Honest to Goodness Australia: A Report on Marketing Strategy

This report analyzes Honest to Goodness (H2G), an Australian online retailer of organic and natural products, using the 5 C framework (Company, Customers, Collaborators, Competitors, Context). It identifies H2G's strengths, such as its first-mover advantage and strong brand name, and weaknesses, like its niche market and premium pricing. Opportunities for international expansion and social media marketing are explored, along with threats from growing competition and potential price wars. The report discusses H2G's target market, collaborations with growers and retailers, and key competitors. It also examines the political, technological, and environmental factors influencing H2G's business. The report concludes by recommending improvements to H2G's marketing mix, focusing on product, price, place, promotion, and people, to enhance customer acquisition and brand positioning.

Honest to goodness
Online retailer, wholesaler and distributor of organic food and natural products

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Table of Contents
Introduction......................................................................................................................................3
Analysis of 5 Cs of the H2G, Australia...........................................................................................3
Company......................................................................................................................................4
Strengths...................................................................................................................................4
Weaknesses..............................................................................................................................5
Opportunities............................................................................................................................5
Threats......................................................................................................................................6
Customers.....................................................................................................................................6
Collaborators................................................................................................................................7
Competitors..................................................................................................................................7
Context.........................................................................................................................................8
Political factors.........................................................................................................................8
Technological factors...............................................................................................................8
Environmental factors..............................................................................................................8
Market research and market analysis...............................................................................................8
Developing Marketing strategy.......................................................................................................9
Marketing mix.................................................................................................................................9
Product.........................................................................................................................................9
Price.............................................................................................................................................9

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Place...........................................................................................................................................10
Promotions.................................................................................................................................10
People.........................................................................................................................................11
Conclusion.....................................................................................................................................11
References......................................................................................................................................13

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Introduction
Honest to Goodness is a leading platform for customers throughout Australia to buy organic and
100% natural products. The company was founded in 2002 by entrepreneur Matt Ward in
collaboration with his wife Karen. Today, sixteen years the later, the organization continues to be
one of the leading brands of natural and organic products in Australia. The brand claims to sell
100% natural products with no added flavors, preservatives, colors, sweeteners, hydrogenated
oils (trans-fat) or any food products that contain palm oil. Since its inception, the brand has
changed the shape of Australian food industry.
The changing lifestyles of people towards healthier living has encouraged various businesses to
venture into selling organic and natural products. H2G (Honest to Goodness) currently offers
bulk wholefoods, organic & natural groceries as well as organic ingredients for meals. Their
offerings are spread across 33 categories including confectioneries, dried fruits, flour, rice,
sugars and tea & coffee etc.
H2G has introduced Australian customers to a unique product and hence continues to target a
niche market of the country. Given the growth of the brand, it is evident that the firm is
experiencing increasing demand and enlarging target market. This report aims to highlight upon
different facets of the organization as well as the industry that it operates in. Currently the brand
is serving to customers across Australia. Operational efficiency of the brand can be attributed to
a strong network of suppliers and distributors of the firm. The report throws light on the 5 C
analysis of the organization which helps in gaining a deeper insight about the strengths and
weaknesses of the brand as well as a macro environmental scenario of the industry that it
operates in. The report also recommends strategies to improve upon the brand’s marketing mix
which would assist the H2G in gaining customers and establishing an improved positioning
across the globe.
Analysis of 5 Cs of the H2G, Australia
5 C analysis is often conducted by businesses in order to understand deeply about the company,
competitors, collaborators, context as well as customers. The overall analysis would help in

