Situation Analysis of Tiny Teddy Biscuits - Essay Example

?Situation Analysis/Target Market Identification Report for Tiny Teddy Biscuits Introduction Tiny Teddy is a brand of biscuits manufactured by Arnott's Biscuits Holdings, an Australian-based company. The manufacture of this brand of sweet biscuits begun in 1991 and recently, the company has been trying to transform its brand image. The concept of reducing the size of the usual teddy Bear Biscuit to a Tiny Teddy that is cute and bite-sized is credited to Scott Dewar, the son of Robert Dewar, the famous biscuit designer. Currently, each Tiny Teddy biscuit is small and is teddy bear-shaped. Their appearance is similar to Teddy Grahams of North America. The names Happy, Hungry Cheeky Grumpy, Silly and Sleepy are used to identify the various facial expressions (Arnotts.com nd). 1.0 Situation Analysis/Current Marketing Mix 1.1 Current Product The main benefits that consumers get by purchasing Tiny Teddy biscuits are their flavors, shapes and sweetness (Ibisworld, 2009). A pack of tiny teddy biscuits contains biscuits that are bite sized hence they are most convenient to eat them almost everywhere. This brand of biscuits is available in five flavors namely honey, chocolate, chocolate chip and 100s and 1000s. The distinctive feature about the packaging of this product is that they are packaged in quantities that help consumers control their portions. The muti-packs enable consumers to limit what they consume. The product is labeled using descriptions of various facial expressions. These are Happy, Hungry Cheeky Grumpy, Silly and Sleepy (Arnotts.com, nd). Each Tiny Teddy biscuit is small and is teddy bear-shaped. Their appearance is similar to Teddy Grahams of North America. The shapes and the use of names denoting facial expressions are the main features that make this product unique and different from competing brands. All the tiny teddies are half-coated in milk chocolate. Arnott's Biscuits Holdings have an online shop through which customers can make their purchases and where possible, the company delivers the product to them (Boag, 1993). The main users of this product are consumers. Due to their great tastes and funny shapes, consumers are wiling to spend an average of 2 hours looking for the product. Most of those who cannot find this product go for substitute product. These mainly include other brands of biscuits from the same company (Boag, 1993). 1.2 Current Pricing Tiny teddy biscuits exist in a very competitive market environment. The market is highly competitive die to the availability of a large number of similar brands of sweet biscuits from various manufactures. These include Yamazaki Baking Company Ltd, Associated British Foods PLC; Morinaga Milk Industry Company Ltd.; United Biscuits UK Ltd, Nabisco Biscuit, Co Goodman Fielder Proprietary Ltd, and The Belberry Biscuit Company (Startlocal, 2011). If there is a change in the price of this product, consumer demand will change due to the wide range of choice available to the consumers. The current price of tiny teddy is lower than that of its competitors. A 325 gm pack goes for $5.85 as compared to $5.0 or more for its main competitors (Aussie Food Shop, nd). Although their prices are attractive, the consumers of tiny teddies mainly base their purchases on the product’s uniqueness like their features and shapes. The business’s costs are very important when determining the price of tiny teddy. This is because the company has to factor in all the expenses incurred in terms of resource utilization and external expenses. These include the total cost of ingredients, labor, energy, government taxation, packaging, advertisements among others. After considering all expenses incurred in the production process, the company comes up with an average figure on which it will add its desired profit so as to come up with a consumer price. 1.3 Current Distribution In Australia, there are as many as 50 locations where consumers can buy tiny teddy. These distribution points are mainly located in urban areas where they can be reached by many people. Before 2004, the locations were basically distribution centers. Since then, the company has been delivering its products including tiny teddy directly to the consumers’ central warehouses. There is also a tiny teddy online shop through which customers are reached and served (Arnotts.com, nd). Consumers are not allowed to buy tiny teddies directly from the manufacturing point. Instead, the company transports this product to the consumers’ central warehouses using its trucks. Consumers are able to undertake personal purchases and secondary transportation from this point (Boag 1993). One of the characteristics of the product that influence its distribution is that it is fragile. This requires the shortening of the distribution chain to minimize or eliminate breakages. 