Whole Foods Market:

Value Matters
By: Michelle Tran, Richard Crawford, Neal
Pathak, Vi Nguyen, Chi Do

Company Description
 Whole Foods Market is an American foods supermarket chain headquartered in Austin, Texas.

Whole Foods Market now has stores all over the U.S. as well as establishment in Canada in 2002 and the

United Kingdom in 2004. The expansion of Whole Foods Market was actually possible through the

acquisition of other natural foods chains, which allows the business to go from regionally to globally. This

expansion phase is not actually finished and Whole Foods Market has many stores currently in

development such as Clearwater in Florida, Closter in New Jersey, Lansdowne Park in Ontario, and many

more. Founded on September 20, 1980, the companys number one goal is to provide its customers with

natural and organic foods. Its vision is much broader than just selling food however. It is also about

healthiness, environmentally sustainable practices, community support, and fair-trade products. The motto

Whole Foods, Whole People, Whole Planet emphasizes Whole Foods interest in the well-being of the

entire community (Wholefoodsmarket).

Making a difference on a local and global level seems to be the main goal for Whole Foods. Ever

since the company was founded, efforts have been made to go beyond. Its three Rs program focuses on

reducing, recycling, and reusing materials in order to reduce it consumption of resources sourced globally.

In addition, its Whole Kids Foundation aims to improve child nutrition in communities across the nation.

Whole Foods strives to do its part in making the world a better place. Customers love a company that

gives back to the community. These activities give the company a competitive advantage.

Whole Foods has a combination of resources and skills that puts them above their competition.

Guaranteed fresh and natural products is the main marketing strategy that they use. Also, there are other

programs that Whole Foods implements to help everyone out. From helping local producers to reducing

poverty in Vietnam, Whole Foods has been getting everyone on their side. Everyone loves the good guy

and that is Whole Foods right now. The experience of shopping at this fantastic store affects their success

as well. Customers love to shop at Whole Foods and then share their experiences. Word of mouth is one

of its strongest marketing tools. However, matching competitor prices is not an option, rather Whole

Foods guarantees that their products are better. Customers are willing to pay more for a better product.

Unless competitors can offer the same quality for a better price, Whole Foods will continue to dominate
the market. Eating clean and natural is a relatively new trend that they have has taken advantage of. With

all these marketing strategies, all the bases seem to be covered. Whole Foods has multiple resources that

give them the competitive advantage. As long as these resources and strategies last, Whole Foods will

continue to be a successful business.

Industrial Analysis

Whole Foods Market is very reputable when it comes to fresh and organic food and people are

very aware of this. Whole Foods Market is the first to be certified organic by the Quality Assurance

International's Organic Certification Program for Retailers. Their products are verified by a third-party

Accredited Certifying Agent to ensure that the organic foods are on par with the USDAs strict National

Organic Program standards. For the customers who shop here, the price are slightly higher compared to

general stores or retail stores but the quality is of the highest standard and the products sold here are

fresh, wholesome, and safe to eat (Wholefoodsmarket). Therefore, the main consumers here are those

who are health conscious and want to live a healthy lifestyle.

The fact that the products are under strict regulation to meet the high standards, Whole Foods

Market makes sure that the food will be free of artificial preservatives, colors, flavors, sweeteners, and

hydrogenated fats (Wholefoodsmarket). All the seafood here, fresh or frozen, are either wild-caught or

farmed raised and are heavily regulated to ensure that they are the finest in terms of nutrition, freshness,

appearance, and taste (Wholefoodsmarket). Moreover, Whole Foods Market is actually the first U.S.

retailer to offer Marine Stewardship Council (MSC)-certified seafood to emphasize the commitment to

quality.

Since fresh and organic are what Whole Food Market believes in, they are not pressured by

environmental regulations since their ideology doesnt clash with any environmental regulations. Through

organic agriculture, healthy eco-systems are promoted because the farmers understand and respect the

delicacy of the environment and that it must be protected, not taken advantage of. With the mutualistic

relationship between the farmers and the environment, the use of genetically engineered seeds or crops,
sewage sludge, long-lasting pesticides, herbicides or fungicides are prohibited (Wholefoodsmarket).

