7 Eleven or also known as 7-11, is part of an international chain of convenience stores. 7 Eleven is the world’s largest operator, franchisor, and licensor of convenience stores with more than 50,000 outlets.
1.1 Objective and Scope
The purpose of this report is to analyze and evaluate 7 Eleven’s marketing strategies and practices to demonstrate that 7 Eleven is “marketing-oriented”. The scope of the report includes PESTEL analysis and Porter’s 5 Forces analysis to confirm its threats and chances to improve it. This report also include SWOT analysis and the 7 P’s and marketing strategies that are applied for 7 Eleven.
1.2 Background of 7 Eleven
The 7-Eleven stores in Malaysia first opened in 9 October 1984 and achieved a milestone with its 1000th store opening in 2008. The store originally opens from 7 am to 11 pm and operates 7 days a weeks. The stores hold around 1,800 of products, including its own propriety brands such as Big Gulp and Slurpee. 7 Eleven introduced new complimentary products and services, differentiating the brand by allowing bill payment service, selling frozen food, ready-to-eat food and fresh food. Other services that are available in 7-Eleven include Touch N Go reload, soft pins, ink cartridge, refill and photocopying, fax, ATM and internet games’ starter packs.
2.0 Environmental Analysis
Environmental analysis is a basic marketing function used to help marketers identify trends or outside forces that may impact upon the success or failure of a particular product. 7 Eleven has analyzed the environment which is its macro environment before starting out the launching of the products by making sure that the products have meets all of its expectations and respects the specifications that are needed to abide by the law. 7 Eleven does its research by observing and getting feedback forms their customers. The marketing intelligence that 7 Eleven applied are internal database by getting information of their customer’s average age, income, education and what they typically spend per visit. This allows 7 Eleven to create profiles of typical customers, characteristics they use to target other noncustomer consumers.
2.1 Macro Environment
PESTEL are used on human resource and introductory marketing courses in most studies. PESTEL are also known as Politic, Economy, Social, Technology, Environment and Legal. It has been used for quite a long time and the history is so far still unknown. PESTEL analysis is applied because it helps a company to make decisions for future which enables them to understand wider about the environment in which they operate. PESTEL analysis is also applied to take advantages to maximize the opportunities and minimize the threats to an organization by conducting strategic analysis.
As can be seen on table 2.1-2, 7 Eleven have a huge amount of threats and this are and will be affecting 7 Eleven’s sales. Firstly, 7 Eleven have a large number of threats in the current situation unlike last time. The threats are high not only in new entrants but also on the substitutes that are currently existed around the world. 7 Eleven may be a booming store last time but not anymore due to a massive amount of new entrée that are almost similar to 7 Eleven from products to services. In order to compete with these competitors, 7 Eleven have formulate effective strategies and marketing mix strategies.
2.3 SWOT Analysis
SWOT analysis is used for identifying and determining the internal and external factors that can have an impact on the capability of a project. SWOT analysis are applied in this project is to make sure that the project or goal is worth conducting and what is the requirement to make it profitable. SWOT stands for Strength, Weakness, Opportunity and Threats.
As can be seen in Table 2.3-1, 7 Eleven has been using its strength by offering a variety of goods in a low price and operates 24 hours in 7 days. So far, 7 Eleven is the only store that supply a cold drink known as Slurpee which makes a number of difference than other stores. 7 Eleven’s weakness is that not every store can provide what other stores can because some stores are smaller which makes it hard to supply. 7 Eleven are well known because of their strategic locations and these attract customers, this makes the store a higher chance of being franchise due to its popularity. However, there are a large number of competitors that provide almost the same stuff that 7 Eleven provide. This makes the products and services sold to have a wide variety of substitutes.
3.0 Marketing Strategies
Marketing strategy is the base of marketing layout like market segmentation, market positioning and market targeting. Marketing segmentation is used to categorize the marketplace into divisions on which are accessible and have marketing potential, while market positioning is used to change the consumer’s perception of a brand or product connected to the idea of other competing products. Last but not least, market targeting is function to sell its products and services to, and to whom it directs its marketing efforts.
3.1 Market Segmentation
7-Eleven applied an effective market segmentation strategy by dividing its segments into four categories for example geographic and demographic strategy. These two strategies can be seen in the diagram below.
3.2 Market Targeting
Market targeting strategy are applied by 7 Eleven after performing a market research like collecting information on the frequency of target customers that may come to purchase the products. In this scenario, 7-Eleven is mostly likely to target the customers from age of 30 and above as working adults and certain adults that have families will most probably come to buy convenient products for the needs of their families. In addition, women and men’s needs are fulfilled as items for both genders are available at 7-Eleven stores. Besides, 7-Eleven stores are located near residential and commercial areas, thus attracting the selected target customers to come and buy products in a quick manner.
3.3 Market Positioning
7 Eleven applies demographic- related positioning to position their products by using various demographics such as age and gender.
Brands of products available 10 7-Eleven 1Product wide range 0 10
Based on the diagram above, the brands and wide range of products available are at a high level indicating that ages and genders differences of customers are being covered as in their needs and wants. Product positioning objectives must be supported by the overall marketing mix. Although positioning shows the target market perception of the product, it cannot be completed with the promotional mix only. All marketing mix particles, especially the product mix, required to be continually stressed at the final positioning mission.
