Table of Contents
This is the beginning
A brief overview
Trader Joe’s Market Orientation
Priority of the Customer
Company Organization
Market Response
The Brand, Trader Joe
The Range of Products
Shopping Experience
In conclusion,
Cites
Here is my introduction
This report will look at Trader Joe’s California specialty store, a small chain with only 474 stores, which has become a staple American tradition. How is Trader Joe’s able to stand out from large competitors such as Whole Foods? Their market orientation is what makes them stand out from other big-name competitors like Whole Foods. It also enables them to be customer-driven. A unique product range of private label products and an exceptional shopping experience have helped to make TJ’s a trusted brand with loyal customers. A Brief OverviewTrader Joe’s is a quirky and cool company that traces its roots back to California. It was established in 1967 by Joe Coulombe, (Trader Joe’s, 2018,). The name invokes images of south sea traders. The company’s trademark nautical motif has remained consistent over the years. The majority of TJ’s stores now sell private label products, which has helped them build loyal customers. TJ’s stores target higher educated shoppers because they offer a more diverse product selection. It is probable that the store has expanded its offerings to healthier, (e.g., organic) products due to its California roots. TJ’s maintains the specialty store is it, but its image of itself as an unpretentious, quality-oriented, health food shop has made it stand out from Whole Foods.
Trader Joe was founded with the mission to offer quality food at a reasonable price. Its mission was to create value and provide great food for customers. They stated that they only focus on the important things — great food and great prices = value. TJ’s can offer low prices every day because they use private label products that they purchase directly from suppliers. Volume sales speak for themselves as to the quality of these items. Supermarket News reported that TJ’s sold 13.3 billion US dollars in 2017 according to Supermarket News. TJ’s achieved 13.3 billion US dollars in sales in 2017, despite Whole Foods still being the market leader with $16 Billion USD. This is impressive considering that TJ’s does not sell any national brands, and their prices are low. Trader Joe’s is a well-known brand that has been loved by many adventurous foodies over the years. The shelves are continually being updated with new products, while some old favorites are being retired. These Trader Joe’s treasures aren’t the only reason customers keep coming back. The company’s superior customer service, and its casual, cool style have truly revolutionized the shopping experience. Trader Joe’s Market Orientation and Trader Joe’s Marketing Strategy. Trader Joe’s integrated customer-driven marketing strategy allows it to offer value to customers not only through its products, but also through its store culture. Armstrong (2016) and Kotler (2016) define success as companies that have a passion for understanding customer needs and helping them to satisfy them. This motivates everyone within the company to create lasting customer relationships and value. TJ’s is a great example of this, thanks to their customer-focused approach and their company structure. Customer Focus According to Kohli & Jaworski (1990), customer-oriented strategies must be customer-focused. TJ’s success relies on the strong relationships it develops with customers. These relationships are TJ’s primary source of market intelligence. Matt Sloan VP Marketing Product, TJ’s says they don’t use customer data and instead “rely on their people to facilitate that kind of customer intimacy” (Yohn, 2018,). This strategy has proved to be remarkably successful over time. TJ’s interacts with its customers through their helpful, knowledgeable, and friendly staff. Customers can leave feedback online, at the store in comments boxes or by hand to a staff member. This allows Trader Joe’s stores to tailor their offerings to each customer’s needs. TJ’s dedication to customers is displayed in its return policy. It states that “Our product guarantee: We tried it!” It was a great product! It’s a great product! TJ’s can receive feedback from customers and it builds trust between them. Narver (1990), and Slater (1996) define customer orientation to mean “a sufficient understanding among one’s target customers to enable one to create superior value to them continuously.” TJ’s can have a comfortable, open dialogue with customers to understand their needs and provide the best service. TJ’s uses no large marketing strategies because of this face-to–face customer-driven approach. Tara Miller, head of marketing, stated that the demo-station, where samples of products are given out at every store, is the company’s biggest marketing expense. Trader Joe’s also produces a monthly flyer called “The Fearless Flyer”, which tells interesting facts and stories about new products. TJ’s relies on word-of mouth advertising from its customers to market their products. This is a sign of how successful and strong its customer-centric approach was. Company StructureTrader Joe is proud of its high standards in customer service. This is due to an entire company effort to promote the company’s market-oriented philosophy. According to Jaworski and Kohli (1990), market orientation can only be successful if it is communicated clearly to all employees and is followed by everyone. TJ’s hires employees who share their market orientation and will live up to the company’s values. Training is provided to all employees that covers communication, teamwork and product knowledge. TJ’s commitment to employees is crucial for their high-quality customer service. Kohli & Jaworski (1990), stated that market orientation requires coordinated effort. The greater an organization’s connections across departments, then the greater their market orientation. TJ’s encourages “togetherness” by allowing employees to share responsibility for all tasks, including shelf stocker and cashier. They pay great wages and give employees the chance to develop their careers. Each supervisor was actually once a bagger. Even Dan Bane, the CEO, still works shifts in stores. The customer-focused philosophy of Trader Joe is instilled in employees from the ground up and continues to be with them throughout their career, allowing them implement it at each step. Trader Joe’s market orientation appears to have helped to create a positive environment that improved the organization’s internal functioning and allowed it to be more focused on its customers’ needs. Kohli & Jaworski (1990), suggest that a market orientation provides a unified focus for individual and departmental efforts, which in turn leads to superior performance. Market-oriented strategies require that you respond to changing customer needs. (Kohli und Jaworski, 1990). Trader Joe’s lack of market information and minimalist approach seems to be