7026MKT_Assignement2_Marketing_Plan_Original Unverpackt

Original Unverpackt
7026MKT Assignment 2, Part 2: International Marketing Report
10/24/2014
Mathilde Kluba & Kathleen Maher

of 27 M. Kluba & K. Maher
Executive Summary
Original Unvperakt (OU) began as business plan and with the support of the public over 100,000 Euros was raised in a crowdfunding campaign to open the first store in Berlin. Original Uverpackt, which roughly translates to ‘Originally Unpacked’, has a waste-free concept in its retail design and is a green/healthy food grocery store. It’s a prime example of a social entrepreneurship.
Cutting down on waste by reducing packaging is a concept that countries worldwide would benefit from. With this in mind, a detailed situational analysis has identified Australia as a very viable international prospect for this European brand. Social, environment and economical aspects of Australia has shown to be a benefit to OU. Socially and environmentally, Australians have shown that they are big waste producers. Furthermore, the environmental landscape provides an opportunity for growth.
The dedicated team are the driving force behind OU. However, there will be a need for expansion of the corporate headquarters in order to service the setup of the initial ‘pilot’ store in the chosen location. There are a number of sources of competition in Australia. Our primary competition are traditional and established health food stores already in existence in Australia. Secondary sources are the bigger supermarket chains, Woolworths & Coles as examples, and other sources of organic or healthy food products such as Farmer’s Markets.
It is consumer perception that they would pay a premium for organic goods over standard produce. Therefore, initially the demographic characteristics of our consumers are those with a higher disposable income and therefore a higher budget to spend on food shopping. The competitive advantage lies in the strength product philosophy. OU provides a sustainable and quality alternative to supermarket shopping with a strong partnership with Australian organic producers. Additionally, product range will be restricted as it has been in Germany. However, market research and secondary research will allow OU to ascertain what to stock. This becomes a key strength as it creates a sense of exclusivity with its suppliers. OU is a genuine effort towards reducing waste without sacrificing on quality.

Original Unverpakt will go international via the “born global” entry mode. The company will internationalize early in its life cycle with a foreign direct investment, which will provide a high degree of control in the activity of the firm and the ability to better understand the foreign market (in this case Australia). Original Unverpakt will launch a wholly owned subsidiary for its first store in Australia via a spin-off from the parent company based in Germany in order to keep as much control of the brand and the operations as possible.
Our primary marketing objective is to build the OU brand in Australia with a mind to make a social impact. Building the brand will be measured by the number of raw visits to the store. Our promotional strategies will also be a source of measureable objectives as a point of measuring brand awareness. Social media will be an essential part of the promotional activities and thus native analytics or social media analytics software, such as Social Sprout, will allow us to quantify awareness through social media conversions. Secondly, the marketing objective is to facilitate sales and reach a budget that will allow OU to exapand to another city in which our target market resides.
The major objective for Original Unverpakt is to build awareness for its brand, social cause and to change consumer behaviour regarding waste by offering a more sustainable option. The global price of food available at original Unverpakt will lie under the premium prices of traditional and existing health food stores thanks to good partnerships directly negotiated with organic farmers businesses and manufacturers. The consumer will also save money because of the absence of packaging which means less marketing costs, less product materials cost and less cost from intermediaries such as packaging factory. Original Unverpakt supermarket will be launched near the city of Brisbane, in a suburb with high income demographics, concern for the environment and health conscious; Bulimba. Marketing budgets will have a higher focus and therefore proportion of funds directed at digital marketing mediums. However, traditional methods such as print, television commercials and public relations pieces will be pursued approximately one week away from the grand opening of the store. ch is Bulimba

