Offering Healthy and Safe Products to the Consumers - Case Study Example

The Marketing Environment and Strategy of Ecostore Name Institution Course Date The Marketing Environment and Strategy of Ecostore Introduction Ecostore was established in 1993 by Malcolm Rands in New Zealand. Over the years, Malcolm and the wife have been utilizing sustainable practices in their home but realised they were more exposed to toxic chemicals from the cleaning and body care products they used every day and for this reason Ecostore was born (Ecostore, 2016). The focus of the company is health fast. The company sources healthier ingredients for their products that are free from toxic and chamicals. The focus on health and sustainability has created a loyal customer following and has contributed to the growth of the company. This report is focussed on the analysis of the marketing environment and strategy of Ecostore (Ecostore, 2016). The study will first describe the marketing background of the company based on sustainable practices such as environment, society and resources. It will also highlight the marketing mix of Ecostore and compare it with that of the competitors. It will also offer some recommendations on how the company can improve its marketing mix in order to become more competitive. Marketing background Ecostore is a manufacturer, distributer and retailer company based in New Zealand that deals with sustainable household as well as body care products (Ecostore, 2016). The company fits in the manufacturing and retail industry. The manufacturing and retail industry has many players and therefore Ecostore is faced with stiff competition from rival companies. In addition, the barrier to entry in the industry is not as strict as those in other industry and therefore customers enjoy variety of products and services from different players (Chapman, 2013). In the recent years, there has been change in the taste and preference of customers. Customers today prefer to buy healthy and sustainable products (Carrigan and Attalla, 2001). This works to the advantage Ecostore which offers sustainable and healthy products to its customers. Ecostore has incorporated sustainable practices in its operations in relation to the environment, society and resources (Ecostore, 2016). Environment Ecostore is committed to reducing environment pollution by reducing waste which is aimed at reducing carbon pollution. In reducing waste, the company has implemented sustainable packaging (Ecostore, 2016). All its product boxes are manufactured from recycled material. Its bottles are made from renewable sugar-based plastic which recyclable too. For every kilogram of plastic made by Ecostore, about 2 kilograms of carbon is being captured from the surrounding which has assisted in reducing carbon footprint (Chapman, 2013). In addition to using 100 per cent recyclable packaging, the company encourages waste reduction by offering its products in bulk sizes and refills. All their products have been certified. For instance, its laundry products are approved by Environmental Choice and all its factories have been certified and approved for operation. This means that all its products are made with care for the environment (Ecostore, 2016). Society In addition to being environmental conscious, Ecostore has not forgotten about the well-being of the society. The company manufactures healthy and safer products without compromising on quality or value (Chapman, 2013). All the ingredients used by the company are first assessed for sustainability and are safer and healthier for people. All its products are free from chemicals and toxins that are contained in most products offered in the market. The products are free from chemicals such as ammonia, chlorine bleach, synthetic perfume and parabens among others. All its ingredients are sourced from plants and animals. In addition to this, the company’s social responsibility program has incorporated goodwill projects (Chapman, 2013). For instance, Ecostore has carried out charitable events in New Zealand and has supported initiatives involving education and donation. Resources One important resource utilized by Ecostore is human resources. The company not only supports the society and the environment, it ensures that it acts sustainably towards its human resources (Chapman, 2013). The company uses sustainable sourcing method. It sources its ingredients from farmers and suppliers who operate in a positive working environment, who are paid fair price for their ingredients, and use sustainable farming activities and practices. Since its ingredients come from plants and animals, it ensures that they buy ingredients that are linked to sustainability initiative such as water management, minimal use of pesticides and erosion control (Chapman, 2013). In addition, Ecostore ensure that all its employees work under positive working environment and have work-life balance. Marketing Strategies used by Ecostore Product Ecostore has extensive product depth. The company deals with healthy and safe skin care and cleaning products. Its products range from baby care products to hair products, from multi-purpose cleaning products to dish washers, from laundry powder to body lotion and hand cream (Ecostore, 2010). The products offered by Ecostore are as a result of extensive scientific research and innovation. Each of its products entails months of development by the chemists and formulators in order to ensure that the products are safe, healthy and environmental friendly. The company is known to offer quality and healthy products with best features based on the preferences of the target market. The quality of its products has enabled the company enhance its competitive advantage (Ecostore, 2010). Due to the growing need for healthy food alternatives, offering of healthy and safe products has increased its customers’ loyalty and boosted its sales and revenues. Ecostore targets people who appreciate the need for sustainable and healthy products (Harris, 2007). Its customers are