Individual Marketing Strategy Formulation - Coursework Example

Individual Marketing Strategy Formulation Introduction The organization under analysis is an organic food manufacturer called Annie’s Homegrown Organic. It is headquartered in Berkeley California, but has facilities throughout the country as well as in other countries such as Canada and the Philippines. In 2013, it was ranked one of the top 25 most successful small businesses in the country. Their marketing strategy is an inspiration for several small businesses that plan on dominating their area. 1) Business description and target market Annie’s Home grown Organic is a small business that deals in the sale of organic food. Most of the products are precooked, frozen, canned or prepackaged. The company started in 1989 as macaroni and cheese seller, and then expanded its product base to include more diverse organic products. Its initial proprietors were Annie Withey and Andrew Martin; however, these individuals sold their shares to Homegrown natural foods. Annie only became an inspirational president and brand ambassador for the organization. She continues to practice organic farming at her residential home but still interacts with customers regularly (Annie’s Homegrown Organics, 2014). The organization largely targets health-conscious consumers interested in eating organically certified food. All their ingredients are organic and natural; however, they strive to make them tasty in order to enhance users’ experiences. The organization specializes in making food for children who need a ready-made but healthy snack. It also targets people on the go who lack time to prepare their own mini-meals, but need something that is not packed with artificial flavors and ingredients. Also environmentally-conscious consumers are also a primary target for the company’s products because the company does not sell GMO foods. 2) Product Strategy The products are basically organic, prepackaged foods. One category is called pastas, which consists of macaroni and cheese among other labels. Under the snacks category, the company sells crackers, pretzels, and several other items made organically. It also has frozen pizzas, frozen entrees like lasagna, sauces and dressings. All these items come in a variety of sizes depending on the quantity that a customer wants. In order to ensure that the organization’s products have high quality, the company starts with the conception process. It works with certified organic cooperatives, like Organic Valley; it does not use herbicides, fertilizer or pesticides are that are synthetic in nature (Annie’s Homegrown Organics, 2014). It then instates quality control systems during the production process so as to prevent contamination and other unwanted material from entering the products. Finally, it checks its products for impurities at the end of each production cycle. Annie’s uses its brand ambassador and cofounder Annie to engage with consumers. Her contacts can be found at the back of most packages, so consumers can contact Annie if they have questions about the production process, ingredients, recipes and the like. This small business also has a close-knit team that works with clients in order to ensure that they receive superior products. Dan Mader – is responsible for customer service. He works with consumers in order to ensure that they can secure their preferred commodities in stores all over the country. He also streamlines availability of the product in various online platforms such as Amazon. The company does relatively well in the whole foods industry. Its main product preposition is the use of organic products. Critics assert that most of the fat and calorie-content in the products are quite close to mainstream ones. Therefore, this is not a unique selling point for the company. Instead, it focuses on its use of organic ingredients. Consumers who are aware of the organic food movement or those who are health conscious will be willing to play slightly higher prices for this value proposition. Perhaps the most valid competitor issue for the organization is the fact that most of its commodities are similar to those of well-established companies like Kraft. These organizations already have a superior distribution system, so they can get their commodities on supermarket shelves much faster than Annie’s (Varadarajan, 2010). 4. Distribution Strategy Prominent supermarkets such as Wal-Mart and Costco sell the company’s products. Most of these packages are located in the organic section. However, the organization has managed to talk to other retail chains and convinced them to place their products in conventional aisles. In addition to supermarkets, the company also makes its products available through its website. People can also access it through a series of third-party, online organizations like Shop organic. com, Vinemarket.com, Soap.com and Drugstoer.com. One may also find the commodities at auctioning and trading ecommerce companies like EBay or Amazon. Amazon is primarily responsible for most of its online sales. Costs associated with shipping the company’s products are particular high, and account for a substantial share of operating costs. Since the commodity is distributed all over the country and in other parts of the world like New Zealand, the Philippines and the UK, the company has to coordinate its services very accurately. The presence of facilities in the above-mentioned countries ensures that products get to consumers fast (Gummeson and Kuusela, 2014). This implies synchronizing efforts throughout the countries. Kraft may not be an organic brand, it has an organic range of products; therefore, these are likely to enjoy greater dominance of supermarket shelves. Annie’s mostly has its product on supermarket shelves but these are usually placed on the organics section. A number of other larger companies are also using the same distribution channels like Amazon, so this is a tough environment. 