孟

How ButcherBox Can Expand

In Beef Market

TEAM 2

Xiangyu (Sue) MENG Dongqi (Tom) WANG

Huiruo (Maggie) ZHANG Yueqi (Monica) MENG

Chante BARNES

Marketing Research---MKGB 7730, 002

Dr. Kachersky

2015/12/7

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Executive Summary

ButcherBox’s creator plans to deliver grass-fed beef directly to the customer’s door

from specially chosen farms. Grass-fed beef not only has many healthy benefits such as

reducing the risk of heart disease, but also tastes better than normal beef.

The primary purpose of our project is to help ButcherBox make better marketing

strategies with the expectation of increasing market shares. In order to achieve this, we used a

carefully designed questionnaire to survey customers about their preferences when they

purchase beef. The questions that we asked include where consumers buy their beef, what

their preferences about delivery service are, if they buy grass-fed beef, and how essential the

certain features of beef are to them, and how much they’re willing to pay for healthy beef and

so on.

Based on the responses, we found the number of online beef buyers is so few that we were

not able to summarize their behavior patterns. Thus, we decided to take a deep look into

offline customers and their behaviors so that we could try to get them to buy BuctherBox’s

product, which is online. Furthermore, among the offline customers, we inferred that men

were more likely to become BuctherBox’s customers because they valued high-quality

healthy beef more than women. At the same time, males seemed to be less sensitive about

higher price than females. As a result, males were the ideal target market. After that, we

suggested that the ButcherBox team should invest more on publicizing the healthy benefits of

grass-fed beef as well as its excellent taste, make the box smaller, and set up a referral

program. By taking these actions, the team will be able to efficiently boost sales among male

customers and finally expand market shares.

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Content

Environment Context of the Problem ........................................................................................ 3

Past information and forecasts ........................................................................................... 3

Resources, constraints and objective ................................................................................. 4

Buyer behavior ................................................................................................................... 4

Economic & legal & technological environment............................................................... 4

Problem Definition..................................................................................................................... 5

Research Design......................................................................................................................... 6

Descriptive ......................................................................................................................... 6

Layout and Sequence ......................................................................................................... 6

Analysis Results and Findings ................................................................................................... 8

Limitation ................................................................................................................................. 13

Conclusion and Recommendation ........................................................................................... 15

Reference ................................................................................................................................. 17

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Environment Context of the Problem

Past information and forecasts

Certified organic pasture has grown up to 2,655,000 acres by 2008, indicating that the

need for organic meat, including beef, is growing (United States Census Bureau, 2012).

According to Mike Salguero, the CEO of ButcherBox project, grass-fed beef only occupies 1%

of all beef consumed in the U.S (ButcherBox Team, 2015). As a result, there’s a long journey

for grass-fed beef to take before people accept it. However, the importance of grass-fed beef

is becoming more obvious due to the discovery of many disadvantages associated with the

current method of raising cows. For example, conventionally raised beef is recently found to

be much more likely to have bacteria overall, as well as bacteria that’s resistant to antibiotics,

than grass-fed beef (Andrea Rock, 2015).

Figure1: Percent Of Samples With Multidrug-resistant Bacteria

As grass-fed beef becomes more popular, more farms raise cows in this way and more

companies sell such beef online and offline. This also means that there’s an increase in the

amount of suppliers and competitors on the market. However, not all farms are qualified.

Additionally, few sellers are professional in both selecting certified farms and delivering beef.

So, ButcherBox team seized the chance to position their project as the most reliable grass-fed

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beef deliverer and has raised much more money than their initial goal through their online

crowd funding.

Resources, constraints and objective

Since we are students with limited resource, the study mainly relies on collecting

secondary data and conducting researches among consumers to assist the creator with

expanding in the raw beef market.

Buyer behavior

We conducted pilot interview with an Asian American who is in his late 40s and is an

experienced beef cooker. We also interviewed an American girl who is in her early 20s and

therefore just start learning cooking these years. We found that ButcherBox’s potential

consumers tend to live healthily and are willing to pay reasonable price premium. In addition,

they may like the box scheme with proper cuts inside because they desire convenience or

easy access.

Economic & legal & technological environment

People are regaining their purchasing power after the recent recession (United States

Census Bureau, 2012). Thus, they may be more interested in healthy food.

Government department defined the legal standard of grass-fed a few years ago (United

States Department of Agriculture, 2008). Based on this, industry alliance created specific

grass-fed certification considering more about the use of hormones and antibiotics,

confinement of animals, and environmental stewardship (Food Alliance, 2008). All these

standards consist of a good legal system.

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Furthermore, with the help of Facebook, Twitter and etc., ButcherBox team keeps

interacting with their customers. This is the gift from today’s high technology.

