Houzit is a chain of homewares stores in Brisbane that specialise in bathroom fittings, bedroom fittings, mirrors and decorative items. They currently have 15 stores spread across the greater Brisbane area, with all stores being managed and coordinated from their head office in Milton.
You have recently been appointed as the marketing manager and must now review the organisation and devise marketing strategies that will move Houzit towards its strategic goals.
The CEO has also asked you to consider some marketing opportunities that may assist Houzit in reaching its goals, and provide him with a brief summary evaluating two alternatives, including the benefits and risks associated with each option, and making a recommendation for the opportunity most likely to produce results.
You have gleaned the following information about Houzit:
● Houzit is close to entering its fifth year of operation; offers a wide range of homeware items on easy-to-manage payment terms and supplies a three-year guarantee on every item sold.
● The typical target customers have the following characteristics:
○ sophisticated people who are houseproud
○ shoppers who will drive to an easy-to-access store
○ customers who require payment plans to spread their commitment over an extended period
○ renovators and new home builders
○ 20–50 years old.
● Houzit recognises the following trends and focuses its efforts on them.
○ Quality – Preference for high-quality items is increasing as customers are learning to appreciate differences in quality.
○ Unique items – Customers want homewares that stand out from mass-produced, low-quality items.
○ Selection – People are demanding a larger selection of choices, and are no longer accepting a limited selection of homewares.
● The typical Houzit store has the following characteristics.
○ Location – A commercial, suburban neighbourhood, or urban retail district.
○ Design – Bright and functional.
○ Size – 1,000–1,500 m2.
○ Employees – 15–20 full time, plus several casuals
○ Types of transactions – 60% cash, 40% on long-term repayment plan.
● Sales break-ups between the existing Brisbane stores reveal sales of:
○ 30% bathroom fittings
○ 35% bedroom furnishings
○ 20% mirrors and decorative items
○ 15% lighting fixtures (recent addition).
● A new customer’s first purchase is generally of mirrors and decorative items, and this gives us the opportunity to sign them up to our loyalty program.
In a brief discussion with the CEO, you asked about the changes taking place in legislation that could impact on Houzit’s operation. The CEO explained:
‘There is a big push by governments on the issue of sustainability. This focuses mostly on environmental issues of waste management and energy conservation. Houzit stores have been deliberately designed in the past to be bright and comfortable places to shop. This means a significant cost in electricity usage to run the lights and the air conditioners. With the new regulations, we are going to have to find ways to still provide customers with what they want without the high electricity usage.’
Strategic plan (extract)
Houzit will be a national retail brand, catering to the needs of home makers with a range of unique, high-quality homewares made accessible to all through our easy-to-manage payment plan.
By 2020, Houzit will have a significant retail presence in homewares in every Australian capital city, starting with 15 stores in the greater Brisbane area and growing to 100 Australia-wide.
1. Increase sales from $15 million per year to $20 million per year in the next three years.
2. Increase our loyalty customers list from 10,000 to 15,000.
3. Establish brand recognition in Brisbane so that at least 1 in 3 people recognise our brand in a random survey taken in 18 months.
For the organisation outlined in the case study provided, identify two marketing opportunities and evaluate each opportunity for risks, strengths, weaknesses and alignment with organisational objectives. After you have reviewed the opportunities, select the best-fitting opportunity for the organisation and develop marketing strategies, approaches and activities to take advantage of the opportunity.
1. Develop an organisational overview that:
a. outlines the strategic direction and organisational objectives
b. outlines the current size, capabilities and resources of the organisation, including any notable strengths and weaknesses
c. identifies any gaps between the objectives and the current capabilities and resources.
1. Identify two marketing opportunities that meet the objectives, and evaluate the risks and benefits of each opportunity.
2. Recommend the opportunity that best addresses organisational objectives and:
a. develop a marketing mix strategy that fits within the capabilities and resources of the organisation
b. describe how your strategies align with the strategic direction of the organisation, and give justifications for your selection
c. detail a marketing performance review strategy using an appropriate tool (competitive analysis, life cycle model, value chain analysis, etc.) to review the performance of the organisation against marketing objectives
d. include the metrics