Myer’s Marketing Report
Table of Contents
Segmentation, Targeting, Differentiation and Positioning (STDP)
Executive Summary
This report entails an evaluation of Myer Holding Limited’s marketing strategies. The report starts by evaluating Myer’s marketing situation, and an analysis of its macro and microenvironment factors. The next part is Myer’s SWOT analysis where the company’s strengths, weaknesses, opportunities and threats are discussed in details. The other part entails the evaluation of the company’s marketing objectives and issues, marketing strategies, segmentation, targeting, differentiation and position of the company. The last part of the report analyses Myer’s marketing mix where the 4Ps of marketing are discussed.
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Introduction
Myer Holdings Limited is an Australian department store retailing a broad range of products ranging from children’s, babies, men’s and women’s footwear, clothing and accessories; computers; electrical; cosmetics and fragrance; furniture; homewares; beddings; flooring; video games; toys; car audio; and travel goods (Myer, 2018). Myer has been the largest department store operating in all states in Australia. The company has had an interesting retailing story considering its humble beginning in 1900 and its market dominance now. Myer acquired its merger with Coles Group in 1985, and it got listed in ASX in 2009. However, just like any other company, Myer has been through ups and downs especially due to some poor brand design and execution strategies. The purpose of this report is to evaluate Myer’s marketing strategies through macro and micro-environment analysis, SWOT analysis, STDP and the marketing mix analysis.
Myer’s Marketing Situation
Myer operates in a competitive business environment and has to develop a robust marketing strategy that will keep it on top of the market. Myer’s main competitor is David Jones whose sales have been growing every year with the 2016 financial year report showing DJs sales increased by 7% while Myers sales rose by 2.7%. In 2016, a study by Roy Morgan Research showed that Myer’s customer satisfaction level was 86.2% which was 0.4% lower than DJs. However, Myer recorded an increase in customer satisfaction level in 2017 with 88.6% while DJs went down to 85.1% (B&T Magazine, 2017). Besides, Myer faces competition from other specialised retailers and online players such as Amazon. Myer is a department store company and targets the middle class and upper-middle-class individuals. It sells clothing, footwear and accessories to both men and women and targets teenage girls with trendy fashion lines.
Microenvironment Analysis
Microenvironment factors are very critical in the analysis of a business marketing strategy. Internal business factors such as customers, suppliers, competitors, media and the general public have a significant impact on the company’s operations. Aware of the influence of customers to the success of a business, Myer treats its customers with a lot of care and priority.
Customers
The company’s customers are mainly middle and upper-class individuals. Myer’s customers are B2C and are mostly local customers within the Australian states. One of the reasons why customers prefer Myer products is because the company offers a wide range of quality products and a competitive price compared to other retailers in the market. The company also has several offers to its customer including Myer gift cards, Myer Insurance, Myer Care Plan, Myer Credit Card etc. it offers excellent customer services such as the return policy where their customers can return the product within 30 days if they have changed their mind and the product is still in sealable condition.
Suppliers
Myer understands that suppliers are crucial to the success of every business and they affect the company’s marketing plan. According to Porral and Stanton (2017), supplier behaviour will impact the business it supplies. For instance, if a supplier supplies poor quality products, the company is likely to suffer customer dissatisfaction. Therefore, Myer maintains a close supplier relationship through its program, “Myer Supplier of the Year’ (Myer, 2018), that recognises its suppliers thus ensuring they provide quality products to enable the company remain competitive.
Competitors
Differentiation is one of the vital elements of a marketing game (Porter, 1998). Every business must ensure they offer better services than their competitors to secure a larger market share and customer loyalty. Myer understands that David Jones is their main competitor in the department store retailing and has diversified their products to ensure that they have a competitive advantage.
Media
Media attention can shape the success of an organisation. Whether the media attention is positive or negative, it has an enormous impact on the company. Myer ensures that they live within the country values and therefore ensure positive media attention. For example, in 2013, the then Myer CEO Bernie Brookes caused an uproar on social media after he was quoted saying that the NDIS scheme by the company was putting a heavy load on its customers and stakeholders. This caused a consumer boycott that temporarily affected the company’s sales for the third quarter of the year (Fitzsimmons, 2013).
General public
Myer recognizes that they have to satisfy the whole public and thus their services must be aimed at achieving this goal. This includes both the general laws and corporate social responsibility. Consequently, Myer has several community initiatives such as the Myer Community Fund which supports the women and children who are impacted by family violence. This helps the company market itself to the community (Myer, 2018).
