Assignment Cover SheetSTUDENT DETAILSID26260875Family nameSUN

Phone no.0449767417Given namesRUYUE

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ASSIGNMENT DETAILSUnit nameMarketing 1Unit codeMCD2050

Assignment titleAssignment 2: Major Assignment: Business Report

Lecturers nameKimbleTutors nameVishwa

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Due dateDec 14,2014Date submittedDec 16,2014

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SignatureRUYUE SUNDateDec 14, 2014

Cover Page

Organisation: BreadtopSpecific Offer: Cake

Student Name: RUYUE SUN (Serena)Student Number: 26260875Assignment: Marketing Assignment 2 - Major Assignment Teacher: VishwaWord count: 2155

Table of Contents Executive Summary 61. Introduction 71.1 Purpose 71.2 Scope 71.3 Background 71.4 Assumption 71.5 Limitations 72. Background information 71 2 2.1 Industry 72.2 The microenvironment 82.2.1 Organisation 82.2.2 Suppliers 82.2.3 Intermediaries 82.2.4 Publics 82.2.5 Customer 82.3 The macroenvironment 92.4 Economic 92.5 Natural 93 Competitors 93.1 Competitor 1: Cupcake bakery Pty Ltd 93.2 Competitor 2: Brunetti 104 Product 104.1 Classification 104.2 Level 114.2.1 Core product 114.2.2 Actual product 114.2.3 Augmented product 115 Target segment 125.1 Physiological needs 135.2 Safety needs 135.3 Esteem needs 136 Evaluation of offer: Cakes 137 Recommendations 148 Conclusions 14Reference list 15

Executive Summary The bread and cake retailing industry is predicted to experience a substantial increase over the next five years. Industry revenue has grown consistently since 2011-12. The report focuses on Breadtop Pty Ltd. And the major competitors are Cupcake bakery Pty Ltd and Brunetti. The microenvironments mentioned in this report are organisation, suppliers, intermediaries, publics and customers. The macroenvironments listed are economic and nature. The specific offer of this report is cake. The core products of it are delicious taste and visual enjoyment. The actual products are Breadtop brand name, cakes, gift boxes, plastic tableware, safety and highly quality, cake packaging and labelling and distinctive design. The augmented products are online shopping, free of charge returned or exchanged and holiday special offer. Household consumers will be the target segment this report is going to discuss. There are three recommendations for Breadtop: adding take-away food service and membership system and improving its official website.

