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MARKET ANALYSIS
FOR
BEM- BAKERY PROJECT
BEMBEKE PARISH-DEDZA DIOCESE
MALAWI
DECEMBER 2014
1
CLM
CONSULTANCY
The Market Analysis was conducted by CLM Consultancy
CLM Consultancy
LILONGWE
MALAWI.
AFRICA.
Mobile number: +265991059694
Contact Person: Annie Banda
Lead Consultant
2
Contents Executive Summary ....................................................................................................................................... 4
1.0. Introduction ...................................................................................................................................... 5
1.1. Background of Bem-bakery Project .............................................................................................. 5
1.2. Rationale for undertaking market analysis ................................................................................... 5
1.3. Conduction of the market analysis ............................................................................................... 6
2.0. Demographic characteristics of potential retailer and consumer respondents ............................... 6
2.1. Distribution of potential retailer and consumer respondents by age ............................................ 6
2.2. Distribution of potential retailer and consumer respondents by gender......................................... 7
2.3. Distribution of potential retailer and consumer respondents by educational levels ........................ 8
2.4. Distribution of the potential retailers and consumers by occupation ............................................... 9
3.0. Potential market for Bem-bakery products .................................................................................... 10
3.1. Description of the potential market for Bem-bakery products .................................................. 10
3.2. Characteristics of the potential market for Bem-bakery products ............................................. 11
4.0. Potential retailer and consumer respondents buying behaviours ................................................. 11
4.1. Where the potential retailer and consumer respondents get confectionary products ............. 11
4.2. Quantity of confectionaries ordered and sold per week by retailers ......................................... 13
4.3. Frequency of ordering ................................................................................................................. 13
4.4. Factors that can influence potential retailers and consumers to switch to new
suppliers/products .................................................................................................................................. 14
4.5. Expectations of retailers and consumers on price of products .................................................. 16
4.6. Potential retailer and consumer respondents’ price sensitivity ................................................. 17
4.7. Decision making in purchasing of confectionaries ..................................................................... 18
4.8. Needs of the potential retailers and consumer respondents ..................................................... 18
5.0. Competition Analysis ...................................................................................................................... 19
5.1. Potential retailer and consumer respondents’ satisfaction levels with supplier products and
services .................................................................................................................................................... 19
5.2. Potential retailer and consumer respondents’ dissatisfaction levels with supplier products and
services .................................................................................................................................................... 21
5.3. Summary of strengths and weaknesses of existing confectionary suppliers ............................. 22
5.4. Prices of Competitors’ products ................................................................................................. 23
5.5. Price differences that potential customers are willing to pay for another suppliers’ products . 23
3
5.6. Competitive advantage and market positioning for BEM-bakery ................................................... 24
6.0. Reactions to adverts and promotions of existing suppliers of confectionary products ................. 24
7.0. Threats of Substitutes Products ...................................................................................................... 25
8.0. Strengths, weaknesses, opportunities and threats (SWOT) Analysis for BEM-bakery project ...... 27
8.1. Strengths ..................................................................................................................................... 27
8.2. Weaknesses ................................................................................................................................ 27
8.3. Opportunities .............................................................................................................................. 28
8.4. Threats ........................................................................................................................................ 28
9.0. Conclusion ....................................................................................................................................... 29
4
Executive Summary The market analysis report presents a detailed analysis of issues revealed by the market analysis
exercise conducted in Bembeke area in Dedza, Malawi. However, this section provides a
summary of key issues.
There is untapped market within Bembeke area that Bem-bakery would have to take
advantage of. Such market comprises: Roughly 600-800 students of Bembeke Teachers’
College; Approximately 150 employees of service facilities around Bembeke; Catholic
educational institutions such as St Kizito seminary, Mtendere and Marist secondary; 14
other educational institutions within the parish; Approximately 50,000 catholic faithful
within Bembeke parish and community members around Bembeke parish. A part from
this potential market, there exist other markets beyond Bembeke such as Dedza central
business point and Ntcheu.
