Introduction:-

The word gourmet is from the French term, defined as "refined and
uncontrolled love of good food". Gourmet is an industry classification for high-
quality premium foods in the United States. Gourmet may describe a class of
restaurant, cuisine, meal or ingredient of high quality, of special presentation, or
high sophistication. Gourmet food is characterized by high quality, accurate
preparation, and artistic presentation. This name “gourmet” was suggested by his
daughter who is living in America.

“Gourmet Bakers and Sweets” is the largest food retail chain of Lahore. It is based
in Lahore, the second largest city of Pakistan known for its traditional foods and
passion for eating. It was started with a single outlet in Ichra in 1987 by Mr.
Muhammad Nawaz Chathha, in the begging they did not get good response
which resulted in shut down. He again started in 1992 at different place at Muslim
town, and Gourmet did not look back since then. Now with its 5 production units,
2 restaurants and 88 sales outlets, gourmet outreaches to a huge population for
their food needs. Mr. Chathha the founder of Gourmet stared his business with 20
million rupees. He is holding the position of Managing Director of the company.
He was serving in Shezan Bakers as a General Manager and later on he decided to
make his own bakery. He started his business through getting employees from
Shehzan bakers in the beginning.

Gourmet produces a wide variety of bakery items, sweets and dairy products
and offers high quality services in their restaurants. Gourmet has introduced
many new items in bakery products categories which were previously not in the
market of Lahore. Gourmet stresses hard on quality and taste of their products
and making them affordable for their customers at the best prices in the market.
 The company has shown an explosive annual growth of more than 25% till 2006
in its business since this unique business was started in 1992. Recently gourmet
shows 65% of annual growth in its business from 2006 to 2009. With his
commitment and strenuous effort to provide the consumers with best quality food
products in a convenient and unmatched displaying manner, Gourmet has
become a success story of business growth in Pakistan. At the moment Gourmet
has more than 4500 employees working in the organization.

Mission statement:-

“Our mission is to provide quality products at lowest prices”

Vision:-

“Leader of quality juice providers in the region by offering products enjoyed in

every home. This will be achieved from the dedication of each employee in
conjunction with supportive participation from management at all levels.”

Gourmet Dairies is another step forward to

provide its consumer with wholesome milk and milk
products. This is also a sort of backward integration
for the provision of dairy raw materials for bakery.
ORGANIZATIONAL/ HIERARCHY CHART OF GOURMET:

Director
G.M Production
G.M Market
Assistant General
Manager
Area Managers

Branch Assistant Branch Complaint Manager/ Auditor

Supervisor Supervisor Purchase Manager

Assistant Branch
Supervisor Purchaser

Store Supervisor

Sales Man

Industry analysis: -
 The food items industry has been rising constantly at a considerable rate and the
eating habits of people are changing over time with the changing life styles.

With the growing trend of having light snacks with tea in the afternoon and other
readymade snacks for a meal instead of the traditional meals of curry n bread, the
demand and consumption for the products of this industry is growing rapidly.

Apart from that as more people and youngsters are working especially the women,
their daily lives are becoming very fast and they don’t have time to cook at home.
Due to this reason more people are now seeking convenience goods, which act as a
alternative to the traditional meals. Although people are becoming more aware
and more health conscious thus they demand high standards of quality and
hygiene along with a balanced nutrition.

Along with that the trend of celebrating events and having a get-together in the
West is now sweeping our culture as well and more people are now celebrating
many different events such as birthdays, ceremonies, anniversaries, New Year,
Valentine’s Day, Mother’s Day etc as compared to the few events celebrated
earlier such as Eid-ul-Adha, Ramadan, Eid-ul-Fitr, weddings, birthdays and get to
gether. These events boost the sales of this industry as people opt to buy things
from outside instead of cooking themselves.

The trends of dining out have also grown rapidly over the past few years and that’s
the reason why many new companies like Gourmet are entering the Restaurants
market.

The acceptance and need for such products are growing every passing day and it

is expected to grow at a higher rate in the future as well which is a very healthy
sign for companies like Gourmet to invest smartly and be in front.
PEST analysis:-
1) Political change= from one party (change of government) to another

Political analysis:-

Political scenario in Pakistan has seen many important changes in recent years.
The political environment directly influences all the industries working in the
country. Similarly the production distribution and use of Gourmet’s products are
subject to some federal laws, such as the Food and Drug Act. The businesses are
subject to the Government stability in the countries as the businesses are directly
subjected to the taxation policy of the country they are operating. They also have
to comply with federal, state and local environmental laws and regulations.

According to the Global Competitiveness Report 2010-2011, Pakistan ranks poorly

in terms of domestic commerce measures: business sophistication, goods market
efficiency as well as property rights protection. Pakistan ranks lowest when
compared to other Asian countries including India, Indonesia, Thailand, Malaysia
and China. As shown in Table 1, Pakistan ranks 46 out of 139 countries in terms of
business cluster development compared with India at 29 and China at 17.

Table 1: Business Sophistication9

Countries Cluster Local Local

Developme Supplier Supplier
nt. Quantity Quality
Pakistan 46 87 95
India 29 7 60
Indonesia 24 43 61
Thailand 34 26 43
Malaysia 15 29 37
China 17 19 54
According to the prices above, a small office space of 12 x 38 square feet is rented
out for between PKR 29,640 (minimum) to PKR 91,200 (maximum) in
Islamabad. The productivity of a city and employment generation needs more
entertainment, hotels, shopping areas and offices in large complexes, but no space
has been provided for large complexes to develop. Trading policies are the long
run hurdles that cannot be resolved in near future.

