Hello everyone, I am going to post one of my marketing assignment carries 30 percentage of marks. you have to analyze the case that I have posted on rich products and healthy eating consumers: corpora

MPK732 Marketing Management 2018

The purpose of this case study was to examine the business procedure and how The Chia Co increased its market value in the world.

Starting from the very beginning, John Foss discovered the demand for healthy foods which were highly ignored by most of the people and how nutritious value of raw foods were dropped down by converting them into final goods.

The purpose of the case study was to apply the fundamental principles of marketing management to a marketing situation given in the form of The Chia Co.

Research for this case study included a review of key concepts, models, and theories in marketing management applied to critique the marketing management theory and using a method of problem-based learning.

The case study analysis involves application of key theories as 5C analysis also known as situation analysis, SWOT analysis, PESTEL analysis.

The analysis describes about how The Chia Co segmented the market and targeted the essential sector, thereby promoting chia seeds.

Depth strategy segmenting technique was used by the company by delivering different varieties of foods having chia seeds as the main component.

Major findings indicate that The Chia Co is facing tough competition in the superfood category from other chia seeds supplier as well as other superfood suppliers.

Furthermore, company’s three-pronged strategy led to overall success of the company till date making it larger supplier of chia seeds worldwide.

While the situation was very common for superfoods manufacturing companies, this report analysis recommends that The Chia Co should create more opportunities in European markets to expand its business and partner with new Chia product startups in Europe, to increase its influence worldwide.

1. Introduction 6

2. Key Problems and issues 7

3. Background 8

4. Segmentation, Targeting and Positioning 10

5. Can the Chia Co keep itself and its products ahead of other superfoods? 13

6. Reference list 19

The ancient seed/grain “Chia” has become immensely prevalent in current food routine in many countries; it contains protein, fiber, vitamins, antioxidants and minerals, and chia is also an excellent source of omega-3 fatty acid due to the high amount of α-linolenic acid (about 65 % of the oil content) (Ullah et al., 2015) (refer Fig 1). Chia became a rare crop for which demand exceeds supply and Australia became the world's leading chia producer (Dumas, 2015).

All these events happened due to efforts of Mr. Foss who set an aim to provide health and wellness to the global community through the production and distribution of chia seeds and started The Chia Co. in 2003 (Foss, 2014) (refer Fig 2), when very few people knew what chia seeds were.

However, while the claims made about Chia are being proved by scientific experiments, can The Chia Co survive the battle of the profitable and sustainable company in superfood category amongst its competitor superfoods as well as chia supplying companies.

The aim of this case study analysis is to evaluate The Chia Co for its success and future based on the application concepts of marketing management on The Chia Co.

With expanding general wellbeing awareness around the world, demand for nutritional food with various health advantages has additionally expanded (Mohd Ali et al., 2012). Superfoods are now a significant section of health foods which are well known for their extraordinary nutritional or medicinal benefits, their ‘authentic’ and ‘natural’ qualities, and their traditional use by ancient civilizations (Loyer, 2016). As access to internet and technology has become convenient it is helping consumers to research what they eat, and superfoods are growing in popularity in that context (www.nielsen.com, 2017). Nielsen (2017) further adds that superfoods are becoming prominent across the grocery stores across the world as they are rich in nutrients and superfoods, like chia, kale and quinoa have heavy dose of ample amounts of vitamins, antioxidants and minerals that help aid in general health.

The 5Cs analysis also called situation analysis is used to frame the general analysis of the entire business situation (Iacobucci, 2013). To understand how The Chia Co became successful and whether it will remain a sustainable company in superfood category in future; its internal and external environment needs to be analyzed to identify what were its key problems and issues, using the 5Cs analysis. The analysis helps to understand the factors that helped The Chia Co. gain a competitive advantage.

The five key areas involved in marketing decisions for an organization - Company, Customers, Competitors, Collaborators, and Climate, are analyzed by a firm to understand its customers, its own capability to serve them and the environment in which this process occurs (Maria, 2017) (refer fig 3). SWOT analysis is also done along with 5 Cs analysis.