a hindrance to their ability to respond to the market. They have evolved their product range to meet changing customer preferences over the years. TJ’s realized that customers are increasingly concerned about their health and began to require non-GMO private label products. TJ’s offers an extensive selection of organic items, even though it is not considered a healthy food store. They have been able to satisfy their existing customers and appeal to a wider market by responding to market needs. Trader Joe’s – BrandTrader Joe’s’ unique core product is its food. It also offers an augmented product that enhances the customer’s shopping experience. Baines et al. According to Baines et. al., (2017), successful brands leave lasting impressions by their communication and the association of psychological feelings or emotions. Trader Joe’s does this because they treat their store like a brand. It’s not only their products. TJ’s has the product line. TJ’s stocks staple products that are commonly purchased and readily available at most grocery stores. These goods are often bought without much thought and the brand is not as important. TJ’s creativity is what makes them stand out from the competition. Not only do they offer the usual staples, but they also offer original, never-before-seen versions (e.g., chili tortillas vs. regular corn tortillas, or cookie butter instead of peanut butter). These products are unique and help Trader Joe’s stand out from the rest, thereby strengthening their brand. TJ’s appears to be able to comprehend the Product Lifecycle (PLC), which describes the process a product experiences from its conception to its final decline. TJ’s website states: “If an product doesn’t perform in our stores, it is thrown out to gangway for a new product” (Trader Joe’s (2018) TJ’s success is dependent on their ability to understand the product lifecycle. Their brand has been built around a constantly evolving product range. Kowitt (2010) says that “Trader Joe’s genius is keeping a step ahead” of Americans’ ever-expanding palates by offering new and interesting products. There are many steps involved in new product development, starting with idea generation and ending up at commercialization. Some new product ideas are generated at Trader Joe’s by customer input. TJ’s strives to anticipate customer demands and provide customers with products they have not yet discovered. Baines et. al. Al. (2017) stated that product development is a reflection of an organization’s approach to customer relations, its risk tolerance, its strategy, culture and strategy. Product development is influenced by the nature of Trader Joe’s customer relationship. TJ’s is able to develop something new and potentially risky due to the trust they have in their loyal customers. Trader Joe’s hires “product designers” who travel all over the globe to find traditional, delicious, and interesting foods that they can translate onto their shelves. This has allowed Trader Joe’s a wide range of products that reflect the diverse flavors from around the globe, including India, China, Mexico and Mexico. The company creatively labels the products sourced from different regions or countries with names such as Trader Giotto (Italian food), Trader Ming (Chinese food) and Trader Jose (Mexican foods). Packaging is more than a nod towards the origins of the food. It is also memorable and strengthens the brand. The Shopping ExperienceAs important as tangible products, an company’s augmented product can also be a key factor in their success. TJ’s augmented products are the basis of its shopping experience. Kowitt (2010) describes Trader Joe’s a fun, quirky discovery space that transforms food shopping in a mundane task into a cultural experience. TJ’s is like going to a fancy farmer market. However, the atmosphere remains casual and friendly. All employees wear Hawaiian-style shirts. Store supervisors call their “mates” while managers are called “captains”. Crew members communicate by using a maritime whistle, which is not intercom. For a chance to win a prize, children can race around looking for hidden stuffed animals. Local artists create chalk signs and descriptions. The employees are always available to answer questions, but they are not salespeople. Baines et. al. According to (2017), by creating positive emotional connections with brands, consumers can find reassurance from their brand purchase (p. Trader Joe’s has created a unique environment where customers can associate their brand with them, which encourages them back. Future Trader Joe’s is a chain of grocery stores in the neighborhood. This is the biggest challenge of Future Trader Joe’s – how do you grow while staying small? The product variety is great, but the real success of the company is in the customer service. They risk losing their customer appeal and being on the same level with generic grocery store chains as well health food grocery retailers. They need to preserve the distinctive qualities that have made their brand so successful. It is quite remarkable that Trader Joe’s has achieved such incredible success. TJ’s might appear niche-oriented and only serve a specific segment from the outside. The reality is that it’s a niche market that caters to everyone. Their success is a testament to the power and flexibility of the market, and more importantly, the power of genuine customer service. They stand out from every other grocery chain by offering an exclusive and diverse selection of tasty delights, as well as an easy and fun shopping experience. Citing sources
Baines, P., Fill, C., & Rosengren, S. Marketing (2017). Oxford University Press.
Kotler P. & Armstrong G. (2016). The fundamentals of marketing encompass a variety of strategies and techniques used to promote and sell products and services. 16th ed.
Harlow. Pearson Education Limited of the U.K. Journal Articles Kohli A., Jaworski B. (1990). Market Orientation. Research Propositions, the Construct, and Managerial Impacts. Journal of Marketing. 54(2).
Mallinger M., Rossy G. (2007). The Trader Joe’s Story: How corporate culture affects business strategy. Graziadio Business Review, [online] 10(2). Available at: https:// gbr.pepperdine.edu/2010/08/the-trader-joes-experience/ [Accessed Nov. 2018].
Narver J. & Slater S. (1990). The Effect of market orientation on business profitability. According to a study published in the Journal of Marketing, 54(4), it was found that (summarize main points of the article). Kowitt, B. has websites. (2018).
The secret world of Trade Joe’s – August 23, 2010. [online] Archive.fortune.com. Available at: http://archive.fortune.com/2010/08/20/news/companies/ inside_trader_joes_full_version.fortune/index.htm [Accessed Nov. 2018].
Traderjoes.com. (2018). Trader Joe’s. [online] Available at: https:// www.traderjoes.com/our-story [Accessed Nov. 2018]
Supermarketnews.com. (2018). Supermarket News. [online] Available at: https://www.supermarketnews.com/data-table/trader-joes-co-0 [Accessed Nov. 2018].
