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Foundations of Business

Table of contents

Problem statement & solution of the problem

Benefits of going online

Need Analysis based on lifestyles and buying patterns

Barriers & solution

Technology & Innovation

About the industry & profitability


Target audience & the right customer

How the products are differentiated from others


Problem Statement

In the time of globalization, the world has become a global village so big brands are operating in multiple nations. Although globalization has been advantageous for businesses on the contrary it has imposed some challenges on them as well. One of the biggest challenges is "to think out of the box" which suggests that businesses should have something unrepeated and distinctive. Now being distinctive could be anything whether it is the marketing tactics or the pricing strategies. Thus, there is an extensive pressure for being different or unique within the industry. Brands are not only expanding their wings and businesses but it also helps in winning economies of scale & financial aids. Based on the brand’s KPIs, financial data, customer satisfaction level, and recent studies on the respective brands the analysis is going to be conducted (Kang, 2004).

However, the online grocery market, there are numerous challenges which are faced by marketers or businesses. Below are some challenges mentioned:

  • Warehouse cost & delivery cost: There are commonly two kinds of grocery products, one is perishable & the other is non-perishable. Perishable products have less shelf life and are delicate to handle while the other is non-perishable products that have no such feature as perishable products. Now the challenge is that the perishable products require huge cost investment, such as refrigeration and so. Meanwhile, it also requires specialized vans for delivery purposes. (Kang, 2004).
  • Fewer profit margins: Customers want rapid delivery service & meanwhile not interested to pay any convenience charge for the same so this becomes the big challenge for e-retailers & later on leads to fewer profit margins. (Kang, 2004).
  • Consumer’s pattern or convention of shopping: No matters how much convenience customers if getting while online shopping but maximum times he goes for offline shopping due to their typical buying behaviour. (Kang, 2004).

Though there are numerous challenges in online business, still there are some loopholes where the e-retailer can take advantage. To save delivery cost and warehouse cost, maximizing the profit margins & meeting the challenge consumer’s convention of shopping; Meteoric grocery store can have a direct contract with the manufacturing units of the products or with FMCGs companies of buying goods in bulk, this will lead to reducing huge cost.

  • Firstly there will be no distributor or mediator that will be involved, so there will be no adding’s of profit margins.
  • Getting the products direct from FMCG companies and providing directly to offline “Small retail shops” and then having a contract business with offline stores will save warehouse cost and delivery cost. Moreover here both the parties are in “win-win situations” since the Small retail stores are getting a supply of products at a less price in comparison to earlier so this is the opportunity for “local Small retail store” to offer products at fewer prices to their customers. While on the side Meteoric grocery is acting as a distributor for Small retail stores and at the same time it is also getting benefits in its e-trade since it has a contract of trading with the offline store.
  • However, the habits of consumers while shopping will not impact so much to the Meteoric grocery store because of its above strategies.

Benefits of going online

The meteoric grocery store is going online but with the cost-saving strategy since the store will be having a contract with the “local Small retail store” which is situated in the respective locality. Having a contract will provide several benefits of Meteoric Grocery Store, such as:

  • No warehouse cost since the product will be delivered to the customer by the nearby Small retail store.
  • The meteoric grocery store is also acting as a distributor for the Small retail stores, and being a distributor it can set its profit margin in the supply of products.
  • High-profit margin.
  • The high volume of customers because the price is less & the reason behind less price is less cost.

Need Analysis Based on Lifestyles and Buying Patterns

Grocery product is demanded from poor to rich, babies to old aged persons, and basics to exotic. But providing the products at the low prices may stimulate to buy more. Grocery product is one of the categories which is needed for anyone and demanded by everyone. (Kang, 2004).

Meteoric grocery store can segment its targeted customers on all basic four factors which are demographic, behavioural, geographic and psychological factors. (Kang, 2004).

