Marketing Management

MPK732/932Marketing Management
Written Assignment
Trimester 1, 2012

Assignment on
Virtual Shopping moves into grocery aisles

Lecturer : Dr. Ho Yin Wong
Group Members: Rudradutt Dave 212104408 YeduguriTejeshwar Reddy 212086416 Sameer A Shaikh 212096123 Gurbir Singh Gill 211725223
Due Date: 7 May 2012
Word Count: 4,259

Table of Contents | Sr.no | Title | Page No | 1 | Introduction | 3 | 2 | Background | 4 | 3 | The environment, research and behaviour | 5 | 4 | Segmentation, targeting and positioning | 7 | 5 | Impact on consumer behaviour | 10 | 6 | Conclusions | 15 | 7 | References | 16 |

Introduction

Virtual shopping and online grocery shopping are upcoming trend in the retail Industry of Australia. The aim of the case study is to analyse the recent introduction of virtual shopping by Woolworths, hence suggesting what marketing approach and strategies to be followed for making profitable sales through that area. Woolworths is amongst one of the Australia’s leading retailers. The maximum revenue generated through online shopping is by the Woolworths online groceries, but the company also sells online through Dick Smith and Big W. The company’s Big W brand deals with general merchandise and the Dick Smith operates in electronic goods. In the year 2009-10 the management of Woolworths declared that the total revenue form the online channel has grew by 58% (Ian Mac Gowan, 2012).
Moreover, during the financial year ended June 2010 $51,784.8 million (approximately $45,669 million) of revenue were noted, which was a rise of 4.2% over FY2009. Also, the operating profit of the company was accounted to $3,082.1 million (approximately $2,718.1 million) in FY2010, again an increase of 9.5% from FY2009. In FY2010 the recorded net profit was AUD $2,020.8 million (approximately $1,782.1 million), an increase of 10.1% over FY2009 (Data Moniter, 2011).
Woolworths has even declared that the company plans to hit the

References: Woolworths has even declared that the company plans to hit the $1billion mark in online sales by 2014 (Herald Sun, 2012).This massive growth in the company’s online sales attracted us to research on the Industry and especially on Woolworths. 6) The Power Shopper (e-commerce times, 2000) * The ‘New to the Net’ shopper According to the above table the three most important reasons people do online shopping are, customers can easily place order have a large selection of product and the products are of cheap prices(Jakob Nielsen 'sAlertbox, 1999). One of the surveys taken by Nielsen Company in 2010 reported that 57% of customers consider and reviews before buying an electronic item(Nielsen News, 2010). Moreover, 80% of the online shoppers change their decision based on negative reviews (Marketing Pilgrim, 2011). So, the company should target the enthusiast shoppers as they can give great benefit. The Consumer Information Processing Model Source: Adopted from Kotler (1997), Schiffman and Kanuk (1997), and Solomon (1996) There are 5 different stages a customer passes through in this model,problem recognition, information search, evaluation and selection of alternatives, decision implementation, and post-purchase evaluation (Ken Matsuno and Babson college, 1997).