Description
A marketing plan may be part of an overall business plan. Solid marketing strategy is the foundation of a well-written marketing plan. While a marketing plan contains a list of actions, a marketing plan without a sound strategic foundation is of little use
Marketing Plan New Products Division: Appendix C
*Superior Commitment to Excellence*
Manufacturers of Food Service & Bakery Equipment.
Magna Industries has been a world class provider of Superior quality bakery equipment, bakery racks, dunnage racks, sheet pans, knock down racks, bread pans and carts and more for the Baking and Food Service Industries for over 25 years. They are able to offer competitive prices by being cost conscious, minimizing waste and vigorously pursuing continuous improvements, resulting in lower prices and greater values.
Magna Industries Mission Statement
Our mission is to provide our customers with products that are designed to be practical in use and durable in service, continuing to build on our long tradition of manufacturing superior quality products. We also offer custom design, for special applications.
For over 25 years, Magna Industries has been known for their high quality bakery equipment and service. They are leaders in the manufacture of bakery equipment. Whether customers are new to the bakery business or have been in business for years, they will find the bakery equipment and supplies that they need at Magna Industries. Magna Industries state of the art capabilities allows them to manufacture and supply institutional equipment, wholesale bakery equipment, restaurant equipment and general baking equipment to many bakeries, restaurants and institutions. They are leading bakery rack manufacturers as well as the primary bakery equipment supplier to many customers. Because of their commitment to quality and service, they are able to offer their customers the very best, at economical prices. As leading bakery equipment manufacturers, Magna Industries has built a solid reputation on superior quality products and service. They are bakery rack manufacturers, as well as manufacturers of a full line of stainless steel and aluminum racks and carts for use in retail and wholesale bakeries and food service. They manufacture oven racks for most domestic and foreign rack ovens, storage racks for proofing, cooling, freezing, and transportation or custom design for special application. They also distribute ovens, mixers, make-up equipment, and other bakery related products. Their full line of products includes bagel racks, bagel baskets, bagel scoops, bagel oven peels, bagel
baking boards, bakery carts, bakery equipment, bakery supplies, restaurant equipment, new bakery equipment, institutional equipment and more. Magna Industries also offers a wide selection of wholesale bakery equipment, restaurant equipment, new bakery equipment, and institutional equipment to bakeries, restaurants, and institutional food services. Their wide selection of bakery equipment includes bakery carts, bagel supplies, bagel racks, bagel baskets, bagel scoops, bagel oven peels, bagel baking boards, pretzel supplies, bakery supplies and more. Safety is their primary concern. They manufacture bakery equipment with safety in mind. Their bakery carts and racks are moved and controlled easily and safely. Sanitation is another concern. Magna strives to manufacture racks and equipment that are easily cleaned and efficient. Their goal as bakery rack manufacturers is to manufacture and bring their customers high quality bakery equipment they can trust. Magna Industries currently markets and focuses sales efforts on wholesale bakery locations, restaurant storefronts, retail bakeries, and institutional food service providers. Magna Industries strives to supply nearly every piece of bakery equipment needed in any of their customer’s current operations. Magna Industries has created a core competency with their reputation as leaders in the industry, which is based on their ongoing commitment to the highest industry standards. By being cost conscious, minimizing waste, vigorously pursuing continuous improvements and being flexible, Magna Industries is able to offer lower prices and greater values to their customers. Magna Industries is a privately owned business and as such is a highly centralized organization. The current marketing unit is organized according to types of customers, this has worked well in the past because they have several groups of customers whose needs and problems differ significantly. Magna Industries has a standard of proactive marketing, they do not react to market conditions, rather they are always looking for ways to improve their processes and product lines. They are a company with a long tradition of introducing new products to fill their customers every need. The introduction of a new product to their existing line creates anticipation throughout the organization. The company has a culture, which embraces change and is always looking for opportunities to grow.
Magna Industries has proven to their customers that when they introduce a new product, the products have been tested for quality, that the product is going to enhance their operations and that the company will stand behind every product they make. For this core competency, Magna Industries is in a position like no other; they are presented with a market opportunity such as they have never faced before. With
the introduction of the Semi-Automatic Turntable, Magna Industries is going to revolutionize the world of cake decorating, offering their customers a unique opportunity to drastically reduce labor costs and improve their bottom line.
Semi-Automatic Turntable
Magna Industries presents a new product, which will revolutionize the world of cake decorating. The semi-automatic turntable is an all-inclusive cake decorating station; it is operated by a foot pump and wheel and pulley system, to give the decorator maximum control in forward or reverse. It is made of stainless steel, a very professional equipment addition for any bakery. There is a small tabletop underneath the decorating table which provides specific locations for cake decorating bags, tips, spatulas, and an inset for a stainless steel bowl to keep hot water (removable for washing). The base of the table and the pole is hydraulic so that the professional can raise the height of the table for standing options, or lower it to their appropriate height for sitting whether in a chair or bar stool. The semi-automatic turntable would also have other applications as it can be marketed to hobbyists as a way to control the turns when they are painting a model car, gluing together a tabletop playhouse, or any project where the consumer has to stop, turn the project to another angle, and resume their work. In the process of cake decorating, it is very difficult to get a continuous flow of icing, perfectly in line, when every few inches the decorator has to stop, move the placement of their hands to turn the table a little, and then try to pick up where they left off. A semi-automatic turntable could save thousands of person-hours for any retail bakery, and can reduce the turnaround time for finished products. This new product will synchronize and complement Magna Industries full line of bakery equipment and will provide an excellent opportunity to expand the current customer market to include consumers. With the introduction of the semi-automatic turntable, Magna Industries is poised to become a household name, spanning the globe. Semi-Automatic Turntable Specification Sheet on Following Page
Product Specifications
Height: Weight: Diameter: Lowered – 36” Extended 48” 22 lbs Base 20” Extender 6” Gear Assembly 10” Accessory Table 12” Turntable 14” Stainless Steel Rubberized mat covering turntable for non-slippage Case 50L x 22W x 22D
Composition: Shipping:
36” tall with adjustable height up to 48 “ tall, ratchets every two inches, setting based on sitting or standing comfort of decorator. 16” round table top with ball bearing rotation for smooth turning. Air pump operated by foot pedal for constant control, rotation based on skill of decorator. Stand alone unit. Attachment, 2nd setting for square cake operations, left to right tracking with 90degree angle for corners. Stainless steel, perfect accent for professional cake decorators. Low maintenance, requires lubrication every 100 uses, manual operation. Adjustable tilt table to 30 degrees. No more starting and stopping to rotate table, perfect continuous flow based on skill and speed of decorator. Attachments for decorating bags, tips and spatulas with a dipper for cleaning.
