Introduction
Whole Foods was founded in Texas, Austin, in September 1980. The company was founded when local businesses decided the industry was ready for natural, healthy food. The idea was to offer customers fresh and wholesome food to avoid dealing with health problems. Their products are new and clean. The company provides various products and services. Some of their products are low in carbohydrates, and the company offers less processed foods. Whole Foods is currently seeking to enter the European market via continental Europe. Whole Foods offers a variety of products to its customer in the United States, Canada, and the UK. Europeans are known for their portion eating and healthy lifestyles. Whole Foods is targeting European countries.
New products that the company can sell or offer to a global market
Whole Foods was first founded in Texas and later acquired by Amazon. The company is a giant online player, and most of its products can be found online. Whole Foods has expansion plans for continental Europe. According to Neerman (2019), “This is the first time the brand sets foot on the European continent.” The company is ready to offer new products to its customers in France. For this project, I will analyze opportunities to market these two new products in France. The company can offer a special low-fat pomegranate smoothie with all the nutrients the body needs to replace a meal for their health-conscious customers. Whole Foods can offer a second product to its customer, and that product is a uniquely flavored low-fat syrup that contains multiple flavors; this syrup is a new kind of syrup.
Methods to determine a need and an existing global market for these products
Whole Foods has over 200 locations in the United States, Canada, and the United Kingdom. The company is an organic food supermarket chain that belongs to Amazon. Whole Foods was previously only available in the United States and the UK, but its market expanded to Europe. Whole Foods is targeting other global markets like France, Germany, Italy, and Spain. Amazon introduced continental Europe through its organic food label. Whole Foods offers a low-fat special pomegranate smoothie packed with nutrients & uniquely flavored low-fat syrup. These two products will be available in stores and online.
Market Research
According to Wunsch (2020), the organic food industry in Europe is a promising market accounting for 8.8% of the industry in Eastern Europe and with a retail sales volume of 29.8 billion EUR in 2015. As stated in the report, “Germany is the leading market for organic products in Europe with an 11.4 percent share of global organic sales, followed by France with 7.3 percent” (Wunsch, 2020). Germany is leading in organic food, but Switzerland and the Nordic countries show higher per capita consumption levels. There is plenty of growth and a promising market; however, organic food production is behind. Organic food production is centered around the production of cereals. Europe does not have many organic farms or organic meat production. In agreement with Wunsch (2020), roughly about 61% of European customers have a high degree of organic food knowledge, and 11% of Europeans search for organic food options.
Surveys & Sampling
Whole Foods’ customer relations department will send surveys to customers who shop from Monoprix. The feedback received from the potential customers will be reviewed and used by Whole Foods. After reviewing potential partners’ and customers’ feedback, a sampling booth will be set up if there is a positive response. French citizens are health conscious and want to have healthy options such as organic food. Sampling booths can be set up in stores where our targeted customers shop regularly. Customers can ask questions and give feedback on the products they tested.
Market Test
One way to test the market is to pull quarterly sales and inventory reports and then analyze the data. These reports will help us see where our competitors are getting their products and the average sales for products like Whole Foods offers. Analyze what our customers are buying and what the competitors are selling—another way to test the market is by providing samples of prepackaged food. Collect the product testing results and check if people want and need our special low-fat pomegranate smoothie packed with all kinds of nutrients & our uniquely flavored low-fat syrup.
Competitive Advantage
Whole Foods focuses on customers that are health conscious. Whole Foods should also target customers with higher income who are seeking healthy options for meals. The company differentiation strategy focuses on people who want organic food and those who want to make a habit of eating healthy organic food. The company will offer a special low-fat pomegranate smoothie packed with all kinds of nutrients & our uniquely flavored low-fat syrup. Whole foods are introducing its product under local supermarket Monoprix. Whole foods products in continental Europe are present on its online platform through Amazon. Health-conscious customers can order low-fat products online.
The customers that struggle with weight loss will enjoy portioned food and low carbs options. Their low-calorie products will eliminate the sugars found in pasta, rice, and beans while replacing these ingredients with healthy alternatives. French people that are health-oriented will be able to get a new product that satisfies their needs. The special low-fat pomegranate smoothie & the uniquely flavored low-fat syrup will target customers looking for healthy options and those aiming for organic and low-fat options. The special low-fat pomegranate smoothie packed with nutrients & the uniquely flavored low-fat syrup seek a balanced meal that is low fat and can be consumed on the go. The main competitor for Whole Foods under Monoprix is Carrefour group and E Leclerc.
Risk in Product Launch
Whole Foods will deal with pushback from French supermarkets because it is a foreign company entering their market. Whole Foods’ main risk is considering if the products being offered are desirable and can sustain. Market research shows that French customers are health-oriented, which takes care of their wants. Amazon owns Whole Foods, and the company has shown lots of potential. Sustainability is one of the expected risks due to local competition, and this happens almost every time a new product is being offered. There is a level of uncertainty that is expected to occur due to just being in a new environment. Whole foods will not know how the market will react, and it cannot predict sales.
