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Whole Foods Market Entry Strategy into Netherlands

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Contents

  • Executive Summary
  • Introduction
    • 2.1 Evolution of Marketing Mix: 4Ps to 7Ps
    • 2.2 Whole Foods Market, Inc
    • 2.3 Objectives
  • Main Findings
    • 3.2 Marketing Mix of Whole Foods Market, Inc., Global Expansion
      • 3.2.1 Product
      • 3.2.2 Price
      • 3.2.3 Place
      • 3.2.4 Promotion
      • 3.2.5 People
      • 3.2.6 Physical Evidence
      • 3.2.7 Process
  • 3.3 Special Netherlands Culture
  • 3.4 Cultural Forces in Netherlands
  • 3.5 Reviews
  • Conclusion
  • Recommendations
    • Product
    • Differentiation pricing
    • Promotion
    • Place
    • People
    • Physical Evidence
    • Process
  • References

1.   Executive Summary

The entire study is centered towards analyzing marketing mix and global market entry strategy which can be adopted by Whole Foods Market in order to enter into Netherlands. There are cultural aspects associated with a country that needs to be taken into consideration before entering into a specific market segment. Dutch culture is aligned with products offered by the company. In the Dutch consumer market natural and organic food goods have a strong demand. The main focus of the company should be to implement effective promotional strategies and set cheap prices so as to gain maximum market share.

2. Introduction

2.1 Evolution of Marketing Mix: 4Ps to 7Ps

Marketing Mix initially encompasses 4Ps such as product, price, place and promotion. However Bitner and Booms in later stage commented that three additional P’s should be added within overall marketing mix. This suggested mixing of resources such as individuals, physical evidence and processes. 7Ps was basically structured in order to represent the service industry. This is because 4Ps mainly highlight functioning of manufacturing industries.

Whole Foods Market Entry Strategy into Netherlands

2.2 Whole Foods Market, Inc.

Whole Foods Market, Inc. was founded by John Mackey in 1980. The organization has its stores across United States, UK and Canada. It specializes in organic and natural food products. The company has its headquarters in Texas. Four local business people initially proposed the idea of Whole Foods Market when they witnessed a growth in supermarket chain in natural food industry. The firm has been able to expand on its business through series of mergers and acquisitions.

Also Study: Whole Food Market in America Analysis

2.3 Objectives

The purpose of this report, while entering the Netherlands, is to outline marketing mix and market entry strategy for Whole Food Industry, Inc. Cultural dimensions of new market would also be included within the study so as to reflect upon its impact on proposed marketing mix. The entire study shall be centered towards global market strategy of Whole Food Market, Inc.

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3. Main Findings

3.2 Marketing Mix of Whole Foods Market, Inc., Global Expansion

3.2.1 Product

  • Concept: Organic products and natural food products would be delivered in Netherlands market.
  • Whole Foods Market, Inc., Global Strategy: Global strategy shall be either direct exporting or wholly owned subsidiary (Hollensen, 2013).
  • Brief Adaptation or Standardization in Netherlands: Standardization product strategy would be applied in Netherlands market in order to sustain their competitive advantage (De Burca, Brown and Fletcher, 2004).

3.2.2 Price

  • Concept: The main concept is to acquire maximum market share and establish a stable market position (Usunier and Lee, 2012).
  • Whole Foods Market, Inc., Global Strategy: In global context the focus would be on market development strategy.
  • Brief Adaptation or Standardization in Netherlands: Adaptation approach will be applied on Netherlands market in context of pricing strategy (Jobber, 2012).

3.2.3 Place

  • Concept: Marketing mix element place is related to distribution network. Whole Foods Market will be delivering products through manufacturing or processing plant to warehouse and finally to retail stores (Porter, 2006).
  • Whole Foods Market, Inc., Global Strategy: Global strategy shall be based on following wholly owned subsidiary network (Wintzer, 2007).
  • Brief Adaptation or Standardization in Netherlands: Whole Foods Market will implement standardized approach while reflecting upon place element.

3.2.4 Promotion

  • Concept: Promotion helps to communicate brand message to target audience. This is an effective tool for highlighting product or service features (Pringle, 2008).
  • Whole Foods Market, Inc., Global Strategy: Promotional strategy would be to associate offerings with consumer’s health. Different innovative media shall be utilized to promote company’s products (Proctor, 2014).
  • Brief Adaptation or Standardization in Netherlands: Adaptation will prove to be beneficial in a new market as it shall determine inclination of customers towards a specific promotional media.

