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MARKETING/ ADVERTISING CAMPAIGN 2009

Masha Lavie

April 20,2009 Professor Evans

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Mission Statement:

Whole Foods, Whole People, Whole Planet. The success is fulfilling the vision

based on customer satisfaction, Team Member excellence and happiness, return on

capital investment, improvement in the state of environment and local and larger

community support. As a whole, Whole Foods Market is looking to improve the

lives of all their stakeholders by eating healthy and eating well. The goal is to sell the

highest quality products with high standards in ingredients, freshness, taste,

nutritive value, safety and appearance that will improve the lives of our customers. i

Whole Foods Market’s mission is to improve the health, well-being and

healing of both people and the environment. As more people are exposed to the

benefits of natural and organic products, they are more likely to come to a category

leader for natural and organic products, offering one of the largest selections at very

competitive prices- Whole Foods Market. ii

Competition:

In an industry such as food retail, there is a large and intense competition including:

Regional, national and international conventional and specialty supermarket

Natural food stores

Warehouse membership clubs

Smaller specialty stores

Restaurants

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Each of these businesses competes with Whole Foods Markets based on product

selection, quality, customer service and price. iii

The specialty food store industry includes about 20,000 stores with

combined annual revenue of $20 billion.iv Major companies include Whole Foods

Market and Trader Joe's. v

Trader Joes:

“At Trader Joe's, our mission is to bring our customers the best food and

beverage values and the information to make informed buying decisions. There are

more than 2000 unique grocery items in our label, all at honest everyday low prices.

We work hard at buying things right: Our buyers travel the world searching for new

items and we work with a variety of suppliers who make interesting products for us,

many of them exclusive to Trader Joe’s. All our private label products have their

own "angle," i.e., vegetarian, Kosher, organic or just plain decadent, and all have

minimally processed ingredients. “ (traderjoes.com)

Trader Joes assures that none of their products contain artificial flavors,

colors or preservatives, MSG, no added Trans Fats. All of the store’s private label

products are ensured to have no genetically modified ingredients.

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Trader Joes Product Mix:

No Gluten Ingredients o A variety of products which do not include gluten- a protein found in

wheat, rye and barely.

Low Sodium o Products that contain 140 mg or less of sodium per serving.

Fat Free o Products that contain less than .5 grams of fat per serving.

Vegetarian o No ingredients that are derived from meal, poultry or fish are added.

Vegan o Products that contain no animal products and/or by-products

including: meat, poultry, fish, eggs, dairy, honey, gelatin, lanolin,

confectioner’s glaze and carmine.

Heart Healthy o Low in fat ( 3 g of fat of less) and low in saturated fat (1 g or less).

Contain less than 430 mg of sodium and less than 20 mg of cholesterol

per serving. Each product must contain at least 10% of the Daily Calue

for at least one of the five nutrients (Vitamins A, C, Calcium, Protein

and Dietary Fiber).

Quick Meal o Entrees that are ready to heat and serve in 15 minutes of less,

regardless of appliance used. The meals are made from a combination

of foods from 2 or more food groups.

Kosher o Products prepared in accordance with Kashrut (Jewish Dietary Laws).

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Target Audience/Market:

Seventy three percent of shoppers are the female head of households, eleven

percent are male heads of the household and 15 percent are both. The household

average spending ranges from $68 dollars a week for shoppers earning under

15,000 dollars a year to $118 a week for those earning more than 75,000 dollars a

year. vi

Trader Joes:

According to Scarborough Data, a market research firm, the typical Trader

Joes shopper is a college-educated, white homeowner with a median age of 44 and a

median household income of $64,000. It is almost evenly divided among the

married, single, female and males. They target people with a $500,000 home.

Trader Joe's targets 'educated' buyer. In 2004, Pat St. John, vice president of

marketing of Trader Joes claimed that the target audience of the company is a cost-

conscious, health- conscious label-reader who is not tied to national brand names.

According to company surveys, many of the target customers are well-travelled.

