BSBMKG507

Assessment Task 1

Interpret Market Trends and Development

1.Organisation profile, outline any internal and external sources of information

relevant to the organisation’s business activities. These may include (but not
limited to)

Business and strategic objectives

BBQfun will be the leading outdoor lifestyle retailer, catering to the growing
need for furnishing new and renovated dwellings in the greater Brisbane area. The
assortment offer of BBQs, outdoor furniture and BBQ accessories will position BBQfun
as best-in-class for outdoor lifestyle retailing.

BBQfun will reinvent the way people shop for outdoor lifestyle products. BBQfun
will build its reputation on offering the fullest assortment of products possible,
incorporating both local and imported goods with products sold on easy to manage
long-term payment plans. Our after sales service and three year guarantees will find
traction with a market dominated by low quality items

Marketing and business performance – Marketing Plan

BBQfun’s advertising budget is set at $250,000 for the year. The advertising
program will target local letter box drops, radio and magazines. BBQfun will use direct
mail and local advertising, with coupon inserts in the BrisNews magazine likely to be
the most successful of the campaigns.

BBQfun will try to get articles about BBQfun into the BrisNews magazine.
Previous features in the BrisNews magazine has seen a dramatic increase of sales
immediately after the article was published.

Comparative market information

BBQfun is close to entering its third year of operation. The initial rollout of
stores has been well received, and marketing is now critical to its continued success
and future profitability. The store offers wide ranging outdoor lifestyle items on
easy-to-manage payment terms and supplies a three year guarantee on every item
sold. The basic market need is for quality, fashionable and unique outdoor lifestyle
items that caters to the house-proud needs of our market.

Changes in technology and Industry trends

Australia furniture market segmentation by end users (Residential, Hospitality

and Commercial), major cities (Sydney, Melbourne, Perth, Brisbane, Adelaide, Auburn,
Gold Coast, New Castle and Canberra), by type of sector (Organized and Unorganized
sector), by residential furniture (bedroom, living room, kitchen, home office furniture,
dining room, storage furniture and other residential furniture), by home furnishing

Jindaporn Rattanapun
ID : 170067
 BSBMKG507

Assessment Task 1

(Indoor, Outdoor and Lighting), by distribution channel (Homewares and Home

Furnishing Stores, Home Improvement and Gardening Stores, Department Stores, Mass
Merchandisers, Internet Retailing, Supermarkets, Variety Stores, Warehouse Clubs and
others)

Changes to the market demographics, social and cultural factors

The profile for theBBQfun customer consists of the following geographic,
demographic, and behaviour factors based on a local Chamber of Commerce
report:

● Overview greater Brisbane area:

○ high population growth of 5% per year

○ new homes and renovated homes growing from a base of 50,000 per year

○ low unemployment of 4.7%.

● Geographic:

○ our immediate geographic target is the area of Brisbane with a

population of 1,000,000

○ a 30 km geographic area is the average store market footprint

○ the total targeted population is estimated at 250,000.

● Demographics:

○ male and female

○ ages 20–50, this is the segment that makes up 50% of the Brisbane
new and renovated house markets, according to the Chamber of
Commerce

Jindaporn Rattanapun
ID : 170067
 BSBMKG507

Assessment Task 1

○ high % of young professionals who work in the central business district

○ high % have attended college/graduate school

○ an average household income of over $130,000.

● Behaviour Factors:

○ no concerns about debt; will borrow on the future to enjoy today

○ looking for security in purchasing looking for the ‘house-proud’ factor in

outdoor lifestyle purchasing

BBQfun Sales Performance 2011–2014

FY2011 FY2012 FY2013 FY2014

Gross sales $ 5,000,000 8,000,000 10,000,000 11,000,000
(ex. GST)

2. Outline legislative and regulatory context of the organisation as It applies to

marketing

 The Competition and Consumer Act 2010

The Competition and Consumer Act 2010 (CCA)[1] is an Act of the Parliament of
Australia. Prior to 1 January 2011, it was known as the Trade Practices Act 1974 (TPA).
[2] The Act is the legislative vehicle for competition law in Australia, and seeks to
promote competition, fair trading as well as providing protection for consumers. It is
administered by the Australian Competition and Consumer Commission (ACCC) and
also gives some rights for private action. Schedule 2 of the CCA sets out the Australian
Consumer Law (ACL). The Australian Federal Court has the jurisdiction to determine
private and public complaints made in regard to contraventions of the Act.

