Grocery Gateway Report

Executive Summary

Grocery Gateway is the largest consumer-direct online company in Canada[i] and the country’s only major internet grocery retailer[ii]. It currently serves Toronto and major surrounding urban centres. Grocery Gateway has succeeded because of its strong logistics system, controlled cost structure and reasonable growth strategies[iii].

Grocery Gateway has made a successful transition into this relatively untapped market and has gained the respect and confidence of investors. However, to sustain its competitive advantage within the industry, Grocery Gateway must adjust its current business strategies. Grocery Gateway currently operates a disjointed marketing mix that lumps all prospective client groups into one category[iv]. Thus, in order to better attract prospective customers as well as retain existing ones, Grocery Gateway must identify a target market segment and develop a viable value proposition for this group.

A detailed analysis has identified the most pertinent target markets. These include downtown core residents, dual income families and seniors. After assessing the pros and cons of each, targeting dual income families appears to be the best strategy to pursue.

Problem Statement

In order to build and maintain a strong and loyal customer base, what is the most pertinent target market for Grocery Gateway and how will the company structure its value proposition to best suit this group?

Situational Analysis -

Analysis of External Factors – Reference Appendix A1 - A13

As an e-commerce business, Grocery Gateway must comply with a number of government regulations and legislation regarding the privacy and information rights of individuals[v]. With compliance requirements come additional costs associated with formulating policy and developing and monitoring adequate controls.

From a positive economic perspective, inflation has decreased in 2003 while interest rates have remained relatively constant, trending downward since...