Biscuit is considered a high-calorie snack in our daily life. It is eaten as extra food to people, which is usually sweet. The raw material includes flour, starch, fat, and sugar. It could have different product types, different flavors, and attractive packages. Nowadays, People eat the biscuit to meet their demands for a snack. The market size has also grown to a large size worldwide. In this report, the focus is on the Australian Biscuit market. The report will go deep into the external analysis, market segment, targeting, positioning, and new product development.
External Analysis
According to the research result, the Australian biscuit manufacturing market size reached 1107.7 million in 2020.
Now, in the Australian or even international market, the competition is fierce in the biscuit market. Different companies come up with different kinds of biscuit products and innovative tastes. Besides, this industry is easy to enter. We could look into the Australian market. The leading two-player holding the largest market share in the Biscuit Company is Arnotts Biscuits Holdings Pty Limited and Kinrise Pty Ltd. Arnotts Biscuits Holdings is the Australian largest producer of biscuits and second-largest supplier of snack food. Its product includes biscuits, crackers, Tim Tam, shapes, etc. It has taken about 60% market share in the Australian biscuit industry. The biscuit price as an essential and nutritional food is relatively low, easy to find, and easy to eat, and it is high and lasting, making it preferable for snacking.
However, nowadays, a healthy lifestyle has driven consumers to move to healthier food. The traditional biscuit may seem unhealthy with high sugar and high oil. The biscuit market is compelled by the growing need for convenience snacking combined with the requirement of healthy elements among buyers. The trend for more-heathy ingredients in biscuit products has emerged. As for the driving forces, the product innovation in biscuit products has driven the market to develop. The price difference may cause a smaller influence to achieve a competitive advantage. The launch of a new product or a more attractive biscuit package may stimulate more sales of the company.
In the macro environment, there are some external forces for the company to create opportunities and risks for the company. For example, the merging of e-commerce provides enormous sales potential for biscuit companies. It provides opportunities that are more available and room for customers to pick their favorites through online shopping. The convenient payment methods and strong supply chain support have brought higher sales potential. In some certain situations that customers may not visit stores in person. They could visit the online stores. However, it will also bring several risks for the industry; it means a higher quality guarantee of the product to reduce the after-sale problems. Biscuit companies produce food, which requires being fresh and safe. Therefore, the company needs to set higher regulation rules or other mechanisms to ensure the safety of their products.
Market Segmentation
Following the wide range of customers in the entire market with diverse beliefs, attitudes, and values, it becomes challenging for the business entity to achieve the peoples’ needs based on the scarce resource owned by the industry. For the management team to facilitate the proper operations of the business, they have to deduce proper market consumers to serve. The market segmentation process entails putting together consumers with varied features into different categories to ensure the clients that bear similar characteristics are placed in one group. This procedure is significant for the business performance; it enables the industry to meet the different customers’ demand such as consumers’ interest, taste, and preference, flavor, value, and satisfy the selected group efficiently and effectively with the available resources and in return get some good revenues from the product sales.
A well-selected market structure can enable the firm to compete accordingly in the market with already developed industries for better short-term and long-run existence. The process of choosing the market sections should involve the arrangement of the business strategies in the market, such as pricing, mode of promotion, the type of product, and means of distribution. Considering all these, the Australian market for biscuits can be segmented according to population structure (demographic), geographical locations, consumers’ behavioral differences, and psychographic. The diverse socio-economic background of the people of Australia enhances the market focus of consumer segmentation to follow the psychographic. These are attention to the customers’ lifestyle, interests, attitudes, personality traits, values, and beliefs and demographics such as age, the status of income, locations, and marital status.
The biscuit market categories are to be generated from the combination of the population structure of the individual consumers and the psychographic. From the demographic and psychographic perspective, the first segment will consist of young persons of age ranging from 12 to 25 years. This group mainly contains the students and the people seeking employments, thus having little money to spend. They have active, positive, spontaneous, friendly, and value-oriented personalities. This category of individuals values fun and social awareness. They have an attitude of embracing happy moments, finding up-to-date experiences, associating with best-quality products, offering or giving many presents as a surprise to their close friends or relatives, and likes eating most of the time. From the search, the segment entrails customers that need high quality and improved products to satisfy their taste and interest towards the given commodity; furthermore, they do not have a strong source of income, thus limiting the purchasing power and consumption rate.
