Gourmet Sweet & Bakers Project (2) Final Final

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Introduction:- The word gourmet is from the French term, defined as "refined and uncontrolled love of good food". Gourmet is an industry classification for high- quality premium foods in the United States. Gourmet may describe a class of restaurant, cuisine, meal or ingredient of high quality, of special presentation, or high sophistication. Gourmet food is characterized by high quality, accurate preparation, and artistic presentation. This name “gourmet” was suggested by his daughter who is living in America. “Gourmet Bakers and Sweets” is the largest food retail chain of Lahore. It is based in Lahore, the second largest city of Pakistan known for its traditional foods and passion for eating. It was started with a single outlet in Ichra in 1987 by Mr. Muhammad Nawaz Chathha, in the begging they did not get good response which resulted in shut down. He again started in 1992 at different place at Muslim town, and Gourmet did not look back since then. Now with its 5 production units, 2 restaurants and 88 sales outlets, gourmet outreaches to a huge population for their food needs. Mr. Chathha the founder of Gourmet stared his

Transcript of Gourmet Sweet & Bakers Project (2) Final Final

Page 1: Gourmet Sweet & Bakers Project (2) Final Final

Introduction:-

The word gourmet is from the French term, defined

as "refined and uncontrolled love of good food". Gourmet is an

industry classification for high-quality premium foods in the United

States. Gourmet may describe a class of restaurant, cuisine, meal or

ingredient of high quality, of special presentation, or high

sophistication. Gourmet food is characterized by high quality,

accurate preparation, and artistic presentation. This name “gourmet”

was suggested by his daughter who is living in America.

“Gourmet Bakers and Sweets” is the largest food retail chain of

Lahore. It is based in Lahore, the second largest city of Pakistan

known for its traditional foods and passion for eating. It was started

with a single outlet in Ichra in 1987 by Mr. Muhammad Nawaz

Chathha, in the begging they did not get good response which

resulted in shut down. He again started in 1992 at different place at

Muslim town, and Gourmet did not look back since then. Now with its

5 production units, 2 restaurants and 88 sales outlets, gourmet

outreaches to a huge population for their food needs. Mr. Chathha the

founder of Gourmet stared his business with 20 million rupees. He is

holding the position of Managing Director of the company. He was

serving in Shezan Bakers as a General Manager and later on he

decided to make his own bakery. He started his business through

getting employees from Shehzan bakers in the beginning.

Gourmet produces a wide variety of bakery items, sweets and

dairy products and offers high quality services in their restaurants.

Gourmet has introduced many new items in bakery products

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categories which were previously not in the market of Lahore.

Gourmet stresses hard on quality and taste of their products and

making them affordable for their customers at the best prices in the

market.

The company has shown an explosive annual growth of more than

25% till 2006 in its business since this unique business was started in

1992. Recently gourmet shows 65% of annual growth in its business

from 2006 to 2009. With his commitment and strenuous effort to

provide the consumers with best quality food products in a convenient

and unmatched displaying manner, Gourmet has become a success

story of business growth in Pakistan. At the moment Gourmet has

more than 4500 employees working in the organization.

Mission statement:-

“Our mission is to provide quality products at lowest

prices”

Vision:-

“Leader of quality juice providers in the region by offering products

enjoyed in every home. This will be achieved from the dedication of

each employee in conjunction with supportive participation from

management at all levels.”

Gourmet Dairies is another step forward to

provide its consumer with wholesome milk

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and milk products. This is also a sort of backward integration for the

provision of dairy raw materials for bakery.

Branch Supervisor

Assistant Branch Supervisor

Complaint Manager/ Auditor Purchase Manager

Assistant Branch Supervisor

Director

G.M Production

G.M Market

Assistant General Manager

Area Managers

ORGANIZATIONAL/ HIERARCHY CHART OF GOURMET:

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Store Supervisor

Sales Man

Industry analysis: -

The food items industry has been rising constantly at a considerable

rate and the eating habits of people are changing over time with the

changing life styles.

With the growing trend of having light snacks with tea in the

afternoon and other readymade snacks for a meal instead of the

traditional meals of curry n bread, the demand and consumption for

the products of this industry is growing rapidly.

Apart from that as more people and youngsters are working especially

the women, their daily lives are becoming very fast and they don’t

have time to cook at home. Due to this reason more people are now

seeking convenience goods, which act as a alternative to the

traditional meals. Although people are becoming more aware and

more health conscious thus they demand high standards of quality

and hygiene along with a balanced nutrition.

Purchaser

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Along with that the trend of celebrating events and having a get-

together in the West is now sweeping our culture as well and more

people are now celebrating many different events such as birthdays,

ceremonies, anniversaries, New Year, Valentine’s Day, Mother’s Day

etc as compared to the few events celebrated earlier such as Eid-ul-

Adha, Ramadan, Eid-ul-Fitr, weddings, birthdays and get to gether.

These events boost the sales of this industry as people opt to buy

things from outside instead of cooking themselves.

The trends of dining out have also grown rapidly over the past few

years and that’s the reason why many new companies like Gourmet

are entering the Restaurants market.

The acceptance and need for such products are growing every passing

day and it

is expected to grow at a higher rate in the future as well which is a

very healthy sign for companies like Gourmet to invest smartly and be

in front.

PEST analysis:-

1) Political change = from one party (change of government) to

another

Political analysis:-

Political scenario in Pakistan has seen many important changes in

recent years. The political environment directly influences all the

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industries working in the country. Similarly the production

distribution and use of Gourmet’s products are subject to some

federal laws, such as the Food and Drug Act. The businesses are

subject to the Government stability in the countries as the businesses

are directly subjected to the taxation policy of the country they are

operating. They also have to comply with federal, state and local

environmental laws and regulations.

