Marketing strategy of Trader Joe s

Posted by Zander Henry on Aug-22-2018

1. The vision of Trader Joe s

The vision of Trader Joe s is to be the leading quality service and product provider for customers. Being the best and the leading player means that Trader Joe s marketing strategy and operations focus on:

• Providing high quality of products and services
• Providing value to customers
• Concentrate on building customer experience

2. The mission of Trader Joe s

Trader Joe s marketing strategy is grounded in its mission. The mission for Trader Joe s is to be the favorite brand of the customers. This mission is essential for the marketing strategy of Trader Joe s as it focuses on all operations and marketing activities in the direction of:

• Consumer centrism
• Using research to understand and influence consumers

3. Brand Equity of Trader Joe s

Understanding and knowing the brand equity is vital for directing and giving meaning to the marketing strategy of Trader Joe s. The knowledge of brand equity will help in shaping Trader Joe s marketing strategy effectively – thereby facilitating the growth of business for Trader Joe s.

3.1. Brand awareness

• Trader Joe s has high brand awareness because of international operations
• The company focuses on higher budget allocation in the country of origin
• Each market for Trader Joe s has modified marketing and strategic directives and plans

3.2. Brand association

• Trader Joe s is directly associated with the brand name and product category
• Trader Joe s has a broad product portfolio
• Trader Joe s is associated with promising and delivering quality and innovative products
• Trader Joe s is also associated with excellent customer service

3.3. Brand loyalty

• Trader Joe s has been successful at gaining high consumer loyalty because of unique and influential marketing strategy
• Trader Joe s has a global customer base
• Trader Joe s keeps adding value addition to the products and product portfolio to keep consumers engaged

3.4. Brand asset

• Trader Joe s has a substantial brand value
• Trader Joe s also enjoys the high financial worth
• Trader Joe s focuses on building a reliable and robust employee base

3.5. Brand element

• Trader Joe s uses the brand element as a means of competitive advantage
• Uses adaptability in product, services, and marketing to meet different cultural demands

4. Situational Analysis of Trader Joe s

The situational analysis will help in developing the marketing strategy of Trader Joe s by conducting a thorough market analysis. This market analysis will aid in understanding the compatibility between external opportunities and other factors, and internal strengths – to be used to maximize the marketing influence of Trader Joe s.

4.1. SWOT

4.1.1. Strengths

Trader Joe s marketing strategy can benefit from the following internal advantages:

• Strong brand image
• Global distribution network
• Investment in market research
• Innovation

4.1.2. Weakness

Trader Joe s faces challenges in marketing strategy because of the following weakness:

• Slow organizational processes
• High product prices

4.1.3. Opportunity

Trader Joe s has the following possibilities of business growth:

• Green lifestyles
• Regional expansion
• Diversification

4.1.4. Threats

Trader Joe s faces business threats because of the following factors:

• Increased competition
• Increased imitation

4.2. PESTEL

4.2.1. Political

• Trader Joe s operates I markets with political stability
• Trader Joe s has funding support from the government for small businesses

4.2.2. Economic

• Trader Joe s enjoys high sales because of higher GDP
• Lower interest rates make business expansion and loaning easier for Trader Joe s
• Low inflation strengthens the financial position of Trader Joe s

4.2.3. Social

• Higher education and awareness increases sales of Trader Joe s predict
• Trader Joe s focuses on understanding consumers and fulfilling their demands through its offerings

4.2.4. Environmental

• Trader Joe s has an active CSR program
• Trader Joe s ensures environmental safety in all its operations

4.2.5. Legal

• Trader Joe s is aware of local and global laws of business and human resource management
• Trader Joe s abides by all statutes – especially labour law, discrimination law, and employee safety laws

4.3. Porter’s Five Forces

4.3.1. Threat of substitutes

• High risk of replacements
• Substitutes offer similar products at low prices

4.3.2. The threat of new entrants

• New entrants need high financial investment
• New entrants need updated technology for keeping par with industry progress

4.3.3. Bargaining power of buyers

• Sales made to end consumer directly
• Stocking of products at retailers, as well as own-controlled retail outlets

4.3.4. Bargaining power of suppliers

• Multiple suppliers of raw materials
• Suppliers are chosen after careful inspection, and through contracts

4.3.5. Industry rivalry

• High industry rivalry
• Players offer similar products
• Players compete through marketing to influence consumers

5. Marketing Objectives for Trader Joe s: The Marketing Strategy of Trader Joe s

Trader Joe s marketing strategy has the following objectives for the current financial year:

5.1. Increased market penetration

• Increase top of mind recall for Trader Joe s brand and products by 30%
• Increase sales for Trader Joe s by 40% by the third quarter of the financial year
• Achieve a trial rate for new products of 10% during the first quarter of the launch
• Increase consumption rate of existing products by 45% during the current financial year

5.2. Enhanced brand recognition

• Increase top of mind recall by 65% during the current fiscal year
• Increase brand recognition by 80% during the first two quarters of the current financial year

5.3. Increased use of digital marketing

• Acquire 25,000 new online customers during the financial year
• Increase website traffic through using blogging and email tactics effectively by 505 during the first two quarters of the year
• Acquire 65,000 likes on the official Facebook page of Trader Joe s during the first quarter of the financial year

5.4. Retail Growth

• Contract with five more leading supermarkets in the first quarter of the year to stock product at eye level shelving
• Contract with two leading online retail sites – eBay and Amazon – to stock our products, and increase accessibility for consumers globally by the second quarter of the financial year

6. Segmentation of Trader Joe s

Trader Joe s marketing strategy uses different means of segmentation to reach an increase in market penetration.

6.1. Demographic segmentation

6.1.1. Age

Trader Joe s has consumers of age groups

• 20-45 years
• 45-60 years

6.1.2. Gender

• Trader Joe s has a broad product portfolio for both males and females

6.1.3. Life-cycle stage

Consumers for Trader Joe s, according to the marketing strategy, are in the following various life cycle stages:

• Single students
• Single graduates
• Single people living at home/not living at home
• Young couples without children
• Married couples with one to four children – all at home
• Married couples with one or two children in college
• Old married couples with an empty nest

6.1.4. Occupation

The marketing strategy devises the following occupations for Trader Joe s consumers:

• Professionals
• Students
• House makers

6.2. Psychographic segmentation

6.2.1. Social class

• Trader Joe s focuses on segments of middle-upper and upper social classes

6.2.2. Lifestyle

Trader Joe s consumer segments have the following lifestyle characteristics:

• They aspire towards a better and higher living standard
• They want to be successful – professionally and socially
• They are not hesitant to try new things, products and services in life
• They are confident in their behaviour and attitude
• They are mainstreamers in their fields

6.3. Geographic segmentation

6.3.1. Region

• Trader Joe s has operations spread across the western developed countries such as America, the united kingdom, and the Netherlands
• It also has operations in emerging markets such as Brazil, India, and China

6.3.2. Density

• The focus of Trader Joe s remains on the urban part of the population

6.4. Behavioural segmentation

6.4.1. Personality

The marketing strategy defines personality characteristics for the consumers of the brand of Trader Joe s, such as:

• Determined
• Confident
• Ambitious
• Hardworking

6.4.2. Usage frequency

• The consumer segments for Trader Joe s are regular and frequent users of the product

6.4.3. Benefits sought

• Consumers seek functional benefits
• The focus, however, is more on the emotional benefits reaped from the consumption of the brand

6.4.4. Degree of loyalty

• Consumers are very loyal
• Have an emotional attachment with the brand

7. Targeting of Trader Joe s Positioning of Trader Joe s

The marketing strategy of Trader Joe s targets consumer groups based on segmentation as follows:

7.1. Target market

• The target market for Trader Joe s is from middle to upper class
• The target market is ambitious and desires to purchase high-end consumer products
• This target market also seeks affordability
• To meet target market expectations, the Trader Joe s focuses on quality control

7.2. Mass marketing

• The marketing strategy of Trader Joe s focuses on mass marketing
• This also requires unique marketing designs and product promotion programs
• Trader Joe s makes use of one strategy to influence all segments

7.3. Undifferentiated marketing strategy

• Trader Joe s does not differentiate between market segments
• It uses a single marketing strategy to target all segments and consumer groups
• Based on this, Trader Joe s also created the marketing mix under the marketing strategy as a singular one for the whole market – regardless of the segmentation divides.

