Green Business Strategies for Small and Medium-Sized Businesses - Case Study Example

Marketing Analysis of Ecostore Name: Course: Course code: Tutor: Date: Introduction Ecostore is New Zealand based company and brides itself in using safe and sustainable minerals and plants based ingredients in producing its products. Some of the company’s products include body wash, soaps and other baby care product. Ecostore was formed in 1993 by Malcon and his wife Kelanie in their home at New Zealand. Malcon and his wife could have been using organic and sustainable gardening practices on their family property for a number of years but they came to realize that they were still exposed to various toxic chemicals through their cleaning and body care products they have been using. This led to the formation of ecostore. The motive behind the formation of ecostore was design healthier products free from any toxic or chemical substances. The main focus of Malcon and his wife was to create loyalty among the customers and make them consume much of their products and for sure much of the customers have been commenting in the company’s website that their dermatitis, eczema, asthma and other allergy diseases had disappeared after consuming ecostore products. With time, their customer number increased thus it also lead to the growth of number of carbon miles that transported their products from and to Freemans Bay. This made them to relocate to Auckland place in 1997so as to allow them open another retail store in Freemans Bay. By 2002, the company had expanded its operations and started producing various household cleaners, baby care and body care products. By the end of 2005, ecostore had expanded its production to countries like New Zealand, Australia and USA (Malcolm Rands, 2013) As far as sustainability is concerned, ecostore utilizes plant-based materials from the palm kernel oil and palm oil to produce its products as an alternative way to using petrochemicals. The petrochemical industry has contributed heavily to environment pollution and has created a lot of impact to the aquatic environment. The company has been committed to ensuring that the palm oil they use in the production is used responsively and does not contribute to deforestation or endanger human rights in any way When it comes to market positioning, the company utilizes various positioning strategies in order to attract its customers into the company’s marketing mix. For instance, the company has adopted functional positioning in relation to its various product functionalities in the market. A very good example is that ecostore sells some of its products through functional positioning. Consequently, the quality of the variety of these products serves as the basis of advertising some selected products for some particular customer segment. The company’s products sold through functional positioning are relatively expensive as compared to ecostore’s common range of products, because good quality and greater functionality can only be met for extra costs. Ecostore also uses experimental positioning, which relates to offering cognitive or sensory stimulation to its customers. This positioning strategy is used to target the company’s customers for its cleaning and body care products (Chitty, 2011). Ecostore’s Products The company produces a range of sustainable and healthy cleaning and body care products that have no any chemical contents. Some of the products include: Laundry- laundry powder, laundry liquid, soaker & stain remover and fabric softener Skin Care- body lotion, lip balm, body butter and hand cream Hair - Normal conditioner, normal shampoo, volumising conditioner, volumising shampoo, ultra-sensitive shampoo etc. Dish – rinse aid, dishwater tablets and dish liquid Home- toilet cleaner, liquid scourer, multi-purpose spray, bathroom and shower spray and glass and surface spray Baby- baby soap, baby moisture, baby body wash, baby shampoo and sleepytime bath Hand and Body wash- hand wash, body wash, coconut wash, vanilla soap, goat’s milk soap and lemongrass soap In most of the cases, the main consumers of the company’s products are families within Australia, New Zealand and the rest of the world. Most of the company’s products are family based such as baby and skincare products. It is therefore worth noting that the biggest consumers are families that have young children As far as suppliers are concerned, the company has focused on those suppliers that offer sustainable raw materials so as to promote production of sustainable products that are ecofriendly Ecostore’s pricing The company adopts cost leadership strategy which has been developed through its business strategy and forms part of the company’s competitive strategy. The company’s management aims at reducing the cost of purchasing its raw materials and other operational costs through economies of scale and other set measures so as to pass the advantage to the final consumer as the key brand value. Ecostore also uses psychological pricing, economy pricing, geographic pricing and product line pricing strategies (Guides, 2005). Ecostore promotion strategies The company has been successful in using customer referrals as one of its promotion strategies. Stories told by the company’s real customers have been a major strength in delivering the sustainable growth of its products. The company has been working on its existing customer tribe and making them share their successful stories about the company’s products in the social media. The company has also been working with other digital companies such as EXCEED, which has