Problem Definition

The CEO of ButcherBox project wants to catch the opportunity of emerging need for

grass-fed beef and therefore to expand in raw beef market. Therefore, as marketing

researchers, we should study the preferences and behaviors of beef’s customers (especially

grass-fed beef’s customers if it is possible). So, we can explain what this online selling team

should do to appeal more customers and increase market share in the years to come. The

specific problem components are mainly generated from the pilot interviews mentioned

before. They are listed as follows:

1. Who:

1.1 Who buy beef and grass-fed beef? (Gender, age, income, household size, etc.) ?

2. What:

2.1 Is there any existing store they like? Why? (Product, service, etc.)

2.2 What’re their requirements about beef? (Texture, price, nutrition, cuts, etc.)

2.3 What’re their requirements about online service? (Delivery time, package, etc.)

2.4 What other service do they want? (Customize, etc.)

3. Where:

3.1 Where to obtain information about beef? (TV, broadcast, newspaper, Internet, leaflet,

exhibition, friends’ recommendations or others)

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3.2 Where to buy? (Online or offline? From farm or retailer?)

4. When:

4.1 When to buy?

4.2 How often do they purchase beef?

5. How:

5.1 How much do they want to pay for beef and for grass-fed beef?

5.2 How much do they buy in one transaction?

5.3 How do they cook beef? (Steak, burger, BBQ ant etc.)

Research Design

Descriptive

Our questionnaire was designed to explore customer information and opinions that

may assist ButchBox’s future development. We divided our questionnaire into three parts.

Part A was about consumption behavior towards beef. We needed to understand general ideas

of beef consumption among people. Part B was about customers’ attitude towards 100%

grass-fed beef. At last, part C was about personal information of respondents, including

gender, income and so on.

Layout and Sequence

Our questionnaire began with a welcoming word to introduce the purpose of our survey.

Then we specified the information needed. We defined our questions and words to overcome

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respondents’ inability and unwillingness to answer. We also tried to improve responses’

accuracy by a few detailed inquiries. Finally, we set the order of all the questions.

For question order, the main idea was to arrange the questions from easy ones to difficult

ones and from general ones to specific ones.

The first question in part A was used to tell useless respondents apart. We built skip logic

for the first question. Respondents who answer “never” to the first question will be led to the

end of the questionnaire.

In the same part, we then designed other questions to understand qualified customers’

general habits and behaviors of purchasing beef. We looked for to what extent customers care

about certain features of beef. At the same time, we collected data about to what extent

customers are satisfied with these features. Since we used the same features in these two

questions, we were able to find possible opportunities by comparing the results of them.

Besides the features of beef itself, we set logic to display questions about online service only

to online buyers. What’s more, we asked about the customers’ favorite ways for getting

information. This was helpful for choosing proper propaganda media after we got target

market. We designed these questions in the form of mirror Likert Scale. Respondents will

measure either positive or negative response to a statement. We believed it is the easiest and

most precise way for customers to express their ideas towards beef.

Part B, attitude to 100% grass-fed beef, offered insights about customers’ attitude to

this certain beef. First of all, we wanted to find out whether people know the difference

between organic beef and 100% grass-fed beef. Besides, we also asked customers about

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proper price premium. Questions in this part included multiple choices and text question.

This was useful for us to collect customers’ views that we didn’t think about initially.

Part C, demographic information and other questions, provided personal information

that could help us understand responses better. Additionally, we placed such questions at the

end because they referred to private information. What’s more, we ended up with one

opening question in case of any missing aspects related to ButcherBox.

Analysis Results and Findings

We received over 90 responses in two weeks and deeply analyzed the results. We then

inputed these results into different charts to show our critical findings clearly.

Figure2 shows the frequency of respondents who like cooking beef at home.

Figure2: Frequency Of Cooking Beef At Home Of Respondents

From Figure2, we could see that about 75% of the respondents of our survey had the

habit of cooking beef at home and 60% of those respondents cooked beef

((16%+18%+11%)/75%=60%) more than once every two weeks. This means the market of

raw beef is considerable.

Then we focused on purchasing channels as ButcherBox sells its 100% grass-fed beef

16%

18%

10% 20%

11%

25%

Several times a week

Once a week

Once two weeks

Once a month

Once several months

Never

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online. We wanted to find if there were large markets for beef sold online. Unfortunately,

only 10% of all respondents who cooked beef at home like purchasing the raw beef through

Internet.

As a result, we took a deep look at offline beef buyers’ behaviors in order to attract them

to buy BuctherBox’s beef. To begin with, we wanted to learn what features these customers

think are important.

Table1: To What Extent Respondents Value The Features Of Beef

According to Table1, we found vital four features (Price, Texture, Freshness and

Nutrition) which over half of respondents believed are important. Particularly, nearly 90%

respondents valued freshness ((17+41)/66=0.879). It is a really meaningful finding because it

reminded Butcher Box of taking care of these four features first, especially freshness.

