A Management Report on International Marketing of Blue Apron Organization
Blue Apron is a leading organization in the food industry offering recipes and food delivery services. The firm was started in 2012. The report analyses the macroeconomic environment of Mexico using a PEST analysis. The microeconomic environment has also been evaluated with a focus on competitors, suppliers, and buyers. Findings are that buyers, suppliers, and competitors all have weak influence in the market. The organization’s marketing mix has been analyzed with a focus on the 7Ps of marketing. Considering that the firm intends to go into the Mexico markets, they should adopt the adaptation approach in all their marketing strategies in the country.
Table of Contents
Executive summary 2
1.1. Overview of Blue Apron Organization 3
1.2. Macroeconomic Analysis of Blue Apron Organization 4
1.3. Microeconomic Evaluation of Blue Apron Firm 4
2. Analysis of the Buyers Behavior and the Target Profile 5
2.1. Segmentation of the Market 5
2.2. Consumer Behavior in Mexico 6
2.3. Target Profile 6
3. Marketing Communication Strategy 7
3.1. Promotion of Blue Apron in Mexico 7
3.2. Preferred Marketing Strategy in Mexico 8
4. Marketing Mix 9
4.1. Marketing Mix 9
4.2. Adaptation Approach of the Marketing Mix 10
1. Analysis of the Environment
1.1. Overview of Blue Apron Organization
The Blue Apron organization is a recipe and fresh delivery service firm that facilitates chefs at different levels to prepare incredible meals from home (Blue Apron, 2018). Blue Apron clients depend on the enterprise to provide various recipes and ingredients to meals so that the consumer is just left with the exciting duty of cooking satisfying and creative meals (Blue Apron, 2018). The Company was started in 2012. Currently, an excess of five million meals is supplied to various Blue Apron clients monthly. The firm’s headquarters are situated in New York City. The firm has over 5000 staff. Net Revenues realized by the firm in 2018 stood at $881 million (Blue Apron, 2018).
1.2. Macroeconomic Analysis of Blue Apron Organization
Political. Various jurisdictions have different rules that the firm has to adhere to. An example is the California state assembly bill that aimed at increasing training in food safety to comprise of staff in the developing delivery space of meal-kits. This bill intended to ensure that staff of the various businesses get a food handler card. With the firm adhering to local regulations and knowledge of dynamism in various jurisdictions, the expansion plans for the firm in Mexico are ideal.
Economic. Economically, there is a general uptrend in Mexico’s GDP. The countries GDP has been growing at 4.5% annually (Statista, 2019). The country has the 15th largest economy worldwide (Statista, 2019). This implies that the economy is performing relatively well. The corporation tax in the country stands at 30% (Statista, 2019). In the United States, the real disposable income of all households has been significantly increasing. The increase has been by 0.7% and 0.6% in 2018 and 2019 respectively. This positively affects Blue Apron’s overall revenues and has a positive impact on the firm’s decision on its expansion plans in Mexico.
Social. There has been a rising concern on individual health in Mexico which is related to what is consumed. People are increasingly being conscious of their diets and moving to more organic and low-calorie diets. Blue Apron having low-calorie meals and recipes makes it a viable option for the firm to expand to Mexico.
1.3. Microeconomic Evaluation of Blue Apron Firm
Suppliers. The power of suppliers in the market in the Blue Aprons industry is generally low. This is supported by the fact that there are many suppliers in the industry compared to firms that are buying. Therefore, the suppliers cannot control prices in the market. The costs incurred by firms in the industry for changing their suppliers are low and are standard (Eskandari and Miri, 2015). This, therefore, makes it easy to change from one supplier to another at ease in the industry. Regarding upward integration, suppliers present in the firm’s industry do not display any threats whatsoever. From the evaluation above, the supplier power in the industry is therefore generally low.
Competitors. Blue aprons competitors are Sun Basket, Home Chef, Door Dash, Grub Hub, and Plated. Their competitors are relatively few compared to the market they are serving and any changes in their commodities pricing or any move whatsoever in the market cannot go unnoticed. All products produced by the Blue Apron firm and its competitors are distinct and unique (Eskandari and Miri, 2015). A client cannot ditch one firm’s commodities for another company with the same expectations. This is due to the differences in commodities. With this, competition and rivalry among involved organizations are weak hence low competing force in the industry.
