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Market Segments And Decision Making

Introduction  to Decision Making

Decision making process is critical and complex process and it requires systematic and organized approach from the side of management. Market segmentation is done for targetting specific group of consumers and it supports for selling commodities and services to large number of customers (Wilson & Gremler, 2012). Present report is based on Australian corporation Woolworths (Woolworths. 2016). The report describes about industry market for the chosen organization and evaluation of current trends in growth, profitability and macro environment has been mentioned. In addition to this nature of competition in industry has been described. Moreover, major market segments for the organization and strategies adopted for meeting the competition that exist in market has been explained.

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1 Industry market for the chosen organization and current trends running in the industry

(A) Growth :-Woolworths is a leading supermarket chain of Australia that deals in supermarket industry and provides superior quality food and services for its consumers. Grocery store sector in Australia is facing intense competition and pressure. Supermarket retail sector is facing competition as many players are trying for starting their business (Kotler,   & Armstrong,  2015). According to AFCG industry reports it has been observed that supermarket and grocery store industry is growing at the rate of 4.1% annual growth. In addition to this it has been forecasted that this industry will observe growth of more than 2.9% in financial year 2016-2017 (AFCC INDUSTRY REPORT. 2016).

(b) Profitability :- Supermarket industry is facing fierce competition  and this industry renders huge success and growth opportunities (Shani & Chalasani, 2013). As per data revealed by AFGC annual report Overall revenue earned by supermarket and grocery industry in financial year 2015-2016 was $105 Billion. It shows that huge success and growth opportunities are provided by this sector.

(c) Macro factor :- Diverse range of factors gives impact on working and operational activities of supermarket and grocery industry. List of macro factors includes political, economical, social, technological, environmental and legal factors (HShani & Chalasani, 2013). Overall performance of supermarket industry gets affected due to it and it is vital that impact of these elements should be considered while carrying out functions of this industry.

2 Nature of competition in industry

Supermarket and grocery store industry in Australia is growing at a faster rate and it is offering huge potential for gaining success and financial revenues. The grocery store and supermarket industry is fiercely competitive and intense competition is faced by existing market players (Hall,  Timothy & Duval, 2012). Woolworths and Coles are major players of supermarket industry that hold more than 80% market share and position. ALDI which is a German based firm has created big challenge for existing supermarket firms in Australian market. In last five years ALDI has gained big market share and it is creating challenge for existing firms such as Woolworths and Coles. Aldi is offering products at reasonable rice rates and due to that popularity and large consumer base has been gained by it majorly due to the discounted price label products (Chandon & Wansink, 2012).

Woolworths, Cole and other supermarket firms are now forced to cut prices of their products for facing the competition that has been created by ALDI. Competitive strategy has been adopted by existing firms and goods and commodities are sold at reduced price rates. Current trends that are going in supermarket and grocery industry is to cut prices of the goods so that large number of consumers can be sold goods of supermarket firm (Cairns & Caraher, 2013). Majority of firms have opted for competitive strategy instead of product differentiation strategy. Price war is going among existing companies Woolworths and Cole and  arrival German based firm ALDI.

As per current trends going in the industry companies are focussing on gaining market share and strategies are formed for gaining big market share instead of gaining more profit and financial revenues. Retailing in Australia has grown at a rate of 3% and huge growth opportunities are shown by this industry. Online selling also ha improved and consumers are giving more preferences for purchasing products through online mode. Companies are focussing on increasing and strengthening their global presence (Crouch & Housden, 2012). In the supermarket and grocery industry integrity has been assured by making use of a sophisticated quality system. In addition to this concentration is paid by companies for providing fresh vegetables, fruits, dairy products and other food items. In addition to this Woolworths and Coles are facing issues with their private label strategies. Both the enterprises offer plain packaging in their home made products while competitor firm ALDI uses Superior quality packaging in their products.

