Whole Food Market Plan Book - Essay Example

Table of Contents SWOT Analysis 4 The Product 5 Product Life Cycle: 5 Product Sales Features 6 Product Positioning 7 Pricing 7 Under the Competition Section 7 A. Strengths of the Competition 7 B. Weaknesses of the Competition 8 Communications Strategy 8 Education is the most effective communication 8 Communicating with the entire customer database. 8 No mark taken so seriously: 8 Culture is the foundation 8 Distribution 8 Marketing 9 A. Positioning Statement 9 B. Marketing Objectives 9 C. Marketing Strategy 9 Target Market 10 A. Primary Target Market 10 B. Secondary Target Market 10 Advertising 10 A. Advertising Objectives 10 B. Media Mix 11 C. Media Vehicles 11 Creative Strategy 11 A. What is the purpose of the advertisements? 11 B. What is the most important thing to say? 11 C. What is the brand image and message? 12 D. What do you want your audience to think and feel? 12 E. What are rational reasons for target audience to buy product? 12 F. How will we achieve this? 12 G. What do we need from the creative team? 13 Budget 13 Measures or Methods of Evaluation 15 Whole Food Market Inc. Plan Book Current Analysis It is the strategy of Whole Food since the year 2002 to open large store about 50,000 Sq. Ft. and larger as compared to any other competitive store operating. The idea was to create interactive and inviting environment for the customers that would make food shopping a good experience. Financial Analysis: According to the financial numbers that have been reported since the year 2005, the sales have been decreasing each year. The debts have been increasing dramatically over the past three years, however the cost of goods sold have been increasing. As compared to competitors in the industry Whole Foods market has low revenue and low EPS1. Assessment of Marketing: During the year 2005, the sales were 1.3 million which rose to 1.7 million in the year 2007. Although market capitalization is rising, the profit margin has reduced considerably over the past three years. Assessment of Finance: As per yahoo financials the stock price has reduced drastically since the year 2005, it now stands at 33.69. The profit equity ratio is actually above the current average of the industry. Assessment of physical resources: The stores operated by the company are approximately eight years of age; it is young age in a grocery industry. The stores are averagely about 30,000 sq. ft. As reported in the year 2006, among 180 stores of the company 113 were larger or 30,000 sq. ft. The physical resources are newer as the company. Assessment of human resources: Human resource of the company is knowledgeable and well trained; they strive for a better customer experience. The payroll, bonus and other benefits of the staff have been increased during the year 2004 to 2005. Employee of the company are motivated by mission statement of the company and feel proud to be a part of the team that supports organic and natural food. The staff feels good about their job as they are contributing towards the betterment of the society. SWOT Analysis Whole Foods Market is a supermarket chain specializing in providing its customers with natural and organic foods of the highest quality on the market. Son una empresa con unos muy altos estándares de calidad en todo lo que hacen ya lo largo de sus 3 décadas de historia se han convertido en el líder mundial en su sector. They are a company with very high quality standards in everything they do and along its three decades of history have become the world leader in this sector. Whole Chain Weaknesses 1. Insufficient coordination among the links. 2. Diversified interests of the members Threats 1. High income elasticity/ Price. 2. Crisis in the World economy Strengths 1. Domestic markets are developed Opportunities 1. High income elasticity/ Price. 2. External tariff is high Primary Production Weaknesses 1. Low bargaining power in the industry. 2. Lack of education related to whole food. Threats 1. High sensitivity to changes in relative prices. Strengths 1. Strong technology adoption (genetics, nutrition, reproduction, facilities, management, etc). 2. Aprovechamiento de economías de escala. Leveraging economies of scale. 3. Alta productividad. High productivity. 4. Calidad de la leche según parámetros industriales. Food quality as industry standards. Relaciones más estables con la industria. Stable relationships with industry. Opportunities 1. Increased demand for quality food Distribution Weaknesses 1. Difficulty focusing public attention. 2. Mayor distancia física de la clientela con relación a los minoristas tradicionales. Greater physical distance from customers relative to traditional retailers. Threats 1. Increased bargaining power of large industrial groups. Strengths 1. High bargaining power with suppliers. 2. Buen manejo de la cadena de frío. Good management of the cold chain. 