evaluate the wants and expectations of the consumers
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Marketing team
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One month
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Meet the needs
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Market Research and survey Analysis
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Control demand for the products
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Marketing team
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Two months
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Consistent with the product demands
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Sourcing local manufacturers
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Provide opportunities to make new contract with other businesses
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Production team
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Two months
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Align with the company’s goals
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Sourcing local suppliers
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Develop better relationships and enrich local culture
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Production team
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One to three months
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Develop better relationship
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Production sampling
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Determine the proportion of time spent in production
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Production team
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Six months
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Constant production process with simple technique
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Analyzing the sample result
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Check the accuracy of the production process
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Production and marketing team
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One month
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Meet the accuracy of outcomes
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Market Analysis
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Determine the attractiveness of the market
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Marketing team
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Three months
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Constantly produce products to attract market
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Competitors Analysis
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Evaluate strengths and weaknesses of competitors
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Marketing team
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Two to three months
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Grab competitive advantages
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Sourcing effective local distributors
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Consider the supply chain costs and bring revenue
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Marketing team
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One to two months
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Distributing products efficiently
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Local employee recruitment
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Determine the marketing knowledge and opportunities
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HR team
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Six month
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Skilled employee with expertise knowledge
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Training
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Evaluate skills and experience of employees
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HR team
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Three to four months
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Enhance marketing skills
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Marketing plan for Event sponsor,
Social media and
Sale promotion
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Capture customers interest and establish measurable goals
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Marketing team
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Four to five months
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Promote selling of products
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Budgeting
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Determine the performance of business
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Financial team
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One to two months
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Set financial budget
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Pricing
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Determine the overall costs
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Financial team
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One month
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Estimate low price for the products
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Product launch
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Evaluate the coverage of the products
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Marketing manager
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Two year
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Cover the features
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Collecting Feedback
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Analyze the opinions and views of the consumers
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Sales and marketing team
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Six to seven months
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Positive response
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Annual Report
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Determine the financial position and cash flow of the year
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Product manager
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One year
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Strong financial position
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Contingency Plans
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Activity
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Possible Issue
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Prospect of occurrence
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Modification
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Sourcing local manufacturers
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Quality
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Miscommunication
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Increase communication skills
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Sourcing local suppliers
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Poor communication
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Poor communication skill
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Enhance negotiation
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Production sampling
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Inadequate data
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Inappropriate use of technique
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Using advance technologies
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Local employee recruitment
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Less knowledge
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Hiring wrong candidate
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Selection of right candidates
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Training
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Lack of equipment
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Insufficient supply
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Use advance equipment
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Budgeting
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Lack of financial costs
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Low budget
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Set high budget
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Product launch
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Quality features
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Improper planning
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Advanced planning
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Exit Strategy
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Losing control
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Misunderstanding
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Keep control
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References
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