Whole Foods Market
Chapter 3: Brand Resonance and the Brand Value
Chain
Mark Gallardo
Monica Lee
Carlo Wayan
Michelle Yang
2
Table of Contents
Executive Summary …………………………………………………………………………
3
Background Section …………...…………………………………………………………….
4
Analysis of the Situation …………………………………………………………………
5 - 10
Team’s Recommendation ……………………………………………………...............
11 - 12
Sources Cited ……………………………………………………………………….......
13 - 14
Executive Summary
3
Whole Foods Market started off as a retailer of natural and organic foods. The company started
off in Austin, TX and now has 56,700 full time employees. As of November 6, 2013, Whole
Foods has 367 stores in the United States, United Kingdom, and Canada. According to Yahoo
Finance, John P. Mackey is the co-founder, as well as Co-Chief Executive Officer and Director.
The other Co-Chief Executive Officer and Director is Mr. Walter E. Robb III. 1 Some of the
biggest competitors that Whole Foods Market faces is The Kroger Co. and Sprouts Farmers
Market, Inc. However, one thing that makes them stand out is that they were on the list for 17
consecutive years as one of the best companies to work for. 2
As of 2/1/2014, the stock for Whole Foods Market (WFM) is at $52.26 per share, and the
company’s gross profit as of September 29, 2013 is $4,629,000.3 On the other hand, one of their
competitors, The Kroger Co. (KR), has $36.10 per share, with a gross profit of $19,893,000, as
of February 2, 2013.4 Although the gross profit of Kroger is higher, Whole Foods Market puts
emphasis on having their products natural and organic. The store is classified as an upper-level
retail store and their customers can rely on Whole Foods for their quality as well as service.
Background
1
http://finance.yahoo.com/q/pr?s=WFM+Profile
http://media.wholefoodsmarket.com/fast-facts/
3
http://finance.yahoo.com/q/is?s=WFM+Income+Statement&annual
4
http://finance.yahoo.com/q/is?s=KR+Income+Statement&annual
2
4
In 1978, John Mackey and Rene Lawson Hardy started their own small natural foods store called
SaferWay in Austin, Texas. Two years later, the original Whole Foods Market officially opened
in September 20, 1980 when Mackey and Lawson partnered with Craig Weller and Mark Stiles
and merged Saferway with their Clarksville Natural Grocery. 5
In 1984, Whole Foods expanded into Houston, Dallas, and then New Orleans. Then in 1989, they
expanded into Palo Alto, California. Within the ‘90s, Whole Foods Market attained natural foods
chains located throughout the United States. By 2002, Whole Foods expanded into Canada and
later, into the United Kingdom in 2004.6
5
6
http://www.wholefoodsmarket.com/company-info/whole-foods-market-history
http://www.wholefoodsmarket.com/company-info/whole-foods-market-history
5
Analysis
Whole Foods Market as a company has established a strong brand. When explaining the brand
resonance model, Whole Foods Market is an example of a company who has established strong
brand imagery, brand judgments, brand salience, brand performance, brand feelings, brand
resonance, and brand-building implications. The brand resonance model explains how companies
create strong and loyal relationships with their customers. The brand value chain model explains
the process of how value is created for their brands and how it affects their marketing processes
financially. This case study of Whole Foods Market will explain how this company achieved a
strong grasp in each of the brand building blocks.
Brand imagery focuses on how the customer’s psychological and social needs are met by the
brand. It is what the customer thinks about the brand extrinsically. Most brand imagery is
established by advertisements, any association with images, or word of mouth. The four main
intangible aspects that are linked to a brand include user profiles, purchase and usage imagery,
brand personality and values, and brand history, heritage, and experiences. For Whole Foods
Market, the user image may be an image of a male or female who is healthy, fit, of middle or
upper class income, liberal, educated, an environmentalist, and lives in an urban or suburban area.
