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This report includes an assessment of the company’s Internal strengths and weaknesses and the potential for Kind Bites to grow and Increase sales throughout 2013. The market for gluten-free products is growing. More people are becoming educated active individuals who opt for a healthier baked good. Gluten-Free products are now appealing to a wider variety of consumers, rather than before where only specific customers with allergies would purchase such a specialty product.
As well, a majority of public schools in British Columbia are forcing the unhealthy products out of the school systems and opting for healthier options. L Kind Bites Bakery offers products to a very niche market that is definitely recognizable in Victoria and the surrounding area. Based on a market analysis the recommended segments for Kind Bites Bakery are: 1 . Primary Target Market – The health conscious mom 2. Secondary Target Market – The hippie wedding couple 3. Tertiary Target Market – The pale kid 1. Mission Kind Bites is dedicated to providing customers with a high quality, 100% gluten-free and dairy free cupcakes and other baked goods. Kind Bites intends to sell to customers looking for a healthy, gluten-free alternative that want customized orders, for small and large events and intend to make enough profit to continue to grow the business and development in the quality products. Kind Bites continues to stay innovative and true to their core products, while meeting the needs of new and attention customers personal needs. 2. Objectives Short Term Build strong customer relationships Acquire at least 2-3 repeat customers each month Obtain $500 in revenue each month for the first three months, increase revenue to $1000 moving into the busier months of summer, and wedding season Increase brand awareness and recognition by improving ease of communication through an integrated marketing channel and proper use of social media Long Term Gain contracts with local schools in Victoria as well as enter into the wedding market, increase economies of scale Build partnerships with a marketing/communications anger to help organize and build the business Acquiring an angel investor to open store front in the downtown market Grow income to pay owner a salary 3. 0 Internal Analysis The owner/operator, Brittany Schneider, is truly enthusiastic about a healthy lifestyle and making cupcakes to bring happiness to people. Although she has recently moving to Victoria, Brittany is able to hold a small amount of market share by focusing on her niche market by building a strong relationship with her friends.
Therefore, friends can freely advertise her small business with the strategy of word- of-mouth in Langford. Furthermore, Brittany mentioned that she is the only owner and baker for her bakery and most of customers ordered small batches for weddings and parties. She is based out of her home and does not have a store front. The business is quite profitable and flexible due to its relatively few fixed and variable costs and reserved orders. In fact, Kind Bites has a variety of baked goods are popular for her niche market; recently, Brittany has deliberately thought about how and Vancouver. Brittany worked with the team to help her to build several possible marketing ideas for the future expansion of Kind Bites in the coming years.
Strengths Growing Market: Kind bites is entering a marketing where people are not only living healthier lifestyles, but struggling with celiac, Crown’s and many others diseases that restrict them from having wheat in their daily diets. Entering into a market with few competitors and a low barrier to entry will give her an advantage to capitalize on this growing market of Gluten-Free baked goods. Networks: Brittany has recently moved to Victoria, but has a strong relationship with friends and family, and has been able to use those networks to grab a small market share of students, while tackling word f mouth advertising around the city Premium product: Kind Bites uses local products that are strictly gluten and dairy free.
It has a variety of flavors and design that can be easily adapted to meet the needs of customers Small Business/ Customization: Brittany is currently the sole owner and baker for Kind Bites. Although it is only a one-person operation, she is able to make batches for medium- sized weddings and custom orders for customers on a short-term basis. Weaknesses Limited room to expand: Kind Bites is currently operating out of a house which limits the amount of orders that can be produced in one day and limits her room for expansion of products. Lack of marketing: Kind Bites has little marketing background. The owner is unfamiliar with market research tactics and has limited resources to spend on marketing of her company at this time. Networking Capacity: Kind Bites Bakery is new to the area and needs to network in the food industry.
She needs to build her reputation as well as clientele and contacts in order to sustain her business and get it off the ground. Opportunities Team International Consulting: Kind Bites has the chance to work with Team International to help build a marketing plan and build stronger business related social media skills to build her business. Team International is made up of five third year university students who have the education and dedication to help build the brand and have it succeed in the Victoria market. Niche product: Having a niche product is usually an advantage and an opportunity when entering into the market of food, restaurants and hospitality.
People are always looking for a better and newer product. When it comes to specialty food grocery stores, there are very limited brands and suppliers that offer certain goods. This is an opportunity for Kind Bites o use their niche products and enter the Victoria market. Store Location: Once the company generates enough revenue, build brand awareness and a reputation in Victoria, there is an opportunity to open a store front in the downtown core or Oak Bay area of the city. Threats Economy: A recession could potentially affect kind bites bakery, as a decline in income could potentially decrease the amount people are willing to pay for a specialty good.
