CAUSES OF SALES DECREASE AT GRAINCORP COMPANY AND STATEGIES FOR SALES INCREASE
Executive Summary
Sales reduction lowers the standard of the company as well as decreases its lifetime period. Every year, thousands of companies are closed down globally because of the failure to make adequate sales that can keep their businesses going on. Therefore, this study aimed to investigate the causes of sales decline at Grain Corp Company. GrainCorp is a company with a diversified product portfolio, including food ingredients and an agribusiness business model. Previous investigations have revealed several correlates of sales decline that form the foundation for this research. This study was conducted using the mixed-method design with a sample size of 100 participants. The qualitative method was instrumental in collecting in-depth details of the topic under investigation. Data was collected using questionnaires and the correlation between variables analyzed. The findings uncover low satisfaction levels with the different factors related to the quality of the company’s products. Moreover, the customers were not completely satisfied that the company offers the best prices for products for grain products such as wheat, barley, canola and sorghum. Moreover, the study findings reveal that majority of the customers were not satisfied with the promotion strategies adopted by the company. Furthermore, the findings from this study reveal that GrainCorp’s sale points are not eye catching to the consumes and therefore difficult to buy products from the company’s wholesale storages and terminals. GrainCorp should focus on the product development phase. The phases should start with marketing research that should help the company to identify emerging opportunities for products in the agribusiness market. The company’s price should be based on several factors – the customer’s willingness to pay, fitting within the company’s operating profit margins and its long-haul marketing strategies. Also, a new promotional mix should be crafted by the company by creating marketing campaigns that incorporate details of the product, price and location of the company’s sale points in order to reach the targeted consumers. Moreover, GrainCorp should improve its distribution and reach by establishing new wholesale storages and terminals in strategic locations within different states.
Introduction and Research Problem
Sales decline is considered as a serious threat to the company which should be solved as soon as possible or else the company will have no guarantee in what will happen. Moreover, this issue has the potential to affect the shareholders, employees and owners of the company (Ranabhat 2018). However, some company owners are not aware that their companies are falling and take the process of sales with the importance that it deserves According to Resnick, et al. (2016), the positive results in sales performance are a result of different factors, such as, the product or service itself, the marketing strategy, the price, the location of the company, management or customer service. Company managers must perfectly sync all the elements of the company so that sales in the company continue to increase (Yeon & Hwang, 2016). However, despite the efforts by company managers to keep their businesses as smooth as possible to guarantee high sales performance, there are other issues that can have a direct impact on sales and revenue of the company (Powell & Hughes 2016).
GrainCorp is a company with a diversified product portfolio, including food ingredients and an agribusiness business model. The company was established in 1916 under the Green Elevator Act. It was governed as a division of the Department of Agriculture of the Government of New South Wales (GrainCorp Annual Report 2019, p. 23). The firm’s business model integrates three grain activities: supply chain, origination, and processing. GrainCorp operates in over 30 countries worldwide with operation bases in Australia, the United Kingdom, Asia, and New Zealand. The company operates under three reporting segments: GrainCorp Oils, GrainCorp Malt, and GrainCorp Grains (GrainCorp Annual Report 2019, p. 23). Some of the firm’s core grains are canola, barley, wheat, and sorghum.
Over the years, a key priority for the company has been to improve the return on capital, strengthen core businesses, and improve the management of year-by-year grain production volatility (GrainCorp Annual Report 2019, p. 7). However, the company experiences a decline in sales, which contributes to revenue reduction. In 2019, for instance, the company reported a net loss after tax of $113 million (GrainCorp Annual Report 2019, p. 7). Although the reduction in revenue was affected by several factors, including restructuring costs from streamlining operations, sales decline is at the center-stage. Therefore, this inquiry sought to identify the underlying causes of sales decline in GrainCorp to enhance operations’ normalization and enhance business sustainability. Low sales lead to decreased revenue, which affects the company. It is necessary to determine the reasons for the decline in sales, as this will enable the industry partner to restore its regular operations. These activities ensure the growth of the company, and also turn out to be beneficial to the society.
Research Aim
This study sought to identify the strategies GrainCorp can utilize to increase its sales to enhance profitability and business growth.
Research Questions
Two critical research questions guided this investigation:
- What factors contribute to sales reduction at GrainCorp Company?
- What would be the most effective strategies for enhancing GrainCorp Company’s sales?
