Marketing Audit Assignment: Case Analysis Of The Good Guys

Question

Task:
Prepare a report on marketing audit assignment demonstrating a succinct and comprehensive objective analysis of marketing activities of The Good Guys.

Answer

Executive Summary
The report on marketing audit assignment is focussed on the marketing audit of one of the leading retailers in consumer electronics and appliances in Australia, “The Good Guys”. The company was acquired by JB Hi-FI, another retailer in consumer goods category in the year 2016. Despite the shutdown of the economy and slipping of Australian economy by 7% in the quarter ending June, The Good Guys showed a modest sales growth of 10.4% owing to strong demands from the consumers working from home. The consumer analysis harbingers that the customers crave for an Omni channel experience, good quality of products and faster delivery, and all of these elements are in a perfect mix at “The Good Guys”.

The company which has over 100+ stores uses Geographical segmentation strategy and targets customers in the age group of 16-55 Years, which includes millennial, time poor consumers, family and elderly individuals. The company’s positioning approach is customer centric, which is reflected in its pricing, services and product quality. The major competitors for the company include Kogan, Betta, Bing Lee, Harvey Norman, Amazon and others. The product portfolio of the company has enough depth and width when it comes to consumer electronics and appliances, and its pricing strategy can be seen as competitive. It also extensively promotes its 30 days price guarantee scheme, which is a big hit amongst its TG. Furthermore, recommendation has been provided to the company on the basis of marketing audit which are promoting its safety and hygiene policy at the stores to win the trust of the customers, use Beacon devices for contextual targeting and lastly focus on the increasing the engagement with its customers leveraging social media.

Introduction
The Good Guys is one of the leading consumer electronics retailers of Australia with also a strong e-commerce presence. The company which was founded in the year 1952, by the Muir Family was called as Ian Muir’s Radio and Electrical Centre until it rebranded itself in the year 1998, and ever since it is known as “The Good Guys”, with underlying philosophy of “Pay Less Pay Cash”(The Good Guys, 2020). The retail chain as of now has over 101 stores and in the year 2016, it was acquired by JB Hi-FI, owing to a strong strategic fit (CrunchBase, 2020). Under the leadership of the group CEO, The Good Guys and JB Hi-Fi has created a strong force in the retail industry (The Good Guys, 2020)

Figure 1: The Good Guys Company Logo

(Source: The Good Guys, 2020)

The report on marketing audit assignment here provides a succinct and comprehensive objective analysis of the company’s marketing activities by conducting a situation analysis using the relevant frameworks, STP, analysis of its marketing mix strategy. The marketing audit assignment is concluded by putting across a three point marketing strategy recommendation on the basis of the analysis conducted and various literature review, to ensure that the company keeps moving forward with its customer centric approach.

Situation Analysis
Company Analysis
The company headquartered in Virginia, Australia is mostly known for its consumer electronic items in the categories of TV’s, Fridge, Ovens, Dishwashers, Cooktops, Dryers, Aircons, etc. and others have won a number of awards for its excellent services and also in other categories (The Good Guys, 2020). The company which got acquired by JB Hi Fi, in the year 2016, believes in the philosophy that it can create a difference in the society by Doing Good every day, which is reflected in its charitable and wellness programs across Australia.

Figure 2: Snapshot of the awards won by The Good Guys over the last years

(Source: The Good Guys, 2020)

PESTLE Analysis
Please refer Appendix 1

Competitor Analysis
Herein marketing audit assignment, below are a list of major competitors for The Good Guys which more or less provide the same products and services like the company itself. JB-Hi FI has acquired The Good Guys(JB Hi-Fi, 2020), hence is out of the competition, which was earlier the market leader with Kogan.com in the consumer electronics category.

Bing Lee-Bing Lee is a 57 year old organization which has specialization in product categories such as TV & Appliances, Health & Fitness, Personal Care, Kitchen Appliances and many others. The major USP of Bing Lee includes Express Click and Collect option, Next Day Delivery, We Price Match and its existence in the industry for 57 years, which has garnered the brand a strong customer loyalty(Bing Lee, 2020). However, it is the “We Price Match”, which is one of the strength of the company, under which the company can go ahead and reduce the price of its product if any of the competitor is selling the same product at a lower price.

