Background
Whole Foods Market is a natural foods supermarket that was
founded in Austin, TX in 1980 by John Mackey. There are now over 300 stores in the US, Canada,
and the UK and its business emphasizes the highest quality of perishable
foods, diverse product choices, and premium services. In the marketplace, Whole
Foods Market is a natural foods grocer offering a premium level of products and
services. Whole foods is also one of the top companies on the US Environmental
Top 25 Green Power Partners and annually contributes at least 5% of its annual
net profits to charitable causes.
Why Whole Foods
Market?
I am interested in Whole Foods for many reasons. First of
all, health and nutrition has been an interest of mine for quite a few years. I was fortunate enough to be raised in a home where my mom homemade dinner
every night, and really emphasized a healthy, well-rounded diet and lifestyle. I
specialized in nutrition in HOSA (Heath Occupation Students of America) in high
school, and I am now a group fitness instructor for UT Rec Sports and the City
of Austin. Further, I am also a wedding server and decorator at the first
certified organic events facility, Barr Mansion, where we recycle and compost
99% of our waste. I really enjoy both of
these jobs, and I think that the fact that they align well with my personality
and values plays a significant role in that. All of this background further matches well
with Whole Foods core mission and values. Oddly enough, I actually like grocery stores and there have been occasions where I have time to kill and will just stop in one and shop around. Continuing with free time, I would rather read Cooking Light or Family Circle than Vogue. However, I admire Whole Foods particularly for its diverse and high quality products as well as the premium services it provides such as cooking classes and special events. Lastly, upon graduation I hope to
become a Marketing Team Leader at one of the locations, and I am currently
applying for a Global Marketing Internship with the company.
Customer Segments and Value Propositions
Upper and Middle
Class Families
The first customer segment Whole Foods focuses on is middle
and upper class families. These families are willing to pay a higher price for
quality food to feed their families. Whole Foods meets different needs by
offering a wide variety of prepared meals so a busy family can still eat
quickly and conveniently without ordering take-out. It also provides a vast
amount of fresh produce and other goods that enable families to make natural,
high quality, homemade meals. This segment is important to Whole Foods because they have higher than average levels of brand loyalty which will keep them coming back again.
Value Proposition:
Whole Foods provides value through brand and convenience to this segment. Whole Foods has also established itself as a
high quality, natural brand, and even the private label products (365) are seen
as better quality than some other brands. In fact, as of January 2010, 75% of customers didn't know 365 was a private label partly because many products in the 365 range are made with ingredients that are of equal or superior quality to nationally branded alternatives sold within the store. The broad selection of prepared foods
allows customers to focus on their busy lives while still eating healthy meals
and snacks.
Example: I babysit
for a family in Austin and at least 80% of the time I am there, the kids take
some sort of prepared food (from either Whole Foods or Central Market) out of the fridge and warm it up for dinner. Both
parents have busy, successful careers and this works well for the family.
Organic Health Nuts
Another customer segment Whole Foods covers is the organic,
all-natural health nuts. This group is sometimes also vegetarian or vegan, and
Whole Foods really caters to that customer. Whole Foods really emphasizes its
all-natural, no-preservatives, fresh products which is very important to this
group, and they are willing to pay for that quality. Going beyond groceries, Whole Foods also offers household products, cosmetics, clothing etc. that emphasize "going green" or organic ingredients.
Value Proposition:
The high quality of food and organic selection offers top performance product
in the grocery category. Further, Whole Foods offers a lot of customization in
preparing your own boxed lunches, salads, etc. as well as keeping a variety of
products and flavors in stock.
Example: One of my
coworkers at MedaPoint is a vegan and often brings in fresh fruits and
vegetables to juice them or will bring in some sort of vegan tofu wrap. She is
a bit of the extreme of this segment, but Whole Foods definitely meets her
needs.
Busy, Health Conscious Young Professional
Next, Whole Foods caters to the busy, health conscious young
professional. This segment is employed, likely unmarried, and makes a decent
disposable income. This segment is also
interested in the cooking classes that Whole Foods provides as they make their
way into their adult lives and move away from the ramen they “cooked” in
college.
Value Proposition:
Whole Foods offers this segment convenience, performance and accessibility. They are able to
get in and out of the store quickly, and have to opportunity to warm up lunch
and sit at the tables in the stores. This segment is busy, so it is nice that
they can get lunch and groceries for the evening fast, but still treat
themselves to high quality goods.
Example: My
sister’s best friend is an Editorial Development Manager for a Multiview in
Dallas, and she often will grab lunch at Whole Foods with co-workers or friends
in the area. Since moving up in her career, she has been able to buy higher
quality food and join a gym, and has lost 20 pounds since graduating college. She
attributes this partly to her healthier food choices.
Involved and
Interactive millennial
Lastly, Whole Foods caters to the involved and interactive
millennial. This segment is slightly reached through different distribution
channels than the other segments. Not only does Whole Foods offer premium
quality, they also provide unique services that other grocers don’t provide
such as cooking classes and other promotional events like Yoga and seasonal
tastings. Much of this is promoted online and on social media where these
millennials spend an immense part of their days.
Value Proposition:
Whole Foods excels in performance for this segment with all of the extras it
offers outside of being a grocery store. It is convenient for this segment to get a
prepared meals for time crunched lives (such as students), and it is also convenient for them to attend a promotional event and do some grocery shopping. Whole Foods also offers samples (often of their private label) to pique the interest of these shoppers to something free and new during their shopping experience.
Example: Whole
Foods has even offered Groupons to their cooking classes to combat this
segment’s slightly lower price point. It also offers events like free yoga
classes (Core Power Yoga on the roof of the Lamar location) once a week to draw
this segment into the store.
Works Cited
Colvin, G. (2013). Whole Foods’ Other CEO on Organic Growth.
Fortune, 167(7), 128.
Grocery Retailing. (2013). Mintel.
Osterwalder, A., & Pigneur, Y. (2009). Business Model Generation. Self
Published.
The Private Label- Food and Drink Consumer. (2010). Mintel.
The Whole Strategy of Whole Foods. (May 2006). October 7, 2013, from ucdavis.edu. http://agecon.ucdavis.edu/people/faculty/shermain-hardesty/docs/the-whole-strategy- of-whole-foods.pdf
Whole Foods Market- Lamar (n.d) Oct. 8, 2013, from Whole
Foods Market website http://www.wholefoodsmarket.com/node/14/?set_store=6606
Whole Foods Market, Inc. SWOT Analysis. (2013). Whole Foods Market, Inc. SWOT Analysis, 1-8.