To reduce such risk, Whole Foods can examine their products and test the product at first. Whole Foods can collect data on that product to make a safe assumption of whether the product will perform well. Sustainability risk can be managed by ensuring the new product will perform well and be differentiated from similar products. When we test the product and collect data, we can predict product performance and make any necessary adjustments.
Whole Foods is continually working on minimizing the risk of sustainability by working with local farms. The company works with farms that care about the environment. Whole Foods emphasizes the importance of locally grown food and protects the environment to reduce the sustainability risk. A second risk to look out for is regulatory changes. The business environment in France is different than in the US, Canada, or the UK. Whole Foods must continuously lookout for a change in laws and rules in France and be careful and address any changes.
The customer relationship management software system to track product inquiries and sales
Whole Foods Market uses AWS, which is the program they have been using since Amazon acquired it. Their CRM is user-friendly and has many different functions. The system has all information about the customers, such as personal information and their preference of customers. This system is built to track sales, products, and service inquiries.
A2.a Explain how the information generated by the CRM software will be used to continue to drive CRM practices and track sales in a global market.
Whole Foods uses Amazon Web services (AWS) as its CRM. AWS is a subsidiary of Amazon, and it provides on-demand computing to individuals, organizations, and governmental agencies. The service is available as pay as you go. AWS offers different tools such as distributed computing and hardware central processing units and a choice of operating systems. Their system is easy to use the user interface, and it is easy to use for shoppers. The system is simple and easy to navigate or comprehend. Their CRM is individualized and tailored for each individual or company. It allows customers to view their order history and makes reordering easy. The CRM system has all customer data, and that is used to customize customer promotional offers.
The CRM gives access to customer information, and customer call logs can be seen. The system also allows Whole Foods to gather data on customers to serve them better. Their CRM system helps both customers and the organization. Amazon’s CRM system assists in driving sales by saving the customers’ data and allowing them to reorder. AWS has an efficient CRM system that has many tabs such as marketing, sales, and customer information.
This strategy of combined interaction of various tabs and sections helps to provide cooperation in creating a unique customer experience (Binns, 2021). The advantages of using this CRM system are that it serves customers better and reduces inefficiencies. The CRM system can improve the quality of the service Whole Foods provide to its customers. It will allow the organization to keep track of sales, customer complaints, inventory, and product performances. The CRM will help us monitor our customer’s evolving tastes via social media. It will give us an understanding of our customers, and we can generate sales lead on social media.
Distribution channels for the new products and services
Whole Foods is looking into partnering with local supermarkets such as Monoprix to offer direct sales due to their perishable products’ nature. Whole Foods can also provide online options for its nonperishable food. Whole Foods has stores in the UK using their stores in the UK to have their product prepacked, then send it to European countries.
Key considerations for entering a global market
Whole Foods’ decision to expand to France as a foreign direct investment is part of Amazon’s growth strategy. The organization will face some global market expansion problems, such as cultural problems. Whole Foods may also meet some pushback from local competitors. France is part of the G-20, which plays a massive role in global business growth and promotes international business. Whole Foods is present in the UK, and the UK stores can be used for shipping needed products. Utilizing the existing stores in the UK can help the company test the water without actually leasing spaces. The current model in the UK can be used to settle in the new markets. The competition is high in France, but Whole Foods is different, so nothing like Whole Foods. Whole Foods will be replicating its success in continental Europe, and this will save the company money as it is a leader in its industry.
How the global supply chain may affect the product
Whole Foods will use local supermarkets to sell its products since it doesn’t have a physical store. Whole Foods will use its UK stores to prepare the prepackaged items and then ship them from there. As stated by Vidalon and Sudip (2018), the organization is in talks about partnering with Monoprix in an attempt to expand to France. Whole Foods may have to deal with cultural issues; some locals may not accept the new products. Local supermarkets may resent the competition, which may drive people to buy local products.
A4. Discuss a major pricing strategy (i.e., cost-plus pricing, competition-based pricing, break-even-based pricing, penetration-based pricing, premium pricing) aligned to your products and/or services’ position within the overall market strategy of the global marketplace.
Whole Foods must use a differentiation pricing strategy to set itself up as the industry leader. In the United States and the UK, Whole Foods practices the differentiation strategy since it offers premium products that are fresh and locally grown. Most of its products come from organic farms, and they usually have higher prices. In the market in that Whole Food exists, it targets an affluent customer base.
Costs associated with developing and launching the new products
The cost of a product must be assessed correctly, and to accomplish that, fixed costs and variable costs must be computed. We must include the factory plant, equipment, admins, licensing, and variable fees such as R&D, marketing, materials, packaging, logistics, and labor. Below is a breakdown of the cost for each of the two products:
Special low-fat pomegranate smoothie packed with nutrients 3.99$.
Uniquely flavored low-fat syrup 5.99$.
Consumer acceptance of the price set for the new products
France does not have Whole Foods Stores, and the local stores have different products so that these new products will be appealing to customers. The research shows that customers enjoy healthy options, so offering these products. Customers will pay a higher price if the products are organic and healthy. The customers targeted by Whole Foods will be upper-income earners and health-conscious customers. Customers are accepting to pay for organic and more nutritious options.
