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Overview of Gousto

Gousto is a UK meal kit service company that was founded in 2012 and is currently all across the UK as one of the best meal kit service companies. The company was initially recognized as one of the best start-up companies in the UK in 2015. Currently, the company provides an endless number of recipes for its customers with an average of 60 recipes every week (Gousto, 2022).  The company has been hugely focusing on variety, quality, and simplicity to attract more customers across the UK. The company runs a subscription-based model which provides meals to its customers on weekly basis and the customers have the freedom to cancel the subscription, whenever they want. The main competitor of Gousto is HelloFresh which holds the maximum market share in the meal kit service industry across Europe (Vardi et al. 2020). This report aims to apply, assess and recommend the marketing communication strategy that Gousto needs to implement to increase its brand awareness and market share, also obtaining competitive advantage.

Gousto has started operating in the UK market in 2012 with a promise to deliver beast meal kits made from fresh ingredients to its target customers (Gousto Blog, 2022). Its main competitor HelloFresh was already present in the market before Gousto and has been serving its customers all across the UK and has the highest market share. Therefore, Gousto started promoting itself on different media like TV and OOH platforms to increase its brand awareness (Sutton 2017). The campaign name was Unbox Possibility and it showcased various types of recipes that were available for the customers. The brand-building promotional strategy did not work as expected because of its poor strategies which mainly focused on providing limited offers and offer codes to the customers. In, 2018, the company implemented direct marketing strategies but the results were not satisfactory and compared to its competitors, the campaigns were outdated. It questioned their brand loyalty and people continued to switch brands. Gousto was sitting at only 17 percent of market awareness compared to HelloFresh which was having 32% brand awareness in the market. The growth rate was slow and HelloFresh was still the market leader. The market share of Gousto was 22 percent compared to HelloFresh which was 28 percent. Thus, Gousto needs to plan a proper communication strategy that would help its market growth and brand awareness along with increasing its market share.

Marketing communication can be defined as the process which is adopted by the company to deliver its messages regarding its products or services and its brands for selling, through direct or indirect channels to the customers (Todorova 2015). The objective of the communication process is to persuade the target customers to purchase their products or services. The marketing communication process includes advertising, sales promotion, events, public relations, direct marketing, interactive marketing, word of mouth marketing, and personal selling (Kitchen and Burgmann 2015).

Gousto implemented certain market communication strategies to reach its target customers and to increase its brand awareness. In market communication, the target audience is the most important element as it determines the fate of the product. For Gousto, the target audience is the ambitious jugglers who are the young families or professional couples between the age of 25 to 55 years. To build a better brand and promote itself to the target market, Gousto has to change its brand positioning from being just a food delivery brand to an attitude brand that offers enthusiasm. Therefore, the company came up with the “Give it Some” campaign that was focused on creating a better positioning of the brand by raising awareness. The initial objective is to make the target audience aware of the brand and convert the interested customers into final customers. In 2019, the company implemented both online and offline communication strategies to reach out to its customers. The tv advertisement schedule was changed into peak time to reach out to the maximum of its audience. The advertisement was released on the online platform YouTube to promote its products and services to the customers as a brand building and brand awareness activity (Chen and Yuan 2020). Further, the posters of the brand were implemented in the London underground for brand promotion. These marketing campaigns were done to increase word-of-mouth marketing and improve brand awareness. The online influencers were also used to market the brand to the customers. The overall marketing campaign was based on Nudge communication which was focused on targeting the behaviour or changes to determine the choices of the audience (Dianoux et al. 2019). The overall communication strategy was focused on repositioning the brand from delivery to attitude brand as well as building the brand better to acquire more loyal customers. Special offers were presented as a sales promotion to the subscribers which includes discounts and coupons for the service.

Gousto's Marketing Communication Strategies

The efforts of the marketing communication activities were quite successful for Gousto. By February 2020, Gousto achieved incredible market growth more than 5 times than its competitor HelloFresh. The company achieved a huge customer base with a subscription rate of 67 % compared to its target which was 50%. The marketing activities helped Gousto to achieve huge brand awareness. Previously it was standing at 17 % which got increased to 40%, overall, the awareness 67 % of the target audience recognize this brand over its competitors. The sales promotion strategies also proved to be a success through the first box discount at which drove almost 75% of the subscription growth. Compared to 2019, the marketing strategies have performed very well and the subscription rates have highly increased but the cost of advertising also remains high. Moreover, the online marketing and influencers have performed well contributing 25% to brand awareness and 16% in brand consideration. The overall marketing communication strategy has been successful for Gousto.