7.4. Focus on quality

• Trader Joe s has created, developed, and maintained a brand that satisfies all consumers under the undifferentiated marketing strategy and mass marketing
• No compromise on quality has been made in the broad product portfolio
• To ensure the influence of a single marketing strategy, the Trader Joe s has also adopted a consumer-centric approach in its overall marketing strategy and operations as well
• This was used for targeting strategy as well as for maintaining growth

8. Company Competitive Advantage in the marketing strategy of Trader Joe s

The marketing strategy of Trader Joe s stands out from the clutter and competition. Trader Joe s has also achieved a sustainable competitive advantage in its marketing strategy. This is because of the following factors that Trader Joe s has utilized:

8.1. Cost-effectiveness

• Trader Joe s focuses on reaching consumers effectively rather than grandeur
• Trader Joe s focuses on developing an integrated marketing approach
• The use of digital marketing efficiently and expertly has helped the company reach a wider audience at a lower cost
• Trader Joe s has in-house copywriters for marketing campaigns which also helps in controlling costs
• Trader Joe s also focuses efforts on ground activities – which are less expensive than commercial marketing tactics

8.2. Innovation

• Trader Joe s has stayed updated with latest developments in marketing research and marketing knowledge
• Trader Joe s makes use of new and innovative tactics to reach its target consumers
• Trader Joe s also employs top of the field marketers to facilitate its marketing strategy and promotional campaigns
• Each marketing campaign launched by Trader Joe s is effective catchier and more influential than the previous one

8.3. Strong market research and consumer understanding grounded

• Trader Joe s marketing strategy is strongly grounded in consumer and market research
• Trader Joe s makes informed marketing campaigns and goals based on consumers’ behavioural feedback
• Trader Joe s also incorporates consumer feedback in its marketing strategy
• Trader Joe s marketing strategy is based on market trends, and consumer needs and wants

8.4. Making effective use of emotional appeals

• Consumers’ emotional needs strongly influence all marketing objectives and marketing goals set by Trader Joe s
• In addition to fulfilling functional needs, Trader Joe s also tries to fulfil the emotional and psychological needs of the consumer
• Trader Joe s tries to build a strong emotional bond with the consumer, which also results in high consumer loyalty

9. Distribution Strategy of Trader Joe s

Trader Joe s marketing strategy highlights the use of the following distribution strategy to maximize reach and accessibility for consumers.

9.1. Intensive distribution strategy

• Trader Joe s makes use of intensive distribution strategy because it is mass marketing
• Trader Joe s’s marketing strategy is based on undifferentiated segments, and thus an intensive distribution strategy allows high penetration and reaches in the overall market
• With the use of the intensive distribution, Trader Joe s tries to maximise its coverage of the markets where it's present
• For achieving the intensive strategy, the company uses hardcore 360-degree integrated marketing strategy and campaign to reach all consumers, across all segments in the market.

9.2. Direct distribution strategy

• Trader Joe s uses direct distribution country of origin as well as in locations where it has subsidiary operations
• The Trader Joe s also makes use of modern retailing channels
• Also, Trader Joe s makes use of e-commerce and makes a sale through online retailers, as well as through the company website
• Direct distributions have allowed Trader Joe s to increase market penetration and accessibility for consumers

9.3. Indirect distribution strategy

• This strategy is largely used for offshore operations where the Trader Joe s does not have a subsidiary
• In these offshore locations, Trader Joe s largely works through the export model
• This makes use of several intermediaries in between, before the product by Trader Joe s reaches the target consumers
• Intermediaries for Trader Joe s include not only the end retail outlets, but also sales agents, retail agents, and distribution agents in offshore locations

9.4. Selective distribution strategy

• For some products of its portfolio which are premium in nature, Trader Joe s makes use of selective distribution channel
• Trader Joe s has maintained a few outlets in the country of origin, and in selected offshore markets for these products
• These placements and locations are chosen based on the niche market that Trader Joe s has for its premium products
• These locations, placements, and marketing strategy helps make the company’s product selectively, but readily accessible for its niche target audience

10. Competition Analysis in the marketing strategy of Trader Joe s

The industry in which Trader Joe s operates is very responsive to market and consumer trends. Trader Joe s, therefore, needs to be vigilant in its market strategy towards competition – to make sure that it maintains its competitive advantage.

10.1. Strategic Group Analysis

• Trader Joe s competes with direct and close competition based on quality and price
• Consumers choose between different companies from the industry based on their functional offering
• Consumers have progressively evolved to strengthen loyalty and form an emotional bond with products that they consume
• Trader Joe s also competes, thereby, with close competition for building stronger brand image, increasing consume loyalty, and for forming strong emotional ties with the consumer

10.2. Industry rivalry

• Trader Joe s experiences high industry rivalry
• The barriers to entry for the industry are low, and new entrants gain easy access in the industry
• The number of local as well as global players is increasing

11. Marketing mix of Trader Joe s

The marketing mix for Trader Joe s as per the marketing strategy is the following:

