Marketing Logistics and Retail Management

Question: Discuss about the Marketing Logistics and Retail Management. Answer: Introduction: Myer is Australias full line departmental store trading in all the states and one of the territories of Australia. It deals with range of womens and mens wear, childrens clothing, footwear, accessories, toys, books, homeware, electrical goods, cosmetics, food and travel goods. It is Australias largest departmental stores and has always remained consistent with latest style and fashion trends. Myers has about 67 retail store across main location in Australia that offers their well-recognized brands to customers and the enhanced online and digital platforms have boost their sale. Currently 55,000 stakeholders, 1200 suppliers, large number of customers and 12,500 team members deal and engage with their brand. In 2013, their total sales generation was about $3.1 billion (Myer 2017). Their main orientation towards marketing is to bring a transformational change in retailing by dealing with creative agency who will take into the digital future. Under their current creative agency, Badgar Ogilvy, they are changing their channel mix and moving to a digital model. However despite digital marketing, they also give value to advertising and catalogues promotion. Their aim is to deliver more focused offer to customer and they are reviewing their suppliers to align with their strategic priorities and their vision of Myer way of working (Oliver 2017). It major product offering is the apparels and the main supplier is PVH heritage supplier who offer brands like Van Heusen, Calvin Klein, Pierre Cardin and Tommy Hilfiger. Through their new Myer brands like Seed, French Connection, Nine West, Zara and H M, they are offering fashion-driven as well as accessible products to customers (Traill-Nash and Traill-Nash 2017). Analysis of 5Cs of the Company Company: One of the biggest strength of the Myer is the presence of its departmental store at prime locations in Australia and its chain of mid to high range departmental store. Their New Myer brand strategy has helped to provide a variety of choices to customers at an affordable cost. Their customer-focused strategy has helped them to build their strong brand presence and reputation in Australia (Inside Retail 2017).However one key weakness is that their customer base is limited to Australia and they do not have a global presence. This is because of under-developed distribution channel which serves only in restricted locations in Australia. Despite this, Myers have the opportunity to build their global reputation as retail store by partnership with foreign players and developing innovative promotional strategies. This might not be easy in the presence of threats like changing customers preference and their more cautious attitude in terms of spending (Lee and Lee 2015). Customers- Myer is particularly offering their product range to middle class and upper middle class individuals in Australia. It is difficult for the retails departmental store to target all segments in Australia due to changing customers preference day by day. According to Roy Morgan value segments, the Myer customers in Australia are conscious about health and fitness. They are more likely to go for short holidays and use media considerably. Hence, based on this analysis of customers attitude, Myers plan their marketing strategies and promotional activities for their brands. Collaborators- Through the Myer Supplier of the Year Awards, Myer recognize all those brands, designers and other partners who play a role in delivering innovative retail experience to the customers. In 2016, M.A.C was declared Myers coveted Supplier of the Year by their innovative ways to engage customers. The general manager of M.A.C was their key business partner and Toni Maticeski was declared the best designer of the year for his fashion-forward creations. Other partners of Myers include the advertising agency who provide community support and the Group Managing Director who play a role in the creative process of retail business at Myer (Govender and Govender 2017). Competitors- David Jones Limited, another Australian departmental store is one of the biggest competitors of Myers. David Jones also has about 37 departmental stores nationwide and their marketing strategy is giving stiff competition to Myer. Both have similar business strategies and due to this competition in the market, they have struggled to reach their target sales figure. For example, Myer has been invested in renowned female figure, Jennifer Hawkins, Miss Universe 2004 to promote their brands. In the same way, Myer collaborated with Victorias secret model to boost their sales. Although the sales margin of Myer is higher than David Jones, Myer is under more debts than its competitors. Harris Scarfe, Kmart Australia and Target Australia are the new rivals of Myer and the CEO of Myer had released The Competitive pricing policy to stay ahead of other competitors in the market (MYER pty ltd. 2017). Context- Myer has been challenged by certain political development in Australia. They are not happy with the goods and services tax applied on imported goods. The GST applies for imports worth more than $1000 and they think that it will create an unfair playing field for local business and create difficult trading environment for them. There is question regarding the cost of GST for items and the income benefit of the tax (ABC News 