Marketing Proposal Capstone - Alexander Edward Murphy
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Marketing Proposal Capstone
24100
Applied Project
Marketing Capstone
Authors:
Mannon White 98050824
The following report was commissioned for
Jamieson Keevers 12552865
freedom atf Steinhoff Asia Pacific Pty Ltd.
Kently Ip 12627055
Najeeb Kaler 97117535
Imran Elhassan 98060775
Dilan Johnpulle 11693367
Alexander Murphy 99140170
01 freedom Marketing Proposal Capstone freedom Marketing Proposal Capstone 02
Contents
05 About freedom
06 freedom History
07 Market Analysis
09 Research Methodology
13 Strengths & Weaknesses
15 Gantt Chart
17 References
03 freedom Marketing Proposal Capstone freedom Marketing Proposal Capstone 04
About freedom
The contemporary mission statement of Freedom is: “To inspire all The competitive characteristics of this industry is combative
Australians to express their individuality and sense of style in their and saturated due to the numerous budget providers supplying
home. At freedom, you can always find something that suits your functional, contemporary designer wares at low prices; whilst
home, tastes and lifestyle.” (Freedom 2018). The company focuses customers are price-sensitive when executing a purchase decision
on achieving this by providing Australians with a vast range of both (Ibisworld 2018 ).
furniture and seasonal homewares to meet the changing attitudes These impeding market conditions and preferential customer
and decorum of domestic consumers. Due to the core verticals of demands have resulted in Freedom occupying a middle market
Freedom’s catalogue being one off purchases, Freedom focuses on position, with ‘wealthy families’ being the pivotal target market, due
seasonal homewares that allow Australian consumers to reinvigorate to the clusters’ ‘large disposable income’ (Piggott 2018).
and complement core furnishings.
Although Freedom has been effective in
The contemporary Australian furniture “To inspire all tapping into this market and ascertaining
industry is valued at AUD$7.4 Billion
dollars. Although, due to weak
Australians to a large market share, they are required
to cultivate a greater market share in the
consumer sentiment of the Australian express their lucrative ‘Gen-Y’ market.
individuality
retail industry, the last five years have
resulted in a challenging economic Freedom is toiled in its ability to unlock
marketplace (Ibisworld 2018). In spite of
and sense of market share within this segment, as,
the fact that this market has experienced unlike fellow markets, ‘Gen-Y’ consumers
a downturn in recent financial style in their have less brand loyalty, and more
years; rising discretionary incomes,
decrease in domestic housing value
home. At purchasing power – resulting in a market
that is focused upon acquiring expressive
and increased demand for residential freedom, you furniture items that are unique to the
can always
property construction provide the individual.
perfect opportunity for freedom to
continue to expand their market share
find something ‘Gen-Y’ consumers are resolute in their
freedom History
in the overall industry (Ibisworld 2018). preferences resounding ‘convenience’
The competitive characteristics of this that suits your shopping, with online and physical store
A major furniture and homeware retailer
Freedom was founded by socialite Warren Higgs at a St Lennards showroom
industry is combative and saturated
due to the numerous budget providers
home, tastes layouts impeding their overall purchasing
decisions, as illustrated by Freedom in 1981. Freedom originated by selling domestically manufactured
supplying functional, contemporary and lifestyle.” representatives when initially briefed. ‘affordable’ furnishings for the Australian public. Nowadays, Freedom is
designer wares at low prices; whilst affiliated with Steinhoff Asia Pacific Holdings Group, a conglomeration which
-Mission Statement supports Freedom to be one of Australia’s largest furniture powerhouses,
customers are price-sensitive when
executing a purchase decision (Ibisworld with over 65 stores throughout Australia and New Zealand - producing
2018 ). in-excess of AUD$300+ million dollars in annual sales [Piggott 2018].