Theoretical Background-Literature Review
Sales play a pivotal role in a company and companies refer to sales as measurable success. Also, sales connect the needs of the consumers to the products and services that are offered by a company. Sales decrease is where a company’s sales start reducing as compared with the usual sales as a result of different factors that the company might have failed to implement (Akgun, et al. 2017). Therefore, the company might even go on a loss with time and as the reduction of sales continues According to Nyumba, et al (2018), all companies in the world exist to sell their products and with no sales, all of them would certainly become bankrupt. This is why it is important for companies to identify the actual reasons why the consumers of wholesale products are not purchasing their products or services. Every year, thousands of companies are closed down globally because of the failure to make adequate sales that can keep their businesses going on (Porto, Costa & Watanabe, 2017). There are different reasons for sales reduction that can be avoided, potentially saving companies from suffering massive loses. In order for companies to repair the damage caused by decline in sales in an efficient and effective way, there is need to be aware of the causes of these decline in sales and have the knowledge to identify their sources in a timely manner. As per the marketing mix, the four factors associated with sales decline are related to the product, price, promotion, and place.
Search Strategy
A literature review is conducted so that so as to generate new knowledge and ideas on the research. Basically, this literature review will include findings from previous research that belong to the same research topic as well as justifies the reason for conducting the research. This literature review will demonstrate knowledge in the field of sales, identify the gaps that could be filled by this research, and enable the researcher to develop the theoretical framework and methodological focus for the study. Therefore, this research will use a systematic review that consists of an overview of existing evidence applicable to a specifically articulated research issue, which uses pre-defined and structured procedures to classify and objectively evaluate the relevant research, and to collect, report and analyze data from the studies reviewed. The purpose is to deliberately document, critically evaluate and scientifically summarize all research on a specifically identified research topic.
As stated, this literature review was done to identify some of the factors contributing to the reduction in GrainCorp Company sales that revolve around product, price, promotion, and place. The search for the articles used in this research was done in different databases, and only the papers that met specific criteria were selected. Only the articles published between 2014 and 2020 were included in the synthesis. The included studies also focused on the sale of agricultural produce, especially the factors contributing to the decline in sales of products and services. Importantly, the literature synthesis and analysis included an exploration of company reports and financial statements and peer-reviewed journal articles. Anney (2014) contends that peer-reviewed articles are more credible because they are reviewed by scholars familiar with the subject being investigated.
Factors that Explain the Decline in Sales
Sales play a crucial role in any company since it is vital to a firm’s measurable success. Sales connect the consumers’ needs to the products and services offered by a company. Therefore, executives need to understand the sales process to enhance the organization’s sustainability and growth. Revankar and Daniel (2014, p. 9) argue that decline in sales could result from several factors associated with the business model such as the marketing mix. Moreover, in many different research studies, the product factor, the pricing factor, the promotion factor, and the place factor have been identified as main determinants of sales decrease. Therefore, they have been chosen for this research because they were also a considering factor for GrainCorp Company.
Product
The product refers to the tangible good or intangible service that a company provides in order to meet the needs and demands of specific consumers. All products follow a product cycle that can be predicted and it is therefore impetrative for the company to comprehend and plan for the challenges that are present at each phase. According to Bazhan, et al. (2018), the failure to understand the product cycle increases the risk of sales decline for a company because it is faced by different challenges that were unpredicted. The failure by company managers to understand the motivation or lack of interest towards the product limits their ability to effectively establish and market products that can solve the problems of the customers or stimulate their desires (Rahman, Sumarwan & Najib 2018).
Companies should produce products that set them apart from competitors. For example, the company could offer products accessible to customers across the globe (Powell and Hughes 2018, p. 30). Many companies are producing related or similar products. Therefore, the company’s products or services should have unique attributes setting it apart from the competition (Dickmänken 2017, p. 3). Companies whose products lack a value proposition are likely to experience reduced sales. Also, even though the uniqueness of a product does not assure the company managers of high profits, it can generate a high interest from the consumers, according to the research conducted by Lindgreen, Hingley & Trienekesns (2018). However, even a highly unique product might fail in the market if consumers are not attracted to it and this might cause a sales decline. This is where other factors like price, promotion, and place come into consideration.
Price
The pricing strategy determines the price that the consumer is supposed to pay for the good or service. Market analysis to determine consumers needs and competition can inform initial pricing, along with supply chain, delivery and running costs. Prices are also related to demand and the relative effectiveness of the product or service (Ranabhat, 2018). According to Camilleri (2018, p. 3), if the price is higher than the perceived value, sales will be negatively impacted. It is crucial to consider the demand and to create value with your target customer while striving for higher price points. If a commodity has no worth in the view of the customer, it will need to be decreased in price, packaged or subsidized in order to boost sales (Kim & Hanssens 2017).
Low pricing may impact sales volume-up or down. Some wholesalers purposely sell such items at a low price in order to draw the interest of customers to whom they are trying to sell some more costly products. However, buyers often fear that the quality of a commodity is bad if it is priced too low (Madanchian, et al. 2017). Majority of the consumers search for value, not only the cheapest price. Many that want quality products are generally able to pay the price that they are valued. Keeping prices so low will send a message to customers that the product is not as good on the market as other comparable goods. Although low rates do not give the company profit, the more they sell the more profit they achieve. Again, low prices cannot produce enough profit to cover expenses, particularly if sales volumes are low (Porto, Costa & Watanabe 2017).
