Starting a Business Idea and Fundamental Marketing for Nel's Bakery

This report discusses the proposed business idea of Nel's Bakery, which offers unique flavoured ice-cream and rusk produced through sugar-free ingredients. It evaluates the external business environment through PEST analysis, competition and competitive advantage through Porter's five forces model, and suggests a target market through the STP model. The report also covers the fundamentals of marketing for starting a business.

Starting a business and
fundamental marketing

Table of Contents
INTRODUCTION...........................................................................................................................4
TASK ..............................................................................................................................................4
Overview of proposed business idea......................................................................................4
Evaluation of external business environment.........................................................................5
A discussion of competition and what the competitive advantage.........................................6
A suggestion for the proposed target market..........................................................................7
CONCLUSION ...............................................................................................................................9
REFERENCE.................................................................................................................................10

INTRODUCTION
Business is defined as the legal organisation which is engage in various activities such as
commercial, professional and industrial for the purpose of attaining profits. It is defined as the
efforts and activities of individual to produce as well as sell goods and services to customers.
Marketing is defined as the activity which is undertake by the organisation in order to promoting
organisational products and services. Business uses different fundamentals of marketing that
enable business to gain competitive advantage over other competitors. In this report chosen
organisation is Nel's bakery which is situated in Birmingham, United Kingdom. Respective
bakery starts business with new idea such as providing different kind of fast food products
specially desert with special diets. These deserts are vegetarian friendly as well as gluten and
sugar free sweet corn ice cream for fitness and wealth conscious people. Apart from that
organisation offers sandwich, pancakes, cookies, cakes and muffins. Organisation provides
Organisation also offers different flavoured rusk such as orange, pineapple to all age customers.
This report covers overview of business idea and evaluation of external environment that
contains PEST analysis. Furthermore, evaluation of competition as well as competitive
advantages and proposed target market is mentioned in this project report.
TASK
Overview of proposed business idea
In this report prosed business is Nel's bakery which is situated in Birmingham, United
Kingdom. Bakery provides various bakery products and deserts with different variants. Bakery
provides salted sweet corn ice cream with different alternative flavour profiles and a unique
texture. The ice cream includes fresh and crunchy touch of sweet corn in vanilla ice cream which
has been infused with cornstarch. It does not infiltrate the flavour of ice-cream instead of that it
thicker as well as more durable the texture. Nel's bakery produces all its sweet products with
low calories and sugar free ingredients for diet and health conscious customers (Bagozzi, 2018).
Bakery opened its bakery shops in various places of United Kingdom and promote organisation
products through using social media platforms that spread awareness regarding new products of
organisation among customers. Respective organisation evaluate marketing, trends and
customers needs as well as check viability of idea in competitive market than take the decision of

staring business with that idea. The idea is beneficial and profitable for organisation and help
business to maintain strong positioning in market place.
Evaluation of external business environment
PEST analysis: PEST analysis is defined as the concept of marketing principles which is
used by the organisation to track and measure external environment factors that impacts business
performance and functionality in positive and negative manner. It enables organisation to take
better decisions and increase efficiency as well as effectiveness of organisation in competitive
market place. Factors of Pest analysis in the context of Nel's bakery are mentioned below:
Political analysis: There are various factors are included in political factor that are
connected with government impacts business operations and functions in direct and indirect
manner. Food outlets are always in the danger of being targeted by the governance because of
safety and well-being of people. In the context of Nel's bakery, managers of organisation ensures
that all health and safety regulations and other regulations which are developed by organisation
are included in decision-making process to ensure sustainability in competitive business
environment (Baron, Harris and Hilton,2018). Respective organisation works in United Kingdom
which is politically stable county that help organisation to run its operations in efficient manner.
Economic analysis: Economic factors are related to economic situations and
performance that impacts business operations in long run. There is number of factors are
included in economic factors such as purchasing power of customers, changes in demand and
supply, inflation rate, interest rate, economy growth pattern and foreign exchange rates. As the
purchasing power of UK customers and demand are high that enable business to attain higher
sales ans profitability. On the other hand, higher interest rate and prices of material increases
organisational cost and as a result the prices of menu also increased.
Social analysis: Social factors are related to the social environmental conditions of
market that influences activities as well as behaviour of customers. These factors consist cultural
trends, demographics as well as sweet ulation analytics. Nel's bakery analyse these factors and
take business decisions accordingly that enable business to sustain in competitive business
environment (Bjerke, 2018). Living standard of UK customers are high and they are ready to pay
higher prices for quality products that help business to attain the objective of growth. As
organisation provides sweet corn ice cream which is healthy and produced by sugar free
ingredients so, health conscious people of UK are attracted towards organisational products and

