1

ANALYSIS OF CUSTOMERS OF UG CAKES

Kathmandu University School of Management (KUSOM)

Balkumari, Lalitpur

UNDERSTANDING CONSUMERS BEHAVIOR

“Analysis of the Customers Of UG Cakes”

Submitted to:

Ms. Roshee Lamichhane Bushal

Assistant Professor- Marketing

Submitted by:

Anamika Shakya (18785)

Nischhal Sharma (18792)

Smarika Shakya (18789)

Nischhal Sharma (18792)

Section- C

Group 2
 2
ANALYSIS OF CUSTOMERS OF UG CAKES

Table of Contents
Why did we choose UG Cakes?..................................................................................................................3
Background of the company........................................................................................................................4
SWOT Analysis...........................................................................................................................................6
Strengths..................................................................................................................................................7
Weakness.................................................................................................................................................8
Opportunities...........................................................................................................................................9
Threats...................................................................................................................................................10
Segmentation.............................................................................................................................................11
Targeting...................................................................................................................................................15
Positioning.................................................................................................................................................16
Personality.................................................................................................................................................17
Brand personality framework................................................................................................................17
Self-image and its impact on consumer behavior..................................................................................18
Perception..................................................................................................................................................19
JND’s implications for Logos................................................................................................................19
Learning....................................................................................................................................................21
Attitude......................................................................................................................................................23
Tri-component attitude model...............................................................................................................23
Age, Income and Family background........................................................................................................26
UG cakes’ customer decision making behavior- Gifting behavior............................................................27
Recommendation to Managers..................................................................................................................28
Recommendations regarding its STP.....................................................................................................28
Recommendation Regarding its 4 P’s:...................................................................................................28
Recommendation to Reopen its Bakery Outlets and Expand the outlets all over Nepal........................29
Importance of Bakery Outlets for UG Cakes.....................................................................................30
Potential Benefits for UG Cakes from its Bakery Outlets..................................................................31
Conclusion.................................................................................................................................................33
 3
ANALYSIS OF CUSTOMERS OF UG CAKES

Why did we choose UG Cakes?

We chose UG Cakes because of its unique yet emerging concept of providing the customizing

facility to the consumers. The UG Cake is a sub brand of Urban Girl that was mainly introduced

in order to meet customers need of customized cakes for several occasions like birthdays,

weddings, weaning ceremonies and many other events. So we chose UG cakes in order to

analyze its marketing strategy including segmentation, targeting, positioning, and its 4P’s, its

SWOT as well as to know more about what influences customer to purchase UG Cakes.
 4
ANALYSIS OF CUSTOMERS OF UG CAKES

Background of the company

Urban Girl (UG) is an ecommerce business which provides offering of custom designed

accessories and gifts. Two young entrepreneurs Ms.Nikita Acharya and Mr. Kiran Timilsina

founded the company in 2012 which is located in Mid-Baneshwor.

UG Cakes is a sub brand of UG that focusses on delivering custom designed cakes through

ecommerce platform. The UG cakes sampled their first cakes to sell in 2014 and in 2015, it

started selling cakes from the third vendors. At that time there was no factory setup of their own.

Later, UG Cakes was officially introduced in the market in 2017 at Bhimsengola which mainly

sells its product from its company’s website called UG bazaar and from UG cakes page in

Facebook and Instagram. It has been seven years for the UG Cakes since it started selling cakes

to the customers. It has been found that there are in total 25 employees all from age 23-27

working in UG Cakes who are selected for skills more than their education qualifications.UG

Cakes is also unique in terms of founding members and its team.

Initially, when the UG Cakes started its business, the company used to sell and deliver the cakes

made by other cake sellers. But as the demand for the UG cakes increased, UG Cakes could not

meet the demand with existing capacity from other sellers and faced several issues of delay in

delivery as a result, UG Cakes established their own bakery to ensure sufficient production, and

to remove any kind of delays. As the team and work grew, the UG cakes moved to Min Bhawan

and later it established UG Cakes in Bhimsengola. Similarly, as the business was scaling up

rapidly, the current model was not sufficient to meet the demand and to provide service to the

customers so, it established its bakery in Mid-Baneshwor to speed up the production process and

delivery system.
 5
ANALYSIS OF CUSTOMERS OF UG CAKES

UG Cake is working with highly trained bakers who can handle multiple orders at once. The

company uses consumer focused marketing concept and is providing different facilities from

customization of cakes, flexibility in placing orders as it can be done through UG’s website,

through the phone. It is providing different payment ways like from cash on delivery, e-payment

through E-sewa, debit/credit card payments.

