Contents I. Executive Summary3 II. Idea Generation4 III. Brief Industry / Market Background8 IV. Industry Structure10 V. STEP Analysis11 VI. Porter’s Five Forces of Competitive Position17 VII. SWOT Analysis20 VIII. Key Success Factors28 IX. Competitor Analysis30 X. Target Market41 XI. Competitive Strategy45 XII. Value Creation54 XIII. Growth Potential58 XIV. Vision, Mission and Values60 XV. Objectives62 XVI. Strategies64 XVII. Marketing Plan66 XVIII. Operations Plan100 XIX. Financial Plan124 XX. Key Milestones133 XXI. Key Results Area134 I. Executive Summary
Almighty Foods Corporation was established in 2007 with the vision of increasing and enhancing Filpinos’ everyday lives through the advocacy of a healthy lifestyle in coordination with quality and home-grown alternatives.
This is concretized by the company’s pursuit to improve the quality and health of food, which is an integral part of the Filipino lifestyle. In this process, the company aims to give new life to the local food industry by creating an internationally competitive product composed of local ingredients and manufactured with Filipino ingenuity.
Thus, Almighty Foods Corporation has come up with Manna Crisps.
Product and Business Concept Manna Crisps is a healthy alternative to the commonly available snack foods, which have often forgone the value of nutrition in exchange for superior taste, thus ending up as junk food. It is also a more affordable and equally competitive alternative to the expensive imported health snacks which are actually composed of a number of inorganic substances such as sugar substitutes. Also, on the simple basis of product quality and taste, it proves to be superior to other commercially available crackers even with the seeming similarities in texture.
This is the main thrust of ALMIGHTY Foods Corp. n their creation of Manna Crisps. It is formulated to become a synergy and combination of the main selling points of three main snack market segments. It is a healthy packaged bread product, an affordable health snack and a tasty and quality cracker. Marketing and Operations Plan By being very selective and prudent with their actions, the company believes that they can gain a small niche market for Manna Crisps. Being priced at Php 50 per 100g unit, the company understands that it must focus its efforts on its target market (15-35 year-olds from the ABC1 brackets) heavily.
These people would probably fit the profile of being college students or young professionals, people who are conscious about their health as well as living active lifestyle which may encounter hunger at any point in their day. In line with this, the company will make the good available where these people’s activities are most prevalent – college and office cafeterias, school functions and events, and it aware to these people through advertisements placed where they are most sensitive and using imagery which they are most responsive to.
With a need for a competitive product, the company chooses to implement a high level of total quality management from supply procurement until the product’s distribution, whether the sales are through direct selling, consignment or online ordering. Also, emphasis is placed on product freshness, that is why a just-in-time inventory system will be employed. Financials ALMIGHTY Foods Corp. requires a minimal initial outlay of P18,000 to be equally divided among the six investors of the company. Majority of the initial investment shall be spent on the company’s initial inventory and bazaar entrance fees.
The company is expecting to sell 1,060 units of Manna Crisps during the first three months of operations, yielding a net profit margin of at least 22% for each month. A 73% return on investment is therefore estimated after the third month, while a full recovery is expected by the end of the first year. II. Idea Generation Background Food is one of the most basic necessities of every living being. As such, human beings have found several means of producing and developing different food products to suffice this crucial need. Being a fundamental necessity, the demand for food will always be present.
Thus, the industry has attracted a lot of different players/businesses engaging in various sub sectors, seeking to earn substantial profit. These days, the variety and complexity of the food market have made it highly competitive. Although easy to penetrate (enter), it is rather difficult to survive and moreover, prosper. The high influx of different food products and services made the market cluttered in several sectors. A lot of new food products come by as fads rather than sustainable product lines. Some examples of past fads are shawarma, pearl shakes and mini donuts.
Recent and still existing ones are donuts (Go Nuts Donuts, Krispy Kreme, Cellos), premium popcorn (Holy Kettle Corn, Kettle Corn, Chef Tony’s) and green tea drinks (C2, Lipton, One, Sunkist). Some of these food/beverage goods were able to maintain consistent sales (green tea drinks), while the others have died down (pearl shakes). The constant appearance of new restaurants or any other food service centers is also met by the closing of others food service businesses as well. Despite the challenges of the food industry, a lot of aspiring entrepreneurs still choose to enter the industry.
Reason for the popularity of the food industry is probably due to the relative ease of entry. It requires little effort as well as capital (although not all the time) to produce or distribute food products. Furthermore, as mentioned previously, the demand is always present. Nonetheless, it indeed is challenging for any new comer to prosper in this industry. It requires not only innovative thinking, but long-term planning and strategizing as well. Addressing the Need Every good business idea should address a certain need. Its feasibility and profitability would depend on how it responds to this need.
In this case, man’s need for food is to be met. Thus, the most primary question is, “What is the product? ” However, in a time and place wherein there is a wide range of choices of supply, the manner and not merely the matter (food itself) is also in question – “How will the product satisfy this need? ” Furthermore, a lot of other goods are available that addresses the same need. Thus the question is not merely, “how will the product satisfy this need? ” but rather, “what makes the product better than others? ” In other words, “why will the consumer purchase our product rather than other available goods? Lastly, the product should not only be better than others (ex. 100% Beef burger as compared to a burger not made of all beef) but should add value to the market. In other words, the good must be innovative and unique such as it gives the consumers not just better choices but a completely new alternative. The “Snack” food Snack food industries/businesses address this basic need. Chips, cookies, crackers, popcorn and bread are examples of which . Snack foods are designed to be appetizing but not meant to make one full, as a regular meal can. They are supposed to be readily available and easy for the customers to carry around.
This satisfies the trend towards the fast-paced, instant lifestyles of modern city individuals. Thus, the quality and value of a snack food relies on its taste as well as its convenience. Need for a Healthier Alternative A problem, however, is the perception of snack foods as being unhealthy due to its lack of nutrients and high cholesterol levels. Since snack food is only meant to momentarily satisfy one’s appetite, more focus is put into the taste rather than the actual content of the good. Snacks then tend to have very little nutrients thus, leading to the perception that snacks are unhealthy food products.
Adding to this notion is the fact that snack foods are pre-prepared giving the idea that it is not fresh and contains preservatives. That is why the term “junk food” is often used. Furthermore, the general public especially in the higher classes (ABC1) has increased priority on health (including the increased preference of healthier food options). Therefore, there has been a growing number of ‘healthier’ food products in the market. There are now numerous low-calorie beverages (Coke light, Sugar free Pepsi) and more recently, the boost of green tea drinks which are marketed as de-toxifying and body purifiers.
