Assignment 3

For the third assignment, we will estimate the financial value of the brand and identify the main drivers to that value.

Calculating NOPAT

In calculating NOPAT, we estimated the following figures:

Peak hours /day 4
Sales/ hour 40
Non-peak hours/day 11
Sales/hour 15
Profit/set meal $3.80
Profit/day $1,252
Profit/month $37,565
Cost of operating/month (salary, rental, miscellaneous) $22,000
NOP/month $14,200
NOP/year $186,775
43 outlets $8,031,325
We start off with Stage 1 which is our customer segmentation and their share in sales.
Stage 1: Market Segments

Based on the observational study we have conducted in assignment 2, our group has classified YKKT’s customer into the following segments

  1. Youths
  2. Senior Citizens
  3. Young couples
  4. Families
  5. PMEBs

For this project, we have will be focusing on 3 main target markets that visits YKKT:

*The figures were derived based on our visitors count from our observational study.

Our group has removed senior citizens and young couples from our calculation as they make up a very small percentage and are mostly comprised in the other target market segments such as families and PMEBs.

Stage 2: Market Annual Growth Rate

In stage 2, we have come up with the annual rates of growth for each customer segment.

Our group has identified the following annual growth rate for each target segment

Families (10%)
*average increase in marriage over the last 5 years

PMEBs (2.5%)
*increase in labor force size from 2006-2011

Students (-1.35%)
*birth rates from 2000-2005

Stage 3: Role of Brand

To identify role of brand YKKT has on purchases, our group conducted a separate survey from 30 respondents (10 from each target market).

Respondents were asked to rate from 1-100

“During your purchase of Kaya and Toast, how influential is YKKT as a brand to make you choose YKKT over other competing brands” and the following results were collected.

In general, YKKT reflects a very low brand influence over its consumers. This would increase the risk of consumers choosing a competing brand over YKKT, especially in the youth segment.

Stage 4: Brand Strength

In analyzing brand strength, we have evaluated the following factors as a group and assigned a grade to each factor.

Internal

Clarity
Our group felt that YKKT is very clear on its positioning as a place to bond people by offering traditional kaya and toast. They have insisted on maintaining the way they prepare their food since its establishment.

Commitment
YKKT has committed to its positioning by maintaining and sharing its status quo with its franchises. Despite extensive franchising, YKKT ensures that each individual outlet replicates each other in store design and menu. They also share their food preparation and quality control methods with all of its outlets to ensure consistency in customer experience in every outlet.

Responsiveness
Our group felt that the level of responsiveness from YKKT is fairly low. Despite introducing new items such as ice beverages to adapt to the needs of the new market, very limited efforts were carried out to ensure that YKKT is keeping up with new trends and satisfying the changing market.

Protection
YKKT has protected itself well by legally protecting the YKKT brand name and logo. YKKT has also successfully protected its unique kaya recipe by keeping it as a family trade secret, ensuring that no other competitors would be able to replicate the exact taste.

External

Relevance
YKKT has not fared exceptionally well in this category, as they are not in tune with the changing needs and demands of the market by rigidly maintaining its existing business.

Authenticity
YKKT has done an excellent job in maintaining its authenticity by maintaining the way they prepare their food items since its establishment in 1950s. Using their traditional kaya recipe and socks to prepare coffee, they maintained the taste and authenticity of food served.

Differentiation
YKKT lacks differentiating factor from its competitors by serving similar food offerings to its consumers. Despite having its own unique Kaya, not all consumers realize it and choose YKKT has a result of it.

Consistency
Due to extensive franchising, YKKT has not met its objective of ensuring consistency in food quality offered in all outlets. Despite setting strict quality control regulations, franchises were not able to replicate the food preparation and taste. Consumers are able to enjoy the same store design and menu in all outlets of YKKT.

Presence
YKKT rarely conducts any form of marketing effort. leading to a mute presence in both online and traditional mediums. Their main sources of communications are via word-of-mouth and storefront.

Understanding
The younger generation lacks an understanding of what YKKT stands to be. Younger generation tends to see YKKT as just another kaya and toast food place rather than understanding YKKT purpose of bonding people together by serving authentic kaya and toast for generations to enjoy. Understanding of YKKT brand purpose is highest in families and the older generations.

Generally, consumers are unaware of the history of YKKT.

Stage 5: Brand Valuation

Finally in stage 5, using the discount rate to calculate how much the brand is worth.

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