The Pakistan Pure Food Laws (PFL) of 1963 is the basis of the existing trade-
related food quality and safety legislative framework. These laws cover 104 food
items falling under nine broad categories: milk and milk products, edible oils and
fat products, beverages, food grains and cereals, starchy food, spices and
condiments, sweetening agents, fruits and vegetables and miscellaneous food
products. The regulations address purity issues in raw food and as well as
additives, food preservatives, food and synthetic colors, antioxidants, and heavy
metals. All these improvements will help Gourmet baker to enter in new markets
which are conscious about traditional food items and also with security measures
such as Sharjah, Dubai and other Middle East countries.

• TAX MEASURES 2010-11

Existing system of General Sales Tax would be reformed to eliminate multiple tax
rates and replace it with a single lower rate of 15%.

The reformed GST will not apply on health, education and food items consumed
by the poor. The GST will not apply to turnover less than Rs. 7.5 million per year
whereas the current threshold is Rs 5 million per year and would be automated
thus reducing possibilities of corruption and refund delay.

Above situation analysis of taxation structure for 2010-11 shows some mixed
trends for the future prospectus of gourmet baker of Pakistan. Increase in
exemptions for income tax will increase the buying potential of gourmet customer
and will stabilize the employee the gourmet baker by strengthen there economical
conditions. In the mean while increase in GST and Surcharges on electricity
consumption will lower down the sales volume of gourmet products due highly
cost of production resulting in high product prices.

• Home market lobbying/pressure groups

In Pakistan sugar industry is operated almost in all by some political families and
in food industry sugar is a major raw material. For the sake of fetching good
profits these groups put a strong pressure and prove themselves a strong lobbying
group. Employee union is also an other lobbing group that pushes the gourmet
baker for higher wages that will result in high cost of productions. Strong
transport unions may also create some logistic problems for Gourmet baker
distribution channel.

• International pressure groups

India is a leading manufacturer of sweet and bakery items. Low labor costs in
India has enable Indians to get more share in international markets. In the mean
while Indian lobby is strong enough as compare to Pakistan to reach in foreign
markets. Gourmet and many other entrepreneurial needs strong government
assistance and coloration to enter in international markets

• Wars, conflict & Terrorism

Recent wave of war against terrorism has created a sense of in security in general
public in Pakistan. Shopping trends are decreasing due to suicidal attacks and
people are not willing to come at bazaar as they were in past. This situation has
adversely affected the sales of gourmet baker and sweets.

2) Economic change= For example a recession creating increased activity at

the lower ends of product price ranges. Rate of interest raises depressing
business and causing redundancies and lower spending levels as well as
energy crisis too.

Economic analysis

Despite inhospitable domestic and international environment resulting from the

either the global recession or due to the terrorism acts, Pakistan’s economy grew
by 2 percent in the financial year 2008-09 according to Economic survey 2008-
09. Reports have shown increase in GDP, increase in per capita income and
increase in IT development as well which are positive signs for the industry but
there are some negativities as well. Like all the other companies are subject to the
harvest of the raw material that they use in their soft drink and juice, like corn,
oranges, grapefruit, vegetables etc. – Gourmet also relies heavily on trucks to
move and distribute many of their products, fuel is a very important subject, so
they are subject to the fuel prices. Moreover, there has been a crisis in the
production of sugar in Pakistan, with prices sky rocketing. Another crisis that
Pakistan is dealing is the shortage of electricity. Such economic factors have
resounding impact on such industries and increase the cost of goods.

3) Socio-cultural change=Involves changing attitudes and lifestyles. The

increasing number of women going out to work, for example, led to the need
for time-saving products for the home.

Socio-culture analysis
The population of Pakistan is on the rise where as the health consciousness
among the people is also a lot more than it has been in the past. The age
distribution of Pakistan is also very balanced, major portion of its population
consists of youth. Gourmet bakery products, dairy products as well as beverages
and moreover Juices and ice creams are subject to the lifestyle changes as the
awareness of health consciousness is rising in the people now. This has affected
the industry in the positive manner and many new companies are being entered in
the food market, the usage of the food products in the households has increased a
lot. The need for hygienic products and healthy products are in important in the
average day-to-day life. Consumers from the ages 37 to 55 are also increasingly
concerned with nutrition. There is a large population of the age range known as
the baby boomers. Gourmet has to pay a special attention on the lifestyle changes.
Further Income of people is increasing more trends towards FMCG. Further a
major social trend in the rural areas of Pakistan has been a shift from presenting
guests with drinks and bakery products such as lassi towards such beverages and
bakery products. People use bakery products on different events new born babies,
Basant, Shabraat, Eid milad-un-Nabi (s.a.w), Eid-ul-Fiter, Eid-ul-
adha, Weddings, Engagement parties, birthdays, Father`s day,
mother`s day, valentine`s day and get together. All these situations are
calling for new and new opportunities and investors.

4) Technological change=creates opportunities for new products and

product improvements and of course new marketing techniques- the
internet, e-commerce.

