Marketing plan presentation

Baby Bunting

Student’s Name

Student Number

Institutional Affiliation

Executive Summary

Baby Bunter provides specialty baby products. The company has been in the industry for over 35 years. The company is able to offer over 6,000 products from the 40 stores that is has across Australia. The company also has an online store that has been able to allow customers to purchase a variety of products with a click on a laptop or a mobile phone. The company targets soon to be parents, parents of 0 - 3-year-old and family and friends of the parents.

The baby product industry is worth $2.3 billion. The industry is bound to grow taking into consideration the annual growth in the number of births per year. Baby Bunting faces competition from other companies that provide specialty baby products as well as other department stores that have baby products among the products that it offers. The department stores have more stores and is thus able to reach more customers.

Baby Bunting has the strength of the market share and growth that it has developed for the last 35 years. Weaknesses comes from the poor results that have resulted from the company in comparison to the revenue estimates that have now gone down. The company has an opportunity of growing in the large Australian market. The market is bound to improve with the increase in birth rates. The company however faces the threat from entry of other businesses such as Amazon that will affect the company’s online market share.

Background

Baby Bunting is a company that is based in Australia. The company was founded in 1979. It deals with the retailing of baby goods. It has a total of 40 stores across Australia. The firm also has an online store that receives a high number of visits on a daily basis. The company targets parents and parents to be. The baby products are meant for babies between the ages of 0 to 3 years across all the demographic. The firm currently employs in 700 people in both the stores and the warehouses. It has over 6,000 product lines which include car seats, toys, furniture, babywear and many more. It has also provided their customers with the best brands in the market. The paper provides information on the customers, the organization, the market, product and a SWOT analysis of the company.

Customer

The primary target market for Baby Bunting is parent and parent to be. The parents who have babies that are between 0 - 3 years need to buy toys, carriers, babywear and others that they might identify that are necessary at the different stages of parenting. Most of the parents buy baby products before giving birth. There are however items that are purchased once the baby is born which include food formula, nappies, liners and other changing and feeding products. A need may also arise that could require the need for other products. As a baby is getting nigger, the baby is toilet trained and thus parents would at this point buy toilets at the babies become bigger.

The soon to be parents are also target market of the company. Most of the soon to be parents buy car seats, furniture, babywear, safety and nursery products way before they give birth. The soon to be parents want to be prepared once the baby comes and thus before birth, the son to be parents buy many products from the company. This group is the primary target market for the enterprise as they require many products in their start to parenthood.

The secondary target market are the friends and family of the parents that have babies or are about to be. There are various events that are held to celebrate babies which include baby showers. The baby showers have been detained before the birth of the baby and custom and ritual celebrations are also held once the baby is born. The friends and family buy various products that they provide as gifts to the soon to be parents as well as the new parents.

The demographic for new parents are young male and female especially recently married couples. The females are however the ones that hold the buying decision and thus marketing strategies target the female population. The median age of expectant women is 28 years and a median household income of $47,764. There are however young single mothers who are also part of the target for the company. The pregnant women are the ones who make the buying decision. They wait for some time before making decision during which they do market research.

Organization

Competencies

The primary competency of the company is its wide range of products. The company offers 6,000 products and the range will continue to increase (Baby Bunting, 2017). The company intends to expand the private labels and exclusive products that it offers. The company’s online store and physical stores allows for a parent to get all the goods that they need at one go without having to visit various store. The stores provide products from all the goods with expensive brands as well as pocket friendly products. The wide variety offers products that meet the needs of the people according to the household income of the parents. The company also has ideal prices that match the value that the customer requires from the products. Some of the baby products are an investment and thus the parents need to feel that they receive value for their money.

The Baby Bunting company has made it easy for the customers to buy products through click and collect on the company’s website. The online store allows the customers to buy all the products that they need from the comfort of their home. The company also provides after sale services that most of the customers appreciate. The staff fitting of the car seat, parenting room and lay-by (4- Traders, 2017). The company also has highly competent staff that are able to determine the best products that best fit the customers. It has gained the customer loyalty of many customers as a result of the provision of quality products.

Deficiencies

Baby bunting has been affected by the news of the entry of Amazon into the industry. The company’s stock price was hit by the news. Amazon will also influence the company as Amazon will be able to have a wider variety and thus more customers will purchase products from Amazon to get more options.

Market

Market conditions

The market condition of the baby goods industry is large. The total revenue in the industry amounts to $2.3 billion per annum. The revenue is bound to increase with time. There is an increase in the number of births over the years. The number of births in 2013 was 310,000. The amount is expected to grow each year by 2.1%. The increase in the number of births relates to a concurrent increase in the revenues generated on an annual basis in the industry. The industry therefore has the ability to grow to greater levels. The industry has many small specialty players who increase the companies that provide baby products. The Australian government has however set some standards that ensure product safety. The regulations place a barrier to the entry of other companies into the industry (Spencer, 2016).