If the price of a good is set so high, it does not matter if the product is unique and customers enjoy it; they will not purchase it (Resnick, et al. 2016). Products should be well-priced because the right price reflects their true worth. Product differentiation is vital, particularly if the companies need to justify high prices. Companies should be careful not to price their goods out of the market. They should aim to deliver good quality and value at a price comparable to that of competition and still make some benefit. (Akgun, et al. 2017).
Promotion
Promotion refers to the communication aspect of the marketing a company’s product or service. According to Ivanov & Sokolova (2017), promotion opens a company to its target market. Through promotion, companies are able to attract the attention of the customers and give adequate information about their products in order to build interest and increase motivation for these consumers to purchase the products. A poorly-driven sales promotion cannot build brand loyalty or enhance brand image (Bellotti & Rochecouste 2014).
Promotion connects to the other three Ps in the marketing mix as the product promotion tells customers the need for the product and why a certain price should be paid for them. In addition, companies prefer to connect the promotion and placement components together so that they can reach their intended audience. Promotional strategies can include advertisement, public relations, product campaigns, exclusive incentives and other promotional strategies (Ivanov & Sokolov, 2017). Whatever network used, it should be relevant for the product, the price and the end customer to which it is being sold to. A promotion strategy that does not follow effective time and channel for promotion, has insufficient promotional goals and poorly-crafted campaign goals, and lacks a message that resonate well with the target audience is might lead to sales decline according to Bellotti & Rochecouste (2014).
Place
Place refers to the location where the product or service is advertised, sold and distributed to the intended purchaser. The marketing departments of companies seek to put the best product service in the right place at the right time (Bazhan, et al. 2018). Today, experienced company owners encourage future entrepreneurs to focus on their web presence. The failure to build an impressive website and poor social media marketing are practices that are associated with sales decline according to Resnick, et al. (2016). Companies should not underestimate the importance of a good business location, because a strategically located wholesale storage or terminal is accessible to many buyers.
Rahardjo, et al. (2019) contends that a miscalculated company location pushes away its customers and creates barriers in the distribution and convenient provision of the product to the customers at the right time. Prior to the advent of the internet, the emphasis was on choosing high traffic areas and achieving maximum product positioning on store shelves and exhibits. Things are a lot better now with the presence of the web and internet (Akgun, et al. 2017). The modern era has transformed buying habits and opened up a myriad of distribution and promotion platforms, including blogs, smartphone applications and social media. In certain cases, place can also refer to the positioning of a product or service on tv, in film or by collaborative campaign campaigns with an influencer (Madanchian, et al. 2017). In any case, a poorly miscalculated place for the company negatively affects its sales.
Conceptual Framework
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As discovered, sales and marketing should collaborate on every step because ineffective marketing strategies affect sales. Sales performance depends on marketing strategies and efforts. A solid marketing strategy utilizing the 4Ps (product, place, price, promotion) is critical in revamping sales (Akgun et al. 2017 p.77; Resnick et al. 2016 p.33). The marketing activities should be characterized by the conception of a product, price, promotion, and distribution to meet consumer demands. These factors have been chosen for the conceptual framework in this research because they were also a considering factor for GrainCorp Company. The conceptual framework is illustrated below.
Methodology
This section describes the methodology utilized in the inquiry to achieve the objectives of the research. The investigation sought to identify the causes of the decline in sales in GrainCorp Company. Specifically, the study aimed to answer the following questions:
- What factors contribute to sale reduction at GrainCorp Company?
- What would be the most effective strategies for enhancing GrainCorp Company’s sales?
Research Design
The inquiry was conducted using a mixed-method research design. A mixed-method research design entails applying both the qualitative and quantitative to explore the complex phenomenon (Vedel et al. 2019, p. 365). Therefore, the investigator collected and analyzed data, integrated findings, and drew inferences using quantitative and qualitative methods. This approach can also be referred to as methodological triangulation, which entails using multiple methods to study a single problem. However, combining the quantitative and qualitative mixed-method approaches in this study was simultaneous because the methods were relied on to provide complementary information (Schoonenboom and Johnson 2017, p. 107). The greatest value of utilizing the mixed-method in this inquiry was its ability to offer a wider scope for constructive and contained research. In effect, the approach provided a more comprehensive and complete research opportunity for synthesis (Schoonenboom and Johnson 2017, p. 108). The researcher was also able to attain additional perspectives and insights beyond the scope of a single approach. The quantitative aspect of the inquiry was done using a survey, whereas a focused group discussion was used for the qualitative part.
Population and Sample
The study population was GrainCorp Company’s wholesale customers that purchase the firm’s products from its terminals and storages.
