Beresford Coker
Devry University BUS 319
November 19, 2006
Product/Service Overview
In today’s world retail business is part of our everyday life .You can’t isolate
your life from retail business, as a matter of fact it is virtually impossible. However you
can chose where to shop, what to buy and who to conduct business with. These decisions
are influence by several factors which vary from consumer to consumer. In the retail
industry there is a high competition between grocery stores as they strive to capture a
decent share of the customer base. Conventional grocery stores are the traditional stores
that our grandparents use to shop. However the trend in the industry has dramatically
shifted to natural and organic food. This has caused grocery retailers to change the way
they conduct business and more retailers are now selling organic food more than ever
before.
An interesting fact about organic food trends states that “the everyday use of
organic products of all kinds will be both accepted and routine by the year 2025.( June
2006 organic food trend) Organic food products is the best tasting and most nutritious
food available. According to wikipedia encyclopedia “Organic food is produced
according to legally regulated standards. For crops, it means they were grown without the
use of conventional pesticides, artificial fertilizers or sewage sludge, and that they were
processed without ionizing radiation or food additives. For animals, it means they were
reared without the routine use of antibiotics and without the use of growth hormones.
Also, at all levels, organic food is produced without the use of genetically modified
organisms”. (www.en.wikipedia.org)
According to the U.S census bureau estimate for 2005, Nashville Tennessee has a
population of 575,261. Opening three Sunshine grocery stores in Nashville
simultaneously will be a very good move for the business and the community. Nashville
is home to more than 250 health care companies, including Hospital Corporation of
America, the largest private operator of hospitals in the world. As of 2006, it is estimated
that the health care industry contributes $18.3 billion a year and 94,000 jobs to the
Nashville-area economy (www.en.wikipedia.org). The strong presence of the health care
industry will help sunshine grow faster given that they sell organic products. People with
special health needs have a preference for organic food. There is also a lack of grocery
retail growth in the city.
SWOT ANALYSIS
Nashville has the largest metropolitan area in Tennessee. Davidson County has the
largest population in the Nashville city below is a chart from homefair.com, analyzing
Davidson County in Nashville TN
Demographics
Population
Details
View
Population Change Since 1990
Population Density
Median Age
Income and Jobs
View
Details
Nashville
37211
Tennessee
National
63,010
5,888,107
293,686,994
16.00%
21.00%
18.00%
2,731
139
N/A
33.02
36.00
35.17
Nashville
37211
Tennessee
National
$40,134
$39,441
$45,683
Average household Income
$48,821
$52,015
$60,586
Per capita income
$22,627
$21,375
$23,504
Median Disposable Income
$35,016
$34,490
$39,327
$42,447
$43,694
$48,284
Median Household Income
Average Total Household Expenditure
View
View
Climate
Details
Nashville
37211
Tennessee
National
Average January High Temperature
45.60ºF
45.96ºF
N/A
Average January Low Temperature
27.90ºF
25.93ºF
N/A
Average July High Temperature
88.70ºF
88.19ºF
N/A
Average July Low Temperature
69.50ºF
66.13ºF
N/A
48.11
53.74
N/A
60
143
100
Annual Precipitation
Earthquake Risk
Weather Risk
View
61
73
100
Air Pollution Index
View
105
109
100
Population in this city has increased 16% since 1990. Even though that percentage is
below Tennessee and National average it is still a double digit change large enough to
attract businesses. Sunshine grocery can benefit overtime with increase in customer count
assuming all other things remain constant. The median age is also good for sunshine
because it is an active workforce. The per capita income is higher than Tennessee‘s
average but lower than the national average. This implies that all the potential consumers
have more disposable income to spend in sunshine Grocery than the rest of Tennessee.
There is a potential for higher demand due to increase in purchasing power .The climate
report is typical for the Tennessee area.
There are a lot of industries in Nashville and Nashville is one of the major cities in
Tennessee. Nashville has three companies that are part of fortune 500 best companies list.
Opening Sunshine Grocery in this location will not only attract media attention but will
boost the economy in terms of attracting new businesses. Sunshine Grocery will be the
first Organic food store in the area. As more and more people are going organic the
possibility for a wider business expansion is high in Nashville. Based on the performance
of the business within the first year, Sunshine will realize the potential for growth within
other major cities.
