Retail value of UK organic market
().
An important factor in considering the Organic retail market is that the leading grocery stores and supermarkets, which are now responsible for 80% of the sales, increasingly dominate it.
COMPETITIVE MARKET
In launching a new line the standards we set will be greatly influenced by the existing market competitors and their strategies, because they will have an effect on the consumer behaviour as well as the retail market. Porter analyses the factors influencing the competitive atmosphere in the business field.
()
The forces affecting the launching of the new line are:
1.Industry Competition- with the major players like Heinz (53.4% market share), HIPP (16.7% market share), Cow and Gate, Baby Organix (50 organic recipes) and store brands i.e. Boots organic baby food range.
2.Buyer Power- in relation to retailers willing to stock a new brand especially when they already stock products from major products mentioned above.
Competition can therefore be placed under two types:
1.Similar specific- These are companies Mentioned above producing a similar product (organic baby food) and having the same target market. These are the more direct competition P&F Naturals face.
2.Similar General- other competing organic products that are for a different age segment i.e. fresh organic products, or baby foods that are not organic i.e. Nestle products, Yeo valley organic products.
Target audience and Retail target market
As a new product line launch P&F needs to be careful in defining their target audience. They are still new and need to select a fairly average audience, so they can measure their success without risking too much monetary input as an unestablished line.There are subtle differences in our chosen audience and market but has a significant communicative function.
The TARGET AUDIENCE, are the people who need to hear and receive the information on our product. These are people who will benefit from our product:
1.Parents
- Women, specifically ages 20- 45 who earn an above average salary
- Pregnant women
- Working young couples
- Working single parents
- Organic lifestyle consumers
2.Retailers, as they will facilitate the functioning of the distribution of the line. These would be:
- Multiple retail companies like supermarkets
- Specialist Organic retailers
The TARGET RETAIL MARKET consists of the above mentioned. As a manufacturer and wholesaler P&F needs to attract the retailers as intermediaries between the company and the end user.
The Specific target market chosen has been influenced by:
- Geographical location and coverage of the UK market
- Market share
- Sales in the organic market and product lines
- New market penetration prospects
- In store media advertising that is cost effective
The graph below shows where the sales in the distribution are concentrated.
U.K. Retail Sales of Organic Food by Distribution Channel
().
Grocery multiples dominate the market but the health food shops also make a sufficient contribute in the market share i.e.
- Planet organic (London based)
- Green Ways Natural food Stores
- Fresh `n Wild
- Holland and Barrett.
These are the specific retailers I have selected out of a possible 14 supermarket chains, as a result so we not only have a large consumer exposure but also can be targeted and explore other markets that competitors have not made adequate use of.
WAITROSE -though this chain store only owns 140 branches, in the Southeast region of England, they are at the forefront of the market with 15% of sales in the organic section. 60% of the baby food sales were in the organic segment, and stocked 1000 organic product lines by 2000.They currently have sales of £2million a week.
They are great retail target because they are aware of the consumer trends and demands and may have a productive input into the “P&F Naturals advertising campaign.
TESCO -Is the largest supermarket retailer in the UK, boasting of 1982 branches in the UK.Their initial stocking of organic products was slow and tagging behind the likes of Waitrose and Sainsbury. In September their range increased to 745 lines. They matched Sainsbury in 2002 in the organic market share. Tesco is a well-established retail brand with the widest consumer exposure. This will assist with the implementing of the Pull media strategy, which will be explained further into the report. It is not geographically limited and will be a useful retailer when we need to measure the success of our objectives according to region and then, in future specify and better target our market and audience.
BOOTS - is a health and beauty multiple retailer with 1400 stores nationwide, and targeting the market form a different perspective. It is also a pharmacy which means customers will go there not jus for grocery but other specialised products of which we want “P&F Naturals” to be a part of.
Aside from the major supermarket chains and health-food stores that sell organic foods as the use of independent heath stores is primary to our function as a specified product, as well as targeting the relevant demographics in our market segment.
HOLLAND AND BARRETT – The store chain has a significant 520 outlets nationwide. It is the largest UK independent health food retailer and have a free catalogue sent to each customer that requests it on their website. This also means they have a database of existing customers interested in health foods, making our media use more targeted and cheaper.
COMMUNICATION OBJECTIVES
The following are the objectives that should be implemented over the 12-month media plan and proposal to create a successful line and a measurable campaign at the end of 12 months. They are to:
- Launch a new product line
- Raise awareness of brand and company name
- Give useful information on the benefits of our organic baby food range
- Encourage distributors to stock our brand/ product
- Persuade unknown potential purchasers to identify themselves
- Position our image, and value offer well and positively
- Use the media to give a different angle of information to different potential buyers
- Use the most effective media to achieve all these goals
- Have a good B2B media network
- To later support the launch campaign for sustained effect and brand awareness
- Provide an interactive platform between P&F, Retailers, and consumers
MEDIA OBJECTIVES
To achieve the communication objectives the use of media has to be targeted, efficient, sustainable and cost effective. They need to carry the intended message correctly and directly t the audience. The factors that will ensure this is achieved are Reach, Weight, Frequency, Cost and Continuity.
