Marketing and Development of Chia Co

Executive summary

The present paper has focused upon the marketing and development of Chia Co. It is an Australian agricultural organization, founded by John Foss, in the year 2003. The company is one of the major producers and suppliers of Chia seeds. The company aims to contribute towards the health and wellbeing of the global community. The paper has emphasized upon the marketing strategy of the organization and tracked its growth throughout the years of operation. The discussion has focused upon the major factors that contributed towards the success of the organization. This has been done through application of the 5Cs model of analyzing the five major organizational factors that can affect the growth and development of a concern, namely, customers, company, climate, collaborations and competitors. The SWOT model has also been taken into consideration. In the second part of the discussion, grater efforts have been made to analyze the targeting, segmentation and positioning strategy of the company. In this section the suitable market segments for the company and their features have been analyzed, along with the target market and the policies of positioning the product adopted by the company. In the last section of the paper, a clear understanding regarding the initiatives that the organization can take in days to come to sustain the market position of the organization and its brand has been provided.

Question 1

For the purpose of identifying the factors that contributed towards the success of Chia Co, thee. The 5Cs of marketing for Chia Co has been presented below:

Customers:5Cs of marketing will be conducted. The 5Cs of marketing is a method of analyzing the five main areas that as associated with the process of the marketing strategy of a brand (Baker and Hart, 2016).  Those main areas comprise the company, customers, competitors, collaborators and climat

The consumption of fast food and unhealthy snacks has led to the prevalence of health issues such as obesity, diabetes, and rising levels of cholesterol among people across the world, especially in developed nations. This has led to the growth of health-conscious customers, which enhanced the demand for health superfoods such as, chia seeds. The chia seeds are considered as beneficial for fighting health issues such as diabetes, lower cholesterol levels, and blood pressure levels. The organization has two main market segments, namely, health-conscious customers and other food processing companies. Chia Co sales its products directly to the customers in the form of groceries sold in departmental stores and supermarkets and at the same time, big food processing organizations have formed ventures and collaborations with Chia Co, where the latter will supply chia seeds as an ingredient (Baker and Hart, 2016).

The company formed an agreement with Baker Delight Holdings in the year 2009 to supply chia seeds to more than 600 stores belonging to the bakery per week. At the same time the company also entered into a contract of supply of chia seeds with another renowned Australian bakery, the Bodhi’s Bakehouse. Chia Co exports chia seeds in around 36 nations, among which the significant are USA, Europe and Australian market with a higher demand for chia seeds. The growth in the US market projected a steady trend, as it has been found that the market size was $21 million in the year 2011 and the same reached to $ 370 million in 201. Ut has been expected that the market size for chia seeds in USA and Europe will be $ 1.1 billion and $ 625 million in 2020. It has also been forecasted that the overall global market for chia seeds will experience a growth of $ 2.1 billion in 2022. Chia co-formed collaborations with The renowned retailers in Australia such as, Woolworths Limited and coles Supermarkets Australia Pty Ltd to sell its breakfast snack Chia Pods (Baker, 2001).

The company took several steps to meet the market demand through its three-tier growth strategies. The company took the initiative to export raw seeds to other organizations, who in turn repackaged and resold the chia seeds. Secondly, the company also worked with brands such as Kashi Company and Dole Food Company Inc to supply raw chia seeds to be used as ingredients for varied foods such as bread, crackers, chips etc. Finally, the company introduced its ready-to-eat breakfast meal, Chia Pod. It has been found that due to high demand, the revenues of the organization projected growth from $ 50 million in 2014 to $ 100 million in 2015. Moreover, it has been found that the growth trend is driven by the attitude of the customers to put more focus on health rather than price (Baker, 2001).

