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Marketing Assignment: Comparison Between Woolworths & Coles


Task: For this marketing assignment, you need to provide a report that compares the marketing of two supermarkets in Australia.


In this marketing assignment, a comparison will be demonstrated between the two Australian supermarkets, namely Woolworths and Coles. The market analysis will be discussed and illustrated in a systematic manner where all the aspects of the marketplace will be identified and compared between the two supermarkets.

Section 1: Overview of the two companies
Woolworth is located in Hawthorn East, Victoria. Coles was founded by George Coles in "1914" and Woolworth company is the top retailing company in Australia and has immensely grown in history. Woolworth, the largest retail company in Australia, was founded in "1924". The Headquartered of Woolworths is in Melbourne. Woolworth is the second largest company in Australia in the context of revenue (Zorbas et al., 2019). Now it has a major chain of Woolworth in Australia and New Zealand. Currently, there are thousands and thousands of supermarkets and convenience stores in Australia. Supermarkets and convenience stores sell many different kinds of products such as fruits and vegetables, pet care products, baby care products. Woolworth mainly has five business segments to operate the business: "Australia Food, Endeavour Drinks, New Zealand Food, Hotels, and Big W" (Govender, 2017). In the Australian Market, Woolworth has the largest market share in Australia. There are 995 stores of Woolworth operating in Australia. Farmers provide the best product to Woolworth to provide the best product to their customers.

Coles is the other retail company of Australia. It covers the 35% market share in Australia, and Coles is the biggest competitor of Woolworth by an online store. Coles online stores provide services to their customers through online stores. Coles has 2500 supermarkets and retailers within the country. The first supermarket in Australia is Coles. The purpose of supermarkets of Coles in Australia was to provide good value and services to their customers and to get success in the long term. The current revenue of Coles is about $39.287 billion, and the operating of the Coles is around $1.413 billion (Olstad et al., 2017). Therefore, Coles has a huge number of brands and products. Coles is constantly growing and achieving success. Coles has also started to make a donation like providing funds for the unemployed.

Section 2: Targeted market and market targeting strategy
Woolworth market divided their market into small markets based upon the different age group, different gender, different customers, or based on the income of different customers. The Woolworth market targeted their customer age group is about 6 to 55 years old. They also target their customer base on the different psychographics, geographic and demographic as well under demographic. Based on the different segments of the target, they target different regions from the different location customers. The customer mostly prefers the quality of a product. They are targeted in the psychographic segment. Woolworth has a lot of competitors like Coles who sell their products at low prices, but through the targeting strategy, Woolworth has loyal customers (Pulker, Scott and Pollard, 2018). The Woolworth market mainly targets geographic market customers who are always ready to buy the product in premium amounts because of having a good quality of the product.

On the other side, Coles also has the marketing strategy they market to their customers based on the customers' behaviour. Coles has a huge number of customers who are satisfying their needs in different manners. On the other hand, Coles targets their customers based on the characteristics of customers such as related to psychographic, demographic, and also geographic and basis of customers. Coles also targets their customers based on the income of their customers and needs. They also target their customers based on the age group of their customers. The characteristics of customers provide the idea of the need of a customer. On the other hand, Coles target their customers through their small stores in small cities (Richards and Devin, 2016). Australia provides its product at both low and high prices, which is targeted to high and low-income customers. Coles mostly target their customers through the chain of small retail stores which is in different cities in Australia. The low pricing strategy of Coles has adopted and started to provide quality products.

