Marketing Plan For “Peapod” Shopping Service Term Paper

Introduction

The virtual and national expansion of companies is happening at an ever-growing pace. Most virtual and online stores have shifted from multi-domestic marketing to international marketing. The appearance of virtual market has been enthused by the speedy enlargement and mixing of countries; the configuration of local trading blocs; the formation of market economies; and advances in production and communications technologies¹. Today, virtual marketing is proving to be of ever-increasing importance to companies of all sizes, to their customers, and to national economies. Worldwide, most companies are now selling to, using materials or equipment from, or competing with products from other nations. Peapod is a leading retailer of groceries and a subsidiary of Giant Foods. For many companies, like Peapod, the current market provides additional profits and is all that enable some companies to make any profits at all. Virtual consumers are not familiar with grocery shopping online but they are familiar with main food brands and products. The virtual market represents great opportunities for Peapod to expand its international activities and enter the new market.

Business Overview & Overall Marketing Plan

Description of Product

Peapod proposes products for two types of customers: home buyers and for business purposes². The main types of products involve general grocery, meat, and seafood, the Deli, meals made easy, health and beauty products. Like the traditional value chain, the virtual value chain is carefully managed if its full potential. The processes by which this value is created are themselves online (bringing together disparate pieces of information, analyzing, sorting, and distributing that information), as are its customers (companies that need information for their own needs).

The methods and underlying company’s ideologies of the virtual economy are likely to be of direct interest to the local community, but understanding how these concepts can be applied in the new environment also tells a lot about how these new ways of business and shopping can be exploited in other functions within the industry. Peapod pays special attention to delivery service and proposes fast delivery for all consumers. The advantage is that a potential customer can choose the time of delivery and check on the site whether this time is available or not. The actual product is grocer while the augmented product is delivery service³.

In terms of the product life cycle, Peapod is in the maturity stage. The traditional characteristics of this stage are exceedingly resourcing intensive. They require the company to remain abreast with the current developments in their own environments and preferably several other fields as well. The core benefit of the product is fast delivery and high-quality products of all types. The customer can order exotic and traditional goods online and check their availability and time of delivery. In other words, the more experiences to which customers are subjected, the more likely they are to be able to make an effective purchase. Also, the more perceptive they are, the more likely they are to generate an effective purchase from that experience. The virtual world can positively increase the level of quality that a buyer can assimilate⁴. Peapod refers to the Internet throughout because online shopping represents a very real and very accessible attempt to introduce the concept of a virtual business alongside the physical world. Online shopping is beginning to touch all aspects of modern life; it is the new society that, probably, continues to make the best use of it today⁵.

Current Market Situation

The USA demographic forecasts indicate that the retail needs of these countries are and will be quite different from those in the north. A fall in birth rates has led to a decline in population throughout the country. Although the USA states have experienced a decline, the rate of decline is much slower than in the north. The southern states are projected to be above the average of 1.7% increase in population. Social changes such as increased labor force participation by women will also affect the demand for consumer goods. The southern states have lagged behind the north in women’s entry into the labor force. In postindustrial societies, the increase in service and part-time employment encourages additional female worker participation. In the USA, the scale of operations in online shopping is very small. There is approximately one retail store for every fourteen households in the country. The researchers found that 20% of Americans scarcely bought anything, rejecting or never entering the consumer society, while the next largest group, 15%, never stopped buying and showing off. Most people did their shopping at the first store they came across and did not compare prices. In the USA, the current market situation is marked by the low purchasing power of buyers as some of them switched to so-called co-op food stores. The advantage of these stores is low prices and wide product range⁶.

Current marketing situation: Product Review

The product of Peapod is a grocery product line including such types of products as general grocery, meat, and seafood, the Deli, meals made easy, health and bakery. Peapod is based on a specific contractual formula based on high quality and on time delivery options. The mission of the company is to delivery quality products to the market and maintains stable market position in this region. The mission has made it clear that virtual grocery market is in the relatively unexploited sector that the company sees its clear­est opportunity for innovation and penetration. The main goal of Peapod is to get and keep a customer.

