Foo.go Development Strategy Case Study

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Introduction

The fresh food industry has witnessed tremendous growth in sales in the recent past owing to intensive marketing, improved quality of products, and the shift to better provision of fresh foods. The industry had previously been dominated by large volume providers whose main driver was to expand their branch network thus maximizing profits. These providers were known to distribute products of uneven quality produced several days before they reach the end consumer. The entry of Green Core Food Company with their sandwich brand (foo.go) in 2000 was meant to radically change this situation. The company aimed at providing consumers with fresh high quality and environmentally friendly products that reach the market the same day they are produced. Their approach was based on the opportunity-centered entrepreneurship approach. This essay will look into the reasons why the brand from a small independent operator has achieved great acceptability considering the competitiveness of the market. It will also delve into the barriers this organization can face in its growth, how managers can address them, the effectiveness of the foo.go website as a marketing tool, and the strengths and limitations of their brand development strategy.

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Reasons why the brand has gained acceptability in the competitive environment

Foo.go has developed a better-tasting product that meets consumer expectations due to its reliance on high-quality ingredients and desire to meet environmentally friendly measures in packaging. According to Cadotte et al (1987, p.316), consumer behavior affects the overall performance of a brand in the market. It reflects their desire or decision to acquire, consume, and dispose of a commodity they bought for their own use. This also involves the time required to acquire, its ease of usage, and disposal. Consumer behavior dictates that consumers prefer products that fit the kind of lifestyles they like. The provision of better-tasting foo.go is one of the preferences that affect consumer behavior. Studies on consumer expectations have indicated that a strong link exists between consumer expectations and their experience from consumption of that product. (Cadotte et al, 1987, 314-318). This is what the foo.go products have tried to achieve since the inception of the company.

Another important factor is that food is desired to provide nutrition thus ensuring a healthy body and happy life. This has brought into prominence the issue of food safety, supply, and nutrition requirements in the manufacturing industry. The foo.go brand embraced this premise and incorporated it in its operations thereby reducing the time taken in processing the products, from harvesting to the time the goods reach the counters, to one day. This was aimed at preserving the nutritional value and freshness while satisfying demand from retailers. Consumer knowledge on nutrition has enhanced the uptake of this brand despite the massive competition posed by the large volume producers. Nowadays, the food consumption of certain food products is pegged on the pleasure they bring to the consumer. For example, products such as ice cream, alcohol, and even sandwiches are often taken to enhance the state of mind of the consumer at the time (Clark, 1998, p.639). This, together with the massive demand for foodstuffs that have quality ingredients that cushion the user from health risks, was key in the establishment of the foo.go brand in the market. A Dell Sandwich Report (2007) notes that the upsurge in demand for healthier sandwiches that meet the consumers’ specifications is driving the industry in rolling out more friendly sandwiches in terms of nutrition and flavors (The National Provisioner’s Meat & Deli Retailer, 2007). Foo.go capitalization on this premise since its inception had started reaping fruits mainly in turnover and balance sheet.

The predictive order processing system has proved to be an asset to the company since it ensures fast and effective transmission of real-time data on orders from the consumers and suppliers. The predictions are based on real-time data relied upon through the information system. The predictive order processing system is meant to assess the behavior of the consumers in relation to the uptake of the products before coming up with a decision on the likely consumption trends in the future (William, 1994, 245). This information is used to guide the processing by dictating the demand and details of the shipments to various retail outlets. This is a better way of taking orders compared to telesales used by high volume producers since it ensures efficiency thus ensuring the products reach the consumers in time. Retailers and consumers do not have to worry about the use of technology for the preservation of the products. This is due to the reliability of the distribution system whereby 200 company vans are deployed, unlike the high volume producers who utilize the services of middlemen. Sourcing of ingredients in the locality also reduces the processing delays brought about by inefficient transport systems. The use of locally available materials and hand labor instead of automated machines gives the products an edge in meeting consumer expectations in terms of flavors and taste specifications.

