Ch. 10: Rate of Adoption

Amy’s products have grown popular greatly in part from word-of-mouth communication. Amy’s products feed a niche market, literally, and because of this compatibility they have been eagerly adopted. Though sales didn’t skyrocket from the start, despite discouraging impute from others, the Berliners continued to introduce new products. Consumers eventually caught on and have past on their experiences. Vegetarians, as well as people with special dietary needs, have always had a challenge finding a variety of prepared foods. Amy’s has given these people a convenience that they never had before with a selection large enough that it never gets boring. Because of this Amy’s is now the leading vegetarian, organic frozen food company. Below is a fan letter written to Amy’s that pretty much sums up why Amy’s has become so successful.

Dear Amy,
I have never written a fan letter to a company, but this one is warranted. Since discovering Amy's a number of years ago, our family of five has been gradually increasing our consumption and reliance on your meals. We bring it to work for lunch, it is a great dinner when I am too busy to cook, and we call it our "Amy's Diet" when we have put on a few pounds and need to cut back for a few days. My kids come home and say,"did you make dinner, or is it an Amy's night?" When I go to the supermarket, people in line tease me about all the different Amy's meals I have in my cart, and I tell them how wonderful a product it is, how healthy, delicious, and portion controlled. My son is in college and has an apartment there, and instead of having a full meal plan he opts for one meal at the cafeteria, and supplements with a lot of Amy's meals. I am a psychotherapist specializing in Eating Disorders, and recommend Amy's to many of my patients as good, delicious food that is convenient and quick, and low in calories. In fact, my husband and I recently had a trip to Hawaii, where we stayed in a timeshare with a microwave, and found Amy's at the grocery. We ate your food for breakfast and lunch, and then went out for dinner resulting not only in money saved, but not gaining weight on this vacation! Can you
tell how excited and passionate we are about your product? Thank you guys for a job well done, and products that enhance this family's life immeasurably. I don't know what we would do without you.
Sincerely,
Emily B

Ch. 10: Developing and Managing Products

When Amy’s started out 1987, selling frozen vegetarian potpies, the mass market wasn't quite ready for their products. The few frozen vegetarian products that existed where assumed by most to be similar in taste to cardboard and very often they were right. In the mid-'90s, as people were becoming more educated about nutrition, the organic food market suddenly began to take off. Amy’s sales had been growing steadily, about 20 percent per year, but in 1997, their sales grew 80 percent. They are definitely still in their growth stage and regularly introducing new products as they continue to cruise the upward sloping product life cycle curve. A complete list of Amy’s Kitchen’s products can be found here: http://www.amyskitchen.com/products/index.php

Ch. 16: Coupons and Contests

Amy’s offers coupons as a purchase incentive for potential buyers and as a gift for loyal fans who write to Amy’s to express their love for their products. Coupons are also used as prizes in promotional contests. Most recently they are offering $500 in Amy’s products for whoever can come up with an official Amy’s slogan (mentioned in an earlier post), which will most likely be in the form of coupons. If you write to Amy’s, pledge your love for their products and ask for coupons, they will most likely send you a few. Their coupons aren’t found regularly in supermarket fliers, though. Let’s just say, I’ve been looking and haven’t found one coupon at my disposal as of yet. It’s probably time I wrote in! Here is an image of one I saw someone selling on ebay (weird).

Ch. 16: Sales Promotion and Personal Selling

As I’ve mentioned in my previous posts where I discussed advertising and public relations, Amy’s Kitchen doesn’t involve itself in advertising. They don’t pay for ad space or commercials. They do however have a loyal customer following that has strengthened over Amy’s life span. Amy’s repeat customers make up the greater portion of their business and they do much of the product promotion for them. Numerous bloggers follow Amy’s activities and regularly share their stories and passion for Amy’s company. Amy’s is frequently referenced in blog posts or websites that are directed to people who are living with diets restrictions, for example http://theglutenfreefoodblog.blogspot.com/2009/06/amys-kitchen-gluten-free-meal-plan.html. Amy’s reach is far via the thousands of health related channels that are identifying consumers with their special diet products. They are also recognized in the sustainability awareness community for their environmentally friendly business practices. Sustainlane.com shows Amy’s product ratings and Food, Nutrition & Science: From the Lempert Report, acknowledges Amy’s in their sustainability series with and in-depth overview of their business practices. It can be found here: http://www.foodnutritionscience.com/index.cfm/do/monsanto.article/articleId/327.cfm Customers write in, email, and post letters raving about their favorite products. Vegetarians, the health conscious, and diet restricted all exist within a tight knit community that bases many food choices on personal research and experience and the communication that takes place via the web and word of mouth.

Tina Fey is CRAZY for Amy's Burritos!!!

*SATURDAY NIGHT LIVE with Tina Fey*

Ch. 15: WIN $500 IN AMY’S PRODUCTS!!!

“Healthy Eating for Busy People” sums up the motivation behind Amy’s Kitchen. Though, they have just celebrated 22 years strong and are searching for a catchier tagline. They are now promoting on their website (and inadvertently through numerous bloggers) a 15 words or less slogan contest. They are searching for a phrase, word, jingle, or rhyme that encompasses “what Amy’s Kitchen means to you”. You have until February 1st, 2010 to enter. Here’s a link to the entry form and contest rules: http://www.amys.com/contest.php.