SWOT Analysis
Strengths 1. The strengths associated with the semi-automatic turntable are quite extensive and numerous. The machine allows any user the flexibility to rotate their project, hands free, ensuring that their final product is finished to their liking. Current research has shown that a product of this nature in nonexistent. The closest any product comes to the semi-automatic turntable is manually operated with one’s decorating hand, thus making stopping and starting points in decorating lines. Durability is another strength associated with this product. The semi-automatic turntable is made of durable stainless steel, with a whisper quiet wheel/pulley/belt system, which has been developed through years of research. This system is similar to a hydrostatic rotary vane pump, in which the operation is smooth and all internal components are 100% sealed. This eliminates the need for costly repairs and all components are shielded from any product coming in contact to the internal parts. All of this ensures a maintenance free future in utilizing this product. Magna Industries has created a distinctive competency by being cost conscious, minimizing waste, vigorously pursuing continuous improvements; they can offer lower prices and greater values to their customers. Safety and sanitation are of the highest priority. Magna Industries advertising department has been an example for others to follow. They offer many internships, for the aspiring advertising student to delve into. The increased motivation of marketing a new innovative product like the CHC Table, will lead to an innovative and exhilarating marketing campaign for this product. This is also evidenced by their superb website for questions and answers and also for displaying their products. Magna Industries product differentiation strategy is the result of a strong marketing orientation, commitment to high quality, and customization of products and support services. They place emphasis on meeting the individual customer’s needs. There is little turnover among employees, who are well compensated and liked by customers. The relatively small staff size of 26 employees promotes camaraderie with coworkers and clients, and fosters communication and quick response to clients’ needs. Magna Industries places heavy emphasis on service/customer representative familiarity. Magna Industries has developed long-term, mutually beneficial, relationships with sole supplier. The development of this relationship has resulted in shared
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knowledge of the Semi-Automatic Turntable’s requirements, adherence to quality standards, and a common vision throughout the development and production process. 8. There is little conflict within the organization, structures and controls are in place to create a constant flow of information, and the flatter organization creates an environment of cooperation between the departments. Magna Industries has a strong customer focus, which is evidenced by their high percentage of reorder business. Their current on-line marketing program has generated some 25 percent of new business each year. The full line of bakery equipment is currently addressing all specialized bakeries needs for racks.
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Weaknesses 1. A major concern for the semi-automatic turntable is getting the customer to part ways with their current craft table and commit to this new table idea. This could potentially delay the anticipated “buyer’s rush” because people may already have a decorating table. The Semi-Automatic Turntable is a customizable product, which can be utilized in many capacities. Magna Industries currently focuses product sales on retail bakeries. Private ownership, and the central power base, may impede creativity and growth. Too few people hold too much power and decisions are made from this power base. Magna Industries relationship with a single supplier may make the company vulnerable in the event of natural uncontrollable environmental forces affecting the Supplier. The current production facility is not capable of supplying large volume production, the Semi-Automatic Turntable demand is expected to exceed supply capabilities. Magna Industries is currently focused on one specific market segment, the SemiAutomatic Turntable should be targeted to a more diverse market segment. The company will have to step outside of normal channels to market this new product. While the small size of the staff fosters camaraderie, it also impedes growth and new-business development. Magna Industries current facilities are crowded; there is little room for additional employees or new equipment.
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Magna Industries has limited exposure to global marketing and currently has no plans in place to develop a global marketing strategy.
Opportunities 1. The Bakery Industry in the United States currently consists of over 29 thousand individual retail bakery locations as well as thousands of franchise bakeries to include Superstore and Grocery markets. The market for the new product is open and available; there are currently no barriers to entry for the Semi-Automatic Turntable. Sales in the current cake decorating market are increasing. More and more people are outsourcing their projects to decorating professionals as to save time and to have a better-finished product. There is no evidence of this declining in the future due to hectic work schedules and quality demanded by consumers. The Semi-Automatic Turntable is in the embryonic stage, it is a new product. The only competition for the product is a fully electronic turntable or a manually operated turntable. Bakeries exist around the globe; the Semi-Automatic Turntable is not confined to any specific geographic area. The globalization of business creates an opportunity to establish new client relationships in foreign markets. The concept of the Semi-Automatic Turntable is universal, marketing will be a matter of showing the product, and its uses will be visual in nature and sold with a simple demonstration. The universal appeal of the product will open up the existing market allowing Magna Industries to introduce their products into their competitor’s customer relationship.
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Threats 1. 2. There is currently a similar model that is on the market for $150, which is fully electric. The semi-automatic turntable is expected to sell for around $200. The Semi-Automatic Turntable is a generic product and will be easily reengineered as a new product. The possible entry to new competitors is a significant threat. A primary threat is a competing company producing a similar product. The current product is American made and all products used in the production line are American made. Outsourcing to overseas countries would provide for a more cost efficient product, but may decline the sales of the semi-automatic turntable
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Single sourcing can be detrimental or even fatal to a company if the buyersupplier relationship is damaged or if the supplying company has financial difficulty. Competition from Bakery Equipment Suppliers is very strong. Breaking into an existing supplier relationship will be difficult to overcome. Moving too slow will create a window of opportunity for competition and substitute products to be introduced. Once word gets out about the new product, the race will be on to create the newest most updated version of the SemiAutomatic Turntable. The current lack of facilities for production will increase the time to market. The barriers to entry by new competition are moderated based on the expense involved in entering the food service manufacturing industry. This creates an opportunity for new businesses to enter the market and compete for the sales of this new product.
