Case Analysis: Pure Organic Food and Juice Bar - Essay Example

? Case Analysis: Pure Organic Food and Juice Bar BY YOU YOUR SCHOOL INFO HERE HERE Case Analysis: Pure Organic Food and Juice Bar Objectives of Ownership Graham and Buob wanted to exploit the trends in the Canadian consumer market that was building higher demand for organic (natural) food products. In 2009, the demand for organic foods was so high, that it represented a $2 billion industry founded on consumer perceptions that organic products were healthier and more environmentally-conscious. Concurrently, the Canadian consumer market offered reports that approximately 20 to 25 percent of adults were eating vegetarian meals at least four times weekly. Even demand was increasing for raw foods, those that were thermally processed at 120 degrees, which is representative of the planet’s ambient temperature, which was said to aid in digestion, sustain natural healthy bacteria levels, and ensure maximum nutritional content. The main objective was to establish an eatery that would have market-centric relevance, especially in relation to food availability on the menu and the internal decor. Utilizing a naturalistic environment consisting of woods, natural greenery, and a variety of displayed vegan and raw products, Graham and Buob wanted to create legitimate relationships with customers that valued these naturalistic elements supported through knowledge exchanges with consumers in an eco-sustainable environment. By promoting an environment where vegan and natural foods consumption lifestyles could merge with ownership and staff, the objective was to create a revolutionary type of restaurant that could cater to this expanding market niche. The Main Problems at Pure Problems with the foods regulatory environment posed reputational risks for the variety of products that were procured by Pure. The United States Department of Agriculture allowed or five percent of an organic product’s attributes to contain non-organic materials. In an effort to expand the industry, Barbara Robinson, the administrator of the USDA in the 2000s, chose to ignore many different recommendations that were offered by USDA board members regarding the presence or relevancy of non-organic materials in organic products, which led to market skepticism about the integrity of genuine organic products. This meant that Pure might not be able to promote products to a holistic niche market since they maintained no control over procurement regulations and would likely not gain the attention of mainstream consumers either. Pure also had to promote a higher pricing model due to the high costs of procurement for organic and vegan products along the supply chain. Mainstream consumers were more attracted to fast food products and packaged/processed foods due to their lower pricing structure. The competitive environment provides many different lower-priced restaurants which would be a hindrance in attempting to appeal to the price-sensitive consumer market segments. Coupled with a mainstream sentiment that vegan and organic products are tasteless and boring related to flavor, it would be very difficult for Pure to attempt to market to the majority of consumer segments, thus being forced to cater to only the niche market segments that legitimately valued natural foods. Furthermore, the growth of availability of organic products at regional grocery stores represented a credible threat of substitutes on the market. Pure was unsure about how the ownership would effectively promote the motivation for dining out to consume natural products when grocery stores made these products widely available, especially important in a market with only 17,000 residents making an average of just under $22,000 annually; below the provincial earnings average. A market environment that is limited in terms of available consumers with legitimate resource restrictions posed a significant threat to the high price model necessary for Pure to remain profitable. These restrictions, coupled with the cultural characteristics in Collingwood to enjoy recreational activities that made budgeting more relevant, were causing problems with profitability at Pure. Consumers that would be interested in organic and vegan restaurant dining could not afford to eat in restaurants regularly. Characterizing the Competitive Market The presence of many different restaurants and pubs in the city made this environment highly saturated with competition, especially since the majority of rivals catered to mass market consumers and did not focus specifically on a niche of the total holistic market in Collingwood. Rival presence likely contributed highly to diminished profitability for Pure. Marketing theory also indicates that when consumers sustain brand recognition, they are more likely to have loyalties especially if they had quality experiences during previous patronage. The presence of highly-branded restaurants such as Kelsey’s, Pizza Pizza and Eastside Mario’s were more attractive to many different consumer segments as they represented familiar names. Furthermore, the business was having a problem with achieving word-of-mouth, since many customers were tourists that were only in Collingwood for vacation and recreation. As such, Pure was not properly positioned in the competitive market and Pure ownership was wholly-unsure of how to proceed to improve advertising against major brand names. The Collingwood competitive market was dynamic and not necessarily favorable for the smaller, independent restaurateur. Evaluating Pure’s Marketing Strategy Pure’s marketing strategy was largely ineffective, due not only to the aforementioned presence of well-branded chain restaurants in the market, but due to lack of owner knowledge about how to proceed with a new positioning and advertising strategy. Pure was over reliant on relationship marketing, using their own child as a means of building a family-oriented environment rather than creating targeted promotional materials to gain market attention. Additionally, the business was relying on patronage from temporary tourists that happened to explore fitness training and attendance of ski clubs circumstantially in the same plaza where Pure was located. Pure was also relying on cross-promotions with other business owners in Collingwood, which was not returning the type of interest and patronage that was expected by the ownership. While the owners wanted to market to the mainstream, essentially using promotions to educate them on the benefits and advantages of natural foods consumption, they were not tackling this targeted approach to advertisement. Because of this, their marketing strategy was inefficient as they were not exploring the many alternatives available in order to gain more market interest. Recommended Strategy Development Clearly, one of the most inefficient aspects of the Pure business model was its marketing strategy. Graham and Buob should be exploring guerilla marketing, in which low-paid representatives are sent into commercial centers or in the streets where individuals congregate or shop in order to promote brand recognition for Pure. These representatives would generally have scripted scenes played out in front of diverse markets, carrying with them low-cost promotional merchandise branded with the Pure logo and any associated tagline. If the content of these performances or even product sampling is inviting and interesting, it builds instant brand recall in markets and could also provide customers with informational literature about the benefits of natural foods consumption. The business should have been more aggressive in getting the brand recognized by the Collingwood market and even tourists during busy seasons. The ownership should also be exploring direct mailing, delivered to a mass market audience with lists obtained by the local Chamber of Commerce, the yellow pages, or even internal sign-up forms for email promotions. Direct mailings could send a menu with pricing and an informational brochure about natural consumption and/or the environment in which products are consumed at Pure (emphasizing the quality decor). This strategy would gain more attention with diverse markets (the mainstream the owners were seeking) and is also a low-cost method of advertisement. These direct mailings could also include short-term incentives promotions for discounts that often serve as ample motivation to try out a new restaurant, especially with price-sensitive consumer segments. Incentives marketing could be a valuable method of getting people loyal to Pure’s brand once they actually get an opportunity to sample how organic foods can be transformed into very quality-tasting finished products. Read More