Introduction
Marketing strategy and plan helps an organization to attain their marketing-related objectives. Marketing plan act as the blueprint for the company. A marketing strategy helps an organization to effectively concentrate on scare resources and on extensive marketing research (Ernst and Dolnicar, 2018). For this report, the selected company is “Aromababy”. The company offers organic and natural baby skincare products in Australia. As, now people are aiming towards organic products (even in cosmetics also). It can be understood that people are now understanding the importance of organic items. The primary objective of the company is to focus on “green” or “environment sustainable” strategies to safeguard the environment (Gerini, Alfnes and Schjøll, 2016). The targeted audience of the company appreciates its motive. However, there is no global standard for natural products thus it creates difficulty for the consumers to make formed decision making. In this report, external environment analysis will be conducted from PESTLE analysis, marketing segmentation will be made, the high pricing strategy will be discussed, etc.
External market analysis
PESTLE analysis
Political analysis:
The country supports foreign trades and the government makes regular changes in their policies. Currently, Australia’s Foreign Relations (State and Territory Arrangements) (Consequential Amendments) Bill 2020 is in operation. This bill establishes a legislative scheme for commonwealth engagement with arrangements among states, territory governments, foreign government and with their associated entities (Countryeconomy.com, 2020).
Economic analysis:
It is expected that in the year 2021 the GDP of the country will cross $1370billion and in 2022 the GDP of the country will cross $1480billion. However, in the year 2018 the GDP of the country was increased by 1.8% and in the year 2019, it was increased by 6.7% (Tradingeconomics.com, 2020).
Social analysis:
In terms of social analysis, the country is known for its wealth, education and quality of life. An individual experiences all of these elements when it comes to spending a high-class social life. Australia is one of the most multicultural and multiracial countries in the world.
Technology analysis:
The country is one of the most technologically advanced countries in the world. The country is known for adopting advanced technologies in an effective way. In 2018, the government increase the funds to be allocated in technology formulation by 4% (in total it amounted to $63billion). In 2019, the government increase the funds to $65billion (Countryeconomy.com, 2020).
Legal analysis:
In order to maintain fair trading and business practices, the country has various law. The Fair Work Act 2009 is the primary piece of business legislation. As per the requirement, the government brings changes or modification in their business laws. Apart from this, the country has laws related to the rights of an employee or workers. Thus, in the country, the law provides security to the employer as well as the employee in an effective way (Kranjac, Vapa-Tankosic and Knežević, 2017).
Environmental analysis:
The country has stunning beaches, mountains and forests. The country is known for its brilliant biodiversity. Although, the government has designed many laws related to environmental sustainability. Domestic as well as foreign companies will need to effectively follow those guidelines in order to put a less adverse effect on the environment (Persaud and Schillo, 2017).
Market segmentation
As, the company deals in making baby care products, thus their targeted audience should be babies or infants. However, it is important to understand that products are brought for babies or infants but products are brought by their parents or caretakers. So, this market segmentation will revolve by considering that parents or caretakers of the babies are the underline targeted audience of Aromababy:
Demographic segmentation
- Age: 25 to 35 years old couples or people who recently become parents
- Income: Upper middle class and rich class income group.
- Education: couples should have knowledge regarding the importance of organic products for their babies.
Psychographic segmentation
The psychology of the targeted people should be that they (parents or caretakers) want an organic product for their babies because the baby’s skin is thinner and more porous then adults thus is important to choose the right product for the baby that suits to his/her skin type. The targeted audience should keep such kind of psychological believes (Peštek, Agic and Cinjarevic, 2018).
Behavioural segmentation
It will be better and easy to target those people who are already using organic products. As, targeting such people is easy because they themselves understands the benefits and advantages of incorporating such products. So, if their behaviour showcase that they are already using organic products then for their babies also they will be going to use the organic products in an effective way (Proshchalykina, Kyryliuk and Kyryliuk, 2019).
Geographic segmentation
From the perspective of geographic segmentation, there is no such specific classification. As, audiences from rural as well as city areas are use the product for their babies (irrespective of their geographic boundaries). Here, it can analyze that the targeted audience should not belong to those regions where they have access to natural products. Such as: the targeted audience should not be belonging to the tribal areas, etc (Sarti, Darnall and Testa, 2018).