This is the basis for the natural and organic produces in Whole Foods Market. Following the natural and

organic motto, the livestock on the farms are humanely treated, allowed fresh air and outdoor space, fed

with organic food that is not subject to antibiotics or growth hormones. The food processing protects the

organic standards by disallowing irradiation, genetically modified ingredients, and synthetic

preservatives. Thus, the products in Whole Foods Market are guaranteed to be truly organic and natural

that will support the health and well-being of the customers.

Market Competitor Analysis

Whole Foods Market is best characterized as an oligopoly. In an oligopoly, only a few firms

supply the entire market. There are not many natural and organic competitors that the supermarket chain

has to compete against (Kerin, 78). An oligopolistic market has product differentiation meaning that the

products are similar, but are innovated to be unique from other competitors products. It is also difficult

for new firms to enter the market since organic foods can be costly to invest for a company, and thus

Whole Foods uses its innovative approach to supply consumers with organic foods free from harmful,

unprocessed substances guaranteed to maximize nutrition. There is also a sense of interdependence,

because the chains actions will influence another firms actions in terms of market conditions like profits,

costs, and revenues. In order to compete with Whole Foods, other conventional and emerging

supermarkets will also provide consumers with organic foods for a better, cheaper deal. Thus, the grocery

chain must set a more effective marketing strategy to keep its spot in Americas top choice for natural

foods (Slhnter3).

The natural food chain has several key competitors that include The Fresh Market, Sprouts

Farmers Market, Kroger, Traders Joes Company, and Natural Grocers by Vitamin Cottage. The three

most competing brands with Whole Foods are Sprouts Farmers, Kroger, and Trader Joes Company (Top

Competitors for Whole Foods Market). These businesses are smaller than Whole Foods yet are competing

for consumer dollars with Sprouts Farmers as the largest of the three with a market cap of approximately

$4 billion (Kretzmann). Kroger, founded in 1883 in Cincinnati Ohio and has 2486 stores, strengths
include its geographical diversity having a significant market share in 44 markets covering 31 states, its

developed private label and loyalty marketing programs along with a strong customer service focus, and

its variety of organic growth products comparable in sales to other stores. Since Kroger operates 42

manufacturing plants, there is a risk for food contamination in its food manufacturing sectors, which can

hurt its brand and profits. Kroger also has a high operating expense structure that can yield inconsistent

productivity and execution across divisions (Zahorsky). Sprouts Farmers, founded in 2002, has opened

170 stores across eight states. The companys strengths include its strong financial backing from a stable

firm called Apollo Global Management that allows it to come second only to Whole Foods in terms of

natural organic retail grocery market. Sprouts also offers attractive promotions like weekly and monthly

coupons, deals, and specials. However, the market is weak due to the limited range of food offered

throughout the seasons compared to other supermarkets, workers lack of motivation due to the inability

to advance within the company, and higher prices in sales compared to other stores (Sprouts Farmers

Market). Trader Joes, founded in 1979 in Monrovia California with a total of 418 stores, strengths are in

its social use of its Mobile app to deliver the latest news and promotions to customers, its sales in a

number of products under its own label, a large employee base of about 20,000 people working for the

retail chain, and its vast expansion of more than 400 stores across the United States. However, most of the

products on stock are its own brands, which the company can purchase directly from small-time vendors,

but this gives the customer less choice. Joes also maintains supplier secrecy, so the products country of

origins are not made known to consumers which may trigger skepticism. The chain is also limited to the

United States as compared to other retail giants, which is another weakness.

The success of a grocery chain or any company depends on its free cash flow, which is operating

cash flow minus the capital expenditures. Free cash flow measures the cash generated by a business after

making capital investments to maintain current stores and open new locations. In 2013, Whole Foods

produced a total of $472 million in free cash flow or $1.3 million per store. Sprouts Farmers Market

produced $73.13 million in free cash flow or $430,000 per store. Fresh Market produced $18 million in

free cash flow cash flow or $119,000 per store. Natural Grocers however was free cash flow negative for
the year, posting free cash flow of negative $13.99 million or ($194,000) per store. Ultimately, Whole

Foods generates and retains more cash flow per store than these three smaller competitors combined,

which highlights the supermarkets dominance as the largest and most successful organic chain

(Kretzmann).