health conscious and range from mothers, old people aged above 45 years, middle class individuals and any person with preference for healthy and safe products. In addition, since all the products of Ecostore are made from plants and animals, they source their ingredients from sustainable suppliers located across the globe (Harris, 2007). Pricing Ecostore is one of the companies that are most trusted in Australia due to its premium quality of the products (Ecostore, 2016). The component of pricing is important in marketing strategy. The company offers its products at effective prices. The prices of all its products are considerable and competitive. However, compared to other companies, Ecostore offer its product at higher prices. The company has advocated for the phrase “pay little for more” which illustrate that, customers should not worry about paying more for the best quality and healthy products in the market. Higher prices for its products have contributed to its small market share (Biel and Dahlstrand, 2005). In addition, occasionally, in order to maintain its customer loyalty, the company uses discounts and price reduction strategies. The prices of the products vary with time since some days ecostore offers their products at lower prices as a promotional strategy (Chapman, 2013). Ultimately, the company operates in the notion that with quality, health and safety comes price. Promotion Ecostore uses promotional activities in order to increase product awareness, revenues and sales. The company utilizes several promotional activities to communicate to the target audience (Kollmuss and Agyeman, 2002). For instance, the company offers promotional products and other gifts at their store locations in order to enhance loyalty. Ecostore over the years has used video, audio, print as well as electronic media in advertising its products. This has persuaded the audience to visit its stores in different locations (Ecostroe, 2010). The company has come up with different advertising campaigns in order to push for healthy and sustainable products. It has covered its vehicles with wrappings that advertise its business. In addition, Ecostore has put attention to the packaging of all its products. All its products are packaged using renewable materials that are white in colour. The colour of its packages is attractive and eye catching which act as promotional tools. Other promotional activities that are utilised by Ecostore include the use of sales persons, direct marketing as well as online advertisement (Harris, 2007). Distribution The distribution of Ecostore is effective and widespread across the globe. The company distributes its products to different countries such as Korea, Singapore and North America (Andreas, 2011). The company offers quality products to its consumers at the right location and in good quality. This is possible through the process of breaking bulk. The company buys ingredients from supplier at large quantities which are used to manufacture the products. The products are broken down accordingly and are passed through a distribution channel to the consumers (Harris, 2007). The company use distributors and retailers to pass their products to the end users. It uses the retail concept in order to make its products available to the consumer at the right time. Supermarkets and hypermarkets are the major retailers used by Ecostore to market its products. Its products are in more than 800 supermarkets in Australia, Hong Kong, United States and Singapore (Leung, 2014). Comparison of the marketing mix with Competitors Although Ecostore has been successful and has high customer loyalty, it is not in the top ten brands in Australia (Leung, 2014). The competitors of Ecostore include brands like Earth Choice, Planet Ark, Surf, Fab, Earthwise and Omo. Among the players in the manufacturing and retail industry in Australia and across the globe, Ecostore products are among the most expensive (Leung, 2014). For instance, the company sells its laundry powder at AUD 8.35 per kilogram which higher compared to Earth Choice which sells at AUD6.65, Surf sells at AUD4.48 and Earthwise sells at AUD8 per kilogram. Ecostore is among the brands that offer eco-friendly products in Australia. Other eco-friendly brands include Earthwise, Planet Ark and Earth Choice. Other mainstream competitors offer normal products (Macnaghten, 2003). In terms of health consciousness, Ecostore is in the top of the chart and is able to target health-conscious people. In addition, compared to the competitors, Ecostore offer limited products (Leung, 2014). Brands such as Earth Choice and Surf offer additional products home care products such as toothpaste and body sprays among others and this makes them take up larger market share. Ecostore is limited to healthy and safe products, which means that it has limited consumer coverage in the market (Leung, 2014). Ecostore uses only one distribution channel which is the retail concept. Other brands such as Omo, Earth Ark and Earth Choice use different distribution channels (Leung, 2014). For instance, they use the retail concepts and sell its products through different retailers across the world. In addition to this, the brands have a number of outlets distributed across the globe where they sell their products directly to the end users (Leung, 2014). This offers them unlimited market access compared to Ecostore which only offers their products through retail stores. In addition, Ecostore competitors utilize TV advertisement and online advertisement more extensively. For instance, Earth Choice utilizes social media as a promotional tool and a communication media (Leung, 2014). Through social media advertisement, the company has created close relationship with the customers and has minimized capital use in advertisement. Ecostore has minimal use of both TV and social media advertisement. Recommendations for Improvement of Marketing Mix In order to be competitive in the industry, Ecostore should add new products to its portfolio. These products should