Section 3: Differentiation and positioning
To sustain the position in a competitive business market, Woolworth has the strategy of differentiation of positioning. The differentiation and positioning strategy help to sustain and make a position in the marketplace. The quality of the product of Woolworth is premium than Cole; this is a differentiation advantage in the marketplace for Woolworth. Because the premium price of the product attracts more customers to buy their product, on the other hand, Woolworth has a higher position in the marketplace as compared to its competitors because of the premium price of its product. Woolworth has the leadership differentiation strategy for the business in the highly competitive business sector in Australia (Pegan, Vianelli, and Luca, 2020). There is also a never-ending discounting strategy for popular products. Woolworth is mainly focused on the product, which is home branded. The fresh food and the milk of Australia of Woolworth has a low price product. The focus of all retailers of Woolworth is to differentiate themselves from other retailers. The employee of Woolworth is responsible for the strategy and for the differentiation for the company to create an advantage in the competitive marketplace to make a good position. The differentiation of cots and home branded products as well as the technology are all making the differentiation in the marketplace.

The differentiation strategy of Coles is a business-level strategy in supermarkets. The brand images utilised by Coles supermarket this is product offering differentiate in the marketplace. On the other hand, the strategy of differentiation is adopted by Colen for their product. The differentiation of the product of Coles has 100% of Beef (Humayun, 2016). To differentiate their product, they have to remove eggs from the range. To differentiate Coles from their competitors, Coles has fresh chicken by RSPCA. Coles provide their customers with fresh food and drink to make their life better. The differentiation of Coles is that Coles is trying to create a niche market for itself. It is observed that Coles provides their value product at a low price. It also creates a differentiation in the marketplace for Coles. The corporate level strategy of Coles helped to become the market leader in the marketplace in Australian retail. Investing in the need to provide a service for a customer is the main focus of Coles. How the company is implementing the strategies is analysed by the functional level strategy. Upper middle and the upper collective class customers are targeted by the Coles marketing strategy.

Section 4: Market offerings

Market Offerings in marketing assignment

Fig: Market Offerings
Source: (Ang, 2021)

Woolworths is Australia's leading supermarket, with a wide range of food products available in the marketplace. Fruits, vegetables, poultry, as well as other packaged goods are available at the store. They also have magazines, accessories, and Dvd players for sale. They offer a wide range of options to their consumers for each segment, including local produce, popular brands, and international cuisine. Simply put, they may not leave their consumers unhappy with their decisions. To ensure consistency, all of the items they sell are certified and checked by Woolworth's specialists. Packs, furniture, jewellery, beddings, shoes, clothes, and household products were amongst their many items. Their diverse product line enables the business to meet all of the preferences of customers, effectively acting as a one-stop-shop for all things (Ang, 2021). They often sell milk products, organic and inorganic foods, everyday care products such as soap and shampoo, pet food, personal infant care, and drinks, among other things. On the other hand, Coles offers a diverse selection of goods to the consumer, resulting in a high portfolio that meets the needs of all consumers. Baking goods, baby care, fresh fruits, gluten-free services, liquor, telephones, and meat are among their many product lines. They also sell "milk products, gift certificates, Kosher, Heston, and other items''. They also sell their exclusive brands, including BonSucro sugar as well as Graze grass-fed beef, as well as Spirit resorts. Their liquor store has scores of brands, including both domestic and imported liquor, wine, including spirits. They often provide banking services such as life, health, house, and rental insurance, as well as credit cards. Nearly a million people use their financial products. They even offer safe purchasing to their consumers through their applications, which have been tailored to each client's requirements (Pulker, Scott and Pollard, 2018).

Furthermore, they have introduced beauty and wellness magazines to gain a maximum number of female buyers and offer a variety of recipes to women through their Youtube account.

Section 5: Pricing
Woolworths is well-known for the great quality of its goods, and as a result, they often charge a premium for them. However, in order to draw buyers, they regularly adjust the prices of several of their items. Due to an increasingly competitive environment, Woolworths has been relying on a competitive pricing strategy in an effort to keep its consumer base over its rivals. They always worked extremely hard to sustain close to or slightly higher rates than those in the industry (Alexandrescu and Milandru, 2018). However, after learning about their wide range of high-end brands in the retailing industry, the rates they are providing are all still competitive in the industry.