Company Analysis

Whole Foods Markets ability to use technology to connect with its consumers, retain high

standards of quality and service, and its large size helps it to stay competitive. However, Whole Foods is

considered a whole paycheck food store which minimizes its consumer base and how much a consumer

purchases from them. They are also experiencing slower than projected growth due to slight

diminishment in its market share. The supply chain for the organic and natural foods market is struggling

to keep up with the growing demand. This company has several avenues in which to maintain and

increase its competitiveness, including confronting its whole paycheck persona. It must keep it guard

up against its competitor attempting to take from its market share with lower prices.

As a company, Whole Foods has set itself apart by living up to its high standard, finding

innovative ways to reach its customers, and expanding its brand across the United States and

internationally. They pride themselves on being, the finest natural and organic foods available, maintain

the strictest quality standards in the industry, and have an unshakeable commitment to sustainable

agriculture. They achieve this by scrupulously vetting their vendors and maintaining a high staff

satisfaction. In 2010 they rank #18 on Fortune magazines Top 100 Companies to Work for. Also they

take pride in their vendors and are open about their relationships and sourcing. Whole Foods also

provides its customers with blogs, podcast, and other online resources. This not only increases their

exposure, but allows them to reach a younger demographic. They have also teamed up with Square to

integrate their ecommerce and brick-and-mortar segments. This will allow consumers to shop online and

pick up purchases at their local store. Whole Foods is also a large and expanding company. It has 378 US

stores as well as 9 in Canada and 9 in the UK with plans to continue to expand domestically and

internationally.
 Though Whole Foods is a strong company, its growth has recently been slower than anticipated

by analyst. Part of this decrease in pace is due to competitors acquiring companies in attempt to curb

Whole Foods hold on the market share. An example would be Krogers recent acquisition of Vitacost, an

online supplement provider, and Harris Teeter, a North Carolina based grocery chain. The acquirement of

Vitacost gives Kroger a boost in its health department while Harry Teeter increases in presence in the

southeast region of the US. Also, Whole Foods is publicly viewed as a whole paycheck food store. This

means that it is perceived to be for more affluent consumers. Most customers do not complete all their

grocery shopping at Whole foods, but rather only purchase select items for them and purchase remaining

items from a less costly competitor. This has open the door for companies such as Wal-Mart to cut into

Whole Foods market share by providing cheaper organic and natural products. It is also to source product

in the natural and organic food store industry. Organic and natural farms are not subsidized as other farms

are, such as corn. Therefore it is less profitable to open such a farm. What Whole Foods is experiencing is

an increased demand for natural and organic products coupled with a under producing supply chain for

those products. Thus, an increase in cost is seen not only by the company, but also in the prices they can

offer to their consumers.

Whole Foods has several areas in which it can increase its competiveness. First of all it must take

steps to shed its whole paycheck image. By being such a strong force in its industry and well spread

out, they can reach to more local vendors to cut logistic cost as well help build the supply chain.

However, they must be conscientious of acquisitions by competitor which may damper their presence in

various regions. Whole Foods must also build upon its reputation for high quality products and standards.

As globally people begin to sway towards healthier lifestyles, Whole Foods can use it strong market

presence to win over new customers. They must be careful in pricing their product as competitors like

Wal-Mart are attempting to win these same customers by offer similar products cheaper. Also Whole

Foods can build its current local initiatives to more intertwine with the communities in which it operates.

Overall, Whole Foods is a strong and thriving company. It is beginning to slow its growth though

and must take actions to reverse that process. By improving its perception to being more accessible to a
broader spectrum of incomes, it can increase its sells per customer. Also building on its companys strong

reputation for quality will increase loyalty from existing customers as well as attract new ones. Whole

Foods must stay on the technological edge and constantly seek other projects such as the one they are

working with Square on to increase their profitability.

