The report brings about the discussion on the strategic marketing management, and the related concepts in respect to the business environment. The concept of marketing management involves discussion of marketing, different approaches to marketing in businesses. It also specifies the extent to which complexities in different marketing scenario affects the competitive position of the organisations. Marketing aims at identifying the specific goals and needs of the consumers and contributing the efforts towards the creation of products or services to attain maximum customer satisfaction. The core concepts of marketing focuses on few aspects such as customer needs, wants and demands, market offerings, which are products, services, and experiences. The other key concepts include customer value and satisfaction, exchange relationships and the marketplace. These are important concepts, which determine the success criteria, customer relationships and gaining a competitive position in the market (Baker, 2016).
The process of marketing management is defined as developing strategies and planning for any product or services and their advertising, promotion, and sales to attract maximum customers in the market. The report analysed the marketing mix and the techniques of segmentation, targeting and positioning with respect to a brand or company. In addition, there is a detailed analysis of the concept of the marketing mix and the application in the strategic, tactical, and operational decision-making. Therefore, to assess and gain an understanding of the market trends and the other management strategies, a company has taken, named as Muji, i.e. Muji cafe based in the Singapore. Hence, the report in the later analyses the market and position of the café amongst other competitors (Chernev, 2018).
Muji is a public company, describing the meaning of the term, as ‘mu’ means without, and ‘Ji’ means brand, i.e. no brand quality goods. The company Muji is a Japanese based retail company that deals in wide variety of household and consumer goods. The company belongs to the industry, dealing in operations in manufacturing, retail, and café. The company is distinguished by the design minimalism, emphasizes on recycling, and avoids wastage in the process of production and packaging in their operations. The company aims to follow no-logo or no-brand policy. Discussing about the history it has been found that Muji started with the 40 products during 1980s, with a broad category of products. These products range from stationery, clothing, to the food/edible items and the major kitchen appliances (Isomura, 2016).
The company has started years before, but the business of Café Muji began few years before only; primary business of the company includes café Muji, meal Muji, florist, and the home-finishing items. The company has also found to be involved in the architectural projects, which were termed as Muji houses.
With context to the strategic marketing management the focus is towards the Muji café, it has been analysed that the café aims to consider that “Simple food is delicious” . This describes that Muji café motive is cook as simple as possible in order to bring out the taste of natural ingredients. These ingredients provide the taste, as the blessings of the sun, water, and soil. They believe that dining with the simple food, is the most effective and delicious, as it is gentle to the body, kind to the world amidst the ambience of Café Muji (The Straits Times, 2015).
The café offers in their menu, a special food item called Deli, which includes breakfast set, 2-Deli set, 3and 4-Deli sets. Others include a number of things enlisted below:
The menu includes the desserts such as green tea Chocolate pear mousse, strawberry Frasier, Yuzu Swiss roll, Caramel Egg pudding, Dessert set, and many others. There are few items in drinks or beverages served by Café Muji, such as Iced Jasmine tea, Red Shiso Soda.
The product taken for the analysis in this report is “Red wine”, which is included in the category of drinks in the café Muji. The wine has served at the price of S$56.00 per serving 125ml Glass. The café can improve the quality of their product service to their customers. Thus, the report focuses on the improvement of their product to increase their sales, and achieve greater customer satisfaction.
The topic describes and assesses the market conditions or scenario of Café Muji, in the industry. Market analysis includes aspects such as prevailing market trends of the café. The market analysis also mentions about the growth trends, i.e. of the Muji café in Singapore. It has exclaimed that Muji is not a trend: How design fuels Muji’s growth. There are around 300 stores operating internationally, Muji does not show signs of slowness in rapid expansion. The Muji has shown growth trends past 5 years, due to philosophy of creating value for their customers. Muji follows the philosophy of focusing not only on price, not only the quality, not the design but also everything together (Budds, 2018). The company has diversified operations, in a thousand of items in the growing roster of goods. Singapore is a competitive market, which poses threats or challenges, and has been evolved and growing over time. The scenario of the Singapore cafes has been explosively growing and attracted consumers or aspirants to create a strong differentiation. The café in today’s scenario has been catering to the varied nature of needs, such as cafes in earlier years focused only on standard services. The standard services included serving snacks, coffee and with a simple décor and ambience largely, but these days they have focusing on full-dining experiences (Junge, Severgnini and Sørensen, 2016).