Environmentalists have relentlessly advocated for the adoption of environmentally-friendly measures in all sectors of production. Their efforts led to the enactment of legislation governing the management of wastes from the industries. The founders of the foo.go company integrated environment-friendly measures in their business model as part of their strategy. The packaging of sandwiches in biodegradable corn film starch was an innovation in an industry that produced huge volumes of polythene wastes. Although the packaging is more costly, it actually appeals to consumers because of their awareness and consciousness of environment conservation. This led to increased sales volume and the fast acceptability of the brand. Dalzell (1999, p.253-291) noted that the implications of the disposal of packaging options to the environment were issues that might shape the food industry. This has been witnessed in the foo.go, business model.

Growth barriers faced by small and medium enterprises (SMEs)

Barber and Metcalf (1989, p.20) asserted that small micro-enterprises are faced with significant barriers which fall into various categories. They include employment regulations that are restrictive to the employer; institutional barriers; inaccessibility of financial resources; and social barriers. Although these factors are largely blamed for restricting growth, actually there are many other small factors that work in lowering the competitiveness of SMEs. The major barriers faced by foo.go are no different from those experienced by other SMEs. Employment regulations can act as a major hindrance in its development due to the overreliance on hand rather than machine labor. Employment guidelines stipulating the issues of human resource management and the process of hiring and firing of workers can work against these companies. The law dictates limitations on the utilization of permanent basis labor by shielding them from sudden layoff unless pertinent issues are raised to qualify the decision. The workers are granted mandatory compensation in severance payments thus making the cost associated with layoff high. The British government has also enacted legislation governing employer-employee relations. The regulations are designed to safeguard the worker’s rights while at the same time ensuring that the employer reaps maximum benefits from the worker. However, the regulations on minimum wage, flexible working hours, leaves and contractual employment may limit the company’s reliance on human labor. Nevertheless, this limitation may not have a widespread effect on the growth considering the history of a good working environment provided by a company such as Foo.go. In 2006, the Federation of Small Businesses highlighted the implications the employment laws were having on their operations. They pointed out that there was an increase of 30% in employment disputes involving their members. The chairman of the Federation of Small Businesses noted that they were 26 acts of parliament on issues affecting employment that were acting against the growth of the SMEs (Federation of Small Businesses, 2006). Lack of simplification of these laws will always lead to acrimonious disputes between employers and employees.

Other issues that might curtail the growth of medium enterprises are government regulation in areas of taxation, environmental protection, trading standards, and consumer rights, premises, and planning rules, transport, and data protection. These factors affect the core aspects of most enterprises. Implementation of unfavorable taxations measures may lead to tax burden thereby forcing the companies to apply cost cutting measures. Change or enactment of regulations on road safety, insurance and transport sector in large would have adverse effects on the transport expenditure. These factors eat into the profits thus lowering savings needed for expansion. The need to protect data has increased in the last few years and hence regulations requiring minimum standards on data storage have been implemented. The predictive order processing system may require more advanced technology to ensure its reliability. According to the Small Business Research Centre (2005), these regulations have caused disproportionate suffering to small businesses. Growth is also curtailed by the lack of response to consumer needs. Failure to carry out regular surveys on tastes and preferences especially in a dynamic market may lead to stagnating sales. This may also make the companies lose on new and better opportunities which could have enhanced their performance (Bartlet et al, 2002, p.39).

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Competitive behavior from other established firms who control a larger proportion of the market may inhibit the fast penetration of small firms. The competitors have diversified in their products range and thus may afford to cut the prices of some of their products to counter the impressive performance of the small firms. This predatory approach may limit the market share of the small firms thereby compromising their financial strength. Unfair competition behavior in terms of pricing and advertising has major implications particularly to the medium enterprises aiming to diversify in other areas outside their core areas (Barber and Metcalf, 1990, p.186). Bribes have also been linked to the creation of a poor business environment. Woodd (2004) found that Cambodian firms ranked corruption as the major hindrance in business. Bribes in Cambodia accounted for 6 %of the total sales volume. Corruption was perpetuated by bureaucracy, weak legislation, and unfair completion from rival companies which were believed to be well connected with prominent personalities. This curtailed the expansion of medium-size enterprises in Cambodia as well as many firms in countries that lack strong anticorruption laws (Woodd, 2004).