At present, after the pandemic hit our country and due to nationwide lockdown, the retail outlet

of bakery in Mid-Baneshwor and Bhimsengola had to shut down completely. And right now,

they do not have a bakery outlet in the valley. Similarly, the UG cakes had expanded to Pokhara

in the past years. However, due to the pandemic and sudden lockdown for many months, the UG

cakes outlet in Pokhara has also been shut down as per the information provided by Ms. Sneha

Yadav, Manager of UG Cakes. Currently, there is no physical bakery retail outlet for the

consumers. Therefore, the customers can only place order through phones, websites and social

media and cannot visit their bakery outlet for the placement of their cakes order as the outlets has

been shut down. So, the UG cakes is taking orders online and through calls and has only one

office in Mid- Baneshwor which in full operation for the production process of cakes and for the

administrative work.
 6
ANALYSIS OF CUSTOMERS OF UG CAKES

SWOT Analysis

Strength Weakness
 Good and strong brand image  Delay in delivery of the cakes

 Offers the facility of customizing cakes  High Employees Turnover

 Efficient production and delivery system  Lack of bakery outlets

 Provides quality cakes to the customers  Use of food colors

Opportunities Threats
 Growing trend of using customized cakes  High competition

 Online shopping trend  Low switching cost

 Lack of free delivery service

In the SWOT Analysis, we have analyzed the internal strength of UG Cakes that gives the

company a competitive advantage over its competitors. Then, we find what the company is

lacking in order to identify their weakness. Then we assess the opportunities and threats for the

UG cakes.

SWOT Analysis Table:

 7
ANALYSIS OF CUSTOMERS OF UG CAKES

Strengths

The strengths of the UG cakes are explained below:

i. Good brand image

UG is a well-known brand in the valley having good customer base. After receiving the best

startup company of Nepal in the year 2017 by New Business Age its brand image has been

increased and has been enhanced further which is a strength for UG cakes.

ii. Customized cakes

UG’s main strength is that it offers premium quality customizable cakes. The customers get the

opportunity to design their cake according to their choice and wishes. Customization has become

a popular trend nowadays and we can see customization in Nepali market in different areas like

in bags, purses, shoes, cakes so customization facility of UG cakes is a strength for UG cakes

along with the bakers of UG cakes are excelling in customizing their cakes as per the wishes of

the customers.

iii. Efficient production and delivery

The company has achieved greater efficiency and speed in making cakes through its experience

in making cakes for more than 4 years. The staff are highly trained who are able to make cakes in

short span of time and can also deliver it on time to the customers.

iv. Quality cakes

Quality is an important factor for any product-oriented business and in case of UG Cakes also it

has always been putting and giving the quality of cakes the top priority. The company is using

quality ingredients in making the cakes in order to deliver the proposed value to the consumers.
 8
ANALYSIS OF CUSTOMERS OF UG CAKES

Weakness

The possible weaknesses of UG Cakes are as follows:

i)Delay in delivery

The company is facing late deliveries as there is very limited number of delivery staffs in the

company. The company does not have sufficient delivery staffs so the delivery of the cakes get

delayed frequently.

ii)High Employee turnover ratio

It has been seen that the bakery staffs of UG cakes and bakers often leave the jobs at UG cakes

as soon as they have completed their training on making cakes in order to open their own bakery.

So, there seems to be very few numbers of skilled staffs available in the UG cakes and the

company often faces high employee turnover ratio. Similarly, due to the pandemic also many

employees were also laid off as there was shutdown of the bakery outlet of UG Cakes in the

valley as well as in Pokhara.

iii)Lack of Bakery Outlets

At present, due to the pandemic, it has been found that there is no bakery outlet of the UG cakes

inside the valley as well as the outlet in Pokhara has also been shut down. In Nepal, the condition

of the pandemic is also slowly reviving as the vaccination has also been in practice now so

people are coming out of their home and visiting places with safety precautions. Likewise, most

of the people in our country still prefer to visit a physical outlet rather than to order online. So, it

could be a disadvantage to the UG cakes for not having a physical bakery outlet as it might lose

those customers who prefer to visit the physical outlet instead of ordering online.
 9
ANALYSIS OF CUSTOMERS OF UG CAKES

iv)Food colors

UG cakes has been using attractive and different colors of food colors in order to make its

customized cakes look attractive but sometimes the customers have complained about the taste

of the cake due to the artificial food colors used. The excessive consumption of the food colors is

also not good for health. However, it is one of the key feature of the UG cakes which has turned

out to be weakness in some cases due to unpleasant taste brought by the food colors.

Opportunities

i) Growing trend of using customized cakes

People nowadays are liking and preferring to order the customized cakes during special

occasions like during weddings, birthdays, engagements, farewell so there is huge market

opportunities for the UG cakes to further expand its business.

2) Online shopping trend

As the pandemic hit our country and the nation-wide lockdown has actually increased the online

shopping culture in our country. Consumers are realizing the benefit of online shopping and thus

are using more and more online platforms for shopping purpose so there is huge potentialities for

the UG Cakes to capture the large share of market.

