Introduction
This marketing report references Bunnings Warehouse to describe the marketing approaches and environmental impacts of global marketing. It will apply the two inner layers (HUB and SPOKES) of the Wheel of International Marketing Framework to assess how Bunnings Warehouse leverages its internal environment (HUB) to explore attractive expansion opportunities in the external environment (SPOKES). Part A will discuss the Wheel of International Marketing in reference to Bunnings Warehouse’s business line, environment, and growth ambitions. Part B will discuss Bunnings Warehouse’s history, background, mission, resources, capabilities, product and market situations, value proposition, and distribution strategy and channel. The STP framework will be incorporated to help analyze the company’s market situation by illustrating its various target market segments. Part C will discuss Bunnings Warehouse’s external environment (SPOKES) by focusing on the company’s competition situation (using Porter’s five forces), economic climate, trading settings, and regulatory forces.
1. Part A: Wheel of International Marketing
1.1. Bunnings Warehouse
An all-inclusive Wheel of International Marketing allows Bunnings Warehouse to achieve its business objectives and promote international sustainable development goals by ensuring sustainable business practices. Bunnings Warehouse evaluates its HUB or internal resources and competencies and leverages them to adopt business practices that align with the external or SPOKE factors unique to a specific market to ensure its activities are environmentally sustainable and economically feasible. Thus, Bunnings Warehouse utilizes the HUB and SPOKES of the Wheel of International Marketing to pinpoint and assess internal and external aspects and forces that impact its service and product marketing. Bunnings Warehouse’s primary market is Australia, but it has expanded its operation to other markets, including New Zeeland and Ireland, making it paramount for the company to effectively balance its internal marketing capabilities to leverage external opportunities to attain sustainable performance and adapt to the unique market conditions of each specific domestic market. Bunnings Warehouse operates over 300 retail storefronts in New Zeeland and Australia, where it entices clients by selling advanced home improvement and lifestyle hardware items and services to targeted consumers/buyers, particularly construction contractors, home builders, commercial merchants, and the real estate sector. The company demonstrates commitment towards environmental sustainability by adopting environmentally responsible practices and initiatives like effective and optimal resource usage, openly communicating its sustainability initiatives, and implementing eco-friendly waste management practices such as recycling and reusing materials. By leveraging its internal capabilities, resources, strategies, and competencies, Bunnings Warehouse implements environmentally and socially responsible practices to heighten its service delivery and ensure its products have minimal to zero environmental impact, making it gain a differentiated competitive advantage.
1.2. Operating Situation and Environment
Bunnings Warehouse functions in a rapidly fluctuating hardware and home improvement environment characterized by constant macro-environmental changes and trends, including technological advancements, fluctuating consumer preferences, and competition forces that make it important for constant strategy upgrades and adoption of unique mechanisms to meet changing market trends and remain competitively relevant. Bunnings Warehouse’s operating environment also involves fluctuating economic trends like changing product interest rates, prices, taxes, rising competition from existing and new entrants, and diverse politically-based operating requirements. The company also functions in an external environment characterized by uncertain situations like the recent COVID-19, which significantly affected Bunnings Warehouse’s normal functioning (Thomson, 2020). For example, COVID-19 resulted in massive job losses, making people have minimal disposable income to spend on non-essential products like Bunnings’ hardware products. Australia’s stable political situation and environment offers Bunnings Warehouse a conducive and supportive environment to sell its home improvement and lifestyle hardware services and items, but it must constantly update its strategies and adopt sustainable marketing tactics to improve its value proposition and guarantee exceptional customer value and satisfaction to maintain and grow its competitive advantage in the saturated home improvement market. In ensuring it better manages operating environment uncertain situations like the recent COVID-19, Bunnings Warehouse has upgraded its service delivery strategy to include intensified online customer service through applications like the Bunnings App to save in-store time and simplify customer shopping experience (Bunnings Ltd, 2021; Thomson, 2020).
1.3.Ambitions to Grow to Non-domestic Markets
Bunnings Warehouse’s considerable success in its primary domestic markets, Australia and New Zeeland, has prompted the management to develop an efficient international marketing approach to grow its business operations in other markets, including Europe, Ireland, and the vast Asian region. Although the company strongly emphasizes expanding to attractive non-domestic markets, it must adopt flexible market entry tactics to ensure its operations align effectively with the targeted market conditions and increase acceptance in the new market. Bunnings Warehouse management aspires to acquire well-located outlets and business units in potential overseas destinations, particularly in Ireland and the United Kingdom, to expand its warehouse chain and serve more customers by delivering exceptional home improvement services and products that meet the diverse needs of the non-domestic customers (Wesfarmers, 2017). The company management views expansion to non-domestic markets as a feasible strategy to grow its market share and heighten its brand competitiveness at a global scale.
