Marketing Activities That Will Ensure Optimal Operation of the Cupcake Shop Chain - Case Study Example

Cupcake Shop Marketing Plan Executive summary This marketing plan provides a comprehensive description of the marketing activities, which will ensure optimal operation of the Cupcake Shop chain. The Cupcake chain outlet is a startup organization that aims at gaining a significant market share in the industry. The Cupcake Shops will be strategically located across different urban areas. The proprietors of the organization have a significant experience in the bakery industry. The shops will provide freshly baked Cupcakes with different flavors to serve a wide customer clientele. The multiple flavors will be easily developed from tasty icing sugar as well as different types of jams. The shops will also offer exquisite cakes representing different cultures. This will ensure that customers will indulge in their products. This marketing plan is aimed at increasing customer awareness of the company’s cake cups. Moreover, the plan will increase the sales and the brand recognition of the Cupcake Shop. When selling a product, an organizations sales department has to be extremely careful while trying to consider which best approach to use when selling. Therefore, in this particular product, the sales department should identify the different market segment. These segments include the commercial market segment and the home customer and market segment for the different baked products. The commercial market has a great advantage over the home consumer selling because in an open consumer or commercial market, many people are likely to purchase the product. Taking the product door to door, many people are not comfortable with the exercise and there is a general believe that the product maybe poorly baked. Table of Contents Executive summary 1 1.1 Business goals 3 1.2 Mission Statement 3 1.3 Market Environment 3 1.4 Market needs and opportunities 4 2.0 Marketing strategy 5 2.1 Market segmentation 5 2.2 Market Positioning 5 2.3 Product Analysis 6 2.4 Place analysis 7 2.5 Integrated communications Analysis 8 2.6 Pricing analysis 11 3.0 Ethical Issues and Social Responsibilities 12 4.0 Conclusion 15 5.0 References 17 1.1 Business goals The objectives for Cupcake Shops will include: 1. To gain a market share of at least thirty percent in every locality they operate. This implies intensive market research and strategy development will be carried out in their area of operation to gain the market share. 2. To open ten new shops to gain ground in new markets for the next financial year. 3. To develop integrative promotional activities that ensures that the community is involved in enhancing the image of the organization. 4. Promote market awareness of the shops to eight percent of the target population. 1.2 Mission Statement To be the preferred cupcake shop for the society in whole region. 1.3 Market Environment In the bakery industry, different food outlets can be portrayed as the key competitors. These organizations offer substitute of the baked products or similar baked products. These range from retail outlets with their own bakery within the premises as well as fast food outlets. Key competitors can be considered both large and small organizations involved in the snacks and fast moving industry. In America, which is the home country of McDonalds there are a range of competitors. The competitors can be considered as either localized competitors in specific states or national competitors. The most notable another player in the food industry in America include the white castle, which is a fast food chain with operations in multiple states and has been in operation for a number of years. Another notable competitor is the Burger King, which in the past decade has taken the fight for market share in the country through creative marketing strategy in the burger market. Another player in the hamburger food chain in America is Wendys. The organization has risen to be in the third position in burger sales volumes in the last two decades (Belch, 2012). Jack-in-the box is another player in the food industry in America. The organization has implemented revolutionary strategies in location and customer service. Other competitors within America with a national outlook include Subway, Krystal, Hardees, as well as the Yum. The players in the food industry who have differentiated their baked products include the cake “Fetish Cupcakes,” “Charm City,” “Love at First Bite” and “Molly’s Cupcakes.” It is pertinent to note that the bakery industry is categorized into retail, food service, in-house and wholesale. The competition in the industry demands that the products are differentiated to retain customers. 1.4 Market needs and opportunities The marketing plan aims at identifying new markets for the baked products. New markets are the upcoming markets that were not in existence before and they have a greater potential then those that were in existence before. An example of this market is probably a new institution has been opened, for example a university, and a new group of people comes to live there. This market was not there and it would appropriate for any company that sells it product to target this new market (Cant, 2006). The new markets are areas of high potential revenue. Potential revenue is the revenue that the company is likely to make from the new market. High-level sales are the sales where the actual sales have exceeded the expected sales. This would highly occur if a new market segment is approached and sales made with them. Finally, the management should understand that a market strategy is having a number of options to use while dealing with the sales on a product in terms of which market is appropriate. However, in order to understand how to go about the selling of the baked product, a deliverable schedule is made which will provide all the details on how the product will be sold. 2.0 Marketing strategy 2.1 Market segmentation When developing marketing strategies for the Cupcake Shops a number of demographic factors must be put into consideration. The factors determine the segmentation to be carried out and the most effective promotional activities. A number of demographic factors have an effect on the process of marketing. These factors include the educational level, gender, race, as well as, the social status plays a critical role in the process. Educational level is a factor, which is based on the highest academic qualification of the consumers. The higher the educational level the easier it is to implement sophisticated promotional activities. The gender factor plays a role-plays a significant role in balancing the roles in the process as well as ensuring cohesiveness in the promotional activities as well as sensitivity of gender preferences (Cant, 2006). 