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QBUS6600 Project Outline
Background
BIG W is part of the Woolworths Group. Operating nearly 180
stores nationwide and employing over 18,000 people, it is a discount department store focused
on selling general merchandise and everyday goods.
The discount department store market is highly competitive; BIG W’s major traditional
competitors are Kmart and Target. BIG W also competes with the supermarket business unit
of the Woolworths Group and the Coles supermarket chain.
BIG W’s core customers as a discount department store tend to be price sensitive and will
often cross-shop with competitors in an effort to find the best offer for the products they are
buying.
In recent years, BIG W’s customers have been struggling due to the prevailing economic
conditions, with the cost of living increasing and the effects of inflation. They will typically have
less disposable income and less purchasing power than in previous years and, therefore, will
be highly discerning about where to spend their money. This has resulted in a tougher trading
environment for BIG W. BIG W’s stated purpose is to “make a real difference for families” - to
this end, Woolworths Group aims to find a way to sell more products to BIG W customers
whilst maintaining their gross profit. This goal will allow the business to deliver more value to
their customers without damaging their profitability, which is of particular concern in the
aforementioned difficult trading conditions in Australia.
Mechanics of Pricing, Promotions and Availability
Pricing
BIG W has a national pricing model, which means that the selling price for an article is the
same in every store.
• The following limits are applied to the frequency and amount of price changes to satisfy
legal requirements and limit the burden on stores for changing product tickets:
o The maximum number of total price changes (total number of products with a
price change applied), excluding promotional price changes for a single week,
is 20.
o Price changes are applied on a Tuesday and should be assumed to take effect
for all transactions onwards including those on the Tuesday, until such time as
another price change is applied. Any price change must remain in effect for a
minimum of six weeks.