Why Expand Breadtalk in Japan
Why Expand Breadtalk in Japan
* Executive summary
In this assignment The focus would be on why I would suggest BreadTalk to have its presence in Japan along with supporting sources and references broken down into introduction, market trend, environment analysis, marketing mix with 4ps and competitors analysis, implementation, evaluation and control, overall report, justification and references.
The first flagship store that BreadTalk started from was from a little humble store in Bugis Juction located in the City of Singapore. It was in July 2000 started with a dream fuelled by the desire to bring a new concept of bread making to a whole new level by introducing their signature ‘see thru’ kitchens which allow their chefs to showcase their expertise upfront, sharing the preparation of the freshly browned breads.( BreadTalk, 2012) BreadTalk’s mission is to be Leading a new lifestyle culture with new, innovative changes and creative differentiation to craft products with passion and vibrancy (BreadTalk,2009) BreadTalk’s Vision Establish BreadTalk as the foremost international, trend-setting lifestyle bakery brand (BreadTalk,2009)
In 2012 their vision statement changed to We have a shared vision to be an international trend-setting lifestyle brand. To this end, we have taken bold strides in introducing new food culture with revolutionary changes and ingenious differentiation. Our products are also crafted with passion and vibrancy to the highest quality. We are confident that our strategies will lend us a distinct competitive advantage and a platform for continued growth. (BreadTalk, 2012)
* Market Trend & environment analysis(Macro Analysis) & eating habits Why Japan Why?
It is long known that Japan is a fast pace city filled with convenient store popping up almost every corner of the street in Japan by taking an example of the success of 7-11 in Japan which is now own by Seven & I Holdings Co., Ltd. 7-11 in Japan have 14005 stores based on 29 February 2012 as compared to North America which have only 7149 stores based on 31 December 2011.(7&i 2012) Its sale of food items make up of 64.9% of total sales. (7&i 2012) Based on an article publish on 2 April 2012 titled Wave of Grain by slate.com have suggested that wheat based products like bread and noodles are more popular then rice products in Japan Adding on to the trend of demand for bread, in 28 September 2010 an article written by Juniper Foo for CNet with the title of Make bread out of rice with Sanyo’s Gopan noted that bread is such a popular consumed product in Japan that Japanese inventor manage to turned rice into flour that is suitable to make rice breads and the machine was sold out despite its high cost of about 50,000 Yen. Western influence on Japanese have more Japanese choosing to dine out rather than the old tradition of eating at home and have chosen more American food over Japanese food.
Food such as Beef are constantly becoming a primary diet for Japanese to eat. (CafeTerra, 2008) In an old article called Sweets in disguise back in 2005, It was suggested that Japan consumer like things that are sweet especially to the younger generation of women in Japan. (Trends in Japan 2005) When it comes to behaviour trends, Japanese consumer are seen to be cutting on spending and like dinning out and holidays and shown an increase on instant food consumption as shown in Research done by 500 consumer both genders nationwide, aged 16 and above (Research Panel Asia May 2011) On top of that, Japanese consumer are also seen to be hunting for the cheapest deal and flocking online to cut cost (Brian Salsberg, March 2010)
Green tea culture is still strong in Japan based on a research data realise in 2009 shows that Japanese consume about 80000 tons of green tea yearly (S.C August 2009) Other trends on Japanese eating habit includes a shift to healthier more organic food as mention in this article called just what the doctor ordered. (Trends in Japan August 2008) adding onto both eating habit and organic food, in another report done by Oceanus, titled Japan’s Consumer Trends and Opportunities have suggested that mother play a big role in deciding what food is for the family and with the continues scare of disaster and radiation leak etc, they become really particular with what inside the food contain. (Oceanus Marketing March 2012) Last of all, there is a growing trend of families in Japan becoming smaller with the increase of singlehood and people living alone or with a friend/etc over the past few years. base on the figure taken from Euromonitor This suggest more people would eat out in Japan instead (gov.mb.ca, March 2010)
Base on http://data.worldbank.org, it stated that Japan’s average annual income per person is about $45,180 USD for 2011 which translate into about 3.53161885 million Yen Base on japan-guide.com, an average meal price can range from 500 yen to 1000 yen and more expansive meals can cost 1000 Yen 3000 Yen. (do note as of 30 july 2012 exchange rate is 1000 yen to $15.96)
* Marketing Mix – 4Ps with competitor analyzes
When it comes to location, BreadTalk is known to set up its stores in high human traffic location and its concept of enable customer to pick and purchase fresh ready to eat bread conveniently within a very short time is what pulls customers to their shop taking example from Singapore outlets like 313 Somerset shopping mall which is high in human traffic and strategically place near the entrance of Somerset MRT also known to be the train transport station. (BreadTalk, 2012)
So based on a figure of retail rental fee in Singapore as compared to Tokyo published on July 2012 by Barbara Farfan, Singapore rental retail space is about $455 USD in 1Q 2012 per sq feet annually as compared to Tokyo which is $1025 USD per sq feet annually (Barbara Farfan, July 2012) As for their competitors like Bread studio which is well establish in Japan, they also place themselves in high human traffic area like their train station. As the map on the left shows where Bread studio is located which is at Amagasaki station (Kobeya Baking, 2011)
(Kobeya Baking, 2011, Google map)
What’s More, Tokyo would be the best start up place in Japan as it’s filled with the highest population of 8.956 million residents compared to its second highest city Yokohama which have 3.690 million (Yasunori Sato May 2012)
BreadTalk is an established brand with presents spread out internationally with 17 countries mostly in Asia countries and its famous for its best selling bread known as the Floss which is a unique soft light bread with flavoured with egg cream and topped off with lots of pork floss. (BreadTalk 2009) Hence a suggestion for a product should be focus on having a stronger and sweeter taste for its bread as suggested earlier in the report based on current trends in Japan. BreadTalk could consider Having a range of organic product that would be target to very heath conscious customers in Japan with a possible light packaging stating any possible chemical or preservative as mention above under the current trend section with the article title of Just what the doctor ordered.