3. Tendencia a la concentración de la distribución en las grandes superficies. Trend towards concentration distribution in supermarkets. Contacto e información de los consumidores gracias a su posición estratégica en la cadena. Contact and consumers thanks to its strategic position in the chain. Opportunities 1. Increased use of labels. The Product Product Life Cycle: The first step was to search for a smart approach to solve the problem related to junk food consumption. The idea was a result of three factors: 1. Unmet needs: Usually the food items sold as suitable for children, young and adults are not only grain-based foods, but often they have a high content of salt and usually high sugar content. In the defense of this allegation, it is always said that high sugar and salt is due to demand in certain countries and not in others. In order to promote the concept of healthy eating, it was necessary to create awareness among consumers about the magic of less processed food, organic vegetables and fruits and fresh and ready meats, seafood and chicken. 2. Existing problem. - The youth these days is consuming food that is high in salt and sugar which leads to increase in diseases such as, heart disease, some cancers and diabetes. Although there are several strategies to deal with this pandemic, a vital aspect is to establish healthy habits among young people. The idea is to promote healthy eating awareness. 3. The untapped resource. – There is utilization of natural resources and human resources such as land, labor, and capital, but it is not perceived immediately due to the following two implicit aspects: capital, which can be an asset (land infrastructure machinery) or monetary capital (which allows its immediate investment) used excessive liquidity. The main focus at the initial level is the product, the focus of our marketing tasks is to ensure the target market, and such tasks are known as: merchandising, distribution channel coverage, positioning, sales force, promotion, place, price, product (Marketing Mix), etc. The operations conducted during the introductory period are characterized by high costs, slow sales, net losses and limited distribution. In many ways, the introduction stage is the most risky and expensive. However, in the case of really new products, there is little direct competition. To recover the cost we will have contingency plans for marketing during the growth period. There will be different strategies utilized to secure and maintain the position in market such as Changing the Target Market (seek to enter new market segments or niches still unexplored), product Modification (they seek to give a new look or improve quality for the customer perceived positive change), and changing the Marketing Mix: Refers to changes in the elements of the marketing mix, whether price, product, place and promotion. Product Sales Features Whole food Distributors is a specialist food distribution company which aims to simplify the ever growing demand for specialized food products. Products which support markets such as the Vegan and Organic market as well as those which pertain to special dietary needs e.g Gluten Free, Dairy Free, Egg Free, Soy free and others. The benefits the company enjoys are as following: 1. Whole Food is a brand well known both at home and abroad, has a good positioning. 2. Good communication with suppliers, customers and distributors 3. Their products are exposed at various points of sale: national stores (Supermarkets, hypermarkets, mini markets, etc.) and Internet 4. Quality / price ratio 5. Bet differentiation and constant innovation 6. The products Whole Foods have a more attractive price than others 7. Healthy and Beneficial for consumers. There is great disparity between countries in their approach to food marketing to individuals and families. Some countries have limited restrictions for advertising unhealthy food to children, while in others there is no legal protection for any advertising. The codes within the food and beverage industries also exhibit variations according to the country in question, the definition of child and promotional strategy employed. CI is campaigning for WHO to adopt a code that addresses this problem through agreed international standards to be implemented by national governments and food companies. The Code of CI / IOTF refers to the promotion of food energy, low-nutrient, high -fat, sugar and salt to children up to 16 years of age. The market for fresh food has grown steadily over the last century, focusing on the last decade particularly in the expansion into regions such as America where there was less tradition of cooking. Whole Food Markets Inc. constitutes a significant portion in promoting healthy eating habits. It is necessary that people become aware about the health consequences that may entail changes in eating habits. The increasing rate of obesity in adults, and more recently, also in children, along with the risk of diabetes and heart disease is a cause that the marketing of healthy eating is taken seriously by the consumers. Product Positioning Whole Foods Market is a supermarket chain specializing in providing its customers with natural and organic foods of the highest quality on the market. They are a company