Competitors: Kind Bites will be competing against many bakeries in the Victoria area such as specialty food stores, and coffee shops such as Struck and Tim Horton for baked goods. Inflation Goods: The rising price of raw materials could drive up the price of the finished good. An increase in Gluten-Free products, and local goods could be a direct threat to Kind Bites Bakery. 4. 0 Product Mix The company’s current products mainly focus on a variety of high-quality cupcakes which are gluten and dairy free. Cupcakes are portion-controlled desserts that are the perfect treat to celebrate birthdays, weddings, parties and serve to individuals. Kind Bites Bakery goods offer lighter cupcakes that are healthier versions of customer’s favorite cupcakes.
The flavors include Vanilla Cupcakes with Chocolate Frosting and can be manipulated to be suitable for specific occasions; and the bakery will also work with customers to choose to create the flavor combinations and custom decorations tailored specifically for customer’s event needs. Furthermore, the company produces other vegan and Gluten-Free goodies, like small squares and sugar cookies. Place In order for Kind Bites to reach potential buyers for their baked goods they need to have a presence beyond their current small customer base. In consultation with Kind Bites we are recommending that they have a presence at one or more of the weekly seasonal markets within the Victoria Area.
Several markets have been identified as good potential venues (Appendix A); both geographically and also because their customer base fits the target market. All of the markets identified have expressed interest in the differentiated product line of Kind Bites, as they do not currently have Gluten-Free vendors. Kind Bites currently has a sales force of one and a market is an ideal location where it can start on a scale it can readily manage. In order to have a presence at the market some additional equipment must be purchased, including a pop up tent, folding table, and a branded banner. All of which combined can be purchased for less than $500. 3 4 In addition to selling baked goods to the customers at the market, Kind Bites will ensure that they have brochures outlining their catering for events as well as business cards to hand out to customers potentially wishing to have an event catered. The market is to be approached as a venue for both immediate sales and also for creating customers who wish to order for events. Price Kind Bites has two main products, cupcakes and cookies. Each of these has different pricing strategies. In Figure 1 and Figure 2, Kind Bites has a significant contribution margin. There is not enough information to do a full cost break down, but the owner/ operator commented that any profit goes back into the company or she receives it for her wage.
The product has a competitive advantage and is competitive within the cupcake market because competitors such as Cupcakes, Ooh La La Cupcakes and Origins place Kind Bites’ product price point at the average point. Due to her specialty in gluten-free and vegan goodies, she can likely afford to charge a higher price especially when there is value added to each order. With such high mark-ups, Kind Bites will be able to focus profits on marketing and creating brand awareness to chive the short-term objectives that will lead into long-term objectives. Figure 1 – Cupcake Price Structure Figure 2 – Chocolate Crinkle Cookies Price Structure Promotional efforts will be aimed to increase the awareness of the brand, product and the availability to the market while reinforcing its positive taste and health attributes.
The three main channels in which promotion will be the most effective will be through afternoon treat giveaways, social media and a website. Afternoon giveaways will involve offering small, six cupcakes at a time and giveaways to different potential customers on a weekly basis. This will include wedding loaners, the Celiac Foundation and schools around the Victoria area. The promotional strategy will give potential consumers a chance to taste the product at the peak hours when they would desire it the most; thus, the cupcakes would be strategically delivered between 2 and 3 o’clock in the afternoon. To complement the push strategy of cupcake giveaways, social media will be utilized to the full extent.
Social media is becoming one of the most effective tools to utilize in marketing and promoting a business in the increasingly technological and global world. It is a cost effective way to create awareness and buzz. As such, social media channels such as Backbone, Twitter and most importantly for food, Pinsetters, are some of the best tools to utilize. 57% of Pinsetters users interact with food-related content, being the sites number one category for content. 5 As of February 2012 the social media giant had over 10 million users, this means 5. 7 million of the users interact with food related contents and represent a very effective and free tool for Kind Bites. A Kind Bites profile on all three channels should be created and actively monitored.
Similarly, to stimulate a larger online presence a website would be extremely beneficial. A website is one of the most effective ways to create something that is tangible and consumers can find. Creating a minimal website with the logo and basic info about and how to order cupcakes should be very inexpensive to initially develop and can be used as a base to refer customers too. This will serve as an effective tool to make customers more aware of the product being offered and compliment the social media online presence. 5. 0 Competitor Analysis The emerge of gluten-free products, including cupcakes, muffins and breads has seen a major increase due to pressure from consumers, and competitors trying to maintain an advantage.
Competition from large companies, local cafeg’s and bakeries are now adapting to the need for a Gluten-Free products. Key competitors in the Victoria market include the following: Ooh La La Cupcakes Ooh La La Cupcakes is a locally owned boutique bakery that offers customers customized cupcakes and cakes for weddings and birthday parties. They currently have four locations: Victoria, Sidney and Langford. They do not run a nut/dairy/ Gluten-Free facility but will work to meet dietary restrictions for their customers. They provide high quality, fresh ingredients to produce a moist and flavor cupcake. Ooh La La also sells customized cakes for weddings and other special events. Origins Bakery Origins was the first bakery in Victoria to sell exclusive gluten-free products. The two women that started the business saw a gap in the market for gluten-free products ingredients (many being local and organic) to produce a Gluten-Free product that everyone will love, including those not gluten intolerant. They sell a variety of products from; muffins, breads, cakes, cookies, pastries and bars. Origins Bakery currently has two locations to serve its market in downtown Victoria as well as Cold. Cupcakes “The Original” Cupcakes is a retro style, Vancouver based bakery that was started by two women in 2002. They opened their first store at a small location in the heart of Vancouver tourism district, English Bay.
