Global Economic Environment and Marketing for Bread Talk Group

Question: Discuss about theGlobal Economic Environment and Marketing for Bread Talk Group. Answer: Introduction The report focuses on the ways in which the changes within the global economy impacts upon the marketing strategies of the Bread Talk Group. The global economic environment has direct relationship with marketing since the global factors including the cultural or social factors, demographics, political factors and legal issues impacts the marketing procedure of the company (Terpstra, Foley Sarathy, 2012). The influence of this organizations present and future strategies for sustainable competitive advantage, branding and its segmentation process is also critically evaluated in this study. It has been well known fact that consumers play the vital role in the business as they are ones that influences the marketing strategies in business. Applying this same economic scenario, the potential affect of the enterprise marketing strategies on the customers decision making is also discussed in this report. In the last section, the Ansoff Matrix (within MARCO: PESTLE) is also explained in this study for evaluating the possible growth opportunities of the Bread Talk Group. The Ansoff matrix refers to the strategic planning tool, which provides the framework to facilitate the marketers as well as managers devise strategies for the future growth. Furthermore, the opportunities for growth within this enterprises MACRO environments are also highlighted in this report. About the Bread Talk Group The Bread Talk Group Limited is the multinational food and beverage enterprise that is headquartered in Singapore. This organization has organized its units of business based on goods and services. It has mainly three operational segments that involve- food court segment, restaurant segment and bakery segment. Their bakery segment is basically engaged in business of production as well as retailing of bakery and other confectionary products involving franchising (BreadTalk Group Home, 2018). The restaurant segment is mainly involved in business operation of food as well as drink outlets and eating restaurants. The food court segment is majorly involved in operation as well as management of the food courts. Its subsidiaries involve Bread Talk Pte Ltd that is a producer, baker and dealer in bread. Over the last few years, the Bread Talk Group has expanded increasingly to become distinguished household brand owner. The group basically operates in more than 850 bakeries and 26 globally a cclaimed restaurants across Singapore. Their vision is to institute this company as the brand and being reputed for innovative and trend setting producer of bread. Their main purpose is to establish this company as familiar brands globally (Kotler, 2015). This firm primarily concentrates on the customers preferences and their level of satisfaction. In fact, their main target markets are the high income or middle income people and young working group. The mina competitors of this enterprise are Four Leaves, My Bread and so on. One of the vital factors which differentiate this enterprise from other traditional bakeries is their meaningful and specific names to all types of bread. This strategy adopted by the company mainly attracts the younger generations the most. Over the years, this company has constructed universal reputation to provide renowned products as well as loftier service to their customers. At present, this firm has been trying to expand its business and also open more o utlets in the existing market. Additionally, they have been looking forward to broaden their commodity development practice and gratify the desires of their customers for improving their position in the market and attain larger market share. Competitive Advantage A firm can attain competitive advantage by offering their customers higher value as compared to the rivalries such as- offering discount or low price product and providing good quality products. Creating competitive advantage is one of the most vital goals of Bread Talk Group as it permits it to attain higher returns for their shareholders (Wagner III Hollenbeck, 2014). Bread Talk Group uses three strategies for gaining competitive advantage over the competitors, which includes- differentiation strategy, focus approach and cost leadership approach. Their differentiation strategy involves production of good quality products, innovation of new products, innovation in food culture and price differentiation approach. This companys focused approach involves acquiring as well as holding of intellectual property rights. In addition, this approach also helps them to narrow their product lines and customer segments. Their cost leadership approach involves manufacturing of products at low cos t by adopting new technologies. Furthermore, adoption of these strategies through which this enterprise attains competitive advantage is explained below: Quality of product- Controlling quality of the products is the major priority of Bread Talk Group. Their RD( research and development) team tries to innovate new products by blending local culture with good quality ingredients. They mainly strategizes to source globally for selecting natural ingredients, which are further prepared from raw state to create fillings of the bread. The manufactured products are further checked as well as qualified by the food technologists. This however ensures them greater control on food quality of finished products. In fact, their breads are also baked fresh at every outlet in regular basis and is then packed as well as indicated with best before date. Thus, adoption of this strategy for producing quality products helps to satisfy their customers and attain their trust. Price leadership- As the standard of living of the individuals is increasing at the present years and economic environment becoming better relative to last years, this organization has adopted price differentiation strategy in marketing their products. The prices of their bakery products are near about 20-25% more expensive in comparison with other traditional bakeries. However, high product price level helps the marketing manager to focus on the main source of custome (BreadTalk Group - Our Strategy. 