services. Apart form that regular changing trends and requirements of customers are the factor
that impacts business functionality.
Technological analysis: Technological advancements and innovation are the aspects
business operations in different manner. Nel's bakery uses latest technologies ans machineries to
produce ice cream and other bakery products. It helps organisation to boost production as well as
reduce the cost of whole production process. Respective organisation also uses robots to serve its
products to customers that help business to gain sustainable competitive advantages.
Nel's bakery analyse all these factors properly than take decisions that help business to
survive in competitive environment.
A discussion of competition and what the competitive advantage
Competitors are defined as the other business entity which offer similar products and
services to customers that impacts business sales and performance. It is important for
organisation to analyse trends, products and pricing policies of competitors than develop own
strategies in order to gain sustainable competitive advantages (Cortez and Johnston, 2017).
Competitive advantages are referred as the factors that allow an organisation to produce products
and services better and more affordable prices than other rivals. These factors enable an entity to
generate high sales and attain high margin than other competitors. To analyse competition and
competitive advantages porter's five forces is conducted in the context of Nel's bakery:
Porter's five forces model:
Bargaining power of suppliers: Suppliers are the person who provides raw material to
organisation for the purpose of producing finished goods. There is various raw material is
required to bakery to produce products. Nel's bakery has number of suppliers that provides
quality material to organisation at affordable prices. If some suppliers raise their prices than,
organisation can switch to other suppliers. Thus, bargaining power of suppliers are low for Nel's
bakery. Through getting quality products at reasonable prices organisation gain competitive
advantages than other competitors.
Bargaining power of buyers: Buyers of bakery organisation divides into two parts such
as individual customers and organisation that provides foods products to customers. Higher
bargaining power of customers impacts business performance and functionality (Farquhar, and
Meidan, 2017). In the context of Nel's bakery, it provides unique flavoured ice-cream and rusk

that are not available in market. So customers have no option to switch the brand. Thus
bargaining of customer is low of organisation.
Threat of new entrants: Threats of new entrants in bakery industry is moderately high
because entry in this industry is quite easy and there is no large capacity prerequisites are
required that impacts profitability margin of Nel's bakery (Vodă, and Florea, 2019). High fixed
cost is the greatest obstacle that are faced by new organisation because they requires technical
and technological equipments that requires high investment as well as insures high degree of
productivity.
Threats of substitute products: Now these days, bakery organisations are not involve in
the production of fresh bread but they produces pies, biscuits, pastries and various others. Nel's
bakery provides unique sweet-corm flavoured ice-cream and orange, pineapple flavoured rusk to
customers which is not provided by any other bakery (Kelsey, 2017). So threat of substitute
product is low for Nel's bakery. It enables respective organisation to cover high market share and
customer that directly enhances organisational sales as well as profitability ratio which provides
competitive advantages to organisation over other competitors.
Rivalry inside industry: Rivalry inside industry is defined as the number of competitors
that provides similar products in market place. Some competitors of Nel's bakery are Loaf
bakery, British bakery and various other that impacts business performance and sales ratio. Nel's
bakery provides unique products and services in market that somehow reduces competition level
for organisation and provides competitive advantages in market place to improve sales.
A suggestion for the proposed target market
STP Model: STP model is defined as the tactical approach which is used by the
organisation to target specific segment of market that contains growth and development
potentialities. STP stand for segmentation, targeting and positioning that enable business to attain
strong positioning in market through provide quality and suitable products to targeted customers
(Mullin, 2018). Factors of STP model are mentioned below:
Segmentation: Segmentation is defined as the process of dividing whole market into small
segments according to their similar characteristics, trades and other aspects. Nel's bakery divides
whole market into demographical, psycho-graphical and behavioural aspects which are
mentioned below:

Demographic: Demographic segment is related to personal characteristics of customers
such as their age, educational level, gender, occupation and various other. In the context Nel's
bakery provide unique flavoured in-cream and rusk to customers as per the requirements and
characteristics of customers that enhances organisational market share.
Geographic: Geographical segment is related to specific place, country, region and city.
Nel's bakery provides its products and services in the market of United Kingdom. Respective
organisation strategy is to cover higher market share of home country.
Psychographic: Psycho-graphical segment contains the customers with similar
personality, attitude, values, opinions and interest level. Nel's bakery provides differentiated
flavoured products to customers that are produced through sugar free ingredients. As customers
of UK are health conscious so, they attracts towards organisational products and services.
Behavioural: Behavioural segment is related to the behaviour of the customer that
reflects their loyalty as well as interests regarding the products that are offered by organisation.
Nel's bakery analyses customers behaviour their buying behaviour that segmented them in
similar groups who have interest in organisational products and services (Pantano, 2017)
(Szablewska, and Kubacki, 2019). It helps business to target potential customers attain higher
market share and profitability ratio.
Targeting: Targeting is defined as the selecting most suitable and appropriate segment of market
that contains various growth and development potentiality. It helps business to attain
opportunities and explore business activities in different market areas. Nel's bakery measures
potentiality as well as commercial attractiveness of each segment that select the best one that
help business to enhance sales. Respective organisation targets all age group customers both
male and female, vegetarian health conscious people because organisation provides gluten and
sugar free ice-cream and different flavour rusks.
Positioning: Positioning is defined as the maintaining strong image in the minds of customers
which differentiate organisation from others. Nel's bakery provides quality products and services
to customers at affordable prices that enable business to attain higher market share and customer
base (Venugopal, and Viswanathan, 2017). Respective organisation modifies its products and
services according to requirement of customers that helps organisation to gain competitive
advantages.

CONCLUSION
As per above report, it can be concluded that business is the legal entity which involves
in the operations of producing products and services and provide them to customers for
generating profits. Business conducts various marketing activities to promote organisational
products and services in market. External business environment factors are situated outside
business boundaries and impacts organisational operations in positive as well as negative
manner. Business analyses these factors then develop business policies that lead business in right
direction. Before conducting business operations in market it is important to analyse competitors
and their activities in organisation gain sustainable competitive advantages. Business decides a
specific segment of market to provides products and services and attain the objective of growth
and development.

REFERENCE
Book and journal
Bagozzi, R.P., 2018. Three systems underpinning marketing behavior. AMS Review, 8(1),
pp.23-29.
Baron, S., Harris, K. and Hilton, T., 2018. Services marketing: text and cases. Bloomsbury
Publishing.
Bjerke, B., 2018. Knowledge development of marketing. In Alternative Marketing Approaches
for Entrepreneurs. Edward Elgar Publishing.
Cortez, R.M. and Johnston, W.J., 2017. The future of B2B marketing theory: A historical and
prospective analysis. Industrial Marketing Management, 66, pp.90-102.
Farquhar, J. and Meidan, A., 2017. Marketing financial services. Red Globe Press.
Kelsey, T., 2017. Introduction to social media marketing: A guide for absolute beginners.
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