Please read the article about the Ooooby Case and answer the multiple choice questions that follow.

Ooooby - Auckland food box business set to grow

Source: NZ Herald

Waiheke-based entrepreneur Pete Russell is on a mission to revive the local food market, one city at a time. After founding fruit and vegetable home delivery businessOoooby(Out Of Our Own Backyards) in Auckland nearly three years ago, Russell now operates the concept in Sydney, Waikato and Christchurch. Ooooby's mission is to put small-scale sustainable farming at the heart of the food system.

The self-declared "start-up guy" wants to makes locally-grown food as affordable and convenient as what people can buy in the supermarket. "We believe we can do that because we can cut a whole lot of fat out of the supply chain," Russell said. By applying the same technology and methods used in long distance supply chains, he aims to get local, natural food into the market at a competitive price without squeezing the farmer. "If we prototype that in Auckland, we can replicate from city to city," he said.

Russell started Ooooby as a social network about six years ago, building a community of local and organic growers who could trade tips, and swap seedlings and food. The network soon grew to 1500 members and Russell identified a viable food production group lacking a channel to market. "We figured 'what would happen if we could provide a way for these guys to tap into the market and make some money from their backyard?'" Ooooby has since grown to 16 part-time staff and a base of 100+ growers, and have delivered over 300,000 boxes of local and organic food to more than 30,000 homes.

In Auckland, growers deliver their food to a depot in Mt Wellington every Tuesday morning, where the boxes are packed to order and sent out in the afternoon. The food was usually picked that morning and carrying out all the work in one day meant there was no need for storage or double-handling, Russell said. A similar model is used in the other cities Ooooby operates in. Customers can choose from a variety of boxes, ranging in price from $20 for the 'Essentials Box' to $60 for the 'Big Mix Box'. Customers can also add individual items, such as miso paste, Bellbird Bread, free range eggs, among many other items, to their box orders.

"We've got a system now where we can cover all our expenses, pay everyone on less than 300 deliveries a week. So we've cracked it in terms of proving the financial model on a small customer base," Russell said. Growers were being paid a minimum of 50 per cent of the retail price. "They're getting paid well compared to if they were selling through traditional outlets," he said. Russell said the model was about being as lean as possible, leveraging off the fact that local food did not have to travel far.

Russell is originally from Australia, and has started a number of businesses there. One of the other businesses he started involved importing pastries from Europe, which were frozen and shipped across to Australia, then distributed throughout the country. "It was good money but I wasn't working on things that were fulfilling or inspiring. It was all about the money," he said. Russell said the biggest problem in the current industrial food system was that family-scale growers were fast "dropping off the vine. As the mainstream markets are consolidating and looking for efficiencies, they're not wanting to deal with 100 different suppliers. They want to deal with one supplier that can do the volume of 100." The result was that family growers were left selling at farmers markets, which were "a minute fraction" of the main market, Russell said.

End of Case

(i) Diane has been using Ooooby for the past year. She has developed a favourable attitude towards Ooooby and she is very likely to continue purchasing from Ooooby. Based on this information, we would say Diane has brand ___________ towards Ooooby.

a.loyalty

b.quality

c.awareness

d.equity

e.personality

(ii) In order to promote their new ready to prepare meal box, Ooooby Eats, the company plans to emphasise distinctive product features, such as locally grown and sustainability produced products, to encourage brand preferences in their customers. Ooooby would be practising:

a.non-price competition.

b.brand differentiation.

c.price competition.

d.competitor differentiation.

e.product competition.

(iii) Pete Russell, CEO of Ooooby, has seen how successful, in terms of sales, the ready to prepare meal boxes like My Food Bag are. He is considering launching a similar ready to prepare meal box using their locally grown food products called Ooooby Eats. Ready to prepare meal boxes are likely in which stage of the product life cycle?

a.Introduction

b.Maturity

c.Decline

d.Development

e.Growth

(iv) When Ooooby promotes that they "deliver straight to your door", they are promoting which level of the total product concept?

a.Core product

b.Augmented product

c.Branded product

d.Actual product

e.Physical product

(v) The article about Ooooby that appeared in the NZ Herald is referred to as what form of marketing communication?

a.Personal selling

b.Publicity

c.Sales promotion

d.Advertising

e.Direct marketing

(vi) If Ooooby markets the Essentials Box to single people and Big Mix Box to families, the company is using a(n) __________ targeting strategy for its fruit and veg boxes.

a.differentiated

b.concentrated

c.stratified

d.multi-use

e.undifferentiated