 10
ANALYSIS OF CUSTOMERS OF UG CAKES

Threats

i) Huge competition

There are many direct and indirect competitors for the UG Cakes is large. The direct competitors

for it includes the bakeries that offer the customizable cakes in online platform and providing

free home delivery service for example Daraz , Sastodeals. Likewise, its indirect competitors

includes all the bakeries selling premium quality cakes in the physical retail store in the valley

like Makoo bakery, Crave bakery, Hermann Helmer's German Bakery and many more who are

the threats to UG Cakes.

ii) Low switching cost

The switching cost to other cake brand is very low and easy at the same time. The customers can

easily switch to another cake brand if the UG cakes is unable to provide quality cakes at

reasonable price and if its delivery service is frequently late then also the customers can easily

switch to other cake brands. There are so many competitors in the market providing

customizable cakes at lower prices than that of UG cakes so the low switching cost is another big

threat for the UG Cakes.

iii)Lack of free delivery service

UG cakes provides the facility of free delivery inside the Ring road area only. Besides that it

charged certain amount to the customers for the delivery of the cakes but the other competitors

are delivering cakes with no charge on delivery. Therefore, it leads to a high chance for the

customers to switch the brand as other bakeries are also providing premium quality cakes with

no delivery charge. So, the lack of free delivery service can also be another threat for the UG

cakes.
 11
ANALYSIS OF CUSTOMERS OF UG CAKES

Segmentation

Market segmentation is the process of segregating the market into distinct groups of customers
who shares similar kind of taste or preferences. It segregates heterogeneous market into
relatively more homogenous market, which helps marketer to satisfy consumer’s unique needs
effectively and efficiently. To segment a market, marketers have to split it up into groups that
have similar characteristics or on or more qualities. It is based on certain parameters like
geographic, demographic, psychographic, and behavioral.

Segmentation is also done by UG cakes for more precise target marketing and for personalized
content. It also divides the large market into smaller units which helps it identify its marketing
strategies for different market segments. There are certain parameters that could be used in
segmentation of UG Cakes’ huge market, which are discussed below:

Demographic Segmentation

Demographic Segmentation categorizes its customers according to the different demographic

characteristics which includes age gender, income, education and social class.

Age: UG cakes majorly focus on youths and elder one as its customers group who basically
made brought UG cakes for their friends, Siblings, children, or their patents. Purchaser are:
Teenagers (13-19), young adults (20-40), and adults (very few) major segregated age groups.

Gender: People of all gender order UG cakes so they have no particular focus on any gender.
However, according to the previous research conducted, Females are slightly more into ordering
UG cakes rather than males.

Income: UG cakes market is divided into lower middle class, middle class and upper middle
class and higher class, which is based on their income level. UG manufactures both affordable
and luxury cakes depending upon the requirement. It makes affordable and small sized cakes to
premium cakes of various sizes and designs. According to Ms. Sneha Yadav, middle class and
high-income class are the major targets of UG.

Education: As UG cakes is based online, people familiar with social media platforms such as
Instagram and Facebook are their major customers. It covers the ones who is aware of online
 12
ANALYSIS OF CUSTOMERS OF UG CAKES

ordering system. It automatically segments market into educated consumer group having access
to internet and telephone calls, or the ones who is able use/understands social medias.

Social class: Same as income levels, social class is also divided according the level of income
earners. Social class can be of lower class (low income earners), middle class (average income
earners) and upper class (higher income earners). With realizing the differences Nepalese people
have in class, UG manufactures cakes of different size and prices. However, it may be quite
affordable only for mid income to high income earners.

Geographic Segmentation

UG cakes is the Online based Cake store in Nepal. It has segmented its market into three major
cities of the valley. That is: Kathmandu, Lalitpur and Bhaktapur, on the the basis of urban and
suburban group. As based on delivery system, it provides service within the whole Kathmandu,
Lalitpur and Bhaktapur areas. Also, they used to have a small outlet in New Banashowr which is
closed at the present time because of the pandemic. That outlet is now only an office of UG
cakes and nothing more.

According to Manager of UG cakes, Ms. Sneha told us they were also operating in Pokhara
before Covid-19. As of now, the service in Pokhara is closed and are only planning to reopen
after the market stabilizes. She also told us that they have been planning to open services in other
major cities of Nepal.

At present, it provides services into populated areas within the capital city. These three cities are
the major target region as it comprises of high market density of potential customers or buyers
than another region of Nepal.

Psychographic Segmentation

Psychographic segmentation divides customers into different segments based on various internal

characteristics. It can be bases on personality, values, beliefs, lifestyle, attitudes, or interests,
which helps marketer to identify and market accordingly.

UG cakes also segments its market on the psychographic bases. As the specialty of UG cakes is
personalization, customers usually call for UG for the customization of cakes according to their
 13
ANALYSIS OF CUSTOMERS OF UG CAKES

personal choices. These are the fun-loving people who wouldn’t mind spending more money for
the designs that reflects the person’s identity, or the occasion its being ordered for.

However, UG also manufactures simple cakes. Its market can also be segmented into groups of
people who really don’t care about the appearance or aesthetics and would just prefer a simple
cake which has a good taste and good quantity.

