Whole Foods Market is an American firm specializing in the manufacturing and selling of organic foods. The company has branches in Canada and the United Kingdom. Whole Foods Market has identified a need among China's affluent consumers who favor organic products of superior quality. It hopes to address this issue by developing organic food outlets in the nation's principal cities.
The food scandal that engulfed China caused people to alter their eating habits. Today, the majority of Chinese prefer a healthy lifestyle. Therefore, they consume organic foods. High demand for organic foods exists in China. However, the nation does not generate enough goods to meet the increasing demand. China is a big organic food importer. There are numerous subsidiaries of foreign organic food enterprises in China. The bulk of organic food producers do not target upscale consumers. Customers like premium-priced, high-quality products. However, the majority of businesses sell their organic products at modest prices. It causes high-end clients to question the products' quality. Additionally, businesses stock tiny quantities of organic products. Therefore, they are unable to fulfill the market.
Whole Foods Market will open stores in Beijing, Shanghai, and Guangzhou in an effort to satisfy the needs of upscale clientele. It will target affluent individuals, white-collar professionals, and high-income groups. These customers have extensive knowledge of organic products and are willing to pay a premium for superior goods. The company will strive to produce high-quality goods. In addition, the company will offer the products at a premium price to recoup production expenses and instill a sense of quality in consumers. Whole Foods Market will focus solely on selling organic products. It will allow the company to distinguish itself from its rivals.
Due to the notion that they are safe, organic foods are gaining appeal around the world. In China, consumers are torn between purchasing local foods that are inexpensive and safe imports (Lu et al. 921). Recent food scandals have caused many Chinese to avoid purchasing local cuisine. The majority of affluent and middle-class consumers favor organic foods because they are unadulterated. Consequently, the demand for organic goods in China has increased dramatically. Local businesses can barely meet market demand. Foreign corporations have the possibility to invest in China. China has a food safety regulation that holds food makers liable for the quality of the substances they use. Despite the passage of the food security law, the demand for imported food goods continues to rise.
In 2018, the Chinese are anticipated to spend at least $77 billion on food imports (Lu et al. 927). People continue to migrate to urban centers. It suggests that the demand for food goods is anticipated to increase over time. Organic foods are no longer considered luxury items in China. As the disposable income of the majority of households increases, more families are moving to organic goods. According to a study done in Shanghai and Beijing, customers are willing to pay a premium for organic foods (Lu et al. 931). The vast organic food industry in China makes the country a viable target for multinational corporations such as Whole Foods Market. This paper will outline the Chinese market strategy Whole Foods Market should employ.
Market Overview The evolution of Whole Foods Market
Austin, Texas serves as the headquarters for Whole Foods Market. The business was founded in 1980. Four businesspeople came up with the concept of establishing a supermarket specializing in the selling of organic foods. They constructed the first store and hired 19 staff. At the time, there were very few firms in the United States that dealt with natural foods. Consequently, there was little competition. It allowed the company to expand and open several outlets across the nation. According to Harbin and Humphrey, Whole Foods Market increased its market share through merger and acquisition (3). The company acquired Whole Food Company in 1984, allowing it to enter the New Orleans market (Harbin and Humphrey 5). The company is well-known for producing high-quality organic foods. Whole Foods Market's goods do not include sugars, hydrogenated fats, artificial flavors, colors, or preservatives. It adheres to the National Organic Program's stated guidelines. Currently, at least 33.6% of the American market is served by the company (Harbin and Humphrey 9). It competes with corporations such as Walmart, Fresh Market, and Kroger.
In addition to producing and marketing organic goods, the company is also involved in environmental management activities. For example, it promotes sustainable fishing methods. Whole Foods Market has made investments in renewable energy to protect the environment. The corporation vowed in 2008 to eliminate non-biodegradable packaging materials (Harbin and Humphrey 13). It no longer uses plastic bags for product packaging. Whole Foods Market has outlets in both the United Kingdom and Canada, despite its reliance on the American market. The firm is in the process of opening stores in international locations.