More specifically, in the snack food industry, products like Nova and Oheya are marketed as healthy snack goods which have high fiber content. Business Concept Hence, given these basic needs and present trends, one’s product must be able to meet such demands and offer an innovative solution to these problems. What is the product? The company’s product is commonly known as unleavened bread. Unleavened bread is the bread made by the Jews during their historical/Biblical Passover. It is coined “unleavened” because it contains no yeast or any other leavening ingredient.
This method of baking was used by the Israelites to prepare bread quickly (no need to wait for the bread rise). These days, several home-made loaves are done in this manner. Unleavened bread contains fewer calories and has no cholesterol making it healthier than normal bread products. It is also very appetizing and tasty and could be flavored in various ways (plain, with basil leaves, sesame seeds, etc). How will the product satisfy the need (appetizing and convenient)? Bread, however, is not a typical snack food (appetizing and convenient/ handy).
Thus, the product would be packed as a snack food (similar to chip products), to be easy to carry and fun to munch on. Air-tight containers would be used to maintain the freshness and to preserve the product. Its design and material will not be the same as those use for “junk food” but instead, something similar to paper that will give a ‘homey’ feel to the product, making it look fresh and tasty at the same time. In addition, the unleavened bread, unlike normal bread, is crunchy and has an addictive taste, which is a common feature of chips and cracker products. Why will the ustomer purchase the product? The advantage of the unleavened bread snack, also called lavosh, is that it promotes a more feel-good feeling over other snack products, being freshly baked and having no cholesterol. The image that will be established will make the product look light, natural and healthy, attracting individuals who are keeping a healthy food diet. What adds value to it and makes it unique (USP)? In other countries, unleavened bread is already being sold in local stores and groceries. However, it is presented as something similar to other bread products and not as a packaged snack food.
In the Philippines, unleavened bread has yet to be commercialized, although it is already being produced in a few households. The team will thus market the unleavened bread as a unique bread product packed as a snack food, which is fresh, healthy, appetizing, convenient and readily available. It offers customers not only a better snack food option but a new snack alternative, which has the good qualities of a snack (fresh, appetizing and convenient) while being healthy and natural at the same time. What makes it feasible?
A good business idea would only be turned to reality if there are sufficient means and resources to pursue the given idea. In terms of production, the unleavened bread is quite easy to produce and requires affordable ingredients. Production of the actual product requires limited capital and equipment (basic baking apparatus). More funding would probably be needed in packaging, to ensure that quality and freshness is preserved. Nevertheless, only minimum financing is needed to produce the snack. More importantly, the product is highly marketable.
Unleavened bread, being a foreign product, could be advertised as a specialty snack food known for its quality and freshness. The innovative edge will be observed on how the bread product will be marketed as a healthy and all-natural bread product. III. Brief Industry / Market Background The Philippines ranks as one of the top snack consumers in the world. Food has one of the biggest shares in household expenditure. More relevant is the fact that snack food is 9th out of the top 20 food categories in the country.
These bits of fact are in line with the culture that Filipinos love to eat delectable food and are willing to try a variety. According to AC Nielsen, there is a nationwide health trend in the country. Filipinos are now switching to healthier food alternatives to the traditional MSG (monosodium glutamate) laden meals and snacks. This trend is made evident by C2, one of Universal Robina Corporation’s top performing products which is based on tea leaf extract. C2 was able to cut Coca-Cola’s sales in half in 2005. Consumers today are shying away from cakes and pastries, instead favoring bread.
That is why packaged bread products have seen a recent surge in growth in 2006. In relation with another type of snack, which is the sweet and savory snack category, consumers view bread products as fresh and therefore, healthier than other types of snack and packaged food. The bread industry is poised to continue its growth due to this perception. Fruit is a generally accepted healthy substitute of snacks. However, snacks are still bought by consumers because fruit is more expensive than the packaged snacks. In addition, fruits have a limited shelf life compared to packaged foods.
Of course, one may be able to extend a fruit’s shelf life simply by placing it inside a refrigerator. But one must consider the fact that fruits take up space in the ref where that space czan be used instead to place other essential perishable products such as meat and vegetables. Snacks, on the other hand, can be placed practically anywhere, whether in the cupboard or in one’s personal drawer. Since there is a health trend in the country, companies are now catering to people who would want the same health benefits of fruit but will have the same convenience and long shelf life of a junk food snack.
Entering the snack industry is generally profitable. Food is one of the top revenue generating industries determined by the Department of Trade and Industry. Baking goods, the sector which our product is in, recently experienced a sales volume growth of 3. 69% from 185,380 tons in 2005 to 192,200 tons in 2006. Revenues increased from 20,925. 57 in 2005 to 23, 066. 17 in 2006. Also relevant to our business is the fact that there is increase in dual income households in the Philippines. This means that there is increased income for the family with the mother also working. This also means another thing.
There is less time for food preparation. With the current pace of technology and information today, more is demanded from our workforce. This may lead to people looking for food that are ready-to-eat and can be brought around everywhere. Students, especially college students, also face a hectic lifestyle, balancing everything from school and extracurricular activities to family and social life. They need food to fill their stomachs while they are studying or in between classes. The distinction between sweet and savory snacks, as well as, between snacks and meals continues to narrow.
Majority of the consumers today are purchasing snack foods that can serve as alternatives to actual meals. Biscuits, sandwiches and the like are some examples of the kind of food that people are looking for to fill their appetites. This increasing demand for snack foods can be attributed to the hectic lifestyles that people have been living today. More and more consumers are inclined to buy on-the-go foods that they can eat on the way to work or school and in between classes or during breaks. These are the also the kind of foods that people look for when they want to munch on.