Know your customer better by getting in touch with them, by getting to know their psychology and getting to know their buying behavior (Iacobucci, 2013). Chia Co Vision – ‘To make a positive contribution to the health and wellness of the global community by making Chia available to people around the world’ (Foss 2014, p2).

Obesity and malnutrition survey data from Consumer Goods Forum revealed that ‘Obesity rates have more than doubled since 1980 as well as 2 billion people worldwide are affected by malnutrition’ (Deloitte Australia, 2017). Foss researched the food trends around the world after winning Nuffield Global Study scholarship in 2000.

His work can be briefed in matrix:

Establishing a new crop was the biggest challenge as understanding of the right way to grow, harvest, clean, pack and freight chia seeds, was required (Azzollini, 2017). In 2006 Chia Co. went on to supply chia to 36 countries, with Australia, the USA and Asia being the biggest markets. By 2012, demand for chia was booming and suppliers of chia in other parts of the world, were struggling to supply. According to Foss, other suppliers used chemicals to ripen, grow and harvest chia seeds as compared to them being the largest producer of chia seeds which were totally organic (Daniells, 2012). Furthermore, Foss claimed that large health food retailers and manufacturers could rely on The Chia Co for quality and consistent supply of chia seeds every year as they were expanding their chia growing area by 100% annually. However, even after this numerous food producers who are delaying venturing out into chia are stressed over potential supply issues. their worry is, is there going to be sufficient supply to maintain their product offering (Cassiday, 2017). The reason for this can’t be expected that those food producers are in not a partnership with The Chia Co, instead their chia seeds suppliers being unable to produce quality chia seeds as per FDA standards.

The retail market in Australian economy has become unpredictable due to the new competitors emerging, changing tastes of Australians, and new technologies (The Conversation, 2017). To sustain themselves in an aggressive Health and Wellness Brand market, retailers are launching new food-items and retail formats to take care of the changing demand of consumers and to extend their profits. Retailer are inclined towards engaging more with consumers and making them the king who decide which product they would buy and which they would banish (Deloitte Australia, 2017).

The Chia Co has more than 10 competitors with some of them being as old as it is itself, although for raw seed supplier– Joseph Enterprises Inc. (U.S.) and Bob’s Red Mill Natural Foods were only competitors. The actual competition began when it launched “Chia Pod” as healthy breakfast substitute against cereals and other superfoods available in markets and cereal market shrunk by 0.5 per cent annually between 2010-2015, for which one reason is attributed to chia pod (Bailey, 2015). There have been studies done on claims about health improvement by eating chia seeds and it is confirmed that if they are added to food then because of the chemical structure of chia seeds, they may propel its nourishing value and a regime with chia seeds might be a part of deterrence of civilization-related-diseases.

PESTLE analysis covers the study of areas that might affect a business and where the business practices either no or constrained control.

involves studying company’s vision, capabilities, strategies, product line, culture, technology, and objectives, also it generally involves a SWOT analysis and in this case study it is given below.

c

STP is the core of marketing plan—what sorts of customers are there (segments), targets to be served, and then formulate the brand’s position (Iacobucci, 2013).

Each segment consists a cluster of customers who have alike set of desires. Two broad clusters under segments:
1. Evocative Characteristics- demographic, geographic, and psychographic
2. Social Considerations- Consumer responses to usage occasions, health benefits and brand

Targeting is choosing segments which the company and marketers feel could create maximum income. Positioning is the plotting a business's offering and image to inhabit a distinguishing place in the minds of the target group.

The Chia Co.’s founder Foss was primarily looking to provide health and wellness to people by supplying chia. After perfecting agronomics; while they already were supplying chia as ingredient for food-items to many businesses (segment 1) like Bakers Delight who wanted to improve nutritional content in their products, they launched chia pods ready-to-eat breakfast option aimed at the urban homes with both the partners working or working bachelors who had very less time to cook a meal (segment 2). People in this section are health conscious and thus prefer to buy ready-to-eat health improving foods.

The main consumers who liked the idea of “Eat Chia” (refer fig 5) were health-conscious young people, Mothers of the family who need to keep check on nourishment of babies and themselves and Decision makers (managers) who lead a stressful work life and lack time for cooking.

