1. Hot Button: motivations whose salience and impact on markets are significant and growing
- Strategic Market Management (9th Edition) – Aaker – Page 33-34
2. Strategic Uncertainties: focus on specific unknown elements that will affect the outcome of strategic decisions
- Strategic Market Management (9th Edition) – Aaker – Pages 22-23
3. Prospector: operates within a broad product-market domain that undergoes periodic redefinition
- Marketing Strategy (7th Edition) – Walker and Mullins – Page 63
4. Active Partner: an invested person who is involved in the daily operations
- Strategic Market Management (9th Edition) – Aaker – Page 34-35
- Google Search - Definition of active partner in business
5. Benefits: desirable attribute of a good or service, which a customer perceives he or she will get from purchasing
- Strategic Market Management (9th Edition) – Aaker – Page 28
- Google Search - Definition of benefits in business
6. Brand Loyalty: when consumers become committed to your brand and make repeat purchases over time
- Strategic Market Management (9th Edition) – Aaker – Pages 29-30
- Google Search - Brand loyalty definition
7. Unmet Needs: is a customer need that is not being met by the existing product offerings
- Strategic Market Management (9th Edition) – Aaker – Pages 35-36
Recently, Whole Foods, who is known for organic and healthy food, has seen a decrease in its sales. Organic/healthy food is a Hot Button for buyers. Lately, stores like Costco, Walmart and Trader Joe’s have been growing in the organic marketplace. But what can Whole Foods do stay at the top (1)? According to Leslie Patton and Craig Giammona, Whole Foods is planning to create a Whole Foods for Millennials. I believe, however, that Whole Foods is making a mistake. They should focus on their current customer base, rather than trying to acquire new customers.
Unfortunately, Whole Foods did not appear to be prepared for Strategic Uncertainties. “It’s about creating a coherent set of scenarios across all critical variables in an analytically rigorous fashion. The goal is to prod leadership to monitor change on a regular basis and move ahead of competitors as future states begin to take shape” (Forbes). Whole Foods should have realized that the health food trend was growing, along with the sales of organic food. With this growth comes competition. Costco and these other stores saw the trend growing and jumped on the bandwagon.
Whole Foods needs be a Prospector. It should be a “first mover” and respond “rapidly to early signals concerning areas of opportunity” (Walker and Mullins). Four things it could have done to prepare to compete against price sensitive stores are: “define which uncertainties the company faces, create a set of probable scenarios, devise a specific set of strategic options, and identify a clear set of signposts” (Forbes).
One way Whole Foods can keep their current customers is making them Active Partners. “Encouraging active dialogue, mobilizing customer communities, managing customer diversity, and co-creating personalized experiences” (Aaker), allows Whole Foods to understand the Benefits sought by their customer base. Keeping the lines of communication open, allows customers to be heard and have their needs/wants met.
Whole Foods should focus on retaining the customer base that is expressing Brand Loyalty. It should follow Customer Relationship Management (CRM), which involves, “identifying, attracting and retaining the most valuable customers to sustain profitable growth” (The Economist). “Retention is likely to be more profitable than acquisition” (CMO by Adobe) and the cost of acquiring new customers is “5 times more” (Forbes) than retaining current customers.
It could be dangerous for Whole Foods to focus on attracting Millennials because they lack Brand Loyalty (2). They want to pay, “as little as possible for products” (Forbes) but are, “also much more willing to pay more for specific attributes in food, such as organics/natural, ethnic and specialty foods” (Forbes). By explaining the Benefits of shopping at its store, and because Millennials are willing to pay more for attributes in food, Whole Foods can attract the Millennials’ business to its current stores.
While Whole Foods realized the Unmet Needs of Millennials, it could have slowly administered those changes into its current stores, rather than creating a new store/brand. It is risky for Whole Foods to create an extension because it could, “damage the original brand by weakening existing associations or adding new, undesirable ones” (Sloan Review). Current Whole Foods customers would most likely start shopping at the new Millennial Whole Foods because it offers similar healthy food at a lower price. This shift could cost Whole Foods profits. If Whole Foods wants to remain the top (1) health food store, they should focus on updates and administer the changes Millennials want to its current stores.