So essentially, the market is segmented on the basis of motives, attitudes, interest and lifestyle of
the customer. On the one side there are trendy customers who want to make the occasion as
grand as possible by showing off the events and cakes on social media are the ones who order for
the premium cakes. And the other sides there are ones who want a subtle, close friends
celebration or order cake just as a formality. The ones who prefers a simple lifestyle and more
introverted.

Behavioral Segmentation

UG cakes also divides customers according to behavior patterns as they interact with them.
Behavioral segmentation segregates the customers according to the behavioral traits of the
customers. It includes occasion of purchase, Benefit needed, Brand loyalty, and User Status,

Occasions: UG Cakes are ordered on various personal occasions such as Birthdays,

Engagements, Anniversaries, Baby Showers, and also on Christmas, Mother’s Day, Father’s
Day, Valentine’s Day, etc. UG faces high demands during these occasions.

Benefits Sought: UG serves different varieties of cakes to fulfill the needs of consumers. So, it
divided on the basis of various benefits sought by the customers. Like some people want a very
tasty cake, some might just one designer cakes and some might just want a good quantity cake.
Some may go for the taste and quality and some may just go for the quantity and appearances.
Likewise, some might such as timely delivery without any hassles. So, looking different needs of
people, UG have to serve accordingly.

Brand Loyalty: Customer loyalty also depends upon the customer behavior. Some people like to
stick with a same brand if the service is good while some people like to switch one brand to
another showing a variety seeking behavior. UG seems to have good brand name and good
numbers of loyal customers.
 14
ANALYSIS OF CUSTOMERS OF UG CAKES

User Status: According to UG cakes, they have high regular customer base. Good number of
people follow them in social media accounts and many of them what UG cakes is all about. And
there are the ones who have moved on to the other competitors.
 15
ANALYSIS OF CUSTOMERS OF UG CAKES

Targeting

Targeting the market segment which is most profitable in order to sell the products and services
helps to yield higher profits. If the company wants to sell its product, it must include a targeted
set of customers which it wants to sell and divert all its marketing efforts.

As UG cakes is famous for customization of cakes, it is using individual targeting marketing

strategy. It uses online delivery system and use social media to promote and display its product,
it is also targeting the one who are technology friendly and likes to order things online.

UG cake use Instagram and Facebook through which it reaches to its targeted set of customers or
individuals who prefer customized cakes. So, from this we can say that UG is targeting the ones
who are young and energetic and want something different for themselves. So, they target mainly
to teens and young adults who are social media savvy and like ordering customized cakes for fun
or to post on social media. UG has recently introduced UG Bazaar as an online e-commerce
platform, which can also be targeting customers who are not into using social media accounts.

The most of the target customer of UG cakes includes ones of middle-class urban population.
They are the Teens to Adults residing in the Kathmandu valley. They age between 13-40 years,
who are likely to make purchase of UG products. To be more precise, they are the ones who can
afford UG, the ones who like to create a special bond, who likes to celebrate different occasion
in a grand way, and the ones who like to show off their daily life in social media.

The cake price of UG ranges from offers cake price ranging from 700 to 6000 per pound. This
price range is set with targeting customers from middle class to upper middle class.

UG has realized the fact that the middle-class population of Kathmandu Valley are being more
inclined to adopt new markets and new offerings. So, with increasing trends of cutting cakes in
Birthdays and anniversary, UG has been targeting the increasing economic class customers.
 16
ANALYSIS OF CUSTOMERS OF UG CAKES

Positioning

After realizing the different target segments, company should position its product to creates its
brand image which helps to influence the consumer perception.

UG Cakes has positioned itself as a premium online cake shop which offers large varieties of
cakes having different size, taste, flavors, designs, etc. It is appealing to those customers who
are looking for custom made cakes as well as those who want a ready-made one. UG has also
positioned itself as an excellent service provider as their highly trained staff can handle multiple
orders simultaneously and make it possible for quick delivery in urgent cases. Also, with their
new MIS system introduced, it has also positioned itself to be technology friendly, which can
track the one to one order, has detailed customer information and has faster and reliable delivery
service. UG has recently introduced website named www.ugbazaar.com, which gives a wide
range of payment options ranging from cash on delivery to bank transfer. This has helped UG to
position itself as the Nepal’s first online e-commerce site to order and customize cakes online.
Apart from the tech, UG Cakes has also earned an emotional appeal with winning hearts of
millions through great customer service and delicious cakes.

With being awarded with “best startup company in Nepal” in the year 2017 by New Business
Age, UG has been in more spotlight and is now considered to be reliable and trustworthy cake
brand. As UG has tagline “Your Brand at Your Doorstep”, all its efforts are done in order to
increase the consumer satisfaction and its delivery services.

