Marketing Strategy of Arnott’s Biscuits Limited in Australia

Introduction

Arnott’s Biscuits Limited is Australia’s largest biscuits producer and the second largest supplier of snack foods. It is a subsidiary of the Campbell Soup Company of the United States. An evaluation of the company’s internal strengths and weaknesses and external opportunities and threats served as the foundation for this strategic analysis and marketing plan. The plan focuses on the company’s growth strategy in terms of building awareness and increasing the brand recognition for the company (Datamonitor (Firm), (n.d.). Environmental Analysis In 1865, a small bakery opened on Hunter St in Newcastle that supplied bread, pies and biscuits to the local people and to the crews of the many ships that docked at the port to load coal (Datamonitor (Firm), (n.d.). Arnott’s has grown into a producer of the best foods in the region. It has created more than fifty thousand jobs Australians. It also employs more people cross the world. A.

The Food Environment

The food environment in Australia has been dynamically adopting technology in production mechanisms. However, there are factors that have been affecting the operations in the industry. These include:

Competitive forces. The competition in the food industry is very strong locally and internationally. Although Arnott’s is an Australian icon in the food industry. There are always other companies competing with them. It competes internationally as one of the largest food companies in the Asian Pacific region (Datamonitor (Firm), (n.d.).

Economic forces. Nationwide, many companies have reduced their overall production budgets as they focus on cutting prices. However, Arnott’s is spending around $250 million on produce, products and services for all the stakeholders, from the farmers to the suppliers. While overall promotion budgets are shrinking, many companies are diverting a larger percentage of their budgets to sales promotion and specialty advertising.

Political forces. There are no expected political influences or events that could affect the operations of Arnott’s Biscuits Limited.

In today’s society, consumers have less time for spending on food. The hallmarks of today’s successful products are convenience and ease of use. If the product does not save time and is not easy to use, consumers will simply ignore it. Arnott’s is focused on making every everyday moments a little more delicious (Datamonitor (Firm), (n.d.). B. Target Market(s) By focusing on commitment to service and quality, Arnott’s has effectively implemented a niche differentiation strategy in a somewhat diverse marketplace. Its ability to differentiate its product has contributed to superior annual returns. Its target market consists of all global markets. Its most profitable product are:

1. Arno Shortbread
2. Bush Biscuits: similar to an Arrowroot but larger and harder, made for camping.
3. Caramel Crowns: a plain biscuit, topped with caramel, and covered in chocolate
4. Cheds: a savory cracker that is perforated and sprinkled with cheddar cheese and salt.
5. Chocolate Butternut Snap: a crunchy oatmeal and coconut biscuit covered in chocolate.
6. Chocolate Dessert C. Current Marketing Objectives and Performance Arnott’s sales representatives call on potential awareness professionals to help develop company awareness strategies.

The company is also focusing on increasing its brand recognition. The analysis of current target markets assesses demographic, geographic, psychographic, and product usage characteristics of the target markets (Palmatier & Sridhar, 2017). It also assesses the current needs of each of the firm’s target markets, anticipated changes in those needs, and how well the organization’s current products are meeting those needs.

SWOT Analysis

Strengths

Arnott’s products differentiation strategy is the result of a strong marketing orientation, commitment to high quality, and customization of products and support services.

There is little turnover among employees who are well compensated and liked by customers. The staff promote camaraderie with coworkers and clients, and foster communication and quick response to clients’ needs.

A long-term relationship with the primary suppliers has resulted in shared knowledge of the products’ requirements, adherence to quality standards, and a common vision throughout the production process.

The high percentage of reorder business suggests a satisfied customer base, as well as positive word-of-mouth communication, which generates new business each year.

Weaknesses

The highly centralized management hierarchy and lack of managerial backup may impede creativity and growth. Too few people hold too much knowledge. 2. Despite the successful, long-term relationship with the supplier, single-sourcing could make Arnott’s vulnerable in the event of a natural disaster, strike, or dissolution of the current supplier. Contingency plans for suppliers should be considered. 3. The seasonal nature of the product line creates bottlenecks in productivity and cash flow, places excessive stress on personnel, and strains the facilities. 4. Both the product line and the consumer base lack diversification. Dependence on current reorder rates could breed complacency, and invite competition. The development of a product that would make the company’s products obsolete would probably put Arnott’s out of business. 5. Arnott’s is reactive rather than assertive in its marketing efforts because of its heavy reliance on advertising to increase the consumer base.

Opportunities

Advertising expenditures in the United States exceed $132 billion annually. More than $25 billion of this is spent on direct-mail advertising, and another $20 billion is spent on specialty advertising. The potential for Arnott’s awareness and brand recognition is significant in this market.

Technological advances have made it easy for consumers to make orders and access Arnott’s from anywhere. It has also made it easy to perform awareness and brand recognition processes replacing the old word-or-mouth methods (Datamonitor (Firm), (n.d.). It has brought greater efficiency but also have increased the amount of stress in their fastpaced lives. Personal computers have become commonplace, and personal information managers have gained popularity.

