Is a lack of Integrated Marketing to blame for Woolworths recent downturn?

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Integrated Marketing Theory & Introduction

Collins, C, Pasch, K, & Williams, J (2013, pg38) explore various definitions of Integrated Marketing Communication (IMC.) IMC emerged as a result of a shift towards customer focused marketing during the 1970’s and 1980’s (Groom & Biernatzki, 2008.) Duncan & Caywood (1996) have emerged as the most widely cited definition of IMC, that is “a concept of marketing, communications planning that recognises value of a comprehensive plan and evaluates the role of a variety of strategic disciplines” Duncan & Caywood in Kliatchko, (2005, p.14.) Shimp and Shimp choose to define the distinguishing features of IMC, with a focus on ‘customer, contact, single voice, relationships and impact on behaviour.’ (Shimp & Shimp, 1997, p.20) Schultz and Kitchen include 4 stages of marketing communication with similar elements to Shimp and Shimp, the first, ‘coordination, gathering information, applying information and finally, strategic and financial integration’ (Schultz & Kitchen, 2000, p.26).

Upon evaluating the key elements of these widely used IMC definitions, I notice in Shimp & Shimps definition; there is a particular emphasis on a ‘single voice’ this definition shows, that a company must be internally-aligned towards their goal, Schultz and Kitchen present coordination & strategic integration as the cornerstones of their definition. The blog aims to focus on the ‘integration’ element and its importance in the overall theory, and attempt to attribute some of these elements to recent examples that have no doubt contributed to negative growth for of Woolworths in recent months.

 

Woolworths & the ‘Integration’ in IMC

In a recent article by the Australian, Woolworths CEO Brad Banducci (pictured) highlights key issues in the Woolworths promotion strategy. First, the influence of bureaucracy from head-office dictating operations at store level. A specific example is given; reducing staffing levels on Sunday, even though it is their busiest, eyeing short-term profitability ahead of oppurtutnity and quality, “Sunday is becoming the busiest day of the week for grocery shopping, but not enough check-out staff are rostered and some customers have left, frustrated with long queues.”

 

 

Brad Banducci’s second point focuses on the lack of integration, this-time within the head office, “There are too many “stock-outs”. The allocation of price investment between everyday low prices and promotions is confused.” Clearly this is a major issue for Woolworths, despite the heavy dollars invested in various advertising streams from catalogues to television adds & and the extensive price discounts offered on key-line items, Woolworths Procurement and Supply-Chain Departments are somewhat disconnected with the Marketing Department, not buying additional product to meet the ‘promotional up-lift.’ This perhaps shows that even macro organisations such as Woolworths have overseen the key principles of IMC highlighted by Shimp & Shimp, and Schultz and Kitchen.

 

Change at the top – examples of Woolworths adopting IMC Theory

Sue Mitchell from the AFR Weekend writes, the newly appointed CEO Brad Banduncci has flagged a new era of accountability, intergration and team work saying ‘We want to take the business back to its best levels and recapture innovation and customer focus right across the business.” (2016). Woolworths have seemingly gone back to basics, pulling the plug on their dissatrous-silo, Masters and instrically focusing resources, investing some 150million dollars in the next 6 months to revamp their stagnating grocery business.

Results from February have showed no growth however, Brad Banducci is aware that this is a long-term strategy and the organisation needs to be alligned. No doubt, Brad illustrats principles of the first stage of the & ‘Shimp and Shimp’ defition; ‘understanding the dynamic of the customer’, he mentions “Premium Customers” a group of customers who are not-so interested with discounts rather convenience, these are the customers who are slow to return to Woolworths and make up a large part of Woolworths “Sunday Convenience” consumer-base. “We need to focus on the Premium Customers, not just Every-Day Customers.”

 

 

 

 

 

 

 

Reference List;

 

  1. Duncan, T., & Caywood, C. (1996) The concept, process, and evolution of intergrated marketing communication. In E. Thorson & J. Moore (Eds.) Intergrated communication: Synergy of persuasive voices (pp 13-34) Mahwah, NJ: Lawrence Erlbaum and Associates.

 

  1. Collins, C, Pasch, K, & Williams, J 2013, Advances In Communication Research To Reduce Childhood Obesity. [Electronic Resource], n.p.: New York, NY : Springer, c2013., DEAKIN UNIV LIBRARY’s Catalog, EBSCOhost, viewed 7 May 2016.

 

  1. Groom, S. A., & Biernatzki, W. E. (2008). Integrated marketing communication: Anticipating the ‘age of engage’. In Communication research trends (Vol. 27, pp. 3–19). Centre for the Study of Communication and Culture

 

  1. Schultz, D. E., & Kitchen, P. J. (2000). Communicating globally: An integrated marketingapproach . Basingstoke: NTC Business Books, Chicago and Macmillan Business..

 

  1. Shimp, T. A., & Shimp, T. A. (1997). Advertising, promotion & supplemental aspects of integrated marketing communications. Dryden Press.

 

  1. com.au. 2016. Nocookies | The Australian. [ONLINE] Available at: http://www.theaustralian.com.au/business/wealth/woolies-facing-long-journey-in-its-turnaround/news-story/37d7c90ea09f5e3095f4adb7579be958. [Accessed 08 May 2016].

 

  1. Financial Review. 2016. Woolworths appoints Brad Banducci as CEO, announces $973m loss | afr.com. [ONLINE] Available at: http://www.afr.com/business/retail/woolworths-appoints-brad-banducci-as-ceo-announces-973m-loss-20160203-gml8lq. [Accessed 08 May 2016].

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