Marketing Analysis of Bunnings

Introduction

Bunnings Warehouse is a leading retail home improvement one-stop shop for most of Australia’s population. Despite being a force to reckon with in the home improvement sector in Australia, the retail store has challenges that inhibit it from soaring to greater heights. The main issues are tied to the stores’ marketing strategy, which needs to be reconceptualized often due to increased competition. Many retail shops are being set up in the home improvement sector in Australia. Stores such as Mitre 10, Home Hardware, and Total Tools are fiercely fighting for their space in the home improvement market by providing an array of products that challenge Bunnings’ presence in the market.

Marketing issues at Bunnings

To counter such efforts, Bunnings needs to remedy some issues with its marketing strategy. Some of the main issues that Bunnings needs to address include:

• Limited online presence – Social Media Marketing (SMM) has taken many sectors by storm, especially after the Covid-19 pandemic. Increased technologies and social media platforms have created many avenues through which retailers and stores can market their products. According to Saravanakumar & Suganthalkshmi (2012), social media sites help to bring retail stores closer to customers. These include social media sites like Instagram, Facebook, Tiktok, and Twitter. Furthermore, stores have created application software to interact with customers, receive and respond to product reviews and sell their products. Bunnings needs to tap into the possibility of making more sales online by influencing more people through such platforms.

• Implied discrimination against some market segments – The PowerPass program was a superb idea by Bunnings to entice tradespeople and commercial businesses into buying their products. However, this program locked out the DIY enthusiasts who are not into business and want to improve their homes. Since they cannot access some of the benefits and price advantages that PowerPass members have, they may feel left out by Bunnings. They may be forced to look for other alternatives, which could be a loss to Bunnings.

• There are fewer purchase options for the customers – the home improvement in Australia is rapidly getting crowded by other companies competing for space with Bunnings. There is a need for Bunnings to diversify options for its customers to maintain their edge in the market. Goods and services at Bunnings are currently offered on a retail basis only. Bunnings could embrace other plans for its customers, such as contractual maintenance programs that will help it boost customer loyalty to the brand. Bunnings needs to keep hold of the customers it already has, even as it looks for new customers.

Objectives that address marketing issues

To address these issues, Bunnings needs to set specific targets that close the gaps in the market and boost the retailer’s marketing strategies. The following objectives will be used in Bunnings’ 12-month marketing plan:

• To introduce a Loyalty Program for regular customers within the first six months and create an online system for tracking customer loyalty progress.

Regular customers who shop at Bunnings will have the advantage of accessing price cuts and other advantages of being part of the loyalty program. The loyalty program will involve the creation of cards that customers can use for purchases in any of Bunnings’ branches.

• To build an online presence by having official accounts on Twitter, Instagram, Facebook, and Tiktok in the first month. The accounts will target an average of 100,000 followers each in three months from the date of their creation.

Most young people in Australia are less likely to own homes than the older generations due to the rocketing costs of home ownership (“Why are young Australians locked out of home ownership? The answer is politics,” 2022). such a trend worries the business as it means a decrease in sales in the future years. Many young people get in touch with each other and developments in society through these social media platforms. For Bunnings to reach out to this segment of the market, there is a need to build an online presence that resonates with the demands and needs of this segment. DIY enthusiasts often reach out to social media for DIY ideas and inspiration. The younger generations mostly use platforms such as Tiktok and Instagram, giving Bunnings a good opportunity to reach out to them. Once the retailer is in touch with the younger generation, it can be assured of sales in future years. Sticking to the pillar of lowest prices will further enhance better sales for Bunnings.

• To develop a contractual maintenance policy for regular customers in the first six months.

Customers unable to use the PowerPass program will be covered under this arrangement and will not feel left out by the retailer. The customers will receive redeemable loyalty points and price cuts every time they shop at any of Bunnings’ outlets. Consequently, Bunnings will experience more customer loyalty and attract more customers in the long term. The main aim is to maintain the available customers while bringing new customers on board.