2018)r. Their main strategy is to have stable customer base rather than having huge one. Therefore, setting the product price higher than other bakery enterprise, stable customer base helps them to attain higher revenue. Thus, this price differentiation strategy facilitates Bread Talk group to attain leadership in price. Integration of new technology-This enterprise has embarked into new technologies and few initiatives of digital transformations for increasing productivity and reducing wastage of food. This mainly involves roll out of e- production and e- scheduling, which in turn improves total productivity by near about 3% and also reduce total wastage by about 20%. As a result, the total cost of manufacturing the product also reduces and thus this benefits the enterprise to maximize profit. Moreover, integration of modern technologies aids the company to deliver innovative goods development efforts at low cost (Musso, 2010). Furthermore, it also facilitates this enterprise to package the product in creative way. Thus, implementation of this strategy helps this enterprise to attract more customers and gain competitive advantage over their rivalries. Intellectual property- This is mainly considered as the assets of the company, which are mainly divided into two types- physical and intangible assets. Protection of Intellectual property is vital for the business to foster innovation. The businesses as well as individuals cannot attain full advantage of their inventions without shielding of the ideas (De Beer, Fu Wunsch-Vincent, 2013). The three methods by which this company protects the intellectual property are patents, copyrights and. Bread Talk Group engages with Star Food Pte, BTG Vault Pte Ltrd and Inc Pte ltd for acquiring as well as holding their intellectual property rights. The strategies as well as actions adopted by this company for gaining competitive advantage have been sustainable. Hence helps them to acquire perceived benefit from these strategies. Market Segmentation Process Market segmentation refers to the procedure of classifying broad customers or the business market, generally comprising of potential customers and sub-groups of these customers depending on some kind of shared features (Weinstein, 2013). This has huge significance in the business as it helps to exactly reach the customers with particular requirements and wants. This process also helps the company to develop niche strategies and stimulate innovation. Moreover, it also aids to build sustainable relationship with their customers and communicate in better way. The market segmentation of Bread Talk basically consists of up-scale suburb consumers. They mainly targets young generations, working experts and high income households. By increasing accessibility of market, they try to concentrate on their target customers. Bread Talk Group market is generally segmented into different categories, which includes- behavioral, psychographic, behavioral and geographical differences. Behavioral- Presently, the demand in Asian market is mainly based on both freshness and quality of product. In response to this, this enterprise has adopted effectual marketing behavioral act. In fact, the product quality is thereby highly administered by this company before delivering it to the customers (McDonald Dunbar, 2012). In addition, another behavioral practice adopted by this enterprise is inspiration of consumer senses. However, by adopting this strategy all the commodities supplied comes in attractive packages. Geographical differences- This Company adjust their commodities according to culture in response to different locations. Furthermore, they also provides mixture of western as well as Asian tastes, which in turn results to near about 150 varied products. They are controlling all these variables for satisfying the desires and needs of their customers in different locations. However, they are aiming to gain large number of customers through this market segmentation process. Demographic-This enterprise is rapidly expanding its network of franchise over the years. While serving all population of the Asian countries, this organization forges partnership with several nations such as Thailand, Bahrain, Hong Kong, Kuwait etc. Furthermore, the demography has also been intended to Mynamar, Sri Lanka, Qatar and so on. Psychographic- This enterprise has been supplying exceptional products around Asian market and thus making it reputed brand. They focus on producing the product with high quality and attractive packaging. This segmentation strategy helps them to abstract the whole market in line with their business (Wedel Kamakura, 2012). They aim to create more than 500 outlets for expanding the business in the global market. Apart from this, they also concentrate on launching more brands such as The Icing Room, Bread Society. In contrast to this, they also offer several launch specials on Bread Talk Stores. As this enterprise is health oriented, they forms iPad apps for enabling the customers purchase coupons. Additionally, they also redeem this by exchanging their product, which in turn attracts large number of customers. Consumer Decision making As the marketer plays a vital role in selling the products in the marketplace, it is necessary for them to have knowledge regarding how their customers make purchasing decision. The consumer decision making procedure thereby explains five stages through which they make