Close
About
FAQ
Home
Collections
Login
USC Login
Register
0
Selected
Invert selection
Deselect all
Deselect all
Click here to refresh results
Click here to refresh results
USC
/
Digital Library
/
University of Southern California Dissertations and Theses
/
Whole foods market -- a communication plan to engage the German market
(USC Thesis Other)
Whole foods market -- a communication plan to engage the German market
PDF
Download
Share
Open document
Flip pages
Contact Us
Contact Us
Copy asset link
Request this asset
Transcript (if available)
Content
WHOLE FOODS MARKET – A COMMUNICATION PLAN TO ENGAGE THE
GERMAN MARKET
by
Julius Maximilian Paul
A Thesis Presented to the
FACULTY OF THE GRADUATE SCHOOL
UNIVERSITY OF SOUTHERN CALIFORNIA
In Partial Fulfillment of the
Requirements for the Degree
MASTER OF ARTS
(STRATEGIC PUBLIC RELATIONS)
May 2009
Copyright 2009 Julius Maximilian Paul
ii
Table of Contents
List of Tables iii
List of Figures iv
Abstract v
Chapter 1: Introduction/ Background 1
• Thesis Goal 1
• Company overview 2
• Introduction to the German consumer market 9
Chapter 2: Business Goal 15
Chapter 3: Statement of Problem 16
Chapter 4: Research Methodology 18
• Research Goal 18
• Research Methods 18
Chapter 5: Situation Analysis 40
Chapter 6: Communication Goals 57
Chapter 7: Objectives 59
Chapter 8: Key Audiences/ Key Messages 60
Chapter 9: Strategies 63
Chapter 10: Tactics 65
• Pre-Launch 65
• Launch 80
• Post-Launch/ Sustainability 84
Conclusion/ Recommendation 90
Bibliography
iii
List of Tables
Table 1: Key Finding 1 27
Table 2: Key Finding 2 28
Table 3: Key Finding 3 29
Table 4: Key Finding 4 30
Table 5: Key Finding 5 31
Table 6: Key Finding 6 31
Table 7: Key Finding 7 32
Table 8: Key Finding 8 33
Table 9: Key Finding 9 34
Table 10: Key Finding 10 35
Table 11: Key Finding 11 36
Table 12: Key Finding 12 37
Table 13: Key Finding 13 38
iv
List of Figures
Figure 1: Organic Priciples 14
Figure 2: Metro Cash & Carry in Figures 44
Figure 3: Real in Figures 45
Figure 4: REWE Group in Figures 46
Figure 5: Tengelmann Group in Figures 47
Figure 6: Perceptual Mapping 55
Figure 7: Whole Foods Market on Twitter 71
Figure 8: Whole Foods Market on German Wikipedia.org 75
Figure 9: TV Market Share Details 79
Figure 10: Price Difference Organics 83
v
Abstract
This master’s thesis is a communication plan for the international retailer Whole
Foods Market Inc. to successfully engage in a new consumer market: Germany. After
entering the European market in 2006, by opening a Whole Foods Market store in
London, the time seems to be right to continue expanding its business. Therefore, I
examined the company Whole Foods Market and dissected the German retail landscape. I
pondered on the following questions: Where are the cultural differences? How do
Germans purchase groceries? What do they value and what way of communication
should be utilized to effectively target the consumer? As an international student growing
up in Germany, my cultural background and insights on the German market allows me to
create a plan that could make a business like Whole Foods Market succeed.
1
Chapter 1: Introduction/ Background
Thesis Goal
"We have been interested in Europe for a long time and thought it would make
sense to start in Britain, which has been more advanced when it comes to embracing
organic foods than the United States," said Jim Sud, executive vice-president of growth
and development, Whole Foods Inc.
1
Two years after Whole Foods Market successfully
opened its first London-based store, it is now time to move forward and target the next
major market: Germany. As the largest European economy, Germany is also the third
biggest economy worldwide with the fifth largest purchasing power. The country has a
reputation for being ‘green’ and environmentally conscious. This can also be seen in the
retail landscape, where since the early 1990’s organic agriculture and humane animal
husbandry became increasingly relevant. Yet, the German retail market, with a combined
revenue of EUR 449 Billion (2007) and 19,800 organic farmers, has no comparable
business model to Whole Foods Market: a grocery store that offers a huge variety of
high-quality, organic products.
In this thesis, I will examine the company Whole Foods Market, dissect the German
retail landscape and create a communications plan to successfully engage in the new
market. I will ponder the following questions: Where are the cultural differences? How
do Germans purchase groceries? What do they value and what way of communication
should be utilized to effectively target the consumer? As a food enthusiast born and
1
http://www.guardian.co.uk/business/2007/jun/07/retail.supermarkets
2
raised in Germany, I understand and can translate those differences; small insights that
could make a business succeed or fail.
As can be seen in the table of contents, this thesis strictly follows the strategic
planning model, a tool that structures the campaign in a measurable and replicable way.
Company overview
Background
In 1980, John Mackey and Renee Lawson Hardy, owners of Safer Way Natural
Foods, and Craig Weller and Mark Skiles, owners of Clarksville Natural Grocery,
founded Whole Foods Market in Austin, Texas, opening the original Whole Foods store
on September 20, 1980. Throughout the 1980’s, Whole Foods Market began its US
expansion moving into Houston, Dallas and New Orleans. During the 1990’s, the Whole
Foods Company acquired a variety of other natural food chains like:
2
• Wellspring Grocery of North Carolina
• Bread & Circus of Massachusetts and Rhode Island
• Mrs. Gooch's Natural Foods Markets of Los Angeles
• Bread of Life of Northern California
• Fresh Fields Markets on the East Coast and in the Midwest
• Florida Bread of Life
• Merchant of Vino of Detroit
• Nature's Heartland of Boston
2
http://www.wholefoodsmarket.com/company/history.php
3
At the beginning of the 21
st
century, Whole Foods Market acquired additional
companies like Food for Thought in Northern California and Harry's Farmers Market
stores in Atlanta. In 2002, Whole Foods Market moved into Canada opening its first non-
US store in Toronto. Two years later, in 2004, Whole Foods Market entered the European
market with the acquisition of seven Fresh & Wild stores in the United Kingdom. In the
last two years the company has opened five Whole Foods Market stores in London, the
only ones operating outside of North America.
Whole Foods Market Today
On January 23, 1992, Whole Foods Market Inc. went public at an IPO price of
$2.125 per share. The company's stock is traded on The NASDAQ Stock Market
(Symbol: WFMI) and is included in both the NASDAQ-100 Index and S&P 500 Index.
3
The company currently employs 41,500 people in more than 270 locations. Its 2007
revenue was $7.9 billion.
4
Fortune magazine has named Whole Foods Market one of the
"100 Best Companies to Work For" in America every year since the inception of the list.
Moreover, Whole Foods Market is the only Fortune 500 Company purchasing wind
energy credits to offset 100% of its electricity use.
6
3
http://www.wholefoodsmarket.com/company/investor-relations.php
4
Annual Report 2007 http://www.wholefoodsmarket.com/company/pdfs/proxy08.pdf
6
http://media.wholefoodsmarket.com/pr/wf/fast-facts.aspx
4
Management
7
The Whole Foods Market board of directors consists of six people:
• John P. Mackey Co-founder of the company; served as Chairman of the Board
and Chief Executive Officer since 1980. He also served as President between
2001 and 2004.
• Dr. John B. Elstrott Served as director of the company since 1995.
• Gabrielle E. Greene Served as director of the company since 2003.
• Hass Hassan Served as director of the company since 2005. Mr. Hassan served as
President and Executive Chairman of Fresh & Wild until 2004 when Whole
Foods Market acquired the company.
• Morris J. Siegel Served as director of the company since 2003.
• Dr. Ralph Z. Sorenson Served as a director of the company since 1994.
Corporate Culture
Core Values
To better understand the corporate culture and the market positioning of Whole
Foods Market, it is necessary to examine core values of the company in order to
successfully craft a communications plan for the German market. It is critically important
to adapt and translate those values for entering the new consumer market. Besides the
fact that these can be seen as a competitive advantage, officials see its corporate culture
as one of the main reasons why people feel that Whole Foods Market is an exciting
7
http://www.wholefoodsmarket.com/company/leadership_board.php
5
company to be a part of. “These core values are the primary reasons for this feeling, and
they transcend our size and our growth rate. By maintaining these core values, regardless
of how large a company Whole Foods Market becomes, we can preserve what has always
been special about our company. These core values are the soul of our company.”
8
Whole Foods Market’s core values are as follows:
9
• Selling the highest quality natural and organic products available.
• Satisfying and delighting its customers.
• Supporting team member happiness and excellence.
• Creating wealth through profits and growth.
• Caring about communities and the environment.
• Creating ongoing win-win partnerships with suppliers.
Locally Grown
Whole Foods Market’s history and reputation are intimately linked to its support of
local farmers. The company’s goal is to provide customers with the broadest possible
selection of the highest-quality products available. Therefore, “locally grown” is one of
the means to meet customer needs. In every community where Whole Foods Market does
business, the company is permanently committed to buying from local producers, whose
fruits and vegetables meet Whole Foods Market’s high-quality standards. Moreover,
8
http://www.wholefoodsmarket.com/company/corevalues.php#selling
9
http://www.wholefoodsmarket.com/company/corevalues.php#selling
6
“local farm production puts a face behind the foods we consume and keeps us connected
to the seasons, as well as the unique flavor and diversity of local crops.”
10
The following list describes why Whole Foods Market sees locally grown food as
desirable:
• Local Means Green. Buying products from local growers reduces the
environmental impact and costs of transportation.
• Preserving Character. Small local farms are a valuable component of a
community's character.
• Crop Diversity and Quality. Farmers producing crops for a local market often
choose to diversify, growing a variety of crops instead of just one. In addition,
they are more likely to harvest them at their peak of freshness and flavor.
Organic
“Organics is at the root of everything we do.”
11
Whole Foods Market is strongly
committed to organic agriculture and food. Besides the huge variety of products offered
in Whole Foods Market stores, the organic aspect is most important for its market
positioning. The company states that it is exclusively “choosing organic farmers and
producers who believe in good health, quality foods and earth-friendly sustainable
10
http://www.wholefoodsmarket.com/products/locally-grown/index.php
11
http://www.wholefoodsmarket.com/values/organic.php
7
agricultural practices.“
12
According to Whole Foods Market organic agriculture:
13
• Builds healthy soil that is rich with nutrients.
• Promotes biodiversity.
• Relies on natural prevention pesticides, fungicides or herbicides.
• Prohibits the use of antibiotics and artificial growth hormones in meat.
• Honors the role that animals play in the cycle of life.
• Prohibits the use of genetically modified organisms (GMOs).
• Safeguards water quality by eliminating harmful runoff from artificial fertilizers
and other toxic chemicals.
The organic aspect of Whole Foods Market will be one of the major competitive
advantages in the German market, even though the term organic has to be redefined for
the German audience due to legal issues. In the course of this thesis I will further
examine the term organic for the German market.
Green Action
The third aspect of Whole Foods Market’s corporate culture is what is described as
“green action.” The company’s strong attempt to reduce its impact on the earth and its
resources is divided into the following three parts:
14
12
http://www.wholefoodsmarket.com/values/organic.php
13
http://www.wholefoodsmarket.com/values/organic.php
14
http://www.wholefoodsmarket.com/values/green-action.php
8
1. Reduce
Whole Foods Market
• Uses paperless ordering systems to reduce paper waste.
• Supports carpooling and public transportation for its employees.
• Uses power monitors and other technology to reduce its energy consumption.
• Uses biodegradable supplies for food and wine sampling.
• Reduces landfill waste by up to 75% in some regions due to composting.
• Banned plastic grocery bags from all stores.
2. Reuse
Whole Foods Market
• Strongly encourages reusing grocery bags.
• Reuses plates and bowls for in-store dining.
3. Recycle
Whole Foods Market
• Replaces disposable batteries with rechargeable ones.
• Uses recycled paper with a high percentage of post-consumer waste whenever
possible.