 Privacy Legislation
The Privacy Act 1988 (Privacy Act) was introduced to promote and protect the
privacy of individuals and to regulate how Australian Government agencies and
organisations with an annual turnover of more than $3 million, and some other
organisations, handle personal information.
The Privacy Act includes 13 Australian Privacy Principles (APPs), which apply to some
private sector organisations, as well as most Australian Government agencies. These are

Jindaporn Rattanapun
ID : 170067
 BSBMKG507

Assessment Task 1

collectively referred to as ‘APP entities’. The Privacy Act also regulates the privacy
component of the consumer credit reporting system, tax file numbers, and health and
medical research.

 ADMA Code of Practice

The ADMA Code of Practice provides a principle-based, agile compliance
framework that places consumers' interests at its core and gives marketers the support
and guidance they need to make responsible decisions about data, technology,
creativity, content and customer experience.

3. Use at least 2 statistical analysis tools to analyse quantitative market data

Data analyse must include one of the following concepts or procedures and an
explanation of why it was chosen:

Central tendency
Central tendency is very useful in psychology. It lets us know what is normal or
'average' for a set of data. It also condenses the data set down to one representative
value, which is useful when you are working with large amounts of data.

In this case we’ll use this to calculate Sample of FY2014 customer spends on BBQ
equipment and the result are:
Mean : 427.77
Median : 461.20
Mode : N/A

Measure of dispersion
While measures of central tendency are used to estimate "normal" values of a
dataset, measures of dispersion are important for describing the spread of the data, or
its variation around a central value.

In this case we’ll use this to calculate Sample of FY2014 customer spends on BBQ
equipment and the result is Variance = 12,360.42

Jindaporn Rattanapun
ID : 170067
 BSBMKG507

Assessment Task 1

4. Interpret and visually present data and/or data analysis

5. Interpret market trends and developments and their potential impact on the
business Trend may include )but not limited to :

Australia Furniture Market Size and Overview

The furniture market of Australia witnessed growth at a CAGR of 3.0% during
the period 2012-2017. Rise in number of furniture manufacturers and retail outlets
largely contributed to the growth in market revenues. Furthermore, rise in urbanization
generated increased demand for furniture from residential, hotels, office and industrial
sectors during the period. Additionally, increasing awareness among the customers
about online sales and e-commerce portals for furniture along with the expansion in
services of e-retailers including Pottery Barn, Zanui and others has also been a
significant factor which has positively impacted Australia furniture market during
recent years.

Australia Furniture Market Segmentation

By End Users: Residential furniture therefore dominated the
overall Australia furniture market in 2017, followed by commercial and hospitality
sector. Retailers existing in the space catered to the varied requirements across all
categories of end users. The growing number of urban household coupled with change
in customer preference for stylish and modern furniture boosted the demand for
residential furniture. Growing demand for housing structures was the major reason
behind the augmented demand for furniture in the country.

Jindaporn Rattanapun
ID : 170067
 BSBMKG507

Assessment Task 1

By Product Categories in Home Furniture: There has been a rapid growth in real
estate sector due to the demand for residential property in the country. Bedroom
furniture was the highest selling product category in home furniture segment as of
2017, followed by living room furniture, kitchen furniture, home office furniture, dining
room furniture, storage furniture and all other residential furniture.

By Organized and Unorganized Sector: Unorganized sector dominated the market, in

terms of large number of unorganized manufacturers operated in the country in 2017.
Lower cost of production by using the locally available resources assists unorganized
retailers in selling products at a lower price than the one sold by established companies
with multiple retail outlets in Australia.The increasing demand for the branded
products among the customers due to rising income level has led to the growth of
organized retailers in the country.

By Type of Office Furniture: Workstation furniture dominated the office furniture

market on the basis of consumer expenditure followed by office chair, office table and
office storage. Office/ Commercial furniture space is governed by players specializing in
designing, manufacturing and supplying modular furniture for schools, government
institutions, offices, and aged care. Major companies involved in office furniture are
DDK Commercial Furniture, BFX Australia, IKEA, Etsy Australia, Buy direct online,
Workspace Australia, Burgtec, Woods furniture Australia, House of Home Australia,
Kmart and others.

Snapshot on Australia Online Furniture Market

Sales for furniture in Australia have been dominated by offline retail outlets,
franchisee outlets, showrooms and exclusive stores of manufacturers and major players
operating in the space. Despite of the presence of approximately 20.67 million internet
users i.e. a penetration rate of over 85.1% in the country during 2016, online sales of
furniture contributed poorly to the overall market revenues during the same year.
Online players faced stiff competition from brick and mortar stores all across the
country, which offered a wide variety of products at competitive prices. Most of the
companies selling via online channel had at least one offline store and are yet to register
significant traffic and product orders through online in the country. The major players
which have dominated the revenues of online furniture sales in 2016 are Brosa,
Fantastic Furniture, Pottery Barn, Zanui and others.