05 freedom Marketing Proposal Capstone freedom Marketing Proposal Capstone 06
Market
Analysis
At present, Freedom Furniture suffers from a considerable number of marketing related issues. These
issues are perceptible when observing the brand’s lagging sales, in comparison to its closest competitor,
and stem forth from one business strategy complication: a lack of competitive positioning to date. As
mentioned at the outset of this deliverable, Freedom wishes to reverse this theme with an ambitious
plan to target and activate Generation Y consumers: renown, high-volume ‘trend setters’ in the wider
marketplace. Unfortunately, this brings additional challenges in terms of marketing strategy to Freedom
Furniture, which are outlined below:
Increased Expectations Cohesive Marketing Strategy
Soares et al. 2017 states that as digital natives, Generation At present, Freedom Furniture lacks a focused marketing approach
Y consumers are better informed than previous generations that targets the any demographic, particularly Generation Y. As a
as to the products and services available to them - within result, this malalignment has impacted the company’s branding
the marketplace. The divergence activity process typically and marketing initiatives. Whilst many Australians are familiar with
undertaken by Gen-Y consumers when analysing competing the Freedom brand, it can be argued that a resulting lack of market
products/offers online, is progressively ‘thorough’, whilst differentiation and brand strategy misappropriation has seen many
yielding a detailed onslaught of fellow customer experiences. consumers shift to competitor brands which they ‘perceive’ as better
This in turn self-educates the consumer to adopt customary value for money, even if the brand has made reasonable restructuring
precedence as to which product they wish to acquire – to initiatives to appease economical patrons.
ensure they make the best-informed decision without
variance offered by a swaying salesperson. Gen-Y customers
are resolute upon making an independent purchase decision
from self-research, making them the most informed buyers in
the marketplace, and well-versed and aware in understanding
competition offerings. $$$
Convenience is chief amongst concerns observed within this
Coco Republic
age group. Although Freedom Furniture does possess an online
store with shipping available direct to consumers’ doorsteps, Plush King Furniture
the long wait times of up to several months for customised
products could be perceived as a ‘turn off’ for many, especially Nick Scali
in the light of the widely held knowledge sourced online: that
competing brands could ship homogeneous products within a
Functional
Designer
distinguishable timeframe. Oz Design
The growing appeal of discount online retailers may provide Harvey
a strong threat to Freedom Furniture’s market share. Online Norman
retailers tend to capitalise upon Generation Y’s heightened Amart
attenuation to what is perceived as trendy; whilst selling
discount products that is perceived as ‘value for money’ - have IKEA
exploded in market share in recent years (Hoyer, 2018).
Fantastic
Customer service is another area of significance to Generation
Y, due to the prevalence of internet reviews that scrutinise
Furniture
every aspect of a business’s performance – circulated virally via
word of mouth across social mediums, and readily available
to customers at every position of the purchase funnel (Hoyer,
2018).
$
07 freedom Marketing Proposal Capstone Avant Garde Annual Report 2012 07
Research
This assessment will be undertaken via the formation
of a structured interview in the preliminary stage of the
appraisal, to understand consumer behavior, preference,
Methodology together with awareness of different product verticals and
offerings. The assessment will then progress into an informal
observation whereby candidates step the researcher through
a typical end-to-end purchase process, providing qualitative
The purpose of this research is to investigate factors by which
experiential feedback throughout the undertaking.
Freedom Furniture can increase market penetration amongst ‘Gen
Y’ consumers. The investigation seeks to examine how Freedom In conjunction with the questionnaire, face to face
Furniture can reinvigorate their customer experience, and reposition Interviews interviews will be conducted: with a total of 14 participants.
their brand position, to form lucid alignment with this customer These interviews will serve as qualitative insights, and
segment. The overarching goal of this research is to effectively in collaboration with the quantitative, findings from the
differentiate Freedom Furniture from rival competition. questionnaire will provide us with a coherent appraisal of
freedom’s current audience sentiment. The interviews will be
For a comprehensive understanding of Freedom’s current market focused on not only freedoms past and current consumers,
position and its future prospects, it is important for us to utilise both but also future clientele. This initiative is key as we will
primary and secondary data in our research. This combination of data be able diverge upon on our ‘Gen-Y’ target market, and
will be used to draw key insights into the business structure and how plot consumer behavioural traits and trends. By merging
it aligns effectively with gen y and ulterior consumer standpoints. consumer behavioural traits and trends, this will deduce a
comprehensive picture of what freedom’s reconfiguration will
Primary Research achieve. This survey is a pertinent element of primary research
due to the ability to discover where freedom’s strengths are
situated from a customer point-of-view, and ascertain sectors
Questionaire
An electronic and paper-back questionnaire will be conducted
to obtain quantitative data of consumer perceptions; periodic where we can deliver further value to our target market.