1. http://www.today.com/id/27573342/ns/today-today_health/t/americas-healthiest-supermarkets/#.V1SgUfkrLIU2.
2. http://www.forbes.com/sites/bethhoffman/2012/09/04/how-millenials-are-changing-food-as-we-know-it/#7e0d6c45339d
- Aaker, David. "Brand Extensions: The Good, the Bad, and the Ugly." MIT Sloan Management Review RSS. 15 July 1990. Web. 3 June 2016. <http://sloanreview.mit.edu/article/brand-extensions-the-good-the-bad-and-the-ugly/>.
- Aaker, David A. Strategic Market Management. 9th ed. New York: Wiley, 1995. Web. 3 July 2016. <https://blackboard.temple.edu/bbcswebdav/pid-4996933-dt-content-rid-52170905_2/courses/51201652400/316201531621_ImportedContent_20150422032019/External and Customer Analysis R7(1).pdf>.
- "What Is Benefit? Definition and Meaning." BusinessDictionary.com. Web. 3 June 2016. <http://www.businessdictionary.com/definition/benefit.html>.
- Davidson, Jacob. "10 Things Everyone Spends Their Money On... Except Millennials." Time. Time, 16 July 2014. Web. 3 June 2016. <http://time.com/money/2820241/10-things-millennials-wont-shell-out-for/>.
- "A Case For Embracing Uncertainty (And Turning It Into Competitive Advantage)." Forbes. Forbes Magazine, 13 Aug. 2015. Web. 3 June 2016. <http://www.forbes.com/sites/baininsights/2015/08/13/a-case-for-embracing-uncertainty-and-using-it-for-competitive-advantage/#16b0272c4caf>.
- Hoffman, Beth. "How 'Millennials' Are Changing Food as We Know It." Forbes. Forbes Magazine, 4 Sept. 2012. Web. 3 June 2016. <http://www.forbes.com/sites/bethhoffman/2012/09/04/how-millenials-are-changing-food-as-we-know-it/#7e0d6c45339d>.
- "Brand Loyalty Definition | Investopedia." Investopedia. 2010. Web. 3 June 2016. <http://www.investopedia.com/terms/b/brand-loyalty.asp>.
- "Active Partner Definition | Investopedia." Investopedia. 2011. Web. 3 June 2016. <http://www.investopedia.com/terms/a/active-partner.asp>.
- Jao, Jerry. "Customer Retention Should Outweigh Customer Acquisition." Customer Retention Should Outweigh Customer Acquisition. 2 Aug. 2013. Web. 3 June 2016. <http://www.cmo.com/features/articles/2013/7/18/customer_retention.html>.
- Lawerence, Alex. "Five Customer Retention Tips for Entrepreneurs." Forbes. Forbes Magazine, 1 Nov. 2012. Web. 3 June 2016. <http://www.forbes.com/sites/alexlawrence/2012/11/01/five-customer-retention-tips-for-entrepreneurs/#3671f1cd17b0>.
- Paul, Pamela. "America’s 10 Healthiest Supermarkets." TODAY.com. 2008. Web. 3 June 2016. <http://www.today.com/id/27573342/ns/today-today_health/t/americas-healthiest-supermarkets/#.V1SgUfkrLIU>.
- "Customer Relationship Management." The Economist. The Economist Newspaper, 18 Sept. 2009. Web. 3 June 2016. <http://www.economist.com/node/14298886>.
- Walker, Orville C., and John W. Mullins. Marketing Strategy: A Decision-Focused Approach. 7th ed. Boston: McGraw-Hill Irwin, 2008. Web. 3 June 2016. <https://blackboard.temple.edu/bbcswebdav/pid-4996930-dt-content-rid-52170871_2/courses/51201652400/316201531621_ImportedContent_20150422032019/Businness Strategies and Marketing Implications R1(1).pdf>.