1.4 Current Promotion One of the recent promotional messages for tiny teddy is “Meet Them Eat Them”. To those people who had an experienced tiny teddy, this proportional message stirs some level of provocation. It makes all existing and potential consumers to want to eat the biscuits whenever or wherever they get them. This promotional message was posted on the Internet, specifically, Countdown, shop smarter. The other proportional message on tiny teddy is “The tiny teddy Experience” (Facebook.com nd). This message was posted on Facebook, 3 months ago. Among those people who have not had an experience with tiny teddy, this message lights the urge to get to taste tiny teddy. For those who have had a good experience with tiny teddy, the advert serves to motivate them to want more. By making promotions on tiny teddy, Arnott's Biscuits Holdings is trying to increase its demand. This is achieved through the creation of short-lived incentives. These incentives are supposed to encourage purchase habits that favor tiny teddy. The theme of the current promotions is the product’s uniqueness (Boag 1993). For this product, not all the messages are sending the same message to the consumers. For example, those posted on Facebook are meant to capture mainly the youth hence those that provoke an experience with them. 2.0 Segmentation Theory 2.1 Define and explain segmentation. Market segmentation refers to the division of the market into a group of companies or individuals with one or more characteristics that can make them to demand similar products according to McDonald and Dunbar (2004). This demand is usually based on the qualities of the offered product. Therefore, the main reason for segmentation is to allow marketing programs to focus on prospects that have higher chances of purchasing the goods or services. The market segment should be uniform in its needs, exhibit common needs and should be reachable through market interventions (McDonald and Dunbar, 2004). The stability of a product’s market segment is greatly affected by price such that if the price of a product increases, the stability of its market reduces. 2.2 Three benefits to the brand Segmenting will help tiny teddy know who its actual and potential customers are. This is important in the identification of groups to prioritize when addressing the consumers. Segmenting enables a company to know the behavior of the customers of its particular brand according to Weinstein (2004). This puts them in a position to respond with the correct market interventions that will enable them to satisfy the varied customer preferences. Improved segmentation can result in significant increases in the effectiveness of a market (Weinstein, 2004). This is because segmentation forms the basis of product positioning. After product segmenting, a company can be able to determine how consumers perceive its particular brand of products. This makes it an important tool for targeting prospects who have higher profit potentials. One of the ways of doing market segmentation is consumer based segmentation. In this strategy, a company matches its specific products with the customer needs. This means segmentation is instrumental in the satisfaction of consumer needs. Segmentation is also important in designing multi-channel distribution strategies (Weinstein, 2004). 3.0 Target Market Identification The geographic location of the company that produces tiny teddy biscuits is Australia. Although the product is exported to as many as 40 countries, a major portion of the market lies in Australia. Region, city size and density, urban and rural density, and climate are relevant to tiny teddies. Religion has no relevance to tiny teddy because has little or no influence on the eating patterns of the people. The state has some impacts on the product. This is mainly seen in terms of its population size and the common eating habits. City size and population density are important because they determine the amount of sales recorded for the product. If a city is big or an area has a high population density, then the company is more likely to record high sales. Climate has little impact as well, especially given that the product can be taken with cold and hot drinks. This means it has a consistent market during the hot and cold seasons. 3.2 Demographic Segmentation Tiny teddy serves a wide range of ages. There are tiny teddies for children and those that serve the general adult population. Gender is relevant to this product because a high consumption of some this product is witnessed more in ladies than in men. The lifecycle stage is also relevant in the consumption of tiny teddies. This rate is lower among old-age people as compared to children, youths and young adults. Disparities in income levels lead to disparities in purchasing power among consumers. This determines the level to which individuals can afford to have this product as part of any of their meals. Education received determines the type of job and consequently, the purchasing power of an individual. Nationality has no relevance whatsoever on tiny teddy. 3.3 Psychographic Segmentation The socioeconomic status is important for tiny teddy. This is because the socioeconomic status of a person gives a hint of their purchasing power as well. This also indicates the level to which they can afford to buy those foodstuffs that are not part of the basis human food. Those who cannot afford it will have to go for a cheaper alternative. Individual values and personality have little impact on tiny teddy because its consumption does not go against any moral values. Individual attitudes and opinions have a moderate in tiny teddy consumption. This is because individual attitude directs the lifestyle of each person. This includes eating habits. The lifestyle set by an individual is important because either it encourages the eating of sweet biscuits like tiny teddies. Some interests and activities which people engage in encourage the eating of tiny teddy for example going for picnics. Australian children from middle income and high income families love to party and often attend celebrations whenever there is opportunity to do so. Furthermore, the kids like to play together sharing packed foods and snacks. 