Master of Business Administration / International Business Management Name, title and organization of the thesis supervisor. Starting a new business can be challenging and new entrepreneurs may not have time to plan for the most important factor in the business, marketing.
Research Background
Introduction of the case company
The outcome of the thesis will be marketing strategy, which will provide useful information for the entrepreneur. The following pictures 1 and 2 show an example of the product range of the case company.
Thesis Objectives, Research Questions and Limitation
This thesis also focuses on a very niche area of business as the case company is a cake baking business. The case company operates in the business-to-customer world and therefore the results may not be legal for business-to-business operators.
Research Methods and Data Collection
Research Methods
In this thesis, a quantitative research method is used, as the goal is to conduct research that answers the research questions of how to do something. Since this case is about research on how to improve something in a certain company, the case study method is also implemented in this study.
Data Collection
The problem and solution space
Issues of the business
The entrepreneur of Hygla bakery is determined to design the entire business concept for Hygla bakery in collaboration with the thesis researcher to make the start of entrepreneurship easier for her. The thesis will examine the possible problem points and try to find solutions to them.
Business plan in general
Marketing plan in general
The concept of marketing
Marketing trends in 2021
Email marketing and social media marketing are becoming more personal as the "one size fits all" approach is no longer beneficial. As mentioned in the personalization chapter, email marketing is no longer generic, but more personalized for each customer.
Social media marketing overview
Market segmentation
Also, the segment must be large enough to make marketing to such a group profitable. The segment must also be fairly stable as it can complicate the marketing process if the segment is too volatile.
Customer decision-making process
The new model creates a circle with few touch points where companies can step in and influence a consumer's decision making. Since the decision-making process can be seen as a circular process, it is never-ending.
Market analysis to support the marketing strategy
PESTEL analysis
Political factors can be understood as all possible ways of government interference in the economy and the effects it has on businesses. Things like freedom of speech, political stability, trade restrictions, tax policy, and environmental laws are good examples of ways government action can affect business. Socio-cultural factors include social factors such as how a particular product is seen and how people feel about it.
Socio-cultural factors can be seen as part of segmenting the market area, as understanding how and why people feel the way they do helps the company understand the operating market. Company policies and laws of the operating area affecting the company are legal factors.
Porter’s five forces analysis
If the products in the market area are all similar and the level of product differentiation is low, rivalry in the area may increase. These factors will make competition in the market area more challenging and may lead to price wars, advertising battles and new product development processes. If competitive rivalry in the market area is high, meaning there is a lot of competition, customers are more likely to switch to competitors in response to price increases.
If the product or service can be easily substituted in the market, the market is not attractive from the company's point of view. The idea of Porter's five forces analysis is to provide important information about market profitability, risks and opportunities before entering the market.
Design of the empirical research
The content of the interview
In the interview, we found that the regular customer of the Hygla bakery is a woman aged 25 to 44 who lives in Helsinki or in the Helsinki metropolitan area. In the future, the Hygla bakery would like to create its own website and focus on search engine optimization. The theory of PESTEL analysis was previously explained in this thesis, and this chapter will develop the analysis for the needs of Hygla Bakery.
The results of the PESTEL analysis help in the development of the SWOT analysis but also provide information for bakery Hygla about the market area. The market area of bakery Hygla is in the center of Helsinki and the working industry is baking.
Political issues
PESTEL analysis analyzes the macro environmental factors, meaning the focus is on external marketing environment.
Economic issues
The current market situation is improving after the coronavirus and new businesses are currently reopening in Helsinki. The economic problems of Helsinki in the baking industry are good and the situation is improving.
Social issues
Technological issues
Environmental issues
Legal issues
As a result of the few suppliers, the prices of the supplied products have remained low and the competition in the market between the suppliers is fair. The largest wholesale market in Helsinki is the Helsinki Food Wholesale Market and has as customers most of the companies operating in the food and flower industry. There are other wholesalers in the market which also enables healthy competition among wholesalers and enables customers to choose between different wholesalers.
