Trader Joe's

Topics: Whole foods, Organic food, Grocery store Pages: 8 (1605 words) Published: April 1, 2014

Trader Joes Case

Jiawen Duan
Table of Contents
Executive Summary
Recommendation 1: Online Market
Recommendation 2: Changing marketing strategy
Recommendation 3: Improve technology in stores
Appendix A----- PESTEL Analysis
Appendix B------Five Forces Analysis
Appendix C-----TOWS (SWOT) analysis
Appendix D----Competitor Overview
Appendix E-----Weighted Competitive Strength Assessment

Trader Joe’s: Executive Summary
Joe Coulombe founded Trader Joe’s in 1967 in Pasadena, California. The original mission is that “Trader Joe’s is for overeducated and underpaid people, for all the classical musicians, museum curators, journalists”. Trader Joe’s offered natural and organic goods, and private label items. Trader Joe’s mission is to focus on providing great value to customers by having competitive prices on all their products. They try to bring a good shopping experience to the customer. The selection of privately labeled products is large. Its weaknesses are that its store locating is not in local urban areas, and it also lacks presence on social media platforms. After conducting a thorough analysis of the industry, competitors, and the company itself, I have developed two recommendations that will enable Trader Joe’s to gain profitability and increase their market position. My recommendations for Trader Joe’s following course of action are: Recommendation 1: Online Market

Recommendation 2: Changing marketing strategy
Recommendation 3: Improve technology in stores
With the analysis I come up with three recommendations. These recommendations are detailed in the following section. The supermarket industry is a highly competitive industry. Many companies with viable resources and capabilities are fighting for market share.

Recommendation 1: online market
Internet plays an important role in modern lives. More and more people like shopping online. The cost of online operation is low. Because of the store location, a lot of people do not have the access to the Trader Joe’s product. “Many customers launched online efforts to persuade Trader Joe’s to open a store in their region. Customers created fan pages, wrote cook featuring meals prepared with the firm’s products, and waited in line for hours before a new store grand opening”. These facts indicate that consumers enjoy shopping at Trader Joe’s. To open a new store need prepare a lot. It also needs a lot of funds. Trader Joe’s has more than 400 locations across 37 states. Many places still do not have even one Trader Joe’s store. Online store will let more people who like Trader Joe’s shop here. It also requires fewer funds than local stores. According to Competitors overview (Appendix D), Whole Food does not offer online shopping either. This is a good chance for Trader Joe’s to develop more customers. The Five Forces (Appendix B) indicates that the bargaining power of buyers is moderate to high. Customers have a lot of choice of organic food. To operate online makes Trader Joe’s more reachable to consumers. By investing in online market, Trader Joe’s will be able to take full advantages of its operation strategy and brand image already establish.

Recommendation 2: Changing marketing strategy
When Trader Joe’s was founded in 1954, the company avoided the traditional supermarket advertising method, such as coupon-filled circulars in the newspapers or television commercials. It used a customer newsletter, which provide information on certain products and introduced new products. It also used short radio ads. The company did not change its advertising method. Trader Joe’s never ran television ads. Customers typically learned about Trader Joe’s though word of mouth.

The SWOT analysis (Appendix C) indicates that Trader Joe’s need to increase its media exposure. Television ads are more attractive to consumers than newsletter or radio ads. Consumers can see and hear the information of products. It...
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