2017).Bernie Brookes, the head of Myer have even blamed the Australian governments budget measures as a factor creating tough trading condition and leading to patchy sales (Greenblat 2017). Collection of information about 5Cs Myer have restricted their price based promotions and replaced them with consumer focused promotions to know their customers and target mostly sophisticated customers to offer range of products offer. They had employed tactics like One day offers, Super Saturdays, and Secret Sales to boost the sales. Their business has been challenges by digital disruption and the globalization of retail sector. In order to restore their relevance with their customers, they have decided to employ their four pillars to bring the love of shopping in consumers life. To identify their loyalty customer base, they have done substantial research on Australian customer retail segments and used the Roy Morgan data to modify their strategy (Eizenberg et al. 2015). They identified three groups of customers through these research- high value consumers who are up to date with fashion, professionally successful customers who have an interest in brands and those who look for better every day value and affordable fa shion. Based on different customer preference, they divided their brands into different categories to suit the marketplace (Cameron 2017). Myers have known about their true competitors in the market after they intense sales rivalry with other departmental stores like David Jones and Target Kmart who offer similar products in different target markets. These upper class departmental stored located in prime locations provides competitive pricing. This trend in the market has highly influenced their sales figure and store maintenance. The research on main customer base has helped them to understand how the context of business is changing with globalization and rise in mobile and digital technology. They know that their market is dominated by females and it is mainly customer based due to premium pricing and brand categories. They are aware that their business is built on the prestige of their brands and hence they try to offer well-known prestigious brands and build strong customer relationship. The hosting of the Myer Supplier of the Year award is a reflection on how they evaluate the role of each suppliers and appreciate them for being their business partners and suppliers. In the year 2015, they announced PVY Heritage Brands Australia as the Supplier of the year because they provide Myer with well-known brands like Pierre Cardin, Van Heusen, Tommy Hilfiger and many others. The suppliers share their passion with Myer to offer innovative products and take proactive steps to bring growth in business (Media-Release 2017). Developing marketing strategy Based on analysis of the market of Myer in terms of its suppliers, customers and competitors, it can be said that Myer needs to target particular market segments to develop the marketing strategy. Through the Roy Morgan research to categorize their customer base, they have identified three groups of customers for their retail products. They also found that omni-channel customers have given them up to 80% sales compared to customers who shop physically (Cameron 2017). Hence, it is recommended that Myer target such omni-channel customer segment and take adequate steps to embrace digital technology to attract this group of customers. They can invest in digital technology like click and collect to increase online sales and invest in other digital hub to provide in-store experience through digital means. Once this pilot project is successful, the digital hub can be rolled out for other stores nationally. However this change cannot be possible without recruitment of chief digital staffs an d data officers who can lead in the change process. It is also recommended to build the value proposition of the local customers by exciting investment in upgrading the stores and tailoring the according to local customers fashion preferences. They can build value propositions with omni-channel customers by bringing changes in their brand make up and adding latest brands to keep up with the demands in retail industry (Osterwalder et al. 2014). The change and reinvention process should all be linked to the customers. They add more brands by analyzing the most wanted brands currently in the retail market and putting efforts to increase sales margin by inclusion of new and high in demand brands. Hence brand building and sales-led marketing strategies can help in dealing with competitors as well as maintaining customer loyalty base (Zhang et al. 2015). A position statement for the target market can include exceptional shopping experience and customer focused offer to sophisticated customers. The CEO and other retail officers at Myer can take steps to enhance customer service by modifying their flagship stores and efficient store management. Efficient store management can be possible by focusing on low cost and high value products. The upgrading of stores can be done by changing lighting and ambience of the stores and providing visual merchandising to online customers (Pantano 2014). Upgrading the Myers website and expansion of more number of digital service will them to achieve impressive sale performance and deliver high quality and fashionable products. Actions can also be taken on productivity related change such as the value sharing future business goals with key partners