Competitive Landscape
The top 7 leading home furniture and furnishing players are Harvey Norman,
Freedom Furniture, Fantastic Holdings, Nick Scali, IKEA, Pacific Furniture and Bedding
and Linen House which holds the largest market share. The companies compete on the
basis of product spread, price range, number of stores, geographical locations, best
selling product.

Jindaporn Rattanapun
ID : 170067
 BSBMKG507

Assessment Task 1

Companies Mentioned

 Brosa
 Careousell
 Dan Kitchens
 Dream Doors
 Fantastic Furniture
 Flat Pack Kitchen
 Freedom Furniture
 Freedom Kitchens
 Fuller Furniture
 Harvey Norman
 Icon By Design
 IKEA
 Kitchen Shack
 Living Styles
 MyDeal.com.au
 Nick Scali
 Pacific Furniture and Linen House
 Pottery Barn
 Temple & Websters
 Zanui

6. Review and discuss the organisation’s performance using qualitative analysis

of comparative market information

Sales Forecast

FY2014 FY2015 FY2016

Total sales 11,000,000 12,000,000 15,000,000

Gross profit 1,800,000 2,400,000 4,200,000

Analysis: From FY2014 – 2016 Total sale and Gross Profit was increased

Jindaporn Rattanapun
ID : 170067
 BSBMKG507

Assessment Task 1

Profitability outcomes budget

Profitability Average price Gross profit

BBQ $600 45%

Outdoor furniture $920 50%

BBQ accessories $50 60%

Analysis: BBQ accessories made more profit (60%) follow by Outdoor furniture(50%)
and BBQ(45%)

FY2014 customer survey results (survey of 500 customers)

New Product Product Analysis

product upgrade replacement
acquisitio
n
Have visited BBQfun 70% 70% 50% New product acquisition
in previous month customers and product upgrade
customers visited BBQFun more
than Product replacement
customers

Have bought a 70% 65% 50% New product acquisition

BBQfun product in customers have bought a
previous month BBQfun product in previous
month the most and the less is
product replacement group
Customer service is 90% 95% 60% Customer service is essential the
essential most for Product upgrade group,
follow by New product
acquisition customers and the
less is product replacement
group
Price is most 10% 20% 95% Price is most important for
important Product replacement group
follow by product upgrade group
and New product acquisition
group

Jindaporn Rattanapun
ID : 170067
 BSBMKG507

Assessment Task 1

Australian made is 80% 65% 55% Australian made is important for

important New product acquisition
customers follow by product
upgrade customers and Product
replacement customers
Will buy online 100% 100% 100% All of 3 customers group will buy
online 100%
Will pay delivery 100% 100% 100% All of 3 customers group will pay
charges for online delivery charges for online
purchases purchases 100%
Loyal customer 30% 20% 10% The most loyal customer is New
product acquisition customers
follow by product upgrade
customers and Product
replacement customers however
% still low

Market Share

The Yard BBQ’s R us Outdoorz BBQfun

FY2013 of 16,000
– 4,000 4,000 8,000
BBQs sold in Brisbane
FY2014 of 20,000
– 6,000 6,000 8,000
BBQs sold in Brisbane

Analysis: BBQFun’s market share is declining in 2014 and lost to BBQ’s R us and
Outdoorz

BBQfun Sales Performance 2011–2014

FY2011 FY2012 FY2013 FY2014

Gross sales $ (ex. 5,000,000 8,000,000 10,000,000 11,000,000
GST)

Analysis: gross sale(ex. GST) was increased every years from FY2011 – FY2014

Jindaporn Rattanapun
ID : 170067
 BSBMKG507

Assessment Task 1

2011 Sales Performance

Item Averag Averag Average Units Revenue Gross

e price e COGS contributio profit on
n sales
BBQ $5,049,15 $2,668,25
$615 $290 $325 8,210 0 0
Outdoor $3,069,00 $1,550,00
Furniture $990 $490 $500 3,100 0 0
BBQ
accessori 39,50 $1,856,50 $1,066,50
es $47 $20 $27 0 0 0

