Bengawan Solo A. Category Definition A retail confectionary chain selling premium-quality cakes and desserts to serve special occasions, especially Full Month Celebrations, Birthdays, Chinese New Year, and the Mid-Autumn Festival. It also specializes in retailing handmade traditional Indonesian desserts. B. Main Competitors 1. PrimaDeli – Confectionary chain with large retail network. Retails mid-priced freshly prepared goods to consumers as snacks, and also sells cakes and seasonal baked goods. (Prima Deli) 2. Polar Puffs and Cakes (“Polar”) – Retail confectionary chain which additionally differentiates itself emphasis on savoury puffs. Polar Puffs & Cakes) It also retails baked goods for special occasions. Polar enjoys high brand presence because of its partnership with ExxonMobil, which has culminated in Polar’s goods are retailed at over 60 petrol stations islandwide (ExxonMobil Singapore). 3. BreadTalk – A confectionary retail chain with a shorter history but much stronger branding. It is presently one of Singapore’s most recognized retail confectionaries. Breadtalk specializes in bread, and is highly visible due to its choice of highly visible retail locations. BreadTalk) 4. Neighbourhood Confectionaries – Independent confectionaries situated in the heart of neighbourhoods. While their products are generic, their locations are convenient, and loyal customers claim that they have a unique flavour, and constantly return in pursuit of that flavour. All abovementioned confectionaries sell festive goods seasonally, and can provide for common celebrations such as Full Month celebrations. PrimaDeli, Polar Puffs and BreadTalk all have strong presence in popular shopping malls with high pedestrian traffic.
This makes them key competitors with each other, as their products and target markets are highly similar. D. SWOT Strengths 1. High Brand Equity. Bengawan Solo is one of Singapore’s most recognized brands. It has appeared regularly on the Singapore “Enterprise 50” list ever since 1997 (Bengawan Solo), and is highly recognized as a producer of cakes and traditional Nonya desserts using traditional, authentic recipes. Bengawan Solo also featured in prominent local publications in 2010, because it sold traditional Indonesian desserts popularized by a local television drama. 2. Premium Product Perception.
Bengawan Solo is constantly focused on improving the recipes and production process of its traditional products (Pan). This has resulted in the creation of a superior product that is perceived as premium, and customers purchase it because the perceived value begotten often exceeds the monetary cost to them. Weaknesses 1. Seasonality of Sales. Due to the nature of its business, Bengawan Solo generates much higher sales during festive seasons such as the Lunar New Year, and the Mid-Autumn Festival, when Singaporean consumers customarily exchange gifts of traditional desserts.
However, usage frequency during non-festive seasons is generally much lower. This affects increases its risks, as its survival is highly dependent on sales during the festive season even as it incurs operations costs for the entire fiscal year. 2. Vulnerability to Cost Increases. Bengawan Solo’s retail outlets are mostly rented. This makes Bengawan Solo particularly vulnerable to losing their prime locations due to exorbitant rent increases. In addition, Bengawan Solo’s raw materials (i. e. , flour, pandan leaves) are sourced from external vendors.
This makes Bengawan Solo highly susceptible to increased costs due to supply shortage in the event of unforeseen natural or political unrest. Opportunities 1. Craving for Snack-sized Portions. Current research has demonstrated that bite-sized desserts have made the top five restaurant trends for the past four years, as customers seek increased variety without consuming more calories or spending more (Michelle Locke, 2011). Bengawan Solo’s bite-sized traditional desserts would enable it to capitalize on this trend, thus increasing its profitability. 2. Traditional Cafe.
Opening more cafes in strategic locations such as outside supermarkets would attract tired shoppers just as the need for a rest strikes them. Furthermore, there are no Peranakan cafes in the Singapore market at present; thus Bengawan Solo would serve to satisfy an unexplored market. In addition, cafes are an excellent avenue for Bengawan Solo to conduct small-scale product testing on customers, and gain immediate feedback on new products. They would also benefit from a branding perspective, as the cafe would immerse customers in the full Bengawan Solo experience, thus building brand equity.
Threats 1. Threat of New Entrants. Bengawan Solo operates in the highly competitive F&B industry which has close to no barriers to entry – R&D and equipment costs are low, and it is easy to imitate products. In addition, its potential competitors are larger, established players in the F&B industries and may have greater financial and marketing resources. The entry of new competitors into the same F&B segments or into the immediate areas around the group’s retail outlets would thus affect its earnings. 2. Westernization of Consumer Tastes.
Continued earnings growth for Bengawan Solo is highly reliant on the sustained popularity of its traditional cakes and desserts. However, current dessert trends in Singapore indicate increasing demand for Western-style desserts. Cupcake shops and Western-style Japanese bakeries, for example, have proliferated in the past two years – the result of Singaporean consumers being highly influenced by Western trends. This is a threat to Bengawan Solo, as it lacks sufficient new demand to replace its most loyal group of consumers whose numbers are dwindling as they grow older. E. How to improve the business
Branding 1. Reinforce Brand Personality. Bengawan Solo can improve its branding by demonstrating a clear and consistent brand identity and personality. This would make it easier for customers to identify with the Bengawan Solo brand. This is important, as consumers today are constantly looking for products which reinforce their personal self-concept. a. Emphasize “Bengawan Solo” story. The renewed interest in Bengawan Solo’s traditional products when local drama “The Little Nyonya” was aired demonstrates that customers are more likely to consume products if they can relate to them on an emotional level.