  • While doing the segmentation on demographic factors Meteoric grocery store can focus on basic grocery items and exotic grocery item, now this will depend on the income level of customers who will prefer what. (Kang, 2004).
  • Segmentation for grocery product can also be done based on the place or locality which means being a distributor Meteoric can supply those goods in the particular grocery store which are usually demanded by the customer of that zone such segmentation is also known as geographic segmentation. (Kang, 2004).
  • Grocery products are bought by customers based on its usage; benefits of the product, product’s loyalty, and the occasion, buying or shopping based on such factors are recognized as behavioural segmentation. Meteoric should supply the products in them based on the occasion factor as well. (Kang, 2004).
  • Meteoric may also offer the products online and offline by considering the lifestyle of shoppers, taste of shoppers, attitude of shoppers and interest of shoppers but this will need the deep research to be carried out by meteoric, however, this can be possible through a various survey this style of segmenting is also known as psychographic segmentation. (Kang, 2004).

Barriers and Solution

Since Meteoric Grocery store will not be doing business in a typical chain which is usually existed in the current time while Meteoric would be having a contract with the FMCGs companies, to minimize maximum cost so that it may lead to less price. Offering the same products at a low price which is present in the market with high value will lead no barrier for entry (Emma, 2014). 

Technology and Innovation

Though Meteoric would be using e-platform for business meanwhile there will be less costly because of the contract with the “Small retail stores” where small retail stores will bear warehouse cost. All in all the pricing strategy of Meteoric is an innovation in its business plan. Since it will acquire the market by just a contract (Emma, 2014).

About the industry and Profitability

In this contemporary era grocery business is carried out on a margin of a maximum of 3% only & meanwhile it depends on the product as well. Grocery stores make money on their volume of sale (Emma, 2014).


Grocery products are the basic necessity for any person since it is demanded by everyone, it depends on what and how much. To fulfil the basic necessity of an individual’s several competitors exist in the market. Amazon pantry, Flipkart, Big Basket, Grofers are few of the big giants in the metropolitan cities. (Donna, 2014) 

Target Audience & the Right Customers

They are four kinds of segmentation that are done based on demographic, geographic, behavioural, psychological factors. (Donna, 2014) 

  • Demographic segmentation is based on factors like income, gender, age, and so on
  • Geographic segmentation is based on localities or places like countries, states, and cities and so on
  • Behavioural segmentation focuses on customer’s knowledge regarding the product; attitude towards the products, basically in this segmenting type marketer stimulates the potential customer since the marketer understands the trigger point of the individual.
  • Psychographic segmenting is done based on their inner personalities like lifestyles and interest and so on.

Targeting an audience for grocery can further count under the below categories:

Customer profiles

  • Budget-conscious: Budget-conscious customers are set themselves for the particular budget; moreover they buy accordingly and as per the need and necessity. The best example of the budget-conscious category is house maker women since these ladies tend to seek for low priced and good quality product. This is segment is highly-priced sensitive since they value the savings. (Donna, 2014) 
  • Fast & Furious: Such customers love to shop as swiftly as possible. The individual belongs to this category don’t bother for price. And for their foremost need is their convenience. (Donna, 2014) 
  • Variety Seekers: This group searches for variety and have ample time to devotee. They are also known as innovators and early adopters. This segment of people who belong to this group always seeks for something new. These people aged between 18-45 or 50. Their profile is also considered a variety of seekers. (Donna, 2014) 
  • Smart Shoppers: They are” the wise” among all the groups, these people do bargain at heights sometimes. Meanwhile, they are very conscious as well for their buying. They demand so many things at the same time as an affordable product, durable product, discounts and so. (Donna, 2014) 
  • Gourmet focus: This group is easily spent, what they demand is quality at its best. These people are willing to pay for a particular product and this group is also considered as high potential buyers. (Donna, 2014) 

How the Product Is Differentiated from Others

Since the marketing mix has primarily four components. The mix is a foundation of any business model. Such components are product, price, place, and promotion.