Technological analysis

Pakistan is considered as developing country. Although it is a nuclear power yet it

lacks behind in other technologies. Technology plays a secondary role in this
industry, as it is not heavily dependent on technological advancements like the
consumer electronics industry, or the software industry. Because bakery and
beverages products are non-tech based in nature, technology in this industry is
therefore limited to function as a catalyst to improve production capacities, speed
of product manufacturing cycles, inventory management. It has to pay attention
to the new distribution techniques as well. Even though one have to take into
account that specialized factors involve a heavy and sustained investment, but
also at the same time if one is able to achieve them, he could generate competitive
advantage. The new technology of internet and television which use special affects
for advertising through media. They make products look attractive and this help
in selling of the products. Due to affective transport facility the company has
achieved great success in distributing its products to all over the country.

SWOT Analysis:

SWOT stands for Strengths, Weaknesses, Opportunities and Threats. Internal

factors, the strengths and weaknesses and external factors, the opportunities and
threats.
The analysis shows Gourmet Baker Pakistan's Strengths, Weaknesses,
Opportunities and Threats. The SWOT analysis will give you a clear picture of the
business environment Gourmet Baker Pakistan is operating in at the present time.

SWOT Analysis of Gourmet

Strengths:

Research and Development Center:

By having a strong R&D center Gourmet is offering a quality product to their

customers. Gourmet is offering a product to their customer in different packing
and according to different occasions.

Well Organized Structure:

Gourmet has a well organized structure. All the departments perform their work
according to the organizational structure. 100% of production at Gourmet is
carried out at automated plants.

Computerized Database System:

Gourmet has an organized database; all the activities are recorded in the
database. Computerized database provides error free center. It is updated on the
regular basis.

Team Work:

All the departments are working as a team such as Quality assurance, Marketing,
MIS, HR and Administration etc. Working as a team increases the efficiency of the
Gourmet.

Low cost:
Keeping costs lower than their competitors and keeping the cost advantages helps
Gourmet Baker Pakistan pass on some of the benefits to consumers.

Supplier relationship:
Supplier relationships are strong at Gourmet Baker Pakistan, which can only be
seen as strength in their overall performance.
Quality:

By applying the various strengths Gourmet offers the product to the customer.
Gourmet never compromise on quality that is why they are able to capture a huge
market share. Sweet and other bakery products are prepared with immense care
using traditional and authentic recipes to give unforgettable taste.

Customer Retention:
As Gourmet is offering complete range of sweets, dairy, and bakery products to
their customers with the best quality and taste. Gourmet is able to retain the
customers because of its brand name and worth of the brand. As retaining the
customer is better rather than switching towards the new customers. 　　

Weakness:
Less Financial resources for advertisement:

Gourmet is using less financial resources for advertisement. By using the

appropriate resources they can advertise their product by different tools of
advertisement.

Latest Machinery required increasing the Production Rate:

Latest machinery is the key strength of any organization, but Gourmet lacks in
this point. By using the latest machinery Gourmet can increase the production
rate.

No broadcast media is used:

The term broadcast media covers a wide spectrum of different communication

methods such as TV, radio, newspaper, magazines and many other materials
supplied by the media and press, so more focus should be on broadcast media.

Opportunities:

• Gourmet Baker Pakistan could benefit from expanding their online

presence and making more money from online shoppers/internet users.
• The changes in the way consumers spend and what they buy provides a big
opportunity for Gourmet Baker Pakistan to explore.
• Gourmet Baker Pakistan is in good financial position, which is an
opportunity for them to explore in terms of investment in new projects.
 • Grasping the opportunity to expand the customer base is something
Gourmet Baker Pakistan can aim for, either geographically or through new
products.
• Expanding the product/service lines by Gourmet Baker Pakistan could help
them raise sales and increase their product portfolio.
• Gourmet Baker Pakistan has a number of highly skilled staff, which is an
opportunity for them to explore as expertise of their staff can help Gourmet
Baker Pakistan to bring the business forward.

Many cities to capture:

One of the most important opportunities is that Gourmet can increase their target
market by capturing other cities which consist of the potential customers.

Brand Worth:

Gourmet is the well recognized brand nationwide and it is also operating

internationally which means the worth of the brand is good in the mind of the
customers. Because of the brand worth Gourmet can come up with the different
market of bakery products.

New market to explore nationwide and internationally:

It is the great opportunity for Gourmet to expand their business and market by
exploring the new markets nationwide and internationally.

Threats:

• Consumer lifestyle changes could lead to less of a demand for Gourmet

Baker Pakistan products/services.
 • Tax increases placing additional financial burdens on Gourmet Baker
Pakistan could be a threat.
• Change in demographics could threaten Gourmet Baker Pakistan.
• The financial burden of increasing interest rates could be a threat to
Gourmet Baker Pakistan.
• Increased competition from overseas is another threat to Gourmet Baker
Pakistan as it could lead to lack of interest in their products/services.
• Extra competition and new competitors entering the market could
unsteady Gourmet Baker Pakistan and be a threat.
• The actions of a competitor could be a major threat against Gourmet Baker
Pakistan, for instance, if they bring in new technology or increase their
workforce to meet demand.
• Price wars between competitors, price cuts and so on could damage profits
for Gourmet Baker Pakistan.
• A slow economy or financial slowdown could have a major impact on
Gourmet Baker Pakistan business and profits.
• The rise and/or fall of the foreign exchange rate could threaten Gourmet
Baker Pakistan with regard to importing and exporting.
• Rising costs could be a major downfall for Gourmet Baker Pakistan as it
would eat into profit.
• Gourmet Baker Pakistan could be threatened by the growing power
customers have to set the price of their products/services.
• Gourmet Baker Pakistan could be threatened by the growing power their
suppliers have to set their prices.

