Organic Food is the principal, self-consistent national seller of organic, natural foods and related products. It also sells organic personal care items, nutritional supplements, and organic produce. Except its surpassing distribution services, it offers a wide range of forward-looking, profitable services for its customers and suppliers, in order to assist mutual development and prosperity. Its services incorporate promotional and marketing tools, mercantile trade, store support services, and category management. The vision of the company is to become the unrivalled key player in the distribution, evolvement and marketing of organic food products by accomplishing the highest standards for quality, succession, sustainable development, product range, reliability, and sincerity in the business and personal relationships. The mission of the company is to surpass the expectations of all its stakeholders, including customers, partners, organic product consumers, suppliers, etc. Organic Food stores meat, seafood, grocery, bakery, prepared foods, tea, coffee, beer, cheese, wine, vitamins, nutritional supplements, and body care items, as well as lifestyle products including pet products, books, and household products.
Several years ago, the Asian organic food market was considered as very small. Nevertheless, nowadays China is displaying crucial evidence of development through both production and the usage of various organic products (Miller, 2008). The market for quality and safe foods is already large. Recent responses to food scares and the concentration of food distribution channels are likely to continue growing strongly. Security and fidelity are progressively becoming backgrounds for market entry. Nevertheless, the prices can be restricted. Although prices are still very high on the market since they are projected to stay high during the short or medium term, price appreciation will not last long because many large producers enter this market (Miller, 2008).
SWOT analysis defines strong and weak characteristics of the Organic Food company together with its opportunities and threats it may face.
Strengths encompass several points. Firstly, the products of the company are nutritious food for the health of customers. Secondly, organic labels attract customers to the product. Thus, the company is competitive. The company labels that the products are 100% organic. In fact, law allows no synthetic ingredients. The production process meets federal organic standards and has been independently verified by accredited inspectors. Thirdly, the company tries to avoid synthetic inputs including pesticides, fertilizers, food additives, antibiotics, etc. Moreover, its products are not genetically modified. Fourthly, the company offers pasteurized, non-homogenized and homogenized products. It indicates that the company has serious technological advantages. Fifthly, the company has positive employee environment. Finally, a reputation of environmentalist fosters brand responsibility and commoditization.
Weaknesses include fewer issues. Firstly, not all customers are concerned with food quality and nutrition. Secondly, the company still uses some synthetic substances allowable by the National Organic Standards Board. Thirdly, the staff turnover is quite high. Fourthly, the debt burden is high. Fifthly, the employee efficiency is quite low. The revenue per employee makes $138K versus industry average of $ 309K. Finally, half of the products are sold for the same price as non-organic ones.
Opportunities encompass a number of points. Firstly, this is media coverage, which notes health benefits of organic foods and makes people suspicious of various contaminants, including hormones, antibiotics, etc. Secondly, consumer spending on health is growing creating and expanding the market. Thirdly, the green and organic movement could create policies that would provide tax benefits to companies. Finally, the world provides high requirement for the environment and animal conservation.
The threats that the company may face include increasing competition, different changes in government regulations, various alterations in economic conditions, and the influence of consumer spending. Moreover, the process of the product expansion can result into several obstacles to the market penetration.
A market segment consists of customers with a similar set of desires, and they share these desires (Koltler, 2010). Market segmentation creates segments with similar characteristics. Good market segmentation will help a company to attract the right customers. These customers will have a stronger purchase interest and match their unique needs (Kotler & Armstrong, 2010).