Table of Contents
1.0 Situational Analysis ..................................................................................................................... 5
1.1 External Analysis ..................................................................................................................... 5
1.1.1 Social ............................................................................................................................... 5
1.1.2 Environmental ................................................................................................................. 6
1.1.3 Economical ...................................................................................................................... 6
1.1.4 Competition .................................................................................................................... 7
1.1.5 Customer ......................................................................................................................... 8
1.2 Internal Analysis ...................................................................................................................... 9
1.2.1 Company Analysis ........................................................................................................... 9
1.3 Summary of findings from Situation Analysis ....................................................................... 10
2.0 SWOT ANALYSIS ........................................................................................................................ 11
2.1 Strength................................................................................................................................. 11
2.2 Weakness .............................................................................................................................. 12
2.3 Opportunity ................................................................................................................................. 12
2.3 Threats .................................................................................................................................. 12
3.0 Market Entry Strategy ............................................................................................................... 13
4.0 Marketing Objectives ................................................................................................................ 13
4.1 Awareness ................................................................................................................................... 13
4.2 Revenue ...................................................................................................................................... 14
5.0 Marketing Mix Strategy ............................................................................................................ 14
5.1 Product .................................................................................................................................. 14
5.2 Price ...................................................................................................................................... 15
5.3 Distribution/Place ................................................................................................................. 15
5.4 Promotion ............................................................................................................................. 16
6.0 Reference List ............................................................................................................................ 16
APPENDIX A ........................................................................................................................................... 19
APPENDIX B ........................................................................................................................................... 20
APPENDIX C ........................................................................................................................................... 21
APPENDIX D ........................................................................................................................................... 22

APPENDIX E ........................................................................................................................................... 23
APPENDIX F ........................................................................................................................................... 25
APPENDIX G ........................................................................................................................................... 26

1.0 Situational Analysis
To better understand the Australian environment in which Original Unverpakt (OU) is going, the following relevant elements of the PESTEL have been analysed: social, environmental and economic. These three factors are the most significant for Original Unverpakt in its expansion to Australia.
1.1 External Analysis
1.1.1 Social
A part of the Australian population has interests in organic products and good for earth concepts. Eco-friendly shops already exist as well as organic restaurants. Moreover, in Australia, households types are changing and lone- person households and one-parent families are growing (Refer to Appendix A).
Food waste is a big concern in Australia, one of the main causes is food sold in overweight packages, designed for large families or big eaters who no longer have a reason to be (Refer to Appendix B). With the selling of bulk food, all types of consumers can choose exactly the amount of food they want to fulfil their needs. With the waste free supermarket people can buy enough, rather than oversized packages of food that a part will be thrown away because out of date.
Research conducted by NSW in 2011 shown that the size of food portions and packages being too large was one of the main causes of food waste by 35%. Furthermore, another big reason leading to waste is unawareness or indifference towards this problem in Australia. The food provided by Original Unverpakt is not processed and with minimal to no preservatives, which is good for health and will fight nutrition and obesity problems that hit Australia.

1.1.2 Environmental
Australia is one of the highest waste producers in the world with 18 million tonnes of waste per year (Australian Waste Policy, 2011). With its eco- friendly concept, Original Unverpakt can follow the trend of reducing waste in the country and follow the Australian Packaging Covenant which aims to change the businesses culture to design sustainable packaging, increase recycling and reduce packaging litter.
1.1.3 Economical
The world economic crisis did not have as debilitating impact in Australia as it did around the world (Refer to Appendix C). People still have a good purchasing power and unemployment rate is low (Refer to Appendix D). The Agriculture, Fisheries and Forestry Foodmap report in 2012, stated that food increase had increased (over the past 20 years) while incomes have risen 36 per cent (as cited by Ting, 2013).
The organic industry in Australia weighed $1.276bn in 2012, 10 to 15% increase is hoped for 2014 if the trend stays the same as 2010 to 2012. In 2011, 1520 agricultural businesses were certified organic. On the side of the consumers, in 2012 over one million Australians regularly purchased organic and 65% of consumers purchase organic food occasionally. (Australian Organic Market Report, 2012)
Furthermore, the National Association for Sustainable Agriculture Australia estimates the Chinese market is worth up to $100million a year for Australian Organic producers (Zonca, 2014). This suggests economies of scale allowing for Australian consumers to take advantage of these prices.

