Developments in the UK Market for Biscuits and Cakes - Essay Example

? Developments in the UK market for biscuits & cakes Insert Insert Grade Insert Insert Introduction Research is an important component of marketing in the contemporary business environment service across cultural based customers. This report will engage the available research on a market that is fast growing in the United Kingdom and hence important for supermarket chains. The food and beverage industry is a highly competitive one and has been on a growth path in the recent years. Although considered as non basic consumption commodities, biscuits and cakes have a huge popularity in the United Kingdom as well as in other parts of the world. There are occasions that the two cannot miss in the menu and therefore they will continue to have a large market. On the other hand, the brand names for these products have also been growing with even more international players joining the fray. As a result, retail chains have to understand the dynamics of the two products to be able to take advantage of their fast moving nature. With competition in the supermarket chains, it is important that our organization specifically understand and implement the best approaches on the sales of the stated products. This report is therefore intended to assist management to make decisions concerning minor adjustments (tactical, short-term) and major changes (strategic, longer-term) to the current product mix. It will analyze the various issues that have majorly stood out on the popular brands of cakes and biscuits in the United Kingdom. The consumers of the available products are also important for this analysis and therefore it is important that the report evaluate the various aspects of consumer market according to the valuable information in the sector. The time frame for this analysis shall be within the last five years. However, before the actual analysis of product mix, it is important to have a brief overview of the sector within the set time frame as discussed in the following section. Market Overview To begin, the biscuit segment in the country has witnessed a gradual growth in the recent years with a growth of 6% according to the year 2012 estimates (Companies and Markets 2013). One driver of consumption in this sector has been the use of biscuits as an accompaniment of hot drinks. On the other hand, biscuits have always benefited from the drop in the cake sector. This situation can be attributed to the costs and health factors that have dominated the concerns of consumers in the contemporary society. Among the major brands in the United Kingdom market is marketed under United Biscuits (UK) ltd, which is a leader in the country for production of popular biscuits. Some of the brands include McVite’s digestive, Mini Cheddars, Jacobs and Hob nobs (Companies and Markets, 2013). As mentioned earlier, health issues and sustainability of the environment has been a great factor in the determination of the brand and product of choice by customers. In addition, the biscuits segment is categorized into seasonal, special treat and children biscuits. With children being some of the major market segments for biscuits, it is evident that the children biscuits has experienced and maintained a rapid growth. To the cake sector, the major categories are the individual and large cakes which may be in the form of pies and tarts. The individual cake category has been fast growing due to the cost issues and convenience factors associated with packaging and brand image. With the economic turbulence of the recent years, consumers have remained conscious of the prices so that they are able to reduce their expenditure on products associated with junkies or referred to as snacks. However, cakes have been traditionally known for occasions like weddings and birthdays. As a result, customized cakes still afford to fetch a lot of money in the sector. In addition, due to health concerns, many producers are constantly changing their product composition for more healthy final products. Product Mix Analysis The product mix or product assortment refers to several dimensions of products as depicted in a particular industry or segment. The dimensions of product mix include the width, length, depth and consistency. In the United Kingdom, the major companies that have been in the cake and biscuit production business for some time include Burton's Foods Ltd, Finsbury Food Group PLC, Inter Link Foods PLC, Nestle UK Ltd, Northern Foods Grocery Group Ltd, Premier Foods PLC, The Ryvita Company Ltd and United Biscuits (UK) Ltd. All these companies have enhanced their marketing and promotion in the market because brand loyalty is a great characteristic of the cake and biscuits segments. Virtually all brands distributed by the companies have majored on the product mix model. Whereas entry companies have focused on the consistency component, the other companies have exploited the advantages in involving the other components. Our company should therefore be aware of the various strategies currently being used in the cake and biscuit segments. Taking one of the leading biscuit production companies; the United Biscuits; the company has largely taken advantage of the length and width components for creating an appeal to the market. By availing the healthy and coated biscuits categories among others, the company has shown a multiple product line. The sector leaders have also often went for variety and hence showing that product depth is also an important factor in the marketing of biscuits and cakes. Some companies have also been dealing in the production of alternatives to biscuits and cakes