with very high quality standards in everything they do and along its three decades of history have become the world leader in its sector. A number of competitors have surfaced in recent years, some of which have become rivals in business. Whole Foods maintains affordable cost and gives tough competition to its competitors. Pricing The company provides healthy edible items at a very affordable rate. It is an assurance to the consumer that the product they are buying is in accordance with the value of their money. The company has won this trust as a result of its honest efforts to provide customers with the best food options. The rates are cheaper, and customers prefer buying from the available stores. It is also a tradition of the company to provide discounts and promotional offers to the customers. Under the Competition Section A. Strengths of the Competition The company is expanding its customer interaction through social media, which is easily accessible by the youth. It is also an advantage to the company that the goodwill it has earned during the time of business and earned a lot of loyal customer without any big scandals. The company has established its position as one of the market leader, the Safeway and Trader Joe’s are strong rivals but the company is keeping with them by maintaining the quality of its supplies. The company has achieved the following targets since its establishment. 1. Leadership in the operated segments or in the total market. 2. High levels of customer loyalty. 3. Prices adjustment according to the competition. 4. Opportunities for growth. 5. Maximum levels of sales. 6. The costs are very low. 7. It achieves the highest return. B. Weaknesses of the Competition The company has a global recognition, it is a position that the company has achieved with the passage of time. Trade Joe’s will have to reconsider their marketing strategies and come up with new ways to stay in touch with the customers. Communications Strategy Education is the most effective communication: The Company has found that consumers who have more knowledge about food are more likely to be customers of Whole Foods. To help consumers better understand the ingredients to prepare healthier meals for themselves, various media sharing techniques as iPhone apps have made Whole Foods closer to consumers. Communicating with the entire customer database. Not all Whole Foods customers are fans of Gourmet products, but for many customers Whole Foods Market purchases additional items for special events, or there are certain favorites which are only sold there. Whole Foods uses social networks to give their buyers reasons to stay connected with them in order to avail benefit from occasional flash sales announcements which are sometimes valid only for a day. Social networks are the only means by which customers can access special offers and promotional packages, which helps the brand to reach those occasional users. No mark taken so seriously: The Whole Foods brand stays close to its customers by allowing fans to interact on social networks. Contests and questions about issues of food and healthy lifestyles are the building blocks of brand communications on social networks. Culture is the foundation: The headquarters of the company has no way to answer questions about the inventory of local stores, have a decentralized structure, so that each store has its own Twitter and Facebook. These translate into local accounts that customers have a better and faster answer to their questions. This also means that the values of social networks are part of each of the Whole Foods stores, which contributes a broad culture of local empowerment. Distribution The company is operated through different distributors at local level through independent sales distributors. It has a decentralized distribution network. The support and association of Whole food distributors is with Sama Group trading as Syndian Natural Food Product. It is said that the company will be utilizing the same resources in future as well. The company has expanded its distribution from fresh supplied to frozen, chilled and dry food. As the company progresses, Whole Foods has increased the number of retail centers that are under operation. The company has worked through a lot hardships to achieve this position, in order to effectively manage the distribution of products. Now the chain of stores is increasing at such a fast rate that the management has to struggle to stay updated with the product demands and stocking of the shelves. The only inefficiency in the operation is decentralized back end. It has twelve geographic divisions including the national headquarter is situated in Austin, bakery facilities, seafood processing facilities, kitchens. There is an independent regional president and operational work place for each geographic division. Many people criticize the chain of supply as they consider it lacking professionalism and amateur. It is because of distribution of responsibilities that the company does not face immediate pressure, when enhancing efficiencies. It is