Customers that choose Trader Joes as their grocery store often share similar

characteristics such as Volvos and are very tolerant of Greenpeace solicitors. These

are the people who wear sunscreen, even over their tattoos, travel using flier miles

with their Lonely Planer Guide, guitar playing tax payers and environmentally

aware people who roller blade, bike or walk to work instead of wasting away the

environment with pollution from their cars. vii

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Whole Foods:

Whole Foods is a national brand, with stores all over the world, primarily

across the United Stated. 1.5 million shoppers step through their doors each week.

Whole Foods appeals more among upper income households. Six out of ten

shoppers at Whole Foods have incomes of $50,000 who drive 66% of the time when

going to pick up groceries. The same group of customers is also 67% of dollar sales

at Whole Foods. viii 1.5 million shoppers who step through their doors each week -- a

market the company hopes to leverage for its web business by promoting the site in

the stores.

Approximately 28 percent of shoppers are defined as those who work to

change their eating habits based on health concerns and an interest in living a

healthy life-style. This tends to be the younger to middle-aged people who have a

medium to high income, thus having the means to purchase many of the nutritious

foods brought to them by Whole Foods. ix

Whole Foods Product Mix:

Perishable food and beverages. Dietary supplements Personal care products Seafood Grocery Meat and poultry Bakery Beer and wine Cheese

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Whole Foods Markets ensures that none of the above listed products are modified with artificial additives, sweeteners, colorings and preservatives. The trademarks of the Whole Foods specialty food store include:

Whole Foods Market 365 Everyday Value 365 Organic Everyday Value Allegro Coffee Company Bread and Circus Fresh Fields Global Local Green Mission Harry’s Famers Market Mechant of Vino Mrs. Gooch’s Vine Buys Wellspring Whole Baby Whole Foods, Whole People, Whole Planet Whole Kids Organic Whole Trade

Differential Advantages of Whole Foods Market:

High quality standards, commitment to natural and organic products, an

emphasis on perishable product sales, focus on customer service and competitive

pricing makes Whole Foods Market the leader in specialty food retail.

We know that, by providing customers with the best products, we turn

customers into advocates for whole foods. We guarantee our customers 100%

product satisfaction or their money will be refunded.

As a whole, Whole Foods Market continuously experiments and innovates in

order to keep the retail standards high. Store environments are designed to be

inviting, unique, informal, comfortable, attractive, nurturing and educational. The

stores are hoped to become a community meeting point where customers can spend

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time with their friends and make new ones. The stores have no discrimination;

everyone is welcome regardless of race, gender, sexual orientation, age, beliefs or

personal appearance.

The business of Whole Foods Market is strongly tied to the neighborhood

and larger community in which we live in. Because without the communities Whole

Foods would not be much of a business, it is important that we give back to the

community. As part of the neighborhood, each store is operated in order to fit the

community’s needs. Team members are part of that local community and are

passionate about supporting the local causes that are of importance to the rest of

the customers as well. x

Whole Foods strongly cares about the local farmers and in support opens up

their parking lot on Sundays so that the local farmers can set up and sell, in order for

the community to better see how much Whole Foods Market really supports the

efforts of the smaller local farmers. xi

Five percent of the after-tax profits are donated to not-for-profit

organizations. Whole Foods Market donates food to area food banks and shelters.

Several times a year, the stores hold what they call “community giving days” where

five percent of that day’s net sales are donated to not-for-profit organizations and

educational programs. Team members are also constantly volunteering in order to

help their community.

Supporting sustainable agriculture brings a larger production of organic and

biodynamic foods in order to reduce pesticides and conserve soil. Using recycled

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and recyclable packaging reduces waste and promotes the community to help

protect the environment. xii

Not only do we provide for our community, but Whole Foods Markets also

give back to the larger national and global communities. The Whole Planet

Foundation provides micro lending in rural communities helping prevent and rid

poverty.xiii We are big supporters or projects that relate directly to organics and

production of good in environmentally friendly ways that will ensure the safety,

health and proper nutrition of customers.xiv

Risks and Opportunities:

No matter the company, there are always risks and opportunities that need

to be discussed. In a company such as Whole Foods Markets, it needs to be

understood that in a time of recession people may not be able to afford the luxury of

natural and organic foods and may have to put their want for healthier food aside,

and go to the conventional supermarkets that will offer the same type of product for

a cheaper price.

