Reference no: EM133649386

Case Study

Woolworths South Africa

The South African retail chain, Woolworths, is owned by Woolworths Holdings Limited with 155 full-line stores, in addition to 194 food stand- alone stores in South Africa, and another 68 stores throughout the rest of Africa. The company was founded in 1931 in Cape Town.

Objectives

Woolworths Holdings Limited's vision is to be one of the most responsible retailers in the world. To held it to achieve this. Woolworths South Africa launched its Good Business Journey in 2007. The Good Business Journey programme focuses on improving eight areas of the business: energy and

climate change. water. packaging and waste. sustainable farming. ethical sourcing. people. social development. and health and wellness. with more than 200 targets supporting these areas. By communicating sustainability to consumers, Woolworths South Africa aims to inform and educate customers, raise awareness of its own initiatives, and drive behaviour change.

Approach Scope and Visual Tools

Woolworths South Africa aims to communicate at least one sustainability attribute on ever Woolworths part-owned food product. across a large and varied product Portfolio. Woolworths uses a mix of its own labelling on the front of the pack alongside third certification labels (both front of back and

back of pack) to communicate these sustainability attributes to the consumer. In the food category. Woolworths focuses primarily on communicating responsible sourcing attributes of key ingredients. often could with information about the sustainability of the food's packaging. Labelling about responsible sourcing helps Woolworths South Africa to meet a shift in consumer demand as more of its customers are asking where products come from, who makes them and what goes into them. More than 90% of Woolworths' cocoa, palm oil seafood and aquaculture products are labelled as responsibly sourced. Some products carry third-party certifications such as Fairtrade or Marine Stewardship Council (MSC). while others show Woolworths' own "Farming for the Future." loco or the equivalent "Fishing for the Future" logo

Farming for the Future is Woolworths long-running agricultural sustainability programme that aims to support farmers to produce good quality food. improve soil quality. save water. and reduce dependence on synthetic fertilisers whilst protecting natural resources and biodiversity. without adding cost to the product. The programme helps farmers to adapt to climate change and extreme weather patterns such as Day 0' a severe water shortage affecting South Africa in 2018. The initiative allows farmers to connect and share their experiences. driving change in the supply chain and providing consumers with more sustainable choices, by labelling products with the "Farming for the Future" logo. Similarly, "Fishing for the Future" is a label Woolworths developed to indicate products that comply with the company's commitment to sustainable fishing. The programme commenced in 2008, when Woolworths signed the WWF-SA Sustainable Seafood Initiative (WWF-SASSI) Retail Charter.

Suppliers' adherence to Woolworths' responsible sourcing standards is monitored through regular audits. Woolworths is a member of SFDFX. a web-based platform for sharing responsible sourcing data on supply chains. The company also recognises other ethical sourcing audits at times. to allow factories to focus on improvement rather than additional costs. audit fatigue and disruptions Woolworths also uses its own labels to communicate organic ranges. hormone-free. free range and local produce. For example. the company labels some locally sourced products such as avocados and milk with a 'Love Local' South African flag label

Channels and Audiences

Beyond product labelling, Woolworths aims to include sustainability messaging within its wider consumer communications, in order to reach its whole customer base. This approach represents a shift away from its previous focus on a more engaged and educated group of consumers to a more

mainstream audience as the company believes sustainabity messages are relevant to all its customers

For example the company includes prominent in store communications about food sourcing and sustainability as part of its visual merchandising through stores and at checkout areas. This includes banners in food aisles and other visual merchandising (the practice in the retail industry of optimising

the presentation of products and services to highlight their features) highlighting responsible sourcing throughout stores. It also includes sustainability in its direct email newsletter to customers, in mainstream magazines and media coverage. The company posts sustainability content on its social. media pages including Instagram and a dedicated Good Business .journey Twitter account. Woolworths' broad approach to channels of communication seeks to show that sustainability is not just something Woolworths embraces with. but that it is embedded within the company's core values. This approach has enabled the company to communicate to as wide an audience as possible

Messaging

Woolworths' use of language and different messaging is designed to respond to the perspectives and motivations of consumers in South Africa. The company aims for sustainability communications to be clear and simple for the mainstream consumer to understand while not overwhelming people with too much information. Woolworths' aim is to repeat consistent messaging across its channels and platforms to build understanding and to avoid confusing the consumer whilst keeping them informed. Much of Woolworths' language around sustainability focuses on preserving the world today to create a better future. There is also an emphasis on the consumer not paying any extra for responsibly sourced products.