The confectionary industry has a fast growing market as people’s consumption habits are
changing. They are going for fast foods due to busy life styles.
Currently, there are three competitors within Bembeke and the surrounding area, one of
which is a major competitor while the other two are not.
Bem-bakery needs to do certain things right to gain a competitive advantage and
penetrate the market. Such things include:
i) Produce superior quality products that would meet the needs of consumers in the targeted
market. Superior products in this case are defined as tasty, soft and fresh confectionaries.
ii) Produce varied products within a particular product line that would go at different prices.
Bem-bakery should avoid ‘one size fits all marketing principle.’
iii) Distribute its products widely through retailers to places such as Bembeke trading,
Bembeke Turn off and to 17 educational institutions within its vicinity.
iv) Deliver products to retailers and collect money later on the same day on return from other
distribution points.
v) Build a sales team that is conscious of customer service-‘Customer is king principle’.
5
1.0. Introduction
1.1. Background of Bem-bakery Project Bembeke Parish which is under Dedza Diocese in Malawi intends to establish a bakery project
under the name “Bem-bakery project”. The idea of starting Bem-bakery project was hatched by a
Dutch couple, Eline and Dominic Hendriks-Houwing who belong to the Dutch NGO People 2
People. This was after meeting wheat farmers in Tsangano area in Ntcheu, Malawi in the
company of Fr. Isaac Mwazambumba of Dedza Diocese. During the meeting, one of the things
that came out clearly was that there exists the need for bread.
It is envisioned that the proposed Bem-bakery project will:
Economically empower community members especially vulnerable women and orphans
through the proceeds that will be made from the sales of the project’s products. The
women will have a source of income to sustain their families. The orphans will have the
opportunity to go back to school as the community will be in a position to support them.
Create employment to community members as some will find job opportunities within
the project.
Transform the lives of community members who will be involved in production of wheat
that will be purchased by the project as raw material for the production of
confectionaries.
Ease problems of access to quality confectionaries faced by boarding students of
Bembeke Teachers’ Training College and other secondary schools and Bembeke
community.
1.2. Rationale for undertaking market analysis The market analysis presents information about the market in which a Bem-Bakery project will
operate the purchasing habits of potential customers in that market and information about
competitors. Before launching a new product or a new business, it is important to conduct a
thorough market analysis to understand the potential market. Doing so helps to minimize risks
and enhance the likelihood of project success. Market analysis allows evaluation of the viability
of the potential market and helps to analyse the competition before making any long-term
6
investment decisions. It empowers management and funders to make new choices and
alternatives.
1.3. Conduction of the market analysis The conduction of the market analysis involved collection of secondary and primary data. The
primary data was collected right from Bembeke area. The participants in the market analysis
exercise included members of Bembeke parish council who are the owners of the proposed
project and potential retailers and consumers, who are potential customers of the proposed Bem-
bakery project products. Data was collected from the members of the parish council through a
focus group discussion. As for the potential retailers and consumers, data was collected through
face to face interviews using a semi-structured questionnaire. A total of 13 retailers and 23
consumers were interviewed. These were identified through firstly cluster sampling and within a
particular cluster, convenience sampling technique was used to identify the respondents.
2.0. Demographic characteristics of potential retailer and consumer
respondents
2.1. Distribution of potential retailer and consumer respondents by age Regarding the age distribution of the potential retailers that participated in the market analysis
exercise, 15% were aged between 20 and 29, 54% were between 30 and 39 and 31% were
between 40 and 49. As for the potential consumers, 35% were between 20 and 29, 43% were
between 30 and 39 and 22% were between 40 and 49. This means that Bem-bakery apart from
those in the educational institutions will be dealing with mature population that is capable of
making rational decisions. In addition, Bem-bakery will be dealing with a population that is very
youthful, economically productive and also risky taking. This kind of population can easily
switch from one product to another if not satisfied or for the sake of satisfying their curiosity.
