Great Harvest Bread Company Marketing Plan

MBA 643 Marketing Management

Prepared By: John Keeney

Charles Hayes

Joseph Slocum

Cassidy Glebavicius

December 16, 2015

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Table of Contents

Executive Summary 3    Background

Situational Analysis 5    Customer                                        Company SWOT Analysis                                Context                                        Collaborators                                        Competition                                       

Market Analysis and Strategies                   10         Potential Customer Survey Data    Positioning StatementTactical Plans 13

ProductPrice PlacePromotion

Conclusion 17References 18

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Executive Summary

This marketing plan was put together to analyze Great Harvest Bread Company

and develop new changes that the company could make to improve business and

increase revenue. Great Harvest is located in the heart of Fairbanks at the Bentley Mall

shopping center. The owners, Eric and Tricia Cray, have been in business since August

of 2012. The store specializes in making different flavors of bread from a basic loaf of

wheat bread to other tasty breads like Cinnamon Chip and White Cherry Chocolate

bread.

During our research we found that Great Harvest has a large number of loyal

customers who help keep their business operating, but their customer base is relatively

small. Customers are loyal to our company because the product is simply that good, but

in the business world your company must continuously keep changing and expanding to

keep up with your competition. Depending on our loyal customers to make routine

purchases will eventually make our business stagnant. Instead, new ideas and solutions

need to be established to fix our company’s problem.

Our research showed us that 60% of Great Harvest’s customer base is made up

of middle aged women between 30 and 45. This group of consumers also makes up

roughly about 75% of Great Harvest’s loyal customers. A loyal customer is defined as

someone who makes a purchase in our store at least once a week. Having this

information, we determined that our company could expand its customer base by

targeting demographic groups outside of middle aged women. Our research and

surveys showed us that military personnel and college students make up over half of

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the Fairbanks city population. Also, out of military, students, and people not affiliated

with either, military personnel and students regularly eat out twice as much. The military

group and student segment chose E-mail and social media as the best way to inform

them about promotions and new products.

Recommendations:

·         Increase product awareness

·         Target military market and college students

·         Improve presence on Facebook and Twitter

·         Send out a weekly newsletter including what breads are offered and any

purchasing discounts

Background

Great Harvest Bread Company Fairbanks is part of a bread making franchise

originated in Great Falls, Montana. In 1976 the first ever Great Harvest Bakery was

opened in Great Falls. Today, there are over 300 Great Harvests nationwide. One of the

important aspects about Great Harvest is that it is not a typical, strict franchise like most

large and successful businesses. Instead, the company works with a loose or freedom

franchise where owners have the freedom to make changes to the menu and offer

goods that other stores around the country might not offer.

    The Great Harvest Bakery in Fairbanks is owned by Eric and Tricia Cray. The two

owners opened the store in August of 2012 and have enjoyed success with their

business. Tricia says they decided to start their business after attending a convention in

Anchorage where they found out they could open their own after following a few easy

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steps and requirements. Since opening, their store has seen some success but their

sales have not grown much in the past year. Our marketing plan will analyze the

company and offer recommendations to help Eric and Tricia increase the store’s

revenue and improve their business.

Situational Analysis

Customers

           The customers of Great Harvest Bread Company in Fairbanks, AK are typical

from what you’d expect in a specialty bread bakery. Both through our observation, our

surveys, and with speaking to the owner we learned their typical customers are middle-

aged and older, female, and are not especially price sensitive.  The higher age of the

customers is indicative of greater disposable income and likely being more health

conscious. That will make them more likely to pay for the quality offered by a specialty

shop such as Great Harvest Bread Company. The fact that more of their customer base

is female is simply a reflection that women do slightly higher percentage of food

shopping than men. We also learned that their customer base is a comparable mix of

those that just focus on the specialty breads or only shop for special occasions and

those that purchase bread there for their everyday bread usage.

Company

The strengths of Great Harvest Bread Company all revolve around how they set

themselves apart with a quality product and quality service, both to the customer and

the community. They build their image on their unique and high quality breads. Using

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only high quality ingredients they make a range of choices from simple wheat bread with

only five ingredients to seasonal and unique artisan creations. In their case, the product

speaks for itself. This is evident in their bread board where you can get large sample

and also with their desire to donate on a large scale. The donations are partially a tactic

to get their bread out to more people, but it also a reflection of their strong values in

providing the best possible service to their customers and the local community. Another

way they build on their business is through their add-on products. Given the fact that

they make great bread it wasn’t a large jump to make good sandwiches, and they also

built upon their use of simple quality ingredients to build an extensive list of artisan

breads and sweets.