1. Introduction1.1. PurposeThe purpose of this business report is to review the appropriateness of various kinds of cakes designed and produced by Breadtop for its household consumers based on relevant marketing theory.1.2. ScopeThis business report focuses on the Bread and Cake retailing industry in Australia market and the whole Breadtop organisation.1.3. BackgroundOver the past three years, the rising demand for premium products that attract higher prices and profit margins has driven the bread and cake retailing industry performance. And this premium trend will continue to benefit the industry in 2013-14. Breadtop organisation was founded in 2002. It now has over 60 branch stores throughout Australia. Breadtop offers more than 200 varieties of bread, cakes and other products.1.4. AssumptionThe specific offer this report focuses on (cakes) is satisfying all target segment needs and wants.1.5. LimitationsThe useful information provided in the Breadtop official website is finite. My study on some specific aspects such as the company's status of operation is restricted. The time constraint is from 1998-2014.2. Background information 2.1. IndustryRetailers in this industry sell a range of bakery items including bread, cakes, pastries and biscuits (ISIB World, 2014).The industry is predicted to experience a substantial increase over the next five years. Industry revenue has grown consistently since 2011-12. Industry revenue is forecast to grow at a compound annual rate of 1.8% over the five years through 218-19, to reach $868.2 million. Major players in this industry are retail Food Group Limited (RFG) which has a market share of 26.4% and other companies. Breadtop Pty Ltd and the Cupcake Bakery Pty Ltd occupy 4.8% and nearly 1.0% market share respectively. Bakers Delight holds a healthy 12.7% market share while Brumbys bakery occupies 7%.3. 4. 2.1. 2.2. The microenvironment2.2.1. Organisation: Breadtop Pty LtdBreadtop Pty Ltd was founded in Box Hill in 2002 and has expanded to over 60 stores nationally. Its rapid growth boosts Breadtop's development so that it reaches almost 5% market share in only 10 years. Breadtop provides various products which focus on Asian cuisines. Breadtop stores also sell products suited for westerners.1. 2. 2.1. 2.2. 2.2.1. 2.2.2. SuppliersCentralised production factories in Victoria, New South Wales, Queensland and South Australia supply products to franchises. Breadtop's central food processing factory in Melbourne was first accredited by HACCP for its hygiene and high food safety standards.2.2.3. IntermediariesResellers for Breadtop include Box hill shopping centre, Chadstone shopping centre, Clayton shopping centre, Glen Waverley shopping centre and so on. 2.2.4. Publics2.2.4.1. Media publicsAustralian, The Australia newspaper has an actual impact on Breadtop's operations. Because the articles published on it would have a potential influence on consumers. For example, the article "Breadtop strikes deal over underpayments" published on January 23th, 2014 would affect Breadtop's reputation (Australia newspaper, 2014).1. 2. 2.1. 2.2. 2.2.1. 2.2.2. 2.2.3. 2.2.4. 2.2.4.1. 2.2.4.2. General publicsBreadtop set up its facebook homepage and twitter homepage to publicise its latest information such as Breadtop fabulous cakes for this Christmas to encourage publics to interact with them.2.2.5. Customer2.2.5.1. Consumer marketAccording to the bread and cake retailing industry report (IBIS World, 2014), household consumers demand bread as part of their staple diet. And consumers demand cakes as part of their weekly shopping purchases.1. 2. 2.1. 2.2. 2.2.1. 2.2.2. 2.2.3. 2.2.4. 2.2.5. 2.2.5.1. 2.2.5.2. International marketBreadtop harbor bigger ambitions, including expansion of the franchise overseas. Breadtop had already registered its trademark in Vietnam and was doing the same in the United States and New Zealand.2.3. The Macroenvironment2.3.1. EconomicMartin (2010) suggested that bakeries have traditionally weathered recessions well, but the drawn-out recovery will continue to be a drag on the bakery industry. In 2010, the economy will be the most influential factor affecting bakery businesses, but bakers will need to watch and adapt to several other trends in the marketplace to retain and attract customers. These trends will affect the bakery industry as a whole, from large commercial bakeries to small retail bakeries. 1. 2. 2.1. 2.2. 2.3. 2.3.1. 2.3.2. NaturalAccording to Kotler et al., (2013, p.133-134) environmental concerns have grown over the past two decades. Wheat, flour and sugar are key inputs in most bread and cake items. Domestic wheat prices largely depend on rainfall. Likewise, the domestic price of sugar is heavily affected by weather fluctuations. As a result, the prices of wheat, flour and sugar have increased which have contributed to rising purchase costs for bread and cake retailers over the past five years.3. Competitors3.1. Competitor 1: Cupcake bakery Pty LtdThe cupcake bakery was founded in 2006 by husband and wife team. The first store was opened in 2007 in Sydney. They have been working on building their company and brand ever since. Now the company is expanded into Melbourne, Sydney and Brisbane and the market share is nearly 1%.1. 