Some opportunities for Sunshine grocery to be a leader in the organic food chain
around Nashville are to actively participate in community events and all major annual
events. These events include CMA music Festival, Tennessee States fair, Nashville Film
festival etc. Activities for sunshine will be distributing free healthy and organic food
products, special diets brochure, and free food and drinks. This will expose the business
and there mission which is to get people to eat healthy organic food. It also gives people
an opportunity to taste their products. Sunshine can also donate to some non profit
organization that cares about the environment so that they can be seen as socially
responsible. Sunshine can also conduct classes in there stores geared towards different
health challenges in the community and the benefits enjoyed from eating organic foods.
All these activities will increase awareness in the community for organic food and will
eventually results to increase sales for sunshine and making the business profitable.
Competitive Analysis.
Competition is part of our everyday life but in business the level of competition is very
high and if a business is slow to react it can affect their bottom line. One major
competitor that will affect Sunshine Grocery is Whole Foods Market which is world’s
number one organic retailer .They have a new store opening schedule for Nashville in
2007 (wholefoods.com). Whole Foods Market is renowned for excellent customer service
and high quality products. With Whole Foods Market entering the market sunshine will
definitely take a hit on sales. Moreover for everywhere there is a Whole Foods Market,
Trader Joes (privately own grocery chain) will conveniently locate a store at least six
miles from Whole Foods Market. This will increase the number of competition for
sunshine. Below is also a list of natural/ organic stores in Tennessee that are not currently
in Nashville but have a potential of spreading out to Nashville after the opening of
sunshine grocery. This list is from green people .org.
• Right way Natural Foods - Health Food, Supplements, Sports Food, etc.. (Athens, TN)
Independently, locally owned and operated since 1969.
• Bristol Health Food Store -(Bristol,
TN)
• Green Life Grocery - Full service grocer. (Chattanooga, TN)
• Whole Earth Grocery - Complete Natural Foods Store and Lunch Cafe. (Gatlinburg, TN)
• The Health Barn - Organic Groceries and Natural Supplements. (Johnson City, TN)
• Good Food Grocery - . (Kingsport, TN)
• Three Rivers Market,
- Three Rivers Market, Knoxville's Community Food Co-op
Knoxville's Community Food Cosince 1981. (Knoxville, TN)
op
• Earth Fare - We feed your body and mind naturally.
(Knoxville, TN)
• Morningside Buying Club - Morningside: Better food for a better you!. (Liberty, TN)
• Harvest Time Natural Foods - Your Health is Our Concern. (Lobelville, TN)
• Square Foods Deli & Market - Square Foods Natural Market. (Memphis, TN)
• Wild Oats Market
- Non-Conventional (Organic) and Conventional (Non-Organic)
grown foods.. (Memphis, TN)
• The Turnip Truck Natural
- LOCAL OWNED MARKET
Market
This is not good news for Sunshine Grocery however taking the lead in the Nashville
market is good news. Because being a leader you have the ability to change the direction
of your followers in this case all potential competitors. Things that will set sunshine apart
from all other competitors are the marketing strategies and marketing mix that will be
implemented.
Target Market
The market segment to which a particular product is market is known as the target
market. Identifying a target market is key to the success of any business. This is because
you can determine what different segments you have, what type of products for each
segment and how many products for each segment. Sunshine grocery has a perfect
opportunity to be successful in the Nashville area if the store is properly segmented. The
variables to consider when segmenting the business are geographic, demographic and
psychographic. According to wikipedia “Nashville has the largest metropolitan area in
the state of Tennessee, spanning thirteen counties. The Nashville Metropolitan Statistical
Area encompasses the Middle Tennessee counties of Cannon, Cheatham, Davidson,
Dickson, Hickman, Macon, Robertson, Rutherford, Smith, Sumner, Trousdale,
Williamson, and Wilson”(www.en.wikipedia.com). This is a larger area enough for
customer acquisition and retention. This can only be done by determine the different
demographics they fall and appealing to each segments if possible.
Below is a chart from the U.S. Census bureau about the Nashville area.
General Characteristics - show more >>
Total population
Male
Female
Median age (years)
Under 5 years
18 years and over
65 years and over
One race
White
Black or African American
American Indian and Alaska Native
Asian
Native Hawaiian and Other Pacific
Estimate Percent
522,662
253,822
48.6
268,840
51.4
35.9
(X)
41,793
8.0
398,126
76.2
55,340
10.6
517,804
99.1
336,731
64.4
149,273
28.6
1,664
0.3
16,943
3.2
0
0.0
U.S.