7
2.2. Distribution of potential retailer and consumer respondents by gender Looking at the gender of the potential retailer respondents, 85% were males and 15% were
females. As for the potential consumer respondents, 57% were females and 43% were males.
The findings entail that Bem-bakery should be prepared to deal with more male retailers than
females and more female buyers than males on the consumer side. This says a lot about the
culture of Malawians and particularly the culture of the areas where Bem-bakery will be
operating. Males are expected to be involved in income generating activities such as running a
shop and females are expected to play an active role in reproductive and maintenance roles of
which buying food stuff is one of them.
0
10
20
30
40
50
60
20 - < 30 30 - < 40 40 - < 50
Distribution of potential retailer respondents by age
% of respondents
0
2
4
6
8
10
12
20 - < 30 30 - < 40 40 - < 50
Distribution of potential consumers by age
% of respondents
8
2.3. Distribution of potential retailer and consumer respondents by
educational levels In terms of educational levels, 15% of the potential retailer respondents had no formal education, 77%
had Primary School Leaving Certification (PSLC) and or anything below and 8% had Junior Certificate
(JC) and Malawi school Certificate of Education (MSCE). As for the potential consumer respondents,
22% had no formal education, 26% had PSLC and or anything below and 39% had JC and MSCE and
13% had degrees. In marketing, it is crucial to appreciate the educational levels of the customers as it may
impacts on preferences, buying decisions and switching patterns. For instance, those with degrees are
prone to seeking superior quality and value for money, and have the ability to get what they want from
distant shops.
0% 20% 40% 60% 80% 100%
Male
Female
Distribution of potential retailer respondents by gender
% of respondents
43%
57%
Distribution of potential consumer respondents by gender
Male
Female
9
2.4. Distribution of the potential retailers and consumers by occupation
All the retailers were business people. Regarding the consumers, 44% were civil servants
working with the education sector, the agricultural sector and the health sector, 39% were
business people and 17% were subsistence farmers. The information on the consumers is very
important as it provides an insight into the buying power of the consumers and possibly their
preferences. For example, civil servants and business people have some buying power as
compared to subsistence farmers. Similarly, civil servants and business people because of the
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
None PSLC and below JC and MSCE Degree
Distribution of potential retail respondents by educational qualifications
% of respondents
0 5
10 15 20 25 30 35 40
None PSLC and below
JC and MSCE Degree
Distribution of potential consumer respondnets by educational levels
% 0f respondents
10
nature of their occupation lead a fast life hence are prone to going for confectionaries than
subsistence farmers.
3.0. Potential market for Bem-bakery products
3.1. Description of the potential market for Bem-bakery products The results of the focus group discussion with some members of Bembeke Parish council
revealed that there is untapped market within Bembeke area that Bem-bakery would have to take
advantage of. The market comprises:
Roughly 600-800 students of Bembeke Teachers’ College
Approximately 150 employees of service facilities around Bembeke
Catholic educational institutions such as St Kizito seminary, Mtendere and Marist
secondary and other 17 educational institutions within the parish
Approximately 50,000 catholic faithful within Bembeke parish and
Other community members around Bembeke parish
A part from this potential market, there exist other markets beyond Bembeke such as Dedza
central business point and Ntcheu.
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
Civil servant Business Subsistence farmer
Distribution of consumers by occupation
% 0f respondents
11
3.2. Characteristics of the potential market for Bem-bakery products The Malawi bakery sector is still growing. There is strong evidence that the market is still
expanding at a rapid pace. This implies that there is still room for new players to enter the
vibrant market. However, the immediate potential market for Bem-bakery products can be
described as a slow growing market in that there is no threat of entry of new competitors in the
immediate future. In terms of demand for confectionary products, it is a fast growing market as
people’s consumption habits are changing. They are going for fast foods due to busy life styles.