Table2: How Satisfied Respondents Are With Features Of Beef In Last Purchase

From Table2, we found among all the factors, respondents were most unsatisfied with

organic nature. It is a chance because Butcher Box's beef is 100% grass-fed, which is an

improved version of organic food and therefore will definitely attract customers.

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Next, we wanted to look for different opinions about certain features of beef among

people with different genders, ages and incomes using crosstab. We found that males and

females did have different habits and preferences.

The main differences were shown through views about the importance as well as the

satisfaction in terms of price.

Figure3: How Male Satisfied With The Last Purchase Price

Figure4: Importance Of Price For Male To Choose Beef

Figure5: How Female Satisfied With The Last Purchase Price

10% 0%

15%

65%

10% Very unsatisfied

Unsatisfied

Neutral

Satisfied

Very satisfied

5% 10%

30% 45%

10% Not Important at all

Not very important

Neutral

Important

Very Important

0% 3%

46% 43%

8% Very unsatisfied

Unsatisfied

Neutral

Satisfied

Very satisfied

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Figure6: Importance Of Price For Female To Choose Beef

Figure3, 4, 5, and 6 told us that 55% male and 62% female respondents thought price

was at least important when buying beef. Besides, 75% male respondents were at least

satisfied with the price of their last purchase but only 51% female respondents were satisfied

with the price of their last purchase. So compared to female customers, male customers

would accept higher prices for the same product.

Figure7: How Much Male Would Like To Pay More For 100% Grass-fed Beef

Figure8: How Much Female Would Like To Pay More For 100% Grass-fed Beef

0%

14%

24%

54%

8% Not Important at all

Not very important

Neutral

Important

Very Important

5% 7%

24%

37%

15%

12% $0

$0.01-0.49

$0.50-0.99

$1.00-1.49

$1.50-1.99

More than $2.00

13%

13%

39%

22%

9% 4% $0

$0.01-0.49

$0.50-0.99

$1.00-1.49

$1.50-1.99

More than $2.00

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After that, based on Figure7 and Figure8, we found 64% male customers would like to

pay more than $1 for 100% grass-fed beef but only 35% female customers would like to do

that. So we knew males not only were more satisfied with price than females but also were

more willing to pay more for 100% grass-fed beef than females.

At the same time, we found the percentages of males who are at least satisfied with

freshness, nutrition or organic nature are all about 10% lower than those of females. This

means they desire high-quality healthier beef like ButcherBox more than women do.

All these differences proved that males should be ButcherBox's target market. Besides,

we found another one difference, which is meaningful when the team promote to males.

Figure9: Importance Of Cut For Male To Choose Beef

Figure10: Importance Of Cut For Female To Choose Beef

According to Figure9 and Figure10, we found that 50% of males believed the cut of beef

5% 10%

35% 35%

15%

0% Not Important at all

Not very important

Neutral

Important

Very Important

Not applicable

5%

19%

30%

30%

11%

5% Not Important at all

Not very important

Neutral

Important

Very Important

Not applicable

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was at least important and 30% within them thought the cut was very important. On the

contrary, about 40% of females thought cut was at least important. This may be because

women are better at cooking beef so that they can deal with whatever cut they’re facing. On

the contrary, men are likely to only know about how to cook very limited kinds of cut.

What’s more, we decided to obtain further detailed information about male customers by

conducting frequency analysis on male respondents. By this way, we could get more insights

to help make specific marketing plans for the target market.

First of all, we found that most male customers preferred two kinds of cut: steak and

stewed dishes with beef. This finding is very useful since we already know males care more

about the cut then females. Then, we found most male customers bought 1~2.99 lbs beef at

one time. When male customers bought beef, they would like to make decisions based on

information from their friends and family members. Besides, although most of male

customers were willing to pay more for grass-fed beef, they actually only accepted a

premium of $1~$1.5. Such a premium is not enough for ButcherBox’s extremely good

product. Another bad news was that only 25% males could tell the difference between

grass-fed beef and organic beef. What’s worse, after checking their responses about what the

difference is, we found they actually didn’t know the core differences.

Limitation

Our respondents are mainly American people and ButcherBox is a project within

America, so our samples are quite representative for this project. The data we collected

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offered a lot of interesting information. Based on these data, we were able to conduct basic

segmentation among customers and recognized the target market. We were also able to get a

general picture of target customers, enabling us to help Butcher’sBox make specific market

plans.

However, there are still some flaws of our research.

If we could get more time and more financial support, we would be able to collect more

respondents and make our database even more representative. For example, about 73% of our

current respondents are under 30. With more time and more financial support, we will

definitely be able to encourage more respondents with higher age to take our questionnaire. If

we had more information about age, we could better segment our customers and generate a

more specific target market. After that, we would be able to provide more suggestions about

whether to target young, middle-aged or older males.