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*SUPERIOR COMMITMENT TO EXCELLENCE*
Magna Industries, is committed to taking all of our experience, traditional values in manufacturing bakery equipment, bakery racks, dunnage racks, sheet pans, knock down racks, bread pans and carts and combining them with new technologies to build better products with the same traditional philosophy and give our customers the most value for their money and the best service, whenever they are looking for bakery equipment, bakery racks, dunnage racks, sheet pans, knock down racks, bread pans and carts. You can count on Magna Industries to supply all of your bakery equipment needs.
Matching Strengths to Opportunities/
Converting Weaknesses and Threats 1. Magna Industries should immediately address the production facility issues, look at a specific production site as an alternative to changing the current facility. This will improve time to market and address issues surrounding space, equipment, and employees. The Semi-Automatic Turntable needs to be patented, this will hinder some of the competition, and give a much needed cushion for marketing strategies to be implemented. Magna Industries should immediately begin surveying customers as to length of time spent decorating cakes and associated labor costs; this will be a valuable marketing tool and justification for purchase. Magna Industries should consider multiple suppliers to cover all necessary components of the Semi-Automatic Turntable. Developing relationships with other suppliers and having vendor contracts in place will minimize the negative effects of single source supplying. Since the Semi-Automatic Turntable is outside of the company’s standard product line, Magna Industries should consider setting up a cross-functional team specifically to design a raw material to customer strategic plan. Magna Industries needs to focus on research and development of this product, matching consumers’ needs, and marketing the product. 7. Magna Industries should create a comprehensive marketing plan for global applications.
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Magna Industries
“Bakery Equipment: our wide selection of bakery equipment includes aluminum oven racks, aluminum bun pan racks, bagel makers accessories, bagel racks, bakers accessories, baking pans, dividers, dunnage racks, humidifiers, lug and platter carts, mixers, ovens, proofers - underbuild, rack options and accessories, sheet pan trucks, stainless bun pan racks, stainless oven racks; everything you need! Magna Industries can supply all of the bakery equipment, bakery racks, dunnage racks, sheet pans, knock down racks, bread pans, carts, storage racks for proofing, cooling, freezing and transportation and custom bakery equipment that you need. If you are just starting out, we can help. If you are replacing equipment, we can help with that, too!”
SWOT Trends
The strengths, weaknesses, opportunities, and threats, which Magna Industries is currently assessing, will need to be continuously evaluated and scanned. The is especially important when expanding the product sales into the global market. There are many environmental forces that can and will affect the sales of the Semi-Automatic Turntable. Constant examination of the competitive forces, economic conditions, political forces, legal and regulatory forces, technological forces, as well as sociocultural forces will keep Magna Industries in a position to minimize their threats and exploit their opportunities. Competitive Forces: The current trend in competitive forces is brand competition. The bakery equipment manufacturing industry is based currently on competition marketing products with similar features and benefits to the same customers at similar prices. The current brand competitors which Magna Industries must compete with are: ABI Ltd - Designs and manufactures bagel equipment and customized bakery production lines. Also distributes and sells standard bakery equipment. American Baking System - Manufacturers and suppliers of bakery equipment to the US market. Baker Enterprises - Manufacturer of bakery equipment and supplies. Benier U.S.A., Inc. - Manufacturer and supplier of baking equipment and dough processing systems. Products include ovens, (rack, deck and tunnel systems,) spiral cooling/freezing systems, conveyors; proofing rooms, pans, pan storage and retrieval systems. Pro Bake Inc - Provides the following equipment: bagel equipment, oven racks, oven decks, revolving & convection ovens, pasta equipment, espresso machines, mixers, retarders, proofers, dough dividers, rounders, moulders & sheeters, multidrop cookie machines,... To move into the Canadian Market Magna Industries will have to compete with a Canadian brand competitor: DBE Food Equipment, Inc. - Canadian manufacturer of bakery and foodservice equipment including bakery ovens, spiral and horizontal mixers, bagel production equipment, overhead bread and roll proofers, bread and roll moulders, glazing machines, sheeters, mixing bowl elevat... The competitors currently listed do not carry any brand of turntables; rather the turntables currently on the market are being sold through small businesses trying to break into the market. These turntables are also being sold through directly to consumers. Careful attention must be paid to these competitors as they are direct competition and
they also have a strong focus placed on research and development. In researching each of these organizations, we have found that all of the companies currently market their products to specific segments of the industry. The competitive structure of the bakery equipment industry is currently a monopolistic competition. There are many potential competitors, forcing Magna Industries to concentrate and constantly analyze their marketing strategy to differentiate its product. Economic Forces The economic forces in the baking equipment industry, which Magna Industries must be aware of to capitalize on opportunities and minimize threats, are the business cycle, buying power of the consumer, and the consumers willingness to spend. Since Magna Industries is poised to become a global supplier, an adequate analysis of the major economies around the globe is necessary. The rise of technology has allowed our environment to be characterized as a global one. The global economy has given business the ability to market products and services all over the globe. It has also allowed businesses to develop partnerships and alliances throughout the world, which has become essential for success in today’s business. Prior to Globalization, the United States dominated the global economy. In recent years, however, the U.S. share of the global economy has shrunk to approximately 25%. This trend is expected to continue as the economies of many newly industrialized countries continue to grow at a faster rate. Global output (gross world product) (GWP) rose by 4.4% in 2005, led by China (9.3%), India (7.6%), and Russia (5.9%). The other 14 successor nations of the USSR and the other old Warsaw Pact nations again experienced widely divergent growth rates; the three Baltic nations continued as strong performers, in the 7% range of growth. Growth results posted by the major industrial countries varied from no gain for Italy to a strong gain by the United States (3.5%). The global economy is currently in a recovery stage and is moving toward prosperity. Buying power is directly related to income, in 2005, the median annual household income according to the US Census Bureau was determined to be $46,326, similar to that of Canada which was roughly $41,510 (USD) in the year 2000. The median income per household member (including all working and non-working members above the age of 14) in the year 2003 was $23,535. In the year 2005, there were approximately 113,146,000 households in the United States. 