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The company delivers products from its 21 distribution centers spread across 16
governorates to more than 64,519 wholesale and retail customers via its 544
vehicles.
After our study, we believe that Edita shall not be able to compete with its current
position in the wafer market. We recommend producing a new improved wafer
product (RICCO) to appeal to the middle / high income segments as an
alternative to the now highly priced imported wafers. This recommendation is in
line with the announced corporate strategy “To introduce new and innovative
products aligned with changing consumer trends – innovation and
differentiation”. This will also support the corporate strategy “Enhance
profitability by improving product mix and driving manufacturing
efficiencies- achieve profitable growth”.
Product
Croissant Rusks Cake Candy Wafer
Segment
Brands
FY15 Market
68% 37% 64% 12% 8%
Share &
#1 #2 #1 #2 #4
Rank
% of
revenues in 33.6% 4.2% 54.2% 3.8% 3.8%
2015
2012-2015
revenue 32.9% 10.3% 9.2% 81.5% 164.6%
CAGR
Growth in
50.8% 41.7% 14.4.5 2.3% 22.3%
2015
Brand
100% 88% 97% N/A 81%
Awareness
Analysts for the Edita’s performance have reported the following information on
wafers:
Wafers:
- 10% of the Egyptian Snack
food market in 2015
- Value in 2015: EGP 1.81bn.
- High growth due to frequent
and high consumption patterns.
- 2010-2015 CAGR rate: 25%
- Dominated by 2 producers;
Ocean Foods and El Shamedan.
- The remainder of the market is
captured by small players.
- Highly fragmented.
- Minimal product
differentiation.
We found that the main snack consumers are school children, university
students and young working adults with various income levels. Price and portion
size were the main elements shaping the demand for wafer products on all
brands. High demand is for the low priced more filling brands (Lambada and
Samba). Main consumers are of these brands are low income adults and
university students. School children prefer sweeter tastes (Shamadan). Some
vendors promote Bisco Misr wafers as suitable for diabetics. Medium to high
income consumers prefer Kitkat and Loaker.
The following table compares the different brand offering to highlight where
“Fresca” stands in the wafer market.
OPPORTUNITIES THREATS
• Growing Egyptian market. • Foreign currency shortages may cause
• Expected growth in snacks market. operational problems (spare parts,
• With increased Dollar prices, some imported ingredients).
snacks will become less favored by middle • Unstable economic and investment
income consumers. Edita can introduce regulations in Egypt
new products to appeal to this segment. • New competitors may come into the market
• Increase export volume and sell to more with new investment law.
countries to increase Dollar income. • Competition from unbranded local products,
http://www.dailynewsegypt.com/2016/10/ offering lower price suiting low income
15/edita-plans-expand-gulf-markets- segment.
supported-new-brands/ • Inflation affecting the price of local raw
materials and labor.
• High borrowing interest rates shall affect
credit availability to the company.
Freska is the least performing product in the family of Edita, we can clearly attribute that
to a problem with the segmentation and targeting strategies. Edita is targeting all 3
segments as it believes that Freska appeal to all to A-C income leveled consumers,
however it is not the case. Our market research and competitor analysis proved
otherwise.
As per Edita’s annual report of key figures, the consumer base for wafers are from
different age groups (Demographic) and (Socio-economic classes). With a main focus
over kids from 3-18 (as they are 31% of Mena Region’s population) and age from 18-24
are the other 20% of the Mena region population.
University Students, school students and blue collars are among the highest consumers
of wafers according to our research. Although not being the favored wafer for Egyptians
and the fact it lies 4th in the market, Edita is still myopic about its current segmentation.
They believe Class A, B and C would like to consume Freska. In fact Class C prefers
the wafer denser, less creamy and heavier in weight. Class C, prefers Lambada (By
Ocean foods), (Shameadan) and Biscomisr respectively as they come at similar or
cheaper price, less cream more dense in structure so it becomes more filling.
Class A used to mainly consume Kitkat (Coated wafers) or Loacker for (Non Coated
wafers) as a preference. Due to the current economic situation, this segment may revise
its choices. Class B today is the equivalent of Class C a few months ago. Big names
like Loacker and Kitkat are being pushed away from top B segment to exclusively A with
some expectations of complete withdrawal in case of continuation of surge in prices.
We accept the income based segmentation system of Edita, however, we choose
to target only Class A segment in Egypt and also the exports. We divided Class A
segment into sub-segments based on age and selling point. The way we view this
segment is as follows:
3.3 Positioning
Introduce a new wafer (RICCO). Design an attractive packaging and make the portion
heavier. Initially launch only 2 varieties (Milky Wafer, less sugary) or (Coated Rich tasty
Chocolate). Promote the new product as an elite snack, healthier because of the lower
sugar content or with chocolate full of anti-oxidants. Differentiate the product by taste
and stress the hazel nut cream content and health benefits.
RICCO
Wafer
snack
Outstanding packaging
p
Affordable for class A
Variety coated or non coated
Only consumed by
Class A social circles
3.4.2 Price
PRICING OBJECTIVE: PRODUCT QUALITY LEADERSHIP –
AFFORDABLE LUXURY (PAGE 390)
PRICING METHOD: PERCEIVED-VALUE PRICING (PAGE
398)
Edita has the chance to implement its corporate strategy by lifting the prices of a wafer
(Coated or non-Coated) to penetrate the weakening market share of premium quality
imported Class A goods like (Kitkat or Loacker).
Class A is re-considering their own expenditures and started looking into their daily petty
cash spending like never before, it is a very good chance to offer RICCO a tasty rich
wafer covered with a rich cocoa mix similar or even better than of Kitkat at a higher price
than current price range set by Edita (0.5 – 3 LE) “company pricing strategy” and it can
gain ground and compete vigorously.
Edita should check the costs of production and revise the price on regular basis to take
into account the change in economic circumstances.
3.4.3 Place
Edita is to follow selective distribution strategy focusing only
on offering the product at certain channels
3.4.4 Promotion
Since we are targeting one segment, a uniform consistent message should be
communicated.
Message strategy: Sensory-reward promise connected with product-in-use experience
(taste), ego satisfaction connected with incidental-to-use experience (wafer for the elite).
Creative strategy: Informational Appeal (tasty, affordable and healthier than other brands),
Transformational Appeal (used by the elite).
Message Source: Doctors for health benefits, celebrities for younger generation motivation
…etc.
The communication channels are integrated as some of them are also the main
selling points and others are viewed by customers in their daily routine lives.
We believe that this projection shall not be realized and a change in strategy is
needed.
Market Research
Documentation
Interview questions for market research
اسم منفذ البيع:
عندك فريسكا؟
ليه؟ ال مابيعتھاش قبل كده بتبيع منھا كام علبة في الشھر؟
عندك منتجات تانية من ايديتا؟ ايه الفرق بينھم و بين الفريسكا؟ السعر؟ الطعم؟
مين بيشتري الويفر عادة؟ اطفال مدارس؟ طلبة جامعة؟ و اال مين بيشتري الويفر عادة؟ اطفال مدارس؟ طلبة جامعة؟ و
كبار؟ اال كبار؟
Focus Group