shopping habits; media consumption; brand perception,
Target
Profiling analysis of the target audience will be utilised to
attitudes and engagement; competitive awareness; together
articulate an illustrative blueprint of an exemplar customer
with demographics and psychographics. The questionnaire
aims to obtain a random sample size of no less than 50 Audience within the ‘Independent Living’ customer segment. This study
responses, with an objective to comprehend the consumer Profiling will elucidate the characteristics and persona of the target
audience, to be utilised when completing critical targeting
behavior of the Gen-Y ’independent living’ customer segment.
decisions against the customer segment. This research will
The brevity of the survey’s duration is such that it aims to
pull both primary, and secondary data when constructing.
be completed in under 10 minutes, to ensure both the
completion rate, and quality of responses is maximised.
Competitive
Competitive analysis will be conducted at rival stores across
Physical Two party (sole participant and instructor) observations will the market domain: IKEA, Coco Republic, Harvey Norman,
be carried out to collect customer insights when conducting Analysis Amart, OZ Design, Fantastic Furniture, Plush, Nick Scali,
& Virtual ‘mock’ transactions ‘physically’ instore, or ‘virtually’ via existing King Furniture. This research seeks to uncover insights from
Observation online mediums. customers and employees at rival stores, in the form of
verbatim feedback.
09 freedom Marketing Proposal Capstone freedom Marketing Proposal Capstone 10
Secondary Research
Financial
Analysis of historic financial reports will be undertaken to
obtain a micro understanding of the corporation, together
Reporting with a macro view of the industry – from the perspective
Analysis of Freedom. This research will uncover historic financial
statements, sales breakdown by product, evaluation of former
marketing strategies, and regional reports.
Product Comparative analysis of Freedom ‘product reviews’ across
all digital and print arenas will allow researchers to obtain
Reviews & a comprehensive understanding of customer sentiment
Benchmarking towards products, product verticals, overall service, areas of
improvement and consumer demand. Customer Reviews
related to Freedom will be benchmarked against competition
product and service offerings.
Academic Academic journal literature will be referenced and probed to
comprehensively apprehend the current market situation of
Journal Freedom, together with strategies/theorems to better position
Articles the agency in the market, differentiate from competitors, and
manage customer touch points.
Consumer To better understand the macro customer and retail
environment within Australia together with data on the
Behavior customer segment, the research team will examine statistics
Statistics from the Australian Bureau of Statistics (ABS), IBIS World,
Factiva, together with other statistics providers. This data
will be referenced to obtain a holistic view of the current
economic environment, consumer purchase behavior and
provide generalist insights into the furniture industry.
Monitor To understand the current and historic media environment of
both Freedom, and parent company Steinhoff International,
News & researchers will monitor and enquire into all articles, mentions
Media and publicity across digital, print and databases mediums.
This data will provide a holistic insight into the current
performance, and public relations commonness in the
international spotlight.
11 freedom Marketing Proposal Capstone Avant Garde Annual Report 2012 07Strengths
& Weaknesses Strengths Unique Selling Position
Freedom is an Australian company in which citizens hold deep
Strengths Market Presence endearment and advocacy towards supporting – providing a strong
advantage in a market affectionate towards ‘100% Australian owned’
companies. The Freedom vision aligns with the ethos of creating the
Freedom Furniture has been in the industry for 36 years, giving them a strong ‘home you want to come home to’, which resonates with a large
advantage towards consumers who tend to purchase Australian made majority of the domestic market (‘The Freedom Story, Freedom
products, as they are depicted as an existing, known and reliable brand Furniture 2016). This ideology of creating the ‘perfect home’ engages
which appeals to both families and middle-income groups. According to with the Australian consumer market reverie, and aids towards revving
‘Inside Retail Australia’, Freedom has permanently reduced prices on over consumer demand as to what they want to envision themselves arriving
5,000 products across its range as the first step in a new customer-centric home to.