easier for the company to delegate information rather than managing every distribution center on its own. Marketing A. Positioning Statement The company in future will use a wide range of sophisticated techniques to promote these products to youngsters, by introducing salad bars in the campus or near work place, creating special discount for youngsters and old people especially on Fridays from 4pm to 8pm. College students will get a 10% discount or some type of benefit for grocery shopping at Whole Foods. There will be sponsoring of college events such as sports/games to get their name out there and make kids interested in the companys products. Moreover, they could have a concession stand/table at these games offering food to let the kids know the food does actually taste good. B. Marketing Objectives Most food brands use a wide range of sophisticated techniques to promote these products to youngsters, including the use of movie characters, celebrities and movies links on packaging gifts, games and contests, plus promotions not included in the package, such as advertising on television, sponsorship of events and websites. Whole foods also plan to promote by using information and images reassuring about the goodness of these products for their health. C. Marketing Strategy As far as promotion through information and images is concerned; the company has a multifaceted plan which consists of three main ingredients; 1. Nutritional quality of products. 2. Labeling and promotion in the package of canned products 3. Promotion of products using television and the internet. Target Market A. Primary Target Market The primary target market of the company is selling of fresh food to youngster, adults and old people. It is the aim of the company to promote healthy eating among the new generation. The focus is on diverting the attention of new generation from commonly used unhealthy foods due to the increasing ratio of obesity and other diseases. The company gains customer loyalty through social networking sites by sharing recipes and discount offers. Also the part of primary markets is the wholesaler’s restaurants, food and beverage companies. They deal directly with company and buy in bulk. B. Secondary Target Market The secondary market of the company is of canned food. The company keeps a stock for people who prefer canned food over fresh grocery shopping. It is closely monitored by the company to check the expiry of the product and removing them from display. Advertising A. Advertising Objectives In the recent Social Event Corporate Social Media Summit one of its executives explained parts of its aggressive use of social media to interact with customers, which for them is the king (the interaction with users) and not the content. This effort is reflected in that 85% of the tweets from Whole Foods are responses to customer feedback, 10% of tweets are based on product content and 5% are promotions. Whole Foods Market has a specialized team called Integrated Market Media Team. This company has multiple Twitter accounts as well as Facebook presence, with a number of accounts and topics of interest such as wine, cheese, recipes. This allows them to maintain a well organized interaction with their customers by offering promotions. B. Media Mix The main media planning process of the company deals with reaching the target audience, geographical scope of media placement, weight of the post, means to implement strategies, reach and frequency of advertisement, Continuity, pulsing (intensity), length or size of advertisements. Mixed media: concentrated stocked, efficiency of the media: cost per thousand (CPM), programming and media buying. Whole Foods has also adopted the social media mix, apart from the traditional media mix. Now the communications plan of the company includes social media mix, which are based on Internet. And the truth; every day we find new possibilities, which feels overwhelmed and a necessity to keep up with. The company communicates through twitter and Facebook. C. Media Vehicles The company has already advertised on their delivery vans that in future they also plan to put up road stalls and salad bar through media vehicle advertising. Creative Strategy A. What is the purpose of the advertisements? The main purpose of advertisement is to create loyal customers for the Whole Food Market. It will be directed towards the target market to purchase the Whole Food products. The result of the action will be to increase brand equity in every operational region. Since a very long time Whole Food has been operating through word of mouth publicity and creating customers through public relations, now it is considering new strategy and approaching the customers with a different advertisement procedure. B. What is the most important thing to say? Whole Food has evolved into the world largest chain of retail natural and organic foods supermarkets. It is because of the highly selective food quality standard that they maintain dedicatedly and as well as the product itself is very nutritious and healthy for the individuals. Since