played a critical role in digital marketing of the company’s products. EXCEED has been committed to marketing the company’s products such as Kiwi and ensuring that the products are expertly showcased around the world Social media has also played a very critical role in promoting the company’s products. It involves the utilization of sites such as Foursquare, Facebook, LinkedIn, and YouTube among others. Ecostore utilizes such forums to generate awareness among its consumers and also get them engaged with one another concerning the brand Distribution strategies adopted by Ecostore The element of place plays a critical role in distribution of a company’s products and services. This relates to locations where the customers can buy the products and services and distribution of the same. Ecostore utilizes both online and offline distribution channels in order to sell its products and services to its customers (Werbach, 2013). The company’s online sales channel is titled ecostore based on the company’s official website- www.ecostore.com.au. It is worth noting that the popularity of the online sales channel has been increase for the last few years with ecostore recording a sales growth of over 20% during the fiscal year 2014/2015 On the other hand, the company has been using offline distribution channels in reaching its customers in various parts of the world. The company has been using both direct and indirect distribution channels in Australia, New Zealand and US to reach its target market. For instance, despite the steep competition in US and Australian markets, ecostore continued to express its expression in these markets and in order to achieve this, it has acquired some companies such as Walgreens, one of the largest stores in United States. Walgreeen has therefore acted as a supply chain where Ecostore’s products have gained access to most of the retail consumers (Dent, 2011). Competitor analysis for ecostore Ecostore Company has been in a throat to throat competition with Earthwise Company, which is also a New Zealand company that produces natural products Ecostore and Earthwise companies represent characters within the same industry. Since ecostore is the market leader within the industry, its share price reflects how it might influence the entire home care products. On the contrary, earthwise being a market follower may cause some vulnerability against ecostore. Some of the products offered by Earthwise include Nourish body –nourish balance shampoo, nourish body balance and nourish protect conditioner. Household cleaning- laundry powder, laundry liquid, fabric softener and wool & delicate wash Baby care- baby shampoo, baby body wash, baby lotion and baby bubble bath Pricing strategies adopted by Earthwise Company. Pricing is an important element to the company and in order to earn more profits, it has adopted psychological pricing by making use of the emotions of the customers to increase their sales. The perception of the customers towards the company’s product has been a basis of setting psychological pricing. Promotion The company utilizes advertisements as its major tool of promoting its products in the market. It has some of the adverts running in the billboards in major towns across Australia and New Zealand. This has proved beneficial since the company’s sales have been growing for the last few years. Earthwise company has also adopted direct marketing as a way of promoting its product. This can be seen by the way they use telemarketing, TVs and catalog marketing Distribution strategies used by Earthwise Like ecostore, Earthwise Company has been using offline distribution channels in reaching its customers in various parts of the world. The company has been using both direct and indirect distribution channels in Australia, New Zealand and US to reach its target market. For example, despite the steep competition in New Zealand and Australian markets, Earthwise continued to express its expression in these markets and in order to achieve this, it has partnered with some chain stores in most parts of the world. The company also uses website marketing where most of its products are found in the company’s official website and the consumers can search directly the products and can order them online Conclusion As mentioned earlier, Ecostore is New Zealand based company and brides itself in using safe and sustainable minerals and plants based ingredients in producing its products. Some of the company’s products include body wash, soaps and other baby care product. Ecostore was formed in 1993 by Malcon and his wife Kelanie in their home at New Zealand. Malcon and his wife could have been using organic and sustainable gardening practices on their family property for a number of years but they came to realize that they were still exposed to various toxic chemicals through their cleaning and body care products they have been using (Malcolm Rands, 2013). The company adopts cost leadership strategy which has been developed through its business strategy and forms part of the company’s competitive strategy. It also uses psychological pricing, economy pricing, geographic pricing and product line pricing strategies. Ecostore has been successful in using customer referrals as one of its promotion strategies. The company has been working on its existing customer tribe and making them share their successful stories about the company’s products in the social media. Ecostore utilizes both online and offline distribution channels in order to sell its products and services to its customers. The company’s online sales channel is titled