According to the Global Competitiveness Report 2010-2011, Pakistan

ranks poorly in terms of domestic commerce measures: business

sophistication, goods market efficiency as well as property rights

protection. Pakistan ranks lowest when compared to other Asian

countries including India, Indonesia, Thailand, Malaysia and China. As

shown in Table 1, Pakistan ranks 46 out of 139 countries in terms of

business cluster development compared with India at 29 and China at

17.

Table 1: Business Sophistication9

Countries Cluster

Developm

ent.

Local

Supplier

Quantity

Local

Supplier

Quality

Pakistan 46 87 95

India 29 7 60

Indonesia 24 43 61

Thailand 34 26 43

Malaysia 15 29 37

China 17 19 54

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According to the prices above, a small office space of 12 x 38 square

feet is rented out for between PKR 29,640 (minimum) to PKR 91,200

(maximum) in Islamabad. The productivity of a city and employment

generation needs more entertainment, hotels, shopping areas and

offices in large complexes, but no space has been provided for large

complexes to develop. Trading policies are the long run hurdles that

cannot be resolved in near future.

The Pakistan Pure Food Laws (PFL) of 1963 is the basis of the existing

trade-related food quality and safety legislative framework. These

laws cover 104 food items falling under nine broad categories: milk

and milk products, edible oils and fat products, beverages, food grains

and cereals, starchy food, spices and condiments, sweetening agents,

fruits and vegetables and miscellaneous food products. The

regulations address purity issues in raw food and as well as additives,

food preservatives, food and synthetic colors, antioxidants, and heavy

metals. All these improvements will help Gourmet baker to enter in

new markets which are conscious about traditional food items and

also with security measures such as Sharjah, Dubai and other Middle

East countries.

TAX MEASURES 2010-11

Existing system of General Sales Tax would be reformed to eliminate

multiple tax rates and replace it with a single lower rate of 15%.

The reformed GST will not apply on health, education and food items

consumed by the poor. The GST will not apply to turnover less than

Rs. 7.5 million per year whereas the current threshold is Rs 5 million

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per year and would be automated thus reducing possibilities of

corruption and refund delay.

Above situation analysis of taxation structure for 2010-11 shows some

mixed trends for the future prospectus of gourmet baker of Pakistan.

Increase in exemptions for income tax will increase the buying

potential of gourmet customer and will stabilize the employee the

gourmet baker by strengthen there economical conditions. In the

mean while increase in GST and Surcharges on electricity

consumption will lower down the sales volume of gourmet products

due highly cost of production resulting in high product prices.

Home market lobbying/pressure groups

In Pakistan sugar industry is operated almost in all by some political

families and in food industry sugar is a major raw material. For the

sake of fetching good profits these groups put a strong pressure and

prove themselves a strong lobbying group. Employee union is also an

other lobbing group that pushes the gourmet baker for higher wages

that will result in high cost of productions. Strong transport unions

may also create some logistic problems for Gourmet baker

distribution channel.

International pressure groups

India is a leading manufacturer of sweet and bakery items. Low labor

costs in India has enable Indians to get more share in international

markets. In the mean while Indian lobby is strong enough as compare

to Pakistan to reach in foreign markets. Gourmet and many other

entrepreneurial needs strong government assistance and coloration to

enter in international markets

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Wars, conflict & Terrorism

Recent wave of war against terrorism has created a sense of in

security in general public in Pakistan. Shopping trends are decreasing

due to suicidal attacks and people are not willing to come at bazaar as

they were in past. This situation has adversely affected the sales of

gourmet baker and sweets.

2) Economic change = For example a recession creating increased

activity at the lower ends of product price ranges. Rate of interest

raises depressing business and causing redundancies and lower

spending levels as well as energy crisis too.

Economic analysis

Despite inhospitable domestic and international environment

resulting from the either the global recession or due to the terrorism

acts, Pakistan’s economy grew by 2 percent in the financial year 2008-

09 according to Economic survey 2008-09. Reports have shown

increase in GDP, increase in per capita income and increase in IT

development as well which are positive signs for the industry but

there are some negativities as well. Like all the other companies are

subject to the harvest of the raw material that they use in their soft

drink and juice, like corn, oranges, grapefruit, vegetables etc. –

Gourmet also relies heavily on trucks to move and distribute many of

their products, fuel is a very important subject, so they are subject to

the fuel prices. Moreover, there has been a crisis in the production of

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sugar in Pakistan, with prices sky rocketing. Another crisis that

Pakistan is dealing is the shortage of electricity. Such economic

factors have resounding impact on such industries and increase the

cost of goods.

3) Socio-cultural change =Involves changing attitudes and

lifestyles. The increasing number of women going out to work, for

example, led to the need for time-saving products for the home.

Socio-culture analysis

The population of Pakistan is on the rise where as the health

consciousness among the people is also a lot more than it has been in

the past. The age distribution of Pakistan is also very balanced, major

portion of its population consists of youth. Gourmet bakery products,

dairy products as well as beverages and moreover Juices and ice

creams are subject to the lifestyle changes as the awareness of health

consciousness is rising in the people now. This has affected the

industry in the positive manner and many new companies are being

entered in the food market, the usage of the food products in the

households has increased a lot. The need for hygienic products and

healthy products are in important in the average day-to-day life.