17.23% of all households had annual incomes exceeding $100,000, while another 12.7% fell below the federal poverty threshold while the bottom 20% earned less than $19,178. While the aggregate income distribution tends to tilt towards the top with the top 6.37%, earning roughly one third of all income, those with upper-middle incomes also controlled a large, though declining, and share of the total earned income. Households in the top quintile, 77% of which had two income earners, had incomes exceeding $91,705. Households in the mid quintile, with a mean of one income earner per household had incomes between $36,000 and
57,657. The median annual household income has been increasing for the last three years and this trend is expected to continue. The current trend in people’s willingness to spend is documented by the following table, The American Customer Satisfaction Index: ACSI Scores by Industry
Base94 line All Others Wendy's Internationa l, Inc. Little Caesar Enterprises, Inc. Limited -Service Restaurants Pizza Hut (YUM! Brands, Inc.) Domino's Pizza, Inc. KFC (YUM! Brands, Inc.) Burger King Holdings, Inc. Taco Bell (YUM! Brands, Inc.) McDonald's Corporation Starbucks Corporation Papa John's Internationa l, Inc. 73 72 95 96 97 98 99 00 01 02 03 04 Previous First Year Year 05 06 % % Change Change 78 80 75 76 2.6 1.3 9.6 5.6
N/A 74 N/A 73
75 71
73 69
74 73
74 71
72 70
73 72
74 74
75 74
NM NM
72
N/A 69
69
73
71 NM 69
70
74
75
NM
74 77
4.1
6.9
69
N/A 70
66
68
69
69
70
71
71
74 NM** 76 77
1.3
11.6
69
N/A 66
63
71
71
68
70
71
70
75
NM
71 76
7.0
10.1
67
N/A 70
68
68
70
67
69
73
75
75
NM
71 75
5.6
11.9
67
N/A 68
69
67
64
64
65
63
69
71
NM
69 70
1.4
4.5
66
N/A 65
67
68
64
66
67
65
68
68
NM
71 70
-1.4
6.1
66
N/A 66
66
67
64
64
63
66
67
68
NM
72 70
-2.8
6.1
63 NM
N/A 63
60
60
61
61
59
62
61
64
NM NM
62 63 NM 77
1.6 N/A
0.0 N/A
N/A NM NM NM NM NM NM NM NM NM
NM
N/A NM NM NM NM 76
77
78
76
76
NM
78 79
1.3
3.9
People’s willingness to spend has been steadily increasing and is a major factor, which will affect the current industry.
The current interest rates at stable and are not expected to increase in the near future. The level of inflation has been declining across the nation and the world. Employment is at an all time high, and the long-term prospects for the economy Gross Domestic Product (GDP) per capita is in a growth stage. Personal income increased $60.6 billion, or 0.5 percent, and disposable personal income (DPI) increased $50.8 billion, or 0.5 percent, in December, according to the Bureau of Economic Analysis. Personal consumption expenditures (PCE) increased $67.1 billion, or 0.7 percent. In November, personal income increased $32.4 billion, or 0.3 percent, DPI increased $25.4 billion, or 0.3 percent, and PCE increased $51.1 billion, or 0.5 percent, based on revised estimates. This growth has been documented and has been steadily increasing throughout 2006; this trend is expected to continue. Political Forces In this industry, political forces around the globe will have an impact on the market. In the United States, the current trend is to view the political forces as beyond control and to adjust to conditions, which arise. However, in the developing nations around the globe, a careful analysis must be done for each marketplace, which Magna Industries wishes to transact business in. The political environment is very stable and has been for many years. There is no expectation that government policy will influence laws that regulate the baking equipment industry. The government is very concerned with the industries marketing ethics. The government is involved in numerous trade agreements with NAFTA, ASEAN, EU, and the proposed trade agreement with South America. The industry needs to carefully watch the South American free trade agreement as this will open up new markets while reducing costs associated with exporting of equipment. Legal and Regulatory Forces The baking equipment industry is carefully regulated by: Baking Industry Sanitation Standards Committee Sanitation standards for the design and construction of bakery equipment and machinery. Many of the competitors, which Magna Industries must compete, currently lack a comprehensive compliance program. This trend, if it continues will give Magna Industries a distinct advantage over their competition. Careful attention must be given to the regulating agencies, as the trend is to have strict compliance guidelines in place to protect the consumer. Other Federal Regulatory Agencies whose requirements must be met by this industry consist of the Federal Trade Commission, the Food and Drug Administration and the Consumer Product Safety Commission.
Technological Forces The rapid technological growth of the last several decades is expected to accelerate. It has transformed the U.S. economy into the most productive in the world and provided Americans with an ever-higher standard of living and tremendous opportunities for sustained business expansion. The technological forces, which will currently affect this industry, are improvements in metallurgy and plastics. The industry also will be affected by technological advances in baking processes, microwave technology, energy efficiency. Technology in the baking equipment industry allows for products and services to be made more cheaply and to a better standard of quality. The technological advances offer consumers and businesses more innovative products and services. Supply and distribution can be greatly affected by technological advances. Technological advances offer the industry new ways to communicate with customers through internet capabilities, which can reduce the costs of marketing. Sociocultural Forces The current sociocultural forces, which affect the baking equipment industry, are the dominant religion in the market, consumer’s attitudes to foreign products and services, how much time consumers have for baking, the roles of men and women in society, and the emphasis currently being placed on home baking. The most important and relevant trend which affects this industry and this product specifically is the trend of consumers to desire the most unique products based on their desire to create special relationships. The baking industry has been capitalizing on this trend for the last two years, retail sales of cakes has increased 23% over the last two years, with the purchase of specialty cakes increasing 45% over the last two years.
doc_912951649.doc
A marketing plan may be part of an overall business plan. Solid marketing strategy is the foundation of a well-written marketing plan. While a marketing plan contains a list of actions, a marketing plan without a sound strategic foundation is of little use
Marketing Plan New Products Division: Appendix C
*Superior Commitment to Excellence*
Manufacturers of Food Service & Bakery Equipment.
