FIVE-YEAR MARKETING PLAN

FOR BREADTALK, TALKING TO YOU

AROUND THE WORLD

I. EXECUTIVE SUMMARY

This marketing plan projects the entry and expansion of BreadTalk in the Philippines
market. Based on the customer analysis in the report, the demand of bakery products has
remained steadily substantial, and the consumer purchasing power has remained growing in
Philippines recently. In the meanwhile, the annual sales growth rate of the bakery industry in
Philippines has surpassed 10% in the recent years. This could imply that the Philippines bakery
industry has entered the rapid development period and contribute the direct impact to
business development of BreadTalk in Philippines. By comparing with main competitors in
Philippines market, there are some competitive advantages of BreadTalk; respectively are
special names of bread with modern style, innovative creations of breads, also the premium
quality of products and services. Therefore, it is recommended that BreadTalk should catch the
growing opportunities and increase its competitiveness to expand its market and business in
Philippines.

BreadTalk will target customer in Philippines market which are the working adults and
white-collar professions who live in the 1st, 2nd, and 3rd tier cities.

In order to operate the business in Philippines and achieve the marketing objectives
successfully, BreadTalk uses a series of marketing strategies to promote its product. For the
product strategy, BreadTalk will provide the customised service to the customers, and promote
special bread such as BreadTalk cakes and bread. Furthermore, for the promotion strategy, it
uses the golden hour promotion, traditional moon cake promotion and talk through breads
promotion to attract more customers.
 II. STRATEGIC FOCUS AND PLAN

MISSION
 Leading a new lifestyle culture with new, innovative changes and creative
differentiation to craft products with passion and vibrancy.

VISION

 Established BreadTalk as the foremost International, trend setting lifestyle bakery

brand.

GOALS

NON-FINANCIAL GOALS

 To maintain the present image as the most demand breads.

 To target more bread lovers.
 To innovate and make new products.
 To be the most number one Bakery worldwide.

FINANCIAL GOALS

 To obtain and increase market sales per year.

 III. CORE COMPETENCY AND SUSTAINABLE ADVANTAGES

UNIQUE CONCEPTS AND BRANDING

BreadTalk bakeries differentiated themselves from traditional bakeries with seeks and
space – age looking store facades and an open – concept design. Unlike other bakeries,
BbreaTalk’s novel open – concept design allowed customers to view the bakers at work and
generated a lot of customer/s interest in its products. In addition, BreadTalk came up with
creative and fun – sounding names for all their buns. Some buns had a short anecdote to tell a
story. New types of buns are introduced regularly as well as to as maintain consumer interest.
Such unique initiatives by BreadTalk allowed them to differentiate themselves from other
bakeries.
 IV. SITUATIONAL ANALYSIS

SWOT ANALYSIS OF BAKERY SEGMENT

To better understand the key issues and trends facing the bakery segments.

SWOT Analysis was implemented, see the FIGURE showed:

STRENGHTS
 Market leader and the only firm locally
in bakery operations.
 Wide product offerings.
 Higher economies of sales.
 Continual and successful innovation.
 Regional ventures.
 Strong franchise partnership.
WEAKNESSES
 Unpredictable consumer tastes.
 No loyal customer base.
 Business which relies heavily on
volume-based sales.
 Innovative products can be easily
replicated.
 Restaurant division is a franchise which
needs to be renewed.
 No directs control over overseas
operations.

OPPORTUNITIES THREATS
 Growing F&B sectors internationally.  Market saturation in the local bakery
 Emerging markets regionally which industry.
share similar diets.  Increasing competition in other
country.
 Existing competitors in new market.

FIGURE 1. SWOT ANALYSIS FOR BREADTALK

INUSTRY ANALYSIS: Future Outlook and Trend

For its outlook, BreadTalk planned for the China and regional market and rising food
cost. This is the largest challenge for the Bakery business. BreadTalk is going to shorten the
supply chain and buying in bulk globally for economies of scale. Shanghai is one of the example
that BreadTalk have successfully piloted using frozen dough to arrest rising labour and rental
costs while maintaining the quality of our products. This is to encourage that BreadTalk will
explore the possibility of extending this initiative beyond Shanghai. The BreadTalk Transit model
has also proven to be an efficient model for swift expansion and its potential we will be
harnessed to expedite growth. For Market Trends, KFC, McDonald's, Long John Silver's and Pizza
Hut were dominating most of the chains in the past in Singapore. However, trends have been
changed for decades. Local Brands were replaced. BreadTalk controls 55% of Indonesia’s bakery
market and it becomes giant franchises dominate the Southeast Asia region. (Fresin Fries,2012)

