2.0 Situation Analysis
Mixed Greens Salad Gardens is a start-up business. The greens have been well received, and marketing is now critical to its continued success and future profitability. MG offers a wide range of high-quality spring field salad greens. MG grows a wide variety of field greens including red leaf, arugula, radichio, mustard greens, endive, and chicory.
The basic market need is high-quality salad field greens with flexibility in production for both the consumer and commercial market.
2.1 Market Summary
Mixed Greens Salad Gardens possesses good information about the market and knows a great deal about the common attributes of our most prized and loyal customers. Mixed Greens Salad Gardens will leverage this information to better understand who is served, their specific needs, and how Mixed Greens Salad Gardens can better communicate with them.
Target Markets
Market Analysis
| Market Analysis |
| | | 2006 | 2007 | 2008 | 2009 | 2010 | |
| Potential Customers | Growth | | | | | | CAGR |
| Individual consumers | 12% | 12,000 | 13,440 | 15,053 | 16,859 | 18,882 | 12.00% |
| Restaurants | 8% | 28 | 30 | 32 | 35 | 38 | 7.93% |
| Other | 0% | 0 | 0 | 0 | 0 | 0 | 0.00% |
| Total | 11.99% | 12,028 | 13,470 | 15,085 | 16,894 | 18,920 | 11.99% |
2.1.1 Market Demographics
The profile for MG's customer consists of the following geographic, demographic, and behavior factors. Please note that Mixed Greens Salad Gardens has two target segment customers, individual consumers and restaurants.
Individuals:
Geographics
- The immediate target is the city of Eugene with a population of 130,000.
- A 20 mile geographic area is in need of the products.
- The total targeted population is 12,028.
Demographics
- Singles and families.
- Ages 25-50, this segment makes up 53% of the Eugene market according to the Chamber of Commerce.
- Have attended college or graduate school.
- Have a household income of more than $45,000.
- Tend to patronize higher-quality restaurants.
- Are cognizant about their health.
Behavior Factors
- Are willing to pay a premium for higher quality, tastier greens.
- There is value attributed to the more attractive presentation of a salad mix.
Restaurants (and their customers):
Geographics
- Eugene is the targeted population.
- A 45 mile geographic area.
Demographics
- Male and female.
- Single and families.
- Household income over $60,000.
- Tend to eat out at least once a week.
- Tend to patronize higher-quality restaurants.
Behavior factors
- Are health conscious.
- Enjoy a high-quality meal without the mess of making it themselves.
2.1.2 Market Needs
Mixed Greens Salad Gardens provides individuals and restaurants with high-quality mixed salad greens. MG seeks to fulfill the following benefits that are important to their customers.
- Selection: A wide choice of different greens with the flexibility to change crops mid-season.
- Accessibility: MG has a booth at the Farmer's Market held twice per week in Downtown Eugene, and also delivers once to twice a week to Eugene restaurants.
- Customer service: The patron will be impressed with the level of attention that they receive.
- Competitive pricing: All products will be priced competitive to true substitutes.
2.1.3 Market Trends
The market for mixed greens has exploded within the last five years. Explanations for this trend are:
- Market supply: The increase of supply has reinforced the demand. Within the last few years many farms that were producing general vegetables have moved to production of salad greens because of the increased margins and market demand.
- Presentation/appearance: Presentation as an element of the culinary experience has taken on more value as chefs have become more creative over the last several years.
- Health consciousness: Americans have become more health conscious and mixed greens have supported this goal as salad greens are inherently healthy and a salad mix is far tastier then the old standby of Romaine or Iceberg.
Market Forecast
2.1.4 Market Growth
In 2000, the national market for mixed greens reached $87 million in sales. This specific type of produce is forecast to grow at 8%, far greater than the rest of the agricultural industry.
Americans are learning to appreciate the more sophisticated taste of this health food. Therefore taste and health consciousness is what is driving this demand. This demand can be seen by the increase of salad offerings by finer restaurants.
Lastly, presentation is becoming a variable in gauging the quality of a meal, and a mix for salad greens is very aesthetically pleasing.
Target Market Growth
2.2 SWOT Analysis
The following SWOT analysis captures key strengths and weaknesses within the company and describe the threats facing Mixed Greens Salad Gardens.
2.2.1 Strengths
- Flexibility in meeting restaurant's needs.
- High-quality product offerings that exceed competitors offerings of price, quality, and service.
- Higher than industry margins due to production efficiencies.
2.2.2 Weaknesses
- Mixed Greens Salad Gardens lacks brand equity.
- A limited marketing budget to develop brand awareness.
- The decreased degree of flexibility when near full production.
2.2.3 Opportunities
- Growing market with a significant percentage of the target market still not aware that Mixed Greens Salad Gardens exists.
- The ability to develop long-term commercial contracts which should lower costs associated with production.
2.2.4 Threats
- An out of state, already established competitor that has decided to make customer service and flexibility their selling point.
- A health scare that questions the safety of mixed greens.
- Poor weather which will lower field yields.
2.3 Competition
There are three types of competitors that MG faces:
- Supermarkets: These stores sell a salad greens mix to consumers. The advantage of the supermarket is convenience. There are many supermarkets around the city and they are open many hours during the day. Their disadvantage is price and quality. The quality is sub par to the offerings of MG and other similar local farmers. The cost is higher, usually 15% more.
- Similar local farmers: These are very similar operations to MG, sometimes larger or smaller. There appears to be room in the market for multiple farmers as most of the farmers sell out their products each day at the farmers market.
- Large distributors: An example of this would be Food Service of America (FSA) which buys a wide variety of products and quality of produce from farmers and distributes them to restaurants. The produce is not usually local and is a few days older from the field compared with the local farmers. The price is comparable and the quality can be comparable, but not necessarily. The disadvantage of a food distributor is the lack of flexibility relative to a local grower when serving local customers.
Growth and Share Analysis
| Growth and Share |
| | | | |
| Competitor | Price | Growth Rate | Market Share |
| Competitor | $0 | 0% | 0% |
| Competitor | $0 | 0% | 0% |
| Competitor | $0 | 0% | 0% |
| Competitor | $0 | 0% | 0% |
| Competitor | $0 | 0% | 0% |
| Other | $0 | 0% | 0% |
| | | | |
| Average | $0.00 | 0.00% | 0.00% |
| Total | $0.00 | 0.00% | 0.00% |
2.4 Product Offering
MG will sell a spring mix of salad field greens. These greens will include, but are not limited to: red leaf, arugula, radichio, mustard greens, endive, and chicory. These greens are grown for use in salad mixtures, purchased by the end consumer as well as by restaurants who then serve it to their patrons. While the greens are washed at the farm they are not certified washed and the patrons are told to wash them an additional time.
2.5 Keys to Success
Exceed the customer's expectations. Additionally, MG will:
- Generate repeat business.
- Increase the transactions amount per customer.
- Increase the number of restaurant accounts.
2.6 Critical Issues
Mixed Greens Salad Gardens is still in the speculative stage as a green grower. Its critical issues are to continue to take a modest fiscal approach; expand at a reasonable rate, not for the sake of expansion in itself, but because it is economically wise to; and continue to build brand awareness to lower future marketing costs.