Consumers from the ages 37 to 55 are also increasingly concerned

with nutrition. There is a large population of the age range known as

the baby boomers. Gourmet has to pay a special attention on the

lifestyle changes. Further Income of people is increasing more trends

towards FMCG. Further a major social trend in the rural areas of

Pakistan has been a shift from presenting guests with drinks and

bakery products such as lassi towards such beverages and bakery

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products. People use bakery products on different events new born

babies, Basant, Shabraat, Eid milad-un-Nabi (s.a.w), Eid-ul-

Fiter, Eid-ul-adha, Weddings, Engagement parties, birthdays,

Father`s day, mother`s day, valentine`s day and get together.

All these situations are calling for new and new opportunities and

investors.

4) Technological change =creates opportunities for new products

and product improvements and of course new marketing

techniques- the internet, e-commerce.

Technological analysis

Pakistan is considered as developing country. Although it is a nuclear

power yet it lacks behind in other technologies. Technology plays a

secondary role in this industry, as it is not heavily dependent on

technological advancements like the consumer electronics industry, or

the software industry. Because bakery and beverages products are

non-tech based in nature, technology in this industry is therefore

limited to function as a catalyst to improve production capacities,

speed of product manufacturing cycles, inventory management. It has

to pay attention to the new distribution techniques as well. Even

though one have to take into account that specialized factors involve a

heavy and sustained investment, but also at the same time if one is

able to achieve them, he could generate competitive advantage. The

new technology of internet and television which use special affects for

advertising through media. They make products look attractive and

this help in selling of the products. Due to affective transport facility

the company has achieved great success in distributing its products to

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all over the country.

SWOT Analysis:

SWOT stands for Strengths, Weaknesses, Opportunities and Threats.

Internal factors, the strengths and weaknesses and external factors,

the opportunities and threats.

The analysis shows Gourmet Baker Pakistan's Strengths, Weaknesses,

Opportunities and Threats. The SWOT analysis will give you a clear

picture of the business environment Gourmet Baker Pakistan is

operating in at the present time.

SWOT Analysis of Gourmet

Strengths:

Research and Development Center:

By having a strong R&D center Gourmet is offering a quality product

to their customers. Gourmet is offering a product to their customer in

different packing and according to different occasions.

Well Organized Structure:

Gourmet has a well organized structure. All the departments perform

their work according to the organizational structure. 100% of

production at Gourmet is carried out at automated plants.

Computerized Database System:

Gourmet has an organized database; all the activities are recorded in

the database. Computerized database provides error free center. It is

updated on the regular basis.

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Team Work:

All the departments are working as a team such as Quality assurance,

Marketing, MIS, HR and Administration etc. Working as a team

increases the efficiency of the Gourmet.

Low cost:

Keeping costs lower than their competitors and keeping the cost

advantages helps Gourmet Baker Pakistan pass on some of the

benefits to consumers.

Supplier relationship:

Supplier relationships are strong at Gourmet Baker Pakistan, which

can only be seen as strength in their overall performance.

Quality:

By applying the various strengths Gourmet offers the product to the

customer. Gourmet never compromise on quality that is why they are

able to capture a huge market share. Sweet and other bakery

products are prepared with immense care using traditional and

authentic recipes to give unforgettable taste.

Customer Retention:

As Gourmet is offering complete range of sweets, dairy, and bakery

products to their customers with the best quality and taste. Gourmet

is able to retain the customers because of its brand name and worth of

the brand. As retaining the customer is better rather than switching

towards the new customers.    

Weakness:

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Less Financial resources for advertisement:

Gourmet is using less financial resources for advertisement. By using

the appropriate resources they can advertise their product by

different tools of advertisement.

Latest Machinery required increasing the Production Rate:

Latest machinery is the key strength of any organization, but Gourmet

lacks in this point. By using the latest machinery Gourmet can

increase the production rate.

No broadcast media is used:

The term broadcast media covers a wide spectrum of different

communication methods such as TV, radio, newspaper, magazines and

many other materials supplied by the media and press, so more focus

should be on broadcast media.

Opportunities:

Gourmet Baker Pakistan could benefit from expanding their

online presence and making more money from online

shoppers/internet users.

The changes in the way consumers spend and what they buy

provides a big opportunity for Gourmet Baker Pakistan to

explore.

Gourmet Baker Pakistan is in good financial position, which is

an opportunity for them to explore in terms of investment in

new projects.

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Grasping the opportunity to expand the customer base is

something Gourmet Baker Pakistan can aim for, either

geographically or through new products.

Expanding the product/service lines by Gourmet Baker Pakistan

could help them raise sales and increase their product portfolio.

Gourmet Baker Pakistan has a number of highly skilled staff,

which is an opportunity for them to explore as expertise of their

staff can help Gourmet Baker Pakistan to bring the business

forward.

Many cities to capture:

One of the most important opportunities is that Gourmet can increase

their target market by capturing other cities which consist of the

potential customers.

Brand Worth:

Gourmet is the well recognized brand nationwide and it is also

operating internationally which means the worth of the brand is good

in the mind of the customers. Because of the brand worth Gourmet

can come up with the different market of bakery products.

New market to explore nationwide and internationally:

It is the great opportunity for Gourmet to expand their business and

market by exploring the new markets nationwide and internationally.

Threats:

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Consumer lifestyle changes could lead to less of a demand for

Gourmet Baker Pakistan products/services.

Tax increases placing additional financial burdens on Gourmet

Baker Pakistan could be a threat.

Change in demographics could threaten Gourmet Baker

Pakistan.

The financial burden of increasing interest rates could be a

threat to Gourmet Baker Pakistan.