Another new possible resource product opportunity is that BreadTalk can utilized Sanyo’s Gopan rice to bread making machine to launch new bread product line that is safe for those allergic to Wheat based products. (Slowfoodrocks.com,2011) Especially When the machine which was first launch in October 8 2010 and was completely sold out even with the price tag of 50,000 Yen. Do show the demand of Rice base bread in the market of Japan. (Juniper Foo, 2010) Another great selling point of BreadTalk would be its wide variety of different unique creative creation of bread that appeals to many consumers as it focus is on being different from the rest.
Unlike Many Japanese bakery product that is heavily and beautifully packaged like Kobeya’s bread which is part of Bread studio Japan (BreadTalk potential competitor in Japan) as seen in the image on the left One competitive suggestion that BreadTalk have is simplicity. Where the actual product display like the one on the right should be able to sell (source image: Kobeya,2012)
(image source:BreadTalkme.com) without any heavy packaging at all that cover the product up or even no packaging.
As mentioned earlier since BreadTalk is such an established brand in Asia countries, having to set up a foot print of one of the must visit city in the world, Tokyo city which have seen a record of 8.6,million tourist in 2010 and out of it 2.44 million are south Korea visitor which BreadTalk is established in along with 1.41 Million from China which BreadTalk existed in and 1.27million from Taiwan which BreadTalk is established as a Joint-Ventura with Lin Cheng Yi in Taiwan back in 2005 (BreadTalk 2012) Does show a lot of potential BreadTalk patrons tourist in Tokyo to visit a BreadTalk establishment in Tokyo. (Mayank Gupta, January 2011) Naturally, Japan is normally cited for crazy wacky ideas. A suggestion of how BreadTalk should promote their products is though an electric paper/flyer. As a limited one time offer for market penetration and that should make a bigger impact on consumer’s mind of a new upcoming brand in the market (Amar Toor, March 2012)
Like any other bakery especially dealing with competitive low price products, the issue with inflation is always looming around with possible price influx of prime stall rental rates, change is resource price like flour, eggs, etc and possible new demand on worker pay increase and changes in utilities bill. Take for example based on the static price history of flour from (ers.usda.gov, 2012) its shows that in Jan 2010, prices of flour were $153USD per metric ton but in Jan 2011, the prices rose to $272USD per metric ton.
As of mentioned earlier regards to rental fee in Singapore and Tokyo, $455 USD compared to $1025 USD in Tokyo do suggest that whichever item that BreadTalk is selling in Singapore have to sell it at double the cost which is surprising competitive in the Japanese market take for example a simple slice of bread with butter would cost 150 Yen which is about $2.40SGD (Heart-Bread shop) up to 1365 Yen for a loaf of Bread which is about $21.70SGD (shop.gnavi.co.jp) Hence pricing for BreadTalk going into Japan wouldn’t be of an issue.
* Implementation, evaluation and control
1.First 3 months.
Selecting a High human traffic area with easy transportation system like beside/inside a train station located at the very heart of Tokyo and bringing the same open concept store setting where it enable curious onlooker to see the operation of creating a perfect BreadTalk bread. Also building a brand imagine with customer and bringing some Singapore cultural taste like the floss Bread into Japanese daily diet with a twist of taste adjustment of the product to be a little stronger for Japanese liking. To create a more lasting impression, a suggestion of issuing electrical paper flyer for the first month of operation as a limited edition advertising item as people may be tempted to keep it due to its uniqueness and with each time potential consumer look at it, There’s a possibility they would try it and with those who have already tired BreadTalk, there is a chance that they may return to buy it again.
