BUNNINGS WAREHOUSE

COMMUNICATIONS STRATEGY ANALYSIS

JUNE 2018

FRANCES GUASTALEGNAME 698669

The University of PUBL90004 Business and Professional Communications 2,492 words Frances Guastalegname 698669

TABLE OF CONTENTS

Executive Summary………………………………………………………. 3

Introduction……………………………………………………………...... 4

Communications Strategy Analysis……………………………………... 5

Television Adverts………………………………………………..... 6

Social Media……………………………………………………...... 8

Recommendations………………………………………………………… 10

Conclusion……………………………………………………………….... 10

References…………………………………………………………………. 11

Appendix…………………………………………………………………... 12

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EXECUTIVE SUMMARY This report analyses and evaluates the current communications strategies of the brand .

An introduction of Bunnings is provided as context for the reader, considering the brand’s three strategic pillars of lowest prices, widest range and best service.

An analysis of two of the brand’s current communications strategies is conducted, providing a description and evaluation of Bunnings’ current television advert campaigns, as well as the brand’s current online social media presence.

The evaluation considers both benefits and missed opportunities for Bunnings through these two strategies, and concludes to recommend a shift towards an integrated marketing communications approach for the Bunnings brand.

Overall, the report finds that although Bunnings Warehouse operates as a market- leading retailer, there is opportunity to improve communications efforts between the brand and its key consumers segments.

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INTRODUCTION Bunnings Warehouse (Bunnings) is the leading home improvement retailer in and , supplying hardware essentials and outdoor living products to tradespeople, commercial businesses and do-it-yourself (DIY) enthusiasts (Bunnings Warehouse 2018). As of 31 December 2017, Bunnings employs more than 40,000 team members, and operates from 253 warehouses, 77 small format stores, 33 trade centres and three frame and truss sites across Australia and New Zealand (Bunnings Warehouse 2018). Between 2016-18, Bunnings expanded into the United Kingdom and Ireland (BUKI) markets, piloting 15 BUKI stores and continuing operations of a further 324 stores with propositions to rebrand (Bunnings Warehouse 2018). However, Bunnings’ parent company announced the closure of BUKI stores in late May 2018, due to an inability to build and maintain favourable customer relationships in the international market (Hatch 2018).

As Australia’s market-leading home improvement retailer, Bunnings possesses a market share of 35.2% within the hardware and building supplies industry (IBISWorld 2018, p. 23). The brand’s primary competitors of , True Value Hardware and Home Timer and Hardware all possess a combined market share of less than 5%, highlighting Bunnings’ superior position as a substantial market leader (IBISWorld 2018, p. 24).

The Bunnings brand positions itself as a big-box retail warehouse, providing its customers with the widest possible range of products, at everyday lowest prices. Bunnings relies on experiential value added through employee participation and growth within the brand, so as to positively instil the brand’s primary vision of “we’re building the best, our team make it happen” (Bunnings Warehouse 2015, p. 7). Additionally, the brand places importance on its guiding values of achievement, respect, teamwork, integrity and innovation in fostering relationships between the brand, its team members and its primary target consumers – that being, tradespeople, commercial businesses and DIY enthusiasts (Bunnings Warehouse 2015, p. 7). Holistically, Bunnings identifies as a brand that is driven by community involvement and relationship building, as supported by leadership from its team members, to positively create resonance through such identity.

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COMMUNICATIONS STRATEGY ANALYSIS To adequately analysis Bunnings’ current communications strategies, it is important to understand the ‘three strategic pillars’ on which the brand builds all its campaigns. Lowest prices, widest range, and best service exist as the three strategic pillars on which all branding and communications efforts for Bunnings are foundered, so as to ensure consistency and reinforcement of brand purpose and vision across all aspects of communications (Bunnings Warehouse 2018). Ultimately, these pillars aim to provide Bunnings’ customers with “the best service and widest selection of products at the lowest prices every day”, and are therefore crucial within the brand’s communication strategies (Bunnings Warehouse 2018).

