Myer and Its Industry - Case Study Example

INDIVIDUАL РHАSЕ RЕРОRT ОF МYЕR Student’s Name: Course Code: Tutor’s Name: Date of Submission MYER AND ITS INDUSTRY Myer is an upmarket departmental store in Australia that deals with selling a variety of products such as clothing, cosmetics, home wares, food as well as stationary and toys (Pash, 2017). It operates in the retail industry. The retail industry in Australia is faced with competition from various companies that sell the same products as Myer. There is competition rivalry in the industry due to the presence of other competitors including David and Jones limited Kmart Australia, Harris and Scarfe as well as Target Australia (Low, 2016). There has been a considerable increase in international online retailers accessing the Australian market. These are like Amazon, Asos .com among others (Freeman, 2017). Myer offers different products for sale ranging from clothing, electrical appliances, and cosmetics as well as stationary and different types of home wares. The company has a marketing strategy which has drawn utility from market research as well as market segmentation for it to achieve maximum profitability as a result of having a blue ocean (Low, 2016). This is a situation where the organisation has tried to succeed in beating its competitors and come up with an uncontested market space (Robertson, 2017). Basic demand conditions The retail industry in Australia is characterised by the presence of numerous consumers who vary in their tastes as well as preferences. In the marketing strategy, Myer should understand its consumers demand. This will help in the company in understanding the economic, socio-cultural as well as material environment affecting the demand which is very important in marketing (Joris & Brand, 2002). The marketing framework should aim at achieving a blue ocean status which will be characterised by the invention of new markets. The company should apply cost leadership strategy. Here Myer should set a goal of increasing its profits through the reduction of costs than other firms in the industry. This will increase the market share through decreasing the sales price and the same time retains profits. Joris & Brand (2002) say that any company such as Myer should also aim at making the products it sells different from the competitors'. There is the need for good research together with developing sales that are effective through the marketing executives (Getty, 2014). Myer should also focus on online marketing and selling of their goods outside Australia together with developing more distribution channels that will reach the consumers in the wider market. It should increase its online marketing to reach more customers both in and out of Australia. Market segmentation Myer can segment its market or divide its consumers depending on their various subgroups with various characteristics (Smit and Niegens, 2000). This segmentation may be in form of demographic. This is a type of segmentation where a company like Myer will segment its consumers putting into consideration their age, race, gender, religion, family size as well as ethnicity. This will help the company in targeting its consumers in an accurate way by providing what they prefer. Consumer’s characters’ will make their demand different and unique (Yankelovich and Meer, 2006). The various products offered by Myer as well as its competitors will have different consumers depending on their demographic characteristics. Smit and Niegens (2000) say that this segmentation will help the company in offering the products that meet the consumers' demand depending on their segment. A very good example is the demand for cosmetic, a product offered by Myer. Different races, as well as religions, will demand the product differently. Myer should aim at meeting the demand of a particular race or religion as it supplies the product. In Australia for example, Myer targets its consumers differently. Most of Myer consumers are the middle class whose demand may affect the entire company if not well segmented. Myer can also segment its market geographically. In the Australian market as well as the international market demands are different and keep on changing depending on the consumers’ willingness and ability to buy the different products in the market (Yankelovich and Meer, 2006). Myer can divide its market depending on the various geographical areas where it operates both in Australia and outside. The different cities in Australia will be characterised by different demand patterns which will affect the company in the long run. This segmentation will aim at meeting the demand of consumers from different cities, regions, as well as countries, depending on their different trends (Yankelovich and Meer, 2006). Myer firms all over Australia encounter different buyers with different tastes as well as preferences. A good marketing strategy will have to put into consideration the entire market characteristic for it to meet the demand of its consumers (Smit and Niegens, 2000). Psychographic, behavioural and other types of consumer segmentation can be of great importance if incorporated in the Myer marketing strategy. The different characteristics of consumers will be into consideration while making decisions on marketing depending on the consumers. Environmental impacts of demand Myer consumers are not isolated in the various environmental factors that may affect the company. The demand for the various products offered by the company may be affected by the various business environments (Mauborgne and Kim, 2005). The Economic environment, for example, may affect the company greatly. Australia is currently being affected by the weakening economic conditions. According to Pash (2017), the rate of unemployment is increasing significantly and the consumer sentiments are weakening. This is affecting the consumers' buying power and the company in a negative way. The technological advancements evidenced in Australia and the world, in general, are also affecting the company. The introduction of online marketing and selling is being characterised by the entry of new firms in the industry (Robertson, 2017). This is affecting the competition in the retail industry all over Australia and the world. New buying methods through the internet are increasing and competition from other established retailers have been affecting the company. This can only be dealt with through opening of new distribution channels where the company will target more consumers from new markets. A