“The confectionary market in this area is fast growing because of the fast-paced life of the people here. People now
do not have much time for cooking breakfast stuff so they go for fast foods like bread, buns etc”-Bembeke College
Tutor.
The market has both the affluent and the low income earning population. Some people are viable
economically and they have money to dispose as they are either engaged in small scale
businesses, are a working class or are doing farming for both substance and income generating.
This therefore increases their capacity to buy. The other category of people (the low income
population) has limited money to dispose as they are subsistence farmers. This means that they
can only afford something that is comparatively cheap. Under such a market environment, Bem-
bakery should consider segmenting its market as follows:
i) the affluent few (the working class and business people)
ii) the price sensitive many (students, peasant farmers)
4.0. Potential retailer and consumer respondents buying behaviours
4.1. Where the potential retailer and consumer respondents get
confectionary products The retailers at Bembeke Turn off and Bembeke Trading get confectionary products right at their
shops at Bembeke Turn off and Bembeke Trading respectively. As for consumer respondents
from the area close to Bembeke parish, they get the confectionary products from Bembeke
12
Trading, Bembeke Turn off and Dedza Metro. Potential consumers from Bembeke Turn off area
get their confectionaries mainly from Bembeke Turn off and Dedza Metro.
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
Bembeke trading Centre
Bembeke Turn-off Dedza Metro
Frequency at which consumers around Bembeke parish get confectionary products from Bembeke Trading, Bembeke Turn off and Dedza Metro
% of frequency
0
10
20
30
40
50
60
70
80
Bembeke Turn Off Dedza Metro
Frequency at which consumers at Bembeke Turn off get confectionaries from Bembeke Turn off and Dedza Metro
% of frequency
13
4.2. Quantity of confectionaries ordered and sold per week by retailers The market analysis established that the retailer respondents order and sell a total of 1,045 loaves
of bread per week (on average 150 loaves of bread a day), 2,090 Bin Laden per week (on average
300 a day), 690 buns per week (on average 100 a day) and 380 doughnuts per week (on average
55 a day). It can be appreciated that Bin Laden is the product line that is ordered and sold in high
quantity, seconded by bread. This implies that Bem-bakery should consider prioritizing the
production of Bin Laden and Bread.
4.3. Frequency of ordering In terms of frequency of ordering, 62% of the retailers order twice a week particularly on the two
market days, Mondays and Thursdays, 30% order daily and 8% order once a week. Based on this
revelation, Bem-bakery should ensure that its products are at all cost distributed to its retailers
twice a week specifically on the market days and if opportunities be on every day of the week to
some few retailers.
0
500
1000
1500
2000
2500
Bread Bin Laden Buns Doughnuts
Quantity ordered by potential retailer respondents per week
Qty of products
14
As for the consumer respondents, which exclude students from Bembeke Teachers’ College and
the 17 educational institutions, the analysis shows that 57% buy confectionaries over two times a
week, 22% twice a week, 17% once a week and 4% on a daily basis. This entails that there is
potential market for confectionaries in the locality that Bem-bakery intends to establish itself.
4.4. Factors that can influence potential retailers and consumers to switch to
new suppliers/products The market analysis revealed that much as the retailers or consumers are used to ordering from a
particular supplier or buying particular products, they can easily switch to another supplier or
product. From the retailers’ perspective, the factors that can influence their decisions to switch to
0%
10%
20%
30%
40%
50%
60%
70%
not a single time
once a week twice over 2 times every day
Frequency of ordering per week by potential retailer respondents
% 0f respondents
0
0,1
0,2
0,3
0,4
0,5
0,6
not a single time
once a week twice over 2 times every day
Frequency of buying confectionaries per week by potentail consumer respondents
% of respondents
15
another supplier included convenience (distribution right at the shop) and was mentioned by all
the retailer respondents, quality of products (mentioned by all respondents), quality of customer
service mentioned by 85% of respondents and price of products mentioned by 46% of
respondents. From the consumers’ perspective, the factors that can influence their decisions to
switch to another product included quality of product (83% of respondents), price of product
(78% of respondents), convenience-product availability within their location (57% of
respondents) and packaging (4% of respondents).