3 Outline of major market segments for organization and identification of primary and secondary target market

Woolworths is a leading supermarket chain of Australia that offers superior quality food products and other consumable goods to consumers. Market for selling goods and commodities of enterprise has been segmented on the basis of demographic, phychographic and geography segmentation. It supports in designing and selling goods of enterprise as per the requirements and preferences shown by consumers.  Major market segments for Woolworths are as described below :-

Primary target market for Woolworths :- Primary target market defines about total number of potential buyers for the organization. Consumers who are most likely to buy products of the company are included under this category. Some vary common characteristics are shared by consumers in primary market area (De, Hastings & Angus, 2013). Large volume of sales and majority of financial revenues are gained by company in this market area. Most of revenue and funds comes from primary market areas consumers are likely to purchase goods and services that are offered by the enterprise. Presently company is offering products by doing market segmentation on the basis of demographics and buying behaviour criteria (Proctor, 2014). In demographic segmentation consumers are targetted on the basis of age, income, occupation , education and financial status. Primary target market areas of enterprise includes Town hall, Woolloomooloo, Riley, Double way, Albion street Barangaroo etc.

Secondary target market for Woolworths :- Secondary target market for the company describes about consumers who can purchase goods offered by the enterprise in near future. In the secondary target market estimations are made about future primary buyers that will likely to buy goods offered by company in near future. Consumers who give preferences for buying commodities of enterprise through online medium are included in the category of buyers in secondary market (Glanz, Bader,  & Iyer, 2012).

In addition to this major market segments for Woolworths company are as described :-

Geographic segmentation :- In this segmentation criteria consumers are identified and targeted on the basis of climate, population density and population growth and region of an particular area. Moreover, location of stores and regional industrial growths are also considered while doing segmentation. Location of place  where supermarket market stores of Woolworths are operating plays a significant role in doing segmentation on the basis of geographic criteria.

Demographic segmentation :- In this category segmentation is done on the basis of age, occupation, education level, marital status and financial background of consumers (Grönroos, & Gummerus,  2014). Products and services offered by enterprise are segmented on the basis of mentioned criteria and it supports for developing the products as per the needs and requirements of consumers.

Psychographic segmentation :- This segmentation method has been adopted in enterprise on the basis of lifestyle, interest, preferences and preferences shown by buyers. Necessary attributes and features are added in the existing foods and other grocery products that are offered by corporation. Woolworths company follows this segmentation criteria for selling their goods and commodities to large base of consumers.

4 Discussion of level of involvement of primary segment that is likely to have towards the organization in terms of decision making

Woolworths is a leading supermarket entity that renders superior quality food and other grocery products to consumers. Market segmentation supports for developing and designing effective action plans for the enterprise (Rowley, 2016). Segmentation done on the basis of geographic, demographic and psychological criteria aids for taking appropriate decisions for the enterprise. Two major market areas for Woolworths company includes primary and secondary market areas. Under primary market existing consumers are included which are purchasing products and services that are offered by the enterprise. In addition to this in secondary market area consumers are included which are likely to purchase goods that are offered by enterprise.

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Involving primary segments supports in taking effective and appropriate decisions for the organization. Preferences and needs of consumers can be identified and on the basis of that decisions can be taken in the company (Cherian & Jacob, 2012). Advantage of existing market opportunities can be taken by involving needs and requirement of consumers in decision making procedure of the company. Various methods are adopted for assessing needs and requirement of buyers. It helps in formulating effective marketing strategies and segmenting markets with objective to target specific group of consumers. Involving primary segments also helps in effectively positioning products of company in the competition. It is vital that decisions in business should be taken by collecting appropriate data, facts, figures and other details so that effective strategies should be formed for carrying out business activities (Wilson & Gremler, 2012). Use of survey, interview, questionnaire and observation method has been used for gathering information about consumers and it has supported for assessing and evaluating needs and requirement of buyers. Advantage of available market opportunities can be taken and different strategies can be formed for adding new attributes and features in existing products.