11.1. Product

• Trader Joe s has a broad product portfolio
• Trader Joe s provides mass marketed products for all segments across the market undifferentiated
• Trader Joe s also provides some selected, premium products to niche customer groups
• All products in the portfolio consistently maintain high quality
• All products are tailored to meet consumer specifications, demands and needs across different regional markets
• The Trader Joe s maintains a high focus on innovation in products and introduces new products frequently to keep the consumers engaged

11.2. Place

• Trader Joe s wants to have a close, emotional and personal relationship with its consumers
• The company maintains high control in its distribution strategies – especially through direct distribution strategy
• The company has a presence in leading supermarkets
• The Trader Joe s also has company-operated stores in malls, and otherwise to make products accessible to consumers easily
• Trader Joe s also makes use of e-commerce to increase penetration and sales

11.3. Price

• The Trader Joe s prices its products so that its target consumers can afford it easily
• Trader Joe s uses relative pricing strategy for its products
• The price of Trader Joe s’s products include not only the high quality raw materials and value additions but also the enhanced customer experience they deliver
• The company’s pricing strategy allows it to enjoy stable revenue and profit growth

11.4. Promotion

• The Trader Joe s has a high budget allocated towards marketing activities
• The Trader Joe s invests substantially in digital marketing activities to reap high and effective results
• Use of digital marketing has also allowed Trader Joe s marketing strategy to cap costs and expenses
• Trader Joe s also takes part in direct consumer engagement through on-ground activities where the company initiates trials
• Trader Joe s also invests in traditional media channels to reach maximum consumers in the market

11.5. People

• Trader Joe s has a large workforce across different companies
• This workforce is continually trained to become experts in their respective fields of operations
• Trader Joe s hires without discrimination
• Trader Joe s ensures that its employees remain motivated through building an inspirational and creative organizational culture
• Trader Joe s focuses on also building and maintaining organizational commitment and loyalty in its employees

11.6. Process

• All activities at Trader Joe s - from raw material procurement to the final sale to the end consumer - undergo systematic processes
• The processes at Trader Joe s are well defined, and well communicated to all employees
• All employees are trained to follow the processes internally to ensure consistently high quality as well as timely production and deliveries
• The systematic processes also ensure a smooth running of operations at the Trader Joe s

11.7. Physical evidence

• The physical evidence for Trader Joe s includes the company logo, company store designs, and the product packaging
• Satisfied and excited customers in the retail spaces of Trader Joe s, as well as during product consumption create a bubbling and an inviting atmosphere
• The e-commerce website for retail by Trader Joe s is also designed with a friendly customer interface to allow maximum interaction with the brand
• The store designs created by Trader Joe s for its retail space allow consumers maximum interaction with the products directly.

12. Promotional tactics for the marketing strategy of Trader Joe s

12.1. Digital marketing

• The company uses social media for reaching consumers effectively
• The Trader Joe s interacts with the consumers directly, and engages with them, answers their queries and takes their feedback
• The company also shares information and build relationships with consumers through digital marketing
• Trader Joe s also makes use of blogging, emails, and content creations as a means of digital marketing

12.2. Conventional marketing

• The company uses a 360-degree approach in its marketing strategy
• This means that the company makes use of traditional marketing channels as well – such as TV, magazine adverts, and out of house placements

12.3. Influencers

• For direct, on-ground engagement, the company uses influencers
• Influencers interact with consumers directly, or through their channels of communication as a means of content creation and endorsing the Trader Joe s brand

13. Monitoring and evaluation of the marketing strategy of Trader Joe s

13.1. Changes in sales

• Trader Joe s regularly tracks its sales to identify the effectiveness of its marketing strategy
• Increase in sales reflect the success of marketing strategy of Trader Joe s
• Sometimes, Trader Joe s experiences increase ins ae after some time of the launch of the marketing promotions

13.2. Surveys and focus groups

• Trader Joe s frequently conducts focus groups and surveys to identify its brand worth
• These methods also help the company identify brand value, brand recall, and brand recognition
• Focus groups allow Trader Joe s to gather feedback on its marketing strategy and helps it understand consumers better

13.3. ROI

• Effectiveness of marketing strategy of Trader Joe s can also be seen through the revenue and profit growth
• Return on investment allows Trader Joe s to effective gauge the effect and influence of the marketing strategy, and measure its success

13.4. Attainment of marketing objectives

• All marketing objectives set by Trader Joe s are SMART
• The quantitative set against each of the marketing objective can facilitate attainment evaluation for the overall marketing strategy
• Successful and timely attainment of these marketing objectives highlight the success of the marketing strategy of Trader Joe s