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<p>MKTG 102 Consumer Behavior Semester 2, AY 2010/2011</p> <p>Group Project Report Sunshine G6 Prepared for Professor Seshan Ramaswami</p> <p>Prepared By:</p> <p>Jeslin Goh Zhi Lin Goh Siau Ling Lim Ting Yong Lin Yuqian Mohammad Nazri Bin Sazali NASTA Aashna</p> <p>April 2011</p> <p>Contents 1. Sandwich bread Industry background ................................................................................ 3 2. Background of Sunshine Bread ......................................................................................... 3 2.1. Sunshine Breads current strategy Nobody bakes it softer! ....................................... 3 3. Market Research and Methods .......................................................................................... 4 4. Target Market and Segmentation ....................................................................................... 4 5. Reasons for Sunshines Laggard Status ............................................................................. 5 5.1 Low effort in Purchase................................................................................................. 5 5.2. Not in the Top of Mind Recall .................................................................................... 6 5.3 No distinct attractiveness about sunshine ..................................................................... 6 5.4 Inefficiency in current marketing strategy .................................................................... 7 6. Misconception of Sunshines perceived quality and taste .................................................. 7 7. Inability to distinguish different brands of bread ............................................................... 8 8. Affecting consumer decision-making process .................................................................... 9 9. Recommendation .............................................................................................................. 9 9.1 Exposure through advertisements ................................................................................ 9 9.1.1. Main Attribute Taste ......................................................................................... 9 9.1.2. Central Theme Premium Quality ..................................................................... 10 9.1.3 Tagline You will not know, till you taste it.................................................... 10 9.2. Exposure though giving back to the community ........................................................ 10 9.2.1. Corporate Social Responsibility (CSR)............................................................... 10 9.2.2. Sponsorship of events......................................................................................... 10 9.2.3. Factory visits to educate primary school students ............................................... 11 9.3. Exposure Through Points of Purchase (POP) ............................................................ 11 9.3.1. Shelf Placements &amp; Decorations ........................................................................ 11 10. Limitations .................................................................................................................... 12 11. Conclusion .................................................................................................................... 12 12. Appendices ................................................................................................................... 13 Appendix A : Survey questionaire ................................................................................... 13 Appendix B: Summary of Survey Results ........................................................................ 20 Appendix C: Sunshine advertisement .............................................................................. 23 Appendix D: Taste Test Questionnaire ............................................................................ 24 Appendix E: Blind taste test results ................................................................................. 26 Appendix F: In-depth interview Questions....................................................................... 271</p> <p>Appendix G: Summary of in-depth interview responses .................................................. 28 Appendix H: Secondary Research Industry Background ............................................... 29</p> <p>2</p> <p>1. Sandwich bread Industry background The everyday sandwich bread makes up 41.62% to 43.86% of the value of all baked goods in Singapore over the past 6 years. Gardenia Foods, which owns the Gardenia and Bonjour makes up for about 2/3 of total sales while Auric Pacific Food Ind, which owns Sunshine and Top One garners most of the remaining 1/3 of market share. In our analysis, we seek to understand why Sunshine trails behind Gardenia in popularity despite being the older brand in this market which is effectively an oligopoly with 2 major players. 