More effective and superior quality commodities can be offered to consumers and action plans can be formed for meeting the needs and requirement of buyers. Diverse range of decisions and strategies that can be formulated includes market penetration, market development, product diversification and product development strategies (Hall,  Timothy & Duval, 2012). Consumers are most significant stakeholders that provides financial revenues and funds by purchasing products. When needs and preferences of buyers will be included in decision making procedure than better judgements can be taken for gaining competitive advantage.

Big market share and market position can be achieved by rendering commodities as per the requirement and need of buyers. Products can be developed as per the choice and demands of buyers and it will aid for making improvement in existing products and developing new products as per the requirement of buyers (Shani & Chalasani, 2013). New products can be launched in new market areas and it will aid for diversifying the company's existing strategies for mitigating the risks that is associated with the business. Moreover, innovative methods can be adopted for making significant changes and adding new attributes and features in food products and groceries that are offered by the enterprise. Involving prime segment helps in meeting with the needs of consumers and providing better products. Market conditions can also be assessed by involving prime segments in the decision making procedure of Woolworths company.

5 Positioning map for the market place

Positioning map is done for diagrammatically representing perceptions and needs of exiting buyers and potential buyers of the corporation. Position of a company is defined through its products, products line and market position of a brand. Existing position of products of the enterprise in market is represented under position map (Cairns & Caraher, 2013). By making use of position map decisions can be taken by enterprise for positing their existing products. It also supports for formulating strategies and action plans for carrying out business activities.

As per the positioning map buyers of the organization has been divided in four categories and products can be developed and sold by making strategies as per the positioning map of the enterprise (Kotler  & Armstrong, 2015). Different products that are offered by Woolworths can be placed in four different Quadrants of position map and it will help in making effective action plans for business to sell their products in prime segment market, consumers can be divided into four different segments which are as described :-

Young buyers :- Consumers belonging from young age group give preferences for purchasing products as per their lifestyle. They give more preference for purchasing products that are of superior quality (Proctor, 2014).

Conservative buyers :- They give preferences for purchasing products that are available at a reasonable price. Super market industry of Australia is facing fierce competition and due to that majority of firms dealing in grocery industry are giving focus on cutting price of commodities that are offered by them (Glanz,  Bader & Iyer, 2012). Some products can be designed and developed for meeting the needs of buyers that belongs to conservative buyers' category.

  • Low price and High quality products :- Patties party pack, Sweet chilli and soup cream, Lemonade,
  • High quality and High price products :- Soft drinks, Shampoo and hair care products, Australian Calypso mangoes, Clothing products, Woolworths branded car, gold
  • High price and lower quality products :- Food products including vegetables and fruits, Nutritional products
  • Low price and Low quality products :- Farmer's own milk

Diverse range of products that are offered by Woolworths can be categorized in four different categories and necessary attributes and features can be added in the existing products and services that are rendered by organization. In the position map products that are offered by enterprise have been divided into four major segments and it includes Low price and high quality products, High quality and high price products, High price and lower quality products, Low price and lower quality products (Rowley, 2016). Dividing products in this four specific categories aids in adding necessary attributes and features in existing products as per the needs of buyers.


Summing up the present report it can be concluded that supermarket industry of Australia is facing intense competition. It is vital for existing organizations to make effective strategies and action plans for gaining competitive advantage and capturing big market share. ALDI which is a German based supermarket firm is creating challenge for the existing players such as Woolworths and due to that intense competition is faced in grocery and supermarket industry. Supermarket industry in Australia is growing at annual rate of 4.1% and it offers huge success and growth opportunities. Different macro environmental factors such as political, economical, environmental, social, technical and legal factors gives impact on operational activities of supermarket industry. Segmentation of market can be done on the basis of geographic, behavioural, psychographic and demographic basis and it supports for targetting specific group of consumers for selling goods and commodities offered by the enterprise.


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