Woolworths acknowledges that while many certifications focus on environmental impacts, social aspects are also very important to South African consumers, including supporting local businesses, suppliers and producers. As such, Woolworths aims for a balance of both environmental and social messages and labels. Outside of its work on food sustainability, one of the most successful consumer behaviour change programmes that Woolworths has run to date is its plastic bag campaign. Woolworths South Africa was the first retailer to start phasing out single-use plastic shopping bags in South Africa in favour of consumers bringing their own reusable bags. This requires customers to change their behaviour, be more aware and understand the impact of using plastic bags. Woolworths employed a number of behavioural tactics to communicate the message to consumers prior to the initiative coming into force: it sent out emails to those registered on its database weeks in advance, informed staff, procured and sent new visual merchandise to stores as well as telling customers in person in store. The company placed signage at the entrance of the check-out aisle, and various placements in-store informing customers that the store is going plastic-bag free. Plastic bags were removed from sight to prevent customers from thinking about them and cashiers changed their language from 'do you need a bag?' to 'have you brought a bag?'. This nudging technique proved simple and effective to get customers actively involved in the decision not to buy bags and to bring their own. Currently, over 50% of the Woolworths store base is plastic-bag free.

Measuring Success

Currently, 58% of Woolworths' primary produce suppliers have adopted new methods as part of its Farming for the Future programme and have shown positive results, while 98% of fish and seafood products meet Woolworths' wild caught and aquaculture sustainability commitments.

Woolworths regularly evaluates the impact of labelling sustainability for consumers and whether it makes a difference to behaviour, along with assessing the costs and benefits of using third party certifications on packs. As such, Woolworths undertakes regular consumer research to evaluate the effectiveness of its communications on this subject.

Challenges

Woolworths works with a number of third-party certification programmes in its sourcing. For example, Woolworths sources cocoa through Fairtrade International, Rainforest Alliance (UTZ), Cocoa Lite and Cocoa Horizons. Communicating clearl about different sourcing programmes to the end

consumer is a challenge, particularly when consumer understanding varies from very little knowledge through to much more educated and knowledgeable consumers. Woolworths uses its own labels to try to cut through this confusion, so that consumers only need to look for one label while shopping

in-store, to indicate a responsible product. For example. its popular new Chuckles ice cream has a 'Responsibly Sourced Cocoa label on the front of packs.

Guidelines

Although the company does not have a formalised set of internal guidelines Woolworths South Africa ensures sustainability communications are honest and hacked in hv evidence.

Looking ahead

looking ahead. Woolworths South Africa aims to further integrate sustainability into its consumer-facing communications. This is driven hv increasing customer interest in the transparency of food products and where the come from. As such. the company will continue to evaluate the effectiveness and

impact of third-party certifications and its own responsible sourcing labels on customer behaviour In the future. Woolworths also intends to explore different onions to increase the transparency of products For example technology may allow a more levered approach whereby a consumer scans a QR

code for further information avoiding the challenge's of having too much information to chow clearly on product packaging

well as more detailed transparency sustainability communications will also continue to extend beyond product packaging as Woolworths South Africa seeks to further embed sustainability into its brand identity.

Question

Woolworths is a well-known company in South Africa and like any other business, it needs a marketing strategy to achieve success. Critique Woolworths' marketing strategy. Follow the steps indicated below.

Critique the following points of the Woolworths marketing strategy. No marks will be awarded for stating theory. Marks will only be awarded for application to Woolworths:

Criticise the vision of Woolworths and provide you own vision for Woolworths.
Based on your new vision for Woolworths, provide strategic marketing objectives accordingly.
Select a target market based on your newly defined objectives.
Specify the position that Woolworths should occupy in the market.
Identify benefits Woolworths' could offer customers based on your objectives.
Discuss Woolworths' competitors and how to react to their strategies.
State your recommended strategy.