However, in their business there are some weaknesses that present difficulties in

their growing success. Being relatively new to the area, there are still many people to

either aren’t familiar with Great Harvest Bread Company at all or don’t know about the

one here in Fairbanks. Another challenge with any small business like this one is the

difficulty in finding and retaining good employees. This is hard on an owner that has to

then do more of the labor themselves when they should be more able to look over the

business and try to manage costs which are quite high for this shop due to the need to

have staff working late at night and early in the morning. Additionally, rent at this

particular location is very high. Another challenge for Great Harvest Bread are the

limitations placed by the franchise often limiting the product line for newer franchise

locations. These challenges combined with the cost of their quality ingredients push

specialty shops like these to have to charge high prices.

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In their attempt to overcome or circumvent these weaknesses, Great Harvest

Bread Company will have to take advantage of some opportunities outside of just their

internal working. For example, there are large military and university related populations

in the area that regularly conduct events of all kinds ranging from sporting and service

events, speakers, and social gatherings. These are great options to present their

product to a larger concentrated audience. Another method would be to continue to

expand upon their community exposure. They already use a lot of donations and appear

at numerous events. However, there is still much opportunity to grow. Specifically, a

booth at events such as the Farmer’s Market, the fair, and events at the Carlson Center

such as the outdoor show, craft show, gun shows, etc. This would get their quality

product in front more people, especially male customers. Another platform where Great

Harvest can potentially benefit is through social media. They already have a good

Facebook presence, but this could grow and include more forms of social media such

as Instagram, Twitter, or Pinterest.

The external threats of concern for Great Harvest Bread Company include diet

trends, supply costs and the unique challenges that are part of being a business owner

in Fairbanks, AK. As a food service provider, they are at the mercy to any diet and

health trends. This is of particular attention with respect to Gluten and carbohydrates.

Additionally, given that Great Harvest uses few ingredients from few suppliers, they are

always at risk of changes in costs of ingredients. Finally, the location of Fairbanks

brings the challenges of bad weather in the winter, extensive road construction in the

summer that could limit access, and seasonal changes in population and income levels.

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Context

Analysis of the context of the business of Great Harvest Bread Company begs

the question of what is going on in the world. These issues stem from big picture

concerns such as politics, the economy, social factors, and technology. For Great

Harvest to succeed, they have to be in an environment where there are enough

customers, they have the disposable income to purchase these specialty breads, and

they must want and believe in the quality and value of the product.

A large percentage of the Fairbanks community is part of the military (roughly

30% of jobs and 38% of wages). In a community like this there are always concerns of

the changes in military personnel. For example, Eielson Air Force Base is likely to

receive a new squadron of aircraft bringing new people to the area. By contrast, there

has been talk on more than one occasion of downsizing Fort Wainwright which would

result in the loss of thousands of personnel. Beyond the risk of downsizing, a major

deployment of military personnel to any overseas conflict would at least temporarily also

bring similar reductions to personnel.

  Another large part of the Fairbanks and Alaska economy revolves around the oil

industry which is currently experiencing a collapse in the price of oil. The loss of this oil

money is pushing Alaska’s economy towards a recession. Likely outcomes include

unemployment and reduction or elimination of the Permanent Fund Dividend, or PFD’s.

This downturn in the economy and level of disposable income could have an effect on

specialty businesses such as Great Harvest.

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Outside of the economic factors, customers also have to believe in the value they

receive from Great Harvest Bread Company. As part of this, Great Harvest has to

continue to have access to the best ingredients to continue to make high quality breads.

Again, they achieve this quality as a result of using few simple and high quality

ingredients. This becomes important if there is a shortage of one of their ingredients

such as an egg shortage this year. Also, a risk of their choice to use only wheat from

Montana, they are at the mercy of the global markets that price the wheat and more

significantly mother nature. There are various concerns over insect infestations in this

region, and with it being just this one region, a shift in weather patterns resulting from

climate change will have an effect on the quality of wheat that can be produced. Another

part maintaining the value of the breads sold at Great Harvest is the reputation and

image of the company. As technology and social media becomes a more integral part of

our society, more and more local businesses can benefit or be damaged by these

platforms. Many people base their shopping choices on reviews and images that are

available online, and it only takes a few negative reviews to have a lasting impact on a

small business.

Collaborators

For good or bad, Great Harvest Bread Company has very few collaborators.

They use few ingredients from a very few suppliers. In fact, their most important

ingredient in obtained from other parts of Great Harvest Bread Company itself. The

company boasts that they take the wheat from the farm to the table. The wheat is

purchased from Montana farms and shipped to the franchise locations all controlled by

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Great Harvest Bread Company. With Great Harvest Bread Company of Fairbanks being

the end provider, they have no distribution channels outside of their own store.