2.2 Market Positioning The business will target temporary demand through the mobile shops. On the other hand, the other shops will be positioned in highly populated areas. Race and ethnicity determine the background of an individual. In the process of marketing, it is important to understand these backgrounds for effective communication and to ensure that everyone is comfortable. This enhances the marketing teamwork as well as diversity appreciation. Social status is another key demographic factor that affects relationships between consumers and the Cupcake Shop attendants. The relationships within an organization influence the success rate of different programs run by the company. Moreover, the general performance of a business has a direct link to the satisfaction levels within its workforce. For a business to attain high employee satisfaction, they must feel appreciated at work. 2.3 Product Analysis Through product differentiation, the organization is able to control the implications of price competition. The Cupcakes will have unusual flavors such as lavender, Chain cardamom, enriched chocolate, as well as peanut butter. The flavors will be instrumental in creating new demand for the products as well as retaining the existing demand. Price competition has some negative implications to the operation of an organization. Price competition increases the uncertainty in the operation of an organization. In a market, where price competition is the key determinant in the sales revenue of the organization the change of price of one company can have enormous implications to their performance. However, product differentiation counters the effect of competing products price adjustments. In the bakery industry, a unique taste as a differentiation tactic is pertinent. Brand loyalty is another benefit gained from the product differentiation. When customers are able to identify with a certain product easily the loyalty to that product increases. With an increased customer base that is loyal to Cupcakes shops, the sales revenue will be highly enhanced. It is pertinent to note that a successful product differentiation in a market leads to a monopolistic competition scenario. The use of unique homemade berry jam in the cakes sold at the shops will support the loyal customers. 2.4 Place analysis The Cupcakes shops will be located in different areas of the residence of target population. The objective is to ensure that a customer does not travel more than ten kilometers to get the product. The products will be available in different location. It is pertinent to note the technological development in the transport industry led to the rise of the mobile shop outlets. These mobile shops can be relocated in accordance with the demand of the products. An effective integration of the organizational presentation will help in establishing consistency in message relayed. Using the business’s website customers can be informed of the schedule of the mobile shops. Moreover, adoption of a scalable and flexible storefront solution to offer enhanced services to customers will enhance customer experience. Integration of business operations is useful in increasing market presence thus enhancing the brand reputation. This would dramatically change the availability of the bakery’s products (Daft, 2008). Cupcake will adopt a franchising technique to gain market entry in new markets. Franchising is the most appropriate strategy for entry into the market based on a series of reasons. Franchising can be considered as the application of a workable model in multiple market environments. The franchisor, which is the mother company, as well as the franchisee both stand a chance of benefiting from the success of the organization. Market entry strategies employed by an organization should be designed in a manner that is most beneficial to the organization. Through franchising, a new organization can open outlets through local representatives. The representatives will be the franchise owners in the local presence and will have a number of responsibilities as indicated in the contract documents. The choice of franchising as the market entry strategy for the organization is based on the following reasons (Goyal & Goyal, 2008). The franchisor has control of product distribution. The organization enjoys the opportunity to tap on local talent. The organization incurs minimal costs during the entry into new markets since the buyer of the franchise in the local setting will provide the funding. Through franchising, it is easy to enter a different market simultaneously. The simplicity of opening new outlets is based on the ability to duplicate a business system. Through franchising, it is possible to identify individuals with a business experience in the locality. This offers the organization a sense of confidence of the success of their operations in the new market. Franchising is an appropriate market entry strategy since it offers the optimal scenario for fast moving goods. The local owner of the franchise is motivated due to some sense of ownership of the business. As a result, the organization will tap new entrepreneurial skills with some understanding of the local market. 2.5 Integrated communications Analysis The business will also engage in mass media advertisement. A commercial evoking the emotional aspect of human beings will be the base strategy. This will be achieved through traditional media. Traditional media is still viable in supporting advertising and public relations activities. The use of the ancient communication approaches has undergone numerous changes based on the demand of the industry but some basics remain the same. However, the common identity of the traditional media is the existence before the advent of new media. The traditional media techniques were mainly meant to meet the masses. A range of factors influences mass communication techniques. With the advent of electronic communication such as television and radio, the two technologies are able to reach out to an enormous audience simultaneously. It is pertinent to acknowledge that old media is closely related with the technology that existed decades ago. The technical techniques used in the delivery of information to the public were heavily dependent with the technological advancement in those areas (Cant, 2006). Another key area of traditional media that will be incorporated in the marketing activities is print media. An advertisement showing the colorful Cupcakes and a memorable tagline will be run in the print media alongside the television commercials. This dates back to the nineteenth century when the print industry had a significant impact in the world. Some of the most prominent print media types include newspaper, books, leaflets, magazines, as