Analysing the café, in Singapore the product features, future growth, consumption pattern, or trends can be stated in the critical analysis. Red wine is a type of wine, which is made from the varieties of dark-coloured grapes. The actual colour of this wine may differ, in terms of intensity; it can be intense violet, to brick red, and brown for the older red wines.
The marketing mix of the product followed by the company is satisfactory to the customers, but can be improved to attract and target a large segment of the market.
The café Muji has some key competitors, as the café itself is located in Plaza Singapura, Singapore; several other cafes that pose threat to the success of the café, in the country (Singh and Srivastava, 2018).
One of the famous café in Singapore, being a competitor of the Muji café, is My Awesome Café located in Franck Hardy, was a heritage shop house turned into hipster café, located in Telok Ayer Street. Forty hands café is placed as one of the top café in Singapore. Therefore, the café positioned at the best position. Looking at the growth trend of the market of cafes in Singapore, it has been observed that from the year 2010 a drastic change has been found in the industry (Henderson, 2016).
The café industry in Singapore has been taking off and growing with a rapid pace, opening 100 new cafés almost every year. Due to the increasing cafes, in Singapore market has been overcrowded posing a threat to their own survival and growth in the future years. Therefore, according to the Singapore’s Accounting and Corporate Regulatory Authority (ACRA), it has been assumed that near around 131 cafés have shut down themselves in the industry (Chef at work, 2017).
The concept of marketing management based on the thought to satisfy the needs and demands of the consumers and attain maximum customer satisfaction in relation to a product or a service. Understanding consumer behaviour is very essential activity for every organisation before and after launching a product in the market. If an organisation fails to identify the consumers attitude towards their products, then they fill face the situation of loss in the longer-term. Consumer behaviour or the buyer’s behaviour is a complex because each consumer behaves in a different manner has unique consumption patterns (Liu et al., 2017).
There are some common factors, which influence the consumer behaviour in an industry such as psychological factors, group influences, purchasing power, motivation, economic conditions, and others. Analysing the current consumer behaviour or attitude in the café industry at Singapore, it can be stated that the consumers in Singapore enjoy a high standard of living and considered keen buyers of foreign products. People or consumers in Singapore are not only brand conscious, but also involve in exploring or trying new products (Kim, Jang and Adler, 2015).
Currently, the number of consumers visiting the Singapore’s café has increased, and there are many types of consumers found visiting the Singapore cafes. It includes that there are some of the food photographers, some visit on a blind date, some as ‘wannabe’, and some as ‘workers’. Prospects in this industry encounter the opening of some cafes and especially coffee shops that will induce the young generation, as the young Singaporeans looking out for the entrepreneurial pursuits (Aguirre, 2016).
The increasing and positive consumption patterns of the consumers in this industry have led to the favourable changes in the consumer behaviour in the Singapore café market. The country has developed in terms of establishing uniquely themed cafes, with their focus on improving interior concept and photo-worthiness of the café. As these are some of the unique features of the Singaporean café which attracts consumers in large, thereby increasing their popularity. The cafes in Singapore distinguish themselves; especially those independently operating have started using food delivery applications, satisfying customers to stand out in the present stiff competition. These all factors contribute to the favourable consumer preference for the Singaporean café market (Lindborg, 2015).
It is a challenging task for every industry to manage their product or service marketing and satisfy their customer’s demands and expectations. The nature if challenges differ from industry to industry, and from consumer to consumer, challenges include defining, maintain and improving the quality of their product or services. The issues in the present scenario of the café market in Singapore relates to lack of experience, poor planning, and challenges in terms of competent manpower. Café owners from the past and present stated that lack of experience, poor planning along-with the poor manpower are the challenges faced by the cafes to keep their businesses running. As the challenges in café industry are more or less common to every city, country or a particular region worldwide. The top running issues found in the Coffee culture, as it is struggling to innovate. Some researchers were of the view that the culture of Singapore’s cafe lack in vision and ambition to serve their purpose. The issue comes in terms of cost, as much of their capital goes into investing in the acquisition of a good espresso machine rather than a good-sized roaster, that can easily be purchased up-to $60000. Tapping a larger population is another challenge faced by the cafes (Platania, Platania and Santisi, 2016).
Thus, the core challenges or issues faced in the cafes of Singapore enlisted below:
Therefore, these above-mentioned are some of the challenges/issues in the café industry in Singapore (Jones, Hillier and Comfort, 2016).