The strategic pillar of lowest prices is primarily represented through the brand’s price- beat policy, “If you find a competitor’s lower price on the same stocked item, we’ll beat it by 10%. That’s our policy.” (Bunnings Warehouse 2018). Bunnings is able to provide lowest prices to its consumers through the use of warehouse pricing strategies as well as in store pricing departments, who monitor market fluctuating product pricing (Bunnings Warehouse 2015). All Bunnings communications strategies highlight the price-beat guarantee policy, as it exists as a branding point of difference for Bunnings when compared to its competitors, and further reinforces the brand’s primary vision and values.

Widest range is a fundamental strategic pillar in Bunnings’ communications strategies, as it again highlights a branding point of difference, while further reinforcing Bunnings as a market leader due to its ability to supply to three distinctly large key customer segments. Large warehouses and small format stores range up to 45,000 different product lines, with an additional 400,000 products available to order through the brand’s Special Orders service (Bunnings Warehouse 2018). It is crucial for Bunnings to include its large stock range within its communications strategies, as consumers will more readily engage with the brand when they are aware of the benefits they receive in relation to product availability, when they shop with Bunnings.

Most importantly, the strategic pillar of best service must always be communicated throughout the brand’s campaigns, as it places emphasis on the importance of always

5 Frances Guastalegname 698669 addressing and meeting the needs of each individual customer. Through thorough customer service and product training, employees on the store floor aim to provide friendly, knowledgeable and helpful service, ensuring the presence of a reliable team who can offer expert advice as a competitive point of difference for the brand (Bunnings Warehouse 2015, p. 18). It is this outstanding in store communication between team members and customers that provides substance to the best service pillar, to ultimately build customer engagement into a loyal and resonant relationship with Bunnings.

Although Bunnings makes use of a number of different communications strategies to engage with and build customer relationships, this report will analyse two approaches so as to thoroughly consider the effectiveness of each strategy for the brand’s key consumer segments of tradespeople, commercial businesses and DIY enthusiasts.

Television Adverts Bunnings’ television (TV) adverts campaign is one of the brand’s longest standing communications strategies, existing as a traditional form of media advertising of which Bunnings continues to use today. Fundamentally, Bunnings’ TV adverts have remained rather consistent since the campaign launched, featuring current team members highlighting the benefits of Bunnings’ lowest prices, widest range and best service (see Figure 1). Created by the brand’s in-house marketing communications and advertising teams, Bunnings’ TV adverts star current team members in their ‘home’ store, to highlight the importance of employee growth and participation in the success of the brand’s communications with its consumers.

All team members featured in the adverts are encouraged to speak on a particularly topic, depending on the purpose of the specific advert, yet no formal script is written. This allows team members to naturally incorporate their experiences as store team members, and to bring to light what benefits they believe consumers should know about. Products are displayed in the adverts through Bunnings’ signature line illustrations, which also feature in the brand’s print media catalogues (see Figure 2). These illustrations exist as a unique selling proposition for the brand, and help to reinforce brand identity for the consumer. Each TV advert ends with the featured team member quoting the brand’s slogan, “Lowest prices are just the beginning.

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That’s our policy.” as repeated exposure to the slogan helps to reinforce brand awareness through familiarity of brand identity (Holt 2003, p. 10).

Arguably, Bunnings has continued to use their well-known TV adverts primarily to maintain creative consistency in a campaign that is favourable within its target market. As mentioned above, Bunnings aims to reach three key target segments - tradespeople, commercial businesses and DIY enthusiasts, all of which are noted to respond well to these adverts as they prompt brand recall through easy identification, in turn effecting overall brand awareness (Keller 2009, p. 141). The key message delivered to these segments through the campaign remains the same across all adverts – that Bunnings can and will provide for all hardware and DIY needs because of its wide range, delivered to the customer through best service at the lowest possible price. Maintaining a consistent key message across all adverts means that the brand’s vision and values built on its strategic pillars are reinforced in the minds of the consumer, and therefore help customers to understand the holistic purpose of the brand’s communications.

Despite their popularity however, Purvis (2013) considers that traditional media forms of advertising such as TV adverts ultimately remain impersonal, as they deliver their key message with the intention of increasing product sales, rather than intimately communicating with their audience (Purvis 2013, p. 23). Additionally, Purvis notes that traditional advertisements aim to convince their audience that an absence of a certain product results in the lack of culture or lifestyle; therefore, consumers must purchase said product to subsequently lead a correlating lifestyle (Purvis 2013, p. 24). While there is the possibility of this perception being understood by Bunnings’ consumers, the brand’s inclusion of unscripted dialogue and working team members in their ‘home’ stores aids in delivering the key message in a more authentic and genuine manner.