Gourmet could be a big threat because it is also offering a sweet Nirala’s taste and
quality could be the restrictive force for other to penetrate.

Change in the consumer preference:

Changing of consumer preferences is a major threat of any organization. As if we
talk about Gourmet now people prefer international brand over local brand which
have become a major threat.

BCG Matrix

The BCG matrix method is based on the product life cycle theory that can be used
to determine what priorities should be given in the product portfolio of a business
unit. To ensure long-term value creation, a company should have a portfolio of
products that contains both high-growth products in need of cash inputs and low-
growth products that generate a lot of cash. It has two dimensions:
 Market share

 Market growth

The basic idea behind it is that the bigger the market share a product has or the
faster the product's market grows the better it is for the company.
Placing products in the BCG matrix results in 6 categories in a portfolio of a
company:

1. Stars (=high growth, high market share)

Stars generate large amounts of cash because of their strong relative market
share, but also consume large amounts of cash because of their high growth rate;
therefore the cash in each direction approximately nets out. If a star can maintain
its large market share, it will become a cash cow when the market growth rate
declines. The portfolio of a diversified company always should have stars that will
become the next cash cows and ensure future cash generation.

2. Cash Cows (=low growth, high market share)

As leaders in a mature market, cash cows exhibit a return on assets that is greater
than the market growth rate, and thus generate more cash than they consume.
Such business units should be "milked", extracting the profits and investing as
little cash as possible. Cash cows provide the cash required to turn question marks
into market leaders, to cover the administrative costs of the company, to fund
research and development, to service the corporate debt, and to pay dividends to
shareholders. Because the cash cow generates a relatively stable cash flow, its
value can be determined with reasonable accuracy by calculating the present value
of its cash stream using a discounted cash flow analysis.

3. Dogs (=low growth, low market share)

Dogs have low market share and a low growth rate and thus neither generate nor
consume a large amount of cash. However, dogs are cash traps because of the
money tied up in a business that has little potential. Such businesses are
candidates for divestiture.

4. Question Marks (= high growth, low market share)

Question marks are growing rapidly and thus consume large amounts of cash, but
because they have low market shares they do not generate much cash. The result
is large net cash consumption. A question mark (also known as a "problem child")
has the potential to gain market share and become a star, and eventually a cash
cow when the market growth slows. If the question mark does not succeed in
becoming the market leader, then after perhaps years of cash consumption it will
degenerate into a dog when the market growth declines. Question marks must be
analyzed carefully in order to determine whether they are worth the investment
required to grow market share.
5. War Horses

They have high market share, but the market has negative growth; the problem
for management is to decide whether the product is in an irreversible decline, or
whether it can be revived, perhaps by repositioning into another market.

6. Dodos

They have a low share of a negative growth market, and are probably best
discontinued.

DATA
FAZAL SWEETS:
Avg. per day sale of Fazal sweets in 2010= 75000
Avg. per month sale of Fazal sweets= 2250,000
Estimated sale of 2010= 27000,000

Avg. per day sale of Fazal sweets in 2009= 68,000

Avg. per month sale of Fazal sweets= 2040,000
Estimated sale of 2009= 24480,000
Avg. per day sale of Fazal sweets in 2008= 63,000
Avg. per month sale of Fazal sweets= 1890,000
Estimated sale of 2008= 22680,000

NIRALA SWEETS:
Avg. per day sale of Nirala Sweets in 2010= 60000
Avg. per month sale of Nirala Sweets = 1800,000
Estimated sale of 2010= 21600,000
Avg. per day sale of Nirala Sweets in 2009= 40,000
Avg. per month sale of Nirala Sweets = 1200,000
Estimated sale of 2009= 14400,000

Avg. per day sale Nirala Sweets in 2008= 20,000

Avg. per month sale of Nirala Sweets = 600,000
Estimated sale of 2008= 7200,000

GOURMET SWEETS:

Avg. per day sale of Gourmet Sweets in 2010= 85,000

Avg. per month sale of Gourmet Sweets = 25550,000
Estimated sale of 2010= 30600,000

Avg. per day sale of Gourmet Sweets in 2009= 70,000

Avg. per month sale of Gourmet Sweets = 2100,000
Estimated sale of 2009= 25200,000

Avg. per day sale Gourmet Sweets in 2008= 50,000

Avg. per month sale of Gourmet Sweets = 1500,000
Estimated sale of 2008= 18000,000

SALES
Companies 2008 2009 2010 Total
Fazal sweets 2268 2448 2700 7416
Nirala 720 1440 2160 4320
Gourmet 1800 2520 3060 7380
 Total 4788 6408 7920

RELATIVE MARKET SHARE-(RMS)

Companies 2008-09 2009-10
Fazal sweets 1.26 0.97
Nirala 0.31 0.57
Gourmet 0.79 1.02
Total 2.36/3=0.78 2.56/3=0.85

MARKET GROWTH
Company Growth of 2008 to 2009 2009 to 2010
Each year
Fazal sweets (2448-2268)/2268*100=7.94% (2700-2448)/2448*100=10.29%
Nirala Sweets (1440-720)/720*100=100% (2160-1440)/1440*100=50%
Gourmet Sweets (2520-1800)/1800*100=40% (3060-2520)/2520*100=21.45%

INTERPRETATION:

In the BCG matrix, Relative market share is given at the x-axis with a median
point of 0.8 and market growth is given at y-axis with a median point of 38.83%
and with positive growth upward and negative growth downward. Positive growth
upward and negative growth downward.