Strengths Weaknesses

high standard whole paycheck food store

expanding its brand under producing supply chain for

organic products
Opportunities Threats

build its current local initiatives to Cheaper organic alternatives

more intertwine with the communities in Competitor acquisitions

which it operates

Global organic trends

Consumer Analysis

In society today, many social and cultural factors affect what consumers want. Those in poor

social and economic circumstances will not be as privileged in education and health. Therefore, as a part

of Whole Foods consumer strategy, it targets the middle to upper class young adults that live in the

suburban or urban areas. Typically, these young adults are between the ages of 18-39 who have a mindset

of living a healthy lifestyle. With the pressures of school, college kids are the perfect target because of

their fear of gaining the freshman 15. College students also have a certain level of learning and beliefs

about staying healthy. Whole Foods influences its consumers by marketing its pristine organic foods in an

attractive and appealing way. Whole Foods has a goal to put customers first. Without hesitation, the

employees are always happy to help customers and take them to whatever aisle they need to go. Besides

customer satisfaction, consumers who shop at Whole Foods may also feel like they are making a

difference in the world. The store has an excellent reputation in philanthropy as they have multiple
programs that give back to small, non-profit organizations in local neighborhoods. These factors help

influence its customers to remain committed and dedicated to supporting Whole Foods.

Market-Product Focus

Their food base ranges broadly from healthy seafood to baked goods to even pet food. It is the

largest and most popular organic food retailer in the business, and it has lead the way for all other organic

and natural food retailers. The companys success is due to its understanding of the general environment

segments. The general environmental segments are divided into six dimensions that include demographic,

global, technological, economic, political, and sociocultural. There are predominantly three out of the six

dimensions that are relevant to Whole Foods Market of which include political, sociocultural, and

demographic dimensions (Writers Muse).

The demographic segment is concerned with a populations size, age group, geographic

distribution, ethnic diversity, and income distribution. Due to the diverse population changes, Whole

Foods is offering different ethnic oriented organic food. Mexican/Hispanic foods represented the largest

segment of the market with nearly two-thirds (62%) of sales, and the Asian and Indian food segments

drive the market growth with an 11% and 35% increase from 2006 to 2008, respectively. Thus, the store

has responded to these trends with more ethnic seasonings, sauces, packaged meals and kits and expanded

its ethnic food sections (Whole Foods Magazine).

According to a report from the Food Marketing Institute (FMI), consumers are preparing more

homemade food and eating out less. Whole Foods helps the customers save money and make healthier to

improve their lifestyles. The Whole Foods target demographic will be health and fitness conscious,

educated professionals with mid-high level incomes, 25-44 year olds more towards women, city and

suburban, and multi-cultural and diverse. The organic food distributor is now targeting young children as

their new base. It has gone as far as to develop an organic line intended just for children that include

products such as peanut butter and applesauce. As child obesity increases, it is very crucial to inform and

help children eat healthier meals. As the worlds largest foods retailer, the supermarket has to be on top of

this new raised awareness. This in turn ties into the sociocultural segment in which a societys attitudes
and cultural values are taking into consideration. Whole Foods is interrelated with the consumers feelings

on organic food and so understanding their views helps them create strategies to sway them. The

sociocultural segment is important and relevant to Whole Foods Market, because it relates to

environmental concern. Growing concerns to go green have helped in the growing success of Whole

Foods. People are more health conscious and are responsibly looking for ways to help cleanse the

environment. Whole Foods in turn support what their consumers do. Lastly, there is the political segment

in which organizations and interest groups compete for attention, resources, and a voice in overseeing the

body of laws and regulations among national interactions. This segment is very important to Whole

Foods, because all products have to pass FDA approval, and if not, it is a waste of investment in time and

money. Whole Foods Market has created their own policies when processing foods. This action not only

adds creditability and responsibility to the environment, but also assures that government regulations will

be followed thoroughly (Muse).

The chain segmented their customer base into four categories. The first category is conscionables

who embody Whole Foods core values, and thus they support every social and environmental initiative

and are frequent shoppers who spend the largest amount of their monthly grocery bill with the chain. The

second segment is Organics who buy organically grown food in order to maintain their personal health.

The Foodies enjoy and love food and are frequent shoppers who shop for selection, value and

convenience. Lastly, the experientials are driven to Whole Foods Market for unique products and special

occasion items such as the newly offered rabbit meat (Consultant Minds).