Another major trend noted by AC Nielsen affecting the food industry is convenience. It simply means convenience in packing and preparation, extreme portability and one-handed eating and drinking, and products that cater to consumers’ specific needs – the ‘just-for-me’ trend. These are the movements of the snack food industry and should be taken into account especially when one wants to enter the industry. Manufacturers should then respond to these trends by offering healthier and delicious alternatives to current products in the market. IV. Industry Structure
The Philippine Snack Food industry is valued at approximately $81,600,000 in 2001 , and is continually growing at an average annual rate of 3. 9%. Our product falls under the sub-category of the said industry namely, Bakery & Cereals which is further sub-divided into 6 parts . Unleavened bread is directly under the category of Crackers. Although unleavened bread is technically a type of bread, Manna Crisps belongs to the Crackers category to reiterate our objective to market it as a ready-to-eat snack. Moreover, the group considers other crackers as our direct competitors more than other read products. Aside from being crispy and thin, our packaging also leans more towards the standard of crackers because of the manner by which the group want our customers to consume our product. Sales volume for Baked Goods, which includes breads, cookies, cakes and pastries, has been constantly increasing since 2001. Its total growth over the 5-year span is 13. 26% while bread has a total growth of 17. 71% in 5 years. Sales Volume 2001-2006: ‘000 tonnes ‘01 ‘02 ‘03 ‘04 ‘05 ‘06Total Growth Baked Goods 169. 69 174. 14 174. 85 179. 50 185. 38 192. 20 13. 26%
Source: Official stastics, trade associations, trade press, company research, store checks, trade interviews, Euromintor International estimates Naturally, the same trend follows for the sales value. The total growth over the 5-year span is 56. 15% while bread has a total growth of 62. 12% in 5 years. Sales Value 2001-2006: P million ‘01 ‘02 ‘03 ‘04 ‘05 ‘06Total Growth Baked Goods 14,771. 98 16,459. 15 17,944. 52 19,156. 79 20,925. 57 23,066. 17 56. 15% Source: Official stastics, trade associations, trade press, company research, store checks, trade interviews, Euromintor International estimates
Growth The baked goods industry grew 5% in volume sales and 10% in value sales. This was driven by the health trend combined with marketing strategies of companies selling “light” products. These “light” variants are usually composed of ingredients with less fat, less calories, less cholesterol, etc. The industry is expected to grow at a steady pace at 7% sales volume growth and 6% peso sales. This is due to the expected rise in prices justified from different size and product variants that will be probably appear in the industry alongside the original variants. V. STEP Analysis
After evaluating the feasibility of the product, STEP Analysis gives a background or an environmental scanning presenting the current status of the country, where the business is to be established. This is an important evaluation to get a feel of the environment and culture where you are doing business. Socio-Cultural Demographic The social-cultural-demographic gives a background of the culture and social trends of people where the business will be established. This gives ideas of how to properly adapt to the environment and taste of the market. Philippine Population and Demographics
The Philippine population is estimated at 88,706,300 for the year 2007, which makes it the 12th largest in the world, comprising 1. 33% of the total world population . It is also the 2nd most populous in Southeast Asia next to Indonesia. Below is the graph from the National Statistics Office of the estimated Philippine Population from year 2000 – 2010. It shows the population escalation at an average rate of 2. 057% per year . Of the population mentioned above, gender distribution is almost equal, with women comprising 49. 7% and men 50. 3%. The Philippine population is also young, with 44% of the population being age 21 and below.
Age of the Market Philippine consumers are deemed the youngest in Asia with a media age of 20 . This statistic is relevant in designing and marketing products that cater to this crucial segment of the market. Market in Greater Manila Area (GMA) Consumers in the Greater Manila Area (GMA) are considered the most important in the Philippines. GMA has the highest population density in the country, making up 14% of the country’s total population and living in less than 1% of its total area . They also own an estimate of 34% of the country’s total wealth, with Manila being the center of business and trade.
Lifestyle Over time, we have seen a trend leaning towards convenience with the emergence of two-income households (explained in purchasing power under the Economic environment). As both parents have to work, time has been of the essence and thus, the need for convenient goods and services. Aside from this, there has also been a trend towards a healthier living. According to the Regional Consumer Confidence Survey conducted by ACNielsen in 2004, 75% of the respondents say that they exercise regularly; 18% of which say that they go to the gym regularly.
It also states in the survey that 83% of the respondents are trying to lose weight, and are either on low fat diets or are trying to cut down their sugar intake. Technological Information A company should keep up with technological advances and innovation to update themselves on new breakthroughs relevant to their business. E-commerce E-commerce has become a common avenue for people marketing their products with the increasing number of Filipinos gaining access to the World Wide Web. Aside from convenience, advertising online is very inexpensive.
In most cases, there is actually no cost in advertising with the emergence of networking websites such as MySpace, Friendster and Multiply. With e-commerce, not only can sellers display and advertise their products, they can also accept orders online. Packaging Along with the increasing trend toward convenience comes the consumers’ preference for smaller packages. A testament to this is the recent upsurge in the sachet industry . Fancy, attractive and environment-friendly packages have also started to sprout around the market, like Holy Kettle Corn’s paper bag-like container and Kettle Chips’ durable, air-tight package.
Total Quality Management In line with the packaging of goods, total quality management in the process of packaging is also crucial for companies, especially for those who in the food industry. Standardizing production helps maintain the level of quality management that a company sets, thereby making it easier for producers and safer for the consumers. Economic It is important to study the economic environment of the place where you would like to do your business, so as to properly address the right market or give the right product to a market. Philippine Economy Overview The Philippines is primarily an agricultural country.
Over the years, it has also evolved into an industrialized country, operating several major industries such as food processing, textiles and garments, and electronic and auto mobile parts. More recently, the Philippines has also experienced a recent upsurge in Business Process Outsourcing, with call centers proliferating all over Metro Manila. The Philippine economy has also experienced a remarkable boost over the past year, with a 5. 4% growth rate. Its Gross Domestic Product per capita currently stands at $4,923 per capita, while the Philippine Peso has significantly improved from a Peso-Dollar Exchange Rate of P55. 8 in 2005 to P45. 93 in 2007. The Philippines was also hailed the Best Performing Currency in Asia in 2005 . Social Stratification The Philippines is predominantly a DE population . However, we have to consider the fact that even though majority of the market is from the DE bracket, it is the ABC group who has a higher purchasing power and greater propensity to spend. Purchasing Power Several factors have contributed to the increasing purchasing power of Filipinos. As mentioned in the Philippine Economic Overview, the size of the Philippine Economy grew by 5. % and the value of Philippine Peso has bounced back significantly over the past two years. Another factor that contributes to the boost in purchasing power is the increase in the number of two-income households. With the price of gas increasing, families try to cope with price hikes by having both parents work to have two sources of income. One proof of this is the increase in number of women entering the workforce . Lastly, it was known that the size of the average Philippine household has decreased overtime. From an average of 5. 57 people per household in 1980, to 5. 4 in 1990 and now, 4. 61 heads per household . Although this means that there are fewer consumers per household, it also implies that income is to be divided into a fewer number of people, giving each a higher purchasing power. Consumer Expenditure Consumer Expenditure for the year 2003 shows that food eats up a bulk of the household income with a percentage of 42. 6%. As for other basic necessities, Housing takes up 14. 5% while transportation and communication takes up 7. 4%. Miscellaneous expenses, which take up 28. 7% of the income, include ducation, medical care, taxes, household furnishings and equipment, and household operations. Political-Legal It is very important to educate oneself regarding the Political-Legal environment of the business location. This can be of tremendous help in avoiding any brushes with the law by knowing early on what is, and what is not allowed. Regulatory Overview As manufacturer of consumer food and commodity food (flour) products, the Company is required to guarantee that the products are pure and safe for human consumption, and that the Company conforms to standards and quality measures prescribed by the Bureau of Food and Drug.