Total $9,974,65 $5,284,75

0 0

2012 Sales Performance

Item Averag Averag Average Units Revenue Gross

e price e COGS contributi profit on
on sales
BBQ $2,507,10
$620 $315 $305 8,220 $5,096,400 0
Outdoor $3,574,75
Furniture $1,380 $475 $905 3,950 $5,451,000 0
BBQ
accessori 46,80 $1,918,80
es $56 $15 $41 0 $2,620,800 0

Total $13,168,2 $8,000,65

00 0

2013 Sales Performance

Item Averag Averag Average Units Revenue Gross

e price e COGS contributi profit on
on sales
BBQ $1,947,60
$605 $365 $240 8,115 $4,909,575 0

Jindaporn Rattanapun
ID : 170067
 BSBMKG507

Assessment Task 1

Outdoor $5,888,00
Furniture $1,750 $470 $1,280 4,600 $8,050,000 0
BBQ
accessori 49,50 $2,128,50
es $55 $12 $43 0 $2,722,500 0

Total $15,682,0 $9,964,10

75 0

2014 Sales Performance

Item Averag Averag Average Units Revenue Gross

e price e COGS contributio profit on
n sales
BBQ $4,999,37 $1,879,76
$625 $390 $235 7,999 5 5
Outdoor $9,492,00 $7,232,00
Furniture $2100 $500 $1600 4520 0 0
BBQ
accessori 5400 $2,700,00 $1,890,00
es $50 $15 $35 0 0 0

Total 17,191,37 11,001,76

5 5

Analysis : Year 2011 BBQ made the most profit but Year 2012 – 2014 Outdoor Furniture
made the most profit

Analysis of Data:
Year Total Revenue Total Gross Profit on
Sales

2011 $9,974,650 $5,284,750

2012 $13,168,200 $8,000,650
2013 $15,682,075 $9,964,100
2014 $17,191,375 $11,001,765

Jindaporn Rattanapun
ID : 170067
 BSBMKG507

Assessment Task 1

The most Total Revenue and Gross Profit of BBQFun is Year 2014

7. Analyse and discuss the market performance of existing and potential

competitors and their products or services to identify potential opportunities or
threats to the organisation

Competition

1) National Competition

● The Yard: has a limited selection but significant depth. All Australian
made. No significant marketing or promotion. The price point is high,
but the quality of products is quite good. Not in Brisbane.

● BBQ’s R us: Broad range of outdoor lifestyle products including trinkets

and furnishings. Lots of cheap imports. Concentrating on established
markets. Strong in the replacements segment. One store in Brisbane.
Mostly in Melbourne and Adelaide.

● Outdoorz: Large operations of only a few stores per city. Mass markets
outdoor lifestyles at good value prices. No imported goods. Extensive
advertising. Low to medium quality. Strong in the replacement segment
rather than new and refurbished dwellings. Gaining strength in
Brisbane market.

2) Local Competition

● All independents. These stores are owned by individual owner operators.

Ranges vary according to owner preferences. There are very few imports.
Mostly retailing Australian manufactured goods. Collectively their

Jindaporn Rattanapun
ID : 170067
 BSBMKG507

Assessment Task 1

average item sale price is $250, they have a market share of 48%, and are
growing at about 8% per year.

BBQfun does not see the competitors changing their marketing strategy or
product offer in the foreseeable future.

Market Share

The Yard BBQ’s R us Outdoorz BBQfun

FY2013 of 16,000
– 4,000 4,000 8,000
BBQs sold in Brisbane
FY2014 of 20,000
– 6,000 6,000 8,000
BBQs sold in Brisbane

Analysis: BBQFun’s market share is declining in 2014 and lost to BBQ’s R us and
Outdoorz

Examples of opportunities could include (but are not limited to):

- Exports
BBQFun can export their products to overseas focus on country which are
islands, have a lot of beaches as they tend to have more BBQ activities. This can help
BBQFun in increase sale in BBQ section as well. The country including Thailand, Fiji,
Indonesia, Maldives etc.
- Business expansion
BBQFun can expand business to others area in Queensland or other state such as
NSW etc. This can help to build brand awareness and increase profit and sales.

Examples of threats could include (but are not limited to):

- New competitors
Beside current competitors there are more strong competitors such as IKEA
which just open in Brisbane.
- Decrease in consumer confidence
Consumer confidence can decrease if quality of products and services not met
their expectation. So it’s important for BBQFun to keep improve products and service
quality.

Jindaporn Rattanapun
ID : 170067
 BSBMKG507

Assessment Task 1

Jindaporn Rattanapun
ID : 170067