Whole Foods is perceived as high price and high quality with sayings like whole paycheck,

whole foods. However, the top chain market of organic and local food, is opening a new store in the

economically struggled city of Detroit this past June 5 as part of its repositioning from an elitist reputation

to a go-to grocery store for everyday shoppers on any budget. The chain will launch stores in Detroit,

New Orleans and on Chicagos South Side in 2013 and 2014 that will feature lower prices as compared to

other markets, fewer staffers, and more frozen and pre-wrapped food such as frozen meatballs and

vacuumed-packed fish according to co-CEO John Mackey. The plan is to reach more people who can
afford to shop with the chain. Whole Foods is trying to serve the needs of communities that others ignore

completely. But if Whole Foods pushes into truly low income areas, it could create some discontinuity in

the brand positioning. Yet, the retailers benefits seem to outdo its risk since the store continues growing

but just at a slower pace. Nevertheless, Whole Foods, with 350 stores and more to expand, is betting on

experimentation to keep its brand robust geographically as well. With 89-signed leases representing over

3 million square feet in its development pipeline, itll have tons of opportunity to do so (Voight).

Product Strategy

Whole Foods has reached a mature market, however, there is still hope for growth. There is a

slowdown in sale growth and narrowing profit margins (Mourdoukoutas, 2014). Competition has

caught up with Whole Foods on both fronts-the resource market, where Whole Foods Market buys

organic food; and the commodity market, where it sells it (Mourdoukoutas, 2014). There is a growing

competition with other grocery stores because they will start to sell non-organic and organic food.

The brands of Whole Foods are known to be pure, naturally derived organics. Not only are the

products targeted towards health-conscious buyers, it is also targeted towards environmentally friendly

buyers. The products uses eco-friendly packaging that promotes a cleaner and greener environment. On

the Whole Foods website, there is a forum where a response team assists anyone with doubts or issues

with any of the products. Whole Foods products are the main reasons for the companys success and it

sets them apart from other competitors.

With stores all over America, Canada, and UK, Whole Foods target educated middle to upper

class young adults located in suburban and urban areas. In addition, since college students are health

conscious, they locate near universities. Unfortunately, the company is running out of affluent

neighborhoods to sell its produce in, which makes the competition pricing pressures worse

(Mourdoukoutas, 2014). Not all consumers are equal in terms of income, even if they have the same

preferences and prices do matter (Mourdoukoutas, 2014).

Whole Foods has a strong Integrated Market Communication (IMC), which is a big part of their

success. Social media such as facebook, twitter, and blogs are top promoters for Whole Foods by
customers posting recipes, photos of items, and suggestions. The company benefits from word of mouth

by loyal customers. Whole Foods also sponsor local non-profit events and participate in fundraisers.

Pricing Strategy

Whole Foods creates value for its products by promoting itself as an environmentally friendly and

health forward company. The products they sell are priced higher than the average grocery, but by

reflecting their core values when promoting their products they create a greater perceived benefit to their

consumers. They also claim to seek out high quality products through fair trade channels. According to

Whole Foods, they cross the globe to make connections with small to mid-level producers and procure

products at a fair market price. This adds an additional ethical perceived benefit to their products.

As a company, Whole Foods uses a social responsible pricing objective to set their prices. While

their prices are more expensive than larger grocery stores, they are on par with their immediate market

competition. They are also at the front of promoting and pursuing ethical, social, and environmental

causes in their market. This is most evident by their commitment to fair trade and can also be evidenced

by their request for their supplier to use reduced and/or recyclable packaging. This is in line with its reuse,

reduce, and recycle initiative. These initiatives have a significant impact on the cost of procurement for

Whole Foods. Having higher ethical standards can lead to smaller profit margins than their less socially

responsible competitors.

When deciding on a price, Whole Foods largest consideration is the cost of procurement. The

typical Whole Foods customer has a higher willingness to pay for a product than an Albertsons or Wal-

Mart customer. The companys first concern must be creating a sustainable profit margin with their

products. Since Whole Foods is in an oligopolistic market, the pricing across competitors typically

remains relatively level. Whole Foods must to be careful to balance profitable pricing with higher

procurement costs and not exceed what consumers are willing to pay. They must also consider the

availability of certain products when pricing. This is relates largely to produce because of its seasonality.

For instance, most citrus tends to be in season from mid-November until the end of May. During the

height of the season, Whole Foods can offer a lower price on citrus because it can be widely sourced. In
the late and off seasons, their prices should increase due to a lower amount to suppliers leading to higher

cost.

