Research Paper On Marketing Plan

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Executive Summary

Integrative Foods has possibly for the first time, pioneered the concept of supplying farm-fresh produce directly to its customers. Its brand promise is supply of farm-fresh vegetables directly to the homes of consumers, without any intermediary storage point, within 72 hours from any vegetable being picked from the plant. Integrative, currently services just five locations in the United States, from five of its farms that are in close proximity to these five locations. To ensure that all its produce meets and exceeds the promises made by the company to its customers, its operations are monitored by Ernst & Young itself. Despite the fact that the company places a minimum 100% premium on its products, there is an excellent demand within the limited supply that the organization can make at the current moment. The company does not extensively promote its product, nor does it have any specific place to sell its produces. All the orders are placed on its website, only by accepting members, giving a further elite touch and feel to the organization. All its products are of extremely high nutritional value and greatly juicy and succulent. These qualities further enhance the taste of the food that is made from them. There is a constant increase in demand, which the company is not able to currently cater to. The company has a nice, fat bottom-line almost 50% of its sale and looks to keep it that way, in the currently foreseeable future. Despite an aggressive and ambitious expansion plan, the major constrain for expansion seems to be the company’s ability to locate farms that are situated in close proximity to urban centres that can provide similar demand for its produce.

Overview of the Company

“Integrative Foods” is an organic foods producer that is intending to sell its products directly to the customers – they work on the “Direct from Farm to your home” principle – possible for the first time in the United States. The company is proud of it’s of distributed farms in five locations and currently serves five cities directly from these farms.
Integrative produces all the vegetables sold by them only in their farms and are all audited by the famous audit company – Ernst and Young. All the farms are ISO certified. The ISO certification and empanelment and certification by Ernst and Young is a direct indicator of the commitment of the company to its customers and the quality that they promise and wear always on their sleeve. All the produce that is delivered to the customers is less than 72 hours from the harvest time and usually less than 24 hours. The produce is produced without any chemical fertilizers or insecticides. The water used for irrigation is drawn up from wells using wind mill energy and solar energy driven pumps to ensure the integrity of the produce.

Mission Statement

“To promote the nature’s most valuable gift – “Life” by promoting the use of organic vegetables at affordable cost”
The mission statement of Integrative is an indicator of the passion that the company puts in to the commitment of life. In the days when the order of the day is crass commercialism this kind of a commitment to holistic approach to life is refreshingly different and goes to attract customers to its stable and retain them there. Every vegetable is delivered to the customers’ kitchen definitely within 72 hours of being harvested and such fresh vegetables are naturally juicy and fresh. This kind of freshness adds a special taste to the food that is made from them.

Description of the Product

Integrative produces all the vegetables sold by them only in their farms and are all audited by the famous audit company – Ernst and Young. All the farms are ISO certified. The ISO certification and empanelment and certification by Ernst and Young is a direct indicator of the commitment of the company to its customers and the quality that they promise and wear always on their sleeve. All the produce that is delivered to the customers is less than 72 hours from the harvest time and usually less than 24 hours. The produce is produced without any chemical fertilizers or insecticides. The water used for irrigation is drawn up from wells using wind mill energy and solar energy driven pumps to ensure the integrity of the produce.
The seeds supplied by the organization are patent protected. This ensures that the farmers do not save seeds for planting them the next season. Crops that cross-pollinate with GE seed stock leave the plants the property of the seeds of the company and when patented plants are noticed in fields not planted with Monsanto seed, Monsanto takes legal action on the grounds of infringement of patents.

Competitors

The major source of competition would be the already existing players in the market. Apart from them non-organic producers who carry out mass production also can be a threat to the business.
Carrying out an industry analysis would help in identifying the number of players in the market and their respective market share. Price differences between the competitor and our product over a particular period needs to be observed and analyzed. Depending on the analysis and alongside keeping the profit margin in mind the prices of the products can be revised. Also the transportation costs, production costs etc. need to be analyzed. The cost of shipping the products to other places between the competitors can be identified and analyzed. Foods that have high potential and consumer demand need to be identified and offered to the customers at optimal price levels. Certain other aspects like quality of food, hygiene factor, taste and health, availability to the customers in a convenient manner are also certain other aspects which are opportunities for the business improvement. Identifying these aspects from the competitor’s point and thereby improving them and providing customers would result in a profitable business.

