Brief Analysis of the Marketing Strategy of Whole Foods

Nowadays, with the influence of financial crisis, major supermarkets are experiencing shrinking profits or losses, and the competition in the grocery retailing industry becomes fiercer and fiercer. Under this economic environment, Whole Foods, as a special grocery retailer, succeeds in breaking the downturn trend and proves the advantage of its marketing strategy to the whole world with its success in Detroit. This paper aims at analyzing its marketing strategy and difference from traditional grocery retailers. The analysis shows that the secret of Whole Foods’ success lies in its special characteristics of the marketing strategy: high-quality standards, environment-friendly concepts, and clear target customers.

To begin with, Niche marketing is the basic strategy Whole Foods uses. This strategy means to focus on the aspect that has been ignored by the main force of this industry. In the industry of food grocery retailing, organic foods are a relatively new kind of product. Whole Foods choose organic foods as its niche due to its high price margin that is double the industrial standard. With this direction of development, Whole Foods was founded in 1992 and soon scaled to 166 stores at the beginning of 2005. Unlike the normal big supermarket whose products cover almost every aspect of life, Whole Foods only focuses on organic foods as its special field and succeeds in persuading customers accept these healthy foods, along with its higher prices. This strategy helps Whole Foods to avoid the direct competition with the dominant grocery retailer of that field. Also, with this strategy, customers are easier to remember its brand.

What is more, the three special characteristics make Whole Food stand out from traditional grocery retailers, which are high-quality standards, environment-friendly concepts, and clear target customers. Instead of pursuing the profit by lowering the cost and price, Whole Food focuses on the quality of its organic products. Its high-quality standard sets Whole Foods apart from traditional grocery retailers. With this high-quality standard guaranteed, Whole Foods charges higher on the customers. Instead of competing directly on the price with other grocery retailers, Whole Food persuades customers the worth of its products. This bold strategy attracts many customers. Competing merely on the price will incur a vicious circle in this industry. Whole Food’s strategy, in some degree, protects Whole Food from this vicious competition and brings a certain group of loyal customers. Also, Whole Food focuses on make their whole process transparent to improve customers’ confidence in its organic food. Moreover, Whole Foods promotes environment-friendly concepts with its original concept of “conscious capitalism”. This concept combines the nature, the food and the customer together. Traditional grocery retailers tend to focus on reducing the cost by adding man-made hormone and gradients. This method brings quicker profits, but it breaks customers’ hearts. The modern society witnesses more and more related reports on unhealthy food with unhealthy man-made gradients, especially in the fast food industry. Thus, customers prefer to spend more money on healthy food. Whole Foods’ strategy caters for customers’ psychological needs. Meanwhile, Whole Foods draws people’s attention on the organic farming and the environmental protection. In order to keep the high quality of the organic farming, farmers need more time and more money to provide the crops, poultry, and livestock. This speed could not follow the fast need of the traditional supermarkets, so it is hard to develop without the popularity in the market and the related financial support. Whole Foods’ success brings their customers to the attention of organic farming. The customers believe that the extra money they spend on the organic food is a kind of support to the organic farming. This sense of social responsibilities relieves the tension when customers compare the prices of organic food with the normal food. In addition, Whole Foods locks its target customers mainly as the middle-class and make adjustments, according to their psychological needs. Whole Foods calls for a green lifestyle of high quality, which suits for the pursuit of the middle-class. People in the middle-class are the main purchase power. They could afford the extra price for their food, and they care their health more than their savings. Whole Foods tries to offer an upper-class service for the middle class. Unlike other supermarkets that bring piles of shelves together, the supermarket of Whole Foods is quite spacious. Its employees aim at providing the best service. This high level of decorations and service, in turn, provide customers with the high level of its food. This strategy succeeds in transferring the marketing of foods into the marketing of a lifestyle.

To sum up, Whole Foods is a very successful business model. It chooses organic food to carry out its niche marketing and precisely catches the psychological needs of the middle class. Unlike traditional grocery retailers, Whole Foods focuses on its quality to earn the trust of customers. Also, its promotion of green life ensures customers of Whole Foods’ social conscience, which also increases its credit.