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conducting a micro analysis on an organizational level and macro analysis on an industrial level.
The 5 C analysis for Honest to Goodness in Australia is depicted as below:
Company
The most strategic way to understand about a company is to conduct a SWOT analysis. This
analysis helps in identifying strengths, weaknesses, opportunities and threats that guide the firm.
The SWOT of Honest to Goodness is as below:
Strengths
First mover advantage: The major strength of the Honest to Goodness is the first mover
advantage that the firm displayed by entering into the niche market of organic and natural
products back in 2002. The industry was still in its infant stage and hence Honest to Goodness
managed to be one of the early entrants in the industry. The first mover in any industry
automatically gain a competitive advantage as opposed to other players (Markides & Sosa,
2013).
Strong brand name: Honest to Goodness has won the award for the “Favorite organic brand”,
“Best organic wholesaler” and “Best organic online store” for three years in a row in the Organic
Consumer Choice Award (OCCA) (Honest to Goodness, 2018). This reflects that the brand is
trusted and resonates well with consumers. These awards are evidence of high levels of brand
salience and recall value in the minds of customers.
Strong value set: Another strength of the Honest to Goodness is the strong set of values of the
business. Strong ethics of any particular organization help the brand in building trust and respect
in the minds of consumers (Hartman et. al., 2014). Honest to Goodness is proud of its solid value
base. The organization and all its stakeholders continue to work towards creating a healthy
society and spread the message of fitness. Honest to Goodness is a socially and environmentally
responsible firm.
Large range of offerings: Honest to Goodness also offers a large range of offerings that
includes rice, wheat, fruits, coffee, tea, flour, juices, dried fruits etc. There are 33 categories

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offered by the brand to customers to select from. Since no other competing firm is offering such
a massive range of products, this is definitely an advantage for Honest to Goodness.
Weaknesses
Niche market: The primary weakness faced by every organization in this industry is that the
market for organic products continues to be niche and highly limited at the moment. The
lifestyles of people are changing but at a slow pace. Hence until the Honest to Goodness would
have to continue putting efforts in attracting more customers. Niche marketing is a lot more
difficult than mainstream marketing because marketers need to create the demand and then work
towards fulfilling it (Kim & Mauborgne, 2014).
Premium pricing and low profit margins: Organic and 100% natural food products are more
difficult to procure and entail larger costs. In order to recover those costs, Honest to goodness
has to adopt a premium pricing strategy. Premium pricing refers to the process of pricing a
product higher than industry standards (Nagle & Müller, 2017). This premium pricing strategy
and lower profit margins require the business to run on economies of scale (Polkinghorn, 2016).
However, this becomes difficult because of the small size of the niche market.
Opportunities
International expansion: The brand’s operations are limited to Australia at the moment.
International expansion to other countries would provide the Honest to Goodness with an
excellent opportunity to grow its target market and enhance its customer base. Planned expansion
through international boundaries would help the brand in going global.
Social media marketing: With the advent of technology and increasing use of internet, social
media marketing has come to play a significant role for organizations in reaching out to
customers (Tuten & Solomon, 2017). Honest to Goodness is not highly active on its social media
platforms and it is recommended that the brand can device effective social media marketing
strategies. This would assist in reaching out a larger customer base.
Increased number of outlets: Even in Australia, Honest to Goodness products are available at
various supermarkets and retail stores. However, the brand’s own stores are very few. Increasing

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the number of stores run under the name of “Honest to Goodness” will help in enhancing brand
awareness and allow the brand to set the right positioning in the minds of its customers.
Tie up with fitness centers: Effective collaborations are pivotal to the success of any business
(Majava et. al., 2013). One opportunity that Honest to Goodness can take advantage of is the
increasing number of fitness centers that have entered the Australian market. The brand can
effectively tie up with the centers and target the most appropriate audience for its branding.
Threats
Growing competition: The primary threat that is posed to Honest to Goodness is the increasing
competition in the industry of organic products. H2G once had the first mover advantage but
now the industry is getting flooded with more and more players making it a Red Ocean market.
This growing competition makes it imperative for industry players to device strategies that
would help them in gaining a competitive advantage over others (Campbell et. al., 2012)
Price war: The increasing competition in the industry in turn poses the threat of a price war
wherein all the players fiercely compete with each other in terms of pricing. This leads to price
of the product falling too low which may lead to losses for business involved (Risen, 2014).
Customers
Honest to Goodness is in the business of selling organic and 100% natural food products. These
products are premium priced owing to their high cost of production and manufacture. At present
the demand for such products is also relatively lower and hence it is difficult for firms in the
industry to run on economies of scale. Hence in order to cover costs, Honest to Goodness has
adopted a premium pricing strategy.
Target market of any business comprises of the set of customers whose needs the business aims
to fulfil (Lee & Carter, 2011). Therefore, predominant customers of the product are premium
customers who can afford organic and natural products. These customers belong to middle and
high income groups and are spread across all age groups. With the changing lifestyles and
increasing awareness, target customer market of Honest to Goodness’s potential customers are
increasing.

