Overview
The Cupcakery is St. Andrews’ only cupcake
delivery business. Student run, The
Cupcakery provides fresh, delicious cupcakes with punctual door to door delivery
with great success. We offer immaculate chocolate,
vanilla, carrot, and red velvet cupcakes as standard. However our menu is seasonally changing, with
weekly specials to delight your taste buds; ranging from cookie dough frosting
to pumpkin spiced latte, with everything in between!
Choice of Project
Our choice of project bore out of a
discussion in Tutorial 1 concerning our skills in the group. While a few ideas
were tossed around, Hanna had a plethora of knowledge and experience baking,
and the group had noticed a minimal variety of home-baked foods in St. Andrews.
By offering customers the chance to order
in advance and specify when they’d prefer their cupcakes, we wouldn’t have to
worry about uncertainties in quantity demanded that we may have faced had we
simply tried to sell cupcakes on the street, as we had initially anticipated. The
idea primarily appealed to us due to its simplicity and uniqueness. Simple, as it played to our strength as a
group and the scope was there to make a discernible profit. Unique, as we couldn’t identify another cupcake
delivery service.
Refining Our Idea
Once
we decided on our project, we were still unsure as to its practicality in St.
Andrews. Therefore we undertook market
research, looking at our major competitors, Bibi’s and Tesco. While Bibi’s sold
only cupcakes for a higher price than Tesco, friends had informed us they were
not pleased with their cupcakes. Meanwhile, Tesco sold theirs for much less,
but the quality and freshness could not be assured.
We strove to gain successful aspects of
each of these competitors, seeing as how they are on opposite ends of the
spectrum in the cupcake market. We determined that one key to success would be
offering different sizes, flavours, and customizable options for our customers.
Seeing as how Tesco requires that people buy packs of only one flavour, we
wanted our customers to have the option of mixing and matching flavours to fit
their desires.
Pricing Strategy
Since we could afford to do so with our low
costs, we wanted to place our price low enough so that people would want to buy
from us, but high enough that it denoted quality. We determined that round
numbers would help the customer, therefore the pricing strategy was developed
as follows:
·
4 Packs = £4
·
6 Packs = £5
·
12 Packs = £10
Role Allocation
While role allocation remains a necessary
factor in developing a business plan, with the nature of our business it was
rather self-explanatory.
Hanna – Baking, Boxing Up, Supply Purchasing, Sales
Gustavo – Delivery, Supply Purchasing, Sales
Adam – Delivery, Sales, Marketing
Rishi – Delivery, Sales, Marketing
Gustavo – Delivery, Supply Purchasing, Sales
Adam – Delivery, Sales, Marketing
Rishi – Delivery, Sales, Marketing
Devising Name and Logo
Our main competitor, Bibi’s seemed very
interested in targeting the female population. While this makes sense,
considering the majority of interest came from women, we wanted to choose a
name and logo that could apply to all of St. Andrews’ student population.
We decided upon Gustavo’s suggestion of
‘The Cupcakery’ in week 4, and thus the business was born. Hanna devised
several logos and we agreed upon the one we did as it was both simple and
professional. We had stickers made to put on the boxes to further advertise
through our product.
From Design Board to Reality
Building the Brand: Facebook
It was realised early on that we had an advantage as students, as we could reach student communities that our competitors couldn’t. We could post in such Facebook groups such as ‘University Class of 2015’ and ‘St. Andrews Flea Market’ in order to attract interest. We also wanted our growth to be based on word of mouth recommendation; therefore creating a brand that could create interest with students was essential.
The Cupcakery’s Facebook Explosion: Week 5
We created our
Facebook page in Week 4, two weeks before we went live. With one week to go before opening, we went
viral.
By the end of Week 5 we had 169 likes with 134 people actively talking about us
on Facebook, an impressive sum.
Building the Brand: Additional Advertising
Adam has student radio show
on STARadio. Shout outs to The Cupcakery
on here and other shows meant we were again appealing to our student customer
base.
As university students in a
small town, word spread quickly about our business and we noticed within a
number of weeks our brand was becoming a recognisable name.
Maturity
Business Adaption
After
our first weekend it became clear we would have to adapt our business. We realised that as students with other
commitments, we simply couldn’t dedicate so much time to a full time delivery
service, so we revised our original plan.
·
We were all to collect orders
in the week, up until midnight on Thursday night, allowing us to know the exact amount of supplies to buy. Hanna would bake Friday, allowing Gustavo, Adam, and
Rishi to deliver on Saturday and Sunday.
Maintaining
Interest
After our first
week, it was crucial that we maintain interest in the business. Although we no longer offered our introductory
deal, we aimed to do this through weekly specials.
From Week 7
onwards we had a weekly special, often stemming from requests that we had
gotten during previous weeks.
Developing
Our Marketing Strategy
We learned that
people were most likely to order on Wednesday and Thursday nights, therefore we
would post the weekly specials on Facebook on Monday, then focus marketing
efforts on Thursday afternoon so people would remember to order. This often
resulted in a number of orders that we may have missed out on otherwise.