Segmentation, Targeting and Positioning
In today’s scenario, of growing business environment segmentation, targeting, and positioning play a key role as a strategic approach in modern marketing. Market segmentation includes identifying the bases for segmentation, and then determining of important characteristics of each market segment. Targeting practices involves analysing and evaluating the potential and commercial attractiveness of each segment in the market. It focuses on selecting two or more segments. The last in the STP approach includes the activities of product positioning with respect to the industry (Pyo, 2015).
Positioning states about development of a detailed product positioning for all selected segments, and then after positioning, marketing mix for each segment is clearly determined. In a broader sense, STP approach focuses on the selection of most valuable segments for the business (Gengler and Mulvey, 2017).
In context to the café industry in Singapore, the segmentation is referred to as segmentation of the market into homogenous groups of customers, each of them react differently to the marketing activities of the organisation. Targeting (market) refers to the market segment to which a particular good or service has marketed. Positioning in cafés is a platform to their brand, therefore it facilitates to produce brand image in the minds of targeted consumers (Bruwer and Li, 2017).
The strategy or approach of STP, in context to the café industry in Singapore, is described through following table.
|
Type of Segmentation |
Segmentation Criteria |
Muji café target segment(wine) |
|
Geographic |
Region |
Domestic/International |
|
Density |
Urban |
|
|
Demographic |
Age |
21-40(young-aged adults) and (old-aged adults)more than 41years |
|
Gender |
Male and Female |
|
|
Life-cycle stages |
Bachelor stage- Youngsters, & single people Newly married- Couples, and with children both |
|
|
Income |
Low, middle and high income level |
|
|
Occupation |
Students, employees, professionals |
|
|
Behavioural |
Degree of loyalty |
‘Hard core levels’, and ‘Switchers’ |
|
Benefits sought |
Cost-effective and premium-quality |
|
|
Personality |
Easy-going, and sophisticated |
|
|
User Status |
Potential and sophisticated wine drinkers |
|
|
Psychographic |
Social Class |
Lower, Middle and working classes |
|
Lifestyle |
Muji targets youngsters, couples (married, unmarried both), resigned, struggler, mainstreamer individuals according to the varied nature of consumption pattern in the wine industry (Bruwer, Roediger and Herbst, 2017). |
|
STP focuses on the three different criteria for market analysis, and for segmentation the bases in the wine industry includes number of aspects. Different wine products are available in the market, with differences in their alcohol content, sweetness, and acidity content. Bases for segmentation used in the above café Muji refers to demographic, geographic, psychographic, and behavioural segmentation. As per behavioural segmentation, market divided into 5 parts, i.e. regular drinkers, often drinkers, potential drinkers, ex-drinkers, and non-drinkers. Age segmentation includes young-aged adult and old-aged adult, with higher drinking capacity in the later one.
Traditionally, the market has focused towards youngsters and couples more, as others have followed it also, but there has been a shift in targeting practices. The cafés nowadays has been targeting to the old-aged adults along-with the young-aged adults, especially the older people as they have high-drinking capacity, thus increasing opportunities for higher consumption. Hence, café will focus upon age factors to enhance production through different packaging and labels, aroma, and flavour.
The target market, i.e. older aged people in different regions must buy or avail the services of the improved product/services in the café industry. As it caters to the needs, moods and expectations of the older-aged adults and reduction and affordable pricing is the most important change that the cafes are aiming to incorporate in the wine marketing strategies. The other benefits include in terms of less costs, drinks with different quality levels, and flavours; “Place serving different needs with different purposes” (Lancaster and Massingham, 2017).
Marketing mix, also known as 4p’s are defined as a set of marketing tools, which facilitates a firm to pursue the marketing objectives, in the target market. Thus, the marketing mix refers to the broad four levels of marketing decisions; these are product, price, place, and promotion. These are traditional elements of marketing mix used by the businesses as their marketing strategies. These four P’s specifically refer to marketing of products or goods (Pomarici et al., 2017).
Product refers to the item sold to the consumers satisfying their needs and wants. It may include both tangible (goods) and intangible i.e. services, ideas, and experiences).
Price: It is the amount a customer pay for product, and the associated marketing decisions involve pricing strategy, allowances, discounts, and others. Typical marketing decisions, of the product consist of determining product design, branding, packaging, and labelling of the chosen product in the market (Lovelock and Patterson, 2015).
Place or placement include the customer accessibility of the product, and includes
determining an appropriate distribution channel. It involves marketing decisions such as
market coverage, inventory/warehousing, transport, and logistics (Khan, 2014).
