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Trader Joe’s

Trader Joe’s is a private company in the retail (grocery) industry, the headquarters of Trader Joe’s are located in Monrovia in California in the United States (Lewis, 2005). Surveys conducted in mid 2013 indicated that the company has roughly four hundred and seventy one outlets, with majority of the stores being located in Southern California; Joy Coulombe is the founder of Trader Joe’s in 1958, the Chief Executive Officer is called Dan Bane while the current owner is called Theo Albrecht (Traderjoes.com, 2013). Trader Joe’s specializes in organic foods, private label staple foods and specialty products; the organization has more than twenty thousand employees, Trader Joe’s Company is in the consumer and grocery market (Lewis, 2005).

Types of markets

Markets are mainly analyzed through the end-consumer, through the product itself or through both factors. Most markets are differentiated through consumer markets and industrial markets. Consumer market considers services and products that bought by the consumers for family or own use. Consumer markets goods are categorized into FMCG (Fast Moving Consumer Goods), consumer durables, soft products and services. FMCG are characterized with products of low unit value, bulk and fast repurchase (Kahn & McAlister, 2007), products sold by Trader Joe’s fall under FMCG. Consumer durables are products characterized with high unit value and low volume value; such products are further subdivided into white goods and brown goods. Examples of white goods identify with cookers, microwaves and fridges and the like; while brown goods identify with personal computers, DVD players and game consoles among others. Maximizing gross revenue is made possible through proximity of the products to the consumers in the right time.

Soft goods are almost similar to products related to consumer durables, difference is in that soft goods wear out quickly, an indication that soft goods are characterized with a shorter replacement cycle; under this category, fashion plays a critical role, it is important for the traders to understand the choices of consumers in attempt of increasing sales and profits (Kahn & McAlister, 2007), examples of soft goods are shoes and clothes. Services category includes childcare, hairdressing and dentists among others. Service industry goes with quality and accessibility of the services offered by the companies to consumers.

Industrial markets sell products among business entities, where the goods do not aim at the consumer markets directly. Such products offered in finished goods like computer systems and office furniture; selling components and raw materials like timber, steel and the like; and selling services that target at other businesses like security, legal services and waste disposal among others. Comparing industrial markets and consumer markets requires different approach in marketing mix and marketing strategy, industrial market targets at small levels of potential buyers as compared to the consumer market that target at mass market considering potential consumers (Weinstein, 2012).

Increasing sales in (FMCG), consumer durables, soft goods and services can be enhancing by shifting marketing schemes from not only attracting new customer base but also in developing mechanisms of maintaining the existing customer base, which is useful in encouraging customer loyalty. (FMCG), consumer durables, soft goods and services industries can heighten sales through setting up programs related with sales incentives, encouraging up-sell by the sales staffs, allowing customers to enjoy inside scoop, enhancing tier of customers, setting up programs associated with rewards and distributing free samples to the aimed market (Weinstein, 2012).

Assuming that Trader Joe’s in areas of operations just target new customers, exhausting the customer base, does it mean that Trader Joe’s will pack and go to other regions? This is not always the case, Trader Joe’s must have strong emphasis on enhancing customer loyalty through developing strategies, mechanisms and systems that allow the customer base feel confident shopping at Trader Joe’s one more time (Bryan, 2012). There are diverse models of retaining customers that Trader Joe’s may engage; consumers are vital in Trader Joe’s, in that customers to Trader Joe’s are the lifeline to respect, profits and reputation. Trader Joe’s should factor in that for every customer lost, there are possibilities on the business losing similar levels of customers, hence proving it vital to preserve the existing customer base, as the customers commercialize Trader Joe’s through the word of mouth (Lewis, 2005).

FMCG is also referred to as CPG (Consumer Packaged Goods), since the products are sold out at low monetary value and at the same time are fast moving products. Profit margins are very small, although the products are sold out to the consumers in huge quantities (Kahn & McAlister, 2007). FMCG is classified under the high volume and low margin businesses, other examples other than Trader Joe’s identify with Metro group, Wal-Mart, Unilever, Nestle and Coca-Cola among others.

Retail Goods in FMCG’s are used up or replaced within a short span of time, an indication that the products have limited shelf life, since some products are highly perishable, increasing the sale margins involves setting efficient distribution channels and market the products aggressively (Weinstein, 2012). Another model of heightening sales is by Trader Joe’s researching the motives and wants of the target market and developing strategies involved in meeting the specific motive and desires of the target customers.

Trader Joe’s can retain customers by keeping the existing customer base happy, training workforce on issues of customer care, allowing feedback from the consumers; and settling challenges or problems with consumers through a prompt manner. Trader Joe’s business falls in the FMCG category, which indicates that regular flow of customers is useful in the profitability and sustenance of Trader Joe’s (Weinstein, 2012). Customers are offered with special incentives that encourage consumers come back for more purchases; regular consumers are extended with discounts or rewards programs that increase sales. Keeping the customers happy can be enhanced by Trader Joe’s in showing consumers on their value and importance being part and parcel of the company. Employees are encouraged to know the customers by names and at the same time greet them once they get into the store, it is also important to know customer’s preferences (Kahn & McAlister, 2007).

Customer care is critical in increasing sales in FMCG industry; Trader Joe’s has the mandates in motivating employees in valuing the customers. Employees should be subjected to ‘‘Customer Favorite’’ (Bryan, 2012) and ‘‘Worker of the year’’ (Bryan, 2012) awards. The organizational culture within Trader Joe’s must emphasize on customer retention. Feedbacks for the workforce and the consumers are useful in changing the business offered by Trader Joe’s, this is enhanced through emails and feedback cards among other systems. It is worth to actively listen to the complaints of the customers as the organization tries to cope with changing choices and wants of the target customers (Bryan, 2012).

Trader Joe’s must have mechanisms of settling disputes with the consumers promptly manner. This is made possible by listening actively to customers, devising methods of ensuring customer is happy and allowing a positive attitude in handling the issues. It is worth letting the customers know and understand that a company is happy serving consumers (Bryan, 2012).

Conclusion

Trader Joe’s falls under the FMCG, and characterized with high volumes of sales and low margins of profit per item. Retaining customers in Trader Joe’s critical for the profitability and sustainability of the organization, an indication that depending on how an organization treats customers is critical for the success or failure of a company (Lewis, 2005).

References

Bryan, D. (2012). How To Attract, Engage And Retain Customers With Mobile Marketing. New York: Advantages of Social Networking.

Kahn, B. & McAlister, L. (2007). Grocery Revolution: The New Focus on the Consumer. Upper Saddle River, New Jersey: Prentice Hall.

Lewis, L. (2005). The Trader Joe’s Adventure: Turning a Unique Approach to Business into a Retail and Cultural Phenomenon. New York: Kaplan Publishing.

Traderjoes.com. (2013). Trader Joes. Retrieved September 05, 2013, from Traderjoes.com: http://www.traderjoes.com/

Weinstein, A. (2012). Superior Customer Value: Strategies for Winning and Retaining Customers. London: CRC Press.