whole foods market i marketing strategy of same product in a new market
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Team 2 – Fenway Cohort
Andres GarzaKamanasish KunduXiaochun SongCarla VelaDalibor Vucic
Quadrant
New ProductSame Market
New ProductNew Market
Same ProductNew Market
What is Whole Foods?
Highest Quality of Products
Natural & Organic Products
Transform Grocery Shopping into Interactive Theater
New lifestyle towardshealth and pleasure
1
2
3
4
Why China?
2nd largest economy
47% of urbanization (2.3% growth rate)
Grocery Market US $285b growing 7% annually
Movement towards Health Culture
45% CAGR in organic food segment
China is one of the top five organic producers
Total US$1.1billion organic market
22% gross profit for foreign players
The Pyramid Model of Business Key Success Factors in China¹
¹ Market Research done in Mainland China by National Taiwan Normal University in 2010
Leadership
R&D and Innovation; Strategy
Corporate Culture: HRM and Development: Market Demand
Relations with Government
Business Information
Brand Reputation
Supply Chain
Critical Success Factors
Supermarkets
Organic retailers
Online Shop
Huge Market Share
Low Price
Stable Supply Chain
Low Cost
Fast Delivery
Convenience
Quality&
Loyalty
In-StoreExperience
Competition Analysis
White collar families
40%Families with
young children
10%
Young people
Families with health issues
10%
Government Officials
10%
Others
10%3%Foreigners live
in China
Overseas returns
5%
7%
Business people from Taipei and Hong Kong
5%
Main reasons for buying organic foods:
Issues that less concerned with:
• Certification relating quality• Food safety• Information about nutrition value
• Promotion and advertising of organic food• Whether the organic food was produced in
China• The social status of people purchasing
organic food
Organic Products Consumer
Source: Organic Food Products in China, Market Overview, 2010
Customer Segmentation
Education Level in the city of China
1 Beijing
2 Shanghai
3 Wuhan
Income Level in the city of China
1 Dongguan
2 Shenzhen
3 Shanghai
Based on the Education and Income level, we chose Shanghai as the Wholefoods first location in China
Foreigners Population in China
1 Shanghai
2 Beijing
3 Hong Kong
Embracers Daily organic shoppers that already knows Whole Foods. Hold core value on health, importance of natural/organic.
Pro-Organic White collar income people, frequent organic product customers that doesn’t know Whole Foods.
Marketing StrategyTarget Market
Marketing StrategyMarketing Objectives
Increase level of confidence within Embracers
2
Position Whole Foods as the 1st high-end organic supermarket in China
1
Create brand awareness and educate Pro-Organic
3
Promise
Vision
Message
Personality
Personality
Message
Promise
Vision
Marketing Strategy
Brand Map
Quality and LoyaltyIn store experienceConvenience
Healthy and quality organic food Delivery & Online ShoppingWHOLE indoor experience
Seek out the finest natural and organic foods available and maintain the strictest quality standards in the industry to be positioned as the 1st organic theater in China
Customer who hold core value on health and cares about the importance of natural/organic.
Marketing Research
• Primary Qualitative
• Interview the top 20 organic producers in China
• Interview 20 distributor,
• 200 selected aim customers survey
• Secondary Qualitative
• Competitor analysis
• Customer research from social media (Chinese Micro blog)
Financial Projections
Year 1 Year 2 Year 3 Year 4 Year 5Number of Stores 2 4 6 8 10Revenues 60,000,000 132,000,000 206,400,000 281,280,000 356,256,000 Marketing Investment 1,800,000 3,960,000 6,192,000 8,438,400 10,687,680 EBITDA 7,200,000 15,840,000 24,768,000 33,753,600 42,750,720 Net Income 4,200,000 9,480,000 14,976,000 20,515,200 26,063,040
Year 1 Year 2 Year 3 Year 4 Year 5
1,800,000 3,960,000
6,192,000 8,438,400
10,687,680
4,200,000
9,480,000
14,976,000
20,515,200
26,063,040 Marketing Investment Net Income
Marketing Mix
PRODUCT
PRICE
PLACE
PROMOTION
OFFERING
VALUE
EXPERIENCE
RELATIONSHIP
Quality Standards: Organic Integrity
No price competition: High-end products
Encourages Five Senses: A Experience
Customers are Brand Ambassadors“Good Food Feels Good”
Marketing Strategy
Marketing Communications• Press Release & Brochures• Loyalty Card• WOM through loyal customer• Newsletter (Coupons, Recipes…) • Value Tours
Outbound Marketing
• WOM with Social Media• Hire influencers who have more than 1,000 followers to
post the stories and recommendations of WF• Advertise with online Farmer Game
Inbound Marketing
Sales Enablement
• Train Employees
• How to daily arrange the store
• How not to run out of stock
• How to manage promotional tools
• How to please customers
• How to conduct value tours
• Create self directed Teams
• Team Member incentive programs
• Employee of the week
• Loyalty Programs
• Team Member Stock Options
• Continuous learning and promotion opportunities
Conclusion
AppendixStrength Weakness Opportunities Threats
Traditional Supermarket
•Have lots of loyal customers•Low price•Big market share
•Lack of high quality products
•Different product price•Customer
behavior education
•They are losing their organic customer because of the quality problem in the former experiments
Organic retailer:Lehuo, Haike
•Have lots of loyal customer•Good reputation
•Supply chain in China has not completed• Small scale
•Franchise •Difficult control supplier’s quality•Too small to
expend
Online shop:Tootoofood,Yiguo
•Low cost•Direct delivery
•Only focus on few KPUs•Late delivery•Customer
satisfaction
• Include more KPUs•Warehouse
management
•Relay too much on suppliers•Competition from
big online shopping mall
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