Founded by the government, the Food and Drug Administration is under the government’s Department of Health. It “establishes standards and quality measures for food, drug and cosmetic” and it “adopts measures to insure pure and safe supply of food, drug, and cosmetic in the country” . BFAD Food Administrative Orders The Bureau of Food and Drugs have set standards for what they consider are quality goods. These standards are to be followed by companies who seek BFAD’s approval of their products. Among the Food Administrative Orders given by BFAD are: 1.
AO 153 s. 2004 – released on May 7, 2004; contains guidelines regarding the proper handling of food during the process of manufacturing, packaging and repackaging to ensure the quality and cleanliness of the product. 2. AO 66 s. 1983 – released on July 18, 1983; sets guidelines regarding the issuance and supervision of results of the analysis of food and drugs. In addition to BFAD’s Food Administrative Orders, they also release Bureau and Memorandum Circulars periodically to update their members regarding new laws or guidelines regarding their products.
Trade Deregulation and Economic Reforms Economic reforms, as well as increase in trade deregulation, have opened international trade with Western Companies, giving them access to the Philippine Snack Market. Furthermore, increasing urbanization and living standards contributed to the increasing demand for snack products. VI. Porter’s Five Forces of Competitive Position There are 5 forces that determine the competitive intensity and attractiveness of a market as developed by Michael E. Porter. Let us study how these forces can applied to the snack food industry. 1.
New Market Entrants Although the snack food industry is already a highly saturated market, competition is still expected to increase in the future. The Philippine government is increasing liberalization on trade and an influx of imports is to be expected due to the World Trade Organization (WTO) and the ASEAN Free Trade Area (AFTA). The WTO is reducing tariff rates imposed on food and agricultural products and eliminating import quotas on its member countries. AFTA is also reducing or eliminating tariffs on manufactured goods over a 15-year period beginning January 1, 1993.
Non-tariff barriers will also be subsequently phased out. With the entry of more competitors and more innovative products, existing competition will become even more difficult for present contenders in the market. 2. Buyer Power The power of buyers in the snack food industry is very strong. The market is a highly competitive one and thus, buyers have so many choices for the products they buy. But despite this abundance in available products, the varieties are not that many. Biscuits of one brand will always almost have a substitute in another brand.
And almost all the time, the prices of these products have a minimal difference. Competitors in the market then, have very little control over their customers’ choices. It would be good if more innovative products enter the market. Snack foods that would make use of revolutionary ingredients or new tastes and an original selection of snacks would diversify the range of snack food products available to consumers. This may be an opportunity for the different brands to capture market interest and weaken buyer power. 3. Supplier Power
The power of suppliers is dependent on the kind of ingredients needed to produce the product/ snack food. If the ingredients are simple and readily available, then supplier power would be weak. The existence of a large number of suppliers would provide more options for the competitors in the industry, thus, weakening the suppliers’ control over their market. Ingredients that are unusual on the other hand, would give suppliers of such ingredients more power over their customers. Since there are only a few providers for such ingredients, less options would be available to contenders in the snack food industry.
But regardless of whether the ingredients are readily available or not, another thing that must be taken into consideration is the selling price of the end products in the snack food industry. Costs of raw materials are also vital in determining which supplier to contract. Also, good customer relations would help in keeping customers loyal to a particular supplier. 4. Availability of Substitutes Fruits and vegetables are considered to be substitutes for snack foods that can be bought from grocery stores and the like. Just as snack foods are available year-round, fruits and vegetables are also obtainable anytime of the year.
However, these substitutes easily spoil. The availability of these fruits and vegetables doesn’t pose much of a threat to the industry. Filipinos have grown to love the taste of junk foods, candies, and other snack foods in the market. These are the foodstuffs they buy even when they are not hungry and are just in the mood to munch on something tasty. Then again, recent studies have shown that the reason Filipinos are inclined to buying these snack foods is because of the relatively cheap price of the products. Another thing that should be factored in is the trend towards healthier living.
Almost all the snack foods sold today are very unhealthy. Thus, introduction of better and healthier products to the market would affect greatly the performance of current foodstuffs. 5. Competitive Rivalry The snack food industry is highly competitive and thus, competitive rivalry is very high in this industry. The competition varies not only by product category but by country and product segment as well. There are a lot of competitors in this industry, both local and international. Local competitors include Universal Robina Corporation, Storck Products, Inc. , Liwayway Manufacturing Corp. Columbia Foods, Republic Biscuit Corporation and Monde Nissin Corp. International contenders are Procter and Gamble Company, Del Monte Foods Company, Frito-Lay, Nestle, Cadbury, Schweppes PLC and Nabisco, Inc . These companies have very similar products thus, adding even more to the already high competition in the market. In such a highly competitive industry, what are the factors that are vital in contending against players? Principal competitive factors are considered to be price, brand recognition, quality, taste, convenience, advertising and marketing, availability of products and ability to get the products widely distributed.
How each company differentiates its own techniques in thee categories determines how well they will perform in the industry. VII. SWOT Analysis SWOT Analysis, used for strategic planning, is mainly done by evaluating the internal and external factors affecting the success or failure of a company. It is crucial for ALMIGHTY Foods Corp. to make this evaluation to be able to take advantage of identified strengths and opportunities, as well as to make a conscious effort to improve on the weaknesses and prepare contingency plans for possible threats.
STRENGTHS:WEAKNESSES: •Strong Commitment to Core Values •Feasibility of Future Expansion and Product Development •Minimal Capitalization •Cost Efficiency and Availability of Raw Materials•Proprietors’ Inexperience •Minimal Budget for Advertisements •Inventory Management •High Product Substitution OPPORTUNITIES:THREATS: •Industry in Top 10 Revenue Streams •Increase in Purchasing Power •Increase in Snack Food Consumption •Trend Towards Healthier Eating Habits•Competitive Environment •Product Replication •Natural Disasters Strengths
Strengths are significant values, traits and characteristics inherent to an organization, rendering it capable of venturing into a business. ALMIGHTY Foods Corp. considers these strengths as intangible assets that need to be utilized in order to aid the company in meeting its main objective. Strong Commitment to Core Values ALMIGHTY Foods Corp. lives by five core values: Quality, Good Business Ethics, Discipline, Balance and Social Responsiveness. A strong commitment to these values is needed for everyone in the company to have a common understanding of how business at ALMIGHTY Foods Corp. s to be done. Therefore, it goes without saying that these core values are the staples of the company, something everyone needs to adhere to even if it sometimes it becomes a competitive disadvantage. Feasibility of Future Expansion and Product Development The nature of ALMIGHTY Foods Corp. gives a lot of room for future product developments and new product lines. Possible Manna Crisps product developments include new flavor variations, inclusion of dips among many others. However, the company recognizes the risks of premature expansion, which is why ALMIGHTY Foods Corp. ntends to release only two variations of Manna Crisps on the first month. Another set of flavors shall be released in the 2nd month, and depending on its performance, other flavors may or may not be released on the succeeding months. Minimal Capitalization Unlike other start-up companies, ALMIGHTY Foods Corp. has a fairly minimal capitalization since it would be using very basic and cost efficient raw materials. On top of this, the company would be outsourcing the production of Manna Crisps, thereby eliminating large overhead costs such as oven and other baking equipments.
