Marketing Management: Bread Industry - Case Study Example

 Marketing Management: Bread Industry Opportunity analysis refers to the process whereby research is carried out to evaluate the opportunities that are available to the enterprise within an operating environment, defined in terms of its external, financial, and internal considerations. One of the advantages of an opportunity analysis is that it provides an effective and holistic approach to the identification and evaluation of the alternatives that exist with regard to potential decisions. The consequence of an opportunity analysis is that the decision-maker has an array of possibilities to choose from that present differing alternatives to the decision that the organization is planning to take. These alternatives are in conformity with the financial and internal factors operating within the environment the organization is exposed to and is instrumental in pursuing the most appropriate decision (Stevens, 2006). This paper provides an opportunity analysis of the bread product category. The paper reviews the patterns that exist in the marketing and sales of the product, and explores how these patterns can be used in a particular scenario. The MSC National Occupational Standards for Management has been used to chart out the marketing plan. The first step of the checklist relates to the formation of strong directives that represent the reason for undertaking the marketing process. The second step involves carrying out a market audit (Chartered Management Institute, 2001); this is done by performing an opportunity analysis. The first step of opportunity analysis is to conduct a detailed and thorough research of the environment in which the company operates. This includes various factors such as legal, political, social, cultural and technological impacts along with economical elements such as the size of the market, growth trends and the attitudes and preferences of the consumers (Stevens, 2006). Moreover the decision-makers should also include a research on the competitors in the market, who maybe after the same consumer group that the organization is targeting. These factors, although external to the organization, are important in determining opportunities and losses for various options. The organization must also remember that the process not only requires time but also requires money. For this purpose, a thorough research was carried out on the growth trends in the bread industry in the US. It has been observed that in the US, bakery fast food remains as the predominant form of fast food in the country. Consumers prefer bakery products over fried goods according to a report published by the Euromonitor International – “Consumer Foodservice in the USA”. (Franchiseek International, 2006). According to a US industry report on the producers of bread, more and more companies are opting for specialization because of the high competition in the industry. The pressure from the supermarkets and grocery stores has increased and is one of the main factors due to which organizations are differentiating in order to increase their profitability. Moreover consumers have also become more conscious about their health and are opting for food which is organic and natural. This has promoted the sales of stores selling such products, and has attracted more companies in the industry (IBISWorld, 2010). According to the IBISWorld Industry Report published in 2010 regarding the growth trends of the bread industry, consumers are still opting to buy healthier specialty products, although they may have become more frugal in their spending in other areas of consumption. This has culminated in slow revenue growth over the passage of the past few years. In 2010, the revenue made by the industry equaled $6,395.3 million whereas the revenue growth was 1.3%. There were 44,457 establishments dealing with bread in the US in 2010, while the number of enterprises summed up to 39,116. 115,570 were employed in the industry in 2010, and the total wages of the industry were $ 2,044 million (IBISWorld, 2010). For the 52 weeks ending May 16, 2010, the total fresh bread sales of the top ten suppliers in the US totaled $6,503,972,000. Private Label made the most sales and generated $1,797,088,000. George Weston, Flowers Foods, Sara Lee Bakery, Hostess Bakery, Bimbo Bakeries, Pepperidge Farm, Stroehmann, La Brea and U.S. Bakeries were amongst the top 9 suppliers of bread after Private Label (AIB International, 2010). In 2009, Total Bread remained the top supplier of fresh bread in the US. According to another report regarding the trends and growth in the bread industry, the intensifying competition and the increasing demands of the consumers are the main reasons that are promoting the growth of the industry. The increasing demand of the consumers is due to the fact that there is greater premiumization in in-store bakery (Business Insights, 2009). These factors are responsible for leading to greater levels of innovation in the market. Moreover the current and emerging trends also point to the pattern that changing lifestyles, better and newer channels of distribution and the advancements in science and technology are pushing industry businesses to take into account a more complicated set of factors in order to promote their product and push up the chances for success (Business Insights, n.d.). The aspect of innovation, as consumers are starting to opt for lesser fat and sodium in their diets, is part of the emerging trends in the bread industry. Moreover the product development lifecycle has changed significantly over the years and the products are being developed and ushered in the market faster than ever. Therefore companies are starting to focus more on the development of innovation in their products (Business Insights, 2010). Innovation can be achieved through targeted marketing, where the company makes changes to its marketing plan and product according to the demands of the customer (Kotler, Brown, Burton, Deans & Armstrong, 2010). It has been observed by Stevens (2006) that if the factors that have been identified through research prove to be favorable to the business, the decision-makers should embark to perform a financial analysis of the proposed opportunity. The importance of the financial analysis can be assimilated from the fact that it is the chief element that can provide an insight into the profitability of the venture. Moreover the results of the financial analysis can be utilized for attracting investors to provide capital for the proposed venture. Therefore the company should identify the financial expenditure involved in spending more on innovation. In the aforementioned bread industry patterns, one can appreciate how established businesses are increasing their profitability through innovation. For instance, in breakfast cereals companies are working for innovative cereal products for children that juxtapose novel and fun trends through introducing flavors, colors and characters in the cereal marketing and packaging (Business Insights, n.d.).The final step in an opportunity analysis encompasses a study of the internal factors which are going to impact the proposed opportunity (Stevens, 2006). This aspect of the analysis requires that the opportunity is matched with the individual objectives and goals. Since the aim of the company is to be as profitable as possible, innovation can be a feasible venture since it is an emerging global trend in the bread industry. Further steps in making a marketing plan encompass setting marketing objectives and estimating the expected results. The organization aims to achieve a 5% share of the market. This is done by further developing the product through innovation. Marketing strategies used would address the marketing mix: product, price, promotion and place. The plan should be defined and communicated appropriately, and the strategy should be consistently reviewed. It cannot be overemphasized that in order to gain the full benefits of the opportunity analysis, the organization must carry in-depth research before finalizing a particular opportunity. Stevens (2006) observes that making a rash decision without investing in research can be wrought with risks and can culminate in failure. It can be argued that the process does not provide complete immunity from failures; however, the probability of success can be greatly boasted if the opportunities are thoroughly evaluated. Reference List AIB International. (2010). Bread Statistics 2010. Retrieved from https://www.aibonline.org/resources/statistics/2010bread.htm Business Insights. (2009). Innovation and Market Drivers in Bakery and Cereals. Retrieved from http://www.globalbusinessinsights.com/content/rbcg0202m.pdf Business Insights. (2010). Future Innovations in Food and Drinks to 2015. Retrieved from http://store.business-insights.com/Product/future_innovations_in_food_and_drinks_to_2015?productid=BI00014-024 Business Insights. (n.d.). Growth Strategy in Bakery Management Report. Retrieved from http://www.globalbusinessinsights.com/content/rbcg0033m.pdf Chartered Management Institute. (2001). Preparing a marketing plan (Checklist 020). Retrieved from http://www.entrepreneur.com/tradejournals/article/100012271.html Franchiseek International. (2006). Baked not fried - bakery fast food shows strongest growth in US fast food. Retrieved from http://www.franchiseek.com/Market_Trends_Fast_Food_USA_0706.htm IBISWorld. (2010). Specialty Food Stores. Retrieved from http://www.ibisworld.com/industry/default.aspx?indid=1046 Kotler, P., Brown, L., Burton, S., Deans, K. & Armstrong, G. (2010). Marketing (8th ed.). Pearson Australia. Stevens, R. E. (2006). Market opportunity analysis: text and cases. Routledge. Read More