Therefore, form this we can say that brand aims and has positioned to be the best cake service in
Nepal, which provides varieties, taste, and quality of cakes.
 17
ANALYSIS OF CUSTOMERS OF UG CAKES

Personality

Personality refers to the inner psychological characteristics that reflect how a person reacts to his

environment. Personality shows the individual choices for various products and brands. It helps

the marketers in deciding when and how to promote the product. Come of the traits that UG

cakes has are as follows: Need for uniqueness is as an individual’s pursuit of differentness

relative to others that is achieved through the acquisition utilization, and disposition of consumer

goods. As this company is actually known for its specialization in customization for customers it

enhances one’s personal and social identity as well. Another trait is Need for cognition (NFC).

Need for cognition measures a person’s craving for or enjoyment of thinking. Since it's a cake

business, obviously it satisfies the cravings and enjoyment of the consumer.

Brand personality framework

Brand personality refers to a set of human characteristics that are attributed to a brand name. An

effective brand increases its brand equity by having a consistent set of traits that a specific

consumer segment enjoys. In other words, brand personality is something to which the consumer

can relate. A company's brand personality elicits an emotional response in a specific consumer

segment, with the intention of inciting positive actions that benefit the firm. In case of UG cakes,

the brand personality of this business is excitement and sincerity.

Excitement

Some of the traits associated with the excitement personality are daring, imaginative, up-to-date,

trendy, spirited and playful. These are brands that provide their customers with an experience

they’ll never forget. UG cakes want to encourage their customers to come on a journey with

them that will lead them to discover something new. The company has created a customization
 18
ANALYSIS OF CUSTOMERS OF UG CAKES

for each cake for each customer who means the product will always be something new and fresh.

They are often good at creating a lot of hype around a product or service. The customers are

always excited to get the product to see if it matches the description, taste, looks. This creates a

level of excitement and joy for the consumers.

Sincerity

The traits associated with sincerity are honest, genuine, wholesome, warm, real, cheerful, and

friendly. Brands that associate themselves with this personality are loved by their customers

because they are straightforward and trustworthy. According to the manager of the UG cakes she

mentioned that, the brand definitely falls in this category about 80%. The brand is always

providing a transparent experience and using real-life experiences, along with the facts, to

promote their company and what it offers. It is not 20% due to the fact that the delivery service

may be late sometimes.

Self-image and its impact on consumer behavior

Self-image refers to the self-knowledge that everyone has about themselves. Self-image includes

the opinions about surrounding world compared to the principles and values. It changes and

develops through the life because of different kinds of feedback that people get from what they

´re doing and how they are acting in diverse situations. There are four type of self image: Actual

self-image, Ideal self-image, Social self-image and Ideal social self-image. In case of uGu cakes,

it is said to follow the actual self-image any order is accepted. Since the customized cake

represents the consumer actually wants and how they see themselves.
 19
ANALYSIS OF CUSTOMERS OF UG CAKES

Perception

Perception refers to the process by which individuals select, organize, and interpret stimuli into a

meaningful and coherent picture of the world. The perceptions consumers have of a business and

its products or service have a dramatic effect on buying behavior. Businesses spend so much

money marketing themselves, honing their customer service and doing whatever else they can to

favorably influence the perceptions of target consumers. Consumer perception on UG cakes has

also changed with its growth of business.

"Initially, people were confused and doubt the online thing but now people are more comfortable

online then real. People trusts us more " – Sneha Yadav, Manager of UG cakes

According to the manager of UG cakes, she mentioned that when the business first in 2015 stated

people were not comfortable ordering a cake online. The consumers were not used to ordering

cakes online as it was new to them and people even doubted it. The consumers doubted if the

products would be how they ordered from the perspective of look, quality, taste and the service.

However, with its growth of the business, consumer has definitely seemed to trust the firm more.

Especially due to the pandemic, it was even a greater success. Not just that but the consumer

has started to trust the brand and has started ordering the cake online without any doubt. This

factor has made the firm grow and extent to even more customers.

JND’s implications for Logos

The difference threshold is the minimum difference that can be detected between two similar

stimuli. The JND is between two stimuli was not an absolute amount, but an amount relative to

the intensity of the first stimuli. They affect small changes so that design fall below the JND and

consumers perceive only minimal difference between succeeding versions.

 20
ANALYSIS OF CUSTOMERS OF UG CAKES

Figure 1 Figure 2

Figure 4

Initially when the UG cakes first opened their logo was as shown in figure 1. Then later they

changed it to a whit color background with bold color as shown in figure 2. Recently with its

establishment of whole shopping platform online, the logo of UG cakes changed again.
 21
ANALYSIS OF CUSTOMERS OF UG CAKES

Learning

Learning is the process by which consumers acquire the information that they apply to future

purchase behavior. In other words, learning is the foundation of consumer behavior acquires the

purchase and consumption knowledge and experience they apply to future. Learning consists of

four elements: motives, cues, responses, and reinforcement.

Motivation

Motivation refers to the unfulfilled needs that lead to motivation, which provides incentive for

learning. This is the degree of relevance, or involvement, with the goal, is critical to how

motivated the consumer is to search for knowledge or information about a product or service. In

case of UG cakes customer, the unfulfilled need would be the want to eat cake. This need can be

for any special occasion. For instance if a consumer is looking for a birthday cake then he/she is

likely to look online for the best cakes. They will look for features such as quality and

attractiveness. An UG cake is one of the top leading brands for cake customization. So the

consumer will search up the knowledge about this brand.

