Olivado is manufacturer and distributor of quality food oils, namely Avocado Oil which is good for health. Olivado started some experimental pressings of other fruit varieties that grew around Northland. In the avocado, it found a winner. Not only, was there an abundant supply but it turned out avocado oil had almost identical health benefits as olive oil - plus better taste and cooking attributes - and a wonderfully rich green color. Olivado is committed to the production of natural products that form the basis of good health

Olivado Company breaks into the food business with an entirely new product and new brand just six months. In under a year, it developed and launched an entirely new food oil product, notching up almost overnight market success. From a standing start, sales hit $230,000 in the first month, exceeding all expectations and almost outstripping manufacturing capacity.

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Olivado achieve such a great success because they know volume is the key to the success of the venture, which meant pricing had to be right for supermarkets. And they adopted a multi-tier sales strategy, targeting volume supermarkets with smaller, lower-priced bottles and delis with an elaborate up market flask. In addition, the sell-in to selected stores included special tasting conducted by Olivado's own in-house chef to build enthusiasm.

As far as Olivado Company concerned, Olivado promoted their oil though TV news, Easter Show which is big presence with free tasting; cooking demos and recipe handouts help product profile. Altering wide consumer acceptance from the influential, the trend-setters, the health professor to chefs. By using relationship marketing appropriately, they conquer the market.

Written by Christina Dai

Question

Evaluate the following aspects of Olivado's marketing strategy as described in the case.

1. Customer Focus

2. Relationship Marketing

3. Responding to the Macro Environment

4. Management Information System/Marketing Research

Answer

1. Customer Focus

Olivado should allow the wants and needs of customers and potential customers to drive all the firm's strategies decisions. For the short term strategy, the initial target market included the influential (food writers and professionals), the trend-setters (early consumer adopters), health lifestyles and chefs. Whereas for the long term strategy, the company is after wide consumer acceptance.

The rationale is that the more Olivado understands and meets the real needs of its customers, the more likely it is to have happy customer who come back for more, and tell their friends. People want to buy a new kind of oil which is in the high-quality and with an affordable price. Olivado's own research suggested it would be unable to get much market differentiation with a 'me-too' product when there are 75 brands of olive oil already out there. "We needed something out of the ordinary," notes managing director Chris Nathan. Therefore, avocado was emerged with the tide of times.

2. Relationship Marketing

* Relationship And Networks

Olivado's longer term aim is to capture 10% of at least one million litres of olive oil, or around 100,000 litres a year in 2001 volumes. Olivado is chasing an expanding market niche. And there's a consumer trend away from cheap food oils to the high-quality, extra-virgin varieties

A marketing network consist the company and all of its supporting shareholder. Olivado utilized the strengths of staff/shareholders and marketing partner Stanford James to involve in an integrated marketing communication approach. Also, an early alliance with Foodtown got the product off to a flying start with nationwide coverage. Niche outlets filled in the gaps. Bulk purchasers could buy the oil in five-litre containers. Furthermore, Olivado got some important information from top chefs.

* Customer Relationship Levels

Customer relationship management means that marketers must focus on managing their customers as well as their products. Company can build customer relationship at many levels, depending on the nature of the target market. At one extreme, in markets with few customers and high margins, marketers want to create full partnership with them. To get a good overview of the market, Olivado teamed up with the Oil and Facts Specialist Group of New Zealand, which provided market data and valuable industry knowledge. On the other hand, a company with many low-margin customers may seek to develope a basic relationship with them. For Olivado, several outlets were happy to have brochure holders mounted on store shelves providing piont-of-sale information for customers.

3. Responding to the Macro environment

* Political Factors:

Olivado have very good contacts within the government and locally, so they will have their own informations before making decisions. In addition, Government do not regulates any laws to forbid the sales of Olivado.

* Economic Factors:

Price is very important for goods. Olivado adopted an affordable price level-pitched at a slight premium to regular oils and below local boutique olive oils. It affected consumer buying power.

Consumers are willing to buy Olivado not only because of their low price, but also it is a healthy product. So people prefer to buy Olivado rather than other oil. It affects consumer spending patterns.

* Sociological Factors:

Olivado started some experimental pressings of other fruit varieties that grew around Northland. In avocado, it found a winner. Not only, was there an abundant supply but it turned out avocado oil had almost identical health benefits as olive oil. Therefore Olivado which as a new product has the low price so that affect society's perception.

Olivado opted for a gala launch at Auckland's Hammerhead restaurant where food writer Julie bison had guests making avocado oil vinaigrette at their tables. This event made TV news and generated some great product recall at Olivado's next big public outing - the Easter Show. There, a big presence with free tasting, cooking demos and recipe handouts helped boost product profile so that affect society's behaviors.