9
Introduction to the German consumer market
Landscape and purchasing power
Germany is Europe’s most populated country (82 million inhabitants) centered
between seven countries in the geographical heart of Europe. It is divided into 16
different states. The states with the highest populations are: North Rhine Westphalia, in
the west with about 18 million inhabitants; Bavaria, in the southeastern part with about
12.5 million; and Baden-Wuertemberg, in the southwestern part with about 11 million. In
addition, there are three major cities that are economically important: Berlin, Germany’s
capital and biggest city with about 3.5 million residents, in the northeastern part;
Hamburg, second biggest city, in the north; and Frankfurt, Germany’s finance-city in the
center of Germany. Currently, the country marks the largest economy within the
European Union and the German purchasing power is the fifth largest in the world. In
2007 the combined retail revenue (traditional, catalogue, online) in Germany was EUR
449 Billion.
15
When it comes to organic food and agriculture, the German market is constantly
growing. In 2008, German retailers realized a combined revenue of EUR 5.8 billion only
15
http://www.lz-net.de/studien/pdf/127-multichannen.pdf
10
with organic products.
16
Moreover, organic agriculture is believed to be an up-and-
coming business. In 2008, the number of organic farmers increased by 1100 to 19,800.
17
As far as Whole Foods Market is concerned, the German landscape provides
spectacular opportunities when it comes to the locally-grown factor. In the United States,
the company has set a radius of 200 miles (320 kilometers) for its food to become local.
18
Depending on the specific location in Germany this criterion could include almost the
entire country (for Frankfurt) or multiple countries, which ultimately broadens the
possible food spectrum.
Trends
Ernst & Young performed a recent study about organic food in Germany.
19
Even
though the organic boom is said to be over, the German demand for organic products in
2008 rose despite the financial crisis.
20
16
http://www.lz-
net.de/archiv/lznet/mylznet/pages/show.prl?params=keyword%3Dbio%26all%3D1%26type%3D4%26whe
re%3D0%26suchid%3D%26quelle%3D%26laufzeit%3D0&id=71213&currPage=1
17
http://www.lz-
net.de/archiv/lznet/mylznet/pages/show.prl?params=keyword%3Dbio%26all%3D1%26type%3D4%26whe
re%3D0%26suchid%3D%26quelle%3D%26laufzeit%3D0&id=71213&currPage=1
18
http://www.iht.com/articles/2007/05/11/news/wbfood.php?page=1
19
http://www.welt.de/wirtschaft/article1296891/Deutsche_kaufen_dreimal_mehr_Bio_Kost.html
20
http://www.welt.de/wirtschaft/article2308043/Warum-die-Kunden-bei-Oeko-Kost-jetzt-knausern.html
11
The combined sales of organic products went up by nearly 10 percent to more than
EUR 5 billion.
21
22
The study also found that customers are expecting an expansion of the
organic variety offered, especially when it comes to drinks and milk products.
23
According to a new study, 94 percent of all food industry executives in Germany
believe that the organic segment will be rising further, and that the demand for quality
products from organic farmers will also continue growing.
24
In addition, the study found
that the German consumer is becoming more and more health-conscious when it comes
to food. Whereas in 2004, 47 percent indicated that they purchase fresh and healthy food,
the percentage in 2007 already was 53.
25
Interestingly, there is no scientific evidence
proving that organic food really is healthier. Dave Cavanagh, head of corporate affairs
and communication at the Institute for Animal Health, was quoted in OrganicFarmFoods:
If anything, extensive farming (free-range as opposed to intensive farming)
can throw up more potential problems. Birds out in the field can come into
contact with other animals that scurry, like rats. Some diseases that chickens
get spend part of their lifetime in earthworms and snails that can burrow up
into chickens, which are roaming. But consumers perceive organic foods as
healthier and therefore have been increasing their consumption as part of a
healthier lifestyle.
26
21
http://www.lz-
net.de/archiv/lznet/mylznet/pages/show.prl?params=keyword%3Dbio%26all%3D1%26type%3D4%26whe
re%3D0%26suchid%3D%26quelle%3D%26laufzeit%3D0&id=71213&currPage=1
22
http://www.test.de/themen/essen-trinken/meldung/-Bio-im-Vormarsch/1662483/1662483/
23
http://www.lz-net.de/dossiers/sortimente/pages/show.php?id=1175
24
http://www.lz-net.de/dossiers/sortimente/pages/show.php?id=1175
25
http://www.lz-net.de/dossiers/sortimente/pages/show.php?id=2440
26
http://www.organicfarmfoods.co.uk/news/19-06-2007.php
12
For Whole Foods Market the time still seems to be right to enter the German
market. With consumers purchasing organic food, a market that demands a bigger variety
of organic products and the overall assumption that organics are a healthier alternative,
the foundation for establishing a German Whole Foods Market is nearly perfect.
Organic vs. Bio
According to Whole Foods Market officials, organic agriculture “emphasizes the
use of renewable resources and the conservation of soil and water to enhance
environmental quality.”
27
This production method promotes healthy eco-systems by
prohibiting genetically engineered seeds or crops (genetically modified ingredients -
GMOs), as well as the use of pesticides, herbicides or fungicides. It is also seen as a
livestock-management practice, promoting a humane treatment of animals. This includes
fresh air and outdoor access as well as the absence of antibiotics and growth hormones.
In the U.S., the definition of what can be called organic is set by the United States
Department of Agriculture's (USDA) Organic Rule, which first became effective on
October 21, 2002. Whole Foods Market was one of the main corporations, working
together with the USDA, to develop this rule. Currently, the Organic Rule applies mainly
to organic food products. The USDA, Whole Foods Market and the organic industry are
working together to create certification standards for other products such as personal
27
http://www.wholefoodsmarket.com/values/organic.php
13
care, textiles, seafood and pet supplies.
28
For Germany and the entire European market, the term organic (Bio) is regulated
by the European Union. Regulation (EEC) No 2092/91 on organic production and
labeling of organic products was first introduced in 1991. Throughout the years it was
repealed and revised several times. The last official version is the
COMMISSION REGULATION (EC) No 889/2008
29
This regulation sets rules regarding the following aspects:
• Rules on production, processing, packaging, transport and storage of products
• Plant production
• Livestock production
• Origin of animals
• Livestock housing and husbandry practices
• Feed
• Disease prevention and veterinary treatment
• Processed products
• Collection, packaging, transport, storage of products
• Climatic, geographical or structural constraints
• Specific labeling requirements for feed
• Control requirements for plant and livestock products & preparation, and imports.
28
http://www.wholefoodsmarket.com/values/organic.php
29
Official Journal of the European Union: 422-889-2008 implement action rule (EEC) No 2092/91
14
Article 4 of this regulation states the overall principles:
30
Figure 1: Organic principles
For Whole Foods Market to successfully enter the German market, it will be
necessary to fully examine the EU-Regulation due to certain differences regarding the
term organic. The basic principles are more or less equivalent to the United States
Department of Agriculture's (USDA) Organic Rule, though.
30
Council Regulation (EC) No 834/2007 of 28 June 2007 on organic production and labeling of organic
products and repealing Regulation (EEC) No 2092/91
15
Chapter 2: Business Goal
This communications plan is created to engage the German market. Therefore, the
main business goal is to successfully launch a Whole Foods Market store for the German
customer. In addition, the overall goals are as followed:
• Creating brand awareness. In Germany, the brand/ name Whole Foods Market is
not recognized so far.
• Mental brand equity: inclusion of the brand in the consumers’ consideration set.
• Financial equity: brand’s economic performance in the marketplace: selling
products and gaining market share.
• Improve Whole Foods Market’s stock/ satisfy shareholders: continuing the
company’s role as a global retailer expanding its business.
16
Chapter 3: Statement of Problem
In times of economic crisis it is questionable whether or not customers are willing
to pay a little more on their groceries.
31
Although Whole Foods Market’s potential
customer base might not start to cut down on high-end products or change their buying
habits when it comes to purchasing groceries, it will still be problematic to engage a new
market with a “luxury” business at this point. Moreover, the German food retailing
market is believed to be one of the toughest markets to engage due to over saturation
32
.
As will be seen in the competitive analysis, a lot of international retail companies are
based in the German market, flooding the landscape with specially tailored grocery stores
for individual customers.
Also, organic products have a longer history in Germany. The German customer is
more health conscious when it comes to food than, for instance, American customers.
However, a recent study by the German magazine and online information platform for the
retail and fast moving consumer goods sector in Europe, the “Lebensmittelzeitung”(LZ),
indicated that skepticism among customers, when it comes to organic products, is still
major: only 45 percent believe that an organic label really means organic ingredients, a
perception that needs to be changed by Whole Foods Market.
In addition to the organic aspect, the fact that it is an American brand cannot be
neglected. For every American company and especially producers of consumer products,
there has always been a certain degree of prejudice among German customers. When
31
http://www.welt.de/wirtschaft/article2308043/Warum-die-Kunden-bei-Oeko-Kost-jetzt-knausern.html
32
http://www.welt.de/wirtschaft/article2161046/Die_Bio_Branche_kaempft_gegen_die_Saettigung.html
17
Whole Foods Market opened its first London based store in 2007, the Guardian, a famous
UK newspaper, called Whole Foods Market the “Disney World of Foods.”
33
When it
comes to food in general, there is an overall bias among European customers that
Americans are not famous for good food. What is known, are fast food chains like
McDonalds, Burger King, and Kentucky Fried Chicken. The perception that American
food is unhealthy and bad needs to be tackled and changed by the company.
The last problem Whole Foods Market might face is the size of stores the company
retails. Even though the variety of products is one of the main competitive advantages
and a signature of Whole Foods Market, it will be very difficult to operate such a big
store on the German market. Besides higher operating costs, labor expenses and utilities,
German cities are structured in a way that makes it difficult to run a grocery store that
requires such immense space.
33
http://www.guardian.co.uk/business/2007/jun/07/retail.supermarkets
18
Chapter 5: Research Methodology
Research Goal
The main research goal is to determine buying habits of the German customer as
well as perceptions of what organic food means to them. Moreover, primary research can
explain why certain tactics and business models will or will not work properly on the
German market. In addition, primary research will show, which tactics Whole Foods
Market is currently using to reach out to its customers, engage them in a conversation and
drive them into the stores.
Research Methods
Primary Research
In order to find out how German customers purchase food, what they value when it
comes to groceries and what their mindset about organic products is, I interviewed a
food-enthusiast (foodie). I choose to interview a foodie, since she represents a main target
audience. In addition, it is important to notice that I consider myself a foodie, being very
conscious about quality and origin of food. Moreover, the fact that I grew up in
Dusseldorf, Germany, gives me a solid background on the German purchasing behavior
and culture. Therefore, a lot of the questions you will be seeing in my primary research
(as well as some of the strategies and tactics) are also based on my personal experience
and expertise. Based on the key findings of my interview and my own hypothesis, I then
created an online survey (provided by www.surveymonkey.com) about buying habits of
19
German customers, which was send out in December of 2008 (Qualifications and
outreach of this survey will be further explained in the section Quantitative).
My second interview partner is a Whole Foods Market account-supervisor from the
Rogers Group, Los Angeles. His first-hand insights will especially help in developing
public relations tactics that will not only work, but are also timely and close to what
Whole Foods Market is currently doing in the United States.
Qualitative
Interview I
Interview partner:
Nina Albrecht, 27 years old from Dusseldorf, Germany, Arts-History Major
Household: 2 people, not married, no kids
On average, how much do you spend on groceries per month?
I would say between 500 and 600 Euros ($640-$760).
How often per week do you prepare meals at home?
It depends on my mood and if I have enough time to cook, but I would say that I prepare
and eat about 15 meals per week at home.
20
When you need groceries, where do you usually go?
I frequently visit a couple of different places to fulfill my grocery list. Besides REWE (see
competitive analysis), where I usually get basics like potatoes, pasta, rice, milk, butter,
spices, and all sorts of things, I tend to purchase fresh food at specialty stores. Bread, for
instance, I exclusively buy at my bakery, meat at my butcher, fruits and vegetables at a
farmers market or at fruit stores.
REWE, as an example of a big retail store, also carries all those products. Why do
still choose to go to different places?
Besides the fact that, for instance, meat simply tastes better when I buy it from my
butcher, I like the big variety of products and of course the freshness. In addition, I like to
know where my food comes from. The butcher I frequently visit has a farm in Neuss
(German town about 15 miles outside of Dusseldorf). I know that my meat is fresh and
does not come out of mass production. Regarding fruits and vegetables, I like the fact
that people at specialty stores or farmers markets can tell me what is in season right now,
what apple really tastes good or what is cheap to get right now. They just know what they
are selling and they are honest. You will never find that at a regular supermarket.
If you are not really satisfied with what REWE has to offer, why do you still choose
to buy your groceries there?
Because it is right around the corner.
21
So proximity is important for you?
Very much. I never buy stocks of groceries ahead of time. Grocery shopping for me
follows the ‘pleasure principle.’ I go shopping once I figured out what I want to eat
today. Every other week or so, we go to Metro (see competitive analysis) to buy
necessities, everything else I tend to purchase fresh for the day.
