Market of Choice

Market of Choice

Company type	Private
Industry	Retail (Grocery)
Founded	1990s
Headquarters	Eugene, Oregon
Key people	Richard Wright Sr., Founder
Products	Grocery
Website	www.marketofchoice.com

A Market of Choice store in Eugene

Market of Choice is a full service deli, grocery, and catering service that serves affluent grocery markets in Western Oregon. The company differentiates itself from average groceries by positioning itself in the high-end market and concentrating on selling organic foods. Through the use of atmospherics such as lighting, music, tasteful architecture and furnishings, stores seek to create an inviting and soothing environment for customers. The company hires well-trained chefs to create healthy, high quality deli foods, and also maintains a catering service. Many products sold at the stores reflect the luxury tastes of the company’s market segment, although mainstream brands are sold as well. The emphasis is on quality, freshness, and choice (600 organic or conventional fresh fruits and vegetables are sold at the store), as well as exceptional customer service, and customers pay a premium for these qualities at Market of Choice.

History

Founded in 1978 by Richard Wright, Sr. in Cottage Grove, Market of Choice has since opened four groceries in Eugene, one in Portland, and one in Ashland. During the 1980s and 90s, the Market of Choice gained a reputation as a company with high quality standards. Changing ownership from a sole proprietorship to that of an S Corporation allowed shareholders to have part ownership, but still allow Market of Choice to remain a relatively small business. Today, the son of the founder, Richard Wright, Jr., acts as Chief Executive Officer and President.

Market of Choice is following a conservative growth plan of reinvesting profits to fund expansion; the company is opening a new store in September, 2006, in the Portland area. Their plan for the future is to continue opening new stores around Oregon.

Management

The Market of Choice mission revolves around creating a unique environment that fosters exceptional service, employee commitment, community involvement, and operational performance. In order for this mission to result in financial success, a well-trained and highly motivated team of employees is pivotal.

When MOC makes staffing decisions, they look for employees who have potential for growth. This all revolves around their democratic leadership style of management. Employees are expected to work as part of a team to blend individual strengths and talents to efficiently achieve company goals. This premise naturally relies heavily on employee competence.

The majority of new employees are departmentalized into an area in which management feels would be a good fit. This does not limit employees to over-specialization, however, since they are utilized in all departments of the store whenever needs arise. As employees gain expertise in all areas of the store, there are no limits in the direction their careers might take them. This ultimately leads to increased responsibility and accountability. An employee’s ownership is crucial in this stage of the game, and management allows team members to display their ownership by allowing for independent decision making.

Market of Choice has numerous incentives to promote job ownership from employees. Their compensation is among the best in the industry, and promotions are always offered from within. When new positions open, MOC always looks first to current employees before interviewing outside applicants. Another incentive, profit sharing, creates a partnership between an employee and the company which proves to be beneficial for both.

The Market of Choice seems to have created a perfect blend of management strategies. They are aware that by giving employees autonomy, they will be effective when collaborating as a team. When employees feel that their work is valued by management, and they receive positive reinforcement in terms of promotions and increased responsibility, operational performance will be increased while keeping the commitment to quality central.

Employment

Market of Choice employs over 800 people in the three markets in which it operates. The company employs a mix of part- and full-time employees, with many career employees as well.

Market of Choice focuses on incentives to motivate its employees; in comparison to other grocers, MOC pays higher standard wages and salaries and provides superior employee benefits. For instance, a dollar-for-dollar 401(k) plan is available to all employees, from grocery baggers to top management. The company also has a health plan which employees who work more than 32 hours a week can participate in. Described as a “two-tiered” plan, the company is self-insured with a liability cap, after which secondary third party insurance kicks in. Also, bonuses are not just limited to management; a bonus pool is provided for non-management employees as well, and divided by performance ratings.