The other group falls between the age brackets of 26 years to about 50. These individuals are at least having a family with one or many children. They are adaptable, very reactive, and pessimistic; they also value their health-conscious surrounding and value the family. Their attitudes are being real, doing the job with high expectations of income, having a living style of family first, and trying to live a good life. It can be noted that this group is more concerned about the family wellbeing thus can quickly look for better impressive means to entice and appreciate the loved ones. Their attitude towards work signifies the possibility of having enough income to spend on the slavish lifestyle of their choice with a lot of caution towards the health status.
Targeting
From the psychographic and demographic analysis, the target group of the new product will be the individuals 26 years of age and above. This category of consumers has enough money to spend; therefore, meeting their demands is very easy. In addition, they have increased number of people in the respective households thus forcing them to buy in large quantity to satisfy everyone’s need.
Positioning
From the research reports done by the government and non-government agencies, it is clearly indicated that there is a shift in biscuit consumption in the country following the underlying health concerns related to the amounts of calories found in the different brands of biscuits. From this point of view, to capture the attention of biscuit consumers in the market, the biscuit brand names should be more of family motivation like ‘Sweet Family.’ Customers especially, the ones with families, will always want to bring home the brand with such a name. Based on the nutrition aspect, the biscuit should be identified or labeled as free calories and contain limited fats. This will create an impressive perception in the minds of the targeted group that is more concerned about the health risks associated with the consumption of biscuits that are full of fats and sugar content.
Using the perception-positioning map, the consumers can easily aid in determining the market structure based on the brands of biscuit offered. The map helps the business to establish the customers’ understanding and reactions to the different products. Thus, making the management team figure out the correct type of biscuit brand to launch in the market. It also allows the firm to know what the clients view on the competitor’s price and products. Therefore, the industry can know the position it has in the mind of consumers about the competitor. This information can enable the business to develop an effective mode of competition and come up with the desirable brand of biscuit in the market.
The brand name of the biscuit is Sweet Family; it comes in different shapes and sizes that will favor the consumers’ preference. The crackers are sugar-free and have great taste, and easily soluble. They take different colors, brown, light brown, and chocolate, with slightly rough texture on the surface. On their surface are an indication of the level of sugar content and the taste. Furthermore, the biscuits have no cholesterol, making them suitable for overall consumption.
Product Promotion
To introduce and create awareness of the Sweet Family biscuit to the potential customers in the market, the firm may use various media to pass the information effectively. In the current world of online marketing, e-commerce is dominating lately with a good number of people accessing the details of the products on the internet; the business should take advantage of advertising the launching of the new product through Facebook pages, YouTube channels, and other influential online platforms that can display the ads. During this promotion process, the marketers must stress the product ‘sugar-free’ related to the targeted consumer preference. Have the customers interest in mind, to create a good impression towards the new product will be of great value to the business development.
Television can also be an appropriate way of communicating with the clients as most of the target group spend some time watching trends in the market; this will give them a clue about the incoming biscuit brand. Setting up burners along the busy roads, market places, in towns with explicit descriptions and images of the products can alert the clients of the commodity. Furthermore, the industry may use roadshows as they offer samples freely to the people to entice them and give a detailed explanation about the product’s features.
Distribution Strategy
Another factor that needs to be carefully considered is how the product is going to be placed in the market. For the new product, the firm should have many outlets such as retail shops, selling agents, wholesalers who will ensure the biscuit brand is readily available in the market so that the consumers can buy them at the near sales stores. The business can also venture into online sales where the customers can order for the biscuit then the company delivers to them. The shopping pattern of the Australians is through retail outlets; thus, the firm should put more effort into supplying the crackers to many retailers as much as possible.
Pricing
When it comes to setting the price of the product, the firm will evaluate the prices used by close competitors to decide on the right value; the business will sell at a slightly lower price than the competitor as this will encourage consumers to purchase the Sweet Family biscuit brand more than the other close brands. Assuming the Arnott sells 200g of packet biscuit at $7.50, the new brand of Sweet Family weighing 200g should be sold at $7.25.
Another way of pricing is by estimating what value the consumers want to pay for the product in the market, by establishing the amount of money shoppers have been spending to buy a similar product will give a clue on the price target. The price should be slightly below the consumer’s view of the product’s value. The firm must know the difference between the brand product and the close competing biscuit to ascertain the value-based cost. Based on the cost pricing criteria, the business has to sum up the production costs incurred then add a markup to generate the market price. Given that the cost of producing a 200g of Sweet Family biscuit is $4.50, the brand might be sold to the consumers directly at $7.00 or to the retailers at $6.25.
Reference
Biscuit Manufacturing in Australia – market size. (n.d.). Ibisworld.Com. Web.