BCG MATRIX- GOURMET SWEETS

STARS QUESTION MARK

N1
N2

Gourmet (2008-2009)
 100%

38.83% CASH COWS

DOGS
Market
Gourmet (2009-2010)
Growth F1 F2

0
1.5 1.4 1.3 1.2 1.1 1.0 .9 .8 .7 .6 .5 .4 .3 .2 .1 .0
WAR HORSES
DODOS

Relative Market Share

INDUSTRY AND MARKET DESCRIPTION

Sweets are in our culture for centuries. It is our cultural heritage; people of our
region have different taste in sweets as compared to west. The western people eat
chocolate as sweets but in our region sweets are mithai. So in every town every
city of Pakistan these sweets shops are seen. Lahore and the people of Lahore are
known for their tastes and eating habits so there are many small scale sweet shops
in almost every area. Gourmet has also started as a small shop in Lahore but with
changing market conditions with increase in purchasing power of customer and
their every day changing taste buds gourmet has also improved. Although the
tastes of customers in many other dishes are changing people now a days are
eating fast foods and liking Chinese and western dishes rather than our typical
eastern or Pakistani dishes, like we have seen many western dishes in our
wedding occasions which shows the changing consumer needs. But this trend is
not in sweets industry the habit of eating sweets is very much in like centuries
before. It is the most essential component of wedding no wedding, no ceremony
or other occasion of celebration is complete without sweets. With the ever
increasing purchasing power people are purchasing sweets in bulk form. Although
the industry of sweets is century old but it is not fading with the time it is getting
rich day by day.

CUSTOMER CHARACTERISTICS

 How selective is your customers in terms of buying your product

 How much customer switch from your product to another product

POSITIONING AND BRANDING

Gourmet carries its image in a positive manner. In consumer’s perception

Gourmet is producing hygienic products with high quality. Its packaging is
perfectly according to the occasions. For the best quality and impressive
representation of the events people prefer gourmet.

1. Brand Positioning:
Gourmet Position their product in the mind of the consumers by offering:

 Superior in Price and Taste

 Quality

 Freshness

 Superior Quality Brand Name

2. Brand Image/Personality:

 Superior in Price and Taste

 Status Conscious (consumer’s perception)

 Strong Commitment

 No Compromise on Taste & Quality

Positioning:

Product Analysis:

The main product because of which Gourmet was able to make a name for it and
has been continuing to go on and on is mithai and they are famous for it but their
bakery products and beverages also give value to their customers. The product
includes:

1. Product Attributes/Features:

The products being sold at Gourmet carry the following attributes which are:

• Quality:

Gourmet has been very careful and has been following a very strong standard for
maintaining its quality so that customer is not complaining about its products.
Since they are dealing in food products where quality plays a very vital role so they
believe in quality good and healthy product to the customer.

• Purity:

It’s another attribute which has been taken care of. In products such as mithai
where people like that they get pure things specially in milk and better where
there are chances that the customers don’t get pure products. Gourmet has made
sure that they use pure materials in making of the product so that when the
customer gets it they don’t feel that it’s not pure.

• Freshness:

Food products all over the world are loved for their freshness and if we talk about
products which Gourmet is selling they should be fresh otherwise customer won’t
purchase it. Gourmet promises to give fresh products to their customers by giving
them those products which they feel are good and healthy to eat and if any
product they feel is not fresh enough they won’t give it to the customer.

• Good Taste:

Taste is because of which a customer would love to purchase a product again if he

likes the taste of your product. For so many years, Gourmet has been way ahead in
the market and leading it on the basis of its taste and it promises to give good
taste to their customer so that they enjoy it.

2. Benefits:

• Same taste:

This is one of the biggest benefits of coming to Gourmet that the consumer will
get the same taste whenever he purchases products from Gourmet it’s not that at
one time the products will taste different and other time they would be different.
• Uniqueness:

One of the strong aspects of Gourmet is that its sweet (mithai) has a unique and at
the same time very nice taste which no other player in the market is providing.

• Large Variety:

The customers can benefit from a large range and variety which Gourmet is
providing them not only in its major products which is sweet (mithai) but lot of
other products such as dairy products etc.

• Cleanliness:

At each and every outlet of Gourmet, special emphasis is laid on cleanliness so

that consumer feels that he is standing at a nice place and doesn’t get irritated.

Owner Point of View:

• Social Class:

From Gourmet point of view they are benefiting from segment they are targeting
which is the upper middle and upper class as they enjoy a large amount of profit
by charging handsome amount and are enjoying huge amount of financial reward.

• Brand Name and branding

Gourmet is one of the strongest brand name and market leaders in its field which
enables them to get more benefit out of it. Since they are one of the biggest as well
as the oldest in this field they have established a name in the market and
consumers are automatically attracted towards Gourmet.

SEGMENTATION AND TARGETING

There prices of Gourmet products are higher as compared to their main
competitors and secondly their shops and stores are mainly located costly areas of
cities. Keeping these factors in view we can say that there target market is upper
middle to upper class.