Price strategy
As, currently the company is using a high price strategy because they are offering premium and high-quality organic ingredient products to its targeted audience. The primary element which makes the price strategy of the company successful is that targeted audience is educated people which understands the benefits of incorporating organic product for their babies instead of using highly toxic products (Verhoef and Van Doorn, 2016). The company uses a premium price strategy which helps them to make optimum quality products and even the targeted audience of the company do not hesitate to pay high prices of the company. Although, in order to gain the competitive advantage it is important that the company should always create a perception in their buyer’s mind that Aromababy products are made of pure extinct and they (targeted audience) can trust the products of the company such as: massage oil for babies, balm for babies, etc. Here, it is suggested that the company should need to maintain trust among its buyers. The company should urge towards getting international certification also for their products. The company should aim at getting certification from: Biological Farmer Association (BFA), ACO, USDA(US) and IFOAM (EUROPE). Currently, the company is distributing its products to the targeted audience through health food stores, baby boutiques, department stores, e-commerce channels, etc (Sarti, Darnall and Testa, 2018).
Advertising strategy
As, it is suggested that the company should primarily focus on social market strategies. As, social market strategies will help the company in creating awareness among the targeted audience in an effective way. Here, the marketing manager of Aromababy should need to market their product among the adults who are planning to have a baby or who already blesses with a baby recently (Sarti, Darnall and Testa, 2018). Thus, in such a case social media marketing strategy will effectively help the company. It is also suggested that the company should focus on creating awareness among the audience which is not going to plan for a baby in the near future. As, promoting in those segments will help the company in effectively creating brand awareness among those groups also which will be going to be parents in the future. For example: suppose a couple is married recently but they decided that none of them is going to keep the expectation for having a baby for the next 5 years. In this case, the marketing manager of the company is not going to promote their product in such a targeted group but it is suggested that the company should focus on creating brand awareness among such group (instead of product promotion). From the long-term perspective, creating brand awareness among those group which will turn into the targeted audience after some time will going to benefit the company in terms of gaining competitive advantage in an effective way. Apart from this, various social media tools will help the marketing management of the company to effectively analyse the arisen demand of the targeted audience (Proshchalykina, Kyryliuk and Kyryliuk, 2019).
Conclusion
In this report, the external market environment of the company is conducted on the bases of PESTLE analysis. From Political analysis, it is concluded that though the country’s foreign relation with another country the company will get major advantages in setting up their business in other countries as well as they (Aromababy) can effectively operate within Australia also without facing any major trade barriers. Although, from the economic analysis it is concluded that the economy of the country is stable and it will help the company in attaining successive growth in the long term. Apart from this, market segmentation is also discussed in this report. Moreover, it is concluded in this report that the products are brought for the babies but the targeted audience of Aromababy are parents and caretakers of infants.
References
Countryeconomy.com. (2020) Australia GDP – Gross Domestic Product. [Online] Available from: https://countryeconomy.com/gdp/australia [Accessed on: 3rd October, 2020].
Ernst, D. and Dolnicar, S. (2018) How to avoid random market segmentation solutions. Journal of Travel Research, 57(1), pp.69-82.
Gerini, F., Alfnes, F. and Schjøll, A. (2016) Organic‐and animal welfare‐labelled eggs: competing for the same consumers?. Journal of Agricultural Economics, 67(2), pp.471-490.
Kranjac, M., Vapa-Tankosic, J. and Knežević, M. (2017) Profile of organic food consumers. Economics of agriculture, 64(2), pp.497-514.
Persaud, A. and Schillo, S.R. (2017) Purchasing organic products: role of social context and consumer innovativeness. Marketing Intelligence & Planning, 1(1), 90-140.
Peštek, A., Agic, E. and Cinjarevic, M. (2018) Segmentation of organic food buyers: An emergent market perspective. British Food Journal, 1(1), 140-160.
Proshchalykina, A., Kyryliuk, Y. and Kyryliuk, I. (2019) Prerequisites for the development and prospects of organic agricultural products market. Entrepreneurship and Sustainability Issues, 6(3), pp.1307-1317.
Sarti, S., Darnall, N. and Testa, F. (2018) Market segmentation of consumers based on their actual sustainability and health-related purchases. Journal of Cleaner Production, 192, pp.270-280.
Tradingeconomics.com. (2020) Australia GDP growth rate. [Online] Available from: https://tradingeconomics.com/australia/gdp-growth [Accessed on: 3rd October, 2020].
Verhoef, P.C. and Van Doorn, J. (2016) Segmenting consumers according to their purchase of products with organic, fair-trade, and health labels. Journal of Marketing Behavior, 2(1), pp.19-37.