Reaching Our Peak
Week 10 was to be our last week of sales, and we advertised this through
Facebook and word of mouth. The impending deadline really drove us to have our
most successful week to date. We had 22
individual orders, repeat orders being crucial, but also with new customers
being added to our customer base.
|
The Stand: 3rd Party Advertisement
In Week 9 the Stand had approached us with regards to an interview. This interview was not published until the
Tuesday before last weekend of sales, however boosted out popularity and sales
for the weekend substantially.
Financial Success
Although our primary goal during opening
weekend was to gain interest in our product, we ended up making a substantial
profit considering how young our business was. In Week 6, we made a profit of
£34.83 despite our introductory deal of ‘buy a 6-packs or 12-pack and get a
second half off’. We received 11 orders, most of them requesting 2 boxes each.
While we anticipated quite a bit of business the following week (7), we only received 6 orders, each for only one box of 4 or 6. This was a huge drop in demand after the hectic schedule during Week 6, and while we were still making a profit with this amount of business, we decided to advertise the leftover cupcakes on Facebook on Saturday. This strategy gained an additional income of £19, resulting in profits for the week being £25.64.
Many customers had inquired about
Neapolitan cupcakes, so in Week 8 we featured them as our special. However,
only three were ordered (a very small figure compared with the popularity of
our weekly specials in other weeks), giving us several leftovers and a profit
of £23.41.
On
Monday of Week 9, we posted that the following week would be our last offering
cupcakes, expecting this to boost demand. While we got a few more orders than
we had in prior weeks, we still only ended up with a profit of £16.89. We did, however,
receive multiple orders from repeat customers, showing that they were pleased and
desired more. In addition, the mixer used in making the cupcakes overheated, so
we had to take £5 out of our profits to replace the necessary equipment.
As our business reached its last weekend in
operation, we gained a lot more interest due to The Stand’s interview being
posted as well as our being mentioned in their list of ‘Five Things You Must Do
This Week.’ We received a total of 22 orders, making an outstanding £71.85 in
profit during our final weekend.
Statistics
Along with our fluctuations in profit came changes
in associated costs. Since we both manufacture and sell our product, the
ordering system worked out well, such that we would only use however many
ingredients we needed in creating our product. While some weeks led to fewer
orders, our profits remained higher than £20 each week due to the ‘made to
order’ nature behind our business.
We
found that chocolate was by far the most popular flavour we offered, which
worked in our favour due to the low cost of creating such cupcakes. Using this
to our advantage, we featured specials in coming weeks that would use chocolate
cupcakes (such as Neapolitan and Samoas) to appeal to our customers tastes as
well as lower our costs.
It
became clear within a number of weeks that 6-packs were our most popular size,
therefore we ordered them in bulk during week 7 to reduce our costs from £1.41
per box to £0.84. The boxes were more expensive than the cost of the cupcakes
inside them, so this helped our profit margin.
Further Success
Social Enterprise
Despite
our profit-seeking efforts, we understood that as a business it is important to
give back to the community. Therefore we
jumped at the chance when we were asked to cater a charity’s film screening
event in Week 8. It is important to note
that we were approached by the charity, showing:
1. Our authenticity as a reputable business at such an
early stage
That we could be trusted as supplying to events that were outside our usual student-focused customer base
In an effort to further our social entrepreneurial credentials, we waived any profit we would make on the order, supplying 30 cupcakes for £10.
We also saw the opportunity to give back further, supplying 50 promotional vouchers to guests at the event, and promising a donation of £1 for every pack the societies’ members purchased.
Other Events
Although we ceased deliveries to the public during Week 10, we were been
approached to cater for a St. Andrews Art Magazine event. Their 6th issue launch is on Tuesday, December 4th. We will be supplying them with 40 cupcakes
for a profit of £34.
Testimonials
The
advantage of Facebook is its ability for social interaction for consumers;
positive feedback therefore fuelled further orders.
|
Future possibilities for The Cupcakery
would include marketing strategies focused on the staff of St. Andrews
University and also on the town’s community, since they may not be as connected
to student organisations. The group’s baker, Hanna, is a JSA and returning to
her home university in December, however, one possibility that arose during the
project fair was the option to hire a qualified baker and continue developing
the business.
If this were to occur, several changes
could be considered. Some aspects that may give us an advantage in continuation
could be: renting a spot in a commercial kitchen, gaining access to a car to
assist in deliveries, developing a way to sell cupcakes throughout the week,
and creating a website to allow for a more user-friendly ordering system.
|
While the project took a substantial amount
of time, especially during weeks 6 and 10 when we filled high numbers of orders
and baked between 150-180 cupcakes for delivery the following days, we felt
that executing the business played out in an extremely successful manner. We
had certainly not anticipated as much interest as we received, especially in
the first week, however we easily targeted our realistic weaknesses in the
business plan and fixed them without further problems.
In such a short time frame, only a matter
of weeks, we managed to not only make a profit, but gain interest across the
university. While challenges were faced, we dealt with them accordingly and
gained a large number of orders in addition to repeat customers and requests
for cupcakes past the closing of our business to prepare for exams.
With no true competition in the cupcake
delivery business, we managed to gain a high rate of interest and feel that
this project made an immense effect on our views of the world of business and
entrepreneurship. From being asked to cater events, to gaining publicity
through our featured article in The Stand, we shared a common goal in executing
the simple plan of baking and delivering cupcakes.
No comments:
Post a Comment