The organic food industry

Case Assignment
Using Excel, create a frequency distribution (histogram) of the age data that was captured
from the survey. You should consider the width of the age categories (e.g., 5 years, 10 years,
or other). That is, which age category grouping provides the most useful information?
Once you have created this histogram, determine the mean, median, and mode.
After you have reviewed the data, write a report to your boss that briefly describes the
results that you obtained. Make a recommendation on how this data might be used for
marketing purposes. Be sure to conduct adequate research on organic foods industry,
organic market analysis, and healthy food industry using IBISWorld database or other
databases such as Business Source Complete (EBSCO) and Business Source Complete –
Business Searching Interface in our online library. Provide a brief description on the
industry background and the consumer changing attitudes and behavior toward healthy
lifestyles. Also identify the customer demographics of organic food industry and explain
how the customers of Loving Organic Foods are different from this target market.
Data: Download the Excel-based data file with the age data of the 124 customers: Data
chart for BUS520 Module 1 Case. Use these data in Excel to create your histogram.

Introduction

The organic food industry is one of the fastest growing industries. To meet the customers’
demands of healthy food, Loving Organic Foods conducted a market research to find the ages of
people who are and should be the targeted customers of the company. 124 people were surveyed
and the data collected was presented in a histogram to help find the best marketing strategies.
The buyers were analyzed in detail and the company was compared to the various others in the
organic food industry. With new competition entering the market every day, Loving Organic
Foods has to go through some changes to meet the demands of the customers, maintain leveled
prices and also provide the best quality product to the people.

The Organic Food Industry and Its Target Market

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Over the years, people have shifted to cooking and eating more organic items. The increase in
education and general knowledge about the side effects of eating fast foods have compelled the
people to eat fresh home cooked meals. This has led to an increase in demand which has been
met with an equal increase in supply (Organic Market Analysis (OTA), 2017). Better quality
chemical fertilizers, rich minerals and a soil which is full of nutrients have aided in planting
healthier, richer crops.

The target market of the organic food industry has been studied in a lot of detail. The results
show that the buyers of organic food are mostly old people around the age of 40-60. When these
people are younger and especially below the age of 30, they do not use organic foods as often
(Dr. Schultz, 2017). Customers were also people who had children and a strong family life. It
was also noted that the mean number of people who use organic foods belonged from small
communities and cities. Whereas, in the larger cities, the people went out for food and did not
use organic products or foods as much. It was also observed that the richer the people, the more
they tended to buy organic foods. This meant that well-educated families who had a better
lifestyle considered organic foods an important part of their diet. Women were also a significant
part of the target market. Health, wellness and safety were also important factors that led people
to buy organic foods. Customers who were not spontaneous buyers were seen to buy more
organic food (Resources, 2017).

Analysis of the Histogram

The histogram represents the age of the customers. It is made to better understand the people
who are buying Loving Organic Foods products and who should be targeted in the future so as to

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increase sales and profits. The histogram has also helped to identify the differences between
Loving Organic Foods customers and the buyers of organic food in general as discussed later.

There were 124 customers whose ages were noted down. These were then grouped and ranges
were formed for the ages to make the analysis easier. We chose to group the age categories in
widths of 5 years. We kept this difference because age is a factor that can cause a lot of variation
in the results. Because this is a research of health determined by eating habits of the population,
we could not take the risk of grouping people with an age difference of ten years, together.
Eating habits can change in a time frame of a few months. A gap of 5 years between each age
category was a sufficient time frame for us to analyze the customers who buy the organic food
products from Loving Organic Foods. For example, a 5-year-old child will not have the same
eating habits as a 10-year-old child and at 15, this child will no longer when remembering what
he liked to eat when he was 5. A 20-year-old person is more likely to completely change the
course of his eating habits when he reaches 30. But if we analyze the same person when he is at
25, we might find some similarities between the eating habits. We could not let the extreme
variation cause a disruption is our result hence we chose the width of the age categories as 5
years.

Analysis of Loving Organic Foods Customers

The frequency on the histogram displayed that Loving Organic Foods had no customers between
the age of 0-20. This is because the people at this age group usually do not earn money on their
own and even if they do, they are dependent on their parents for the basic necessities. The money
that they get is mostly spent on fast food and other youth related activities. Our customers started
from the age of 21 with over 10 people falling in the age category of 20-25. Evaluating this with

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the overall market of the organic foods, we can see a slight change because overall the most
customers are above the age of 40 with very few to none falling under the age of 30. This makes
the customers for our company unique.