Distributed first through TV, and subsequently posted on Bunnings’ YouTube channel, this television campaign remains crucial to Bunnings’ overall communications strategy, as it ultimately fuses traditional forms of media with the digital space through the constant availability and accessibility of the campaign for all consumers. As a majority, the use of television to distribute the campaign is an

7 Frances Guastalegname 698669 appropriate channel for its intended audience, as traditional media channels remain popular among these target segments. Furthermore, as Bunnings’ target markets are aging, it is appropriate to make these adverts available on YouTube as younger and more digitally literate generations are emerging as the brand’s primary consumers.

As noted above, Bunnings’ TV adverts ultimately exist as a unique selling proposition and an effective competitive point of difference for the brand. Although they are not necessarily bold or startling, the adverts do aid in differentiating Bunnings from its competitors, who underwhelming deliver marketing or communications content of a similar kind.

Social Media Bunnings’ minimal online presence and social media campaigns are fundamental to acknowledge when analysing the brand’s communications strategies, as there is effectively missed opportunity by Bunnings to create further engagement with their key consumer segments. As discussed in relation to the brand’s current and longstanding TV campaign, Bunnings places a large reliance on traditional forms of advertising to ultimately push content and communication out to its consumers. The brand has made attempts in recent years to build two-way communication in a digital space with its consumers, primarily through the use of the social media platform Instagram. Observing the platforms of Facebook, Twitter, Instagram and YouTube, it is evident that Bunnings is most actively engaging in communication with its consumers on Instagram, as its Facebook and Twitter platforms possess little to no content whatsoever (Facebook 2018; Twitter 2018; see Figures 3 and 4). The brand’s YouTube channel does feature content, including TV adverts as mentioned above, as well as ‘how-to’ instructional videos, again featuring current team members (YouTube 2018; see Figures 5 and 6).

With specific consideration of Bunnings’ Instagram page, the brand aims to communicate project ideas and inspiration to its followers (Instagram 2018; see Figure 7). As of the end of May 2018, the page features 453 posts which showcase completed renovations and current projects outside of the warehouse environment (Instagram 2018). Although there are sporadic reposts of customer’s photos taken in store to prompt consumer engagement by using the hashtag ‘bunnings’, the platform

8 Frances Guastalegname 698669 ultimately aims to provide consumers with ideas and encouragement to begin new projects, and in turn complete these projects using products sold at Bunnings.

Undoubtedly, an online presence is almost a necessity for brands to communicate and engage with their consumer base in today’s marketing and communications space. By building a digital space for the brand through platforms such as Instagram, Bunnings is providing itself with the opportunity to more readily reach their key target segments, and further interact with them through engaging communications. As mentioned earlier, Bunnings’ primary consumers are now typically younger generations of tradespeople and DIY enthusiasts, who are actively searching for inspiration and ideas through platforms including Instagram and Pintrest (IBISWorld 2017, p. 14). Therefore, it is crucial that Bunnings grow and maintain a presence on these platforms, so that they are able to deliver the inspiration and ideas their consumers are looking for, and in turn supply products as the market-leading retailer of hardware and DIY supplies.

Despite its efforts to build an inspirational platform for its consumers, Bunnings’ social media communications strategies do not adequately maintain two-way communication, or prompt consumer engagement to the greatest extent. Communications from Bunnings on the brand’s Instagram page fundamentally end with the posting of an image; despite consumers often commenting on posts, there are no attempts to further engagement through discussion or call to action prompts for the consumer (Instagram 2018; see Figure 8). This highlights a flaw in the brand’s online communications strategies, as there is missed opportunity for Bunnings to create resonant relationships with their communications through thorough two-way communications.

