Organic Health Today, Marketing Plan Example

Executive Summary

We at Organic Health Today(OHT) believe that the timing is right to introduce an organic store online. We are living in an era that people are wanting healthier food choices. The goal is to introduce an organic store online that provides organic foods that are grown. Our niche is providing organic food that are grown or raised with no chemicals or preservatives.  The local health food stores have raised the prices so high that the average person that wants to eat organic cannot afford it. There are many people in world that are adopting the options with no chemicals because studies have proven that people are living longer and less chances for cancer. The is our secondary niche which consumers that have change their eating habits because of a devastate disease.  Our research found that these consumers have no choice but to pay the highest prices for organic food. We are addressing the massive amount of advertising of unhealthy foods that are nutritionally poor. Organic Health Today(OHT).  If people in the modern American society were to focus more on consuming organic foods and products, people would be healthier, reducing high medical costs and improving the overall well-being of Americans. The benefits of organic foods avoid the harsh chemicals that the government is using in agriculture crops. The non-organic corps use pesticides to kill the insects however, the chemicals are absorbed into the crops and people ingest the chemicals. The OHT plans to combine the organic products online and the education of healthier eating organic choices.

We believe that OHT new product timing is right for an online organic solution online that not only provides the lowest prices for organic prices but we network with affiliate programs to ensure the customer can get the best organic prices. The OHT will provide healthy solutions to communities and schools that have a need for organic products. Our products will provide the opportunity for consumers a choice that is economical for the family. Our relationship with all the organic growers, online organic vendors and affiliate programs is our organic niche.

Current Marketing Situations

The current marketing situation is whole food stores and organic stores are driven by the market demand therefore the prices are too high to purchase in the stores. The organic market has become one the most profitable industries in the last 5 years. The demand for organic options has receive attention from the grocery stores that are carrying more organic products to meet the needs of the public. The last 10 years there are growing health concerns globally about toxic and unhealthy contaminates and pesticides in our food. The refusal by the agriculture industry and farmers to stop using pesticides has led to the growth of the organic food demand. The grocery stores are not the only business moving towards organic products such as the supermarkets, restaurants, farmer’s markets, fruit markets and retail stores.

The organic market has found a place in the family kitchen because consumers are paying close attention to food quality and ingredients. In addition, the consumer is become more savvy about calories, food ingredients, pesticides, animal ingredients and how to maintain a healthy heart. The main issue today is the use of artificial hormones or toxic ingredients allowed in drinks and food by the FDA which are causing ill health to consumers.  The ethical responsibility of businesses is being questioned concerning their honestly in including all the ingredients of their products.

Our company OHT has found in the current market consumers want information and education which sets up apart from the other competitors. In the current market we will provide comparison and ingredients of every product in a dictionary database. The customer will be able to check weight, grams, ingredients, sugar, and aspartame products before they purchase. Our organic site is not just an organic store but a resource for organic products, healthy foods, up to date information on FDA, vegan menus and resources. The current market is demanding these options which we plan to meet that market need.

Marketing Description

The market for the brick and mortar stores have the organic customers paying whatever price margin the consumer will pay. The brick and mortar stores prices are double or triple because the demand for that organic product is so high the consumers must pay the price to be healthy. The online stores are beginning to raise the price to some of the same price margins as the brick and mortar. With that said how many customers will be potentially buying this organic product? According to the Statisa (2010) found that marketing statistics found that 38.38 million people that purchased organic products online. There is a plethora of customers that want our product and the way market the products as educational, discount and comparison database with ingredients. Our market is global because the marketing strategy is to concentrate on buyers from all over the world but concentrating on health conscious people is our niche market. We will market to the weight loss population by using Constant Contact marketing tools and a marketing landing page.

Product Review

The product online is organic products at low prices from OHT and organic vendor relationships and affiliate programs that ensure the consumers get best price. The products will be from all the reputable vendors that all the consumers are already buy the products. However, our products will discount lower that all the competition with free shipping regardless of the product. The organic industry online is making millions from charging excessive shipping charges which online consumers are searching for other options that provide free shipping.  The products will be scrutinized base on ingredients, organic reviews on the product, research proven effectiveness of our products and provide a data base of the best ingredients. Our products will come with a 100% guarantee refund if they are not satisfied with purchase. The online market takes advantage of customers that want to pay a fair price and willing to pay more for discount deals. However, they want to live longer so the mindset is price to pay for good health has not price ceiling but the market is gouging the customer. Our products will attract the best customers that are looking for a bargain and the customers that do not care as long as the product is quality and proven. The best example the priced for a gallon of Braggs Apple Cider Vinegar which is the top of the line in the market. Our company will find the best deals for the Braggs brand then offer several prices that are below the market prices and the consumer gets more of the product.