Amy’s website (http://www.amys.com/index.php) is a great venue for marketing their company. It updates all new products and events, including every new (and old) publication they were featured in. It features letters written by Amy’s fans and a form to subscribe to their newsletter. They also offer an abundance of health information including their own diet plan that includes a shopping list and daily planner. Amy’s Kitchen has thousands of newsletter subscribers and numerous blogs posted about them regularly.

Amy’s is “the leading organic frozen food company” and yet they still don’t have an official slogan?! This amazes me, even as a longtime vegetarian and huge Amy’s fan. How does a company become so successful when they don’t engage in advertising, even with all of their PR effort. I definitely feel that at this point in their development stage, advertising could be an effective tool for them. Consumers are ready for these types of products. Amy’s should make the effort to familiarize more of the population with their company and the benefits that their products can offer them. Their huge following does say a lot about the quality of their products and the loyalty of their customers, so they must be doing something right. Maybe it’s just the nature of this niche market. They’ve developed intimate relationships with customers that are more comfortable with the trial and error mentality (since the vegetarian market is still fairly young) and are eager to find products that suit their lifestyle. Their even letting their customers do their advertising for them.

Ch. 15: Advertising and Public Relations

October 16-18 of 2008 Amy’s Kitchen debuted a new product category at the Natural Products Expo East Show in Boston. There they featured their new organic vegan Cakes including Amy’s Orange Cake and Chocolate Cake which are both organic, vegan and delicious! In February of 2009 these cakes were featured in VegNews magazine in a short article encouraging consumers to ring in the New Year with healthy eating habits. Amy’s organic canned beans where featured in The Nibble, July 13, 2009 as a note to “Franks and Beans Day”. September 2, 2009, Self Magazine printed an article, “The whole enchilada: An authentic Mexican meal in your freezer” promoting their new Enchilada Verde whole meal. The same magazine previously awarded them the Lifetime Achievement Award, in their Healthy Food Awards category, for being "body-friendly fast food." These are just a few of the public relations activities that Amy’s Kitchen has been engaged in and encompasses their executional marketing style.

Amy’s Kitchen’s marketers aren’t buying time slots on cable television or ad space in health magazines or on bus stop billboards. Believe it or not, they don’t really advertise but they DO promote their products, and the company as a whole, in the form of public relations (PR). PR is their main marketing tool, with the exception of coupons which in my experience are few and far between. Amy’s reaches a niche (vegans, vegetarians, the diet restricted, health conscious, etc.) that has allowed Amy’s success to grow by word of mouth and by simply being an option among few others. When Amy’s started up about 22 years ago they were catering to a small niche with the primary retailer being health food markets. As a long-time vegetarian I remember as a child (15-20 yrs. ago) my mom preparing the majority of our meals at home, from scratch. Any prepared vegetarian foods (frozen or otherwise) would be found, primarily, in a health food market. There was really no need for advertising because the target market was already at the market, so to speak.

Though, consumer habits have changed significantly since then and people, not just vegetarians, are growing more and more health and eco-conscious. Amy’s does certainly have a reputation birthed from the experience of eager vegetarians, yet they are also engaging in PR with moderate frequency. Amy’s does this by sending out press releases for new products and events they will be involved in. They have been featured by numerous health magazines yet they are also of interest in the business world having been featured in Fortune Small Business where they discuss how they built a leading frozen food brand. The Press Democrat reported them for their environmentally friendly business practices. PR is a powerful marketing activity and has been the road Amy’s has taken into the greater population via popular national magazines and newspapers.

Ch. 17

As more frozen dinners “go natural”, prices will naturally adjust in the face of competition. Though the availability of alternatives has great influence on prices, so does the distribution strategy. Consumers will often pay higher prices for convenience and accessibility. Amy’s Kitchen has a huge distribution network from super centers like Wal-mart to college campus convenience stores (where they are in great demand).

Consumers may also be more apt to accept higher prices when they are amongst other similar prices, like in a high priced market or when sharing a shelf next to an expensive line of products. Shoppers may be more prone to spending a few extra cents or even dollars on a product after investing 20 minutes in an expensive market than they would if they were to assess a product individually.

Manufacturers have lost much control within the distribution channels, however, giving wholesalers and retailers the power to adjust prices to suit the purpose of the retail outlet. For example, they may raise prices of brand names in order to increase the sales of their store brand products. This can be avoided, in part, by sticking with one distribution system, avoiding “price-cutting discounters” or even printing the price on the package (which may not be an acceptable image).

Product loyalty is by far the most powerful piece of the pricing puzzle. When customers are loyal demand becomes more inelastic. Even a moderate increase in price will not deter a loyal customer (at least in the short run) as long as they remain completely satisfied with the product or service that they are purchasing.