Appliances Online- This is another major player in the consumer electronics category and offers more or less the same services like The Good Guys. The company basks on the excellent customer service support, which is available 24*7 and is rated one of the biggest strength of the company (Appliances Online, 2020).

Kogan.com- As per the investigation carried on this marketing audit assignment, Kogan is the market leader which has a wide range of product portfolio and is also seen as one of the biggest competitor to the e-commerce giant Amazon. Kogan is seen to be known for its consumer electronics, appliances, home wares, hardware’s, toys and many more (Kogan, 2020). The company only has an online retail marketplace, just like Amazon which strives on providing more competitive rates than any of the e-tailers or the retailers in Australia.

Harvey Norman- The company has both an online and an offline presence and has the same offering as that of The Good Guys and other competitors. The company pulls in customers to the stores by flooding them with various discounts and offers on any of its products. Bonus Gift Cards, 60 Months Interest Free purchase are some of the highlights of the company (Harvey Norman, 2020). The pricing is competitive.

Betta- Betta operates under the guidelines of the BSR Australia and BSR Franchising in the electrical retail industry across Australia. Betta is positioned more like a home living brand which provides home appliances and furniture solutions to the customers across Australia (Betta, 2020)

Customer Analysis
Customer taste and preferences keep evolving with times, hence it becomes instrumental to understand the behaviour of the customers in order to align the strategy of both the online and offline retail stores(Hoyer, et al., 2020). In accordance to the report of KPMG considered in this section of marketing audit assignment, 2019 was a momentous year for the retail in Australia and it made headlines for all the wrong reasons such as spending slumped to a 28 year low, the industry was challenged with challenges of employee underpayments, number of retailers had to shut their stores, and all this was largely driven by the change in customer taste and preferences (KPMG, 2020). Technology plays a major role causing the wave in customer change, consumer expectations have changed and now providing an omnichannel experience is considered as an expectation and norm in the retail industry. Thus, the first learning here is to provide customers with an enriched customer experience through all the channels(Deloitte, 2020). Additionally, this also puts a pressure on the inventory management, which requires retailers to know about the stock that has been picking up the most, time manage to get the inventory from the warehouses to the stores and more so(KPMG, 2020).

Failure to deliver is another challenge the retailers have been facing increasingly. Customers trust is paramount to the success of the business, in the way that when they order something online they expect the product to be delivered in accordance to what the adverts have shown to them, even a little camouflage in the information or misleading advertisement is seen to be a trust failure in the retail industry(PWC, 2020). Location is seen as another important factor in customer trust, customers can go ahead and look for the product online, and use the store location services to visit the store and make an offline purchase(Xu & Lee, 2020). This trend is seem to be resonating more with the millennial and time poor consumers. Some of the best ways by which The Good Guys can have a grip over its customers are mentioned in the following section of marketing audit assignment:

• Developing a sense of clarity on the Target customers.
• A customer focussed approach which implies firstly delivery the excellent product of service to the customers, and then leverage the same through marketing communication and not the other way round(KPMG, 2020).
• The Good Guys to invest in Data driven approach using techniques such as big data analytics from inventory management and also to pour out interesting insight on the products in the stores.
• Use of efficient technology to improve the customer experience at the stores.
• Improvement in the overall ability of the brand to be nimble and quick in decision making by adopting to new customer preferences(Deloitte, 2020)

SWOT & TOWS Analysis

Segmentation, Targeting and Positioning
Segmentation Strategy

Figure 3: The Good Guys Stores across Australia

(Source: The Good Guys, 2020)

A snippet above of The Good Guys Stores provided in this marketing audit assignment clearly reflects the massive presence of the brand along the coastline of the country. The company uses what is called as Geographical segmentation strategy, under which the company has scientifically opened stores on the basis of density of population, store size availability and other factors(Yoseph, et al., 2020). The other segmentation which can be seen here is in terms of age, the store is fit for people of all age group, especially 16-60 years of age, owing to the product offering(Peker, Kocyigit & Eren, 2017).