What do you think about organic food?
Organic is good for certain products. I try to buy whatever organic I can get, but I have
to say that it sometimes does not taste that great. For me, organic production is most
important when it comes to meat, because of the way animals are treated. I am willing to
pay more for my meat, if I know that the animals are able to walk around and are being
treated humane.
You said that you are willing to pay a little more. In your opinion, are organic
products more expensive?
Absolutely. I would say that organics are at least 1/3 more expensive, sometimes even
more.
But you are willing to pay that price?
Sure, because I know why it is more expensive and why it is needed. If you need more
land and workers to farm organically, you need to be paid more. As I said, the treatment
22
of animals is especially important for me. Moreover, I think that organic food is healthier
for us, which also is very important.
When you think of a grocery store, is there anything you really miss?
Exotic food. Something you cannot find anywhere, like special spices for instance. In
addition, I really love how on the farmers markets in Italy you can buy the perfect
vegetable mix for a Minestrone. Already chopped up, but fresh. This is really something
that is missing. Semi-finished goods, which are fresh and organic.
Interview II
Interview partner:
Keith Creighton, Rogers Group, Whole Foods Market Account
For Whole Foods Market it is important to be “more than just a grocery store.”
From time to time, the company offers special events like “singles-nights” in some of
its stores. Do you have any insights on what we will be seeing next from Whole
Foods Market? Are those tactics being appreciated and valued by its customers?
While the Whole Foods Market brand, and the quality of the products within each store,
remain consistent location to location, it is up to the Store Team Leaders, the store
marketing managers and each person on the store floor to help cater to the specific needs
of their clientele. Clientele to the 38 stores in the Southern Pacific Region are consistent
in priding themselves on purchasing the best natural and organic foods. But beyond that,
23
the Venice, CA store enjoys a large share of singles traffic. Their prepared foods sales,
wine tasting events and singles night mixers are wildly popular. Stores in the suburbs
cater to families - their peak times are different and much of their food sales (prepared
and uncooked) is enjoyed at home. Digging deeper, many stores offer Artisan Corners,
where art, jewelry, clothing and home furnishings by local artists are sold. All stores
stock locally-sourced food products, keeping family farms thriving in the region.
How does Whole Foods Market typically promote a grand opening of a new store?
What importance does the community surrounding the store play? What tactics are
utilized to create awareness among local residents?
Connecting with the surrounding community is the most important part of the store
opening. Key industry leaders and opinion leaders work in collaboration with the store
management during the store's development to ensure the needs of the community are
being addressed - parking, noise, employment, product selection are all discussed, so
when the store opens, the community is already fully invested in its success. We give
preview tours to community leaders and key media. Instead of "ribbon cutting" - we
break bread and share it with one and all before opening our doors. At most store
openings, there is a line around the block on opening day, and the traffic rarely lets up
from then on. Many stores also select local charitable partners, and have 5% days to
raise funds and awareness.
24
At last, it would be very beneficial to get some insights and thoughts on how they
outreach to their different audiences. What new tactics have been implemented to
drive customers to the stores or get them involved in an online conversation or social
media?
Whole Foods Market connects with its many diverse audiences on the national, regional,
city and local level. YouTube, Facebook, Twitter and their continually expanded web site
offer a tremendous amount of fresh, relevant content to keep customers engaged. Their
"Whole Deal" newsletter (published quarterly, expanding to 6 times/year) is like having a
personal concierge guide you through the store - among their popular recipe ideas: one
list of groceries - and recipes to make from that list for the whole week. Recipes for one,
couples and families. It allows customers to expand their palates, eat fresh, and make
sure no food goes to waste. You can download it as a PFD off their Web Site.
The Whole Deal - and the store's personally guided weekly "Value Tours" remind
customers just how competitive Whole Foods Market is on most staple pantry items. The
company's private label 365 Brand products compete head to head on price point, while
delivering the natural and organic quality standards people demand from Whole Foods
Market. The Whole Foods Market customer just isn't willing to sacrifice the quality of the
foods they put in their bodies - it's a way of life.
Quantitative
In December 2008, I created an online survey based on these interview findings
and my own hypothesis, with a total number of 123 respondents. The qualifications for
25
the survey were quite simple. All respondents had to be older than 18. Out of my
respondents I had 58 female and 65 male shoppers, 80 of them between the ages of 26
and 63. As far as the outreach is concerned, I relied completely on new media
technologies and ways of communication, such as social networking sites and e-mail
contacts, since it was an online survey provided by “surveymonkey.com”. Based on my
own hypothesis and mostly on the key findings of the interview with my foodie, I then
constructed an online survey concentrating on German buying habits. The following
questions were asked:
1. Do you visit more than one store to fulfill your grocery list?
2. In a week, I:
a. Prepare the majority of my meals at home
b. Eat the majority of my meals outside of the home
3. On average, how much do you spend on groceries per month?
4. When considering a grocer, how important is/are:
a. Reasonable prices
b. Convenience of location from work or home
c. Freshness of produce
d. Quality of meat
e. Overall quality of store
f. Broad selection of products
g. Rewards program
26
h. In-store experts to assist me
5. How often do you frequent the following stores? (Variety of possible
competitors for Whole Foods Market)
6. When shopping, do you tend to buy name brands or generic?
7. Do you read a product's label before purchasing?
8. Please indicate how important buying organics and/or natural foods is to
you.
9. Would you say, you can find organics in most stores?
10. Please rank the following options considering organics:
a. Price
b. Diversity, variety
c. Shelf-life
d. In-store organic experts
11. When you hear the word "organic" what comes to mind?
In order to get as many respondents as possible, I used new media sources to
distribute the survey such as Facebook.com and the German equivalent StudiVZ.net. In
addition to that I used the e-mail outreach of my undergraduate University, the Heinrich-
Heine University Dusseldorf, as well as personal e-mail contacts. As a result I had 123
respondents, most of them living in North Rhine Westphalia (western Germany), the
most populated state with the highest purchasing power in Germany.
Rationale for the different age groups:
27
Between the ages 18 to 20, German high-school students usually graduate. Most
students graduating from College or University are between the age of 24 and 26. Young
professionals are between 26 and 35. The age group of 36 to 49 usually is considered to
be more affluent and tend to have a bigger household. At the age of 63 most Germans
retire. The generation 64+ grew up in the post World War II era, a time where a lot of
families lost everything. Most of them have a small retirement plan and live simpler lives.
It is necessary to notice that the outcome of this survey just shows trends. With a sample
of 123 respondents I know that these results cannot be generalized. It is obvious that the
number of survey respondents and the demographic diversity is too low to make
generalizations. However, the survey delivered the following key findings that can be
seen as trends:
Table 1: Key Finding 1
It can be seen, that most Germans visit more than one store to fulfill their grocery
list. Especially the generation 50+ frequents a variety of stores to get their groceries done.
The German landscape, as will further be seen in the competitive analysis, is over floated
28
with small specialty stores for individual needs. Compared to the U.S., a sheer mass of
small bakeries, butchers, fruit and vegetable stores as well as organic supermarkets can
be found everywhere. Quality meat is mostly purchased at butchers, fresh bread at
bakeries. Only a small portion of the German recipients indicated that they would only
have to visit one store to fulfill their grocery list.
Table 2: Key Finding 2
Cooking and eating at home has a high value in the German culture. Fast food and
delivery services are not as widespread and diverse as in the U.S. or even the UK; dining
at a restaurant has more of an event characteristic. The results indicate that the working
population between the ages of 26 and 49 are cooking less meals at home than other age
groups (still about 50 percent). These numbers clearly indicate a solid foundation for
retail and grocery stores like Whole Foods Market in general.
29
Table 3: Key Finding 3
It can also be seen that the average German consumer spends more than EUR 120
($150) a month exclusively on groceries. 58 out of 113 respondents even indicated that
they were spending more than EUR 200 ($250).
30
Table 4: Key Finding 4
For almost 70 percent, convenience of location from their work or home was
named as important. Because of the fact that German cities are structured differently,
most city residents do their shopping without a car. Therefore, proximity is key.
31
Table 5: Key Finding 5
Table 6: Key Finding 6
32
Freshness and quality seem to be the key to success. Throughout every age group,
80 percent or more indicated that they highly value freshness of products, especially in
meat. In recent years, a variety of food scandals disrupted the German retail market. Old
meat was being sold, issues with animal husbandry and other food related problems are
still on the customers’ minds. Due to this, the German consumer is very skeptical and
conscious about quality and freshness of products. For Whole Foods Market it is
therefore critically important to position themselves as being dedicated to fresh products
and humane treatment of animals.
Table 7: Key Finding 7
Even though German consumers tend to fulfill their grocery list by shopping at a
variety of different stores, a broad selection of products seems to be desirable. Whole
Foods Market’s business model with a huge variety of products has to be communicated.
33
Table 8: Key Finding 8
Rewards programs are of minor importance. Although most retailers offer some
sort of ‘club card,’ it is only being used by a few.
34
Table 9: Key Finding 9
Even though the organic market is still booming, special organic stores (Bio-
Supermarkets) are still not being frequented. 69 percent indicated that they rarely or
never shop at one of those stores, while only 3 out of 112 respondents indicated that they
do the majority of their shopping here. What this exactly means for Whole Foods Market
will be determined later, since those stores are structured radically different from a Whole
Foods Market.
35
Table 10: Key Finding 10
It can be seen that the average German consumer frequently shops at specialty
stores like bakeries and butchers as well as farmers markets. Only about 5 percent of my
respondents indicated that they never shop at one of those places. The vast majority (63.4
percent) often decides in favor of those alternatives to grocery stores.
36
Table 11: Key Finding 11
It can be seen that organic products overall are not valued to be that important.
Even though almost 50 percent of my respondents said that organic food is somewhat
important to them, the numbers are not really standing out. Freshness and quality is
valued higher than the organic aspect.
37
Table 12: Key Finding 12
As will be seen in the competitive analysis, most German retail and grocery stores
already offer organic products. Looking at the statistics, it becomes obvious that most
German customers are aware of this. 83.6 percent of my respondents indicated that they
believe that most stores carry at least some organic products.
38
Table 13: Key Finding 13
When asked for word associations with the term “organic,” the vast majority
indicated that organic equals healthy. In addition, most respondents said that organic food
is locally grown, has a better taste to it and is more expensive.
Secondary Research
As far as secondary research s concerned, I relied mostly on new-media research
methods. For Whole Foods Market as well as its main competitors, I utilized corporate
websites to gather necessary information. Moreover, I researched major German and
British newspapers to gather information regarding organic trends and current public
39
discussions surrounding food in general. For all sorts of statistics on the German
purchasing behavior as well as organic trends, legislation amendments and company
profiles I relied heavily on LZ.net (“Lebensmittelzeitung” = “food paper”; online
information platform for the retail and fmcg sector in Europe), planetretail.net and the
official website of the European Union.
40
Chapter 5: Situation Analysis
Following is a S.W.O.T. analysis that I conducted in order to determine the internal
strengths, internal weaknesses, external opportunities and external threats surrounding
Whole Foods Market. This examination is necessary in order to successfully craft a
media campaign for the German consumer market.
Whole Foods Market in Germany
Strengths
• Whole Foods Market has a winning business model in the U.S. market
• Whole Foods Market has an innovative business model that could be adapted to
the German market.
• Whole Foods Market would bring something new to the German market.
• Whole Foods Market is an established and publically traded company.
• Whole Foods Market already engaged the European market in 2007 by opening
the first London-based store.
• Germany is a country with strong economic power
• Germany is a country with strong purchasing power
• German Consumers are already organic-savvy
• German Consumers are health-conscious
• Germans tend to buy their groceries at a variety of different stores. Whole Foods
Market could be one of them.
41
Weaknesses
• Price of products. Limited target audience due to pricing.
• Size of stores. German cities are structured differently and have less space for big
retail stores in city centers.
• Location. A lot of German customers do their grocery shopping without a car due
to proximity to smaller supermarkets, bakeries, butcheries, etc.
• Currently, Whole Foods Market has limited to no brand awareness in Germany.
• The name Whole Foods Market. Since it is an English term, the association with
“wholesome food” will be lost. The brand name will have no meaning for the vast
majority of Germans.
Opportunities
• Organic market is still booming.
• The German consumer is more health-conscious than the American and values
healthy food as a more important part of his or her life.
• Germany has a strong purchasing power. A lot of affluent consumers that could
be potential customers.
• Until today, there is no such business model on the German market. Whole Foods
Markets idea of offering a huge variety of organic products is new to the market.
• Because Whole Foods Market has very limited brand awareness among Germans,
the company would enter the new market without any prejudice of consumers.