To create more awareness, electric paper advertisement should be place inside train station and inside the train itself as public train transport is the main and economical way of travelling around in Tokyo. (Japway.com) and maximized band exposure for the next 6 months. To build Japan’s BreadTalk website, have a channel of collecting customer feedback in-stall by either filling feedback forums or dropping off e-mails at the Japan’s BreadTalk website By the end of 3 months. i suggest that the way to measure success would be based on the ability to pay the shop rent, resources and the staff working in the shop a long with some advertisement fee. If earning falls short, i suggest having a free bread day to create more brand awareness and hopefully get people more addicted to BreadTalk’s product.
2.Following 6 months
This following 6 month would be use to bring in more Breadtalk Varieties based on customer’s feedback on what food items is prefer in terms of taste and also use existing sale figures to determine what’s the best selling product and develop more varsities on it for example if the Japanese love BreadTalk cream cheese bun, how about coming out with wasabi favour cream cheese buns? It can be done by a series of promotion like having 1 free wasabi bun for every 3 buns purchased.
Also the introduction of free small bun sampling would be effective to let consumer try new type of products. As mention in the earlier part of this report writing, to stand out from other competitors is have loaf of bread made from rice flour to target customer who are allergic to wheat base product. Factor to determine if success or not would be based on not only the ability to make profit but also cover at least half of the start up fee. If target is not met, the suggestion of having all day student and senior citizen rates for BreadTalk products to be implemented to drive up sales.
3.The next 3 months.
It would be focus on Expansion on of BreadTalk outlets to other high human traffic areas that area are near to transportation hubs and the implementation of home and office delivery system via walking to those customer who stay nearby the outlets within and to those who stay near train station within Tokyo City. To create more awareness of the delivery system, advertisement should be carried out in train station around Tokyo to tell consumer that delivery is now possible. success would be based on popularity of delivery service used and at the same time sustainability of outlet’s profit. If profit falls into loss, the company may want to consider having contracts with schools and offices to supply fresh buns as a mean of stable income.
Based on the report and all reference and suggestion and marketing ideas, It seem to me that Tokyo would be an ideal place to start up a new outlet for BreadTalk as opportunity with a potential pool of 8.956million customer is available not counting the tourist figure of 8.6million that visited the city during 2010. It’s concept of being like a convenient store just like 7-11 would possibly bring in good profit and expand in no time with the trend shifting to fresh fast quick healthy cheap and convenient food products not forgetting the good infrastructure in place for easy access to customers citywide.
http://breadtalkindia.com/html/aboutUs.htm ( 2009 vision and statement)
http://www.breadtalk.com.sg/ourstory.php ( concept and vision statement change 2012)
http://www.7andi.com/en/ir/pdf/annual/2012_05.pdf ( Number of 7-11 stores in Japan compared to North America)
http://www.7andi.com/en/ir/pdf/annual/2012_13.pdf ( Food sales percentage in 7-11 Japan)
http://www.slate.com/articles/life/food/2012/04/wheat_in_japan_how_the_nation_learned_to_love_the_american_grain_instead_of_rice_.html ( Japanese prefer Bread over rice )
http://news.cnet.com/8301-17938_105-20017956-1.html (rice to bread flour machine and bakery)
http://breadtalkindia.com/html/breads.htm (Floss Product)
http://www.ers.usda.gov/datafiles/Wheat_Wheat_Data/Yearbook_Tables/Domestic_and_International_Prices/WheatYearbookTable20.pdf (price flour change)
http://www.cafeterra.info/2008/11/food-and-health-in-japan.html (Japanese chose to eat out more and more beef in their diet)
http://web-japan.org/trends/lifestyle/lif051221.html ( Sweet Trend)
http://www.researchpanelasia.com/newspr/pressrelease/2011/may_11th.html (total spending cut)
http://www.mckinseyquarterly.com/The_new_Japanese_consumer_2548 (new Japanese consumer trend) http://www.teatronaturale.com/article/952.html (green tea demand)
http://web-japan.org/trends/07_food/jfd080808.html (Trends in Japan )
http://www.oceanusmarketing.com/2012/03/24/japan%E2%80%99s-consumer-trends-and-opportunities/ (organic food and possible food danger in japan)
http://www.gov.mb.ca/agriculture/statistics/agri-food/japan_consumer_report_en.pdf (statics on living household)
http://data.worldbank.org/indicator/NY.GNP.PCAP.CD (average annual income per person)
http://retailindustry.about.com/od/famousretailers/a/Highest-Retail-Store-Rental-Prices-In-The-World-Global-Comparison-2007-2012.htm (Retail rental fees)
University/College: University of Chicago
Type of paper: Thesis/Dissertation Chapter
Date: 19 October 2016
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