Targeting Strategy
Looking at the age range of the population the company is eying, there is no doubt to say that a number of marketing tactics are being used to lure in the customers. Such as Facebook Advertising, Instagram Advertising, and online advertising(Purani, Kumar & Shahadev, 2019). Besides this the company also heavily promotes its USP of 30 days price guarantee, which is a great marketing stunt for the Target audience. The company thus relies more on the contemporary of the digital advertising tools(Smith, 2019), however, its TV commercials which are meant for the family audience, are another part of its effective targeting strategy.

Positioning Strategy
The company clearly has a customer centric approach, which is reflected in terms of its prices, its product selection, number of stores across Australia and its 30 Days price guarantee scheme. Hence, it is fair to say that just like Amazon, which also has a customer centric approach, which is reflected in its business policies and process, the same is aspired by the brand herein marketing audit assignment.

Deals & More Deals- The Company has positioned itself as the one which provides its customers with more deals than any of its competitors.

Phone Sales- The Company also provides customers an additional benefit by providing Phone sales from 9AM to 9PM(The Good Guys, 2020).

30 Days Price Guarantee Scheme- This is what the company advertises and promotes extensively in all of its marketing campaign. The scheme can be understood as, if the price of the product has dropped at The Good Guys Store or any of the approved competitor by more than $5 within 30 days of the purchase. The company pays its customers 120% of the difference amount as the store credit. This is seen as the peace of mind for the customers when they are making the purchase.

Marketing Mix Audit
Product Portfolio

Figure 4: Product Categories at The Good Store

(Source: The Good Guys, 2020)

It is evident in this marketing audit assignment that The Good Guys has a product portfolio which comprises of TV, Fridges, Cooking and Dishwashers, Small Kitchen Appliances, Laundry, Tables and Gaming, Vacuums & Cleaners, Digital Cameras and Smart Home products. The company can be seen selling products which cements its position in the category of consumer electronic appliances and have been doing successfully for over 70 years now. Besides this the company also helps its customers to make a smart choice in disposing off their electronic good items through its subsidiary by the name of Ecoactiv. All of the products in The Good Guys store are branded such as Samsung, Telstra, Bosch, Dyson, LG, Apple, Weber and others, this shows its strong supplier relationship in the market. It can also be said without a hint of doubt that The Good Guys has a great depth in its product portfolio, especially in terms of Product line extension, which is remarkably good for both of its online and offline stores, as they have multiple options to choose the product from wide range of companies(Phong, et al., 2020).

Brand Strategy
The company uses Geographical market segmentation and product line extension as its brand strategy which is clearly visible throughout its product portfolio. This is most certainly a win-win both for the customers and the company, as customers get to select the product from a wide range of product across different brands. However, the company has must and should enter into diversification by focussing on other lines such as Home Décor and others. As the store is for the family audience as well, and the customers do have the habit of getting into impulse purchase, which might add to the revenues of the company(Japtura, Nguyen & Melewar, 2019).

Pricing Strategy
Australia’s retail industry is highly saturated with a large number of retailers who are competing on the price and excellent product quality and services to lure the customers(Kremez, et al., 2019). The brand, thus cannot go overboard with the prices due to various regulation on the retailers and also keeping in mind the competition and its prices. The company sees to be using a Penetration pricing strategy, which makes its stores accessible to all. The company further uses discounted price strategy, 30 Days Price Guarantee, Hot deals and other pricing tactics to ensure that the pricing of the company stays competitive and it can compete with other retailers on the quality of the product, delivery, customer support and other services.