and addressing issues related to occupancy cost, space productivity and capital investment in each stores (Fernie and Sparks 2014). The marketing goals can become successful by having a dedicated team who are ready to adapt to new culture of change at the store. Talented and capable people can be recruited to support the system and understand digital process. In case of specialized designation, they can provide extensive training to concerned staffs. They measure the progress and delivery of the new strategy through performance metrics and evaluating their growth within set time frame (West et al. 2015). Justification of marketing mix of the company The growth in target market of any industry depends on the price, product, place and promotion factors. The following steps can be taken to justify the marketing mix in accordance with above recommended marketing strategy for the Myer: Product- As the marketing strategy is customer-focused offer and exceptional shopping experience of consumers; this can be achieved by giving products range that satisfies the needs of target customers. The right product mix will be one that that offer most wanted brands and products complemented by strong omni-channel offer. To inspire and delight their customers, they can invest in brands that provide fashion trends as well as value for their products. Collaboration with well-known brands and international designers can provide significant control and flexibility to Myers business plans (Tambo 2014). Price- Price is also the most important element of attracting customers and bringing profitability in the business. Pricing strategy also helps to shape the perception of the product in consumers eye. To stay ahead of other rivals in the retail industry, their focus should be on giving affordable pricing as well as product offers to customers (Myer2013.annual-report.com.au. 2017). The inclusion of brands like Seed, French Connection and Nine West can help them to battle competition in different sections like arrival of new entrant in retail market and challenges due to online shopping. They can also develop pricing strategies after surveying their existing customers about the things they are looking forward to while shopping at Myer. The inclusion of new brands like Zara and H M can also help to target affordable price and fashionable relevance in products (Traill-Nash and Traill-Nash 2017). Place- In case of Myer, placement or distribution of their product will play a major role in maximizing their productivity. It can go for selective distribution or franchising to enhance their merchandise offer. Myers departmental store already has an advantage of being located in premium locations across Australia to offer their products. In accordance with their omni-channel, they can go for investing in swift digital technology to display their products in a much larger platform from where international customers can also enjoy exceptional shopping experience (Ailawadi and Farris 2017). The focus on best performing stores can help to revive sales figure and restructure cost of products. With a proud history of being the largest departmental store in Australia, this form of prudent action can help to redevelop their balance sheet and achieve flexibility in their business. Reallocation of space and fine tuning merchandise according to store cluster can help to achieve supply chain e fficiencies and a more efficient store network (Lusch et al. 2015). Promotion- As marketing strategy development suggest Myer to invest in new brands to stay ahead of competitors, smart promotional strategy is important to enhance brand recognition and improve sales. Promotion can be done by innovative advertising and sales promotion techniques. With the increase in digital commerce, a point-of-sale system can act as a useful step for inventory management. Optimization of store network and balancing the digital marketing opportunity would act adequate step to integrate the marketing strategy in their retail channel. Effective store network along with attractive advertising techniques can help attract customers to new brands (Kasemsap 2015). Conclusion The report gave insight into the core business and product offerings of Myer, the largest full line departmental store in Australia. With about more than 60 stores in Australia and having their own designer womens wear brands, they have established more than 130 million customer base (Myer 2017). The analysis of the strength and weakness of the company along with key customers and collaborators in the business gave the idea that although they have the advantage of brand reputation, however their business has been challenged by new entrants in the market. To keep up with the demands of retail industry, it is recommended to develop new marketing strategy based on enhanced customer experience and putting more efforts on consumer focused product offer. To succeed in this venture, the support was given by innovative marketing concept in the area of pricing, promotion, product distribution and special emphasis on fashionable products. It can be a sustainable step to keep up with business d emands at the time of globalization and digital commerce. Reference ABC News., 2017.Myer wants review of GST threshold. [online] Available at: https://www.abc.net.au/news/2013-11-20/myer-wants-gst-review/5105050 [Accessed 27 Jan. 2017]. Ailawadi, K.L. and Farris, P.W., 2017. 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