42
Threats
• Over saturation of the German retail market.
• Vast array of direct competitors.
• Current economic and financial crisis.
• The perception that Whole Foods Market is a “Disneyland of food.” Similar to the
UK market there is some sort of skepticism among German consumers when it
comes to American companies in general.
• The only U.S. food chains and businesses operating on the German market are
fast food chains.
• Prejudice among German customers when it comes to organic products.
o Mindset that an organic label does not mean organic ingredients.
o Organic food is way more expensive.
o The taste of organic food often times is not as good.
Competitive Analysis
After conducting a S.W.O.T. analysis on the German market in general, this section
provides information about Whole Foods Market’s main competitors. This is necessary to
fully understand the German market landscape and will further explain the German
purchasing behavior. The German market is believed to be one of the toughest markets in
the world due to over saturation. Therefore, this section is critically important to identify
and recognize the competition. Each competitor will be described from a financial and
market-positioning standpoint, followed by an indication of how the company/ the
43
supermarket is perceived by consumers. After the analysis, a perceptual mapping will
illustrate Whole Foods Market desired market positioning in comparison to its main
competitors.
You will also see an indication of quality, price, store-size and organic segment.
Metro Group AG
The METRO Group is one of the most important competitors for Whole Foods
Market. The company is an international retailer employing 290,000 people.
34
It is
currently operating over 2,100 stores in 32 European, African and Asian countries.
35
In
2006, the Metro Group acquired all 85 German Wal-Mart Stores Inc. hypermarkets
boosting the sales-revenue to EUR64.3 Billion (2007).
36
The company’s diversified
portfolio includes the following two direct competitors:
• Metro Cash & Carry
37
is an international market leader in the sector of self-
service wholesale. The stores and services offered by Metro Cash & Carry are
especially targeted to meeting specific needs of professional customers. The
company operates 626 stores in 29 countries, offering a broad selection of high-
quality goods at wholesale prices.
34
http://www.metrogroup.de/servlet/PB/menu/1000080_l2/index.html
35
http://www.metrogroup.de/servlet/PB/menu/1084740_l2/index.htm
36
http://www.metrogroup.de/servlet/PB/menu/1000117_l2/index.html
37
http://www.metrogroup.de/servlet/PB/menu/1000091/index.html
44
Figure 2: Metro Cash& Carry in Figures
High-quality; wholesale price; comparable variety of products; about 600
organic products
• Real hypermarkets
38
In 2006, the Real branch acquired Wal-Mart Germany
integrating former Wal-Mart hypermarkets during the first half of 2007. The
brand profile of Real is targeted at young families with children and the 50-plus
generation.
38
http://www.metrogroup.de/servlet/PB/menu/1001973/index.html
45
Figure 3: Real in Figures
Low-quality; low-cost; food section has lower variety of products; about 900
organic products
REWE Group
The REWE Group is a German retail and tourism company based in Cologne. It is
the third biggest supermarket chain in Europe, operating 12,000 stores in 13 countries
(3,000 in Germany), employing more than 270,000 people (180,000 in Germany).
39
In
2007, the company’s combined sales-revenue was EUR45 Billion.
40
Similar to Whole
Foods Market, the company is committed to locally grown products, offering its
customers a variety of high-quality, high-cost products. In the last couple of years,
REWE supermarkets are continuously and systematically expanding its organic segment,
satisfying the customers growing need for wholesome food. REWE’s business model,
39
http://www.rewe-group.com/index.php?id=11&L=1
40
http://www.rewe.de/index.php?id=47
46
corporate culture and the variety of high-quality products (and therefore the target
audience) are most comparable to Whole Foods Market. In addition to “REWE” grocery
stores, the company also operates “Penny Markt,” a very cheap food discounter as well as
“Vierlinden”-stores, a new organic only supermarket. Currently the company operates
five of those stores, four in North-Rhine-Westphalia (Western-Germany) and one in
Munich, Bavaria (Southern-Germany).
41
Figure 4: REWE Group in Figures
41
http://www.lz-net.de/dossiers/sortimente/pages/protected/show.php?id=3266&backid=1178
47
REWE: High-quality; high-cost; comparable variety of products; big organic segment
Penny Markt: low-quality; low-cost; food section has lower variety of products; small
organic segment. Biggest threats to Whole Foods Market’s success.
Kaiser’s Tengelmann AG
The Kaiser's Tengelmann AG, headquartered in Viersen, is a subsidiary of the
Tengelmann Group, based in Mülheim an der Ruhr.
42
As a food retailing company it
operates 700 stores, employing more than 17,000 workers.
43
The company has an
annualized sales volume of EUR2.51 billion.
44
It is currently the market-share leader in
Berlin and Munich. In addition to “Kaiser’s” grocery stores, the company operates
“PLUS,” a cheaper discount version of Kaiser’s also selling branded products. In the last
couple of years, PLUS systematically extends its own organic segment called “BioBio.”
The company currently operates 2,700 stores employing over 27,000 workers.
Figure 5: Tengelmann Group in Figures
45
Sales Revenue Billion € Compared to 2007 (%)
Germany 14.16 -0.3
Europe 5.56 10.3
42
http://www.kaisers.de/infoseiten/industry.html
43
http://www.kaisers.de/infoseiten/about.html
44
http://www.plus.de/is-bin/INTERSHOP.enfinity/WFS/Plus-PlusDE-Site/de_DE/-/EUR/ViewCms-
Content?Path=%2Fpages%2F61608
45
http://www.tengelmann.de/tengelmanninzahlen.html
48
Total 19.71 2.5
Employees Number Compared to 2007 (%)
Germany 88,344 1.4
Europe 28,103 6.1
Total 116,447 2.5
Stores Number Compared to 2007 (%)
Germany 6,011 0.4
Europe 1,415 7.9
Total 7,426 1.7
Kaiser’s: High-quality; medium-priced; food section has lower variety of products;
medium-sized organic segment
PLUS: Medium-quality; low-cost; food section has lower variety of products; small
organic segment
Schwarz-Group
The Schwarz Group is a privately owned retail company based in Neckarsulm. The
holding company’s sales-revenue in 2006 was €44 billion.
46
The owner Dieter Schwarz
46
http://www.handelsblatt.com/unternehmen/handel-dienstleister/schwarz-gruppe-waechst-
zweistellig;1233298
49
currently employs 170,000 workers.
47
In 2008, Schwarz ranked number 10 in Deloitte’s
“Global Powers of Retailing 2008” study.
48
The main competitors for Whole Foods
Market are Lidl and Kaufland, subsidiaries of this holding company. Kaufland currently
operates 750 hypermarkets in Germany. The discount version Lidl operates 3,000 stores
in Germany. Since the company is not publicly traded, there are no additional data
available.
Kaufland: Medium-quality; medium-priced; hypermarket; big food section; small
organic section.
Lidl: Low quality; low-cost; food section has smaller variety of products; small organic
section.
EDEKA-Group
The EDEKA-Group claims to be the number one food retailer in Germany with
more than 10,000 stores and a combined sales revenue of €38 Billion.
49
The company
currently operates about 4,700 independent supermarkets generating €15 Billion is sales
alone.
50
In 2007, the company employed more than 253,000 workers.
51
The company’s
core business is described to be a mix of the independent grocery stores EDEKA and its
discount branch Netto. The company prides itself with having the best balance between
47
http://www.deloitte.com/dtt/cda/doc/content/de_CB_R_GPofRetailing08_140108%281%29.pdf
48
http://www.deloitte.com/dtt/research/0%2C1015%2Ccid%25253D186365%2C00.html
49
http://www.edeka.de/EDEKA/Content/DE/AboutUs/Unternehmen/Profil/index.jsp
50
http://www.edeka.de/EDEKA/Content/DE/AboutUs/Unternehmen/Strategie/index.jsp
51
http://www.edeka.de/EDEKA/Content/DE/AboutUs/Presse/ThemenSpezial/Qualitaetsleitlinien/index.jsp
50
quality of products and their prices. Even though EDEKA communicates its high
standard of products and its commitment to high-quality food, so far organic products are
rare.
EDEKA: medium-quality; medium-priced; big variety of products; small organic
segment
Netto: low-quality; low-cost; food section has smaller variety of products; small
organic segment
Aldi Nord/ Süd.
In addition to the discount alternatives mentioned above, the company ALDI plays
a major role in the German food market. ALDI is a privately owned discount chain
divided up into ALDI Nord (north; operating stores in North-West Germany; owned by
Berthold Albrecht) and ALDI Süd (south; operating stores in South-East Germany;
owned by Theo Albrecht). The combined sales-revenue is estimated to €38 billion. In
Germany, both companies operate more than 4,200 stores.
52
ALDI’s concept is to buy
huge amounts of branded products, which are renamed and sold under a different name
for a discount price.
52
http://www.aldi-sued.de/de/html/company/ueber_aldi_sued.htm?WT.z_src=main
51
Whereas ALDI’s fresh food section is limited and perceived to be of lesser quality,
ALDI ranks very high in customer-satisfaction and quality surveys for all its other
products. It is estimated that three out of four families frequently shop at an ALDI store.
53
Medium-quality; very low-cost; food section has lower variety of products; small
organic section
Butchers, Bakeries, Fruit & Vegetable Stores
When it comes to buying habits, one of the biggest cultural differences between
Germans and Americans is the value of butchers, bakeries, and fruit and vegetable stores.
Even though most grocery stores offer a variety of meat and bread products, the average
German customer purchases his or her bread in small bakeries, offering a huge variety of
baked goods. They can literally be found on every other corner inside or outside city
centers. Currently, there are more than 800 different bakery chains in Germany, some of
them privately owned and limited to a local audience; others are corporations with up to a
thousand stores and revenues up to €500 Million.
55
Those bakeries offer a huge variety of
high-quality baking goods at cheap prices. Consequently, most German grocery stores are
partnering with bakeries developing shop-in-shop alternatives for customers.
A comparable cultural trend is the importance of butchers for the German customer.
Butchers or meat markets can also be found everywhere. Because of the high-quality
meat and the huge variety of products offered in those stores, prices exceed convenient
53
WirtschaftsWoche Nr.10 March, 5, 2007 P.55
55
http://www.kamps.de/unternehmen/ueber-uns/
52
grocery stores by far. Health-conscious and solvent customers are more likely to choose
in favor of butchers.
Due to climatic conditions, prices and the variety of fruits and vegetables are very
dependent on a particular season. Unlike most supermarkets, fruit and vegetable stores
are offering products all year round for higher prices. Many customers decide to shop in
one of those stores to fulfill their shopping list.
Bakeries: high-quality; low-cost; big variety of baking goods; can be found everywhere
Butchers: high-quality; high-cost; big variety of meat products; most of them locally
produced
Fruit & Vegetable stores: high-quality; medium-priced; big variety of products
Farmers Markets
Farmers markets have a long tradition in Germany. Local farmers sell high quality
goods for mostly medium prices. The customers value the locally-grown aspect as well as
friendliness of the mainly family-run businesses; quality and variety of food; as well as
honesty and knowledge about their products. It is recommended not to open a Whole
Foods Market in the same neighborhood of an all-year farmers market.
Bio supermarkets
In the last couple of years, more and more privately owned organic retail stores
opened up on the German market. Moreover, a couple of companies focus on organic
products and organic farming, due to an increase in consumer demand. The combined
53
sales revenue of all “Bio-supermarkets” increased more than EUR 100 million between
2005 and 2006, to now more than EUR 1 billion.
56
The following lists the two biggest
companies and therefore most important competitors.
Basic AG
The Basic AG is a publically traded company based in Munich, which is focusing
on organic products. The company currently operates 25 retail stores in 17 German cities.
Up to 18,000 organic products are offered to a fairly cheap price.
57
In the last couple of
years the company was facing enormous financial difficulties resulting in a loss of EUR 7
million in 2007 and the closure of four stores.
Medium-quality; medium-priced; medium variety of products; organic only
Alnatura
Market leader when it comes to organic specialty stores. The privately owned
company currently operates 45 stores in 32 German cities, employing about 1,100
workers.
58
In 2008 the combined sales revenue grew 24 percent to now EUR 304 million.
Besides major cities, Alnatura stores can mostly be found in western and southern parts
of the country. On average, those grocery stores offer 6,000 organic products.