Buyers. Buyers’ power in the industry is low. The number of firms providing the Blue Apron service in the market is relatively few compared to the buyers seeking the service and commodities. With this, buyers are controlled on the overall organizations that they can choose. With this limitation, buyers have little power in setting prices in the market. The operating firms fix the prices as they have a higher power in the market compared to buyers. Commodities in blue Aprons industry are distinguished. With this, buyers cannot move from one firm to another seeking a commodity that will similarly fulfill their expectations. In the total number of firms, they can select. This justifies the low power that is held by buyers in the Blue Aprons industry.
2. Analysis of the Buyers Behavior and the Target Profile
2.1. Segmentation of the Market
Market segmentation is based on four aspects. These aspects are demographic, behavioral, psychographic, and geographic segmentation.
• Mexico’s demography is composed of a young population with a median age of 28 years (French, 2017). The country’s population growth rate is 1.1%.
• The geographical location of Most Mexicans is in urban areas and are mainly located in the states of Veracruz and Jalisco (Statista, 2019). These cities are composed mainly of working-class individuals with decent salaries.
• The consumer behavior of most Mexicans is tied to the quality of a commodity, its price, and its practicality. Mexicans behavior of consumption is tied to timesaving commodities. An example is a meal ready to eat meals is a trend since 64% of all Mexicans feel they lack adequate time to prepare authentic meals (Statista, 2019). There is also an increased demand for organic commodities where more Mexicans are moving to healthier diets.
• On psychographics, Mexicans have a good attitude towards foreign brands and would openly purchase them.
2.2. Consumer Behavior in Mexico
The criteria for purchasing commodities in Mexico are based on prices, time-saving, and quality. The Mexicans also highly value customer service in informing their purchase decisions. There is a widespread use of e-commerce in making purchases in Mexico. Over 85% of buyers in Mexico made at least one purchase of a commodity through online platforms (Sarmugam and Worsley, 2015). The biggest beneficiaries being Walmart, Mercado, and Amazon. Consumers in Mexico are ranked among the most loyal to various brands worldwide. Most buyers are always seeking to have a good relationship with a firm or a brand. Among the most popular consumer trends are timesaving services and commodities. An example is already prepared meals. This is because over 64% of Mexicans consider they lack time to prepare authentic dishes (Statista, 2019).
2.3. Target Profile
A target profile is essential in ensuring that a firm can communicate with prospective clients in a specific market. For the Blue Apron organization, they intend to roll out their operations in Mexico. The organization’s target in the Mexican market should be a behavioral segment of the market. The firm should capitalize on Mexican behavior in the markets. With the desire for healthier diets and more organic meals, the firm should target this segment by coming up with organic and fewer calorie foods (Sarmugam and Worsley, 2015). In line with Mexicans behavior, the firm should provide quality meals, as most individuals prefer ready to eat meals.
3. Marketing Communication Strategy
3.1. Promotion of Blue Apron in Mexico
With Blue Apron intending to roll out its activities in the Mexican market, they need to employ a marketing strategy that will best meet their objectives. The firm will utilize a variety of approaches in trying to get a share of Mexico’s food industry. Considering that there exist many competitors, the firm has to stand out and be rigorous in its marketing so that they can attract clients. Currently, Blue Apron’s marketing mix has been instrumental in its success (Blue Apron, 2018).
The organization’s products are differentiated highly hence ensuring that the features on their products are not available in other commodities. The firm sells commodities that are of higher quality hence justifiable for the high prices. The firm has a wide variety of products; this allows customers to choose from the available variety. On pricing, the firm uses a competitive strategy in pricing (Blue Apron, 2018). Commodities sold online have additional costs hence being pricier.
The firm also utilizes bundle pricing. Here commodities are bundled and are sold at lower prices. Commodities from Blue Apron are sold through two different marketing channels. The channels are direct sales to consumers and the second is selling to wholesalers who sell to major retailers than to the consumers. The organization utilizes an Omni-channel system of distributions through this system, offline and online stores are integrated enabling the consumer to easily access commodities (Saidani and Sudiarditha, 2019).
In promoting its commodities, Blue Apron utilizes various approaches. The firm uses traditional methods of promotion. These include radio and television adverts. Social platforms are also used in promotion efforts. The firm also uses personal selling and sales promotion in its promotion efforts.
3.2. Preferred Marketing Strategy in Mexico
The firm should embrace social media marketing to attract consumers in Mexico. Considering there are similar businesses in Mexico, the firm should use social media and communicate a message of unique, quality products where customers will have value for money on its commodities (Solberg, 2017). This approach will be relying on the notion that consumers will be attracted to a leading brand globally offering new commodities and services.