blue ocean can also be realised through differentiation of products by Myer where consumers will get the products at a fair price and in time. Government regulation relating to taxation as well as trading hours in Australia may also affect the consumers' demand and the industry in general (Getty, 2014). The socio-cultural environment may also shape the buying behaviour of these consumers. Through good segmentation, the company will achieve a blue ocean strategy by developing its own uncontested market all over the world with the use of the internet. Transport system and infrastructure, in general, is another factor that will affect the company in that the products offered by Myer must reach the market using the infrastructure. Better communication and transport systems will increase the company's profitability and competitive advantage. Myer’s Porters five marketing framework Myer's competitors have the capabilities to sell the same products as Myer. This is a force that the company has to put into consideration when marketing its products through the adopted strategy (Getty, 2014). There is also the bargaining power of supplier's force which can affect Myer. Suppliers such as M.A.C. cosmetics brand. They usually affect the costs in the firm as well as other firms in the industry. Customer's bargaining power in Myer usually affects their quality as well as pricing (Mauborgne and Kim, 2005). According to Freeman (2017), Myer usually targets the middle class as well as the high-class customers, therefore, making the company try and understand their buying power so as to be better than the competitors. The retail industry in Australia where Myer operates usually attracts new entrants in the market (Getty, 2014). The few risks involved in the industry, as well as cost advantages and access to inputs, will affect the industry and Myer as a company ha to consider that. There is also the threat of substitutes from the competitors in the industry where Myer operates. This will determine how Myer will do its pricing to remain competitive and profitable at the same time, therefore, getting a blue ocean (Getty, 2014). Discovering Myer’s blue ocean According to Mauborgne and Kim (2005), to find the company's blue ocean, or operating in a market with less competition, Myer has to come up with a new value curve by reconstructing the buyers' element of values. This will involve breaking differentiation as well as low cost (Mauborgne and Kim, 2005). It has to rise what it can above the standards of other firms in the same industry. This will include going online as many of the customers are nowadays found online or they have access to the internet. This will help Myer to attract more customers both in and out of Australia (Robertson, 2017). This would be an effort for the company to reach higher than its competitors in the industry and getting a market with no threats from competitors. There are some factors that Myer has been competed on. These include the use of celebrities in their marketing for the attraction of cosmetics customers. As far as the company uses the methods, it should include other elements of marketing as well as eliminating others. The industry where Myer operates has been characterised by domestic competition without going in the global market. Myer should expand their distribution channels both in Australia and outside with the help of online marketing to develop a new value curve (Govender, 2017). Myer should also create other factors that have not been offered in the industry. These will include additional products as well as services which will attract other customers and retain the ones they have. Online marketing all over the world can be accompanied by the setting of new distribution channels in areas where the company does not operate (Robertson, 2017). This will facilitate achievement of a new value curve in that more customers will be reached and new products will be available for them to buy. Other than selling clothing, cosmetics, home wares, food as well as stationary and toys; Myer can introduce the sale of motor vehicles and other automotive appliances. The introduction of online marketing together with the new products, the company will be in a position to create Blue Ocean (Pash, 2017). Some factors are also supposed to be reduced below the levels in the industry. The retail industry in Australia is associated with some factors that are common. This includes shoppers going directly to the shops for their shopping needs. If Myer reduces these factors by distributing its products to the customers directly, it will have an added advantage than its competitors in the industry, therefore, having a new value curve. This will help the company to empower its customers in such a way that there will be tailored shopping as well as retailers being bridged. Application of the four actions framework will make Myer have a new look, increase its competitive advantages, therefore, become more profitable (Mauborgne, and Kim, 2005). References Freeman, G., 2017, March 16, Myer interim result underwhelms as sales slide continues. Morning star, retrieved from http://www.morningstar.com.au/1/articles/16409-myer-interim-r Getty, P. M., 2014, Slide 6: Unique Competitive Advantages. The 12 Magic Slides, p. 133-142. doi:10.1007/978-1-4302-6485-9_13 Govender, P., 2017, March 16, Myer HY17 online sales increase by 48 per cent, power retail, http://www.powerretail.com.au/news/myer-half-year-results-2017/ Joris, M. & Brand, M. J., 2002 June, “Organizational Structure and Performance”, SCALES-paper N200214. Low, C., 2016, September 15, First year of 'New Myer' drives profit result. The Sydney morning, Retrieved from http://www.smh.com.au/business/retail/myer-full-year-sales-up-3-per-cent-to-33- Mauborgne, R. and Kim, C. ., 2005, Blue Ocean Strategy: From Theory to Practice, California management review, Vol.47, No. 3. pp. 105-121. Pash, C. 2017, march 16, Myer has returned to profit growth. Business insider, retrieved from https://www.businessinsider.com.au/myer-has-returned-to-profit-growth-2017-3 Robertson, A., 2017, March 30, Myer raid could trigger David Jones merger: analyst, ABC news, retrieved from http://www.abc.net.au/news/2017-03-29/could-myer-raid-trigger-david- Smit, E. G. and Niegens, P. C. 2000, Segmentation Based on Affinity for Advertising, Journal of Advertising and research, Vol. 40, No. 4, pp. 35-43. Yankelovich, D. and Meer, D., 2006, Rediscovering Market Segmentation, Harvard Business Review vol. 84. no 2, pp. 122–13 Read More