3.4 Behavioural Segmentation Arnott's Biscuits Holdings uses the brand tiny teddy to draw attention to itself. This is because tiny teddy has a unique brand positioning as compared to its competitors. Consumers who miss out on tiny teddy may opt for an alternative from the same company. Tiny teddy biscuits are commonly desired by school going kids who have a liking for chocolate and icing. The sweetness of the sugar and icing are their main attraction to the product which they commonly take while at school or at home. School going kids particularly like the biscuits as they also act as little toys (tiny teddy bears) that they can play with as they satisfy their hunger. Young adults and especially ladies will love to receive tiny teddy biscuits as gifts. In this respect they will also purchase packets of the same to those they love as gifts especially taking advantage of the product’s superior packaging. Compared to other brands, children prefer tiny teddy for their unique shapes, sweetness and small sizes. Similarly, young adults are loyal to the brand considering that the biscuits can be used as bedside snacks. 4.0 Target Market Collage Geographic segmentation 1 Hot weather 2 Country town 3 Cold weather 4 Urban centres Demographic segmentation 5 School kids 6 Young adults 7.Girls between 8. Bed time snack 10 and25 years Behavioural segmentation 9 Partying kids 10 Brand loyalty 11 Craving for chocolate 12 Preferred gift Psychographic segmentation 13 Playing children 14 Mid/high income families 15 Snack between 16 Outgoing kids Studying sessions Brand photos The brand photos for the product are shown in the above pictures. 5.0 Rationale of the Target Market Collage Images Geographic 4 images and words Demographic 4 images and words Assigned Brand photos and words Behavioural 4 images and words Psychographic 4 images and words 6.0 Description of Collage Images Image No. Rationale 1 Tiny teddys can be eaten when it is hot and out of doors. The outside environment such as the beaches is a favourite place for consuming the tasty snacks during picnics. 2 Tiny teddys is consumed by consumers residing in the country side and is found in some countryside shops 3 During cold weather, tiny teddy is an ideal snack with a hot drink. Ideally the snack can be taken at any time irrespective of the weather 4 In towns, tiny teddy is preferred to many other biscuit brands and is sold in superstores and local shops. 5 Primary school kids find tiny teddy a delicacy when at home at school or in social gatherings. 6 Young adults also take tiny teddy for its chocolate taste on dates for the moods that the snacks present 7 Girls treasure tiny teddy biscuits more than boys. There preference is related to the emotions presented by the snacks and their great tastes 8 For dating couples and kids, the snack is also taken as a bedside snack. It in this case it is consumed to pass time, and to kill boredom before falling asleep 9 During kids parties, tiny teddy is taken together with drinks, sweets and other foods. 10 Tiny Teddy enjoys a strong brand loyalty and kids sometimes are seen donning masks that make them resemble the little teddy bears that they eat (tiny teddy) 11 Many children and young adults like the taste of chocolate and icing. The biscuits are laced with these to enhance its taste and so satisfy people’s craving for chocolate 12 The packaging, sweetness and shape of tiny teddy makes it a favourite gift for young kids and ladies especially 13 The shapes of tiny teddy biscuits make them fun to play with for children. The children make their faces look like those presented by the biscuits 14 Given the cost of tiny teddy biscuits relative to other brands, they are mainly bought by middle-and high income families. 15 When studying, kids will often like to take a break to refresh. Tiny teddy comes in handy at such times for them 16 Outgoing children and young adults will find it trendy to associate with one another and share fun times by eating tiny teddy biscuits together. References Arnotts.com. (nd) Our Products: Tiny Teddy. Accessed 1 August, 2011 http://arnotts.com/our-products/products/arnotts-tiny-teddy.aspx Aussie Food Shop (nd) Arnott's Tiny Teddy Biscuits. Accessed 1 August, 2011 http://www.aussiefoodshop.com/catalog/item/5163594/7301125.htm Boag, Charles (1993). The Story of Arnott's Famous Biscuits: A History & A Celebration. Sydney. Lansdowne. Facebook.com (nd) Tiny Teddies ---> Meet them and eat them. Accessed 1 August, 2011 http://www.facebook.com/pages/Tiny-Teddies-Meet-them-and-eat-them/116688495038490 Ibisworld (2009) Arnotts Biscuits Holdings Pty Limited http://www.ibisworld.com.au/enterprisefull/default.aspx?entid=9959 McDonald Malcolm and Dunbar Ian (2004) Market segmentation: how to do it, how to profit from it. Butterworth-Heinem ann. Startlocal (2011) Biscuit Manufacturers in Australia. Accessed 1 August, 2011 http://www.startlocal.com.au/industrial/biscuitmfrs/ Weinstein Art (2004). Handbook of market segmentation: strategic targeting for business and technology firms. Routledge. Read More