Company:

To understand the position of the company, it will be necessary to conduct a SWOT analysis of Chia Co. The SWOT analysis of Chia Co has been projected below:

Strengths:

• The company operates in a niche market, where the opportunities are very high. There is less number of chia seeds producers in the global market. Hence, the organization has experienced huge market demand or its products.
• Lack of competition can be considered as another most important aspect that contributed to the success of Chia Co. There are two main manufacturers of raw chia seeds, which are Joseph Enterprises and Milwaukee and Bob’s Red Mill. Hence, the competitive pressure is low for the company.
• The volume of health-conscious customers is raising across the globe, especially in the USA, Australia and European nations. Various health issues have emerged due to the consumption of fast food and unhealthy snacks in recent times, such as, diabetes, rising levels of cholesterol, blood pressure, and obesity. Chia seeds have considerable nutritional benefits that can fight these health issues. As a result of that customers are focusing upon health and less concerned about the prices of the products (Baker, 2001).

Weakness:

• The benefits of chia seeds have newly been introduced to the world, as a result of that many areas of the world are less aware about eh same. Chia Co has found it difficult to educate the people in new markets about the benefit of the product. As a result of that it has become difficult for the company to enter into Asian markets.
• The rising demand for chia seed is a plus point for the organization, however, the company has lack of required capacity to produce more chia seeds to meet the rising demand. The company is struggling to produce more to meet the huge global demand for chia seeds. The lack of competitors in the market has also enhanced the pressure upon Chia Co to produce more to satisfy the growing demand.

Opportunities:

• There are huge opportunities for Chia Co to achieve market growth. The number of raw chia seeds producer is less and the demand for the product is very high. Chia Co can strengthen its production system to increase production to grab higher market share.
• The company can form collaborations with other super market chains such as Tesco, Aldi, Lids, Sainsbury etc, to strengthen its distribution systems in Europe and other parts of the world.
• The company can focus upon Asian markets, as these nations carry 60% of the global population, it is a huge market (Baker, 2001).
• The company can target emerging markets such a Brazil, Chile and India to enhance its market size and revenue.

Threats:

• The competitive pressure from immediate competitors is considerably low, however, the main threat for the company can be considered as other varieties of superfood such as,
• blueberries, flax seeds, Quinoa etc, have similar nutritional characteristics, however, they are cheaper as compared to chia seeds.
  Competition:
  Chia Co faced less competitive pressure from the immediate competitors as the numbers were low, there were a small number of raw chia seeds suppliers, two of them are Joseph Enterprises and Milwaukee and the Bob’s Red Mill. This has helped Chia Co to maintain strong relations with its valued clients such as PepsiCo and Chobani. However, the organization experienced competitive pressure from the other superfoods that can be considered as substitutes, such as Kale, Quinoa, and others. There are cheaper and they have almost equal nutritional properties.
  Collaborators:
  The company has formed collaborations with supermarket chains such as Woolworths and Coles Supermarket to distribute chia seeds and its ready-to-eat breakfast product, Chia Pod. The company formed an agreement with Baker Delight Holdings in the year 2009 to supply chia seeds to more than 600 stores belonging to the bakery per week. At the same time, the company also entered into a contract of supply of chia seeds with another renowned Australian bakery, the Bodhi’s Bakehouse. The company also worked with brands such as Kashi Company and Dole Food Company Inc to supply raw chia seeds to be used as ingredients for varied foods such as bread, crackers, chips, etc.
  Climate:
  Political:
  The company supplies its products in around 36 different nations and it also carries out educational campaigns in those nations. The company has its offices in London, New York, and Melbourne. The organization is required to abide the various policies relating to employment, taxation, import and export and many more, relating to the nations, where the organization operates its business and the same will affect the expenditure and profitability of the company (Sandhusen, 2000).
  Economic:
  Being an exporter of Chia sees, Chia Co is required to consider the economic factors, such as change in exchange rates, interest rates etc, as the same will affect the profitability of the company.
  Social factors:
  The increasing number of health-conscious customers in almost every society across the globe can be considered as a factor that can help the organization to grow in the future. This will enhance the sales volume and market size of Chia Co (Sandhusen, 2000).
  Technological factors:
  Improvement and new development in the field of technology has helped the organization to a greater extent. The company relied on latest technologies, such as satellites, GPS, as well as automatic steering on tractors. This helped the organization in conducting the process of crop monitoring and identifying the moisture content of the soil (Cassiday, 2017).
  Question 2
  Segmentation, targeting and positioning are considered as essential marketing strategy, which are considered as necessary for every organization to formulate. These three different strategies form a three layer approach.
  Segmentation is considered as a process that enables an organization to divide the market in different categories and develop their individual profiles. This helps an organization to develop appropriate strategy for each segment. The process of market segmentation is done to segregate the market into different groups according to the needs of the groups; the segmentation is also done identifying the characteristics of the customers belonging to each group and the behavior of the customers belonging to the segments. On the basis of such features the marketing mixes and products are developed. There are four different segments which are provided below:
  Geographic segmentation:
  This is a type of segmentation, where an organisation segments its market on the basis of geographic regions. Appropriate market strategy is formed on the basis of the profile and characteristics of the geographic segments that have been targeted (Baines, Fill and Page, 2011).
  Demographic segmentation:
  This is a type of market segmentation that focuses upon the demographic factors relating to the customers. The segmentation is done by considering the factors such as, age, gender, occupation, socio-economic status, marital status, income, educational qualification, ethnicity and religion.
  Psychographic segmentation:
  This is an approach of segmenting the market on the basis of lifestyle of the customers. The segmentation of the customers is done on the basis of their opinions, interest and activities. This can be done by considering the external factors that can influence the customer groups and the factors that can motivate the customers of different groups (Baines, Fill and Page, 2011).