2. Part B: HUB
2.1. Firm Analysis
2.1.1. Bunnings Warehouse History, Background, Mission, and Workforce
Bunnings Warehouse was launched in 1886 in Western Austria under the management of Wesfarmers Association to offer advanced and sustainable home improvement and hardware items and services to house construction firms, commercial builders, Do-It-Yourself enthusiasts, tradespersons, and retail hardware outlets (Bunnings, 2022; Wesfarmers, 2018). Bunnings’ history began as a general sawmilling business before later transforming into the currently popular home improvement and hardware Bunnings Warehouses spread across well-stationed outlets and storefronts in Australia and New Zeeland. Bunnings Warehouse has witnessed progressive growth since its inception in 1886, gaining a dominant market share in the home improvement sector (Dart, 2021; Wesfarmers, 2018). The company often applies a vertical growth strategy to expand its product line and add new features to its existing products to offer customers exceptional value and satisfaction. Bunnings Warehouse’s guiding mission focuses on offering clients a broad array of hardware and home improvement items and services, excellent customer service, and the lowest price strategy. To ensure it remains competitive and relevant, Bunnings Warehouse adopts sustainable actions by emphasizing environmental and social accountability, workforce wellbeing, inclusion and diversity, and ethical business practices at all levels of its operations. Bunnings’ strong innovative capability allows it to develop home improvement items with unique designs and features to meet customer preferences and needs better (Dart, 2021). The company incorporates a team of around 53,000 professionally competent workers responsible for implementing the company’s mission and objectives and guaranteeing effective service delivery to customers (Bunnings, 2022; Wesfarmers, 2018). Bunnings also utilizes a hierarchical organizational structure to facilitate effective management of its diverse business operations and ease implementation of decisions to heighten its value proposition and customer experience.
2.1.2. Capabilities and Resources
Bunnings Warehouse has several valuable, rare, inimitable, and excellently-organized resources and capabilities that reinforce its internal power to exploit external opportunities to improve its business performance and build a sustainable competitive advantage. The popular 10% discount offer on all its services and items gives Bunnings Warehouse a rare and inimitable capability to overcome competition by enticing a large pool of potential customers and inspiring existing customers to remain loyal and consequently avoid the risk of substitution (Bunnings, 2022). Bunnings Warehouse has also established a robust distribution network to enhance its customer service capability by guaranteeing customers receive orders in real-time and conveniently. Incorporating an effective distribution network allows Bunnings to serve its customers better, leading to exceptional customer satisfaction, which plays a central role in heightening its brand reputation and competitiveness (Dart, 2021). Bunnings Warehouse also has a well-organized and skilled workforce, indicating its capability to create quality and unique home improvement items and deliver outstanding customer service, leading to enhanced customer relationships and reduced customer churn.
2.2. Product Situation
2.2.1. Actual, Core, and Augmented Product
The actual products and services developed by Bunnings Warehouse comprise the physical and tangible items that clients can buy from the company, including wallpapers and paints, construction equipment, flooring tools, garden furniture, curtains, kitchen appliances, blinds, plumbing and electrical tools, and other different household goods (Bunnings, 2022). Customers purchase these products for home improvement or Do-It-Yourself (DIY) purposes. When purchasing Bunnings Warehouse’s actual products, customers seek to obtain core or fundamental value and benefits such as a variety of unique home improvement items, high-quality items, cost-saving, and convenience when accessing the Bunnings products to satisfy their professional or DIY requirements and needs. Bunnings Warehouse augmented products involve the additional services and feature it offers to heighten the overall customer shopping experience in its online and offline shopping outlets. Some augmented products include knowledgeable customer care staff, workshop demonstrations and training sessions for customers, free installation services, and product replacement, repair, and refund (Dart, 2021). These augmented products help Bunnings Warehouse to reinforce and complement the core benefits of its different actual products in order to create an enhanced overall customer value and shopping experience.