2. Background of Sunshine Bread Home-grown manufacturer of sandwich bread, Sunshine Bakeries, is the oldest bakery in Singapore. It used to be a small humble business with operations confined to a single shop house but was acquired by Singapore Cold Storage (SCS) to become Singapores first commercial bakery in 1930. Sunshine, an 80-year-old brand is a ubiquitous option when it comes to purchasing bread in Singapore and has received the Heritage Brand Award for its success as a long-standing brand. 2.1. Sunshine Breads current strategy Nobody bakes it softer! Sunshines belief in innovation and responsiveness to market needs is evidenced by its full range of healthier choice bread varieties in response to the increasing consumer preference for wholemeal variants over white breads. With Nobody bakes it softer! as its tagline, Sunshine aims to target consumers who prefer their bread made softer and focuses on texture rather than taste in its positioning. Additionally, Sunshine lacks variety of flavours as it only has 3 types of flavoured bread; this segment is largely catered for by Bonjours large variety of flavoured breads. Apart from this, Sunshine also targets consumers using nutritional value as its unique selling proposition (USP), resulting in its tagline Goodness of grains in a soft hearty loaf.</p> <p>3</p> <p>3. Market Research and Methods Firstly, we conducted in-depth interviews to give us insights into the consumers feelings, perceptions, and purchasing behaviour on sandwich breads. These interviews shaped the scope of our surveys and generated our hypotheses for the laggard status of Sunshine bread. The 4 hypotheses we came up with are: 1. Sunshine is perceived as a brand with lower quality bread than Gardenia. 2. Sunshine bread does not taste as good as Gardenia bread. 3. Buying bread is a low effort, habitual buying behaviour. 4. Sunshine has an unfavourable strong yeasty smell, which deters some consumers. We conducted a structured survey in order to collect primary quantitative data to validate our hypotheses. It was conducted using Qualtrics, via the convenience sampling method, for a sample size of 95 69 non-health conscious and 26 health conscious respondents. We also conducted a blind taste test to compare the taste, texture and smell preferences for white sandwich bread among the 4 brands (Sunshine, Gardenia, Bonjour, and Top One) on our 13 participants - 6 females and 7 males. Participants were offered product samples in identical presentations and were asked to taste and evaluate the samples according to 5 attributes, which spanned across taste, texture and smell. It helped us to determine if Sunshine bread was under-performing as a product, and we obtained valuable insights on the aspects in which our laggard brand could improve on. 4. Target Market and Segmentation As bread is seen as a staple food product and commodity, the target market is made up of consumers who are generally indiscriminate of demographics. Although there are distinctions between the purchaser and the end consumer, our in-depth interviews showed that the end consumers have the power to influence the buying decisions of the purchaser. Together with this, the increasingly distinct positioning of Sunshine portraying nutritional value as its USP</p> <p>4</p> <p>in recent advertisements prompted us to segment the market psychographically. In our research, we then segmented the market into those who are health conscious and those who are not. In our surveys, this classification was determined by whether the respondent indicated a preference for wholemeal bread or other types of bread. Secondary research data showed that wholemeal bread had an increasing market share of sandwich bread sales in Singapore and reached 28%1 of total sandwich bread sales in 2010: indicating that consumers are slowly switching to healthier alternatives. Although price segmentation was considered, the retail prices of bread differed by less than a dollar and were deemed by some interviewees as nearly negligible. The effect of lower prices to provide greater value was also manifested in the frequent price promotions by various brands instead of being constantly dominated by a single brand. Thus, we found price segmentation unsuitable for our product. 5. Reasons for Sunshines Laggard Status 5.1 Low effort in Purchase Bread is a commodity with low effort in its purchasing behaviour, which is often unconscious. Bread buying behaviour invokes the use of heuristics based on choice tactics such as price and brand loyalty. These schemas are often conditioned using experiential attributes such as taste, rather than its search and credence attributes such as nutritional value. As such, most of the manufacturers compete on price promotions to entice bargain-seekers and new product launches to target taste preferences. The key to unlock consumer preferences for bread is through the interference with existing schemas, which can be done either by targeting the purchaser or consumer. Our in-depth interviews found that most consumers had chosen their bread based on brand and price promotions. Coherent with that,</p> <p>1</p> <p>Refer to Appendix H</p> <p>5</p> <p>our surveys found that 71.6%2 of consumers bought their usual brand of bread or the cheapest brand of bread available. However, it is notable that our surveys found that most consumers (88.4%)3 would be swayed by price promotions and freebies. Consumer research also found that there was psychological value in price promotions and the bundling of products for greater perceived value by the consumer. Thus, there is evidence that it is difficult to establish strong brand loyalty and there may be low value in brand loyalty in the case of bread purchasing behaviour. 