* Technological Factors:

Olivado desired their five-litre containers which is long-necked, slim Italians glass bottles with designer labels instead of larger containers so that bulk purchasers could buy it.

Olivado used innovative banner which is if you thought olive oil was healthy and great with food, you should try Olivado avocado oil to attract customers that purchase olive oil.

Olivado has the high technology to make oil more health. They can call it

Extra Virgin because it's pressed at temperatures below 55 degrees and contains an acid content of 0.2%, far below the 1% required for the Extra Virgin designation. In addition, no heat or solvents are ever used to extract the oil from the fruit. Due to its high chlorophyll content, Avocado oil is very unstable and can degrade very quickly, so after extraction the Olivado subjects the oil to a unique and natural process that completely stabilizes it, retaining the goodness for up to 2 years in an unopened bottle.1

4. Management Information System/Marketing Research

* Defining the problem and research objective

Olivado's own research suggested it would be unable to get much market differentiation with a 'me-too' product when there are 75 brands of olive oil already out there. Olivado stated some experimental pressings of other fruit varieties that grew around Northland. In the avocado, it found a winner. Not only, was there an abundant supply but it turned out avocado oil had almost identical health benefits as olive oil - plus better taste and cooking attributes - and a wonderfully rich green color. The company immediately decided to dilute its olive oil focus and design a marketing and communication plan around avocado oil.:

Delight the market with a fresh new food product; establish "Olivado" as a recognizable brand for quality food products; employ innovative marketing initiatives to support brand image and products; lead the market, and create new trends in food and health markets.

* Developing the research plan for collecting information

Marketing objectives were pretty straightforward: delight the market with a fresh new food product; establish "Olivado" as a recognizable brand for quality food products; employ innovative marketing initiatives to support brand image and products; lead the market, and create new trends in food and health markets.

* Implementing the research collection and analyzing the data

Olivado adopted a multi-tier sales strategy, targeting volume supermarkets with smaller, lower-priced bottles and delis with an elaborate up market flask; Olivado's main marketing message is summed up in its advertising; Olivado use a big presence with free tasting, cooking demos and recipe handouts helped boost product profile.

* Interpreting and reporting the findings

"From the start, the company was aware it was not only launching a new product, but a new brand. Few, if any, food oils are recognizable by brand and are thus doomed to become a commodity." says Nathan. Olivado saw from the outset that long-term future rests in a strong recognizable brand with which to diversify our product range and avoid being a one-horse company.

Written by Kevin Xu/Jimmy He

Conclusion

To analysis the four aspects of Olivado's marketing strategies, we understand that: a company must take all kinds of marketing strategies in the market and also build long term satisfying relationships at many levels with key parties in order to generate enormous profits and achieve great success.

Olivado's avocado oil not only managed to capture public imagination but is also well en route to capturing its target penetration into the expanding market or premier food oils. Marketing objectives were pretty straightforward: delight the market with a fresh new food product; establish "Olivado" as a recognisable brand for quality food products; employ innovative marketing initiatives to support brand image and products; lead the market, and create new trends in food and health markets.

Olivado did very well in customer focus, relationship marketing, responding to the macro environment and management information/marketing research. Olivado's own research suggested there should be a new kind of oil to satisfy the requite of all the customers. Thus, the firm immediately decided to dilute its olive oil focus and design a marketing and communication plan around avocado oil. Avocado was emerged with the tide of times. Then, Olivado utilized the strengths of all its partners to publicizes and sell its avocado. From a standing start, sales hit $230,000 in the first month, exceeding all expectations and almost outstripping manufacturing capacity. It isn't easy to break into the food business with an entirely new product and new brand, but Olivado did it in just six months. That the company caught the wave of premium oil popularity contributed to rapid market acceptance.

Written by Kami Chen

Recommendations

As far as the good situation concerned, we try to give some recommendations.

The firm should strengthen the construction of the relationship among its key parties-customers, suppliers, distributor. It can buy more materials from the suppliers. It can give a lower price of the products to the distributors to let them make more profits. The most important thing is that the firm should give more services to the customers after selling. The firm should go to the person's house to tell the persons how to use the product well.

Olivado can try to diversify its productions involved the food oil so that it may satisfy more tasting standers of more customers. Also, Olivado can expand its operations overviews. It can build some factories in some areas where food oil is popular with the local people.

For price, olivado should give more concerned about it. They should do more comparison work with the analogical production and make a suitable price for the public.

Also, the firm should continue its push into promotion in order to improve its popularity. It can cooperate with more ad companies to introduce its products.