wesolve marketing challenge 2016
TRANSCRIPT
Groman’s FoodsIntroducing Grocer-Ease, the grocery list you don’t have to make.
Sara GardepheRahul GuptaJenika G. Shannon
• Groman’s Food Inc., a high quality organic grocery food store, has a strong brand equity for its healthy selection of products. It currently operates 88 stores in six major north-eastern states in the US.
• Groman’s is experiencing stagnating growth, explained by its reliance on word-of-mouth marketing and an aging consumer base.
• It is also facing stiff competition from other healthy grocery food stores, restaurants and on-demand food services.
• At present, women aged 35-55 contribute about 61% of Groman’s profit across all locations.
• With only 3% of the business coming from the Young Adults segment, it presents a huge opportunity to be captured.
3.18%12.74%
61.15%
22.93%
Profit Contribution
Young Adults(Age 18-34)
Men(Age 35-55)
Women(Age 35-55)
Seniors(Age 55+)
Groman’s is facing sluggish growth in the increasingly competitive grocery healthy foods market.
• Increase total market share through improved customer segmentation and refined value proposition.
• Capture interest and loyalty of younger consumer base.
• Expand footprint and increase brand awareness by opening new stores in three metropolitan areas outside the current geographical presence.
Steps to Success
Groman’s New Target ConsumerAge: 18-34
Gender: Male/Female
Students & Young ProfessionalsIncome <$75K
Health-consciousTime-constrained
AdventurousEarly adopters
Store Experience
Customer Service ∙ Engaging ∙ Personalized
Shopping Experience
Perceived Price ∙ Simplicity ∙ Time
Brand Values
Community ∙ Environment ∙ Health
Consumer Needs
• Millennials are often perceived as self-centered. In actuality, they focus on the betterment of themselves in order to give back to the greater good.
• They need to feel special, and crave a sense of belonging.
• With so many options, and little brand loyalty, millennials tend to be highly price- and time-sensitive.
Our proposed go-to-market strategy will position Groman’s with a competitive advantage in five areas key to attracting millennials.
How to Reach Target Consumer
Customized Meal Plans
Engagement
Perceived Price
Time
Healthy Lifestyle
Marketing Strategy
• Leverage brand equity in healthy foods to enhance competitive advantage.
• Engage target segment by providing weekly suggested lists of grocery items, meal plans, and recipes that align with their health objectives and fitness plans.
• Promotional activities to build a community experience for the shoppers: Grocery runs, Scavenger hunts, Healthy Fridays, Cooking Competitions (refer to Appendix).
• Pilot Groman’s Grocer-Ease (refer to slide 8) at select stores (25% of the existing 88 stores) to fill remaining need gaps of target segment.
Store Expansion
• Open new stores in locations proximal to current stores to scale up presence and outreach.
Recommendations
App Overview
The Groman’s Foods mobile app is designed to be simple, informative, convenient, and time-saving. The main features include:
• Store map
• Loyalty program integration to track consumer behavior
• Personalized product and coupon suggestions (based on shopping patterns)
• Groman’s Grocer-Ease
Groman’s FoodsWelcome, Jennifer!
Better groceries at better prices.You have SAVED $54.97 this year!
We thought you might enjoy our New Vanilla AlmondMilk! It’s got zero calories and zero artificial sweeteners - but it’s still got all that yummy flavor!
SAVE $1.50@$6.99, just for you.
Try it for yourself.It’s waiting patiently
.
Groman’s has got the goods!
Add to PlanMain Menu
Day 3Meal 1:Egg white omeletFruit + Oatmeal
Meal 2:Baked chicken breastSteamed broccoliWhite rice
Meal 3:Oven-roasted turkeySweet potato hashGrilled asparagus
Day 4
Bulking Meal Plan
CheckoutChoose Plan
Pick up the groceries for your Bulking Meal Plan before 6:00 pm on Thursday, November 17th.
Just present this QR code to any Groman’s cashier in Rochester, NY.
Groman’s no-shop groceries:fresher, faster, for you.
Grocer-Ease WorkflowGroman’s Grocer-Ease will revolutionize the way health-conscious millennials buy food – providing them with personalized and convenient nutritional guidance. With the app, shoppers can:
• Add a weekly meal plan to bag based on fitness goals (i.e., bulking, shredding, cutting, losing).
• Add non-meal plan items to bag.
• Pay within the app.
• Save time and eliminate need to wander aisles by utilizing EZ pickup ($6 service fee).