In addition, also due to the shortage of time and funds, we adopted a simple random

sampling, which is the most basic random method, instead of stratified random sampling.

High-income cluster is the minority in this society, which doesn’t have a large number of

people within. Thus, we couldn’t get enough high-income respondents using simple random

sampling. So, we cannot have a better understanding of this cluster. However, studying

high-income groups of people are very significant for us since they are more likely to

purchase BuctherBox’s product, a high-end high-priced product, than low-income customers

are. With more time and funds in the future, we will carry on stratified random sampling to

get a better understanding of high-income group. After that, we will be able to generate a

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whole picture of the beef-purchasing habit and preferences of high-income males instead of

just males. By this way, we can hit the most accurate target market.

Conclusion and Recommendation

From deeply analyzing our representative data sample, we generated several conclusions.

The first conclusion is that the first task of the ButcherBox team should be attracting

consumers to their online project because most beef buyers prefer purchasing offline. In order

to overcome the challenge, we studied the offline customers’ behaviors and from this we

generated advice.

We believe the ButcherBox team should work on convincing offline consumers that

grass-fed beef is very fresh and has good texture. In order to accomplish this, they should

invest more on publicizing how good such beef tastes. This is because offline customers

value freshness and texture very much, but they usually feel it’s difficult to confirm such

features through online channel because they cannot actually see and touch the beef.

Other than the purchasing channel, we found the high price is another threat that keeps

customers away from grass-fed beef. This is because customers really care about price but

ButcherBox’s product is about three times as expensive as the most common beef. Therefore,

the team needs to convince consumers that the price is reasonable. In addition, there’s still

hope because customers are unsatisfied with the healthiness of the beef they purchased. That

is to say, if we can prove that grass-fed beef is healthy enough to warrant a high price and is

fresh as well as tasty, we have a chance to obtain more market share.

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From further analyzing respondents with different genders, ages and incomes, we found

that male customers were the ideal target customers compared with female customers. This is

because they feel less satisfied about common beef’s freshness, nutrition and organic nature

than females and the grass-fed beef is better than common ones in terms of these features. So,

males have the motivation to buy grass-fed beef, the better choice based on their preference.

At the same time, they feel much more satisfied with the price of common beef and are

willing to pay more for good beef than females. That means males tend to think the current

price for common beef is not expensive. Therefore, they show a high possibility of accepting

the high price of ButcherBox’s grass-fed beef.

Finally, we made a general description of male customers and then designed proper

marketing plans to hit the target customers.

We found males usually only buy 1~3 lbs at one time but ButcherBox offer a box

containing more than 8 lbs of beef. Given such information and the fact mentioned above that

males care a lot about freshness, we believe males require smaller box. By this way, they can

eat the beef before the beef is not fresh enough. In addition, since males care much about the

cuts within the box, the ButcherBox team should put cuts for steak and stewed dishes, which

are males’ favorite cuts.

What’s more, just as other offline customers, neither do many male customers want to

pay high premium for grass-fed beef, nor do they really know what the grass-fed beef is.

Therefore, we still need to work very hard on explaining the huge healthy benefit as well as

the excellent taste of grass-fed beef when promoting ButcherBox to males. In order to deliver

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such information in the most efficient way, we suggest making use of males’ favorite

channels for getting needed information about beef. As we mentioned in finding part, the

channel is through friends and family members. Thus, we suggest setting up a referral

program. This program is about giving current customers discount if they recommend

ButcherBox’s product to their friends and motivate actual purchase successfully.

We believe, with the help of these recommendations mentioned above, ButcherBox team

will be able to boost sales and finally expand in raw beef market.

Reference

ButcherBox Team. ButcherBox: Open your door to healthy, 100% grass-fed beef. Retrieved

fromrhttps://www.kickstarter.com/projects/butcherbox/butcherbox-open-your-door-to-heal

thy-100-grass-fed/description

Food Alliance. (2008). Grassfed Label. Retrieved from http://foodalliance.org/grassfed

Rock. A. (2015, November 18). How Safe Is Your Ground Beef? Retrieved from

http://www.consumerreports.org/cro/food/how-safe-is-your-ground-beef

United States Census Bureau. (2012). Statistical Abstract of the United States: 2012.

Certified Organic Farmland, Crops, and Livestock: 2000 to 2008.

United States Census Bureau. (2012). Statistical Abstract of the United States: 2012. Income,

Expenditures, Poverty, and Wealth.

United States Department of Agriculture. (2008). Grass Fed Marketing Claim Standard.

Retrieved from http://www.ams.usda.gov/grades-standards/beef/grassfed