Peapod is a grocery company that sells its products over the internet. Customers make their orders on-line and the orders are delivered to their doorsteps. It was founded in 1989 by two brothers, Andrew and Thomas Parkinson. The goal behind the establishment of this company was to make shopping easy for all types of customers.
In July 1990, Peapod began testing its market by allowing customers in Evanston to place orders on-line. It also provided software to the customers and sold modems to them in order to make ordering easy. By that time, the two brothers did not have a vehicle for the company and deliveries were made using their own cars. Family members and friends came in to help them in the picking, packing, and delivery of the products to the customers.
By 1998, demand for Peapod’s products had increased substantially and the company expanded to other markets such as Chicago and also opened its own website. Its mission is to provide friendly and quality services to all its customers as it strives to exceed customers’ expectations (Peapod-Online Grocery Shopping, 2005).
Peapod’s largest market is in Chicago area. It has managed to expand its services to other states including but not limited to New Jersey, Boston, New York, and Baltimore. To make marketing easy, Peapod has partnered with big companies in the food industry in the respective state of its operation. For instance, in Chicago, it has formed a partnership with Jewel Food Stores and Randall’s in Texas.
Peapod is the leading e-retailer in the grocery industry and this has been made possible by the partnerships it formed with Royal Ahold, an international food company based in Netherlands (Peapod, 2010). Today, 75% of Peapod’s services are targeted to the single parents and families with young children (Peapod-Online Grocery Shopping 2005). These are the people who are believed to have less time to go to the grocery stores and would prefer shopping from their houses.
However, this is a very narrow market considering the growth in the online market. In addition, it has only been able to expand on specific geographical areas especially along the East coast. I believe Peapod target market will change with time when it starts to put other things into consideration. Apart from time issues, other factors that can be considered in designing the target market are physical constraints such as inability of the elderly to jump from one vehicle to the other while going to the grocery stores.
Just like other on-line groceries, Peapod has been experiencing the problem of customers questioning the quality and freshness of its products. To curb this problem, the company has introduced a delivery system called Stay Fresh that keeps all products at optimal temperatures before they are delivered to customers.
With this system, customers are able to receive their products when they are still fresh and this has led to an increase in the company’s sales. Another problem that is experienced by the company is that many customers are not quick to make orders for products they cannot see. Although the website may contain much information on the nutritional value of the products, the pictures displayed on the website do not offer a good basis for customers to make comparisons (Bretagne, 2010).
Other people argue that purchasing over the internet is more expensive than face-to-face purchases. Peapod Company has introduced a marketing strategy that allows customers to use promotional code. This ensures that customers are convinced about the company’s products and they are also able to save money (Riedman, 1997).
Peapod has been able to utilize its warehouse facilities to customize its products. To do this, Peapod uses centralized distribution with a warehouse and a wareroom. Deliveries are made on the day following an order request using an intact supply chain.
This has allowed the company to utilize the use of the store’s assets in opening new markets which are later transitioned into warehouses as the business expands its operations. The use of Ahold stores has assisted the company in the provision of quality products and services, controlling its inventory, and minimizing out-of-stocks (Peapod, 2010).
One of the major competitors that are likely to enter the online grocery shopping market is Wal-Mart stores. This is the largest retailer in the world a position which it has earned through its marketing approach including low priced products, just-in time delivery, and its organizational behavior.
Wal-Mart’s superior marketing strategy complements its mission statement and has seen its product being well positioned in the market. The company’s reputable brand name is a source of competitive advantage as it lures customer traffic. There is a likelihood of the company going online in marketing of its groceries and if this happens, it will be a major threat to Peapod considering its market position.
Another competitor likely to enter the market is Publix Super market. This is a supermarket based in Florida. It was ranked among the best one hundred international companies and it’s among the largest companies in America. Publix is a food retailer that is privately owned although not available to a large population.
This company has not yet gone on-line but with the current trend in technology and the increased reliance on the internet, it poses as a major competitor for Peapod for the reason that soon it may decide to market its groceries over the internet.
Peapod uses a two way communication system which helps in increasing its sales volume as well as its development. It uses external advertising agents such as Kraft Foods and Frito-lay. About 75% of its customers are able to access its services over the website while the rest use dial-up method to access the services (Riedman, 1997).
One of its selling tools includes pre-testing of its content before they are placed on the web. This ensures that customers are not deceived but get the right information. Today, about 15 million households shop at Peapod online market in spite of all the competitors present in the online market. To ensure that it is able to retain its customers, it analyses customers’ shopping behavior through promotions which forms part of its business model.
Having looked at the history and current situation of Peapod, I conclude that peapod has a promising future. In five years to come, the company will have extended into other international markets. It would be better if the company considers expanding into the developing countries since most of the large companies have not yet explored these markets.
However, the company has to develop new marketing strategies that will help in beating the present competition. One of such strategies would be low cost products and services that will see the company being ranked as the largest online retailer in marketing of groceries ten years from now.
Bretagne, R. (2010). Bad Experiences with Shopping Grocery Online. Retrieved from http://www.helium.com/items/291261-bad-experiences-with-shopping-grocery-online
Peapod, (2010). The Peapod Start. Retrieved from http://company.monster.com/peap.aspx
Peapod-Online Grocery Shopping (2005). Peapod Official Website. Retrieved from http://www.peapod.com/index.jhtml?opcoId=null&NUM1=1131405415782R4ONI1QRXZ01ECQBD0WCF3Q
Riedman, P. (1997). Media & Marketing: Peapod Readies For Web With Revised Service: Shoppers’ Buying Habits to Be True Test of Ads. Retrieved from http://adage.com/article?article_id=70952