Assignment 2 (surpermarket)

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					                               Assignment 1: Business Report




                                        Table of contents
List of table …………………………………………………………………………... 2
List of appendix………………………………………………………………………. 2

Executive summary ...................................................................................................... 3

1.0 Introduction .............................................................................................................. 4
     1.1 Purpose.............................................................................................................. 4
     1.2 Scope ................................................................................................................. 4
     1.3 Methodology ..................................................................................................... 4
     1.4 Assumptions ...................................................................................................... 4
     1.5 Limitations ........................................................................................................ 4

2.0 Market Overview….……………………………………………………………… 5
  2.1 Industry summary ................................................................................................ 5
   2.1.1 Industry trends……………………………………………………………...5
   2.1.2 Market share………………………………………………………………..5
   2.1.3 Market environment………………………………………………………..6
  2.2 Broad characteristics of selected corporation and brands .................................... 7

3.0 Research Summary Plan .......................................................................................... 8

4.0 Plan for assignment 2 and 3 ..................................................................................... 9
                                    MCD2110 Assignment 1: Business Report                                         09/07/2012


5.0 Reference list .......................................................................................................... 13




List of table

Comparison between Coles and Aldi………………………………………………7




List of appendix

Major players in supermarket and other grocery stores in Australia
                                                           …….11

Statistical summary of Australia country profile
                                                                                        ……. 11

Revenue and real household disposable in supermarket and other grocery stores in
Australia
                                                         ……. 12




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Executive summary




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The objective of this business report aimed to state the market information in relation
to the product category of Coles and Aldi by collecting, analyzing the information and
business data. Furthermore, the broad characteristics of the supermarket industry, the
product category, the corporations and the specific brands, will be discussed in this
assignment, which will be used to indicate the specific strategic direction as used in
further assignments. The needed information and data will be collected from
academic books, journal articles, and various databases. The research draws attention
to the fact that Australian supermarkets and other grocery stores industry in which
several major companies provide branded, private-label and organic products. This
industry is currently growing with the stable environment. Compare and contrast
about Coles and Aldi based on characteristics including market share, corporation size,
product, price, promotion and distribution in relate to marketing strategies will be
discussed in detail. Moreover, a research summary and plan focused on research
methodology used will be discussed and the information collected will be evaluated.
In the end, a specific plan for assignment 2 and 3 based on further information and
theories will be described comprehensively.




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1.0 Introduction

1.1 Purpose

The purpose of this report is to illustrate the market information relative with Coles
and Aldi. And a given indication for the structure of this report will be prepared. By
examining the broad characteristics of the supermarket industry, the product category,
the corporations and the specific brands, which provide the significant marketing
information and buyer behavior used in further assignment 2 and 3.


1.2 Scope

This report refers to the information about supermarket industry, two specific
supermarkets, will be compared. This covers the situation about supermarket industry
in Australia, in which two particular supermarkets will be involved with product
category, corporations, brands microenvironments.


1.3 Methodology

The information and relevant data in this report will be retrieved from academic
books, Australian Bureau Statistic, IBIS world and other journal articles.


1.4 Assumption

All the needed information used in this report will be true and relevant.


1.5 Limitation

The collected information about Coles and Aldi may not be fully available and current.
In addition, this report may not expressly analyze all the aspects of supermarket
industry.


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2.0 Market Overview

2.1 Industry Summary

Supermarket industry simply retail and provide a range of groceries and food lines
which including fruit and vegetables, bread, canned food, dairy goods, cleaning goods
and cigarettes. The major products and services in this industry are branded products,
organic products and private-label products. There are seven major companies that are
involved in this Australian supermarket industry. (Slvasallam, 2012)


2.1.1 Industry trends

The industry will continue to resemble a battlefield over 2011 to 201, with
expectation to growth of 2.5%. The trends of supermarket sales will continue to
control the retail sector over the next five years, with revenue to rise to $94 billion by
2016 to 2017. (Slvasallam, 2012)


2.1.2 Market share

As seen in the appendix A, there are three main players involved in this industry,
which are Woolworth LTD, Wesfarmers Limited and others. Woolworth is regarded as
one of Australia’s leading food retailers and owns 40% market share of the whole
industry. The company operates over 820 supermarkets and serves over 13 million
customers Australia-wide each week. Wesfarmers Limited states 31% of market share.
This company traditionally operated in retail trade via its Bunnings hardware business
and with following supermarket- Coles. However, there are also 29% of other
companies in market share which includes IGA which belongs to Other Companies
Independent Grocers of Australia 7%, Germany ALDI estimated 4% of market share,
Australian United Retailers estimated 2.3% of market share, Franklins estimated less
than 1% of market share and SPAR Australia less than 1% of market share
(Slvasallam, 2012). There are number of competitors in Australian supermarket
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industry. However, the most effective one will be Costco. The entry of Costco into the
domestic market has putted further pressure on industry retailers. Costco established
15 stores across Australia broad and they aim to provide competitively priced
products and offer the most valuable goods to budget conscious shoppers. The idea
has attracted a number of consumer’s attention. Costco is set to continue affecting the
trading landscape for supermarket retailers over the next five years (Slvasallam,
2012).


2.1.3 Market environment

There are number of macro environment factors that may affect the market
performance and their marketing strategies (Kotler et al., 2010). Economic and
political environments are two main factors that will impact on supermarket industry.
Economic environment refers to the changes in disposable income and consumer
spending pattern (Economist Intelligence Unit, 2009). According to the statistics (see
appendix B and C), a sharp decrease in disposable income (from 8% in 2007 to 3% in
2008) caused by recession (represented as a drop in GDP from 4.7% in 2007 to 2.5%
in 2008) led to a decrease in industry revenue. The reason for this decrease was
caused by fierce price competition (Slvasallam, 2012). Meanwhile, the drop in
consumer sentiment index indicates an inconstant trend in consumer spending pattern
from gourmet items to private-labels products (Euromonitor International, 2012).
Moreover, marketing decisions can be influenced strongly by political environment,
especially in ethics and socially responsible actions (Kotler et al., 2010). There is a
trend that supermarket is differentiating its brand image to be more environmentally,
position the green and fresh product on consumers’ mind by reducing the Carbon foot
printing and the source of local food to reduce the pollution (Vicki, 2008). Although
the price of its product will go higher, the more environmental and safer product will
be positioned on consumer’s mind. Thus, consumers are willing to pay for them at
higher price (David, 2011).



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2.2 Broad characteristics of selected corporation and brands


In this report, the broad characteristics of those two corporations will be identified and
compared initially. The contrast of characteristics based on market share, corporation
size, product, price, promotion and distribution, which are shown in the table below.

                 Coles                                       Aldi
Market share     31%                                         4%
Corporation size Over 3,000 locations throughout             Over 200 stores operating in
                 Australia and New Zealand                   Australia
Product          Branded product and few private             Private label product
                 label product
Price            Low                                         Lower
Promotion        Heavy mass marketing       
				
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