SWOT Analysis

The strength of any organic food company would be the ability to deliver everyday farm fresh items to the consumers. The weakness is that the business is too dependent on natural processes which are fairly uncontrollable and outputs might vary. There is a growing awareness among general public which will create an ever expanding market. Mass production from non-organic sources and existing competitors in the market who are dealing with organic food are the main threats for the business.

Market Segment

The target market for the business is the small business owners. The reason behind this is the number of office goers and the numbers of foreigners who actually know more about the organic food and also who are more interested in organic food consumption are relatively high. Also, if the small business owners are targeted, it will be easy to handle them and also the amount of risk is relatively less.
The rationale behind the above selection is the booming growth of the organic food industry, especially in the United States. According to a recent study, “with retail sales of organic food and beverages amounting to about $ 8 billion in 2000 (expected to reach about $ 9.5 billion in 2001); the United States is the world’s largest market for this product group. Industry sources expect recent years’ strong growth to continue over the short to medium term. According to the Organic Consumer Trends 2001, published by the Natural Marketing Institute in cooperation with the Organic Trade Association (OTA), retail sales might reach $ 20 billion in 2005.”

4Ps Branding Strategy

The main objective would be educating the public and creating awareness among them about organic food and the benefits they may get by consuming it. Also, focus should be on tapping as many customers as possible by using different kinds of innovative strategies. Promoting organic foods needs to be done in a systematic way. Before directly promoting the product, creating awareness among the customers about the concept of organic foods is more important and even all the more necessary. Extensive education about the organic foods is to be given. The promotional strategy should focus on natural health care. Also educating the consumers about the rejuvenation along with holistic health will be helpful.
The marketing strategy for the business would be in-store advertising and point-of sale advertising the organic foods. The different tools used in point-of sale advertising are mobiles, posters, banners, shelf tickets etc.

Advantages of in-store advertising and point-of sale advertising

The announcements or the advertisements regarding various offers at the store are directly delivered to the customer.
The advertisings are broadcasted to the whole store with one broadcasting tool.
Network operations can be controlled like calculation of the sales volume, its increase or decrease etc. can become much easier.

Customers can be reached during their shopping time itself.

Persuade them to purchases which they may have not planned.
Disadvantages of the chosen strategy
The customer gives attention to such advertisings and announcement only for a very little time,
Wastage of advertising materials
Advertising has a lot of scope for expression and dramatization is possible. There is the danger that some companies might misuse this freedom and suffer as a consequence.
This form of communication is ideal to generate quick sales and create a long-term image for the product. There are also certain disadvantages that come along with the advantages. There is rarely any generation of feedback. The communication is also less persuasive than personal selling. Though cost per potential customer is low, the absolute outlay needed for advertising is high.
“An effective standardized campaign needs careful management and good communication. Non-standardized campaigns often miss corporate objective. This happens when firms follow the laissez faire philosophy. When adopting non-standardized campaigns, some multinational corporations relax all controls over foreign affiliates and let them decide how to advertise.” The first principle is - knowing about the target market. Both the international advertising executive situated at company headquarters and the local advertising executive should have good market knowledge. They should collect market data continuously on their products or the competitors’, with regards to performance in international markets. Information like customer demographics like age, sex, income level and occupation etc., shopping behaviours and product usage have to be on hand.

Pricing Strategy

The promise of the company to deliver farm-fresh produce, produced in the most natural organic method including how the water for irrigation is pumped means certain amount of costs that are incurred being on time always and also absorbing all of the costs that accrue because of lower agricultural efficiency makes Integrative expensive than the normally produced vegetables.
The accepted policy of the company is to acknowledge the enhanced costs of its produce, which is more than 100% premium when compared to other vegetables in the market. While there was an initial resistance for the product because of its premium pricing, the initial launch very carefully marketed by the company by offering free samples for the whole family lured many customers because of its improved taste and nutritional values.
The Integrative’s fresh vegetables are definitely sold at a 100% premium, while in few cases, the premium goes over 200% too. This pricing strategy covers not only the production costs but also gives a nice fat margin to the company.