More information regarding outsourcing shall be given in the Operations Plan. Cost Efficiency and Availability of Raw Materials Manna Crisps is an unleavened bread made from very simple ingredients, which basically consist of flour, water, flavorings and butter. These ingredients are abundant and very much available in an agricultural country such as the Philippines. After scouting several firms, ALMIGHTY Foods Corp. has settled with Killion Merchandising Grocery for its supplies. Weaknesses Weaknesses are characteristics of the company that could slow down or even hinder the company from succeeding in the business.
It is important to note that these weaknesses are internal issues of the company, which, if not acted upon, could cause major problems in ALMIGHTY Foods Corp. ’s foundations. Proprietors’ Inexperience ALMIGHTY Foods Corp. is a start-up company, making it susceptible to a lot of rookie mistakes which could prove to be costly in the long-run. It is however, to be understood that the partners of ALMIGHTY Foods Corp. do not just come into the business without prior knowledge about the industry. Although well-equipped with theories and mastery of strategic planning, the company Minimal Budget for Advertisements
Minimal budget is available for advertising Manna Crisps. Being a new entrant in the market, advertising is important to direct attention to the product. On top of this, the snack industry is a fairly saturated market, so it would take a lot of effort and advertising to draw attention to Manna Crisps. Even when it does manage to penetrate the market, it would need an even bigger budget to stay afloat. Inventory Management Manna Crisps is a perishable product since ALMIGHTY Foods Corp. would like to do away with preservatives and other additives.
Naturally, Manna Crisps’ shelf-life is at least 2 weeks so an efficient inventory management is crucial, otherwise, the company may incur too many spoilage and wastage expense. High Product Substitution Consumers may easily find substitutes for Manna Crisps since snacks in general are highly substitutable. This may make it difficult for the company to establish loyal customer base and brand loyalty. Opportunities Opportunities are external conditions which affect the performance of an industry, including the companies within its scope.
These include the latest industry surveys, news and trends, which are essential for a company to keep in step with the other players in the industry. As a new entrant in the market, ALMIGHTY Foods Corp. intends to update itself on these growing and changing trends, in order to learn more about the industry and make the necessary adjustments. It is important to note, however, that ALMIGHTY Foods Corp. would not fully depend on these trends and shall be wary of fads and other short-lived or misleading trends. Industry in Top 10 Revenue Streams One of the main reasons why ALMIGHTY Foods Corp. hose to enter the food industry is that it believes it can address the need for a healthier snack alternative. This choice of industry later on, proved to be a logical move with the release of the Department of Trade and Industry’s (DTI) Top 10 Revenue Streams. These industries were chosen based on their inherent or proven competitiveness. Therefore, vital growth is expected from these sectors in the coming years. TOP 10 REVENUE STREAMS (alphabetically arranged) Construction Materials Electronics Food Products Giftware and Holiday Decor Home and Furnishings
IT Services Marine Products Motor Vehicles, Parts and Components Organic Material Products Wearables Moreover, the Snack Food Industry ranks #9 in the Top 20 Food Categories , further validating the logic of entering the industry. Top 20 Food Categories 1Carbonated Soft Drinks11Corned Meat 2Dietetics12Powdered Concentrates 3Powdered Milk13Canned Sardines 4Instant Nooles14Evaporated Milk 5Biscuits15Condensed Milk 6Hotdog16RTD – Milk 7Coffee17Chocolates 8Choco-Flavored Drinks18Luncheon Meat 9Snack Foods19Cheese 10Soft/Hard Candies20Soy Sauce Increase in Purchasing Power
According to a 2006 ACNielsen Survey, there has been an increase in purchasing power of Filipinos with the emergence of dual income households. More than the fact that this trend is brought about by an increase in the cost of living in the Philippines, this dual income household means that the Filipino family is deviating from the stereotype that the father should earn his keep for the whole family, thereby allowing women to contribute in covering household expenses. As families now have two sources of income, they experience an increase in their propensity to spend.
Furthermore, if we were to take a look at the percentage of food in the Family Income Expenditure, it has the largest budget allowance with 43. 6% . Increase in Snack Food Consumption As mothers spend more time in their day jobs and offices, they have less time to cook meals and prepare baon for the children. This is why purchasing snacks is more convenient for them. However, what replaced home-made sandwiches and other baons are junk-food, chips and other MSG-loaded snacks, thereby giving the impression of prioritizing convenience over health. This is why ALMIGHTY Foods Corp. rovides a healthy snack alternative in Manna Crisps, a healthy, home-made unleavened bread. Now, consumers need not choose convenience over health when they can have both. Trend towards healthier eating habits. As people today become more conscious about their weight and appearance, they also become more choosy when it comes to the food they eat. ALMIGHTY Foods Corp. takes it upon itself to take advantage of this opportunity to enter the market, as these trends towards a healthier lifestyle prove to be a more long-term development rather than merely a fad. Threats
Lastly, threats are external conditions which can delay or hold the company back from achieving its objectives. While most threats are inevitable, ALMIGHTY Foods Corp. will try to work its way around them or better yet, find a way to turn each threat into an opportunity. Competitive Environment There are many players in the Philippine Snack Industry such as Kraft Foods, Inc. , Golden Bakery, URC, Monde among many others. Given this, ALMIGHTY Foods Corp. has to make itself stand out from the rest of the pack by properly and effectively differentiating Manna Crisps, in contrast to its competitors.
Product Replication Unleavened bread is a generic product which is why it is easy to replicate. Different recipes of unleavened bread are found online, and once a new entrant or a competitor finds a way to produce the product more efficiently, it would be able to charge a lower price than Manna Crisps. Natural Disasters Fortuitous events and other natural disasters may affect the prices of the company’s inputs, thus leading to an increase in the costs. Delay in the delivery of supplies and finished goods can also result from natural disasters or calamities.
