Business report -marketing Smiley toast

by vaishali3094 (student)

International Baccalaureate Business Studies

SMILEY TOAST: Healthy & tasty!

PRODUCT MARKET

Past: Bread first came to the attention of man approximately 12,000 years ago, yet it took 11,900 years for the white sliced loaf to arrive in the 1930s. It was then when the craze of white bread begun. Generally, only the regular white bread loaves were sold; brown and whole wheat bread was in minority back then. Also, it didn’t cost too much, so it was easy to buy these for breakfast; there weren’t too many options for breakfast anyway.

Present: Innovative types of bread have come up, increasing the variation in the type of bread available for consumers. We still don’t get two pieces of toasted bread ONLY- normally only sold as bread loaves or not toasted. The prices have increased along with inflation and increased costs of production. Also, the demand for bread generally has decreased as there are more options available for breakfast. However, for those who do prefer bread, the options available have increased tremendously. People have become more health conscious so the market share for those supplying healthier bread has increased. Health, as well as convenience has been the main reasons behind an innovation drive by the industry which has led manufacturers to introduce a variety of new bread lines. These newly introduced brands and varieties are increasing competition in the bread industry.

Future: There will be much more competition, more variation and more specified wants- emerging companies to fulfil these wants. People will become more health conscious allowing more variation in the type of healthy bread sold. This will most definitely increase prices with an increase in the use of innovative technology. People may shift from white bread to whole wheat and brown bread as it’s healthier. Things would have moved a long way in the bread market since the traditional white sliced loaf, with consumers becoming more discerning as the choice of breads becomes more diverse. This will pave way for other breads to make their step into the bread market/industry.

PRODUCT BEING MARKETED:

This is a preview of the whole essay

PRODUCT BEING MARKETED:

The product could be defined as a healthy, nutritious and delicious toast that strives to bring about smiles in children. The product will cater to middle income-high income categories as it will penetrate the market with a relatively low price. It will come in a packet of two slices of toasted whole wheat/multi grain bread. Each bread slice will have an imprinted smiley face on it. The smile and eyes will be filled with flavoured cream. There will be different flavours available to children; chocolate, vanilla, strawberry and orange. The bread will be made tastier with freshly grinded wheat. The multi grains/whole wheat will make the bread healthier for children as it is necessary for them to have it as a part of their meal; they are good sources of fibre, carbohydrates, protein and a wide range of vitamins and minerals. Most importantly, bread should be the main source of energy in their diet. It’s a product with the perfect blend: nutritious and tasty.

COMPETITION

The smiley toast could be had at any time of the day; generally, we would sell it as a product for breakfast or as a snack at home/to school. Hence, some of the products that could replace Smiley Toast are: Kurekure, Lays, other chips, Snacks, Road side food, biscuits, oats, corn, other breads and pastry.

Strengths for competitors:

They have been in the market for a very long time, giving them a better edge with their customers.

They must be experiencing economies of scale – allowing them to sell their products at low prices ( exception: Road side food- they sell at low prices anyway as their costs and quality isn’t so high)

They have gained a lot of experience by being in the market for so long

They have a high and loyal customer base, which allows them to fend against competition.

They enjoy bargaining power of suppliers as they have been dealing with them for a long time; they will get concessions. The raw materials will be easier to get.

Weaknesses for competitors:

There is way too much competition in the market as our competitors are competing against themselves as well.

There are various legal barriers that may slow the growth of the product.

Low entry barriers in the market cause more competitors in the market to enter

High threat of substitutes and new entrants

High expectations of customer satisfaction

Customers want more product innovation and diversification in each product. E.g- in biscuits, there are various shapes, sizes, flavours, etc. This will increase their costs.

