I. Executive Summary
Truly Wholesome Foods, Inc. is a small grocery store chain consisting of 54 stores located throughout Missouri, Arkansas, Oklahoma, and Kansas. Through various owners, branding, and locations, the company has been in business for nearly fifty years. Truly Wholesome maintains a target demographic of those looking for locally owned stores offering local and organic products in addition to the typical lines found at a grocery store. In addition, the company has an ever expanding Delicatessen department that is focused on providing hot and cold, ready-made foods for consumers. However, due to the economic situation, ever increasing external forces, and rising food costs, the deli departments have seen significant decrease in traffic, resulting in lower sales and overall profitability.
As a whole, the company has an excellent marketing campaign. However, less than 5% of company promotional materials are in some way targeted towards increasing sales for the deli. An intensive evaluation of the internal and external strengths and weaknesses, opportunities, and threats serve as the groundwork for this marketing plan. Not only is the company as an entity discussed, but more specifically, the deli. This plan focuses on opportunities to gain new customers, build stronger relationships with current customers, and the development of new food products, menus, or ideas focused on building and expanding the current deli business. Because Truly Wholesome offers a retail environment for its products and services, it is currently considered a business-to-consumer marketer.
II. Environmental Analysis
Originally founded as a small, local, family-owned grocery store, Truly Wholesome has evolved into a full-line retail grocer offering extensive selections in all departments. The company was founded by Bill Winter in 1954 and was later passed down to his son, John Winter, in 1978. In 1985, the company was purchased by David Grisham, who owned several other grocery stores in the area. Over the years, the company has expanded through renovation of old locations, the acquisition of other grocery stores, and - in 2005 - built its first store from the ground-up. The current store types range from traditional supermarkets to Fresh Format stores. The company currently owns stores in four states and services more than 32 communities. Currently, the company wishes to promote and drive sales in the Delicatessen department.
A. The Marketing Environment
1. Competitive forces. The competition in the grocery industry is very intense, which results in already low margins on most items and negative margins on items used as loss-leaders. The industry average Net Profit after Taxes is 1.09%. Currently, TWF is trending with that margin for 2013. In addition, direct competition is also from restaurants, which have an increasing amount of revenue annually. In addition, the margins at restaurants tend to be greater than grocers.
Also, the continuous opening of "big-box" stores such as Wal-Mart, Costco, and so forth, offer a serious threat to the sustainability of locally-owned supermarkets. Locally owned stores, such as TWF, must find ways to offer a competitive advantage to the consumer instead of purchasing from a larger retailer.
2. Economic forces. Overall, it has become quite common for grocers to reduce their allocation of marketing funds in an attempt to cut expenses during the current recession. A lot of these cuts have occurred in print or television advertising and less funds have been used to drive online and social-media advertising. In addition, many local grocers are focusing on promotional advertising, sweepstakes, and so forth in an effort to create excitement about food shopping and gain new customers due to a creative and exciting experience.
Additionally, the current recession has attributed to the ever decreasing purchase of hot-food. More Americans...