MG3122 Srategic Marketing
Word Count: 2182
MARKETING AUDIT FOR PETS AT HOME
Founded in 1991, Pet’s at Home (PAH) is the largest pet supplies retailer in the UK, with market share growing from 15% in 2012, to 16% in 2011. The principle activity of the company is the retail of pet food, products, services and small pets through their superstores and, for appropriate elements of their offer, on-line. Pet’s at Home has a wide product range for a wide variety of animals including dogs, cats, fish, reptiles, birds and small pets including rabbits and rats. Pets at Home has had a successful financial year with total sales up 7.1%, reflecting a robust like for like sales performance of 1.3% and the impact of the new store opening programme with a record 32 (2011: 25) new stores opening in the financial year. The estate now compromises of 313 (2011: 281) stores nationwide. Gross margin also increased to 52% (2011: 51.8%) reflecting the increasing participation in Pet’s at Home sales mix of directly imported product, improvements through working with suppliers in order to improve margins in both existing and new ranges plus continued growth in the company’s own brand offer (PAH Annual Report, 2012).
The UK pet care market was worth £3.6 billion in 2011, and has grown compared to 2010 (£3.3 billion) despite the difficult economic conditions we’ve experienced over the past few years (the market is expected to grow steadily until 1016 when it’s estimated to be worth approximately £3.9 billion). The growth has mainly been driven by increased spend on cat and dog foods (Euromonitor, 2012) and this growth shows that pet owners are trying not to compromise their spending on their pets. Despite growth in the market, PAH should remain aware of the uncertainty within the UK retail market at present as pressure on consumers disposable incomes remains high, thus directors should be prepared for any future impact from this on the pet market. There are two key drivers of growth in the UK pet care market. Firstly, a range of sociological trends including the growing number of single-person households which is leading to pets increasingly being considered as companions. This growing humanisation is expected to lead to a healthy growth in premium products including cat and dog treats, clothing and accessories. This has also led to an increase in toy sales, particularly in households containing children as they are considered to be one the most influential factors when it comes to buying pet accessories, as well as the type of pet. Secondly, purchasing insurance is increasingly popular as consumers are more concerned in protecting themselves from unexpected and expensive vet bills, with almost a 1/3 pet owners estimated to be insured in 2011 (PAH Annual Report, 2012). Finally, an increase in popularity of reptiles is evident as consumers have realised they are fairly easy to care for and fit in well with working lifestyles.
When marketing their products, Pet’s at Home needs to create a successful mix of having the right product, sold at the right price, in the right place, using the most suitable promotion. Figure 1 shows the marketing mix for PAH:
People are also of great importance to the company and there is a strong focus on recruiting staff members with the right qualities and passion for pets and training them via the “Pet’s at Home Academy”. PAH aims to offer “Pawsitively outrageous” customer service, through their knowledgeable staff and dedication to animals to match their tagline “We know pets by heart.”
PAH has many strengths, and the key strength is the high level of customer service it provides through the quality of staff. The company was voted second in the Times 25 best big companies to work for, and this is due to the amount of focus the company’s strategy has on training and improving staff...
References: EuroMonitor. (2012). Market Overview. Pet 's at Home Annual Report. Pg 4.
Jim Riley. (2012). Porter 's Five Forces Model: Analysing industry structure. Available: http://www.tutor2u.net/business/strategy/porter_five_forces.htm. Last accessed 16th Nov 2012.
The Times 100 Business Case Studies. (2012). The extended marketing mix. Available: http://businesscasestudies.co.uk/business-theory/marketing/the-extended-marketing-mix-7ps.html#ixzz2BxasTPoV. Last accessed 15th Nov 2012.
The Times 100 Business Case Studies. (2012). Marketing Mix. Available: http://businesscasestudies.co.uk/business-theory/marketing/marketing-mix-price-place-promotion-product.html. Last accessed 15th Nov 2012.EuroMonitor. (2012).
Pet 's at Home Annual Report. Available:http://www.petsathome.com/wcsstore/Pets%20at%20Home/Static%20Pages/Customer%20Services/Media%20Centre/Business/Trading/KKR%20My%20Best%20Friend%20UK%20Finco%20Limited%202012%20-%20PDF.pdf. Last accessed 14th Nov 2012.
* Figure 1: The PAH product range includes pet supplies (toys, pet food, pet cages and small pets), veterinary services, dog grooming services and pet insurance. The dog and cat foods are allocated under wet or dry food, and are then further segmented into three different types; “Feed Natural”, “Advanced Nutrition” and “Everyday Brands”. There is a wide range of dog and cat toys which cost between seventy-five pence, to twenty-four pounds. Pet’s at Home is licensed to sell small animals and currently sells rabbits, guinea pigs, bearded dragons, snakes, rats, chinchillas, degus, dwarf hamsters and fish. The company also provides a range of products for puppies and kittens including food and training equipment. If PAH can get a customer from the start of the pet’s life (i.e. puppy or kitchen), they have the opportunity to create a loyal customer who will potentially continue to purchase from PAH for the duration of the pet’s life. The veterinary practice is available for all general consultations, and the dog grooming parlours provide micro-chipping, hair trimming, nail clipping services from five pounds.
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