Place Plan

Integrative does not have any tie-up or relationship with any retailer, and does not offer its produce in any supermarket or a grocer. Integrative has taken the direct-from-farm-to-home approach and has its own exclusive website that takes orders only from paid members and delivers them directly. The delivery vans have large advertisements on either sides of the vehicle, which acts as mobile billboards for the company. The traffic for Integrative website is generated by means of a variety of paid and free promotions the company gets. The company very often, is reviewed on televisions, and also gets spoken about by dieticians, sports persons, and others, because of its enhanced nutritional value. This makes Integrative truly place independent and has its own place strategy that is unique and independent of the usual marketing parlance.
A focused differentiation strategy is the one that is strongly recommended for Integrative. According to this kind of strategy, a firm tends to serve a specific segment instead of catering to the entire market (ICMR - ICFAI Center for Management Research, 2004). This segment may be a special group of customers, a specific geographic area, or a particular product or service line. The major advantage of having a focused differentiation strategy is of pricing their products at a higher price (Kotler, 1972). Post successful completion of market research pertaining to a variety of issues discussed above as well as sufficient information gathering, marketing strategies are to be devised, following the product development and the opportunity analysis.
As already mentioned in the initial parts of this paper, Mass production from non-organic sources and existing competitors in the market who are dealing with organic food are the main threats for the business (Donald, 1995). A very strong supply chain, brand reputation, and quality of products are the main performance indicators of Monsanto Company. However, in wake of the current economic downturns, it is advisable that the company utilizes its buying power and negotiates to procure low-cost products from its suppliers and introduce other marketing strategies like discounts and low-cost sales etc. to handle the recession and sustain their brand value and market share.

Branding Strategy

The primary branding for the company happens through its delivery vans that take the produce to the customers. Other than this, branding for Integrative, is consciously done through a variety of online media, social media, and offline promotional campaigns. More often than not, the media relationship company hired by Integrative for the purpose of promoting the company has done an excellent job of raking up the interests of different publications and making them provide valuable editorial space free of cost, because of the nature of the Integrative’s produce.
The primary factor that sells and creates interest in Integrative’s produce is because of the freshness of its vegetables that are succulent and juicy, even when they reach the customer’s table. Usually, the so called fresh vegetables sold otherwise in the market are definitely more than a week old from the time of harvest, which makes them lose their juiciness and also a loss in nutritional value. This is the biggest brand strength that Integrative has in its product.

Slogan

Direct-from-farm-to-your-kitchen
Logo
Conclusion
Integrative foods is the producer of organic vegetables and pioneer in the direct-from-farm-to-kitchen business model and not using any conventional retail intermediate point to sell its products. The Integrative Foods hallmark is its commitment to the customer to deliver Products within 72 hours of it being harvested and definitely with higher nutritional value. The company uses a variety of online and offline strategies to promote its products, and all its products are invariably sold at a minimum of 100% premium and also the profit margin for the organization is approximately around 50%, which is exceptionally high for this kind of a business.
Integrative Foods, currently has a serious constraint of being present only in five locations in the United States, and its scaling up requires farms that are closer and accessible to larger urban locations. Scaling up for Integrative, has its own set of challenges, despite ambitious and aggressive growth plans for the organization. Ultimately, the company has an excellent product and a price that its customers are willing to pay, thus making the company extremely profitable.
There are inherent advantages with a long planning horizon. It gives enough time to visit markets that need special attention. Longer lead times also permit overseas advertising managers to adopt the campaign objectives. Increased lead time is particularly helpful when an organization adopts non-standardized campaigns. It will have enough time to develop a campaign that suits the local situations and such a campaign is also consistent with the overall corporate goals. Conducting an industry analysis would help in understanding and knowing the number of players in the market and their respective market share. Price differences between the competitor and the selected product over a particular period needs to be observed and analysed. Depending on the analysis and alongside keeping the profit margin in mind the prices of the products can be revised.

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