In addition, economic crises, inflation and fluctuations are also important factors that may affect the demand and supply of Manna Crisps. TOWS (Threats ? Opportunities ; Weakness ? Strength) After identifying the company’s strengths, weaknesses, opportunities and threats, SWOT Analysis renders useless if the company does not do anything to remedy identified problems. This is why ALMIGHTY Foods Corp. chose to do a TOWS analysis. In this strategic planning, the company finds ways to turn Threats into Opportunities, and use Weaknesses as Strengths. Threats ? Opportunities
The company mentioned the industry’s competitive environment as one of its threats. Rather than seeing competitors as such, it is important to look at them as motivations for the company to constantly develop products and to further differentiate itself from the rest of the pack. This becomes an opportunity for ALMIGHTY Foods Corp. to prove that it can be a trend setter, a market leader, and not a mere follower of other firms. Product replication is also mentioned as a threat since recipes of unleavened bread are generic and can easily be found on recipe books and even online.
The company, however, would like to emphasize that there are different kinds of unleavened breads. Pita breads and crepes are another form of unleavened bread, so as long as the company can manage to keep the recipe / proportions of ingredients a secret, product replication can be prevented. Natural disasters, calamities, economic crises and other fluctuations are unpredictable and are therefore far beyond the company’s control. Although the company can set contingencies, ALMIGHTY Foods Corp. recognizes its limitations. Weaknesses ? Strengths
Inexperience of the proprietors can be seen as a weakness when we equate inexperience with mistakes. However, inexperienced business people can also be seen as non-traditionalist strategists from whom unconventional yet effective ideas can come from. Experience may make a person settled and content on long-established norms in the industry, whereas inexperience gives a lot of room for new ideas and creativity. ALMIGHTY Foods Corp. ’s minimal budget has limited its advertising expense, leading the company to resort to more cost efficient means of advertising such as word of mouth and online promotions.
In the case however of word-of-mouth advertising, even though it may not be the most organized way to disseminate information, the quality of actual customers’ testimonials yield a more effective and tangible result. We can then say that ALMIGHTY Foods Corp. ’s advertising strategy focuses more on quality rather than quantity. As mentioned before, the fact that ALMIGHTY Foods Corp. ’s does not use preservatives and additives in the production of Manna Crisps makes the inventory management a weakness because of the product’s relatively shorter shelf-life.
However, this is not always a bad thing as people today look for healthy snack alternatives. In line with the problem of Manna Crisps’ high product substitution, the absence of preservatives adds to the company’s efforts to differentiate its product from other MSG-loaded snacks. VIII. Key Success Factors Key Success Factors are competencies of an organization that play an imperative role in achieving a set objective. The purpose of the company is to make the customers feel good by providing them with healthy food alternatives.
Below are identified Key Success Factors that ALMIGHTY Food Corp. will maximize to be able to attain its purpose. Consistent Product Quality The company will be formulating Total Quality Management procedures to ensure that each package of Manna Crisps will be uniform in taste and appearance. TQM will be conducted from the arrival of supplies up until the final packaging of the product. An example of the procedures to be conducted in TQM is random sampling, which involves selective testing of the finished product to determine the quality per batch. Healthy ALMIGHTY Foods Corp. nly manufactures products which have health benefits, refraining from use of preservatives and other unhealthy ingredients such as monosodium-glutamate. Monosodium glutamate, a common ingredient in snacks, is known to cause adverse reactions such as bronchospasms, drowsiness, headaches, palpitation and chest pains to people who are intolerant to the flavor enhancer. Efficient Production The company has decided to outsource the process of Manna Crisps to benefit from effective production techniques so that the materials and other resources are utilized economically.
The company will ensure top quality and consistency throughout its production process. Management Employees and top management will dedicate its efforts in satisfying customers, as well as ensuring the company of its profits and growth. Customer Loyalty to the Brand The company will produce goods of the best quality to capture customer loyalty to the brand. The company will dedicate itself to consistency so that the customers can enjoy the same delicious taste and health benefits with every bag they buy. The company acknowledges the significance of having a loyal customer base that is why quality and product consistency is always a priority.
Advertising and Product Positioning ALMIGHTY Foods Corp. recognizes the importance of advertising and product positioning. It will allocate suitable resources for this purpose so that everyone, from rush hour commuters to college students, will be aware of the product. In addition, quality advertising shall be implemented through word-of-mouth, maximizing the quality of referrals with customers’ actual testimonials with minimal monetary input. E-commerce The company acknowledges the fact that recent developments in technology have shaped the world, especially in business.
To address this fact, the company will use the Internet to its advantage through online advertisements and by accepting orders online. Sustainability In order for the company and its business to last, management will engage in short-term and long-term planning in order to take into account market and economic trends. Included in planning is the release of other lines of snacks that is in accordance to the company’s promise of delectability and healthy products. IX. Competitor Analysis With the great amount of competition in the market, specifically the snack ood market, it is best to understand the positioning of other products in order to determine the feasibility of the product. The following tables show the current products which Manna Crisps will be directly competing with – packaged bread snacks, health snacks and crackers. Each of the three tables focuses on a subgroup of the snack market which the product may be considered under and would potentially take away market share from. Packaged Bread Products CompanyBrandPositioningPrice per Gram (Php)Target Market ALMIGHTY Foods Corp. Manna Crisps-healthy snack alternative -“so good it had to come from above”0. 0ABC1 NabiscoRitz Crackers-low sodium -no cholesterol -low fat0. 41ABC1 Wheat Thins-whole grain -0g trans fat -no cholesterol0. 52ABC1 Teddy Grahams-whole grain -0g trans fat -no cholesterol0. 35ABC1 Triscuit-reduced fat -baked whole grain -100% grain -0g trans fat -may help reduce risk of heart disease0. 61ABC1 DanoneJacob’s-low salt -high fiber -enriched with vitamins, calcium, iron – no preservatives -high calcium0. 38ABC1 Hwa TaiLuxury (Original, Vegetable, Saltine, Oatmeal)- with calcium and tocotrienols0. 38ABC1 LazaroniSnackini-savory snack -baked crispy Italian cracker0. 86ABC1 Bruschette-with olives produced in Italy with extra virgin oil0. 92ABC1 Beigel BeigelSesame Sticks, Pretzels-no cholesterol -no additives -no preservatives -baked not fried0. 44ABC1 New York StylePita Chips-baked -no trans fat -from authentic pita bread0. 98ABC1 Jules DestrooperBaked Waffles-butter crisp waffles according to the 19th century recipe0. 97ABC1 MondeBread Stix-freshly baked bread0. 11BCD OishiBread Pan-fresh bread -fortified with vitamin A -savoury toasted bread0. 12BCD La PacitaPrima Toast-buttered toast0. 14CD Supreme Flakes-saltine crackers0. 10CD Laura’s Baked DelightsButtered Manna Toasts-buttered toast0. 16CD
Bread Sticks-fresh bread sticks0. 12CD Garlic Bread Sticks-fresh garlic bread sticks0. 16CD Competitor Analysis – Health Snacks CompanyBrandPositioningPrice per Gram (Php)Target Market ALMIGHTY Foods Corp. Manna Crisps-healthy snack alternative -“so good it had to come from above”0. 50ABC1 KashiTLC-all natural chewy granola -300mg Omega-3s -0g trans fat -nothing artificial1. 74AB South Beach DietCereal Bars-crunchy granola bar -excellent source of whole grain0. 87ABC1 Sunny SelectChewy Granola Bars-low fat -variety of flavors0. 61ABC1 WasaMultigrain Bars-foundation for healthy snacking -all natural -fat free0. 2ABC1 QuakerChewy Granola Bars-90 calories -low fat -0g trans fat -good source of calcium0. 72ABC1 DevonsheerMelba Rounds-organic -all natural0. 96ABC1 Competitor Analysis – Crackers CompanyBrandPositioningPrice per Gram (Php)Target Market ALMIGHTY Foods Corp. Manna Crisps-healthy snack alternative -“so good it had to come from above”0. 50ABC1 M. Y. SanSkyflakes-baked with care for your enjoyment -original, garlic, onion chives0. 14 CD Fita-circular crackers -original, spicy tuna0. 11CD Grahams-honey graham crackers -honey, cheese flavors -“feeling expert ka sa dessert”0. 17CD First Choice Food Corp.
