Student name: |
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CEG number: |
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Programme (e.g. UFP) |
IY1 Marketing and Advertising |
Programme Start Date (e.g. September 2018) |
September 2020
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Marketing & Advertising
Marketing Plan For IRIS Bakery
word count 2500
Name …….
CEG ……..
Business and Law International Year One
September 2020
Word Count 2500
Contents
1.0 Introduction
2.0 Segmentation, targeting and positioning
3.0 Buyer behaviour
4.0 Product life cycle and extended marketing mix
5.0 Discuss the major decisions involved in developing an advertising program
6.0 Conclusion and Recommendations
1.0 Introduction
1.1 Overview of the Business
According to the Federation of Bakery, The UK bakery market is worth £3.9 billion. It is also one of the largest sector in the UK food industry. There are three principal bakery products are produced by large baking companies. They will distribute the products directly to the supermarkets in the form of wholesaling. In-store bakeries (ISB) within supermarkets contribute about 17% of baking products. Lastly, high street retail bakers produce the rest. The target of this market plan is on London, the Capital of the UK. The city has a cool climate for eight months out of the year. Hot coffee and milk tea products will be very much in demand. High street bakery stores do not just sell bread and sandwiches but also sell hot beverages. The milk tea business in Asian countries are extremely popular. Bubble tea, for instance, is a tea-based drink originated from Taiwan. It is famous because of the ingredients used in preparing the beverage. Chewy jell-like “pearls” or other toppings are added in the drink. This market plan is designed for a start-up bakery store named “IRIS bakery” in London. The major highlight of the bakery products is coffee and milk tea especially bubble tea. It is expected that bubble tea and other hot beverage products in the bakery store can gain popularity among local residents.
In London, the market value of baking products can be viewed in Table 1 below. Large plant bakers occupied the largest market share of 75% and followed by in-store bakeries. High street bakers only earn about 5% of the market share (Fob, 2020). In this sense, it is highly important for high-street bakers to adjust the current products and recipes to attract more customers. Like the aforementioned, “IRIS Bakery” is very different. The selling point is its vast variety of Asian milk tea products. In order to accurately analyze the internal and external factors which may affect the business performance of IRIS bakery, SWOT model can be highly relevant as shown in Table 2.
Table 1: Market Share of London baking products by value and volume
Source Credit: Federation of Bakers Ltd
Table 2: SWOT analysis of IRIS Bakery
Strengths |
I will maximise them by: |
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Ø Cheap Labor cost Ø Variety of Recipes Ø Comfortable dining environment Ø Time-efficiency and takeaways |
IRIS Bakery does not need a lot of employees. As compared with in-store bakers, the rental fees are much lower. There will be more budget which can be invested on promotional marketing strategies
|
Weaknesses |
I will minimize them by: |
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Ø Fierce competition in the market.
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The market for bakeries has already been saturated in London. IRIS Workshop also needs to compete with local coffee shops and other quick-service restaurants (QSR). I should minimize the weakness by create unique customer experience and satisfying products for customers. |
Opportunities |
I will maximise them by: |
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Ø Not just a Bakery store. It can provide milk tea to students, professionals, and businesspersons and create a peaceful working or studying environment for them. Ø Introduction of Asian Hot Beverages |
Ø Sound insulation environment Ø Renovate and redecorate the shop
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Threats |
I will maximise them by: |
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Ø Starbucks and other small coffee shops
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Currently, it is difficult for IRIS Bakery to retain loyal customers. The cost of switching to other bakeries or coffee shops is not very high. In order to minimize the risks, I should try to accurately identify the market position of IRIS’ Bakery. |
1.2 The concepts and process of marketing
Marketing is the process of communicating and delivering the value of a product or a service to target customers(Peter, Donnelly & Vandenbosch, 2000). It should be noticed that marketers must clearly identify the critical need and demand of customers before promoting the products. The value created must effectively meet customers’ expectations and address their needs. This marketing plan is designed for a start-up high street bakery shop. As compared with other bakery stores in London, IRIS Bakery wanted to introduce a variety of Asian hot beverages to local customers.
According to Boone and Kurtz (2013), marketers should identify what are differences among the need, want, and demand of customers. Need is something that satisfies a customer’ basic needs such as food and drinks. Wants may refer to something directed to a specific type of items. For instance, a customer may want to wear green color dress at a specific time. Demand refers to a product or a service that a customer is willing to pay for(Armstrong, 2009). In this sense, the bakery products and coffee sold in IRIS Bakery should not just be viewed as a kind of food that meet customers’ basic needs. They must be something that customers are more than willing to purchase. Marketing process is thus about identifying customers’ critical demand about goods and services.
A marketing process often comprises four parts, including identifying market opportunities, market segmentation and positioning, marketing mix development (7Ps model), and the implementation & control of marketing efforts. Firstly, it is important to determine customers’ demand with respect to baking and milk tea products. Bakery has always been an important part of London’s residents’ daily life. They need a light refreshment in their afternoon tea usually from 3 o’clock to 5 o’clock (Lupi, Batey & Turner, 2012). Besides, customers are mostly working professionals, students and business persons. They need a peaceful environment to consume their food and services.
