Good Food Industry

GOOD FOODS INCORPORATED

Good Food, Incorporated (GFI) is a company founded on the belief that children can grow up healthier and live longer if they are fed a natural, nutritionally balanced diet starting earlier in life. GFI's goal is to increase awareness of this link between diet and health.

Good Food Industry was a start up business with three principals presently involved in its development. GFI's principals have researched and developed a line of unique children's food products based on the holistic health concept. The holistic concept, which health food consumer determined was widely accepted among adult consumers of health foods, was new to child-care field. Hence GFI planned to take advantage of the opportunities for market development and penetration that its principals were confident exists. GFI also believed that the existing baby-food industry paid only cursory attention to providing high quality, nutrition products, and that the limited number of truly healthy and nutritious baby foods created a market void that GFI could successfully fill.

Market Research

During its market research phase, GFI engaged "Vick Product Sales Research Corporation" as its marketing and advertising consulting company. Vick prepared reports on industry trends for the traditional children's food industry and healthy food industry.

Vick's market research showed that the United States was entering a "mini baby boom" that would increase the potential market base for its products. Health food products would approach the market place primarily through the health food stores and nature food centres in major supermarket chain stores, initially in the northwest and California. Acceptance of the GFI concept in these areas would enable The Company to expand to a national market.

Market Definition

GFI planned to direct its efforts to the sale of its health care products through the health food retail outlets and natural food centres located within major supermarkets. Geographically, the company would initially direct its efforts in two key areas: Northeast, especially around New York City: and particularly in the Reno, Nevada and Sacramento, California area. Both areas had a high concentration of adult health food consumers who GFI had found, through market research and analysis, to be most receptive to health concepts for children.

According to this market research the specific target markets that GFI would approach through these outlets were:

* Parents who were concerned about their health and their children's health and who thus demand higher quality and more nutritionally lanced foods and products.

* Operators of child-care centres who provide meals to children.

Competitive Analyse

GFI expected to face competition from two key areas; first, traditional children's food suppliers and second, the health food trade.

The children's food industry was highly competitive, with a small number of very powerful suppliers. Three children's food manufacturers currently supplied nearly the entire industry. In the view of these companies' dominance of the market, GFI had developed an initial approach to marketing that would focus on the outlets other than the mass merchandisers. As with mass-market food products for adults, there had been a noticeable trend towards food products for children that made nutritional or quasi-nutritional claims. This trend was helpful to GFI in that it increased consumer awareness of importance of nutrition. However these products were not competing with those of GPI because they were primarily sold in the children's food sections of standard supermarkets. GFI believed the nutritional value and quality of these traditional