Blueskies-rich and creamy crackers -sulit talaga ang blueskies0. 16CD URCMagic Flakes-apat dapat -original, chocolate, onion chive0. 10CD Croley FoodsSunflower Brand Crackers (original)-great original flavor0. 18CD Sunflower Brand Crackers (flavored)-blueberry, strawberry & mango sandwich flavors -cheese, pizza, butter, onion garlic flavors0. 18CD Milton’s Quality Baked GoodsWhole Wheat Crackers-with sesame seeds -0g trans fat0. 59ABC1 Everything Multi-grain Crackers-crunchy burst of onion, garlic, sesame, caraway & poppy seeds -0g trans fat0. 59ABC1 My ChoiceMini-Original-oven-baked crackers0. 27CD Republic Biscuit Co.
Rebisco Crackers-4 big pieces0. 09CD Rebisco Super Thin-15+3 pieces -crunch milk/chocolate crackers -milk, chocolate flavors0. 09CD Competitive Positioning As seen in the tables above, Manna Crisps will differentiate itself by becoming a synergy of all three snack market segments. In comparison to the packaged bread products, it can compete on the basis of its being healthy in spite of the very tasty flavor each of the variants will be having. Against the health snacks which are often imported, Manna Crisps will be able to carve a small portion of the market based on its affordability and its being a Filipino brand.
Lastly, against crackers, which it has a similar texture to, it can compete on the level of its being healthy and heavier to the appetite. It can also be seen that health snacks come at a very high price with a minimum of 0. 52 Php per gram. Because the product can also be sold as a healthy alternative, it can compete with these foreign brands through its cost. Although the product cannot be marketed as having 0g trans fat or having no cholesterol, the product already minimizes fattening substances and this trade-off of price versus dietary impact will be provided to the consumers.
Lastly, the product can compete in the market because of its unique product concept. Currently and as mentioned, there is no available source of unleavened bread widely sold as a snack. Most sources are only backyard operations without access to mainstream distribution channels. Our product, by moving into the market now, can actually have the first mover advantage and establish itself as the standard-bearer for all future products of the similar nature. With this, the product can build some loyalty in the market and ensure its sustainability.
The company understands that for a 100g-package, the price might seem a bit steep for consumers not coming from the AB brackets; however, this price is designed to condition the minds of consumers that there is a premium on the good because more has been put into it. More resources, more labor and more research and development costs were incurred to be able to come up with a product which is superior in quality. Market Shares / Volumes As of the present, no true data on the entire snack food market can be made because of the remaining prevalence of bakeshops in Filipino communities.
Since these homemade/traditional products are in fact very active and still competitive, no true numbers or figures can be shown to reflect the entire market when combined with the packaged snack market. However, with the trend on of out-of-home food consumption on the rise, it can be said that packaged snacks are eating up these bakeshops’ market share, and our product, if produced and acted on immediately can join in eating up some of that share especially since it will be the first unleaven bread offered to the public in mass production.
According to interviews with several supermarket and grocery personnel though, the market leader for the crackers industry still stands to be M. Y. San’s Skyflakes, as it had been for the past few years. Closing in on the gap though is Blueskies primarily because of the many flavors it has such as cheese and onions and chives. In fact, it has forced SKyflakes to cope with this move and Skyflakes has come up with its own garlic-flavored and onion-flavored variants. Third in the market is Magic Flakes, which sets itself apart from the competitors by having four pieces per pack.
In truth, this actually has very little advantage to the customers since the masses of these brands are relatively similar. Another competitor is Sunflower which is approximately as old as Skyflakes, but due to its lack of advertising, the two younger players, Blueskies and Magic Flakes, have overtaken its position in the market. The Competitive Profile Matrix As mentioned, the company intends to position itself as a high-quality product that has a loyal customer base. Compared to other competitors, we plan to use direct-selling to introduce our product in order to establish a relationship, as well as brand loyalty, to our customers.
The company has three Competitive Profile Matrices: one for packaged bread products, another one for health snacks and last, for crackers. The company would be considering these three types of snacks as our competitors since the product would be positioned as a healthy food that is packaged as a snack while also having the taste consumers desire. In the selection of Critical Success Factors, the company gave much importance to Marketing and Advertising because given a saturated market like ours, it is crucial to stay afloat and to make sure that the consumers are aware that our product exists.
Marketing consists of what the company does in order to make the product attractive to customers and these include the products’ tag line, unique selling proposition and packaging. Advertising, on the other hand, consists of how the company manages to stay visible and make noise in the market. These include newspaper ads, TV commercials, flyers, billboards, and other advertising stunts such as loyalty cards, discounts, and other promos. Price Competitiveness was also given one of the biggest weights. Pricing is important in a snack market because consumers tend to have a smaller budget compared to regular meals.
This is because snacks, in theory, are just “in-between meals” that fill-up the stomach while waiting for the regular meal. Due to the high number of players in the industry, the company has chosen to focus on competing with these three segments so that the company’s focus can be concentrated on carving a niche for the product. As it will be revealed in the matrices, it will be seen that Manna Crisps will be able to differentiate itself from each of the submarkets due to the product’s innate characteristic of being a synergy of the three.