Increased competition from overseas is another threat to

Gourmet Baker Pakistan as it could lead to lack of interest in

their products/services.

Extra competition and new competitors entering the market

could unsteady Gourmet Baker Pakistan and be a threat.

The actions of a competitor could be a major threat against

Gourmet Baker Pakistan, for instance, if they bring in new

technology or increase their workforce to meet demand.

Price wars between competitors, price cuts and so on could

damage profits for Gourmet Baker Pakistan.

A slow economy or financial slowdown could have a major

impact on Gourmet Baker Pakistan business and profits.

The rise and/or fall of the foreign exchange rate could threaten

Gourmet Baker Pakistan with regard to importing and

exporting.

Rising costs could be a major downfall for Gourmet Baker

Pakistan as it would eat into profit.

Gourmet Baker Pakistan could be threatened by the growing

power customers have to set the price of their

products/services.

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Gourmet Baker Pakistan could be threatened by the growing

power their suppliers have to set their prices.

Gourmet could be a big threat because it is also offering a sweet

Nirala’s taste and quality could be the restrictive force for other to

penetrate.

Change in the consumer preference:

Changing of consumer preferences is a major threat of any

organization. As if we talk about Gourmet now people prefer

international brand over local brand which have become a major

threat.

BCG Matrix

The BCG matrix method is based on the product life cycle theory that

can be used to determine what priorities should be given in the

product portfolio of a business unit. To ensure long-term value

creation, a company should have a portfolio of products that contains

both high-growth products in need of cash inputs and low-growth

products that generate a lot of cash. It has two dimensions:

Market share

Market growth

The basic idea behind it is that the bigger the market share a product

has or the faster the product's market grows the better it is for the

company.

Placing products in the BCG matrix results in 6 categories in a

portfolio of a company:

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1. Stars (=high growth, high market share)

Stars generate large amounts of cash because of their strong relative

market share, but also consume large amounts of cash because of

their high growth rate; therefore the cash in each direction

approximately nets out. If a star can maintain its large market share,

it will become a cash cow when the market growth rate declines. The

portfolio of a diversified company always should have stars that will

become the next cash cows and ensure future cash generation.

2. Cash Cows (=low growth, high market share)

As leaders in a mature market, cash cows exhibit a return on assets

that is greater than the market growth rate, and thus generate more

cash than they consume. Such business units should be "milked",

extracting the profits and investing as little cash as possible. Cash

cows provide the cash required to turn question marks into market

leaders, to cover the administrative costs of the company, to fund

research and development, to service the corporate debt, and to pay

dividends to shareholders. Because the cash cow generates a

relatively stable cash flow, its value can be determined with

reasonable accuracy by calculating the present value of its cash

stream using a discounted cash flow analysis.

3. Dogs (=low growth, low market share)

Dogs have low market share and a low growth rate and thus neither

generate nor consume a large amount of cash. However, dogs are

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cash traps because of the money tied up in a business that has little

potential. Such businesses are candidates for divestiture.

4. Question Marks (= high growth, low market share)

Question marks are growing rapidly and thus consume large amounts

of cash, but because they have low market shares they do not

generate much cash. The result is large net cash consumption. A

question mark (also known as a "problem child") has the potential to

gain market share and become a star, and eventually a cash cow when

the market growth slows. If the question mark does not succeed in

becoming the market leader, then after perhaps years of cash

consumption it will degenerate into a dog when the market growth

declines. Question marks must be analyzed carefully in order to

determine whether they are worth the investment required to grow

market share.

5. War Horses

They have high market share, but the market has negative growth;

the problem for management is to decide whether the product is in an

irreversible decline, or whether it can be revived, perhaps by

repositioning into another market.

6. Dodos

They have a low share of a negative growth market, and are probably

best discontinued.

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DATA

FAZAL SWEETS:

Avg. per day sale of Fazal sweets in 2010= 75000

Avg. per month sale of Fazal sweets= 2250,000

Estimated sale of 2010= 27000,000

Avg. per day sale of Fazal sweets in 2009= 68,000

Avg. per month sale of Fazal sweets= 2040,000

Estimated sale of 2009= 24480,000

Avg. per day sale of Fazal sweets in 2008= 63,000

Avg. per month sale of Fazal sweets= 1890,000

Estimated sale of 2008= 22680,000

NIRALA SWEETS:

Avg. per day sale of Nirala Sweets in 2010= 60000

Avg. per month sale of Nirala Sweets = 1800,000

Estimated sale of 2010= 21600,000

Avg. per day sale of Nirala Sweets in 2009= 40,000

Avg. per month sale of Nirala Sweets = 1200,000

Estimated sale of 2009= 14400,000

Avg. per day sale Nirala Sweets in 2008= 20,000

Avg. per month sale of Nirala Sweets = 600,000

Estimated sale of 2008= 7200,000

GOURMET SWEETS:

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Avg. per day sale of Gourmet Sweets in 2010= 85,000

Avg. per month sale of Gourmet Sweets = 25550,000

Estimated sale of 2010= 30600,000

Avg. per day sale of Gourmet Sweets in 2009= 70,000

Avg. per month sale of Gourmet Sweets = 2100,000

Estimated sale of 2009= 25200,000

Avg. per day sale Gourmet Sweets in 2008= 50,000

Avg. per month sale of Gourmet Sweets = 1500,000

Estimated sale of 2008= 18000,000

SALES

Companies 2008 2009 2010 Total

Fazal

sweets

2268 2448 2700 7416

Nirala 720 1440 2160 4320

Gourmet 1800 2520 3060 7380

Total 4788 6408 7920

RELATIVE MARKET SHARE-(RMS)