In France, there is nothing similar to Whole Foods, and the customers are health-oriented. French people enjoy syrup, and they eat it for breakfast. French citizens prefer organic food and low-fat food. Customers don’t want to spend time on cooking and will like organic options on the go, such as the low-fat pomegranate smoothie packed with nutrients. The French people’s lifestyle fits in Whole Food’s products as they meet the want and needs of targeted customers.
Competitor prices for similar products
The main competitors of Whole Foods are the French supermarkets such as Monoprix, Casino, Naturalia, and Carrefour (“List of supermarket chains,” 2020). The competitors are not currently offering products that are similar to Whole Foods’ products, and some of these competitors are working to partner with Whole Foods as a growth strategy. The competitors have their product lines, and bringing these two products into France will be a change. Whole Foods is offering a low-fat pomegranate smoothie packed with nutrients and a low-fat, uniquely flavored syrup. Both of these products have similar products offered by the competition.
I picked two products offered by a competitor that are nearly related to Whole Foods products. The first product offered by Carrefour is Sirop Grenadine moulin de valdonne- la bouteille de 70cL priced 2,47€ (“Sirop grenadine Moulin de Valdonne,” n.d.). The second one is the Smoothie fraise banana innocent- la bouteille de 750mL at the price of the 2,99€ (“Smoothie fraise banane Innocent,” n.d.). These two products are closely related to the products Whole Foods is offering.
Their products are not organic, and the products don’t satisfy customers’ needs, which is to buy organic products that are low in fat and carbs. These products do not have low carbohydrates, and they contain a high level of fat, starches, and sugars. These products’ price is almost the same as the two new products offered by Whole Foods, but they are not organic or low carbs; therefore, the customers are paying a higher price for low-quality products. Whole Foods products will satisfy the customer needs and help customers pick a healthier option. Whole Foods is offering two new products that are differentiated and very unique.
The promotional strategy for products in a global market
Whole Foods Market focuses on upper-income customers that can afford their premium products. The organization can promote their products to highlight the importance of the freshness of their products and use local organic farms. This strategy will help Whole Food enter the market smoothly without backlash from citizens. Another promotional strategy is to partner with local supermarkets and sell their products under the local supermarket. The customers will eventually seek out Whole Foods products once they become familiar with their products. Whole Foods Markets should advertise online and on TV to make their products known and target high-income citizens. The company can also advertise on social media and target customers who enjoy organic food and those seeking portion control.
Mass media and social media channels to promote new products in a global market
TV ads
Whole Foods can advertise its products on tv since most people watch tv; this strategy will help reach many people. TV ads are a bit costly, but they will be worth it since most people watch TV. A 30-second ad can cost so much, so we must consider the cost of advertising.
News Paper
Another way to advertise the products is via newspaper since some people read the newspaper. This strategy may not be that efficient since people don’t read the newspapers. Advertising via Newspapers will help reach some of our targeted customers but not all.
Amazon Prime TV
This strategy will help us reach Amazon customers with prime TV, it is a low-cost promotional strategy, but it only reaches Amazon customers.
Social Media- Facebook and Instagram
This strategy seems the most effective method as most people use social media in some form and shape. It will cost quite a bit, but it is not as expensive as TV ads. Social media advertising reaches far more people and seems the most efficient way to advertise Whole Foods products. Whole Foods Market can target customers on social media platforms such as Facebook and Instagram. A diverse group of customers uses both platforms. This strategy will allow Whole Foods to target specific groups such as health-conscious and higher-income customers.
I chose these channels to stretch the reach. The TV ads are to target customers that are older and wealthier but also health-oriented. The TV ads may not allow reaching everyone, but they will achieve our affluent customers that are slightly older and busy. The newspaper will reach middle age and more aged customers as the younger generations get their news online. The newspaper channels will not reach everyone but some customers. Social media sites such as Facebook and Instagram will earn diverse customers, and the ads can be tailored and specific to a particular group. Social media lets you customize the ads for each target group, so this channel is instrumental as it will help reach precisely the audience we need.
Sales promotion activities to promote the new products in a global market
Whole Foods can use different promotion strategies as it will be new to France. To make their product appealing to customers, they can offer coupons. Customers will flock to our products if we give them coupons or discounts. Once Whole Foods is well established in the market, we can provide customer loyalty and seasonal deals. Another sales promotion activity the company can use is prices that customers can earn, such as free products if they try a new product.
References
Binns, R. (2021). Amazon CRM case study. ExpertMarket. Web.
List of supermarket chains in France. (2020). Wikipedia. Web.
Neerman. P. (2019). Whole Foods expands to continental Europe. RetailDetail. Web.
Smoothie fraise banane Innocent (n.d.). Carrefour. Web.
Sirop grenadine Moulin de Valdonne (n.d.). Carrefour. Web.
Vidalon, D., & Sudip, K. G. (2018). Amazon targets French grocery market with Monoprix deal. Reuters. Web.
Wunsch, N. (2020). Organic food market in Europe — statistics and facts. Statista. Web.