When deciding on the correct price, Whole Foods uses various methods because they offer a wide

array of products. The most common are target pricing, odd-even pricing, and price-skimming. Target

pricing allows Whole Foods to determine their prices based on its oligopolistic market and cost they

incur. They want to stay within the market competitive price range, but have to cover their own cost.

Whole Foods must carefully create target profit margin for its items to maintain balance. Odd-even

pricing is very common amongst all grocers. Most consumers are ingrained to view a price ending in an

odd or even cent value as more of a deal than that of one ending in a zero. Price-skimming is also used

widely across the natural and organic grocery market. Consumers in this market tend to have a greater

ability and willingness to pay higher prices, so companies tend to charge more than a company not in this

market. For example, an organic apple at Wal-Mart may be 99 cents per pound while at Whole Foods, or

even a competitor like Central Market, it would be $1.69 per pound.

Whole Foods will always offer price adjustments in its efforts to reach a broader customer base.

The most common is offering a percentage discount on the listed price of a product for a limited time or a

percentage discount on the purchase of multiples of the same item. Examples would be 50% off organic

bulk candy from October 1st through the 7th. This provides three advantages to the company. First, the

discounts attract those who would not typically be consumers in their stores. Second, it allows them to

move through seasonal and discontinued items. Finally, it helps promote new items that consumers may

not have otherwise been aware of.

Promotional Strategy

In the world of business, promoting your company correctly is crucial. Chances of failing are a

lot higher without a well thought out promotional strategy. Whole Foods knows that a good product

means nothing unless everyone knows about it, so they have an advertising sector that deals with

problems relating to promotion. They have done an effective job so far, as Whole Foods is pretty well

known.
 There are many types of advertising strategies companies can use to promote their products such

as TV ads, billboards, etc. Whole Foods participates actively on social media sites, such as Twitter,

Pinterest, and Facebook. While posting recipes, pictures, and interacting with followers, the company gets

word of mouth advertising for relatively cheap. The target market for the company is the college-

educated, median-income leveled population. Stores are strategically placed in suburban shopping

centers.

Public relations are especially important for Whole Foods. The company prides itself in hosting

fundraisers and local non-profit events. The Local Producer Loan Program is a popular effort made by the

company to increase public image. The program is just one of many ways Whole Foods uses to increase

relations with the public.

With multiple locations across the U.S, Whole Foods relies on direct selling of its products. There

is no need for an intermediary. Having the highest quality natural and organic products available is the

main factor in Whole Foods appeal. This is what the company is based on, and the core value of the

organization. There are other methods that the company uses to increase appeal as well, like serving and

support local communities, ensuring team member happiness, etc. Using all these factors while

advertising the company makes consumers feel safe and trusting. After trusting Whole Foods, these

consumers are locked in with the company, and are reluctant to shop elsewhere.

A pull strategy involves motivating customers to seek out your product, and this is exactly what

Whole Foods does. Claiming that their products are healthier and superior, consumers are drawn in

wanting this superior product. The other ways the company pulls people in is through good customer

relations, social media, and word of mouth. When people see other people wanting something, they want

it too, and Whole Foods has taken advantage of that. It is easier when consumers are pulled in to your

product rather than the product being pushed on them.

The chain has offered its customers consistent whole foods organic deals packaged with coupons

weekly ranging from whole wheat bread to tomatoes to organic chocolate bars. Anything can be on sale,

and all that customers have to do is check for regular updates on their mobile apps or on the organic deal
website (Organic Deals). The natural food vendor operates Facebook and Twitter accounts for nearly

every branch of the franchise including separate accounts for wines and cheeses for example. With this

strategy, the chain can take a look at their global community to see whos interested in their brand and can

also engage with customers on a personal basis. In tailoring their social experience, they develop deeper

connections with loyal customers and can entice new ones as well. In addition to the blog, the grocers

have the opportunity to also update a recipe site, listing unique ingredients found in the stores. This is an

excellent way to inspire sales of new or distinguished products while providing basic content that anyone

on the internet can benefit from and this strategy can be aimed towards the the experiential segment.

