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Costco marketing segmentation
Retail evolution in india
Costco marketing strategy
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ORGANISATION TYPE COMPETITIVE ADVANTAGE THREAT
Coles Current substitute By offering the same or similar products like Woolworths and with a better customer loyalty scheme, Coles is a current substitute. The revenues for Coles are projected to grow in the next five years as they look to tackle both Woolworths and ALDI, by revamping its private-label inclusions.
Very High
ALDI Potential substitute With its low cost model and better range of private-label goods, ALDI takes a large of customers from the 1st, 2nd and 3rd quintiles from Woolworths. There also has been increasing positivity in consumer sentiment on private-labelled goods. This only add to the increasing the threat of ALDI to Woolworths.
Very High
COSTCO New entrant Costco Australia is a subsidiary of US-based Costco Wholesale Ltd. Since 2009, Costco has provided an alternative to traditional supermarkets and grocery stores. Costco offers low-price
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products in a wholesale format to customers who purchase memberships. The competitive strategy of a hybrid on low cost focus.
Most Costco stores in Australian are located in suburban or regional areas where there are limited transport options. Since most of their goods are sold in bulks, this attracts time-poor customers and families to stock up on essentials, limiting their grocery shopping. Costco also, attracts niche market segment that Woolworths ignores, i.e. the small business owners by being a one-stop shop for their business supplies.
Costco also, takes the concept of “one-stop” shop to expand its product offering to include whitegoods, electronics, clothing etc. This customer appeal is universal, especially among the first four quintile groups.
High
IGA Potential substitute Independent Grocers Association(IGA) is part of Metcash Limited. The parent company manages a portfolio of brands that independently owned stores, IGA. Metcash is responsible for the purchasing, merchandising, warehousing, marketing and distribution of products to stores. Individual store operators are then responsible for day-to-day
operations. However, IGA-branded stores have lost market share over the past five years. This is resulted in the parent company to take-up a new strategic direction which involves price-matching and emphasising the important of local suppliers to socially-conscious shoppers. However, this new strategy is the in early stages of implementation to carefully asses its threat to Woolworths. Low Convenience and local grocery stores Potential substitute Local convenience stores like 7Eleven are able to attract impulse shopping, especially during late nights. However, the percentage of sales is low without any significant threat. Another substitute might be local grocery stores that sell organic and local products to appeal to “foodie” segments. However, a new venture and Woolworths has made some attempts to draw this segment through the Macro and Gold food brand. Low Harris Farm Markets Potential substitute Harris Farm Markets owned fruit and vegetable business across NSW. Its competitive strategy is product differentiation. They provide a far greater variety of fresh produce than Woolworths. They focus on customer experience and loyalty, giving customers incentives for referrals. Recently, the company has made a venture to digitalise their business, updating their IT systems and introducing online shopping. However, the lack of availability of other product lines and overall, less agile and lack of presence across Australia, have stagnated Harris Farm Market’s growth. Low
There are ten elements needed to survive a zombie apocalypse: a steady food supply, clean water, medicine, transportation, gas, a defense system, a sturdy shelter, a safe place to sleep within the shelter, weapons, and simple tools. Costco supplies all of these items. According an article in The Concordian, “If you asked 100 people where they would hide during a zombie apocalypse, 98 would say Costco. Costco is a vast market that sells basically anything you would need to live there permanently” (Menexis). Unfortunately that still leaves those two out of one hundred people that disagree. Those people say that Costco would be an unwise place to be during the apocalypse because of its sheer size. They state that the massive size of a Costco store is too big for a person or even small group of people to defend. While this argument has a logical line of thinking behind it, there are several factors that render this viewpoint invalid. Costco does not need a huge defense system because it is literally a huge warehouse. This means that Costco is essentially a huge concrete box with two ope...
Their boards are similar in member size (Walmart with 12 and Costco with 13). Both companies also advocate for a separate CEO and Chairman. They also have a similar number of meetings per year (Walmart 6 and Costco 5) (Spencer 4). Both companies also utilize executive sessions and Costco, like Walmart, has at least two executive sessions a year for independent directors (Costco 11). Finally Costco also has a code of ethics that applies to all employees, directors and executives. They
Another point can be the innovational shopping techniques put forward by the CEO, like the self service checkout stations which tries to provide some form of quality service for the customers.