Ch 17: Pricing Concepts

Organic food products, like Amy’s Kitchen, have traditionally been in a high cost category both for the producer, the consumer and everyone in between. This is because up until the last 5 years or so these types of products were still in their introductory stage as they were just beginning to be introduced to a competitive market. Ten years ago vegetarians and other health conscious consumers had to pay top dollar for high quality, organic food items because low demand resulted in low supply and demand was fairly inelastic. In that market where alternatives were scarce, prices could skyrocket and people had only two options, pay the high price for that type of product (ie. organic multi-grain snack bars) or don’t buy them at all. Health is not just for the hippies which was once the “bean sprouts and granola” stereotype. Consumers growing awareness of the harmful impact of pesticides and preservatives has lead organic food products into a growth stage, giving products more elastic demand, allowing for more competitive prices. Growing demand is causing more suppliers (manufacturers, farmers, producers of ingredients) to enter the field increasing opportunities for brands and the procurement of resources, finally driving down prices. Amy’s products, which have been around for about 22 years, are now facing competition though they are still the nation’s leading organic frozen food supplier.

Ch. 13: BugStores.com

The concept of a retail store has grown over the past decade because of the ever expanding internet. Before internet retailers or e-tailers, retailing was mostly limited to physical stores. Non-physical retailers for consumer purchasing did exist however and included catalog and mail order, home shopping networks and telemarketing.

As the internet has become more popular traditional retailers are adding online retail stores where their customers often have more access to a range of products that can’t be stocked in the physical store. Many e-tail stores are being erected with no physical location at all. This is giving people more power as consumers, allowing them absolute control of when they shop and the ability to evaluate competitor offerings with the touch of a button.

The expansion into e-tailing has also given marketers more opportunity to reach their target market. The internet is a powerful tool allowing retailers to track their customers browsing behaviors and preferences giving them the upper hand. The information retailers gather about their customers can be used to create a marketing plan that is individualized.

I recently visited an online retail store in search of a groomsman gift for a good friend of mine. I googled “cigar torch lighter” for lighters to give the groomsmen to accompany their traditional groomsmen cigars. The first e-tail store on the list was BugStores.com. I’ve never shopped for a cigar lighter before so I didn’t know quite what I was looking for, besides that it should be a cigar torch lighter by the suggestion of a friend. When I clicked on BugStores.com I was routed to the homepage of the website, where similar to a store front, I could see a sneak preview of what they have to offer. Unlike a physical storefront, though, the homepage offers much more information giving customers full control of their shopping experience. BugStores.com has an attractive layout filled with professional photographs of their products. They also have all of their products categorized and to my surprise they had a category labeled Groomsmen Gifts! Under the Groomsmen Gifts category is a page that displays a generous array of products including cigar cutter lighters, tobacco pipes and cigarette cases. At the top of the page is “product sorting options” that allow you to narrow your search by price, popularity and rating, a clever feature that again empowers the customer and individualizes the shopper experience. The website includes detailed product information including a FAQ page where commonly asked questions can be answered like, “How do I refill my butane lighter?” Customers can comment on products and the loyal customer can even follow them on Twitter. You name it, they’ve thought of it. I ended up tossing a Monarch Z DualTorch into my virtual shopping cart and headed to checkout. The Monarch Z DualTorch can be found here: http://www.bugstores.com/shop/lighters.php?product=BS0M30

I’m like so many busy, busy Americans these days that have to carefully ration their time. Online shopping allows consumers to spend less time on the “in between”, cutting out valuable time that could be spent on more important things. Some could say that browsing through an e-store is in many ways far superior to browsing in a traditional retail store. I wouldn’t go so far to say that I’d take an e-tail store over a tradition retail store any day, but I’d be lying if I didn’t say, most days.

Ch. 13 Retailing

As Amy’s Kitchen’s allotted shelf space has grown in grocery stores due to its expanding product line, so have the number and type of retailers it distributes to. Amy’s products started out in health food stores, 20 or so years ago, because for many vegetarians that was their primary grocery source, at least for the modern vegetarian seeking a variety of food options. As consumers food preferences are ever developing, food retailers are all catching on to the demand for Amy’s (and the like) health food products.

Food retailers usually known as grocery stores are expanding in and of themselves. You can now categorize some stores as retailers that sell food. Supercenters like Target and Wal-mart for example offer a full-circle shopping experience. One trip to Target and you’ve checked off your grocery list as well as purchased bathroom products, intimates, lawn furniture and camping equipment. Warehouse membership clubs like Sam’s Club and Costo have also earned a huge place in food retailing operations. Amy's has jumped on the wagon and can be found at Whole Foods, Costco, Fred Meyer, Wal-Mart, Target, Giant, Shopper's Food Warehouse, Albertson's and many others.

Another growing avenue for retailers is e-tailing or online retailing. Established retailers
are broadening their reach by adding e-commerce to the mix. Online sales account for approximately 8% of total retail sales. Some retailers are strictly e-tailers with no physical store and are experiencing great success due to the internets great presence in our society. Amy’s Kitchen offered online purchasing for a period but isn’t “temporarily” for reasons unknown to customers. They are however redirecting customers to online retailers that are offering Amy’s products such as Fresh Direct and Netgrocer.com. For a full list of e-tailers offering Amy’s:http://www.amys.com/buy/buy_online.php