Competitors

One of the things that make Great Harvest Bread Company in Fairbanks

successful is that no other competitors do exactly what they do. Their only competition

include other sources of bread such as Fred Meyer, Safeway, and Lulu’s Bread and

Bagels; and other places for lunch such as Brueggers next door, Speedy Subs,

Chowder House and other choices in the area.

Market Analysis and Strategies

    While looking at Great Harvest Bread Company's segmentation, targeting, and

positioning we took a look at their potential customer survey data, main competitors, a

competitive analysis, and their positioning statement.

Using the information we gathered from our survey we looked at three primary

groups: military, no affiliation, and students. These are the groups that we perceive to

be the three main segments in Fairbanks. One of the first questions we looked at with

these three segments is how these segments prefer to receive their information. For

students we found that Facebook is the best way to reach their segment, for no

affiliation it was radio, and for the military the best way to reach them was through e-

mail.

Collectively we found the best way to focus and reach all three segments was

through E-mail. We felt that a good strategy to reach out to people was through either a

weekly or monthly newsletter. This allows Great Harvest Bread Company to reach out

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to repeat customers and offer information on new breads they are serving as well as

offering discounts or promoting events.

The next area we looked at in our data was which of the three segments was the

most important for us to reach out to. In order to do this we surveyed to see how often

people in each segment eat out per week. It doesn’t make any sense to spend a lot of

effort and money to market towards a group that doesn’t tend to eat out anyways. We

found that the majority of students and no affiliation tend to eat out between 1 and 3

times per week, the military we surveyed tended to eat out between 4 and 6 times per

week.

Of the 30 surveys we had in each group, 47% of military eat out between 4 and 6

times per week, no affiliation 67% ate out between 1 and 3 times per week, and 50% of

students ate out 1 to 3 times per week. This shows that all three groups make sense to

target as only 13% of each group reported they don’t eat out at all. The military is the

best target segment but only by a mild margin, military also tends to be closer in

location to Great Harvest Bread Company because of how close it is to base.

Great Harvest Bread Company has a lot of room to reach into new markets. Of

the 30 people surveyed in each segment 83% of military have been to GHBC, and 23%

of students and no affiliation have been. This means a lot of students have not been to

GHBC which could be a result of location. A good way to reach out to more students

would be to create a stronger Facebook presence, 44% of UAF students said their main

way of getting information was through Facebook.

Great Harvest Bread Company doesn’t have a ton of competition in the local

area, but some of their main competitors are LuLu’s bagels, Fred Meyer, and Safeway

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bakeries. GHBC is more of a specialized product rather than being an everyday grocery

store (Safeway/Fred Meyer) or a breakfast bagel/bread shop. The most similar in

comparison with Great Harvest Bread Company is Safeway or Fred Meyer’s.

Looking at the three main competitors with Great Harvest Bread Company we did

a competitive analysis using the variables of price, location, and selection. There wasn’t

a huge different in price but Great Harvest Bread Company is slightly more expensive

than its competitors. When we looked at location it was hard to really compare the

competitors because LuLu’s is close to campus and Great Harvest Bread Company is

closer to the military base, Safeway and Fred Meyer’s both have two locations with one

being by base and the other by campus giving them both an advantage on location

Safeway and Fred Meyer’s lead the way in selections, most of these breads are

considered your everyday bread versus LuLu’s and GHBC which are more specialty

breads.

Great Harvest Bread Company has created their own positioning statement,

which says “We believe our success comes from a strong commitment to uphold the

legacy and integrity of the Great Harvest Brand. Great harvest is about customer

experience and the promise of phenomenal tasting products made with freshly milled

whole grain and pure and simple ingredients”. This is a strong statement, which shows

Great Harvest Bread Company’s main goal is to provide health conscious, natural bread

for its customers without sacrificing taste. This determines their target segment as

anyone looking for a healthy way to still enjoy bread.

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Tactical Plans

Product

Brand is an important aspect of a company’s product, especially in the case of

Great Harvest Bread Company. Brand associations are characteristics which come to

mind when a consumer hears the brand name. Brand associations follow a hierarchy; at

the top are basic product attributes, then product benefits, and finally emotional

benefits. Product attributes that are immediately associated with the Great Harvest

brand are bread and great quality. Product benefits attributed to the brand are that their

products are great to bring to social gatherings such as parties or dinners. When a

person is trying to think of what to bring to a church gathering or potluck, the Great

Harvest brand may come to mind due to brand associations of product benefits.

Emotional benefits are what connect brand to consumer on a personal or unconscious

level. These are the feelings associated with the brand such as positive social

interaction or developed interpersonal connections with the Great Harvest Bread

Company brand.