Magna Industries has been a world class provider of Superior quality bakery equipment, bakery racks, dunnage racks, sheet pans, knock down racks, bread pans and carts and more for the Baking and Food Service Industries for over 25 years. They are able to offer competitive prices by being cost conscious, minimizing waste and vigorously pursuing continuous improvements, resulting in lower prices and greater values.
Magna Industries Mission Statement
Our mission is to provide our customers with products that are designed to be practical in use and durable in service, continuing to build on our long tradition of manufacturing superior quality products. We also offer custom design, for special applications.
For over 25 years, Magna Industries has been known for their high quality bakery equipment and service. They are leaders in the manufacture of bakery equipment. Whether customers are new to the bakery business or have been in business for years, they will find the bakery equipment and supplies that they need at Magna Industries. Magna Industries state of the art capabilities allows them to manufacture and supply institutional equipment, wholesale bakery equipment, restaurant equipment and general baking equipment to many bakeries, restaurants and institutions. They are leading bakery rack manufacturers as well as the primary bakery equipment supplier to many customers. Because of their commitment to quality and service, they are able to offer their customers the very best, at economical prices. As leading bakery equipment manufacturers, Magna Industries has built a solid reputation on superior quality products and service. They are bakery rack manufacturers, as well as manufacturers of a full line of stainless steel and aluminum racks and carts for use in retail and wholesale bakeries and food service. They manufacture oven racks for most domestic and foreign rack ovens, storage racks for proofing, cooling, freezing, and transportation or custom design for special application. They also distribute ovens, mixers, make-up equipment, and other bakery related products. Their full line of products includes bagel racks, bagel baskets, bagel scoops, bagel oven peels, bagel
baking boards, bakery carts, bakery equipment, bakery supplies, restaurant equipment, new bakery equipment, institutional equipment and more. Magna Industries also offers a wide selection of wholesale bakery equipment, restaurant equipment, new bakery equipment, and institutional equipment to bakeries, restaurants, and institutional food services. Their wide selection of bakery equipment includes bakery carts, bagel supplies, bagel racks, bagel baskets, bagel scoops, bagel oven peels, bagel baking boards, pretzel supplies, bakery supplies and more. Safety is their primary concern. They manufacture bakery equipment with safety in mind. Their bakery carts and racks are moved and controlled easily and safely. Sanitation is another concern. Magna strives to manufacture racks and equipment that are easily cleaned and efficient. Their goal as bakery rack manufacturers is to manufacture and bring their customers high quality bakery equipment they can trust. Magna Industries currently markets and focuses sales efforts on wholesale bakery locations, restaurant storefronts, retail bakeries, and institutional food service providers. Magna Industries strives to supply nearly every piece of bakery equipment needed in any of their customer’s current operations. Magna Industries has created a core competency with their reputation as leaders in the industry, which is based on their ongoing commitment to the highest industry standards. By being cost conscious, minimizing waste, vigorously pursuing continuous improvements and being flexible, Magna Industries is able to offer lower prices and greater values to their customers. Magna Industries is a privately owned business and as such is a highly centralized organization. The current marketing unit is organized according to types of customers, this has worked well in the past because they have several groups of customers whose needs and problems differ significantly. Magna Industries has a standard of proactive marketing, they do not react to market conditions, rather they are always looking for ways to improve their processes and product lines. They are a company with a long tradition of introducing new products to fill their customers every need. The introduction of a new product to their existing line creates anticipation throughout the organization. The company has a culture, which embraces change and is always looking for opportunities to grow.
Magna Industries has proven to their customers that when they introduce a new product, the products have been tested for quality, that the product is going to enhance their operations and that the company will stand behind every product they make. For this core competency, Magna Industries is in a position like no other; they are presented with a market opportunity such as they have never faced before. With
the introduction of the Semi-Automatic Turntable, Magna Industries is going to revolutionize the world of cake decorating, offering their customers a unique opportunity to drastically reduce labor costs and improve their bottom line.
Semi-Automatic Turntable
Magna Industries presents a new product, which will revolutionize the world of cake decorating. The semi-automatic turntable is an all-inclusive cake decorating station; it is operated by a foot pump and wheel and pulley system, to give the decorator maximum control in forward or reverse. It is made of stainless steel, a very professional equipment addition for any bakery. There is a small tabletop underneath the decorating table which provides specific locations for cake decorating bags, tips, spatulas, and an inset for a stainless steel bowl to keep hot water (removable for washing). The base of the table and the pole is hydraulic so that the professional can raise the height of the table for standing options, or lower it to their appropriate height for sitting whether in a chair or bar stool. The semi-automatic turntable would also have other applications as it can be marketed to hobbyists as a way to control the turns when they are painting a model car, gluing together a tabletop playhouse, or any project where the consumer has to stop, turn the project to another angle, and resume their work. In the process of cake decorating, it is very difficult to get a continuous flow of icing, perfectly in line, when every few inches the decorator has to stop, move the placement of their hands to turn the table a little, and then try to pick up where they left off. A semi-automatic turntable could save thousands of person-hours for any retail bakery, and can reduce the turnaround time for finished products. This new product will synchronize and complement Magna Industries full line of bakery equipment and will provide an excellent opportunity to expand the current customer market to include consumers. With the introduction of the semi-automatic turntable, Magna Industries is poised to become a household name, spanning the globe. Semi-Automatic Turntable Specification Sheet on Following Page
Product Specifications
Height: Weight: Diameter: Lowered – 36” Extended 48” 22 lbs Base 20” Extender 6” Gear Assembly 10” Accessory Table 12” Turntable 14” Stainless Steel Rubberized mat covering turntable for non-slippage Case 50L x 22W x 22D
Composition: Shipping:
36” tall with adjustable height up to 48 “ tall, ratchets every two inches, setting based on sitting or standing comfort of decorator. 16” round table top with ball bearing rotation for smooth turning. Air pump operated by foot pedal for constant control, rotation based on skill of decorator. Stand alone unit. Attachment, 2nd setting for square cake operations, left to right tracking with 90degree angle for corners. Stainless steel, perfect accent for professional cake decorators. Low maintenance, requires lubrication every 100 uses, manual operation. Adjustable tilt table to 30 degrees. No more starting and stopping to rotate table, perfect continuous flow based on skill and speed of decorator. Attachments for decorating bags, tips and spatulas with a dipper for cleaning.