Purchase and usage of Whole Foods Market would include being an everyday usage, a necessity,
known for providing healthy, wholesome, organic, and ethically grown and raised food. Whole
Foods Market has a strong presence in this category, for they strongly advocate sustainability
and environmental awareness as a company. Whole Foods is known for supporting sustainable
agriculture, recycling, reusing, reducing, and packing their produce and goods in recyclable
6
packaging, and practicing energy conservation.7 Brand personality and values for Whole Foods
Market would include sincerity and sophistication. Whole Foods Market has created an image
for itself as a brand that is known for their sincerity including their wholesome foods, honest
practices, and friendly and outstanding customer service. As a brand, they can also be described
as sophisticated because of their clean, well-kept interiors, higher prices, and upper-class
association. History, heritage, and experiences can also be associated with Whole Foods Market
as a brand, which can be the strongest associations because they are personal and unique to each
customer. Experiences with Whole Foods Market in general could include their forest green
color, and charitable acts, including their “5% Days” where five percent of the store’s sales are
donated to a local nonprofit or educational organization.8
Brand judgments are what the customers think and feel about the brand. They are the opinions
that they form from the brand imagery. Brand judgments and attitudes are often made about the
brand quality and credibility. For Whole Foods Market, customers associate the brand with
providing the highest quality products available. Whole Foods emotionalize the customer’s
shopping experience through the store’s interior design and architecture, their product selection,
product display, premium pricing, and attentive customer service. As for their brand credibility
and superiority, customers are loyal to the brand because of their experience with healthy and
high quality products, premium and first-class shopping atmosphere and experience, ethically
raised, grown, and delivered products, and staff excellence.
7
http://www.wholefoodsmarket.com/mission-values/core-values/we-practice-and-advanceenvironmental-stewardship
8 http://www.wholefoodsmarket.com/mission-values/core-values/we-serve-and-support-our-local-andglobal-communities
7
Brand salience refers to how often the brand is thought of, recalled or related to by customers.
Whole Foods Market is recognized nationwide in middle and upper class neighborhoods in
suburban and urban locations. The brand has even been recognized as “America’s Healthiest
Grocery Store”.9 A nutritionist even went, as far to say, “It’s the Rolls Royce of healthy
eating”.10 Whole Foods is recognized as a grocery store that supports healthy, vegan, organic,
natural, and vegetarian lifestyles. There are more than 360 stores in the United States, United
Kingdom, and Canada combined.11 The depth of Whole Foods Market as a brand is provided by
its easily recognizable logo and high brand loyalty. Whole Foods Market is usually the top
grocery store that consumers think of when thinking of a health food store. The breadth of Whole
Foods Market includes their top quality products, everyday groceries, and how they provide
healthy foods for all meals of the day. Their product category structure, which is how customers
organize product categories in their minds, is in order from groceries, to meals, then
miscellaneous items, which could include toiletries and clothing. Strategic implications for
Whole Foods are strong, naturally because they are a grocery store. Consumers think about
Whole Foods at home, at work, and on the road. Customers think of Whole Foods consistently
and on a regular basis because groceries are always needed. They will also look to Whole Foods
specifically for their organic, fresh produce, in regards to New Year’s resolutions, and changes
for healthier lifestyles.
Brand performance deals directly with the product a brand provides. It describes how well the
product satisfies the customer’s functional needs. For Whole Foods, their produce is the main
9
http://www.wholefoodsmarket.com/blog/whole-story/americas-healthiest-grocery-store
http://www.health.com/health/gallery/0,,20307195_2,00.html
11 http://www.wholefoodsmarket.com/company-info/whole-foods-market-history
10
8
product. Their produce is marketed as the finest, natural, and organic foods of the strictest quality
standards in the industry. Their produce is known for being grown and raised from ethical and
sustainable agricultural practices. It is also known that with the shopping experience, customers
will receive high customer service and satisfaction, which proves strong service effectiveness,
efficiency, and empathy. Whole Foods makes sure they serve their customers “competently,
efficiently, knowledgeably and with flair”.12 Product reliability is high because customers can
always rely and expect to purchase high quality food because Whole Foods Market has already
done the background homework for the customers.
Brand feelings for Whole Foods Market are intensely positive, which results from their upper
class environment, high customer attentiveness, and the social approval customers receive for
shopping at Whole Foods.
Brand resonance explains the connection customers feel with the brand on an emotional level.
