Industrial Analysis For The Candy Store Marketing Essay

Our business plan is to design an on campus candy store which provides a wide range of candies to students and the staff at a cheaper rate. We hope to provide a new sweet experience to our customers to sweeten their most memorable days with our candies. To the students who like sweets our store will be a paradise of candies. And we will ensure the 100% customer satisfaction.

Our mission statement.

Our mission is to introduce a new era in the sweet industry by innovating new products, to give a totally different experience to our customers who step on to our store and to inject freshness in the sweet industry such as candies with different flavours, wide range of party packages, seasonal offers and many more.

Market forecast

Sales value of sweets were slightly in pace between 2005 and 2006 but sales has being increased because of gum and jellies. Sources suggests that the sugar confectionery market will increase by 9% at current prices over the 2007-12 period, rising to an estimated £1.3 billion by 2012.

C:UsersSubnet1Desktopid=273283&name=figure6-1-1185370514.jpg&maxWidth=851&maxHeight=450.jpg

Sales of sugar confectionery in the UK have followed a modest upward trend over the review period. Some industry commentators estimate even flatter trends and a minor growth of 3-3.5% between 2005-2007. Health concerns as well affected for the sales growth because more concern about balance diets.

The sugar confectionery market will increase by 9% at current prices over the 2007-12 periods, rising to an estimated £1.3 billion by 2012. However, removing the effects of inflation reveals a much more growth equating to just 1% in real-terms.

The market increasing at a similar rate to that seen over the 2002-07 period, growing 6% over the next five years. With volume growth behind value in current terms, this is indicative of a rise in spend per unit on sugar confectionery over the forecast period.

SWOT analysis

Following are the strengths and opportunities of our business which we possess to bring a better range of candies to satisfy the customers we will minimize our weaknesses and threats while finding solutions to overcome them.

Strengths are,

The logo which speaks to the customer and attract them. Especially youngsters will be keener on the logo.

Main concern will be on more natural colours and flavours will help to attract more customers.

Since consumers are focus on health, gum and jellies have taken more priority as they made up of natural fruit juices.

Novelty products such as party bags, seasonal products and surprise gifts help to drag more customers’ as well customized range of party packages.

Attractive price range so that everyone willing to buy.

Strong management team to organize plans for future and for past. As well developing good skills, sales strategies to attract more customers and also to maintain good faith with the retailers.

Weaknesses are,

Higher innovation cost has to occur to invent new candies to attract the customers.

Efficiency is less as incapable of paying higher salary to staff.

Less exposure to the wider market to attract more customers.

Opportunities can be,

Young generation looking for more diverse product range.

On campus is a good location as there are no specific candy shops which provide variety of candies.

Event coverage with discounted packages.

Even in higher economic crisis’s people will are willing to buy candies.

Threats can be,

Competition with other supermarkets which are based on campus.

Economic slowdown.

Price wars.

Trend for discounts.

Higher labour cost.

PEST control analysis

Political: The government would have to collect taxes from the shop therefore the candy store would have to pay the normal tax rates. The business doesn’t need to be privatised because the property that they are going to use is in Brunel University. They have to follow the health and safety regulation due to being in the packed food industry. The business would not have control on the spending of the public funds however since they would pay tax they would want to know where the government is using the tax that they pay.

Economical: The store will be less likely to be affected with the interest and inflation rate because the products are not very expensive therefore there would be minimal effect on the sales of the shop. If the store keeps the service friendly, helpful and has policies to deal with situations like sales return these factors would help create consumer confidence. The rate of unemployment would affect the business due to the reason that the people would be less likely to spend their disposable income on things like candy therefore they should develop a strategy that would help them keep going at the time of recession. The labour cost would be how much money they would spend on recruitment and the recruitment process.

Socio- culture: the trend, consumer’s taste and preferences, change in lifestyle would affect the store the occupation wouldn’t matter because all age groups would have it. Mainly it is targeted to the students and staff of the university. Also including things like organic candy that would also be ethnic and healthy to would attract many consumers.

Technological: there would be a balanced effect of this factor on the business. They need software that would help them to innovate thing for the business so that they can maintain their consumers however they may also use it to increase the number of consumers for the business. The business can discover something new or improve the way they serve the consumers. If they have any way of doing the accounts and also to keep track on the financial side of the business.