According to facts told by Foss, these people were dieticians, naturopaths, nutritionists and medical doctors who needed to be conveyed about the benefits of chia and gain credibility (Azzollini, 2017). According to Forbes, female shopper buying power surpasses the GDP of India and China combined (Deloitte, 2018). Deloitte (2018) report also states that women will be controlling ‘75% of household spending by 2028’. That make women shoppers being the largest market opportunity. And the Chia Co. positioned very well in this aspect to deal with segment 2. As advertisement plays a bigger role in persuading the buying choices made by customers, The Chia Co., in this context targeted to influence more women who have a fitness regime by sponsoring Women’s Health Fit Night Out with behemoth partners Vital and Garnier (B&T, 2018). Chia Co. positioned itself as a trademark for economic, social and environmentally sustainable product maker when they introduced chia pods (Foss,2014) and have been striving to keep the same values up.

In 2015 there was a 36% increase in food and drink products launched globally, termed as “superfood” (Mintel, 2016). This was because there was a strong demand among consumers for highly nutritious product. Mintel (2016) also reported that ‘there was an increase of 70% in the percentage of products launched containing chia’ as well as strong interest in ancient grains like chia.

According to Nielson Global Health and Wellness Report (2015), customers are ready to pay extra for foods claimed healthy. Nielsen (2017) also reported that Chia seeds, for example, were found in 23% of superfood category products, growing from 21% of categories last year, while other superfoods were growing as well (refer fig 6).

By 2015, clean and clear label started to trend.

According to Innova Market Insights (IMI) (2016) the mandate for full transparency started to include the whole supply chain as a clean label positioning became more complete. IMI further argues that this trend would be disruptive for many suppliers as they would face challenges in sourcing enough naturally grown/made products to deal with the rise in demand (refer fig 7).

Whatever kind of food/superfood product is there entering the market this new trend demands transparency that has become serious with customers likewise fixated on ‘what is not in their food & beverage as what is in it, and where it came from’ (Iriworldwide.com, 2018).

According to Technavio market research, the global superfoods market is ‘expected to grow at a Compound Annual Growth Rate (CAGR) of 16% during the period 2018-2022’ (Businesswire.com, 2018). Furthermore, the research adds a fact that health benefits and new product launch are the major market drivers as increasing popularity of superfoods lead to a surge in the introduction of innovative foodstuffs that carry the super grain, superfood and super fruit, label.

Well it seems that insights reveal that market grows when consumers are influenced by products, which is a tactic used by marketing strategists to broaden the reach of their product. Consumer attitudes, will and decision-making are impacted by influence of good information, biases and social norms like choices based on wealth (Iacobucci, 2013). BBC.com (2018) published a story that ranks various foods, based on research data from three different sources, gave rank 5 to chia seeds and no 1 in all the other superfood seeds available in the market right now. According to the USDA, chia is a total protein, which implies it contains the greater part of the amino acids essential to people and is practically identical in protein quality to meat. The content of protein, lipids, fiber and antioxidants in chia seeds essentially higher than in numerous harvests (Ángeles, López and Tecante, 2015)

Costs of chia seeds fluctuate pertaining to demand, production volume and quality, and amid 2014, with speculation and dramatic price increases activated rapid production of chia in several countries, with trading costs reaching US $8000-$12000 per ton (Orona-Tamayo, Valverde and Paredes-López, 2015).

Business environment nowadays changes constantly and the capability of consumer products (CP) businesses to rapidly innovate, adapt and distinguish themselves in the market, thus driving brand development, is vital to success. (Deloitte, 2018).

The Chia Co already being innovation with sustainable practices on board and good range of products, should be looking out for emerging players and technological innovations being used in agricultural business to boost up the production of chia without compromising the quality of seeds. However, these being the common methods which every company uses big or small; the Chia Co must be focused on retaining the quality of their product and increasing the supply of chia to demand and thus it must aim to attain globalization to drive growth and differentiation. It could benefit by strategically capitalizing on the growth in emerging markets. By identifying opportunities to acquire or partner successful startup businesses of chia products in these emerging markets, such as Europe, in coming future thereby it will have access to their consumers.

