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Case Study 8

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Case Study 8 specialist
Victoria University

‘Butcher’ doesn’t cut it! Try the fresh food

By Helen Madden-Hallett,

Elg & Robinson are about as far away from the traditional butchers’ shop image as could be. Their produce includes not only the standard meat fare, but also a diversified offering of specialty meats, poultry, wine (as part of a loyalty program), spices, smallgoods (prepared on-site) and seafood. Their bouquet specialty meats, fish and poultry selections are prepared on the premises and are purchased by a burgeoning number of professional families with dual incomes living in the area. The marketing effort underpinning this innovative approach to retailing encompasses new product lines, modern promotions, competitive pricing and a close eye on location. The creative team behind the image is a partnership between Phillip Elg and Peter Robinson. Mr Robinson explains: ‘Phillip is the director for the company, Elg Developments; and although we are both employees, we have a partnership agreement.’ The company has focused on their store in Williamstown, which has 12 employees in total. Phillip was born and bred in Williamstown, and has had a long association with businesses in particular in the area. He built The Strand, a well-known local seafood eatery, 18 years ago. Phillip was offered the current site in the concourse directly opposite a Coles supermarket (and the conduit to one of the main carparks) because of his professional training as a butcher and his expertise in food. In figure 8.1, the site for Elg & Robinson in Williamstown, near the Coles supermarket, is shown.

FIGURE 8.1 The Elg & Robinson storefront and the entry to the Coles supermarket

Source: Used with permission of Elg & Robinson.
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Another perspective of the storefront is shown in figure 8.2.

FIGURE 8.2 The Elg & Robinson storefront

Source: Used with permission of Elg & Robinson.

Product
The partners quickly realised that they were catering to a select market of sophisticated professionals who manage careers and families; making them time-conscious and willing to purchase prepared and part-prepared meat, poultry and fish meals. The sale of these items is a major differentiating factor between the store and the Coles supermarket just across the concourse. As well, the partners realised that there was also a market for speciality smallgoods, so these are provided prepacked and are displayed separately. They also understand the modern consumer has a need for an ever-changing selection of products. This is why the partners had an intention to introduce a range of gourmet curries in filo pastry for winter. The typical customer is accustomed to high-quality restaurant meals and high-quality produce for meals in the home, which is partially why the partners adopted the approach of only using fresh ingredients, with all food preparation done on-site. The goal is for ‘restaurant quality food’ to be available in a butcher shop. The prepared meat products that are offered at Elg & Robinson are shown in figure 8.3.

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FIGURE 8.3

Prepared meat products at Elg & Robinson

Source: Used with permission of Elg & Robinson.

Local area
The catchment for this outlet is predominantly the municipality of Hobsons Bay. This area has shown a relatively stable population for over ten years, with the level of departures from the city approximately equalled by the number of arrivals. Given that housing prices are, in the main, at the top end of the price range, there is a stable high-income-earner population well within the area to be serviced by Elg & Robinson. The location of the shop directly opposite the only supermarket in the area is also an advantage, as is the partners’ astute approach to not compete head-to-head with Coles on similar product lines. Some local area statistics (Hobsons Bay City Council 2010) include: • forecast population for 2010 — 86 632 people • forecast change in population between 2010 and 2031—13 451 people • average annual percentage change between 2010 and 2031 (21 years) — 0.69 per cent per annum • total percentage change between 2010 and 2031 (21 years) — 13.44 per cent. While the population for the City of Hobsons Bay has remained relatively stable in recent years, it is expected that the population of the area will gradually increase in the future. The forecast population for the area is shown in figure 8.4.

