market analysis of Fiasco

market analysis of Fiasco

Introduction

Marketing analysis is an essential component of the business plan which defines the market position in a particular industry. The situational analysis helps a company reflect its current situation to assists in developing a plan. Based on the analysis, the company it’s in a position to develop future decisions. The target market helps determine how the company segments its customers in the market it serves. Based on the analysis, a company is in a position to create a promotional campaign. Marketing objectives identify reasons for the planned campaign. It also indicates the main objective of the promotional campaign, and the broad results that the company will attain. The report will conduct a market analysis of Fiasco, a Canadian company that deals in selling Gelato and Sorbetto ice-creams in the region.

Overview of the business

Fiasco was formed by Matt Wilson in 2003 to offer Gelato to a cosmopolitan Alberta city, Canada. Gelato is a kind of cream that has several ingredients such as milk, sugar, fruit, and nut puree (Fiasco, 2020). With the help of a friend James Boettcher, Simon was able to design a strategy that would provide high quality Gelato. In 2009, James acquired Fiasco following a fire that damaged the front store. James spends the first half of 2010 in rethinking about the business strategy. A garage with about 100ft commissary space was leased so as to continue with operations. Together as a team, Fiasco restarted the business and named it Little Gelato Shop in 2012. Fiasco was committed to transform the store into a wholesale business offering the finest Italian Ice Cream in Alberta. During this period, Fiasco began with only 5 employees, and was committed to create an impact to the community.

Gelato is committed to outsource the best ingredients both locally and globally. The main ingredients are blueberries which are grown in the Fraser Valley, Columbia. Pineapple ingredients are outsourced from Hawaii whereas vanilla beans are flown from the Madagascar. Fiasco also relies from the local suppliers around Alberta (Fiasco, 2020). For instance, honey, and milk are outsourced from Alberta and other parts of Canada. All these ingredients offers a mix of flavors such as Mango Pineapple, Raspberry Lime and Dark Chocolate. Apart from producing Gelato, Fiasco is able to make Sorbetto which have natural colors and flavors. Particularly, the Sorbetto is vegan friendly which enables Fiasco to gain another consumer segment. Sorbetto contains a natural sugar which sweetens this product.

Situational analysis

This analysis will use the Michael’s Porter Five Forces to determine the attractiveness of the industry that Fiasco operates. It determines the intensity of the competition, and the overall profitability level in this industry. If the competitive forces are stronger, then the industry is less profitable. An industry with many suppliers, few buyers, threat substitutes and high competition will be less profitable.

Threat of Entrants

This analysis shows how easier it is for a new firm to enter the industry that Fiasco operates. Fiasco is a little store which has less than 10 employees (Jurevicius 2013). It means that less capital is required to start this kind of business. The barriers to entry and exist is low since few regulations are required to start the business. Fiasco also does not possess trade markets or brand reputation. This means that other businesses can easily copy how Fiasco operates its business. Customer switching costs are minimal since they can easily switch to what other firms are offering. Additionally, there are many identical ice-creams in this industry which Fiasco can do little to retaliate. Due to high number of identical products in the market, Fiasco lacks a high consumer loyalty.

Bargaining power of Suppliers

As indicated earlier, Fiasco has a lot of suppliers in Canada and all over the world. The cost of switching raw materials is therefore low (Jurevicius, 2013). The existence of high number of suppliers means that their negotiation power is low. This is an advantage to Fiasco since it can switch to other suppliers in case they decide to increase the price of raw materials (Porter, 2008). The cost of raw materials is low which means that Fiasco can maximize its profits.

Bargaining power of buyers

The buyers bargain for a higher quality product at the minimum price possible. This means that buyers can easily shift from one firm to another. Lower price means that Fiasco will report lower revenues and profit margins (Jurevicius, 2013). It is therefore difficult to produce high quality products, and sell them at a lower price. Buyers are also too sensitive to increase in prices, and shift to the other firms.

Threat of substitutes

This occurs when one product has various alternatives that meet the same customer needs. The threat of substitute in the industry is high meaning that buyers will easily shift to other products (Jurevicius, 2013). Buyers do not incur a lot of charges when shifting from one firm to another. Additionally, there are many substitute products which offers similar tastes and preferences (Porter, 2008). However, customers are interested in high quality ice creams which enable them consumes the product as many times as possible.

Rivalry among existing competitors

There are many competitors in the industry which makes most firms to use lower pricing strategy (Jurevicius, 2013). This is a clear indication that the overall industry is less attractive or profitable. As these firms compete, Fiasco’s market share is reduced. Many products are not differentiated meaning that they can be easily substituted. Due to this, the industry is characterized by low customer loyalty.

Target Market

This analysis involves breaking the market into different segments. The analysis allows a business to concentrate on meeting the customer’s needs in these segments. It allows a firm to match the customer offerings with the customer’s desires. This strategy allows the business to increase its market share, sales, and the long term profitability. The main objective of target market is to enable a company develop marketing efforts to particular groups (Devault, 2017). Additionally, the firm is easily to develop decisions regarding products, pricing, distribution and promotion. Target market analysis is considered a cost effective strategy of implementing the marketing strategies.

Before developing the promotional campaign like newspapers or advertising, its crucial to identify the target market (Devault, 2017). This is the desired market which the company feels that it can attract most customers. The analysis enables the firm to have a positive return on investment. Fiasco, an ice-cream selling company categorizes its target customer in several types including demographic, geographic and psychographic segmentations.

Demographic segmentation

Fiasco products mainly targets most millennial who are less than 30 years. Particularly, the Gelato serves the young generation due to its sugary tastes. On the other hand, Sorbetto serves the older generation due to its vegan nature. Sorbetto is preferred especially for those people who do not want to gain weight (Devault, 2017). Fiasco also targets the middle class income level since they can afford the products. Fiasco targets genders, races and religions since there are no restrictions in using Fiasco’s products.

Geographic segmentation

It involves segmenting the market based on location or geographies (Devault, 2017). This segmentation depends on the size and scope of business. The analysis argues that customers in a particular region will prefer a certain product or service. Fiasco will serve the needs of customers living in Alberta City, Canada. The business will also sell the products neighboring Alberta, and later to other parts in Canada.

Marketing objectives

It is crucial when an organization wants to create its awareness about the products and services it offers to the customers. A marketing plan is essential in implementing the established goals and objectives (Kaho & Seidel, 2019). The marketing objectives will ensure that the company increases its sales, and a positive return on the investment. Notably, this means that the sales should able to cover the marketing costs by a higher margin. The marketing objectives should increase the number of customers of the target segment. Additionally, the business should serve the customers who do not live nearby Fiasco. Online platforms should be considered as one objective of selling Gelato and Sorbetto.

The marketing objectives should improve the product awareness not only to people living Alberta City but across Canada. This requires Fiasco to use a good marketing campaign. However, the strategy should be unique, and attract the targeted segment. This strategy will increase the company’s market share and revenues.