49.0%
51.0%
36.4
7.0%
74.6%
12.1%
98.1%
74.7%
12.1%
0.8%
4.3%
0.1%
Margin of
Error
+/-2,820
+/-1,965
+/-1,935
+/-0.3
+/-871
+/-2,266
+/-1,475
+/-3,054
+/-4,193
+/-1,651
+/-441
+/-338
+/-282
Islander
Some other race
Two or more races
Hispanic or Latino (of any race)
Household population
Group quarters population
Average household size
Average family size
Total housing units
Occupied housing units
Owner-occupied housing units
Renter-occupied housing units
Vacant housing units
Social Characteristics - show more >>
Population 25 years and over
High school graduate or higher
Bachelor's degree or higher
Civilian veterans (civilian population 18
years and over)
Disability status (population 5 years and
over)
Foreign born
Male, Now married, except separated
(population 15 years and over)
Female, Now married, except separated
(population 15 years and over)
Speak a language other than English at
home (population 5 years and over)
Economic Characteristics - show more
>>
In labor force (population 16 years and
over)
Mean travel time to work in minutes
(workers 16 years and over)
Median household income (in 2005
inflation-adjusted dollars)
Median family income (in 2005
inflation-adjusted dollars)
Per capita income (in 2005 inflationadjusted dollars)
13,193
4,858
37,463
522,662
(X)
2.24
2.92
258,497
233,588
132,396
101,192
24,909
2.5
6.0%
0.9
1.9%
7.2 14.5%
100.0 100.0%
(X)
(X)
(X)
2.60
(X)
3.18
90.4
56.7
43.3
9.6
Estimate Percent
89.2
66.9
33.1
10.8
+/-2,964
+/-1,584
+/-155
+/-2,820
(X)
+/-0.03
+/-0.07
+/-1,239
+/-3,484
+/-4,420
+/-4,310
+/-3,535
Margin of
Error
+/-1,911
84.2%
(X)
27.2%
(X)
U.S.
355,850
(X)
(X)
84.6
31.7
38,029
9.6
10.9%
+/-2,702
72,103
15.0
14.9%
+/-4,386
54,883
10.5
12.4%
+/-4,215
97,170
48.8
55.9%
+/-3,914
89,006
41.2
51.0%
+/-3,405
65,860
13.7
19.4%
+/-4,217
Estimate Percent
U.S.
Margin of
Error
281,255
68.6
65.9%
+/-4,613
23
(X)
25
+/-0.7
40,214
(X)
46,242
+/-1,126
49,748
(X)
55,832
+/-2,099
25,005
(X)
25,035
+/-763
With reference to the chart, 51% of the population is female and 48% are male. Since
Sunshine is a grocery store a large percentage of the customers will be female. This is
because of the population statistics and also based on the fact that more women do
grocery shopping than men. Another target market is the international market. According
to wikipedia, “Nashville has become a popular city for immigrants to settle in.[8]
Nashville’s foreign-born population more than tripled in size between 1990 and 2000,
increasing from 12,662 to 39,596. Large groups of Mexicans, Kurds, Vietnamese,
Laotians, Arabs, and Somalis call Nashville home, among other groups.[9] Nashville has
the largest Kurdish community in the United States, numbering more than 5,000. During
the Iraqi election of 2005, Nashville was one of the few international locations where
Iraqi expatriates could vote”(www.en.wikipedia.com).
I will recommend a section that carries international products from the countries stated
above. Nashville also has a large family population as shown on the chart. This is also a
market target and there should be large varieties of family pack products available in
different departments.
Pricing
Price allocation is very important to the success of a business. The type of pricing
strategy implemented in sunshine grocery has to make the company profitable in the long
run. Some pricing options are: Penetration pricing, skimming pricing, competitor
indexing, cost-plus pricing, psychological pricing. Organic products are usually
expensive because of the processes involve in maintaining organic integrity. The supply
of organic products is also limited because of limited organic farms. Cost plus pricing
should be one strategy for organic products that other organic food stores carry. This will
be around the market price of similar organic products and will create a better price
image for sunshine grocery. However for brand name products I will recommend a
skimming price strategy. This will allow them to not only portray a high quality product
image but also increases revenue to cover over head cost before competitors’ stream into
the market.
Product
Customer satisfaction is closely tied to how well a product or service meets and
exceeds their needs. Understanding consumers’ perception about quality and value is
significant when developing a product. Product performance, style, durability and
benefits are equally important in the mind of a customer and must be given due attention
when developing a product strategy.