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FIGURE 8.4

Population forecast

Source: Hobsons Bay City Council (2010). When questioned about Elg & Robinson’s range of products, Mr Robinson explains that they need to maintain a certain amount of fresh meat, such as lamb chops, steak and fresh sausages. He goes further, saying where our industry changes and where we are very fortunate as butchers is that we have diversified into fresh fish, and we make our own smallgoods. We’ve planted ourselves right outside a major supermarket — the only supermarket in Williamstown — and they serve 30 000 people a week, but 70 per cent of what is in our window isn’t available in Coles. So, if you want a handmade chicken filo, or any one of a number of varieties we make, that’s not available in there [in the Coles supermarket]; right down to some of the value-adding we do with fresh fish. Customers can’t get filo with fresh fish [from Coles], and certainly can’t get a marinara like we make it. Any of our marinated lines and food prepared lines that we do … just about all of them aren’t available in Coles, so it makes us a very healthy competitive alternative to what the supermarkets provide, and we almost work hand in hand with them to offer a broader selection.

Promotion
The contemporary and eye-catching storefront is one of the first things that can be noticed when coming through the concourse. There are large backlit atmospheric panels and sales pitches around weekly specials. Even when closed, the glass concertina doors remind consumers of the Elg & Robinson promise — with etchings in frosted glass panels. To ensure that they developed and adhered to a strong brand, the partners approached an innovative promotion agency, Can I Play (CIP), to design the logo, the colours and the layout of the shop. Mr Robinson explains: Everything we do is branded; we leave that to two young seriously clever blokes at CIP. Phillip and I sit on a more practical side of things — we look at the floor and I write down active signage at the front. The signage changes a few times a year just subtly, to give the place a different look and a different feel seasonally. The beautiful landscape at the top of the shop was also done by CIP. We realised that it was time for butchers to stop thinking they can design their own business cards and
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their own signage, and we concentrated on what we know — fresh food. We employ people that are a lot smarter than we are in that area; the professionals that deal in that field.

Loyalty program
A customer loyalty program was introduced soon after opening the store and has been very successful, because, according to Mr Robinson, it is a program that actually works. Mr Robinson says customers can see the value they get by using it, and it does not require too many steps. He explains: Our customers are busy people who don’t have time to learn complicated rewards systems. The system credits 2 per cent of anything you spend on your card as a discount, and the beauty of that discount is that it can be added up at any amount of time, so if you haven’t used that discount in a set period of time, you don’t lose your loyalty points or that 2 per cent of anything you spent. You can save it up all year if you like, whereas with FlyBuys; well, I’ve never been involved in that, because you can never get enough points or use them in a period of time before you lose them. The supermarket also runs a loyalty program. In their program, you only pick up loyalty points on particular lines, and I am assuming it is their own brand lines. If you use Sanitarium’s Weet-bix — well, sadly — they don’t want to give you loyalty points; so it’s selective. I think unless people see you are actually physically giving them something that they are able to use, then why bother? In figure 8.5, some promotional materials for Elg & Robinson are shown.

FIGURE 8.5

Promotional materials for Elg & Robinson

Source: Used with permission of Elg & Robinson.

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In figure 8.6, a print advertisement promoting the Elg & Robinson loyalty program is shown.

FIGURE 8.6

The Elg & Robinson loyalty program

The loyalty program is linked via a computerised plastic card. This card is used to record each transaction. One of the partners explains: We change our specials weekly — we have five or so different specials every week. The service staff scan the barcode on the back of the loyalty card; it identifies that they are one of our members. If a customer purchases any one of those five lines, they automatically get that percentage discount off that line. We link it with the wine, we have a liquor licence and we carry three wines from a company from Yarra Valley. If a customer purchases one of those wines and they have the loyalty card, they get a 40 per cent discount on each bottle. So, that is a $35 bottle of wine for $15; once again, this is linked with the loyalty card.