In the other direction, Coles has implemented a low-price approach, inability to implement premium goods to their dissatisfied consumers at the most affordable rates. They try to deliver value to customers from both the low and high-income groups. They have quite a cost leadership approach that helps them maintain consumers interested in their products and services. With the exception of Woolworths, they sell affordable costs and great goods to their consumers. After all, in order to create a competitive edge, they tend to maintain consistently cheap costs in the weekly basket of products while the living cost in Australia keeps rising. According to Coles' financial statement, they have been reducing their costs for the past six years, and Australian households would save "$639" per year by purchasing at Coles. They are also expanding in their commercial centre, streamlining training and procedures, attracting talented employees, renovating stores to sustain low prices, and delivering a positive user experience (Kumar and Patra, 2017). For the sake of convenience, they have successfully enacted a regular price strategy, which primarily consists of low-cost food and '80-cent coffee'.

Section 6: Promotional mix
The advertising mix is basically the amalgamation of commercial advancement, publicity and furtherance. Some questions that have been followed in the context to have a mixture of the promoting tools are like about the most successful way to notify customers, about the most effective way to inform customers, about the usage of marketing methods, about the promotion efforts, about marketing activities (Kasanagottu and Bhattacharya, 2018). The words that we have to go through with the advertising mix are the elements of advertising, personal selling, sales promotion, public relations, direct marketing.

In the case of Woolworths, the promotional and advertising plan of action is as follows: promotion always played an important role in the company of Woolworths. They are in the habit of having the same innovations constantly (Grootboom, 2018). The company offers various Loyalty Schemes for customers, including petrol pump discounts also. By the time 1987, a Fresh Food People Campaign was launched by them, which later went on till the year 2012. They also socially promoted their company through magazines and newsletters, which draws them, loyal customers. They deal extensively and offer the shoppers gift tokens and achieve extensive promotion by online media. They also possess online markets and offer deducted to attract customers. Currently, the company Woolworths operates with 2000 people, and it tends to increase further by 1600 more. Excellent sales of Woolworths are responsible for its success to a greater extent.

Advertising strategy revolves around lower prices in the company of coles that are supermarket offers." Why pay more"," Extra value for you and me" and " Cheap groceries " are the taglines which actually highlight the lower prices and get from shopping at Coles (Solberg, 2017). Loyalty, discount and promotion schemes are the main factors for the company of Coles. It rewards programs in one of Australia's largest with 5.5 million users, which was judged by an independent research agency. Customers get more than 6x points on all Coles supermarket shops when they use Coles credit card and Coles insurance product. Woolworths, operating across Australia, is still the largest supermarket chain with 933 stores, whereas Coles with 762 stores in the present but still not far from it. They are now coming in terms of conversation volume, the share of voice, sentiment and conversation themes on social media. In comparison to Coles, Woolworths represented double the social media conversation and represented 60% of that of the global online news. Sentiments for both of the brands are neutral. However, Coles have more positive social media sentiments; in terms of online information, sentiments are equally distributed in both brands. Many unique themes are associated with both brands; Woolworths places around a total of 2,491 social media conversations. Comprehensively, we can say that Woolworths is gaining more attention on social media and online news in comparison to Coles (Samiee and Chirapanda, 2019). Both the brands comprise huge opportunity into the media intelligence and extract valuable insights that help both the brands influencers and brand advocates create cut-through messages that can be more responsive to public criticisms and, hence, revitalise their marketing.