By combining the three most sought after criteria from each of the markets, the product will be able to battle its direct competitors because of the qualities which cannot be found in the other products classified in the same group. While the product may have difficulties competing with the market leaders and challengers of each segment such as Bread Stix, Bread Pan and Skyflakes, the company sees that it can be very competitive against the other players in the market. Manna Crisps can actually sway other consumers from these small niches to shift in their brand loyalty, thus giving the product a fighting and profitable chance in the market.
CPM for Packaged Bread Products ALMIGHTY Foods Corp. Hwa TaiJules DestrooperLazaroniMonde Critical Success FactorsWeightRatingScoreRatingScoreRatingScoreRatingScoreRatingScore Marketing and Advertising0. 220. 430. 620. 420. 430. 6 Product Quality0. 1540. 630. 4530. 4530. 4530. 45 Price Competitiveness0. 1520. 330. 4520. 320. 340. 6 Management0. 130. 330. 330. 330. 330. 3 Financial Position0. 0830. 2430. 2430. 2430. 2430. 24 Customer Loyalty0. 1540. 620. 340. 640. 620. 3 Distribution (Availability)0. 0520. 130. 1530. 1530. 1540. 2 Inventory System0. 1230. 3630. 3630. 3630. 630. 36 TOTAL2. 92. 852. 82. 83. 05 NabiscoNew York StyleOishiUniversal Robina Corporation Critical Success FactorsWeightRatingScoreRatingScoreRatingScoreRatingScore Marketing and Advertising0. 220. 420. 430. 630. 6 Product Quality0. 1540. 640. 630. 4520. 3 Price Competitiveness0. 1510. 1520. 340. 640. 6 Management0. 130. 330. 330. 340. 4 Financial Position0. 0830. 2430. 2430. 2440. 32 Customer Loyalty0. 1530. 4520. 320. 320. 3 Distribution (Availability)0. 0530. 1520. 140. 240. 2 Inventory System0. 1230. 3620. 2430. 3630. 36 TOTAL2. 652. 733. 052. 18 CPM for Health Snacks
ALMIGHTY Foods Corp. DevonsheerKashiQuakerSouth Beach Diet Critical Success FactorsWeightRatingScoreRatingScoreRatingScoreRatingScoreRatingScore Marketing and Advertising0. 220. 420. 420. 430. 630. 6 Product Quality0. 1540. 630. 4530. 4540. 640. 6 Price Competitiveness0. 1530. 4510. 1510. 1520. 320. 3 Management0. 130. 330. 330. 330. 330. 3 Financial Position0. 0830. 2430. 2430. 2430. 2430. 24 Customer Loyalty0. 1540. 630. 4530. 4530. 4540. 6 Distribution (Availability)0. 0520. 120. 120. 130. 1520. 1 Inventory System0. 1230. 3630. 3630. 3630. 3630. 36 TOTAL3. 052. 52. 4533. 1 Sunny SelectWasa Critical Success FactorsWeightRatingScoreRatingScore Marketing and Advertising0. 230. 630. 6 Product Quality 0. 1530. 4530. 45 Price Competitiveness0. 1520. 320. 3 Management0. 130. 330. 3 Financial Position0. 0830. 2430. 24 Customer Loyalty0. 1530. 4530. 45 Distribution (Availability)0. 0520. 120. 1 Inventory System0. 1230. 3620. 24 TOTAL2. 82. 68 CPM for Crackers ALMIGHTY Foods Corp. M. Y. SanFirst Choice Foods Corp. Universal Rubina Corp. Croley Foods Critical Success FactorsWeightRatingScoreRatingScoreRatingScoreRatingScoreRatingScore
Marketing and Advertising0. 220. 420. 430. 630. 610. 2 Product Quality0. 1540. 620. 320. 320. 330. 45 Price Competitiveness0. 1510. 1540. 640. 640. 620. 3 Management0. 130. 330. 320. 220. 230. 3 Financial Position0. 0830. 2430. 2430. 2430. 2430. 24 Customer Loyalty0. 1540. 640. 620. 320. 340. 6 Distribution (Availability)0. 0520. 120. 120. 120. 120. 1 Inventory System0. 1230. 3620. 2430. 3630. 3630. 36 TOTAL2. 752. 782. 72. 72. 55 Milton’s Quality Baked GoodsMy ChoiceRepublic Biscuit Co. Critical Success FactorsWeightRatingScoreRatingScoreRatingScore Marketing and Advertising0. 10. 210. 210. 2 Product Quality0. 1540. 4520. 330. 45 Price Competitiveness0. 1510. 1520. 340. 6 Management0. 130. 330. 330. 3 Financial Position0. 0830. 2430. 2430. 24 Customer Loyalty0. 1520. 320. 310. 15 Distribution (Availability)0. 0510. 120. 120. 1 Inventory System0. 1230. 3620. 2420. 24 TOTAL2. 11. 982. 28 Criteria Assessment Marketing and Advertising Being a start-up company, the company’s expenditure for marketing and advertising would be limited. For advertising, the company would be relying mainly on word-of-mouth and electronic media due to their cost efficiency.
Although this may mean covering only a limited number of consumers, their testaments however, are invaluable as they would produce both tangible and intangible results in our sales. As compared to other companies who spend on newspaper ads and billboards, the company’s advertising strategy is to first and foremost, establish brand loyalty to our customers (via promos for loyal customers) through a consumer-producer relationship of trust before expanding to a bigger market. The emphasis is on the quality of the customers we are attracting, as opposed to quantity.
For marketing, the company would be investing on an elegant, air-tight container in order to differentiate the product from other snacks. Low-cost ingredients allow the company to have a bigger budget to invest on a good packaging not only for aesthetic purposes, but also to help maintain the quality of the product (air-tight container). Also, it is through this packaging that the product’s image will be mainly communicated. Product Quality In line with being a healthy snack alternative, the company plans to use only the highest quality raw materials.
In comparison to other junk foods (packaged bread products) which are able to price competitively at the expense of food quality, our product manages to be both inexpensive and superior because the raw ingredients of unleavened bread are naturally low-cost and are easily available in an agricultural country such as ours. More so, the raw materials to be used will be high on the accompanying nutrition and not excessive in the use of flavors so as the preserve the product’s integrity as a healthy alternative to other commercially available and affordable snacks.
Price Competitiveness In comparison to other healthy snacks in the second Competitive Profile Matrix, our product is priced very competitively because majority of the healthy snacks available in the market are imported. For our competitors stated in the matrix, there is a negative correlation between product quality and price competitiveness. This is why our company is attempting to reconcile both very important and critical factors by providing a high-quality, healthy snack alternative at an affordable price.
Also, in comparison to other health snacks, the company does not feel the need for a big difference to be