The implication of the findings is that for Bem-bakery to have customers at retail and consumer
level, there is need to make retailers and consumers switch from their loyal brand to a new brand.
To achieve this, Bem-bakery should focus on quality of products, convenience and price for both
the retailer and the consumer and customer service particularly for the retailer.
0% 20% 40% 60% 80% 100% 120%
Price
Quality of Product
Quality of Service
Convinience
Factors that can influence potential retailer respondents' to switch to ordering from another supplier
% 0f respondents
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
price quality convenience packaging
Factors that can make potential consumers to switch to new products
% of the respondents
16
4.5. Expectations of retailers and consumers on price of products Both retailers and consumer respondents expressed their expectations on the price of products for
them to be motivated to buy. On the part of the retailers, the expectations included varied price
that is dependent on size and quality (31% of respondents), value for money (15% of
respondents), standard price among suppliers (31% of respondents) and affordability (23% of
respondents). As for the consumers, 61% expected affordability and 39% value for money.
0%
5%
10%
15%
20%
25%
30%
35%
Varied price - size and quality
Value for money
Standard price among
suppliers
Affordable price
Expectations of potential retailer respondents on price of products
% 0f respondents
0% 10% 20% 30% 40% 50% 60% 70%
Value for money
Affordable
Expectations of potential consumer respondents on price of products
% 0f respondents
17
4.6. Potential retailer and consumer respondents’ price sensitivity Further, the potential retailer and consumer respondents were at different levels in terms of price
sensitivity. Some were very sensitive (8% of retailer and 30% of consumer respondents), others
were somehow sensitive (46% of retailer and 57% of consumer respondents) and another
category was not sensitive (46% of retailer and 13% of consumer respondents). Marketing
penetration of Bem-bakery will depend on how it will take care of these categories of retailers
and consumers. The best way is to produce products for a segmented market such as superior
quality products at high price for the price in-sensitive category and high quality products at low
price for the price sensitive category.
0%
10%
20%
30%
40%
50%
very sensitive somehow sensitive not sensitive
Potential Retailer Respondents' Price Sensitivity
% 0f respondents
30%
57%
13%
Potential consumer respondents' price sensitivity
very sensitive
somehow sensitive
not sensitive
18
4.7. Decision making in purchasing of confectionaries The analysis shows that all the potential retailer respondents were decision makers in relation to
deciding what and from what supplier to order. As for the potential consumer respondents, 87%
were decision makers and 13% were not when it comes to buying of confectionary products.
This means that the market analysis collected information mainly from decision makers when it
comes to ordering or buying decisions regarding confectionary products and listening to their
needs would be of importance to the success of Bem-bakery.
4.8. Needs of the potential retailers and consumer respondents It was interesting to note that all the retailer respondents indicated similar needs. The needs were:
quality products, quality customer service, delivery right at the shop, product lines of varied sizes
and prices, deliver and collect money later on the same day and deliver in the morning hours. As
for the consumers, their needs were mainly quality products in terms of tastiness, softness and
freshness (all the respondents), affordable products (87% of respondents), product lines of varied
sizes and prices (78% of respondents) and products being available at convenient points (all
respondents).
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
Yes No
Whether consumer respondents are decision makers
% respondents
19
The success of Bem-bakery in the proposed market depends on its ability to meet the specified
needs of the retailers and consumers. Bem-bakery can take advantage of this and build its
business around the needs of the potential retailers and consumers.
5.0. Competition Analysis The market analysis revealed that there are currently three suppliers of confectionary products
for the area that Bem-bakery intends to introduce its products. The suppliers are Nyika, Baker’s
Pride and Metro.