2.3.Market Situation
2.3.1. Geographic Market
The primary geographic markets where Bunnings Warehouse operates are New Zeeland and Australia domestic markets. Bunnings has a considerable existence across Australia, with several store outlets located in regional, suburban, and urban metropolis, such as Western and Southern Australia, Victoria, Northern Territory, Australian capital metropolis, New South Wales, Tasmania, and Queensland (Bunnings, 2022; Tomlik, 2021). Bunnings have strategically positioned its store outlets across these Australian regions to guarantee accessibility and convenience for clients nationwide. Bunnings have also established a dominant market existence across the South and North Island areas of New Zeeland, with strategic stores in Tauranga, Hamilton, Auckland, Dunedin, Wellington, and other regions (Bunnings, 2022). The widespread store network across New Zeeland and Australia enables Bunnings to conveniently offer its services and products to exceedingly satisfy the specific wants of its diverse domestic customer base.
2.3.2. Target markets
In addition to geographic markets, Bunnings Warehouse strives to meet its customers’ specific needs by assessing their behavioral, psychographic, and demographic preferences. Bunnings Warehouse targets clients based on demographics like income, lifestyle, age, and family size to serve a customer base that comprises gardening enthusiasts, DIY enthusiasts, homeowners, and certified tradespeople (Bunnings, 2022). Bunnings also target its customers by considering psychographic and behavioral features, like DIY preferences, trade-associated needs, home improvement lifestyle, and spending patterns. Therefore, Bunnings Warehouse offers differentiated product and service categories to cater to each specific customer segment’s diverse and unique needs and interests to guarantee an outstanding customer shopping experience.
2.3.3. Value Proposition
Bunnings Warehouse provides its wide customer base with an enthralling value proposition, including a broad product range, competitive pricing, knowledgeable and expert staff assistance, seamless accessibility and convenience, engaging shopping experience, and reliable item quality and durability (Bunnings, 2022). Bunning’s competitive pricing approach of a 10% price reduction for its products based on competitor’s prices aids appeal to price-sensitive customers, upholds improved customer loyalty, and maintains its dominant competitiveness (Bunnings Group, 2020). A wide network of store outlets allows Bunnings to offer customers outstanding accessibility and convenience to purchase their preferred home improvement products during their free or convenient days (Mcleish, 2018). Bunnings Warehouse has robust online shopping stores that enable customers to have an all-in-one shopping experience as they can browse, compare, order, and make payments from their comfort. Thus, regardless of the targeted customer segment, Bunnings seeks to offer the items, experiences, and expertise that satisfy the specific customer anticipations and make the customer shopping journey efficient and enjoyable.
2.3.4. Distribution Strategy and Channel
Bunnings Warehouse has established a robust distribution framework that includes strategically located distribution centers in New Zeeland and Australia that function as hubs or focal points for receiving, packing, storing, and dispatching home improvement items to individual outlets where customers can view and buy the items. Bunning’s distribution network comprises approximately over 700 retail outlets, including around 30 trading centers, 370 trading destinations, 65 retail outlets, and 270 warehouses across New Zeeland and Australia to guarantee accessibility and convenience for clients across numerous geographical domestic regions (Bunnings, 2022). Large outlet format and intensified online presence are key strategies Bunnings Warehouse applies to compliment and reinforce its distribution channel, guarantee a seamless supply chain, and enhance the customer shopping experience, contributing to heightened competitive advantage.
3. Part C: SPOKES
3.1. Commercial Forces/Competition Situation
3.1.1. Key Competitors [Porter’s 5 Forces]
Bunnings encounter increasing rivalry from several direct competitors in the vast home improvement sector, including Home Hardware and Timber {Australia}, Mitre 10 {New Zeeland}, and other local hardware outlets offering similar or complimentary home improvement products (Dart, 2021). Although the home improvement sector has high attractiveness for the influx of new entrants, Bunnings faces a relatively minimal threat of competition from new entrants because it has already established a strong brand presence and reputation, making it hard for its loyal customers to substitute or shift to other emerging firms. Bunning’s robust market dominance enables it to control high negotiation authority over suppliers, but the potential of substitute suppliers poses a moderate threat to its negotiating power (Tomlik, 2021). Bunnings Warehouse’s value proposition elements, such as its extensive product portfolio, lowest-pricing policy, expert staff, conveniently accessible outlet locations, and dominant brand reputation, help uphold customer loyalty, attract potential customers, and minimize buyer power (Bunnings Group, 2020).
3.1.1.1. Points of Difference and Parity
The similarities between Bunnings Warehouse and its key competitors include an extensive product portfolio, quality, convenience, customer-centric, personalized services, and strategically located store outlets (Dart, 2021). However, Bunnings Warehouse incorporates unique characteristics that distinguish it from its competitors. Bunnings differentiating features include a competitive pricing policy, large store outlets that facilitate exceptional customer interaction with products, comprehensive online and in-store shopping experience backed by knowledgeable and expert staff assistance, and an extensive portfolio of innovatively designed home improvement products.