Competitors

Baby Bunting is the leading retailer of baby products in the industry. The competitors in the industry that provide specialty baby goods include Baby “R” Us, Baby Bounce, Bubs, Baby Company, Baby Kingdom, Baby Savings and Baby Mode. The greatest competitors among the above is Baby “R” Us. Baby “R” Us has 18 stores. The company is however unable to meet the competition levels that have been set by Baby Bunting. Baby “R” Us has a limited range of products unlike Baby Bunter. The other competitor is Baby Bounce. The company has recently purchased stores from another retail chain by the name My Baby Warehouse. The company has therefore increased the stores that it owns with 15 new stores. the company has however been able to counter the competition by its provision of variety of product as well as having many sores around the country.

The company also receives competition from department stores. The game that the firm receives from department stores is way more than what it receives from specialty stores. Some of the department stores include Target, Kmart, Big W, Myer and David Jones. All of the mentioned department stores has more stores than Baby Bunter. Target for example has 306 stores in Australia, Kmart has 191 stores and Big W has 186 stores. The department stores offer many products and baby products are components of the products that they offer. The customers are bound to go to the department store while doing household goods shopping and thus they can end up buying other products there.

Product

The products offered in the online store include prams, car seats, carriers, furniture, nursery, safety items, babywear, Manchester branded products, changing products, toys and feeding products. The products come from many brands. The same products are offered in the physical store. The company offers delivery and pick up options for the customers who make online purchases. The many stores that the company has been used as pick up points. The products that are offered in the two stores are however the same.

SWOT Analysis

Strengths

The company’s growth over the years is one of the strengths that it has. The expected growth of the company is an asset that is a strength. The company is expected to increase in growth by 49% by the year 2020. The company is able to open up several stores in a yearly basis. The growth is expected to continue with an increase in revenues and thus profitability for the company. The business development analysts have predicted better results from the company. This is attributed to the increase in visibility in core activities and their earnings. The company’s valuation is also a strength. The company’s valuation is low. Its enterprise value is 0.69 of its sales

The company has also started on focusing on organic growth in comparison to focusing on acquisitions. The company has also concentrated in providing a good retail experience to the customers in all the networks that it has. The company has a strength from its strong competitive advantage. Its wide variety products and good service give the company a competitive advantage. The company also performs very well financially. The company has a strong return on invested capital that is greater than 70%. The company also has well accomplished leadership that has been able to lead the company in the right direction (Spencer, 2016).

Weaknesses

There are weaknesses that are associated with the company. The company pays too much in terms of shareholders compensation. This leaves little amount of money that can be reinvested into the business. The company has had revenue estimates that have been revised downwards over the current year as well as future years. The company’s earnings forecast has gone down as well as the profit forecasts (4- Traders, 2017).

Opportunities

The company has an opportunity for growing the online market (ROICOMAU, 2017). The company can be able to increase the online market and thus increase the revenues that it makes using this segment. The profitability that the enterprise can achieve is high since the running costs of the online store are lower than the operating costs of the physical stores. The online store provides an opportunity of either having the products delivered and the customer can also go and collect the product at their comfort location.

The company also has an opportunity from the large Australian market. The baby product market and very fragmented thus enabling an opportunity for the company to grow and increase the market share that it currently has.

Threats

The company is under the threat from other companies that are trying to get into the market. The company faces competition from other companies such as Amazon that wants to get into the Australian market. Amazon is an international company that provides a variety of products. Amazon is an online store that has partnered with a variety of companies to provide to its customers a wide variety of products. Amazon will be a threat to Baby Bunting online store. Amazon will be able to provide a wider variety of options for the customers who shop online and thus the company’s market share in the online market will be affected. It will lead to lower revenues and lower profitability too (Spencer, 2016).

References

Baby Bunting, (2017). Trending Items. Retrieved from

https://www.babybunting.com.au/ on September 18, 2017.

Spencer, M., (2016). Investor Presentation. Retrieved from

http://www.babybuntingcorporate.com.au/wp-content/uploads/2016/01/FY2016-Investor-Presentation-12-August-2016-FINAL.pdf on September 18, 2017.

ROICOMAU, (2017). Market Snapshot Report: Baby Products and Baby Bunting. Retrieved from

https://www.roi.com.au/blog/market-snapshot-report-baby-products-baby-bunting/ on September 18, 2017.

4- Traders, (2017). Baby Bunting Group LTD. Retrieved from

http://www.4-traders.com/BABY-BUNTING-GROUP-LTD-24446297/strategies/ on September 18, 2017.