5.2. Not in the Top of Mind Recall Given the low effort in purchasing behaviour, the aim should be to attain a higher level of top of mind recall. With only 2 main players in the market, improving the recall of Sunshine to affect the evoke set would encourage buying behaviour more than improving recall in the consideration set. Among the 95 respondents, Sunshine had a low top of mind recall of 11.60% as compared to the market leader, Gardenia, of 42.10%4. This reduces the possibility that Sunshine will be chosen when making purchase decisions outside of the store despite being in the consumers evoke set as measured by the uncued recall. This recall gap closes up from 30.5% as we move from top of mind to 17.9% uncued and -5.3% cued brand recall. It is likely that top of mind recall has severe impact on Sunshin sales as compared to Gardenia because it encourages choices made through availability heuristics. 82.10% of consumers have purchased Gardenia bread in the past three months, while 67.40% purchased Sunshine5. 5.3 No distinct attractiveness about sunshine When respondents were asked about their belief of each of the stated attributes, Sunshine was consistently ranked 2nd and 3rd for most attributes and is not the most strongly rated in any attribute. While the compensatory Fishbein model has indicated the 2nd placing of Sunshine</p> <p>Refer to Appendix B Refer to Appendix B 4 Refer to Appendix B 5 Refer to Appendix B2 3</p> <p>Survey results question 9 Survey results question 10 Survey results question 4 Survey results question 6</p> <p>6</p> <p>for the non health-conscious and 3rd placing for the health conscious, decision could be based on a lexicographical order as well6. Going by this order, most consumers would buy what they perceive to be the tastiest, followed by bread with the best texture and then nutritional value. Health conscious consumers on the other hand, would buy only the bread with the highest nutritional value, followed by taste then texture if the breads did not noticably differ in the first attribute. For most, Gardenia dominates all 3 attributes, Bonjour dominates flavor and fragrance, and Top One dominates price and size, leaving Sunshine with no USP lower sales to these customers. 5.4 Inefficiency in current marketing strategy Sunshines current marketing strategy strongly emphasizes nutritional value of their bread and can be seen as an attempt to craft out a USP based on nutritional value. However, according to our Fishbein analysis, Sunshine has a score of 6.59 and lags behind Gardenias score of 7.10 in this attribute.7 As nutritional value is a search and credence attribute, crafting out a USP based on it could be much more difficult than establishing taste as a USP. As Sunshine is a laggard brand in the industry, it may be very difficult to garner this trust from consumers due to Sunshines relative lack of credibility compared to Gardenia; promotional efforts may instead benefit Gardenia. Through trial samples and noticeable differences in taste scores, it would be more possible for Sunshine to carve out a market advantage. 6. Misconception of Sunshines perceived quality and taste In the blind taste test, respondents were unaware of the brands. Respondents then rated each brands attribute with 5 being the most desired level and 1 being the least desired level of the given attribute. Results in figure 1 showed that respondents</p> <p>6 7</p> <p>Refer to Appendix B Survey results question 7 Refer to Appendix B Survey results question 7</p> <p>7</p> <p>rated Sunshine as having significantly better taste, smell and texture than the other brands, including market leader Gardenia8. As such, the hypothesis on Sunshine bread being lower quality, poorer tasting and having an undesirable yeasty smell are all unfounded based on our taste test results. 7. Inability to distinguish different brands of bread As seen in Figure 2, results from our blind taste test showed that 61.54% of our respondents ranked Sunshine as their preferred first choice while only 23.08% of respondents ranked Gardenia as their first choice. These results are contrary to popular belief that Sunshine is a lower quality brand as compared to the market leader, Gardenia. Respondents mistook Sunshine for the market leader, Gardenia when asked to iden...</p>