59
High-quality; high-cost; small variety of products; organic only
56
http://www.lz-net.de/dossiers/sortimente/pages/show.php?id=1166
57
http://www.welt.de/wirtschaft/article2098365/Basic_hat_das_Vertrauen_vieler_Kunden_verloren.html
58
http://www.alnatura.de/de/daten-und-fakten
59
http://www.alnatura.de/de/daten-und-fakten
54
Premium Supermarkets & Department Stores
It is also important to note that German department stores have high-quality/ high-
cost food markets in their basements. Those supermarkets serve as premium shopping
venues for financially strong customers. Inside German city centers they can be found in
nearly every department store. Depending on the particular store and city, they are
structured completely different. Some of them are privately owned grocery stores, others
are subsidiaries of the department store’s holding company and again others are
collections of small and delicate butchers, farmers-markets, bakeries, etc. For an inner-
city location they have to be seen as the biggest competition, since other grocery stores
mentioned above (REWE, Metro, Kaiser’s, Real, etc.) are mainly absent in those areas.
High-quality; high-cost; comparable variety of products; some organics
55
Perceptual Mapping
Figure 6: Perceptual Mapping
Additional side notes on German buying habits
A common mistake U.S. companies are making while entering the German market
concerns packaging and quantity of products. In contrast to U.S. customers, Germans do
not buy products in large quantities (one reason why Wal-Mart had problems in
Germany). The rationale behind this is the fact that Germans tend to live in smaller
homes/apartments and do not have storage capacity. Moreover, a lot of Germans buy
their groceries without bringing a car. The third aspect is the difference that some
56
Germans tend to go grocery shopping multiple times a week to buy whatever they need
fresh.
Another concept that could lead to problems is “food on sale.” Whereas coupons or
sales on food products are very common in the United States, German customers would
be skeptical. Discount on food has a connotation of old and bad. It is just very unusual
and therefore should not be prominently considered.
Strategic Implications
Following up on the conducted S.W.O.T. analysis as well as the competitive
analysis, it becomes obvious that the main task for Whole Foods Market and this
campaign is to differentiate the company from the mass of direct competitors.
Furthermore, it will be necessary to tackle the consumer’s mindsets about organic food.
In addition, the economic and financial crisis may hinder a financially strong launch.
However, there is no such business model on the German market. Whole Foods
Market’s idea of offering a huge variety of organic products is new to the still-booming
organic market.
57
Chapter 6: Communication Goals
The overarching goal of this PR campaign is to create brand awareness. In addition, the
plan should seek to:
• Change customer perception about organic food and bring awareness and interest
to the subject.
o One of the most influential publications by the leading German customer
safety group “Stiftung Warentest”
60
recently published a study saying that
organic food in general is more expensive but the quality is not better. A
variety of top newspapers picked up this study, writing negative stories
about organic food in general.
61
• Change customer perception about costs for organic products.
• Expand and maintain positive communication about organic food and agriculture.
o In order to position Whole Foods Market as the best organic food store, it
is necessary to increase and maintain the total number of news stories
about organic food and agriculture.
60
http://www.test.de/
61
http://www.welt.de/wirtschaft/article1216141/Bio_Produkte_sind_teurer_aber_nicht_besser.html
58
• Increase and optimize the amount of factual information concerning Whole Foods
Market that is available and first to appear in an online search.
o Increasing and optimizing the amount of factual information concerning
Whole Foods Market will allow people to have better access to learning
accurate information that may aid in their decision to shop at Whole Foods
Market.
59
Chapter 7: Objectives
• Within one year, successfully launch one German Whole Foods Market.
• Increase and establish positive brand awareness of Whole Foods Market.
• Establish win-win partnerships with companies, institutions and the media
working in the food business.
• Score highly on quality and/or price comparison by “Stiftung Warentest.”
(German customer safety group; most influential publication)
60
Chapter 8: Key Audiences/ Key Messages
The following chapter identifies Whole Foods Market’s key audiences that have to
be targeted in order to successfully engage the German market:
• Food enthusiasts/ Foodies: people who are already very concerned about organic
and healthy food
o College students: men and women between the ages of 18 to 24 who are
conscious about organic agriculture and animal husbandry.
o The older generation: men and women over the age of 60 who cook the
largest percentage of meals at home.
o Individuals that are concerned about food, but which are not satisfied with
their current grocery store.
o Hobby-Chefs: men and women that are passionate cooks and are
constantly searching for new ideas and shopping alternatives. The big
variety of products is a critical message to this group.
• Health-conscious consumers: individuals who are generally living a healthy
lifestyle.
• Celebrities: It is always good to have celebrities shopping at your store. For this
audience, the “green factor” as well as the “health factor” are important. Shopping
at Whole Foods Market could send a signal to meat mass-production industry.
Moreover, eating healthy and living healthy is a big concern to many celebrities.
61
• Key influencers: Besides celebrities, kitchen chefs, restaurant and food testers as
well as journalists have to be targeted strongly. This audience is most likely to be
very critical, yet, it is important to get fast and positive brand awareness.
• Direct neighborhood: Whole Foods Market will be entering a new community. It
is critically important to get the immediate neighborhood involved and happy to
have a Whole Foods Market around the corner. In the UK, a lot of residents felt
negatively about Whole Foods Market because the company built a huge parking
lot, destroying the ambiance of the neighborhood. Even though German
customers would probably appreciate the convenience, American-sized parking
lots are very unusual and ugly, and would therefore be seen as a negative.
• Food publications: Food magazines that reach out to those consumers who are
already food enthusiasts. “Everything Whole Foods Market” is potentially
relevant to them. (Company overview, organic commitment, green commitment,
recipes, etc.)
• General Media: For the general media, Whole Foods Market is a new major
corporation entering the German market. They will mostly be interested in the
business model.
• Parents: “Do something good for you and your kids.” This motto should be
repeated when targeting parents. This audience is important since they teach the
new generation the value of food. More importantly, this group is most likely to
cook a lot of meals at home and tend to shop bigger amounts of groceries.
62
• Generation 64+: The older generation is mostly concerned about quality and
freshness of products. Moreover, they are the ones cooking a lot of their meals at
home. In addition to that, the aspect of teleshopping/ food-delivery is very
important to them.
• Generation 18-30: For the younger generation, the future core of Whole Foods
Market’s business, it is most important to communicate humane animal
husbandry. The young generation is very concerned about mass-produced meat
and the way animals are treated by large corporations. Telling them that Whole
Foods Market is very committed to organic agriculture and the humane treatment
of animals will create positive awareness. The goal is to get this audience to buy
from Whole Foods Market, because they believe in doing the right thing.
• Neighborhood business professionals: Whole Foods Market is the fastest way to
get a healthy lunch. During lunch break (noon-3 P.M.), German city centers are
packed with professionals working in the area. Highlight Whole Foods Market’s
diverse lunch menu to this target audience.
• Local farmers: Whole Foods Market needs to create win-win partnerships with
local farmers. Mutual interests in quality and freshness of products have to be
communicated to local farmers. Therefore, Whole Foods Market’s green
commitment should be emphasized to create an atmosphere where the farmers are
proud to supply Whole Foods Market.
63
Chapter 9: Strategies
To communicate the key messages, it is recommended that Whole Foods Market
implements the following strategies in order to effectively target the key audiences
mentioned above.
• Position Whole Foods Market as a new, high-quality grocery store.
• Differentiate Whole Foods Market from its competitors such as REWE and
EDEKA because of its unique choice of products.
o In order to attract the largest number of possible customers, it will be
necessary to make Whole Foods Market stand out on its own. It needs to
be communicated differently to draw in new customers.
• Differentiate Whole Foods Market from other organic supermarkets such as Basic
because of its unique variety of products.
• Position and communicate Whole Foods Market to be environmentally friendly.
• Shift focus away from comparison to regular grocery stores.
• Shift focus away from comparison to other organic supermarkets.
• Use Internet and other viral outreach to create awareness about Whole Foods
Market.
• Highlight:
o Nutrition of products.
o Variety of products.
o Variety, freshness and quality of products in a German tagline.
64
o Whole Foods Market’s organic commitment.
o Whole Foods Market’s unique market positioning.
o Social, ethical aspect of organic farming and the price you have to pay for
it.
o Whole Foods Market’s diverse lunch menu.
• Use national media outreach to broaden awareness about fresh and locally grown
food.
65
Chapter 10: Tactics
The following chapter is devoted to communication tactics that effectively target
the audiences mentioned above. I am recommending a “rolling launch,” and have divided
the tactics into three main waves:
• Pre-Launch: everything leading up to the launch of Whole Foods Market.
• Launch. The timeframe surrounding the grand opening of the first Whole Foods
Market in Germany.
• Post-Launch. These tactics should be implemented for sustainability reasons.
Even though this communication plan focuses on entering the German market, a
nationwide increase of brand awareness is desired for future expansion to
different cities.
Pre-Launch
Company/ Brand Name
Prior to all communication tactics it is critically important to recognize the problem
of the English brand name “Whole Foods Market.” Even though German children are
now starting to learn English in their first grade of elementary school, the vast majority
does not appropriately understand English terms used by a variety of especially U.S.
companies. A recent study found out that even very simple English is not being
understood properly.
62
Examples for taglines that were not correctly received are
62
http://www.spiegel.de/unispiegel/wunderbar/0,1518,310548,00.html
66
“Lufthansa – There’s no better way to fly,” “McDonald’s – I’m lovin’ it” (has been
translated shortly after the introduction), “Have a break, have a kitkat,” and even
“Magnum (M) – Yes I’ M.” According to this and prior studies, 92 percent of the
respondents did not understand what the tagline or slogan meant.
63
Moreover, German
customers who do understand the meaning are less affected by English terms, taglines or
slogans. Whereas, “Whole Foods Market” automatically stimulates the association with
wholesome food for the English speaking community, it will not be understood by the
average German customer. Therefore, it is important to add a German tagline that
expresses Whole Foods Market’s values and business model. According to a variety of
studies, newspaper articles and my own survey, the most important factors when it comes
to organic food are:
• Freshness of products
• Organic meaning healthy
Moreover, it could be seen that the market desires a bigger variety of organic
products. The new tagline should meet those demands. My suggestion is:
Whole Foods Market – Gesunde Vielfalt
(Whole Foods Market – Healthy Variety)
or
63
http://www.spiegel.de/unispiegel/wunderbar/0,1518,310548,00.html
67
Whole Foods Market – Frische Vielfalt
(Whole Foods Market – Fresh Variety)
Partnerships for German green-action approach
In 2002, Whole Foods Market’s Berkeley store became the first major food retailer
in the U.S. to use solar energy as its primary power source. In 2006, Whole Foods Market
made its first landmark purchase of renewable energy credits from wind farms to offset
100% of its electricity used in the United States and Canada.
64
It is desirable to create
such win-win partnerships in Germany following this green action. Germany is the world
leader when it comes to recycling and renewable energy. Therefore, it is necessary to
continue this green-energy commitment, by implementing or purchasing electricity from
renewable energy sources.
Social Media Tactics
Pull versus push is key to social media. In order to effectively engage in an online
conversation it is important to understand that pushing out a message will not work
properly online. It is desirable to create content that is compelling to the target audience
so they pull the information.
Whole Foods Market is a company that is extremely involved in social and online
media in general. Whole Foods Market continuously turns its website into a destination
where customers can meet, talk, and exchange information about products they care
64
http://www.wholefoodsmarket.com/values/green-action.php
68
about.
65
Recipes are also very popular on www.WholeFoodsMarket.com. The company
provides the opportunity for visitors to rate and comment on posted recipes and store
favorites ones in an individual recipe box.
66
This tactic is directly changing customer
behavior, by engaging into an online conversation and then providing shopping tips and
shopping lists for individual recipes. The online blog “blog.wholefoodsmarket.com” is
also trying to change customer perception by informing consumers about nutrition facts,
organic and wholesome food in general, the company’s green action approach and its
commitment to environmentally friendly farming.
67
Adam Weiroth, director of product marketing at Pluck said:
The blog has become a place where customers come together to learn more
about organic food and express their thoughts on a range of topics central to
the Whole Foods Market community. Enhanced by video and audio podcasts,
the blog is used by Whole Foods Market experts to alert customers to topical
issues, such as last summer’s tomato safety concerns, as well as share the
inside scoop on new products coming to market. Customers also contribute
their opinions and directly interact with Whole Foods Market experts via the
blog.
68
Besides engaging directly with consumers via online blog, Whole Foods Market is
also using an even newer way of online communication: Twitter. The company is
currently tweeting about product recalls, reward programs or special offers. It is also
utilized to redirect interested customers to all sorts of special events, like a Live-Blog
65
http://www.wholefoodsmarket.com
66
http://multichannelmerchant.com/ecommerce/0113-benefit-social-media/
67
http://blog.wholefoodsmarket.com
68
http://multichannelmerchant.com/ecommerce/0113-benefit-social-media/
69
about value shopping. Similar tweets about how to shop or how to cook are especially
creating interest among young food-enthusiasts and parents.