COMPANY ANALYSIS
 BreadTalk, a Singaporean lifestyle brand that has gained international appeal, is widely
credited for taking the bread and bakery industry to new heights. Its introduction of the floss
bun propelled the brand into consumer’s minds and since opening in 2000, BreadTalk has
continued to chum out exciting products and offer a unique shopping experience for its
customers. Emphasizing its boutique bakery concept, each BreadTalk store is literally a bread
shopping haven where each product tells a story. Be a chef’s or baker’s own inspiration, the
workings of politics or society’s trends. BreadTalk’s “Earthquake Cheese”, Mr. Beans, Crouching
Tiger, hidden brought real stories to life. Youthful names and desugns, the stories cleanliness,
and BreadTalk open kitchen all come together for a fun and sophisticated experience.

CUSTOMER ANALYSIS

BreadTalk breads are unique from ingredients, flavor taste and the final bread itself that
can build the interests of its individual to taste BreadTalk products, because people especially
Filipinos love breads its either sweets, or not, because they believe that “breads are the second
way to solve hunger”.

When it comes to health and nutrition, BreadTalk are very confident from ingredients to
the final products. Ingredients are came from Singapore, BreadTalk ingredients are strictly
inspected and approved by Department of Health (DOH), They assure that the ingredients are
100% healthy and safety for all consumers.

COMPETITOR ANALYSIS

BreadTalk operates in the highly competitive F&B industry which has close to no barriers
to entry. Some of its competitors are established players in the bakery and confectionery
industries and may have greater financial and marketing resources. The entry of new
competitors into the same F&B segments or into the immediate areas around the group’s retail
outlets may affect its earnings (CIMB Research Report,2009). Focusing on main competitors, the
direct competitors of BreadTalk outlets are local names such as Four Leaves and My Bread
(CIMB Research Report,2009).
 V. MARKET-PRODUCT FOCUS

CURRENT MARKET

Filipino bread lovers got the surprise of their lives when BreadTalk was formally
launched in the Philippines in 2004. The first BreadTalk store opened in May 2004 at Glorietta 4,
Ayala Center. To further its market, today, BreadTalk Philippines is still expanding as they still
aim to open more branches in the provinces and in key locations in Metro Manila. The situation
of the breadshop is still going on and nice because some of the customers are in the middle and
high class people wherein the breadshop gained more money which is increasing.

NEW MARKET

Our new market for the BreadTalk are the following:

 Students
 Call Center Agents
 Office workers
 Others

NEW PRODUCT

Create breads to the consumers get to taste and will go for the normal one if the flavors
are nice which affordable to our new market.

TARGET MARKET

BreadTalk has primarily targeted working adults and white-collar professions.These

people are rush and hasty all day because of their working-life in the urban areas, they do not
have much time to cook or eat. Fast food that are convenient for carrying on the way, therefore
would likely be the suitable breakfast for their lifestyle instead of the proper meal. Moreover,
the target markets are expected to be in the middle class or over and have more than Php 4000
monthly income due to the price and quality of BreadTalk are higher than the average of other
bread shops.

SEGMENTATION BASE SELECTED VARIABLES DESCRIPTION

Geographic Density Urban and Rural areas
Demographic Income Above Php 4000 per month
Age 18 years above
Psychological Social Class Middle class and over
Lifestyle Rush and Hasty
Behavioral Benefits Sought Premium quality

POINTS OF DIFFERENCE

-The “point of difference”-characteristic that make BreadTalk Talking to you around

world… unique:

 Unique Taste
 No known competitors offer spicy breads example “Fire Floss” and other
innovative breads.

POSITIONING

BreadTalk products have been either convenient or tasty. BreadTalk catch the mind and
taste of customers by the delicious breads that can be served good and quickly.

VI. MARKETING PROGRAM

PRODUCT STRATEGY

Creative Given Name

This is one of the product strategies that BreadTalk has successfully utilised it to gain
more customer attention and awareness. A creative and interesting name is given to each
BreadTalk’s bread in order to convey the story ad taste of the bread to the customers as. The
name allows customers to learn about the bread before purchasing. Therefore, BreadTalk
should continue this product strategy because it could be able to increase the possibility for the
customers to purchase more bread and cakes while spending more time in the outlets by
considering each bread name.