Organic food's history in China
Decades passed with no market statistics for China's organic food industry. However, this did not indicate that the nation did not manufacture and market organic foods. Pei et al. assert that China has produced and sold organic foods for decades (415). Perhaps the lack of statistics regarding the country's organic food business might be attributed to the historically low demand for natural products. Today, demand has increased dramatically. China is the world's leading producer and importer of organic foods. In fact, the country is the fourth largest organic market in the world. China is the world's largest producer of natural raw materials (Pei et al. 417).
A 2010 survey determined that the nation produced at least ten million tons of organic products. It devoured 70% of the food and exported the remainder to other countries (Pei et al. 419). The country's organic market continues to expand at a rapid rate. Over fifty global firms already export organic foods to China. Nevertheless, the Chinese market remains unmet. An Indian market research organization, Ken Research, predicts that the Chinese market would expand (Pei et al. 420). The majority of Chinese are concerned about food safety. In addition, the number of middle-class households and the educated population continue to grow. Thus, many individuals can now afford organic goods, resulting in market expansion.
Analysis of SWOT Strengths
Whole Foods Market has a long history in the natural products market. As a result, the business has established a reputation. Brand reputation is one of the company's strengths. Whole Foods Market is a globally recognized brand, not only in the United States. The company is able to attract a large number of clients due to its reputable brand. Due to its popularity, there is no question that the company will swiftly adapt to the Chinese market. Qiao et al. mention Whole Foods Market's strength as its commitment to quality (380). The organization has extensive experience producing organic products. Whole Foods Market produces its foods using novel techniques. It helps to produce high-quality goods and reduce production expenses. Whole Foods Market is distinguished from rivals by its production of high-quality items.
The majority of competitors produce low-quality goods. It emphasizes the reason why their prices are so low. According to Qiao et al., Whole Foods Market has a positive organizational culture (382). It allows the business to attract and keep a motivated workforce. Indeed, there are no expenses associated with staff turnover. By retaining a committed workforce, Whole Foods Market is able to maximize output and reduce human resource costs. According to Qiao et al., Whole Foods Market designs their stores in an aesthetically pleasing manner (384). In order to attract clients, the company's leadership ensures that the stores have an attractive atmosphere. The company's storefronts are easily identifiable from a distance. They have attractive displays that pique the curiosity of consumers. Customers are practically compelled to visit Whole Foods Market's stores.
Whole Foods Market's reliance on the American market is one of its principal drawbacks. The organization has numerous locations around the United States. Therefore, it is susceptible to the U.S. economic crisis. A recession in the United States would have a devastating effect on the company's success. Another deficiency of Whole Foods Market is the price of its merchandise (Qiao et al. 386). The business sells organic foods for a premium price. Even while the price plan allows the corporation to generate a substantial profit, it prevents it from exploiting a large market. The corporation cannot target price-conscious customers. At present, Whole Foods Market relies on a limited number of suppliers. Thus, the company's bargaining position vis-à-vis its suppliers is weak. The company's ability to sell its products at competitive prices is hampered by its dependency on a small number of suppliers. Additionally, it hinders the company's capacity to rapidly expand its market share.
Whole Foods Market currently operates stores in the United States, the United Kingdom, and Canada. The business has failed to exploit the global market. Thus, it can expand its operations to other global markets. In industrialized nations, the demand for organic foods is high. Thus, Whole Foods Market has the opportunity to open stores in countries such as China, France, Germany, and Singapore. Due to the fact that the Chinese market is underserved, Whole Foods Market has the possibility to enter this country.