Addressing growth barriers

Managers hold the key to the success of their businesses since they are the decision-makers on the growth plans they will embark on. According to Recklies (2001), successful managers require skills and knowledge in current business practices. They need to have exemplary skills in managing business operations like setting prices, filing of tax returns, and the legal considerations of all business aspects. The managers must be decisive in forecasting growth and weigh the options available especially when yearning for expansion. The strategic options include mergers, diversification, acquisitions, and joint ventures. They should not relent in their quest for consolidation of regulations governing employment issues and taxation by the government (Recklies, 2001). Other ways of ensuring growth would be the initiation of a business plan strategy, a strong financial base, and regular monitoring of business practices and environment to avoid taking unnecessary risks (Recklies, 2001, P.1-4).

Website as a marketing tool

Marketing has evolved as the most dynamic field due to the immense growth in the number of business and range of products on offer. This has led to companies to utilize several and unique marketing strategies and ideas that are designed to increase the awareness and acceptability of different products. Website marketing strategy is one of the innovative marketing tools in use (Sussman, u.n). It’s advantageous since it is relatively inexpensive and the marketers can be able to measure the rate of success by using analytical tools. The foo.go website is a beneficiary of this innovation. The role the website plays cannot be overlooked since it provides the initial contact of the customer and the organization. It displays the range of products associated with the brand in an enticing manner. Any consumers who visit this site won’t fail to pause to check on the mouth-watering menus displayed on the home page. The website marketing strategy has a well-planned layout that will enhance brand identification and recognition. The layout, simplicity, interactive strategy, and regular updating of information are key to the effectiveness of this strategy.

The foo.go website is appealing to the viewer hence creating awareness of the range of products on offer. The personality given to the website by the displayed menus may induce more readership and interest in the site. This coupled with the simplicity of navigating to the company website where more information on its activities is well articulated makes this website an effective strategy. Graphical design especially in the background is instrumental in bringing the tasty flavors of the sandwiches (Arnold et al, 2009, p.121). It connects the viewer with the actually packaged sandwiches on the shelves. The interactive strategy where the customers can log in to make orders and comments on the services rendered will foster communication that will help in the improvement of the services. The use of foo.go.com as a gateway to the company website is a good approach in web marketing since the people are more conversant with the brand name than the holding company. This may improve the acceptability of their other products especially if the viewer endorses the use of foo.go sandwiches. Nevertheless, the use of this strategy has limitations because customers have to get accustomed to the change of technology. Therefore it’s advisable for this strategy to be used together with other forms of advertisement. Search engine optimization is another development that enhances the tool by ensuring the website gains prominence in its category (Arnold et al, 2009, p.151). Failure of foo.go to optimize on this may reduce traffic flow to this website thus comprising on its efficacy as a marketing tool. Increased traffic results in an increase in the number of people getting information on a certain product thereby increasing sales volume.

The web marketing tool has great implications in the motivation of consumers to purchase certain brands. The consumers have reservations particularly to their needs and want which they want to be addressed by the various production methods (Vannoppen et al, 2001, P.810). The foo.go website tries to bring this aspect to the limelight. This factor would motivate me to buy the products and also recommend them to other people. The graphical design of the tasty products addresses the consumer perceptions on flavor and packaging. According to the foo.go website, products are stocked in popular retail outlets which have a large branch network in the UK and the Republic of Ireland. The ease with which you can access the products is another motivator that would make me seek the products. Its explanation of the source of ingredients and the quality assurance measures put in place by the company addresses the questions the consumers seek before making the decision. The remembrance of a brand name is pegged on the placement of the advertisement. The use of unusual but interesting visual tools is one of the factors that boost the remembrance of the brand (Hoyers and Macinnis, 2008. p. 21). The use of unusual background visuals in this website is an advantage to the company since it motivates me to seek more information on the products. The green core is a good name for a company in the sandwich industry. In this era of consumer awareness of the value of organic foods, the name may elicit a positive message to their minds. This, combined with the visuals showing the fresh organic components on the home page, is another factor that helps in addressing consumer concerns. These concerns include the implications of the products at the personal, environmental and societal levels.

