Founded in 1930, Sunshine Bakeries is one of the largest and most established bread manufacturers in Singapore. Sunshine supplies fresh and quality bread loaves of up to 10 different varieties which are delivered to around 3000 retail outlets daily. It also produces 4 different varieties of rolls and buns and 9 flavours of cream rolls. Sunshine has won many prestigious awards as testament to its quality. 1.1 Problem Identification
Sunshine faces strong competition from local brands such as Gardenia and First Choice, not to mention the increasing number of boutique bakeries such as BreadTalk that have sprung up in recent years. Last year, Sunshine recorded a loss of $700,000. To increase Sunshine’s market share and profitability, it is imperative that Sunshine retains its current customers while attracting new ones. 1.2 Hypothesis for Laggard Brand Status
1.2.1. Target Segment One - Singaporean Families with Children Hypothesis A: Consumers perceive Sunshine to be inferior in its product attributes–variety and taste. 1.2.2. Target Segment Two - Western Expatriates
Hypothesis B: Consumers perceive Sunshine to be inferior in its product attributes– freshness and taste. 1.3. Research Objectives
We will address this problem by investigating consumer behaviour patterns in buying bread and the effects on purchasing decisions. We will determine the bread attributes consumers value, and thereafter suggest marketing tactics to increase Sunshine’s market share in the bread industry. 2.
Industry Analysis (Baking Industry)
2.1. Segmentation and Structure of the Market
The Singapore Bakery industry has grown from an industry dominated by small bakeries producing unbranded bread to large manufacturing bakers in the last decade. Since the late 1980s, the overall bread market has expanded at an average of 15% to 30% per year. The overall volume growth in sales of bread has increased by 11.9% from 2003 to 2008. It is also forecasted for volume in sales of bread to increase by 6.8% by 2013. (See Appendix) 2.2. Competitive Landscape
The Bakery industry can be considered to be fragmented, consisting of smaller players and some stronger established ones. With the current economic downturn, competition is further intensified as customers are more careful in their spendings. Faced with this competitive climate, it is unwise for bakeries to compete on price alone. Bakeries need to constantly engage in R&D to offer a comprehensive range of innovative and novel products which meet customer needs and differentiate themselves from other players. Branding is a common phenomenon used to enhance product identity. 2.3. Trends of the Industry
2.3.1. Trends Towards Healthier Products
Singaporeans today are increasingly concerned about their health, and there has been wide media coverage on issues concerning the rising incidence of health conditions like obesity and concerns over physical appearance. This trend has served as an opportunity in the mature bakery industry. Bakeries have started to introduce natural and organic products with added fibre and mineral supplements. The Healthier Choice Symbol has also been used by manufacturers to assure consumers that their products are healthy. 2.3.2. Trends Towards Tastes and Variety
Consumers are increasingly demanding premium products as they have become more discerning of taste and quality of the products they consume. Premium bakery products offer a superior taste experience and are usually rich in fat and calories. Value sales at these bakeries are expanding, bucking a long--term decline in bread consumption across the industry. Today’s consumers want the best they can afford when buying bread- a trend reflected in the growing number of people who choose premium quality lines. 3.
Current Market Position
Sunshine has always been perceived as Singapore’s very own household bread brand. With its lower prices, it is regarded as a trusted and value-for-money product. However at...
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