Cues

The next step of learning is cues. If motives serve to stimulate learning, cues are the stimuli that

give direction to the motives. In the marketplace, price, styling, packaging, advertising, and store

displays all serve as cues to help consumers fulfill their needs in product-specific ways. Here,

UG cakes would fulfill the need of consumer in case of attractive as it has special customization

done for each of their customer. It also has great packaging, delivery system and other features to

attract the customers. And it is known to fulfill its expectation of customers. Cues serve to direct

consumer drives when they are consistent with their expectations.

 22
ANALYSIS OF CUSTOMERS OF UG CAKES

Response

Response refers to the individual’s reaction to a drive or cue. In other words it is how

individuals react to a cue, how they behave, constitutes their response. A response is not tied to a

need in a one-to-one fashion. Once the cues are reacted by the consumer, he/she is likely to

purchase or order the product to give it a try. A need or motive may evoke a whole variety of

responses. The response a consumer makes depends heavily on previous learning that, in turn

depends in how related responses were reinforced previously.

Reinforcement

Reinforcement refers to the reward such as the pleasure, enjoyment, and benefits that the

consumer receives after buying and using a product or service In other words, reinforcement

increases the likelihood that a specific response will occur in the future as the result of particular

cues or stimuli. If a consumer is rewarded, that consumer has learnt to associate the purchase

with a pleasant feeling and is likely to repeat the learnt behavior and become a loyal customer.

Here after the consumer tries a product of UG cakes and the response is good to that product then

there are likely to purchase that again for the reward they got in their first try. There is no single,

universal theory of how people learn. Each offers insights to marketers on how to shape their

messages to consumers to bring about desired purchase behavior

 23
ANALYSIS OF CUSTOMERS OF UG CAKES

Attitude

Consumer attitude may be defined as a feeling of favorableness or unfavorable that an individual

has towards an object. An individual with a positive attitude is more likely to buy a product and

this result in the possibility of liking or disliking a product. Consumer attitude basically

comprises of beliefs towards, feelings towards and behavioral intentions towards some objects.

Tri-component attitude model

The tri-component attitude model discusses about the inner components of consumer attitudes

and evaluates how these attitudes are formed. There are three components in this model:

cognitive component, affective component and conative component.

Cognitive component

The cognitive component refers to the cognitive processes that lead to the formation of attitudes.

Cognition is the knowledge and perceptions that are acquired by a combination of direct

experience with the attitude-object and related information. The observations are what they have

seen or experienced in the past that stays with them today. So this could be the feeling when they

first tasted a cake and the feeling that aroused with the taste and quality. These factors will be the

way that they have known from their own or what they were brought up on. In the case of the

UG cake, this component reflects the person’s knowledge of the various topics such as the taste,

quality, look, packaging, delivery time, after service. The cognitive component of UG cake

seems to be positive for most of the consumers. This beliefs and opinions are getting repeatedly

reinforced, and finally give rise to the attitudes towards the university.
 24
ANALYSIS OF CUSTOMERS OF UG CAKES

Affective Component

A consumer’s emotions or feelings about a particular product or brand constitute the affective

component of an attitude. The affective component depicts what a person’s attitude is towards

the product, brand or service. This is because it depicts the emotional extremes i.e., positive,

negative or neutral views of the consumer. Unlike cognitive component, this component of the

model hardly is similar with array of consumers, as it is quite obvious that everyone’s emotion is

not same like the common knowledge that we are fed. According to Affect-laden experiences

manifest themselves as emotionally charged states such as happiness or sadness. In case of UG

cake if customer enhances their positive experiences while they are ordering and having the cake

their then they create a happy experience and would want to order more to create better

experiences. However if the customer have a bad experience in the while ordering, with bad

quality and horrible after service, then would recall that place as a sad or negative experience.

Later recollections of such experiences may impact what comes to mind and how the consumer

acts towards the company.

Conation Component

Conation, the final component of the tri-component attitude model, is concerned with the

likelihood or tendency that an individual will undertake a specific action or behave in a particular

way with regard to the attitude-object. While the first two components- knowledge and emotions

shape up the emotions, all that matters for the marketers or business is the conative component of

the consumer. Only the conative component indicates the action part of the attitude that a

consumer has towards the brand, product or service. In the context of UG cake, the conative

component represents the actual behavior or perception about the business rather than just

cognitive or affective component. There is positive attitude towards UG cakes, because the
 25
ANALYSIS OF CUSTOMERS OF UG CAKES

consumers are quite satisfied with the whole product, this is the actual attitude towards the

business. In addition, the conative component is frequently treated as an expression of the

consumer’s intention to buy. This is reflected by the Intention-to-buy scales. It is used to assess

the likelihood of a consumer purchasing a product or behaving in a certain way.