5.1. Potential retailer and consumer respondents’ satisfaction levels with
supplier products and services The potential retailers and consumers indicated high levels of satisfaction with Nyika and Dedza
Metro products and customer service. Consumers who manage to get bread from Dedza Metro
also expressed high levels of satisfaction with Metro bread and customer service.
0%
20%
40%
60%
80%
100%
120%
Quality products
Affordability products of varied sizes and
prices
Available at a convenient
point
Needs of consumer respondents
% of respondents
20
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
quality of product
(Tasty, soft and fresh)
Distribution/ delivery
customer care shelf life deliver in morning and get money
later
% of respondents
0%
20%
40%
60%
80%
100%
quality of product (Tasty, soft, freshness) Packaging
Reasons for potentail consumer respondents' satisfaction with some of the suppliers products
% of the respondents
21
5.2. Potential retailer and consumer respondents’ dissatisfaction levels with
supplier products and services All the retailer and consumer respondents demonstrated high levels of dissatisfaction with
Baker’s Pride products and customer services. Retailers and consumers at Bembeke Trading
mentioned that they buy Baker’s Pride products because they do not have another alternative
since it is only Bakers’ Pride that distributes at Bembeke Trading. Dissatisfaction with Baker’s
Pride products and customer service is the sole reason that all the retailers at Bembeke Turn off
stock only Nyika products.
0% 10% 20% 30% 40% 50% 60%
nothing
tasteless and very hard
not fresh
poor customer service
unclean trays
unstable pricing
Reasons for potential retailer respondents' dissatisfaction with some suppliers products and services
% 0f respondents
0%
10%
20%
30%
40%
50%
60%
70%
80%
nothing tasteless not fresh not soft poorly baked
limited variety
Reasons for potential consumer respondents' dissatisfaction with some of existing suppliers' products
% of the respondents
22
5.3. Summary of strengths and weaknesses of existing confectionary
suppliers Supplier Distribution point Strengths from
retailer perspective
Strengths from consumer perspective
Weaknesses from retailer perspective
Weaknesses from consumer perspective
Nyika
Bembeke Turn off Quality products
(tasty, soft and
fresh)
Quality products
(tasty, soft and
fresh)
Un clean trays No varied sizes and
prices for products of
a specific line
Deliver right at
retailer’s shop
Good packaging Do not distribute
at Bembeke
Trading
Products not
available at Bembeke
Trading
Deliver in the
morning and
collect money
later in the day
Quality
customer service
Variety of
products-bread,
buns, Bin Laden
and doughnuts
Long shelf life
Baker’s Pride Bembeke Trading
(Used to distribute at
Bembeke Turn off but
lost market due to
poor customer
service)
Deliver right at
the retailer’s
shop
Poor customer
service
Poor quality
products (tasteless,
hard and not fresh,
poorly done
“We buy because we
do not have an
alternative”
Limited product lines
Dedza Metro Only available in
their shop at Dedza
Central business point
Quality products
(tasty, soft and
fresh)
Quality products
(tasty, soft and
fresh)
Do not use
retailers-only
sale at their shop
Limited product lines
Quality
customer service
Buy at wholesale
price
Long shelf life
23
5.4. Prices of Competitors’ products It was difficult to compare the prices for all the confectionary products available on the market
from the three competitors because some competitors do not supply certain products. However,
comparison was made on prices of bread and found that two suppliers (Nyika and Baker’s Pride)
had a standard price while Metro bread was MK20 less. In addition, Nyika and Baker’s Pride had
standard price on buns.
Type of product Nyika Bakers’ Pride Metro
Bread MK280 MK280 MK260
Bin Laden MK100 Do not produce Do not produce
Doughnuts MK30 Do not produce Do not produce
Buns MK50 MK50 Do not produce
5.5. Price differences that potential customers are willing to pay for another
suppliers’ products The market analysis showed that 87% of the potential customers are willing to pay for a product
at a 10-20 Kwacha (3.6% and 7.2%) difference, 9% at a 21-39 kwacha difference and 4% at a
40-59 kwacha difference lower or higher than the current price of confectionary products. For
the start, setting the price of Bem-bakery products at 10-20 Kwacha lower will be the best way to
go.
