wesolve marketing challenge 2016

Groman’s FoodsIntroducing Grocer-Ease, the grocery list you don’t have to make.

Sara GardepheRahul GuptaJenika G. Shannon

• Groman’s Food Inc., a high quality organic grocery food store, has a strong brand equity for its healthy selection of products. It currently operates 88 stores in six major north-eastern states in the US.

• Groman’s is experiencing stagnating growth, explained by its reliance on word-of-mouth marketing and an aging consumer base.

• It is also facing stiff competition from other healthy grocery food stores, restaurants and on-demand food services.

• At present, women aged 35-55 contribute about 61% of Groman’s profit across all locations.

• With only 3% of the business coming from the Young Adults segment, it presents a huge opportunity to be captured.

3.18%12.74%

61.15%

22.93%

Profit Contribution

Young Adults(Age 18-34)

Men(Age 35-55)

Women(Age 35-55)

Seniors(Age 55+)

Groman’s is facing sluggish growth in the increasingly competitive grocery healthy foods market.

• Increase total market share through improved customer segmentation and refined value proposition.

• Capture interest and loyalty of younger consumer base.

• Expand footprint and increase brand awareness by opening new stores in three metropolitan areas outside the current geographical presence.

Steps to Success

Groman’s New Target ConsumerAge: 18-34

Gender: Male/Female

Students & Young ProfessionalsIncome <$75K

Health-consciousTime-constrained

AdventurousEarly adopters

Store Experience

Customer Service ∙ Engaging ∙ Personalized

Shopping Experience

Perceived Price ∙ Simplicity ∙ Time

Brand Values

Community ∙ Environment ∙ Health

Consumer Needs

• Millennials are often perceived as self-centered. In actuality, they focus on the betterment of themselves in order to give back to the greater good.

• They need to feel special, and crave a sense of belonging.

• With so many options, and little brand loyalty, millennials tend to be highly price- and time-sensitive.

Our proposed go-to-market strategy will position Groman’s with a competitive advantage in five areas key to attracting millennials.

How to Reach Target Consumer

Customized Meal Plans

Engagement

Perceived Price

Time

Healthy Lifestyle

Marketing Strategy

• Leverage brand equity in healthy foods to enhance competitive advantage.

• Engage target segment by providing weekly suggested lists of grocery items, meal plans, and recipes that align with their health objectives and fitness plans.

• Promotional activities to build a community experience for the shoppers: Grocery runs, Scavenger hunts, Healthy Fridays, Cooking Competitions (refer to Appendix).

• Pilot Groman’s Grocer-Ease (refer to slide 8) at select stores (25% of the existing 88 stores) to fill remaining need gaps of target segment.

Store Expansion

• Open new stores in locations proximal to current stores to scale up presence and outreach.

Recommendations

App Overview

The Groman’s Foods mobile app is designed to be simple, informative, convenient, and time-saving. The main features include:

• Store map

• Loyalty program integration to track consumer behavior

• Personalized product and coupon suggestions (based on shopping patterns)

• Groman’s Grocer-Ease

Groman’s FoodsWelcome, Jennifer!

Better groceries at better prices.You have SAVED $54.97 this year!

We thought you might enjoy our New Vanilla AlmondMilk! It’s got zero calories and zero artificial sweeteners - but it’s still got all that yummy flavor!

SAVE $1.50@$6.99, just for you.

Try it for yourself.It’s waiting patiently

.

Groman’s has got the goods!

Add to PlanMain Menu

Day 3Meal 1:Egg white omeletFruit + Oatmeal

Meal 2:Baked chicken breastSteamed broccoliWhite rice

Meal 3:Oven-roasted turkeySweet potato hashGrilled asparagus

Day 4

Bulking Meal Plan

CheckoutChoose Plan

Pick up the groceries for your Bulking Meal Plan before 6:00 pm on Thursday, November 17th.

Just present this QR code to any Groman’s cashier in Rochester, NY.

Groman’s no-shop groceries:fresher, faster, for you.

Grocer-Ease WorkflowGroman’s Grocer-Ease will revolutionize the way health-conscious millennials buy food – providing them with personalized and convenient nutritional guidance. With the app, shoppers can:

• Add a weekly meal plan to bag based on fitness goals (i.e., bulking, shredding, cutting, losing).

• Add non-meal plan items to bag.

• Pay within the app.

• Save time and eliminate need to wander aisles by utilizing EZ pickup ($6 service fee).