According to Harbin and Humphrey, the company has the opportunity to expand its supply chain (15). Complementing the company's expansion would be the expansion of the supplier chain. Whole Foods Market could easily obtain raw ingredients from various places. Eventually, the company would be able to offer competitively priced items. Harbin and Humphrey note Whole Foods Market's competitive pricing as another opportunity (16). The corporation charges premium prices for its items. It mostly targets wealthy and middle-class individuals. It might increase its market share by providing competitively priced products. A minor decrease in prices would not negatively impact the company's reputation. As a result, it would be able to target a large customer base.
China's economy continues to expand. As a result, the disposable income of many households has increased. It indicates that many individuals can afford organic foods. Youth participation in the labor force has expanded dramatically. The majority of young adults have moved to major cities in pursuit of employment. On the other hand, many individuals are aware of the advantages of organic foods. The majority of Chinese are mindful of what they consume. They favor purchasing imported foods because they perceive them to be safer. A rise in the consumption of organic foods not only in China but around the world presents Whole Foods Market with an excellent business potential. The company's market is destined to expand. The development of technology has made it simple for businesses to sell their items without creating physical locations. The opportunity exists for Whole Foods Market to invest in online retail outlets. It will enable the corporation contact customers in locations where it has no physical presence. Whole Foods Market has the ability to partner with organic farmers and Chinese grocery retailers. It would be advantageous for the business to distribute its products and acquire its raw materials locally.
The competition from competitor corporations, such as Wal-Mart, Century Mart, and Carrefour, is one of the greatest risks that Whole Foods Market faces. According to Chen, Wal-Mart markets itself as a socially responsible company (47). The company portrays itself as dedicated to addressing all clients' demands. The fundamental product of Walmart is their retail service. The company's strategy of providing effective services has enabled it to gain a large clientele. Employees of the organization assist customers in locating products in the store. Even though Wal-Mart sells organic goods, it carries tiny quantities of these items. Therefore, it cannot satisfy the market. Chen asserts, "Wal-Mart employs an everyday low price (EDLP) pricing strategy" (51). The corporation routinely reduces the prices of organic groceries. As a result, it attracts numerous clients. Due to its limited stock of organic items, the company is unable to accommodate all of its clients.
To sell its items, Wal-Mart employs a plethora of promotional methods. In each store, the company does personal selling. In addition, the company advertises its products on television, online, in newspapers, and on billboards. In addition, the corporation performs sales promotions by providing clients with discounts. Currently, Wal-Mart has many locations throughout China. The retail locations are crucial. Thus, they are readily available. Moreover, they offer customers an excellent shopping experience.
Carrefour describes itself as a firm focused on products and customers. It strives to manufacture products that meet client desires. The corporation currently profits from the sales of both organic and inorganic food products. However, it focuses mostly on selling inorganic food products. Chen contends that Carrefour carries modest amounts of organic items (56). Therefore, it cannot satisfy China's demand for the products. The company's items are sold at standard prices. The pricing plan is intended to help Carrefour attract a large number of clients. To advertise its organic foods, the company employs an integrated marketing communications strategy. Carrefour runs television ads (Wang et al. 31). At addition, it performs direct marketing in all of its retail locations. The firm employs sales marketing to acquire clients. It also offers discounts on organic foods to encourage consumers to purchase these items. Carrefour distributes its merchandise through six types of outlets. It consists of hypermarkets, hard discount stores, supermarkets, cash-and-carry stores, convenience stores, and e-commerce (Wang et al. 31). The corporation operates stores in all of China's main cities.
Century Mart advertises itself as a unique and distinguished brand. Indeed, it is one of the most prestigious retail chains in China. The business carries both organic and inorganic goods. However, it sells predominantly non-organic foods. Century Mart offers inexpensive natural products. However, its prices are more expensive than Walmart's. Chen claims that Century Mart offers low-priced merchandise to entice people (62). Although the company sells organic foods at affordable costs, it does not generate large profits since it carries insufficient amounts of the products. Century Mart advertises their products on television. In addition, the corporation engages in direct marketing in its retail locations. Employees connect with clients directly and convince them to buy organic products. In order to win consumer loyalty, the corporation gives discounts and samples. Multiple Century Mart locations in China assist the delivery of organic and inorganic items. Chen hypothesizes that the corporation opens fifteen stores every year to compete with Walmart (64).