well as brochures. Traditional media has heavily contributed to the effectiveness of public relations. The use of mass communication techniques for an organization to reach out to multiple audiences is effectively applicable across different geographical regions (Daft, 2008). The adoption of issues that are of interest to the public to enhance organization image and integrating public relations messages with the discussions have been used in television shows as well as radio shows. I t is pertinent to acknowledge that the opinion of stakeholders is largely dependent on the information they receive through the mass media elements such as radio and television. As a result, organization should continuously embrace traditional media to reach out to large audiences as well as influencing the perceptions of the public. Over the years, the need by organization to have the overall control over the perceptions that employees, investors as well as investors have is driven by the benefits it has to the organization at large. Print media will offer a number of benefits to the organizations, which include enhancing its brand image. Multiple approaches can be used to promote the Cupcakes in the internet. This is instrumental in increasing the online presence of the business. Social bookmarking sites are one of the techniques applicable in this case. This is where interesting article will be published through different social bookmarking sites such as Netscape to create a viral effect attracting visitors to the site. Another approach will be to seek an opportunity to include a link to the bakery on different universities website (Davis, 2000). Linking the website to the online platform of a university will help many students to visit the website since they are always visiting the university website to access different services. Through social networking sites, it is possible to promote the website of the Cupcake bakery. Social networking sites such as face book and MySpace are a significant part of the social life of university students. Creating links to the website that are easily visible in social media pages will increase traffic to the website. Conventional approaches such as word of mouth can be used to promote the website. Banner advertisement as well as text ling advertising is some of the easily adaptable techniques for promoting the website. These techniques are cheap and attract significant traffic to the website. The purpose of the integrated communication plan is to provide guidelines on the communication process during the marketing plan implementation. It provides a framework of the channels to be used amongst the business, marketing manager, sponsors, and other officials responsible for the successful completion of the marketing plan. This plan will be subject to changes due to the dynamic nature of this project. The communication requirement for each of the parties is clearly defined within the plan. The most pertinent aspect of the plan is the definition of whom, when and how information will be relayed. The communication objectives during project implementation vary from moment to another. The objective of any communication plays a central role in determining the communication method to be adopted as well as the frequency of communication. When the communication is vertical, for example from the events assistants to the manger a formal outlook is necessary. However, if the communication is horizontal then the communication can be informal. A two-way communication that is effective across all the parties involved in the event will be necessary to ensure successful completion of the project. Through effective communication, it will be possible to discover omissions as well as misallocations expeditiously (Cealster, 1998). The marketing manager will play the most significant role in the ensuring the successful information exchange. The business management will be informed about the progress project through memos sent on a fortnight basis. During the implementation stage, when promotional activities will be running the marketing manager will handle the detailed communications. These include the budgetary allocations as well as the baseline messages received from different parties. The marketing manager acts as the centre of all the information flowing during the project implementation (Goyal & Goyal, 2008). 2.6 Pricing analysis The pricing strategy to be adopted in the first weeks of operation of the Cupcakes shops will be price leadership. This is where the bakery’s frontline product will be priced below the market prices. The strategic option for food products business can adopt to enhance their position in the market. The strategy involves minimizing the cost of production of the entire organization so that their prices in the market are lower than their competitors can. It is pertinent to note that cost leadership is a crucial strategy in developing a competitive advantage for a business. The scale of production plays a significant role in determining the cost of production, as well as, the operational costs of a business entity. The organization will reduce its operational costs through a standardized approach to operations. This where all the products, as well as, operations of the organization follow a specified approach. Cost leadership strategy is helpful to the organization producing baked products since multiple vendors and price competition characterize the market. Through low cost leadership, the organization will be able to reduce the costs of products in the market. This increase the chances of the organization increasing its market share in the target populations (Bradley, 1995). Low cost leadership has a series of requirements that make it a stable strategy for the bakery. First, economies of scale are a key determinant of the success of the strategy. An increased scale of operation of the organization is instrumental in reducing the average cost operational cost of the organization. As the labor force, of an organizations gains experience in the production process so does their efficiency increases (Goyal & Goyal, 2008). 