Companies 2008-09 2009-10

Fazal

sweets

1.26 0.97

Nirala 0.31 0.57

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Gourmet 0.79 1.02

Total 2.36/3=0.78 2.56/3=0.85

MARKET GROWTH

Company Growth

of Each year

2008 to 2009 2009 to 2010

Fazal sweets (2448-2268)/

2268*100=7.94%

(2700-2448)/

2448*100=10.29%

Nirala Sweets (1440-720)/720*100=100% (2160-1440)/1440*100=50%

Gourmet Sweets (2520-1800)/1800*100=40% (3060-2520)/

2520*100=21.45%

INTERPRETATION:

In the BCG matrix, Relative market share is given at the x-axis with a

median point of 0.8 and market growth is given at y-axis with a

median point of 38.83% and with positive growth upward and

negative growth downward. Positive growth upward and negative

growth downward.

BCG MATRIX- GOURMET SWEETS

STARS QUESTION MARK N1 N2

Gourmet (2008-2009)

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100%

38.83%

Market

Growth

0

Relative Market Share

INDUSTRY AND MARKET DESCRIPTION

Sweets are in our culture for centuries. It is our cultural heritage;

people of our region have different taste in sweets as compared to

west. The western people eat chocolate as sweets but in our region

CASH COWS

Gourmet (2009-2010) F1 F2

DOGS

1.5 1.4 1.3 1.2 1.1 1.0 .9 .8 WAR HORSES

.7 .6 .5 .4 .3 .2 .1 .0

DODOS

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sweets are mithai. So in every town every city of Pakistan these

sweets shops are seen. Lahore and the people of Lahore are known

for their tastes and eating habits so there are many small scale sweet

shops in almost every area. Gourmet has also started as a small shop

in Lahore but with changing market conditions with increase in

purchasing power of customer and their every day changing taste

buds gourmet has also improved. Although the tastes of customers in

many other dishes are changing people now a days are eating fast

foods and liking Chinese and western dishes rather than our typical

eastern or Pakistani dishes, like we have seen many western dishes in

our wedding occasions which shows the changing consumer needs.

But this trend is not in sweets industry the habit of eating sweets is

very much in like centuries before. It is the most essential component

of wedding no wedding, no ceremony or other occasion of celebration

is complete without sweets. With the ever increasing purchasing

power people are purchasing sweets in bulk form. Although the

industry of sweets is century old but it is not fading with the time it is

getting rich day by day.

CUSTOMER CHARACTERISTICS

How selective is your customers in terms of buying your product

How much customer switch from your product to another

product

POSITIONING AND BRANDING

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Gourmet carries its image in a positive manner. In consumer’s

perception Gourmet is producing hygienic products with high quality.

Its packaging is perfectly according to the occasions. For the best

quality and impressive representation of the events people prefer

gourmet.

1. Brand Positioning:

Gourmet Position their product in the mind of the consumers by

offering:

Superior in Price and Taste

Quality

Freshness

Superior Quality Brand Name

2. Brand Image/Personality:

Superior in Price and Taste

Status Conscious (consumer’s perception)

Strong Commitment

No Compromise on Taste & Quality

Positioning:

Product Analysis:

The main product because of which Gourmet was able to make a

name for it and has been continuing to go on and on is mithai and

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they are famous for it but their bakery products and beverages also

give value to their customers. The product includes:

1. Product Attributes/Features:

The products being sold at Gourmet carry the following attributes

which are:

• Quality:

Gourmet has been very careful and has been following a very strong

standard for maintaining its quality so that customer is not

complaining about its products. Since they are dealing in food

products where quality plays a very vital role so they believe in quality

good and healthy product to the customer.

• Purity:

It’s another attribute which has been taken care of. In products such

as mithai where people like that they get pure things specially in milk

and better where there are chances that the customers don’t get pure

products. Gourmet has made sure that they use pure materials in

making of the product so that when the customer gets it they don’t

feel that it’s not pure.

• Freshness:

Food products all over the world are loved for their freshness and if

we talk about products which Gourmet is selling they should be fresh

otherwise customer won’t purchase it. Gourmet promises to give fresh

products to their customers by giving them those products which they

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feel are good and healthy to eat and if any product they feel is not

fresh enough they won’t give it to the customer.

• Good Taste:

Taste is because of which a customer would love to purchase a

product again if he likes the taste of your product. For so many years,

Gourmet has been way ahead in the market and leading it on the basis

of its taste and it promises to give good taste to their customer so that

they enjoy it.

2. Benefits:

• Same taste:

This is one of the biggest benefits of coming to Gourmet that the

consumer will get the same taste whenever he purchases products

from Gourmet it’s not that at one time the products will taste different

and other time they would be different.

• Uniqueness:

One of the strong aspects of Gourmet is that its sweet (mithai) has a

unique and at the same time very nice taste which no other player in

the market is providing.

• Large Variety:

The customers can benefit from a large range and variety which

Gourmet is providing them not only in its major products which is

sweet (mithai) but lot of other products such as dairy products etc.

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Cleanliness:

At each and every outlet of Gourmet, special emphasis is laid on

cleanliness so that consumer feels that he is standing at a nice place

and doesn’t get irritated.

Owner Point of View:

• Social Class:

From Gourmet point of view they are benefiting from segment they

are targeting which is the upper middle and upper class as they enjoy

a large amount of profit by charging handsome amount and are

enjoying huge amount of financial reward.