4.0 Marketing Mix Strategies
Marketing mix strategies is a framework applied in marketing by marketers. It is an important during releasing a product or brand’s offer, and is often related with the four P’s which are price, place, promotion, and product. While in service marketing, the four Ps are further added into seven P’s which are process, physical evidence people and are used to describe the characteristics of services.
7 Eleven’s product includes fresh food with hot drinks, treats, refreshments, convenient items and personal care products.7 Eleven are a recognized brand due to its ability of creating effective changes that determines the local market needs which makes it famous. 7 Eleven is able to meet a high demand in convenience retail through its facilities, everyday fresh products and good quality customer service. 7 Eleven guarantees that the products and services are in good quality. As an example, 7 Eleven provides recharge cards, chargers, batteries and handsets to help their customers to stay connected.
Pricing strategy is used in business to sell a certain product or services. It can be used to protect an existing market from new competitors, expand market share in a market or to penetrate to bigger market. The type of pricing strategy used by 7 Eleven is the competition pricing which defines setting a price in comparison with competitors. 7 Eleven has three main options which are to lower the price, exact price or price higher than the competitor’s products. The benefit of applying this strategy is that it will offer a price matching service which set a price limit for items available at 7 Eleven stores to maintain the price like other stores, which prevents regular customers of 7 Eleven to purchase at other stores.
Distribution strategy is a way to grab the product or service in any distribution mediums to the end-user in other words, how and where the consumer purchases the product or service. Strategy applied by 7 Eleven is its multi-channel distribution strategy where it covers purchases from a store, website, telephone ordering, catalog ordering and comparison shopping sites. For example, 7 Eleven does not only provides purchasing of items in their stores but also deliver the products to homes such as confectionary items, snacks, beverages, perishable items, tobacco and mobile phone top-up . The location of 7 Eleven is commonly situated at high-traffic and easily accessible areas such as along peak roads, highway rest stops, petrol stations that are operates 24-7. This makes it simple and convenient for customers to shop.
Promotional tools are applied to differentiate the delivery of both paid and unpaid promotional methods. Each tool contributes in a unique way to connect customers and achieve communication goals. Example of tools is sales promotion, advertisement, personal selling and public relation. Promotional tools are used effectively by 7 Eleven stores as it provides good coverage of advertisement and sales promotion on their products. Under advertisement section, 7 Eleven gives clear advertisement message about their products by stating out their selected products to offer, discounted price of the item, ways to reach them and dates before the promotion ends.
Message is advertised through short video playbacks on internet and online advertisement on social network as these channels and medium are the latest and effective method for advertising media today. Besides that, 7 Eleven also uses sales promotion method as their strongest platform to find customers as it can gradually increase sales. Examples of sales promotion used are promoting their products through online websites, lucky draw competitions, contests and gift cards.
Employees in 7 Eleven stores are efficient and effective as it recruits creative and qualified salespersons that are capable in overseeing day to day operations and are willing to work diligently while fostering a good shopping environment for their customers. The employees are trained by attending four to eight weeks of training before begin to work. Interactive classroom tuition is provided to train employees and computer-based training modules to teach staffs about customer service standards. In addition, employees at 7 Eleven are taught and trained to have good communication skills with customers to keep their good impression on 7 Eleven reputation. Apart from that, they monitor their customer’s satisfaction by requesting feedbacks and comments from their customers through social network or questionnaires given to them.
Process is effective as customers are retained as other services and products are expanded and indicated to them. It is used to meet the needs of different individuals by experiencing a similar service at the same time as well as balancing the demands of customers with the supply provided. The balance of demand and supply can be explained using two situations. Firstly, if the demand is high, 7 Eleven will hires more staffs and part time employees to serve the customers and to monitor the stores. Secondly, if the demand is low, the price of the products is lower than normal to keep their customers from buying from other retailers.
4.7 Physical evidence
7 Eleven is excellent as the signage around the building is strategic and is clear to grab the attention of customers. The logo design of the building is attractive and catchy enough for customers to come and shop at the stores. 7 Eleven’s website is well maintained and is updated regularly to inform their customers about 7 Eleven’s latest offers of the products. Uniforms of the employees are neatly worn to show good image of their brand, 7 Eleven. The interior designs of the stores are in good condition and the air-conditioning is working perfectly at all time. The facilities provided such as vending machines are in good state.
7 Eleven has applied appropriate marketing strategies and marketing mix strategies by utilizing its opportunities and strengths such as operating 24 hours a day, 7 times a week to serve their customers and promote products and services through various social media. In addition, multi-channel distribution strategy is strongly applied to support their product sales in various kinds of mediums. Threat and weaknesses are reduced as suitable marketing strategies and mix strategies are used to counter it. Besides that, online ordering is available in 7-Eleven stores to help customers to purchase products in an easier manner.
5.1 Recommendations for improvement of marketing strategies and marketing mix strategies 7 Eleven can be improved by upgrading their stores as 7 Eleven in Malaysia are usually small and doesn’t have most of products and services that are available in other country like Japan and Singapore. They should also advertise their Slurpee more often as most kids nowadays do not realize that such product existed, this means that by increasing their advertising method, they are able to attract more customers.