3.0 Ethical Issues and Social Responsibilities Provision of prices that are friendly to the customers will be incorporated for ethical purpose of the marketing plan. The organization will focus on reducing the cost of products by selecting suitable locations that are close to the customers and source of raw materials. This reduces the cost of transportation. The reduction of the cost of transportation from the source of raw materials or the market is instrumental in reducing the aggregate cost of the products. It should be considered that customers would always reflect on the distance to be travelled to get their food products. Another aspect of the strategy that the organization should take into consideration is the process design. The process design involves the production process and the level of standardization of the final products. The baking process can be standardized through mechanization and embracing technology. This will guarantee consumers quality and similarity in products. The pricing strategy used for the business after the stabilization of the customer base in the market will be the marginal-cost pricing. Since the products are highly differentiated, the price of one product will be at the cost of producing an extra Cupcake. There are multiple pricing strategies used in the bakery industry, which incorporate but not limited to multiple pricing and bundling arrangements. Pricing of the products is directly associated with the financial management of a business. Financial management within an organization has many implications across the organization. The business financial position can help to in bulk purchases of baking materials, thus reducing the cost of production. Economies of scale are a major aspect of reduction of the cost of operation of an organization (Belch, 2012). Through reduced costs, the organization can be able to focus its resources on handling customer needs and requirements. The tastes and preferences of a customer can be spread across a broad spectrum. The costs for producing these different flavors should be normalized allowing minimal difference in price between cakes of different flavors. However, it is pertinent to note that regardless of the preferences of customers there is some base requirement of cakes. Moreover, the nutritional value of the products must not be compromised while cutting the cost of production. For the mobile shops, dynamic pricing technique will be used. This is a technique where the prices of the products sold by the organization are determined by a systematic analysis of the market factors and the prices offered by other organizations for the same products. The overhead costs for the mobility of the shops are also put into consideration. This technique is highly flexible since it is influenced by many factors in the market place. However, its sensitivity to changes in the market ensures that the prices of the product offered by the organization put into consideration the willingness of the customer as well as the cost of offering the product. This pricing will ensure that the organization gets maximum revenues for its services without intimidating other customers. Over the years, this technique has received praise for its effectiveness in market analytics considerations as well as convenience (Davis, 2000). Marketing functions The market research will be carried out to determine the consumer behavior and market dynamics. Once the preferences of the customers are determined, the flavors to be used in baking the cakes are positively identified. Moreover, the packaging of the products will be influenced by the results of the marketing plan. The branding of the different Cupcakes produced at the bakery and sold by the shops will be influenced by the results of the market research (Cealster, 1998). The core marketing function is to ensure that the products they receive from the shops meet customer need. The entity strives to identify customer problems first before developing products and flavors. This has been the development of nutrient rich cakes while the cost of operation of the business is put into consideration. A marketing problem starts from the identification part where an organization is bound to first identify a potential customer before finding out problems that exist. The process ensures the acquisition of a product for both nutritional value and indulgence. If the price of a product that is needed is low, the purchase will be made without much thought (Cealster, 1998). On the other hand, if the acquisition of the product will cost a significant sum of money then the purchase is discussed. The business marketing strategy is to be the most recommended bakery. Since the company deals with low value food products, which require minima consultations and enquiries before the purchase, evoking the customer’s emotions is pertinent. Through an effective after sale services, as well as, word of mouth marketing the company can be able to expand their parity point’s area and the point difference area. The marketing strategy that focuses on meeting the key functions has led to the development of a strong competitive advantage of bakery. Moreover, the brand reputation of the company can be enhanced over the years for their quality and tasty cakes. Personal selling where prospective customers are directly contacted through different communication techniques (Belch, 2012). 4.0 Conclusion The marketing plan implementation has to be continuously reviewed to monitor the progress as well as the effectiveness of the strategies adopted. Marketing evaluation will be instrumental in determining the effectiveness of the marketing techniques applied within the organization. A marketing program should be controlled to determine the variation of the outcome from the expectations of the management. The evaluation process puts into perspective each of the marketing techniques and their benefits as well as the parameters used to determine their effectiveness (Bradley, 1995). A Gantt chart will be instrumental in the evaluating and monitoring process. The evaluation process involves checking the proportion of the project that has been implementing. The monitoring process helps in holding the project implementers accountable in terms of time and activities. Each of the regional radio shows promotions are designed to attract the target population. However, the days of the selected talk show varies from one region to another. As a result, some of the activities will take longer than the projected time. However, this should be closely monitored through the monthly review reports. The monthly review reports will also incorporate the activities that were not effectively completed, and elaborate the reasons for the variance from the planned activity. 5.0 References Belch, G. E., (2012). Advertising and promotion: an integrated marketing communications perspective (9th ed.). New York: McGraw-Hill/Irwin. Bradley, F (1995). International marketing strategy, London, Prentice Hall. Cant, M. C. (2006). Marketing management (5th ed.). Cape Town, South Africa: Juta. Cealster, F (1998). International Business: Text and cases, Sydney, Prentice hall. Daft, LR (2008). Business and Economics. Cengage Learning: New York. Davis, S. M. (2000). Brand asset management: driving profitable growth through your brands. San Francisco: Jossey-Bass Goyal, A & Goyal, M (2008). Business Environment, London, K Publications. Read More