A total of 100 participants were selected for the investigation through purposive sampling. Sixty of the chosen participants were male, while the other 40 were females. Of the participants, 43 (43%) were aged between 20-30, 52 (52%) were aged between 30-45 years, while the rest 5 (5%) were aged above 45 years. There were no participants aged below 20. 22 (22%) of the participants earned a household income of less than $25,000, 24 (24%) between $25,000 – $50,000, 27 (27%) between $50,000 – $100,000, 21 (21%) between $100,000 – $200,000, and 6 (6%) earned more than $200,000. 72 (72%) of the participants chose Sydney as their place of residence, 24 (24%) chose Melbourne, while the rest 4 (4%) identified other locations of residence.
Data Collection
Primary data was collected through a survey. The survey has simple questions written in simple English to eliminate ambiguities. The first part of the survey had open-ended questions meant to determine the customers’ perspectives on the causes of GrainCorp’s low sales. The second section of the survey investigated the correlations of the company’s decline in sales. A Likert scale was utilized to evaluate the responses of wholesale customers that better fit their point of view. It was used to assess the attitudes of the participants by asking them the degree to which they agreed or disagreed with a specific question or statement. 5 items were used to investigate the wholesale consumers’ perception of the product, 5 items about price, 6 items about promotion, and 4 items about place. The participants were expected to indicate the different levels of agreement or disagreement with the statements provided.
Data Analysis
The researcher conducted a questionnaire analysis to determine the wholesale customer’s perspective of the causes of the decline in sales in GrainCorp Company pertinent to the correlates delineated in the conceptual framework. The researcher used both inferential and descriptive analyses for the study. Qualitative data from focus group discussions were analyzed through thematic coding and data triangulation. Data triangulation allows a researcher to corroborate results and compensate for any data weaknesses by strengths in other data (Carter et al. 2014, p. 545). The focus group discussions were instrumental in exploring the causes of the decline in sales by brainstorming possible issues and solutions.
Ethical Considerations
Ethical considerations in a qualitative research are the set of rules that govern the
expectations and the behaviors of the researchers and respondents. Research ethics govern how the scientific qualitative research is carried out and how the results are disseminated (Anney 2014). Two imperative ethical considerations during a research study are informed consent and
confidentiality (Vedel, et al. 2019). Each participant was informed of all the data collection and analysis procedures and the results’ dissemination methods. Importantly, each of the 100 participants was assured of the anonymity and privacy of their responses. The participants were also informed that their participation was voluntary, and they could withdraw their participation at any time without a penalty.
Findings
The study acquired a sample of 100 participants. The participants in this study were wholesale customers that purchase GrainCorp’s products from its storages and terminals. Of the participants, 43 (43%) were aged between 20-30, 52 (52%) were aged between 30-45 years, while the rest 5 (5%) were aged above 45 years. There were no participants aged below 20. 22 (22%) of the participants earned a household income of less than $25,000, 24 (24%) between $25,000 – $50,000, 27 (27%) between $50,000 – $100,000, 21 (21%) between $100,000 – $200,000, and 6 (6%) earned more than $200,000. 72 (72%) of the participants chose Sydney as their place of residence, 24 (24%) chose Melbourne, while the rest 4 (4%) identified other locations of residence. The researcher conducted a questionnaire analysis in order to determine the wholesale customer’s perspective of the causes of the decline in sale in GrainCorp Company pertinent to the correlates delineated in the conceptual framework. The researcher used both inferential and descriptive analysis for the study. The Likert scale utilized to evaluate the responses of wholesale customers that better fit their point of view is illustrated below in Table 1.