Our decision is to invest in Wal-Mart. The choice for Wal-Mart is on the basis that their functional-level strategy is really robust, nevertheless of the fact that they do not treat their employees well. The fact remains that they are financially stronger, have a better business-level strategy, and have a corporate-level strategy than Costco. Costco v. Wal-Mart: What must we learn about them? Let start with Costco. Costco is Wholesale, Retail Corporation which operates an international chain of membership distribution centers that provides quality, brand name merchandise at noticeably more affordable rates than a conventional wholesale or retail sources. Costco 's warehouses display the largest and great product categories such as groceries, candy, appliances, television and media, automotive supplies, tires, toys, hardware, sporting goods, jewelry, watches, cameras, books, house wares, apparel, health and beauty aids, tobacco, furniture, office supplies and office
In the warehouse segment, Wal-Mart’s Sam’s Club competes harshly with Costco. Costco has fewer warehouses but greater sales and revenues. Costco customers also shop at Costco more frequently than Sam’s Club customers and, on average, spend more each visit as well. Costco’s dominance may be the result of better innovation. Costco offers luxury items and was the first to sell fresh meat and produce, and gasoline. This is important because innovation is a key factor in assessing competitors in an industry.
As for the second issue, it seems that Costco’s efforts to become an international company are moving slowly. They have not reached a point where their US and Canadian warehouses provide a backbone for their finances. Costco’s third issue is their expenses, which include merchandising costs and pre-opening expenses, have been increasing steadily and they need to balance this out to keep a positive net income. Analysis: Key Issue #1: Costco has many competitors, with the primary two being Sam’s Club, a wholesale business managed by Walmart, and BJ’s wholesale club. Sam’s Club offers the same services as Costco.
Due to the extended services Albertson's offers such as a butcher, baker, and gourmet coffee bars, they are able to outperform Wal-mart in urban areas. Other than the current contenders in this market, I don't feel that Albertson's has any major worries, such as new entrants or other substitutes. 2) Information systems play a very significant role in Albertson's business strategy. From corporate office functions to customer interactions, they are committed to providing leading edge technology. They are taking their core business functions and enhancing them with technology, not only from their own industry, but also from others.
Oliver’s market competes with rivals by its pricing strategy. They set their everyday prices on traditional grocery items eight to ten percent below Safeway’s prices. They also price its natural foods just below Whole Foods. Beside that they use promotion and advertising as another weapon to compete in the market. They have a Direct to You program that offers a ten percent discount to seniors on Wednesdays before 4:00 p.m. They also have a staples program which compares prices to Safeway for everyday items.
Big rivals such as Tesco and Morrisons started to compete in price by shrinking packages, introducing cheaper equivalent products, or using cheaper ingredients. Although these strategies cause a sluggish revenue increase, it works on boosting sales and market shares. For example, Tesco’s sale grew by 2.2 percent during July to September. Apart from the traditional retailers, Aldi who applies a similar discounter model is also a strong competitor. In 16th July, the market share of Aldi was 6.2% while Lidl occupied 4.6% of the market (Gale,2016) Compared to Lidl, Aldi has a more dominant market position and better corporate with local farmers. To stand out from these rivals, Lidl still has a long way to go.
As ASDA has joined the Wal-Mart family, ASDA stores are working much more better and making more profits from a large number of customers due to attracting more customers to achieve both of the ASDA and Wal-Mart products under one roof. ASDA has more socio-cultural and economic aspects and ASDA's main competitors would be stores like Tesco, Sainsbury, Kwik Save, etc.
As well as these shops there is competition between multiple different stores. These stores include Vodafone and Telstra, Coles and Aldi, Price Attack and Priceline, Noni B and Suzanne Grae, Bank SA and Commonwealth Bank and Prouds and Zamels. (Directory 2016)
Walmart has thin profit margins, which leads them to cut costs, as much as possible. Thin margins are an effect that is caused by using the cost leadership strategy. Since Walmart prices are so low, they must reduce their operating costs. They can do this by lowering their workers hours, developing new technology to speed up efficiency in stores, and by lowering worker accidents and liabilities. In turn, however, this may also cause more employee and customer accidents because, with cutting costs, comes more risk. While stores are trying to cut costs, the inventory side of the business can be problematic.
The food and staples retailing is an increasingly competitive industry. The market giants (competitors) are Coles (owned by Wesfarmers) which has 741 stores across Australia and plans to add 70 m...
Woolworths is one of the biggest retail group in Australia. Its motto is to provide fresh food to customer with in an affordable price. The company procures goods from the manufactures and also produces few products from their manufacturing plant. With its corporate office in Sydney it operates all the distribution channels, petrol sites and support centres. It has a trusted food, liquor and general merchandise brands.
customers convenient shopping that aims to fulfil all of their expectations and requirements under one roof. A major focus for Coles has been to tailor store product ranges and concepts to meet the needs of the local residents.