The firm uses a sales promotion strategy as part of its marketing efforts in Mexico. To gain ground in the new market the firm should come up with various sales promotion strategies. An example is having a free shipping service where customers enjoy free shipping for any purchases made on their websites. Discounts on selected commodities would also be ideal in marketing the firm’s activities in Mexico. Regarding its placement strategy, the firm should use a different approach compared to their current approach. They should utilize personal selling, engage large retailers in Mexico, and sell to them (Abril and Rodriguez-Canovas, 2016). Large retailers are exposed to a huge market share and therefore would be ideal in making sales. The firm should collaborate with online retailers such as Amazon who will provide a readily online platform to ensure purchases of its commodities (Rao-Nicholson and Khan, 2017). The firm should construct a message where it will factor creating awareness, triggering the interest of commodities, creating a desire that will make a consumer get into action which is buying. The message should be offering, unique and quality goods where value for money is guaranteed. Social platforms would also be ideal in promoting the product in Mexico considering that many consumers use social platforms (Abril and Rodriguez-Canovas, 2016). They should also use mass platforms like television in marketing their commodities.
With Blue Apron going into the Mexican markets, the firm has to cope with new demographic and cultural variations on how they handle its promotional activities. The business should consider foregoing its universal goals, wants, and needs and adapt and adaptation approach to marketing. The business should consider tailoring its marketing to attract the demographic and cultural specificity of a consumer in the Mexican markets (Samiee and Chirapanda, 2019). Considering that meals in Mexico are different from the USA, the firm should consider developing commodities that are best suited to the cultural diversities in Mexico. This is also realized by changing their pricing, placement, promotion, and product design techniques.
4. Marketing Mix
4.1. Marketing Mix
Under Blue Apron’s marketing mix, people, physical evidence, and processes have been essential in the organization’s growth and success. Blue Apron organization has individuals who are working in its sales department who play a very crucial role in the firm’s promotional activities. These individuals are trained to be persuasive; however, they show a lot of respect to their clients while considering their preferences. The firm has individuals in the customer service unit. These individuals guide any issues through various processes of ensuring that any issues raised by consumers. These individuals also respond to any queries regarding commodities purchased. Blue Apron has individuals who work with its suppliers in obtaining raw materials’ they play a very crucial role in improving and maintaining final commodities produced (Saidani and Sudiarditha, 2019). The firm has individuals who work in various retail shops. They are vital in helping consumers through responding to any queries or aiding in picking commodities that suit their requirements best.
Processes are essential in ensuring the continuity of operations in an organization. Blue Apron has its processes operating efficiently which has been instrumental in its success (Blue Apron, 2018). The firm in a bid to ensure that commodities are available always in various retail stores incorporated various systems where retailers can communicate when low levels of inventory are experienced. More commodities are then provided to ensure continuity and consumers never lack. The organization has a delivery system online. Through this system, clients can make orders and based on the orders, relevant commodities are shipped through various service providers to the client (Sarmugam and Worsley, 2015). Blue Apron in involved actively in the research of various promotion activities so that they can further comprehend consumer needs.
Physical evidence is essential in distinguishing the firm’s commodities. Blue Aprons commodities are distinguishable from other firms’ commodities. This is attributed to the firm’s commodities having a unique appearance and packaging which is distinguishable from the rest. With this, it is easier for buyers to identify and purchase commodities easily in busier stores (Saidani and Sudiarditha, 2019). The organization’s website is easy to use for its users hence ensuring they can able to check and purchase the firm’s commodities easily.
4.2. Adaptation Approach of the Marketing Mix
The business should consider adopting an adaptation approach in its marketing efforts as they gear up to go into the Mexican market. Regarding people, Blue Apron should hire local people who will make up its sales team. The firm should train the sales individuals, customer service individuals and purchasing individuals (Stead and Hastings, 2018). This is because they are crucial in that consumers get the value of the firm’s commodities. The organization in its marketing efforts in Mexico should avail of various incentives to its salespersons. The incentives should come in the form of commissions or bonuses once targets are reached. This will boost their promotion efforts. The firm should hire an individual who is respectful to its consumers and commit to the firm. As they go into the Mexican market, the firm should adopt various innovative ways of improving various processes related to cost and efficiency. This would help in price reduction which would give the firm an edge in competition in the market (Saimee and Chirapanda, 2019). The organization should incorporate the use of computers in different processes to enhance efficiency and guarantee deliveries are made promptly to consumers.
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