87%
9% 4%
10-20 Kwacha
21-39 Kwacha
40-59 Kwacha
24
5.6. Competitive advantage and market positioning for BEM-bakery Considering the strengths and weaknesses of the existing suppliers of confectionary products in
the areas that Bem-bakery will be operating, it is important for Bem-bakery to build on the
strengths of the existing suppliers and take advantage of the weaknesses of the existing suppliers
if it is to successfully penetrate the market. To do this, Bem-bakery should consider:
Producing products of superior quality in terms of tasty, softness and freshness.
Producing varied products within a particular product line that should fetch different
prices. For instance, bread can be in full size and half size. Bem-bakery should avoid ‘one
size fits all marketing principle.’
Distributing its products widely through retailers to places such as Bembeke trading,
Bembeke Turn off, Dedza central business point and to 17 educational institutions within
its vicinity.
Working out better terms of payment after supplying to retailers-Deliver and collect the
money later on the same day on return from other distribution points.
Building a sales team that is conscious of customer service-‘Customer is king principle’.
6.0. Reactions to adverts and promotions of existing suppliers of
confectionary products When asked how the potential retailers and consumers respond to adverts and promotions of
existing suppliers of confectionary products, all the potential retailer and consumer respondents
mentioned that their buying decisions are not influenced by adverts and promotions of suppliers.
They elaborated that the existing suppliers (Nyika, Baker’s Pride and Metro) do not undertake
any advertising and promotional activities. They introduce the products to the market through
distribution to retail shops. The consumers are introduced to the new products by the retailers
and normally are prone to buy as a trial. When the consumers are convinced with the quality of
the confectionaries, they maintain customer loyalty.
The retailers’ information corresponds with what the potential customer respondents indicated on
how they react to advertisements and promotions in relation to their buying habits. All the
potential customer respondents pointed out that they have never seen or heard an advert or
promotion on confectionaries. However, they buy newly introduced confectionary products as
25
part of trial and when they like the quality in terms of taste, freshness and softness and the price
of the product is within the competitive range, they continue going for that product.
“We are satisfied with the products from Nyika. But we are open to new suppliers. Quality and price are what
determines our choice of products.”
With these revelations, Bem-bakery should start marketing its products within Bembeke area and
expand to surrounding areas (Dedza central business point and Ntcheu) possibly in the next three
to five years. Within Bembeke area, Bem-bakery should penetrate the market by distributing its
confectionaries widely to retailers such as those in Bembeke Trading, Bembeke Turn off, other
market points and educational institutions. To succeed in this, Bem-Bakery would need
distribution vehicles (vans) and distribution staff (sales representatives) that are good at customer
service.
In terms of promotions and adverts, in the first years of business, Bem-Bakery will have to rely
more on word -of -mouth marketing strategy. However, great market share would be realized if
the products will be of superior quality (tasty, soft and fresh) and the prices are competitive.
Regarding the nature of competition, the market does not have a fierce competition. Currently,
there are three suppliers of confectionary products who almost hold a 100% share of the market
in which they operate. Under such a competition, Bem-bakery has a great chance of gaining a
good market share as long as its products are of superior quality, customer service is good and
distribution facilities are available.
7.0. Threats of Substitutes Products Both the potential retailer respondents and potential consumer respondents agreed that there are a
number of products that can substitute confectionary products in their localities and or homes.