| Counts/Respondents | Base | Strongly disagree | Absolutely disagree | Disagree | Neither agree nor disagree | Agree | Absolutely agree | Strongly agree | |
| Product | GrainCorp’s storages and terminals provide high quality products up to your expectations. | 100 | 17 | 35 | 10 | 12 | 11 | 6 | 9 |
| A wide range of grain products are available at GrainCorp’s terminals and storages | 100 | 5 | 7 | 8 | 7 | 9 | 45 | 19 | |
| Unique products are available at GrainCorp’s storages and terminals | 100 | 15 | 25 | 12 | 13 | 9 | 15 | 11 | |
| GrainCorp’s wholesale products have maintained quality over the years and are still valued by customers | 100 | 21 | 30 | 9 | 10 | 13 | 9 | 8 | |
| GrainCorp’s Grains and related commodities are competitive than those found in other wholesale storages and terminals | 100 | 19 | 32 | 11 | 9 | 14 | 9 | 6 | |
| Price | I’m satisfied from the amount of money I pay for GrainCorp’s products. | 100 | 23 | 28 | 11 | 9 | 12 | 11 | 6 |
| The prices offered are cheaper if I purchase in big amounts. | 100 | 21 | 30 | 9 | 10 | 13 | 9 | 8 | |
| GrainCorp products have the lowest price for Grains and related products. | 100 | 24 | 27 | 11 | 13 | 10 | 7 | 8 | |
| GrainCorp wholesale storages and terminals offers the best prices everyday. | 100 | 19 | 31 | 11 | 14 | 9 | 9 | 7 | |
| I prefer to purchase from GrainCorp wholesale storages and terminals because of the price. | 100 | 22 | 29 | 13 | 8 | 12 | 10 | 6 | |
| Promotion | GrainCorp is able to serve its customers on a timely basis | 100 | 18 | 36 | 12 | 10 | 6 | 9 | 9 |
| I associate the Canola Oil [GrainCorp Oilseeds] with quality. | 100 | 20 | 33 | 10 | 13 | 9 | 7 | 8 | |
| GrainCorp wholesale storages and terminals gives seasonal attractive promotion (Christmas, New year …. etc | 100 | 20 | 35 | 10 | 12 | 6 | 10 | 7 | |
| I’d like to hear about the new product from GrainCorp in its storages and terminals. | 100 | 8 | 8 | 4 | 5 | 15 | 35 | 25 | |
| The last advertisement encouraged me to purchase GrainCorp’s products | 100 | 17 | 35 | 10 | 12 | 12 | 6 | 9 | |
| I like the new promotion about dry blended and single oils | 100 | 24 | 30 | 9 | 10 | 13 | 9 | 8 | |
| Place | I find GrainCorp products in the wholesale storages and terminals where I shop | 100 | 23 | 28 | 11 | 9 | 12 | 11 | 6 |
| The wholesale storages and terminals are easy to find | 100 | 22 | 33 | 10 | 12 | 6 | 10 | 7 | |
| The wholesale storages and terminals location are appreciated | 100 | 20 | 35 | 10 | 12 | 6 | 10 | 7 | |
| I’m shopping from GrainCorp’s wholesale storages and terminals because of the location | 100 | 20 | 32 | 10 | 12 | 11 | 6 | 9 | |
Table 1: Likert Scale Showing Participant’s perception on Product, Price, Promotion, and Place at GrainCorp Company.
The participants’ responses were converted into useful mean values by analyzing the values using a score. The scores allowed the researcher to assign a value to each question code. After that, the analysis was done using the score instead of the code. Values were assigned to the satisfaction responses as follows: -3 strongly disagree, -2 absolutely disagree, -1 disagree, 0 Neither agree nor disagree, +1 agree, +2 absolute agree, +3 strongly agree. The mean scores were calculated by summing the values and dividing by the number of cases. The “Neither agree nor disagree” values were scored as neutrals during calculation to determine the levels of satisfaction with different aspects of the sales of GrainCorp Company. Table 2 shows the results of the mean scored values.
| Mean Score Analysis | ||||
| Variables | Male | Female | Overall | |
| place | 2.44 | 2.62 | 2.51 | |
| price | 1.99 | 2.2 | 2.07 | |
| product | 2.92 | 3.24 | 3.04 | |
| promotion | 2.79 | 3 | 2.87 |
Table 2: Useful Mean values
Additional correlation analysis at 95% confidence interval was conducted so as to determine the relationship between the dependent and independent variables. The standard deviation of the individual correlates (Product, Price, Promotion, and Place) were calculated in order to facilitate the analysis of data. Table 3 below illustrates the results obtained from the correlation analysis. From the analysis, there is a positive correlation between the dependent variable (sales decrease) and the independent variables; Product (.860, p = 0.013), Price (.841, p = 0.019), Promotion (.398, p = 0.0025), and Place (.290, p = 0.0027). Further analysis indicates that at p<0.05 at 95% confidence level, all the factors are statistically significant. On the basis of the significance value (p), products have the most significant impact on sales reduction (p= 0.013), followed by Price, Promotion and Place at (p = 0.019), (p = 0.0025), and (p = 0.0027) respectively.
| Sales decrease | Product | Price | Promotion | Place | |
| Sales decrease | 1 | ||||
| Product | .860
(p = 0.013) |
1 | |||
| Price | .841
(p = 0.019) |
.447
(p = .000) |
1 | ||
| Promotion | .398
(p = 0.0025) |
.251
(p = .000) |
.291
(p =.000) |
1 | |
| Place | .290
(p = 0.0027) |
.189
(p = 0.010) |
.307
(p = 0.001) |
.405
(p =0.0001) |
1 |
Table 3: Correlation Analysis (*p< 0.05 at 95% confidence level)
The researcher also conducted multiple regression analysis so as to determine the extent to which a given change in each independent variable would cause and effect on the effect on the dependent variable. Table 4 below summarizes the results from the multiple regression analysis. From the results, it can be seen that a unit change in product would reduce sales decrease by a factor of 0.912. A unit change in the price of GrainCorp’s products would reduce sales decline by a factor of 0.747. A unit change in promotional strategy would reduce sales decrease by a factor of 0.622. A unit change in place would reduce sales decline by a factor of 0.537. Therefore, product has the most significant effect on the sales decline.