Competitive Review

The Whole Food Markets has an establish customer base however they are losing ground to the new competitors that understand the buyer’s trends are to purchase online instead at the brick and mortar Whole Food Market stores. The competition Whole Food Markets catered to the upscale clients that would pay the excessive over priced products. They refused to catered to the organic buyers needs which is lower prices and online capabilities that provide the same discount as the store. In addition, our competition cannot get new clients in zip codes that may not be upscale which our product plans to serve. The Whole Food Market made a mistake by offer one day deals which the customer realized they could discount their prices. We will be marketing to the Whole Food Markets loyal customers with deep discounts but our free shipping may be the deciding factor to shop with our online store. In addition, the grocery store chains are starting to compete with the Whole Food Market by putting the upscale products the customer wants at a lower price that Whole Food Markets. Kroger Foods is leading the way to take away market shares and customers from Whole Food Market by purchases Harris Teeters to bolster their organic products in the store enticing customers to move away from Whole Food Market. Our products are hitting the online market at the right time offering a quality product for less than they can get at Whole Food Market or Harris Teeters or Kroger’s grocery. We will price our competitors out of the market while providing informative reviews are the best quality products.

Pricing Model

Our pricing model is based on bulk purchasing form the vendors and farmers which allows us to use the Walmart pricing strategy and Puritan Pride pricing strategy. We analyzed all the prices from several organic stores brick and mortar and the average pricing online. Once we determine the organic price margins for each product, we found that we could apply the proven Walmart pricing strategy. We set our prices at 30% to 70% depending on the product and which organic products are most in demand. The Walmart pricing and purchasing strategy is to order large volumes from the major vendors that provide discounts for the number of units.

Breakeven Analysis

The breakeven analysis for the monthly revenues will be based on $32,277, which is the assumption from other online organic businesses monthly revenues. In analysis of the other online businesses the Average Percent Variable Cost was about 30% and the estimated fixed cost $22,493.00. We utilized the simple forecast costs and sales based on other online organic stores such as Organic Foods Online and True Food Markets. The breakeven analysis was based on how much revenue had to be earned to break even meaning our total sales or revenues equal its total expenses. In order to sustain our business, we must acknowledge the breakeven point because its calculation is critical. Our breakeven point provides us with a roadmap on monitoring our sales and revenues.

The fixed costs are the same because my start-up cost is low, not rent, minimal insurance and the computers can be fixed with zero percent interest for payoff in 18 months. The top five online organic website all indicated that their fixed cost was very low for entry into the market. The variable cost for the organic online website for each item sold do not affect our bottom line. As the business grows we can market appropriately based on future variance costs. The marketing psychology of pricing is based on the Puritan Pride model that markets purchasing at a discount of more than one purchase. The more items the consumer purchases each time they visit the more discount based on the volume. The strategy keeps our fix cost down while we build a loyal customer base that will continue to shop because our fix cost is low and we can pass the discount to the customers. The other fix cost models used by the organic businesses online used the high shipping cost to offset high fix cost. Our plan is to do the opposite by setting a low fix cost so we can provide other value added services to our consumers.

SWOT Analysis

The strengths of the OHT is the diverse products which included educational information, discount prices, free shipping, organic products comparison guide and the largest selection of vendors to choose products. The online vendor programs with the affiliates are a strong point because regardless of what product the consumer chooses at the OHT website revenues will be generated from the affiliates. This is a distinct advantage because we have gathered every discount code online which the consumer can buy from the competitors and we will still have the lowest price because we list all the discount codes at “Retail Me Not” who finds all the discount codes. We have built a working online relationships sending any store “Retail Me Not” does not have the discount coupon. The coupon website is one the major strengths because” Retail Me Not” allows us to provide lower prices regardless of the competitors prices. The free shipping will pay dividends in the long run because many habits of the online buyer is to find the best or lowest prices. The free shipping will generate new customers that buy the same products for the organic sites that charge for shipping those customers can buy the same product for less at OHT.

The weakness of the online plan is the lack of reputation or branding with new product. The new customers may have some apprehension from purchasing from a new website. The online businesses open up each day for the hundreds that are trying to compete with the organic brand names. It will take at least 6 months to get the brand recognition of the other competitors and the trust of online buyers. There are so many scams that online buyers are careful and they investigate new business which a simple misunderstanding such as refund policy can destroy the business. That is the reason we have a 100% refund policy that will be refunded upon demand however, it will take months to overcome unhappy customers and new customer’s apprehension to buy from a new start-up company.

Opportunities

The opportunities are excellent because the organic market is making the same mistake as IBM that refused to change from mainframes to PC computers. The new technology era ushered in the age of the PC which IBM refused to stop making mainframes until the company became close to bankruptcy.  The organic online stores and brick and mortar stores are making the same mistake by refusing to lower prices because the consumer is willing to pay more for organic.  This is an opportunity for OHT to gain new loyal customers because of our no shipping charges or low prices with coupons.

Threats

The threats are the new entry into a growing and saturated market because the organic market has 38.3 million online organic customers online. The new entry is a scary proposition because any type of market shift or change can impact a new start-up business. There are many barriers to new start-ups such as not enough traffic to the website or not attracting the right customers. The threat to the new website can be not using the right key words that drive customers to the website. The key words are the primary words the organic customer’s types into the search engine to find the OHT website products. The website has to be built correctly to bring customer based on keywords.

Marketing Strategy Conclusion

The marketing strategy and concepts are sound and tested by studying the mistakes of the top online organic businesses. The brick and mortar businesses refused to lower their prices because the buyers will pay top dollar for organic products. The consumers expect the healthier food to be higher because they have been condition with high price margins online and brick and mortar stores as well. The current marketing situation is whole food stores and competitors are getting competition from grocery stores that are selling to upscale consumers. There are many customers that want organic products and will be drawn to educational, discount and comparison database with ingredients.