Also, it is aimed to achieve competitive advantage and sustainable competitive creating value for their customers, select markets where they can excel and present a moving target to their competitors by continually improving their position. Three of the most important factors are innovation, quality and inventory reduction. Be in one of the most highly rated industries for stability and success, Peapod offers unique product mix of home and consumer electronics to everyone. It is advantage is that consumer grocery products can meet the requirement of wide audience. The high quality of the product is the main criterion. The purpose is to provide customers with high quality products at reasonable price using successful management techniques and new ways of effective marketing from both ethic and financial perspectives⁷.

Needs and corresponding features/benefits

For Peapod, the family is an identifiable unit that can be studied through purchase reactions, tastes, and consumption decisions. To a considerable extent, families life style is characterized by the goods purchased and displayed — homes, furniture, furnishings, services, recreation, and travel. Important shifts are occurring in low and middle class family life. The roles of husbands, wives, and children have changed. Modern families tend to become more democratic and the power of children has increased⁸. Reducing leisure, night and weekend shopping hours, and shopping centers located near homes encourage online shopping.

The impact of either husband or wife varies with the exact purchase. On a broad level, the allocation of financial resources must be specified — for instance, what portion of the family fiancé goes to food, grocery, recreation, and travel. Then there are decisions concerned with the special food to be purchased within each category — the kind of meat, produce, or grocery. Low and middle class family decisions must also be made on the special purchase within each class. Lastly, a choice of the food itself must be made. Delivery services are becoming a more important part of shopping. A large proportion of food nd grocery products and services is purchased and consumed at a considerable distance from home. Therefore, transport to and from services is important, and consumers become increasingly dependent on efficiently organized delivery systems. Many services involve direct contact between the buyer who furnishes and the person who receives them⁹.

Competitive Review

The main competitors of Peapod are Wal-Mart and other supermarkets specialized in cheap food and grocery products. Grocery market is marked by increasing capital markets activity over the past 5 years. It is estimated that average annual returns are anticipated to exceed 13 percent over the next 10 years, with investment alternatives performing at single digit growth rates (approximately 7 percent to 9 percent). This approach is based on Peapod superior understanding of the problem solved by the product, the benefits it offers and issues it addresses. As consumers become more concerned about price, mobility and quality consumer electronics is the best choice for this target group. When product is standardized it becomes established for minimum quality and features, competition shifts to a greater emphasis on cost and service. Consumer marketing strategies are the broad approaches intend to adopt in the longer term to achieve its marketing objectives in accordance with its mar­keting policies. New strategy will take into account increased competition. The blend of controllable marketing variables required producing the response wanted in the target market. The mix includes new products, prices, promotion, packaging, advertising, field sales and distribu­tion. Internet services and Internet providers are another potential area for peapod¹⁰.

Distribution Review

Potential buyers are diverse in character. They represent $175 billion in annual buying power and about $1000 per week in disposable income. These customers expect to find unique products, regardless of what the price and proposition. This target group can be characterized as the skeptical consumers who are health conscious. Most of them are looking for a toy chest of automotive accessories including interior lighting, taillight dress-up kits, carbon-fiber shift knobs, and sports mufflers. The best distribution channel is online shopping and shopping thought agents¹¹.

The new channel will be positioned as a unique one which promises mobility and social freedom. Personalization, innovation, and technology will be the core of positioning strategy. The buyer perception of benefit-generating attribute will be based on unique design and stylish image appealing to a wide target audience. Social mobility and personalization will be the main attributes of positioning strategy. A unique image of the grocery purchase and sense pf belonging to new generation will appeal to potential consumes¹².

SWOT

Strengths

The strengths of Peapod are strong brand image and expert system, excellent web-site and customer support. Resource-based philosophy and innovations create new opportunities for market development and brand recognition. Customers’ loyalty can be achieved through the people who are employed by Peapod. The strengths are strong brand image and expert system, excellent web-site and customer support. Resource-based philosophy and innovations create new opportunities for market development and brand recognition. Unique vision of the customer needs becomes the responsibility of R&D, which is staffed by specialists in visualizing and realizing trivial or main product changes. Since senior management is accountable for planning and control throughout the company in retail firms, it follows that they must adopt a leadership approach that is fairly directive. In most of Peapod stores, managers adopt either a democratic, consultative, or participative style¹³. Retail service makes an emphasis on people as unique target audience.