 26
ANALYSIS OF CUSTOMERS OF UG CAKES

Age, Income and Family background

Every business tries to tap into the market targeting a specific segment. In the case of UG cakes,

it has segmented the market into a specific demographics which includes characteristics like age,

income and background.

 Age: As the business is online oriented, it has targeted youths and young adults for

marketing. This includes people from age of 13-45. The business has been renowned in

this age group as the rise of online shopping and delivery has gained massive success in

the same age group.

 Income group: The income level is generally ranging from middle class and high-class

clients from the valley for UG cakes. In many cases they have developed the regular

customers and ones referred by the preexisting customers. The online platform has

limited UG cakes to focus on producing to the lower income class people. However,

before the COVID-19 crisis, a small café like space was put into operation which was

quite popular among the college students around the area, thus, it also targeted students

with limited budget.

 Family background: As the income group of mid and higher class is targeted, the same is

reflected in the background of the clienteles that business caters. As the name of the

business itself reflects, the family background it targets is therefore more- modern, urban

and educated; living a contemporary lifestyle. For instance, the online orders in many

cases have been done for birthday surprises to friends or family members. Similarly, the

cakes are generally ordered with specific designs that serves the event that it is being

ordered for. It shows that segmentation has been inclined more towards catering the

needs of premium lifestyle.

 27
ANALYSIS OF CUSTOMERS OF UG CAKES

UG cakes’ customer decision making behavior- Gifting behavior

The influence of western culture has been quite apparent in Nepal at present. Many events such

as baby shower, engagement, haldi, Christmas etc. are some of the events which has been

celebrated in many households in city areas. It might have been caused by the rise in use of

social media, children’s cartoons, schools etc. This growing trend of newer festivals and

occasions and requirement of a cake in it, has been an important business with UG cakes.

UG Cakes makes cakes for different occasions such as Mother’s Day, Father’s Day, valentine’s

day etc. The demands are spike up during these occasions. Similarly, they also serve to those

who order cakes for personal occasions such as birthdays, anniversaries, baby shower,

graduation, farewells, etc.

 Inter-category Gifting-

In most cases, this behavior occurs for UG cakes as group of friends pitch in for gifting a

birthday cake, or other personal occasions such as farewell to a friend going abroad. As

stated earlier in many Hindu traditional occasions such as bhai tika, birthdays have been

celebrated with cakes these days, where, sisters could pitch in to buy cake, sweets for

brothers, or brothers pitching in together for mom’s birthday and so on. Such gifting

behavior of consumers is very common for UG cakes.

 Intragroup Gifting-

Success party by a department of a business, or a graduation party thrown together by a

batchmate, is also one of the type of orders, which involves gifting behavior of

consumers of the UG cakes. A group gives a gift to itself or its members has been a very

common behavior of corporates these days, for maintaining motivation and ensuring

teamwork in the group.

 28
ANALYSIS OF CUSTOMERS OF UG CAKES

Recommendation to Managers

After analyzing the marketing strategy including the segmentation, targeting, positioning and the

4 P’s of the UG Cakes company as well as by performing customer analysis we have made some

recommendations for the UG Cakes for its existing strategy which is explained below:

Recommendations regarding its STP

It has been found that, UG cakes have been mostly focusing on the consumers belonging to the

upper class and middle-class social status so, we think that the UG Cakes should also focus on

lower class people too by offering cakes at different price, sizes and flexible weight like offering

even half pound cakes to the consumer so that customers belonging to different social class can

also buy the cakes from the UG Cakes.

Recommendation Regarding its 4 P’s:

 Product

The UG Cakes should focus on producing new and unique designs of premium and quality

cakes which will be helpful for the UG Cakes to stand out from its competitors in the market.

Similarly, the better quality of food colors should be used so that the taste would not be

hampered by the food color. If possible UG Cakes should replace the food color to its cake

by using the natural colors brought by the natural fruits that could give same attractive look

to the cake which is healthier as well.

 Price

UG Cakes should focus on providing different ranges of pricing options to the customers. At

present, the price of the cakes is quite expensive as compared to other bakeries, so we think

UG Cakes should introduce different price ranges for the cakes to offer so that every
 29
ANALYSIS OF CUSTOMERS OF UG CAKES

customer can afford to buy the cakes of their choice from UG cakes which will also lead to

increase in profits for the company.

 Place

At present the customers of Kathmandu can only enjoy the cakes of UG Cakes as UG Cakes

service is limited to valley only so it should focus on expanding its service to other location

inside the valley as well as outside the valley.

 Promotion

UG Cakes promotions should be further increased through different social media platforms

like from Facebook, Instagram, YouTube. UG Cakes can use paid promotions in the

YouTube by using famous YouTube Influencers for promoting UG Cakes for example it can

use the help of famous YouTube influencers like Priyanka Karki as she also has a cooking

show in the YouTube and she is also very famous in Nepal. So, by giving paid promotions to

YouTube influencers also, UG Cakes can promote its product in large scale to reach wider

customer segments.