Bengawan Solo should thus immerse its customers in their rich history during the consumption process. This can be done by printing a nostalgic version of Bengawan Solo’s history on the insides of cake boxes. This would add another dimension to the consumption experience, as consumers can fantasize about the brand’s journey, as they consume the Bengawan Solo product. 2. Streamline Focus. Bengawan Solo’s existing tagline is “Rediscover the Freshness of a Tradition”.
However, more than half of its product line consists of Western-style cream cakes for adults and children in flavours such as Blueberry, Blackforest, and Strawberry, which are not traditionally Indonesian. These flavours deviate from Bengawan’s focus on Peranakan desserts, and are easily available at generic bakeries elsewhere. They should thus be phased out, with more focus being placed on traditional Peranakan flavours. 3. Innovation and Customer Engagement. In order to want to be loyal to the brand, customers need a reason to return. This means that Bengawan Solo must keep innovating to improve their product.
In addition to upgrading technologies used in production, Bengawan Solo should develop new products with traditional flavours so that customers can keep returning. Segmentation Despite its tagline emphasizing an adherence to tradition, Bengawan Solo greatly emphasizes 3D and Cartoon Character cakes for children at its outlets. These cakes’ popularities are highly dependent on what is currently popular in the media. Also, more parents are choosing to order customized 3D cakes from artisan chefs with better decorative skills than Bengawan Solo. Thus, it is difficult to remain profitable in this segment.
Bengawan Solo should streamline its focus to cater to satisfy “Adults, and Families”. This would highlight the chain’s focus, and allow it to focus on differentiating its product. Positioning 1. Emphasize Premium Quality. As Singapore grows increasingly affluent, consumers’ tastes have also become more premium. It would thus benefit Bengawan Solo to position itself as an affordable luxury, with products of premium quality. This would help it to compete with key competitors on a non-price aspect. 2. Emphasize Heritage. Current advertising and positioning is still very product-focused.
However, today’s consumers desire narrative immersion when buying a product. Educating customers on Bengawan Solo’s long history during the consumption process (via its cake boxes, as mentioned earlier) would differentiate it from competitors with less illustrious histories. 3. Focus on Home-made characteristic. There is emerging consumer resistance against mass-produced goods. Bengawan Solo should thus emphasize the home-made origins of its recipes by educating customers about the truth that its products are the result of a homemade recipe which has been constantly fine-tuned over decades.
Product 1. Traditional Flavours in Modern Cakes. Bengawan Solo should focus on differentiating their cakes by developing modern cakes in traditional flavours. At present, its only differentiated cake is the popular Pandan Fudge Cake. More cakes in traditional flavours could be introduced. This is congruent with its tagline, “Rediscover the Freshness of a Tradition”, and would attract younger consumers who enjoy new and innovative products, while retaining existing ones who enjoy traditional flavours.
Competitors would also find it difficult to replicate such products as they lack Bengawan Solo’s expertise in harnessing premium traditional ingredientson a large scale. 2. Inspired Cake Designs. Bengawan Solo’s cake designs are unattractive to the new generation of consumers (born after 1985), who find them dated. Bengawan Solo can improve cake designs by incorporating traditional Singaporean and Peranakan elements into cake designs, such as by dusting the cake’s tops with orchid petals, thus creating a clearer image of “tradition”. This reinforces the brand’s links to tradition and its Singaporean and Peranakan background. . Online Booking System. Many of Bengawan Solo’s customers are working adults who cannot find time to place cake orders via phone during its operational hours. The introduction of an online booking system for single orders would render Bengawan Solo’s product more desirable because it is easier to purchase. Such a system would also minimize the probability of human error in operations, and also shorten the service process, thus making the ordering system more efficient. 4. Scent Marketing. Bengawan Solo should scent its outlets with the smell of its fresh-baked traditional goods.
Customers are more likely to remember visual images when coupled with a pleasant, congruent fragrance. Also, smelling a familiar scent has been proven to have the same effect as seeing a familiar image. (Lindstrom, 2008) While Bengawan Solo’s retail environment is visually cluttered with logos and branding efforts by other brands, the olfactory domain is largely unexplored. Scenting the retail outlets with the scent of fresh-baked goods would serve to reinforce Bengawan Solo’s image of “freshness” and “tradition”. Works Cited Bengawan Solo. (n. d. ). Retrieved September 11, 2011, from Bengawan Solo: http://www. engawansolo. com. sg/ BreadTalk. (n. d. ). Retrieved September 11, 2011, from BreadTalk – BreadTalk Singapore: http://breadtalk. com. sg/ ExxonMobil Singapore. (n. d. ). Esso service stations in Singapore. Retrieved September 11, 2011, from Esso service stations in Singapore: http://www. exxonmobil. com/ap-english/ps_service_stations. aspx Lindstrom, M. (2008). Buyology: Truth and Lies About Why We Buy. New York City: Broadway Books. Michelle Locke, F. T. (2011, March 14). Chains take a bite out of mini-dessert trend. Retrieved September 11, 2011, from Yahoo!
Singapore Finance: http://sg. finance. yahoo. com/news/Chains-take-a-bite-out-of-apf-206741434. html? x=0 Pan, S. (n. d. ). – Interview with Mrs Liew-tjendri Anastasia. Retrieved September 11, 2011, from Spirit of Enterprise: http://www. soe. org. sg/files/interview2009. php? i=386&a=&c=&year=2009 Polar Puffs & Cakes. (n. d. ). Retrieved September 11, 2011, from Polar Puffs & Cakes – A Fresh New Look: http://www. polarpuffs-cakes. com Prima Deli. (n. d. ). Retrieved September 11, 2011, from PrimaDeli – Giving Life to Taste: http://www. primadeli. com/home/home. asp