Opportunities still stand for Whole Foods Market in the sense that they are

the largest and best chain specialty store around. They have the largest variety in

organic and natural foods, that no other supermarket can beat as of yet.

Whole Foods has the ability to preserve their current clientele and attract

new shoppers if they become more economically friendly. It still needs to be kept in

mind that organic and natural foods are not as cheap to produce as the produce in

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regular supermarkets. The offer still stands that Whole Foods offers products

without artificial flavoring, coloring, pesticides and preservatives.

Helping change the economy must start within communities, and Whole

Foods Market has that on their side. They go out of their way to help the local

businesses and the community as a whole. In becoming advocates of helping their

neighbors, Whole Foods may attract more customers.

The main risks that rise are pretty simple:

1. It is possible that another company such as Trader Joes will offer cheaper

organic and natural products.

2. People will not be able to afford the extra few dollars for the healthier

natural foods and will stop coming to Whole Foods.

Sales & Marketing:

People come to the store in order to see all the fresh produce, buy organic

foods and eat at one of the stores’ restaurants. Whole Foods Market focuses on

providing the best quality of both prepared and unprepared food for maximal

customer satisfaction. The chain specialty grocery store is appealing to more and

more people as society turns into a place of “health freaks”, and yet seems to be

losing out on its overall brand and identity image.

Whole Foods seems to be becoming of more like other grocery stores causing

less of an appeal, especially with such high pricing. People are seeing Whole Foods

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Markets as a luxury type of grocery store, which they go to for special occasions

because it has the image of a higher-end grocery store. xv

Although Whole Foods is becoming less supportive of local farmers, one

regional vice president states that the support for local growers is a key part of the

company’s mission, “having an inventory mix of unique local products makes

shopping at Whole Foods special for the customer and separates us from the

supermarket chains that sell the same inventory coast to coast”.xvi

Whole Foods Markets spends much less than other supermarkets on

advertising and marketing. About 0.5% of total sales in fiscal year 2008 were used

for that year’s advertising for WFMI. The store relies mainly on word of mouth

recommendations from shoppers.

Most of the marketing budget is used on in-store promotions and marketing-

related activities such as hosting the local farmers market, taste fairs, classes, tours

and product samplings. For the company it is more important to follow through

with the mission statement, and instead of spending copious amounts of money of

marketing and ad placing, it is more important to give back to the community.xvii

Advertising and marketing expenses have been respectively low compared to

the amount spent by other companies. In 2008 Whole Foods Market spent

approximately $39.7 million. Advertising costs are included in the Direct Store

expenses when the store decided to do internal marketing. xviii

Marketing and Advertising of the Past:

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Whole Foods somehow managed to gain the reputation of being the

expensive and luxurious grocery store, yet realistically speaking; Whole Foods has

very competitive priced products. In 2003, the company decided to bring out a

campaign in order to help inform people of the affordable pricing.

For 10 weeks, Whole Foods ran print advertisements throughout New York

City emphasizing two of the most important words in marketing- “value” and

“deals”. Whole Foods truly made the attempt to strive away from the slogan that the

public has associated with the store “Whole Foods, Whole Paycheck”.

The ads stood consistent with what the brand stands for, according to Allen

Adamson, managing director of the New York office of Landor Associate, a corporate

identity consultant. “The reality is that they have a premium-looking store

positioned as an all natural place to shop. Both of those signal ‘expensive’”.xix

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Interestingly enough, in 2005, Whole Foods was mentioned on an episode of

“Six Feet Under” where a character was asked to pick up some soymilk from Whole

Foods. Product placement was not paid for in this case, and Whole Foods benefitted

a lot.

John Moor, head of Brand Autopsy, an Austin marketing consulting firm and

former marketing manager of Whole Foods claims that Whole Foods does not need

to spend heavily on marketing and advertising. “They never set out to build a brand.

