Do you love baking cakes and are now looking to convert your passion into a business? Then you’re in luck because there are many people out there – individuals and businesses – looking to buy cakes from someone who knows what they’re doing.
But just because someone is interested in your cakes, doesn’t automatically make them a good target market for your business. And so, you will need to spend time really thinking about who your ideal customer is and who isn’t. And we hope this article will help you in that effort.
We will analyze the target market for a cake business by reviewing the reasons why someone would place an order for a cake with a bakery or cake baking business. We will also review some of the key factors that influence people’s decision to go with one cake bakery or another.
Analyzing the Target Market for a Cake Business
One of the best ways to analyze the target market for a cake business is to understand the reasons why people go to an external cake business instead of baking a cake by themselves.
By using this segmentation criterion to classify the target market for a cake business, we get the following market segments:
- People who need a cake for a birthday
- People who need a cake for a wedding
- People who need a dessert for a special dinner
- People who need a special cake with a theme
- People who love cakes but can’t bake (as good as you can!)
- Businesses who need a cake for a corporate event
Let’s look closely at each of these market segments.
1. People who need a cake for a birthday
Cakes ordered for birthdays make up the largest target market for a cake business. Birthdays are celebrations that people have every year and almost always involve a cake.
While some people may choose to bake their own cake or buy a cake from the grocery store, many people prefer to order a custom-made cake from a bakery. The main reasons for this are that they want the cake to be special and unique, and they may not have the time or skills necessary to bake an impressive cake by themselves.
When it’s a child’s birthday the cake often needs to reflect the child’s current obsession. For example, if they are into dinosaurs then the cake will be in the shape of a dinosaur or have dinosaur decorations on it. If they love Barbies, the cake will be in the shape of a Barbie doll. And so on. And most parents do not the skill (or the patience!) to bake such complicated cakes.
2. People who need a cake for a wedding
Wedding cakes are another significant target market for a cake business. While some couples may choose to make their own wedding cake or have a friend or family member bake one for them, many couples prefer to order a custom cake from a bakery.
The main reasons for this are that they want the cake to be perfect and they want to avoid the stress of having to bake it themselves. Also if a bakery specializes in wedding cakes and has experience with them, the couple can be confident that the cake will turn out well.
Wedding cakes are often very elaborate, with multiple tiers and intricate designs. They are also usually quite large, feeding a hundred or more people. This is another reason why couples may choose to order a wedding cake from a bakery because there is no way to make such a large and complex cake in most home ovens.
One way to enter the wedding market is to partner with catering companies because there is a veritable overlap between the target market for a catering business and that of a cake business or a bakery.
3. People who need a dessert for a special dinner
While not as common as birthdays or weddings, there are many people who order a custom cake for a special dinner party. Maybe they have many guests coming over and the planning for the rest of the meal is so overwhelming that they decide to get the dessert from somewhere else. And a cake can be an ideal dessert that can feed a lot of people.
Another reason can be that they would like the cake to be impressive and they just cannot do it by themselves. For instance, a complex cake like a Baked Alaska or a Black Forest can be quite difficult to make at home but will be straightforward for a cake professional.
4. People who need a special cake with a theme
A very interesting target market for a cake business is people looking for a custom cake for a special event that has a specific theme, like Halloween or a Harry Potter party. These people look for a cake that fits with the theme of the event and often the decorations on the cake are just as important, if not more important, than how the cake tastes.
While some people may try to make these cakes themselves, many prefer to order them from a bakery because they want the cake to be perfect. And it can be very difficult to get the decorations right if you’re not experienced with cake decorating.
5. People who love cakes but can’t bake (as good as you can!)
This segment of the target market for a cake business includes people who love cakes but cannot bake to save their life. Many just don’t have the time to bake or they’ve tried it before and failed miserably.
But they need their cakes! And so they will order cakes from their favorite bakery or cake business and satisfy their sweet tooth that way. This segment of the market can be very interesting for you because they will never say “Nah, let’s just make it at home”.