Food consumption in China presents individualized and diversified trend. Individuality and diversity is not simply to pursue a distinctive style, the majority is willing to follow the mainstream, and they will choose the consumption to show their personality (Chan, 2001). Consumers hope that the company will provide more choices and better products to curry favor with customers. At the same time, they prefer to go shopping in a comfortable shopping environment. Apart from improving material life, Chinese consumers also want to enrich their spiritual life. They will purchase the products on the basis of their own values, spiritual requirements and desires (Chan, 2001). In addition, more attention is paid to food safety, the nutrition value of the food. In recent years, there are plenty of cases about food security crisis in China. Consumers pay much more attention to the food security than before as a result of the various health problems caused by modern life. Chinese consumers are willing to spend money on the product, which can improve their mental and physical performance. Consumers want to buy the food if they are sure that it does not harm their health. Moreover, the trend shows that food consumption is more female-oriented (Krystallis & Chryssohoidis, 2003). In China, most of women bear a heavy burden of daily life issues. The fast economic development highly improved the status of women, and they have greater freedom. Therefore, women are more likely to come up with their own perceptual ideas to affect the consumption behavior. The enhancement of the status of women will bring new market opportunities. Finally, there exists the trend of cereal food consumption. In the last few years, cereal grain consumption began to rise. Cereal food is healthy and beneficial to the human body. It also has good taste and is digestible. Eating cereal is a perfect way to deal with the nutritional imbalance caused by the modern fast-paced urban life (Paull, 2008). Thus, the marketing objective is to increase the current market. Current market will be grown by the growing consumer awareness of organic food. Moreover, customer awareness will be enlarged with the help of popular magazines and periodicals in China, such as Duzhe, New Weekly, and Jia ting. The primary target for Organic Food products will be consumers who live and believe in an organic lifestyle. These consumers will be interested in a healthy lifestyle and supporting the environment. It is important to focus on maintaining and increasing sales quantities by various attempts to provide the customers with the products of the highest quality. It is also important to lower the cost structure through the production and distribution chains and other efficiency projects. The marketing goals in the Chinese market are as following. Firstly, it is important to enable people to adopt a healthy lifestyle with the help of collaboration and organic awareness. Secondly, it is crucial to practice environmental information awareness and combined approaches in all aspects of treatment, production, commerce and operations. Finally, it is essential to have respect for the human, animal, plant, and global life.
The organic marketing mix in China consists of four elements, including product, price, place, and promotion (Ps). For organic products, place has appeared to be a very decisive aspect. Sales channels for organic products include larger sales taking place outside the main channels, and this influences all the other Ps, i.e. how the products are defined, promoted, and priced (Paull, 2008). Among these, place seems to be the most decisive for understanding the organic food market as a place forms obvious restriction to the prospective influences of the other Ps. As a matter of fact, 54% people think the food security status in China is normal, 28% people consider that it is bad. 88% people think the problems of food safety in China exist in the sphere of raw materials and their processing (Chan, 2001). Therefore, the food situation in China provides a basis for the development of organic food. That is why more and more companies enter the green food field.
The price of organic products is also an important factor. The factors of environmental protection and food security are considered to be the result of the fact that the price of organic food is higher than the price of general food. From consumers point of view, most people do not choose organic food because of the high price. Some people buy organic food as gift-giving for celebration. However, that does not mean that organic food is luxury in China (Krystallis & Chryssohoidis, 2003). Another point shows that if consumers buy organic food for themselves to improve their health, they have to maintain long-term purchasing habits. The low and middle-income groups cannot allow purchasing organic food on a regular basis.
Chinese consumers think the factor of place of organic products is more important than other factors. It depends on physical characteristics of products. Shelf life of organic products, like vegetable, fruit and meat, is very short, but the quantity of daily consumption is large. Place factor is the most important way to remove the restriction of the high price. On the other hand, promotion is not necessary due to simple and visible physical characteristics together with media publicity (Paull, 2008).
The company will use several methods in order to implement the marketing mix. The company will increase its competitiveness through opening special outlets and differentiability of organic products. The indirect promotion by media also helps the company to increase consumer acceptance of the organic food concept. The company will better its competitiveness and the capability of differentiability of organic food though minor strengthening promotion. Due to the instability of food environment, huge Chinese food market provides a good basis for the company development.
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|Marketing Mix Analysis|