Opportunities

The opportunities of Peapod include high potential to growth and profitability, professional management team and unique corporate culture, customized order system and discounts. There is a great opportunities for ssupermarkets in this field, because specialized shops, throughout the world are interested in goods produced in the environmentally friendly manner. The opportunities include high potential to development and expansion, professional approach to management and wider product range. Retail service assesses the areas in which the organization can benefit the most from greater emphasis on creativity and innovation. Competitive advantage serves both as a way of identifying what creative and innovative things competitors are doing as well as finding out for each of the areas requiring imagination and innovation who is the best¹⁴.

Weaknesses

The main weaknesses of Peapod are low market potential in some geographical areas. Competition is the main threat for Peapod. In spite of weaknesses and threats, Peapod has an attractive position based on a combination of cost management and customer services. In spite of weaknesses and threats, Peapod has an attractive position based on a combination of cost management and customer services¹⁵. The market trends establish challenges for generating creativity and innovation for large companies like Peapod. They also provide research challenges from a creative and innovative management perspective. Research challenges fall into two major approaches of further success: one deals with methodologies and the other deals with issues to rethink, realign and reorganize large-scale retail companies¹⁶.

Threats

Limited geographical market and increased competition are the main threats for Peapod. The main threat for Peapod is increased competition and near monopolistic position of other entailers on the market. New methods of accountability will be needed to ensure that creative and pioneering activities are truly better than traditional ways.

First year objectives

The main objective of the first year is to help traditional buyers of Peapod to use online shopping and save time on traditional shopping practices. More narrowly, the function of the new strategy will be to provide the informational and analytical inputs necessary for effective planning of future market marketing activity, control of current marketing operations, and evaluation of results. Three programs will be involved at Peapod: (1) customer feedback input, (2) customer satisfaction surveys, and (3) total quality control. So-called worldwide relationship surveys are run about every 12 months¹⁷. The objectives will be to: (1) attract wide target audience; (2) educate buyers how to use online shopping; (3) educate buyers about healthy life styles and importance of fruits and vegetables in diet; (4) include exotic fruits and vegetables in the Peapod’s product line.

Implementation and Control of promotion campaign

1. August 1^st – Start creating advertising campaigns and the internet website for consumers;
2. September 1st- Production of the new online stores begins.
3. September 15^th – national and local advertising and promotion campaigns
4. October 1^st – the first online stores will be opened out to the different channels
5. October 8th- Internet promotions will begin for individuals who are looking to purchase their products online.
6. October 15th- Special promotions will start for the new online stores

A special attention will be devoted to the milestones (each month) which determine whether or not sales are being met.

Positioning strategy

The core strategy of Peapod will be based on value propositions and product differentiation is well developed. The main strengths of this strategy are clear identification of the product advantages and potential target audience. This strategy will result in a plan that can assist the company in selecting and positioning of the product. Product differentiation strategy will help to create entry barrier for other companies and creates a unique market proposition. This strategy makes sense because of a prod­uct’s perceived uniqueness. Differentiation should be achieved as a result of unique product attributes and effective marketing communications. In the case of Peapod, product differentiation and brand loyalty increase for would-be industry entrants who would be required to make substantial investments in R&D or advertising. As with the selling philosophy and relationship strategy, Peapod must include comprehension of the target market’s characteristics and the fact that pre­vailing needs and wants may mandate products that are different than those offered in the home country¹⁸.

As the first marketing tactic element, differentiation should create a truly different and unique product for cus­tomers. Peapod not only has to be perceived differ­ently by customers (positioning), it has to be really differ­ent in content, context, and infrastructure (differentiation). In addition to differentiation strategy, product positioning will help to establish trustworthiness, confidence, and competence for customers. If Peapod has those ele­ments, customers will then have the “being” of the com­pany within their minds. It is about earning customers’ trust to make them willingly follow Peapod. Because customers cannot be managed, they have to be led. In order to successfully lead customers. Peapod has to have credibility. So posi­tioning is not just about persuading and creating image in the consumers’ minds, it is about earning consumers’ trust and loyalty. Positioning strategy should support differentiation strategy in order to widen product potential market. It will help to occupy the consumers’ minds with unique offer­ings and will lead the customers’ credibly.

