Strategic Marketing Plan for Earth\'s

Strategic Marketing Plan for Earth's Best Organic Baby Food

Strategic Marketing Plan

Environmental Analysis

Economic Forces

Political and Legal Forces

Demand

Competitive Forces

Technological Forces

Social and Cultural Forces

Strengths and Weaknesses

Opportunities and Threats

Marketing Objectives

Marketing Strategies

Target Markets

Marketing Mix

Product Strategy

Pricing Strategy

Distribution Strategy

Promotional Strategy

Implementation of Marketing Structure

Environmental Analysis

Any company's activity is under the influence of a series of environmental factors activating on a large scale. These are general factors with an exogenous character reported to the agents that compose the microenvironment. The connection established between these factors is usually indirect, with a long-term influence. The ensemble of factors with indirect, long-term, and lower intensity action on the company's activity compose the company's macro environment. The components of the macro environment are various: demographic, economic, technological, cultural, political, institutional, and natural environment.

1.1. Economic Forces

The economic environment is composed of the elements affecting the economic activity of the space in which the company is active. In its analysis one must take into consideration the structure of the economic activity, the level of development, employment, unemployment, or the financial situation. In this context, when analyzing the economic environment of a certain region, it is required to emphasize the factors that determine the size and dynamics of consumption expenses: income distribution, economies, debts, and other factors.

Earth's Best is a Canadian company. Certain facts about the economic environment are detailed in the following lines.

Canada is considered to be "an affluent, high-tech industrial society in the trillion-dollar class" (CIA, 2007). Regarding the market orientation of the economic system, Canada follows the United States model. The period that followed after World War II was characterized by significant growth in sectors like manufacturing, mining, and services. The country's trade has developed as well, once the North American Free Trade Agreement was signed.

A series of economic facts about Canada are presented in the following lines: GDP - $1.181 trillion; GDP per capita - $35,700; GDP composition by sector - agriculture 2.1%, industry 29%, services 68.9%; labor force - 17.59 million; unemployment rate - 6.4%; household income or consumption - lowest 10%: 2.6%, highest 10%: 24.8%; inflation rate - 2%; investment (gross fixed) - 22% of GDP; budget - revenues: $510.6 billion, expenditures: $501 billion; public debt - 67.7% of GDP; industrial production growth rate - 0.7%; external debt - $684.7 billion; market value of publicly traded shares - $1.481 trillion (CIA, 2007).

Canada's main exports partners are: the United States 81.6%, the United Kingdom 2.3%, and Japan 2.1%. The most exported commodities are: motor vehicles and parts, industrial machinery, aircraft, telecommunications equipment, chemicals, plastics, fertilizers, wood pulp, timber, crude petroleum, natural gas, electricity, and aluminum. The total value of exports in 2006 was of $401.7 billion f.o.b.

Canada's main imports partners are: the United States 54.9%, China 8.7%, and Mexico 4%. The most imported commodities are: machinery and equipment, motor vehicles and parts, crude oil, chemicals, electricity, and durable consumer goods. The total value of imports in 2006 was of $356.5 billion f.o.b.

1.2. Political and Legal Forces

The political environment reflects a country's society's structure, social classes, and their role in the society, political forces and the connections between them, the state's implication degree in the economy, the stability degree of the internal, local, and international political climate. These factors' role increases in situations of instability.

Canada is a constitutional monarchy that is also a parliamentary democracy and a federation. Regarding its administrative division, Canada has 10 provinces and 3 territories. The legal system is based on the English common law. In Quebec the legal system is based on the French law. The executive branch is represented by the chief of state, head of government, and cabinet. The legislative branch is represented by a bilateral Parliament consisting of the Senate and the House of Commons. The judicial branch is represented by the Supreme Court of Canada, Federal Court of Canada, Federal Court of Appeal, and Provincial Courts. The political parties in Canada are: Bloc Quebecois, Conservative Party of Canada, Green Party, Liberal Party, and Democratic Party.

1.3. Demand

The organic baby foods market is on an ascending direction, having increased by 28.2% between 1995 and 2000 (Key Note Publications, 2001). It seems that the reason for this significant growth is represented by changes in lifestyles associated with the increasing number of working women. This market increase is also due to a large number of product innovations in this field. In the United States, organic baby foods account for $6.6 million of the entire $3.1 billion baby food market, increasing up to 19% from 2005 (Reyes, 2006).

It is estimated that in 2005 the organic baby food market in the United States has accounted for more than $100 million in sales and that the organic niche has grown over 60% in the past five years, although birth rate has remained constant (Duggan, 2006). However, organic baby foods can cost twice or three times more than standard non-organic foods. Their price ranges between $0.75 to $1.50 per 2 ounce serving compared to approximately $0.40 or $0.50 for standard non-organic foods.

1.4. Competitive Forces

Competitors form a special category of the company's microenvironment. They distinguish among themselves through the role they play regarding their customers, the attitude towards novelty, means of communication with consumers, market intervention style and others. Earth's Best main competitors are: Tastybaby Frozen Organic foods, Plum Organics Frozen Baby Food, Homemade Baby Organic Baby Foods, Gerber Organics Baby Foods, and Baby Cubes Frozen Organic Baby Food.

Tastybaby is the newest frozen organic baby food producer, as it was founded in 2007. The company is considered to be "devoted to a balanced and healthy lifestyle" (PR Newswire, 2007). Retailers in this industry are showing great interest for this company. Also, the company has a very good promotional strategy. The strategy is based on approaching other issues than organic baby foods, like fashion, family, social work, and others.

Plum Organics Frozen Baby Food is another one of Earth's Best competitors. The company was established by experts that have a successful career in food sales. Their approach towards this type of products is quite similar to that of Tastybaby mentioned above.

