PROPOSED MARKETING STRATEGY TO INCREASE CAKE SALES FOR SMALL BAKERIES IN JAKARTA: CASE STUDY OF SBS CAKE

• Main Author: Oktaviani, Grace
• Format: Theses
• Language: Indonesia
• Online Access: https://digilib.itb.ac.id/gdl/view/72701
• Institution: Institut Teknologi Bandung

Indonesia’s cake industry is a red ocean, with 639 companies being registered in the baking industry. However, this omits smaller yet unregistered bakeries in Indonesia despite 68% of the baking industry being composed of SMEs. With the cake industry expected to grow above 10% per year, it is inevitable that small bakeries will face stiffer competition year after year. SBS Cake is currently facing this challenge, where cake sales are seen to be dropping starting February 2022 to an average of less than 20 cake orders per month. Hence, SBS Cake needs to find a new marketing strategy that can improve its cake sales volume and earn higher profits. There are three research objectives that needed to be answered in order to formulate a new marketing strategy. First, to understand SBS Cake’s internal and external conditions. Second, to identify SBS Cake’s competitive advantage in order to understand its weaknesses and strengthen its advantages. Third, to develop a marketing strategy plan that can increase cake sales volume. Internal and external analysis methods, which are VRIO, PESTLE, Porter’s Five Forces, 7P, STP, semi-structured interview, and ghost shopping, were used to gather information about SBS Cake, its competitors, and the industry in general and answer the research objectives. To select potential interviewees, a potential area map was created with Tangerang and Pluit as the epicenters and the circles being 17 kilometers in radius. 17 kilometers was chosen as there were several SBS Cake customers that are located as far as 17km away. The potential customers were then segmented into several segments based on three levels – the type of organization or business depending on their customer types, service types, and size of the organization or company. This segmentation process resulted in 6 customer segments, with 14 participants in total taking place in the research and three of them being interviewed using ghost shopping. The interview questions were formed based on fourteen variables. Based on the findings, the marketing strategy was designed using SWOT-TOWS Matrix, Strategy Diamond Framework, and Business Model Canvas. Two hypotheses were also formulated from the literature review. First, the seller, extrinsic cues, and intrinsic cues are critical factors when deciding which custom cake store to buy from. Second, social media is an effective channel for selling custom cakes. There were several findings obtained from the research. First, it accepted the first hypothesis to a certain extent as the seller, extrinsic cues, and intrinsic cues were important factors when purchasing cakes and also accepted the second hypothesis as social media is an effective channel for selling custom cakes. However, note that the second hypothesis only applies to custom cake sales to B2C customers. We also found that intrinsic cues, extrinsic cues, and sellers play an important role in a buyer’s decision-making process for both B2C and B2B customers. From the research results, we recommend SBS Cake target B2B Party and Event Planners using its existing cake menu to increase cake sales. However, it is also recommended not to let go of the B2C market segment because there are still new and existing customers that place cake orders from SBS Cake.