Peapod Report

Topics: Grocery store, Retailing, Supermarket Pages: 9 (2076 words) Published: August 19, 2008

The company’s current mission is to be the world's leading and preferred provider of interactive grocery shopping services.
Peapod Inc. is committed to providing genuine value to its customers by providing:
On line shopping services where customers can shop 24 hours a day 7 days a week.

Top quality products : fresh meat , deli , produce , bakery goods , name brand packaged foods , households items and health and beauty products.

Deliveries on the same day or next day at a time chosen by the customer.


As explicitly stated in the case, current objectives are as follows:

To attract more users and retain the business of current users. •To increase the frequency with which users place orders and increase the average order size. •To enhance awareness of the Peapod brand name.

To keep investments and fulfillment costs down.


The central thrust of Peapod’s strategy is to build and strengthen the company’s long-term competitive position. The company has forged a series of strategies both in the market and internally that are capable of producing sustainable competitive advantage. The company has opted to adopt a new order fulfillment business model using a local company-owned, company operated central distribution warehouse to store, pick, and pack customer orders for delivery.

The company utilizes an easy-to-use website with highly functional features which encourages repeat purchasers and differentiates Peapod from other e-tailers. Customer can search for products utilizing various ways such as browsing by aisles, product search by brand name or category, product category alphabetically or by price, nutritional content, and sales items, among others.

In order to achieve it’s marketing objectives of attracting more users, retaining business of current users, increase frequency with which users place orders, to grow average order size and top enhance awareness of Peapod brand, the company uses radio and newspaper advertisement, direct mail, ads on local mass transit systems, internet advertising and branding on delivery trucks and on employees uniforms.

To enhance it’s marketing efforts to attract new customers; the company uses the Peapod Affiliate Program to compensate other websites for promoting Peapod and for providing links to the company websites. The company also has an agreement with Hearst’s Home Arts Networks as the exclusive Internet grocery service promoted on their site. This is aimed at further promoting customer awareness of Peapod to its user base, which matches Peapod’s target customers. A marketing alliance with Excite Inc., also gives Peapod exposure to about 35% of Internet users. •In order to optimize order fulfillment and reduce costs, Peapod has reengineered its product distribution and order fulfillment practices, minimize stock outs, improve accuracy of order picking, deliver orders when scheduled, and accommodate higher order volumes more economically using new software. A scanning device is used to control order selection, minimize labor time for picking and packing and identify out-of-stock items for immediate replenishment.

The company plans to increase profitability by reducing order fulfillment cost to a smaller percentage of revenue. This will be achieved once its warehouses are up and running and it no longer have to utilize the stores of it retail partners to fill orders.

The database the company accumulates from its users, helps the company to deliver highly targeted and electronic coupons to users, count number of web page exposure, click through, coupon redemptions and sales to measure the impact of its marketing plan.

Peapod plans to expand into additional market areas and add new products and services to those already offered. To achieve this, the company plans to use its central...
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