SWOT Analysis
Strengths 1. The strengths associated with the semi-automatic turntable are quite extensive and numerous. The machine allows any user the flexibility to rotate their project, hands free, ensuring that their final product is finished to their liking. Current research has shown that a product of this nature in nonexistent. The closest any product comes to the semi-automatic turntable is manually operated with one’s decorating hand, thus making stopping and starting points in decorating lines. Durability is another strength associated with this product. The semi-automatic turntable is made of durable stainless steel, with a whisper quiet wheel/pulley/belt system, which has been developed through years of research. This system is similar to a hydrostatic rotary vane pump, in which the operation is smooth and all internal components are 100% sealed. This eliminates the need for costly repairs and all components are shielded from any product coming in contact to the internal parts. All of this ensures a maintenance free future in utilizing this product. Magna Industries has created a distinctive competency by being cost conscious, minimizing waste, vigorously pursuing continuous improvements; they can offer lower prices and greater values to their customers. Safety and sanitation are of the highest priority. Magna Industries advertising department has been an example for others to follow. They offer many internships, for the aspiring advertising student to delve into. The increased motivation of marketing a new innovative product like the CHC Table, will lead to an innovative and exhilarating marketing campaign for this product. This is also evidenced by their superb website for questions and answers and also for displaying their products. Magna Industries product differentiation strategy is the result of a strong marketing orientation, commitment to high quality, and customization of products and support services. They place emphasis on meeting the individual customer’s needs. There is little turnover among employees, who are well compensated and liked by customers. The relatively small staff size of 26 employees promotes camaraderie with coworkers and clients, and fosters communication and quick response to clients’ needs. Magna Industries places heavy emphasis on service/customer representative familiarity. Magna Industries has developed long-term, mutually beneficial, relationships with sole supplier. The development of this relationship has resulted in shared
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knowledge of the Semi-Automatic Turntable’s requirements, adherence to quality standards, and a common vision throughout the development and production process. 8. There is little conflict within the organization, structures and controls are in place to create a constant flow of information, and the flatter organization creates an environment of cooperation between the departments. Magna Industries has a strong customer focus, which is evidenced by their high percentage of reorder business. Their current on-line marketing program has generated some 25 percent of new business each year. The full line of bakery equipment is currently addressing all specialized bakeries needs for racks.
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Weaknesses 1. A major concern for the semi-automatic turntable is getting the customer to part ways with their current craft table and commit to this new table idea. This could potentially delay the anticipated “buyer’s rush” because people may already have a decorating table. The Semi-Automatic Turntable is a customizable product, which can be utilized in many capacities. Magna Industries currently focuses product sales on retail bakeries. Private ownership, and the central power base, may impede creativity and growth. Too few people hold too much power and decisions are made from this power base. Magna Industries relationship with a single supplier may make the company vulnerable in the event of natural uncontrollable environmental forces affecting the Supplier. The current production facility is not capable of supplying large volume production, the Semi-Automatic Turntable demand is expected to exceed supply capabilities. Magna Industries is currently focused on one specific market segment, the SemiAutomatic Turntable should be targeted to a more diverse market segment. The company will have to step outside of normal channels to market this new product. While the small size of the staff fosters camaraderie, it also impedes growth and new-business development. Magna Industries current facilities are crowded; there is little room for additional employees or new equipment.
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Magna Industries has limited exposure to global marketing and currently has no plans in place to develop a global marketing strategy.
Opportunities 1. The Bakery Industry in the United States currently consists of over 29 thousand individual retail bakery locations as well as thousands of franchise bakeries to include Superstore and Grocery markets. The market for the new product is open and available; there are currently no barriers to entry for the Semi-Automatic Turntable. Sales in the current cake decorating market are increasing. More and more people are outsourcing their projects to decorating professionals as to save time and to have a better-finished product. There is no evidence of this declining in the future due to hectic work schedules and quality demanded by consumers. The Semi-Automatic Turntable is in the embryonic stage, it is a new product. The only competition for the product is a fully electronic turntable or a manually operated turntable. Bakeries exist around the globe; the Semi-Automatic Turntable is not confined to any specific geographic area. The globalization of business creates an opportunity to establish new client relationships in foreign markets. The concept of the Semi-Automatic Turntable is universal, marketing will be a matter of showing the product, and its uses will be visual in nature and sold with a simple demonstration. The universal appeal of the product will open up the existing market allowing Magna Industries to introduce their products into their competitor’s customer relationship.
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Threats 1. 2. There is currently a similar model that is on the market for $150, which is fully electric. The semi-automatic turntable is expected to sell for around $200. The Semi-Automatic Turntable is a generic product and will be easily reengineered as a new product. The possible entry to new competitors is a significant threat. A primary threat is a competing company producing a similar product. The current product is American made and all products used in the production line are American made. Outsourcing to overseas countries would provide for a more cost efficient product, but may decline the sales of the semi-automatic turntable
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Single sourcing can be detrimental or even fatal to a company if the buyersupplier relationship is damaged or if the supplying company has financial difficulty. Competition from Bakery Equipment Suppliers is very strong. Breaking into an existing supplier relationship will be difficult to overcome. Moving too slow will create a window of opportunity for competition and substitute products to be introduced. Once word gets out about the new product, the race will be on to create the newest most updated version of the SemiAutomatic Turntable. The current lack of facilities for production will increase the time to market. The barriers to entry by new competition are moderated based on the expense involved in entering the food service manufacturing industry. This creates an opportunity for new businesses to enter the market and compete for the sales of this new product.
