2013-2014 Marketing Plan of Organics on the Go
Jason M. Farber
Devry University’s Keller Graduate School of Management
Executive Summary
Organics on The Go is an innovative start-up company that offers high quality, fairly priced, 100 percent all organic products for the on the go individual. These products are crafted to meet the specific needs and wants of a carefully selected target market. The demand for organics at large is strong and growing providing an excellent opportunity for success with a business that relies on a carefully crafted holistic marketing plan. Organics on The Go has developed an intricate holistic marketing plan that incorporates a comprehensive IMC approach to ensure success
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Market Size and Growth:
As of 2012 the total revenues of the organic market had grown to 27 billion back in 2012 and continues to grow at an average rate of about 7.4% during the recession, with a growth rate that has continued to increase and exceed analysts’ expectations according to the findings of the USDA. (USDA, pg. 1) However, the exact number of people that comprise the whole foods customer base is still not known with credible certainty, but is believed to be well within the millions in the USA alone. (USDA, pg 6).
Market Trends:
Rachael L. Dettman in her presentation to the USDA wrote: “Organic produce: Who’s Eating it? A Demographic Profile of Organic Produce Consumers” research suggested that in the post-recession period, organic produce, which is the largest organic sector, is now growing at 15% and the demand for organic foods at large is sharply increasing. (Dettmann, pg. 1). Matt Townsend in his article: “Whole Foods Profit jumps on Demand for Organic Foods” cited Merideth Adler, analyst for Barclays Plc that for the organic market: “sales trends remain strong as it appears that the growth of the natural and organic industry has continued to exceed expectations” (Townsend, pg. 1)
SWOT Analysis:
The following SWOT analysis encompasses the strengths and weaknesses to which the logistic and strategic components of the marketing plan will be tailored to address from the internal business
Marketing plan is always based on information regarding product, customers, market and competitors. The best way to analyze all this information is through a SWOT analysis. SWOT stand for strengths, weaknesses, opportunities and threats. This analysis takes into account both internal and external factors, internals being strengths and weakness, and external being opportunities and threats (Kotler & Keller, 2009).
Adjusting the pricing strategy and targeting key demographics will help to increase Whole Foods’ market share in the organic industry. If instituted successfully, consumers will be able to choose which experience they would prefer: either a larger atmosphere with a greater selection and supply or a cheaper, smaller environment in which popular food items are available at a lower cost. This can satisfy both those who are interested but on a budget and the loyal customers who have high disposable income that is used to purchase premium organic products without regard for price.
In regards to income, more specifically, 35% of people considered as organic consumers earn more than $50,000 as opposed to the non-organic consumer which comprises a total of 30%. Finally, taking into account the geographic location of the common organic consumer, the majority of them are concentrated in the Western and Midwestern regions of the United States (“Marketing”, 2011). I think you will find that all of these elements combined will be of great help in targeting our potential market for organic products.
Since 2006, the demand and market for organic food and drinks has been increasing exponentially. The demand for these organic products is growing much faster than the supply. Consumers are more interested in where their food is coming from and how it was made. “The latest data shows organic sales in Canada have tripled since 2006 to 3.7 billion dollars a year.” (Global News). There are not enough farms in Canada that produce and supply organic products to meet the high demand. It takes approximately three years for an average farm to convert to an organic farm. However, the whole farm does not have to be organic, a portion of the farm can be converted to organic while the rest operates the way it was previously. The demand curve has shifted
The prediction of organic products’ market growth is from $6.5 billion in 1999 to $13.3 billion in 2003. Generally, there are few characteristics of shoppers who purchased organic products regardless of channel which are higher income, more educated person and mostly live in the Northeast and West. 46% of them bought organic products at the supermarket, 25% at a small health foods store and 29% at a natural foods supermarket. Organic dairy products were bought by 74% of heavy organic food buyers and 29% of light organic food buyers.
Whole Foods in recent years has poorly performed in recent years. The company’s stock price plunged 46% year over year, as well cutting workforce, and changing the organization’s structure. Organic food has become the main trend, leading to stronger competition. The United States organic sales marked a new record of 43.3 billion in 2015, the industry is growing tremendously. Consumers are getting involved and concern about environmental and health issues; since the 1990s, the demand for organic products has been growing by double digits and 84 percent of American consumers rather buy an organic product over a regular product, according to Consumer Report survey. Millennials are the largest generation in the United States, not only that but
Technology has influenced the availability and selection of foods today compared to foods in the past. Organic Food have become popular in the United States.Many people have switch to organic food, because it's a lot healthier to eat. With most things there is always a catch, this one is that it cost twice as much to buy and get less.But nevertheless demand for organic food is growing so fast that consumer demand is outstripping some domestic supplies.The United States now spends more than $1 billion a year to import organic food, according to the USDA, and the ratio of imported to exported products is now about 8 to 1. About 10,000 American farmers have made the transition to organic food production on about 2.3 million acres of land. American
Although organic products represent just about 2% of the total food and beverage sales in the US, the market is growing approximately 20% annually. More consumers are preferring natural, fat-free and healthy food products. Food items containing trans-fat are losing market share to low calorie, low fat, natural and organic products. Increasing customer preference for organic foods is likely to impact the company’s sales, given its leading market position in the organic grocery segment.
Whole Foods Market (WFM) is struggling to stabilize the natural and organic market share among competitors. One of the major problems is their organic product prices are very high for average consumers and they are using the same food distributor in the U.S. According to the Business Insider report, the WFM brand image is no longer attracted to new customers because they can find alternative organic products with cheaper prices in the competitor stores. And also WFM competitors such as Trader Joe’s and Kroger are maintaining their private-label products to make unique organic products and promote their band image.
The U.S. has less communities where 40% of the residents have college degrees, yet the organic market profits $29.5 billion and 8 in 10 U.S families purchase organic products.
U.S. sales of organic foods and beverages have grown from $1 billion in 1990 to $24.8 billion in 2009. Sales in 2009 represented 5.1% growth over 2008 sales (Industry Statistics and Projected Growth, 2010). These trends are having a significant impact on the food market industry as a whole, and in particular the organic foods markets. Provide a discussion of the trends in the organic foods industry and how these trends will impact the organizations that sell organic foods. Examine the competitive environment that organic foods can create for an organization and apply Porter's model, providing an analysis of each factor relative to the industry. Identify the opportunities and potential threats to the organic foods industry by completing a
According to “The United States Organic Food Market Forecast & Opportunities, 2018”, the organic food market of the US will grow at about fourteen percent from 2013 to 2018. Organic food sales in the U.S. have grown from about $11 billion in 2004 to about $27 billion in 2012. Markets for organic food witnessed enhanced progress for decades in the U.S. Below is a chart for organic food sales and annual growth for 2004-2013.
“Sales of organic foods have soared in recent years, as more consumers pay attention to
In order for advertising to be effective for the organic food market the advertiser first must have an understanding of the consumer needs. In today’s society there is more information available for consumers, and this is shaping their understanding of the products they are buying. According to the Journal of Advertising this concept seems even more prevalent because of “the green market for ‘green’ products and, in particular, organic food products, where exponential growth has recently been observed.” (Ioannis, Carlson, & Muehling, 2014). This would account for United States sale growth of over 400 million dollars annually with the help of over 300 certified organic products annually. Organic marketers do not see this trend slowing down anytime
According to the Organic Trade Association (OTA), “the booming U.S. organic industry posted new records in 2015, with total organic product sales hitting a new benchmark of $43.3 billion, up a robust 11