Innovative marketing isn't about creating ways to bring a horse to water, but finding ways to make
horse thirsty. Perhaps this was thinking when Trader Joe's began exclusive distribution of Charles Shaw brand of wine at an unheard of price of $1.99.Great marketing ideas seem obvious after they become successful. Such is case with this niche grocery store and what Global Marketing, Inc. terms "$2-Buck-Chuck" marketing phenomena.
Started by Joe Coulombe Trader Joe's has evolved into its present form over a number of years. Trader Joe's actually began in 1958 as a chain of convenience stores called "Pronto Markets" in Los Angeles area. In 1967 Joe Coulombe, wanted to expand stores' offerings and enhance their image. He doubled floor space and offered hard-to-find, boutique domestic and imported wines and gourmet food items at outstanding prices. He decked out stores with cedar plank walls and nautical décor and garbed Captain (the store manager), First Mate (the assistant manager) and CrewMembers in colorful Hawaiian shirts. "Trader Joe's" was born.
Today, 200 stores strong in 17 states, Trader Joe's has expanded to Arizona, Connecticut, Delaware, Illinois, Indiana, Maryland, Massachusetts, Michigan, Nevada, New Jersey, New York, Ohio, Oregon, Pennsylvania, Virginia and Washington. With annual sales of roughly $2.2 billion, this privately held firm is considered one of America's fastest growing companies.
Dan Bane is current Chairman and CEO of Trader Joe's. When Dan assumed this position in 2000 he was already a long-term employee of Trader Joe's. As president of Trader Joe's west he managed about 120 stores and supervised various operational, real estate and marketing elements for business.
When Dan became CEO he already knew he had one pressing problem. Trader Joes had grown into a significant leader in a smaller market of niche product offerings. To take Trader Joes to next level of growth he would have to find ways to expand his customer base.
Expanding his served markets would not be easy. Dan needed to find a marketing strategy that allowed his firm to retain their present customer base, while addressing and capturing portions of larger, albeit, more competitive market opportunity now served by biggies - Ralph's, Vons, Albertsons, etc.
Dan felt confident that Trader Joes proven business model would lay foundation of this strategy, but what would be catalyst that drives entry into this expanded market?
Success comes in a variety of ways. Sometimes it emanates from clever, well thought-out ideas, meticulously executed in market with just right amount of luck. And then there is coming together of forces, almost coincidentally, that meter out phenomenal success - such is case when Trader Joes and Fred Franzia of Bronco Winery came together in late 2002.
It turns out that as Dan Bane was looking for a growth strategy for his Trader Joes, Fred Franzia was looking for a new customer base where he could sell a high volume of ‘budget' wine.
So who is Fred Franzia? And what part does he play in this tale?
Fred is part owner and president of Bronco winery. Started in 1973 by brothers Fred and John Franzia and cousin Joe Franzia, Bronco has grown to be one of highest volume wineries in California. It has a wine storage capacity of 62 million gallons and can crush up to 60,000 tons per day.