there are a lot of diseases caused because of unhealthy eating such as heart diseases, obesity and diabetes, organic food and healthy cooking is a key to healthy life style. C. What is the brand image and message? The Whole Food Market is operating with the mission statement to promote vitality and well being by offering highest quality of organic food to the individuals. It is less processed, more flavored and the food is preserved naturally. The company is planning to promote organic food, as it will lead to direct promotion of their business. It is necessary that they customers as aware that it is available in their local areas and the prices are affordable as well. The message of advertising should also point out that Whole Food has maintained its presence since long by serving quality food. It should increase the brand image and loyalty of the customers. It should assist in increasing the market share and profit ratio of the company. D. What do you want your audience to think and feel? The audience should gain an understanding about the necessity of healthy eating, and how it will affect their lifestyle. It should also portray the quality and affordability that Whole Food is offering. The company already has a strong market presence, existing customers must feel that they are a part of the brand and new customers should feel that they should give it a try. Advertising should help in associating that Whole Food is the best and primary organic food provider currently. E. What are rational reasons for target audience to buy product? 1. Whole Food supports and promotes traditional eating in the local areas. 2. The products are organic. 3. It is healthy, nutritious and promotes wellbeing. 4. Healthy eating can save from diseases such as heart diseases, obesity and diabetes. 5. Products are sold at affordable prices 6. The quality is maintained. F. How will we achieve this? 1. The target market will be approached by promoting the company at the local radio stations to gains new customers. There will be bill boards placed in the area to grab attention of the customers and to create awareness about organic food. 2. There will be promotional advertisement at the national television as well. The company also aims to sponsor local health related programs and events to a gain statistics and appear attractive to the target market. 3. It will be the result of these activities that the demand of organic food will increase which directly cause the market share and profit of the company to increase. 4. The image of the brand will be portrayed as a symbol of healthy lifestyle and customers will be attracted to it. G. What do we need from the creative team? 1. Placement of interactive hoardings approximately to four to five in different areas. 2. To redesign attractively pages on social media such as Facebook page for advertising. 3. Print advertisements in the cooking magazines. 4. Advertising on television during cooking show and healthy lifestyle programs 5. Sponsoring of healthy events in the local area. Budget2 Cooking Magazine: Full page, color advertisement in three different issues = $11,250 Lifestyle Magazine: Two-inch colorful ad, runs two times per week, for three months = $15,796 Metro New York: ½ page, color advertisement for 13 weeks = $99,150 Metro Philadelphia: ½ page, color advertisement for 13 weeks = $40,195 FOX (During Master Chef): One month worth of advertising = $36,000 AXN (During Top Chef): One month worth of advertising =$25,000 BBC Food: Three months worth of advertising = $75,000 Facebook: $20 per day worth of impressions for 365 days = $7,300, Promotional campaign Facebook design: $8,745 Billboards: Three billboards per month = $38,000 Billboards: Three billboards per month = $36,225 Billboards: Three billboards per month = $32,100 Bus Shelters: Four shelters each Baltimore, Philadelphia, and Trenton for three months = $25,200 Promotional Campaign: Associated Costs = $50,000 Magazines $11,250 (2%) Newspapers $155,180 (31%) Outdoor $131,525 (26%) Online $143,300 (29%) Facebook Design $8,745 (2%) Promotional Campaign $50,000 (10%) Total = $500,000 Measures or Methods of Evaluation 1. To conduct qualitative research in all the major cities regarding brand image before and after. 2. Compare and contrast the sales pattern in the weekly campaigns. 3. Measure the sale during the time period to monitor which promotional activity is more effective 4. Monitor the timings of the advertisements, which one is more effectively reaching out the target customers. 5. Check the traffic on the website of the company, if it has increase significantly because of the promotional activities. 6. The statistics of the Facebook page should be reviewed as well, the number of customers accessing the page after promotion either it has increased or decreased. 7. Online surveys should be conducted that which channel advertisement contributed in creating more customers. 8. Customer should be offered coupon in the advertisement, it can also be monitored through the number of coupons presented during the sales. Read More