Target market segments for Bunnings

When applying marketing strategies, Bunnings must focus on particular segments of the market that guarantee significant business sales and profits. For Bunnings, three main segments will be targeted by these marketing objectives:

• DIY enthusiasts – many Australian homeowners still value DIY projects and would love to improve their own homes. Therefore, targeting this segment is without question as it forms a significant chunk of Bunnings’ customers.

• Tradespeople – the home improvement business in Australia is booming with high demand for goods and services. Many homeowners would love to get tools and equipment for their DIY projects at home. Some have no direct access to the main retailers, such as Bunnings, and depend on the tradespeople to meet their home improvement needs. Targeting the tradespeople keeps Bunnings in business as they contact their customers through these middlemen.

• Young generation (Ages 15- 30) – these are the next market for Bunnings’s products. It is, therefore, important for Bunnings to keep in touch with them and ensure they know the retailer’s range of products and the benefits they can get from the retailer.

The different market segments have varying needs that distinct methods of product positioning will meet. For the younger generation, social media, especially Tiktok and Instagram, will be prime platforms for advertising the products available at Bunnings. The digital marketing team at Bunnings will post unique products and deals of the day on these platforms consistently to create awareness among as many customers as possible. Additionally, the digital team at Bunnings can post videos illustrating how different products can be made or improved on the platforms to develop interest among the audience. The posts will always highlight at least one useful attribute of the advertised product. Once the audience is aware of the use of a product and the benefit they can get from it, they are more at ease shopping for it.

The loyalty program will capture basic customer information, such as contact details, that will be used to reach out to the customers. Personalized messages will be sent to the customers on product deals and price cuts, as well as on the status of the loyalty points. Such information will develop an interest in the customers to check out the products at Bunnings and increase their probability of shopping there. Social media platforms will also be used as alternative means of putting the products on sale out there and known by the target customers. These advertisements aim to position the products from Bunnings as the cheapest among all other retailers yet the most dependable.

Marketing mix elements

The marketing mix involves various intertwined elements that contribute to the overall success of the marketing process in a company. There are seven important P’s of the marketing process. These are product, price, promotion, place, people, packaging, and process (Duermyer, 2022). A marketing team needs to strike a balance between all these elements for successful marketing and to increase sales in a company. These elements are further highlighted in detail below:

• Product/service – marketing will focus more on the unique features that give it an edge over similar products in the market. This focus will be on product attributes such as design and quality. Customers need to be convinced they are getting the best quality in the market. The product should also be aesthetically pleasing and focused on meeting specific customer needs.

• Price – each product’s price will be clearly and boldly spelled out for the customers to notice. Conspicuous prices give the impression that the product is cheap, as customers often assume cheap products are advertised more openly than expensive products. The company’s main pricing strategy will align with one of its major pillars, the lowest price. Customers will be assured of the lowest prices in the market for similar products and have a chance to experience occasional price cuts on products offered. The prices should, however, match the quality of the products for the customers, not cast doubt on product quality.

• Promotion/place – these marketing mix elements are central in keeping the market informed of the available products, their attributes, and price-cut deals, among others (“Marketing mix and the 7 Ps of marketing,” n.d.). They complement each other’s efficiency by ensuring product promotion is done in the right place and for the right audience. There will be various platforms to be used for the promotion of Bunnings’ products. The company’s online shop will have at least 80% of the products in physical outlets. Customers can then view specific products through the online shops and specific attributes of interest. Other customers who have used the product before will also be given a chance to make their reviews on the products. The company will set up a customer relationship management team for the online shops to respond to customer reviews, suggestions, or queries. Any negative reviews by customers from the online shops will be picked up for action and improve the customer experience. Furthermore, all customers who shop from Bunnings outlets will get a ‘thank you email’ from the customer loyalty management platform. The emails will always be personalized with customer details such as name and favorite outlet. Personalization will help build a special experience and increase customer loyalty to the brand. Social media sites are also important marketing platforms for many companies today. The company will capitalize on Instagram, Facebook, Twitter, and TikTok to reach the younger generation who form Bunnings’s current and future market. The customer management team will work in collaboration with the digital marketing team to ensure there are daily posts on the platforms to attract more customers. Gaining followers on these platforms also enables the company to reach as many people as possible with a single post.