Market Segmentation and Geographic Targeting
Market segmentation is the process of dividing consumers into various categories. It aids in identifying and satisfying mutual wants. According to Wang et al., market segmentation aids a business in developing an effective marketing mix (33). Different types of consumers in China seek organic foods. Therefore, a business must comprehend the numerous consumer segments and their preferences. Geographic, demographic, and psychological characteristics will be used by Whole Foods Consumer to segment its target market. Regarding geographical considerations, the organization will target customers who reside in the core cities.
Whole Foods Market plans to establish locations in Shanghai, Beijing, and Guangzhou. The fundamental rationale for concentrating on major metropolitan areas is the huge demand for organic foods. Moreover, organic foods are not expected to remain unsold for long. The major urban centers have constructed transport networks (Wang et al. 35). Therefore, the corporation will have an easier time transporting their items to the market. The vast majority of urban residents are employed. Their disposable income is substantial. Therefore, they are able to afford organic meals. Whole Foods Market plans to charge premium rates for its items. Customers in remote areas would be unable to afford the company's items.
As previously stated, Whole Foods Market will charge premium rates for its items. The company will target affluent metropolitan residents. In addition, it will target the white collar and high-income classes. The company will mostly target young people. Currently, the majority of Chinese between the ages of 18 and 39 are employed in the big cities. They must purchase food because they have no other options. Fear of food contamination compels them to rely on organic items. According to Wang et al., women make up the largest proportion of organic product purchasers (36). Today, many Chinese women have joined the labor force. Whole Foods Market will target city-dwelling female employees.
The rise in the incidence of diseases related with improper eating has prompted individuals to be vigilant about what they consume. Currently, the majority of Chinese are cautious about the food they consume. China runs the majority of its industries on coal. The country's ecosystem is severely polluted. Many individuals avoid purchasing non-organic foods out of concern that they may be contaminated. There has recently formed a group of health-conscious consumers that favor organic products. Whole Foods Market will attract customers who seek a healthy way of living. These individuals prioritize their health. They have an extensive understanding of organic products and their benefits. According to Xiu and Klein, organic food consumers prefer to shop at natural stores (465). They do not shop at conventional supermarkets. Organic items command a premium price from consumers. They are just concerned with the quality of the food products.
Walmart, Century Mart, Carrefour, and City Shop will be Whole Foods Market's competitors. Century Mart and Wal-Mart attract customers that are price-conscious. As a result, they sell their items at reduced pricing. Carrefour, on the other hand, sells its organic products at standard rates. The three businesses carry limited quantities of organic groceries. Thus, they are unable to adequately serve their target market (Xiu and Klein 468). City Shop targets affluent customers. The corporation charges relatively high pricing for its items. However, it does not sell a substantial amount of natural products. Whole Foods Market will target wealthy and affluent customers. Thus, the corporation will charge premium prices for its items. Whole Foods Market specializes in the sale and production of organic products. As a result, it will stock its items in large quantities. The organization will have the opportunity to serve numerous consumers. Cost and quality are anticipated to be the most important aspects for consumers.
Today, a large proportion of the Chinese population resides in major urban centers. The populace is dependent on food purchases. In the recent past, a food crisis in China caused many individuals to reject non-organic foods. Currently, many individuals prefer to consume organic foods. Despite the strong demand for natural foods, the country does not generate sufficient quantities to meet market demand. Consequently, numerous international enterprises export organic foods to China. According to Xiu and Klein, the majority of businesses sell their merchandise at low costs (469). Therefore, the wealthy and those with large incomes do not purchase the products. They question their caliber. No corporation in China currently targets the wealthy, high-income groups, and white collar class. Consequently, Whole Foods Market will target this market niche.