They set out to build a business, one that stood for something. They build bigger,

better stores rather than bigger, funnier ads.”xx

As part of a campaign, Whole Foods Markets has taken itself to a “whole” new

level. For residents of New York City, the company is offering free pedi-cab rides for

customers take home their groceries.xxi

In 2002, when the country became obsessed with “Going Green”, Whole

Foods came out with an idea to bring your own bags to shop instead of using the

paper and/or plastic ones.

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For the holidays, Whole Foods Market created an ad showing how much

easier it is to purchase and serve foods from their supermarket as opposed to any

conventional supermarket.

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In order to appeal to those who don’t understand the differences between

the food at Whole Foods and that at a different supermarket, the company came out

with a very short, simple and sweet advertisement that explains that the food that

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they sell at Whole Foods will not disappoint you, even after looking at the labels and

nutrition facts.

In an attempt to show the public how much Whole Foods cares about their

community and about the people that choose to use Whole Foods as their primary

shopping source of groceries, they created a campaign helping new artists to be

heard.

CAMPAIGN FOR 2009

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Going “Green” and saving money are the two largest topics of discussion

when it comes to companies and their marketing. In the past Whole Foods Markets

has created a campaign where on Earth Day of 2008, if you brought your own bags

for your groceries, you would get at least 5 cents per bag back. Within the past year,

more and more people are finding it hard to spend the extra few bucks on healthier,

natural and organic foods, we are launching the new and improved B.Y.O.B. (Bag)

Campaign.

B.Y.O.B will now promote recycling by offering customers 5% off of their

purchase every time they bring their own bags. This will be a “stimulus package”

marketing strategy of Whole Foods Markets.

To begin with, Whole Foods does not do much advertising. The budget of

2008 was 39.7 million dollars. If we assume that to be out budget for this year, we

can do a lot to ensure that the customers we do have, will not switch to the ordinary

supermarkets for cheaper products. They should not have to suffer eating pesticide-

filled produce just because of the economy.

Magazines:

Martha Stewart Everyday Food Magazine

The magazine has 4.8 million people as an audience. 3.9 million of those are

women. The median age is 44.2 and the median household income is $55,240. 55%

of the audience has had some form of college education.

In advertising with Martha Stewart Everyday Food, we will be reaching the

main target audience of Whole Foods. We will advertise with a full page, full color

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(4/C) bleed ad that will be placed in every issue of Everyday Food magazine in the

year 2009 (10 issues).

Full Page 4/C Bleed- $52,500 per ad

Cost for the whole year will be $525,000.

We will also place ads in Martha Stewart Living Magazine 6 times

throughout the year on a half page full color (4/C) for $83,600 per issue. This will

run us $501,600 for the whole year. xxii

Online:

Advertising online is efficient and cheaper than advertising in print

publications. Spirituality and Health magazine online targets the same audience

that Whole Foods Market attracts. This includes the wealthier, middle- ages, health

conscious women. There are 227,000 readers of the publication. 93% of which

believe in purchasing products to support sustainability and 80% will pay more for

sustainable products. They are the perfect online media in order to advertise “Going

Green” and saving money at once.

A banner advertisement runs at $20 cpm.

With 227,000 readers we can say that it will cost $11,350 if everyone views the ad

once. If we make the assumption that readers will be checking the website

approximately once a week, we multiply $11,350 by 52 weeks giving us the final

cost of the online placement as $590,200 for the entire year. xxiii

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In-store Marketing

Whole Foods is famed for little advertising to the public and more

advertising to the customers they already have. Because the economy is worsening

by the day, many people are stating to reconsider where they purchase their

groceries and whether it is really worth it to continue buying healthy, natural and

organic foods. In order to keep the customers from switching to ordinary

supermarkets we will put up posters and signs around all the Whole Foods Market

stores in the country.