Continuous Learning about the Market:

Gourmet is different from others because they have been continuously upgrading
themselves over the years. They started their business from the inner city
congested

Locality as traditional sweet shop mostly found in cities doing small scale
business and selling only mithai related products or dairy products.

But Gourmet has learned a lot from the changing tastes of their customers and
their preferences. They changed their stores outlook made them more modern
and updated and introduced more updated functions in stores operation. They
have been successfully able to shift their small scale business to a company level
business. Their initial area of business was their hometown Lahore, but they
successfully expanded their business to other big cities of Pakistan.

Secondly they continuously keep working on their products and for over the years
been able to launch different successful products in market. Their major focus is
on quality of their products so to maintain strict laws of quality they have separate
quality control department.

The other example of their continuous learning about the market is their
successful launch of snacks product category and their dairy products. They
launched Gourmet milk in the market a few years back although their milk was
not the big success as it has to compete industry giants like nestle, haleeb etc. but
their snacks category is successful and been able to capture a large portion of the
market. These snacks and beverages are not only available at gourmet stores but
at some other stores also.

Target Market Analysis:

Demographics:

Mithai is a product well-known among all age group people.

People of all:

 Age

 Gender

 Generation

 Family Size

People belong from all ages generally love sweets and our core products so there is
no exception likewise teenagers like it whereas old people don’t like it, but in one
sense gourmet is targeting more towards people belong from age group approx 10
to 50 years

I.e. including teenagers, youngsters, mature people however age group exceeding
50 years i.e. old usually suffers from different sugar prohibit diseases. So this
sector is a low consumer of their traditional product.

New generation is more concern about new taste and looks, gourmet’s seems
quite conscious about this factor. It is continuously modifying its products
according to the changing needs of the new generation i.e. virtual placement in
order to facilitate the customers worldwide.

Being a server of eastern society like Pakistan where family size is usually large
which means strong concern about events and occasions. Gourmet as one of the
largest sweet dealers was always be there to facilitate them i.e. whether it’s a joyful
moment like marriages or a moment of sorrow.

Geographic:

Gourmet is targeting mostly the urban areas all over Pakistan

Lahore, Karachi, Islamabad, Rawalpindi, Faisalabad, Sialkot, Kasur, Multan,

Gujranwala

Psychographic:

Marriages, cultural occasions and personal events are the events from which no
social class can be excluded. However being a sole marketer of high quality which
ultimately leads to higher price, Gourmet’s focus is more towards society’s middle
and upper class.

Media Graphics

Hoardings, Banners, Leaflets, Magazines, Newspaper, Advertisement on public

transport
 Porter 5 Forces

Threats of New Entrants:

Capital Requirements:

High capital cost is required for acquiring good places for the outlets if anyone
wants to jump in the market.

Government Policy:

In our country the government has no policies for this industry.

Own Distribution System:

It’s very difficult for newcomer to own a distribution channel because it needs
huge investment. Gourmet has its own distribution systems.

Brand Identity:

To identify a brand in the market is more difficult for any new entrants, because
gourmet already has introduced such type of taste & quality in this industry that it
is very hard to compete.

Threat of Substitute Products:

The substitute products may be;

 Bakery makes cakes, chocolates, ice-cream etc

 Local area manufacturers

Bargaining Power of Buyers:

The bargaining powers of buyers are high because;

 Convince Product

 Low Involvement of Buyers

 Buying Behavior – Price sensitivity

 Brand Loyalty Status is low

Bargaining Power of Suppliers:

The bargaining powers of suppliers are low because;

 Large number of suppliers in the market.

 It is an honor to become a supplier for Gourmet.

 Now Gourmet has become its own supplier.

ORGANIZATION PROCESS AND CULTURE

Culture and environment inside the Gourmet is very much attractive people
serving customers are always available for service. The person at desk always is in
a happy mood to treat the customers.

Well Organized Structure:

Gourmet has a well organized structure. All the departments perform their work
according to the organizational structure. More than 20% of Mithai production at
Gourmet sweets is carried out at automated plants.

Computerized Database System:

Gourmet has an organized database; all the activities are recorded in the
database. Computerized database provides error free center. It is updated on the
regular basis.
Team Work:

All the departments are working as a team such as Quality assurance, Marketing,
MIS, HR and Administration etc. Working as a team increases the efficiency of the
Gourmet sweets.

Quality:

By applying the various strengths gourmet offers the product to the customer.
Gourmet never compromise on quality that is why they are able to capture a huge
market share. Sweet is prepared with immense care using traditional and
authentic recipes to give unforgettable taste.

Product Life Cycle:

The stages that product go through from development to withdrawal from the
market.
• Each product – different

• Determines revenue earned

• Helps

-identify when a product needs support, redesign, withdrawal etc.

-in new product development

-in forecasting and managing cash flow.

The stages of the product life cycle:

• Development

• Introduction
 • Growth

• Maturity

• Decline

Gourmet sweet & bakers

Gourmet bakers
Gourmet deals in multi products and it possess:
• A distinct mission
• Own managers
• Identifiable customer segments
• Specific competitors
• Ability to plan independently
BCG Strategies
• Question marks- products with low market share in industries with high
growth potential- Covert to star, or Exit market.
• Stars- products with high market share in industries with high growth
potential- make heavy investment because of sales/profit potential.
 • Cash cows- products with high market share in industries with low market
growth potential-maintain status as long as possible-products produce
strong positive cash flows.
Cash cows support Gourmet because of good will and market share.
• Dogs-products with low market share in industries with low market growth
potential-minimize position-withdrawal.