3.2.5 People

  • Concept: People mainly represent those who work for the organization. This aspect takes into consideration skills, professionalism, commitment, behaviour, attitude, etc (Pride and Ferrell, 2014).
  • Whole Foods Market, Inc., Global Strategy: To enhance skills of employees and even involve local people in the process (Onkvisit and Shaw, 2009).
  • Brief Adaptation or Standardization in Netherlands: Adaptation approach will be implemented for this specific marketing mix element.

3.2.6 Physical Evidence

  • Concept: This encompasses outward visuals, tangible evidence, signals or clues that form an essential part of both business partners and organization.
  • Whole Foods Market, Inc., Global Strategy: Focus would be on developing desirable ambience and providing required facilities.
  • Brief Adaptation or Standardization in Netherlands: Standardization approach shall be applied in new market of Netherlands.

3.2.7 Process

  • Concept: Process is the way through which business operations are undertaken and effective handling of customer transactions at all service points.
  • Whole Foods Market, Inc., Global Strategy: The global strategy would be to reduce on queue time from customer’s perspective (Churchill, 2009).
  • Brief Adaptation or Standardization in Netherlands: Process shall be standardized in Netherlands market so as to gain economies of scale.

3.3 Special Netherlands Culture

Netherlands culture can also be regarded as Dutch culture. There is cultural diversity observed in this region due to foreign influences and regional differences. Dutch culture is closely knitted to their traditions with lesser impact of modernization (Capon, 2008). Their culture clearly portray that Dutch people are more inclined towards vegetable consumption rather than meat consumption. On the other hand, dairy products are also consumed by Dutch people to a greater extent. They are more health conscious in comparison to other European regions (Lynch, 2011). Alcoholic beverages are strictly absent in Dutch cuisine.

3.4 Cultural Forces in Netherlands

The major cultural force for Whole Foods Market’s wide array of products in Netherlands is a large base of health conscious individuals. There is a high consumer market demand in Netherlands for natural or organic food products. Other cultural force is change in social pattern trend whereby more individuals prefer to purchase from supermarket stores (Barney, 2007). Though the culture outlines limited diversity but it greatly varies from one region to another. Dutch people are conscious about product quality along with its price.

3.5 Reviews

3.5.1 Examples of Whole Foods Market, Inc in global markets

Marketing Mix           United States Canada United Kingdom
Product Natural or organic food Natural or organic food Natural or organic food
Price Competitive pricing strategy in order to acquire maximum market share Market penetration strategy so as to establish a stable market position

 

Cost plus pricing strategy has been applied in UK market for gaining desirable profit margins (Keegan, 2013)
Promotion Promotions done through television, leaflet distribution in newspapers, radio and social media (Blythe, 2009) Events have been organized by the company in Canadian market. Apart from this mechanism, traditional media is also taken into consideration Promotion in UK market is done through both traditional and digital media (Baker and Hart, 2008)
Place Product distribution is through their wholly owned subsidiaries. The company has been able to expand its business across United States through series of mergers and acquisitions Few retail stores has been set up by the company in Canadian market in order to speed up product delivery process UK market is an intensely competitive market and hence focus is on acquiring existing retail stores or to set up its own store outlet
People Standardized approach applied for this element since the company encompasses diverse cultural workforce Local business partners enhances skill set or knowledge base of workforce In UK market, there are diverse cultural background employees present who are provided with proper training and development programs
Physical Evidence This aspect is implemented through proper structuring and designing of retail store outlets Facilities and technology based equipments are provided to Canadian consumer market segment (Ulwick, 2005) Physical ambience is developed through appropriate retail store environment
Process Process mainly comprises of information accessibility and reduction in lead times In Canada, the company has greatly focused on queuing time Customer transaction is considered to be central component and highly efficient devices are utilized

 