Customised Service

It is a service that allows customers to create their own bread or cakes through
BreadTalk’s creative patterns provided. The customer can mix and match the types of bread,
flavours and toppings: they also can write some messages on their bread or cakes. This service
will be offered with a minimum purchase 6 items of bread or 1 pound of cake for each design
plus an additional 10% of service charge. By doing so, BreadTalk could differentiate itself
significantly from the competitors by providing unique experiences to the customers, as well as
gain more awareness and preferences from target audiences.

PRICE STRATEGY

The premium pricing strategy should be adopted. This pricing strategy intended to
exploit the tendency for buyers to assume that expensive bread enjoy an exceptional reputation
or represent exceptional quality and distinction. BreadTalk therefore should maintain the price
of its products around 10% - 15% higher than the industry average in order to reflects its
premium brand image and encourage favourable perceptions among the target markets.

PROMOTION STRATEGY

PLACE (DISTRIBUTION) STRATEGY

Supply Chains

Since BreadTalk demand good quality of fresh ingredients to produce and serve fresh
bakery, it should partnership with an experienced and reliable company to supply and deliver
ingredients in each region. BreadTalk does not demand to import ingredients because it could
have ingredients in a cheaper price. However, a logistic system to transport the product is lack
of safety and not very effective because of pollution, effects of exhaust emission, traffic
congestion and wastage exist in products in the logistic.

Diverse Distribution Channel

BreadTalk do not require outbound products from the main company because every
piece of bread is baked freshly every morning and served in a store. By this way, BreadTalk still
need to deliver ingredients every day. BreadTalk therefore should have a warehouse like a
central kitchen to store and prepare the ingredients from its suppliers before delivering to each
BreadTalk outlet in an area

VII. FINANCIAL DATA AND PROJECTION

PAST SALES REVENUES

BreadTalk experienced positive growth in terms of revenue from 2002 to 2007.

However, the growth has been fairly inconsistent as illustrated in the table below.

2002 2003 2004 2005 2006

2007
Revenue 109.60 % 15.10 % 24.60 % 89.80 % 29.70 % 26.70 %
Growth
FIGURE 2. SALES REVENUE FOR BREADTALK

FIVE-YEAR PROJECIONS

Five-year financial projections for BreadTalk appear below. These projections reflect the
continuing growth in number of cases sold and inreasing production as sales volume increases.

PROJECTIONS

FIGURE 3. FIVE-YEAR PROJECTIONS FOR BREADTALK

VIII. ORGANIZATION

IX. IMPLEMENTATION PLAN

In order to be able to compete and success in the intense bakery market in China,
BreadTalk should be flexible and agile in operating. It therefore should adopt the marketing
Implementation-through-Change approach. Affordability budgeting coulb be utilized to do the
marketing budget by using the retained profits from the last year as the initial capital which is
around $22.4 million (BreadTalk Group Limited, 2013).

X. EVALUATION AND CONTROL

Evaluations and Control The balance scorecard will be used to assist Breadtalk Group to
identify the strategic objectives and control from the financial, customer, internal and
learning & growth perspective. This will help to achieve sustainability of the business and
gain competitive advantage over their competitors through well managed and integrated
planning and control (Dess, Lumpkin & Eisner, 2010).

Strategic Objectives Strategic Control

Financial F1: To increase profit rate by  Return on Capital
50% and improve market Employed (ROCE)
position by 2017 Gross profit to sales
F2: To lower operational  Net margin
expenses by 2017  Cash flow
 Volume growth rate
vs F&B Industry
Customer C1: To continually delight  Mystery shopper
the customers with new rating
innovative product which  Customer survey to
are value for money understand the
C2: To improve Customer demand of the
Relationship Management market
and obtaining feedbacks for  Loyalty program
continuous improvement
Internal I1: To be the market leader  To monitor
in the F&B industry by 2022 competitors and
I2: To market their products adjust business level
through social media and strategies to gain
other various means to competitive
reach out to target advantage
consumers  Sales revenue
I3: To lower production cost  Profitability index
and operational cost  Staff turnover rate
I4: To improve health, safety and incident report
and environmental  Staff sick leave rate
performance  Quality control and
I5: To ensure high quality random sample test
product delivered to
consumer at all time
Learning & Growth L1: Continuous training and  Employee’s
upgrading courses for staff performance
to improve on skills and appraisal
service standard  Training records
L2: Create a innovative and  Employee survey
positive working
environment

APPENDIX A.

APPENDIX B.