1.1.4 Competition
There are a number of competitors for OU in Australia, however official numbers are difficult to attain. Go Vita, a health store that was founded in the 1980s alone boasts 150 retail (Go Vita, 2014). Furthermore, Flannery’s, a Queensland based natural food grocer has been established for over 20 years (Flannery’s, 2014). This research suggests that natural health food stores could run into the thousands and thus indicates that threat of new entry is high overall.
There are a multitude of suppliers in Australia with a billion-dollar domestic organic food market that is rapidly growing (Zonca, 2014), which places the buyer at an advantegous position with ease of ability to substitute if needed.
Threat of substitution is also high with the preferred method of shopping by consumers being to visit supermarkets (Refer to Appendix F). Buyer Power is high with minimal costs to changing shopping habits and low price sensitivity. Therefore, overall the competitive rivalry of this industry is mid to high. Based on this analysis, the competitive strategy is to use a combination of Differentiation and Focus. Our current sources of competition include customer needs and industry competition.
There are primary and secondary competitors in the environment. Based on similarity of product range and serves, primary competition includes established traditional health food stores. Secondary sources of competition stems from the similarities in products and potential customer values (concern for eating sustainably produced products) but differ in their distribution channels. These are: organic food markets, online shops & supermarkets that now include organically certified food products.
Refer to Appendix E to view the positioning of Original Unverpakt in relation to the competition. As a result of the analysis, the two variables that have been chosen are: waste (environmental concern) & price (competition & customer

concern). Secondary competitors have been included because they can offer substitute products however as noted, their distribution channels (including store processes) are much different to Original Unvperkt.
1.1.5 Customer
Original Unverpakt is an alternative to the current offering for food shopping. Customers are provided with a quality product and a means of shopping in a way that assures them that they are not creating more waste. This is through their ability to ‘buy as they need’ instead of overbuying which effectively means consumers are throwing their money away as well creating more waste which has an environmental impact.
Pacific Magazines conducted a three year research programs which assessed Australia’s health trends (See Table 3.1 below). The top rated and third ranked trends identified are a good definition of the type of customers in our segment:
Table 3.1: Australia’s Health & Well-Being Trends
Health Trend
Description
Health Esteem
Health has become aspirational, the country’s social currency. The trend manifests in social media as
‘healthies’ have become a badge of honour, testifying to personal health achievements.
Against (The Refined) Grain
A movement towards a more natural state of being and eating. Wholefoods and organics are on the up; product claims are skewing towards product claims are skewing towards what is left out, as opposed to what ingredients
are within
Source: http://www.sevenwestmedia.com.au/docs/default-source/business-unit- news/australia's-2013-health-report.pdf?sfvrsn=2

It is consumer perception that they would pay a premium for organic goods over standard produce (Organic Food Buying Guide, 2007). Therefore, initially the demographic characteristics of our consumers are those with a higher disposable income and therefore a higher budget to spend on food shopping. Appendix G highlights the type of area and average income described.
1.2 Internal Analysis
1.2.1 Company Analysis
Original Unverpakt was founded by Sara Wolf and Milena Glimbovski. The team behind the company are listed in the table below with their relevant expertise described.
Details
Expertise
Sara Wolf, Founder
- Worked for Fair Trade.
- High interest & love for Food
Milena Glimbovski, Founder
- Media Designer
- Studied Communication in Berlin.
- Worked for Veganz- a young vegan supermarket chain.
- Experience in food retailing as a result.
Sarah Pollinger
- Studied Economics with experience in procurement.
Janina Steigerwald, Intern
Lola Mora

Original Unverpack was created in 2012, with a simple business plan that won several prizes at the Berlin Business Plan-Competition (Original Unverpackt - the supermarket without disposable packaging, n.d). The team were holders of the SAP Social Impact Lab Scholarship for social businesses and used crowd funding as their option to raise funds for the opening of the retail shop. They were able to raise 114,689 Euros for the first store that opened in October, 2014.
The team behind the concept are small passionate women who have worked hard and in collaboration with relevant authorities (for example, health authorities for strict hygiene processes) to develop the processes for the store (Glimbovski,2014).
1.3 Summary of findings from Situation Analysis
The key corporate strength that can be identified is the growth of this concept as a social entrepreneurship venture. In addition, the business plan itself has been thoroughly reviewed and received professional commendation. The competitive advantage lies in the strength product philosophy. OU provides a sustainable and quality alternative to supermarket shopping with a strong partnership with Australian organic producers. Additionally, product range will be restricted as it has been in Germany. However, market research and secondary research will allow OU to ascertain what to stock. This becomes a key strength as it creates a sense of exclusivity with its suppliers. OU is a genuine effort towards reducing waste without sacrificing on quality. This is further supported by the positioning of OU in relation to its primary and secondary competitors.