6. Businesses who need a cake for a corporate event
This segment of the target market for a cake business includes businesses that need a cake for a corporate event. They are often looking for two things: a cake that reflects their brand and a cake that will impress their clients or customers.
Their first requirement often is that the cake should be on-brand, meaning that it should match the company’s colors, logo, or theme in some way. The second thing is that the cake should be impressive, either in its size, its design, or both.
This target market is usually willing to pay a bit more for a cake that meets their needs because they know it will help them make a good impression. And that’s valuable to businesses.
To reach this market you could consider partnering with event planners as many corporate events are handled by professional event planners. This could open more doors into other markets that event planners target.
How do customers select a Cake Business or Bakery?
Once a customer decides to place an order for a cake, there are a number of factors that influence their decision as to which cake business or bakery to go with.
Some of the most important of these factors are:
- Ability
- Design options
- Price
- Location
- Delivery times
- Reputation
Let’s briefly study these factors.
Ability
If a customer wants a specific type of cake, no doubt they will select a cake business that is capable of making such a cake. For example, if they want a wedding cake with multiple tiers and intricate designs, they will choose a business that knows how to make one.
Design options
Customers often have specific ideas about what they want their cake to look like. For instance, if a child wants a birthday cake with a Ninjago theme, the parents will likely select a cake business that already has such design options in its portfolio.
The broader the range of designs that you can offer, the more likely it will be that your potential customers will find something that they like and place their order with you.
Price
Of course, price is always a factor when customers are making a purchase. But when it comes to the cake business the impact of price varies depending on the occasion for which the customer is buying the cake.
For instance, if a customer is buying a cake for a dinner party, they may be more price-sensitive because the cake isn’t everything. But if a couple is buying a cake for a wedding, they will want it to be absolutely perfect and will be willing to pay whatever it takes to get what they want.
In fact, the profitability of a bakery or a cake business can be bolstered by offering expensive (and often high-margin wedding cakes) to counter the less expensive everyday cakes that they also have to carry.
Location
Most people prefer to order a cake from a cake business that is close to them. This is because they want to be able to see the cakes in person before making a decision and they don’t want to have to pay for delivery.
Having said that if the cake is for a very special occasion like a wedding, people will be willing to travel far to get the cake that they absolutely want to have.
Delivery times
Another important factor for customers is delivery times. When ordering a cake for an event, people want to be sure that the cake will arrive on time and in good condition.
So if you can guarantee fast and reliable delivery, it will give you a significant advantage over other businesses. If you’re also willing to deliver the cake to the customer’s address rather than having them come to your bakery to pick it up, that’s going to be the cherry on top of the cake.
Reputation
Most customers will first order smaller cakes from you before they order a cake for a big event. This is because they will want to make sure that you’re able to deliver a quality product as promised.
They will also ask friends and family for recommendations before making a decision. So if you have a good reputation in your community, that’s going to be a big advantage.
Also, remember that your cakes are going to be eaten not just by your customer but by many other people – perhaps hundreds of other people. And if they all like it, many of them are likely to ask for your name and contact. This is how a good reputation can spread. So think of your cake, not as a cake but as a marketing device!
Summary
The largest segments of the target market for a cake business are people who need a cake for a birthday and people who need a cake for a wedding. In both these cases, customers look for custom-made cakes that are both special and unique.
Sometimes people will order cakes from a bakery when they have guests coming over for a special dinner and they want the dessert to be perfect. People will also order cakes when they want the cake to follow a special theme that they have in mind, and they cannot bake it by themselves.
Another segment of the market for a cake business includes people who love cakes but aren’t very good at baking them. These people will often look for different kinds of cakes in different cake shops to satisfy their pangs for cakes.
And finally, businesses also order cakes for special events including large company meetings or birthdays in the office or for someone’s leaving party.
When selecting a cake business or a bakery, customers first and foremost look at whether the cake business has the ability to bake the cake that they have in mind. They also see if the bakery gives them a range of design options to choose from. Other considerations include price, location of the cake business or bakery, delivery times and reputation.