Moreover, Whole Foods Market is also using social media sites like Facebook.com
to engage in a conversation with especially the younger target audience. A recent
Facebook initiative was a recipe contest. Interested customers where asked to submit
their favorite “Big Game Recipe” for the Super Bowl.
69
The winner received a $25
Whole Foods Market gift card. This tactic presents a two-way call of action. First, people
get involved by posting a recipe. After that, at least the winner will be shopping at a
Whole Foods Market and hopefully buy products for more than the $25 he or she won.
Overall, the company is strongly engaged in online media, using a variety of
different channels to reach its target audience and get them involved. A strong online
presents not only changes customer perception about the Whole Foods Market itself, but
also changes behavior by providing desired content that is redirecting consumers directly
into the stores. Moreover, Whole Foods Market perfectly connects all its social media
content by redirecting blogs to tweets, tweets to Facebook groups and Facebook groups
to the corporate website.
Facebook/ StudiVZ.net
The German equivalent to Facebook is called “StudiVZ” (short for
Studentenverzeichnis; student directory). Currently it has about 12 million users and is
69
http://www.facebook.com/topic.php?uid=24922591487&topic=6028
70
the ninth most-visited Website in Germany.
70
71
Unlike Facebook it has fewer
applications and an overall simpler design. Corporate accounts are not introduced, yet.
Recently, the owners announced the opportunity for corporations to buy banners for
advertisement or announcements. Targeting the young audience with a variety of key
messages via StudiVZ.net will increase brand awareness among health-conscious
students and young professionals. Currently, Facebook states that there are about 600,000
German users registered at their website.
72
It is also possible to target those users on
Facebook by sending tailored messages (in German) to those users logging in from a
German server. Currently, Facebook is the 12
th
most visited Website in Germany.
73
Twitter
Twitter is relatively new in the world of social media. Founded by Jack Dorsey, Biz
Stone, and Evan Williams and launched in July 2006, it is “a social networking and
micro-blogging service that allows users to post their latest updates. An update is limited
by 140 characters and can be posted through three methods: web form, text message, or
instant message.”
74
In March 2008, web analytic service Hitwise indicated that users as
well as tweets are going up, but are still not big, with only about one million users and
70
http://www.studivz.net/l/about_us/1
71
http://www.alexa.com/site/ds/top_sites?cc=DE&ts_mode=country&lang=none
72
http://thekillerattitude.com/2008/02/facebook-statistics-update.html
73
http://www.alexa.com/site/ds/top_sites?cc=DE&ts_mode=country&lang=none
74
http://www.crunchbase.com/company/twitter
71
about three million tweets per day.
75
Only 1.12 percent of those were Germans.
76
Since it
is an up and coming business and because Whole Foods Market is already engaged into
Twitter, they the company should create a German subdivision, continuing to release
special offers and company information via short messages. Press releases should
prominently display the Twitter logo with a short rationale explaining the consumer
benefits, if customers follow Whole Foods Market on Twitter. It is a cheap way to create
awareness on a platform that may get picked up by Germans soon. Besides engaging
directly with consumers, Whole Foods Market is currently tweeting about product recalls,
reward programs or special offers. It is also utilized to redirect interested customers to all
sorts of special events, like a Live-Blog about value shopping:
Figure 7: Whole Foods Market on Twitter
Similar tweets about how to shop or how to cook would especially create interest
among young foodies and parents.
75
http://www.techcrunch.com/2008/04/29/end-of-speculation-the-real-twitter-usage-numbers/
76
http://www.basicthinking.de/blog/2008/04/23/regionale-verbreitung-von-twitter/
72
Blogs
Whole Foods Market continuously turns its website into a destination where
customers can meet, talk, and exchange information about products they care about.
Recipes are also very popular on WholeFoodsMarket.com. As mentioned above, the
company provides the opportunity for visitors to rate and comment on posted recipes and
store favorites ones in an individual recipe box.
77
It would be wise to continue this way of
communicating with Whole Foods Market customers.
It is important to recognize that when it comes to social media and blogs, the
German audience is just about to start using it. Different from the U.S., where thousands
of blogs allow millions of users from a variety of different age groups to engage into an
online conversation, Germans are still very passive and skeptic. A study from 2006 found
that about 55 percent of the German population over 14 is aware of the format, 45 could
not associate anything with it. About 32 percent (equivalent to 6.6 million) indicated that
they (sometimes) read a blog. On the other hand, about 7 percent (1.5 million) indicated
that they have an own blog.
79
However, a different study from 2008 indicates that only
about 200,000 German blogs are updated frequently, while there is still skepticism
whether individuals or companies mainly operate those blogs.
80
77
http://multichannelmerchant.com/ecommerce/0113-benefit-social-media/
79
Digital Life Report http://www.basicthinking.de/blog/2006/09/21/umfrage-weblogs-und-internetnutzung/
80
http://don.antville.org/stories/1816384/
73
An older format, forums, is still bigger and actively used by 47 percent of all
Internet users. Why Germans are not really engaged, is being discussed in multiple ways.
One of the most popular and most influential weekly magazines “Der Spiegel” recently
wrote that the main problem is a lack of credibility and teamwork. Whereas U.S. bloggers
are working as a team, linking and quoting each other on their websites, the German
landscape is a puzzle of individual blogs that are not connected to each other. Moreover,
German bloggers are said to be less professional, egocentric and not engaged in serious
discussions. The top 100 German blogs are mostly carrier blogs, computer-technology
blogs or city and sightseeing-blogs.
81
Unlike in the U.S., German mothers do not visit
blogs to inform themselves about healthy food or nutrition.
There are a few food-blogs that are interesting to keep track of. Yet, they have a
very limited audience:
• http://blog.wordpress-deutschland.org/
• http://kochtopf.twoday.net/
• http://www.genussblogs.net/
• http://www.testschmecker.de/
• http://www.abgespeist.de/actimel/index_ger.html
• http://www.oekoinform.de/
• http://www.blogverzeichnis.eu/gourmet/
81
http://www.deutscheblogcharts.de/
74
It is still questionable why German Internet users are currently not that engaged in
blogs. For Whole Foods Market this means that there is less need for blogger-relations,
and more need to create an own blog. It should function as an explanatory or educational
blog, informing heath-conscious consumers and food-enthusiasts about organic food, a
healthy lifestyle and new ways of cooking and shopping groceries. A video blog about
Whole Foods Market’s locally grown products could be implemented. The German
consumer will want to know where his or her meat/ fruit/ vegetables come from.
Moreover, a digital tour through the new store should be created, posted and hopefully go
viral. A lot of the top 100 German blogs
82
are city blogs. Posting a video-tour on those
blogs would create a buzz prior to the launch. In addition to that, it is necessary to also
inform U.S. bloggers about Whole Foods Market activities in Germany, since it is a
publically traded company.
Corporate Website and Search Engine Optimization
Prior to publishing any launch activities, it is critically important optimize search
engine results. The German google.de, for instance, only provides the corporate website
and a variety of third party URL’s, none of them in German. It is absolutely necessary to
establish a German equivalent to wholefoodsmarket.com. The German “.de” is available.
In addition, press releases have to be tailored in a way that they can be found on
google.de. There is no doubt that an English website would not be used by the vast
majority of customers. Also Wikipedia has to be tackled from all sides. Right now the
82
http://www.deutscheblogcharts.de/
75
German Wikipedia entrance (keyword: Whole Foods Market) only shows the following
result:
Figure 8: Whole Foods Market on German Wikipedia.org
It is also important to create German content and manage these search engines
constantly. Key messages for the German audiences have to be available on online
searches. It cannot be expected for German customers to visit an English website.
Keywords that should relate to Whole Foods Market on an online search are:
• Bio/ Bio-Supermarkt (organic/ -supermarket)
• Gesunde Ernaehrung (healthy diet/ nutrition)
• Lokal angebaut (locally grown)
• Lebensmittel (food)
76
Currently google.de is the most visited Website in Germany, google.com the second most
visited and Wikipedia.org number 5.
Media Outreach
This segment is devoted to the media that has to be targeted in order to
communicate key messages, which were mentioned above. I divided them into the
categories newspapers, magazines, television, and food and retail publications. Audio
broadcasting (Radio) is limited to specific regions and cities. It would be necessary to
determine specific Radio stations, once the desired location of the Whole Foods Market is
set.
1. Newspapers: traditional newspapers still have a very high influence on the
German consumer and are (besides television) the main resource for information.
Press releases should be tailored in a way that the company profile is prominent.
Highlight Whole Foods Market’s green action, commitment to organic farming
and products as well as corporate information about its business model. The most
influential newspapers that need to be targeted on a regular basis are:
a. FAZ (Frankfurter Allgemeine Zeitung). Daily newspaper with a
circulation of 390,000. A special edition on Sundays sums up main events
of the week.
b. Sueddeutsche Zeitung. Daily newspaper with a circulation of 460,000.
c. Die Welt. Daily newspaper with a circulation of 280,000. A special edition
on Sundays sums up main events of the week.
77
d. Financial Times Deutschland. Daily newspaper with a circulation of
100,000.
e. Die Zeit. Weekly newspaper with a circulation of 550,000 and an
estimated readership of over 2 million.
f. Handelsblatt. German financial/ economy newspaper with a circulation of
150,000 daily copies. Mostly read by business professionals and
politicians.
g. Bild. Daily newspaper with a circulation of 3,300,000 and an estimated
readership of 11.5 million. A Sunday edition sums up main events of the
week. The reporting style and tonality of this newspaper is comparable
with “The Sun UK.”
2. Magazines: Pitch the company profile to those magazines. Focus and Spiegel
frequently write about health issues and new companies; Wirtschaftswoche is a
straight-up business publication that will be more interested in the corporate
aspect of Whole Foods Market.
a. Spiegel. One of Germany’s and Europe’s biggest weekly magazine with a
circulation of 1 million and an estimated readership of 6.5 million.
b. Focus. Weekly magazine with a circulation of 750,000 and an estimated
readership of 5.7 million.
c. Wirtschaftswoche. Weekly magazine with a circulation of 190,000 and an
estimated readership of 800,000.
78
3. Food and retail publications: Pitch shopping and meal alternatives as well as
news stories about local German farmers that supply Whole Foods Market with
healthy, organic food. It is critically important to generate a positive partnership
with these publications in order to successfully get key messages across to food-
enthusiasts.
a. Lebensmittelzeitung (LZ). Leading publication for the retail industry in
Germany.
b. Meine Familie & Ich. General food publication
c. Lust auf Genuss. General food publication
d. Der Feinschmecker. Monthly ‘haute cuisine’ food publication
e. Essen & Trinken. Monthly food publication
f. Schrot & Korn. Organic food publication
4. Television: The German TV landscape is structured differently from the United
States. It is more comparable to the UK system. A strong and influential public
broadcasting network generates about 50 percent market share. Besides that, the
“Bertelsmann AG” and the “ProSieben/ Sat 1 Media AG” are the two major
corporations operating most of the other network stations. Analog Cable-TV
allows customers to watch 34 different channels; terrestrial television (DVBT
Digital Video Broadcasting – terrestrial) offers 12 to 32 different channels
(depending on location). The most important TV stations for Whole Foods Market
are:
• ARD (public)
79
• ZDF (public)
• RTL (private)
• Sat 1 (private)
• ProSieben (private)
Figure 9: TV Market Share Details:
83
To secure news coverage, it is necessary to communicate with editors and
influencers on a regular basis, using a variety of round-up articles, trend stories and
features that are appropriate for Whole Foods Market.
83
http://www.agf.de/daten/zuschauermarkt/marktanteile/
80
Spokesperson
Besides company executives, a spokesperson should be announced to become
Whole Foods Market’s public face. My recommendation would be Heidi Klum. The fact
that she now lives in Los Angeles (for a certain amount of time throughout the year)
makes her credible for being familiar with the company, its products and business model.
As a supermodel, Klum stands for a quality diet. As a loving and caring mother of three
children, she stands for being cautious about healthy food. Heidi Klum, more than
anybody else, represents the desired target audience. Moreover, she is known and
respected throughout every demographic. Germans love Heidi. Getting a quote like “in
California I always shop at a Whole Foods Market because it’s good for me and my
family,” would have a huge and positive effect.
Launch
High-Touch Promotion
German city centers are comparably dense and heavily frequented with pedestrians.