The store also does an excellent job in tailoring email subscriptions. Consumers have the

right to choose the number of emails and/or what content they want to receive. Whole Foods has

an extensive blogging network that consists of regular updates and great content. Whole Foods

meets all these criteria and ensure that its content is relevant to their audiences lifestyles and

interests particularly for their young and healthy customer base. The chain also incorporates

digital magazine and mobile and tablet apps dedicated for its recipes, the Dark Rye magazine,

and an adorable game to teach children to eat wholesomely. This strategy provides convenience

for parents for grocery shopping, entertainment for the kids, and promotion for healthy living

especially geared towards the organics segment. Whole Foods also offers local delivery options

from neighborhoods branch as part of its online shopping strategy. The service is brilliant for

city dwellers and the elderly. Whole Foods masters the marketing strategy. Every channel- social,

mobile, email ecommerce, etc. have unified the brand and resulted in a loyal, cohesive

messaging to its consumer base (Gunawan).

Overall, the promotion strategy by Whole Foods is fairly simple. All the company truly has to do

is have the best products, and all the other parts fall into place. The true strength comes from the

exponentially growing customer base, which in turn provides free advertising. The company has
convinced the consumers that they need their products, which is not entirely untrue. Eating healthy is very

important and Whole Foods is taking advantage of that fact. As long as the wants and needs of the

consumers stay the same in this category, Whole Foods will continue to control the organic food industry.

Distribution Strategy

During Whole Foods Market expansion, only some of the stores are new and many are actually

acquired from other natural food retailers. Therefore, Whole Foods Market is believed to use horizontal

integration as its channel depth. There are still many more currently in development in locations like

Closter, New Jersey, Dallas, TX, and Los Angeles, California, just to list a few. When determining the

new store location, Whole Foods Market use an internally developed model to analyze potential sites

based on various criteria such as education levels, population density and income levels within certain

drive times (Wholefoodsmarket). This model allows them to tailor the store to that particular community

to establish a positive connection with the people and the environment there, which explains their myriad

successes as a business. Whole Foods Markets is very flexible in their location allowing them to expand

into different market segments- urban and suburban, domestic and international.

When Whole Foods Market was created, the owners had a vision:to sell the highest quality

natural and organic products available (Wholefoodsmarket). This vision became a reality and now the

supermarket is one of the most recognizable trademarks in organic food. Whole Foods Market has

become a high quality brand with its products being sold only in whole food retail outlet to emphasize

that the products are unique in that it is of the highest standard. This means that the channel breadth is

very exclusive. For instance, the tomatoes sold at Whole Foods are exclusive in taste unlike other grocery

stores. These high quality products will therefore have a higher price tag on them when compared to other

retailer products such as Wal-Mart or Tom Thumb. With the understanding that higher price meant higher

quality, customers who shop at Whole Foods Markets are very health conscious and want whats best for

their body even if they have to input in a few more bucks.

To ensure that the products that are sold at any whole food retailers are top notched, Whole Food

Markets obtain their organic produces from local vendors located near every stores location so that they
know exactly what they are buying. Both Whole Foods Market and the local vendors share the same

beliefs in organic food to ensure that the produces meet the highest standard of quality. Whole Foods

Markets also own and operate four facilities that serve as bases for monitoring and distributing seafood,

which in many cases is caught or grown just for [them] (Wholefoodsmarket). This allows them to have

more direct control of what is exactly being sold in their retailers, and it demonstrates that Whole Foods

Markets channel structure is that of an indirect channel with a short length.

With growing competition in the organic market, there are bound to be conflicts between

companies, and Whole Foods Market is no exception. In 2005, John Mackey, Whole Foods CEO,

badmouthed one of his competitor, Wild Oats, via an online Yahoo forum. John took on an anonymous

name called Rahodeb and then started to negatively belittle Wild Oats on the forum saying banters such as

Oats has no value and future and [n]o company would want to buy Wild Oats Markets Incat its price

then of about $8 a share (Consumerist). Johns intention was actually to get Wild Oats to lower down

their prices because earlier that year, his company agreed to buy Wild Oats for $565 million, or $18.50 a

share (Consumerist). Johns identity as Rahodeb was later discovered and he immediately sought to

explain himself as trying to have some fun, and that it was just a game. This incident shows just how

vicious business can be and that the borderline of whats ethical or not can be blurred during the heat of

the battle. This also illustrates a horizontal conflict between Whole Foods Market and Wild Oats.
 Works Cited

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