3.5.2. Examples of Other foods companies entered Netherlands

Marketing Mix Nestle Kraft Foods PepsiCo
Product Food products comprising of snacks, confectionery items, etc. The company offers wide range of food and beverages PepsiCo basically offers grain-based snack foods and beverages
Price The company applies cost based pricing strategy Kraft Foods focuses on market penetration pricing strategy (Ståhlberg and Maila, 2013) PepsiCo implements competitive pricing strategy (Smith, 2011)
Promotion Promotion done in the form of advertising campaigns broadcasted in television, radio, social media, etc (Doole and Lowe, 2012) Traditional media channels adopted by the firm for promotional activities. Investment in promotional measures is comparatively less Traditional media along with large number of event sponsorship (Livingstone, 2004)
Place Manufacturer–> distributor > retailer > customers Manufacturer–> warehouse > distributor > retailer > customers Manufacturer–> distributor > wholesaler > retailer > customers
People The company is inclined towards internal recruitment procedure Kraft Foods company believes in maintaining cultural diversity within its employee base Internal and external recruitment procedure followed along with appropriate training and development program
Physical Evidence Physical evidence established through their facilities and customer service Customer retention through effective customer service (Traill and Grunert, 2007) Technologically advanced equipments
Process Faster rate of information accessibility Wide set of information is accessed by the company in order to formulate business strategies and offer superior product quality to customers (Cheverton, 2005) Technological implementation for reducing lead times

4. Conclusion

As per this study, Whole Foods Market has been able to expand on its business across the globe. The company initially started off its business with only one retail store outlet. However increasing demand towards natural and organic food products proved to be a key success factor for the company. Whole Foods Market through its wide base of supermarket chain desires to supply quality natural products to all its customers. The next global expansion strategy of the organization is in Netherlands. This would facilitate acquiring sufficient market share and establishing a strong market position. The organization has its operations spread across United States, United Kingdom and Canada. It can be stated that cultural force of Netherlands is highly aligned with the firm’s business operations. Dutch culture highlights more tradition and Dutch people prefer to consume vegetables more in comparison to meat. This might be advantageous for the company in terms of gaining high revenue margins.

5. Recommendations

  • Product

Standardized product should be delivered by Whole Foods Market, Inc. It would be highlighted as brand leveraging strategy. Maintaining its current product line shall enable the company to acquire more customers based upon its competitive advantage. Natural and organic products have a high demand in Netherlands since people are health conscious and consume vegetables more. It is recommended that the company can change its packaging by implementing some creative ideas.

  • Differentiation Pricing

Pricing strategy should not be standardized while expanding into a completely unknown market. The economic stability of Netherlands cannot be compared with the company’s other operating regions. Pricing techniques need to be implemented based upon demographics and culture of new market. It is recommended that in initial stage of its operations Whole Foods Market should apply market penetration strategy. Product quality along with cheap price would enhance level of customer satisfaction.

  • Promotion

Promotional techniques are evaluated on basis of quality and speed of message transmission. There are many food companies who are operating in Netherlands and hence appropriate promotional tools have to be incorporated. Social media can be utilized by the company since target customer segment prefers to utilize this form of electronic media. On the other hand, billboards, promotional offers, advertisements in TVs or radio’s, etc., would be productive promotional techniques for Whole Foods Market.

  • Place

Place is also at times indicated as distribution in marketing mix. This aspect has to be standardized because the major objective of the firm is to develop a large base of loyal customers. It is highly recommended that the company establishes retail outlets across specific less competitive locations in Netherlands. There would be manufacturing or processing plants set up in Netherlands in order to provide constant supply of food products.

  • People

Employees form the basis of organizational growth or success. While implementing a global strategy it is essential to possess a base of talented or skilled employees. These employees would be responsible for implementing strategy in global markets. Whole Foods Market should provide proper training to employees before entering into Netherlands. The company is recommended to hire local people more on board since they are aware about external environmental conditions. This shall benefit the firm in context of strategy formulation and implementation.

  • Physical Evidence

Retail store ambience plays a vital role for those companies operating in this particular sector. Whole Foods Market would be able to establish a strong market position through offering best facilities to customers along with wide array of products. The store ambience can be created through building a team of well trained sales personnel along with lights, music, scent, colours, etc.

  • Process

The major problem in supermarket store is in terms of queuing time. Whole Foods Market is recommended to focus on queue time so as to ensure that products are delivered to customers on time. The less time spend by customers in the queue more satisfied they would be with the supermarket store. On the other hand, the company also needs to focus on information accessibility.

References
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