• Brand Name and branding

Gourmet is one of the strongest brand name and market leaders in its

field which enables them to get more benefit out of it. Since they are

one of the biggest as well as the oldest in this field they have

established a name in the market and consumers are automatically

attracted towards Gourmet.

SEGMENTATION AND TARGETING

There prices of Gourmet products are higher as compared to their

main competitors and secondly their shops and stores are mainly

located costly areas of cities. Keeping these factors in view we can say

that there target market is upper middle to upper class.

Continuous Learning about the Market:

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Gourmet is different from others because they have been continuously

upgrading themselves over the years. They started their business

from the inner city congested

Locality as traditional sweet shop mostly found in cities doing small

scale business and selling only mithai related products or dairy

products.

But Gourmet has learned a lot from the changing tastes of their

customers and their preferences. They changed their stores outlook

made them more modern and updated and introduced more updated

functions in stores operation. They have been successfully able to shift

their small scale business to a company level business. Their initial

area of business was their hometown Lahore, but they successfully

expanded their business to other big cities of Pakistan.

Secondly they continuously keep working on their products and for

over the years been able to launch different successful products in

market. Their major focus is on quality of their products so to

maintain strict laws of quality they have separate quality control

department.

The other example of their continuous learning about the market is

their successful launch of snacks product category and their dairy

products. They launched Gourmet milk in the market a few years back

although their milk was not the big success as it has to compete

industry giants like nestle, haleeb etc. but their snacks category is

successful and been able to capture a large portion of the market.

These snacks and beverages are not only available at gourmet stores

but at some other stores also.

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Target Market Analysis:

Demographics:

Mithai is a product well-known among all age group people.

People of all:

Age

Gender

Generation

Family Size

People belong from all ages generally love sweets and our core

products so there is no exception likewise teenagers like it whereas

old people don’t like it, but in one sense gourmet is targeting more

towards people belong from age group approx 10 to 50 years

I.e. including teenagers, youngsters, mature people however age

group exceeding 50 years i.e. old usually suffers from different sugar

prohibit diseases. So this sector is a low consumer of their traditional

product.

New generation is more concern about new taste and looks,

gourmet’s seems quite conscious about this factor. It is continuously

modifying its products according to the changing needs of the new

generation i.e. virtual placement in order to facilitate the customers

worldwide.

Being a server of eastern society like Pakistan where family size is

usually large which means strong concern about events and

occasions. Gourmet as one of the largest sweet dealers was always be

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there to facilitate them i.e. whether it’s a joyful moment like

marriages or a moment of sorrow.

Geographic:

Gourmet is targeting mostly the urban areas all over Pakistan

Lahore, Karachi, Islamabad, Rawalpindi, Faisalabad, Sialkot, Kasur, Multan, Gujranwala

Psychographic:

Marriages, cultural occasions and personal events are the events from

which no social class can be excluded. However being a sole marketer

of high quality which ultimately leads to higher price, Gourmet’s focus

is more towards society’s middle and upper class.

Media Graphics

Hoardings, Banners, Leaflets, Magazines, Newspaper, Advertisement

on public transport

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Porter 5 Forces

Threats of New Entrants:

Capital Requirements:

High capital cost is required for acquiring good places for the outlets

if anyone wants to jump in the market.

Government Policy:

In our country the government has no policies for this industry.

Own Distribution System:

It’s very difficult for newcomer to own a distribution channel because

it needs huge investment. Gourmet has its own distribution systems.

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Brand Identity:

To identify a brand in the market is more difficult for any new

entrants, because gourmet already has introduced such type of taste

& quality in this industry that it is very hard to compete.

Threat of Substitute Products:

The substitute products may be;

Bakery makes cakes, chocolates, ice-cream etc

Local area manufacturers

Bargaining Power of Buyers:

The bargaining powers of buyers are high because;

Convince Product

Low Involvement of Buyers

Buying Behavior – Price sensitivity

Brand Loyalty Status is low

Bargaining Power of Suppliers:

The bargaining powers of suppliers are low because;

Large number of suppliers in the market.

It is an honor to become a supplier for Gourmet.

Now Gourmet has become its own supplier.

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ORGANIZATION PROCESS AND CULTURE

Culture and environment inside the Gourmet is very much attractive

people serving customers are always available for service. The person

at desk always is in a happy mood to treat the customers.

Well Organized Structure:

Gourmet has a well organized structure. All the departments perform

their work according to the organizational structure. More than 20%

of Mithai production at Gourmet sweets is carried out at automated

plants.

Computerized Database System:

Gourmet has an organized database; all the activities are recorded in

the database. Computerized database provides error free center. It is

updated on the regular basis.

Team Work:

All the departments are working as a team such as Quality assurance,

Marketing, MIS, HR and Administration etc. Working as a team

increases the efficiency of the Gourmet sweets.

Quality:

By applying the various strengths gourmet offers the product to the

customer. Gourmet never compromise on quality that is why they are

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able to capture a huge market share. Sweet is prepared with immense

care using traditional and authentic recipes to give unforgettable

taste.

Product Life Cycle:

The stages that product go through from development to withdrawal

from the market.

Each product – different

Determines revenue earned

Helps

-identify when a product needs support, redesign, withdrawal

etc.

-in new product development

-in forecasting and managing cash flow.

The stages of the product life cycle:

Development

Introduction

Growth

Maturity

Decline

Gourmet sweet & bakers

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Gourmet bakers

Gourmet deals in multi products and it possess:

A distinct mission

Own managers

Identifiable customer segments

Specific competitors

Ability to plan independently

BCG Strategies

Question marks- products with low market share in industries

with high growth potential- Covert to star, or Exit market.