Furthermore, Bunnings struggles to define a clear marketing mix for each of its target segments in the online space, and is therefore unable to create content specific to each segment, to prompt effective communications and engagement. Distinctively segmenting and then targeting each primary consumer audience will allow Bunnings to effectively communicate with each respective segment, as they will respond more favourably to communications and content that they believe adds value to their experiences with the brand (Hunt and Arnett 2004). This in turn will allow Bunnings

9 Frances Guastalegname 698669 to reinforce its overall brand identity through its communication, while still addressing the primary needs and concerns of each consumer segment.

RECOMMENDATIONS Considering both traditional and digital media campaigns, through TV adverts and the brand’s Instagram page, I recommend for Bunnings to consider shifting their communications efforts towards a holistically integrated communications campaign, so as to create synergy across all forms of media communications. Although the brand’s communications are currently successful in relation to their TV adverts, and their growing social media presence, there is opportunity for the brand to formulate a more integrated campaign that will again bolster the brand’s three strategic pillars of lowest prices, widest range and best service. By highlighting these pillars, and then targeting each consumer segment through their individual marketing mix, Bunnings will be able to reflect their current and successful campaigns in a manner that will foster two-way communication with their consumers.

CONCLUSION Undoubtedly, Bunnings warrants its position as Australia’s market-leading home improvement retailer through its strong brand positioning foundered on its three strategic pillars of lowest prices, widest range and best service. Current communications strategies, including TV adverts and social media presence demonstrate the brand’s ability to create content that is relevant and recognisable to maintain brand image, while further addressing the needs and wants of the brand’s primary consumers. Despite missed opportunities in fostering two-way communication, Bunnings has potential to shift their communications strategies towards a more integrated approach, so that both the brand and consumers can benefit from the development of more engaged, loyal and overall resonant relationships.

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REFERENCES

Bunnings Warehouse 2015, Bunnings and You – Book 1, Bunnings Warehouse.

Bunnings Warehouse 2018, About Us, viewed 22 April 2018,

Facebook 2018, Bunnings Warehouse Australia, viewed 19 May 2018, < https://www.facebook.com/BunningsWarehouseAustralia/>

Hatch, P 2018, In for $705m, out for £1: Wesfarmers abandons UK Bunnings disaster, viewed 27 May 2018, < https://www.smh.com.au/business/companies/wesfarmers-decides-to-pull-out-of- uk-bunnings-disaster-20180525-p4zhg4.html>

Holt, D B 2003, Brands and Branding, Harvard Business School Publishing, p. 10.

Hunt, S D and Arnett, D B 2004, “Market Segmentation Strategy, Competitive Advantage, and Public Policy: Grounding Segmentation Strategy in Resource- Advantage Theory” in Australasian Marketing Journal, vol. 12, no. 1, Texas Tech University.

IBISWorld 2018, February, Hardware and Building Supplies Retailing in Australia, retrieved from

Instagram 2018, Bunnings, viewed 19 May 2018, < https://www.instagram.com/bunnings/

Keller, K L 2009, “Building strong brands in a modern marketing communications environment” in Journal of Marketing Communications, vol. 15, no. 2-3, Routledge, p. 141.

Purvis, T 2013, “Advertising as a way of life” in Advertising as Culture, United Kingdom, Bristol, pp. 23-24.

Twitter 2018, Bunnings Warehouse, viewed 19 May 2018, < https://twitter.com/Bunnings>

Youtube 2018, Bunnings Warehouse, viewed 19 May 2018, < https://www.youtube.com/user/bunningswarehouse>

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APPENDIX

Figure 1: A screenshot of Bunnings' current TV adverts featuring team members in their 'home' stores (Bunnings Warehouse 2018).

Figure 2: A sample of Bunnings' line illustrations, which feature in their current TV adverts and print media catalogues (Bunnings Warehouse 2018).

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Figure 3: Facebook profile for Bunnings (Facebook 2018).

Figure 4: Twitter profile for Bunnings (Twitter 2018).

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Figure 5: YouTube channel for Bunnings (YouTube 2018).

Figure 6: Sample of Bunnings' 'how-to' videos featured on their YouTube channel (YouTube 2018).

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Figure 7: Instagram profile for Bunnings (Instagram 2018).

Figure 8: A sample Instagram post from Bunnings. Comments on the right are from consumers. There are no replies to comments by Bunnings (Instagram 2018).

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