The majority of wealthy individuals do not purchase non-organic products. Moreover, they do not care about the price of organic products so long as they fulfill the required standard of quality (Xiu and Klein 470). Therefore, Whole Foods Market has a chance to market to this segment. The business has extensive experience producing organic meals. Moreover, it is recognized for producing high-quality goods. Therefore, it is more equipped to meet the demands of this market area. In China, there has been a significant shift in household composition recently. Many families consist of three members. Chinese citizens adhere to the one-child policy. Therefore, most families have only one child. As a result, they are able to buy high-quality foods and luxuries. Moreover, the majority of Chinese support animal rights (Yin et al. 1364). They refrain from purchasing products containing animal-based substances. Instead, they choose to utilize goods comprised of plant-based components. It emphasizes the reason why many individuals utilize organic products.
The bulk of organic food purchasers are young adults and high-income individuals. The youths consist of individuals between the ages of 18 and 39. They reside in major cities. Whole Foods Market will target wealthy and high-income individuals and families. These are those that like to shop at natural supermarkets for groceries. In addition, people are willing to pay a premium for superior products. According to Yin et al., women are the predominant purchasers of organic foods (1364). Therefore, the company will mostly target wealthy ladies. Consumers associate pricing with a product's quality. They believe that high-quality goods are costly. The majority of food companies in China sell their products at inexpensive prices. Therefore, the wealthy population questions their quality. Consequently, no manufacturer meets the demand for organic food among the wealthy population. Whole Goods Market strives to satisfy the demands of this market by delivering premium-priced organic foods of superior quality. To instill a sense of quality in the minds of customers, the corporation will sell things for premium costs.
Whole Foods Market is a supermarket that sells "responsibly sourced, premium organic and natural foods" (Yin et al. 1366). The organization has extensive experience in the organic food market. It strives to meet the requirements of all consumers. Consequently, it examines the purchase habits of customers to uncover unmet demands. Whole Foods Market will position itself as a socially conscious organization in China. It will provide customers with specialized services. In addition to meeting the needs of the target market, the company will exceed consumer expectations. The purpose is to earn clients' trust. It will ensure that clients receive value for their money by providing products of high quality. In addition, Whole Foods Market will continually develop novel approaches to meet client demands. The stores will have surroundings that are representative of the target market. In other words, Whole Foods Market will transform its stores into locations where customers can socialize with their friends.
Customers on the Chinese market are willing to pay a premium for superior products. It also has clientele who are price-sensitive. Companies such as Wal-Mart, Century Mart, and Carrefour attract customers that are price-conscious. The cost is the optimal point for their target customers. It emphasizes why the businesses sell their items at low prices. Whole Foods Market will target affluent customers with substantial disposable cash. It will target clients whose primary concern is quality.
Whole Foods Market will target affluent, environmentally and health-conscious consumers. Customers are eager to spend any amount of money on high-quality products. As a result, Whole Foods Market will adhere to safety regulations when producing its products. It will sell only products that are not only fresh, but also meet all nutritional requirements. Whole Foods Market will ensure the integrity of its production procedures. The organization will provide a comprehensive selection of items to fulfill the demands of all consumers. Organic product selection is limited at Wal-Mart, Carrefour, and Century Mart, which is one of their shortcomings (Yin et al. 1366). Consequently, Whole Foods Market will be the exclusive retailer of natural products in bulk. In actuality, the company will focus only on the manufacturing and selling of organic products. Whole Foods Market's leadership recognizes that people have diverse nutritional choices. Thus, the business will sell products to all types of customers. It will carry items for persons with dietary preferences such as vegetarianism.