Stars- products with high market share in industries with high

growth potential- make heavy investment because of sales/profit

potential.

Cash cows- products with high market share in industries with

low market growth potential-maintain status as long as possible-

products produce strong positive cash flows.

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Cash cows support Gourmet because of good will and market share.

Dogs-products with low market share in industries with low

market growth potential-minimize position-withdrawal.

HIGH LOW

HIGH

LOW

Model Use and Applicability

The BCG identified four major strategic thrusts in terms of

market share.

Once the products have been plotted, the planner then has to

decide on a strategy for that product. There are 4 major

strategies that can be followed.

Build

Hold

Harvest

Divest

Build

The product or SBU’s market share needs to be increased to

strengthen its position. Invest in one or more SBUs to build a

share .This strategy are suited to Question Marks.

Stars Question?

Cash cows(hold) Dogs

DodosWar Horses

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Hold

Gourmet objective is to maintain the current share position

and it lies in cash cows and this strategy is often used for Cash Cows

so that they continue to generate large amounts of cash.

Gourmet invests just enough to maintain a share in the

market.

Harvest

Here management tries to increase short-term cash flows as far

as possible (e.g. price increase, cutting costs).

It is a strategy suited to weak Cash Cows or Cash Cows that

are in a market with a limited future.

Harvesting is also used for Question Marks where there is no

possibility of turning them into Stars, and for Dogs.

Divest

The objective of this strategy is to rid the organization of the

products or SBUs that are drain on profits and to utilize these

resources elsewhere in the business where they will be of greater

benefit.

This strategy is typically used for Question Marks that will not

become Stars and for Dogs.

Gourmet lies in Cash cows and these are cash generators and

require an invest or hold strategy while maximizing cash flow.

Gourmet aim is to achieve a balanced portfolio, sustaining or

holding the Cash Cows.

Cash Positions of Gourmet VS Competitors

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Business Type Cash Source Cash

Use

Net cash Balance

Cash

Cows(Gourmet)

More Less Funds available

Star More More Build Competitive

position and grow

Dog

(Fazal Sweets)

Less Less Divest and redeploy

proceeds

Question

mark(Nirala

Sweets)

Less More Funds needed to

invest

Market Attractiveness/Business Strength Matrix

Or

GE Matrix

It includes:

Market Attractiveness

Organizations strength

Gourmet Attractiveness is determined by factors such as:

Market Growth Rate

Market Size

Demand Variability

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Industry Profitability

Industry Rivalry

Global Opportunities

Macro Environmental Factors (PEST)

Gourmet Strength can be determined by following factors:

Market Share

Growth in market share

Brand Equity

Distribution Channel Access

Production Capacity

Profit margin relative to competitors

Technological or other innovation

Customer Loyalty

GE Matrix

(Gourmet sweets & bakers)

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Gourmet sweets & bakers

Gourmet lies in YELLOW ZONE ; a position in the yellow zone

is viewed as having medium attractiveness. Management must

therefore exercise caution when making additional investments

in this product/service.

The suggested strategy is to seek to maintain share rather

than growing or reducing share.

Best Strategy: INVEST FOR EARNINGS

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The GREEN ZONE consists of the three cells in the upper left

corner. If your enterprise falls in this zone you are in a favorable

position with relatively attractive growth opportunities. This

indicates a "green light" to invest in this product/service.

Best Strategy: INVEST FOR GROWTH

The RED ZONE consists of the three cells in the lower right

corner. A position in the red zone is not attractive. The

suggested strategy is that management should begin to make

plans to exit the industry.

Best Strategy: HARVEST or DIVEST.

High Attractiveness

LEADER

Strong Competitive Position

Strategies:

provide maximum

investment

diversify

your position to focus your

resources

accept moderate near-term

profits to build share

High Attractiveness

GROWTH

Average Competitive

Position

Strategies:

build selectively on

strength

define the implications of

challenging for market

leadership

fill weaknesses to avoid

vulnerability

High Attractiveness

IMPROVE/QUIT

Weak Competitive Position

Strategies

ride with the market growth

seek niches or specialization

seek an opportunity to

increase

strength through acquisition

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Medium Attractiveness

TRY HARDER

Strong Competitive Position

Strategies:

invest heavily in selected

segments

establish a ceiling for the

market share you wish to

achieve

seek attractive new segments

to apply strengths

Medium Attractiveness

Average Competitive

Position

Strategies:

segment the market to find

a more attractive position

make contingency plans to

protect your vulnerable

position

PROCEED WITH CARE

Medium Attractiveness

PH. WDL

Weak Competitive Position

Strategies:

act to preserve or boost cash

flow as you exit the business

seek an opportunistic sale

seek a way to increase your

strength

Low Attractiveness

CASH GENERATION

Strong Competitive Position

Strategies:

defend strengths

shift resources to attractive

segments

examine ways to revitalize

the industry

time your exit by monitoring

for harvest or divestment

timing

Low Attractiveness

PH. WDL

Average Competitive

Position

Strategies:

make only essential

commitments

prepare to divest

shift resources to a more

attractive segment

Low Attractiveness

WITHDRAWAL

Weak Competitive Position

Strategies:

exit the market

prune the product line

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STRATEGIES

BUSINESS STRENGTH (Gourmet)

Strong Medium

Weak

PROTECT POSITION

• Invest to grow at

maximum digestible

rate.