The best situation is to build a profitable relationship with suppliers or arrange a situation where the use of many suppliers is possible (Berry 2020).
Buyer power
Competitive rivalry
Threat of substitution
In the case of Hygla furnace, the threat of substitution is a risk as there are other companies in the industry that provide similar services. However, with good marketing and fast, exclusive service, Hygla oven can compete with rivals and avoid substitution.
Threat of new entry
The concept of the case company
SWOT analysis
The following figure 7 illustrates the gender balance of the visitor on Hygla bakery's Instagram account and the most active visiting hours. The most active hours of visiting on Hygla bakery's Instagram account are in the evening. The account of Hygla bakery was active in July and there are three posts on the account.
The following photos 3 and 4 show the most popular posts in July on Hygla bakery's Instagram account. The marketing review of Hygla bakery shows that the Instagram account activity influences the interest towards the company.
The customer segment of Hygla bakery
Production costs
In the case of the Hygla bakery, the cost of making one cake for 10 people is 10-15 euros per cake. The cake is for 10 people and has flowers, and for decoration there are also macaroons made by the entrepreneur. Since the entrepreneur makes the cakes herself and now works from home, there are no other costs apart from the costs of making and decorating the cake.
How many hours it takes to make the cake and how much planning and doing a creative job is valued. All together the cost of making a cake would be 75 euros, if the cake includes flowers.
Operating market
In the case of Hygla Bakery, making a cake for 10 people takes a total of 3 hours, including planning and decorating. However, it can be seen that Hygla oven's entry pricing strategy is to keep prices low at the penetration stage to attract customers from competitors. In this strategy, the short-term profit may be limited, but if the goal is to build customer relationships, it is beneficial in the long run.
Another aspect that speaks for the cake business is a small moment of enjoyment in the midst of a busy life. In an interview, the entrepreneur of the Hygla bakery said that at the beginning of the Covid-19 pandemic, some cake orders were canceled because people could not organize planned parties.
Competition in the market
The interview with the entrepreneur of the Hygla bakery was also included in the development of this marketing strategy. The marketing strategy is forward-looking and the suggestions in this chapter will be implemented later. The focus of the thesis was to develop a marketing strategy that helps the entrepreneur of the Hygla bakery to make enough profit to make a living from the cake business.
For that reason, the marketing strategy will differ from the current marketing campaigns of the Hygla bakery. The marketing strategy consists of five modules, which the entrepreneur should focus on in order to boost the company's marketing.
New marketing channels
As a limitation to take into account, the collection of information about customers requires familiarization with the GDPR regulation of the collection of information about individuals. With TikTok Hygla, the bakery would arouse interest in its business and products and guide the new customers to order cakes or other products. Via TikTok, the company was able to find new potential customers and boost brand awareness, which was the first step in the consumer decision-making process.
This is the first stage that it is still possible for a new company to enter the game and influence the buying decision (Court et al. 2009.). With email marketing, Hygla bakery would reach the final step of the customer decision-making process (figure 2) and enter the loyalty loop.
Activity on social media and other marketing channels
Personalization of marketing activities
Interactivity
Omnichannel marketing
Research questions and answers
Validity and reliability of the research
Suggestions on further research
Available at Using Porter's Five Forces When Creating Your Marketing Plan - Marketing Plan Help & Marketing Advice - Mplans. Available at https://www.mckinsey.com/business-functions/marketing-and-sales/our-insights/under-standing-and-shaping-consumer-behavior-in-the-next-normal. Available at 9 Tips for Marketing to a Female Demographic in the Digital Age - SocialToaster | Brand Ambassador Engagement.
Available at https://www.te-palvelut.fi/en/employers/for-entrepreneurs/services-new-entrepreneurs/startup-grant. Available at Social Media Trends 2021: Optimizing Your Digital Marketing Strategy for Social Success - ScottDClary.com.