As Australian companies look for ways to develop customer relationships rather than just close sales, reminders of this relationship could come in the form of acceptable premiums or gifts that are useful to the customer (Fuller et al, 2016).

Reengineering, right-sizing, and outsourcing trends in management may alter traditional channel relationships with brokers, dealers, and distributors or eliminate them altogether.

The technology, knowledge, and equipment required to create awareness and brand recognition is of great magnitudes. The possible entry of new competitors is a significant threat.

Theft of trade secrets and product piracy through unauthorized copying are difficult to control.

Specialty advertising through promotional items relies on gadgetry and ideas that are new and different. As a result, product life cycles may be quite short.

Single-sourcing can be detrimental or even fatal to a company if the buyer-supplier relationship is damaged or if the supplying company has financial difficulty.

Competition from traditional food industries is strong.

Matching Strengths to Opportunities/ Converting Weaknesses and Threats

The acceptance of technological advances and the desire to control awareness and brand recognition creates a potential need for computer systems.

Arnott’s has more opportunity for business growth during its peak season and this would provide advances in the marketing objectives.

Arnott’s must modify its management hierarchy, empowering its employees through a more decentralized marketing organization.

Arnott’s should discuss future growth strategies with its supplier and develop contingency plans to deal with unforeseen events. Possible satellite facilities in other geographic locations should be explored.

Arnott’s should consider diversifying its product line to satisfy new market niches and develop nonseasonal products.

Arnott’s should consider surveying its current customers and its customers’clients to gain a better understanding of their changing needs and desires.

Marketing Objectives

Arnott’s Biscuit Limited, is in the business of producing several quintessentially Australian biscuits. Besides formulating a marketing-oriented and customer-focused mission statement, Arnott’s should establish an objective to achieve cumulative growth in net profit of at least 50 percent over the next five years. At least half of this 50 percent growth should come from new, nonmanufacturing customers and from products that are nonseasonal or that are generally delivered in the off-peak period of the calendar cycle. During the development of a marketing plan, marketers attempt to match internal strengths to external opportunities.

In addition, they try to convert internal weaknesses into strengths and external threats into opportunities. The development of marketing objectives is based on environmental analysis, SWOT analysis, the firm’s overall corporate objectives, and the organization’s resources. For each objective, this section should answer the question, “What is the specific and measurable outcome and time frame for completing this objective?” Strategic Achievement of Marketing at Arnotts To accomplish its marketing objectives, Arnott’s should develop benchmarks to measure progress. Regular reviews of these objectives will provide feedback and possible corrective actions on a timely basis.

The major marketing objective is to gain a better understanding of the needs and satisfaction of current customers. Since Arnott’s is benefiting from a 90 percent reorder rate, it must be satisfying its current customers. Arnott’s could use the knowledge of its successes with current clients to market to new customers. In order to capitalize on its success with current clients, benchmarks should be established to learn how Star can improve the products it now offers through knowledge of its clients’needs and specific opportunities for new product offerings. Another objective should be to analyze the billing cycle r now uses to determine if there are ways to bill accounts receivable in a more evenly distributed manner throughout the year.

In addition, the need for enhanced provision of information will essentially provide reliable communication for repeat customers might be willing to place orders at off-peak cycles in return for discounts or added customer services. The use of software is likely to generate and should create new products that can utilize its current equipment, technology, and knowledge base (Park & Tran, 2018). It should conduct simple research and analyses of similar products or product lines with an eye toward developing specialty advertising products that are software based but not necessarily calendar related.

Marketing Reviews

The marketing plan clearly specifies and describes the target market towards which the organization will aim its marketing efforts. The difference between this section and the earlier section covering target markets is that the earlier section deals with present target markets, whereas this section looks at future target markets.

References:

1. Baker, M. J. (2014). Marketing and Corporate Strategy. Marketing Strategy and Management, 25-59. doi:10.1007/978-1-137-34213-3_2 Datamonitor (Firm). (n.d.). Arnott's Biscuits case study: 140 years of change and innovation to maintain market leadership.
2. Fuller, N. R., Fong, M., Gerofi, J., Leung, L., Leung, C., Denyer, G., & Caterson, I. D. (2016). A randomized controlled trial to determine the efficacy of a high carbohydrate and high protein ready-to-eat food product for weight loss. Clinical Obesity, 6(2), 108-116. doi:10.1111/cob.12137
3. Palmatier, R. W., & Sridhar, S. (2017). Marketing Strategy: Implementing Marketing Principles and Data Analytics. Marketing Strategy, 259-278. doi:10.1057/978-1-137-52624-3_9
4. Park, J. H., & Tran, T. B. (2018). Internal marketing, employee customer-oriented behaviors, and customer behavioral responses. Psychology & Marketing, 35(6), 412-426. doi:10.1002/mar.21095
5. Pulido Polo, M. (2018). Acts or events? A perspective from the marketing mix. IROCAMM-International Review Of Communication And Marketing Mix, (1), 56-66. doi:10.12795/irocamm.2018.i1.04 Reyment, K. (2011). Foodies' guide 2012. Prahran: Hardie Grant Books.