With a successful marketing strategy, Gousto has been able to become the highest growing meal kit company across the UK. The market share has also increased from 22 % to 31% which is impressive for the company. The brand awareness has also increased drastically along with the subscription. Despite the success, the marketing spending of the company is increasing compared to its signups due to aggressive marketing strategies. Television, events, and OOH marketing took the maximum cost of promotion compared to online marketing or influencer marketing. Now that the company has gained pace in market growth and share, there are certain improvements that the company needs to implement regarding marketing communication strategy. The essential recommendations include –

  1. The company needs to focus mainly on customer retention to increase and improve its customer base (Alkitbi et al., 2020). This can be achieved through brand loyalty and hence the company needs to implement better brand loyalty strategies like discounts, food coupons, extra meal boxes for encouraging referrals. Public relation is one of the most effective strategies for customer retention as it builds a relationship between the company and its customers for mutual benefits (Johnston and Sheehan 2020).
  2. Gousto should invest more in internet marketing, influencer marketing, and other BTL activities rather than OOH to reduce marketing costs. Internet marketing provides better facilities for choosing the target market as well as offering better insights about the market at a low price (Grubor and Jakša 2018). Social media marketing, email marketing is some of the important marketing strategies that Gousto should focus on.
  3. Lastly, Gousto should conduct a market audit and properly build a marketing budget before implementing any marketing strategy. The marketing budget will provide a better idea about the expenses regarding all the marketing campaigns which includes content creation, social media ads, email marketing cost, print media cost, SEO efforts, and other processes. This will provide an overall insight into the marketing budget and hence the company will be able to strategize better (Ilina and Nikitenko 2015).

Conclusion 

Gousto has been able to successfully present itself through its out-of-the-box strategy and hence, achieved greater results in the UK market. From the above report, it can be concluded that Gusto’s marketing strategy has been successful and has been able to successfully compete with HelloFresh, but the cost of marketing is higher compared to its output. So, the company needs to highly focus on customer retention and brand loyalty and also on reducing its marketing cost. By following the recommendation provided, Gousto will be able to successfully retain its customers and market share, becoming the most famous meal kit company across the UK.

References 

Alkitbi, S.S., Alshurideh, M., Al Kurdi, B. and Salloum, S.A., 2020, October. Factors affect customer retention: A systematic review. In International Conference on Advanced Intelligent Systems and Informatics (pp. 656-667). Springer, Cham.

Chen, Z. and Yuan, M., 2020. Psychology of word of mouth marketing. Current opinion in psychology, 31, pp.7-10.

Dianoux, C., Heitz-Spahn, S., Siadou-Martin, B., Thevenot, G. and Yildiz, H., 2019. Nudge: A relevant communication tool adapted for agile innovation. Journal of Innovation Economics Management, (1), pp.7-27.

Gousto Blog, 2022. About Gousto | Gousto Blog. [online] Gousto Blog. Available at: <https://www.gousto.co.uk/blog/about-gousto> [Accessed 8 January 2022].

Gousto, 2022. Gousto. [online] Gousto. Available at: <https://www.gousto.co.uk/> [Accessed 8 January 2022].

Grubor, A. and Jakša, O., 2018. Internet marketing as a business necessity. Interdisciplinary Description of Complex Systems: INDECS, 16(2), pp.265-274.

Ilina, O. and Nikitenko, O., 2015. Marketing audit and its use in practice of companies.

Johnston, J. and Sheehan, M. eds., 2020. Public relations: Theory and practice. Routledge.

Kitchen, P.J. and Burgmann, I., 2015. Integrated marketing communication: Making it work at a strategic level. Journal of Business Strategy.

Sutton, P., 2017. The Use of Scent in Out Of Home (OOH) advertising. In Designing with Smell (pp. 132-139). Routledge.

Todorova, G., 2015. Marketing communication mix. Trakia Journal of sciences, 13(1), pp.368-374.

Vardi, S., Rosenthal, S., Woods, N., Levy, J. and Tanner, D., 2020. Hello  Fresh.

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