or complimentary products like beverages and grocery (Key Note 2012). It is important for our company therefore to identify the leading brands and their range of products that attract many buyers for the purposes of boosting sales as well as improving on inventory management. Consistency has also showed in the variety of biscuit and cake brands available. The products currently sold in the market largely depend on brand identity because they might only have slight variations in terms of flavours and sizes. As a result, cost benefits are also considered in the purchase of biscuits and cakes by customers. It is therefore important that the company identifies such distinctions and stock cheaper products without compromising on value. Biscuits have exhibited a lot of depth in the way it has shown variety. There are health based brands, half coated biscuits with assorted flavours and coatings, cookies which are also popular, whole meal biscuits and tea biscuits. Customers are therefore always spoilt for choice in this segment. This implies that the supermarket should look into ways of promoting its sales in the different categories through awareness. On the other hand, Individual cakes, tarts, pies and cake bars are also popular among consumers (Key Note 2013). Cakes are usually packaged differently with examples including multipacks and singly packed. There has been an overall gain in these categories. However, other cake varieties in the large cakes including whole cakes, pies and tarts slowed down in sales within the last five years. This trend can be attributed to a number of factors, including the growing number of smaller households and the economical constraints discussed earlier. As a result, the supermarket chain should review its stocking on the cake category by looking at more individually packaged cakes as opposed to larger ones to drive sales in this product. On the other hand, comparing the relative strengths of the two products in the market reveal other complexities in the United Kingdom market as indicated earlier in this report. For instance, the biscuit sector has had a strong brand identity and therefore faster market penetration ability than cakes. There is also a strong tendency of customers to associate with certain brands and therefore a sharp taste for brand loyalty. As a result, the company should be able to identify the loyalty ratings of the popular brands to be able to cash in on the competition that has resulted from this condition. Additionally, consumer concerns on nutrition labelling due to increased linkage of poor diet with an array of health conditions (Curray 2002). As a result, it is likely that healthier biscuits and cake products are going to be more popular as have been the trend in recent years. The supermarket chain should therefore look into ways of stocking and identifying the cake and biscuit products that have a healthy composition. Some of the ingredients in the food industry that consumers are always looking into include any traces of additives, artificial colouring, flavours and preservatives. Despite the growth in cake and biscuit segments, there has been competition from other segments like fruits. Conclusion and Recommendation The analysis and discussions above indicate a positive outlook for the biscuit and cake segments in the United Kingdom market. If the mentioned growth will be reflected in the coming months, then the supermarket should look to taking advantage of the popularity of the two products by having adequate variety in stock. However, it is important that the company identify the best ways of improving sales of cakes because it has faced stiff competition from alternative products. Biscuits and largely cakes are occasional products and therefore are likely to be consumed in large quantities with regards to special events or occasions. In recognition of this fact, the supermarket chain should look into ways of promoting the brands stocked in its branches during social activities and other occasions. Customer service is also an important factor in attaining a competitive advantage, it is therefore important that the company looks at the concerns of healthiness and wellness in the products that are presented to them in the chains (European Commission 2005). The supermarket should also take steps to avail information on the various brands in the area of nutritional advantage so that there is development of trust and loyalty which is very important in the marketing of cakes and biscuits. Lastly, with an economically troubled market, it is important that the supermarket looks for ways of ensuring cost advantages to its customers. Bibliography Companies and Markets, 2013. “UK biscuit market led by iconic brands such as McVitie's Digestive, Mini Cheddars and Hob Nobs.” My News Desk [Online]. Available at: http://www.mynewsdesk.com/uk/view/pressrelease/uk-biscuit-market-led-by-iconic-brands-such-as-mcvitie-s-digestive-mini-cheddars-and-hob-nobs-839289 (accessed 6 May 2013). Curry, D. Sir 2002. ‘Future of farming and food: a sustainable future’, Policy Commission on Future of Farming and Food, [Online]. Available at: www.cabinet-office.gov.uk/farming/pdf/PC%20Report2.pdf (accessed 6 May 2013). European Commission, 2005. ‘Promoting healthy diets and physical activity: a European dimension for the prevention of overweight, obesity and chronic disease’, green paper, COM/2005/637, European Commission, Brussels. Key Note 2012. ‘Biscuits and Cakes Market Report 2012.’ Keynote, [Online]. Available at: https://www.keynote.co.uk/market-intelligence/view/product/10565/biscuits-%26-cakes?utm_source=kn.reports.browse (accessed 6 May 2013). Read More