go hand-in-hand with its mission which is to offer safe, healthy and sustainable products (Kong et al., 2002). The company should add more home care products such as perfumes and toothpaste to its portfolio in order to expand its market share and become competitive. In addition, Ecostore should re-evaluate its pricing strategy. One reason why customers run away from its products is due to their high prices (Autio, Heiskenen and Heinonen, 2009). Due to the fact that Ecostore is not an established company as compared to some major players in the market, it needs to use pricing strategy in order to penetrate the market (Arnould, Price and Zinkhan, 2004). The price of its different products needs to be lower than the competitors for it to boost its competitive advantage. In addition, Ecostore should use differentiation strategy in order to differentiate itself from the competitors. Differentiation strategy entails the search for something that has the ability to be valued by customer and is unique and diverse to them. Ecostore should establish itself as the most sustainable company in Australia (Abeliotis, Koniari and Sardianou, 2010). The company has the ability to do this by investing large amount of capital in advertising and promotion. It can differentiate itself from major competitors through the use of unique marketing and advertising initiatives (Padel and Foster, 2005). For instance, Ecostore should increase its social media presence by utilizing media channels such as Instagram, Snapchart and Twitter. These social media pages are growing to be among the most used and can therefore act as important global marketing strategies for Ecostore (Leung, 2014). Although Ecostore has established itself as a sustainable business it should carry the same concept in its supply chain (Bosselmann, 2016). Sustainable supply chain also involves logistics factor. Ecostore products are transported to different countries through shipping and road transportation. This leads to high usage of fuel which negatively affects the environment (King et al., 2006). Therefore, in order to avoid this, the company should embrace local production of products as this will minimize long distance transportations of products. Also, the company should change its distribution strategy. It should diversify its distribution strategy in order to meet the local needs of consumers. For instance, in some countries, the company should serve its customers directly which in other countries, consumers should be served through retail concept (De Young, 2000). Diversifying the distribution strategy will ensure wide product coverage in different regions will satisfy the needs of different markets. In addition, there are different elements that constitute sustainable business such as manufacturing plant, distribution of products and sourcing of raw materials. The company has direct suppliers of raw materials and packaging equipment (Connolly and Prothero, 2003). The company should regularly check the suppliers for the compliance of social and environmental sustainability in order to ensure that all its business processes are sustainable. In addition to offering sustainable, healthy and safe products, Ecostore should establish superior customer service which will enable the company boost its competitive advantage (Ecostore, 2012). Customers look for personalized service and will appreciate friendly and reliable service during a purchase. Offering superior service will go a long way in enhancing customer loyalty and boosting competitive advantage. Conclusion In conclusion, Ecostore is a manufacturing and retail company located in New Zealand that offers sustainable household as well as body care products. The company has based its business on offering healthy and safe products to the consumers. It has ensured that it meets all the environmental and social sustainability requirements. All of its products come from plants and animals and are free from toxins and chemicals. Its products range from baby care products to hair products, from multi-purpose cleaning products to dish washers. The company uses retail concept to distribute its products to the end user and make use of promotional activities such as advertisement, direct marketing, and online advertisement. Compared to the competitors, Ecostore products are expensive which has contributed to its small market share. In order to be competitive, the company should increase sustainable products in its portfolio and differentiate itself from the competitors by using unique and diverse marketing and promotional activities such as social media marketing. In addition, offering superior customer service is able to enhance its customer loyalty and competitiveness. References Abeliotis, K., Koniari, C & Sardianou, E 2010, The Profile of the Green Consumer in Greece. International Journal of Consumer Studies, vol. 34, no. 2, pp. 153‐160. Andreas, F 2011, A simple path to sustainability green business strategies for small and medium-sized businesses, Santa Barbara, Calif: Praeger. Arnould, E. J., Price, L. L & Zinkhan, G. 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Appendix Positioning Map Chart SWOT Analysis Strength High customer loyalty Effective business model and brand building Global presence and recognition Offer variety of healthy and sustainable products High quality products Weaknesses Minimal use of promotional activities High prices for its products Limited product line Their brand diversification is very low since they have only concentrated on healthy products Poor customer service Opportunities Opportunity to explore other markets through internalization Their focus in health enhances their offering to their customers Change in preference of customer to healthy product will provide great opportunity for future growth Market development in foreign countries Threats Intense competition from strong brands and market players Its products have many substitutes High sustainability initiative prevent it from accessing larger market Read More