Dole and Chiquita - Organic Bananas Production Differentiation

Going (Organic) Bananas

When it comes to bananas, Dole has long been at a disadvantage. Dole is association for most Americans with pineapples and with various shady dealings in Hawai'i. If you want to go bananas, you go to Chiquita.

This paper examines the marketing strategy currently employed by Dole Bananas, asking how well this company is doing against others in the banana business as well as asking from what other directions Dole might face competition in the future and how well it is prepared to meet those challenges.

Chiquita is indeed Dole's major competitor at least in terms of banana sales (it is not a significant competitor in terms of pineapples, for example) and the two companies have clearly tried in recent years to differentiate themselves from each other so as to grab a larger share of the market. This is difficult for the two companies to do because - without meaning to disparage the curving yellow fruit that nutritionists and kids both find to be close to the perfect food - what both companies are selling is basically the same.

What Dole and Chiquita have had to do, as a result (as would any two other companies in their situation) is to try to find a way to convince the public that their products really aren't the same after all.

The structure of a market - of any market - is affected by the extent to which those who buy from it prefer some products to others. In some industries the products are regarded as identical by their buyers; this is true of nearly all basic farm crops. (It is, of course, also true that in some markets the products are in fact differentiated in some way so that various buyers prefer various products - some people want to drive VW Bugs, others SUVs, for example).

Often (and arguably this may nearly always be true) that the criterion or criteria that cause people to choose one product over another is a subjective one or a group of subjective ones. Buyers' preferences may have little to do with tangible differences...

Or they may refuse to buy Dole bananas because of the company's shameful role in overthrowing the Hawai'ian royal family.
Product Differentiation

The degree of product differentiation - and this is generally true, not just of Dole and Chiquita or of food companies in general - as registered in the strength of buyer preferences ranges from the minimal to fairly large. It tends on a quite consistent basis to be greatest among infrequently purchased consumer goods and "prestige goods," particularly those purchased as gifts.

In other words, people tend to care very much about the brand of car that they buy and whether the chocolate they send really is Godiva but probably don't actually much care whether their bananas are Dole or Chiquita. To the extent that this is true, one of the most important marketing concerns for companies is to get their products into the appropriate market place (in this case, the produce aisles of the largest grocery stores) so that people will buy their brand without having to think about it too much.

In addition to having to address the problem that a banana is a banana, Dole must also address as a part of its overall marketing and business plans the difficulties faced when shipping a perishable product over long distances and across multiple legal jurisdictions (Roche, 1999, p. 38). And these problems must in turn be added to the problems inherent in the business of farming - problems that include primarily the unpredictability of the weather and the wastage caused to crops by pests.

Dole, as with other North American-based companies that depend on Latin American land, supplies and laborers, must also address the problems of trying to do business in geographic areas of political upheaval, which may affect the availability of labor, lead to the destruction of…