Launch the app; Offer coupons (at store checkouts & public places) to achieve the 25K+ download target

Roll-out the predictive

analytics engine to push new, higher-margin

products

Marketing Strategy Timeline

Identify potential partners

(dieticians, fitness groups)

Offer bundled meal plans

through in-store promotions

(Healthy Fridays)

Promote the new app in-store and online (Groman’s website, social

media)

(4-8 weeks)

(4-6 weeks prior to app launch)

(Starting 2 weeks prior to app launch)

Groman’s Foods

(6-12 months post launch)

Estimated benefit of the new marketing strategy is ~$30M

Additional Staff $1,445,400

App Development(one-time) $25,000

Wellness Partnerships $25,000

Miscellaneous Expenses (safety budget) $100,000

Total Expenses $1,595,400

* Additional staff would be required for initial in-store promotions and packaging/pickup services* Salary for additional staff is calculated as:Man-hours per day: 20Hourly wage: $9 (min. wage)# Stores: 22 (pilot in 25% of 88 stores)

Young Adults(Age 18-34)

Men(Age 35-55)

Women(Age 35-55)

Seniors(Age 55+)

$6,250,000 $25,000,000

$120,000,000

$45,000,000 $25,000,000

$37,500,000

$120,000,000

$45,000,000

Projected Impact on Profits

Profit (current mkt share) Projected Profit (new mkt share)

* All numbers are in Millions ($)* New marketing strategy will help capture more market share from Young Adults and Men aged 35-55; resulting in $31.25M add. profit

Estimated Costs

Shortlisted 9 locations based on geographical proximity. Assessed population demographics that best suit Groman’s target consumer goals

Raleigh, NC

Charlot

te, N

C

Columbu

s, OH

Cincinnati

, OH-K

Y-IN

Richmond

, VA

Virginia

Beach

-Norfo

lk-Newpo

rt News,

VA-NC

Hartford

-Wes

t Hartfo

rd-E

ast H

artfo

rd, C

T

Pittsbu

rgh,

PA

Clevelan

d-Elyr

ia, O

H -

400,000 800,000

1,200,000 1,600,000 2,000,000

Market Size by Target Segments, 2015

Young Adults(Age 18-34)

Men(Age 35-55)

Women(Age 35-55)

Seniors(Age 55+)

* 3 Locations selected based on population demographics and growth rates* Population # derived from growth rates in Appendix 2 of the case applied on 2010 US Census figures.

Current Footprint (88 Stores)NY (43)PA (18), VA (9)NJ (8), MD (7), MA (3)

12.66%

9.44% 6.29%2.04%

5.23%

2.87%

-0.09%

-0.14%

-0.79%

Wrap-upGroman’s can capitalize on a growth opportunity by mobilizing traditional marketing tactics, launching an app, and expanding to strategic locations. To reach its goals, Groman’s must:

Leverage healthy brand image

Engage millennials

Increase reach

Appendix - Store Location analysisMetropolitan Area 2015

Estimate2010

CensusChange Current Market Share Improved Market Share

Young Adults(0.25%)

Men(0.5%)

Women(1%)

Seniors(1.5%)

Young Adults(1%)

Men(0.75%)

Women(1%)

Seniors

(1.5%)

Raleigh, NC 1,273,568 1,130,490 +12.66% 761

958

1,998

3,657

3,045

1,436

1,998

3,657

Charlotte, NC 2,426,363 2,217,012 +9.44% 1,126

1,412

2,959

5,946

4,503

2,118

2,959

5,946

Columbus, OH 2,021,632 1,901,974 +6.29% 1,223

1,384

2,812

6,324

4,891

2,076

2,812

6,324

Cincinnati, OH-KY-IN 2,157,719 2,114,580 +2.04%

1,216 1,531

3,153

7,851

4,866

2,296

3,153

7,851

Richmond, VA 1,271,334 1,208,101 +5.23% 759

936

1,994

4,874

3,036

1,403

1,994

4,874

Virginia Beach-Norfolk-Newport News, VA-NC

1,724,876 1,676,822 +2.87% 1,116

1,156

2,467

5,845

4,465

1,734

2,467

5,845

Hartford-West Hartford-East Hartford, CT

1,211,324 1,212,381 -0.09% 647

871

1,818

4,900

2,589

1,306

1,818

4,900

Pittsburgh, PA 2,353,045 2,356,285 -0.14% 1,219

1,621

3,363

10,961

4,875

2,431

3,363

10,961

Cleveland-Elyria, OH 2,060,810 2,077,240 -0.79%

1,032 1,426

3,027

8,737

4,129

2,139

3,027

8,737

Appendix – Projected profit

Segment Sales (in $B)

Avg. Profit Margin

Old Mrkt Share

New Mkt Share Revenue Profit (current

mkt share)Profit

ContributionProjected

Revenue (new mkt share)

Projected Profit (new mkt share)

Young Adults(Age 18-34) 100 2.50% 0.25% 1.00% $250,000,000 $6,250,000 3.18% $1,000,000,000 $25,000,000

Men(Age 35-55) 250 2.00% 0.50% 0.75% $1,250,000,000 $25,000,000 12.74% $

1,875,000,000 $37,500,000

Women(Age 35-55) 400 3.00% 1.00% 1.00% $4,000,000,000 $120,000,000 61.15% $

4,000,000,000 $120,000,000

Seniors(Age 55+) 150 2.00% 1.50% 1.50% $2,250,000,000 $45,000,000 22.93% $

2,250,000,000 $45,000,000

$7,750,000,000 $196,250,000 $9,125,000,000 $227,500,000