For the product, (red wine) mentioned in context to the Café Muji, there are some other elements, which define about the marketing of services in their firm. These include another 3 P’s, i.e. process, physical evidence, and people.
Product: The café Muji has diversified their operations in terms of new and varied products and services, here mentioned about red wine, which is a tangible product, satisfying the needs and demands of customers at large. The elements of product focus on features, intensity of flavour, complexity, balance, texture, and length of flavour. These are the primary aspects, but the focus is towards the key areas such as design of bottle, label, the closure, and cases. As there are types of consumers from different age groups, so their preferences also differ. Therefore, different customers groups will prefer different levels of quality and premium cues. Thus, the company or Muji café must focus on designing and improving the packaging, labelling, and packaging of the red wine, as a brand (Rundh, 2016).
Branding, labelling and packaging are the important attributes to the marketing of the goods or services in an industry. Branding refers to the practice of giving a specified name to product or group of products, i.e. red wine here is categorised by the café under the brand name of Antinori. When customers look for wines, the most attractive aspect is the design of the bottle. Bottles are traditional aspects, as they display class and exclusivity of the brand/product. Boxed wines are the alternatives that can be adopted. In addition, tetra packs can be introduced as they provide portability because of low-weight and small size. Another option can be cans, which will distinguish company’s brand from others (Hestad, 2016).
Brand packaging and labelling can make or break sales easily; therefore-effective steps must be taken to improve the same. Labelling or putting a label on the bottle of the wine giving a description about the type, origin, alcoholic degree and the quality of the wine. Paper labels are most common, thus café can invest in labelling of wine through screen-printing (Lick et al., 2017).
Muji Café should focus on what products should be introduced in the market, at what price, determining the place or channels of distribution i.e. Where. Other important area to be focused is ascertaining the purpose of introducing the product in the market, i.e. why. Who is another concern, which defines about who is going to undertake the major product or marketing decisions, and how they will be executed properly to achieve their goals and objectives.
Price- the most simplest and important indicator of the premium or low quality wine is represented through the pricing of the wines. Prices of the wines determined by the government regulations, competition in the economy, and purchasing power of the consumers. The company has kept their prices as S$56.00. This has found catering the needs of high-section of the society only. Thus, the café or company must market their brand at affordable prices so that it must be in reach of customers (Lantos, 2015).
Place – The right people at the right place drinking the right product must be the aim of the company or any café in Singapore. The target market for making the availability of wines is the major concern. Thus, wines should be available in the best and known restaurants that will be a superb cue for most of the customers (Dolan et al., 2017).
Promotion- As small businesses or cafes cannot afford to involve in high-level promotion activities to promote their brand, thus they must increase their sales using internet marketing with online sales. Moreover, with the use of advertising it can be improved better (Stead and Hastings, 2018).
People – The key focus towards professional brand management based on deciding about the niche or particular customer group, as they are ones who will receive the services or product benefits by consumption. Company should focus on places if the person is an old sophisticated drinker than any merchant banker (Huang, and Sarigöllü, 2014).
Process – it involves the whole mechanism of satisfying the customer demands, and expectations through the development of such brand image of the wines in the minds of customers. The company must become customer-oriented and cater to their changing preferences, thus giving them maximum benefits.
Physical evidence- It mentions about developing the online experiences of the service of wines to customers. By improvising the packaging of the wines, the café/company can focus on enhancing online services. Hence, amongst all 7 P’s of marketing mix, price and people are considered as the major elements, of the marketing mix strategies of the café. Effective marketing strategies lead to profit making in the longer run (McDonald and Wilson, 2016).
Conclusion
To conclude the above discussion, on the strategic marketing management, it has been analysed that marketing management is a key contributor in the success of every business organisation. Strategic marketing management provides a comprehensive description of developing and implementing in the business, a market-driven approach, including marketing strategy, and determining the position of the company in the market. The report assessed the market conditions of Muji café, and their products marketing in Singapore. Concepts mentioned in the report relates to the market trends, of café highlighting the competitors and the consumer behaviour towards the cafes. As per the analysis of the market, and the industry’s STP policies, and marketing mix strategies, there is a wide scope of the café industry in Singapore to increase sales further and grow in the future years. Hence, the café industry in Singapore can improve their marketing activities such as pricing strategy and others, which will increase sales, thereby leading to higher profits in the future.
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