These generous incentives benefit Market of Choice in numerous ways. First, Market of Choice can capitalize on its unique treatment of employees by advertising its commitment providing fair employment, similar to Starbucks’ strategy. This translates well into a perceived local community orientation, which is increasingly important for corporations that wish to expand (especially in Oregon markets, where there is a high emphasis on corporate responsibility). Essentially, the strength of Market of Choice's fair employment standards and generous benefits constitutes a marketing opportunity for the company.

Another reason these incentives serve as a direct benefit to Market of Choice is the fact that the company has tremendous appeal in the labor market, giving it a competitive advantage in hiring valuable and skilled employees. This allows the company to save money in management-related costs because superior employees need less direction and can be afforded more responsibility. Also, Market of Choice does not have to bargain with unions, simply because its employees are satisfied and have little interest in organizing a union.

The incentives also reduce turnover, and ultimately, the cost of training new employees—which employers who experience high turnover know, is significant. McDonald’s Corp. employs 400,000 employees worldwide, most as entry-level “crewmembers.” The annual turnover rate for crewmembers was 150 percent a few years ago. After enhancing its medical insurance and 401(k) offerings, this number had reduced to 90 percent . Presumably, McDonald’s motivation for offering these new benefits was based on a cost-benefit analysis in which the company found that the expense of paying for them was far less than the money it would save by reducing turnover-related training costs. Market of Choice too has realized the monetary benefit of providing a decent wage and benefits to employees.

For the most part, Market of Choice uses on-the-job training. New employees are given quick orientations and cashier training at a small training center in South Eugene and gain much of the rest of their experience by using problem solving on the job. By hiring employees with a high aptitude for learning quickly, Market of Choice can continue to keep its training and management costs low.

Currently, no diversity program exists, as management has found that the Eugene-Springfield metropolitan area lacks large enough numbers of minorities to enforce hiring quotas. Wright asserts that the company is committed to hiring women, immigrants, members of different ethnic groups, people of different sexual orientations, elderly people, and people with disabilities.

Marketing

As of 2005, Market of Choice's marketing budget was $1.2 million. Most of this budget is spent on weekly and biweekly newspaper advertising inserts in the Register-Guard. They also publish a direct mail quarterly magazine, called Choices, which is sent to Eugene residents based on their income. This magazine includes articles of interest to the local communities, recipes, and food tips from MOC chefs. The magazine and all other promotions are also published in PDF format on the company’s website, which not only makes the information conveniently accessible, but reduces waste as well. All of these advertising and marketing materials are produced in-house, which Market of Choice believes is more economically efficient than utilizing an external advertising agency.

Perhaps the single most effective marketing strategy that MOC uses is customer service. Any trip into the store reveals a highly motivated and well-trained team of employees who go above and beyond to address the individual questions and concerns of customers. Cooking demonstrations and tasting are a standard affair on weekends, which add a “fun factor” to a normally mundane shopping experience. There is always an employee with expert knowledge and advice on the products in their department. It is evident that these employees like their jobs. If you mix these strategies with an exceptionally clean, well lit, well organized environment, you have a recipe which will naturally bring customers back for more. It appears to be working; sales increased by more than 51 percent from 1992 to 2002 and are still climbing.

Finance

From the time Market of Choice was founded, the company has been very financially stable. Management follows Wright's motto, “Making profit for your pocket, not for the bank.” This means reinvesting income from profits instead of obtaining loans from financial institutions to fund expansion. This saves the company great sums of money on interest payments and also reduces financial risk. In fact, to this date, Market of Choice has not opened a line of credit.

Having previously used a large national bank, Market of Choice now does their banking with Umpqua Bank strictly because the company feels Umpqua has superior service. The company deposits huge amounts of profit each day. Annually, Market of Choice makes two to three times the average grocery profit margin of 1.8 percent. This high margin allows the company to expand while remaining financially stable.

All credit cards are welcome at Market of Choice except American Express, which the company plans to begin accepting soon. Market of Choice has neither a membership card, such as those of Costco and Bi-Mart, nor a rewards card, such as those of Kroger and Safeway.

External links

• Market of Choice web site