Customers associate a product's price with its worth. Wealthy customers avoid purchasing inexpensive items because they believe they are of inferior quality. In this approach, Whole Foods Market will charge premium rates for its items. Quality is one of the ideal characteristics of its target market. Thus, the corporation attempts to instill a sense of quality in its target customers by offering more expensive products than its competitors. The high-income and white-collar classes value the benefits of organic foods. They are willing to pay premium pricing for high-quality goods (Yin et al. 1367). Moreover, wealthy members of society tend to identify with a certain class. They do not shop in stores frequented by the middle class and the impoverished. The sale of organic products at premium pricing will deter the poor and middle-class from shopping at Whole Foods Market. The stores will cater solely to the wealthy and working class. The company will eventually succeed in capturing its target market.
Cost and target market determine the advertising techniques employed by organizations. Effective marketing strategies depend on the company's ability to contact consumers. Chen argues that it is essential to comprehend the social life of the intended market (52). It would aid in identifying the most suitable channel for product advertising. Whole Foods Market caters to wealthy and well-educated customers. They are individuals who interact through social media sites. In addition, people utilize both print and digital media to stay informed. Whole Foods Market will advertise its products on television. The corporation will advertise its items through major television networks. In addition, it will use local newspapers and health publications to promote its products. The majority of wealthy individuals are tech-savvy. Therefore, the corporation will develop a website for marketing purposes in China. In addition, it will leverage social media sites like as Facebook, Sina Weibo, and Twitter to communicate with customers and collect feedback.
Some organic items must be introduced to the market when they are still fresh. Therefore, it is essential to construct organic food stores in places with established transportation. Whole Foods Market will focus on upscale consumers. It will establish locations in major cities such as Beijing, Shanghai, and Guangzhou. The businesses will be carefully placed in high-traffic areas to attract a large number of customers. Whole Foods Market will eventually collaborate with local stores to facilitate the distribution of organic foods. The bulk of working individuals rarely visit retail establishments (Chen 54). Therefore, people prefer to shop online. Whole Foods Market will establish an online store for consumers who lack the time to visit its physical locations. It will ease product delivery to clients who are unable to visit the company's retail locations. Below is the organization's perception map.
China's organic food industry is underdeveloped. Whole Foods Market should utilize the market as quickly as possible. Utilizing an integrated marketing communication approach, the organization will increase its visibility in China. It will sell its items via television and billboards for six months. Advertisements for the company will air on major television networks. In addition, billboards will be placed on the streets of Beijing, Shanghai, and Guangzhou. The company will sell itself using social media, its website, and a mobile application. Whole Foods Market will create accounts on Sina Weibo, Facebook, and Twitter, as the majority of its target consumers use social media. The accounts will aid in both the marketing of organic products and the collection of consumer feedback. The majority of Chinese citizens own smartphones. Whole Foods Market will therefore invest in a mobile application. The application will assist in the promotion of the company's products. It will also enable online shopping for customers.
For three months, Whole Foods Market will utilize celebrity endorsement. It will employ well-known celebrities such as Daniel Wu. In addition, the company will partner with other companies, such as Taobao, to facilitate product distribution and raise public awareness. In the organic food market, efficiency is key. Whole Foods Market will collaborate with regional farms to increase its efficiency. The company will work with Chinese organic farmers. It will allow the company to acquire raw materials at a discount. The company will also distribute natural items through brand licensing. It will permit companies that offer personal care items to utilize its logo. In addition, the company's products will be featured in prominent television series and films. Whole Foods Market will employ point-of-sale technology to engage with customers and collect feedback. Employees will be encouraged to interact directly with clients to better comprehend their requirements.
China's desire for organic foods has increased dramatically. Since the food scandal, consumers are cautious about what they consume. They favor purchasing imported organic foods. Several foreign enterprises currently export organic products to China. However, no businesses target wealthy and high-income individuals. Whole Foods Market will target this particular market niche. The corporation will charge premium prices for its items. It will also strive to produce quality goods. Whole Foods Market will have locations in the major metropolitan areas. In addition, it will deploy an integrated marketing communication strategy to reach its intended audience.
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