decision regarding purchase of product. The five stages are discussed below: Need Recognition- The consumers decision making procedure starts with the need recognition. In this stage, the marketer first recognizes the requirement of customers and thereby manufactures product accordingly for satisfying them (Sekhon, 2015). Bread Talk group first recognizes the varied needs as well as changing preferences of their customers and then produces varieties of breads, cakes according to their taste. Besides this, they are constantly innovating new products for satisfying their consumers changing preferences and tastes. Additionally, they introduce more than 10 products every four months for increasing the purchasing options of consumers. Search of information-At this stage, customers gather information regarding the quality of product either though advertisements, sellers, dealers and close relatives. Based on this information, the customers make the decision of buying the products. Bread Talk Groups being a renowned bakery company, the information about their products becomes easily available in internet, magazines etc. This in turn helps the customers make decision regarding purchasing of goods. Assessment of alternatives purchase- After acquiring the knowledge about the goods, the customers evaluates different alternative products based on their needs, quality, price and other features. As the products of Bread Talk are higher than their competitors, the consumers sometimes evaluate other companys products based on their needs. In some cases, the customers switch over to other companys product, which in turn affects the profit margin of Bread Talk Group (Breadtalk Marketing Plan 2018). Buying decision-In this stage, the customers buys the suitable product after assessing the alternative products. But in some instances, the customers also postpone their buying decision owing to some reasons. In this situation, the marketers analyze this reason and try to solve it by providing proper information to their customers and giving assurance regarding product quality. The marketers of Bread Talk Group analyze their target customers behavior before giving them proper information about the product or changing its features accordingly. Recent facts reflects that this strategy adopted by this enterprise marketers leads to increase in their product sales. Post purchase behavior-This stage reflects whether the customers are satisfied with the companys product. This however influences the sales and reputation of the company. The customers of Bread Talk Group are usually satisfied with their products because of its good quality. In case, if the customers become dissatisfied with their products, their marketers tries to change the packaging of the product and adopts different method of marketing it. Ansoffs Matrix (within MARCO: PESTLE) Ansoff matrix is basically a communication tool that facilitates to overview possible growth strategies for the enterprise. The four growth strategies of Ansoff matrix is explained below: Market Penetration-This strategy is adopted by the enterprise when existing product requires growth strategy within the market. As the intention of Bread Talk Group is to improve their brand image and attain good reputation in the market, they have started innovating new products and their packaging style (Ansoff Matrix, 2018). In addition, they have also adopted new promotional method for providing more information about the product in order to increase sales. Market Development-This strategy is mainly adopted when the company targets new market with their existing products (West, Ford Ibrahim, 2015). Bread Talk Groups strategizes to launch their existing products in new market and to new customer base. This helps them to expand their brand in global market. Product development-This strategy is required when the enterprise has good consumer base and thus the existing products market reached saturation point. Bread Talk groups launches global store concept by incorporating baking artistry, natural ingredients and emerging technology for aiming to deliver efforts of innovative product development (Wheelwright Clark, 2012). Diversification-This strategy is used when the commodity is being launched in new market. Although it is a risky strategy, it helps to gain competitive advantage over their rivalries. Backward integration-Bread Talk pursues backward integration strategy for improving efficiency as well as cost savings. They strategize to lower production cost for enhancing profit margin. Forward integration- This strategy involves expansion of business activities globally. In order to expand the business, Bread Talk is opening new outlets across the global market. Related integration- This strategy is adopted when the several products becomes related to each other. Bread Talk tries to differentiate the packaging of product in case it is related to each other. Unrelated integration-This diversification refers to the form in which the organization adds unrelated commodity lines and then penetrates into new market. Bread Talk innovates new product and services before penetrating into new market. Conclusion From the above study, it can be concluded that Bread Talk marketing strategies has been effective as it increases their sales growth over the years. Although the strategies adopted by them has been effective, the present revenue of this enterprise highlights that the company is facing difficulty in maintaining good position in the market owing to some of their declining products. However, it is recommended that the company must focus on few areas in marketing process for enhancing sales growth. These areas includes- advertisement through social media, banner etc, positive business environment for customers and increment of total outlets. 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