 

 

• Behavioral segmentation:
  It is a way of segmenting the market by considering the behavior of the customers in the market and the factors that can influence their buying behavior (Baines, Fill and Page, 2011).
  Considering the case of Chia Co, it has been found that the company has focused towards producing and selling Chia seeds, which is considered as a super food that can differentiate itself from the un healthy processes foods, which are available in the market. Moreover, the growth of health problems such as, obesity, diabetes, cholesterol levels and heart diseases has enhanced concerns of the customers towards availing super foods, like Chia seeds to reduce cholesterol levels and controlling health problems such as diabetes and obesity (Cassiday, 2017).
  Considering the segmentation strategy of Chia Co, it has been found that the organization has targeted 36 different nations, where it supplies chia seeds. The organization put higher focus in Australian, USA and European; it has been found that the demand for chia seeds among these markets is highest due to a large number of health conscious customers present in such markets. Chia Co also put greater emphasis to capture the Asian market; it carries around 605 of the global population. This will help the company in enhancing its market share and reduce the cost of transportation, as the Asian markets are geographically closer to Australia. However, the company faced issues in expanding to the Asian markets due to a lack of knowledge and awareness about chia seeds present in Asian markets, for this purpose, the company had to put greater emphasis on creating awareness of Chia seeds in Asia markets (Cassiday, 2017).
• The company has also segmented its market on the basis of customer behavior. The presence of the increased amount of processed foods in the developed markets has enhanced health issues such as obesity, diabetes, rise in cholesterol levels, etc. The company intends to position its product as food with nutritional benefits and it wants to target health-conscious customers, who prefer healthy food over junk food.
  Targeting marketing is considered as a strategy adopted by an organization to break down a large market into smaller divisions and focus upon a specific segment of the market. As per this approach, the company concentrates upon small part of the market and intends to serve that part only. It will feasible for an organization to focus its marketing strategy upon a specific market segment, instead of reaching out the entire market (Baines, Fill and Page, 2011).
• Considering the targeting strategy of Chicago, it has been found that, the founder, John Foss has targeted both customers and retailers to supply the chia seeds. The company intends to supply products both in bulk and also directly to the consumers. The organization generally targets health conscious customers. It has been found that over the recent years, the health issues such as, obesity, diabetes, rise in cholesterol levels have risen and that has produced tones of health-conscious customers across the world, especially in the developed nations. The company intends to promote its products as a super food, which has many nutritional benefits. The company mainly targets the health conscious customers belonging to varied ages.
  On the other hand, the rise in the levels of obesity and other health problems as mentioned above has enhanced the number of manufacturers of healthy food. The company has targeted those manufacturers, who want to add chia seeds as an ingredient to the healthy foods thay produce, due to the established nutritional benefits of chia seeds (Baines, Fill and Page, 2011).