strategy (Inside Retail Australia, 2017). Having long operated in a category
dominated by endless cycles of high-low pricing and promotions,
Freedom states that it has pledged to embed integrity into its pricing Strengths
Weakness Differentiated
Depicted Market Strategy
as ‘High-End’ brand
and customers strategy, and position it at the core of its business (Harvard
Business Review, ‘Selling the brand inside’ 2002). This enhances Freedom’s
market presence, as a reduction in price on select items allows new families, Freedom aspires to enable consumers from diverse segments to acquire
singles, lower income earners and generation Y the ability to enter this brand, furniture from their marketplace. As the furniture is manufactured
typically perceived as ‘too premium’. domestically, the cost of wages is significantly higher than competitors
who fabricate their items offshore. This creates barriers to Freedom’s
level of accessibility, as even although they yearn not to be a premium
Strengths Differentiated Market Strategy brand, high labor costs they accrue mean they are less competitive against
firms who outsource their manufacturing e.g. IKEA - which hinders their
opportunity to tap into the Generation Y market.
A distinguished marketing strategy is evident for Freedom Furniture as they
not only appeal to one consumer segment, but target three discreet target
markets, including: young families, families with a higher disposable income Weakness Differentiated
Market Market Strategy
Weakness
and independent living. This strategy allows Freedom the opportunity
to attune their marketing communicate plan towards each market, and
exclusively target each group’s specific needs. Freedom Furniture holds Freedom Furniture have embraced negative media attention which hinders
a diverse platform of furniture, display rooms and homewares which a positive brand image in a savvy consumer’s mind. On December 7th,
specifically target different consumer segments. However, even with 2017, the Australian Financial Review published “Freedom furniture owner
their ability to saturate a large segment of the market, Freedom Furniture Steinhoff caught up in accounting crisis” stating that ‘PWC had taken over
have not yet been in touch with the Generation Y market. This lack of the companies accounts to look them over for accounting irregularities’
demographic conversion could pose as a potential threat to the business, if (Australian Financial Review, December 2017) Due to Freedom’s inability
no plan is deliberated to align with the transitioning marketplace. to compete against retail giants such as IKEA, they are not primed to handle
negative press exposure.
13 freedom Marketing Proposal Capstone freedom Marketing Proposal Capstone 14Gantt
Chart
The following gantt chart provides a succinct overview as to the
major deliverables, timeframes, required to ensure the overarching
project is sustainable, and meeting cross-party goals:
15 freedom Marketing Proposal Capstone freedom Marketing Proposal Capstone 16References
CHUDOBA, B., 2018-last update, How much time are respondents willing to
spend on your survey? [Homepage of SurveyMonkey], [Online]. Available:
https://www.surveymonkey.com/curiosity/survey_completion_times/ [08/14,
2018].
FREEDOM FURNITURE, 2016-last update,
The freedom Story [Homepage of Steinhoff Asia Pacific Limited 2016],
[Online]. Available: https://www.freedom.com.au/freedom/the-freedom-
story [08/11, 2018].
IBISWORLD, 2018-last update, Furniture Retailing - Australia Market Research
Report [Homepage of IBISWorld], [Online]. Available: https://www.ibisworld.
com.au/industry-trends/market-research-reports/retail-trade/other-store-
based-retailing/furniture-retailing.html [08/14, 2018].
PIGGOTT, J., 2018-last update, Freedom UTS Pitch [Homepage of Freedom
Furniture], [Online]. Available: https://online.uts.edu.au/bbcswebdav/pid-
2991731-dt-content-rid-34222315_1/courses/24100-24101-2018-SPRING-
CITY/AP_SPR18_Lecture_1.pdf [08/13, 2018].
REIS SOARES, R., ZHANG, T., KANDAMPULLY, J. and PROENÇA, J., 2017. Why are
Generation Y consumers the most likely to complain and repurchase? Journal
of Service Management, 3(28), pp. 526-527.
HOYER, W., D., ed, 2018. Consumer Behaviour. South Melbourne, VIC.
24100
Applied Project
Marketing Capstone
Copyright Statement:
Any part of this document cannot be used without the explicit permission of the Author.
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