Product Strategy

Segmenting decisions can be complicated by the fact that national income fig­ures, such as those cited for Italy are averages. Age segmentation will involve young people between the ages of 18 – 76+, and young families who value good products and low cost. These people by virtue of their shared interest in fashion, music, and a youthful lifestyle, exhibit consumption behavior that is remarkably consistent across borders. Young consumers may not yet have conformed to cultural norms. For Peapod, gender segmentation will have a great influence on marketing campaign, but it is predicted that the majority of consumers will be males. Psychographic segmentation will help to group people in terms of their attitudes, values, and lifestyles. For Peapod, the majority of the target audience is stylish young people who admire fashionable cars and lifestyle. They will feel the new model is tailored according to their needs and wants. Income segmentation: the grocery market consists of those who are willing and able to buy. The buyers belong to upper, middle and low class families. Taking into account standards of living in Italy, they will offer 0% interest for five years or the option¹⁹.

Pricing Strategy

For Peapod, the market skimming pricing strategy will be part of a deliberate attempt to reach a market segment that is willing to pay a premium price for a particular product. Companies that seek competitive advantage by positioning their products in the premium segment frequently use market skimming. For Peapod, the skimming pricing strategy is appropriate in the introductory phase of the product life cycle when both online shopping capacity and competition are limited. By setting a relatively low price, demand is limited to innovators and early adopters who are willing and able to pay the price²⁰.

Distribution Strategy

Channels of Peapod’s distribution: marketing organizations and direct agents. Agents will be representatives who act on behalf of the exporter. The agents will be paid on the basis of commission. It is expected that in two years the company will create its own distribution system²¹.

Marketing Communications Strategy

In its new marketing campaign, peapod will use TV programs and press clubs, newsletters, press releases. Press conferences will help Peapod to inform potential clients about recent developments and innovations, about future directions and strategy of the company. Newsletters will inform all clients about recent changes and innovations applied by the company. This information will help to create an image as a unique brand. Online promotion: on-line community. Since Peapod’s business is not as usual, the promotional plans of the firm should be somewhat similar to a contingency plan. This contingency plan is designed to maintain the proactive orientation of the firm. Advertisements; in local and national press, radio and TV, off-the-page advertising, direct mail, a catalogue selling, posters, billboards, signs and free gifts.

Internet advertising: web banners and web site. It will help to control product perceptions and feelings toward the brand in real time. In the market place where there are so many different firms, an enterprise cannot automatically establish its identity. The deliberate action to accomplish this identity cannot be too sporadic²². Peapod has the tendency to advertise or promote when the economy is in an upswing, and they cut down advertising and promotion in the times of economic slow-down. However, they must continue with their total promotional program and make only a few adjustments at the periphery as the economic conditions change or competitive conditions necessitate. Accelerating promotional activity may not be quite adequate to counteract the turbulence. The firm needs to be more proactive within the constraints of a promotional plan that is guided by the promotional objectives²³.

Conclusion

The advantage of product originality will allow Peapod to create a strong international brand image. Brand loyalty will also be important factor in increasing the costs for customers of switching the products of new competitors. Using an international mar­ket development strategy, Peapod will capture a larger share of a market for current products through market saturation and market pene­tration. Taking into consideration rapidly changing environment and customers expectations it is not enough to operate only on a national market. Online marketing will help Peapod substantially increase the level of sales. marketing plans are heavily dependent on consumer or buyer feedback, which in turn is dependent on the limited perception and experiences of the consumers or buyers. Too often these consumers or buyers are unable to articulate their needs or wants in terms of a futuristic perspective.

Latent needs and desires that may identify futuristic product possibilities are rarely identified by most survey research methods currently in use by Peapod. It is a special type of consumer that can articulate these possibilities, and special research efforts are needed to find these people and draw out their ideas. This implies that, once certain plans and financial decisions are made, business continues as usual. The necessary flexibility and proactive behavior are not built into promotional plans. Furthermore, it is assumed that business conditions are not likely to change significantly and that the best approach is to implement the plans as they were originally devised. This type of conservative and traditional point of view makes it impossible for the firm to cope with turbulence. The case of Peapod shows that firms can behave this way because they are big and powerful. Therefore, they reinforce survival of the fattest. Though, Peapod must realize that by not being proactive and not attempting to counteract instability in business is likely to lose money in both the present and future.