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Health conscious customers are also targeted by the brand. These customers understand the
importance of organic and natural products as well as the positive impact that these products
have on their health. These customers are spread across different age groups, ethnicities and
religions.
Owing to limited geographic expansion of Honest to Goodness, the brand’s customers are
limited to Australia.
Collaborators
The success of any business largely depends on the network of the business and its various
collaborations with different stakeholders of the firm (Lawrence & Weber, 2014). For Honest to
Goodness, the predominant collaborations include the brand’s growers and suppliers. The
growers include farmers who grow the organic products in a 100% natural form. The suppliers
are the stakeholders who supply Honest and Goodness’s products to its customers. The growers
of the products are strictly guided regarding the strategies used to grow the products in order to
ensure that the products are grown in an environment friendly manner.
Another important collaboration of Honest and Goodness are its retailers. Since the brand has
limited outlets running by its own brand name hence the business needs retailers who can sell the
brand’s products in their own outlets. This is where the brand’s collaboration with retailers
comes into the picture. These retailers’ stock products sold by Honest and Goodness and sell it to
customers.
Competitors
The changing lifestyle of people and the increasing number of health consciousness among
consumers has led to an increase in competition in the market. There are several other players in
the organic foods industry in Australia. The key players in the market include Hemp foods
Australia, Sanitarium health and well-being, complete health products, Santos organics
warehouse etc.
These brands are relatively new and hence do not pose a strong threat to the strong brand name
of Honest and Goodness especially in the Australian market.

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Context
Political factors
Australia is a constitutional monarchy under a political democracy. The political scenario is
Australia is stable which provides a positive environment for businesses to begin and function.
There are two main political parties which include Liberal Party of Australia and National Party
of Australia. The political scenario of Australia and its stability has created a positive business
environment which is directly beneficial for the brand.
Technological factors
The increasing advent of technology in the world has a direct impact on various businesses
(Sako, 2012). Honest and Goodness sells organic and natural products online. This requires
customers to use internet. The increasing advent of internet has made it possible for Honest and
Goodness to reach out to customers through various platforms. These customers are now able to
book their orders and get them delivered at their doorstep. The entire business model of H2G is
the gift of growing technology and this growth has positively impacted the business.
Environmental factors
Environment responsibility is crucial for the growth of any business. Honest to Goodness is in
the business of sourcing organic and natural products and hence it is of utmost importance that
the brand effectively manages waste. H2G must also ensure environment friendly packaging of
its products. The growing sustainability of these products and the environment is the primary
responsibility of any business (Jonoski et. al., 2015).
Market research and market analysis
There are various factors that are currently impacting the business of Honest to Goodness.
Understanding customer needs is pivotal to the long term sustainability of any business
(Williams & Naumann, 2011). For H2G, customers need 100 % natural foods that are organic.
Customers need to make sure that the products offered are grown and distributed in an
environment friendly manner. It is imperative that customer needs are effectively analyzed and