2. 3. 3.1. 3.1.1. Competing offer: CupcakesThere are 20 basic cupcakes produced by Cupcake bakery. The designs and patterns try to satisfy consumers' needs and wants better. For example, the fruit- flavor cupcakes (lemon and poppyseed cake, vanilla strawberry cake, banana cake, etc.) are more for females. There are also different flavoured cakes suit for younger generation, such as chocolate cakes, cheese cakes, vanilla flavoured cakes and so on. The most attracting about these cupcakes is that consumers can order and design their own cupcakes whether they plan to promote business, celebrate a company milestone, organise a business function or need to make a sale pitch. Cupcake bakery can create edible images on each cupcake which is sure to make the right impression. In addition, the company provides delicate gift boxes to wrap up a little bit of sunshine to properly celebrate some special occasions. All products Cupcake bakery provided can order online.3.2. Competitor 2: BrunettiBrunetti began trading at the Faraday street location in 1985.Over the years, Brunetti has become so popular that in April of 2005 another Brunetti caf opened in Melbournes City Square, followed by a caf in Camberwell (October 2007) and another in Myer Melbourne (October 2010). With Brunettis expansion across Melbourne, an international location opened its doors. Tanglin Mall, Singapore, welcomed Brunetti in September 2011.3.2.1. Competing offer: CakesThere are four different kinds of cakes in Brunetti: celebration cakes, special occasion cakes, children's cakes and wedding cakes. The celebration cakes occupy the largest part. They are in distinct shapes, patterns and sizes and cover almost all flavours for different consumers. The name or words customers want to put on special occasion cakes can be designed by themselves. And they are also given a gift boxes which can also be customised. Children's cakes are produced into popular cartoon figures in bright colors. As for wedding cakes, they are available in mud cake, sacher torte, fruit cake, opera cake, and torta di arancia. They are different-tiered and are decorated with flowers like roses and orchids.4. Product4.1. ClassificationCakes are consumer products which are bought by final consumers for personal consumption (Kotler et al., 2013, p.279). Cakes are also convenience products. According to Kotler et al. (2013) convenience product are consumer goods and services that people usually buy frequently, immediately, and with a minimum of product comparison and buying effort.Household expenditure survey from 1998 to 1999 (Australian Bureau of Statistics, 2000) found that in the 12 months to June 1999, Australian households spent an average of $699 each week on goods and services. Average household expenditure on bakery products, flours and cereals was $15 per week, the largest components being bread ($6), cakes, tarts and puddings ($3) and biscuits ($3). That proves the frequent purchase and little shopping effort of cakes.1. 2. 3. 4. 4.1. 4.2. levels4.2.1. Core productFor cakes in Breadtop, the core benefits are the delicious taste and visual enjoyment for different cakes. People who buy cakes are less interested in keeping the physical cakes and more interested in enjoying the fantastic appearance and then tasting them to satisfy their need.1. 2. 3. 4. 4.1. 4.2. 4.2.1. 4.2.2. Actual productFor cakes in Breadtop, the actual products are Breadtop brand name, cakes, gift boxes, plastic tableware, safety and highly quality, cake packaging and labelling and distinctive design. Because of the long history of Breadtop, the Breadtop brand name is powerful. Breadtop use brand strategy which is establishing this brand imagery with the peculiar font and combination of Chinese and English for a long time to reinforce the consumer loyalty and result in customers demanding this brand. And "Breadtop" will be written on chocolate slices topped on some cakes. Breadtop also consistently offer higher-quality cakes at a given price. There is a board on every franchise wall that reads "every product is produced today." There are many kinds of ice cream cup in Breadtop, such as green tea ice cream cup, mango sorbet ice cream cup and so on which are specially packaged. They produce the special container and wrapper with brand name, flavours explanation and beautiful pictures printed on. 4.2.3. Augmented productFor cakes in Breadtop, the augmented products include online shopping, free of charge returned or exchanged and holiday special offer. There is online shopping service on its official website homepage. And the company promises they are totally responsible if there's a quality problem with their products. They will also release some special activity during every Chinese and western holiday. Breadtop set up its facebook homepage and twitter homepage to publicise its latest information such as Breadtop fabulous cakes for this Christmas to encourage publics to interact with them.