  Positioning is considered as a strategy through which an organization positions the products in the minds of the customers and the way, the brand attempts to distinguish its products from its competitors. Chia Co simply positioned chia seeds as a healthy food; the company clearly placed its products by projecting the difference between healthy and unhealthy processed foods. The company attempted to educate the customers about the nutritional benefits of chia seeds and for that purpose and as a result of that Chia Co focused upon educating the naturopaths and food coaches in Australia about the nutritional benefits that can be derived from Chia seeds. In order to enhance market visibility, the company focused towards sports and music sponsorship, along with celebrity endorsement. The company entered into a significant deal with the United States Tennis Association’s US Open. The organization also made a partnership with Australian Football Team and Collingwood Football Club to provide Chia seeds and related products. The company also made celebrity endorsements by signing an endorsement contract with Kelly Slater, who is a celebrity professional American surfer (Cassiday, 2017).
  Chia Co faced less competitive pressure from the immediate competitors as the numbers were low, there were a small number of raw chia seeds suppliers, two of them are Joseph Enterprises and Milwaukee and the Bob’s Red Mill. This has helped Chia Co to maintain strong relations with its valued clients such as PepsiCo and Chobani. However, the organization experienced competitive pressure from the other superfoods that can be considered as substitutes, such as Kale, Quinoa and others. There are cheaper and they have almost equal nutritional properties (Ferrell and Hartline, 2013).
  Question 3
  In order to sustain growth in the future and to experience further development in the future Chia Co is required to take essential steps. Although, the number of immediate competitors is negligible; the company has to face intense competitive pressure from the substitutes, such as the other superfoods. In order to fight the competition, the company is required to target the market consisting of health-conscious customers, especially the ready-to-eat breakfast meal market. Focusing upon this market will also help the organization in positioning its brand as a retail brand and not as a brand supplying ingredients to other organizations (Hill, 2012). This opportunity will help the company come into the limelight reducing the competitive pressure of the other superfoods, which are generally supplied as ingredients to food manufacturers. Moreover, the company will be able to differentiate its products from the other brands operating in the ready-to-eat breakfast meal market. It has been found that there is a considerable gap existent in the healthy breakfast market focusing upon busy customers. It has been found that major players in the breakfast meal market provide products that have high sugar and preservative content and are loaded with artificial flavors. The company has already launched its ready-to-eat breakfast product Chia Pod and it is all-natural and no added preservative (Hill, 2012).
  The organization has already launched Chia Pod and it will be the product for the breakfast meal market. The positioning of the the same will be done by simply projecting the differences between healthy breakfast and unhealthy breakfast meals. The positioning statement will highlight the health needs of the growing market of health-conscious customers and at the same time, the company will also highlight the nutritional benefits of Chia seeds, along with stating the product as natural and free from any preservatives and differentiating the same with other breakfast brands that add huge amount of sugar, preservatives and artificial flavors, which are unhealthy in nature (Fifield, 2012).
  Moreover, the organization will also focus upon sports and music sponsorship, along with celebrity endorsement. At the same time, the company is also required to promote the nutritional benefits of the products over social media to reach out to maximum numbers of customers and collect their feedback. This approach will provide dual effect, firstly promoting the

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