The second step is about marketing segmentation and positioning. In this step, marketers should identify who their potential and target customers are. The two primary target customers for IRIS bakery are students and young working professionals. According to Zeithaml et al., (2002), without identifying target and profitable customers, it would be a waste of marketing resources. For instance, it is not advisable for marketers to invest in TV advertising if the target customers are students. It is because students will generally receive information from social media platforms. In the market segmentation process, marketers should identify demographic and behavior information of target groups so that the promotional marketing strategies can reach potential and target customers accurately. Market positioning is about influencing the perception and buying preferences of target groups. It allows a company to communicate a tangible brand image to customers. For instance, McDonald is situated as a quick-service restaurant which offers fast food to customers at an affordable price(Khan et al., 2016). Subway, on the other hand, focuses on selling fresh-made sandwiches at a shorter time. The coffee sold in Starbucks is in high quality but usually with a higher price.
The third step of the plan is to identify marketing mix. The conventional 4P Marketing mix model includes price, place, product and promotion(Constantinides, 2006). The extended marketing mix model introduces three more dimensions on the 4Ps model, namely people, process and physical evidence. The extended marketing mix is an effective tool for marketers to create brand awareness or enhance brand image in the marketing process.
The last step will be management of marketing efforts. It is also known as the implementation and control process. Marketing implementation is about setting clear marketing goals and implementing respective marketing strategies based on the goal. Usually, a S.M.A.R.T goal model is used for setting marketing goals(Chaffey, 2019). Market control is about controlling, managing and assessing the marketing strategies. For instance, milestones could be set during the implementation process. The marketing team should inform the management team or employer about whether the goals at each stage have been achieved or not.
2.0 Segmentation, targeting and positioning
Marketing segmentation is a process of grouping the customers into different divisions based on similar characteristics. A market segment consists of an identifiable group within a target market. It should be noticed that a product or a service is not always required by everyone. Thus, diving customers into different groups will save marketing resources and efforts. A commonly used market segmentation model has four parts, including geographic, demographic, psychographic, and behavioral dimensions (Wedel & Kamakura, 2012). Springer Science & Business Media.. As shown in Table 3, there are two major target groups, including college students and working professionals nearly the Southampton Row.
Table 3: Market Segmentation Model
Target Groups |
Geographic |
Demographic |
Psychographic |
Behavioral |
College Students |
Ø London Ø Near Southampton Row |
Ø 18~25 years old Ø Local and International Students |
Ø Interested in bubble tea or Asian stylish milk tea Ø Curiosity about new hot beverage products Ø Love to study or read in a peaceful environment |
Ø Takeaway food (for lectures and tutorials) Ø Staying in the Bakery store for a longer time for studying purposes Ø Cannot afford high price Ø High brand loyalty |
Working Professionals |
Ø London Ø Near Southampton Row |
Ø 25~35 years old Ø Employees who work in nearby companies Ø Businesspersons |
Ø Looking for peaceful and quiet environment to work Ø Looking for light refreshment and afternoon Ø High educational background |
Ø Prefer both takeaway and in-store bakery and beverage Ø Can afford higher price Ø Medium Brand loyalty depending on the dining environment |
Group One is mostly college students from University of London. There are also many international students who study English Languages in the St. Giles International. As shown in table 3, these students usually cannot afford high-price milk tea and bakery products. But if IRIS bakery can provide high-quality bakery products to them, the customer loyalty will be very high. College students often look for a peaceful environment for them to read books or do tutorials. Most importantly, they need a takeaway service that allow them to bring bakery and milk tea to the classroom. Thus, in order to meet the expectation of group 1 customers, the packaging design of the milk tea is highly important as students need to bring the beverage along with them. Futuristic or attractive design will make them feel a strong sense of brand loyalty.
In Group 2, most customers are identified as working professionals. The most important thing is to have good sound insulation. They need a peaceful place to do their working. The dining environment should have modernistic design that suits their taste. Nordic stylish design is a good option for IRIS Bakery to renovate the store. Sound insulation should also be installed so that customers will not be disturbed by external environment,.
The marketing positioning map can be viewed in figure 1 below. As compared with Starbucks, IRIS cannot set the price very high at the initial stage. One reason is that college students cannot afford very high-price bakery and hot beverage products because they do not make an income. However, after developing brand awareness, it is possible for IRIS Baker to charge a higher price if it successfully identifies the perceived value of students and working professionals. However, it does not mean that the quality of bakery products and beverage should be compromised. Small coffee shops often sell low-quality and cheap bakery products. IRIS Bakery does not intend to compete with small coffee shops. In-store bakeries have to pay rental fees to large supermarket. Thus, it is expected that the price of products and services is high. Besides, the place in supermarket or shopping mall is quite limited. It is not likely for them to invest heavily on the renovation or decoration of the stores. The service quality can be adversely affected
Fig 2: Market Positioning Map
3.0 Buyer behaviour
There are many theories and models that can be used to describe buyers’ behavior such as motivation conflicts theory, perception theory, absolute and different threshold theory, personality trait theory, Freudian theory, AIOs model, Vals theory, Buying Decision Process model, etc. In this marketing report, buying decision process will be used to illustrate the buying behavior of target customers of IRIS Bakery as shown in Table 4 and 5 (Munthiu, 2009).