Marketing research - Woolworths South Africa free essay sample

The Existing Gaps Between The Producer and The Consumer] Retailers can be considered as middlemen or go-betweens, whereby they acquire an array of consumer products from suppliers and then offer these to the public at a retail price (Cant Van Heerden, 2010). It is not common practice for the consumer to go directly to production houses and make their purchases, as that would be rather inconvenient, time-constraining and perhaps even expensive when considering the distances and number of trips that need to be made. 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 (Cant Van Heerden, 2010). The space gap is the actual physical distance between the manufacturer and consumer (Cant Van Heerden, 2010). One way in which Woolworths 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, Woolworths is a brand of producer in itself. We will write a custom essay sample on Marketing research Woolworths South Africa or any similar topic specifically for you Do Not WasteYour Time HIRE WRITER Only 13.90 / page 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), Woolworths transports their retail products from their production/distribution 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 (Cant Van Heerden, 2010). Woolworths 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, TasteMag Online, 2010) Woolworths 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, features, prices and so on, of current and new products. If there were no advertisements and marketing done, consumers would have to literally stumble upon a product and further enquire, or hear it from other people who have experienced it. 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 (Cant Van Heerden, 2012). Woolworths 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, Woolworths 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 for it and wait for the title deed to be in his name (Cant Van Heerden, 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. Woolworths 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 Woolworths 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 Cant and Van Heerden (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, Woolworths 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 the price. The retailer’s marketing team churn out creative, tasteful, relevant and concisely informative advertisements. They pay attention to detail and aesthetics, and like most marketers, strive to tap into consumers’ psychology. Subtle coercions 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 Woolworths] Marketing activities are those activities used to transfer the market offering to the buyer and fall into three categories, namely: primary, auxiliary and exchange (Cant Van Heerden, 2010). The primary marketing activity is transport and the purpose of it is to deliver the product to the consumer safely and timeously (Cant Van Heerden, 2010). Any means of appropriate  transport can be used e.g. road, sea, air freight and rail. Woolworths 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. Woolworths’ employs the use of advanced trucks which are equipped to cater for the secure storing of goods, as well insulation and refrigeration of them where necessary. In 2010, Woolworths became the first South African retailer to adopt the ecoFridge refrigeration systems in their vehicles (Hartigh, Media Club South Africa, 2010). This system allows for more effective temperature control which a variety of Woolworths’ 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: sourcing supplying of information, standardization grading, storage, financing and risk-taking (Cant Van Heerden, 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 (Cant Van Heerden, 2012). Woolworths 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 Woolworths. 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 (Cant Van Heerden, 2010). Woolworths 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 of this auxiliary activity. Woolworths’ eggs are differentiated in type and if no labeling is present to indicate to the customer about the quality and attributes of the eggs, the customer will be clueless and dissatisfied. Thus Woolworths 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 Woolworths 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 (Cant Van Heerden, 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. Woolworths 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 Woolworths’ 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 (Breda, Food and Beverage Reporter Online, 2007). As the years have gone by the magnitude and effectiveness of storage carried out by Woolworths 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 Cant and Van Heerden (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. Woolworths has demonstrated its financial prowess by convening the cost variables of local international suppliers, corporate 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 Woolworths. 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 (Cant Van Heerden, 2010). Woolworths 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. Woolworths 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’s retail policies it may or may not have a warranty. Then again, warranties generally cover problems that arise from a faulty product or poor workmanship and 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 (Cant Van Heerden, 2010). Woolworths’ purchasing department concerns itself with the buying activities whilst the marketing department deals with selling activities (Cant Van Heerden, 2010). The buying and selling process occurs between Woolworths and their suppliers, as well as between Woolworths 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 Woolworths cannot demand anything as such but simply welcome sales assist where required. [Question 3 – Woolworths’ Marketing Orientation] The marketing orientation of a business strongly influences the marketing activities that it carries out (Cant Van Heerden, 2010). There are four main competing orientations, namely: production, sales, marketing, and societal marketing –orientations (Cant Van Heerden, 2010). Based on the knowledge that I have gathered on Woolworths and the four main orientations, I posit that Woolworths’ marketing orientation is a societal marketing one. In fact, as a consumer of theirs myself, their marketing activities and vivid focus on eco-friendly and sustainable practices all make much more sense now. According to Cant and Van Heerden (2010), this orientation convenes the satisfaction of consumers’ needs, wants, and demands, the business’ endeavors to improve society’s 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. Woolworths 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, Woolworths 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 statements, 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.). Cant and Van Heerden (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 would, whereby they have to effectively integrate their efforts towards two different entities. Whilst a tedious task, Woolworths  left no stone unturned to meet this challenge.