| Model | Un-standardized
Coefficient |
Standardized
coefficient |
t |
Sig |
|
| Beta | Std. error | Beta | |||
| Constant | 1.141 | 1.2138 | 0.159 | 1.727 | .0378 |
| Product | .912 | 0.1067 | 0.047 | 3.557 | .0136 |
| Price | .747 | 0.3642 | 0.159 | 3.270 | 0.0173 |
| Promotion | .622 | 0.2694 | 0.171 | 4.123 | 0.0187 |
| Place | .537 | 0.2147 | 0.183 | 3.657 | 0.0198 |
Table 4: Multiple Regression Analysis (5% significance level, 95% confidence level).
From the second part of the survey that sought to collect qualitative data, the researcher gained an in-depth understanding of the strategies that can be utilized to increase the sales of GrainCorp company. The investigator collected data from the 100 participants who shared common experiences about the marketing mix of Grain Corp and concentrated on the shared meanings. Several themes emerged form the responses. First, the participants indicated that the use of social media channels such as Facebook, Twitter, and Instagram as well as e-commerce channels can be used to improve sales and are accessible through smartphones, computers and tablets. Also, many had only purchased the company’s products once after seeing their adverts and in the last one month, only a few had made purchases of the company’s products. Finally, most of them perceived the company’s prices for its infant nutrition products as unfair compared to the prices of other substitutes advertised online.
Discussion
This study was conducted with the aim to explore the factors that contribute to decrease in sales at GrainCorp Company and the strategies that can be used to increase the company’s sales. A non-experimental design was used to help identify the relationship between the variables, A mixed method research design was applied where both quantitative and qualitative data was analyzed. In the study, a survey was used with different factors for the investigation of the individual variables (Product, Price, Promotion, and Place) that were derived from the conceptual framework. The dependent variable was sales decrease whereas the independent variables included product, price, promotion, and place.
Causes of Decline in Sales in GrainCorp Company
The quality of products was discovered to have a considerable effect on the decrease in sales at GrainCorp Company. The findings uncover low satisfaction levels with the different factors related to the quality of the company’s products. As discovered, 62 customers perceive that GrainCorp does not offer high quality products that meet their expectations. Also, a high number of customers (57) would not like try to try the company’s new products such as the new Margarine Vanilla flavored. Moreover, many customers (54) would not like to recommend the company new products such as the Canola meal for Beef feed to other customers. In terms of product competitiveness, many were unsatisfied that GrainCorp’s products have the best quality to compete with its competitors such as ABB Grain, Bunge and Scoular. The findings resonate with other research studies that found out a positive connection between sales decrease and the quality of the product. Bazhan, et al. (2018) contends that poor-quality products have a negative impact on the customers of the company. They cause a company to lose its customers fasters than it gains new ones. In the consumer driven market, meeting the expectations and needs of the clients is imperative to the maintenance and improvement of market share (Amin, Michael & Emma 2017). According to Rahman, Sumarwan & Najib (2018), customers expect products that not only reach them in good condition but ultimately passes the test of being high quality based on their needs and expectations. Poor quality products lead to overall client dissatisfaction and a low Net Promoter Score. The negative reviews by unsatisfied consumers can lead to a decrease in sales and expose the company to the risk of letting its loyal customers migrate to other products and brands (Kim & Hanssens 2017). As per the correlation analysis, it can be deduced that the failure to provide and guarantee the customers with high quality products eventually leads to dangerously low profits and loss of market share.
As discovered from the customers, price can be used to differentiate and enhance the image of the company’s products in order to increase sales in the targeted market with 75 of them agreeing with that. According to Dodor (2015), a well-chosen price achieves the company’s financial goals and fits in well with the customers’ realities in the market place. The findings of this study reveal that a high number of customers (62) are not satisfied with the amounts paid to purchase GrainCorp’s products. Also, they are not satisfied with the prices offered by GrainCorp in case they make big purchases. Moreover, 65 customers were not completely satisfied that the company offers the best products for grain products such as wheat, barley, canola and sorghum. Also, majority of the customers (61) would prefer not to purchase at GrainCorp’s storages and terminals due to the company’s price. These findings are connected to a study by Li, et al. (2020) that found out that the price attached to a product affects its sale. The perceived value of the product by the customer may vary with what the company expects the user to pay for the product. According to Kim (2017), if a product is priced higher or lower than its perceived value, then sales will be affected. From the correlation analysis, it can be deduced that GrainCorp does not understand the perceived value of its customers which leads to the negative customer value in successfully purchasing the company’s products by paying the set prices.