There are about 270 stores in the United States. For each one of these stores

we will give about 10 banners to use and replace over the course of the year. And

each store will also have 3 standing signs- one to place outside by the sliding door

entrance, one to place inside so that customers can see it as they enter the store, and

one by the exit to remind customers that they should bring their own bags to receive

a 5% discount when they spend $150 or more on their next visit to the grocery

store.

As part of a new way to get customers intrigued, we will give then reusable

bags with any purchases of $100 or more. The bags will have a recycling sign along

with the Whole Foods Market logo on it.

270 stores needing 10 banners each gives us 2,700 banners that need to be

created for distribution.

According to Kinkos.com indoor banner options, 3’x5’ banners cost $119.99.

$119.99 x 2,700 = $323,973.

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According to BuildaSign.com, if we purchase 3 sandwich signs for every

store, coming out to 810 sandwich boards, each sized 36” x 24” we are looking at

$93,150 plus an additional $12,524.50 for shipping and handling. This brings us to

the total of $105,664.50.

For the months of April and May, Whole Foods will give out bags to

customers spending $150 or more made of recyclable materials with the Whole

Foods Logo on it along with a recycle circle. One million canvas tote bags will be

given out to those customers. According to garrettspecialties.com, this will cost

approximately $2,450,000 plus shipping and handling.

BUDGET

Start: $39,700,000.00 Media Type Media Name Cost

Magazines Martha Stewart Everyday Food $525,000

Martha Stewart Living $501,000

Online Spirituality & Health $590,200

In-Store Banners $590,200.00 Sandwich Signs $105,664.50

Totes $2,450,000 TOTAL= $4,762,064.50

We are left with $34,937,935.50 to spend. They rest of the money will go into making up for the discounts given to customers

who come in with their own bags.

Whole Foods functions mainly through word of mouth and the awareness the

store received from community outreach programs. Advertising is not something

that they do much of, simply because they do not need it. In order to ensure that the

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economic hardships that many Americans are facing today, will not affect their

grocery-shopping outlet.

ADVERTISEMENTS

ONLINE BANNER:

This will go above the homepage and subpages of Spirituality & Health online magazine. This is very simple, to the point and is very subtle. It is not one of those advertisements that will annoy people or try to get their attention by having them “shoot a duck”. Instead, it is a more elegant approach to banner advertisements for

online media outlets.

POSTER AND LIVING MAGAZINE AD:

This advertisement will be placed as a poster in all of the Whole Foods Market stores along with placement in Martha Stewarts Living Magazine. It is very simple and to the point. It shows that Whole Foods is trying to get customers to be as eco-

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friendly as they are, and at the same time saving people money when they spend money at the store.

Sandwich Sign in all of the stores nationwide:

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Help save the environment while saving yourself money. Bring your own bag and save 5% on purchases over $150.

Go Green. Eat Healthy. Save Money.

Everyday Food Magazine + Posters

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When you bring your own bags to pack your groceries we take 5% off of your purchase of $100 or more.

When you spend $150 or more during the months of April and May 2009 you will receive a Whole Foods tote bag for free.

The totes that will be given out with purchases of $150 or more will look as follows and will include the Whole Foods logo on it. The bags are made out of eco-friendly materials and are durable for even heavy groceries.

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This is one bag with a different image on each side.

BIBLIOGRAPHY AND FOOTNOTES:

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i "Our Core Values | WholeFoodsMarket.com." Whole Foods Market: Natural and Organic Grocery. 19 Apr. 2009 <http://www.wholefoodsmarket.com/values/corevalues.php>. ii "Declaration of Interdependence | WholeFoodsMarket.com." Whole Foods Market: Natural and Organic Grocery. 19 Apr. 2009 <http://www.wholefoodsmarket.com/company/declaration.php>. iii U.S. Securities and Exchange Commission . 19 Apr. 2009 <http://sec.gov/Archives/edgar/data/865436/000110465908073613/a08-29339_110k.htm>. iv "Specialty Food Stores." Market Research Reports - Business Market Research Reports & Industry Analysis. 19 Apr. 2009 <http://www.marketresearch.com/product/display.asp?productid=2207666&SID=41214545-444863076-418443317&curr=USD&kw=&view=abs>. v "Specialty Food Stores Industry, Specialty Food Stores Industry Research, Specialty Food Stores Industry Report." Company Information from Hoover's including business reports and profiles. 19 Apr. 2009 <http://www.hoovers.com/specialty-food-stores/--ID__330--/free-ind-fr-profile-basic.xhtml>. vi "Grocery Store (Market Analysis Summary): Information from Answers.com." Answers.com - Online Dictionary, Encyclopedia and much more. 19 Apr. 2009 <http://www.answers.com/topic/grocery-store-4>. vii "Trader Joe's targets 'educated' buyer." Seattle news, sports, entertainment | seattlepi.com - Seattle Post-Intelligencer. 19 Apr. 2009 <http://seattlepi.nwsource.com/business/137334_traderjoes30.html>. viii "June 2003." Welcome to the Facts, Figures, & the Future Newsletter with Phil Lempert! Your source for the latest consumer data, facts, figures, and trend information! 19 Apr. 2009 <http://www.factsfiguresfuture.com/archive/june_2003.htm>. ix Independent Investment Research :: Analyst Coverage Reports, Updates, Sector and Industry Ratings. 19 Apr. 2009 <http://www.spelmanresearch.com/reports/35.pdf>. x "Community Giving | WholeFoodsMarket.com." Whole Foods Market: Natural and Organic Grocery. 19 Apr. 2009 <http://www.wholefoodsmarket.com/company/giving.php>. xi Burros, M. (2007, February 28). Is Whole Foods Straying From its Roots? The New York Times: New York, pg. F5.

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xii "Green Action | WholeFoodsMarket.com." Whole Foods Market: Natural and Organic Grocery. 19 Apr. 2009 <http://www.wholefoodsmarket.com/values/green-mission.php>. xiii "Whole Planet Foundation | WholeFoodsMarket.com." Whole Foods Market: Natural and Organic Grocery. 19 Apr. 2009 <http://www.wholefoodsmarket.com/values/whole-planet-foundation.php>. xiv "Our Core Values | WholeFoodsMarket.com." Whole Foods Market: Natural and Organic Grocery. 19 Apr. 2009 <http://www.wholefoodsmarket.com/values/corevalues.php>. xv Burros, M. (2007, February 28). Is Whole Foods Straying From its Roots? The New York Times: New York, pg. F5. xvi Kasdon, L. (2007, March). Whole Foods Goes Small. Fortune Small Business: New York, 17, pg. 66. xvii U.S. Securities and Exchange Commission. 19 Apr. 2009 <http://sec.gov/Archives/edgar/data/865436/000110465908073613/a08-29339_110k.htm>. xviii Whole Foods Market: Natural and Organic Grocery. 19 Apr. 2009 <http://www.wholefoodsmarket.com/company/pdfs/2008_10K.pdf>. xix Barbaro, Michael. "Whole Foods Talks Dollars and Cents." The New York Times - Breaking News, World News & Multimedia. 10 May 2006. 19 Apr. 2009 <http://www.nytimes.com/2006/05/10/business/media/10adco.html>. xx "Stores Not Ads - Advertising and Marketing Blog - AdPulp.com." AdPulp: Daily Juice from the Ad Biz. 19 Apr. 2009 <http://www.adpulp.com/archives/000976.php>. xxi "Whole Foods Unveils New Outdoor Ad Campaign - Whole Foods ad campaign New York." Triple Pundit - Business, Better. Since 2005. 19 Apr. 2009 <http://www.triplepundit.com/pages/whole-foods-unv.php>. xxii "Contact for Advertisers and Press." Recipes, Cooking Tips, Home Decorating Ideas, Crafts, Gardening, Food and Dessert Recipes, and Entertaining from Martha Stewart. 19 Apr. 2009 <http://www.marthastewart.com/advertise?rsc=footer>.

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xxiii "Rates | Advertising with Spirituality & Health Magazine." Spirituality & Health Magazine | The Soul/Body Connection. 19 Apr. 2009 <http://www.spirituality-health.com/advertising/advertising-rates>.