Therefore, street promotion is important to reach out to a majority of residents. Especially
on weekends as well as in the timeframe before major holidays, German cities are also
heavily frequented by residents of surrounding towns and countries. On the four
weekends leading up to the launch and the two weeks after, a street promotion team
should visit the neighborhood and downtown area where the Whole Foods Market is
located. During the week, they should target high-traffic areas like train stations. In the
timeframes between 6:00 A.M. and 10:00 A.M. as well as between 4:00 P.M. and 7:00
81
P.M. a huge amount of commuters can be reached (a team of 6 can easily create 15,000
personal contacts/ day). The team’s goal is to hand out flyers. The front should
prominently display the logo as well as the new tagline. The backside should have one
key message, a map with the location and contact information (website, blog, twitter,
etc.) on it. A sample of Whole Foods Market organic chocolate attached to it would make
it easier for the promotion team to grab and engage with the audience.
In-Store Recommendations
In 2007, The Guardian wrote: “employees milled around, keeping customers happy
with free oatmeal biscuits and cubes of cheese from the store's special cheese aging
room.” This way of engaging directly with the customer is not that common or desirable
in Germany. Besides the fact that employees should be trained well enough to assist
customers when they ask for it, I would not recommend a proactive approach. It is very
uncommon in the German culture to start a conversation when the consumer did not ask
for it. It is also questionable if some sort of economic service that Whole Foods Market
introduced in the U.S. would be viewed as positive (see Value Tour). Moreover, German
customers would not appreciate paper bags for their groceries. For environmental
reasons, Whole Foods Market recently banned all plastic bags from its stores. In
Germany, fabric/ cloth bags should be used instead of paper versions. As a general rule,
even plastic grocery bags have to be purchased. Another aspect that could lead to
problems is “food on sale.” As stated earlier, this practice should not be considered in the
German market. The general store-atmosphere and therefore culture of Whole Foods
82
Market should be kept. “At a typical Whole Foods Market store, it’s common to see
shoppers and employees chatting about cooking tips, product ingredients, and their
personal experiences with products.”
84
This farmers-market-like atmosphere is highly
desired.
Third-Party Price Comparison
My research found that organic food in general is perceived as extremely pricey. It
is recommended that a third party compares Whole Foods Market’s prices to other
organic and non-organic products from a variety of different competitors. It is important
to get a positive outcome that could be used for follow-up news stories. A similar tactic
was used in the UK, showing that Whole Foods Market’s prices are not ultimately higher.
Especially staple pantry items from Whole Foods Market are very competitive according
to Keith Creighton: “The company's private label 365 Brand products compete head to
head on price point, while delivering the natural and organic quality standards people
demand from Whole Foods Market.”
The current price difference between organic and non-organic food is averaging 20
percent:
84
http://multichannelmerchant.com/ecommerce/0113-benefit-social-media/
83
Figure 10: Price Difference Organics
One of the most influential publications is the leading German customer safety
group “Stiftung Warentest.”
85
This independent foundation constantly compares products
and labels, grading them on a numeric scale (1 very good – 6 very bad). The outcome of
these tests plays a major role for the German purchasing behavior. It is therefore vital to
review prior tests in order to find out what the Foundation is looking for.
Launch Event
“We give preview tours to community leaders and key media. Instead of "ribbon
cutting" - we break bread and share it with one and all before opening our doors.”
86
An
old German tradition is to give your new neighbors bread and salt as a housewarming
gift. Back in the days, salt was a very expensive good and therefore stands for wealth.
85
http://www.test.de/
86
Interview Keith Creighton
84
The bread symbolizes food in general and is being handed out to neighbors so that they
should never starve again. Even though this is an old tradition that is not being celebrated
anymore, a lot of Germans still understand and especially value it. For Whole Foods
Market as a supermarket that wants to become more than just a grocery store, this is
perfect opportunity to get involved with the surrounding neighborhood, get instant
recognition and a positive standing amongst residents and/ or business people. It also
provides great opportunities for news stories and even photo ops.
Post-Launch/ Sustainability
Celebrity Management
Celebrities are key influencers, also when it comes to food. Celebrity partnerships
always work among certain demographics. It is necessary to establish and maintain
partnerships with celebrities known for being healthy and body-conscious. In Germany,
for instance, Heidi Klum even became a spokesperson for McDonald’s after the company
introduced its “Salads Plus” line. Let celebrities create their favorite, nutritious and
organic Whole Foods Market meal and publicize them on TV. The cooking show “Das
Perfekte Dinner” (Perfect Dinner) has a weekly special, where celebrities in groups of
four compete against one another by cooking at their homes. It is extremely popular and,
interestingly, viewed by all audiences (14-79) to pretty much the same extent. On this
show it should be easy to get celebrity endorsement. For credibility reasons, it would be
necessary to find a celebrity living in the same city as the Whole Foods Market. (VOX:
10.9 percent market share)
85
TV Cooking Shows
Similar to the U.S., German foodies love TV cooking shows. Partnering with of
those for product placement is highly desired and would create huge brand awareness
among food-enthusiasts. It is important to be absolutely transparent about these
partnerships. A variety of food labels maneuvered themselves into a negative public
discussion about product placement, because they did not display it appropriately.
Some of the “TV-chefs” even film themselves grocery shopping to explain insights.
A special episode about organic food in general, and Whole Foods Market in particular,
would need to be arranged. The most recommended shows are (TV stations in brackets):
• Alfredissimo (ARD)
• ARD-Buffet (ARD)
• Johann Lafer (ARD)
• Lafer! Lichter! Lecker! (ARD)
• Johannes B. Kerner – Kochen bei Kerner (ZDF)
• Die Kuechenschlacht (ZDF)
• Die Kochprofis mit Ralf Zacherl (RTL 2)
• Die Kochprofis (RTL 2)
• In Teufels Kueche (RTL 2)
• Unter Volldampf (VOX)
• Die Kocharena (VOX)
86
Chef-Days
To garner positive brand awareness among key influencers, a special night for
restaurant chefs should be set up. Quarterly, Whole Foods Market should open its doors
exclusively for this audience (Monday mornings, for instance). They should be able to
walk around and take their time to explore the whole market. Trained Whole Foods
Market employees should personally assist the chefs whenever they need. This is a great
opportunity to present Whole Foods Market’s diverse product assortment and can also
place emphasis on seasonal products.
Value Tours
“The store's personally guided weekly "Value Tours" remind customers just how
competitive Whole Foods Market is on most staple pantry items. The company's private
label 365 Brand products compete head-to-head on price point, while delivering the
natural and organic quality standards people demand from Whole Foods Market.”
87
This
tactic should be adapted and utilized in the German store as well. It is a great opportunity
to how customers the benefits of Whole Foods Market. It can also function as an
educational tool to explain prices and origin of products available.
Lunch at Whole Foods Market
The new neighborhood of the Whole Foods Market has to be systematically
targeted with lunch coupons and key messages. Some sort of invitation cards that can be
87
Interview Keith Creighton
87
distributed to nearby businesses should be created. Whole Foods Market should promote
its diverse, healthy, organic and tasty lunch products to all surrounding businesses. It is
an easy way to get people into the store and interested in Whole Foods Market. Thereby
brand awareness can be created also among people living in different cities.
Wine Tastings
Wine tastings in general are a welcomed and valued event at every winery and
specialty store. Yet, my research and personal experience does not implicate that any
German supermarket offers something comparable. I suggest offering those tastings at
specific points throughout the year that are already associated with wine. In June for
instance, a major event for the greater Dusseldorf area is the so-called “Weinblutenfest.”
In celebration of the first wines of the relevant year, local wine growers and high-class
restaurants are creating an annual wine-festival on the streets. In December a famous
French wine, the Beaujolais Primeur, is offered everywhere for the Christmas season.
Depending on the location of the new store, wine tastings should be timed with regional
traditions and events surrounding wine.
Twitter Campaign/ Cell Phone Service
Especially for working parents, the daily question “What’s for dinner?” could be
answered by Whole Foods Market. The idea is to create daily recipes that could be
distributed via text message, tweet or blog to the subscriber’s cell phone. Every day at
around 4:30 P.M. a message with the recipe, its ingredients and the price could be send
88
out. On the corporate blog, customers could then research the actual cooking steps. It is a
great opportunity to draw-in customers, especially business people who work but do not
live next to the store, and set emphasis on promotions or seasonal items.
Rewards Programs, Memberships & Newsletter – The “Whole Deal”
As could be seen in my survey, Germans in general are not that interested in
rewards programs. Most retail stores have some sort of membership card/ rewards
program, but customers do not really care. Yet, rewards programs are an easy and
effective way to gather data about buying habits and desires.
(When it comes to data protection, Germans are extremely cautious. Under no
circumstances this data should be given to third parties.)
Most important are the customers’ e-mail addresses. A monthly newsletter should
be created informing the Whole Foods Market member about new products, cooking
recipes or special offers. Even though this is an older one-way communication, which is
(to some extent) contradictory with social media, it still is an effective way to keep
consumers interested and loyal to one brand. This newsletter should also prominently
display the corporate blog and twitter-account. The consumer can then decide if he or she
engages into a conversation or not. For event announcements those newsletters should
contain .ics files (Apple iCal, Microsoft Outlook). These files are making it easy for
89
consumers to add the event to individual calendars and most importantly remind them of
Whole Foods Market.
Their "Whole Deal" newsletter (published quarterly, expanding to 6 times/year) is
like having a personal concierge guide you through the store - among their popular recipe
ideas: one list of groceries - and recipes to make from that list for the whole week.
Recipes for one, couples and families. It allows customers to expand their palates, eat
fresh, and make sure no food goes to waste. You can download it as a PFD off their Web
Site.
88
88
Interview Keith Creighton
90
Conclusion/ Recommendation
In times of economic crisis it is questionable whether or not customers are willing
to pay a little more on their groceries. Although Whole Foods Market’s potential
customer base might not start to cut down on high-end products or change their buying
habits when it comes to purchasing groceries, it will still be problematic to engage a new
market with a “luxury” business at this point. Moreover, the German food retailing
market is believed to be one of the toughest markets to engage due to over saturation.
For Whole Foods Market the time still seems to be right to enter the German
market, though. With consumers purchasing organic food, a market that demands a
bigger variety of organic products and the overall assumption that organics are a healthier
alternative, the foundation for establishing a German Whole Foods Market is nearly
perfect. In addition, it could be seen that 94% of industry executives believe in a further
growth of the organic segment in Germany. Revenues of organic retailers are still rising
and the organic agriculture is booming.
In my opinion, Whole Foods Market should start monitoring the German market
immediately. Because of the current economic crisis that also affected Germany, the
company should wait one or two more years with the grand opening of its first store.
Now is the time to create brand awareness and buzz surrounding Whole Foods Market.
By creating online contend like a corporate website and food blogs, and by optimizing
search engine results as well as pitching stories about Whole Foods Market and organic
products in general, the company can now start to generate future customers.
91
Similar to what Whole Foods Market did in the United Kingdom, I suggest opening
one store at a time, staring in Dusseldorf, Munich, Hamburg or Frankfurt, bigger cities
with a desirable demographic.
Moreover, it is important to recognize and respect cultural differences and ways of
living. Do not try to adapt or simply translate American ways of engaging with
customers. Coffee giant Starbucks, for instance, started asking customers for their first
name, when purchasing a product. While this may be seen as friendly invite to a ‘family-
like’ atmosphere in the U.S., the German culture strictly forbids a personal question like
this.
Besides those minor suggestions, I believe that Germany, the German customer and
the market landscape is a perfect fit for Whole Foods Market. After entering the
European Market two years ago, Germany should most definitely be the next step to
continue the company’s extraordinary business model and its motto:
"Whole Foods, Whole People, Whole Planet."