Food products affect our physical wellness thus consumers are looking for products with less fat content to enhance their shape (Marilyn, 2002). This is vital especially in a sector that is experiencing high competition in the production of high-quality organic end products. My preference for fresh organic end products would make me buy the product since my gratification would be addressed. The packaging also addresses my concerns and hence I would be more than willing to seek the product.

Strengths and limitations of brand development strategy

Brand development has become a hard task due to the many choices offered to consumers by different competitors. In 2005, the Interbrand 100 Global Brands described brand development as a process that helps managers to convert their business strategies into brand strategies. It is this premise that brings the need for the brand message to capture the attention and address the expectations of the consumers. The brand development must be done with an aim of long-term success whilst remaining consistent and relevant in the dynamic business environment. The brand offers the platform for one company to differentiate itself from its competitors while at the same time attracting and influencing consumers’ selection ability. Yang (2005) in his book asserts that a brand name can make the needed great difference in the business arena. He also notes that the name may be of great value in the marketing of a company. In modern times, brands constitute one of the invaluable assets to companies thus there are numerous acquisition offers from other established firms to take a popular brand (Yang, 2005, p.187). According to the Interbrand 100 Global Brands (2005), the Coca-Cola Company had 64% of its market value, $67 billion, in its brand name. The foo.go brand is one brand that is gaining popularity in the United Kingdom food industry. Its popularity is been driven by the opportunity-centered approach that saw it introduce products that addressed the consumers’ needs and expectations. Therefore, brand identity has everything to do with the consumer perception and thus the need to take his/her core values in its development. This brings into fore the importance of branding the company rather than the products identified by that brand. A brand identity is pertinent considering the limited differences between similar products from various companies. Kapferer (2008, p.172-191) in his book describes brand identity as the brand component that encompasses the attributes associated with it. These attributes include messages the consumer gets from using the product or from people, places, and communication regarding the brand. Therefore, brand identity is what makes the organization be unique and command loyalty from its consumers.

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The brand development strategy has its own limitations and strengths. The brand strategy will work for the foo.go due to the strong association that would exist between the brand and the outlets. According to Yen (2007, p.335-339), brand extension based on strong parent brand associations is very effective for companies that offer a limited range of products. This is more evident when a brand extension strategy is relating well with the consumer attitude. The acceptability of the products due to the benefits accruing from their use is key to brand development. This is one area the foo.go brand has perfected and which might guarantee its development success. Brand positioning with an intention of creating an identity that will have a valued place in a consumer’s mind and overall life can add momentum in the cognition of the business linkages. The reliance on brand strategy on the existing brand positioning is a credible way of ensuring that the brand gains prominence faster than usual. The consumer is able to relate well to the benefits and rewards that are commensurate with all the products from that company. The existing framework of management in that corporate brand can be used in navigating the new business segment in the achievement of its objectives. The brand strategy is proactive since it is a deliberate risk-taking task aimed at opening more growth opportunities. It is done out of creativity with the desire to capitalize on the perceptions perceived by consumers. The existing knowledge and presence of the initial brand are resourceful in diversifying since the company does not have to vigorously advertise and promote the new products. This may lower expenditure that goes into promotions and awareness campaigns.

Nevertheless, the brand development strategy has its limitations in business. Brand extension outside the product might not achieve much success because the consumers might fail to see the association. This was a major limitation for companies in the United States in the last three decades (Kapferer, 2008, p.296-320). According to Yen (2008, p.338), inadequate presence was another detrimental factor attributed to the failure of brand development strategy.

Conclusion

The foo.go case study is a good example of the application of the opportunity-centered entrepreneurship approach that made the company achieve tremendous growth. Despite the various challenges faced by the small-medium enterprises in their growth, many managers have been able to steer their outfits in the right direction thereby safeguarding their market share. The innovation of website marketing has great potential for advertisement and promotion as shown by the exemplary design of the foo.go website. The brand development strategy is one of the growth strategies that is currently been utilized by many companies due to the fact that its strengths outweigh its limitations. The foo.go case is a business model that managers and entrepreneurs should yearn to emulate in order to maximize the opportunities available.

Reference

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