Olive oil company

Background information

This olive oil company is a family-owned business (SME), born as a typography, which started in 1911 producing oil from local olive production and distributing it by mail. At a later stage, due to increasing demand it started to buy olives and olive oil from (strictly-)selected producers in the Mediterranean area. In the Eighties, the company started with the production of preserves (containing olive oil), and in the Nineties it created a new cosmetic line based on olive oil). The typography activity continues to present, and is mainly linked to the olive oil production (through printing price lists and communication with customers).

Innovation behaviour
  • Introduction of incremental product innovation or new combinations, and not radically new products that do not originate from customer needs.
  • Introduction of new products is carefully planned and is very time-demanding (consumers involvement, launch of small pilot projects, long testing periods, etc.).
External communication
  • customers represent an incommensurable value
  • customer relationship management strategy: to achieve stronger relationship and develop continuous learning
  • Focus of the company: on capturing external knowledge: Knowledge acquisition from customers (focus groups, direct contacts) and from marketing research institutes and from the main sectorial publications and trade journals (on market trends and competitors).
  • The communication channels used are various: email, mail, phone, contact at fairs, etc., through which customers can express appreciation, make complaints, offer suggestions, etc.
  • The front-line personnel – which is composed of call centre staff, the correspondence department, and the delivery service – is directly and carefully selected by the head of the marketing department.
    • The company has a correspondence department that is “hypetrophic”.
    • The call centre staff receive orders from customers (internet orders are increasing, but still represent only 6% of total orders)
    • The delivery personnel has to follow certain behavioural rules and to wear the company uniform
  • The company exploits the information from its customers in order to create a company image that fully responds to customer expectations .
    • Example: customers recently attribute great relevance to localness of products, so the company decided to stop a plan for introducing a new line of espresso coffee machines, as it was perceived as unrelated to the territory where the company is located.
Internal communication
  • The company has a data warehouse containing customer and sale data for the domestic market.
  • The marketing department performs all report design, data extraction, and marketing activity.
  • The ICT department is developing an intranet portal to archive and index documents (emails, and postal correspondence to/from customers, press articles, etc.
  • New employees spend their first 6 months visiting all departments, as it is felt important in order to absorb the tacit knowledge permeating the firm
  • The intranet is the main communication channel within the firm
Lessons learnt on communication during food innovation process
  • The company is extremely focused on its customers, as it builds an exclusive relationship with them, based on loyalty and care.
  • This relationship allows the company to know their customers’ preferences and needs, and this is used to improve products and services.
  • The company developed a large data warehouse to store and manage large amounts of data concerning their customers and sales.
  • So, the company pays special attention to external communication, which is extensively used in order to develop innovative products and to launch them on the market. Internal communication is used in terms of storing information acquired from customers and using such information to develop incremental product innovations based on customers’ needs and preferences.  
References

Massa, S, Testa, S (2009). A knowledge management approach to organizational competitive advantage: Evidence from the food sector. European Management  Journal, 27:129-141.