Organic and natural products are perceived of having very good nutritional values and
health benefits .For this reason many more people have increased their level of organic
consumption. There are lots of organic products in the market these days and to stand out,
Sunshine Grocery should clearly and consciously differentiate their products from the
rest of their competitors. Another option is for sunshine to have a private label brand that
reflects the different departments in the store. This will allow sunshine grocery to carry
different products with different packaging in the store and maintaining brand equity.
Value image is very important about a product; therefore it is compelling that sunshine
Grocery maintains a high quality product at all time. Having a compelling story about the
products will also help consumers understand the benefits of their products and create a
positive image perception of the sunshine business.
Providing exceptional customer service is significant to the success of a business.
Quality products with exceptional customer service are a recipe for business success.
Sunshine has to devote to exceptional customer service to maintain and build sales. This
will help customer retention and acquisitions. Employees should attend a customer
service training that will enable them provide the kind of service sunshine will like for
their customers. The Nashville area has a lot of health care facilities and I will
recommend that sunshine create a website that can give customers access to online
ordering.
Place
The channel of distribution is very important in the success of the business. Certain
products will be channel through small vendors with good reputation and references. All
other products will be channel through a central warehouse for sunshine grocery.
Marketing Objectives
The success of a new store depends on several factors amongst which include the ability
to acquire and retain customers. Below are three specific marketing objectives for
sunshine grocery.

5% increase in customer count on a weekly basis

10 % increase in sales on a fiscal period basis.

20% increase in customer count and 20 % increase in sales after first anniversary.
Marketing Strategies
I will recommend two strategies to attain the objectives stated above.
Cost Leadership Strategy:
“This focuses on reducing expenses and in turn lower products prices while targeting
a broad array of market segment”.(Marketing page 589).
This strategy will be implemented for all products that are common in the market
amongst all competitors. By doing this customers perception about sunshine will not
be biased. Sunshine will not be tag with a high price image causing customers to
spend their entire pay check in the store. Being consistent in prices with other
competitors will help retain old customers and acquire new ones. It will also result in
a better financial performance for sunshine given the fact that the cost leadership
strategy focuses on reducing expenses.
Differentiation Strategy:
“Requires product to have significant points of difference in products offering, brand
image, higher quality, advanced technology, or superior service to charge a higher
price while targeting a broad array of market segments”( Marketing page589).
This strategy will be geared towards unique products to Sunshine and their private
label brands. Since these prices will be a little higher than regular products, the need
for superior customer service is paramount. Having a customer service trainer to
conduct extensive trainings in customer service in product knowledge will help in
providing a high quality service to customers. Customers are willing to pay a little
more for a product if they receive great attention from workers, with a lot of
information about different products. Educating and informing the customers in a
friendly atmosphere by workers goes a long way in building customer count, average
basket size and increase sales. Overhead paging by workers should not be allow as
this in some cases distort the thought process of a customer. Using more advance
intercom technology will provide a calm and relaxing mind for customers during their
shopping trip. Creating a checklist for all the perishable departments for product
quality will also help in ensuring that high quality products are always on the sales
floor.
Promotion
This is the biggest mix in achieving the objective. If there is no promotion then the
chance of the business survival is zero. I will use the following media for promotion.
TV, Newspapers, Radio, local newspaper and billboards.
For the TV commercial, I will recommend showing photos of successful Sunshine
grocery stores in other states. This will enable customers to have a bigger picture of
what the store will be like and what kind of products the store will have. I will also
recommend incorporating in the TV commercial some interviews with customers
from other location explaining why Sunshine grocery is unique and a great place to
shop. At the end I will also recommend to highlight the benefits involve in eating
natural and organic foods. The radio commercial will be exactly like the TV
commercial.
I will recommend including a photo in the advertisement.
A photo similar to this explaining about the benefits of natural and
organic food .This can be done in the form of a story in which at the end the story
concludes with the reason why this customer has his hands occupied with two full
grocery bags. I will also include a puzzle or trivia in the local advertisement for each
household to participate. Every winning household will receive coupons and a special
$10.00 gift card to be used on the day of store opening.
The billboard will read
This will be on both sides of the building so that as people drive by, they will read
and get informed of the location and the new grocery store. I will also recommend to
contact and build relationship with real estate owners so that they can distribute flyers
to residents about Sunshine.
REFERENCES
www.organicfoodtrend.com
www.en.wikipedia.com
www.greepeople.org
www.wholefoods.com
www.census.gov
www.homefair.com
.