HIGH LOW

HIGH

Stars Question?

Cash cows(hold) Dogs

LOW

War Horses Dodos

Model Use and Applicability
• The BCG identified four major strategic thrusts in terms of market share.
• Once the products have been plotted, the planner then has to decide on a
strategy for that product. There are 4 major strategies that can be followed.
 Build
 Hold
 Harvest
 Divest

 Build
The product or SBU’s market share needs to be increased to strengthen its
position. Invest in one or more SBUs to build a share .This strategy are suited to
Question Marks.
  Hold
Gourmet objective is to maintain the current share position and it lies in
cash cows and this strategy is often used for Cash Cows so that they continue to
generate large amounts of cash.
Gourmet invests just enough to maintain a share in the
market.

 Harvest
Here management tries to increase short-term cash flows as far as possible
(e.g. price increase, cutting costs).
 It is a strategy suited to weak Cash Cows or Cash Cows that are in a
market with a limited future.
 Harvesting is also used for Question Marks where there is no possibility
of turning them into Stars, and for Dogs.

 Divest
The objective of this strategy is to rid the organization of the products or
SBUs that are drain on profits and to utilize these resources elsewhere in the
business where they will be of greater benefit.
This strategy is typically used for Question Marks that will not become
Stars and for Dogs.

Gourmet lies in Cash cows and these are cash generators and require an
invest or hold strategy while maximizing cash flow. Gourmet aim is to
achieve a balanced portfolio, sustaining or holding the Cash Cows.

Cash Positions of Gourmet VS Competitors

Business Type Cash Source Cash Use Net cash Balance
Cash Cows(Gourmet) More Less Funds available
Star More More Build Competitive
position and grow

Dog Less Less Divest and redeploy

(Fazal Sweets) proceeds

Question Less More Funds needed to invest

mark(Nirala Sweets)

Market Attractiveness/Business Strength Matrix

Or
GE Matrix
It includes:

 Market Attractiveness
 Organizations strength

Gourmet Attractiveness is determined by factors such as:

 Market Growth Rate

 Market Size
 Demand Variability
 Industry Profitability
 Industry Rivalry
 Global Opportunities
 Macro Environmental Factors (PEST)

Gourmet Strength can be determined by following factors:

 Market Share
 Growth in market share
 Brand Equity
 Distribution Channel Access
 Production Capacity
 Profit margin relative to competitors
 Technological or other innovation
 Customer Loyalty

GE Matrix
(Gourmet sweets & bakers)
 Gourmet sweets & bakers

 Gourmet lies in YELLOW ZONE; a position in the yellow zone is viewed

as having medium attractiveness. Management must therefore exercise
caution when making additional investments in this product/service.
The suggested strategy is to seek to maintain share rather than
growing or reducing share.
Best Strategy: INVEST FOR EARNINGS

 The GREEN ZONE consists of the three cells in the upper left corner. If
your enterprise falls in this zone you are in a favorable position with
relatively attractive growth opportunities. This indicates a "green light" to
invest in this product/service.
Best Strategy: INVEST FOR GROWTH

 The RED ZONE consists of the three cells in the lower right corner. A
position in the red zone is not attractive. The suggested strategy is that
management should begin to make plans to exit the industry.
Best Strategy: HARVEST or DIVEST.

High Attractiveness High Attractiveness High Attractiveness

LEADER GROWTH IMPROVE/QUIT
Strong Competitive Average Competitive Weak Competitive Position
Position Position Strategies
Strategies: Strategies:  ride with the market growth
 provide maximum  build selectively on  seek niches or
investment strength specialization
 diversify  define the implications of  seek an opportunity to
 your position to focus challenging for market increase
 your resources leadership  strength through
 accept moderate near-  fill weaknesses to avoid acquisition
term profits to build vulnerability
share
Medium Attractiveness Medium Attractiveness Medium Attractiveness
TRY HARDER Average Competitive PH. WDL
Strong Competitive Position Weak Competitive Position
Position Strategies: Strategies:
Strategies:  segment the market to  act to preserve or boost
 invest heavily in find a more attractive cash flow as you exit the
selected segments position business
 establish a ceiling for  make contingency plans  seek an opportunistic sale
the market share you to protect your  seek a way to increase your
wish to achieve vulnerable position strength
 seek attractive new PROCEED WITH CARE
segments to apply
strengths
Low Attractiveness Low Attractiveness Low Attractiveness
CASH GENERATION PH. WDL WITHDRAWAL
Strong Competitive Average Competitive Weak Competitive Position
Position Position Strategies:
Strategies: Strategies:  exit the market
 defend strengths  make only essential  prune the product line
 shift resources to commitments
attractive segments  prepare to divest
 examine ways to  shift resources to a more
revitalize the industry attractive segment
 time your exit by
monitoring for harvest
or divestment timing
 STRATEGIES
BUSINESS STRENGTH (Gourmet)
Strong Medium
PROTECT POSITION INVEST TO BUILD
• Invest to grow at • Challenge for
maximum digestible rate. leadership
• Concentrate effort on • Build selectivity on
maintaining strength strengths
• Reinforce vulnerable
areas
Weak
BUILD SELECTIVITY
• Specialize around ltd
strengths
• Seek ways to overcome
weaknesses
• Withdraw if indications
of
sustainable growth are lacking
BUILD SELECTIVITY
• Invest heavily in most
attractive segments
• Build up ability to counter
competition’
• Emphasize profitability by
• raising productivity
Hold SELECTIVITY/ LIMITED EXPANSION OR
MANAGE HARVEST
FOR EARNINGS • Look for ways to expand
• Protect existing without high risks else
program minimize investment
• Concentrate
investments
in segments where profit-
ability is good and risks are
relatively low.