• Concentrate effort on

maintaining strength

INVEST TO BUILD

• Challenge for

leadership

• Build selectivity on

strengths

• Reinforce vulnerable

areas

BUILD SELECTIVITY

• Specialize around ltd

strengths

• Seek ways to

overcome

weaknesses

• Withdraw if

indications of

sustainable growth are

lacking

BUILD SELECTIVITY

• Invest heavily in most

attractive segments

• Build up ability to

counter

competition’

• Emphasize profitability

by

• raising productivity

Hold SELECTIVITY/

MANAGE

FOR EARNINGS

• Protect existing

program

• Concentrate

investments

in segments where profit-

ability is good and risks

are relatively low.

LIMITED EXPANSION OR

HARVEST

• Look for ways to

expand

without high risks else

minimize investment

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PROTECT AND REFOCUS

• Manage for current

earnings

• Concentrate on

attractive

segments

• Defend strengths

MANAGE FOR

EARNINGS

• Protect position in

most

profitable segments

• Upgrade product

line

• Minimize investment

DIVEST

• Sell at time that will

maximize

cash value

• Cut fixed costs and

avoid

investments meanwhile

SCORPIO TECHNIQUE

This technique is used to justify the strategies that we have

selected while doing the analyses of BCG Matrix. Scorpio technique

is a continuous process of every company and each and every

company have own time frame to review the technique may be in 0ne

year or one month ,may be in one week or other .

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Industry or Market

Industry or technology thinking

1. Example:- online complaint centre, e-commerce, research & development.

CUSTOMER:-

1. Middle class, upper middle class, upper class.

2. Cakes, pastries, beverages and dairy products, because large number of branches are there for their easy access.

3. Soft drinks charges are less then coca cola and Pepsi etc, online complaint desk, as people are more concerning about health.

4. Increase number of branches, Alternate Distribution Channel.

5. Inflation rate, high prices of sugar, energy crisis, etc

6. Reliability, loyalty, customer relation, customer retention.

7. Branches, website under construction (updating reason), online complaint desk.

SEGMENTATION AND TARGETING

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1. Differentiated, each and in every branch give response to the customer same and fair interaction.

2. To increase customers by targeting all the level of social classes now.

3. Upper middle class, upper class.

4. To develop Durability, to targeting the customer according to the need and demand, built a positive relations to customer , to increase loyalty and to do research and survey on customer preferences.

5. No priority because same treatment to all the customer

6. Now they are trying to target all the segments as their beverages are available on other local retail shops.

7. By delivering new offerings e.g. catering in parties on different occasions.

POSITIONING AND BRANDING

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1. Differentiation marketing.

2. high quality and good position

3. more and more improvement in quality of the product and position to built relation to customer to improve brand loyalty

4. To innovate different product and services and built a positive image in the mind of the customer.

5. Establishment a complete bakery of first choice to facilitate the customer.

6. Customer trust increases

7. Increase promotional activities like advertising on different channels, pamphlets, concerts etc.

Retention Strategies

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1. Holding current customers to attract new customers, and giving more value to customer through more advertisement.

2. Listen and Respond to complaint

3. No, it can also increase the customers

4. No.

5. Good

6. To get satisfaction of the customers

7. Offering new items.

ORGANIZATION: PROCESSES AND CULTURE

1. Both internal & external include employees ,customers

2. Providing better hygienic and healthy food.

3. Strictly followed

4. Yes

5. BCG Matrix

OFFERINGS

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1. Superior values and services with attractive and hygienic and healthy products.

2. Different products, beverages, cakes, pastries.

3. Provide banking facility that influence the customers, provide value, improved brand image, introduced new innovative products.

4. Sugar free ice creams.

5. Providing more healthy products to satisfy each and every type of customers

6. Yes we are managing the life cycle.7. Through Advertisement, print media, number of branches

increase.

Analysis and recommendations

The whole report shows that the Gourmet bakers and sweets are

striving to get a competitive advantage against its customers but

there are some problems too on which the company should

concentrate because they serve many other factors respectively

1. Gourmet should offers incentives and benefits to its old employees

to reduce its turnover rate.

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2. And secondly they should reduce the employee work hours so that

they better deals the customers.

3. The Gourmet hasn’t advertised themselves through media; they

should have adopted some other source of advertisement to cater the

market. Well they are well known in the market but they should use

TV media for their advertisement, they could also advertise

themselves on the cable in the areas in which they are having their

chains.

4. The Gourmet should plan for the loyalty of its customers. They

should give discounts to its regular customers in this way the

customer’s sincerity with the company will grow.

5. The Parking area of the Gourmet bakers should be enhanced if

their customers face problems in parking .then the customer would

prefer to go on some other store to find convenience rather than

buying for the Gourmet.

7. The Gourmet should increase the quality of the new products as it

has offered (milk and ice-cream) and it should also concentrate on the

advertisement of the new product seriously.

8. The Gourmet should take feedback from the customers by

personally survey and should concentrate on the requirement of the

customers.

9. As the people is weight and diet conscious today so the Gourmet

bakers should introduce sugar free sweets and cakes for those people

too.

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10. They should be concentrating on the quality of their products so that the customers wouldn’t be returning the goods back and thus the image of the Gourmet wouldn’t be lost in the eyes of the customers.

11. By adopting reduce price strategy they can make more and permanent customers. Not only more customers will come there will be increase in the number of loyal customers as well.

12. They have to acquire new technology for production if they don’t move towards acquiring new technology then they won’t be able to meet the needs of customers.

13. Sales promotions like prizes, lucky draw schemes should be introduced to attract more customers and involve kids and children to increase sales.

14. Must capture some special events like local sports series, convocations & charities shows by sponsoring these shows as would give a good image about the company to the consumer.