    Brand personality characterizes the brand as a whole. It personifies the brand

collectively based on the marketing mix and experiences with the company. Great

harvest has a reputation for being charitable and community oriented, and therefore

possesses a sincere brand personality. Employees frequently greet customers in a

friendly manner and give their undivided attention when interacting with others. The

owners are active in the community and interact with customers also. All of these

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actions and characteristics make for the sincere brand personality of the Fairbanks

Great Harvest Bread Company.

    Brand strategy describes how a company brands their product offerings. Some

companies will have multiple brands in order to carry different associations with each

product line. Great Harvest utilizes umbrella branding. This strategy places the same

brand name on all of the products the firm sells. Everything sold by Great Harvest

carries that brand name.

Goods and services determine the firm’s product structure. Great Harvest

Bread Company’s product structure lies closer to the goods side of the continuum, but

also covers some aspects related to services. Products sold by Great Harvest are

tangible and standardized by following a recipe, which are characteristics of a good.

Characteristics that shift nearer to the service side of the product continuum are the

experience and perishability of Great Harvest Bread Company products. The breads

sold are produced daily and should be consumed within one week of purchase, so

these products are perishable to an extent. Consumers must also experience the

product to determine the quality. Unlike goods, one cannot simply look at the bread and

know the high quality or taste. All aspects considered, the Great Harvest Bread

Company products are considered goods, but also have some characteristics of

services.

Product offerings include a company’s core market offerings and value-added

offerings. The core market offerings are essentially the main products sold by the firm,

or what their focus is. The core market offerings for Great Harvest are bread, healthy

ingredients, and quality. The added-value offerings include items such as drinks, food,

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catering, gifts, friendly service, and seating for customers. These are all additional

benefits offered to consumers that are received as “extras” to their core market offering.

New Products are important to companies because they intrigue consumers and

retain interest from existing customers. New products are effective for Great Harvest

because the company is in the growth stage of the product life cycle. In this stage the

company is known but trying to expand and grow the business. The effect of new

product offerings on the life cycle can be extremely helpful because they add energy to

the company and promote growth rather than stagnation. Great Harvest has many

options for new products, but a convenient alternative are seasonal offerings. This

creates a similar energy as new products when integrated into the system but contains

less risk.

Price

Great Harvest Bread Company utilizes a diversified pricing strategy. They

consider cost pricing but because the costs associated with their products are

excessive, they must charge higher end prices for their product. This situation forces the

company to look also into what customers are willing to pay for their product. The

demand is inelastic and their customers are generally very brand loyal, which allows

them to charge higher rates than their competition. The high price point also exists due

to the actual quality differences and rarity of their product. The company does offer

quantity discounts in the form of punch cards, as well as sales sometimes for

consumers who may be more money-conscious.

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Place

Great Harvest Bread Company has many distribution channel strategies. There

are some aspects of backward integration in the channels such as the employees both

milling wheat in the store and baking all of the breads every day. In other aspects they

do utilize suppliers such as purchasing Montana wheat, eggs, and other staples from

manufacturers. The franchise connects local stores to partners within the supply chain,

providing a smooth transition.

Promotion

    Marketing goals consist of three steps: cognition, affect, and behavior. Great Harvest

lies between the cognition and affect goals. Cognition is the goal to promote awareness

of the company and provide consumers with information. Great Harvest is still a

relatively new local firm and therefore continues to try developing awareness through

various mediums like trade shows and presentations. Affect is the goal to increase the

likeability of their products for consumers. Great Harvest is working on this goal by

providing samples to the public and emphasizing the high quality of their breads.  

    Great Harvest Bread Company uses a pull strategy in their promotions. The owners

attend trade shows and offer free samples because they are confident once customers

have tasted their product, it will “pull” them to the store and result in sales. They also

announce discounts on Facebook and social media, and rely on word of mouth from

brand loyalists to pull more customers into the store.

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Conclusion

    Great Harvest needs to focus on increasing product awareness and their customer

base. Their products speak for themselves and the franchise has been successful for

almost 40 years. However, to experience growth and increase sales Great Harvest

should focus on attracting new customers first while still satisfying their loyal shoppers.

The military segment and student segment are two primary groups that the company

should target with promotions and product information. The best way to reach these

groups would be organizing a weekly newsletter that is sent out to invite people in the

store and offer discounts after making purchases. Also, increasing their updates on

social media like Facebook and Twitter will increase product awareness for Great

Harvest.

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References

Eberhart, John (2015 August 27) Military Matters to Fairbanks. The News

Miner. Retrieved from www.newsminer.com

Iacobucci, Dawn (2013) Marketing Management. Mason, OH: Cengage

Learning

King, Jonathan "Alaska Economic Outlook 2015." Presented with World

Trade Center Alaska. February 3, 2015.<http://fairbankschamber.org/

wp-content/uploads/2015/02/2015-Economic-Outlook_Jonathan-

King.pdf>

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