The reason for company using the Penetration pricing strategy mentioned in the marketing audit assignment is not a surprise, as that is what is being done by all other competitors. Plus, when the market is saturated with large number of players, it makes sense to have competitive pricing and then to compete on the basis of product quality, delivery, service, return and refund ease and other such elements

Place/Distribution Channels Strategy
Retailing in Australia and the consumer trends points to providing an Omni channel experience for any retailer operating in the country. It is due to this reason, the company uses both click and mortar model as its channel strategy:

• Online Stores- The company has a fully functional and a high responsive shopify website, which allows customers to make a purchase online. Or even better, the customers can go online, look for the deals, visit the stores and make the purchase(Mordor Intelligence, 2020). In this case, the experience of the customers both at the offline and online store has to be great to ensure repeat purchase behaviour from the customers.
• Offline Stores- For the customers who are more likely to visit the stores, have a demo of the product and then make a purchase. The company has over 100+ stores spread across the country, which are based on geographical segmentation. Furthermore, the reps at the offline stores are more effective in building rapport with the customers, hence becomes more effective channel strategy(Fenech, 2016).
• Phone Sales- The Company also takes orders over the phone and delivers to the customers at a delivery fee of AUD 4.95. This option has been provided as an add on for the customers, who like to look at the products online but are more comfortable in paying cash. This service is more likely to be used by the people of elderly generation who are not quite comfortable buying things online.

What is the Promotional Strategy of a company explored in the present context of marketing audit assignment?
The company uses a large number of promotional strategy both for its online and offline customers which are:

30 Days Price Guarantee- This is one of the USP of the company which provides its customers with the peace of mind. As already explained before, here the company guarantees to pay 120% of the difference of the product which they purchased at the store, provided that in 30 days they find a deal which is $5 less than what they paid for. This is seen as a remarkable promotional strategy and gives customers a peace of mind.

Hot Deals and Other Discounts- The Good Guys extensively promotes hot deals, money back guarantee, door buster deals, hot buy and also promotes bundle products for increased buying(The Good Guys, 2020).

The same is advertised through its TV commercials and marketing communication on social media and other promotional methods the company uses.

Recommendation
The recommendations are provided on the basis of the study conducted above within this marketing audit assignment and keeping in mind the new trends in retail sector:

• The first recommendation to the brand is based on the unlikely times and challenges presented by the Pandemic of COVID-19. Hence, it is advised to the company to create a TV commercial or a Facebook commercial and demonstrate its safety and hygiene practices it follows in the store. This would help the customers to come out and shop freely without any worries in the stores.
• The second recommendation is based on the engagement of the company with its customers. Although it has a decent social media presence with over 10K followers on Instagram, however, the engagement is still quite low(Instagram, 2020). Things like influencer marketing strategy, User Generated content strategy, and then delving into content analysis can help the company in uplifting its engagement score and also to build a better rapport with its customers.
• It has been seen that The Good Guys has a customer centric approach, the company can further showcase this approach by leveraging smart marketing hardware such as Beacon at the store. These beacons will help the customers in navigating easily around the store and also provide them with information or the discounts currently running at the store (Da Silva, 2017). It also serves as a tool to promote highly contextual content to the customers.

Conclusion
This marketing audit assignment for The Good Guys store can be concluded by saying that despite the pandemic, the sales of the company hasn’t dropped, in fact a growth of 10.4% has been registered which is due to the growing needs of the consumers working from home. The company has major competition from Kogan, Harvey Norman, Bette and others, but it is not a concern for the company, as now with the acquisition by JB Hi-FI, the company has access to all the resources and capabilities which can help the company become a market leader in the consumer electronics category. Furthermore, the company has over 100+ stores and it uses Geographical market segmentation strategy. The company targets its customers using a wide range of both the traditional and contemporary marketing tactics. The positioning of the company is that of customer centric in nature, which is reflected in its customer friendly policies and process. The product portfolio of the company has massive depth in terms of product selection, and its penetration pricing strategy with a 30 days Price warrantee is a big hit amongst its customers. The company uses online sales, Offline sales and Phone sales as its distribution channel strategy. It has been recommended that the company further advertises on the safety and hygiene standards at the store and increases its engagement with the customers on social media to further add onto its brand equity.

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Appendix
PESTLE Analysis