PROTECT AND REFOCUS MANAGE FOR EARNINGS DIVEST

• Manage for current
earnings
• Concentrate on attractive
segments
• Defend strengths
• Protect position in most
profitable segments
• Upgrade product line
• Minimize investment
• Sell at time that will
maximize
cash value
• Cut fixed costs and avoid
investments meanwhile

SCORPIO TECHNIQUE

This technique is used to justify the strategies that we have selected while
doing the analyses of BCG Matrix. Scorpio technique is a continuous process of
every company and each and every company have own time frame to review the
technique may be in 0ne year or one month ,may be in one week or other .
Industry or Market
 Industry or technology thinking
1. Example:- online complaint centre, e-commerce, research &
development.
CUSTOMER:-

1. Middle class, upper middle class, upper class.

2. Cakes, pastries, beverages and dairy products, because large number of
branches are there for their easy access.
3. Soft drinks charges are less then coca cola and Pepsi etc, online complaint
desk, as people are more concerning about health.
4. Increase number of branches, Alternate Distribution Channel.
5. Inflation rate, high prices of sugar, energy crisis, etc
6. Reliability, loyalty, customer relation, customer retention.
7. Branches, website under construction (updating reason), online
complaint desk.
SEGMENTATION AND TARGETING

1. Differentiated, each and in every branch give response to the customer

same and fair interaction.
2. To increase customers by targeting all the level of social classes now.
3. Upper middle class, upper class.
4. To develop Durability, to targeting the customer according to the need
and demand, built a positive relations to customer , to increase loyalty and to do
research and survey on customer preferences.
5. No priority because same treatment to all the customer
6. Now they are trying to target all the segments as their beverages are
available on other local retail shops.
7. By delivering new offerings e.g. catering in parties on different occasions.
POSITIONING AND BRANDING
1. Differentiation marketing.
2. high quality and good position
3. more and more improvement in quality of the product and position to
built relation to customer to improve brand loyalty
4. To innovate different product and services and built a positive image in
the mind of the customer.
5. Establishment a complete bakery of first choice to facilitate the customer.
6. Customer trust increases
7. Increase promotional activities like advertising on different channels,
pamphlets, concerts etc.
Retention Strategies
1. Holding current customers to attract new customers, and giving more
value to customer through more advertisement.
2. Listen and Respond to complaint
3. No, it can also increase the customers
4. No.
5. Good
6. To get satisfaction of the customers
7. Offering new items.

ORGANIZATION: PROCESSES AND CULTURE

1. Both internal & external include employees ,customers

2. Providing better hygienic and healthy food.
3. Strictly followed
4. Yes
5. BCG Matrix

OFFERINGS
1. Superior values and services with attractive and hygienic and healthy
products.
2. Different products, beverages, cakes, pastries.
3. Provide banking facility that influence the customers, provide value,
improved brand image, introduced new innovative products.
4. Sugar free ice creams.
5. Providing more healthy products to satisfy each and every type of
customers
6. Yes we are managing the life cycle.
7. Through Advertisement, print media, number of branches
increase.

Analysis and recommendations

The whole report shows that the Gourmet bakers and sweets are striving to get a
competitive advantage against its customers but there are some problems too on
which the company should concentrate because they serve many other factors
respectively
1. Gourmet should offers incentives and benefits to its old employees to reduce its
turnover rate.
2. And secondly they should reduce the employee work hours so that they better
deals the customers.
3. The Gourmet hasn’t advertised themselves through media; they should have
adopted some other source of advertisement to cater the market. Well they are
well known in the market but they should use TV media for their advertisement,
they could also advertise themselves on the cable in the areas in which they are
having their chains.
4. The Gourmet should plan for the loyalty of its customers. They should give
discounts to its regular customers in this way the customer’s sincerity with the
company will grow.
5. The Parking area of the Gourmet bakers should be enhanced if their customers
face problems in parking .then the customer would prefer to go on some other
store to find convenience rather than buying for the Gourmet.
7. The Gourmet should increase the quality of the new products as it has offered
(milk and ice-cream) and it should also concentrate on the advertisement of the
new product seriously.
8. The Gourmet should take feedback from the customers by personally survey
and should concentrate on the requirement of the customers.
9. As the people is weight and diet conscious today so the Gourmet bakers should
introduce sugar free sweets and cakes for those people too.
10. They should be concentrating on the quality of their products so that the
customers wouldn’t be returning the goods back and thus the image of
the Gourmet wouldn’t be lost in the eyes of the customers.

11. By adopting reduce price strategy they can make more and permanent
customers. Not only more customers will come there will be increase in the
number of loyal customers as well.

12. They have to acquire new technology for production if they don’t move
towards acquiring new technology then they won’t be able to meet the needs
of customers.

13. Sales promotions like prizes, lucky draw schemes should be introduced to
attract more customers and involve kids and children to increase sales.

14. Must capture some special events like local sports series, convocations &
charities shows by sponsoring these shows as would give a good image about
the company to the consumer.