Re-positioning the meat industry
Elg & Robinson are very proactive in modernising the sector and changing the traditional butcher shop image into a fresh food retail outlet that meets the needs of today’s families. They have the support of the Australian Meat Industry Council (AMIC), and Mr Robinson has just commenced a voluntary term on the AMIC. The council’s espoused mission is ‘Advancing our members — advancing our industry’. (AMIC n.d.). The partners are also involved with Meat and Livestock Australia ambassador’s group. There are ten members, or groups, in Victoria. invitation, based on one’s efforts to advance the industry. One of butcher’s tour three to four times a year. A typical tour will have up
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(MLA; MLA n.d.) and host an Membership of this group is by the main activities is to host a to 35 butchers coaching in from

across the state to the outlet to have a look at some of the innovative approaches that are being done and receive some expert advice on how to compete effectively in this market. It is clear that the partners do not consider the visiting butchers as competitors, but take a far more altruistic approach to improving the sector. Mr Robinson says: If anything, the more people build stores like we have, the better the whole industry becomes — they take that next level up. Once upon a time when I was an apprentice if you went to a party as a young guy, you would tell people that you mowed lawns for the council before saying you were a butcher. Butchers were nothing; it was an ordinary industry to be involved in, and there were a lot of elements that you wouldn’t want to be involved with in respect to our industry — and that has all since been cleaned up over the years. If you go to Europe and you’re a butcher over there, it’s almost the same [social] standing as a brain surgeon, because they hold you in high regard. This is because food is such a passion over there. We don’t quite have it here, but it’s getting there. We are building people’s perceptions of what we are doing, literally through the look of the store and how we go about it.

Future plans
The first 12 months was considered the building phase of the business, in which the loyalty program was initiated and improved. Staff were trained on the new computer-based point of sale system, and then the focus was on building the business. The partners are now starting to look more strongly to the future and towards evolving new ideas. Mr Robinson says: ‘It keeps us interested and it keeps our customers interested.’ The business operates under a 20-year lease and the partners recognise that that puts them in a fortunate position, given their ideal location. Nevertheless, they are both realistic about recovering costs incurred to build this type of premises, and they understand that it is important to establish the correct pricing margins. Mr Robinson says: For us, literally, it’s about survival. I love my job, just love it, you have to be passionate in what you do, but at the end of the day, unless you can see light at the end of the tunnel, and there’s money to be made out of it, you wouldn’t bother. The loyalty program … it’s literally about building a network of customers and having them come back week in week out; at the same time, we would hope to have them back not only outside of that loyalty program, but … [because] we are offering them literally the best premises in Victoria — somewhere they can feel comfortable that they haven’t seen anywhere with such stringent hygiene. We are leading the way with everything we do — you would like to think our staff are pleasant; that the food is excellent. Some of the cooked food lines we are now introducing in the winter months … [are of] restaurant quality. I think they’re better than restaurant quality. At the end of the day, when you put it together, hopefully Phillip and I can go on another holiday; the industry has been fantastic for him. We are both passionate about what we do, but what happens is a return — living a comfortable life; [having] a lovely home [and] a beautiful family.

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Conclusion
The traditional image of the butcher’s shop has been replaced with a vibrant and exciting alternative. This modern approach heralds a change across the entire sector, with more traditional butchers taking an interest in what Elg & Robinson have to offer, not only in their product lines, but also with their popular loyalty program, their stringent hygiene standards, their adoption of new technologies and their willingness to use new promotional approaches that are appropriate to their market. Underpinning this approach, the partners behind the business have sought out and developed professional relationships with key industry bodies, such as the AMIA and MLA, reinvigorating the sector so that time-poor customers are well served.

Questions
1. Using appropriate sources, develop a detailed profile of the target market for Elg & Robinson’s store. 2. Analyse Elg & Robinson’s promotional materials, using the photos that are included in this case study. 3. The term ‘fresh food specialist’ is often used to also mean fresh fruit and vegetable specialists. Come up with another term that could be used to replace ‘fresh food specialist’, and also replace ‘butcher’ as a term. Choose a term that is a modern blend of both, as depicted in this case.

References
Australian Bureau of Statistics (2010), ‘2006 Census data by location’, www.abs.gov.au. Australian Meat Industry Council (2010), ‘About AIMC’, www.amic.org.au. Hobsons Bay City Council (2010), ‘Welcome to the City of Hobsons Bay population forecasts’, www.hobsonsbay.vic.gov.au. Meat and Livestock Australia, ‘Marketing red meat’, www.mla.com.au. Robinson, P. (2010), personal interview, Elg and Robinson Pty. Ltd., Melbourne.

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