Milk War - Coles and Woolworth

Milk price war curdles supermarkets ‘wholesome image.

How the situation will affect the business:

The milk price war can lead the customers firstly to boycott Woolworths and Coles home brand milk supermarkets or even worst boycott all the generic Coles and Woolworths brands by supporting Aussie dairy farmers and by showing they are not be taken in by marketing tools used.

Or on the contrary the milk price war can drive people to buy Coles and Woolworths home brand milk because it is cheaper and they can save money or they can spend it for others products. In the time of GPS, price is a downright and not inconsiderable lever and asset.In that case the Australian dairy industry would be hit head on.

Whether Australian customers would agree on de valuing the Australian agricultural industry by continuing to buy these products remains to be seen.

Marketing impact points:

Price: Price is an important lever for purchasing, even more during GPS.

Quality:

Quality is also a strong level. Since the cases of mad cow disease, bird flu, swine flu, contaminated milk with melamine, consumers pay more attention to quality.

Customer perception: Australians value the connection with the bush. They rather prefer buying home country products than imported one. They try to support the Australian agriculture.

Customer reaction: If they discern that all the advertising used was just marketing tools and those farmers are hurting, they will likely boycott home products and blame these supermarkets.

Reputation:

Woolworths has the reputation to take care of environmental issues, and being involved in Australian agriculture issues by promoting a long term viability of Australian industry and helping rural families to go through financial hardships. But acting the same way than Coles