Strategic Plan for Woolworths/Macro Wholefoods

3.5 Customer analysis

The target market for organic foods consists of health conscious and socially aware individuals who can afford and can justify the significant price premium presently commanded by organic produce. While no research available has specifically identified the target market for organic produce, we can find clues from a number of facts:

•It seems that many people consider organic food or occasionally purchase it, with the number increasing from 40% of total fresh produce customers in 2008 to 60% in 2010, so there is, indeed, wide appeal (Mitchell, Bez, Kristiansen, & Monk, 2010)

•Women are more inclined to understand the benefits of organic food than men (50% to 40% respectively) dictating that women are more likely prospective purchasers of organic produce, although only slightly (Shield, 2007)

•A certain proportion of customers tend to buy for emotional reasons (Zanoli & Naspetti, 2006) or less tangible benefits, such as health benefits, quality, natural content, animal welfare, and environment protection purposes (Australian Bureau of Agricultural and Resource Economics, 2003).

Presently, the premium price commanded by organic produce is seen as a significant roadblock to purchasing organic food, as is the more limited range. However, as discussed, we believe that both these factors will change over time. It is, therefore, our view that as awareness of both organic product generally and their benefits continues to increase, the target market for organic produce and the target market for fresh produce will converge, albeit with a skew towards those who are more affluent for the premium priced organic produce.

3.6 Summary of external position in the environment

The last couple of years have seen a significant growth in organic industry due to the increasing awareness about health and environmental concern among consumers. The two major factors which restrict the growth of the organic food market are the range of organic products offered being