MEDIA ANALYSIS
Media available for advertising is vast and this is where we consolidate the target audience and market and match them to the appropriate media, as the media will have different capabilities at different times during the12 month duration.
Class, Type and the particular Vehicle to be used can categorize the media.
Traditional sources of media are;
- Television
- Newspapers, Magazines
- Radio
- Direct Flyers
- Posters
- Point of Sale
Cyber media:
- Internet
- Interactive television
- Call centre
- SMS
TELEVISION
Advantages
- Visual and audio therefore allows for maximum creativity
- Appeals to retailers
- Links with other media i.e. internet, newspapers
- Interactive with the mass audience
- Repetition in different channels allows for increased product recall/awareness
- Representational of reality
- Market selectivity
Disadvantages
- Expensive
- Clutter of ads reduces focus of the audience
- Perishable advertising message
- Can be niche medium because of selective geography and satellite services that need consumer subscription
RADIO
Advantages
- Mass medium
- Interactive medium
- Market selectivity- according to gender, age, race etc.
- Flexible
Disadvantages
- Poor reception
- No visual- limits creativity
- Easily perishable
- Doesn’t demand undivided attention
NEWSPAPERS, MAGAZINES
Advantages
- Targeted to demographic factor
- Retainable, long life Ad capability
- Editorial support
- Flexible Ad insertion
- Commitment achieved as decision to buy is intellectual
- Supports other forms of media i.e. TV, Point of sale
- Market selectivity
Disadvantages
- Short news life
- Newspapers have poor quality print
- Passive and static limits creativity
- Limited availability- according to the number of copies printed
CYBERMEDIA
Advantages
- Targeted to a specific audience
- People choose to visit it, so it has a high personal interactivity
- High creativity
- Very topical
Disadvantages
- Can be an idle medium for unpredictable lengths of time
- Niche market medium
- Clutter with pop ups and unwanted information
PROMOTIONAL MEDIA
Point of sale (POS), direct mail
Advantages
- Immediate link of Ad and actual product
- Impulse purchasing
- Flexible
- Trial opportunities- testers
- High Impact
- Long life permanence
- Retail market and Target market selective
Disadvantages
- Needs the audience in specific place to view Ads
- Limited space
- Clutter with competitors promotions
- Is made expensive because of the need to produce many posters, pamphlets, packaging
MAIN B2B MEDIA ALTERNATIVE MEDIA
1.Trade material- Magazines 1.Sales Literature
2.Cyber Media- Internet 2.Exhibitions
3.Direct Mail
4.Below the Line-POS
-Body media
-Named Goods
PUSH AND PULL MEDIA STRATEGIES
In the Push communication flow the information transcends from the manufacturer to wholesaler to retailer and consumer.
P&F initiates the communication process through B2B media to attract the retailers who will then in turn communicate the product information to the targeted consumer demographic. Push media P&F can use include:
- Trade magazines
- Cyber media
- POS and other Below the line media
In the pull flow P&F will disseminate the information using pull media such as
- Television
- Magazines
- Outdoor
- Direct mail
To the consumer, who then demands the product from the intermediary retailers, which will be the multiple retail supermarkets and the independent shops. The product will be produced as a result of customer demand and is pulled down the distribution chain.
PROPOSED MEDIA SELECTION
Out of the available media we have selected the following as a the final media and their respective media vehicles
Traditional media
Television- that we will use as our main pull strategic media to target our audience of 5,104, 142 (consumers and retailers) and will also address the greater mass audience that will provide new potential consumers
-
ITV1 channel- boasts of the largest audience at 20% market share (financial times), good programme production and high ratings. It is the largest investor in original programming of any European broadcaster outside the BBC.
Magazines- this will select the market according to a specific demographic and also plays a role as a pull medium.
-
Mother and Baby magazine has a circulation of 80,876 (ABC) and a monthly readership average of 709,000.It covers pregnancy issues up to 2 years. It can be later used for promotional activities i.e. coupons.
-
Observer Food magazine has a high readership of1.3 million (NRS), targeting a well-educated and upmarket section of the population. 54% earn more than the national average income. Published every second Sunday,
Cyber Media
Internet- as it is a main source for business transactions especially
Concerning the organic market. It makes purchasing less tiresome, but has effective retail advertising potential.
-
The Whole Earth website- , provides an online shopping area that also has a section purely for children- Whole Earth Kids, stocking products for wholesalers.
B2B Media
Trade Magazines- that will intercept the retail market directly and allow information retention, and is the main push flow medium. They dominate other media forms in terms of usefulness to business decision makers. Our chosen magazine will directly target the multiple retailers selected in the target market.
-
The Grocer offers industry news and has a healthy circulation of 40,272 (ABC) a week. It is an ideal platform to establish the “P&F Naturals” as a brand as they produce brand reports. 59% of the readers have access to the Internet and therefore we’ll create a link with our chosen Internet site.