5. Price Strategy The company relies on a skimming strategy. The organic food movement is taking shape in Annie’s key markets. Therefore, people are more than eager to try out their new product. They are willing to pay a little extra because of the potential benefits they will get from the commodity. Most of them are eager to feed their children or themselves with these exclusively organic products (May, 2012). Annie enjoys a first-mover advantage in the organics food industry within the US and its borders. However, this position is slowly eroding owing to entry by other conventional food industries in the market. These companies are offering similar merchandise at much lower prices. Therefore, the company might need to reconsider its skimming strategy (Hsu, 2011). On the other hand, the company has a number of arrangements in which consumers can get lower prices for their products. For instance it has coupons that may be garnered from purchasing a lot of merchandise. It also offers product packaging initially designed for bulk purchases. Furthermore, cost savings could be realized by buying on Amazon instead of other retail stores. 6. Promotion Strategy The company has an innovative advertising strategy that has set the pace for several other small businesses in the country. It does not use television or billboard advertisements like large firms. Instead, it prefers to create witty videos about the company’ practices as well as its products. For instance, it created a Good and Good campaign video about children who had to choose between macaroni and cheese or pizza. This was a fun way of using consumer psychology to sell its products (Ferell and Hartline, 2012). Several YouTube enthusiasts thought the campaign was quite cute and interesting. Annie’s also has a series of videos on its main website with farmers talking about their commitment to growing food organically. One of them said that he got into the organic industry because it was the “right thing for the land; not for the money” (Dorris, 2013). The company thus sells its sustainable business practices in advertisements. The company relies on newsletter opt-ins to connect with its consumers. It also has a blog where service members can get an opportunity to talk about the products and expand their experiences. It sends messages through social networking websites like facebook and twitter. Sometimes, the company sends mail correspondence to its followers. Sales promotions occur through a mobile marketing vehicle in which the company launches products after placing notification on the media. People thus get a chance to taste the new product before it enters supermarkets. It also uses television to publicize its products; the company’s marketing manager made appearances on the Dr. Oz show as well as the Today show and many others. It also relies on a marketing program for children, where it asks people to pledge and help a cause. Therefore, publicity occurs through appearance on national shows, various online platforms and media releases. Competitor challenges stem from the use of other witty videos to sell products. Furthermore, the publicity events do not involve free things as consumers still have to purchase the new products. Some competitors go to malls and offer free samples. Problems with brand attack occur when individuals talk negatively about the products on blogs and other internet platforms (Kotler, 2011). 7. Technological issues Social media is one of the most effective platforms for the company. Its facebook page has over 300, 000 followers, where people get to learn about games, promotions and the like. The company also has a twitter, instagram and linked-in page where it updates potential buyers about new events or product expansions. You Tube is also a powerful tool for the company because several individuals are able to access videos, join the conversation and even contribute to a campaign (Slater et. al., 2010). The company has enjoyed positive retail sales growth, with its advertised products increasing by double digits after these initiatives. The firm’s YouTube channel has over 1.5 million viewers thus indicating that their publicity efforts are reaching intended audiences 8. Financials 2014 Current Projected Sales Volume Forecast 17,398,006 22,450,981 Marketing and Service provision costs 1,846,521 2,650, 540 Estimated Income NA 19,800, 441 Source: Annie’s Inc. (2013). 2013 Annual report to stakeholders. Retrieved from http://phx.corporate-ir.net/External.File?item=UGFyZW50SUQ9MTkzNDIzfENoaWxkSUQ9LTF8VHlwZT0z&t=1 Competitor issues relate to the entry of larger organizations, which have conventionally-made other products. The company will also struggle to compete with large meeting budgets that communicate similar messages to consumers. 9) Recommendations It would be advisable for the company to continue to promote itself as a sustainable company. Annie’s may not be so different from other conventional peers but its company has registered as a positive contributor to sustainability values. For this reason, there could be a need to emphasize this component. Price skimming should be abandoned and aggressive marketing to get products in the middle of supermarket aisles should commence. References Annie’s Inc. (2013). 2013 Annual report to stakeholders. Retrieved from http://phx.corporate-ir.net/External.File?item=UGFyZW50SUQ9MTkzNDIzfENoaWxkSUQ9LTF8VHlwZT0z&t=1 Annie’s Homegrown Organics, 2014. About us. Retrieved from http://www.annies.com/our-mission/about-annies/ Dorris, J. (2013). How Annie’s recast selling out as buying in. Retrieved from http://www.slate.com/articles/business/when_big_businesses_were_small/2013/10/annie_s_homegrown_profits_how_the_company_recast_selling_out_as_buying_in.html Ferell, O. and Hartline, M. (2012). Marketing strategy: Text and cases. London: Prentice. Gummeson, E. and Kuusela, H. (2014). Reinventing marketing strategy by recasting customer/ supplier roles. Journal of Service, 25(2), 228-240. Hsu, Y. (2011). Design innovation and marketing strategy in successful product competition. Journal of Business and Industrial Marketing, 26(4), 223-236. Kotler, P. (2011). Reinventing marketing to manage the environmental imperative. Journal of Marketing, 75, 132-135. May, R. (2012). Annie’s home grown shares soar nearly 90% on first trading day. Retrieved from http://www.foodbeat.com/industry-news/annies-homegrown-shares-soar-nearly-90-on-first-trading-day/ Slater, S., Hult, G. and Olson, E. (2010). Factors influencing the relative importance of marketing strategy creativity and marketing strategy implementation effectiveness. Industrial Marketing Management, 39(4), 551-559. Varadarajan, R. (2010). Strategic marketing and marketing strategy: domain, definition, foundational issues and foundational premises. Journal of Academy of Marketing Science, 38, 119-140. Read More