• People – the staff working for the company are the heart of its operations and directly determine whether the company succeeds. The staff will be trained every three months on best practices in handling customers and providing the ultimate service. According to Guastalegname (2018), the best service helps meet consumer needs successfully and build a lasting relationship between the brand and the consumers. For a people-centered company like Bunnings, customer service is key, and the staff should provide the required level of service to the customers. This will cover not only the physical store but also online stores. Responding to customer inquiries on time online or giving suggestions on how to use a certain product will go a long way in building good customer relations with the company. The company will also ensure enough staff to cover the pressure of peak sales periods.

• Packaging – the packaging for the products will be handled by a qualified design team that targets specific market segments with the different products. Unique colors and packaging materials will be used to make the products stand out in the market in a way that attracts new customers to the store.

• Process – the processes such as purchase and delivery are crucial in a company of this scale and greatly affect customer perception of the level of service offered. Convenience for customers and the company itself can only be achieved through well-thought-out logistical arrangements. The company will ensure each outlet has at least two delivery trucks to ferry the products purchased online to the customer pick-up points. The trucks will run on strict schedules that ensure products are supplied on time for customer convenience. Furthermore, these trucks will keep the third-party retailers in stock and avoid running low on some products at critical times.

Conclusion

Digital marketing is the ‘new normal’ in marketing, especially after the Covid-19 pandemic. Many companies and retail outlets have moved into this space and tirelessly try to capture a wider market and sell as many products/services as possible. Bunnings is no exception and should embrace digital marketing fully for better results. This marketing plan has mainly focused on creating a commanding presence in the digital space and reaching out to more customers.

The home improvement sector in Australia may be less booming since the younger generations believe they may not be able to own homes in the future (Galloway & Malo, 2023). This is due to the high cost of owning a home in Australia. Furthermore, the young generation is more interested in technology and consequently spends most of their time on the social media platforms such as Facebook, Instagram, Twitter, or Tiktok. Their focus on DIY projects like their parents is, therefore, diverted.

For Bunnings to capture this population for her future sales, it is necessary to create a strong presence on these platforms and build the younger generation’s interest in its products. Most young people follow the lifestyles led by influencers and prominent personalities online. Using these celebrities in the marketing process and having them on the company’s social media sites is a sure way of bringing this market segment on board.

The customer loyalty programs will encourage more customers to shop from the retailer as they are assured of benefits in the future, such as price cuts or promotions that may come in handy on a rainy day. Redeemable loyalty points will enable customers to continue shopping for their favorite products even with low funds. A strong relationship of trust is created between Bunnings and its customers by establishing a contractual home management plan. This plan will help them to hold the customers they already have as they look for more customers. These processes will require commitment from all the company’s departments but will guarantee better sales moving forward.

References

Duermyer R. (2022, December 30). What are the elements of a marketing mix? The Balance. https://www.thebalancemoney.com/marketing-mix-what-is-it-and-how-to-use-it-1794425

Galloway, A., & Malo, J. (2023, February 25). More than 70% of young people believe they’ll never be able to buy a home. The Sydney Morning Herald. https://www.smh.com.au/politics/federal/more-than-70-percent-of-young-people-believe-they-ll-never-be-able-to-buy-a-home-20230223-p5cn01.html

Guastalegname F. (2018). Bunnings Warehouse Brand Analysis [Unpublished doctoral dissertation]. The University of Melbourne MKTG90006 Brand Management.

Marketing mix and the 7 Ps of marketing. (n.d.). Mailchimp. https://mailchimp.com/marketing-glossary/marketing-mix-7ps/#What_are_the_7_Ps_of_Marketing%3F

Saravanakumar M., & SuganthaLakshmi T. (2012). Social Media Marketing. Life Science Journal, 9(4), 4444-4451. http://www.lifesciencesite.com/lsj/life0904/670_13061life0904_4444_4451.pdf

Why are young Australians locked out of home ownership? The answer is politics. (2022, January 15). the Guardian. https://www.theguardian.com/commentisfree/2022/jan/16/why-are-young-australians-locked-out-of-home-ownership-the-answer-is-politics