The Warehouse, is a New Zealand based company and is one its largest discount retailers offering a wide product offering ranging from Apparels, Jewelry, Fragrances, Gift sets, Books, Music, Entertainment, Gaming, Toys, Electronics, Sports and outdoor goods, Pet care, Home ware, Hardware, Gardening, Automotive accessories to Cards and Insurance policies. “The Warehouse Group Limited had adjusted net profit after tax excluding unusual items of $65. Million on sales of $1. 732 billion for the 52 weeks ended 29 July 2012. ” During the early ass’s in New Zealand, government policies and restrictions on imports and real estate had increased the prices of imported products for the middle income people and had confined their choice of products available in the retail market. For satisfying their basic needs they had to go to cities and shop in established department stores.
There was this large segment of people who were staying in the suburbs and could not afford high value products nor had the time to go to cities, these people were also demanding various other kind of products to satisfy their wants, which was unavailable at that time with the present players in the retail market. Established by Sir Stephen Tindal in 1982, The Warehouse filled up this gap starting its first store in Warier road, Auckland and currently operating through 92 stores across the country employing more than 9000 people. Assignment Outline
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This report is an analysis of The Warehouse (red shed), its market segment, target market and marketing mix. This report starts with explaining the theory of market segmentation and the application of this theory in determining the market segment of the Warehouse. It is followed by an explanation of the concept of target marketing and relating it to the target market of the warehouse . Next it discusses the concept of marketing mix with theoretical expansion of the 4 As ending with describing the image of ‘The Warehouse’ and how the ups helped in creating this image.
Demography takes factors like age, gender, marital status, income and education into inconsideration. Geographic factors take place or region in account. Chirography’s studies a customer’s life style, his likes, dislikes and his activities and Behavioral segmentation is based on the consumer’s response to price change, his patterns of buying and perceived product benefits. Warehouse is as a department store in the ‘low value-high volume’ market segment.
Considering the above mentioned criteria for market segmentation we can apply the theory and determine that the market segment of ‘The warehouse’ consists of low income, working class customers located n the suburbs and cities of New Zealand. They value family life, likes gardening, keep pets, and involve in sports and outdoor activities. This customer segment is very price sensitive, but buys more often and wants good quality products and prefers good service. TARGET MARKETING The concept of target marketing.
The process of evaluating each market segment’s attractiveness and selecting one or more segments to enter is termed as target marketing. (Armstrong et al. , 2102). This process helps a firm or organization in focusing its marketing effort towards a specific segment or a group of segments. Depending on the product, organizational goals, the size of the firm and the marketing resources available a firm may target only one ‘niche’ segment or alternatively focus on several related segments.
Another method can be to start with one segment and add more when business grows successfully. Large companies often target all market segments and try to serve them by offering a large variety of products to suit all their needs, wants and demands. The Target Market of ‘The Warehouse’ The target market of The Warehouse is Families. All of their marketing efforts are targeted to serve them. Their product, price, placement and promotion are all focused on this particular group.
MARKETING MIX (1) The 4 Product, Price, Place and Promotion also commonly known as the ups are the major factors or tools with which a firm or an organization operates in the market by offering a superior value proposition to its clients and customers and thus earning value back from them in return to achieve the objectives of its shareholders. These ups are combined together to form the marketing mix of a firm. The Concept of marketing mix Marketing mix is the set of controllable tactical marketing tools which that the firm lends to produce the response it wants in the target market. (Armstrong et al. 2012) business environment and also use variations of the all the As or some of them depending on socio-cultural and global factors. Multinational companies often use this variation technique to penetrate global markets and establishing their base. Elaborating on the UP;s Product – A product is a tangible or non- tangible object, which a firm produces taking in consideration existing or potential customer in their target segment and offer it to them by emphasizing on the benefits offered by these products to satisfy their need, ant and demand. Price – A price is the monetary value of a market offering which a consumer needs or wants.
This is an important factor of the marketing mix especially for firms operation in the volume market because the consumers in this segment are very price sensitive and are always on lookout of more favorable market offerings in terms of prices. Place – These are the set of activities which an organization implements to make its product offering readily and easily available to its target consumers. High paced urban lifestyle does not leave too much time available with people. Unless the reduce offering is exclusive in nature, consumers always have a choice of procuring it from other sources which are easily reachable and available.
Technological advancements have taken this factor of marketing mix to a different level altogether; today a firm needs to think of global customers and try and reach out to them for increasing their market share and profitability. Promotion – These are the set of processes which a firm undertakes to reach out to its target customers and explain the benefits of their products and services in such a way that the customer understands and retains the information while developing a favorable attitude towards the product offering and the firm as a whole.
This process helps the firm to create a distinct image of itself in relation to its competitor and results in pursuing the consumer to buy its products. In today’s time this factor also includes emphasizing the firms to social and environmental contribution due to increase consumer consciousness of sustainable growth and environmental effects of process and their hazards. MARKETING MIX (2) Brand image of ‘The Warehouse’ The tagging of the warehouse, “where everyone gets a bargain” is self explanatory enough.
The image of Warehouse is of a firm selling innovative, desirable products while offering the customer a wide range of choice across each product category at as top level priority. It combines this image with that of a Value for money retailer who satisfies customer’s basic needs and wants. The Warehouse links all these to an image of a sustainable organization who emphasizes on ethical work process internally and externally, and are sensitive to environmental impacts of its work process. It also promotes easy, honest, reliable and viable business transaction for its customer base.
While Where everyone gets a bargain’ still is and will always be The Warehouse’s mantra, we have further developed our positioning to also include Where everyone gets their essentials’. We are in a unique position in that we are both a variety store where kiwis shop for a treasure trove of bargains, parallel imports and fantastic WOW deals as well as a department store where kiwis shop for everyday essentials that their families need. ” The role of the ups in creating the image of ‘The Warehouse’.
Product – The Warehouse sells a wide range of products ranging from Apparels, Jewelry, Fragrances, Gift sets ,Books, Music, Entertainment, Gaming, Toys, Electronics, Sports and outdoor goods, Pet care, Home ware, Hardware, Gardening, Automotive accessories to Cards and Insurance policies and offers a lot of brand and product type choices across each category. This Justifies its image of offering lot of options to its customers. But as with every firm some of the products are the core customer pullers while the others are supportive offerings.
Reflecting on their results on the product analysis of the warehouse Strickland, Teetering, Fitches, and Messenger,( 2012) states that “Clothing, home ware, entertainment and consumer electronics are the most attractive product categories” (p. 2). Pricing – The Warehouse keeps it prices low by buying from low labor cost countries like china in big volumes which helps them to cut its purchase costs during purchase and hence they can offer their customers better prices while keeping their margins intact.
The warehouse stores are also built from like basic sheds with concrete floorings with bins and racks for storage and display, this format helps them in reducing their investment costs enabling them to add less costs to there products. They also offer deals, discount,customer programs and sales from time to time which offers the customer an attractive proposition in terms of price. Place – The Warehouse stores are located both suburbs and cities, the operate through stand alone stores and also through the shop in shop concept.