Lindgreen, Hingley & Trienekesns (2018) opine that the marketing communication strategies utilized in the promotion of a company’s products such as advertising, public relations, sales promotions, and special offers affect how the target market perceives the product and makes the purchase decision. The study findings reveal that majority of the customers (66) were not satisfied with the promotion strategies adopted by the company. For instance, these customers were not satisfied with the promotion strategy of the canola oil 5l. For instance, some argued that the promotion was not health-conscious because it encouraged the use of high levels of erucic acid which is toxic for human beings when consumed in large amounts. Likewise, 53 of them felt that wholesale GrainCorp storages and terminals do not give satisfactory seasonal attractive promotions during holiday times such as Christmas and New Year, yet it is well known that seasonal offers and promotions are an effective strategy in revamping the sales of a company. Nonetheless, the 51 customers were not satisfied with the last advertisement made by GrainCorp in encouraging customer purchase for its products. They were also not satisfied with the new promotions about the dry blended and single oils that the company offers. When it comes to decrease in sales, Evans, Ntiamoah & Daniel (2019) assert that a poorly-designed promotion strategy has a negative effect on the image of the company. It causes the consumers to suspect that products have not been selling effectively or the products have become outdated. In the case of GrainCorp, it can be concluded that the undertaken strategies are not adequately effective in making the product known to the customers in the market which explains the negative effect on the sales of the company.
The company’s point of sale or the placement its products determines how they will be accessed by the consumers. In this case, distribution is a key element in the product’s placement as it determines the most effective channel that is most suited to the product (Gao & Choy 2019). The findings from this study reveal that GrainCorp’s sale points are not eye catching to 65 consumers and therefore difficult to buy products from the company’s wholesale storages and terminals. Along these lines, customers were unsatisfied with finding GrainCorp’s products at their wholesale shopping storages and terminals, found it difficult to access the wholesale storages and terminals due to their location and did not find their location as the main driving factor towards making their purchase decision of the company’s products. In a previous study by Rahardjo, et al. (2019), it was found out that a miscalculated company location pushes away its customers and creates barriers in the distribution and convenient provision of the product to the customers at the right time. In the case of GrainCorp, it can be deduced that the company does not adequately consider the patterns and accessibility of its customers hence pushing them away from strategically accessing its wholesale storage and terminals.
From the group discussions that the researcher engaged with the participants, it was discovered that the level of online marketing and advertisements influences the sales of a company, with 78 customers saying that they find it convenient to first look at the company’s wholesale products on e-commerce channels and social media. Findings revealed that 75 consumers were not satisfied with the company’s use of social media and e-commerce platforms in promoting its products hence the decision not to purchase them on a frequent basis. These findings resonate with the study by Jaminyasa, et al. (2017) which uncovered that social media, e-commerce and advertisements marketing failures disconnect a company with its consumers, does not adequately promote awareness about the brand, and reduces leads and sales. From the findings, it can be inferred that GrainCorp’s online marketing fail has far reaching negative implications on the leads and sales of the company.
Factors that Contribute to Sales Reduction at Graincorp Company
Poor-quality products have had a negative impact on the customers of the company. They have caused the company to lose its customers fasters than it has been gaining new ones. The negative reviews by unsatisfied consumers have led to a decrease in sales and expose the company to the risk of letting its loyal customers migrate to other products and brands. GrainCorp does not understand the perceived value of its customers which leads to the negative customer value in successfully purchasing the company’s products by paying the set prices. The undertaken promotional strategies are not adequately effective in making the product known to the customers in the market which explains the negative effect on the sales of the company. Finally, the company does not adequately consider the patterns and accessibility of its customers hence pushing them away from strategically accessing its wholesale storage and terminals.
Recommendations
The findings of this study uncover gaps in the sales strategy adopted by GrainCorp Company which relates with the research questions. The conclusions made from the research can be utilized in identifying and describing the factors that GrainCorp should focus on in order to increase its sales.
Strategies to Increase Grain Corp Sales
As found out, product quality is the most is the most significant variable that affects the amount of sales that the company makes. In order for GrainCorp to improve the quality of its products, the company should focus on the product development phase. The phases should start with marketing research that should help the company to identify emerging opportunities for products in the agribusiness market. GrainCorp should focus o brand-new grain products or revamp the existing products that have fallen out with the consumers. Also, the company should describe the consumer needs if the products are satisfying and enhance them to make them competitive in the market. While increasing its product portfolio, the company ought to focus on providing products that maintain high quality throughout and give the consumers a good value for the amount paid to acquire them.