Launch the app; Offer coupons (at store checkouts & public places) to achieve the 25K+ download target
Roll-out the predictive
analytics engine to push new, higher-margin
products
Marketing Strategy Timeline
Identify potential partners
(dieticians, fitness groups)
Offer bundled meal plans
through in-store promotions
(Healthy Fridays)
Promote the new app in-store and online (Groman’s website, social
media)
(4-8 weeks)
(4-6 weeks prior to app launch)
(Starting 2 weeks prior to app launch)
Groman’s Foods
(6-12 months post launch)
Estimated benefit of the new marketing strategy is ~$30M
Additional Staff $1,445,400
App Development(one-time) $25,000
Wellness Partnerships $25,000
Miscellaneous Expenses (safety budget) $100,000
Total Expenses $1,595,400
* Additional staff would be required for initial in-store promotions and packaging/pickup services* Salary for additional staff is calculated as:Man-hours per day: 20Hourly wage: $9 (min. wage)# Stores: 22 (pilot in 25% of 88 stores)
Young Adults(Age 18-34)
Men(Age 35-55)
Women(Age 35-55)
Seniors(Age 55+)
$6,250,000 $25,000,000
$120,000,000
$45,000,000 $25,000,000
$37,500,000
$120,000,000
$45,000,000
Projected Impact on Profits
Profit (current mkt share) Projected Profit (new mkt share)
* All numbers are in Millions ($)* New marketing strategy will help capture more market share from Young Adults and Men aged 35-55; resulting in $31.25M add. profit
Estimated Costs
Shortlisted 9 locations based on geographical proximity. Assessed population demographics that best suit Groman’s target consumer goals
Raleigh, NC
Charlot
te, N
C
Columbu
s, OH
Cincinnati
, OH-K
Y-IN
Richmond
, VA
Virginia
Beach
-Norfo
lk-Newpo
rt News,
VA-NC
Hartford
-Wes
t Hartfo
rd-E
ast H
artfo
rd, C
T
Pittsbu
rgh,
PA
Clevelan
d-Elyr
ia, O
H -
400,000 800,000
1,200,000 1,600,000 2,000,000
Market Size by Target Segments, 2015
Young Adults(Age 18-34)
Men(Age 35-55)
Women(Age 35-55)
Seniors(Age 55+)
* 3 Locations selected based on population demographics and growth rates* Population # derived from growth rates in Appendix 2 of the case applied on 2010 US Census figures.
Current Footprint (88 Stores)NY (43)PA (18), VA (9)NJ (8), MD (7), MA (3)
12.66%
9.44% 6.29%2.04%
5.23%
2.87%
-0.09%
-0.14%
-0.79%
Wrap-upGroman’s can capitalize on a growth opportunity by mobilizing traditional marketing tactics, launching an app, and expanding to strategic locations. To reach its goals, Groman’s must:
Leverage healthy brand image
Engage millennials
Increase reach
Appendix - Store Location analysisMetropolitan Area 2015
Estimate2010
CensusChange Current Market Share Improved Market Share
Young Adults(0.25%)
Men(0.5%)
Women(1%)
Seniors(1.5%)
Young Adults(1%)
Men(0.75%)
Women(1%)
Seniors
(1.5%)
Raleigh, NC 1,273,568 1,130,490 +12.66% 761
958
1,998
3,657
3,045
1,436
1,998
3,657
Charlotte, NC 2,426,363 2,217,012 +9.44% 1,126
1,412
2,959
5,946
4,503
2,118
2,959
5,946
Columbus, OH 2,021,632 1,901,974 +6.29% 1,223
1,384
2,812
6,324
4,891
2,076
2,812
6,324
Cincinnati, OH-KY-IN 2,157,719 2,114,580 +2.04%
1,216 1,531
3,153
7,851
4,866
2,296
3,153
7,851
Richmond, VA 1,271,334 1,208,101 +5.23% 759
936
1,994
4,874
3,036
1,403
1,994
4,874
Virginia Beach-Norfolk-Newport News, VA-NC
1,724,876 1,676,822 +2.87% 1,116
1,156
2,467
5,845
4,465
1,734
2,467
5,845
Hartford-West Hartford-East Hartford, CT
1,211,324 1,212,381 -0.09% 647
871
1,818
4,900
2,589
1,306
1,818
4,900
Pittsburgh, PA 2,353,045 2,356,285 -0.14% 1,219
1,621
3,363
10,961
4,875
2,431
3,363
10,961
Cleveland-Elyria, OH 2,060,810 2,077,240 -0.79%
1,032 1,426
3,027
8,737
4,129
2,139
3,027
8,737
Appendix – Projected profit
Segment Sales (in $B)
Avg. Profit Margin
Old Mrkt Share
New Mkt Share Revenue Profit (current
mkt share)Profit
ContributionProjected
Revenue (new mkt share)
Projected Profit (new mkt share)
Young Adults(Age 18-34) 100 2.50% 0.25% 1.00% $250,000,000 $6,250,000 3.18% $1,000,000,000 $25,000,000
Men(Age 35-55) 250 2.00% 0.50% 0.75% $1,250,000,000 $25,000,000 12.74% $
1,875,000,000 $37,500,000
Women(Age 35-55) 400 3.00% 1.00% 1.00% $4,000,000,000 $120,000,000 61.15% $
4,000,000,000 $120,000,000
Seniors(Age 55+) 150 2.00% 1.50% 1.50% $2,250,000,000 $45,000,000 22.93% $
2,250,000,000 $45,000,000
$7,750,000,000 $196,250,000 $9,125,000,000 $227,500,000