2.0 SWOT ANALYSIS
2.1 Strength
The strength of OU comes from its growth from a social entrepreneurship concept. The team behind it are dedicated and committed to the cause and have already shown consumer willingness to be a part of this concept through its crowd funding campaign. Its product philosophy is also a strength as most health food shops will provide a large array of products in their range, OU chooses to limit its product range with a promise to its consumers on the best quality and sustainably (presumably organic) produced food items. OU is deliberately minimising the noise and addressing possible cognitive dissonance towards health food products by making it easy for consumers to shop.
•Threat of Substitution is high.
•Major players may become a factor (supermarket giants).
•OU provides a viable solution for decreasing waste but with benefits.
•Oppportunity for growth as a result of a strong econoomy.
•Size of the Company
•Social entrepreneurship concept
•Highly involved and dedicated company team
Strength
Weakeness
Threats
Opportunities

2.2 Weakness
The obvious weakness is the scarce human resources at the company level. This may make it difficult to manage the entry into the Australian market. While this could be addressed with the appointment of additional team members, the on boarding and induction processes could hinder time constraints. Another weakness is the company and its brand will have low brand awareness in comparison to its direct competitors who have been established for at least 20 years.
2.3 Opportunity
Australia has been identified as a high waste producer. With environmental concerns ever prevalent in the Australian media, Original Unverpakt is providing a solution for a social issue but also servicing the consumer with value, quality and a unique shopping experience with the ‘waste-free’ concept at its core.
There is also an opportunity for growth with Australia’s growing interest to capitalise on export opportunities in China. This means that Australian consumers could benefit from a reduction of cost should economies of scale come into play for Australian producers. Thus, consumer price sensitivity will be addressed.
2.3 Threats
The most significant threat stems from the low barriers of entry and more prominently the threat of substitution. From observation, both supermarket giants have their own organic ranges, however delivered in traditional packaging. If these supermarket giants decide to make a concerted energy in to providing specialty organic food offering this will be further threat to OU. Similar gravity delivery containers have been witnessed a Woolworths inside the Carindale Shopping Centre. Furthermore, the push to creating ‘shopping’ villages as evidenced by both Coles and Woolworths, would mean a concept like OU could be identified as a strategic fit not only as a brand extension but also a means of strengthening their brand image through their environmental efforts.

3.0 Market Entry Strategy
Original Unverpakt will go international via the “born global” entry mode. Indeed, the company will internationalize early in its life cycle with a foreign direct investment which will provide a high degree of control in the activity of the firm plus the ability to better understand the foreign market in question. To have the best control, Original Unverpakt will launch a wholly owned subsidiary for its first store in Australia via a spin-off from the parent company based in Germany.
“A wholly owned subsidiary is a company whose common stock is 100% owned by the parent company.” (Investopedia, 2014)
As it will be the first store in this country, the company needs to have control over the brand image, the staff and the contributors (such as suppliers) to best reach its target consumers. This entry strategy has also been chosen because of the nature of the product. The store concept is the first of its kind (in terms of making a focus to reduce waste) in Australia which indicated a higher need for monitoring.
The downside with the wholly owned subsidiary is the risk involved because of no contingency from an Australian established company. To lower this risk, Original Unverpakt has to show its resource-based advantages, its ability to achieve and sustain competitive advantages. The company’s concept and way of shopping is its strength.
4.0 Marketing Objectives
4.1 Awareness
The major objective for Original Unverpakt is to build awareness for its brand, social cause and to change consumer behaviour regarding waste by offering a more sustainable option.
The outcome can be measured through the increase of store visitors, calculated with an aim of 10% store traffic increase each month. Moreover, awareness is about promotion and advertising, Original Unverpackt will have to reach a certain number of people depending on the amount they spend on advertising in order to have a good return on investment. Heavy