‘Europe trade in around 16,182 tonnes (€ 31 million) of chia seeds in 2016’ (Cbi.eu, 2018).

Further information from the source revels that there were many startups emerged after 2009, which launched various new products containing chia seeds. This opportunity was picked up by Chia Co as it established itself in the U.K. however, presence in other European countries can still be worked upon as global retail sales of packed foods is predictable to increase over $3 trillion by 2020 with evolving marketplaces being the chief driver. Also, gluten-free foods touched 4.63 billion (€ 4.1 billion) in 2015, globally. And sales are now anticipated to reach US$ 7.59 billion (approx. € 6.81 billion) by 2020 (Cbi.eu, 2018). This increment demonstrates development opportunities for ingredients like chia seeds, yet in addition to a few different ingredients which contend specifically with chia, states Cbi on its website. Chia Co’s Chia pods and Chia breakfast boosters are recommended for this target market as Europe is the country which get most of the tourists from all over the world in almost every country in Europe (refer fig 9). There are target groups emerging with specific needs like having nutrients rich food-items on-the-go, without cutting a hole in their wallet. These people can be solo travelers, senior travelers, millennials etc.

To show how the target-market customer perceives the placing of the rival products in the market, perceptual mapping is performed based on survey data, databases insights etc. In this case, information is analyzed from various food blogs, news websites and superfood ratings.

Following perceptual mapping we can define positioning strategy that would be suitable for Chia Co in coming future is to continue to sell chia seeds as ingredients to food manufacturers while slowly entering and expanding their coverage in European market and only ethical concern being not to become monopolist when it starts partnering with new chia product startups. And focus parallelly on the ready-to-eat breakfast options to be marketed more in European markets with the help of celebrity endorsements or creating awareness in those markets as it did in Asian markets such as Hong Kong where it saw sales volume, post awareness campaign, increased by three times per store as compared to the USA. (cite case study, add in last)

Ángeles, M., López, V. and Tecante, A. (2015). Chapter Two - Chia (Salvia hispanica): A Review of Native Mexican Seed and its Nutritional and Functional Properties. Advances in Food and Nutrition Research, 75th ed. Waltham, MA: Elsevier/Academic Press, pp.Pages 53-75. [Accessed 23 Aug. 2018].

Azzollini, Meena. (2018). A Q&A with The Chia Co. [online] WellBeing Magazine. Available at: <www.wellbeing.com.au/community/holistic-q-a/a-qa-with.html > [Accessed 23 Aug. 2018].

B&T. (2018). Women’s Health Fit Night Out Returns with Sponsors Garnier, The Chia Co & Vital - B&T. [online] Available at: http://www.bandt.com.au/media/womens-health-fit-night-returns-sponsors-garnier-chia-co-vital [Accessed 27 Aug. 2018].

Cassiday, L. (2017). Chia: Superfood or superfad?. [online] Aocs.org. Available at: https://www.aocs.org/stay-informed/read-inform/featured-articles/chia-superfood-or-superfad-january-2017 [Accessed 25 Aug. 2018].

Cbi.eu. (2018). Exporting chia seeds to Europe | CBI - Centre for the Promotion of Imports from developing countries. [online] Available at: https://www.cbi.eu/market-information/oilseeds/chia-seeds/europe/ [Accessed 30 Aug. 2018].

DANIELLS, S. (2012). Tight chia supply? Not us, says Australia’s Chia Co., as it continues global expansion. [online] bakeryandsnacks.com. Available at: https://www.bakeryandsnacks.com/Article/2012/07/18/Tight-chia-supply-Not-us-says-Australia-s-Chia-Co.-as-it-continues-global-expansion [Accessed 25 Aug. 2018].

Deloitte Australia. (2017). Health & Wellness Progress Report | Deloitte | Consumer Business. [online] Available at: https://www2.deloitte.com/au/en/pages/consumer-industrial-products/articles/health-wellness.html [Accessed 24 Aug. 2018].