From 25-35 years, we have a total of 20 customers with 10 falling in each age category group.
People at this are mostly concentrating on their jobs, new families and just trying to become
successful. Therefore, there are fewer people in these categories. From 35-40 we have 13 people
which show a significant change from our previous age group. This edition of 3 people clearly
signifies that now people start concentrating on having a healthier lifestyle. Most women are
mothers and they must look after their whole family. From 40-45, we have the highest number of
people. The 15 people in this category are the ones who have enough money to spend on organic
food even though it is a bit pricey. They can afford this food and for their own health and safety,
tend to change their eating habits. This age is also known as the ‘mid-life crisis’ age where
people tend to try out new things. This increase in numbers does correspond to the increased
buyers in the organic food market but still differs because most of the buyers were above 40 and
continued to have a higher frequency until the age of 60. However, from 45-50 the number falls
to 10 and then from 50-55 years the number of customers falls to 7. This is a major decrease and
7 is the second lowest number of people in our research.

From 55-75 years we see a major fluctuation and variation in the number of people in each
category. This may be due to the fact that we only got the data for 124 people. As big of a
company as Loving Organic Foods is, this is a very small number of people. Another research
should be carried out to identify the number of people that fall in the age categories between 55
and 75.

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From 75-80 years we just have 4 people. This is a very old age and customers at this age usually
do not shop much for eating. They have one or two meals a day so even if they eat organic foods,
it would not be in a large quantity. The mean is 48, median 47 and mode is 38 which shows that
we do not have a lot of variation either. These statistical data all fall between the ages of 35-45
years which is what we call the middle age.

Recommendations

After analyzing the data through the histogram, it is very clear that Loving Organic Foods main
target market are middle-aged people. To reach out to the masses, they need to focus on
advertisements that are played on television because this age group mostly watches television in
their spare time. The advertisements should focus on telling the health benefits obtained by the
use of organic foods. The safety and wellness that these products provide cannot be achieved by
the other chemically grown foods. The low cholesterol, sugar and fat should be highlighted
because the people in this age group have a greater tendency of getting such diseases. In recent
studies, it has been proven that diabetes, high blood pressure and heart diseases are three of the
most concerning health issues for these people.

The placing of organic foods and the various shops of Loving Organic Foods, should be placed
and opened in areas where women can easily travel to and where the community is more family
oriented. The easy access of such foods will automatically increase the sales. For women, it is
already very difficult to go out and get these essential items and because of lack of time, it is
much easier for them to buy these foods at their local stores. To counter competition, Loving
Organic Foods should turn to more local stores.

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Another way to increase sales and profit is to change the packaging of organic foods. Most
organic foods need to be kept in the refrigerator for longer use. However, because they are
usually displayed openly and do not come in any container, this makes it difficult to store them.
A package should be developed that allows the storing of these foods in refrigerators. The
container should be clean so it appeals to the middle-aged people who have a high want for clean
and fresh food.

People in this target market are mostly working and are always looking for the best prices.
Occasional vouchers of ‘buy one get one free’ and ‘buy one get the second for a discounted
price’ play an important role in targeting these individuals. If Loving Organic Foods really wants
to capture the buyers, it should make use of these pricing strategies.

Risk Assessment

Employing the marketing strategies explained above, would help Love Organic Foods to not
only expand its business but to also get a customer base that is loyal. Because people are
investing more in healthy foods there is more risk in this industry.

The mean age of the customers is 48 years old. This is the time when they are watching more
television and trying to eat healthier food. That is why if we invest in advertising agencies who
can help make us good commercials, we would not be taking a huge risk. Even if a loss is
incurred and the company does not reach as many people as it had hoped to reach, the magnitude
of this loss would be very less. The loss can be covered from the other marketing strategies

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explained above. The different recommendations cancel the risk factor and if one idea fails, there
is a chance of covering it up. (Cronin and Wharton, 2015)

Of course, Love Organic Foods will benefit when the whole organic foods industry becomes
popular. They will be interrelated but this does not pose any risk for the company as in the past
decade, organic foods have seen a constant rise in popularity.

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References
Dr. Schultz (2017). New target Groups in the Organic Food Market
Organic Market Analysis | OTA. (2017). Ota.com. Retrieved 14 July 2017,
Resources, U. (2017). Consumer Profiles of Buyers and Non-Buyers of Organic
Produce. Sfp.ucdavis.edu. Retrieved 14 July 2017
Cronin and Wharton, U. (2015) The Organic Food Industry: An Analysis of Supply and Demand
via Aggregate Prices.

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