Free of charge returned or exchanged

Breadtop brand nameCakes Gift boxes

Distinctive designHoliday special offerDelicious taste Visual enjoyment

Cake packaging and labelling

Online shopping

Plastic tableware

Safety and highly quality

Social website homepage

5. Target segmentThe target segment for Breadtop cakes could be described as household consumers. This segment is aged between 16-49 years old and is within young, single and young, married, with children family life cycle stage. Given the price of the cakes, the income range would be between under $15000 or $15000-$50000. The occupation of this segment would range from students, housewives, white collar, retired, administration and managers. The values they hold are based on basic needs and healthy eating. They are mainly traditional family life and conventional family life. The benefits they seek from the cakes include quality, safety and convenience. Their loyalty status is medium and their attitudes towards cakes are enthusiastic and positive.The key needs of the segment include physiological needs, safety needs and esteem needs.1. 2. 3. 4. 5. 5.1. Physiological needs The main function of cakes is to solve people's hunger problem.5.2. Safety needsMaking healthy products and finding ways to eat better and promote a healthier lifestyle are on the top of consumers' to-do lists (Lauren, 2012). Lauren (2012) also explained that consumers are paying more attention to labels and ingredients, so clean labels are more prevalent. Clean labels are also a prime opportunity to tout the nutritional benefits of ingredients.1. 2. 3. 4. 5. 5.1. 5.2. 5.3. Esteem needsAccording to bread and cake retailing industry report (IBIS world, 2014), When consumers are confident about their future income, they are more willing to spend their current disposable income. Poor consumer sentiment negatively affects demand for non-essentials, such as cakes and pastries. Therefore, buying cakes is a hint of consumers' positive sentiment which results in recognition and status seeking.6. Evaluation of offer: CakesHousehold expenditure survey from 1998-1999 (Australian Bureau of Statistics, 2000) revealed that average household expenditure on food and non-alcoholic beverages was $127 per week. The most significant items of food expenditure were bakery products, flours and cereals ($15), the largest components being cakes, tarts and puddings ($3). Certainly, cakes satisfy household consumers' physiological needs. There are numerous public policies to promote a healthy diet. Studies conducted to analyse the existing measures to promote healthier eating counted 121 policy interventions in 2011 (Capacci et al., 2012). Breadtop's central food processing factory in Melbourne was first accredited by HACCP for its hygiene and high food safety standards. So quality assured cakes provided by Breadtop satisfy consumers' safety needs. There has been a good deal of work trying to categorize consumers according to their food-related lifestyle (Brunso and Grunert, 1998; Grunert et al., 1997, 2001a), which is defined as the general pattern of how consumers use food to fulfill basic motives or attain life values, and of which quality perception is an important component. Therefore, cakes are one kind of the food household consumers can use to satisfy their esteem needs. 7. RecommendationsBreadtop should increase the level of augmented product. They should add delivering take-away food service. And this service should reflect both in every franchise and on official website homepage. Breadtop should also set up membership system. They should release the V.I.P. cards to regularly customers. Finally, Breadtop should improving its official website to make it more comprehensive for the products and the company's introduction.8. ConclusionsIn conclusion, Breadtop is responding to the ever-changing marketing environment flexibly. It uses specific marketing strategies to survive and compete in the industry. Therefore, Breadtop can make an impressive progress in the future.

Reference listKotler, P., Burton, S., Deans, K., Brown, L., & Armstrong, G. (2013). Marketing (9th ed.). Frenchs Forest, Australia: Pearson Australia.

Martin, K. (2010). Bakery industry forecast: How it all adds up. Baking Management, 14(1), n/a.

Lauren, R. H. (2012). Teeing up in the bakery market. Snack Food &Wholesale Bakery, 101(6), p.16-17.Grunert, K.G. (2007). How consumers perceive food quality. Understanding Consumers of Food Products (pp. 181-199).

Marotta, G., Simeone, M., & Nazzaro, C. (2014). Product reformulation in the food system to improve food safety. Evaluation of policy interventions. Appetite, 74, 107-115.

Tonkin, B. (2014). IBISWorld Industry Report: Bread and cake retailing in Australia (Inquiry Report No. G4129). Australia. Retrieved from http://www.ibisworld.com.au.

Breadtop, (2014), Fresh bread, cakes, biscuits & pastries Australia. Retrieved from https://www.breadtop.com.au/

Brunetti, (2014), Cakes. Retrieved from http://brunetti.com.au/

The cupcake bakery, (2014), Welcome to the cupcake bakery. Retrieved from http://www.thecupcakebakery.com.au/

The Brumby's Story, (2013), Brumby's bakery. Retrieved from http://www.brumbys.com.au

Healthy eating, (2014), What we bake, Retrieved from http://www.bakersdelight.com.au

MCD2050; Marketing 1Assessment 2: Major Assignment: Business ReportMarking guideCRITERIA%Very PoorPoorAverageGoodVeryGoodComments

Content (50%)

Description of the industry ,micro and macro environment, market and product category10

Identification and evaluation of major competitors5

Description of the specific offer with reference to, the type of offer, the three levels of the offer, the brand, packaging and labeling 10

Description of the target segment including their defining characteristics and their needs and wants in relation to this product category 10

Analysis of the current offer in relation to the needs and wants of the target market 10

Recommendations for adjustment

5

Cognitive skills (30%)

Ability to judiciously apply marketing theory, concepts and models within the assignment

10

Ability to source appropriate sources of information

10

Critical analysis of information with relevance to the topic area / model

10

Structure and Style (20%) 15% to be allocated to the other sections

Literacy standard

Develops clear argument and direction

Follows suggested formatting including executive summary & introduction

Referencing correctly, technical accuracy

Appropriate and adequate use of references Please note that using fewer than 5 references from recognised academic sources will prevent a student from receiving a mark higher than a Pass! 5

Evidence of wider reading

Grade: Marker: Double Marker (if applicable):Comments:

17