Such products include: Irish potatoes, sweet potatoes, cassava and home-made doughnuts and
banana fritters. However, the respondents pointed out that despite the existence of substitute
products, confectionary products have their own place. People continue to use the confectionary
products due to a number of reasons. The reasons that were presented by the potential retailer
and consumer respondents are presented below:
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Irish potatoes and sweet potatoes are mostly grown for sale
Since the households produce the irish and sweet potatoes themselves, they like to eat
something different (go for confectionaries for a change)
Confectionaries are mostly used by those who are in transit or away from home for
example, business people mostly take confectionaries as snacks and also as lunch.
Confectionaries are fast foods for busy people like the employed, those doing business,
students and so on.
Children love confectionaries than the substitutes
Substitutes are sometimes expensive than confectionaries especially when they are out of
season
0
0,2
0,4
0,6
0,8
1
0
78%
100% 100%
86%
100% 100%
0
76%
100% 100%
60%
100% 100%
% of consumer respondnets % of retailer respondents
27
The evidence shows that despite the fact that Bembeke area produces a lot of irish and sweet
potatoes which are direct substitutes of confectionaries and apart from the availability of
other substitute products like cassava and home-made doughnuts and banana flitters, there is
still potential market for confectionary products in areas surrounding Bembeke.
8.0. Strengths, weaknesses, opportunities and threats (SWOT) Analysis
for BEM-bakery project
In an effort to understand the viability of the proposed Bem-bakery project, one of the tools used
was the SWOT Analysis. The analysis revealed that the proposed bakery project has strengths,
weaknesses, opportunities and threats as elaborated in the follow up sections. As regards the
weaknesses, the analysis surfaced possible solutions.
8.1. Strengths 1. The project will be managed by the community
2. The project will be established on existing structures-Bembeke Parish under Dedza
Diocese
3. Unquestionable project sustainability
4. Wheat which is the main raw material will be produced locally and some will be sourced
from the neighbouring district (location)-Tsangano. The community has experience and
history in wheat farming
5. Strong community interest in the proposed project
6. Great capacity for generation of power at the project site
7. Project site already identified
8.2. Weaknesses Weakness Possible Solution
1 Lack of capacity (knowledge and skills) in
confectionery production, running of business and
Provision of Training in confectionery production,
running of business and modern wheat farming
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modern farming of wheat.
2 Lack of modern machinery for quality
production of confectioneries.
Provision of modern machinery
3 Lack of vehicles (vans) for distribution of
confectioneries
Procurement of vehicles (vans) for distribution
of confectioneries
4 Water problem Drill boreholes or install pump water as
alternative source of water of Water Board
Water source
8.3. Opportunities 1. Availability of market for the confectioneries
2. Availability of land for wheat production
3. Favourable climate conditions for wheat production
4. Change of consumption patterns-people preferring fast foods like confectionaries than
substitutes such as cassava, sweet and irish potatoes due to busy life
5. Good road network which allow distribution of produced bakery products
8.4. Threats
Threat Strategies for averting the threat
1 Wheat production may surpass the demands of the
proposed bakery project.
Regulating wheat production
2 Existence of substitute products Quality confectionary products, in varied sizes and
prices can help to avert this risk
3 Confectioneries not staple food for Malawians Sensitizing communities on the need for food
diversification
4 Malawi moving towards plastic free environment
which may affect the packaging of confectioneries
By being adaptable to change when that time comes
5 climate change as a global threat which may affect
wheat production
Sensitizing the community on the need to embark on
activities that will mitigate climate change such as
tree planting
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9.0. Conclusion The report has presented the results of the market analysis for the proposed Bem-bakery
to be planted in Bembeke parish in Dedza Malawi. Areas of focus included:
Demographic characteristics of potential retailers and consumers; Potential market for
Bem-bakery products; Potential retailer and consumer buying behaviours; Competition
analysis; Competitive advantage and market positioning for Bem-bakery; Retailer and
consumer reactions to adverts and promotion; Threats of substitute products and SWOT
analysis for Bem-bakery project. Overview, the market analysis has revealed that there is
untapped market for Bem-bakery products. However, Bem-Bakery needs to do certain
things right in order to penetrate the market
