Peapod - Marketing in the United States

Situation

        Marketing in the United States has relied deeply on the transactional model, where businesses served as the only provider of goods to the consumer, leaving the customer dependent on the select providers for certain goods and services. During the late 1980’s, the dynamic shifted as many companies began to roll out plans to better represent themselves and their product via a relationship model between the consumers and the companies. One such company is Peapod, a consumer-direct shopping company in many metropolitan areas, though the scope of this analysis is only for the Greater Boston area. As with many consumer-direct companies, especially in highly competitive field, relationships are paramount to attract the customer and keep the customer continuing to utilize the services rendered by Peapod. Since Peapod has run into multiple issues, the situation though not dire, does have many flaws which could make keeping customers long-term a difficulty, though the largest delivery company in the Boston metropolitan area by over 100% compared to the next company (Fournier & Schulman, 2014).

Problems

        Peapod does have an excellent business model for providing a grocery delivery service in which busy professionals can maintain household functionality with limited time, as well as providing healthy and nutritional food to their families without wasting precious down time on weekly trips to the grocery store. There are numerous problems within the model though especially after the rollout of the warehouse model, listed below.

• Time required to drive to pick-up destinations
• Representation at a local level
• Selection of products that were once available are no longer available
• Personal interaction with consumers is low
• Brand Management of “personal shoppers”
• Low quality of fresh produce
• Lack of Trust in company with substitutions of groceries
• Groceries the only service offered compared to Shoplink and Streamline

Analysis

        Though Peapod is the maintaining a large lead on the competitors, the company is not meeting several fundamental relationship aspects from business to consumer. One of the chief concerns is lack of personalized service and understanding. Of the customers interviewed, all were surprised at the lack of understanding in the substitution of products or the selection of fresh produce. As Peapod looks to expand its operations as well its customer base, properly training and selecting of grocery shoppers and inventory, as it moves towards warehouse distribution is paramount for customer satisfaction and retention. With constant mistakes at the merchandise level, the entire business model is at risk, as customers have 3 other choices within the greater metropolitan area, some offering more value for a smaller monthly charge.  Though centralized distribution will allow for greater control of what the customer can order, offering substitutions, must be closely regulated and safeguards must be put in place in order to allow for greater customer trust and satisfaction within the company.