promotion will be launched before the opening to promote the store and after that, the visitors trend will be analysed to know if the company needs to launch another promotional campaign.
Awareness is calculated thanks to store visitors but can also be measured via the social media activity of the group (as explained in detail further). Online awareness is also important for the waste-free supermarket and can be measured with Facebook analytics, use of hash tags and other analytics indicating people are talking about the concept.
4.2 Revenue
The company has a second objective, more common, the increase of income, in order to develop to other Australian cities. The first store in Germany opened thanks to 100 000 euros which represents $150 000. The higher cost of living and prices in Australia are to be considered.
Relying on the budget of other Australian start-ups building the same kind of business, health food stores, the company will need around $250 000 to open. It takes into account, a small initial stock purchase as all the products will have an expiration date; a point-of-sale system, the running costs including staff and the location rent plus promotion for the opening.
According to the Complementary Healthcare Council of Australia (CHCA) a gross profit of 39% is a good return for a health food store. This means that if sales for the week are $10,000, in 65 weeks, the shop will have the money to launch another store ($3,900 *65 = $253 500) if they are doing well.
5.0 Marketing Mix Strategy
5.1 Product
The product range of OU will work towards being as close to 100% Australian owned and made (10% allowance if needed). Our guarantee is that the products we offer of the best sustainable standards. This will largely indicate that the products are organically made with organic methods said to be much kinder to the environment

than ‘mainstream’ methods of farming (Organic food buying guide, 2007). This strategy not only is in line with our core beliefs, it also provides us with a strategic advantage both consumers and our suppliers. From our consumer’s point of view we are supporting Australian suppliers and therefore economy and being true to our brand. For our suppliers, we are an outlet for them and a possible means of creating revenue by cutting their packaging costs.
5.2 Price
The global price of food available at original Unverpakt will lie under the premium prices of traditional and existing health food stores thanks to good partnerships directly negotiated with organic farmers businesses and manufacturers. The consumer will also save money because of the absence of packaging which means less marketing costs, less product materials cost and less cost from intermediaries such as packaging factory. It will be an advantage compared to the competition which is selling mostly products coming with packaging. Moreover, the waste-free concept will allow less wage expense with the reduced need for picking and packing stock for example.
5.3 Distribution/Place
Original Unverpakt supermarket will be launched near the city of Brisbane, in a suburb with high income demographics, concern for the environment and health conscious; which is Bulimba. It is located just from one ferry ride from Teneriffe and New Farm suburbs that have quite similar population demographics with young professionals and high interest in food (as representative of existing food outlets in these areas).
In order to satisfy its target market the supermarket will resolve known retail consumer grievances such as ease of parking, easy access to the shop and high customer service standards. To respect state and local council planning laws that don’t allow supermarkets to open in residential zones for example, the waste-free concept will open its doors in a retail zone near other shops.

The distribution channel will be indirect because Original Unverpakt is the intermediary between the manufacturer and the consumer. It will still be a short channel as it concerns food which is perishable. As the product sold is a concept and a service, not a classic processed product, the distribution scope and channel control needs to be adapted. Original Unverpakt will work closely with organic food retailers and manufacturers through partnership. As the organic industry in Australia is growing, the company will have the choice between partners to sign contracts with and make win-win agreements.
5.4 Promotion
Marketing budgets will have a higher focus and therefore proportion of funds directed at digital marketing mediums. However, traditional methods such as print, television commercials and public relations pieces will be pursued approximately one week away from the grand opening of the store. Print advertising will consist of advertisements in magazines with relevant subject matter (for example, Good Health) and also in mainstream magazines (for example, Woman’s Day) so as to increase return on investment in terms of exposure. Social media platforms, content marketing through the use of reputable and highly ranked bloggers will be utilised following the initial drive. Furthermore, video content will be a key component with video ads and v-logging strong trends in consumer use on the internet.
6.0 Reference List
Bhardwaj, V., Eickman, M. & Runyan, R. (2011): A case study on the internationalization process of a “born-global” fashion retailer, The International Review of Retail, Distribution and Consumer Research.
Bowling, D. (2013). Waste not, want not: how packaging can help tackle food waste. Retrieved from: http://www.foodmag.com.au/features/waste-not-want-not-how- packaging-can-help-tackle-f