They currently run and operate eight locations including franchises across Canada. Cupcakes specialize in cupcakes, retro cakes for weddings, birthdays and special events. They are currently the most well-known cupcake store within Canada and have gained a strong brand image to help them expand into new markets. The prices of their cupcakes range from $14. 00 for a dozen mini cupcakes or $31. 0 for 12 large cupcakes. 9 Wildfire Organic Bakery & Cafe Wildfire Bakery was founded in 1998, in the downtown market of Victoria, British Columbia. It is a small family owned business that specializes in artisan baking. Their vision is to enhance and support a community that values humanity, health and nature.
They offer a variety of organic, Gluten-Free muffins, pastries, cookies, breads and customized cakes. Not all their products are Gluten-Free, but everything is made with the highest quality and finest ingredients. Wild Fire Bakery has been running out of its one location on Quadrant SST. Or the last 15 years. 10 *Competitive Advantage Despite the growing competition for Gluten-Free bakes goods in the Canadian market, Kind Bites has defined a strategy of potential customers and a marketing strategy on how to target these segments. Kind Bites offers high quality, 100% gluten/dairy free products that focus their products 95% on cupcakes and 5% on other baked goods.
The products will be sold too very niche market of consumers, who are health conscious and/or gluten intolerant. The products can be customized for small or large events such as weddings, corporate events and schools in the Victoria geographic area. Although Kind Bites has two direct competitors, as well as two indirect competitors, Kind Bites has features that edge the competition, which will allow it to gain market share. Appendix D, Table B shows a competitive analysis chart. 6. 0 Market Analysis & Description “According to Remuneration International, the food intolerance market in North America was worth SIS$3. 6 billion in 2010, fuelled by gluten and lactose-free products. 11 The presence of gluten-free products in the marketplace is ever growing, be it in a local grocery store, coffee shop or specialty food catering, gluten- ere product visibility is on the rise. The number of products marked “no gluten” tripled from 2005 to 2008 on the North American market. 12 More recently, Canada has seen a retail value growth of 10% and a market that totaled $27 million in 201013. It has also been noted the gluten-free products are the market leader in the “free-from” category according to Agriculture and Agro-Food Canada and the driving force behind demand for specialty food products. It goes without saying that the gluten-free market is on the rise and represents significant opportunities for new companies to gain market share.
Additionally, it has been noted by the Canadian approximately 2,729 people are affected of the total population in 2012 of 363,000 Victoria, BC. Similarly, the Canadian Digestive Health Foundation has noted that families spend roughly $1 50 million annually in Canada to obtain gluten-free foods; this represents a lucrative market to enter if the business can enter it properly and effectively. This upward trend in gluten-free products isn’t Just for those afflicted by the disease; it is also for those trying to live a healthier lifestyle, adding to the increase in demand for the products. The wave of gluten-free consumers is growing and solidifying the need for gluten-free products in the marketplace.
This wave represents an opportunity for Kind Bites to grow with the market and capitalize on its prosperity. 7. 0 Implementation Plan By considering the comprehensive analysis of Kind Bites and Britain’s willingness, we will initially facilitate a two-year implantation for her bakery goods. To start, we recommend that Kind Bites should use 2-3 weeks to build potential customer relationship based on their current network which will contribute to increase the company’s revenue in short time. Our objectives will guide Kind Bites to reach $500 in sales per month and $1,000 a month in peak season (April to September). This will be based on repeat customers that order at least 2-3 times per week as well as an increasing clientele base.
In order to make these sales the bakery will need to sell Furthermore, we plan to employ the marketing strategy to steadily increase its customer base in Langford through using many low-price distribution channels, such as samples in the communities, elementary schools and universities, like Royal Roads University or the University of Victoria. Implementation will begin as early as April, in order to build brand recognition, by attending local markets and setting up booths to reach out to new customers. While Kind Bites is very small right now, Team International firmly believes that the company will be able to expand to meet market demands. Throughout the first few months of implementation, the goals are to reach out to a wide variety of customers, with the hopes of positive word of mouth advertising our target market will become more defined as those consumers become aware of what Kind Bites has to offer.
Moving into the second year, we will measure our success of the current strategy based on customer feedback, and revenue. We will evaluate the potential to grow, and the next steps to implement into Kind Bites marketing strategy. By evaluating the latest marketing environment, such as new policies and new strategies from the competitors, this will gage whether Kind Bites will generate sufficient capital to expand to a store location in Victoria. If everything is on the right track, we will decide to facilitate a second year implementation mainly focusing on a market development strategy, including growing more contacts with schools and wedding/event planner.