Published by MBA Skool Team, Last Updated: August 20, 2017
Marketing Strategy of Grofers analyses the brand with the marketing mix framework which covers the 4Ps (Product, Price, Place, Promotion). There are several marketing strategies like product innovation, pricing approach, promotion planning etc. These business strategies, based on Grofers marketing mix, help the brand succeed.
Grofers marketing strategy helps the brand/company to position itself competitively in the market and achieve its business goals & objectives.
Let us start the Grofers Marketing Strategy & Mix to understand its product, pricing, advertising & distribution strategies:
Grofers Product Strategy:
The product strategy and mix in Grofers marketing strategy can be explained as follows:
Grofers is an ecommerce player based out of India focused on food and groceries. Grofers offers almost everything for daily needs in the food and grocery space. It allows its customers to customize the delivery time. Grofers sells product in the categories Fruits and Vegetables, Grocery & Staples, Beverages, Home & Kitchen, Household needs, Personal Care, Breakfast and dairy, Noodles pasta and instant food, Sauces, Jams and Condiments, Baby and Kids, Organic and Gourmet, Pet-care and Meats and Seafood. Grofers follows a product adaptation strategy in its marketing mix due its hyperlocal business model. Its product offerings do vary from one city to other city depending upon the availability in the customer’s local market. However, the communication of offerings does not vary as much. Grofers sells range of branded products to private labels. Grofers has made tie ups with brands like Patanjali and Nestle who have ran their combo products scheme through the portal. The company is offering fruits and vegetables under private label while using inventory model which is a shift from its strategy of hyperlocal model of operations.
Grofers Price/Pricing Strategy:
Below is the pricing strategy in Grofers marketing strategy:
Grofers is a platform provider hence it draws money from the transaction between the merchant and the buyers.
It subsidises the buyers to attract more buyers on its mobile app platform and as the buyer’s number increases, due to strong and positive cross side network effects the number of merchants selling through the Grofers increases. Grofers charges a commission from the merchant for listing their product on its online page. It also charges merchants for putting up their advertisement on Grofer’s webpage. It follows a market leader pricing in its marketing mix where It offers free delivery to the customer over a certain minimum amount of orders, else it charges a fixed rate for delivery. Grofers offers periodic sales discount on certain range of products to gain customer orders in those product segment. The company prices the product competitively as it faces stiff competition from other similar platform providers like Big Basket and Local Banya. Grofers has tie ups credit card and other money transaction companies and provide periodic discounts to those company’s cardholders and payment gateways users.
Grofers Place & Distribution Strategy:
Following is the distribution strategy in the Grofers marketing mix:
Grofers has its operations in 18 cities across India. It currently has operations in New Delhi, Bengaluru, Pune, Jaipur, Chennai, Hyderabad, Kolkata, Lucknow, Ahmedabad, Gurugram, Noida, Kochi, Bhubaneshwar, Indore, Bhopal, Kanpur, Madurai, and Ranchi. Grofers had previously closed its operations in a few cities due to lower adoption of its business.The company takes orders mostly from its mobile app which available on Android store and Apple iOs. However, customers can log in to their accounts via internet also to place their orders using a PC/ Windows platform. Grofers takes orders of items which are available in local market of the buyers and then the company’s delivery personnel provide the delivery to the customer’s doorstep.
Grofer’s regularly review the performance of its retail partners and adds or subtract its contract with them according to the performance and market needs.
Grofers Promotion & Advertising Strategy:
The promotional and advertising strategy in the Grofers marketing strategy is as follows:
Grofers has used TV commercial ad films to promote its brand. The TV ads are focused on two aspects of the company,
a. Central Brand and b. Service Features of the brand
The company ad campaigns are targeted towards working couple who find it hard to make balance between their personal and professional lives. Grofers also utilises paid media like print ads on newspaper advertising some sale on its app or unique product offerings. Grofers focuses on providing on time good delivery services as it is central to their brand promotion. Companies uses discounts to promotes itself as well as Google AdSense to advertise on search result pages. Digital media platforms like YouTube films are well exploited by the company to promote itself. Company is also present on social media platforms like Twitter and Facebook uses its page on these sites create buzz and acquiring higher recall in customer mind space.
Since this is a service marketing brand, here are the other three Ps to make it the 7Ps marketing mix of Grofers.
Grofers has about 1000 employees. Employees have a key role in the operations of the company as its business model is based on collecting orders from the local stores and delivering to the customer’s doorstep. Grofers being a start-up do not have a well-placed HR team to consider the hiring or employ engagement issues, however as per employees review it is an exciting place to work where employees are encouraged to bring in new ideas and most of ideas get implemented in quick time. Grofers wants it employees to be committed towards the customers as its service is key customer touch point. Company has an informal culture where employees are given freedom to work according to their wish if they deliver.
Grofers has been mentioned repeatedly in the articles of leading newspapers and magazines such as Forbes and Business Insider which provides the evidence of its growth. Grofers has grown over 400% in terms of monthly user base and has expanded its presence in 18 cities across India. Its app has more than 3 million downloads on Google Play store and Apple iOS combined. It has been able to raise more than $125 million alone from softbank in 2015 when it was looking for only $85 million. Grofers has more than 8500 merchants listed with the company. The company has been very flexible in its strategy and responds quickly to the situation. It has recently started inventory model of inventory management for vegetables and fruits and has added B2B business to its wing which contribute 10% to the company’s revenue.
Grofers started with hyperlocal model where it collected orders from the listed local merchants and delivered to customers doorstep thus requiring less inventory management cost. In this business model, it had two fulfilling option. In the first model, the Grofers will be responsible for the last mile delivery and in the second the listed merchants handled the last mile delivery and the second mode was about 30% of Grofers transactionin 2015 which they wanted to reduce as it incurred inefficiency in operations. Grofers has also venture into inventory models for private labels in fruits and vegetables which requires investment in warehousing. The company has also expanded itself to B2B business and is targeting to have 40000 merchants on board for this business by 2018. Grofers make significant investment on its IT infrastructure to make its mobile app more appealing and user friendly to customers. Hence, this completes the marketing mix of Grofers.
Grofers is an Indian e-commerce company which provide platform for grocery shopping. Grofers business model is based on door step delivery of grocery items which customers shop online on their mobile app from their nearby stores. Grofers was established in 2013 and is headquartered in Gurgaon India. Food and Grocery segment holds 60% of total market value of Indian retail. Indian food and grocery market is dominated by local mom and pop shops and there has been entry of numerous companies in the space of online food and grocery shopping owing to the rising penetration of smartphones and internet in India.
The online food and grocery market is valued at $600 million in 2016 and is expected grow up to $ 5 billion by 2020 at a CAGR of 72%. Grofers has reported a revenue of INR 14.3 crores in the fiscal year 2016 and has so far raised over $200 million from investors like Softbank and Tiger Global.
This article has been researched & authored by the Content & Research Team. It has been reviewed & published by the MBA Skool Team. The content on MBA Skool has been created for educational & academic purpose only.
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