Foodwise. Fast Facts on Food Waste. Retrieved from: http://www.foodwise.com.au/foodwaste/food-waste-fast-facts/
Glimbovski, M. (Founder). (2014). Retrieved from: http://www.youtube.com/watch?v=W3Gu4qTvbJU
Hammond, M. (2011). Health food store. Retrieved from: http://www.startupsmart.com.au/planning/health-food-store/201101111302.html
Lewis, P. (2014). Australia’s economy is healthy, so how can there be a budget crisis? Retrieved from: http://theconversation.com/australias-economy-is-healthy-so-how- can-there-be-a-budget-crisis-26036
Monk, A., Mascitelli, B., Lobo, A., Chen, J. & N. Bez. (2012). Australian Organic Market Report. BFA Ltd, Chermside, Brisbane, Australia. Retrieved from: http://austorganic.com/wp-content/uploads/2013/09/Organic-market-report-2012- web.pdf
Ting, I. (2013). How Australia eats: The ultimate pie chart. Retrieved from: http://www.goodfood.com.au/good-food/food-news/how-australia-eats-the-ultimate- pie-chart-20131102-2wstm.html
Zonca, C. (2014). Jessica Rudd in the race to sell Australian organic produce to China. Retrieved from: http://www.radioaustralia.net.au/international/2014-09-26/jessica- rudd-in-the-race-to-sell-australian-organic-produce-to-china/1372875
Australia’s new wave of health & wellbeing trends revealed. (2013). Retrieved from: http://www.sevenwestmedia.com.au/docs/default-source/business-unit- news/australia's-2013-health-report.pdf?sfvrsn=2
Organic food buying guide. (2007). Retrieved from: http://www.choice.com.au/reviews-and- tests/food-and-health/food-and-drink/organic-and-free-range/organic- food.aspx#ixzz3GqsAd26O
Original Unverpackt - the supermarket without disposable packaging, (n.d). Retrieved from: https://socialimpactfinance.startnext.de/original-unverpackt

Australian Institute of Family Studies.(2011). Family Facts and Figures: Australian households. Retrieved from: https://aifs.gov.au/institute/info/charts/households/index.html
Flannery’s. Retrieved from: http://flannerys.com.au/
Investopedia. Retrieved from: http://www.investopedia.com/terms/w/whollyownedsubsidiary.asp
Go Vita. Retrieved from: http://www.govita.com.au/about-us/our-story/
National Farmers’ Federation. (2012). Farm Facts. Retrieved from: http://www.nff.org.au/farm-facts.html

APPENDIX A
Figure 1: Average household size, 1911-2011, ABS 2011 Census.

APPENDIX B
Figure 2: 2009-2011 data, Food Waste Avoidance Benchmark Study’ by NSW and ABS 2011 Census about households.

APPENDIX C
Figure 3: Australia GDP per capita PPP, tradingeconomics.com, World Bank.

APPENDIX D
Figure 4: Unemployment rate, OECD, 2013.

APPENDIX E
LOW WASTE
HIGH PRICE LOW PRICE
HIGH WASTE
Figure 1.14: Positioning Map

KEY:
(ONLINE Store)

APPENDIX F
Supermarket Market Share in Australia
SOURCE: http://www.businessinsider.com.au/chart-aldi-is-australias-third-largest- supermarket-chain-and-growing-2014-2

APPENDIX G

Table 6. TOP AVERAGE TOTAL INCOMES, Queensland, 2005-06 to 2010-11(a)
2005-06
2010-11
Average annual growth rate 2005-06 to 2010-11
Broad region
Top 5 SA2s(a)
$
$
%
Greater Brisbane GCCSA
Ascot
74 219
96 281
5.3
Hamilton Bardon
74 127 58 989
95 911 81 461
5.3 6.7
Bulimba
55 862
80 547
7.6
Hawthorne
55 695
80 220
7.6
Greater Brisbane GCCSA
40 575
52 016
5.1
Rest of Queensland
Moranbah
61 235
83 257
6.3
Broadsound-Nebo
54 578
71 435
5.5
Central Highlands- East
54 753
67 288
4.2
Emerald
48 413
63 894
5.7
Shoal Point-Buscasia
48 361
63 748
5.7
Rest of Queensland
36 469
46 269
4.9
Queensland
38 454
49 057
5.0

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