It simply means the products which are offered in the market to the buyer. It is foremost to have the best features in the product offered.


Price is the numeric value or it is the cost of product plus profit at which the product is offered to the buyers. However, price relies on below five factors.

There are 5Cs of pricing


This is the crucial element of pricing decisions; no brand can fix the price of a product or service without knowing the cost of the same.


Pricing of a product also relies upon the customer’s paying capacity and eagerness or willingness to buy the product.

Channel of distribution

If a brand sells through middlemen, to get to the customers of the products or services, those intermediaries directly affect the prices of a product.


Competition for a particular product highly affects the pricing strategy of the same product, for some brands, competitors are big affecting factors if it is about the pricing. So it’s very important to set the unique price of the product for a customer.


Pricing is not a stand-alone decision; however, it should work in concert with everything else, which the brand tries to attain.

But according to me focusing on competitor’s price is very important these days, it is the biggest threat in this current era since new entrants enter the market very easily reason being there is no such barrier, coming onto the market and setting the foot is very cost-effective. 

Moreover, Meteoric Grocery Store should focus on a competitive pricing strategy, where it should primarily consider the margins and profits of the product thoroughly. (Cassel, Ian, 2014) 


Engaging middlemen in the distribution of the product may highly affect the price of a product, while retail distribution is the most traditional form of distribution channel. The common model consists of the manufacturer using different intermediaries such as wholesalers or distributors to deliver products directly to retailers, then ultimately to the end-user of a product. This model delays delivery to the consumer and inclines consumer cost as each participant in the distribution channel must take possession of the product and receives a commission or say compensation for its role in distribution. Meteoric Grocery Store has chosen to eliminate distributors to decrease product delivery time and decrease the cost to the consumer since the wholesaler often uses a distributor or other smaller wholesaler as an intermediary to deliver products, or it may offer products directly to retailers or consumers. The scope of the manufacturer's relationship with the wholesaler can have varying effects on product delivery time and price. (Cassel, Ian, 2014) 


The social media marketing strategy will certainly lead to meet objectives or goals of Meteoric Grocery Store since the individual who purchases based on inner personalities & features. For example, interest & lifestyle. It may lead to incline in sales volume, margins on a product, & net profit of Levis.

However social media marketing strategy may lead to driving traffic to the website, helps in generating new leads, helps in boosting brand engagement, build up a community around the business, increase brand awareness. (Cassel, Ian, 2014) 

It has no. benefits too. Such are mentioned below:

  • Risk of negative publicity is less
  • It is a low cost
  • Long time on ROI
  • It reaches to a massive or big audience
  • Fastest way communicating
  • Feedback or comment have been continuously shared by customers on such a platform so it is very easy to provide the resolution and mitigate the problem in the products since two ways communication takes place on a public forum.

However, the deep analysis of the marketing mix can lead Meteoric Grocery Store to do wonders in the present. 

Since the proper study of the above factors will certainly lead to attaining the aims of the Meteoric Grocery Store.

References for Business Proposal On Online Grocery Store

Thomasson, Emma. (2014) "Online grocery sales to double in key European markets by 2016: IGD". Reuters. 

Xie, Kang (2004). A Strategic Analysis of Online Grocery and Its Future Outlook.

Tam, Donna. (2014) "Peapod who? Online grocer shows Amazon, Walmart how it's done".

Cassel, Ian. (2014) "The Food Tech Revolution". Seeking Alpha.

"Online grocery growth tests U.S. retail agility". The City Wire. (2014)

"Annual real food price indices". Food and Agriculture Organization of the United Nations. (March 2014)

Jenkins, Nancy (April 2004). "Health Food and the Change in Eating Habits". The New York Times.

"Food prices rising across the world", CNN. (March 2008)

Remember, at the center of any academic work, lies clarity and evidence. Should you need further assistance, do look up to our Accounting and Finance Assignment Help

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