3.2. Economic Climate: Trends and Conditions
External environment disruptions like the recent COVID-19 pandemic caused extensive supply chain interruptions, causing delays and shortages of certain home improvement raw materials (Thomson, 2020). Disruption of the supply chain affects Bunning’s ability to uphold sufficient stock levels and distribute products to customers. Inflations and high-interest rates affect Bunning’s pricing approach as the company may face the dilemma of maintaining its lowest price policy and making sustainable profits (Bunnings Group, 2020). Since Bunnings Warehouse operates in two domestic markets, it is likely to face fluctuating economic climate due to different trade taxes, interest rates, and trade negotiations that might impact its pricing strategy and, consequently, its profitability. However, Bunning’s robust customer-centric focus enables it to overcome most economic trends and maintain a sustainable competitive edge.
3.3. Trading Environment: Bunnings Warehouse Trading Activities
Bunnings Warehouse amalgamates conventional and innovative marking/trading activities to manage current and foreseen market trends to ensure it maintains an uninterrupted supply chain and meets every customer need for home improvement equipment and services. The company enhances its trading strength by intensifying online and social media brand advertising to communicate its offerings to a larger audience and consequently augment its brand attractiveness and acceptability in the highly competitive home improvement market (Mcleish, 2018). Bunnings Warehouse also supports social local community initiatives to help communities live positively (Bunnings, 2022). Supporting social initiatives helps Bunnings gain a positive reputation and attract more people to purchase its products, leading to augmented market share and competitive advantage.
3.4. Regulatory Environment
Bunnings must remain updated and compliant with variations in the applicable regulations and laws to maintain uninterrupted operations. Bunnings Warehouse has an obligation to comply with occupational safety and health regulations by putting workplace measures that guarantee the safety and wellbeing of its staff and customers, such as emergency preparedness, risk valuation, and availing safety training and equipment (Bunnings, 2022). Since it deals with home improvement items, Bunnings must comply with building standards and codes such as quality, durability, safety, and performance of various products like electrical appliances, plumbing tools, and other building equipment. Bunnings Warehouse functions in a sector that significantly impacts the environment, especially emissions, waste management, and energy use, making it mandatory for the company to adopt practices that comply with environmental sustainability regulations (Bunnings, 2022). Moreover, Bunnings Warehouse’s expansion ambitions to non-domestic markets require it to expect to comply with more political-legal regulations and trade requirements as different trade regulations and requirements govern different nations or markets.
4. Conclusion
The report has indicated that the HUB and SPOKES layers of the wheel of international marketing help Bunnings Warehouse to assess its internal activities and effectively exploit external opportunities to reinforce its value propositions and offer customers an outstanding shopping experience. Bunnings Warehouse has been indicated to possess the robust capability in utilizing its internal resources such as a knowledge and expert workforce, extensive product portfolio, comprehensive distribution network, unmatched lowest pricing policy, and engaging hierarchical organizational structure to heighten its value proposition and guarantee an exceptional customer shopping journey. Overall compliance with trading environment regulations and requirements are significant in helping Bunnings to maintain an uninterrupted supply chain and attain augmented brand reputation and competitiveness.
5. References
Bunnings Group. (2020). Price policy. Bunnings.com.au. https://www.bunnings.com.au/policies/price-policy
Bunnings Ltd. (2021). Bunnings App. https://www.bunnings.com.au/campaign/bunnings-app
Bunnings. (2022). Sustainability. Bunnings. https://www.bunnings.com.au/about-us/sustainability
Dart, G. (2021). Home improvement industry market report | Hardware Journal. https://hardwarejournal.com.au/home-improvement-industry-market-report-by-geoff-dart/
Mcleish, O. (2018). Factors Affecting International Marketing Strategies: Pricing, Channel Structures, and Advertising. https://core.ac.uk/download/pdf/234627095.pdf
Thomson, J. (2020, May 22). How Bunnings built a path through COVID-19. Australian Financial Review. https://www.afr.com/chanticleer/how-bunnings-built-a-path-through-covid-19-20200522-p54vhf
Tomlin, P. (2021). Bunnings properties attract strong investor demand. Shopping Centre News. https://www.shoppingcentrenews.com.au/latest-news/industry-news/bunnings-properties-attract-strong-investor-demand/
Wesfarmers. (2017). The First Bunnings Warehouse store in the UK opens for trading. Www.wesfarmers.com.au. https://www.wesfarmers.com.au/util/news-media/article/2017/02/02/first-bunnings-warehouse-store-in-the-uk-opens-for-trading
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