Four categories that brand resonance can be broken down into include behavioral loyalty,
attitudinal attachment, sense of community, and active engagement. Behavioral loyalty is strong
for Whole Foods Market because they provide groceries, which are needed frequently. If a
customer decides they enjoy shopping at Whole Foods, Whole Foods will become their everyday
grocery store. Attitudinal attachment describes strong loyalty customers develop. They “love”
Whole Foods and will only shop at Whole Foods for their groceries because they connect with
the brand on a personal level, for personal reasons. They may relate and agree with the way
Whole Foods only provides ethically, cage-free raised chicken, or they may applaud the
12
http://www.wholefoodsmarket.com/mission-values/core-values/we-satisfy-delight-and-nourish-ourcustomers
9
charitable donations the brand makes. Whole Foods Market establishes a sense of community by
their practice of providing locally grown foods in the stores. Community strength is also built
with the brand because they often donate and volunteer to local causes and organizations.13
Brand-building implications are a result of having strong presence in each of the brand building
blocks of the brand resonance model. One aspect to keep in mind when trying to build strong
brand resonance is that customers own the brands. The success of a company’s marketing
strategy solely depends on the customer’s reactions and feelings about the brand. Whole Foods
Market has strong, loyal, passionate customers because of the positive emotions they associate
with their shopping experiences with the brand. Another important aspect to think about is that to
build a strong brand, it will take time and patience. The time it takes to build a strong brand will
reflect the strength of the beliefs and attitudes associated with the brand. For Whole Foods
Market, which was first established 1980 with only 19 people, has become successful only after
hard work, trials, dedication, and ethical practices.14 Now, Whole Foods Market is associated
with being ethical, honest, organic, safe, local, and charitable. In addition, brands should also
have a duality. It is important to appeal to both the mind and the heart. Customers will look for
rational reasons to be loyal to a brand, but will be won over by emotional reasons. Whole Foods
Market provides rational reasons to shop at their stores because they provide safe, organic,
healthy, and natural foods that is justifiable for their costs. However, most customers are loyal to
the brand because Whole Foods carryout their practices in an ethical manner, advocate for
sustainable energy practices, treat customers well, donate to charities, support local businesses
and farming, and have built their brand as a means of social approval. Brands should also have
13
http://www.wholefoodsmarket.com/mission-values/core-values/we-serve-and-support-our-local-andglobal-communities
14 http://www.wholefoodsmarket.com/company-info/whole-foods-market-history
10
richness. This means that it is important for a brand to build depth. The detail of brand resonance
is important to create the most possible responses from consumers. These categories provided by
the brand resonance model shows that it is necessary to have a wide range of strong points, but it
is also okay to not be strong in every category. Many companies naturally cannot establish depth
in each category because of the type of product being offered. The last important point of brandbuilding implications is that brand resonance provides important focus. Marketing should
ultimately come to focus on the primary points of brand resonance, which include loyalty,
attachment, community, and engagement. Whole Foods Market naturally has a higher brand
resonance potential because they are a health foods grocery store. Many customers feel strong
brand loyalty to the brand because healthy, natural, organic food is very appealing to people by
nature.
11
Recommendation
The Whole Foods Market Company has become one of the largest organic retailers in the United
States surpassing Trader Joe’s, Safeway, and Costco in 2010 after only being open to the public
two decades ago in 1980 (Top 5 Largest Organic Retailers in North America 2010, Chait).
However, the Whole Foods Market Company has many future opportunities to accomplish
increasing their market share and further their brand awareness, image, and loyalty through
various forms of advertising and public relations. Whole Foods already holds a strong position in
the market, but they have relied mostly on its loyal customers to advertise for them through
word-of-mouth. If the company wants to increase its sales of current customers and attract a
larger audience, they need to update their marketing strategy and increase their marketing budget
to capture customers that might not be aware of their brand. Through the use of direct mail, print
ads in health and fitness magazines, and e-mail letters, they can increase their brand awareness
and also capture more customers in the areas where they are located. For long-term
implementation15, Whole Foods could launch national advertising campaigns through sponsoring
large health related events and gain statistics on the target market TV shows so that they can
advertise in these channels at the given time of the target markets’ attentiveness. Aside from just
promotional advertising to increase brand awareness, Whole Foods can educate its current
customers and potential customers about the importance of eating healthy organic foods, and at
the same time clear the misconceptions of premium pricing for organic products. They can also
utilize the free tools available in the web like social media (Twitter, Facebook, Instagram) to
connect with their customers and also to get them to start talking about the brand. Overall, Whole
Foods should increase its brand awareness and image through using various forms of advertising
15
http://pnphillip.asp.radford.edu/portfolio.htm
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and public relations to help them penetrate further into the market and continue to increase
market shares and profits.
13
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