Snacks and Pastries Business Market - Essay Example

Snacks and Pastries Business Market Research Introduction Acquiring timely and accurate information about the marketplace as well as the overall environment is what defines market research. The information acquired should drive the business to better business strategies, products, decisions and actions, which mean that researchers should be able to understand and adjust information collected while considering the underlying business issues. The main challenge of market research is being able to anticipate the conditions of uncertainty in the market and make rational decisions. Marketers are faced with the uphill task of identifying marketing problems and pinpointing pertinent solutions, whilst keeping in mind that resources are scarce and every cost incurred should be justifiable (Smith & Albaum 3-4). Because of the developments in technology over time, the marketing industry has evolved greatly where marketers now have to embrace social media as an invaluable marketing tool. This is because social media has facilitated instant consultation among consumers and this has led to reversal of traditional branding where consumers now have more power owing to influence through social media. In addition, traditional media sources such as televisions have been rendered ineffective as computer networks have come up, rapid online communication and multiple sources of information have become available (Patino & Pitta 234-235). Snacks and pastries business This paper looks into the marketing research process of a snacks and pastries business to be undertaken close to a university/ college and office buildings. The idea is to lease out a truck that would serve as the ‘shop’ and kitchen for the business from which snacks such as samosas, kebabs, sandwiches, cupcakes, doughnuts and soft drinks. This is because my friend and I have noticed that we are usually lacking time to sit down at a restaurant for breakfast and lunch. Sometimes even for dinner we end up ordering out as we are tired from school and extracurricular activities. The only free time we have is Saturday evenings where we do our cleaning and because we both enjoy cooking, experiment on new recipes. She loves meat so she tries out meaty snacks while I, having a sweet tooth, try out pastries and cakes recipes. This pinpoints a need in the market, which is a part of the process involved in market research. Next, we identified that there isn’t competition nearby, the closest food truck is about ten minutes away. Still, people are fond of it ourselves included; therefore, we intend to compete with this by offering fresh, quality snacks and pastries at affordable prices. Because we are passionate about cooking, we intend to come up with innovative recipes for our products, which will give us competitive advantage. Statistics on the product Cinnamon rolls and cupcakes are listed among the top 25 most American foods which is an indication of their demand and high preference across all age groups. The list also includes meaty snacks such as beef burgers and chicken sandwiches thus, we intend to make our meaty snacks using chicken and beef initially (Lutz). In addition, dried meat snacks were reported to bring in sales of $1.19 billion in 2012 which is a 12.4% rise compared to the previous year. This coupled with the fact that Hillshire Brands’ CEO stating that consumers desire protein in their snacks which creates a need in the market and indicates earning potential of the business (Riell,). Due to the fact that the meat jerky was reported as being resilient in the course of 2007 to 2012, despite the economic recession, we intend to use this in our sandwiches- mostly chicken and beef. This has been attributed to the fact that meat jerky has a low price that has continued to sustain consumer sentiments. Notably also, because it is a dried product it can be stored longer making it favorable for our business idea (IBISWorld). Target Audience and Cost Considerations The main target audience for the business is college and university students that are within the environs, considering as well that we are college students. Within the same location, there are offices buildings that imply a potential market as these people look for convenient snacks to have over lunch that allow them to walk out and take a break. We plan to have delivery services over time, as we would like to emphasis on convenience as a commodity that we offer our customers. Our biggest headache will be acquiring capital to first lease out a food truck, then purchase equipment needed for the business such as a microwave and mini-fridge, and complementary things like serviettes, paper plates and brown bags for packing the snacks. We have done cost estimations that will give us an indication of how much we will spend to lease out a truck and prepare our first batch of snacks. This has then allowed us to set prices that will ensure we get reasonable returns that will allow us to repay the loan we plan to take from family members. Primary cost considerations relate to legal expenses associated with getting licenses and permits, and prepayments for a three-month lease for the food truck. Supply and demand forces Since the business is largely dependent on college and university students, we acknowledge the fact that during school breaks such as over the summer there will be minimal demand. This causes a change in quantity demanded as it is because of reduction in the numbers of consumers in the market. In addition, because of the nature of the economy we anticipate rise in prices of our raw materials, which are primarily meat, sugar and flour. This will cause a shift in demand, as we will have to adjust our prices owing to rise in cost of production. However, when adjusting prices we will be careful not to set them too high as we rely on consumers’ disposable income and this means that following the law of demand they may opt for cheaper products. Similarly, we intend to offer more value by coming up distinctly tasteful products. Where variation in quantity demanded is affected solely by variation in price, this result in movement along the demand curve. In the same way, if changes in price occur causing there to be changes in supply there will be movement along the supply curve. These movements depict consistent relationships in both demand and supply (Minkiw 66-67). Market equilibrium Another concept that comes into play is market equilibrium where supply and demand forces intersect that is, all the goods being supplied do not exceed or fall short of quantity demanded by consumers. The business at this point is considered to be operating efficiently where both consumers and producers are satisfied with the current economic conditions. Nevertheless, this is only achievable in theory as supply and demand are constantly fluctuating making it difficult to strike a balance between either forces. In contrast, there is disequilibrium where the situation may be either excess supply or excess demand. Where producers wish to supply more than consumers’ desire, then supply will be in excess and this happens when producers want to increase their profits by selling more where consumers find this unattractive and will buy less of the product because of high prices. Where too few goods are being made such that consumers’ demands are not satisfied, then there is excess demand. This happens when prices are below equilibrium making consumers demand more of the goods. Rise in demand usually leads to rise in prices, above the equilibrium (Minkiw 77-81). Market equilibrium will guide our business as it makes future projections concerning sales, revenue, costs to be incurred and complementary products or services to be offered. This will enable us analyze potential growth and financial health of the business as well as make it possible to aptly react to changes in economic conditions. Conclusion Market research is a continually developing process aimed at improving decision-making where for this business idea the internet and textbook readings have acted as guiding tools. However, the process has included observations and ‘informed’ speculations as certain aspects of a business require practical accounts in addition to theory; overall, it is clear that it is process that one must continually apply to gain competitive advantage and survive during harsh times. Works Cited Smith, Scott and Albaum, Gerald. Fundamentals of Marketing Research. California: Sage Publications. 2005 Print. Patino, Anthony, Dennis A. Pitta, and Ralph Quinones. "Social Media's Emerging Importance in Market Research." The Journal of Consumer Marketing 29.3 (2012): 233-7.  Lutz, Ashley. The 25 Most American Foods of All Time. Business Insider. 2013. Web. Nov. 26, 2013. < http://www.businessinsider.com/the-25-most-american-foods-of-all-time-2013-7 > Riell, Howard. The Facts on Meat Snacks. Convenience Store Decisions. 2012. Web. Nov 26, 2013. IBISWorld. Meat Jerky Production in the US: Market Research Report. 2012. Web. Nov. 26, 2013. < http://www.ibisworld.com/industry/meat-jerky-production.html> Mankiw, Gregory. Principle of Microeconomics. 6th Edition. Stamford, CT: Cengage Learning. 2012. Print. Read More