92
Bibliography
Aktiengesellschaft Fernsehforschung. Marktanteile der AGF- und Lizenzsenderim
Tagesdurchschnitt 2008, http://www.agf.de/daten/zuschauermarkt/marktanteile/
Albrecht, Nina. Interview on buying habits, January 28, 2009
Aldi Sued. Corporate Website, Company Profile, http://www.aldi-
sued.de/de/html/company/ueber_aldi_sued.htm?WT.z_src=main
Alexa Internet. Statistics on German Internet Usage,
http://www.alexa.com/site/ds/top_sites?cc=DE&ts_mode=country&lang=none
Alnatura. Corporate Website, Facts & Figures, http://www.alnatura.de/de/daten-und-
fakten
Arrington, Michael. End of Speculation: The Real Twitter usage Numbers, April 29,
2008, http://www.techcrunch.com/2008/04/29/end-of-speculation-the-real-twitter-usage-
numbers/
Berger, Christoph. Regionale Verbreitung von Twitter, April 23, 2008,
http://www.basicthinking.de/blog/2008/04/23/regionale-verbreitung-von-twitter/
Creighton, Keith, Interview on Whole Foods Market, March 20, 2009
Crunchbase, Company Profile Twitter, http://www.crunchbase.com/company/twitter,
visited December 27, 2008
Dahlmann, Don. Warum Blogs in Deutschland (noch) nicht funktionieren, July 14, 2008,
http://don.antville.org/stories/1816384/
Deloitte Development LLC. 2008 Global Powers of Retailing,
http://www.deloitte.com/dtt/cda/doc/content/de_CB_R_GPofRetailing08_140108%281%
29.pdf
Deloitte Development LLC. 2008 Global Powers of Retailing,
http://www.deloitte.com/dtt/research/0%2C1015%2Ccid%25253D186365%2C00.html
Die Welt Online. Bio Produkte sind teurer aber nicht besser, September 27, 2007,
http://www.welt.de/wirtschaft/article1216141/Bio_Produkte_sind_teurer_aber_nicht_bes
ser.html
93
Digital Life Report. http://www.basicthinking.de/blog/2006/09/21/umfrage-weblogs-und-
internetnutzung/
Edeka. Corporate Website, Qualitaetsleitlinien,
http://www.edeka.de/EDEKA/Content/DE/AboutUs/Presse/ThemenSpezial/Qualitaetsleit
linien/index.jsp
Edeka. Corporate Website, Unternehmensprofil,
http://www.edeka.de/EDEKA/Content/DE/AboutUs/Unternehmen/Profil/index.jsp
Edeka. Corporate Website, Unternehmensstrategie,
http://www.edeka.de/EDEKA/Content/DE/AboutUs/Unternehmen/Strategie/index.jsp
European Union. Journal of the European Union: 422-889-2008 implement action rule
(EEC) No 2092/91
European Union. June 28 2007, Council Regulation (EC) No 834/2007 on organic
production and labeling of organic products and repealing Regulation (EEC) No 2092/91
Exler, Andrea. Die Welt Online: Basic hat das Vertrauen vieler Kunden verloren, June
13, 2008,
http://www.welt.de/wirtschaft/article2098365/Basic_hat_das_Vertrauen_vieler_Kunden_
verloren.html
Exler, Andrea. Die Welt Online: Die Bio Branche kaempft gegen die Saettigung,
http://www.welt.de/wirtschaft/article2161046/Die_Bio_Branche_kaempft_gegen_die_Sa
ettigung.html
Exler, Andrea. Die Welt Online: Warum die Kunden bei Oeko Kost jetzt knausern,
http://www.welt.de/wirtschaft/article2308043/Warum-die-Kunden-bei-Oeko-Kost-jetzt-
knausern.html
Freeman, Hadley. The Guardian: Over the top and over here: ‘Disney World’ of food
opens first UK store http://www.guardian.co.uk/business/2007/jun/07/retail.supermarkets
Handelsblatt. Schwarz-Gruppe waechst zweistellig, March 3, 2007,
http://www.handelsblatt.com/unternehmen/handel-dienstleister/schwarz-gruppe-waechst-
zweistellig;1233298
International Harold Tribune. May 11, 2007,
http://www.iht.com/articles/2007/05/11/news/wbfood.php?page=1
Kaisers Tengelmann AG. Corporate Website, About,
http://www.kaisers.de/infoseiten/about.html
94
Kaisers Tengelmann AG. Corporate Website, Industry,
http://www.kaisers.de/infoseiten/industry.html
Kamps AG. Corporate Website, Ueber Uns, http://www.kamps.de/unternehmen/ueber-
uns/
Leffers, Jochen. Der Spiegel Online: Komm rein und finde wieder raus, July 28, 2004
http://www.spiegel.de/unispiegel/wunderbar/0,1518,310548,00.html
Metro Group. Corporate Website, Company,
http://www.metrogroup.de/servlet/PB/menu/1000080_l2/index.html
Metro Group. Corporate Website, Investor Relations,
http://www.metrogroup.de/servlet/PB/menu/1000117_l2/index.html
Metro Group. Corporate Website, Press,
http://www.metrogroup.de/servlet/PB/menu/1084740_l2/index.htm
Metro Group. Corporate Website, Sales Brands,
http://www.metrogroup.de/servlet/PB/menu/1001973/index.html
Metro Group. Corporate Website, Vertriebsmarken,
http://www.metrogroup.de/servlet/PB/menu/1000091/index.html
Myrberger, Johan. Facebook statistics – an update, February 26, 2008,
http://thekillerattitude.com/2008/02/facebook-statistics-update.html
Plus. Corporate Website, Plus – Das Unternehmen, http://www.plus.de/is-
bin/INTERSHOP.enfinity/WFS/Plus-PlusDE-Site/de_DE/-/EUR/ViewCms-
Content?Path=%2Fpages%2F61608
Rewe Group. Corporate Website, Alles ueber Rewe,
http://www.rewe.de/index.php?id=47
Rewe Group. Corporate Website, Facts and Figures, http://www.rewe-
group.com/index.php?id=11&L=1
Rigby, Elizabeth. Organic Farm Foods: Whole Foods launch in the UK, June 2, 2007,
http://www.organicfarmfoods.co.uk/news/19-06-2007.php
Schroeder, Jens. Deutsche Blogcharts, http://www.deutscheblogcharts.de/
Seidel, Hagen. Die Welt Online: Deutsche Kaufen Dreimal mehr Bio Kost, October 25,
2007,
95
http://www.welt.de/wirtschaft/article1296891/Deutsche_kaufen_dreimal_mehr_Bio_Kost
.html
Stiftung Warentest. Corporate Website, Home, http://www.test.de/
Stiftung Warentest. Test 04/2008: Bio im Vormarsch, http://www.test.de/themen/essen-
trinken/meldung/-Bio-im-Vormarsch/1662483/1662483/
Studentenverzeichnis. Corporate Website, About Us, http://www.studivz.net/l/about_us/1
Tengelmann Group. Corporate Website, Tengelmann in Zahlen,
http://www.tengelmann.de/tengelmanninzahlen.html
Weinroth, Adam. How to benefit from social Media, January 13, 2009,
http://multichannelmerchant.com/ecommerce/0113-benefit-social-media/
Whole Foods Market, Corporate Facebook Account: Big Game Recipe, February 2,
2009, http://www.facebook.com/topic.php?uid=24922591487&topic=6028
Whole Foods Market Inc., Corporate Webblog, http://blog.wholefoodsmarket.com
Whole Foods Market Inc., Corporate Website, Core Values,
http://www.wholefoodsmarket.com/company/corevalues.php#selling
Whole Foods Market Inc., Corporate Website, Green Action,
http://www.wholefoodsmarket.com/values/green-action.php
Whole Foods Market Inc., Corporate Website, History,
http://www.wholefoodsmarket.com/company/history.php
Whole Foods Market Inc., Corporate Website, Home, http://www.wholefoodsmarket.com
Whole Foods Market Inc., Corporate Website, Investor Relations,
http://www.wholefoodsmarket.com/company/investor-relations.php
Whole Foods Market Inc., Corporate Website, Leadership Board,
http://www.wholefoodsmarket.com/company/leadership_board.php
Whole Foods Market Inc., Corporate Website, Locally Grown,
http://www.wholefoodsmarket.com/products/locally-grown/index.php
Whole Foods Market Inc., Corporate Website, Organic,
http://www.wholefoodsmarket.com/values/organic.php
96
Whole Foods Market Inc., Corporate Website/ Press Room,
http://media.wholefoodsmarket.com/pr/wf/fast-facts.aspx
Whole Foods Market Inc., January 28, 2008, Annual Report 2007
http://www.wholefoodsmarket.com/company/pdfs/proxy08.pdf
Wisken, Angela. Lebensmittelzeitung, http://www.lz-
net.de/archiv/lznet/mylznet/pages/show.prl?params=keyword%3Dbio%26all%3D1%26ty
pe%3D4%26where%3D0%26suchid%3D%26quelle%3D%26laufzeit%3D0&id=71213&
currPage=1
Wisken, Angela. Lebensmittelzeitung, http://www.lz-
net.de/dossiers/sortimente/pages/protected/show.php?id=3266&backid=1178
Wisken, Angela. Lebensmittelzeitung, http://www.lz-
net.de/dossiers/sortimente/pages/show.php?id=1166
Wisken, Angela. Lebensmittelzeitung, http://www.lz-
net.de/dossiers/sortimente/pages/show.php?id=1175
Wisken, Angela. Lebensmittelzeitung, http://www.lz-
net.de/dossiers/sortimente/pages/show.php?id=2440
Wisken, Angela. Lebensmittelzeitung, http://www.lz-net.de/studien/pdf/127-
multichannen.pdf
Abstract (if available)
Abstract
This master's thesis is a communication plan for the international retailer Whole Foods Market Inc. to successfully engage in a new consumer market: Germany. After entering the European market in 2006, by opening a Whole Foods Market store in London, the time seems to be right to continue expanding its business. Therefore, I examined the company Whole Foods Market and dissected the German retail landscape. I pondered on the following questions: Where are the cultural differences? How do Germans purchase groceries? What do they value and what way of communication should be utilized to effectively target the consumer? As an international student growing up in Germany, my cultural background and insights on the German market allows me to create a plan that could make a business like Whole Foods Market succeed.
Linked assets
University of Southern California Dissertations and Theses
Conceptually similar
PDF
The food truck phenomenon: A successful blend of PR and social media
PDF
The entertainment value in food and its value to the public relations industry
PDF
Evolution in the processed foods industry: exploring the impact of the health foods movement
PDF
Selling the world: an exploration of the past, present and future of destination marketing
PDF
Social media best practices for communication professionals through the lens of the fashion industry
PDF
Reinventing the wrapper, not the Whopper: the ""greenwashing"" PR behind fast food chains' niche healthy menus
PDF
Nostalgia: more than just the flavor of the week: a critical look at the movement of nostalgic food from "trend" to "mainstream"
PDF
Investment or gamble? What brand managers should know about targeting second- and third-generation Hispanics
PDF
A critical look at organic farming and positioning of organic products in the American market
PDF
Public engagement, media relations and the future of the PR industry
PDF
Physicians' perceptions on the ethics of free drug samples
PDF
The food trends that will never go out of style: a modern take on how food and hospitality are shaping society
PDF
The luxury appeal: analyzing affordable luxury brands through the Great Recession
PDF
Strategic communications in dietary supplement marketing — a case study of the marketing of Coenzyme Q10 supplements
PDF
How Brand USA will reach its fastest-growing international market - China: Brand USA Chinese strategic public relations plan
PDF
Surviving the "Made in China" stigma: challenges for Chinese multinational corporations
PDF
Social innovation: Crowdsourcing and the new face of corporate social responsibility
PDF
How a strategic public relations campaign can enhance the reputation of China's financial public relations industry
PDF
Wake up PR practitioners, the Lovemark is here to stay: an analysis of the Lovemark theory with a discussion of the future of brands
PDF
Luring lovers: how brands make consumers fall head over heels
Asset Metadata
Creator
Paul, Julius Maximilian
(author)
Core Title
Whole foods market -- a communication plan to engage the German market
School
Annenberg School for Communication
Degree
Master of Arts
Degree Program
Strategic Public Relations
Publication Date
05/07/2009
Defense Date
04/01/2009
Publisher
University of Southern California
(original),
University of Southern California. Libraries
(digital)
Tag
Communication,Food,OAI-PMH Harvest,organic,Public Relations,strategic planing,Whole Foods Market
Place Name
Germany
(countries)
Language
English
Contributor
Electronically uploaded by the author
(provenance)
Advisor
Floto, Jennifer D. (
committee chair
), Cody, Michael J. (
committee member
), Lynch, Brenda (
committee member
)
Creator Email
jawl@gmx.de,juliuspa@usc.edu
Permanent Link (DOI)
https://doi.org/10.25549/usctheses-m2208
Unique identifier
UC1484015
Identifier
etd-Paul-2868 (filename),usctheses-m40 (legacy collection record id),usctheses-c127-238110 (legacy record id),usctheses-m2208 (legacy record id)
Legacy Identifier
etd-Paul-2868.pdf
Dmrecord
238110
Document Type
Thesis
Rights
Paul, Julius Maximilian
Type
texts
Source
University of Southern California
(contributing entity),
University of Southern California Dissertations and Theses
(collection)
Repository Name
Libraries, University of Southern California
Repository Location
Los Angeles, California
Repository Email
cisadmin@lib.usc.edu
Tags
organic
strategic planing
Whole Foods Market