1. WHOLE FOODS
Soumya Kethu,
Yijie Qiu,
Eugene Wong,
Tianyi Lu,
Edmund Chow

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Company Background
Marketing Problem
Market Situation
Product Situation
Competitive Situation
Distribution Situation
Microenvironment
Situation
• Initial Research
• Proposed Solution

3. Company Background
• Founded in 1980 by John Mackey and Renee Lawson Hardy
• First store was created in Austin, TX with 19 staffs
• Expanded through acquisition – Now 373 stores in U.S. and U.K.
• 8th largest public food and drug retailer in the U.S. and #232 on
Fortune 500
• 17 companies under the parent company Whole Foods Market
including:
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Wild Oats
Fresh & Wild
Nature’s Heartland
Fresh Fields
Wellspring Grocery

5. Whole Foods Motto

6. Marketing Problem:
Whole foods seems to have developed an
image of being higher-end and expensive
therefore limiting its consumer base.
Whole Foods needs to re-brand itself in
order to increase market penetration as a
result of increased competition within
the organic food market .

7. Market Situation
• Increase in competition in the organic food market.
• Customers are finding alternatives at their local neighborhood
markets and mainstream supermarkets.
• With numerous options, customers are looking for fresh, healthy
produce at cheaper prices.
• First Quarter 2014 earnings increased by 10% to 4.6 billion but comp
sales growth decreased to 5.6%.

8. Product Situation
• Whole Foods offer a broad and differentiated selection of highquality natural and organic products with a strong emphasis on
perishable foods.
• Product selection includes:
• Produce and floral, grocery
• Meat, Seafood
• Bakery, Cheese
• Prepared foods, catering
• Drinks, Nutritional supplements, vitamins,
• Body care, household products
• Lifestyle products including books, pet products
• Exclusive Brands and 365 Everyday Value Brands

9. Whole Food stores carry on average approximately 21,000 SKUs
(Stock Keeping Units). Approximately 30% of sales, outside of
prepared foods and bakery, were organic and had a contribution
margin of approximately 5% in the fiscal year of 2013.
Figure 1.2 showing Net Sales
(in Billions)
Figure 1. showing annual
percentage sales by product category
2013
Perishables:
Prepared Foods and bakery
19%
Other Perishables
47%
Total perishables
66%
Non-perishables
34%
Total Sales
100%

10. Competitive Situation
Whole Foods Competitors Revenue (in billions)
Kroger
Safeway
Trader Joes
Whole Foods
0
20
40
60
80
100
120
Whole Foods Competitors- Number
of locations
Kroger
Safeway
Number of locations
Trader Joes
Whole Foods
0
1000
2000
3000

11. Trader Joes
Whole Foods
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Products:
• Private Label Staple Foods, organic
foods, specialty foods
Positioning:
• “Give customers the best food and
beverage values that they can find
anywhere and provide them with the
information required to make
informed buying decisions”
Marketing Strategy:
• Limited stock with specialty products
at low prices
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Products:
• 365 Everyday Value, Whole Foods
Exclusive, organic foods, specialty foods
Positioning:
• “Whole food, Whole people, “Whole
Planet”
• Help support the health and well being of
people, organizations and planet
Marketing Strategy:
• Take spotlight off of costs and focus on
customers’ health and state of the world
as a whole
Safeway Inc
Krogers
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Products:
• Supermarket, grocery, pharmacy, fuel
Positioning:
• Offer customers superior quality
products, a unique shopping
experience, and customer focused
service while generating long-term
profits for shareholders
Marketing Strategy:
• Promote personalization and mobility
for its customers through “Just for
You” program
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Products:
• Convenience Store, Specialty super market
Positioning:
• Be a leader in the merchandising and food
industry by enforcing 6 values:
honesty, integrity, respect for
others, diversity, safety, inclusion
Marketing Strategy:
• Customer 1st Strategy – provide customers
with a shopping experience that will make
them want to return. The key area of the
strategy is meeting expectations for
quality and safety

12. Macroeconomic Situation
• Rising cost of living
-healthcare
-unemployment
-inflation
• Gasoline costs and fuel costs
• Stagnant recovery of the US
economy

13. Distribution Situation

14. Distribution Situation (cont.)
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First store in Austin, TX
Currently 365 stores in U.S., Canada, and U.K.
Long term, CEO sees about 1200 locations
Store layout the key focus in on being comfortable and attractive
Expanded mostly through acquisition and creating Everyday Value Brand
Expanding caused self-cannibalization of sales - the new stores opening
seemed to eat up sales from the older stores.
• In terms of distribution channels, Whole Foods gets a majority of their
produce from local farms located across the U.S.
• In terms of the retail experience, consumers can purchase groceries in
store as well as ordering online.

16. Initial Research Results
How would you rate the prices at Whole Foods compared to other
grocery chains ?
0% 0%
17%
29%
1 - signficantly cheaper
2 - slightly cheaper
3 - about the same
4 - pricier
54%
5 - too pricy to be considered

17. Describe Whole Foods in 3 Words

18. What would you pay a premium for?
8%
locally grown produce
12%
organic produce
43%
varieties from other countries
16%
prepared food
(salads, sandwiches, etc.)
Specialty Foods (exclusive
products not available in other
stores
21%

19. Proposed Solutions
• Stock as much local produce as possible rather than importing
• Reduce COGS by minimizing transport costs and import tariff
• “Local” as a selling point
• Increase sampling in stores
• Promote sales of specialty products and adds value to the shopping
experience
• Emphasize quality, variety, and service in PR
• Costumers perceive Whole Foods’ value as worth the markup