Macro-environment analysis
Macro environment factors are very significant for the future of the organisation. They provide substantial details about operating challenges that face an organisation (Issa et al. 2018). These factors include political, social, economic, legal and technological factors.
Political factors
These factors play a critical role in determining the factors that impact Myer’s long-term profitability in Australia. Political stability; the level of corruption; bureaucracy and interference in retailing industry; trade regulations; anti-trust laws; taxation; pricing regulations; mandatory employee benefits; wage regulations such as the minimum wage; as well as industrial safety regulation that are introduced to the retailing sector all have an influence in the operations of Myer.
Social factors
Being the most significant player in the department stores, Myer faces direct impact from social factors within the Australian population. Such factors as the culture (that is the gender roles and social conventions); demographics of the population; class structure, power and hierarchy structure in the society; attitudes (environmental consciousness of the population); and the education level of the Australian population. All these factors influence the way marketers at Myer will understand their target customers.
Economic factors
Economic factors such as the inflation rates, unemployment rates, labour costs, government intervention in the free market, interest rate and foreign exchange rates have a direct impact of demand and supply of every market. Myer holdings limited uses indicators such as the consumer spending and the retailing growth rate to evaluate the uncertainties in the market. For example, the company was affected by the 2009 global financial crisis and recorded a low turnover compared to previous years (Myer Annual Report, 2011).
Legal factors
Some of the legal factors that affect Myer are the Australian employment laws; health and safety laws; anti-trust laws in the retailing industry; e-commerce and consumer protection as well as the data protection laws for their online customers. Other legal factors include the Fair Work Act regulations that govern all businesses in Australia and require companies to observe them keenly. Myer should always be keen on these factors since they have a direct impact on the company.
Technological factors
Myer has been consistent in embracing new technology within the retailing industry. The company now has Myer Market which is an online market where customers order products and they are delivered to their doorsteps. This has widened the Myer customer base.
Myer’s SWOT Analysis
Strengths
Myer has several strengths that have been vital for its success within the Australian retail sector. First, the company has stores in all Australian states as well as in one of Australia’s territory. Also, the strong brand and reputation created by Myer have enabled it to dominate the department store sector. Besides, the company has various brands available to customers at affordable prices thus giving the consumers vast choices to choose from. It is also important to note that Myer boosts of upscale mid to high range of departmental stores that are all characterised by high customer-focused services (MBA Skool, 2017).
Weaknesses
Some of the shortcomings of the Myer Holdings Limited are the underdeveloped distribution channels which limit the accessibility of the company by clients from all the parts of the country. Also, Myer has low usage of the area in the showroom which may hinder it from the adequate marketing of their products. Besides, Myer is only limited to local consumers and lacks international presence.
Opportunities
With increased foreign players dominating the Australian and international department store sector, Myer has a chance to link with them. Such players include Amazon. The company can also explore innovative promotional strategies to increase its footfalls. More so, Myer can increase the number of showrooms within the Australian market. Also, Myer has an opportunity to acquire both the current and potential competitors such as Target Australia and Harris Scarfe, to secure their market share. Finally, the company should improve its online experience as a way of exploiting the technology opportunity.
Threats
Myer faces a threat from the continuously changing consumer preferences and lifestyle (Megelus, 2018). The company has also been unable to target all the segments of the society. Nonetheless, Myer’s main rival David Jones is continuously expanding, and it is almost at per with Myer. Notwithstanding, the threat posed by many upcoming overseas competitors such as Amazon is serious.
Objectives and Issues
According to Myers (2014), marketing objectives are crucial in every marketing plan of a company since they show the goals and the time frame for achieving them. Myer’s marketing objective is to communicate with their loyal MYER one members and the customers as well as to engage with the local communities (Myer Annual Report, 2009). This objective is in line with the company’s partnership with the international pop star Kate Perry who will bring the tour to several cities across Australia (Myer Annual Report, 2017). However, Myer faces issues such as high competition from both international and local companies such as Amazon and David Jones respectively, and inability to have stores in all locations across Australia.
Marketing Strategy
In 2017, Myer revealed a new strategy after the US giant, Amazon, penetrated into the Australian retail market. The approach focuses on four main areas namely: The Customer-Led offer; Wonderful Experiences; Omni-Channel Shopping; and the Productivity Step Change. Digital and social media marketing strategy support this strategy. The company’s Visual merchandising in all their stores continue to set a benchmark. Besides, the MYER one loyalty program has been described as one of the key marketing strategies that have given Myer a competitive advantage over their competitors. Nonetheless, the strategy used by Myer to strengthen its brand awareness by supporting community events has significantly helped it in marketing their products (Myer Annual Report, 2009).