Kurekure, Lays, other chips, biscuits and snacks- They all have an added advantage as they are junk foods and children generally love junk food. However, Smiley toast is a healthier option. Children may force their parents to opt for them instead of Smiley toast as they have been in the market for a longer time and children already have tuned to the taste of it. However, parents contrary to that may be very particular with the diet option they want to offer their kids; this will result in parents choosing the healthier option for their children. Also, snacks may be easier to eat and carry around compared to the toast.

Road side food- This is the cheaper and lower quality option compared to the smiley toast. It’s an easy excuse for children to hang out with their friends. It’s also a trend in Mumbai to have roadside food/snacks often. This may put the toast at a disadvantage.

Oats and corn- It’s another form of bread and another way of gaining carbohydrates in one’s diet. This could be an easy substitution in the diet to replace the Smiley toast. However, the smiley toast could be the child’s demand as its more appetizing.

Other breads and pastry- Children generally love most kinds of pastry! There are many different types of breads emerging in the market; they could show as very competitive players to the Smiley toast. In fact, there may be new products entering the market which are very similar to Smiley toast which will have the same target audience and customer base.

PRICE

The price of Smiley Toast will be relatively cheap; it will be sold at Rs 7.99 per packet, which contains two slices of toast. The price is very competitive as most other bread brands are selling their products at around Rs 5-10. This price also meets the demands of the customers and works well psychologically as we are using Rs 7.99 instead of Rs 8. This will encourage kids to use ‘pester power’ to push their parents to purchase the product. Since it’s an innovative product, the price can’t be too high; neither can it be too low as Smiley toast needs to recover its costs. Smiley toast will be able to easily penetrate the market to gain market share and brand awareness in the industry.

SUMMARY OF COST OF GOODS PER MONTH

PACKAGING

The Smiley Toasts will be wrapped in thick plastic moulds to keep the cream intact; this will also ensure that the shape of the toast stays the same even in critical conditions. Over the plastic will be a shiny plastic wrapper with the brand name, logo, type of smiley, flavour and a cartoon. Behind the cover, there will be short jokes by cartoon characters with speech bubbles (these will get updated every three weeks) along with the ingredients, nutrition label and the address it has been manufactured from.

PROMOTION

The promotional activities that will be used by Smiley toast could be mainly categorised as Above-the-line, pull and below-the line promotion.

The strategies which will be used to promote Smiley Toast are:

Advertise Smiley Toast with the help of young actors/actresses.

Put posters near schools and places where children visit.

Allow children to take part in small competitions to win an extra toast.

Encourage children to taste different flavours by giving one free with every two bought.

Get Kid brands to support us.

Give out free puzzles/activities for kids on the behalf of Smiley toast

PLACE

The channel of distribution used will be one-level channel: It will be sent from the factory (producers) to various retail outlets which will eventually reach consumers. The retailers will include hypermarkets, supermarkets and independent retailers. This will make Smiley toast available to a large customer base. Smiley toast will be available in small local shops to cater to people around each locality. Instead of buying the normal bread loaf, parents can easily buy the toast for breakfast or snack when hungry.

SUCCESS METRICS

First year goals

Smiley toast will strive to penetrate the market with the various promotional strategies, competitive pricing and excellent quality of products. It will gain its customer base and try to make it loyal by offering attractive offers throughout the year. Sales must increase to various hypermarkets, supermarkets and retail outlets as our main aim is to reach out to our middle/upper middle-class income customers.

Additional future goals

Open and introduce Smiley Central- our own toast shop where in people can personally come and choose their shapes and flavours. It will be done on the spot-fresh! There will be personalized services catering to kids and parents. Our company can also merge with another company doing similar business for expansion.

Requirements of success

Well trained labour/workers to ensure perfection and high quality in each product made. Training must also be utilised to increase the efficiency of the products made in order to save costs down the line. Hygiene meters must be checked periodically. Machines must be replaced every year or two to keep up the quality. Purchase of the latest technology when Smiley Central is introduced.

We are determined to see Smiley Toast’s growth in the bread market. Smiley Toast will work to see smiles in children across borders, cities and countries!

Vaishali Harirajan