ecostore based on the company’s official website. Ecostore has been in a throat to throat competition with Earthwise Company, which is also a New Zealand based company producing natural products such as Nourish body, Household cleaning and Baby care products (Jonash, 2010) Recommendations on how to improve the company’s marketing mix A successful marketing strategy is of great help to an organization as it defines its goals and the direction for its marketing. An organization’s strategy should articulate on how it is going to deliver its products and services in a manner that offers customer satisfaction. Once target market or customers have been identified, one has to create some tactics on how to develop and implement them. Marketing mix comprises of some elements that can be used to carry out a strategy on how to reach your customers The following are some of the recommendations on how to improve the marketing mix of an organization The organization should consider the types of products it offers to its customers. It should consider its branding, packaging and its ongoing product development. It should also consider the benefits and the features being offered by the product and its distinctive selling points and the potential spin-off products Product pricing plays a very critical part in the marketing mix. Coming up with the right price for the company’s products assists in maximizing profits and builds a good relationship with your customers. Designing the right prices will assist in curbing serious financial issues that might occur if pricing is too low or too high When it comes to marketing position or place, whether in retail store or in social media, careful decisions have to be made during the distributions of the product. Being in the right place can be a contributing factor and determines whether the consumer will buy from you or your competitors. It is therefore paramount to carryout marketing research before making a decision on where to position or place your products. The way an organization promotes its products and services is proportionate to its sales volume. Regardless of how the business may look good, if one does not publicize its existence, there is a possibility that sales will be very low. Promotion is all about getting the right people to consume and reuse your products. In this case, the company can still utilize other available avenues to publicize its products in market. It should consider such platforms as public relations, advertising and branding. The company should strive at carrying out comparative component analysis of every product as compared to leading brands so as to ensure that it achieve proper environmental rating thus improving its image (Dent, 2011). The company should carry out independent environmental testing so as to ensure that its products are suitable for grey water and septic tanks systems.  Since packaging has been one of the impending problems facing the company, it should aim at reducing waste as much as possible by adopting the use of recyclable and a mix of recycled materials during packaging Ecostore is also committed in ensuring that their approach to sustainability is built upon RSPO certification and takes full responsibility of ensuring that it engages with its suppliers and manages its supply chain. It is important for the company to trace its supply chain back to the source that meets sustainability and the requirements of RSPO and also those of the company. The company progress on sustainability is available on the company’s website in order to support the company’s transparency (Maris, 2010). References Andreas, F., 2011. A Simple Path to Sustainability: Green Business Strategies for Small and Medium-sized Businesses. ABC-CLIO. Chitty, W., 2011. Integrated Marketing Communications. Cengage Learning. Dent, J., 2011. Distribution Channels: Understanding and Managing Channels to Market. Kogan Page Publishers. Frankel, C., 2008. In Earth's Company: Business, Environment, and the Challenge of Sustainability. New Society Publishers. Guides, E., 2005. How to Live Earth Friendly: Simple Solutions to Save the Planet. iUniverse. Jonash, R.S., 2010. Greenovate!: Companies Innovating to Create a More Sustainable World. IXL Center. Kopnina, H., 2014. Sustainable Business: Key Issues. Routledge. Laszlo, C., 2003. The Sustainable Company: How to Create Lasting Value through Social and Environmental Performance. Island Press. Laszlo, C., 2003. The Sustainable Company: How to Create Lasting Value through Social and Environmental Performance. Island Press. Malcolm Rands, M.T., 2013. Ecoman: From a Garage in Northland to a Pioneering Global Brand. Random House New Zealand. Maris, L., 2010. Live Green, Calgary!: Local Programs, Products & Services to Green Your Life and Save You Money. Rocky Mountain Books Ltd. McNall, S.G., 2011. The Business of Sustainability: Trends, Policies, Practices, and Stories of Success, Volume 1. ABC-CLIO. Nancy E. Landrum, 2009. Sustainable Business: An Executive's Primer. Business Expert Press. Pearse, G., 2012. Greenwash: Big Brands and Carbon Scams. Black Inc. Piramovsky, N., 2012. Managing Channels of Distribution. AMACOM. Thomson, M.R.&.M., 2013. Ecoman: From a Garage in Northland to a Pioneering Global Brand. Random House New Zealand. Wells, G., 2013. Sustainable Business: Theory and Practice of Business Under Sustainability Principles. Edward Elgar Publishing. Werbach, A., 2013. Strategy for Sustainability: A Business Manifesto. Harvard Business Press. Appendix 1 SWOT Analysis of Ecostore Appendix II Product Ecostore Positioning Read More