University Case Study Competition2014
Introduction
Saint Joseph’s UniversityFood Marketing Program, Haub School of Business• Meredith Brisbane• Jack Matsen• Monica Argenzio• Michael Bucher
Thank you for this opportunity!
Case Study Briefing
Fresh Encounter Supermarket: • Headquartered in Findlay, OH • 30+ stores in greater Ohio
Company Objective: • “We want to grow sales, customer count, item count and
profit…” (8/27/2013 conference call)Specific Local Question:
Should we consider local as…1. A “store within a store” merchandising tactic,2. An integrated “across the store” strategy, or 3. A hybrid of numbers one and two?
Approach
1. Research
2. Overall Positioning for Local
3. Customer Definition and Objectives
4. Program Strategies and Tactics
5. Program Schedule
Secondary Research
Reviewed 40 sources from these areas: • University studies • Industry studies• Academic articles • Government reports• Trade and popular magazines • Case studies (Balls Food Stores)• Websites and blogs
Industry Definition: Local
There are several different definitions of Local.Industry• Distance (USDA, 400 miles)• Size (Wegmans, 100 acres)• Drive-time (Whole Foods, 7 hours)• In state (Wal-Mart, Ohio Proud)
Consumer Definitions
Beyond distance, consumers consider multiple attributes:
• Fresh • Scale of Producer• Artisan• Wholesome
• Benefits to Local Economy • Personal Connection• Environmental Impact• Transparency Local?
Primary Research
We conducted a custom Shopper Survey.• Online Qualtrics Survey, Fall 2013 • 300+ shoppers across the US drawn from national
shopper panels • Representative sample of US demographics 18+
Consumer Definition
Most Important Characteristics of Local: 1. Family-owned 2. Close to home 3. Small or independent 4. Part of community 5. Regionally traditional or unique 6. Non-corporate 7. Specialty 8. Artisan
Distance Dimension
How do shoppers think of distance? • Same community or state (over 50%)• 117 miles • Not time
Benefits Ranking
Why do shoppers buy Local?1. Fresher (71)2. Better tasting (43)3. Higher quality (42)4. Support local economy/jobs (36)5. Knowing where and who your food comes from (36)6. Healthier, more nutritious (35)7. Supports community or small business (35)8. Picked later at their peak ripeness (34)9. Minimally processed, more natural (34)
Where do shoppers most expect Local products?1. Produce (89%)2. Dairy (77%)3. Bakery & Deli (74%)4. Natural & Organic (73%)5. Meat & Seafood (69%)6. Grocery Foods (53%)7. Non-Foods (49%)
Department Ranking
How does Local marketing need to improve?• Sampling • Advertising, Signage • Promotion, Specials• Variety • Finding Products
Improvements
Two Types of Customers
Heavy Local Users • Caucasian, Household size: 2, Age: 45-65, $45k-$60k• Influencers, purchase local at least once a week, demand
authenticity and competence.
Mainstream Shoppers • Caucasian, Household size 2.5, Age: 35-50, $30k-$45k• Families, price and quality, purchase local occasionally,
retailers must grab attention
30+ Fresh Encounter
Stores
60+ Kroger's
60+ Wal-Mart's
120+ Dollar
General’s
Save-A-Lot, Independent
grocers
Expected Retailers
Where do shoppers expect to buy Local?1. Farmers/green markets2. Natural food stores 3. Local independent grocery4. Specialty food stores 5. Whole Foods 6. Trader Joe’s7. Large chain supermarkets8. Supercenters9. Warehouse clubs10. Online grocers
• The definition of local is more than just distance
• Shoppers seek product quality, then other benefits
• Consumers are willing to pay more for Local products
• Shoppers expect certain retailers to sell local
• Intense competition requires differentiation
Research Insights
• Consumer-driven definition of Local needed
• Characteristics and benefits need to drive a Local program
• Consumers expect local in multiple departments
• Must cater to the needs of two different types of customers
Defining the Problem
“Leverage a local program to create relevance and interest in Fresh Encounter stores to attract new and retain current shoppers in an intensely competitive marketplace.”Two Target Customers:
• Heavy Local Users • Mainstream Shoppers
Local Positioning
Heavy Local Users
To have heavy local users trust that Fresh Encounter stores have a credible local mission/commitment
#1 Demonstrate knowledge and expertise
Objective Strategies
#2 Develop “deeper” product offerings
#3 Drive legitimacy through suppliers
Heavy Local Users
Strategy #1 Tactics
Demonstrate knowledge and expertise
Expand experience through digital technology
Train one Local Captain for each store
Train one Local Captain for each store• Personal experience and interaction with products and
suppliers
• Passionate locavore, supplier liaison, connected to community
• Store-level Local trainer
Heavy Local Users
Heavy Local Users
Strategy #2 Tactics
Develop “deeper” product offerings
Expand variety
Scale and leverage “Grow for it”
Scale and leverage “Grow For It” • Develop a hoop house garden in each
major market to supply clusters of nearby Fresh Encounter stores
Heavy Local Users
FE Store
GFI Garden
FE Store
FE Store FE Store
FE StoreFE Store
GFI Garden
FE Store
FE Store FE Store
FE StoreFE Store
Scale and leverage “Grow For It” • The 5-6 gardens would continue to function as CSAs
• Invite heavy local users to visit and participate
Heavy Local Users
Heavy Local Users
Strategy #3 Tactics
Drive legitimacy through suppliers
Show program results
Supplier in-store special events
Bring supplier into store with media
Mainstream Shoppers
Objective Strategies
To help mainstream shoppers realize and appreciate the benefits of buying local from Fresh Encounter stores
#1 Define Local and build awareness
#2 Demonstrate freshness, quality, and taste
#3 Consistent program presentation in store
Mainstream Shoppers
Strategy #1 Tactics
Define local and build awareness
Formally define “Local”
Integrate local products into circulars
Department specific local displays
Create “department specific” local displays • A hybrid strategy
• In 4 departments; assorted products - Produce, Dairy, Bakery & Deli, Meat & Seafood
• Authentic décor, fixtures and signage
Mainstream Shoppers
Mainstream Shoppers
Strategy #2 Tactics
Demonstrate freshness, quality and taste
Provide recipes and sample local products
Use multiple touch points in the store
Mainstream Shoppers
Strategy #3 Tactics
Consistent program presentation in store
Leverage “Local” dept. displays
Leverage signature products
Create a “Local” brand
Mainstream Shoppers
Create an umbrella brand and identity for the local program
Local Fresh Encounters
Local product call-out
Interactions with suppliers
Key attribute of local
Local source
Local Fresh Encounters
Implementation Schedule
Budget
Average sales per square foot (according to FMI)
x total selling area square footage for FE stores
x typical percentage of marketing spend by food retailer
x 10% of budget allocated to local program
= $125,000 yearly budget
= $4,300 per store
Expected Return
Balls Food Stores Example• Increased sales of local foods by average of 20-35%
annually
• Increased average basket size
• High customer count
• Began with hot house tomatoes
ConclusionLocal Fresh Encounters
GFI Garden
FE Store
FE Store FE Store
FE StoreFE Store