Segmentation, Targeting, Differentiation and Positioning (STDP)
Segmentation
Myer’s segmentation is a price conscious group targeted departmental store. The company has divided its customers into geographic, demographic, income, and psychographic segments. Its geographic segment implies that the company’s segmentation criteria are regional since it operates within Australia. Demographic segment means that the company has products for both male and female, and children and adults.
Targeting
Myer targets middle class and upper-middle-class individuals. However, it is important to note that Myer targets all category of customers through their online marketing strategy and MYER one retail. The company has been able to achieve the loyalty of both middle and upper-middle-class customers due to their fashion and style quality. Myer targets individuals of all age categories ranging from children to adults.
Differentiation
Myer uses differentiation strategy to achieve a competitive advantage in the highly departmental store sector. The company ensures that their products are unique, stylish and quality to maintain their loyal customers.
Positioning
Myer has positioned itself as a stylish and quality company. Its products are of high quality, and they are always up to date with trends and styles. Their ‘Off-Price’ retail sells branded products which are trendy and of high quality.
4Ps of Marketing Mix
According to Huang and Sarigollu (2014), any business is driven by its four critical items; product, price, place and promotion. Myer recognises this fact and employs the 4Ps marketing mix strategy in its strategic plan.
Product
The company retails a wide range of products ranging from women’s, men’s and children clothing lines, travel products, books and stationaries (Myer.com,au, 2017). Myer provides their customers with discounts, a free copy of their magazine, and a sample of their products to achieve their loyalty.
Price
Myer provides their international buyers with a variety of high quality products at a competitive price. The company offers cheaper goods and services compared to their competitors. Besides, Myer offers their customers discounts in various forms.
Place
Myer’s stores in Australia are located in all states and also in the Australian’s capital territory. Notwithstanding, the company has embraced technology and developed a robust online platform where most of the sales are made both locally and internationally.
Promotion
Myer has had various advertising and promotion strategies including their new slogan ‘find wonderful’ and partnership with famous actress, Cobham Harvey in 2014 and the current partnership with the international pop star Katy Perry (Myer Annual Report, 2017).
Conclusion
Myer’s marketing strategy has enabled it to stay in the top of the industry for the last one century. However, if the company addresses its weakness effectively and takes advantage of the available opportunities, it can still perform better in both the local and international market. Myer should invest more in its online marketing strategy to enable it to penetrate the global market.
References
- B&T Magazine. (2017, October 9). Study: Myer customers now more satisfied than rival David Jones’. Retrieved from B&T Magazine: http://www.bandt.com.au/marketing/study-myer-customers-satisfied-rival-david-jones
- Fitzsimmons, C. (2013, May 2). How Myer CEO Bernie Brookes caused a social media to stink with his comments on the NDIS. Retrieved August 23, 2018, from Financial Review: https://www.afr.com/business/media-and-marketing/how-myer-ceo-bernie-brookes-caused-a-social-media-stink-with-his-comments-on-the-ndis-20130502-jyak6
- Huang R., Sarigollu E. (2014). How Brand awareness relates to the market outcome, brand equity, and marketing mix. In Fashion and Consumer Behaviors, 113-132.
- Issa T., Chang V., Issa T. (2010). Sustainable business strategies and PESTEL framework. GSTF International Journal on Computing, 73-80.
- MBA Skool. (2017, June 21). Myer SWOT Analysis. Retrieved August 23, 2018, from MBA Skool.com: https://www.mbaskool.com/brandguide/lifestyle-and-retail/4954-myer.html
- Megelus, K. (2018, February 15). Myer once stood for the aspirational middle class, but now it’s lost sight of who its customers are. Retrieved August 23, 2018, from The Conversation: https://theconversation.com/myer-once-stood-for-the-aspirational-middle-class-but-now-its-lost-sight-of-who-its-customers-are-91832
- Myer. (2009). Annual Report 2009. Sydney: Myer Holdings Limited.
- Myer. (2017). Annual Report 2017. Sydney: Myer.
- Myer. (2018, February 23). Myer Today. Retrieved from Myer Official Website: https://www.myer.com.au/p/about-myer/the-company/about-us/content-myer-today/
- Myers, G. S. (2014). Marketing. University of Maryland Publication, 3-7.
- Porral C. C., Stanton J. L. (2017). Principles of Marketing. New York: ESIC Editorial.
- Porter, M. E. (1998). He Adam Smith address: location, clusters, and the “new” microeconomics of competition. Business Economics, 7-13.
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