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fulfilled by brands. In order to achieve this, Honest to Goodness must put efforts in
understanding consumer buying behaviors, patterns and attitudes.
One of the most importance change observed from the industry perspective, there is an
increasing competition that is being faced by Honest to Goodness. Every player in the industry
tends to adopt different strategies in order to gain a competitive advantage (Madu, 2012). The
number of players within the industry are consistently on a rise. Hence Honest to Goodness
would have to put efforts in gaining a competitive advantage against these firms.
With the increasing competition, there is an Increasing bargaining power of collaborators. The
same suppliers and retailers are now approached by different brands. This leads to an increase in
the overall cost for Honest to Goodness.
Developing Marketing strategy
Marketing mix
Product
The product offered in this case are predominantly organic foods which are 100% natural. The
brand also sells recipes and books which attempt to guide customers on the advantages of
consuming organic products. Growth of the product offering by a particular brand leads to
sustainable growth of the business (Armstrong et. al., 2015).
The brand must consistently widen its product line. This can include tying up with chefs and
introducing new cuisines which are healthy. They can also sell other products which are
environment friendly. These can include bamboo toothbrushes, wooden pens and paper bags
which eliminate the use of plastic from the market.
Price
The pricing strategy adopted by Honest to Goodness is premium pricing. Honest and Goodness
CEO mentioned that if the demand for organic products rises then the firm would be in a better

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position to reduce its prices and hence more people will be able to afford these products thereby
enhancing the brand’s target market (Inside FMCG, 2017).
Hence in order to adopt a more competitive pricing strategy, the brand must focus on increasing
awareness of the product. This in turn would increase demand. This will eventually lead to
increased sales and hence improved pricing strategy by the brand.
Place
The place where a business operates largely defines its growth in the industry (Gordon, 2012).
Currently the brand is only functioning in Australia. Honest and Goodness products are
distributed throughout Australia via various channels. This includes their online website, several
retail stores, supermarkets and other wholesalers who are working towards distributing the
product among people.
In order to improve the brand’s reach, it is recommended that Honest and Goodness breaks its
geographical boundaries and caters to customers present outside of Australia. In order to achieve
the same, Honest to Goodness can start exporting in other countries. Another strategy would be
to enter the Asian market through a joint venture. This would help the brand in reaching out to
more customers across different parts of the globe. A planned international expansion can help
Honest and Goodness become a global brand.
Promotions
Promotional strategies adopted by the brand help organizations in devising effective strategies to
reach out to their customers (Singh, 2012). Currently the brand has resorted to traditional forms
of marketing in order to target new customers. However, it is recommended that in order to fight
the increasing competition in the industry, the brand must resort to digital media marketing
strategies in order to reach out to technologically savvy customers.
Social media marketing strategies involve reaching out to customers through social media
platforms including Facebook, Instagram and Twitter (Packer, 2011).

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Besides this, digital media marketing strategies in the form of search engine optimization and
search engine marketing must be adopted. SEO and SEM are conducted to ensure that customers
can search for the brand easily and hence gain enhanced awareness about the same (West, 2012).
People
The people associated with any organization includes all the stakeholders of the business. It is
the people of the business that actually form the backbone of the business. Honest to Goodness
must make sure that it corresponds well with all its stakeholders. Stakeholder satisfaction is
crucial for any organization and results in increased employee and customer satisfaction (Taylor
& Judson, 2014). Honest and Goodness must put efforts in understanding customer needs,
keeping their employees satisfied, developing long term relationships with their collaborators
and establishing sustainable bonds with all the stakeholders of the business. This will lead to
increased coordination among these stakeholders and hence improved business efficiency.
Conclusion
The changing lifestyles and increasing switch towards healthier alternatives in food have created
the organic food industry which is consistently on a rise. A leading player of the industry in the
Australian market is Honest and Goodness. The brand sells organic and 100% natural products to
its customers. These products are spread across a large variety and reach out to customers
through effective collaboration with growers, suppliers and retailers.
The organization has a strong brand name which is trusted among customers and is largely
respected. The strong value set of the business has also further added to the trust. At present, the
business is catering to Australian customers but it is strongly recommended that H2G breaks its
geographic boundaries and puts efforts towards serving customers in different parts of the world.
Various improved promotional strategies including digital marketing (SEO & SEM) and social
media marketing strategies have been recommended to the brand for improved ways to reach out
to customers. Efforts to better understand consumer needs, keeping employees satisfied and
establishing sustainable relationships with all the collaborators is sure to positively impact the
business, enhance customer base and eventually lead to improved growth. Honest and Goodness
is one of the early movers in the organic foods industry. The initiative is truly commendable and

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it is the growing number of such brands that people are becoming more responsible towards their
own health as well as the environment.

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