GrainCorp should also rethink its pricing strategy and come up with well-chosen prices. The company’s price should be based on several factors – the customer’s willingness to pay, fitting within the company’s operating profit margins and its long-haul marketing strategies. In addition, the company ought to consider a cost-based pricing strategy where it should engage in research and development before making the decision to set the price of a particular product. In line with the cost-based pricing strategy, GrainCorp should consider redesigning its cost-structure and include an effective low-cost strategy that should assist the company to produce at a low cost and sell them at a low price that is affordable to the consumers. When making decisions to raise the prices of the products, the company should provide new high-quality features that justify the price increase.
Also, a new promotional mix should be crafted by the company by creating marketing campaigns that incorporate details of the product, price and location of the company’s sale points in order to reach the targeted consumers. Prior to designing the promotional strategy, the company should engage in market research and development so as to design a well-informed strategy that appeals to the consumer. Then, GrainCorp should determine the marketing platforms that will be most effective for communicating the promotional messages. For instance, the company can utilize its influential social media platforms such as Facebook, Twitter, and Instagram that have a strong presence of followers. The use of this platforms will facilitate high level customer engagement and low customer response time and therefore create wonderful experiences that can encourage the customers to purchase back from the company hence increasing its sales. The well-informed marketing campaigns should also be put in its well-function, interactive, and user-friendly website that has the capacity to draw a high number of online sales.
Finally, GrainCorp should improve its distribution and reach by establishing new wholesale storages and terminals in strategic locations within different states. Having adequate access to the customers should be the primary focus of the company when it comes to choosing the location to set up a new wholesale storage and terminal. After determining the customers’ location and needs, the company should create outlets in locations that are easily accessible to the consumers. This will ensure that its products are available to a large number of consumers in a timely manner. Also, the company should enhance its relationships with its dealer community so as to improve the supply and promotion of the company’s products in different states.
Most Effective Strategies for Enhancing Graincorp Company’s Sales
In order for GrainCorp to improve the quality of its products, the company should focus
on the product development phase. The phases should start with marketing research that should
help the company to identify emerging opportunities for products in the agribusiness market.
GrainCorp should focus of brand-new grain products or revamp the existing products that have
fallen out with the consumers. GrainCorp should also rethink its pricing strategy and come up
with well-chosen prices. The company’s price should be based on several factors – the
customer’s willingness to pay, fitting within the company’s operating profit margins and its long-
haul marketing strategies. Also, a new promotional mix should be crafted by the company by
creating marketing campaigns that incorporate details of the product, price and location of the company’s sale points in order to reach the targeted consumers. Finally, GrainCorp should
improve its distribution and reach by establishing new wholesale storages and terminals in
strategic locations within different states. Having adequate access to the customers should be the
primary focus of the company when it comes to choosing the location to set up a new wholesale
storage and terminal.
Limitations and Conclusion
This study aimed to investigate the causes of sales decrease at GrainCorp and the strategies that the company can utilize to increase its sales to enhance profitability and business growth. The study relied on a mixed-method research design involving the collection of both qualitative and quantitative data. The findings identified numerous issues influencing sales decrease at the company including product, price, promotion, and place. The findings uncover low satisfaction levels with the different factors related to the quality of the company’s products. Moreover, the customers were not completely satisfied that the company offers the best prices for products for grain products such as wheat, barley, canola and sorghum. Moreover, the study findings reveal that majority of the customers were not satisfied with the promotion strategies adopted by the company. Finally, the findings from this study reveal that GrainCorp’s sale points are not eye catching to the consumes and therefore difficult to buy products from the company’s wholesale storages and terminals. All these finding resonate with several other studies that have shown a positive link between reduced sales and the quality of the product, its price, promotion strategies, and the place where the company is located.
In a research, limitations are areas where the researcher had negligible to no control, yet they could have a significant effect on the validity and reliability of the results of the study (Yin 2014). A key limitation in this research was that the responses acquired through the surveys relied upon the bits of knowledge, information, and encounters of respondents participating in the study. Moreover, the research had a limited scope implying that the discoveries may not be summed up or generalized to different settings, environments, or similar companies. Other limitations included the reflexivity of the investigator, limited sample size, and the fact that the conclusiveness and precision of the examination discoveries of this research relied upon the honesty of the respondents.
Based on the correlation and regression analysis, it can be argued that the quality of the product has the most significant effect on sales decline at GrainCorp company. Therefore, GrainCorp should strive to improve the quality of its products. The company should focus on the product development phase. The phases should start with marketing research that should help the company to identify emerging opportunities for products in the agribusiness market. The company’s price should be based on several factors – the customer’s willingness to pay, fitting within the company’s operating profit margins and its long-haul marketing strategies. Also, a new promotional mix should be crafted by the company by creating marketing campaigns that incorporate details of the product, price and location of the company’s sale points in order to reach the targeted consumers. Finally, GrainCorp should improve its distribution and reach by establishing new wholesale storages and terminals in strategic locations within different states.