Legal: the business would need to follow all the employment laws and company laws. The business would need to find out what are the regulations of the business their type they may do this by going to the food department of the location where they are going to start and find out what sort of licence is needed to start up the store the business would also need to get employees identification number, resale permit and a food handler permit.

Environmental: the store will not be affected a lot with the climatic changes because you can have candy anytime. The business may make more profits around Halloween and Christmas however it may remain popular throughout the season. Water resources wouldn’t affect the business because the business wouldn’t need water to serve the consumers however they would need it to remain hygienic however they may also use anti-bacterial gels. Energy supply would affect the business because they would not be able to use the computers, they may use the fridge that keeps the stock of the candy at a certain temperature if the electricity is not there that might differ the taste of the candy.

Porter’s five forces

The threats of new entrants

Usually there will be more threats to a candy store as it can be initiate with lesser amount capital, can start up as a home industry, no investors needed etc. But since our candy store located on campus there will be less threats of new entrants so the competition will be low.

The buyer power

The consumers will compare the prices of other candy stores with us, and choose which one they can get more benefit and which one is cheaper, which one is delicious, in this case, we maybe reduce the price then get less profit or enhance the quality of candy then more and more consumers like our candy. So it can be stated that buyer power is high since the students and willing to buy a candy as a snack after a lecture.

The supplier power

In production of candies the primary raw materials we need are the coco beans, milk, sugar etc. When finding manufacturers, there are many but it is more important to find one which has quality products at a reasonable price. Sometimes the manufacturers may use financial techniques such as hedging in order to reduce the price impact of price rises on their own margins. However since the fine grade of coco production shows small part of world supply, the bargaining power of suppliers will increase. Overall it can say that suppliers power is high as we are buying raw materials from suppliers and preparing our sweets.

The threat of substitution

Some substitutes for a candy shop could be traditional chocolates, snacks and other confectionary products which customers used to satisfy their sweet tooth. So it’s clear that the candy industry should face numerous types of other substitutes such as peanut butter, yoghurts, ice creams, cookies etc. Therefore there is a good variety of substitutes available for the consumers which make the threat of substitution high.

The competitive rivalry

The intensity among rivalry among competitors in a business can lead to price wars, advertising battles, new product lines and high quality customer service. On campus our main rivalry party will be the supermarkets and shops which sell candies but as we selling variety of candies such as jaw breakers. Gummies, candy cane etc the competition will be less. So as we based on campus the competitors’ threat will be less to our candy store.

SWOT analysis for our competitors

Strengths

Firms brand name and resources.

Experience of being in the industry for longer time.

Highly skilled labour.

Weaknesses

Low product awareness.

Lack of variety of candies.

Poor facility location.

Lack of innovations.

Opportunities

Easy access to market.

Even in inflationary situations people will tend to buy the candies.

Special seasoning offers.

Threats

Since it is easy to start up more competitors will be there.

As customers are more health conscious it will affect the sales volume.

Imposing new regulations by government towards the sweet industry.

Market segmentation – Geography

Segmentation strategy will allow the company to determine whether the segment is large enough to sustain the product or if there is no viable market for the product. If the company decides that the strategy is a viable one, than the company can implement and design a marketing mix strategy to implement for each of their individual segments.

The candy shop we are going to open will be on campus in which our target customers will be mainly the students and the staff. The first task important to our candy shop is to understand the relationship between consumers and products in order to understand the environment and those involved in the consumer process. Once we evaluates the environment then must investigate the segmentation bases. Our segment will be students and the staff to whom we will be bound to serve according to their preferences like what candies they like most, what flavours they need etc. Determining the segmentation of the marketing process identifies useful categories in specific segments in which to target.

Soft confectionery: the sweet of choice

NPD and advertising support have helped drive sales of soft confectionery, which exceeded £700 million in 2011. This segment represents just under half of the total market, with steady growth expected to continue in the coming years.

Consumer tastes appear to be shifting from traditional hard to soft confectionery as static sales of hard sweets have seen the segment lose market share despite a recent rise in NPD.

Gum represents just under 20% of the total market, and although the segment posted growth in 2011, its share fell slightly due to the growth rate falling behind that of the overall market.

