Trader Joe Case Study Case Study Examples

Trader Joe – Case Study

Trader Joe (TJ), formerly a South Sea chain of stores having unique offerings, later got acquired by Aldi. The Aldi group has attempted to retain the original concept of the Trader Joe stores since it was this concept that made the store a number one entity across consumers in the US. The company’s marketing strategy was thoroughly unconventional since it had no social media presence nor did they advertise in newspapers, TV and other media. (Ager & Roberto, 2014, p.8) Further, the company had an ‘everyday low price’ philosophy due to which it did not offer any sales or coupons like other supermarkets. Even technology-wise, the store introduced electronic price scanners quite late in the day and it does not offer self-checkouts to this day. In 2013, when most supermarket stores suffered, TJ managed well for itself. However, long checkout lines and poor parking facilities in some stores are a dampener for some customers. Further, virtually all of the merchandise was private label and the meat items were frozen which meant that most families could not completely depend on TJ, but had to shop outside for these supplies. Although TJ was the best employer, with the expansion came competition coupled with increasing bureaucracy in the company, much to the chagrin of the older employees who believed that the older South Sea TJ was much better. Would TJ continue to successfully blend its old South Sea store experience and enhance its marketing approach as it expands?
Some of the new processes and procedures implemented by the company management are likely to bring the company back to the mainstream. However, these processes are also likely to change certain aspects of the shopping experience, including the loss of its ‘charm’ and ‘quirky cool’ – the main reason for the popularity that TJ enjoys amongst its customers. Most customers (including writer Beth Kowitt) fear the loss of these values as the group expands. The paper proposes two separate plans to find a solution to these problems.

Plan 1

The first plan would be for the company to connect to social media. The company may not want to participate in TV and print ad campaigns since these media talk one-way (business to customer). However, an online media presence is a two-way interaction of the company with its customers. As of today, the only online presence that the company has would be through its loyal customers and the company should find ways to change this scenario.
As critics point out, the company is missing a great opportunity to spread the loyalty and the customer experience outside their store. It would certainly be a wise move to participate in these online conversations so the management can get guidance in the direction that it should expand. This public feedback would also help the management determine the extent of changes in processes that it should undertake to aid its store expansion in the face of competition without sacrificing its traditional store appeal. Further, an online social media presence would also help the company enhance its brand image as a transparent, cost saving and employee friendly entity. Social media presence would also help the company understand the manner in which it should position itself in the present competitive environment. Such programs can operate only on a mass scale and efficiency, only if the company chooses to implement this first plan.

Plan 2

If the company, for some reason, wants to refrain from social media campaigns, it must survey its customers as well as its employees to find out the middle ground between its store expansion and keeping its image as the cool neighborhood store intact. However, in doing so, the company would find itself bearing a cost that would be significant since it would need to hire a firm that would do these kinds of brand surveys. Further, the outreach of these surveys would be limited since it would only reach out those people who would visit the store during certain timings or days. Also, a crowd of people at these counters would deter most people from giving their views on the subject. Further, peripheral issues such as overcrowded parking lots, long lines at payment counters and their resolutions may or may not be effectively addressed due to such marketing surveys.
The advantage, however, of such surveys is the real life feel of giving one’s views, which is the foremost point for most customers who display unswerving loyalty to TJ. Further, if TJ wants to project itself as a thoroughly traditional South Sea store, then it would do well to consider traditional marketing surveys and stay out of the bounds of social media.

Recommendation

Both the plans have their own advantages and disadvantages; however TJ must consider the future in the retail space before considering a minority of critics who criticize the store of having walked away from its roots. Plan 2 would be pretty much a status quo for the company’s marketing and branding strategy. The company, however, needs to find a middle ground wherein it retains its traditional customer base considering the competition in the market. With the future in mind, Plan 1 is certainly the better of the two for the following reasons – 1. The first plan is more cost effective, 2. The plan has a much wider outreach amongst customers and employees alike, and 3. This plan has the potential to bring about further transformation in the image of the TJ brand, especially in regions where there is not much awareness of the brand, and, most importantly, 4. An online social media presence would help TJ counter the onslaught of competitor brands that are attempting to encroach in the brand space that TJ operates. The online social media presence would also help TJ clearly position itself as a niche, “cheap chic” retailer and prove that it is a pioneer in this space, which would bring it a significant first mover advantage. For these reasons, Plan 1 would be the best approach.

Reference

Ager, D & Roberto, M. Trader Joe’s. Cambridge, MA: Harvard Business School, 2014. Print.