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*SUPERIOR COMMITMENT TO EXCELLENCE*
Magna Industries, is committed to taking all of our experience, traditional values in manufacturing bakery equipment, bakery racks, dunnage racks, sheet pans, knock down racks, bread pans and carts and combining them with new technologies to build better products with the same traditional philosophy and give our customers the most value for their money and the best service, whenever they are looking for bakery equipment, bakery racks, dunnage racks, sheet pans, knock down racks, bread pans and carts. You can count on Magna Industries to supply all of your bakery equipment needs.
Matching Strengths to Opportunities/
Converting Weaknesses and Threats 1. Magna Industries should immediately address the production facility issues, look at a specific production site as an alternative to changing the current facility. This will improve time to market and address issues surrounding space, equipment, and employees. The Semi-Automatic Turntable needs to be patented, this will hinder some of the competition, and give a much needed cushion for marketing strategies to be implemented. Magna Industries should immediately begin surveying customers as to length of time spent decorating cakes and associated labor costs; this will be a valuable marketing tool and justification for purchase. Magna Industries should consider multiple suppliers to cover all necessary components of the Semi-Automatic Turntable. Developing relationships with other suppliers and having vendor contracts in place will minimize the negative effects of single source supplying. Since the Semi-Automatic Turntable is outside of the company’s standard product line, Magna Industries should consider setting up a cross-functional team specifically to design a raw material to customer strategic plan. Magna Industries needs to focus on research and development of this product, matching consumers’ needs, and marketing the product. 7. Magna Industries should create a comprehensive marketing plan for global applications.
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Magna Industries
“Bakery Equipment: our wide selection of bakery equipment includes aluminum oven racks, aluminum bun pan racks, bagel makers accessories, bagel racks, bakers accessories, baking pans, dividers, dunnage racks, humidifiers, lug and platter carts, mixers, ovens, proofers - underbuild, rack options and accessories, sheet pan trucks, stainless bun pan racks, stainless oven racks; everything you need! Magna Industries can supply all of the bakery equipment, bakery racks, dunnage racks, sheet pans, knock down racks, bread pans, carts, storage racks for proofing, cooling, freezing and transportation and custom bakery equipment that you need. If you are just starting out, we can help. If you are replacing equipment, we can help with that, too!”
SWOT Trends
The strengths, weaknesses, opportunities, and threats, which Magna Industries is currently assessing, will need to be continuously evaluated and scanned. The is especially important when expanding the product sales into the global market. There are many environmental forces that can and will affect the sales of the Semi-Automatic Turntable. Constant examination of the competitive forces, economic conditions, political forces, legal and regulatory forces, technological forces, as well as sociocultural forces will keep Magna Industries in a position to minimize their threats and exploit their opportunities. Competitive Forces: The current trend in competitive forces is brand competition. The bakery equipment manufacturing industry is based currently on competition marketing products with similar features and benefits to the same customers at similar prices. The current brand competitors which Magna Industries must compete with are: ABI Ltd - Designs and manufactures bagel equipment and customized bakery production lines. Also distributes and sells standard bakery equipment. American Baking System - Manufacturers and suppliers of bakery equipment to the US market. Baker Enterprises - Manufacturer of bakery equipment and supplies. Benier U.S.A., Inc. - Manufacturer and supplier of baking equipment and dough processing systems. Products include ovens, (rack, deck and tunnel systems,) spiral cooling/freezing systems, conveyors; proofing rooms, pans, pan storage and retrieval systems. Pro Bake Inc - Provides the following equipment: bagel equipment, oven racks, oven decks, revolving & convection ovens, pasta equipment, espresso machines, mixers, retarders, proofers, dough dividers, rounders, moulders & sheeters, multidrop cookie machines,... To move into the Canadian Market Magna Industries will have to compete with a Canadian brand competitor: DBE Food Equipment, Inc. - Canadian manufacturer of bakery and foodservice equipment including bakery ovens, spiral and horizontal mixers, bagel production equipment, overhead bread and roll proofers, bread and roll moulders, glazing machines, sheeters, mixing bowl elevat... The competitors currently listed do not carry any brand of turntables; rather the turntables currently on the market are being sold through small businesses trying to break into the market. These turntables are also being sold through directly to consumers. Careful attention must be paid to these competitors as they are direct competition and
they also have a strong focus placed on research and development. In researching each of these organizations, we have found that all of the companies currently market their products to specific segments of the industry. The competitive structure of the bakery equipment industry is currently a monopolistic competition. There are many potential competitors, forcing Magna Industries to concentrate and constantly analyze their marketing strategy to differentiate its product. Economic Forces The economic forces in the baking equipment industry, which Magna Industries must be aware of to capitalize on opportunities and minimize threats, are the business cycle, buying power of the consumer, and the consumers willingness to spend. Since Magna Industries is poised to become a global supplier, an adequate analysis of the major economies around the globe is necessary. The rise of technology has allowed our environment to be characterized as a global one. The global economy has given business the ability to market products and services all over the globe. It has also allowed businesses to develop partnerships and alliances throughout the world, which has become essential for success in today’s business. Prior to Globalization, the United States dominated the global economy. In recent years, however, the U.S. share of the global economy has shrunk to approximately 25%. This trend is expected to continue as the economies of many newly industrialized countries continue to grow at a faster rate. Global output (gross world product) (GWP) rose by 4.4% in 2005, led by China (9.3%), India (7.6%), and Russia (5.9%). The other 14 successor nations of the USSR and the other old Warsaw Pact nations again experienced widely divergent growth rates; the three Baltic nations continued as strong performers, in the 7% range of growth. Growth results posted by the major industrial countries varied from no gain for Italy to a strong gain by the United States (3.5%). The global economy is currently in a recovery stage and is moving toward prosperity. Buying power is directly related to income, in 2005, the median annual household income according to the US Census Bureau was determined to be $46,326, similar to that of Canada which was roughly $41,510 (USD) in the year 2000. The median income per household member (including all working and non-working members above the age of 14) in the year 2003 was $23,535. In the year 2005, there were approximately 113,146,000 households in the United States. 17.23% of all households had annual incomes exceeding $100,000, while another 12.7% fell below the federal poverty threshold while the bottom 20% earned less than $19,178. While the aggregate income distribution tends to tilt towards the top with the top 6.37%, earning roughly one third of all income, those with upper-middle incomes also controlled a large, though declining, and share of the total earned income. Households in the top quintile, 77% of which had two income earners, had incomes exceeding $91,705. Households in the mid quintile, with a mean of one income earner per household had incomes between $36,000 and