All the companies mentioned in the competitors section have similar approaches regarding their customers. Their websites are designed in order to seem very friendly, comfortable, and cozy for the customer. These companies are trying to position themselves as a friend or as an advisor for the customer. Each of them was created by people with personal experience in this field, experience that is shared in their websites. These companies approach other subjects that are important to their customers.

1.5 Technological Forces

The technological environment in which the company operates is consisted of components that basically explain how the company's products are obtained. The company is involved in the technological environment's dynamics as both beneficiary and supplier, through the market. This is because changes suffered by technologies lead to modifications in terms of supply's, demand's, and prices' volume, dynamics, and structure.

The technological environment represents one of the most dynamic components of the company's macro environment. The evolution of the technological environment can be correctly expressed through specific elements, like: inventions, innovations, research and development activity, explosion of new products, perfecting traditional products, and others.

The organic baby foods sector is quite a new branch of the organic foods larger branch. Also, frozen organic baby foods are the newest discovery in the field. Given the fact that this market is at its beginnings, there are several innovations implemented.

1.6. Social and Cultural Forces

The social, or the demographic, environment refers to the population in the company's area of activity, in terms of labor force, on the one hand, and in terms of demand formative factors. Among specific indexes one must take into consideration the population number, sex and age groups structure, number of households, medium household size, territorial population structure, birth rate, and others.

For Earth's Best Canadian market, demographic indexes are the following: population - 33,390,141; age structure - 0-14 years: 17.3% (male 2,967,383, female 2,824,189), 15-64 years: 69.2% (male 11,604,723, female 11,490,839), 65 years and over: 13.5% (male 1,927,035, female 2,575,972); median age - 39.1 years; population growth rate - 0.869%; birth rate - 10.75 births/1,000 population; infant mortality rate - 4.63 deaths/1,000 live births; life expectancy at birth - 80.34 years; literacy - 99%.

The cultural environment is consisted of the elements regarding the system of values, habits, traditions, beliefs that rule people's statute in the society. The buying and consumption behavior that the company must take into consideration is based on these components.

The values and habits that influence this market's activity in general and Earth's Best's activity in particular is related to the changing lifestyle of individuals. Nowadays, more and more individual are orienting towards healthier lifestyles, and healthier eating habits. There are more and more people orienting towards organic foods. These individuals have a medium to high education level, they realize the benefits of organic food and are willing to spend more money on this type of food.

2. SWOT Analysis

2.1. Strengths and Weaknesses

The most important strong point of Earth's Best is its wide range of products. The company's extremely diversified products satisfy all types of customers. Earth's Best has lines of products for each age group: the Infant Line, based on iron-fortified cereals and single ingredient foods. The product line for children aged 18 months and older is consisted of Arrowroot Squares, Cereal Bars, Crunchin' Blocks, and Organic Juices. There is also a line for older children, consisting of Organic 2% Milk, Apple Sauces, and Whole Grain Bars. In addition to this, Earth's Best has launched a body care products line.

Another strength refers to the quality of Earth's Best's products. The company's products benefit from a lot of credit from its customers, which become loyal clients. The company's web site presents a series of testimonies from customers that appreciate the quality of the company's products and services.

The company's web site is also very appealing to its customers. Through its web site, the company provides guidance and advice on food related issues. Also, there several lifestyle issues under discussion, issues that are of great interest for the company's customers.

However, the company has a series of weaknesses as well. One of them is related to the quite high prices practiced by the company. This is a weakness that one may find in any organic foods company. Given the financial resources required by manufacturing organic foods, the prices of outputs are in accordance with the costs of inputs.

Another weakness is related to press scandals in which the company was involved. One of these scandals refers to botulism accusations regarding a series of Earth's Best's products. The company was forced to withdraw these products. In addition to cost related problems because of this withdrawal, the company's image was affected as well.

2.2. Opportunities and Threats

The greatest opportunity that the company could take advantage of is represented by the tremendous potential of the organic foods market that has not yet been exploited. Given the fact that this market is at its beginning, the timing is perfect for Earth's Best to establish itself as one of the main producers in this field.

In addition to this, the company should expand its geographical coverage. The company should approach the European market as well. Reports have revealed that Europe presents an increased interest towards organic foods.

The most important threat is represented by the company's competitors. There are more and more companies that address the organic foods segment. One of the organic foods producers that was established in 2007 already has gained quite impressive amounts of interest from customers and retailers. Most of the companies competitors have similar threats, which means that t would be quite easy for Earth's Best to distinguish itself from these competitors.

3. Marketing Objectives

The main marketing objectives that must be addressed by Earth's Best are:

Increasing market share by 5%

Increasing brand recognition

Increasing market coverage degree by 10%

Increasing social responsibility towards the company' customers and towards society

4. Marketing Strategies

4.1. Target Markets

The company's target markets are located in urban areas in Canada and the United States. In addition to this, the company should address the European market as well, due to its enormous unexploited potential, as mentioned above. The main customers segment is consisted of individuals aged 25-35, with medium to high educational level, medium to high incomes, health oriented lifestyle and eating habits.

4.2. Marketing Mix

4.2.1. Product Strategy

The entire product strategy for Earth's Best should be based on expanding the company's current range of products. Due to the fact that this market segment of organic foods is at its beginning, there plenty of new products to be discovered, and plenty of new directions that the company could orient towards. The company has already expanded its range of products by launched a body care product line. In addition to food products and body care products, the company should orient towards entertainment related products and educational products as well. The company's preoccupation towards such types of products could help create a better image for the company. It would show that the company is not only interested in profit, but in educational issues also.