Section 7: Place or distribution
Woolworths distributes its services and products through a variety of stores and supermarkets. Woolworths has nearly "1000" stores across Australia from where they provide their goods or services to their consumers. They also launched different sites where consumers can request orders for groceries and other products. It is reported that they operate over "950" supermarkets as well as other retail outlets. In Melbourne, nevertheless, a few of their shops are running as Safeway shops. They also operate via an online portal and, at the very same moment, create and provide phone app purchasing services. 'Woolworth Select, Woolworth Home-brand, Woolworth Gold', as well as other branded products are available. After all, in New Zealand, their service business used to be known as Countdown, and then this term has been used in Mexico, Austria, and even the United Kingdom. On the other hand, Coles does indeed have a diverse supply chain, which indicates the business always had to distribute its goods and services across a variety of networks. They have nearly 807 supermarkets scattered across Australia (Gurumoorthy and Santhiya, 2019). They have launched an online shopping centre to provide their potential customers with more affordable options and experiences. As part of a strategic advertising mix for distribution, they include nearly 2300 channels, allowing their staff to attract millions of customers. They still seek to improve their networks and also have a clear goal of increasing supermarket capacity by around 2-3 per cent each year. Earlier, they had launched a new state-of-the-art store in which they used to provide the most up-to-date supermarket services. They have added a fresh food segment to their market and an in-store shop (Mullin, 2018). In the year 2015, they opened 20 new stores. Coles' retail platform used to position and fulfil services on schedule, resulting in a 25% increase in sales.

Finally, the study draws a distinction between two of Australia's largest supermarkets, Woolworths and Coles. The evidence shows that both of these retail businesses are fierce competitors, and in addition to maintaining their dominance, they are developing new tactics such as delivering low-cost, high-quality goods. Woolworths is more concerned with efficiency, while Coles is much more concerned with price reductions. Both have a strong competitive presence.

Section 8: Reference
Alexandrescu, M.B. and Milandru, M., 2018. Promotion as a form of Communication of the Marketing Strategy. Land Forces Academy Review, 23(4), pp.268-274.

Ang, L., 2021. Principles of integrated marketing communications. Cambridge University Press.

Govender, S., 2017. How social media can be used to engage and interact with consumers in the retail industry: an analysis on Woolworths' online strategies (Doctoral dissertation, The IIE).

Grootboom, V., 2018. University of KwaZulu-Natal students’ perceptions of green branding at Woolworths (Doctoral dissertation).

Gurumoorthy, T.R. and Santhiya, M., 2019. MARKETING MIX IN GLOBAL MARKET. Advance and Innovative Research, 6(2), p.15.

Humayun, S.H., 2016. Merchandising operation of Woolworths Global Sourcing.

Kasanagottu, S. and Bhattacharya, S., 2018. A Review of Metro, Target, & Woolworths Global Business Strategy. International Journal of Mechanical Engineering and Technology, 9(7).

Kumar, S. and Patra, S., 2017. Does promotion mix really help to enhance brand equity: A literature review—Indian Journal of Commerce and Management Studies, 8(2), p.80.

Mullin, R., 2018. Promotional marketing. Routledge.

Olstad, D.L., Crawford, D.A., Abbott, G., McNaughton, S.A., Le, H.N., Mhurchu, C.N., Pollard, C. and Ball, K., 2017. The impact of financial incentives on participants' food purchasing patterns in a supermarket-based randomised controlled trial. International journal of behavioural nutrition and physical activity, 14(1), pp.1-7.

Pegan, G., Vianelli, D. and Luca, P.D., 2020. International Marketing Strategy. Springer.

Pulker, C.E., Scott, J.A. and Pollard, C.M., 2018. Ultra-processed family foods in Australia: nutrition claims, health claims and marketing techniques. Public Health Nutrition, 21(1), pp.38-48.

Richards, C. and Devin, B., 2016. Powerful supermarkets push the cost of food waste onto suppliers, charities. The Conversation.

Samiee, S. and Chirapanda, S., 2019. International marketing strategy in emerging-market exporting firms. Journal of International Marketing, 27(1), pp.20-37.

Solberg, C.A., 2017. International Marketing: Strategy development and implementation. Routledge.

Zorbas, C., Gilham, B., Boelsen?Robinson, T., Blake, M.R., Peeters, A., Cameron, A.J., Wu, J.H. and Backholer, K., 2019. The frequency and magnitude of price?promoted beverages available for sale in Australian supermarkets. Australian and New Zealand journal of public health, 43(4), pp.346-351.

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