Dumas, D. (2015). The unlikely new capital of global chia production. [online] The Sydney Morning Herald. Available at: https://www.smh.com.au/national/the-unlikely-new-capital-of-global-chia-production-20151021-gkf357.html [Accessed 25 Aug. 2018].

Foss, J. (2014). Building a global supply chain from farm to consumer. [online] Ausgrainsconf.com. Available at: http://ausgrainsconf.com/sites/default/files/files/John%20Foss%20-%20Chia%20Co.pdf [Accessed 25 Aug. 2018].

Iriworldwide.com. (2018). 2017 New and Emerging Snacking Trends. [online] Available at: https://www.iriworldwide.com/IRI/media/video/2017%20SNAXPO%20IRI%20%20Emerging%20Trends.pdf [Accessed 28 Aug. 2018].

Iacobucci, D. (2013). MM4. Mason, Oh.: South-Western College Publishing, pp.223-226. [Accessed 23 Aug. 2018].

Loyer, J. (2016). Communicating superfoods: A case study of maca packaging. Proceedings of the Oxford Symposium on Food and Cookery, 2015, Oxford, UK. In print. [Accessed 24 Aug. 2018].

Maria (2017). What Are 5 C’s Of Marketing ?. [online] Blog.essaycorp.com. Available at: https://blog.essaycorp.com/5-cs-marketing/ [Accessed 24 Aug. 2018].

Mohd Ali, N., Yeap, S., Ho, W., Beh, B., Tan, S. and Tan, S. (2012). ‘The Promising Future of Chia,Salvia hispanica L.’, Journal of Biomedicine and Biotechnology  [online] Available at: https://www.ncbi.nlm.nih.gov/pmc/articles/PMC3518271/ [Accessed 26 Aug. 2018].

Naturalhealthmag.com.au. (2018). The Chia Co – Australia’s first sustainable chia farm | Nourish magazine Australia. [online] Available at: https://www.naturalhealthmag.com.au/nourish/chia-co [Accessed 24 Aug. 2018].

Schmidt, D. B. (2000). Consumer response to functional foods in the 21st century. AgBioForum, 3(1), 14-19. Available on the World Wide Web: http://www.agbioforum.org.

The Conversation. (2017). Company results: how competition is transforming Australia's retail sector. [online] Available at: http://theconversation.com/company-results-how-competition-is-transforming-australias-retail-sector-72844 [Accessed 28 Aug. 2018].

Bailey, M. (2015). Ten million Chia Pod sales a sign of changing tastes. [online] Financial Review. Available at: https://www.afr.com/it-pro/ten-million-chia-pod-sales-a-sign-of-changing-tastes-20150302-13sqpt [Accessed 27 Aug. 2018].

Nielson Global Health and Wellness Report. (2015). We are what we eat. Healthy Eating Trends Around the World. [online] Available at: http://www.nielsen.com/content/dam/corporate/us/en/reports-downloads/2015-reports/january-2015-global-health-and-wellness-report.pdf [Accessed 26 Aug. 2018].

Spring Superpower, Brought To You By Superfoods Across The Store. [online] Available at: http://www.nielsen.com/us/en/insights/news/2017/spring-superpower-brought-to-you-by-superfoods-across-the-store.html [Accessed 24 Aug. 2018].

Orona-Tamayo, D., Valverde, M. and Paredes-López, O. (2018). Chia—The New Golden Seed for the 21st Century. [online] sciencedirect. Available at: https://doi.org/10.1016/B978-0-12-802778-3.00017-2 [Accessed 30 Aug. 2018].

Ullah, R., Nadeem, M., Khalique, A., Imran, M., Mehmood, S., Javid, A. and Hussain, J. (2015). Nutritional and therapeutic perspectives of Chia (Salvia hispanica L.): a review. Journal of Food Science and Technology, 53(4), pp.1750-1758. [Accessed 25 Aug. 2018].

Valentina Resetarits, B. (2018). A Harvard professor just busted the myth that coconut oil is good for you, calling it 'pure poison'. [online] Business Insider Australia. Available at: <www.businessinsider.com.au/harvard-speaker-busts-coconut-oil-health-myth-calling-it-pure-poison-2018-8?r=US&IR=T > [Accessed 23 Aug. 2018].