Figure 30: UK retail value sales of sugar confectionery and gum, by type, 2009-11

2009

%

2010

%

2011 (est)

%

% change 2010-11

% change 2009-11

£m

£m

£m

Soft confectionery

681

44

690

44

704

45

+2.0

+3.4

Mint confectionery

215

14

219

14

220

14

+0.5

+2.3

Hard confectionery

181

12

182

12

183

11

+0.5

+1.1

Functional confectionery*

130

8

128

8

129

8

+0.8

-0.8

Other confectionery

40

2

42

3

42

3

+0.0

+5.0

pricing strategy for the candy store:

Our business would be using a combination of pricing strategy.

We believe that Psychological pricing would help the consumers set a boundary and realise that the one pence makes a difference in the way they think about the price. for example when the price is £10 pounds the consumer may not buy it but if it is written as £9.99 then they may be attracted to it.

We would also concentrate on the consumer based pricing because this may boost the sales of our shop and if the consumers find that we have a reasonable prices for our product of better promotional strategy. We think that the more offers we keep on the candies the more consumers we will get. This sort of pricing strategy can also sometimes keep us in line with our consumer because we will always know what sort of pricing most attracts them and do they think that our price for the candy is reasonable.

We will also be using popular pricing: is when the shop would know how much are the consumers willing to pay for the product and then we will put an offer for example two bags of candy normally would cost £10 but we would sell two bags less than £9.50.

Organisational structure:

Organizational structure refers to the way that an organization arranges people and jobs so that its work can be performed and its goals can be met. When a work group is very small and face-to-face communication is frequent, formal structure may be unnecessary, but in a larger organization decisions have to be made about the delegation of various tasks. Thus, procedures are established that assign responsibilities for various functions. It is these decisions that determine the organizational structure.

Candy store organisational structure:

Director of marketing in candy store

A marketing director is a person responsible for the overall marketing operations of an organization or business. The job requires not only having skill in the creative aspect of advertising, but also having the budgetary knowledge needed to plan appropriately. Thus, the marketing director must be an effective manager in terms of both budget, and the creative process. Time at the job will often be split between these two primary functions. In our candy store, there are two people manage advertising and budget. Our advertising should always be aesthetically pleasing so student will think happy thoughts when they think of candy. And use the Internet and traditional advertising to market your candy store, including writing your own press releases to disseminate to your local newspapers. Another idea is to visit local condominiums and leave samples and literature in the clubhouse, or take samples along with business cards to office buildings and give them to receptionists to hand out

And budget our money so we have the resources to do what we want , for example: more advertising to attract student; more kinds of candy; more activity.

Director of sales in candy store

An individual employed by a business to manage the activities of subordinate salespeople, and to develop and implement an effective selling strategy for the business in general. The sales director typically has full control over the sales function and staff within the budget allocated by a business and is often part of its higher management.

The director of our candy shop should presents a summary of his visits to the director of sales and marketing on a weekly basis prior and after the week is completed and conduct monthly competitor market survey on their new candy, promotion and pricing tactics and to report to director of sales for proactive strategic planning.

Director of operations in candy store

The manager of our candy store, who is responsible for the overall day-to-day operations. We divide our candy store to two parts, one of them is shop A, including zone A-D, and another one is shop B, including zone E-G, in this case, the student in campus can buy candy easily.

Opportunities and treats

There are many opportunities for new businesses to enter the sweet confectionary market. It is predicted that the sale figures of this market has increased by 9.6 percent in the UK. This is the only business that is not threatened by the inflation, because consumers still buy confectionary sweet even when they are on a tight budget. The graph below supports the statement.

sugar sales 2006 to 2016.JPG

Marketing strategy

The market strategy for the company is to sell products that are organic, with no artificial flavours and colours. The business will also have an ethical approach towards their consumers and employees.

The market offers the business to be potentially successful due to the consistent increase in the sales on sugar confectionary.

It has grown so much that all of the supermarket must have an aisle where they don’t sell sweets.

As long as we keep our prices reasonable consumers are likely to be loyal and they would defiantly repurchase again and again.

Figure 13: Consumer Confidence Index, monthly, January 2007-October 2011

C:UsersThe HarsMusicid=599844&seq=11&maxWidth=851&maxHeight=450.jpeg