Likewise, after studying the marketing strategy and customer base of the UG Cakes company we

have come up with some recommendations and suggestion for the UG Cakes that it can consider

to grab more market opportunities in Nepal.

Recommendation to Reopen its Bakery Outlets and Expand the outlets all over Nepal

From the interview with Ms. Sneha Yadav, the manager of UG Cakes, we got the valuable

information that the UG cakes outlet in the Kathmandu valley and Pokhara has been completely

shut down due to the pandemic. And it has been found that UG Cakes do not have any bakery

outlet at present and is running its business purely through ecommerce platforms and through

calls for taking the order. Therefore, we suggest UG Cakes to reopen its Bakery outlet in the
 30
ANALYSIS OF CUSTOMERS OF UG CAKES

major locations in Kathmandu, Lalitpur and Bhaktapur first and also to expand its bakery outlets

in the main areas of our country slowly as now the situation of pandemic is slowly and steadily

reviving back to the normal conditions.

Importance of Bakery Outlets for UG Cakes

UG Cakes is solely running its business through online platform and through calls for the

placement of the order of the cakes which is its main business idea of buying and selling

customized cakes online. But still in context of Nepal, people still like to visit a Bakery Outlet to

place the order of their cake as most of the consumers of all age groups are still not used to using

the online platform for placing the order for cakes online. These consumers would like to visit

the physical Bakery outlet to place the order so if the UG Cakes starts to reopen its bakery outlet

once again in the valley and slowly to other areas of our country then there are high opportunities

for the UG Cakes to grab the huge part of market share easily as UG Cakes have a strong brand

image. Similarly, the UG Cakes will have high opportunity to be recognized as a well-

established cake brand if it has a physical retail outlet in the main areas of our country including

Kathmandu. Lalitpur, Bhaktapur, Pokhara, Chitwan, Hetauda, Nepalgunj, Biratnagar and so on.

Therefore, we suggest UG Cakes to reopen its bakery outlets with proper layout and expand its

bakery outlet to the main cities of Nepal which has high market opportunities for the UG Cakes.
 31
ANALYSIS OF CUSTOMERS OF UG CAKES

Potential Benefits for UG Cakes from its Bakery Outlets

After studying the overall marketing strategy and its present customer base, we have found out

the following benefits that UG Cakes will get by opening its bakery outlets and expanding it to

major areas of Nepal:

 UG Cakes can increase it market reach by opening its bakery outlet again in the valley

and expanding it to the major cities of Nepal.

 By reopening the bakery outlets with good layout, proper interior designs with adequate

space, the UG cakes can offer its other bakery items like UG biscuits, cookies, puffs and

many more besides customized cakes in its outlet. It can also offer to sell beverages like

tea and coffee in its outlet where the consumers can enjoy having cakes, other bakery

items with these beverages in its retail outlet.

 It has been found that one of the threat to UG Cakes is that it does not have the facility of

free delivery system outside the Ring road area so when it opens its bakery outlet, then

people who do not want to pay the extra cost of delivery charge will be more willing to

order quality cakes from UG cakes as the consumers can directly visit its outlet and buy

the cakes without paying the extra charge for the delivery. So, it can also be another

advantage to UG Cakes to increase its customer base.

 By expanding UG Cakes outlets to other main cities of Nepal like in Pokhara, Chitwan,

Biratnagar, Hetauda, the UG Cakes can create multiple sources of income for the UG

Cakes and target the consumers living in different geographical location that would help

the UG cakes to not only increase its market reach but also it will be able to create

multiple source of income for the company.

 32
ANALYSIS OF CUSTOMERS OF UG CAKES

Therefore, the benefits that UG cakes will get by reopening it bakery outlets and expanding its

outlet to the main cities of Nepal is huge and it will also get wide market opportunities to utilize

it for delivering the right value to the consumers belonging to different geographical locations as

well. So, we suggest UG Cakes to reopen its bakery outlet and expand the outlets to the main

cities of our country in order to explore the wide market opportunities and benefits.
 33
ANALYSIS OF CUSTOMERS OF UG CAKES

Conclusion

To conclude, UG cakes has been successfully running its business through online medium, being

already been familiar in e-commerce scene through other UG projects. With the rise of

popularity of online medium for food delivery and shopping rising in the urban areas of Nepal,

the scope for UG cakes’ expansion is quite relevant. Similarly, it seems like UG cakes can work

on promotion of their business more, with the end goal of making sure the brand could create a

very strong presence in the bakery market of Kathmandu. Similarly, as interacted in the

interview with the manager, branches in Bhimsengola and Pokhara has been shut. However, with

people staying in home, UG cakes might benefit from scaling out and at least running the

existing branches. In every other matters, UG cakes has been in good form in the mist of

growing popularity of e-commerce and online food delivery services in Nepal.

 34
ANALYSIS OF CUSTOMERS OF UG CAKES

Reference
https://www.lotame.com/what-is-market-segmentation/