57,657. The median annual household income has been increasing for the last three years and this trend is expected to continue. The current trend in people’s willingness to spend is documented by the following table, The American Customer Satisfaction Index: ACSI Scores by Industry
Base94 line All Others Wendy's Internationa l, Inc. Little Caesar Enterprises, Inc. Limited -Service Restaurants Pizza Hut (YUM! Brands, Inc.) Domino's Pizza, Inc. KFC (YUM! Brands, Inc.) Burger King Holdings, Inc. Taco Bell (YUM! Brands, Inc.) McDonald's Corporation Starbucks Corporation Papa John's Internationa l, Inc. 73 72 95 96 97 98 99 00 01 02 03 04 Previous First Year Year 05 06 % % Change Change 78 80 75 76 2.6 1.3 9.6 5.6
N/A 74 N/A 73
75 71
73 69
74 73
74 71
72 70
73 72
74 74
75 74
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N/A 69
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71 NM 69
70
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74 77
4.1
6.9
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N/A 70
66
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69
70
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71
74 NM** 76 77
1.3
11.6
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N/A 66
63
71
71
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70
75
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71 76
7.0
10.1
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N/A 70
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73
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71 75
5.6
11.9
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N/A 68
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69 70
1.4
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71 70
-1.4
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N/A 66
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67
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66
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68
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72 70
-2.8
6.1
63 NM
N/A 63
60
60
61
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64
NM NM
62 63 NM 77
1.6 N/A
0.0 N/A
N/A NM NM NM NM NM NM NM NM NM
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N/A NM NM NM NM 76
77
78
76
76
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1.3
3.9
People’s willingness to spend has been steadily increasing and is a major factor, which will affect the current industry.
The current interest rates at stable and are not expected to increase in the near future. The level of inflation has been declining across the nation and the world. Employment is at an all time high, and the long-term prospects for the economy Gross Domestic Product (GDP) per capita is in a growth stage. Personal income increased $60.6 billion, or 0.5 percent, and disposable personal income (DPI) increased $50.8 billion, or 0.5 percent, in December, according to the Bureau of Economic Analysis. Personal consumption expenditures (PCE) increased $67.1 billion, or 0.7 percent. In November, personal income increased $32.4 billion, or 0.3 percent, DPI increased $25.4 billion, or 0.3 percent, and PCE increased $51.1 billion, or 0.5 percent, based on revised estimates. This growth has been documented and has been steadily increasing throughout 2006; this trend is expected to continue. Political Forces In this industry, political forces around the globe will have an impact on the market. In the United States, the current trend is to view the political forces as beyond control and to adjust to conditions, which arise. However, in the developing nations around the globe, a careful analysis must be done for each marketplace, which Magna Industries wishes to transact business in. The political environment is very stable and has been for many years. There is no expectation that government policy will influence laws that regulate the baking equipment industry. The government is very concerned with the industries marketing ethics. The government is involved in numerous trade agreements with NAFTA, ASEAN, EU, and the proposed trade agreement with South America. The industry needs to carefully watch the South American free trade agreement as this will open up new markets while reducing costs associated with exporting of equipment. Legal and Regulatory Forces The baking equipment industry is carefully regulated by: Baking Industry Sanitation Standards Committee Sanitation standards for the design and construction of bakery equipment and machinery. Many of the competitors, which Magna Industries must compete, currently lack a comprehensive compliance program. This trend, if it continues will give Magna Industries a distinct advantage over their competition. Careful attention must be given to the regulating agencies, as the trend is to have strict compliance guidelines in place to protect the consumer. Other Federal Regulatory Agencies whose requirements must be met by this industry consist of the Federal Trade Commission, the Food and Drug Administration and the Consumer Product Safety Commission.
Technological Forces The rapid technological growth of the last several decades is expected to accelerate. It has transformed the U.S. economy into the most productive in the world and provided Americans with an ever-higher standard of living and tremendous opportunities for sustained business expansion. The technological forces, which will currently affect this industry, are improvements in metallurgy and plastics. The industry also will be affected by technological advances in baking processes, microwave technology, energy efficiency. Technology in the baking equipment industry allows for products and services to be made more cheaply and to a better standard of quality. The technological advances offer consumers and businesses more innovative products and services. Supply and distribution can be greatly affected by technological advances. Technological advances offer the industry new ways to communicate with customers through internet capabilities, which can reduce the costs of marketing. Sociocultural Forces The current sociocultural forces, which affect the baking equipment industry, are the dominant religion in the market, consumer’s attitudes to foreign products and services, how much time consumers have for baking, the roles of men and women in society, and the emphasis currently being placed on home baking. The most important and relevant trend which affects this industry and this product specifically is the trend of consumers to desire the most unique products based on their desire to create special relationships. The baking industry has been capitalizing on this trend for the last two years, retail sales of cakes has increased 23% over the last two years, with the purchase of specialty cakes increasing 45% over the last two years.
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