References

Botan. C. (1992). “International Public Relations: Critique and refomulation”, Public Relations Review 19 (2), pp. 150-151.

Drejer, A. (2002), Strategic Management and Core Competencies: Theory and Application. Quorum Books.

Fill, C. (1999), Marketing Communication: Contexts, Contents, and Strategies 2 edn. Upper Saddle River, NJ: Prentice Hall.

Griffin, T., Mcarthur, D.N. (1997). A Marketing Management View of Integrated Marketing Communications. Journal of Advertising Research,37 (1), p. 19.

Griffith, D. A., Hu, M. Y. and Ryans, J. K. Jr. (2000). “Process standardization across intra- and intercultural relationships”. International Business Studies, 31, pp. 303-24.

Hollensen, S. (2007), Global Marketing: A Decision-Oriented Approach. Financial Times/ Prentice Hall; 4 edition.

Jacoby, J., Johar, G.V., Morrin, M. (1998), Consumer Behavior: A Quandrennium. Annual Review of Psychology, 49 ((1), p. 34=37.

Peapod Home Page. (2009). Web.

Footnotes

1. Botan. C. (1992). “International Public Relations: Critique and refomulation”, Public Relations Review 19 (2), pp. 150-151.
2. Peapod Home Page. (2009). Web.
3. Peapod Home Page. (2009). Web.
4. Hollensen, S. (2007), Global Marketing: A Decision-Oriented Approach. (Financial Times/ Prentice Hall; 4 edition.), 43.
5. Griffin, T., Mcarthur, D.N. (1997). A Marketing Management View of Integrated Marketing Communications. Journal of Advertising Research,37 (1), p. 19.
6. Griffith, D. A., Hu, M. Y. and Ryans, J. K. Jr. (2000). “Process standardization across intra- and intercultural relationships”. International Business Studies, 31, pp. 303-24.
7. Fill, C. (1999), Marketing Communication: Contexts, Contents, and Strategies 2 edn. (Upper Saddle River, NJ: Prentice Hall), 98.
8. Drejer, A. (2002), Strategic Management and Core Competencies: Theory and Application. Quorum Books.
9. Peapod Home Page. (2009). Web.
10. Botan. C. (1992). “International Public Relations: Critique and refomulation”, Public Relations Review 19 (2), Summer, pp. 150.
11. Fill, C. (1999), Marketing Communication: Contexts, Contents, and Strategies 2 edn. Upper Saddle River, NJ: Prentice Hall.
12. Ibid., 43.
13. Fill, C. (1999), Marketing Communication: Contexts, Contents, and Strategies 2 edn. Upper Saddle River, NJ: Prentice Hall.
14. Jacoby, J., Johar, G.V., Morrin, M. (1998), Consumer Behavior: A Quandrennium. Annual Review of Psychology, 49 ((1), p. 34.
15. Drejer, A. (2002), Strategic Management and Core Competencies: Theory and Application. Quorum Books.
16. Fill, C. (1999), Marketing Communication: Contexts, Contents, and Strategies 2 edn. Upper Saddle River, NJ: Prentice Hall.
17. Jacoby, J., Johar, G.V., Morrin, M. (1998), Consumer Behavior: A Quandrennium. Annual Review of Psychology, 49 ((1), p. 34.
18. Hollensen, S. (2007), Global Marketing: A Decision-Oriented Approach. (Financial Times/ Prentice Hall; 4 edition), 76.
19. Hollensen, S. (2007), Global Marketing: A Decision-Oriented Approach. (Financial Times/ Prentice Hall; 4 edition.), 87.
20. Ibid, 29.
21. Hollensen, S. (2007), Global Marketing: A Decision-Oriented Approach. (Financial Times/ Prentice Hall; 4 edition.), 83.
22. Peapod Home Page. (2009). Web.
23. Fill, C. (1999), Marketing Communication: Contexts, Contents, and Strategies 2 edn. (Upper Saddle River, NJ: Prentice Hall), 28.